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The EU General Court dismisses the action brought by the Landeskreditbank Baden-Württemberg against its being under the direct supervision of the ECB | 16 May 2017 ( *1 )‛Economic and monetary policy — Prudential supervision of credit institutions — Article 6(4) of Regulation (EU) No 1024/2013 — Article 70(1) of Regulation (EU) No 468/2014 — Single supervisory mechanism — Competences of the ECB — Decentralised exercise by the national authorities — Assessment of the size of a credit institution — Need for direct supervision by the ECB’In Case T‑122/15, Landeskreditbank Baden-Württemberg — Förderbank, established in Karlsruhe (Germany), represented initially by A. Glos, K. Lackhoff and M. Benzing, and subsequently by A. Glos and M. Benzing, lawyers,applicant,v European Central Bank (ECB), represented initially by E. Koupepidou, R. Bax and A. Riso, and subsequently by E. Koupepidou and R. Bax, acting as Agents, assisted by H.-G. Kamann, lawyer,defendant,supported by European Commission, represented by W. Mölls and K.-P. Wojcik, acting as Agents,intervener,ACTION pursuant to Article 263 TFEU for annulment of Decision ECB/SSM/15/1 of the ECB of 5 January 2015, taken pursuant to Article 6(4) and Article 24(7) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63), by which the ECB refused to recognise the applicant as a less significant entity within the meaning of Article 6(4) of that regulation,THE GENERAL COURT (Fourth Chamber, Extended Composition),composed of M. Prek (Rapporteur), President, I. Labucka, J. Schwarcz, V. Kreuschitz and F. Schalin, Judges,Registrar: S. Bukšek Tomac, Administrator,having regard to the written part of the procedure and further to the hearing on 28 September 2016,gives the following Judgment I. Background to the dispute 1The applicant, the Landeskreditbank Baden-Württemberg — Förderbank, is the investment and development bank (Förderbank) of Baden-Württemberg (Germany). Created by Paragraph 1(1) of the Law on the Baden-Württemberg regional credit bank, it is a legal person governed by public law and wholly owned by the Land (State) of Baden-Württemberg.2On 25 June 2014, the European Central Bank (ECB) informed the applicant, in essence, that on account of its size it was subject solely to its supervision rather than shared supervision under the single supervisory mechanism (SSM), pursuant to Article 6(4) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63) (‘the Basic Regulation’) and invited it to submit its observations.3On 10 July 2014, the applicant disputed that analysis, arguing inter alia the presence of particular circumstances within the meaning of Article 6(4) of the Basic Regulation and Articles 70 and 71 of Regulation (EU) No 468/2014 of the ECB of 16 April 2014 establishing the framework for SSM cooperation between the ECB, the national competent authorities and the national designated authorities (OJ 2014 L 141, p. 1) (‘the SSM Framework Regulation’).4On 1 September 2014, the ECB adopted a decision classifying the applicant as a significant entity within the meaning of Article 6(4) of the Basic Regulation.5On 6 October 2014, the applicant requested review of that decision pursuant to Article 24(1), (5) and (6) of the Basic Regulation, read in conjunction with Article 7 of Decision [2014/360/EU of the European Central Bank] of 14 April 2014 concerning the establishment of an Administrative Board of Review and its Operating Rules (OJ 2014 L 175, p. 47). A hearing was held on 23 October 2014 before the Administrative Board of Review.6On 20 November 2014, the Administrative Board of Review gave an Opinion finding the ECB’s decision to be lawful.7On 5 January 2015, the ECB adopted Decision ECB/SSM/15/1 (‘the contested decision’), which repealed and replaced the decision of 1 September 2014, whilst maintaining the applicant’s classification as a significant entity. The ECB emphasised, in essence, the following:—the applicant’s classification as a significant entity was not in contradiction with the objectives of the Basic Regulation;an entity’s risk profile was not a relevant question at the stage of its classification and Article 70 of the SSM Framework Regulation could not be interpreted as including criteria that had no basis in the Basic Regulation;even if it did take the view that there were particular circumstances in the applicant’s case, it would also have to ascertain whether such circumstances justified reclassifying the applicant as a less significant entity;under Article 70(2) of the SSM Framework Regulation, the concept of ‘particular circumstances’ had to be interpreted restrictively and, therefore, it was only when direct supervision by the ECB was inappropriate that a ‘significant’ entity could be reclassified as ‘less significant’;taking into account the principle of proportionality for the purpose of interpretation does not require it to ascertain whether the application of the criteria laid down in Article 6(4) of the Basic Regulation to an entity was proportionate and the examination whether it was ‘inappropriate’ to classify an entity as significant did not amount to conducting such an examination of proportionality;the adequacy of national supervisory frameworks and their ability to apply a high supervisory standard did not lead to a finding that the exercise of direct prudential supervision by the ECB was inappropriate, since the Basic Regulation did not make it subject to proof that the national supervisory frameworks or national supervisory standards were inadequate.II. Procedure and forms of order sought 8By application lodged at the Registry of the General Court on 12 March 2015 the applicant brought the present action.9By document lodged at the Registry of the Court on 23 July 2015, the European Commission applied for leave to intervene in support of the form of order sought by the ECB.10By decision of 27 August 2015 the President of the Fourth Chamber granted the Commission leave to intervene in support of the form of order sought by the ECB.11On 9 October 2015, the Commission lodged its statement in defence.12Acting upon a proposal of the Fourth Chamber, the Court decided, pursuant to Article 28 of the Court’s Rules of Procedure, to refer the case to a formation sitting with a greater number of Judges.13Acting upon a proposal of the Judge-Rapporteur, the General Court (Fourth Chamber, Extended Composition) decided to open the oral part of the procedure.14The parties presented oral argument and replied to questions put by the Court at the hearing on 28 September 2016.15The applicant claims that the Court should:annul the contested decision whilst ordering the maintenance of the effects attaching to the replacement of the decision of 1 September 2014;order the ECB to pay the costs.16The ECB and the Commission contend that the Court should:dismiss the application;order the applicant to pay the costs.III. Law 17In support of its application for annulment of the contested decision, the applicant puts forward five pleas in law: (i) infringement of Article 6(4) of the Basic Regulation and Article 70 of the SSM Framework Regulation in the choice of criteria applied by the ECB; (ii) manifest errors of assessment of the facts; (iii) infringement of the obligation to state reasons; (iv) misuse of powers arising from the ECB’s failure to exercise its discretion; and (v) infringement by the ECB of its obligation to take into consideration all the relevant circumstances of the case.A. The first plea: incorrect legal criteria applied by the ECB 18Under the present plea, the applicant puts forward, in essence, three complaints.19The first complaint alleges incorrect interpretation of the condition of what makes the classification of an entity as significant ‘inappropriate’ under Article 70(1) of the SSM Framework Regulation. By its second complaint, the applicant criticises the ECB for having found that its classification as significant entity was appropriate, irrespective of the examination of the specific factual circumstances and without account being taken of the objectives and principles of the Basic Regulation. By its third complaint, the applicant criticises the ECB for having erred in law in its interpretation of the concept of ‘particular circumstances’ in Article 70(1) of the SSM Framework Regulation.1. Relevant provisions of the Basic Regulation and of the SSM Framework Regulation 20Article 4 of the Basic Regulation, entitled ‘Tasks conferred on the ECB’, states in paragraph 1 that, ‘[w]ithin the framework of Article 6, the ECB shall … be exclusively competent to carry out, for prudential supervisory purposes, the following tasks in relation to all credit institutions established in the participating Member States’, followed by a list of nine tasks.21Article 6 of the Basic Regulation, entitled ‘Cooperation within the SSM’, states in paragraph 1 that ‘[t]he ECB shall carry out its tasks within a single supervisory mechanism composed of the ECB and national competent authorities’ and that ‘[t]he ECB shall be responsible for the effective and consistent functioning of the SSM’. Within the SSM, the overall scheme of Article 6(4) to (6) of the Basic Regulation establishes a differentiation between prudential supervision of ‘significant’ entities and that of entities classified as ‘less significant’ in relation to seven of the nine tasks listed in Article 4(1) of that regulation.22It follows therefrom, firstly, that the exclusive competence for the prudential supervision of ‘significant’ entities falls to the ECB. The same holds true for the prudential supervision of ‘less significant’ entities in relation to the tasks listed in Article 4(1)(a) and (c) of the Basic Regulation.23Secondly, regarding ‘less significant’ entities and the other tasks listed in Article 4(1) of the Basic Regulation, it is apparent from a combined reading of Article 6(5) and (6) of that regulation that their implementation is conferred under the ECB’s control on the national authorities, who thus carry out the direct prudential supervision of those entities. Under Article 6(6) of the Basic Regulation, ‘[w]ithout prejudice to paragraph 5 of this Article, national competent authorities shall carry out and be responsible for the tasks … and adopting all relevant supervisory decisions with regard to the credit institutions referred to in the first subparagraph of paragraph 4 of this Article, within the framework and subject to the procedures referred to in paragraph 7 of this Article’.24However, the exercise of that direct prudential supervision is overseen by the ECB, which, under Article 6(5)(a) and (b) of the Basic Regulation, has the competence to communicate to those authorities ‘regulations, guidelines or general instructions to national competent authorities, according to which the tasks defined in Article 4 [of that regulation] … are performed’ and, moreover, to remove authority from a national authority and to ‘decide to exercise directly itself all the relevant powers for one or more credit institutions’.25Under Article 6(7) of the Basic Regulation the ECB is empowered to adopt a framework aimed at organising the detailed practical rules for cooperation under the SSM. It was on that basis that the ECB adopted the SSM Framework Regulation.26Thirdly, it should be noted that the first subparagraph of Article 6(4) of the Basic Regulation uses as a criterion for distribution of the roles within the SSM the significance of the supervised entity. On that basis, a distinction is drawn between the ‘less significant’ and ‘significant’ entities. Three criteria are used: size (Article 6(4), first subparagraph, (i) of the Basic Regulation), importance for the economy of the Union or any participating Member State (Article 6(4), first subparagraph, (ii) of the Basic Regulation) and significance of cross-border activities (Article 6(4), first subparagraph, (iii) of the Basic Regulation).27Those criteria are specified in Article 6(4) second subparagraph, of the Basic Regulation, under which ‘a credit institution or financial holding company or mixed financial holding company shall not be considered less significant, unless justified by particular circumstances to be specified in the methodology, if any of the following conditions is met’. Under Article 6(4), second subparagraph, (i) of that regulation, those conditions include where the total value of its assets exceeds EUR 30 billion.28Lastly and fourthly, Article 6(4), second subparagraph, of the Basic Regulation provides that an institution need not be classified as ‘significant’ in ‘particular circumstances’ which the ECB is entrusted with specifying.29That specification of ‘particular circumstances’ allowing for the declassification of a credit institution as ‘significant’ is given in Articles 70 and 71 of the SSM Framework Regulation, the interpretation of which is at issue in the present plea. Under Article 70(1) of that regulation, they must be ‘specific and factual circumstances that make the classification of a supervised entity as significant inappropriate, taking into account the objectives and principles of [the Basic Regulation] and, in particular, the need to ensure the consistent application of high supervisory standards’. Article 70(2) of the same regulation states that the expression ‘particular circumstances’ is to be interpreted strictly. Lastly, Article 71(1) of the SSM Framework Regulation highlights the need for an examination of those particular circumstances made on a case-by-case basis and specific to each supervised entity.2. Content of the contested decision 30In the contested decision, the ECB observed that the value of the applicant’s assets exceeded EUR 30 billion and refused to uphold the applicant’s arguments alleging that there were ‘particular circumstances’ for it within the meaning of Article 6(4) of the Basic Regulation justifying its continuing to come under direct prudential supervision by the German authorities.31In the contested decision, the ECB found that it had not been demonstrated that its direct supervision of the applicant was ‘contrary to the objectives of the Basic Regulation’ and that, therefore, it was not inappropriate within the meaning of Article 70(1) of the SSM Framework Regulation. In that regard, in the Administrative Board of Review’s Opinion, of which the contested decision is an extension, it is stated inter alia that the significance-related criteria set out in Article 6(4) of the Basic Regulation could be disapplied through the use of the ‘particular circumstances’ option only if that meant that the objectives of the Basic Regulation, including the need to guarantee consistent application of high prudential supervisory standards, were better safeguarded through direct supervision by national authorities, which the applicant had failed to demonstrate.32Regarding the applicant’s line of argument alleging, in essence, that the prudential supervision conducted by the national authorities given its particularly weak risk profile was sufficient, the ECB, in essence, found it to be entirely irrelevant, since the risk assessment put forward by an institution for the stability of the financial system or its creditors need not be taken into account at the stage of classification of an entity. It also took the view that it was not required to carry out an examination of whether the classification of a significant institution was proportionate. Under Article 6(4) of the Basic Regulation and Article 70(1) of the SSM Framework Regulation, it considered that it was required only to examine whether direct supervision by the ECB was inappropriate.33Lastly, the ECB also stated that, in the event that it found that there were particular circumstances for the supervised entity within the meaning of Article 6(4) of the Basic Regulation, it would still have to determine whether those particular circumstances were such as to justify the classification of a ‘significant’ credit institution as ‘less significant’.3. The complaint alleging error of law in the interpretation of the condition relating to the inappropriateness of the classification of a supervised entity as ‘significant ’ 34As stated in paragraph 31 above, a reading of the contested decision, read in the light of the Administrative Board of Review’s Opinion, shows that the ECB considered that the application of Article 70(1) of the SSM Framework Regulation could lead to the applicant’s not being classified as a significant entity only if direct prudential supervision by the German authorities was better able to safeguard the objectives of the Basic Regulation than supervision by the ECB.35The applicant submits, in essence, that such an analysis is vitiated by an error of law. It submits that the reference to the inappropriateness of the classification of a supervised entity as ‘significant’, laid down in Article 70(1) of the SSM Framework Regulation, is an indeterminate legal concept that must be interpreted in the light of the principle of proportionality enshrined in Article 5(4) TEU, which governs the manner in which the EU institutions are to exercise their competences. It follows that classification of an entity as ‘significant’ on the basis of the size criterion does not justify direct prudential supervision by the ECB and is, accordingly, ‘inappropriate’ because it is not necessary, where monitoring by the national competent authority under the macroprudential supervision of the ECB would be sufficient for achieving the objectives of the Basic Regulation. Moreover, the wording of those two provisions does not preclude an examination of the proportionality of the classification of an entity as significant. The same holds true for a systematic and teleological interpretation of those two provisions. The applicant also denies that there has been a transfer of competence in favour of the ECB with regard to all of the tasks listed in Article 4(1) of the Basic Regulation and in respect of all entities. On the contrary, a reading of that provision, combined with Article 6(4) thereof, leads to the conclusion that, in conformity with the principle of subsidiarity, the transfer of competence was made only in respect of significant entities, with the direct prudential supervision of less significant entities remaining within the remit of the national authorities.36Thus, it is clear that the applicant proposes an interpretation of Article 70(1) of the SSM Framework Regulation in the light of a requirement that direct prudential supervision by the ECB must be necessary, which is implied by the principle of proportionality — and the principle of subsidiarity — enshrined in Article 5 TEU. It follows that the ECB ought to have ascertained whether prudential supervision by the German authorities afforded achievement of the objectives of the Basic Regulation. Therefore, in so far as the applicant did demonstrate that its profile showed a low degree of risk, the objective of protection of financial stability pursued by the Basic Regulation will be sufficiently achieved by the German authorities’ exercising their supervision. In that light, there was justification for reclassifying the applicant as a ‘less significant’ entity under Article 70(1) of the SSM Framework Regulation.37The ECB and the Commission dispute the merits of that interpretation. They submit inter alia, in essence, that the principles of proportionality and subsidiarity have already been taken into account by the legislature when the Basic Regulation was drafted, by allowing for decentralised implementation of certain of the tasks listed in Article 4(1) of the Basic Regulation by the national authorities in respect of those entities classified as ‘less significant’.38It should be noted at the outset that the applicant’s written pleadings do not contain, either explicitly or implicitly, any plea of illegality of Article 70(1) of the SSM Framework Regulation, alleging that it is contrary to the principles of proportionality or subsidiarity or Article 6 of the Basic Regulation. Thus, in its written pleadings, the applicant opted to direct its line of argument solely at the interpretation of that provision, without questioning its validity.39In order to respond to the questions of interpretation thus raised and determine the exact scope of Article 70(1) of the SSM Framework Regulation, account must be taken not only of its wording but also of its context and of the objectives pursued by the set of rules of which it forms a part (see, to that effect, judgment of 7 June 2005, VEMW and Others, C‑17/03, EU:C:2005:362, paragraph 41 and the case-law cited).40Moreover, where the textual and historical interpretations of a regulation, in particular of one of its provisions, do not permit its precise scope to be assessed, the legislation in question must be interpreted by reference to both its purpose and general structure (see, to that effect, judgments of 31 March 1998, France and Others v Commission, C‑68/94 and C‑30/95, EU:C:1998:148, paragraph 168, and of 25 March 1999, Gencor v Commission, T‑102/96, EU:T:1999:65, paragraph 148).41Moreover, it is equally settled case-law that where it is necessary to interpret a provision of secondary EU law, preference should as far as possible be given to the interpretation which renders the provision consistent with the Treaty and the general principles of EU law (judgments of 4 October 2007, Schutzverband der Spirituosen-Industrie, C‑457/05, EU:C:2007:576, paragraph 22; of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 174; and of 25 November 2009, Germany v Commission, T‑376/07, EU:T:2009:467, paragraph 22).(a) The literal interpretation of Article 70(1) of the SSM Framework Regulation 42As regards the literal interpretation of Article 70(1) of the SSM Framework Regulation, it should be remembered that it is worded as follows:‘Particular circumstances, as referred to in the second and fifth subparagraphs of Article 6(4) of [the Basic Regulation] … exist where there are specific and factual circumstances that make the classification of a supervised entity as significant inappropriate, taking into account the objectives and principles of [the Basic Regulation] and, in particular, the need to ensure the consistent application of high supervisory standards.’43It is clear that the literal interpretation of the provisions of Article 70(1) of the SSM Framework Regulation confirm the position favoured by the ECB in the contested decision.44The wording of Article 70(1) of the SSM Framework Regulation focuses solely on the examination of whether or not the classification of an entity as significant is appropriate and, therefore, its supervision by the ECB alone, in relation to the objectives of the Basic Regulation. No reference is made to an examination of the need for direct supervision of a significant entity by the ECB.45Whilst generally the examination of whether an EU act is appropriate focuses on whether it is suitable for attaining the legitimate objectives pursued by the legislation at issue, the assessment of whether it is necessary consists in ascertaining whether or not it goes beyond what is necessary in order to achieve those objectives (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 67 and the case-law cited).46Therefore, Article 70(1) of the SSM Framework Regulation, referring as it does to ‘specific and factual circumstances that make the classification of a supervised entity as significant inappropriate, taking into account the objectives and principles of [the Basic Regulation]’, must necessarily be understood as suggesting that direct prudential supervision by the ECB, implied by the classification of an entity as ‘significant’, is less able to ensure achievement of the objectives of the Basic Regulation than direct prudential supervision of that entity by the national authorities. On the other hand, a literal interpretation of Article 70(1) of the SSM Framework Regulation does not suggest reclassification of a ‘significant entity’ as ‘less significant’ on the ground that direct supervision by the national authorities under the SSM is just as able to achieve the objectives of the Basic Regulation than supervision by the ECB alone.(b) Interpretation of Article 70(1) of the SSM Framework Regulation in conformity with superior norms of law, including the principles of proportionality and subsidiarity 47In arguing against that literal interpretation of Article 70(1) of the SSM Framework Regulation, the applicant submits, in essence, that, on the one hand, as Article 6(4) of the Basic Regulation confers on national authorities the competence to carry out prudential supervision in respect of certain of the tasks listed in Article 4(1) of the Basic Regulation whilst, on the other, Article 70(1) of the SSM Framework Regulation serves to distribute the exercise of competences delegated to the ECB and held by the national authorities, it should be interpreted in conformity with the principles of subsidiarity and proportionality laid down in Article 5(3) and (4) TEU.48It follows that the term ‘inappropriate’ laid down in Article 70(1) of the SSM Framework Regulation should be construed as excluding prudential supervision by the ECB alone when the objectives of the Basic Regulation may be sufficiently achieved through supervision by the national authorities. In other words, the derogation provided for in that provision applies not only when the objectives of the Basic Regulation would be better achieved through direct prudential supervision by the national authorities, but also when such supervision would be sufficient to achieve them.49As the applicant’s argument is based on the postulate that the national authorities retain their competence under Article 6(4) of the Basic Regulation in respect of the tasks listed in Article 4(1)(b) and (d) to (i) thereof, as regards those entities classified as ‘less significant’, it is appropriate to consider the scope of the competence transferred to the ECB by the Basic Regulation before examining the possibility of interpreting Article 70(1) of the SSM Framework Regulation, as highlighted by the applicant.(1) The scope of the competences transferred to the ECB by the Basic Regulation 50The applicant disputes that there has been a transfer of competence to the ECB with respect to all of the tasks referred to in Article 4(1) of the Basic Regulation and in respect of all entities. It is apparent from a reading of that provision, combined with Article 6(4) of that same regulation, that there was a transfer of competence only with respect to ‘significant’ entities, with the direct prudential supervision of ‘less significant’ entities remaining within the competence of the national authorities, with the exception of the tasks listed in Article 4(1)(a) and (c) of the Basic Regulation. That distribution of competences complies with the principle of implementation of EU law by the Member States as expressed in Article 291(1) TFEU.51The applicant further observes that its analysis of the scope of the competences transferred to the ECB is not only favoured in the doctrine, but is also consistent with the historical background to the adoption of the Basic Regulation. The legislature knowingly dismissed the Commission’s initial proposition — which was based on a transfer of competence to the ECB in regards to prudential supervision of all credit institutions — preferring a solution more in conformity with the principles of subsidiarity and proportionality.52In essence, the applicant submits that as regards, first of all, the issue of the ECB having powers of indirect prudential supervision over less significant entities, including inter alia the possibility of adopting regulations and general guidelines, followed by direct supervision of those entities in respect of the tasks listed in Article 4(1)(a) and (c) of the Basic Regulation and, lastly, the prerogative to exercise direct supervision over certain less significant entities under Article 6(5)(b) of that regulation does not prevent Article 6(4) and (6) thereof from attributing competence for direct supervision of less significant entities to the national authorities.53On the contrary, the ECB, supported by the Commission, takes the view that exclusive competence was transferred to it so that it could carry out all of the prudential tasks referred to in Article 4(1) of the Basic Regulation, with only the implementation of the tasks referred to in Article 4(1)(b) and (d) to (i) of the Basic Regulation in respect of less significant entities being delegated to the national authorities under the supervision of the ECB.54The Court notes, firstly, that it is apparent from the examination of the interaction between Article 4(1) and Article 6 of the Basic Regulation, as discussed in paragraphs 20 to 28 above, that the logic of the relationship between them consists in allowing the exclusive competences delegated to the ECB to be implemented within a decentralised framework, rather than having a distribution of competences between the ECB and the national authorities in the performance of the tasks referred to in Article 4(1) of that regulation. Similarly, under Article 6(4), second subparagraph, of that same regulation the ECB has exclusive competence for determining the ‘particular circumstances’ in which direct supervision of an entity which should fall solely under its supervision might instead be under the supervision of a national authority.55That finding is supported by a reading of the recitals in the preamble to the Basic Regulation.56Firstly, it is apparent from recitals 15 and 28 of the Basic Regulation that only those tasks explicitly entrusted to the ECB fall outside the competence of the Member States and that prudential supervision of financial institutions on grounds other than those listed in Article 4(1) of that regulation continues to fall within the competence of the Member States. It necessarily follows that it is at the stage of the definition of the tasks entrusted to the ECB by Article 4(1) of the Basic Regulation that the competences between the ECB and the national authorities were distributed.57It should further be noted that although recital 28 in the preamble to the Basic Regulation provides a list of the supervisory tasks that are to remain within the remit of the national authorities, it does not include any of the tasks listed in Article 4(1) of the Basic Regulation. Nor does that recital present direct supervision of less significant entities as constituting the exercise of a competence falling within the remit of the national authorities.58Secondly, it should be noted that the supervision of institutions classified as ‘less significant’ is referred to in recitals 38 to 40 in the preamble to the Basic Regulation, more specifically directly after recital 37 therein, which states that ‘national competent authorities should be responsible for assisting the ECB in the preparation and implementation of any acts relating to the exercise of the ECB supervisory tasks’ and that ‘[t]his should include, in particular, the ongoing day-to-day assessment of a credit institution’s situation and related on-site verifications’. The arrangement of the recitals of the Basic Regulation suggests that direct prudential supervision by the national authorities under the SSM was envisaged by the Council of the European Union as a mechanism of assistance to the ECB rather than the exercise of autonomous competence.59Secondly, it should also be noted that the ECB retains important prerogatives even when the national authorities performs the supervisory tasks laid down in Article 4(1)(b) and (d) to (i) of the Basic Regulation, and that the existence of such prerogatives is indicative of the subordinate nature of the intervention by the national authorities in the performance of those tasks.60Thus, under Article 6(5)(a) of the Basic Regulation, the ECB is to issue ‘regulations, guidelines or general instructions to national competent authorities, according to which the tasks defined in Article 4 excluding points (a) and (c) of paragraph 1 thereof are performed and supervisory decisions are adopted by national competent authorities’.61Although it is true that that subordination does not include the possibility for the ECB to issue individual guidelines to a national authority, that is compensated for by the possibility offered by Article 6(5)(b) of the Basic Regulation to remove direct prudential supervision of an entity from the competence of a national authority. It should be noted in that regard that the terms employed in that provision that the exercise of that prerogative calls for broad discretion conferred on the ECB, stating as it does that ‘when necessary to ensure consistent application of high supervisory standards, the ECB may at any time, on its own initiative after consulting with national competent authorities or upon request by a national competent authority, decide to exercise directly itself all the relevant powers for one or more credit institutions referred to in paragraph 4 …’.62Thirdly, the competences conferred on the ECB are also evident from the comparison of the provisions allowing for adjustments to the criterion for distribution of the roles between the ECB and the national authorities relating to the size of the supervised entity. Whereas, for the reasons set out in paragraph 61 above, Article 6(5)(b) of the Basic Regulation provides broadly for the possibility for the ECB to remove competence from a national authority, Article 6(4), second subparagraph, of that same regulation uses, on the contrary, the more restrictive formulation of ‘particular circumstances’ for the purposes of envisaging the possibility of direct supervision of an entity which should be classified as ‘significant’ being entrusted to a national authority and entrusts the ECB with exclusive competence to determine the content.63It follows from all the foregoing that the Council has delegated to the ECB exclusive competence in respect of the tasks laid down in Article 4(1) of the Basic Regulation and that the sole purpose of Article 6 of that same regulation is to enable decentralised implementation under the SSM of that competence by the national authorities, under the control of the ECB, in respect of the less significant entities and in respect of the tasks listed in Article 4(1)(b) and (d) to (i) of the Basic Regulation, whilst conferring on the ECB exclusive competence for determining the content of the concept of ‘particular circumstances’ within the meaning of Article 6(4), second subparagraph, of that same regulation, which was implemented through the adoption of Articles 70 and 71 of the SSM Framework Regulation.64That conclusion cannot be invalidated by the arguments put forward by the applicant, inter alia the fact that the insertion of Article 6 into the Basic Regulation was due to an amendment made by the Council to the Commission’s initial proposal. Although such an amendment may be indicative of the Council’s willingness to associate the national authorities with the implementation of those tasks, it does not allow any conclusions to be drawn as to maintaining prudential supervisory competence for the national authorities with regards to certain of the tasks referred to in Article 4(1) of the Basic Regulation. Moreover, the various statements made by politicians and administrative managers referred to by the applicant merely reflect expressions of personal opinions.(2) Interpretation of Article 70(1) of the SSM Framework Regulation in conformity with the principle of subsidiarity 65It follows from the examination of the competences transferred to the ECB by the Basic Regulation that, should the applicant’s argument be construed as being based on an interpretation of Article 70(1) of the SSM Framework Regulation in conformity with the principle of subsidiarity, it cannot be upheld. Although, when it does apply, the principle of subsidiarity involves inter alia a determination of whether the proposed action can be better achieved by the European Union or whether it can be achieved just as effectively by the Member States, it must be borne in mind that under Article 5(3) TEU it applies only in areas which do not fall within exclusive EU competence (see, to that effect, judgment of 18 June 2015, Estonia v Parliament and Council, C‑508/13, EU:C:2015:403, paragraph 44 and the case-law cited). Accordingly, it is irrelevant for the interpretation of Article 70(1) of the SSM Framework Regulation or Article 6(4) of the Basic Regulation, which, for the reasons set out in paragraphs 50 to 63 above, concern solely the detailed rules for the decentralised exercise of the ECB’s exclusive competence.(3) Interpretation of Article 70(1) of the SSM Framework Regulation in conformity with the principle of proportionality 66According to Article 5(4) TEU, under the principle of proportionality, the content and form of Union action is not to exceed what is necessary to attain the objectives of the Treaties. The EU institutions are to apply the principle of proportionality as laid down in the Protocol on the application of the principles of subsidiarity and proportionality, annexed to the Treaty on the Functioning of the European Union.67It should also be borne in mind that, according to the settled case-law, in accordance with the principle of proportionality, which is one of the general principles of EU law, the acts adopted by EU institutions must be appropriate for attaining the legitimate objectives pursued by the legislation at issue and must not exceed the limits of what is necessary in order to achieve those objectives; where there is a choice between several appropriate measures, recourse must be had to the least onerous; and the disadvantages caused must not be disproportionate to the aims pursued (see judgment of 4 May 2016, Philip Morris Brands and Others, C‑547/14, EU:C:2016:325, paragraph 165 and the case-law cited).68It must also be borne in mind that the assessment of the proportionality of a measure must be reconciled with compliance with the discretion that may have been conferred on the EU institutions at the time it was adopted (see judgment of 12 December 2006, Germany v Parliament and Council, C‑380/03, EU:C:2006:772, paragraph 145 and the case-law cited).69The applicant submits, in essence, that the requirement of necessity of the Union action arising from the principle of proportionality entails that the implementation of the Union’s exclusive competences be done in a manner that leaves the broadest possible latitude to the exercise of national competences.70In support of its argument, it refers to the Opinion of Advocate General Kokott in Toshiba Corporation and Others (C‑17/10, EU:C:2011:552, paragraph 90), in which the fundamental and constitutional importance of the principle of proportionality in the Treaty system was highlighted in support of the conclusion that the uniform application of EU competition law did not require that the competition authorities of the Member States not be allowed to apply their national ‘antitrust’ legislation permanently and definitively, as it was sufficient to withdraw that competence from them for the duration of a procedure initiated by the Commission and to require them to comply with the Commission’s decision once that procedure had been completed.71Suffice it to observe that that analysis was highlighted in a legal context that is not comparable to the one before the Court in the present case.72What was at issue in that case was the impact of the Commission’s exercise of its competences to implement EU competition law on the national competition authorities’ application of their national competition law. Yet in the present case, for the reasons set out in paragraphs 50 to 64 above, under the SSM the national authorities are acting within the scope of decentralised implementation of an exclusive competence of the Union, not the exercise of a national competence.73Therefore, the only competence liable to be affected by the exercise of direct prudential supervision by the ECB is the Member States’ competence in principle for the implementation of EU law in their legal order, underscored in Article 291(1) TFEU. That provision states that, according to the institutional system of the Union and the rules governing between the Union and the Member States, it is for the latter, in the absence of any contrary provision of EU law, to ensure that EU law is implemented within their territory (see, to that effect and by analogy, judgment of 23 November 1995, Nutral v Commission, C‑476/93 P, EU:C:1995:401, paragraph 14).74It is clear, however, that the preservation of that competence cannot involve an interpretation of Article 70(1) of the SSM Framework Regulation as advocated by the applicant, which would require ascertaining on a case-by-case basis in respect of an institution classified as significant under the criteria laid down in Article 6(4) of the Basic Regulation whether its objectives may be just as well attained through direct supervision by the national authorities.75That interpretation amounts to calling into question the balance provided for in the Basic Regulation, involving as it does a case-by-case determination of whether, despite the application of the criteria set out in Article 6(4) of the Basic Regulation, a significant institution should come under the direct supervision of the national authorities on the ground that they are better able to attain the objectives of the Basic Regulation.76It is clear that such an examination would run directly counter to two factors that play a fundamental role in the logic of Article 6(4) of the Basic Regulation, being, firstly, the principle that significant institutions come under the sole supervision of the ECB and, secondly, the existence of specific alternative criteria affording the classification of a financial institution. Under Article 6(4), second subparagraph, (i), they include the threshold of EUR 30 billion of total value of the assets of the financial institution considered, which criterion is fulfilled by the applicant.77In any event, it should be noted that the legislature reconciled the role of the Member States in the implementation of EU law with the fulfilment of the objectives of the Basic Regulation in Article 6 thereof by creating the SSM.78Firstly, as is apparent from recitals 13 and 15 of the Basic Regulation, it aims, inter alia, at protecting the stability of the financial system of the Union through specific tasks concerning policies relating to the supervision of credit institutions, tasks that the ECB is well placed to perform as the euro area’s central bank with extensive expertise in macroeconomic and financial stability issues.79Secondly, the Basic Regulation, far from excluding the Member States from the exercise of the prudential tasks devolved to the ECB, associates them with it by allowing, under the SSM and through Article 6(4) and (6), that most of the tasks referred to under Article 4(1) may be implemented on a decentralised basis in respect of less significant entities.80It follows from all the foregoing that Article 70(1) of the SSM Framework Regulation, in referring to ‘specific and factual circumstances that make the classification of a supervised entity as significant inappropriate, taking into account the objectives and principles of [the Basic Regulation] and, in particular, the need to ensure the consistent application of high supervisory standards’, must be understood as referring solely to specific factual circumstances entailing that direct prudential supervision by the national authorities is better able to attain the objectives and the principles of the Basic Regulation, in particular the need to guarantee consistent application of high prudential supervisory standards.81It follows that the ECB did not commit the error of law alleged in finding, in essence, that the application of Article 70(1) of the SSM Framework Regulation could rule out classification of the applicant as a significant entity only if it was demonstrated that direct prudential supervision by the German authorities would be better able to ensure attainment of the objectives of the Basic Regulation than supervision by the ECB.82This conclusion is not invalidated by the applicant’s argument alleging that the ECB, in other decisions having led to reclassifications, did not apply the criteria to which it referred in the contested decision.83Should such an argument be relied on in order to demonstrate that the ECB was incorrect in refusing to examine whether direct prudential supervision by the national authorities was sufficient for attaining the objectives of the Basic Regulation, it should be rejected at the outset, since it has been found that the ECB did not err in law in its interpretation of Article 70(1) of the SSM Framework Regulation.84If the intention is that this argument must be understood as alleging, in essence, infringement of the principle of equal treatment to the applicant’s detriment, it cannot be upheld. It is appropriate to recall that the principle of equal treatment must be reconciled with the principle of legality and thus a person may not rely, in support of his claim, on an unlawful act committed in favour of a third party (see, to that effect, judgment of 14 April 2011, Visa Europe and Visa International Service v Commission, T‑461/07, EU:T:2011:181, paragraph 219 and the case-law cited). Thus, even if the ECB was incorrect in reclassifying the entities referred to by the applicant, such an error has no bearing on the merits of the contested decision to refuse reclassification of the applicant as a ‘less significant’ entity.85The present complaint must therefore be rejected.(c) The complaint alleging failure to examine the specific factual circumstances and the objectives of the Basic Regulation 86The applicant in essence criticises the ECB for having found that its classification as a significant entity was appropriate, irrespective of the examination of the specific factual circumstances and without taking account of the objectives and principles of the Basic Regulation.87It is sufficient to note in that regard that, for the purpose of requesting review of the decision of 1 September 2014, the applicant based its argument on the alleged adequacy of the exercise of prudential supervision by the German authorities in the light of its allegedly weak risk profile.88It is apparent from a reading the applicant’s letters of 10 July 2014 and 6 October 2014 that its argument was based solely on the lack of need for prudential supervision by the ECB in order to ensure consistent application of high supervisory standards, without its being argued that national supervision would be better able to attain those objectives.89Therefore, having regard to the wording of Article 70(1) of the SSM Framework Regulation, the ECB could legitimately find that such a line of argument was irrelevant, without its being necessary to examine whether the factual circumstances alleged by the applicant were true or ascertaining whether supervision of the applicant by the German authorities was liable to fulfil the objectives of the Basic Regulation.90This complaint must therefore be rejected.(d) The complaint alleging error of law in the interpretation of the concept of ‘particular circumstances ’ 91The applicant also criticises the ECB for having conducted a ‘two-tier examination’ in finding, first of all, that there were particular circumstances and, secondly, that they make the ECB’s prudential supervision inappropriate, contrary to the wording of Article 70(1) of the SSM Framework Regulation.92It should be borne in mind that, under Article 70(1) of the SSM Framework Regulation, ‘[p]articular circumstances, as referred to in the second and fifth subparagraphs of Article 6(4) of [the Basic Regulation] … exist where there are specific and factual circumstances that make the classification of a supervised entity as significant inappropriate, taking into account the objectives and principles of the SSM Regulation and, in particular, the need to ensure the consistent application of high supervisory standards’.93Article 71(1) of the SSM Framework Regulation states that ‘[w]hether particular circumstances exist that justify classifying what would otherwise be a significant supervised entity as less significant shall be determined on a case-by-case basis and specifically for the supervised entity or supervised group concerned, but not for categories of supervised entities’.94The necessary reading from those two provisions is that the determination of whether there are particular circumstances must be made in the light of the factual circumstances specific to the supervised entity.95In the contested decision, the ECB found, ‘even if the ECB should find that particular circumstances as referred to in Article 6(4) of the Basic Regulation were liable to be applied to the supervised entity, the ECB would still have to ascertain whether such particular circumstances are such as to justify its classification as a less significant entity’.96It is clear that should the passage of the contested decision referred to in paragraph 95 above have to be understood as confusing the concept of ‘specific factual circumstances’ found in Article 70(1) of the SSM Framework Regulation and applicable in order to consider whether or not the classification of an entity as significant is inappropriate, with that of ‘particular circumstances’, used in Article 6(4) of the Basic Regulation and which the purpose of Article 70(1) of the SSM Framework Regulation is to specify, then it is legally incorrect.97In so reasoning, the ECB establishes as separate conditions the demonstration of whether there are ‘particular circumstances’ and the application of Article 70(1) of the SSM Framework Regulation. It follows that particular circumstances within the meaning of Article 6(4) of the Basic Regulation do not in themselves afford justification of the reclassification of a ‘significant’ entity as ‘less significant’. It is also necessary that the criteria of Article 70(1) of the SSM Framework Regulation be fulfilled.98That is not the logic inherent in the articulation of those two provisions. The presence of particular circumstances suffices to justify the reclassification of an entity. However, in order to verify their existence, Article 70(1) of the SSM Framework Regulation must be applied.99That passage of the contested decision is, therefore, vitiated by an error of law, which however has no bearing on its legality, as that passage must be viewed as having been put forward for the sake of completeness, as shown by the use of the conditional tense. The ECB does not acknowledge that there are ‘particular circumstances’, but merely gives its opinion on the potential impact of there being such circumstances, supposing they are present. This complaint must therefore be rejected in any event.100In the light of the foregoing, the first plea in law must be rejected.B. Second plea: manifest errors of assessment 101The applicant submits that the contested decision is vitiated by manifest errors of assessment.102Firstly, direct prudential supervision by the ECB is not necessary in order to attain the objectives of the Basic Regulation, consisting in ensuring the stability of financial markets, the safety and solidity of credit institutions and the protection of depositors. Secondly, direct prudential supervision by the ECB is not necessary in order to safeguard the objective of consistent application of high prudential supervisory standards. Thirdly, nor is direct prudential supervision by the ECB necessary in the light of other objectives of the Basic Regulation. Fourthly, direct prudential supervision of the applicant by the national authority complies with the principles of the Basic Regulation. Fifthly, even from the perspective of the incorrect assessment criterion employed by the ECB, the contested decision is vitiated by manifest errors of assessment.103The ECB, supported by the Commission, contends that the present plea should be rejected.104It should be noted at the outset that the essence of the line of argument put forward by the applicant under the present plea is based on the postulate that the objectives of the Basic Regulation and the consistent application of high prudential supervisory standards can be attained through direct supervision by the German authorities. The applicant insists in its written pleadings that it was manifestly incorrect to maintain the classification as a significant entity, given the lack of need for prudential supervision by the ECB.105It is clear that such a line of argument is completely irrelevant, given that, for the reasons set out in the examination of the first plea, Article 70(1) of the SSM Framework Regulation cannot be interpreted as including a condition of assessment of the need for direct prudential supervision of an entity to be classified as ‘significant’ under Article 6(4) of the Basic Regulation.106It is only in the alternative that the applicant submits that, ‘even using the ECB’s incorrect assessment criterion, the contested decision is vitiated by manifest errors of assessment’.107In support of that statement, the applicant refers, firstly, to the content of its letters of 10 July 2014 and 6 October 2014.108However, for the reasons set out in paragraphs 87 to 89 above, it is noteworthy that the applicant did not argue therein that national supervision would be better able to attain the objectives of the Basic Regulation than direct supervision by the ECB.109Secondly, in the reply the applicant submits, in essence, that prudential supervision by the German authorities would be better able to attain the objective of consistent application of high prudential supervisory standards referred to in Article 70(1) of the SSM Framework Regulation. It points out in that connection that it is subject to various regulatory instruments, being not only Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1), as rectified (OJ 2013 L 208, p. 68, and OJ 2013 L 321, p. 6), and the German law on the organisation of the banking sector, but also the Law on the regional credit bank of Baden-Württemberg, as well as multiple supervisory authorities, being not only the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) (Federal Financial Supervisory Authority, Germany), the Bundesbank (German Federal Bank) and the ECB, but also the Ministry of Finance, Baden-Württemberg.110Thus the applicant submits, in essence, that the diversity of legal frameworks and supervisory authorities forming the parameters of its activity means that the national authorities are better able to cooperate amongst themselves in order to ensure consistent application of prudential supervisory standards than with the ECB.111Suffice it to note in that regard that the applicant does not highlight any arrangement or collaboration between the authorities of Baden-Württemberg and the German authorities that might make cooperation easier with them than with the ECB.112The present appeal must therefore be rejected.C. The third plea: infringement of the obligation to state reasons 113The applicant submits that the ECB failed to fulfil its obligation to state reasons at the time of adoption of the contested decision. It observes that the obligation to state reasons for the contested decision is clearly stated in Article 33(2), Article 39(1) and Article 44(1) of the SSM Framework Regulation and in Article 22(2), second subparagraph, of the Basic Regulation and the second paragraph of Article 296 TFEU.114Firstly, the statement of reasons in the contested decision lacks consistency and is self-contradictory, which makes it impossible to infer which criterion was applied by the ECB. The interpretation of the concept of ‘inappropriateness’ favoured by the ECB in its written pleadings is not found in the contested decision and in any event is self-contradictory.115Secondly, the applicant submits that the statement of reasons in the contested decision merely sets out simple, unsubstantiated statements and negations. It criticises, inter alia, the ECB for having failed to provide reasons for its assertion that the absence of risk for the stability of the markets or creditors is not a particular circumstance. Similarly, the contested decision does not explain why supervision by the German authorities would not be better able to attain the objectives of the Basic Regulation.116Thirdly, the applicant criticises the ECB for having failed to examine the arguments put forward by it during the administrative procedure, alleging specific factual circumstances making its classification as a significant entity inappropriate. It submits that a detailed explanation of the reasons why the ECB did not find those arguments relevant was called for, especially since it has discretion in the application of Article 70(1) of the SSM Framework Regulation. No such explanation is apparent from either the contested decision or its surrounding context.117118Under Article 22(2), second subparagraph, of the Basic Regulation, decisions of the ECB are to state the reasons on which they are based.119Under Article 33(1) and (2) of the SSM Framework Regulation, an ECB supervisory decision is to be accompanied by a statement of the reasons for that decision. The statement of reasons is to contain the material facts and legal reasons on which the ECB prudential supervisory decision is based.120Article 39(1) of the same SSM Framework Regulation provides that ‘[a] supervised entity shall be considered a significant supervised entity if the ECB so determines in an ECB decision addressed to the relevant supervised entity …, explaining the underlying reasons for such decision’.121Provisions such as this merely reiterate, in the body of the Basic Regulation and of the SSM Framework Regulation, the obligation to state reasons by which EU institutions and bodies are bound under the second paragraph of Article 296 TFEU.122The obligation to state reasons laid down in Article 296 TFEU is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure (see judgment of 11 July 2013, Ziegler v Commission, C‑439/11 P, EU:C:2013:513, paragraph 114 and the case-law cited).123In that vein, first of all, the statement of reasons required under Article 296 TFEU must be appropriate to the measure in question and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted that measure, in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to carry out its review. As regards, in particular, the reasons given for individual decisions, the purpose of the obligation to state the reasons on which an individual decision is based is, therefore, in addition to permitting review by the Courts, to provide the person concerned with sufficient information to know whether the decision may be vitiated by an error enabling its validity to be challenged (see judgment of 11 July 2013, Ziegler v Commission, C‑439/11 P, EU:C:2013:513, paragraph 115 and the case-law cited).124Furthermore, the requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the statement of reasons to specify all the relevant matters of fact and law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment of 11 July 2013, Ziegler v Commission, C‑439/11 P, EU:C:2013:513, paragraph 116 and the case-law cited).125In the present case, the Administrative Board of Review’s Opinion is part of the context of which the contested decision forms a part and may, therefore, be taken into account for the purpose of determining whether that decision contained a sufficient statement of reasons as referred to in the case-law cited in paragraph 124 above.126Article 24 of the Basic Regulation, entitled ‘Administrative Board of Review’, states in paragraph 1 that ‘[t]he ECB shall establish an Administrative Board of Review for the purposes of carrying out an internal administrative review of the decisions taken by the ECB in the exercise of the powers conferred on it by this Regulation after a request for review [is made]’ and that ‘[t]he scope of the internal administrative review shall pertain to the procedural and substantive conformity with this Regulation’. Paragraph 7 of that article provides:‘After ruling on the admissibility of the review, the Administrative Board of Review shall express an opinion within a period appropriate to the urgency of the matter and no later than two months from the receipt of the request and remit the case for preparation of a new draft decision to the Supervisory Board. The Supervisory Board shall take into account the opinion of the Administrative Board of Review and shall promptly submit a new draft decision to the Governing Council. The new draft decision shall abrogate the initial decision, replace it with a decision of identical content, or replace it with an amended decision. The new draft decision shall be deemed adopted unless the Governing Council objects within a maximum period of ten working days.’127It necessarily follows that, in so far as the contested decision ruled in conformity with the proposal set out in the Administrative Board of Review’s Opinion, it is an extension of that opinion and the explanations contained therein may be taken into account for the purpose of determining whether the contested decision contains a sufficient statement of reasons.128Firstly, for the reasons set out in paragraphs 31 to 32 above and contrary to the applicant’s assertions, it is apparent from a combined reading of the contested decision and the Administrative Board of Review’s Opinion that not only did the ECB consider that there could be ‘particular circumstances’ only if attainment of the objectives of the Basic Regulation could be better safeguarded through direct prudential supervision by the national authorities, it also found that the applicant had not demonstrated that that condition was fulfilled in respect of it. It should also be noted that both the Administrative Board of Review’s Opinion and the contested decision contain a summary of the applicant’s arguments.129It is also clear that the analysis of the first plea shows that the applicant was able to understand the ECB’s reasoning, since it challenged it through that plea, and that the Court has been able to conduct judicial review of the merits of the reasons in the contested decision.130Secondly, regarding the applicant’s assertion alleging insufficiency of the response to its argument put forward during the administrative procedure, it is apparent from paragraphs 87 to 89 and 107 to 108 above that during that procedure the applicant merely attempted to establish that direct prudential supervision by the ECB was not necessary on the ground that supervision by the German authorities would be sufficient in order to attain the objectives of the Basic Regulation, without attempting to show that it would be better able to attain those objectives. Therefore, since that argument is clearly irrelevant in the light of the interpretation favoured by the ECB, it cannot be held that the ECB was bound to provide a detailed statement of reasons for its refutation, as the applicant could easily infer them from the contested decision and the Administrative Board of Review’s Opinion.131Thirdly, regarding the applicant’s complaint alleging that the reasons in the contested decision were self-contradictory, it is true that the statement of the reasons for a measure must be logical and contain no internal inconsistency that would prevent a proper understanding of the reasons underlying the measure (judgment of 29 September 2011, Elf Aquitaine v Commission, C‑521/09 P, EU:C:2011:620, paragraph 151).132However, it is clear that the statement of reasons in the contested decision is not self-contradictory as alleged.133For the reasons set out in paragraphs 31 to 34 above, and contrary to what the applicant appears to argue, there is no contradiction between, on the one hand, the reference in the Administrative Board of Review’s Opinion to the fact that the presence of ‘particular circumstances’ means that the attainment of the objectives of the Basic Regulation, including the need to ensure the consistent application of high prudential supervisory standards, must be better ensured through direct supervision by the national authorities and, on the other, the reference in the contested decision to the fact that direct supervision of the applicant by the ECB must be contrary to the objectives of the Basic Regulation in order for Article 70(1) of the SSM Framework Regulation to apply.134Nor is the assertion that the reasons set out in the contested decision were self-contradictory in suggesting that the presence of particular circumstances was sufficient to justify application of Article 70(1) of the SSM Framework Regulation. It was noted in paragraph 99 above that that reason in the contested decision was included merely for the sake of completeness. That passage was therefore not liable to prevent a proper understanding of the criterion applied by the ECB in the contested decision.135It follows from the above that the contested decision contains a sufficient statement of reasons.136The third plea in law must therefore be rejected.D. The fourth plea: misuse of powers by the ECB in unlawfully failing to exercise its discretion 137The applicant criticises the ECB for having failed to exercise its discretion in the application of Article 70(1) of the SSM Framework Regulation in respect of it, which amounts to a misuse of powers. It observes that that provision does not contain an exhaustive list of the reasons which the ECB may take into consideration. It was therefore incorrect in finding in the contested decision that the arguments put forward by the applicant led to reasons not provided for in that regulation being taken into account.138The ECB, supported by the Commission, contends that this plea should be rejected.139Although it is settled case-law that when discretion is conferred on an institution, it must exercise that power fully (see, to that effect, judgments of 14 July 2011, Freistaat Sachsen v Commission, T‑357/02 RENV, EU:T:2011:376, paragraph 45, and of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 90). Thus, the Community institutions which have adopted the act in question must be able to show before the Court that in adopting the act they actually exercised their discretion, which presupposes the taking into consideration of all the relevant factors and circumstances of the situation the act was intended to regulate (judgment of 7 September 2006, Spain v Council, C‑310/04, EU:C:2006:521, paragraph 122).140However, it should be remembered here that, as pointed out in paragraphs 87 to 89 above, the argument put forward by the applicant during the administrative procedure was intended solely to establish that the objectives of the Basic Regulation could be attained through direct supervision of the applicant by the national authorities and that, for the reasons set out in connection with the analysis of the first plea, such an argument is irrelevant for the application of Article 70(1) of the SSM Framework Regulation.141The ECB cannot, therefore, be criticised for having failed to exercise its discretion by rejecting at the outset an argument that is completely irrelevant.142The fourth plea must therefore be rejected.E. The fifth plea: infringement of the ECB’s obligation to examine and take into consideration all relevant circumstances of the case 143The applicant observes that, under Article 28(2) of the SSM Framework Regulation, the ECB must take account of all relevant circumstances. It also refers to the ECB’s obligation to examine and take into consideration, carefully and impartially, all elements of fact and of law that are relevant to the case, which arises from the right to good administration enshrined in Article 41(1) of the Charter of Fundamental Rights of the European Union.144It criticises the ECB for having failed to take into account the circumstances alleging: (i) the practical impossibility in which it found itself in dealing with a situation of insolvency; (ii) that it did not meet any of the criteria of Article 6(4) of the Basic Regulation, apart from size; and (iii) that the prudential supervision by the German authorities had not been shown to have any shortcomings in the past.145146It is clear from settled case-law that, where the institutions of the European Union have a power of appraisal, respect for the rights guaranteed by the legal order of the European Union in administrative procedures is of even more fundamental importance.147The guarantees afforded by EU law in administrative proceedings include, in particular, the principle of sound administration, which is enshrined in Article 41 of the Charter of Fundamental Rights, which entails the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (judgment of 30 September 2003, Atlantic Container Line and Others v Commission, T‑191/98 and T‑212/98 to T‑214/98, EU:T:2003:245, paragraph 404).148That obligation is reiterated in Article 28(2) of the SSM Framework Regulation, which states that, ‘[i]n its assessment, the ECB shall take account of all relevant circumstances’.149However, for reasons similar to those set out in paragraph 140 above, it is sufficient to state that the circumstances which the ECB is criticised for having failed to take into account were irrelevant in the light of the wording of Article 70(1) of the SSM Framework Regulation and that, consequently, the ECB cannot be successfully criticised for having failed to take such circumstances into account in the application of that provision.150The fifth plea must therefore be rejected as unfounded and, accordingly, the action in its entirety must be dismissed.IV. Costs 151Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those of the ECB in accordance with the latter’s pleadings.152In accordance with Article 138(1) of the Rules of Procedure, the institutions which have intervened in the proceedings are to bear their own costs. The Commission must therefore bear its own costs.On those grounds,THE GENERAL COURT (Fourth Chamber, Extended Composition)hereby: 1. Dismisses the action; 2. Orders the Landeskreditbank Baden-Württemberg — Förderbank to bear its own costs and to pay those incurred by the European Central Bank; 3. Orders the European Commission to bear its own costs. PrekLabuckaSchwarczKreuschitzSchalinDelivered in open court in Luxembourg on 16 May 2017.[Signatures]( *1 ) Language of the case: German. | 22384-21cb8fe-4bfb | EN |
The courts of one Member State may review the legality of requests for tax information sent by another Member State | 16 May 2017 ( *1 )‛Reference for a preliminary ruling — Directive 2011/16/EU — Administrative cooperation in the field of taxation — Article 1(1) — Article 5 — Request for information sent to a third party — Refusal to respond — Penalty — Concept of ‘foreseeable relevance’ of the information requested — Review by the requested authority — Review by a court — Scope — Charter of Fundamental Rights of the European Union — Article 51 — Implementation of EU law — Article 47 — Right to an effective judicial remedy — Access of the court and of the third party to the request for information sent by the requesting authority’In Case C‑682/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour administrative (Administrative Court, Luxembourg), made by decision of 17 December 2015, received at the Court on 18 December 2015, in the proceedings Berlioz Investment Fund SA v Directeur de l’administration des contributions directes, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, M. Ilešič, L. Bay Larsen, T. von Danwitz, M. Berger and A. Prechal, Presidents of Chambers, A. Arabadjiev, C. Toader, M. Safjan, D. Šváby, E. Jarašiūnas, C.G. Fernlund (Rapporteur), C. Vajda and S. Rodin, Judges,Advocate General: M. Wathelet,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 8 November 2016,after considering the observations submitted on behalf of:—Berlioz Investment Fund SA, by J.‑P. Drescher, avocat,the Luxembourg Government, by A. Germeaux and D. Holderer, acting as Agents, and by P.‑E. Partsch and T. Evans, avocats,the Belgian Government, by J.-C. Halleux and M. Jacobs, acting as Agents,the German Government, by T. Henze, acting as Agent,the French Government, initially by S. Ghiandoni, acting as Agent, and subsequently by E. de Moustier, acting as Agent,the Italian Government, by G. Palmieri, acting as Agent, and by P. Garofoli, avvocato dello Stato,the Polish Government, by B. Majczyna, acting as Agent,the Finnish Government, by S. Hartikainen, acting as Agent,the European Commission, by R. Lyal, J.‑F. Brakeland, H. Krämer and W. Roels, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 10 January 2017,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 1(1) and Article 5 of Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC (OJ 2011 L 64, p. 1), and of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The request has been made in proceedings between Berlioz Investment Fund SA (‘Berlioz’) and the directeur de l’administration des contributions directes (Director of the Direct Taxation Administration) (Luxembourg) concerning a pecuniary penalty which the latter imposed on Berlioz for its refusal to respond to a request for information in the context of an exchange of information with the French tax administration.Legal context EU law The Charter 3Article 47 of the Charter, entitled ‘Right to an effective remedy and to a fair trial’, provides:‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. Everyone shall have the possibility of being advised, defended and represented.…’ Directive 2011/16 4Recitals 1, 2, 6 to 9 and 19 of Directive 2011/16 state:‘(1)... There is a tremendous development of the mobility of taxpayers, of the number of cross-border transactions and of the internationalisation of financial instruments, which makes it difficult for Member States to assess taxes due properly. This increasing difficulty affects the functioning of taxation systems and entails double taxation, which itself incites tax fraud and tax evasion …(2)... In order to overcome the negative effects of this phenomenon, it is indispensable to develop new administrative cooperation between the Member States’ tax administrations. There is a need for instruments likely to create confidence between Member States, by setting up the same rules, obligations and rights for all Member States.…(6)... To this end, this new Directive is considered to be the proper instrument in terms of effective administrative cooperation.(7)This Directive builds on the achievements of [Council] Directive 77/799/EEC [of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States in the field of direct taxation (OJ 1977 L 336, p. 15)] but provides for clearer and more precise rules governing administrative cooperation between Member States where necessary, in order to establish, especially as regards the exchange of information, a wider scope of administrative cooperation between Member States. …(8)... Provision should … be made to bring about more direct contacts between services with a view to making cooperation more efficient and faster. …(9)Member States should exchange information concerning particular cases where requested by another Member State and should make the necessary enquiries to obtain such information. The standard of “foreseeable relevance” is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Member States are not at liberty to engage in “fishing expeditions” or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. While Article 20 of this Directive contains procedural requirements, those provisions need to be interpreted liberally in order not to frustrate the effective exchange of information.(19)The situations in which a requested Member State may refuse to provide information should be clearly defined and limited, taking into account certain private interests which should be protected as well as the public interest.’5Article 1(1) of Directive 2011/16 provides as follows:‘This Directive lays down the rules and procedures under which the Member States shall cooperate with each other with a view to exchanging information that is foreseeably relevant to the administration and enforcement of the domestic laws of the Member States concerning the taxes referred to in Article 2.’6Article 5 of the directive provides:‘At the request of the requesting authority, the requested authority shall communicate to the requesting authority any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries.’7Article 16(1) of the directive is worded as follows:‘Information communicated between Member States in any form pursuant to this Directive shall be covered by the obligation of official secrecy and enjoy the protection extended to similar information under the national law of the Member State which received it. …8Article 17 of the directive, entitled ‘Limits’, provides:‘1. A requested authority in one Member State shall provide a requesting authority in another Member State with the information referred to in Article 5 provided that the requesting authority has exhausted the usual sources of information which it could have used in the circumstances for obtaining the information requested, without running the risk of jeopardising the achievement of its objectives.2. This Directive shall impose no obligation upon a requested Member State to carry out enquiries or to communicate information, if it would be contrary to its legislation to conduct such inquiries or to collect the information requested for its own purposes.3. The competent authority of a requested Member State may decline to provide information where the requesting Member State is unable, for legal reasons, to provide similar information.4. The provision of information may be refused where it would lead to the disclosure of a commercial, industrial or professional secret or of a commercial process, or of information whose disclosure would be contrary to public policy.5. The requested authority shall inform the requesting authority of the grounds for refusing a request for information.’9Article 18 of Directive 2011/16, entitled ‘Obligations’, states:‘1. If information is requested by a Member State in accordance with this Directive, the requested Member State shall use its measures aimed at gathering information to obtain the requested information, even though that Member State may not need such information for its own tax purposes. That obligation is without prejudice to paragraphs 2, 3 and 4 of Article 17, the invocation of which shall in no case be construed as permitting a requested Member State to decline to supply information solely because it has no domestic interest in such information.2. In no case shall Article 17(2) and (4) be construed as permitting a requested authority of a Member State to decline to supply information solely because this information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.10Article 20(1) of Directive 2011/16 provides, with regard to requests for information and for administrative enquiries pursuant to Article 5 of that directive, for the use, as far as possible, of a form adopted by the Commission. Article 20(2) is worded as follows:‘The standard form referred to in paragraph 1 shall include at least the following information to be provided by the requesting authority:(a)the identity of the person under examination or investigation;(b)the tax purpose for which the information is sought.The requesting authority may, to the extent known and in line with international developments, provide the name and address of any person believed to be in possession of the requested information as well as any element that may facilitate the collection of information by the requested authority.’11Article 22 of Directive 2011/16 provides, in paragraph (1)(c):‘Member States shall take all necessary measures to:(c)ensure the smooth operation of the administrative cooperation arrangements provided for in this Directive.’ Luxembourg law The Law of 29 March 2013 12Directive 2011/16 was transposed into Luxembourg law by the loi du 29 mars 2013 portant transposition de la directive 2011/16 et portant 1) modification de la loi générale des impôts, 2) abrogation de la loi modifiée du 15 mars 1979 concernant l’assistance administrative internationale en matière d’impôts directs (Law of 29 March 2013 transposing Directive 2011/16 and (1) amending the General Tax Law; and (2) repealing the amended Law of 15 March 1979 on international administrative assistance in the field of direct taxation) (Mémorial A 2013, p. 756; ‘the Law of 29 March 2013’).13Article 6 of the Law of 29 March 2013 provides:‘At the request of the requesting authority, the Luxembourg requested authority shall communicate to it the information that is foreseeably relevant for the administration and application of the domestic legislation of the requesting Member State relating to the taxes referred to in Article 1 that it has in its possession or that it obtains as a result of administrative enquiries.’14Article 8(1) of the Law of 29 March 2013 provides:‘The Luxembourg requested authority shall effect the communications referred to in Article 6 as quickly as possible, and no later than six months from the date of receipt of the request. However, where the Luxembourg requested authority is already in possession of the information concerned, the communications shall be effected within two months of that date.’ The Law of 25 November 2014 15The loi du 25 novembre 2014 prévoyant la procédure applicable à l’échange de renseignements sur demande en matière fiscale et modifiant la loi du 31 mars 2010 portant approbation des conventions fiscales et prévoyant la procédure y applicable en matière d’échange de renseignements sur demande (Law of 25 November 2014 laying down the procedure applicable to the exchange of information on request in tax matters and amending the Law of 31 March 2010 approving the tax conventions and laying down the procedure applicable thereto in relation to the exchange of information on request) (Mémorial A 2014, p. 4170; ‘the Law of 25 November 2014’) contains the following provisions.16Article 1(1) of the Law of 25 November 2014 provides:‘This Law shall apply from its entry into force to requests for exchange of information in tax matters made by the competent authority of a requesting State pursuant to:(4)the [Law of 29 March 2013] on administrative cooperation in the field of taxation;17Article 2 of the Law of 25 November 2014 provides:‘1. Tax administrations shall be authorised to request information of any kind required in order to implement the exchange of information provided for by Conventions and laws from the holder of that information.2. The holder of the information shall be obliged to provide the requested information in its entirety, accurately and without alteration, within one month of notification of the decision requiring the requested information to be provided. That obligation shall extend to the transmission of unaltered documents on which the information is based.18According to Article 3 of the Law of 25 November 2014:‘1. The competent tax administration shall verify that the request for exchange of information is in order. A request for exchange of information shall be considered to be in order if it states the legal basis, identifies the competent authority making the request and contains the other information prescribed by Conventions and laws.3. If the competent tax administration is not in possession of the information requested, the director of the competent tax administration or his authorised representative shall notify the holder of the information by registered letter of his decision requiring the requested information to be provided. Notification of the decision to the holder of the information requested shall constitute notification to any other person referred to therein.4. The request for exchange of information may not be disclosed. The decision requiring the requested information to be provided shall contain only such information as is essential in order to enable the holder of the information to identify the information requested.19Article 5(1) of the Law of 25 November 2014 provides:‘If the information requested is not provided within one month of notification of the decision requiring the requested information to be provided, the holder of the information may be subject to an administrative fine of a maximum of EUR 250000. The amount of the fine shall be fixed by the director of the competent tax administration or his authorised representative.’20Article 6 of the Law of 25 November 2014 states:‘1. No appeal shall lie against a request for exchange of information or a decision requiring the requested information to be provided as referred to in Article 3(1) and (3).2. The holder of the information may apply to the tribunal administratif (Administrative Tribunal, Luxembourg) for a decision referred to in Article 5 to be varied. The action must be brought within one month of notification of the decision to the holder of the information requested. The action shall have suspensive effect. …An appeal to the Cour administrative (Administrative Court) shall lie against the decisions of the tribunal administratif (Administrative Tribunal). The appeal must be lodged within 15 days of notification of the judgment by the Registry. … The Cour administrative (Administrative Court) shall rule within one month of the date on which the reply is lodged or otherwise within one month of expiry of the period for lodging a reply.’The dispute in the main proceedings and the questions referred for a preliminary ruling21Berlioz is a joint stock company governed by Luxembourg law, which received the dividends paid to it by its subsidiary, Cofima, a simplified joint stock company governed by French law, in application of an exemption from withholding tax.22On 3 December 2014, the French tax administration, doubtful as to whether the exemption enjoyed by Cofima complied with the conditions laid down by French law, sent the Luxembourg tax administration a request for information concerning Berlioz pursuant, in particular, to Directive 2011/16.23Following that request, the Director of the Direct Taxation Administration adopted a decision on 16 March 2015 in which he stated that the French tax authorities were checking Cofima’s tax affairs and needed information in order to be able to make a ruling on the application of withholding taxes on dividends paid by Cofima to Berlioz. In that decision, he directed Berlioz, on the basis of Article 2(2) of the Law of 25 November 2014, to communicate certain information to him, asking it, in particular:whether the company has a place of effective management in Luxembourg and what are its key features, namely a description of the office, the amount of its office space, physical and IT equipment belonging to it, a copy of the lease of the premises and the business address, with supporting documentation;to provide a list of its employees with their function within the company and identification of employees linked to the company’s registered office;whether it hires staff in Luxembourg;whether there is a contract between Berlioz and Cofima and, if so, for a copy of the contract;to provide a statement of its shareholdings in other companies and how those shareholdings were financed, with supporting documentation;to provide the names and addresses of its members, the amount of capital held by each member and the percentage of share capital held by each member; andto provide details of the amount in which Cofima’s securities were recorded as assets of Berlioz prior to the general meeting of Cofima on 7 March 2012 and a chronology of the starting values at which Cofima securities were recorded as assets at the time of the capital contribution of 5 December 2002, the capital contribution of 31 October 2003 and the acquisition on 2 October 2007.24On 21 April 2015, Berlioz stated that it was responding to the decision requiring the requested information to be provided (‘information order’) of 16 March 2015, except as regards the names and addresses of its members, the amount of capital held by each member and the percentage of share capital held by each member, on the ground that that information was not foreseeably relevant within the meaning of Directive 2011/16 for the assessment as to whether the dividend distributions made by its subsidiary should be subject to a withholding tax, that being the subject matter of the checks being carried out by the French tax administration.25By decision of 18 May 2015, the Director of the Direct Taxation Administration imposed an administrative fine of EUR 250000 on Berlioz, on the basis of Article 5(1) of the Law of 25 November 2014, on account of its refusal to provide that information.26On 18 June 2015, Berlioz brought an action before the tribunal administratif (Administrative Tribunal) against the decision of the Director of the Direct Taxation Administration imposing the fine, and asked that court to determine whether the information order of 16 March 2015 was well founded.27By judgment of 13 August 2015, the tribunal administratif (Administrative Tribunal) upheld in part the main action for variation and reduced the fine to EUR 150000, but dismissed the action as to the remainder, holding that there was no need to adjudicate on the action for annulment brought in the alternative.28By application of 31 August 2015, Berlioz lodged an appeal before the Cour administrative (Administrative Court), maintaining that the refusal of the tribunal administratif (Administrative Tribunal), based on Article 6(1) of the Law of 25 November 2014, to determine whether the information order of 16 March 2015 was well founded constituted a breach of its right to an effective judicial remedy as guaranteed by Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’).29The Cour administrative (Administrative Court) considered that it might be necessary to take account, in particular, of Article 47 of the Charter, which mirrors the right referred to in Article 6(1) of the ECHR, and requested the parties to the main proceedings to submit their observations on the matter.30The Cour administrative (Administrative Court) queries whether a person who may be the subject of administrative measures (a ‘relevant person’), such as Berlioz, has a right to an effective remedy if that person cannot, even exceptionally, have examined the validity of the information order underpinning the penalty imposed on him. It questions, in particular, the meaning of the ‘foreseeable relevance’ of the information requested, as referred to in Article 1(1) of Directive 2011/16, and the scope of the review which the tax and judicial authorities of the requested State must carry out in that respect without undermining the purpose of that directive.31In those circumstances the Cour administrative (Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:Is a Member State implementing EU law and thus rendering the Charter applicable in accordance with Article 51(1) thereof in a situation such as that in the main proceedings when it imposes an administrative pecuniary penalty on a person on account of that person’s alleged failure to fulfil his obligations to cooperate pursuant to an order requiring him to provide information (“information order”) made by the competent national authority of that State under national procedural rules introduced for that purpose, in the context of that Member State’s execution, in its capacity as the requested State, of a request for exchange of information from another Member State that is based by the latter State, inter alia, on the provisions of Directive 2011/16 on the exchange of information on request?In the event that it is established that the Charter is applicable to the present case, can a person rely on Article 47 of the Charter if he takes the view that the aforementioned administrative pecuniary penalty imposed on him is designed to place him under an obligation to provide information in the context of the execution, by the competent authority of the requested Member State of which he is a resident, of a request for information from another Member State for which there is no justification as regards the actual fiscal aim, there being therefore no legitimate aim in the present case, and which is intended to obtain information that has no foreseeable relevance to the tax case concerned?(3)In the event that it is established that the Charter is applicable to the present case, does the right to an effective remedy and to a fair trial as laid down by Article 47 of the Charter require — without the possibility of restrictions being imposed under Article 52(1) of the Charter — that the competent national court must have unlimited jurisdiction and accordingly the power to review, at least as a result of an objection, the validity of an information order made by the competent authority of a Member State in the execution of a request for exchange of information submitted by the competent authority of another Member State, inter alia, on the basis of Directive 2011/16 in an action brought by the third party holder of the information, to whom that information order is addressed, such action being directed against a decision imposing an administrative pecuniary penalty for that person’s alleged failure to fulfil his obligation to cooperate in the context of the execution of that request?In the event that it is established that the Charter is applicable to the present case, are Article 1(1) and Article 5 of Directive 2011/16, in the light, on the one hand, of the parallels with the standard of foreseeable relevance arising out of the Organisation for Economic Cooperation and Development’s [(OECD’s)] Model Tax Convention on Income and on Capital and, on the other, of the principle of sincere cooperation laid down in Article 4 TEU, together forming the objective of Directive 2011/16, to be interpreted as meaning that the foreseeable relevance, in relation to the tax case referred to and to the stated fiscal purpose, of the information sought by one Member State from another Member State constitutes a condition which the request for information must satisfy in order to trigger an obligation on the part of the competent authority of the requested Member State to act on that request, and in order to justify an information order issued to a third party by that authority?(5)In the event that it is established that the Charter is applicable to the present case, are the provisions of Article 1(1) in conjunction with Article 5 of Directive 2011/16, and Article 47 of the Charter, to be interpreted as precluding a legal provision of a Member State that generally limits the examination by its competent national authority, acting as the authority of the requested State, of the validity of a request for information to a review as to whether the request is in order, and as requiring a national court seised of court proceedings such as those described in the third question above to verify, in the context of those court proceedings, that the condition of foreseeable relevance of the information requested has been satisfied in all its aspects regarding the links to the particular tax case in question, the stated fiscal purpose and compliance with Article 17 of Directive 2011/16?In the event that it is established that the Charter is applicable to the present case, does the second paragraph of Article 47 of the Charter preclude a legal provision of a Member State that precludes a request for information made by the competent authority of another Member State from being submitted to the competent national court of the requested State in court proceedings before it such as those described in the third question above; and does it require that document to be produced to the competent national court and access to it to be granted to the third party holding the information, or, indeed, that document to be produced to the national court without access to it being granted to the third party holding the information, owing to the confidential nature of that document, provided that any difficulties caused to the third party by a limitation on his rights are sufficiently counterbalanced by the procedures followed by the competent national court?’Consideration of the questions referred The first question 32By its first question, the referring court asks, in essence, whether Article 51(1) of the Charter must be interpreted as meaning that a Member State implements EU law within the meaning of that provision, and that the Charter is therefore applicable, when that Member State makes provision in its legislation for a pecuniary penalty to be imposed on a relevant person who refuses to supply information in the context of an exchange of information between tax authorities based, in particular, on the provisions of Directive 2011/16.33According to Article 51(1) of the Charter, the provisions of the Charter are addressed to the Member States only when they are implementing Union law. Accordingly, it is necessary to determine whether a national measure providing for such a penalty can be regarded as an implementation of EU law.34It must be noted in that regard that Directive 2011/16 imposes certain obligations on Member States. In particular, Article 5 of the directive provides that the requested authority is to communicate certain information to the requesting authority.35Furthermore, under Article 18 of Directive 2011/16, entitled ‘Obligations’, the requested Member State is to use its measures aimed at gathering information to obtain the requested information.36In addition, as set out in Article 22(1)(c) of Directive 2011/16, Member States must take all necessary measures to ensure the smooth operation of the administrative cooperation arrangements provided for in the directive.37While it refers to the measures aimed at gathering information that exist under national law, Directive 2011/16 thus requires Member States to take the necessary measures to obtain the requested information in a way that is consistent with their obligations in relation to the exchange of information.38It must be noted that, in order to ensure that the directive has practical effect, those measures must include arrangements, such as the pecuniary penalty at issue in the main proceedings, which ensure that there is sufficient incentive for the relevant person to respond to tax authorities’ requests, and thereby enable the requested authority to fulfil its obligations towards the requesting authority.39The fact that Directive 2011/16 does not make express provision for penalties to be imposed does not mean that penalties cannot be regarded as involving the implementation of that directive and, consequently, falling within the scope of EU law. The concepts of ‘measures aimed at gathering information’ within the meaning of Article 18 of the directive and ‘necessary measures to ensure the smooth operation of the administrative cooperation arrangements’ within the meaning of Article 22(1) of the directive are capable of encompassing such penalties.40In those circumstances, it is irrelevant that the national provision serving as the basis for a penalty such as that imposed on Berlioz is included in a law that was not adopted in order to transpose Directive 2011/16, since the application of that national provision is intended to ensure that of the directive (see, to that effect, judgment of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 28).41National legislation, such as that at issue in the main proceedings, which provides for a penalty for failure to respond to a request from the national tax authority that is intended to enable that authority to comply with the obligations laid down by Directive 2011/16 must, therefore, be regarded as implementing that directive.42Consequently, the answer to the first question is that Article 51(1) of the Charter must be interpreted as meaning that a Member State implements EU law within the meaning of that provision, and that the Charter is therefore applicable, when that Member State makes provision in its legislation for a pecuniary penalty to be imposed on a relevant person who refuses to supply information in the context of an exchange between tax authorities based, in particular, on the provisions of Directive 2011/16. The second question 43By its second question, the referring court asks, in essence, whether Article 47 of the Charter must be interpreted as meaning that a relevant person on whom a pecuniary penalty has been imposed for failure to comply with an administrative decision directing that person to provide information in the context of an exchange between national tax administrations pursuant to Directive 2011/16 is entitled to challenge the legality of that decision. Whether there is a right to a remedy under Article 47 of the Charter 44According to Article 47 of the Charter, entitled ‘Right to an effective remedy and to a fair trial’, everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal. The obligation imposed on the Member States in the second subparagraph of Article 19(1) TEU, to provide remedies sufficient to ensure effective legal protection in the fields covered by Union law, corresponds to that right.45Several governments submitted that, in a case such as that in the main proceedings, there was no ‘[right] guaranteed by the law of the Union’ within the meaning of Article 47 of the Charter because Directive 2011/16 does not confer any rights on individuals. According to those governments, like Directive 77/799, which the Court examined in its judgment of 22 October 2013, Sabou (C‑276/12, EU:C:2013:678), Directive 2011/16 covers only the exchange of information between tax administrations and confers rights only on them. Accordingly, a relevant person such as Berlioz could not claim on the basis of Article 47 of the Charter that it has a right to an effective remedy.46The Court held, in paragraphs 30 to 36 of that judgment, that Directive 77/799, the purpose of which is to govern cooperation between the tax authorities of Member States, coordinates the transfer of information between competent authorities by imposing certain obligations on the Member States, but does not confer specific rights on the taxpayer as regards his participation in the procedure for the exchange of information between those authorities. In particular, that directive does not impose any obligation for those authorities to give the taxpayer a hearing.47For its part, Directive 2011/16 states, in recital 7, that it builds on the achievements of Directive 77/799 by providing for clearer and more precise rules governing administrative cooperation between Member States where necessary, in order to broaden the scope of such cooperation. It must be noted that, in so doing, Directive 2011/16 pursues a similar objective to that of Directive 77/799, which it replaces.48However, that does not mean that a relevant person in Berlioz’s situation cannot defend his case before a tribunal in accordance with Article 47 of the Charter in the context of the application of Directive 2011/16.49The Court has consistently held that the fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by EU law and that the applicability of EU law entails applicability of the fundamental rights guaranteed by the Charter (see, to that effect, judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraphs 19 to 21, and of 26 September 2013, Texdata Software, C‑418/11, EU:C:2013:588, paragraphs 72 and 73).50In the present case, the dispute in the main proceedings concerns a measure penalising a relevant person for failing to comply with a decision directing it to provide the requested authority with information to enable that authority to respond to a request made by the requesting authority on the basis, in particular, of Directive 2011/16. Since that penalty was based on a national provision which, as is evident from the answer to the first question, implements EU law within the meaning of Article 51(1) of the Charter, it follows that the provisions of the Charter, in particular Article 47 thereof, are applicable to the facts of the dispute in the main proceedings (see, to that effect, judgment of 26 September 2013, Texdata Software, C‑418/11, EU:C:2013:588, paragraphs 74 to 77).51As regards, specifically, the requirement of a right guaranteed by EU law within the meaning of Article 47 of the Charter, it should be borne in mind that, according to settled case-law, protection against arbitrary or disproportionate intervention by public authorities in the sphere of the private activities of any natural or legal person constitutes a general principle of EU law (judgments of 21 September 1989, Hoechst v Commission, 46/87 and 227/88, EU:C:1989:337, paragraph 19, and of 22 October 2002, Roquette Frères, C‑94/00, EU:C:2002:603, paragraph 27, and order of 17 November 2005, Minoan Lines v Commission, C‑121/04 P, not published, EU:C:2005:695, paragraph 30).52That protection may be invoked by a relevant person, such as Berlioz, in respect of a measure adversely affecting him, such as the information order and the penalty at issue in the main proceedings, so that a relevant person can rely on a right guaranteed by EU law, within the meaning of Article 47 of the Charter, giving him the right to an effective remedy. The subject matter of the right to a remedy 53In the case of a penalty, it is necessary to establish whether a right to a remedy against that measure, such as that provided for by the legislation at issue in the main proceedings, is sufficient to enable the relevant person to assert the rights conferred on him by Article 47 of the Charter, or whether that article requires that he should also be able then to challenge the legality of the information order on which the penalty is based.54It should be noted in that regard that the principle of effective judicial protection is a general principle of EU law, which is now set out in Article 47 of the Charter. Article 47 secures in EU law the protection afforded by Article 6(1) and Article 13 of the ECHR. It is necessary, therefore, to refer only to Article 47 (see, to that effect, judgment of 6 November 2012, Otis and Others, C‑199/11, EU:C:2012:684, paragraphs 46 and 47).55The second paragraph of Article 47 of the Charter provides that everyone is entitled to a hearing by an independent and impartial tribunal. Compliance with that right assumes that a decision of an administrative authority that does not itself satisfy the conditions of independence and impartiality must be subject to subsequent control by a judicial body that must, in particular, have jurisdiction to consider all the relevant issues.56Consequently, as the Advocate General noted in point 80 of his Opinion, the national court hearing an action against the pecuniary administrative penalty imposed on the relevant person for failure to comply with an information order must be able to examine the legality of that information order if it is to satisfy the requirements of Article 47 of the Charter.57The Commission argued that to accept that the relevant person has a right to a remedy against an information order would effectively be to acknowledge that he has more procedural rights than a taxpayer. It follows, according to the Commission, from paragraph 40 of the judgment of 22 October 2013, Sabou (C‑276/12, EU:C:2013:678), that a request for information that is sent to a taxpayer, which is part of the investigation stage during which information is collected, is a measure that is merely preparatory to the final decision and could not be challenged.58The circumstances of the case in the main proceedings must, however, be distinguished from those of the case that gave rise to the judgment of 22 October 2013, Sabou (C‑276/12, EU:C:2013:678). The latter case concerned requests for information sent by the tax administration of one Member State to the tax administration of another Member State and, in particular, the right for the taxpayer who was the subject of a tax investigation in the requesting Member State to participate in the procedure relating to those requests. No request for information had, however, been sent to the relevant person, unlike in the case of Berlioz in the main proceedings. Thus, in the case that led to that judgment, the Court was called upon to determine whether the taxpayer who was the subject of requests for information as between national tax administrations had a right to be heard in that process, and not, as in the present case, whether a relevant person in the requested Member State has a right to a remedy against a penalty imposed on him for failure to comply with an information order issued to him by the requested authority following a request for information sent to that authority by the requesting authority.59The answer to the second question is, therefore, that Article 47 of the Charter must be interpreted as meaning that a relevant person on whom a pecuniary penalty has been imposed for failure to comply with an administrative decision directing that person to provide information in the context of an exchange between national tax administrations pursuant to Directive 2011/16 is entitled to challenge the legality of that decision. The fourth question 60By its fourth question, which must be examined before the third, the referring court asks, in essence, whether Article 1(1) and Article 5 of Directive 2011/16 must be interpreted as meaning that the ‘foreseeable relevance’ of the information requested by one Member State from another Member State is a condition which the request for information must satisfy in order for the requested Member State to be required to comply with that request, and thus a condition of the legality of the information order addressed by that Member State to a relevant person.61Under Article 1(1) of Directive 2011/16 concerning the subject matter of that directive, the Member States are to cooperate with each other with a view to exchanging information that is ‘foreseeably relevant’ to the requesting administration in the light of the provisions of the tax laws of the Member State of that administration.62Article 5 of Directive 2011/16 refers to that information in providing that, at the request of the requesting authority, the requested authority is to communicate to the requesting authority any information referred to in Article 1(1) that it has in its possession or that it obtains as a result of administrative enquiries. Article 5 thus imposes an obligation on the requested authority.63It is apparent from the wording of those provisions that the words ‘foreseeably relevant’ describe a necessary characteristic of the requested information. The obligation imposed on the requested authority under Article 5 of Directive 2011/16 to cooperate with the requesting authority does not extend to the communication of information that is considered not to have that characteristic.64Thus, characterisation of the requested information as being of ‘foreseeable relevance’ is a condition of the request relating to that information.65It is also necessary to determine by whom and how that characteristic is assessed, and whether the relevant person to whom the requested authority turns in order to obtain the information sought by the requesting authority may claim that it lacks that characteristic.66Reference must be made in this respect to the wording of recital 9 of Directive 2011/16, according to which the standard of ‘foreseeable relevance’ is intended to provide for exchange of information in tax matters to the widest possible extent and, at the same time, to clarify that Member States are not at liberty to engage in ‘fishing expeditions’ or to request information that is unlikely to be relevant to the tax affairs of a given taxpayer.67As a number of governments and the Commission argued, this concept of foreseeable relevance reflects that used in Article 26 of the OECD Model Tax Convention, both because of the similarity between the concepts used and given the reference to OECD conventions in the explanatory memorandum to the proposal for a Council Directive COM(2009) 29 final of 2 February 2009 on administrative cooperation in the field of taxation, which led to the adoption of Directive 2011/16. According to the commentary on that article adopted by the OECD Council on 17 July 2012, Contracting States are not at liberty ‘to engage in fishing expeditions’, nor to request information that is unlikely to be relevant to the tax affairs of a given taxpayer. On the contrary, there must be a reasonable possibility that the requested information will be relevant.68The aim of the concept of foreseeable relevance according to recital 9 of Directive 2011/16 is thus to enable the requesting authority to obtain any information that seems to it to be justified for the purpose of its investigation, while not authorising it manifestly to exceed the parameters of that investigation nor to place an excessive burden on the requested authority.69The requesting authority must be able, in the context of its investigation, to determine the information it considers that it would need, having regard to national law, in order, as recital 1 of Directive 2011/16 states, properly to assess the taxes due.70It is therefore for that authority, which is in charge of the investigation from which the request for information arises, to assess, according to the circumstances of the case, the foreseeable relevance of the requested information to that investigation on the basis of the progress made in the proceedings and, in accordance with Article 17(1) of Directive 2011/16, after having exhausted the usual sources of information which it has been able to use in the circumstances.71Although the requesting authority has a discretion in that regard, it cannot request information that is of no relevance to the investigation concerned.72Such a request would not comply with Articles 1 and 5 of Directive 2011/16.73As regards the relevant person, should the requested authority nevertheless contact him, sending him, if necessary, an information order for the purpose of obtaining the information sought, it follows from the answer to the second question that he must be entitled to rely in court on the non-compliance of that request for information with Article 5 of Directive 2011/16 and on the resulting illegality of the information order.74The answer to the fourth question is, therefore, that Article 1(1) and Article 5 of Directive 2011/16 must be interpreted as meaning that the ‘foreseeable relevance’ of the information requested by one Member State from another Member State is a condition which the request for information must satisfy in order for the requested Member State to be required to comply with that request, and thus a condition of the legality of the information order addressed by that Member State to a relevant person and of the penalty imposed on that person for failure to comply with that information order. The third and fifth questions 75By its third and fifth questions, which it is appropriate to examine together, the referring court asks, first, whether Article 47 of the Charter must be interpreted as meaning that, in the context of an action brought by a relevant person against a penalty imposed on that person by the requested authority for non-compliance with an information order issued by that authority following a request for information sent by the requesting authority pursuant to Directive 2011/16, the national court has unlimited jurisdiction to review the legality of that information order. Secondly, it asks whether Article 1(1) and Article 5 of Directive 2011/16 and Article 47 of the Charter must be interpreted as precluding the requested authority’s examination of the validity of a request for information issued by the requesting authority from being limited to the procedural regularity of such a request, and as requiring the national court, in such an action, to verify that the condition of foreseeable relevance has been satisfied in all its aspects, including in the light of Article 17 of Directive 2011/16.76As regards, in the first place, the review carried out by the requested authority, it has been pointed out in paragraphs 70 and 71 of the present judgment that the requesting authority has a discretion to assess the foreseeable relevance of the information requested of the requested authority, with the result that the scope of the latter’s review is limited accordingly.77In view of the system of cooperation between tax authorities established by Directive 2011/16, which, as is apparent from recitals 2, 6 and 8 of Directive 2011/16, is founded on rules intended to create confidence between Member States, ensuring that cooperation is efficient and fast, the requested authority must, in principle, trust the requesting authority and assume that the request for information it has been sent both complies with the domestic law of the requesting authority and is necessary for the purposes of its investigation. The requested authority does not generally have extensive knowledge of the factual and legal framework prevailing in the requesting State, and it cannot be expected to have such knowledge (see, to that effect, judgment of 13 April 2000, W.N., C‑420/98, EU:C:2000:209, paragraph 18). In any event, the requested authority cannot substitute its own assessment of the possible usefulness of the information sought for that of the requesting authority.78However, the requested authority must nevertheless verify whether the information sought is not devoid of any foreseeable relevance to the investigation being carried out by the requesting authority.79In that regard, as is apparent from recital 9 of Directive 2011/16, reference must be made to Article 20(2) thereof, which mentions matters that are relevant for the purposes of that review. These include, on the one hand, information which must be provided by the requesting authority: the identity of the person under examination or investigation and the tax purpose for which the information is sought; and, on the other hand, the contact details of any person believed to be in possession of the requested information and anything that may facilitate the collection of information by the requested authority.80In order to enable the requested authority to proceed with the verification referred to in paragraphs 78 and 79 of the present judgment, the requesting authority must provide an adequate statement of reasons explaining the purpose of the information sought in the context of the tax procedure underway in respect of the taxpayer identified in the request for information.81If required, the requested authority may, for the purposes of that verification, ask the requesting authority, on the basis of the administrative cooperation established by Directive 2011/16 in relation to tax matters, for additional information that may be necessary in order to rule out, from its own perspective, the possibility that the information sought manifestly has no foreseeable relevance in the light of the matters referred to in paragraphs 78 and 79 of the present judgment.82The review to be carried out by the requested authority is not limited, therefore, to a brief and formal verification of the regularity of the request for information in the light of those matters, but must also enable that authority to satisfy itself that the information sought is not devoid of any foreseeable relevance having regard to the identity of the taxpayer concerned and that of any third party asked to provide the information, and to the requirements of the tax investigation concerned.83As regards, in the second place, the review by a court seised of an action brought by a relevant person against a penalty imposed on him on the basis of an information order issued by the requested authority in response to the requesting authority’s request for information, that review may not only relate to the proportionality of that penalty and lead, where appropriate, to its being varied, but may also concern the legality of that information order, as the answer to the second question shows.84If the judicial review guaranteed by Article 47 of the Charter is to be effective, the reasons given by the requesting authority must put the national court in a position in which it may carry out the review of the legality of the request for information (see, to that effect, judgments of 4 June 2013, ZZ, C‑300/11, EU:C:2013:363, paragraph 53, and of 23 October 2014, Unitrading, C‑437/13, EU:C:2014:2318, paragraph 20).85In the light of what has been stated in paragraphs 70 and 71 of the present judgment concerning the requesting authority’s discretion, it must be held that the limits that apply in respect of the requested authority’s review are equally applicable to reviews carried out by the courts.86Consequently, the courts must merely verify that the information order is based on a sufficiently reasoned request by the requesting authority concerning information that is not — manifestly — devoid of any foreseeable relevance having regard, on the one hand, to the taxpayer concerned and to any third party who is being asked to provide the information and, on the other hand, to the tax purpose being pursued.87The referring court also asks whether reviews to be carried out by the courts must cover compliance with the provisions of Article 17 of Directive 2011/16, imposing limits on the communication of information requested by the authority of a Member State.88It must be noted that those provisions which, as far as some of them are concerned, could be taken into account in determining the legality of a request for information to the relevant person, do not have any bearing on a review of the foreseeable relevance of that information. As is evident from the request for a preliminary ruling and from the written and oral observations submitted by Berlioz, its refusal to communicate some of the information requested is based solely on the claim that that information has no foreseeable relevance, not on any reliance on a ‘limit’ within the meaning of Article 17 of Directive 2011/16.89Consequently, the answer to the third and fifth questions is that Article 1(1) and Article 5 of Directive 2011/16 must be interpreted as meaning that verification by the requested authority to which a request for information has been submitted by the requesting authority pursuant to that directive is not limited to the procedural regularity of that request but must enable the requested authority to satisfy itself that the information sought is not devoid of any foreseeable relevance having regard to the identity of the taxpayer concerned and that of any third party asked to provide the information, and to the requirements of the tax investigation concerned. Those provisions of Directive 2011/16 and Article 47 of the Charter must be interpreted as meaning that, in the context of an action brought by a relevant person against a penalty imposed on that person by the requested authority for non-compliance with an information order issued by that authority in response to a request for information sent by the requesting authority pursuant to Directive 2011/16, the national court not only has jurisdiction to vary the penalty imposed but also has jurisdiction to review the legality of that information order. As regards the condition of legality of that information order, which relates to the foreseeable relevance of the requested information, the courts’ review is limited to verification that the requested information manifestly has no such relevance. The sixth question 90By its sixth question, the referring court asks, in essence, whether the second paragraph of Article 47 of the Charter must be interpreted as meaning that, in the context of a judicial review by a court of the requested Member State, that court must have access to the request for information addressed to the requested Member State by the requesting Member State, and whether that document must also be communicated to the relevant person in the latter Member State, so that his case can be given a fair hearing, or whether he may be refused access on grounds of confidentiality.91It should be stated in that regard that any manifest lack of foreseeable relevance of the requested information must be examined in relation to that document.92Accordingly, if the court of the requested Member State is to be able to conduct its judicial review, it is important that that court should have access to the request for information sent by the requesting Member State to the requested Member State. That court may, if necessary, ask the requested authority for the additional information which it may have obtained from the requesting authority and which may be necessary in order to rule out, from its own perspective, the possibility that the requested information manifestly has no foreseeable relevance.93As to whether the relevant person has a right of access to the request for information, it is necessary to take into account the secrecy attached to that document in accordance with Article 16 of Directive 2011/16.94That secrecy is accounted for by the discretion which the requesting authority must normally display at the information-gathering stage and which it is entitled to expect of the requested authority if the effectiveness of its investigation is not to be jeopardised.95Anyone can therefore be barred from having access to the request for information in an investigation on account of the fact that it is secret.96In the context of judicial proceedings, it should be borne in mind that the principle of equality of arms, which is a corollary of the very concept of a fair hearing, implies that each party must be afforded a reasonable opportunity to present his case, including his evidence, under conditions that do not place him at a substantial disadvantage vis-à-vis his opponent (judgment of 6 November 2012, Otis and Others, C‑199/11, EU:C:2012:684, paragraph 71).97The Court has also held that the question whether there is an infringement of the rights of the defence, including the right of access to the file, must be examined in relation to the specific circumstances of each case, including the nature of the act at issue, the context of its adoption and the legal rules governing the matter in question (see judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 102, and of 10 September 2013, G. and R., C‑383/13 PPU, EU:C:2013:533, paragraphs 32 and 34).98It is necessary to determine in the light of those considerations whether a relevant person, such as Berlioz, who regards the information he has been directed to provide as not foreseeably relevant, must have access to the request for information addressed to the requested authority by the requesting authority in order to be able properly to present his case before a court.99It follows from the answer to the third and fifth questions that, in order to establish the unlawfulness of the information order that is based on the request for information and of the penalty imposed for failure to comply with it, it is necessary, but sufficient, to demonstrate that all or part of the requested information manifestly has no foreseeable relevance in the light of the investigation being carried out, given the identity of the taxpayer concerned and the tax purpose for which the information is sought.100To that end, it is not necessary for the relevant person to have access to the whole of the request for information in order for that person to be given a fair hearing regarding the condition of foreseeable relevance. It is sufficient that that person has access to the minimum information referred to in Article 20(2) of Directive 2011/16, that is to say, the identity of the taxpayer concerned and the tax purpose for which the information is sought. However, if the court of the requested Member State considers that that minimum information is not sufficient in that respect, and if it asks the requested authority for additional information as referred to in paragraph 92 of the present judgment, that court is obliged to provide that additional information to the relevant person, while taking due account of the possible confidentiality of some of that information.101Consequently, the answer to the sixth question is that the second paragraph of Article 47 of the Charter must be interpreted as meaning that, in the context of a judicial review by a court of the requested Member State, that court must have access to the request for information addressed to the requested Member State by the requesting Member State. The relevant person does not, however, have a right of access to the whole of that request for information, which is to remain a secret document in accordance with Article 16 of Directive 2011/16. In order for that person to be given a full hearing of his case in relation to the lack of any foreseeable relevance of the requested information, it is sufficient, in principle, that he be in possession of the information referred to in Article 20(2) of that directive.Costs102Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules:1. Article 51(1) of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that a Member State implements EU law within the meaning of that provision, and that the Charter of Fundamental Rights of the European Union is therefore applicable, when that Member State makes provision in its legislation for a pecuniary penalty to be imposed on a person who may be the subject of administrative measures (a ‘relevant person’) who refuses to supply information in the context of an exchange between tax authorities based, in particular, on the provisions of Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC. 2. Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that a relevant person on whom a pecuniary penalty has been imposed for failure to comply with an administrative decision directing that person to provide information (‘information order’) in the context of an exchange between national tax administrations pursuant to Directive 2011/16 is entitled to challenge the legality of that decision. 3. Article 1(1) and Article 5 of Directive 2011/16 must be interpreted as meaning that the ‘foreseeable relevance’ of the information requested by one Member State from another Member State is a condition which the request for information must satisfy in order for the requested Member State to be required to comply with that request, and thus a condition of the legality of the information order addressed by that Member State to a relevant person and of the penalty imposed on that person for failure to comply with that information order. 4. Article 1(1) and Article 5 of Directive 2011/16 must be interpreted as meaning that verification by the requested authority to which a request for information has been submitted by the requesting authority pursuant to that directive is not limited to the procedural regularity of that request but must enable the requested authority to satisfy itself that the information sought is not devoid of any foreseeable relevance having regard to the identity of the taxpayer concerned and that of any third party asked to provide the information, and to the requirements of the tax investigation concerned. Those provisions of Directive 2011/16 and Article 47 of the Charter must be interpreted as meaning that, in the context of an action brought by a relevant person against a penalty imposed on that person by the requested authority for non-compliance with an information order issued by that authority in response to a request for information sent by the requesting authority pursuant to Directive 2011/16, the national court not only has jurisdiction to vary the penalty imposed but also has jurisdiction to review the legality of that information order. As regards the condition of legality of that information order, which relates to the foreseeable relevance of the requested information, the courts’ review is limited to verification that the requested information manifestly has no such relevance. 5. The second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that, in the context of a judicial review by a court of the requested Member State, that court must have access to the request for information addressed to the requested Member State by the requesting Member State. The relevant person does not, however, have a right of access to the whole of that request for information, which is to remain a secret document in accordance with Article 16 of Directive 2011/16. In order for that person to be given a full hearing of his case in relation to the lack of any foreseeable relevance of the requested information, it is sufficient, in principle, that he be in possession of the information referred to in Article 20(2) of that directive. [Signatures]( *1 ) Language of the case: French. | 8cb2a-3e39038-45cc | EN |
An air carrier which is unable to prove that a passenger was informed of the cancellation of his flight more than two weeks before the scheduled time of departure is required to pay compensation to that passenger | 11 May 2017 ( *1 )‛Reference for a preliminary ruling — Air transport — Regulation (EC) No 261/2004 — Article 5(1)(c) — Compensation and assistance to passengers in the event of cancellation of a flight — Exemption from the obligation to pay compensation — Contract for carriage concluded through an online travel agent — Air carrier having informed the travel agent in good time of a change to the scheduled time for the flight — Travel agent having communicated that information to a passenger by email 10 days before the flight’In Case C‑302/16,REQUEST for a preliminary ruling under Article 267 TFEU from the rechtbank Noord-Nederland (District Court, Northern Region, Netherlands), by decision of 18 May 2016, received at the Court on 27 May 2016, in the proceedings Bas Jacob Adriaan Krijgsman v Surinaamse Luchtvaart Maatschappij NV, THE COURT (Eighth Chamber),composed of M. Vilaras, President of the Chamber, J. Malenovský and D. Šváby (Rapporteur), Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:—Surinaamse Luchtvaart Maatschappij NV, by A.J.F. Gonesh, advocaat,the French Government, by D. Colas, E. de Moustier and M.‑L. Kitamura, acting as Agents,the Austrian Government, by G. Eberhard, acting as Agent,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by N. Yerrell and F. Wilman, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the followingJudgment1The present request for a preliminary ruling concerns the interpretation of Article 5(1)(c) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (OJ 2004 L 46, p. 1).2The request has been made in proceedings brought by Mr Bas Jacob Adriaan Krijgsman against Surinaamse Luchtvaart Maatschappij NV (‘SLM’), an air carrier, concerning SLM’s refusal to pay compensation to Mr Krijgsman for the cancellation of his flight.EU law Regulation No 261/2004 3Recitals 1, 7 and 12 of Regulation No 261/2004 state:‘(1)Action by the Community in the field of air transport should aim, among other things, at ensuring a high level of protection for passengers. Moreover, full account should be taken of the requirements of consumer protection in general.…(7)In order to ensure the effective application of this Regulation, the obligations that it creates should rest with the operating air carrier who performs or intends to perform a flight, whether with owned aircraft, under dry or wet lease, or on any other basis.(12)The trouble and inconvenience to passengers caused by cancellation of flights should also be reduced. This should be achieved by inducing carriers to inform passengers of cancellations before the scheduled time of departure and in addition to offer them reasonable re-routing, so that the passengers can make other arrangements. Air carriers should compensate passengers if they fail to do this, except when the cancellation occurs in extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.’4Article 2 of that regulation provides:‘For the purposes of this Regulation:(b)“operating air carrier” means an air carrier that performs or intends to perform a flight under a contract with a passenger or on behalf of another person, legal or natural, having a contract with that passenger;…’5Article 3(5) of that regulation provides:‘This Regulation shall apply to any operating air carrier providing transport to passengers covered by paragraphs 1 and 2. Where an operating air carrier which has no contract with the passenger performs obligations under this Regulation, it shall be regarded as doing so on behalf of the person having a contract with that passenger.’6Article 5(1) and (4) of that regulation is worded as follows:‘1. In case of cancellation of a flight, the passengers concerned shall:(c)have the right to compensation by the operating air carrier in accordance with Article 7, unless:(i)they are informed of the cancellation at least two weeks before the scheduled time of departure; or4. The burden of proof concerning the questions as to whether and when the passenger has been informed of the cancellation of the flight shall rest with the operating air carrier.’7Article 7(1) of Regulation No 261/2004 provides:‘Where reference is made to this Article, passengers shall receive compensation amounting to:(a)EUR 250 for all flights of 1500 kilometres or less;EUR 400 for all intra-Community flights of more than 1500 kilometres, and for all other flights between 1500 and 3500 kilometres;EUR 600 for all flights not falling under (a) or (b).8Article 13 of that regulation provides:‘In cases where an operating air carrier pays compensation or meets the other obligations incumbent on it under this Regulation, no provision of this Regulation may be interpreted as restricting its right to seek compensation from any person, including third parties, in accordance with the law applicable. In particular, this Regulation shall in no way restrict the operating air carrier’s right to seek reimbursement from a tour operator or another person with whom the operating air carrier has a contract. Similarly, no provision of this Regulation may be interpreted as restricting the right of a tour operator or a third party, other than a passenger, with whom an operating air carrier has a contract, to seek reimbursement or compensation from the operating air carrier in accordance with applicable relevant laws.’The dispute in the main proceedings and the question referred for a preliminary ruling9On the internet site www.gate1.nl (‘Gate1 website’), Mr Krijgsman booked a return flight from Amsterdam Schiphol (Netherlands) to Paramaribo (Surinam), operated by SLM. The outbound flight was scheduled to depart on 14 November 2014 at 15.15.10On 9 October 2014, SLM informed Gate1 website that that flight had been cancelled.11On 4 November 2014, Mr Krijgsman received an email from Gate1 website informing him that his outbound flight had been rescheduled for 15 November 2014 at 15.15.12On 20 December 2014, Mr Krijgsman filed a claim for compensation in that regard from SLM. That claim was rejected on 5 March 2015 on the ground that the information on the change to the date of departure had been communicated to Gate1 website on 9 October 2014.13On 12 June 2015, Gate1 website informed Mr Krijgsman that it refused to accept any liability for any harm in respect of which compensation had been claimed on the grounds that, in essence, first, its area of responsibility extended only to the conclusion of contracts between passengers and air carriers, that it was therefore not responsible for changes to flight schedules made by an air carrier, and that the responsibility for informing passengers in such situations fell to the air carrier, to whom the passenger’s email address had been sent in the booking file.14On 12 June 2015, Mr Krijgsman again sought payment from SLM of the flat-rate sum of EUR 600 specified in Article 7(1)(c) of Regulation No 261/2004. That claim was rejected on 3 September 2015.15Mr Krijgsman subsequently brought proceedings before the rechtbank Noord-Nederland (District Court, Northern Region, Netherlands) seeking a provisionally enforceable judgment against SLM for payment of that sum.16SLM disputes that claim. It contends, first of all, that Mr Krijgsman had entered into a travel contract with a travel agent. It then emphasises that all travel agents marketing its tickets, including Gate1 website, were informed of the cancellation of the flight scheduled for 14 November 2014. Finally, it submits that it is common practice for air carriers to communicate information on flights to travel agents which have entered into the travel and carriage contract on behalf of passengers, and that those agents are required to forward that information on to passengers. In the present case, taking into account the information communicated by SLM to Gate1 website on 9 October 2014, Mr Krijgsman had to be regarded as having been informed of the cancellation of his flight more than two weeks before its scheduled time of departure.17The referring court takes the view that Regulation No 261/2004 does not specify the conditions in accordance with which the air carrier is required to inform passengers of flight cancellations in the case where the contract is entered into via a travel agent or website.18In those circumstances, the rechtbank Noord-Nederland (District Court, Northern Region, Netherlands) decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:‘What (procedural and substantive) requirements must be imposed on the performance of the obligation to inform referred to in Article 5(1)(c) of Regulation No 261/2004 in the case where the contract for carriage has been entered into via a travel agent or the booking has been made via a website?’Consideration of the question referred19It is apparent from the decision to refer that the applicant in the main proceedings, a passenger who, via an online travel agency, bought a ticket for a flight operated by SLM, seeks to recover from that air carrier the compensation specified in Article 5(1)(c) and Article 7 of Regulation No 261/2004, on the ground that he had not been informed of the cancellation of that flight at least two weeks before the scheduled time of departure.20It is, however, not disputed, according to that decision, that, more than two weeks before the scheduled time of departure of the flight in question, that air carrier informed the online travel agency that that flight had been cancelled, but that that agent did not inform the applicant in the main proceedings of that cancellation until 10 days before the scheduled time of departure. In this regard, it is in no way apparent from that decision that the applicant challenges the conditions in which that information was provided and its operative effect.21Thus, by its question, the referring court asks whether Article 5(1)(c) and Article 7 of Regulation No 261/2004 are to be interpreted as meaning that the operating air carrier is required to pay the compensation specified in those provisions in the case where a flight is cancelled and that information is not communicated to the passenger at least two weeks before the scheduled time of departure, including in the case where that air carrier, at least two weeks before that time, had communicated that information to the travel agent via whom the contract for carriage had been entered into with the passenger concerned and that passenger had not been informed of that cancellation by that agent within that period.22Article 5(1)(c) of Regulation No 261/2004 provides that, in the case of cancellation of a flight, the passengers concerned have a right to receive compensation from the operating air carrier in accordance with Article 7 of that regulation, unless they are informed of the cancellation of the flight at least two weeks before the scheduled time of departure.23In accordance with Article 5(4) of Regulation No 261/2004, the operating air carrier has the burden of proving that it informed passengers of the cancellation of the flight in question and of proving the period within which it did so.24According to settled case-law, for the purposes of interpreting a provision of EU law, it is necessary to consider not only its wording, but also its context and the objectives of the rules of which it is part (see judgment of 16 November 2016, Hemming and Others, C‑316/15, EU:C:2016:879, paragraph 27 and the case-law cited).25In the present case, as the French, Austrian and Polish Governments and the European Commission have noted in their written observations, it follows from the clear wording of those provisions that, since the operating air carrier is not able to prove that the passenger concerned was informed of the cancellation of his flight more than two weeks before the scheduled time of departure, that air carrier must pay the compensation specified in those provisions.26Contrary to what SLM contends, this interpretation applies not only when the contract for carriage has been entered into directly between the passenger concerned and the air carrier, but also when that contract has been entered into via a third party such as, as is the case in the main proceedings, an online travel agency.27As it follows both from Article 3(5) of Regulation No 261/2004 and from recitals 7 and 12 thereof, the operating air carrier which performs or intends to perform a flight is alone liable to compensate passengers for failure to fulfil the obligations under that regulation including, in particular, the obligation to inform set out in Article 5(1)(c) thereof.28Such an interpretation is the only one which fulfils the objective of ensuring a high level of protection for passengers set out in recital 1 of Regulation No 261/2004 by guaranteeing that a passenger whose flight was booked via a third party before its cancellation is able to identify the entity liable for payment of the compensation specified in Article 5(1)(c) and Article 7 of that regulation.29Nonetheless, it should be noted that the discharge of obligations by the operating air carrier pursuant to Regulation No 261/2004 is without prejudice to its rights to seek compensation, under the applicable national law, from any person who caused the air carrier to fail to fulfil its obligations, including third parties, as Article 13 of that regulation provides (see, to that effect, judgment of 17 September 2015, van derLans, C‑257/14, EU:C:2015:618, paragraph 46 and the case-law cited).30That article provides, in particular, that Regulation No 261/2004 in no way restricts the operating air carrier’s right to seek reimbursement from a tour operator or another person with whom the operating air carrier has a contract.31In the light of the foregoing, the answer to the question referred is that Article 5(1)(c) and Article 7 of Regulation No 261/2004 must be interpreted as meaning that the operating air carrier is required to pay the compensation specified in those provisions in the case where a flight was cancelled and that information was not communicated to the passenger at least two weeks before the scheduled time of departure, including in the case where that air carrier, at least two weeks before that time, communicated that information to the travel agent via whom the contract for carriage had been entered into with the passenger concerned and the passenger had not been informed of that cancellation by that agent within that period.Costs32Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Eighth Chamber) hereby rules: Article 5(1)(c) and Article 7 of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, must be interpreted as meaning that the operating air carrier is required to pay the compensation specified in those provisions in the case where a flight was cancelled and that information was not communicated to the passenger at least two weeks before the scheduled time of departure, including in the case where the air carrier, at least two weeks before that time, communicated that information to the travel agent via whom the contract for carriage had been entered into with the passenger concerned and the passenger had not been informed of that cancellation by that agent within that period. [Signatures]( *1 ) Language of the case: Dutch. | b76fc-77e22d8-4158 | EN |
According to Advocate General Szpunar, the Uber electronic platform, whilst innovative, falls within the field of transport: Uber can thus be required to obtain the necessary licences and authorisations under national law | 20 December 2017 ( *1 )(Reference for a preliminary ruling — Article 56 TFEU — Article 58(1) TFEU — Services in the field of transport — Directive 2006/123/EC — Services in the internal market — Directive 2000/31/EC — Directive 98/34/EC — Information society services — Intermediation service to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys — Requirement for authorisation)In Case C‑434/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3, Barcelona, Spain), made by decision of 16 July 2015, received at the Court on 7 August 2015, in the proceedings Asociación Profesional Élite Taxi v Uber Systems Spain SL, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič, J.L. da Cruz Vilaça, J. Malenovský and E. Levits, Presidents of Chambers, E. Juhász, A. Borg Barthet, D. Šváby (Rapporteur), C. Lycourgos, M. Vilaras and E. Regan, Judges,Advocate General: M. Szpunar,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 29 November 2016,after considering the observations submitted on behalf of:–Asociación Profesional Elite Taxi, by M. Balagué Farré and D. Salmerón Porras, abogados, and J.A. López-Jurado González, procurador,Uber Systems Spain SL, by B. Le Bret and D. Calciu, avocats, R. Allendesalazar Corcho, J.J. Montero Pascual, C. Fernández Vicién and I. Moreno-Tapia Rivas, abogados,the Spanish Government, by M.A. Sampol Pucurull and A. Rubio González, acting as Agents,the Estonian Government, by N. Grünberg, acting as Agent,Ireland, by E. Creedon, L. Williams and A. Joyce, acting as Agents, and A. Carroll, Barrister,the Greek Government, by M. Michelogiannaki, acting as Agent,the French Government, by D. Colas, G. de Bergues and R. Coesme, acting as Agents,the Netherlands Government, by H. Stergiou and M. Bulterman, acting as Agents,the Polish Government, by B. Majczyna, acting as Agent,the Finnish Government, by S. Hartikainen, acting as Agent,the European Commission, by É. Gippini Fournier, F. Wilman, J. Hottiaux and H. Tserepa-Lacombe, acting as Agents,the EFTA Surveillance Authority, by C. Zatschler, Ø. Bø and C. Perrin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 11 May 2017,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 56 TFEU, Article 1 of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services (OJ 1998 L 204, p. 37), as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998 (OJ 1998 L 217, p. 18) (‘Directive 98/34’), Article 3 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) (OJ 2000 L 178, p. 1), and Articles 2 and 9 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36).2The request has been made in proceedings between Asociación Profesional Elite Taxi (‘Elite Taxi’), a professional taxi drivers’ association in Barcelona (Spain), and Uber Systems Spain SL, a company related to Uber Technologies Inc., concerning the provision by the latter, by means of a smartphone application, of the paid service consisting of connecting non-professional drivers using their own vehicle with persons who wish to make urban journeys, without holding any administrative licence or authorisation. Legal context EU law Directive 98/34 3Article 1(2) of Directive 98/34 provides:‘For the purposes of this Directive, the following meanings shall apply:…(2)“service”, any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.For the purposes of this definition:“at a distance” means that the service is provided without the parties being simultaneously present,“by electronic means” means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means,“at the individual request of a recipient of services” means that the service is provided through the transmission of data on individual request.An indicative list of services not covered by this definition is set out in Annex V.…’4In accordance with Articles 10 and 11 of Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services (OJ 2015 L 241, p. 1), Directive 98/34 was repealed on 7 October 2015. Nevertheless, Directive 98/34 remains applicable ratione temporis to the dispute in the main proceedings. Directive 2000/31 5Article 2(a) of Directive 2000/31 provides that, for the purposes of the directive, ‘information society services’ means services within the meaning of Article 1(2) of Directive 98/34.6Article 3(2) and (4) of Directive 2000/31 states:‘2. Member States may not, for reasons falling within the coordinated field, restrict the freedom to provide information society services from another Member State.4. Member States may take measures to derogate from paragraph 2 in respect of a given information society service if the following conditions are fulfilled:(a)the measures shall be:(i)necessary for one of the following reasons:public policy, in particular the prevention, investigation, detection and prosecution of criminal offences, including the protection of minors and the fight against any incitement to hatred on grounds of race, sex, religion or nationality, and violations of human dignity concerning individual persons,the protection of public health,public security, including the safeguarding of national security and defence,the protection of consumers, including investors;(ii)taken against a given information society service which prejudices the objectives referred to in point (i) or which presents a serious and grave risk of prejudice to those objectives;(iii)proportionate to those objectives;(b)before taking the measures in question and without prejudice to court proceedings, including preliminary proceedings and acts carried out in the framework of a criminal investigation, the Member State has:asked the Member State referred to in paragraph 1 to take measures and the latter did not take such measures, or they were inadequate,notified the Commission and the Member State referred to in paragraph 1 of its intention to take such measures.’ Directive 2006/123 7According to recital 21 of Directive 2006/123, ‘transport services, including urban transport, taxis and ambulances as well as port services, should be excluded from the scope of this Directive’.8Article 2(2)(d) of Directive 2006/123 provides that the directive does not apply to services in the field of transport, including port services, falling within the scope of Title V of Part Three of the EC Treaty, which is now Title VI of Part Three of the FEU Treaty.9Under Article 9(1) of Directive 2006/123, which falls under Chapter III thereof, headed ‘Freedom of establishment for providers’:‘Member States shall not make access to a service activity or the exercise thereof subject to an authorisation scheme unless the following conditions are satisfied:the authorisation scheme does not discriminate against the provider in question;the need for an authorisation scheme is justified by an overriding reason relating to the public interest;(c)the objective pursued cannot be attained by means of a less restrictive measure, in particular because an a posteriori inspection would take place too late to be genuinely effective.’10Under Chapter IV of the directive, headed ‘Free movement of services’, Article 16 lays down the procedures enabling service providers to provide services in a Member State other than that in which they are established. Spanish law 11In the metropolitan area of Barcelona, taxi services are governed by Ley 19/2003 del Taxi (Law No 19/2003 on taxi services) of 4 July 2003 (DOGC No 3926 of 16 July 2003 and BOE No 189 of 8 August 2003) and by Reglamento Metropolitano del Taxi (Regulation on taxi services in the metropolitan area of Barcelona) of 22 July 2004 adopted by the Consell Metropolitá of the Entitat Metropolitana de Transport de Barcelona (Governing Board of the Transport management body for the metropolitan area of Barcelona, Spain).12Under Article 4 of that law:‘1. The provision of urban taxi services is subject to the prior grant of a licence entitling the licence holder for each vehicle intended to carry out that activity.2. Licences for the provision of urban taxi services are issued by the town halls or the competent local authorities in the territory where the activity shall be carried out.3. The provision of interurban taxi services is subject to the prior grant of the corresponding authorisation issued by the ministry of transport of the regional government.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 13On 29 October 2014, Elite Taxi brought an action before the Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3, Barcelona, Spain) seeking a declaration from that court that the activities of Uber Systems Spain infringe the legislation in force and amount to misleading practices and acts of unfair competition within the meaning of Ley 3/1991 de Competencia Desleal (Law No 3/1991 on unfair competition) of 10 January 1991. Elite Taxi also claims that Uber Systems Spain should be ordered to cease its unfair conduct consisting of supporting other companies in the group by providing on-demand booking services by means of mobile devices and the internet. Lastly, it claims that the court should prohibit Uber Systems Spain from engaging in such activity in the future.14The Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3, Barcelona) noted at the outset that although Uber Systems Spain carries out its activity in Spain, that activity is linked to an international platform, thus justifying the assessment at EU level of the actions of that company. It also observed that neither Uber Systems Spain nor the non-professional drivers of the vehicles concerned have the licences and authorisations required under the Regulation on taxi services in the metropolitan area of Barcelona of 22 July 2004.15In order to determine whether the practices of Uber Systems Spain and related companies (together, ‘Uber’) can be classified as unfair practices that infringe the Spanish rules on competition, the Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3, Barcelona) considers it necessary to ascertain whether or not Uber requires prior administrative authorisation. To that end, the court considers that it should be determined whether the services provided by that company are to be regarded as transport services, information society services or a combination of both. According to the court, whether or not prior administrative authorisation may be required depends on the classification adopted. In particular, the referring court takes the view that if the service at issue were covered by Directive 2006/123 or Directive 98/34, Uber’s practices could not be regarded as unfair practices.16To that end, the referring court states that Uber contacts or connects with non-professional drivers to whom it provides a number of software tools — an interface — which enables them, in turn, to connect with persons who wish to make urban journeys and who gain access to the service through the eponymous software application. According to the court, Uber’s activity is for profit.17The referring court also states that the request for a preliminary ruling in no way concerns those factual elements but solely the legal classification of the service at issue.18Consequently, the Juzgado de lo Mercantil No 3 de Barcelona (Commercial Court No 3, Barcelona) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Inasmuch as Article 2(2)(d) of [Directive 2006/123] excludes transport activities from the scope of that directive, must the activity carried out for profit by [Uber Systems Spain], consisting of acting as an intermediary between the owner of a vehicle and a person who needs to make a journey within a city, by managing the IT resources — in the words of [Uber Systems Spain], “smartphone and technological platform” interface and software application — which enable them to connect with one another, be considered to be merely a transport service or must it be considered to be an electronic intermediary service or an information society service, as defined by Article 1(2) of [Directive 98/34]?Within the identification of the legal nature of that activity, can it be considered to be … in part an information society service, and, if so, ought the electronic intermediary service to benefit from the principle of freedom to provide services as guaranteed in [EU] legislation — Article 56 TFEU and Directives [2006/123] and … [2000/31]?(3)If the service provided by [Uber Systems Spain] were not to be considered to be a transport service and were therefore considered to fall within the cases covered by Directive 2006/123, is Article 15 of Law [No 3/1991] on unfair competition [of 10 January 1991] — concerning the infringement of rules governing competitive activity — contrary to Directive 2006/123, specifically Article 9 on freedom of establishment and authorisation schemes, when the reference to national laws or to legal provisions is made without taking into account the fact that the scheme for obtaining licences, authorisations and permits may not be in any way restrictive or disproportionate, that is, it may not unreasonably impede the principle of freedom of establishment?(4)If it is confirmed that Directive [2000/31] is applicable to the service provided by [Uber Systems Spain], are restrictions in one Member State regarding the freedom to provide the electronic intermediary service from another Member State, in the form of making the service subject to an authorisation or a licence, or in the form of an injunction prohibiting provision of the electronic intermediary service based on the application of the national legislation on unfair competition, valid measures that constitute derogations from Article 3(2) of Directive [2000/31] in accordance with Article 3(4) thereof?’ The jurisdiction of the Court 19Elite Taxi claims that the legal classification of the service provided by Uber does not fall within the Court’s jurisdiction because that classification requires a decision on issues of fact. In those circumstances, according to Elite Taxi, the Court has no jurisdiction to answer the questions referred.20In that regard, it should be recalled that the referring court has clearly stated, as is apparent from paragraph 17 above, that its questions concern solely the legal classification of the service at issue and not a finding or assessment of the facts of the dispute in the main proceedings. The classification under EU law of facts established by that court involves, however, the interpretation of EU law for which, in the context of the procedure laid down in Article 267 TFEU, the Court of Justice has jurisdiction (see, to that effect, judgment of 3 December 2015, Banif Plus Bank, C‑312/14, EU:C:2015:794, paragraphs 51 and 52).21The Court therefore has jurisdiction to reply to the questions referred. Consideration of the questions referred Admissibility 22The Spanish, Greek, Netherlands, Polish and Finnish Governments, the European Commission and the EFTA Surveillance Authority note that the order for reference is insufficiently precise as regards both the applicable national legislation and the nature of the activities at issue in the main proceedings.23In that regard, it should be recalled that the Court may refuse to give a ruling on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to enable it to give a useful answer to the questions submitted to it (judgment of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 25).24On that last point, the need to provide an interpretation of EU law which will be of use to the referring court requires that court, according to Article 94(a) and (b) of the Rules of Procedure of the Court, to define the factual and legislative context of the questions it is asking or, at the very least, to explain the factual circumstances on which those questions are based (see judgment of 10 May 2017, de Lobkowicz, C‑690/15, EU:C:2017:355, paragraph 28).25Furthermore, according to the settled case-law of the Court, the information provided in orders for reference not only enables the Court to give useful answers but also serves to ensure that the governments of the Member States and other interested persons are given an opportunity to submit observations in accordance with Article 23 of the Statute of the Court of Justice of the European Union. It is for the Court to ensure that that opportunity is safeguarded, given that, under Article 23, only the orders for reference are notified to the interested parties, accompanied by a translation in the official language of each Member State, but excluding any case file that may be sent to the Court by the national court (judgment of 4 May 2016, Pillbox 38, C‑477/14, EU:C:2016:324, paragraph 26 and the case-law cited).26In the present case, it must be noted that the order for reference, while brief in its reference to the relevant national provisions, nevertheless serves to identify those that may apply to the provision of the service at issue in the main proceedings, from which it would follow that a licence or prior administrative authorisation is required for that purpose.27Similarly, the referring court’s description of the service provided by Uber, the content of which is set out in paragraph 16 above, is sufficiently precise.28Lastly, in accordance with Article 94(c) of the Rules of Procedure, the referring court sets out precisely the reasons for its uncertainty as to the interpretation of EU law.29Consequently, it must be held that the order for reference contains the factual and legal material necessary to enable the Court to give a useful answer to the referring court and to enable interested persons usefully to take a position on the questions referred to the Court, in accordance with the case-law referred to in paragraph 25 above.30The Polish Government also expresses its doubts as to whether Article 56 TFEU, inter alia, is applicable to the present case, on the ground that the matter in the main proceedings is allegedly a purely internal matter.31However, it is apparent from the order for reference, in particular the information referred to in paragraph 14 above and the other documents in the file before the Court, that the service at issue in the main proceedings is provided through a company that operates from another Member State, namely the Kingdom of the Netherlands.32In those circumstances, the request for a preliminary ruling must be held to be admissible. Substance 33By its first and second questions, which should be considered together, the referring court asks, in essence, whether Article 56 TFEU, read together with Article 58(1) TFEU, as well as Article 2(2)(d) of Directive 2006/123 and Article 1(2) of Directive 98/34, to which Article 2(a) of Directive 2000/31 refers, must be interpreted as meaning that an intermediation service such as that at issue in the main proceedings, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, is to be classified as a ‘service in the field of transport’ within the meaning of Article 58(1) TFEU and, therefore, excluded from the scope of Article 56 TFEU, Directive 2006/123 and Directive 2000/31, or whether, on the contrary, the service is covered by Article 56 TFEU, Directive 2006/123 and Directive 2000/31.34In that regard, it should be noted that an intermediation service consisting of connecting a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey is, in principle, a separate service from a transport service consisting of the physical act of moving persons or goods from one place to another by means of a vehicle. It should be added that each of those services, taken separately, can be linked to different directives or provisions of the FEU Treaty on the freedom to provide services, as contemplated by the referring court.35Accordingly, an intermediation service that enables the transfer, by means of a smartphone application, of information concerning the booking of a transport service between the passenger and the non-professional driver who will carry out the transportation using his or her own vehicle, meets, in principle, the criteria for classification as an ‘information society service’ within the meaning of Article 1(2) of Directive 98/34 and Article 2(a) of Directive 2000/31. That intermediation service, according to the definition laid down in Article 1(2) of Directive 98/34, is ‘a service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’.36By contrast, non-public urban transport services, such as a taxi services, must be classified as ‘services in the field of transport’ within the meaning of Article 2(2)(d) of Directive 2006/123, read in the light of recital 21 thereof (see, to that effect, judgment of 1 October 2015, Trijber and Harmsen, C‑340/14 and C‑341/14, EU:C:2015:641, paragraph 49).37It is appropriate to observe, however, that a service such as that in the main proceedings is more than an intermediation service consisting of connecting, by means of a smartphone application, a non-professional driver using his or her own vehicle with a person who wishes to make an urban journey.38In a situation such as that with which the referring court is concerned, where passengers are transported by non-professional drivers using their own vehicle, the provider of that intermediation service simultaneously offers urban transport services, which it renders accessible, in particular, through software tools such as the application at issue in the main proceedings and whose general operation it organises for the benefit of persons who wish to accept that offer in order to make an urban journey.39In that regard, it follows from the information before the Court that the intermediation service provided by Uber is based on the selection of non-professional drivers using their own vehicle, to whom the company provides an application without which (i) those drivers would not be led to provide transport services and (ii) persons who wish to make an urban journey would not use the services provided by those drivers. In addition, Uber exercises decisive influence over the conditions under which that service is provided by those drivers. On the latter point, it appears, inter alia, that Uber determines at least the maximum fare by means of the eponymous application, that the company receives that amount from the client before paying part of it to the non-professional driver of the vehicle, and that it exercises a certain control over the quality of the vehicles, the drivers and their conduct, which can, in some circumstances, result in their exclusion.40That intermediation service must thus be regarded as forming an integral part of an overall service whose main component is a transport service and, accordingly, must be classified not as ‘an information society service’ within the meaning of Article 1(2) of Directive 98/34, to which Article 2(a) of Directive 2000/31 refers, but as ‘a service in the field of transport’ within the meaning of Article 2(2)(d) of Directive 2006/123.41That classification is indeed confirmed by the case-law of the Court, according to which the concept of ‘services in the field of transport’ includes not only transport services in themselves but also any service inherently linked to any physical act of moving persons or goods from one place to another by means of transport (see, to that effect, judgment of 15 October 2015, Grupo Itevelesa and Others, C‑168/14, EU:C:2015:685, paragraphs 45 and 46, and Opinion 2/15 (Free Trade Agreement with Singapore) of 16 May 2017, EU:C:2017:376, paragraph 61).42Consequently, Directive 2000/31 does not apply to an intermediation service such as that at issue in the main proceedings.43Such service, in so far as it is classified as ‘a service in the field of transport’, does not come under Directive 2006/123 either, since this type of service is expressly excluded from the scope of the directive pursuant to Article 2(2)(d) thereof.44Moreover, since the intermediation service at issue in the main proceedings is to be classified as ‘a service in the field of transport’, it is covered not by Article 56 TFEU on the freedom to provide services in general but by Article 58(1) TFEU, a specific provision according to which ‘freedom to provide services in the field of transport shall be governed by the provisions of the Title relating to transport’ (see, to that effect, judgment of 22 December 2010, Yellow Cab Verkehrsbetrieb, C‑338/09, EU:C:2010:814, paragraph 29 and the case-law cited).45Accordingly, application of the principle governing freedom to provide services must be achieved, according to the FEU Treaty, by implementing the common transport policy (judgment of 22 December 2010, Yellow Cab Verkehrsbetrieb, C‑338/09, EU:C:2010:814, paragraph 30 and the case-law cited).46However, it should be noted that non-public urban transport services and services that are inherently linked to those services, such as the intermediation service at issue in the main proceedings, has not given rise to the adoption by the European Parliament and the Council of the European Union of common rules or other measures based on Article 91(1) TFEU.47It follows that, as EU law currently stands, it is for the Member States to regulate the conditions under which intermediation services such as that at issue in the main proceedings are to be provided in conformity with the general rules of the FEU Treaty.48Accordingly, the answer to the first and second questions is that Article 56 TFEU, read together with Article 58(1) TFEU, as well as Article 2(2)(d) of Directive 2006/123 and Article 1(2) of Directive 98/34, to which Article 2(a) of Directive 2000/31 refers, must be interpreted as meaning that an intermediation service such as that at issue in the main proceedings, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of Article 58(1) TFEU. Consequently, such a service must be excluded from the scope of Article 56 TFEU, Directive 2006/123 and Directive 2000/31.49In the light of the answer given to the first and second questions, it is not necessary to provide an answer to the third and fourth questions, which were referred on the assumption that Directive 2006/123 or Directive 2000/31 applied. Costs 50Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 56 TFEU, read together with Article 58(1) TFEU, as well as Article 2(2)(d) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, and Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services, as amended by Directive 98/48/EC of the European Parliament and of Council of 20 July 1998, to which Article 2(a) of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) refers, must be interpreted as meaning that an intermediation service such as that at issue in the main proceedings, the purpose of which is to connect, by means of a smartphone application and for remuneration, non-professional drivers using their own vehicle with persons who wish to make urban journeys, must be regarded as being inherently linked to a transport service and, accordingly, must be classified as ‘a service in the field of transport’ within the meaning of Article 58(1) TFEU. Consequently, such a service must be excluded from the scope of Article 56 TFEU, Directive 2006/123 and Directive 2000/31. [Signatures]( *1 ) Language of the case: Spanish. | 37a4e-cd07aaf-4a1f | EN |
The General Court annuls the Commission decision refusing the registration of the proposed European citizens’ initiative ‘Stop TTIP’ | 10 May 2017 ( *1 )‛Law governing the institutions — European citizens’ initiative — Transatlantic Trade and Investment Partnership — Comprehensive Economic and Trade Agreement — Manifest lack of powers of the Commission — Proposal for a legal act for the purpose of implementing the Treaties — Article 11(4) TEU — Article 2(1) and Article 4(2)(b) of Regulation (EU) No 211/2011 — Equal treatment’In Case T‑754/14, Michael Efler, residing in Berlin (Germany), and the other applicants whose names are listed in the annex, represented by B. Kempen, professor, ( 1 )applicants,v European Commission, represented initially by J. Laitenberger and H. Krämer, subsequently by H. Krämer and finally by H. Krämer and F. Erlbacher, acting as Agents,defendant,ACTION under Article 263 TFEU for the annulment of Commission Decision C(2014) 6501 final of 10 September 2014 rejecting the request for registration of the proposal for a citizens’ initiative entitled ‘Stop TTIP’,THE GENERAL COURT (First Chamber),composed of H. Kanninen, President, E. Buttigieg (Rapporteur) and L. Calvo‑Sotelo Ibáñez‑Martín, Judges,Registrar: S. Bukšek Tomac, Administrator,having regard to the written part of the procedure and further to the hearing on 13 September 2016,gives the followingJudgmentBackground to the dispute1By decision of 27 April 2009, the Council of the European Union authorised the Commission of the European Communities to open negotiations with Canada with a view to concluding a free-trade agreement, subsequently referred to as the ‘Comprehensive Economic and Trade Agreement’ (‘the CETA’). By decision of 14 June 2013, the Council authorised the Commission to open negotiations with the United States of America with a view to concluding a free-trade agreement, subsequently referred to as the ‘Transatlantic Trade and Investment Partnership’ (‘the TTIP’).2On 15 July 2014, Mr Michael Efler and the other applicants whose names are listed in the annex, submitted, in their capacity as members of the citizens’ committee set up for that purpose, a request for registration of the proposed European citizens’ initiative (‘the ECI’) entitled ‘Stop TTIP’ (‘the ECI proposal’). In respect of its purpose, the ECI proposal states that ‘the European Commission … recommends that the Council cancel the negotiating mandate for the [TTIP] and not conclude [the CETA]’. In respect of the aims pursued, the ECI proposal states that they consist in ‘preventing the TTIP and the CETA because they contain several critical issues such as procedures for the resolution of disputes between investors and States and provisions on regulatory cooperation which threaten democracy and the rule of law …, avoiding opaque negotiations leading to a weakening of the rules on employment protection, social protection, environmental protection, protection of private life and of consumers and preventing public services (for example, water supplies) and culture from being deregulated’ and supporting ‘a different trade and investment policy in [the European Union]’. The ECI proposal refers to Articles 207 and 218 TFEU as the legal bases of that initiative.3By Decision C(2014) 6501 of 10 September 2014 (‘the contested decision’), the Commission refused to register the ECI proposal in accordance with Article 4(2)(b) of Regulation (EU) No 211/2011 of the European Parliament and of the Council of 16 February 2011 on the citizens’ initiative (OJ 2011 L 65, p. 1).4The contested decision states, in essence, that a Council decision authorising the Commission to open negotiations with a view to concluding an agreement with a third country is not a European Union legal act and that a recommendation relating thereto does not therefore constitute an appropriate proposal within the meaning of Article 11(4) TEU and Article 2(1) of Regulation No 211/2011, in so far as such a decision constitutes a preparatory measure in the light of the subsequent decision of the Council to authorise the signing of the agreement, as negotiated, and to conclude that agreement. Such a preparatory decision would produce legal effects solely between the institutions concerned, without changing European Union law, contrary to the case of the decision to sign and conclude a specific agreement, which could be covered by an ECI. The Commission inferred from that that the registration of the ECI proposal, in so far as it seeks to invite it to submit a recommendation to the Council to adopt a decision withdrawing authorisation to open negotiations with a view to concluding the TTIP, must be refused.5The contested decision states moreover that, in so far as the ECI proposal could be understood as inviting the Commission not to submit to the Council proposals for Council decisions for the signing and conclusion of the CETA or the TTIP or to submit proposals to the Council for decisions not to authorise the signing of those agreements or not to conclude them, such an invitation also does not come within the scope of application of Article 2(1) of Regulation No 211/2011, according to which the ECI seeks the adoption of legal acts necessary for the implementation of the Treaties and producing independent legal effects.6The contested decision concludes that the ECI proposal is, therefore, outside the framework of the Commission’s powers to submit a proposal for a legal act of the Union for the purpose of implementing the Treaties in accordance with Article 4(2)(b) of Regulation No 211/2011, read in conjunction with Article 2(1) of that regulation.Procedure and forms of order sought7By application lodged at the Court Registry on 10 November 2014, the applicants brought the present action.8By a separate document, lodged with the General Court Registry on 15 April 2016, the applicants brought an application for interim relief, which was dismissed by Order of 23 May 2016, Efler and Others v Commission (T‑754/14 R, not published, EU:T:2016:306). By a document of 17 July 2016, the applicants brought an appeal in accordance with the second subparagraph of Article 57 of the Statute of the Court of Justice of the European Union, which was dismissed by Order of the Vice-President of the Court of 29 September 2016, Efler and Others v Commission (C‑400/16 P(R), not published, EU:C:2016:735).9The applicants claim that the Court should:—annul the contested decision;order the Commission to pay the costs.10The Commission contends that the Court should:dismiss the action;order the applicants to pay the costs.Law11In support of their action, the applicants invoke two pleas in law, the first alleging an infringement of Article 11(4) TEU, of Article 2(1) and Article 4(2)(b) of Regulation No 211/2011, the second alleging an infringement of the principle of equal treatment.12As regards the first plea in law, the applicants note in the first place that, in so far as the refusal to register the ECI proposal is based on the fact that the Council decisions seeking to authorise the opening of negotiations with a view to concluding an international agreement are preparatory measures, they do not contest that those decisions are of such a nature. However, the situation is no different with respect to the Council decisions authorising the signing of an international agreement. Moreover, Regulation No 211/2011 covers, in general, all legal acts, without being restricted to measures producing definitive effects, and neither the history of the provisions at issue nor their legal context indicates that the concept of ‘legal act’ must be given a narrow interpretation. Finally, a decision to withdraw a negotiating mandate in favour of the Commission would lead to the end of the negotiations, would be legally binding and would therefore be final.13The applicants note in the second place that, in so far as the refusal to register the ECI proposal is based on the fact that the Council decisions authorising the opening of negotiations with a view to concluding an international agreement produce only effects between the institutions at issue, the broad concept of legal acts included in Articles 288 to 292 TFEU prohibits that classification from being denied to Commission decisions taken outside the ordinary legislative procedure and prohibits the latter from being excluded from the scope of application of the provisions relating to the ECI, as long as those decisions are legally binding. It does not follow from the wording of the Treaties, from the background thereof, or from the objectives pursued by those Treaties that the principle of democracy, upon which the Union is based, should apply only to persons affected or concerned by the legal act at issue. The Commission contradicts itself also in so far as it accepts, moreover, as admissible an ECI acclamation and confirmation seeking to sign and conclude an agreement whose subject and contents are already fixed.14The applicants note in the third place that, in so far as the contested decision is based on the ‘destructive’ character of the proposals for acts seeking to withdraw from the Commission the negotiating mandate for the conclusion of the TTIP and to submit to the Council a proposal not to authorise the signing of the TTIP and the CETA or not to conclude those agreements, such proposals could not be blocked by the fact that, in accordance with Article 11(4) TEU and Article 2(1) of Regulation No 211/2011, the proposed legal act should contribute to ‘implementing the Treaties’, since the proposed acts would lead, in one form or another, to making operational the foundations of powers derived from primary law. According to the applicants, the general right of citizens to participate in the democratic life of the European Union includes the power to take action with a view to amending secondary legislation in force, to reform it or annul it in whole or in part. The registration of the ECI proposal would lead to more public debate, which is the primary objective of all ECIs.15Moreover, if, as the Commission submits for the first time in the statement of defence, all types of international treaty, whether they seek to repeal an existing treaty or to establish a completely new treaty, could be proposed by an ECI, it would be contradictory for the latter not to be able to aim to prevent the conclusion of a treaty in the process of being negotiated.16The applicants add that a Council proposal not to approve the CETA does not exclude that amended draft transatlantic free trade agreements could be subsequently developed.17Finally, the ECI proposal does not, in any event, ‘manifestly’ fall outside the framework of the Commission’s powers, as required by Article 4(2)(b) of Regulation No 211/2011.18The Commission notes at the outset that the plea in law alleging an infringement of Article 11(4) TEU is ineffective, since Regulation No 211/2011, adopted on the basis of the first subparagraph of Article 24 TFEU, constitutes the reference for the review of the lawfulness of Commission decisions relating to the registration of ECI proposals.19The Commission contends next that a Council decision authorising it to open negotiations with a view to concluding an international agreement, as opposed to a Council decision to sign such an agreement, is purely preparatory, in so far as it produces legal effects only in the relations between the institutions. A systematic and teleological interpretation of Article 2(1) and Article 4(2)(b) of Regulation No 211/2011 leads to the conclusion that a purely preparatory legal act is not a legal act for the purposes of those provisions.20Furthermore, according to the Commission, only legal acts whose effects go beyond the relations between the institutions of the European Union can be covered by an ECI, because the purpose of the democratic participation that that ECI seeks to promote is to involve citizens in decisions relating to matters which concern, at least potentially, their own legal sphere. The Council and the Commission enjoy sufficient indirect democratic legitimacy to adopt acts whose legal effects are limited to the institutions.21Moreover, according to the Commission, the ECI proposal circumvents the rule that an ECI cannot request the Commission not to propose a particular legal act or to propose a decision not to adopt a particular legal act. The wording of Article 10(1)(c) of Regulation No 211/2011, in so far as it makes reference to ‘the action it intends to take’, assumes that only ECIs which seek the adoption of a legal act with a precise content or which seek the annulment of an existing legal act are authorised. If the Commission stated, in its communication pursuant to Article 10(1)(c) of Regulation No 211/2011, that it did not intend to propose a corresponding legal act, that would result in an unacceptable political restriction of its right of initiative. In addition, the ECI’s function, consisting in prompting the Commission to publicly address the topic of the ECI and to thus stimulate a political debate, could be fully realised only by an ECI proposal seeking the adoption of a legal act with a precise content or the annulment of an existing legal act. An ECI which requests that a Council decision not be adopted is no longer capable of carrying out the function consisting in launching such a political debate for the first time and amounts to an inadmissible interference in an ongoing legislative procedure.22Finally, a Council decision to reject the TTIP or the CETA, such as suggested by the ECI proposal, is not independent in scope from the mere failure to adopt a Council decision approving the conclusion of the agreement, so that such a decision is legally superfluous. An ECI with such an aim is functionally equivalent to an ECI requesting that no proposal for a legal act be made and is, on that basis, inadmissible.23The Court notes that Article 11(4) TEU states that not less than one million citizens who are nationals of a significant number of Member States may take the initiative of inviting the Commission, within the framework of its powers, to submit any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties.24As is stated in recital 1 of Regulation No 211/2011, by which the European Parliament and the Council adopted, in accordance with the first subparagraph of Article 24 TFEU, the provisions relating to the procedures and conditions required for the presentation of an ECI for the purposes of Article 11 TEU, the EU Treaty reinforces citizenship of the Union and enhances further the democratic functioning of the Union by providing, inter alia, that every citizen is to have the right to participate in the democratic life of the Union by way of an ECI (judgments of 30 September 2015, Anagnostakis v Commission, T‑450/12, currently under appeal, EU:T:2015:739, paragraph 26, and of 19 April 2016, Costantini and Others v Commission, T‑44/14, EU:T:2016:223, paragraphs 53 and 73). According to that recital, that mechanism allows citizens, following the example of the Parliament under Article 225 TFEU and of the Council under Article 241 TFEU, to directly approach the Commission asking it to submit a proposal for a legal act of the Union for the purpose of implementing the Treaties.25To that end, Article 2(1) of Regulation No 211/2011 defines the ECI as an initiative submitted to the Commission in accordance with that regulation, inviting the Commission, within the framework of its powers, to submit any ‘appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Treaties’, which has received the support of at least one million eligible signatories coming from at least one quarter of all Member States.26In accordance with Article 4(2)(b) and 4(3) of Regulation No 211/2011, the Commission is to refuse to register an ECI proposal if it manifestly falls outside the framework of its powers to submit a ‘proposal for a legal act of the Union for the purpose of implementing the Treaties’.27Article 10(1)(c) of that regulation provides that, when the Commission receives an ECI in accordance with Article 9 of that regulation, it is to set out, within three months, its legal and political conclusions on the ECI, the ‘action it intends to take, if any, and its reasons for taking or not taking that action’.28As regards the scope of the ECI proposal, the applicants stated, in answer to a question posed at the hearing, that its aim was not to request the Commission not to submit to the Council a proposal for an act with a view to authorising the signing of the TTIP and of the CETA and to concluding those agreements, but that it sought to request the Commission to submit to the Council, first, a proposal for a Council act to withdraw the negotiating mandate for the conclusion of the TTIP, secondly, a proposal for a Council act not to authorise the Commission to sign the TTIP and the CETA and not to conclude those agreements.29Furthermore, the present action does not relate to the competence of the European Union to negotiate the TTIP and CETA agreements, but the applicants contest the grounds invoked in the contested decision for refusing to register the ECI proposal in so far as it seeks to terminate the negotiating mandate for the conclusion of the TTIP and to prevent the signing and conclusion of the CETA and the TTIP.30In that regard, it is apparent from the contested decision that, according to the Commission, the fact that a Council decision authorising it to open negotiations on the conclusion of an international agreement is preparatory and produces legal effects only between the institutions prevents that decision from being classified as a legal act for the purposes of the regulation at issue and opposes the registration of the ECI proposal in so far as it seeks the withdrawal of such a decision. The same applies to the ECI proposal in so far as it requests the Commission to submit to the Council a proposal for a decision not to authorise the signing of the agreements at issue or not to conclude them, because such a decision does not produce independent legal effects although, according to Article 2(1) of Regulation No 211/2011, ECIs are to seek the adoption of legal acts necessary ‘for the purpose of implementing the Treaties’, which is not so in the present case.31As was previously stated, the Commission refuses to register ECI proposals which are manifestly outside the framework of powers under which it can submit a ‘proposal for a legal act of the Union for the purpose of implementing the Treaties’.32It is not disputed that the Commission may, on its own initiative, present a proposal to the Council for an act to withdraw from it the mandate by which it was authorised to open negotiations with a view to concluding an international agreement. The Commission may also not be prevented from presenting to the Council a proposal for a decision not to authorise, ultimately, the signing of a negotiated agreement or not to conclude that agreement.33The Commission however contends that an ECI proposal cannot relate to such acts and it invokes, first, the fact that the act for the opening of negotiations with a view to concluding an international agreement is preparatory and the absence of its legal effects outside the institutions and, secondly, the fact that the legal acts whose adoption is proposed are not necessary ‘for the purpose of implementing the Treaties’.34It should be noted at the outset that the parties are in agreement that a Council decision authorising the Commission, in accordance with Articles 207 and 218 TFEU, to open negotiations on the conclusion of an international agreement should be considered to constitute a preparatory act in relation to the subsequent decision to sign and conclude such an agreement and that it produces legal effects between the European Union and its Member States as well as between the institutions of the European Union (see, to that effect, judgments of 4 September 2014, Commission v Council, C‑114/12, EU:C:2014:2151, paragraph 40, and of 16 July 2015, Commission v Council, C‑425/13, EU:C:2015:483, paragraph 28).35As the applicants correctly claimed, the concept of a legal act, for the purposes of Article 11(4) TEU, Article 2(1) and Article 4(2)(b) of Regulation No 211/2011, cannot, in the absence of any indication to the contrary, be understood, as the Commission interprets it, as being limited only to definitive European Union legal acts which produce legal effects vis-à-vis third parties.36Neither the wording of the provisions at issue nor the objectives pursued by them justify in particular that a decision authorising the opening of negotiations with a view to concluding an international agreement, such as in this case the TTIP and the CETA, taken under Article 207(3) and (4) TFEU and Article 218 TFEU and which clearly constitute a decision for the purposes of the fourth subparagraph of Article 288 TFEU (see, to that effect, judgments of 4 September 2014, Commission v Council, C‑114/12, EU:C:2014:2151, paragraph 40, and of 16 July 2015, Commission v Council, C‑425/13, EU:C:2015:483, paragraph 28) be excluded from the concept of a legal act for the purpose of an ECI.37On the contrary, the principle of democracy, which, as it is stated in particular in the preamble to the EU Treaty, in Article 2 TEU and in the preamble to the Charter of Fundamental Rights of the European Union, is one of the fundamental values of the European Union, as is the objective specifically pursued by the ECI mechanism, which consists in improving the democratic functioning of the European Union by granting every citizen a general right to participate in democratic life (see paragraph 24 above), requires an interpretation of the concept of legal act which covers legal acts such as a decision to open negotiations with a view to concluding an international agreement, which manifestly seeks to modify the legal order of the European Union.38The Commission’s position, according to which it and the Council have sufficient indirect democratic legitimacy in order to adopt the other legal acts which do not produce legal effects vis-à-vis third parties, has the consequence of limiting considerably recourse to the ECI mechanism as an instrument of European Union citizen participation in the European Union’s normative activity as carried out by means of the conclusion of international agreements. In so far as the reasoning set out in the contested decision can therefore, where appropriate, be interpreted as definitively preventing European Union citizens from proposing any opening of negotiations relating to a new treaty to be negotiated by means of an ECI, that reasoning manifestly runs counter to the objectives pursued by the Treaties and by Regulation No 211/2011 and cannot, therefore, be admitted.39Accordingly, the Commission’s position in the contested decision, according to which the decision to withdraw authorisation to open negotiations with a view to concluding the TTIP is excluded from the concept of legal act for the purposes of an ECI proposal on the ground that that authorisation does not itself come within that concept due to the fact that it is preparatory and due to the absence of effects vis-à-vis third parties, must also be rejected. That is all the more true since, as the applicants correctly stated, a decision to withdraw authorisation to open negotiations with a view to concluding an international agreement, in so far as it brings those negotiations to a close, cannot be classified as a preparatory act, but is, instead, definitive.40Moreover, in order to oppose the registration of an ECI, the Commission contends in addition that the Council acts which that proposal seeks to have adopted, in particular Council decisions not to sign or conclude the TTIP and the CETA, amount to ‘destructive’ acts which do not take effect for the purpose of ‘implementing the Treaties’, and, therefore, cannot be covered by an ECI.41In response to that, it should be noted that the regulation on the ECI contains no information, according to which citizen participation could not be undertaken in order to prevent the adoption of a legal act. Indeed, although, according to Article 11(4) TEU and Article 2(1) of Regulation No 211/2011, the proposed legal act must contribute to the implementation of the Treaties, that is the case with acts whose object is to prevent the conclusion of the TTIP and the CETA, which seek to modify the legal order of the European Union.42As the applicants correctly stated, the objective of participation in the democratic life of the European Union pursued by the ECI mechanism manifestly includes the power to request an amendment of legal acts in force or their annulment, in whole or in part.43Therefore, nothing justifies excluding from democratic debate legal acts seeking the withdrawal of a decision authorising the opening of negotiations with a view to concluding an international agreement, as well as acts whose object is to prevent the signing and conclusion of such an agreement, which, contrary to the Commission’s contention, clearly produce independent legal effects by preventing, as the case may be, an announced modification of European Union law.44The Commission’s position, as it seems to follow from the contested decision, would ultimately mean that an ECI could relate only to the Council decision to conclude or to authorise the signing of international agreements with respect to which the institutions of the European Union have taken the initiative and which those institutions previously negotiated, while preventing European Union citizens from having recourse to the ECI mechanism in order to propose modifications or the withdrawal of such agreements. Indeed, before the Court, the Commission maintained that an ECI could, where appropriate, also include a proposal to open negotiations with a view to concluding an international agreement. However, nothing justifies, in the latter case, the authors of an ECI proposal being obliged to await the conclusion of an agreement so as to be able to subsequently contest only the appropriateness thereof.45The Commission’s argument, according to which the acts which an ECI proposal requests it to submit to the Council would lead to an inadmissible interference in an ongoing legislative procedure, also cannot succeed. The aim pursued by the ECI is to allow European Union citizens to participate more in the democratic life of the European Union, in particular, by presenting in detail to the Commission the questions raised by the ECI, by requesting that institution to submit a proposal for a European Union legal act after having, as the case may be, presented the ECI at a public hearing organised at the Parliament, in accordance with Article 11 of Regulation No 211/2011, therefore, by stimulating a democratic debate without having to await the adoption of the legal act whose modification or withdrawal is ultimately sought.46To admit such a possibility therefore also does not infringe the principle of institutional balance, characteristic of the institutional structure of the European Union (see, to that effect, judgment of 14 April 2015, Council v Commission, C‑409/13, EU :C:2015:217, paragraph 64), in so far as it is for the Commission to decide whether or not it will accept the ECI by presenting, in accordance with Article 10(1)(c) of Regulation No 211/2011, by means of a communication, its legal and political conclusions on the ECI, the action it intends to take, if any, and its reasons for taking or not taking that action.47Consequently, far from amounting to an interference in an ongoing legislative procedure, ECI proposals constitute an expression of the effective participation of citizens of the European Union in the democratic life thereof, without undermining the institutional balance intended by the Treaties.48Finally, nothing precludes that the action that the Commission ‘intends to take, if any’, for the purposes of Article 10(1) of Regulation No 211/2011, may consist in proposing that the Council adopt the acts sought by the ECI proposal. Contrary to the Commission’s contentions, nothing prevents, as the case may be, the institutions of the European Union from negotiating and concluding new draft transatlantic free-trade agreements following the adoption by the Council of acts which are the object of the ECI proposal.49In view of all the above considerations, it must be concluded that the Commission infringed Article 11(4) TEU and Article 4(2)(b), in conjunction with Article 2(1), of Regulation No 211/2011, by refusing to register the ECI proposal.50Consequently, the first plea in law must be upheld and, therefore, the action in its entirety, without it being necessary to rule on the second plea in law.Costs51Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to pay the costs of the present proceedings and those relating to the interim proceedings, in accordance with the form of order sought by the applicants.On those grounds,THE GENERAL COURT (First Chamber)hereby:1. Annuls Commission Decision C(2014) 6501 final of 10 September 2014 rejecting the request for registration of the proposed European citizens’ initiative entitled ‘Stop TTIP’; 2. Orders the European Commission to pay its own costs and those incurred by Mr Michael Efler and the other applicants whose names are listed in the annex, including the costs relating to the interim proceedings. KanninenButtigiegCalvo-Sotelo Ibáñez-MartínDelivered in open court in Luxembourg on 10 May 2017.[Signatures]( *1 ) Language of the case: German.( 1 ) The list of the other applicants is included only in the annex to the version notified to the parties. | 3bba0-58958dc-48c3 | EN |
A third-country national may, as the parent of a minor child who is an EU citizen, rely on a derived right of residence in the EU | 10 May 2017 ( *1 )‛Reference for a preliminary ruling — Union citizenship — Article 20 TFEU — Access to social assistance and child benefit conditional on right of residence in a Member State — Third-country national responsible for the primary day-to-day care of her minor child, a national of that Member State — Obligation on the third-country national to establish that the other parent, a national of that Member State, is not capable of caring for the child — Refusal of residence possibly obliging the child to leave the territory of the Member State, or the territory of the European Union’In Case C‑133/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Centrale Raad van Beroep (Higher Administrative Court, Netherlands), made by decision of 16 March 2015, received at the Court on 18 March 2015, in the proceedings H.C. Chavez-Vilchez, P. Pinas, U. Nikolic, X.V. Garcia Perez, J. Uwituze, I.O. Enowassam, A.E. Guerrero Chavez, Y.R. L. Wip v Raad van bestuur van de Sociale verzekeringsbank, College van burgemeester en wethouders van de gemeente Arnhem, College van burgemeester en wethouders van de gemeente ’s-Gravenhage, College van burgemeester en wethouders van de gemeente ’s-Hertogenbosch, College van burgemeester en wethouders van de gemeente Amsterdam, College van burgemeester en wethouders van de gemeente Rijswijk, College van burgemeester en wethouders van de gemeente Rotterdam, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič, J.L. da Cruz Vilaça, E. Juhász, M. Berger, A. Prechal and E. Regan, Presidents of Chambers, A. Rosas (Rapporteur), C. Toader, M. Safjan, D. Šváby, E. Jarašiūnas and C.G. Fernlund, Judges,Advocate General: M. Szpunar,Registrar: C. Strömholm, Administrator,having regard to the written procedure and further to the hearing on 10 May 2016,after considering the observations submitted on behalf of:—Ms Guerrero Chavez, Ms Enowassam, Ms Uwituze, Ms Garcia Perez, Ms Nikolic, Ms Pinas and Ms Chavez-Vilchez, by E. Cerezo-Weijsenfeld, J. Kruseman, S. Çakici-Reinders and W. Fischer, advocaten,Ms Wip, by H. de Roo and T. Weterings, advocaten,the Netherlands Government, by C.S. Schillemans and K. Bulterman, acting as Agents,the Belgian Government, by C. Pochet, M. Jacobs and S. Vanrie, acting as Agents,the Danish Government, by C. Thorning, M. Lyshøj and M. Wolff, acting as Agents,the French Government, by R. Coesme, acting as Agent,the Lithuanian Government, by R. Krasuckaitė and V. Čepaitė, acting as Agents,the Polish Government, by B. Majczyna, acting as Agent,the United Kingdom Government, by V. Kaye, C. Crane and M. Holt, acting as Agents, and by D. Blundell and B. Lask, Barristers,the Norwegian Government, by I. Jansen and K. Moen, acting as Agents,the European Commission, by D. Maidani, C. Tufvesson and G. Wils, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 8 September 2016,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 20 TFEU.2The request has been made in proceedings between, on the one hand, Ms H.C. Chavez-Vilchez and seven other third-country nationals, who are each mothers of one or more minor children who are of Netherlands nationality and for whose primary day-to-day care they are responsible, and, on the other, the competent Netherlands authorities, concerning the refusal of their applications for social assistance and child benefit, on the ground that they did not have a right of residence in the Netherlands.Legal context European Union law 3Article 2 of Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States, amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC (OJ 2004 L 158, p. 77, and corrigenda OJ 2004 L 229, p. 35, and OJ 2005 L 197, p. 34), headed ‘Definitions’, states:‘For the purpose of this Directive:(1)“Union citizen” means any person having the nationality of a Member State;(2)“Family member” means:…(d)the dependent direct relatives in the ascending line and those of the spouse or partner as defined in point (b);(3)“Host Member State” means the Member State to which a Union citizen moves in order to exercise his/her right of free movement and residence.’4Article 3(1) of that directive, that article being headed ‘Beneficiaries’, provides:‘This Directive shall apply to all Union citizens who move to or reside in a Member State other than that of which they are a national, and to their family members as defined in point 2 of Article 2 who accompany or join them.’5Article 5 of Directive 2004/38, headed ‘Right of entry’, states:‘1. Without prejudice to the provisions on travel documents applicable to national border controls, Member States shall grant Union citizens leave to enter their territory with a valid identity card or passport and shall grant family members who are not nationals of a Member State leave to enter their territory with a valid passport.No entry visa or equivalent formality may be imposed on Union citizens.2. Family members who are not nationals of a Member State shall only be required to have an entry visa in accordance with [Council Regulation (EC) No 539/2001 of 15 March 2001 listing the third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement (OJ 2001 L 81, p. 1)] or, where appropriate, with national law. For the purposes of this Directive, possession of the valid residence card referred to in Article 10 shall exempt such family members from the visa requirement.Member States shall grant such persons every facility to obtain the necessary visas. Such visas shall be issued free of charge as soon as possible and on the basis of an accelerated procedure.…’6Article 7(1) and (2) of that directive read as follows:‘1. All Union citizens shall have the right of residence on the territory of another Member State for a period of longer than three months if they:(a)are workers or self-employed persons in the host Member State; or(b)have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence and have comprehensive sickness insurance cover in the host Member State; or(c)have comprehensive sickness insurance cover in the host Member State and assure the relevant national authority, by means of a declaration or by such equivalent means as they may choose, that they have sufficient resources for themselves and their family members not to become a burden on the social assistance system of the host Member State during their period of residence; orare family members accompanying or joining a Union citizen who satisfies the conditions referred to in points (a), (b) or (c).2. The right of residence provided for in paragraph 1 shall extend to family members who are not nationals of a Member State, accompanying or joining the Union citizen in the host Member State, provided that such Union citizen satisfies the conditions referred to in paragraph 1(a), (b) or (c).’ Netherlands law 7Article 1 of the Vreemdelingenwet 2000 (Law on Foreign Nationals of 2000), in the version applicable at the material time (‘the Law on Foreign Nationals’), provides:‘For the purposes of the present Law and of the provisions adopted on the basis thereof:(e)Community nationals shall mean:1°nationals of the Member States of the European Union who, under the Treaty establishing the European Community, have the right to enter and reside on the territory of another Member State;2°the family members of those persons referred to in paragraph 1 who are nationals of a third State and who, on the basis of a decision taken in application of the EC Treaty, are entitled to enter and reside on the territory of a Member State;8Article 8 of that Law provides:‘A foreign national is lawfully resident in the Netherlands only:by virtue of his status as a Community national, so long as the person resides in the Netherlands on the basis of arrangements established under the Treaty establishing the European Community or the Agreement on the European Economic Area;(f)if, pending the decision on an application for a residence permit, … the present law, a provision adopted on the basis of the latter or a court order provides that the deportation of the foreign national should be deferred until a decision has been taken on the application;(g)if, pending the decision on an application for a residence permit … or on the extension of the period of validity of a residence permit … or an amendment thereof, the present law, a provision adopted on the basis of the latter or a court order provides that the deportation of the applicant should be deferred until a decision has been taken on the application;(h)if, pending the decision on an application for administrative or judicial review, the present law, a provision adopted on the basis of the latter or a court order provides that the deportation of the applicant should be deferred until a decision has been taken on the application for review.’9Article 10 of the Law on Foreign Nationals provides:‘1. A foreign national who is not lawfully resident may not claim entitlement to benefits and allowances awarded by decision of an administrative authority. The previous sentence shall apply mutatis mutandis to exemptions or licences issued pursuant to a law or a general administrative measure.2. Paragraph 1 may be derogated from if the claim relates to education, the provision of emergency medical care, the prevention of situations that would jeopardise public health, or the provision of legal assistance to the foreign national.3. The granting of a claim does not confer a right to lawful residence.’10The Vreemdelingencirculaire 2000 (the Circular of 2000 on Foreign Nationals), in the version applicable at the material time (‘the Circular on Foreign Nationals’), consists of a number of guidelines issued by the Staatssecretaris van Veiligheid en Justitie (the Secretary of State for Security and Justice, Netherlands). That circular is accessible to all and anyone may rely on those guidelines. In assessing applications for residence permits, the competent national authority, in this case the Immigratie- en Naturalisatiedienst (the Immigration and Naturalisation Service; ‘the IND’) is required to comply with those guidelines. It may depart from them only if it provides reasons for so doing and in exceptional cases that were not considered when the guidelines were drawn up.11Section B, point 2.2 of the Circular on Foreign Nationals states:‘A foreign national is lawfully resident under the [Law on Foreign Nationals] if all the following conditions are met:the foreign national has a minor child who has Netherlands nationality;that child is dependent on the foreign national and lives with that foreign national; andthat child would, if the right of residence were withheld from the foreign national, be obliged to follow the foreign national and leave the territory of the European Union.The IND shall in any event not assume that the child [whose father or mother is a foreign national] is obliged to follow [the foreign national parent] and leave the territory of the European Union if the child has another parent who is lawfully resident under the [Law on Foreign Nationals] or who has Netherlands nationality, and that parent is in fact able to care for the child.The IND shall in any event assume that the other parent is in fact able to care for the child if:the other parent has custody of the child, or is still able to obtain custody of the child; andthe other parent can make use of help and support services related to the care and education of the child offered by public authorities or by social organisations. The IND shall understand that to include the provision of a benefit from public funds to which all Netherlands nationals in the Netherlands are in principle entitled.The IND shall in any event assume that the other parent is not in fact able to care for the child if that parent:is in detention; orshows that custody of the child cannot be awarded to him/her.’12Pursuant to the Wet Werk en Bijstand (Law on Work and Social Assistance; ‘Law on social assistance’) and the Algemene Kinderbijslagwet (General Law on Child Benefit; ‘Law on child benefit’), parents who are third-country nationals must be lawfully resident in the Netherlands and therefore qualify for a right of residence in order to be entitled to claim social assistance and child benefit.13On 1 July 1998 the Wet tot wijziging van de Vreemdelingenwet en enige andere wetten teneinde de aanspraak van vreemdelingen jegens bestuursorganen op verstrekkingen, voorzieningen, uitkeringen, ontheffingen en vergunningen te koppelen aan het rechtmatig verblijf van de vreemdeling in Nederland (Law to amend the Law on Foreign Nationals and other laws in order to link the claim of foreign nationals against administrative bodies in respect of provisions, facilities, benefits, exemptions and permits to the lawful residence of the foreign national in the Netherlands) of 26 March 1998 (Stb. 1998, No 203) entered into force. For foreign nationals other than nationals of a Member State of the European Union, that law introduced, into the social assistance legislation, the requirement to obtain from the competent authority a residence permit in order to be treated in the same way as a Netherlands national, and, into the legislation on child benefit, the equivalent requirement in order to be regarded as an insured person.14An application for a residence permit is to be submitted to the IND. The IND makes the decision on a right of residence on behalf of the Secretary of State for Security and Justice.15Applications for child benefit under the Law on child benefit are to be submitted to the Sociale verzekeringsbank (Social Insurance Fund, Netherlands; ‘the SvB’).16Applications for social assistance under the Law on social assistance must be submitted to the College of Aldermen of the municipality where the person concerned lives.17Article 11 of the Law on social assistance provides:‘1. Every Netherlands national residing in the Netherlands whose circumstances there are or threaten to become such that he/she does not have the resources to meet essential subsistence costs, is entitled to social assistance from the authorities.2. A foreign national living in the Netherlands and lawfully resident there pursuant to the introductory sentence to Article 8 and Article 8(a) to (e) and (l) of the [Law on Foreign Nationals], shall be treated in the same way as a Netherlands national referred to in Article 11(1), with the exception of cases referred to in Article 24(2) of [Directive 2004/38].18Article 16 of the Law on social assistance provides:‘1. Notwithstanding this section, the College [of Aldermen] may, having regard to all the circumstances, provide assistance to a person who is not entitled to assistance if very urgent reasons so require.2. The first paragraph does not apply to any foreign nationals other than those referred to in Article 11(2) and (3).’19Article 6 of the Law on child benefit provides:‘1. Insured persons for the purpose of the present provisions are:residents;non-residents subject to income tax in respect of salaried occupational activities carried out in the Netherlands.2. Foreign nationals who are not lawfully resident in the Netherlands for the purposes of the introductory sentence to Article 8 and Article 8(a) to (e) and (1) of the [Law on Foreign Nationals] are not to be regarded as insured persons.’The disputes in the main proceedings and the questions referred for a preliminary ruling20The eight disputes in the main proceedings relate to applications for social assistance (bijstandsuitkering) and child benefit (kinderbijslag), submitted to the competent Netherlands authorities, pursuant to, respectively, the Law on social assistance and the Law on child benefit, by third-country nationals who are each mothers of one or more children of Netherlands nationality, whose fathers are also of Netherlands nationality. Those children have all been acknowledged by their fathers but live mainly with their mothers.21Ms Chavez-Vilchez, a Venezuelan national, came to the Netherlands in 2007 or 2008 on a tourist visa. Her relationship with a Netherlands national led, on 30 March 2009, to the birth of a child who has Netherlands nationality. The parents and the child lived in Germany until June 2011, when Ms Chavez-Vilchez and her child were compelled to leave the family home. They went to the emergency refuge in the municipality of Arnhem (Netherlands) and stayed there for some time. Ms Chavez-Vilchez has since then been responsible for the care of her child and has stated that the child’s father does not contribute to the child’s support or upbringing.22Ms Pinas, a national of Surinam, had been from 2004 the holder of a residence permit in the Netherlands; that permit was withdrawn in 2006. She lives in Almere (Netherlands) and is the mother of four children. One of the children, born on 23 December 2009 from a relationship with a Netherlands national, accordingly has Netherlands nationality. Ms Pinas and the father have joint custody with respect to that child but they live apart, and the father does not contribute to the child’s support. The two parents remain in contact but there is no agreement on access rights. On 17 May 2011, Ms Pinas and her children were granted a residence permit for a fixed period. Consequently, child benefit was granted as from the third quarter of 2011.23Ms Nikolic came to the Netherlands in 2003 from the former Yugoslavia. Since she has no identity papers, her nationality is unclear. Her application for a residence permit was rejected in 2009. On 26 January 2010 her relationship with a Netherlands national led to the birth of a child, who has Netherlands nationality. Ms Nikolic lives in Amsterdam (Netherlands) and has custody of the child. Both live in a community refuge. Ms Nikolic has stated that she and the father of her child cannot live together, because he has been placed in a young persons’ institution within which he is in a supported accommodation scheme.24Ms García Pérez, a Nicaraguan national, came to the Netherlands in 2001 or 2002 from Costa Rica, accompanied by a Netherlands national. Their relationship led to the birth on 9 April 2008 of a child, who has Netherlands nationality. Ms García Pérez lives in Haarlem (Netherlands) in a community refuge. She has custody of her child; the father does not contribute to the child’s support, and his present whereabouts are unknown.25Ms Uwituze, a Rwandan national, gave birth on 12 December 2011 to a child who, like her father, has Netherlands nationality. The father does not contribute towards the child’s support or upbringing. He has stated that he neither wishes to nor is able to care for the child. Ms Uwituze lives with her child in ’s ‑Hertogenbosch (Netherlands) in a community refuge.26Ms Wip, a national of Surinam, has given birth to two children, on 25 November 2009 and 23 November 2012. Like their father, the children have Netherlands nationality. The parents are separated but the father maintains contact with the children several times a week. He receives social assistance and child benefit. He does not contribute to the support of the children and does no more than transfer the child benefit to Ms Wip. In the material period, Ms Wip was living in Amsterdam.27Ms Enowassam, a national of Cameroon, came to the Netherlands in 1999. Her relationship with a Netherlands national led to the birth, on 2 May 2008, of a child who has Netherlands nationality. The parents have joint custody of their child but live apart. The child is registered as living at the address of her father, but lives in fact with her mother, who lives in emergency reception facilities in The Hague (Netherlands). The child stays three week-ends a month with her father and sometimes spends holidays with him. The father pays EUR 200 a month in child support. He also receives child benefit which he transfers to Ms Enowassam. The father is in full-time work, and has stated that, for that reason, he is not able to care for the child.28Ms Guerrero Chavez, a Venezuelan national, arrived in the Netherlands on 24 October 2007 and then returned to Venezuela on 2 November 2009. She came back to the Netherlands in January 2011 and is living in Schiedam (Netherlands). Her relationship with a Netherlands national led to the birth, on 31 March 2011, of a child who has Netherlands nationality. Ms Guerrero Chavez is separated from the father of her child. The father has almost daily contact with the child but is unwilling to take care of the child, and makes a limited contribution to costs of support. Ms Guerrero Chavez takes day-to-day care of the child and has custody of the child.29In each of the disputes in the main proceedings, the applications for social assistance and child benefit made by the parties concerned were rejected by the competent authorities on the ground that, since the parties did not have a right of residence, they did not, under the national legislation, have any right to receive such assistance and benefits.30Over the periods, covering the years from 2010 to 2013, in which the applicants in the main proceedings sought to obtain social assistance and child benefit, none of them were the holders of a residence permit in the Netherlands. While some of them, pending a decision on an application for a residence permit, were nonetheless staying legally in the Netherlands, others were staying there illegally, although no steps had been taken to remove the latter from the Netherlands. Last, the applicants in the main proceedings were not permitted to work.31After actions brought to challenge the decisions refusing them entitlement to the assistance and benefits applied for were dismissed by judgments of the national courts of first instance, the applicants in the main proceedings brought appeals against those judgments before the Centrale Raad van Beroep (Higher Administrative Court, Netherlands).32The referring court seeks to ascertain whether the applicants in the main proceedings, who are all nationals of third countries, may, as mothers of a child who is a Union citizen, derive a right of residence under Article 20 TFEU in the circumstances specific to each individual case. The referring court considers that, in that event, the individuals concerned could rely on the provisions of the Law on social assistance and the Law on child benefit that allow foreign nationals who are staying lawfully in the Netherlands to be treated as Netherlands nationals, and to be entitled, where appropriate, to receive social assistance or child benefit under that legislation; that entitlement not being subject to a requirement that the IND decide to grant them a residence permit or a document certifying that they are staying legally.33In the opinion of the referring court, it is apparent from the judgments of 8 March 2011, Ruiz Zambrano (C‑34/09, EU:C:2011:124), and of 15 November 2011, Dereci and Others (C‑256/11, EU:C:2011:734), that the applicants in the main proceedings would acquire under Article 20 TFEU a right of residence in the Netherlands, derived from the right of residence of their children, who are Union citizens, provided that those children are in a situation such as that described in those judgments. It is necessary, in each of the disputes in the main proceedings, to determine whether the circumstances are such that those children would be obliged, in practice, to leave the territory of the European Union if the right of residence was refused to their mothers.34The referring court seeks to ascertain, in those circumstances, what importance is to be given, in the light of the Court’s case-law, to the fact that the father, a Union citizen, is staying in the Netherlands or in the European Union, as a whole.35The referring court states, further, that it is the task of the administrative bodies responsible for the application of the Law on social assistance and the Law on child benefit and of the courts with jurisdiction to make an independent assessment of whether a parent who is a third-country national may, in the light of the Court’s case-law relating to Article 20 TFEU, rely on that provision in order to qualify for a right of residence. Those administrative bodies, namely the Colleges of Aldermen and the SvB, are obliged, on the basis of the information provided to them by the persons concerned and such additional information as might have to be provided, if necessary, to carry out, in cooperation with the IND, an examination in order to determine whether a right of residence in the Netherlands can be obtained under Article 20 TFEU.36In that regard, the referring court states that, in practice, various administrative bodies interpret the judgments of 8 March 2011, Ruiz Zambrano (C‑34/09, EU:C:2011:124), and of 15 November 2011, Dereci and Others (C‑256/11, EU:C:2011:734), restrictively and hold that the case-law enshrined in those judgments is applicable only in situations where the father is not, on the basis of objective criteria, in a position to care for the child because he is, for example, in prison, confined to an institution or hospitalised, or even dead. Other than in such situations, it is for the third-country national parent to establish a plausible case that the father is incapable of caring for the child, even with the possible assistance of third parties. According to the referring court, such rules stem from the guidelines in the Circular on Foreign Nationals.37The referring court adds that, in each of the disputes in the main proceedings, the Colleges of Aldermen concerned, the SvB and the IND considered the following factors to be irrelevant: the fact that it was the mother, a third-country national, and not the father, a Union citizen, who was responsible for the primary day-to-day care of the child; the nature of contact between the child and his or her father; the extent to which the father contributed to the support and upbringing of the child, even whether the father was willing to take care of the child. The fact that the father had no rights of custody with respect to the child was also not considered to be relevant where no plausible case had been made that rights of custody could not be awarded to him. The referring court seeks to ascertain whether the case-law of the Court should be subject to such restrictive interpretation.38If the Court were to consider, in each of the cases in the main proceedings, that the mere fact that the child is dependent on his or her mother for daily support is not a criterion that is determinative of the issue of whether the child is dependent on his or her mother to such an extent that the child would, in practice, be obliged to leave the territory of the European Union if a right of residence were refused to the mother, the referring court asks what other circumstances of those cases might be relevant to that issue.39In those circumstances the Centrale Raad van Beroep (Higher Administrative Court) decided to stay proceedings and refer to the Court the following questions for a preliminary ruling:‘1.Must Article 20 TFEU be interpreted as precluding a Member State from depriving a third-country national who is responsible for the day-to-day and primary care of his/her minor child, who is a national of that Member State, of the right of residence in that Member State?2.In answering that question, is it relevant that it is that parent on whom the child is entirely dependent, legally, financial and/or emotionally and, furthermore, that it cannot be excluded that the other parent, who is a national of the Member State, might in fact be able to care for the child?3.In that case, should the parent/third-country national have to make a plausible case that the other parent is not able to assume responsibility for the care of the child, so that the child would be obliged to leave the territory of the European Union if the parent/third-country national is denied a right of residence?’Consideration of the questions referred Preliminary observations 40As a preliminary point, it should be noted that the situations at issue in the main proceedings reveal, in addition to some common features, a number of particular features which must be taken into consideration.41Admittedly, as stated in paragraph 30 of this judgment, each of the situations at issue in the main proceedings concerns a third-country national who, over the periods relevant to the rejection of applications for child benefit or social assistance: was staying in the Netherlands without holding a residence permit; was the mother of at least one minor child of Netherlands nationality who lived with her; was responsible for the primary day-to-day care of that child, and was separated from the father of the child, the father also being of Netherlands nationality and acknowledging the child as his.42However, the situations at issue in the main proceedings reveal differences, with respect to the relationships between the parents and the children in terms of custody and contributions to costs of support, the situations of the mothers in terms of their right to stay within the territory of the European Union, and the situations of the minor children themselves.43First, as regards the relationships between the parents and the children, it is apparent from the order for reference that contact between the children and their fathers was, variously, frequent, seldom or even non-existent. Thus, in one case, the father could not be traced, and in another the father was in a supported accommodation scheme. In three cases, the father was contributing to maintenance costs for the child, while, in five other cases, no contribution was made. Whereas in two out of the eight cases the parents shared custody, in the six other cases the primary day-to-day care of the child was the responsibility of the mother alone. Last, in half of the cases, the child was living with the mother in an emergency refuge.44As regards, second, the situation of the applicants in the main proceedings in terms of their right to stay within the territory of the European Union, it has to be noted that a residence permit has, in the interim, been granted to two of them.45Accordingly, at the hearing, the representatives of Ms Wip and Ms Chavez-Vilchez and the Netherlands Government stated that those two persons can now be described as residing lawfully. Ms Wip has obtained a residence permit in Belgium, where she lives and works with her daughter. Ms Chavez-Vilchez was, in April 2015, issued with a residence permit in the Netherlands, on the basis of Article 8 of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and she is working in Belgium.46Third, as regards the situation of the minor children themselves, it must be stated that the child of Ms Chavez-Vilchez lived in Germany with her parents until June 2011 before returning to the Netherlands with her mother, who then submitted an application for child benefit to the Netherlands authorities.47On the other hand, the minor children of the other seven applicants in the main proceedings never exercised their right of free movement before or during the period relevant to the applications for social assistance or child benefit at issue in the main proceedings, and they have resided since birth in the Member State of which they are nationals.48As the Court has consistently held, even though, formally, the referring court has limited its questions to the interpretation of Article 20 TFEU alone, such a situation does not prevent the Court from providing the referring court with all the elements of interpretation of EU law which may be of assistance in adjudicating on the cases before it, whether or not that court has specifically referred to them in its questions (see, to that effect, judgments of 5 May 2011, McCarthy, C‑434/09, EU:C:2011:277, paragraph 24; of 19 September 2013, Betriu Montull, C‑5/12, EU:C:2013:571, paragraph 41; and of 10 October 2013, Alokpa and Moudoulou, C‑86/12, EU:C:2013:645, paragraph 20).49In this case, it is appropriate to analyse, first, the situation of the child of Ms Chavez-Vilchez and of Ms Chavez-Vilchez herself in the light of Article 21 TFEU and of Directive 2004/38, whose objective is to facilitate the exercise of the primary and individual right to move and reside freely within the territory of the Member States, a right which is conferred directly on Union citizens by Article 21(1) TFEU and whose objective is in particular to reinforce that right (see, to that effect, judgments of 5 May 2011, McCarthy, C‑434/09, EU:C:2011:277, paragraph 28, and of 12 March 2014, O. and B.,C‑456/12, EU:C:2014:135, paragraph 35) and, second, the respective situations of the children of the other applicants in the main proceedings, who have always resided with their mothers before and during the period relevant to the applications for social assistance or child benefit at issue in the main proceedings, in the Member State of which they are nationals, and the situations of those applicants themselves, from the perspective of Article 20 TFEU.50As regards the child of Ms Chavez-Vilchez, that child exercised her freedom of movement before an application was made, by her mother, for benefits in the Netherlands for periods between 7 July 2011 and the end of March 2012, since the child stayed, until June 2011, with her parents in Germany, the Member State where her father lives and works, before returning, in the company of her mother, to the Netherlands, the Member State of which she is a national.51As stated by the Netherlands Government at the hearing, although Ms Chavez-Vilchez has, subsequently, obtained a residence permit in the Netherlands, the referring court considers that an examination of her situation and that of her child with respect to the law on EU citizenship remains necessary, since the grant of that residence permit post-dated the periods that are relevant to the applications for the benefits at issue in the main proceedings.52As regards the existence of a derived right of residence, based on Article 21(1) TFEU and Directive 2004/38, the Court has held that that directive confers rights of entry into and residence in a Member State not on all third-country nationals, but solely on those who are a ‘family member’, within the meaning of point 2 of Article 2 of that directive, of a Union citizen who has exercised his right of freedom of movement by settling in a Member State other than the Member State of which he is a national (judgments of 15 November 2011, Dereci and Others, C‑256/11, EU:C:2011:734, paragraph 56; of 6 December 2012, O and Others, C‑356/11 and C‑357/11, EU:C:2012:776, paragraph 41; and of 18 December 2014, McCarthy and Others, C‑202/13, EU:C:2014:2450, paragraph 36).53The Court has, moreover, held that Directive 2004/38 is only applicable to the conditions governing whether a Union citizen can enter and stay in Member States other than that of which he is a national. Directive 2004/38 does not therefore confer a derived right of residence on third-country nationals who are family members of a Union citizen in the Member State of which that citizen is a national (see, to that effect, judgment of 12 March 2014, S. and G., C‑457/12, EU:C:2014:136, paragraph 34).54However, the Court has held that, when a Union citizen returns to the Member State of which he is a national, the conditions for granting a derived right of residence, based on Article 21(1) TFEU, to a third-country national who is a family member of that Union citizen and with whom that citizen has resided, solely by virtue of his being a Union citizen, in the host Member State, those conditions should not, in principle, be more strict than those provided for by Directive 2004/38 for the grant of such a right of residence to a third-country national who is a family member of a Union citizen in a case where that citizen has exercised his right of freedom of movement by becoming established in a Member State other than the Member State of which he is a national (see, to that effect, judgment of 12 March 2014, O. and B., C‑456/12, EU:C:2014:135, paragraph 50).55Even though Directive 2004/38 does not cover such a return, it should be applied, by analogy, in respect of the conditions that it lays down for the residence of a Union citizen in a Member State other than that of which he is a national, given that in both cases it is the Union citizen who is the reference person if it is to be possible for a derived right of residence to be granted to a third-country national who is a family member of that Union citizen (judgment of 12 March 2014, O. and B., C‑456/12, EU:C:2014:135, paragraph 50).56It is for the referring court to assess whether the conditions laid down by Directive 2004/38, in particular in Articles 5 to 7 thereof, which govern entry into and residence in the territory of Member States, were satisfied in the period relevant to the refusal of the applications for benefits, so that Ms Chavez-Vilchez could rely on a derived right of residence based on Article 21 TFEU and on Directive 2004/38.57If not, it would then be appropriate to examine the situation of the child, a Union citizen, and the child’s mother, a third-country national, in the light of Article 20 TFEU.58As regards the children of Ms Wip, who were living with their mother in the Netherlands when Ms Wip sought social assistance for the months of October and November 2012, it was stated, at the hearing, that they now reside with their mother in Belgium, where she has obtained a residence permit and is in employment. Since the period in which those children exercised their freedom of movement and freedom to reside as Union citizens in a Member State other than that of which they are nationals and in which their mother obtained a residence permit in that other Member State post-dates the period relevant to the dispute in the main proceedings, it remains necessary to assess whether their mother could have been entitled, for the period under consideration, to a derived right of residence under Article 20 TFEU. The first and second questions referred 59By the first and second questions referred, which can be examined together, the referring court seeks, in essence, to ascertain whether Article 20 TFEU must be interpreted as precluding a Member State from refusing a right of residence in its territory to a parent, a third-country national, who is responsible for the primary day-to–day care of a child who is a national of that Member State, when it cannot be excluded that the other parent, who is also a national of that Member State, might be able to take charge of the primary day-to–day care of the child. The referring court seeks to ascertain whether the fact that the child is not entirely dependent, legally, financially or emotionally, on the third-country national is relevant to that issue.60In accordance with the Court’s settled case-law, the children concerned in the disputes in the main proceedings may, as nationals of a Member State, rely on the rights pertaining to their status as Union citizens conferred on them by Article 20 TFEU, including against the Member State of which they are nationals (see, to that effect, judgments of 5 May 2011, McCarthy, C‑434/09, EU:C:2011:277, paragraph 48; of 15 November 2011, Dereci and Others, C‑256/11, EU:C:2011:734, paragraph 63; and of 6 December 2012, O and Others, C‑356/11 and C‑357/11, EU:C:2012:776, paragraphs 43 and 44).61The Court has held that Article 20 TFEU precludes national measures, including decisions refusing a right of residence to the family members of a Union citizen, which have the effect of depriving Union citizens of the genuine enjoyment of the substance of the rights conferred by virtue of their status (judgments of 8 March 2011, Ruiz Zambrano, C‑34/09, EU:C:2011:124, paragraph 42, and of 6 December 2012, O and Others, C‑356/11 and C‑357/11, EU:C:2012:776, paragraph 45).62On the other hand, the Treaty provisions on citizenship of the Union do not confer any autonomous right on third-country nationals. Any rights conferred on third-country nationals are not autonomous rights of those nationals but rights derived from those enjoyed by a Union citizen. The purpose and justification of those derived rights are based on the fact that a refusal to allow them would be such as to interfere, in particular, with a Union citizen’s freedom of movement (judgments of 13 September 2016, Rendón Marín, C‑165/14, EU:C:2016:675, paragraphs 72 and 73, and of 13 September 2016, CS, C‑304/14, EU:C:2016:674, paragraphs 27 and 28 and the case-law cited).63In this connection, the Court has already held that there are very specific situations in which, despite the fact that secondary law on the right of residence of third-country nationals does not apply and the Union citizen concerned has not made use of his freedom of movement, a right of residence must nevertheless be granted to a third-country national who is a family member of that Union citizen, since the effectiveness of Union citizenship would otherwise be undermined, if, as a consequence of refusal of such a right, that citizen would be obliged in practice to leave the territory of the European Union as a whole, thus depriving him of the genuine enjoyment of the substance of the rights conferred by that status (see, to that effect, judgments of 8 March 2011, Ruiz Zambrano, C‑34/09, EU:C:2011:124, paragraphs 43 and 44; of 15 November 2011, Dereci and Others, C‑256/11, EU:C:2011:734, paragraphs 66 and 67; of 13 September 2016, Rendón Marín, C‑165/14, EU:C:2016:675, paragraph 74; and of 13 September 2016, CS, C‑304/14, EU:C:2016:674, paragraph 29).64The situations referred to in the preceding paragraph have the common feature that, although they are governed by legislation which falls, a priori, within the competence of the Member States, namely legislation on the right of entry and residence of third-country nationals outside the scope of provisions of EU secondary legislation, which provide for the grant of such a right under certain conditions, those situations nonetheless have an intrinsic connection with the freedom of movement and residence of a Union citizen, which precludes the right of entry and residence from being refused to those nationals in the Member State of residence of that citizen, in order to avoid interference with that freedom (judgments of 13 September 2016, Rendón Marín, C‑165/14, EU:C:2016:675, paragraph 75, and of 13 September 2016, CS, C‑304/14, EU:C:2016:674, paragraph 30 and the case-law cited).65In this case, if it were to be established, that being a matter for the referring court, that a refusal to allow residence to the third-country nationals at issue in the main proceedings would have the effect that the parties concerned would have to leave the territory of the European Union, the consequence might be a restriction on the rights conferred on their children by their status as Union citizens, in particular the right of residence, since those children might be compelled to accompany their mothers and therefore to leave the territory of the European Union, as a whole. In the event that the mothers were obliged to leave the territory of the European Union, their children would thus be deprived of genuine enjoyment of the substance of the rights conferred on them by their status as Union citizens (see, to that effect, judgment of 13 September 2016, Rendón Marín, C‑165/14, EU:C:2016:675, paragraph 78 and the case-law cited).66The Netherlands Government maintains, however, that the mere fact that a third-country national parent undertakes the day-to–day care of the child and is the person on whom that child is in fact dependent, legally, financially or emotionally, even in part, does not permit the automatic conclusion that a child who is a Union citizen would be compelled to leave the territory of the European Union if a right of residence were refused to that third-country national. The presence, in the territory of the Member State of which that child is a national or in the territory of the Union, as a whole, of the other parent, who is himself a Union citizen and is capable of caring for the child, is, according to the Netherlands Government, a significant factor in that assessment.67The Netherlands Government also states that, in certain circumstances, the competent national authorities assume that the parent who is a Union citizen is unfit or unable to care for the child. That applies where that parent is dead or cannot be traced; where that parent has been imprisoned, confined to an institution or admitted to hospital for long-term treatment; where, according to objective sources, such as a statement from the police or youth assistance services, that parent is shown to be incapable of caring for the child, and, last, where an application by that parent to obtain custody, even jointly, has been dismissed by the courts.68In that regard, it must be recalled that, in the judgment of 6 December 2012, O and Others (C‑356/11 and C‑357/11, EU:C:2012:776, paragraphs 51 and 56), the Court held that factors of relevance, for the purposes of determining whether a refusal to grant a right of residence to a third-country national parent of a child who is a Union citizen means that that child is deprived of the genuine enjoyment of the substance of the rights conferred on him by that status, include the question of who has custody of the child and whether that child is legally, financially or emotionally dependent on the third-country national parent.69As regards the second factor, the Court has stated that it is the relationship of dependency between the Union citizen who is a minor and the third country national who is refused a right of residence that is liable to jeopardise the effectiveness of Union citizenship, since it is that dependency that would lead to the Union citizen being obliged, in practice, to leave not only the territory of the Member State of which he is a national but also that of the European Union as a whole, as a consequence of such a refusal (see, to that effect, judgments of 8 March 2011, Ruiz Zambrano, C‑34/09, EU:C:2011:124, paragraphs 43 and 45; of 15 November 2011, Dereci and Others, C‑256/11, EU:C:2011:734, paragraphs 65 to 67; and of 6 December 2012, O and Others, C‑356/11 and C‑357/11, EU:C:2012:776, paragraph 56).70In this case, in order to assess the risk that a particular child, who is a Union citizen, might be compelled to leave the territory of the European Union and thereby be deprived of the genuine enjoyment of the substance of the rights conferred on him by Article 20 TFEU if the child’s third-country national parent were to be refused a right of residence in the Member State concerned, it is important to determine, in each case at issue in the main proceedings, which parent is the primary carer of the child and whether there is in fact a relationship of dependency between the child and the third-country national parent. As part of that assessment, the competent authorities must take account of the right to respect for family life, as stated in Article 7 of the Charter of Fundamental Rights of the European Union, that article requiring to be read in conjunction with the obligation to take into consideration the best interests of the child, recognised in Article 24(2) of that charter.71For the purposes of such an assessment, the fact that the other parent, a Union citizen, is actually able and willing to assume sole responsibility for the primary day-to-day care of the child is a relevant factor, but it is not in itself a sufficient ground for a conclusion that there is not, between the third-country national parent and the child, such a relationship of dependency that the child would be compelled to leave the territory of the European Union if a right of residence were refused to that third-country national. In reaching such a conclusion, account must be taken, in the best interests of the child concerned, of all the specific circumstances, including the age of the child, the child’s physical and emotional development, the extent of his emotional ties both to the Union citizen parent and to the third-country national parent, and the risks which separation from the latter might entail for that child’s equilibrium.72In the light of the foregoing, the answer to the first and second questions is that Article 20 TFEU must be interpreted as meaning that for the purposes of assessing whether a child who is a Union citizen would be compelled to leave the territory of the European Union as a whole and thereby deprived of the genuine enjoyment of the substance of the rights conferred on him by that article if the child’s third-country national parent were refused a right of residence in the Member State concerned, the fact that the other parent, who is a Union citizen, is actually able and willing to assume sole responsibility for the primary day-to-day care of the child is a relevant factor, but it is not in itself a sufficient ground for a conclusion that there is not, between the third-country national parent and the child, such a relationship of dependency that the child would indeed be so compelled were there to be such a refusal of a right of residence. Such an assessment must take into account, in the best interests of the child concerned, all the specific circumstances, including the age of the child, the child’s physical and emotional development, the extent of his emotional ties both to the Union citizen parent and to the third-country national parent, and the risks which separation from the latter might entail for the child’s equilibrium. Consideration of the third question referred 73By the third question submitted for a preliminary ruling, the referring court seeks in essence to ascertain whether Article 20 TFEU must be interpreted as precluding a Member State from providing that the right of residence in its territory of a third-country national, who is a parent of a minor child that is a national of that Member State, and for whose primary day-to-day care that parent is responsible, is subject to the condition that the third country national must establish that the other parent, who is a national of that same Member State, is not in a position to provide the primary day-to-day care of the child.74According to the Netherlands Government, pursuant to the general rule that a party who seeks to rely on certain rights must establish that those rights are applicable to his situation, a rule that is accepted in EU law (see, to that effect, judgments of 8 May 2013, Alarape and Tijani, C‑529/11, EU:C:2013:290, paragraph 38, and of 16 January 2014, Reyes, C‑423/12, EU:C:2014:16, paragraphs 25 to 27), the burden of proof of the existence of a right of residence under Article 20 TFEU lies on the applicants in the main proceedings. It is for them to demonstrate that, because of objective impediments that prevent the Union citizen parent from actually caring for the child, the child is dependent on the third-country national parent to such an extent that the consequence of refusing to grant that third-country national a right of residence would be that the child would be obliged, in practice, to leave the territory of the European Union.75In that regard, it must be stated that, in the event that a third-country national, the parent of a minor child who is a national of a Member State and for whose primary day-to-day care that parent is responsible, seeks to obtain from the competent authorities of that Member State recognition of a derived right of residence based on Article 20 TFEU, it is for that third-country national to provide evidence on the basis of which it can be assessed whether the conditions governing the application of that article are satisfied, in particular, evidence that a decision to refuse a right of residence to the third-country national parent would deprive the child of the genuine enjoyment of the substance of the rights attached to his or her status as a Union citizen by obliging the child to leave the territory of the European Union, as a whole.76However, as stated by the European Commission, while it is, as a general rule, for the third-country national parent to provide evidence to prove that he or she has a right of residence under Article 20 TFEU, in particular evidence that, if residence were to be refused, the child would be obliged to leave the territory of the European Union, the fact remains that, when undertaking the assessment of the conditions required in order for the third-country national to be able to qualify for such a right of residence, the competent national authorities must ensure that the application of national legislation on the burden of proof such as that at issue in the disputes in the main proceedings does not undermine the effectiveness of Article 20 TFEU.77Accordingly, the application of such national legislation on the burden of proof does not relieve the authorities of the Member State concerned of the obligation to undertake, on the basis of the evidence provided by the third-country national, the necessary inquiries to determine where the parent who is a national of that Member State resides and to examine, first, whether that parent is, or is not, actually able and willing to assume sole responsibility for the primary day-to-day care of the child, and, second, whether there is, or is not, such a relationship of dependency between the child and the third-country national parent that a decision to refuse the right of residence to the latter would deprive the child of the genuine enjoyment of the substance of the rights attached to his or her status as a Union citizen by obliging the child to leave the territory of the European Union, as a whole.78In the light of the foregoing, the answer to the third question is that Article 20 TFEU must be interpreted as not precluding a Member State from providing that the right of residence in its territory of a third-country national, who is a parent of a minor child that is a national of that Member State and who is responsible for the primary day-to-day care of that child, is subject to the requirement that the third-country national must provide evidence to prove that a refusal of a right of residence to the third-country national parent would deprive the child of the genuine enjoyment of the substance of the rights pertaining to the child’s status as a Union citizen, by obliging the child to leave the territory of the European Union, as a whole. It is however for the competent authorities of the Member State concerned to undertake, on the basis of the evidence provided by the third-country national, the necessary enquiries in order to be able to assess, in the light of all the specific circumstances, whether a refusal would have such consequences.Costs79Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Article 20 TFEU must be interpreted as meaning that for the purposes of assessing whether a child who is a citizen of the European Union would be compelled to leave the territory of the European Union as a whole and thereby deprived of the genuine enjoyment of the substance of the rights conferred on him by that article if the child’s third-country national parent were refused a right of residence in the Member State concerned, the fact that the other parent, who is a Union citizen, is actually able and willing to assume sole responsibility for the primary day-to-day care of the child is a relevant factor, but it is not in itself a sufficient ground for a conclusion that there is not, between the third-country national parent and the child, such a relationship of dependency that the child would indeed be so compelled were there to be such a refusal of a right of residence. Such an assessment must take into account, in the best interests of the child concerned, all the specific circumstances, including the age of the child, the child’s physical and emotional development, the extent of his emotional ties both to the Union citizen parent and to the third-country national parent, and the risks which separation from the latter might entail for the child’s equilibrium. 2. Article 20 TFEU must be interpreted as not precluding a Member State from providing that the right of residence in its territory of a third-country national, who is a parent of a minor child that is a national of that Member State and who is responsible for the primary day-to-day care of that child, is subject to the requirement that the third-country national must provide evidence to prove that a refusal of a right of residence to the third-country national parent would deprive the child of the genuine enjoyment of the substance of the rights pertaining to the child’s status as a Union citizen, by obliging the child to leave the territory of the European Union, as a whole. It is however for the competent authorities of the Member State concerned to undertake, on the basis of the evidence provided by the third-country national, the necessary enquiries in order to be able to assess, in the light of all the specific circumstances, whether a refusal would have such consequences. [Signatures]( *1 ) Language of the case: Dutch. | ece74-d7b7d58-4ef8 | EN |
The obligation to declare any cash sum over €10 000 applies in the international transit areas of airports located in the territory of EU Member States | 4 May 2017 ( *1 )‛Reference for a preliminary ruling — Regulation (EC) No 1889/2005 — Controls of cash entering or leaving the European Union — Article 3(1) — Natural person entering or leaving the European Union — Obligation to declare — International transit area of a Member State’s airport).’In Case C‑17/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour de cassation (France), made by decision of 5 January 2016, received at the Court on 12 January 2016, in the proceedings Oussama El Dakkak, Intercontinental SARL v Administration des douanes et des droits indirects THE COURT (First Chamber),composed of R. Silva de Lapuerta (Rapporteur), President of the Chamber, E. Regan, J.-C. Bonichot, A. Arabadjiev and C.G. Fernlund, Judges,Advocate General: P. Mengozzi,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:—the French Government, by A. Daly and D. Colas, acting as Agents,the Greek Government, by E. Tsaousi and K. Georgiadis, acting as Agents,the European Commission, by L. Grønfeldt and F. Dintilhac, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 21 December 2016,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 3(1) of Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community (OJ 2005 L 309, p. 9) and of Article 4(1) of Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2006 L 105, p. 1).2The request has been made in proceedings between Mr Oussama El Dakkak and Intercontinental SARL, and the Administration des douanes et droits indirects (Customs and Excise Authority, France) concerning their claims for compensation for the loss suffered as a result of the latter’s seizure of cash sums transported by Mr El Dakkak while passing through Roissy-Charles-de-Gaulle airport (France) on the ground that he failed to declare those sums.Legal context Regulation No 1889/2005 3Recitals 2 and 4 to 6 of Regulation No 1889/2005 are worded as follows:‘(2)The introduction of the proceeds of illegal activities into the financial system and their investment after laundering are detrimental to sound and sustainable economic development. Accordingly, Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money laundering [OJ 1991 L 166, p. 77] introduced a Community mechanism to prevent money laundering by monitoring transactions through credit and financial institutions and certain types of professions. As there is a risk that the application of that mechanism will lead to an increase in cash movements for illicit purposes, Directive 91/308 … should be supplemented by a control system on cash entering or leaving the Community.…(4)Account should also be taken of complementary activities carried out in other international fora, in particular those of the Financial Action Task Force on Money Laundering (FATF), which was established by the G7 Summit held in Paris in 1989. Special Recommendation IX of 22 October 2004 of the FATF calls on governments to take measures to detect physical cash movements, including a declaration system or other disclosure obligation.(5)Accordingly, cash carried by any natural person entering or leaving the Community should be subject to the principle of obligatory declaration. This principle would enable the customs authorities to gather information on such cash movements and, where appropriate, transmit that information to other authorities. …(6)In view of its preventive purpose and deterrent character, the obligation to declare should be fulfilled upon entering or leaving the Community. However, in order to focus the authorities’ action on significant movements of cash, only those movements of EUR 10000 or more should be subject to such an obligation. Also, it should be specified that the obligation to declare applies to the natural person carrying the cash, regardless of whether that person is the owner.’4Article 1(1) of that regulation provides:‘This Regulation complements the provisions of Directive 91/308 … concerning transactions through financial and credit institutions and certain professions by laying down harmonised rules for the control, by the competent authorities, of cash entering or leaving the Community.’5Article 3(1) of that regulation provides:‘Any natural person entering or leaving the Community and carrying cash of a value of EUR 10000 or more shall declare that sum to the competent authorities of the Member State through which he is entering or leaving the Community in accordance with this Regulation. The obligation to declare shall not have been fulfilled if the information provided is incorrect or incomplete.’6Article 4(2) of Regulation No 1049/2001 provides:‘In the event of failure to comply with the obligation to declare laid down in Article 3, cash may be detained by administrative decision in accordance with the conditions laid down under national legislation.’ Regulation No 562/2006 7Under Article 1 of Regulation No 562/2006:‘This Regulation provides for the absence of border control of persons crossing the internal borders between the Member States of the European Union.It establishes rules governing border control of persons crossing the external borders of the Member States of the European Union.’8Article 4(1) of that regulation provides as follows:‘External borders may be crossed only at border crossing points and during the fixed opening hours. The opening hours shall be clearly indicated at border crossing points which are not open 24 hours a day.Member States shall notify the list of their border crossing points to the Commission in accordance with Article 34.’The dispute in the main proceedings and the question referred for a preliminary ruling9Intercontinental instructed Mr El Dakkak to transport American dollars (USD) from Cotonou (Benin) to Beirut (Lebanon) by aeroplane, with a transit stop at Roissy-Charles de Gaulle airport.10On 9 December 2010, whilst in transit at that airport, Mr El Dakkak was checked by the customs officials at the boarding gate for Beirut. When those officials found that he was in possession of EUR 3900 and USD 1607650 (approximately EUR 1511545) in cash, Mr El Dakkak presented them with a declaration made to the customs authorities of the Republic of Benin.11Following that check, Mr El Dakkak was detained by the customs authority and was subsequently formally charged by an examining magistrate with failing to declare capital, money laundering and fraud.12The cash transported by Mr El Dakkak was seized, then officially sealed by the Customs and Excise Authority.13By judgment of 11 May 2011, the examining chamber of the cour d’appel de Paris (Paris Court of Appeal, France) annulled the entire proceedings due to an irregularity relating to Mr El Dakkak’s detention and ordered the sealed items to be returned.14By letter of 2 April 2012, the competent authority consequently informed Mr El Dakkak that it was going to transfer the euros, the consideration in euros for the US dollars seized and a pro rata proportion of the handling charges.15Next, Mr El Dakkak and Intercontinental brought an action before the Tribunal d’instance d’Aulnay-sous-Bois (District Court, Aulnay-sous-Bois, France) and the Paris Court of Appeal, seeking compensation for their losses, claiming that the Customs and Excise Authority was not entitled to rely on an infringement of an obligation to declare, on the part of Mr El Dakkak, because he was not bound by any such obligation.16After the Paris Court of Appeal dismissed his claim by judgment of 25 March 2014, Mr El Dakkak brought an appeal on a point of law before the referring court.17It was in those circumstances that the Cour de cassation (Court of Cassation, France) decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:‘Must Article 3(1) of Regulation … No 1889/2005 … and [Article] 4(1) of Regulation … No 562/2006 … be interpreted as meaning that a national of a third State who is in the international transit area of an airport is not subject to the obligation to make a declaration under Article 3(1) of Regulation … No 1889/2005 …, or, on the contrary, must those provisions be interpreted as meaning that that national is subject to that obligation by virtue of having crossed an external border of the [EU] at one of the border crossing points referred to in Article 4(1) of Regulation … No 562/2006 …?’Consideration of the question referred18By its question, the referring court seeks to determine, in essence, whether Article 3(1) of Regulation No 1889/2005 must be interpreted to the effect that the obligation to declare under that provision is applicable in the international transit area of an airport of a Member State in circumstances such as those in the main proceedings in which a natural person entered that area by disembarking from an aircraft coming from a third State, and waits there before boarding another aircraft heading to another third State.19The scope of that obligation to declare is determined on the basis of the interpretation to be given to the notion of a ‘natural person entering or leaving’ the European Union, referred to in Article 3(1).20In that regard, it should be pointed out at the outset that Regulation No 1889/2005 does not define that notion.21However, that notion is not ambiguous and must be understood as having its normal meaning, that is to say, as referring to the movement of a natural person from a place which is not part of EU territory to a place which is part of that territory, or from a place which is part of EU territory to one which is not.22EU territory corresponds to the geographical space referred to in Article 52 TEU and Article 355 TFEU which define the territorial scope of the Treaties.23In the absence of detail as to the territorial scope of an act of secondary legislation, that scope must be determined on the basis of those provisions, since the secondary legislation applies in principle to the same area as the Treaties themselves and applies automatically in that area (see, to that effect, judgment of 15 December 2015, Parliament and Commission v Council, C‑132/14 to C‑136/14, EU:C:2015:813, paragraphs 76 and 77).24First of all, the airports of Member States are part of that geographical area, and therefore part of EU territory.25Next, the inevitable conclusion is that the provisions of Regulation No 1889/2005 do not exclude the applicability of the obligation to declare, laid down in Article 3(1) of that regulation, in the international transit areas of those airports, any more than Article 52 TEU and Article 355 TFEU exclude those areas from the territorial scope of the treaties, or lay down any exceptions in relation to those areas.26This implies that, where a natural person moves from a place which is not part of the geographical area covered by Article 52 TEU and Article 355 TFEU to a place which is part of that area, that person enters the European Union for the purposes of Article 3(1) of Regulation No 1889/2005.27That is the case with a person who, like Mr El Dakkak, disembarks from an aircraft coming from a third State in an airport in the territory of a Member State and waits in the international transit area of that airport before boarding another aircraft heading to another third State.28The interpretation that that obligation to declare applies in the international transit areas of airports located within the territory of the European Union is also consistent with the objective pursued by that regulation.29In that regard, it should be recalled that, in accordance with recitals 2, 5 and 6 of Regulation No 1889/2005, the regulation seeks to prevent, discourage and avoid the introduction of the proceeds of illegal activities into the financial system and their investment after laundering by the establishment, inter alia, of a principle of obligatory declaration of the movements of cash entering or leaving the EU, allowing information to be gathered concerning them (see judgment of 16 July 2015, Chmielewski, C‑255/14, EU:C:2015:475, paragraph 18).30To that end, Article 3(1) of that regulation lays down an obligation, for any natural person entering or leaving the European Union and carrying an amount of cash equal to or more than EUR 10000, to declare that amount (see judgment of 16 July 2015, Chmielewski, C‑255/14, EU:C:2015:475, paragraph 19).31Moreover, as is apparent from Article 1(1) of Regulation No 1889/2005, read in conjunction with recitals 1 to 3 of that regulation, in the context of promoting harmonious, balanced and sustainable economic development throughout the European Union, that regulation seeks to supplement the provisions of Directive 91/308 by laying down harmonised rules for the control of cash entering or leaving the European Union (see judgment of 16 July 2015, Chmielewski, C‑255/14, EU:C:2015:475, paragraph 17).32In that context, it should also be recalled that the Court has held that Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (OJ 2005 L 309, p. 15), which replaced Directive 91/308, has as its main aim the prevention of the use of the financial system for the purposes of money laundering and terrorist financing, as is apparent both from its title and the preamble, and from the fact that it was adopted, like its predecessor, Directive 91/308, in an international context, in order to apply and make binding in the European Union the recommendations of the ‘Financial Action Task Force’ (FATF), which is the main international body combating money laundering (see, judgment of 25 April 2013, Jyske Bank Gibraltar, C‑212/11, EU:C:2013:270, point 46).33Like Directives 91/308 and 2005/60, Regulation 1889/2005, as is apparent from its fourth recital, was adopted in order to take account of complementary activities carried out in other international fora, in particular those of FATF, whose Special Recommendation IX of 22 October 2004 calls on governments to take measures to detect physical cash movements, including a declaration system or other disclosure obligation.34Consequently, as the Advocate General stated in points 44 and 45 of his Opinion, it is clear from the objective pursued by Regulation No 1889/2005, from its international context and from the need to pursue the preventive and deterrent aim of the obligation to declare laid down in Article 3(1) of that regulation, that the notion of a ‘natural person entering or leaving’ the European Union, referred to in that provision, must be given a broad interpretation.35If that provision were to be interpreted to the effect that people in an international transit area of a European Union airport are not subject to that obligation, the effectiveness of the control system for cash entering or leaving the European Union, provided for by Regulation No 1889/2005, and consequently the attainment of its objective would, at least in part, be jeopardised.36The issue whether or not a national from a third State in the international transit area of an airport of a Member State has crossed the external border of the European Union, for the purposes of Article 4(1) of Regulation No 562/2006, is irrelevant to the previous considerations.37In that regard, it should be pointed out that, as is attested in particular by the different legal bases on which those regulations were adopted, they have different aims and objectives.38As has already been stated in paragraph 31 above, Regulation No 1889/2005 aims to supplement the provisions of Directive 91/308 by laying down harmonised rules for the control of cash entering or leaving the European Union, whilst Regulation No 562/2006, according to Article 1, provides for the absence of border control of persons crossing the internal borders between the Member States and establishes rules governing border control of persons crossing the external borders of those States.39Moreover, Regulation No 1889/2005 contains no indication that its provisions should be interpreted in the light of the provisions of Regulation No 562/2006.40Thus, in the absence of any express provision to that effect in either of those enactments, the interpretation of Article 3(1) of Regulation No 1889/2005 cannot depend on the interpretation of the notion of crossing an external border of the European Union for the purposes of Article 4(1) of Regulation No 562/2006.41Having regard to all the foregoing considerations, the international transit areas of the airports of Member States must not be excluded from the scope of Article 3(1) of Regulation No 1889/2005, so that, if a natural person disembarking from an aircraft coming from a third State in an airport in the territory of a Member State and waiting in the international transit area of that airport before boarding another aircraft heading to another third State is in possession of a sum equal to or greater than EUR 10000 in cash when he enters the European Union, he is subject to the obligation to declare laid down in Article 3(1) of Regulation No 1889/2005.42In that regard, it falls to the Member States to take the appropriate measures to enable the interested parties to comply with that obligation in such a way as to ensure full legal certainty.43In those circumstances, the answer to the question referred is that Article 3(1) of Regulation No 1889/2005 must be interpreted to the effect that the obligation to declare laid down in that provision is applicable in the international transit area of an airport of a Member State.Costs44Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (First Chamber) hereby rules: Article 3(1) of Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community must be interpreted to the effect that the obligation to declare laid down in that provision is applicable in the international transit area of an airport of a Member State. [Signatures]( *1 ) Language of the case: French. | 6d25c-36688a7-49f8 | EN |
Luxembourg has transposed in too wide a manner the rules in the VAT Directive on independent groups of persons | 4 May 2017 ( *1 )‛Failure of a Member State to fulfil obligations — Taxation — Value added tax — Directive 2006/112/EC — Article 132(1)(f) — Exemption from VAT of supplies of services by independent groups of persons to their members — Article 168(a) and Article 178(a) — Right of deduction for the members of the group — Article 14(2)(c) and Article 28 — Actions of a member in his own name and on behalf of the group’In Case C‑274/15,ACTION under Article 258 TFEU for failure to fulfil obligations, brought on 8 June 2015, European Commission, represented by F. Dintilhac and C. Soulay, acting as Agents,applicant,v Grand Duchy of Luxembourg, represented by D. Holderer, acting as Agent, F. Kremer and P.-E. Partsch, avocats, and B. Gasparotti, acting as expert,defendant,THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Chamber, E. Juhász, C. Vajda (Rapporteur), K. Jürimäe and C. Lycourgos, Judges,Advocate General: J. Kokott,Registrar: V. Tourrès, Administrator,having regard to the written procedure and further to the hearing on 30 June 2016,after hearing the Opinion of the Advocate General at the sitting on 6 October 2016,gives the followingJudgment1By its application, the European Commission asks the Court to declare that, by providing for the value added tax (VAT) regime applicable to independent groups of persons, as defined in Article 44(1)(y) of the consolidated text of the loi du 12 février 1979 concernant la taxe sur la valeur ajoutée (Law of 12 February 1979 on value added tax) (Mémorial A 1979, No 23, ‘the Law on VAT’), Articles 1 to 4 of the règlement grand-ducal du 21 janvier 2004 relatif à l’exonération de la TVA des prestations de services fournies à leurs membres par des groupements autonomes de personnes (Grand-Ducal Regulation of 21 January 2004 on the exemption from VAT of supplies of services by independent groups of persons to their members) (Mémorial A 2004, No 9, ‘the Grand-Ducal Regulation’), circulaire administrative no707, du 29 janvier 2004 (administrative circular No 707 of 29 January 2004), in so far as it comments on Articles 1 to 4 of the Grand-Ducal Regulation (‘the administrative circular’), and the note of 18 December 2008 drafted by the working group within the comité d’observation des marchés (Market Observation Committee, COBMA) with agreement from the administration de l’Enregistrement et des Domaines (Registration and Land Authority) (‘the COBMA note’), the Grand Duchy of Luxembourg has failed to fulfil its obligations under Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2010/45/EU of 13 July 2010 (OJ 2010 L 189, p. 1) (‘Directive 2006/112’), and, in particular, under Article 2(1)(c), Article 132(1)(f), the second subparagraph of Article 1(2), Article 168(a), Article 178(a), Article 14(2)(c) and Article 28 of that directive.Legal context European Union law 2The second subparagraph of Article 1(2) of Directive 2006/112, which is set out in Title I thereof entitled ‘Subject matter and scope’, provides as follows:‘On each transaction, VAT, calculated on the price of the goods or services at the rate applicable to such goods or services, shall be chargeable after deduction of the amount of VAT borne directly by the various cost components.’3Article 2(1)(c) of that directive provides:‘The following transactions shall be subject to VAT:…(c)the supply of services for consideration within the territory of a Member State by a taxable person acting as such;…’4The first subparagraph of Article 9(1) of Directive 2006/112, which is set out in Title III thereof entitled ‘Taxable persons’, is worded as follows:‘“Taxable person” shall mean any person who, independently, carries out in any place any economic activity, whatever the purpose or results of that activity.’5Article 14(2)(c) of that directive, which is set out in Title IV thereof entitled ‘Taxable transactions’, provides:‘In addition to the transaction referred to in paragraph 1, each of the following shall be regarded as a supply of goods:the transfer of goods pursuant to a contract under which commission is payable on purchase or sale.’6Article 28 of Directive 2006/112 provides:‘Where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he shall be deemed to have received and supplied those services himself.’7Article 132(1) of that directive, which is set out in Title IX thereof entitled ‘Exemptions’, provides:‘Member States shall exempt the following transactions:(f)the supply of services by independent groups of persons, who are carrying on an activity which is exempt from VAT or in relation to which they are not taxable persons, for the purpose of rendering their members the services directly necessary for the exercise of that activity, where those groups merely claim from their members exact reimbursement of their share of the joint expenses, provided that such exemption is not likely to cause distortion of competition;8Article 168 of Directive 2006/112, which is set out in Title X thereof entitled ‘Deductions’, is worded as follows:‘In so far as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay:(a)the VAT due or paid in that Member State in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person;9Article 178 of that directive provides:‘In order to exercise the right of deduction, a taxable person must meet the following conditions:for the purposes of deductions pursuant to Article 168(a), in respect of the supply of goods or services, he must hold an invoice drawn up in accordance with Sections 3 to 6 of Chapter 3 of Title XI;10Article 226 of Directive 2006/112, which is set out in Title XI thereof entitled ‘Obligations of taxable persons and certain non-taxable persons’, provides:‘Without prejudice to the particular provisions laid down in this Directive, only the following details are required for VAT purposes on invoices issued pursuant to Articles 220 and 221:(5)the full name and address of the taxable person and of the customer; Luxembourg law 11Under Article 44(1) of the Law on VAT, as amended, in particular, by paragraph 2 of the fifth subparagraph of Article 5 of the loi du 22 décembre 1989 concernant le budget des recettes et des dépenses de l’État pour l’exercice 1990 (Law of 22 December 1989 on the budget of revenue and expenditure of the State for the 1990 financial year) (Mémorial A 1989, No 81):‘The following shall be exempted from value added tax within the limits and under the conditions to be laid down by Grand-Ducal Regulation:(y)the supply of services by independent groups of persons, who are carrying on an activity which is exempt from VAT or in relation to which they are not taxable persons, for the purpose of rendering their members the services directly necessary for the exercise of that activity, where those groups merely claim from their members exact reimbursement of their share of the joint expenses, provided that such exemption is not likely to cause distortion of competition.’12The conditions for the application of Article 44(1) of the Law on VAT, as amended, were specified in the Grand-Ducal Regulation, Article 1 of which was worded as follows:‘For the purposes of applying the provisions of Article 44(1)(y) of the Law [on VAT, as amended], an “independent group of persons” shall mean:a group which has legal personality;(b)a group which does not have legal personality but which acts in its own name, as a group, with regard to its members and third parties.’13The règlement grand-ducal du 7 août 2012 (Grand-Ducal Regulation of 7 August 2012) (Mémorial A 2012, No 168) amended the Grand-Ducal Regulation by adding the following subparagraph to Article 1:‘The present grand-ducal regulation shall not apply to independent groups of persons whose supplies of services are used, by one or more of their members, primarily for carrying out transactions which are subject to the tax and which are not covered by an exemption.’14Article 2 of the Grand-Ducal Regulation is worded as follows:‘Services supplied by the independent groups of persons referred to in Article 1 to their members shall be exempt from the tax provided that:the activities of the group consist exclusively in supplying services directly necessary for the exercise of the activity of its members, and that the members all carry on an activity which is exempt under Article 44(1) of the [Law on VAT, as amended] or in relation to which they are not taxable persons. For the purposes of applying Article 44(1)(y) of the [Law on VAT, as amended], members who, in the framework of their economic activity which is exempt from VAT under Article 44(1), or in relation to which they are not taxable persons for VAT purposes, also carry out supplies of goods and services which are not exempt from the tax under Article 44(1), shall be regarded as carrying on an activity which is exempt under Article 44(1) or in relation to which they are not taxable persons for VAT purposes, provided that the annual turnover excluding tax relating to those taxed supplies of goods and services does not exceed 30% of the annual turnover excluding tax relating to all their transactions, the turnover to be taken into consideration being that referred to in Article 57(3) of the [Law on VAT, as amended], and subject to what is set out in Article 3;15Article 3 of the Grand-Ducal Regulation provides:‘As regards the percentage figure set out in Article 2(a), the exemption, for a calendar year, of the supplies of services by the group shall be conditional on that percentage figure not having been exceeded by the members of the group in the preceding calendar year. However, exceeding that percentage figure shall not result in loss of the exemption provided that the percentage figure is not exceeded by more than 50% of that percentage figure and provided that the period of time over which it has been exceeded has not exceeded the two consecutive calendar years preceding the calendar year in respect of which the applicability of the exemption is being ascertained.The foregoing conditions must be satisfied by each member of the group, failing which all the services supplied by the group shall be excluded from the exemption.’16Under Article 4 of the Grand-Ducal Regulation:‘The members of the group who, in the framework of their economic activity which is exempt from VAT under Article 44(1) of the [Law on VAT, as amended] or in relation to which they are not taxable persons for VAT purposes, also carry out, within the limits of the percentage figure referred to in Articles 2(a) and 3, supplies of goods or services which are not exempt under Article 44(1), shall be permitted to deduct from the tax which they are liable to pay in respect of the taxable transactions carried out by them, the [VAT] invoiced to the group or payable by the group in respect of the group’s input transactions, and included in the amount of the payment attributed individually to them in accordance with the provisions of Article 2(c). The deduction shall be made in accordance with the provisions of Chapter VII of the Law [on VAT, as amended].’17Article 4 of the Grand-Ducal Regulation forms the subject matter of the following comments in the administrative circular:‘In order to ensure, in so far as possible, compliance with the principle of the neutrality of [VAT], Article 4 is intended to confer on taxable person members, who achieve within the limits of the percentage figure laid down in Articles 2(a) and 3 a turnover which falls within the scope of the tax and which is not exempt under Article 44, a right to deduct the input VAT paid or payable by the independent group. It is to be understood that that right of deduction must, moreover, comply with the rules laid down in Chapter VII of the Law [on VAT] and, in particular, in Articles 50 (general pro rata) and 51 (actual use) thereof.In practice, the taxable person member in question may proceed to deduct the VAT paid by the group or payable by the group only if he is in possession of a statement of account, supported by copies of the invoices, issued to him by the group, setting out the exact net price paid to suppliers, the amount of the tax charged by them or payable by the group and the member’s share of the joint expenses and of the tax.’18The COBMA note is intended to clarify certain matters for the purposes of the practical application of the legal regime applicable to independent groups of persons. It contains, inter alia, the following questions and answers:‘ –Which entity must appear on the invoices to be received from third parties relating to shared costs where the group does not have legal personality?Two possible situations may arise:—the group has a direct relationship with the third parties and receives from them the goods and services in its name;the members have a direct relationship with the third parties and receive from them the goods and services in their names. The members then share the expenses relating to those goods and services received from third parties and on that basis allocate those expenses to the group. That situation may arise, inter alia, where a direct relationship between the group and the third parties may not be entered into for commercial or legal reasons.In the first situation, the invoices issued by third parties relating to shared costs must be clearly addressed to the independent group of persons. Since the group does not have legal personality, the invoices shall be addressed: “Group ABC / Care of member X - address of member X”. That member X must allocate the cost (all taxes included) to the group, irrespective of the right of deduction to which that member may be entitled as regards VAT incurred in his own name. Since the group does not have legal personality, at least one of its members must nevertheless be designated as a party legally bound by the payment terms of, and other obligations arising from, the contract.In the second situation, the invoices issued by third parties shall be addressed to one of the members. That member shall then share the expenses relating to those goods and services and allocate those expenses to the group. Those expenses (all taxes included) must be allocated to the group irrespective of the right of deduction to which that member may be entitled as regards VAT incurred in his own name.Furthermore, it is hereby clarified that the allocation of shared expenses by the members to the group is a transaction that falls outside the scope of VAT.Pre-litigation procedure19By letter of formal notice of 7 April 2011, the Commission drew the attention of the Grand Duchy of Luxembourg to the fact that the VAT regime applicable to independent groups of persons (‘IGPs’ or ‘IGP’, as appropriate), as defined, in particular, in Article 44(1)(y) of the Law on VAT and in Articles 1 to 4 of the Grand-Ducal Regulation, did not appear to it to be compatible with several provisions of Directive 2006/112.20In its first ground for complaint, the Commission stated that the national provisions under which services supplied by IGPs for the benefit of their members are exempted from VAT, including where those services are used for the purposes of the taxed transactions of those members where the annual turnover excluding tax in relation to those taxed transactions does not exceed 30%, or even 45% in certain cases, of their total annual turnover excluding tax, appeared to it to be incompatible with Article 2(1)(c) and Article 132(1)(f) of Directive 2006/112.21In its second ground for complaint, the Commission stated that the national legislation was incompatible with the second subparagraph of Article 1(2), Article 168(a) and Article 178(a) of Directive 2006/112, in so far as it provides that the members of an IGP who carry out taxable activities up to a maximum of 30% of their total annual turnover excluding tax may deduct the VAT invoiced to the IGP in respect of the goods and services supplied to it from the VAT for which they themselves are liable.22The third and last ground for complaint raised by the Commission was directed at the fact that, where a member of an IGP acquires goods and services from third parties in his own name, but on behalf of the IGP, the national legislation excluded from the scope of VAT the transaction consisting, for that member, in allocating to the IGP the expenses thus incurred, contrary to the provisions of Article 14(2)(c) and Article 28 of Directive 2006/112.23In its reply of 8 June 2011 to the letter of formal notice, the Grand Duchy of Luxembourg disputed the interpretation of the national legislation and EU law adopted by the Commission. As a preliminary point, it contended that the concept of ‘independent groups of persons’ referred to in Directive 2006/112 mainly concerned structures which do not have legal personality, the activities of which are attributable to their members which have legal personality.24As regards the first ground for complaint, the Grand Duchy of Luxembourg replied that Article 44(1)(y) of the Law on VAT limited the scope of the exemption to that defined in Article 132(1)(f) of Directive 2006/112, and that the Grand-Ducal Regulation merely laid down subsidiary rules in respect of the regime applicable to IGPs.25As regards the second ground for complaint, the Grand Duchy of Luxembourg replied that, where an IGP does not have legal personality, the right of deduction, depending on the nature of the output transactions, must benefit the group’s members, not the group. Whilst accepting that, from a theoretical point of view, the regime provided for by national law departed from the ‘principle of the prefinancing of the tax by the customer’, the Grand Duchy of Luxembourg nevertheless submitted that that was of no consequence in practice.26As regards the third ground for complaint, the Grand Duchy of Luxembourg contended that the regime resulting from Article 14(2)(c) and Article 28 of Directive 2006/112 was not applicable in the case in point.27The Commission found that reply unconvincing, and, on 27 January 2012, issued a reasoned opinion in which it maintained its position as set out in the letter of formal notice and invited the Grand Duchy of Luxembourg to take the measures necessary to bring its legislation into conformity with Directive 2006/112, and, in particular, with Article 2(1)(c), Article 132(1)(f), the second subparagraph of Article 1(2), Article 168(a), Article 178(a), Article 14(2)(c) and Article 28 of that directive, within two months of receipt of that opinion.28The Grand Duchy of Luxembourg replied to the reasoned opinion by letter of 7 February 2012, again disputing the merits of the grounds for complaint addressed to it, and maintaining its position as set out in its letter of reply of 8 June 2011.29The Grand Duchy of Luxembourg indicated, however, by letter of 26 March 2012, that it undertook to adopt a regulation designed to bring the Luxembourg legislation into conformity with Directive 2006/112 in order to satisfy the requirements in the first ground for complaint in the reasoned opinion, although it maintained its arguments relating to the second and third grounds for complaint.30By letter of 11 June 2012, the Commission requested that the Grand Duchy of Luxembourg forward the draft regulation announced and the timetable for its adoption.31By letter of 4 September 2012, the Grand Duchy of Luxembourg sent the Commission the Grand-Ducal Regulation of 7 August 2012, which amended Article 1 of the Grand-Ducal Regulation.32The Commission found, however, that, having regard to the three grounds for complaint raised in the reasoned opinion, the Grand-Ducal Regulation of 7 August 2012 had not brought the Luxembourg legislation into conformity with Directive 2006/112. In view of the persistence of those grounds for complaint, the Commission announced, on 20 February 2014, its decision to bring an action.The action The first ground for complaint, alleging failure to comply with Article 2(1)(c) and Article 132(1)(f) of Directive 2006/112 Admissibility of the first ground for complaint– Arguments of the parties 33The Grand Duchy of Luxembourg contends, in the first place, that the first ground for complaint must be rejected as inadmissible on the ground that the Commission’s application is based on a complaint different from that set out in the reasoned opinion. The ground for complaint put forward in the reasoned opinion alleges that the Grand-Ducal Regulation does not preclude the possibility that the services of a group intended principally, or even exclusively, for taxable transactions, may be exempted. By contrast, the ground for complaint put forward in the application alleges that the Grand-Ducal Regulation permits the exemption of services supplied by an IGP and intended, secondarily, for its members’ taxable transactions.34The Grand Duchy of Luxembourg contends, in the second place, that the Commission was in breach of the principle of sincere cooperation by its failure to react to the amendment made to the Grand-Ducal Regulation in August 2012. According to the Grand Duchy of Luxembourg, the Commission ought to have informed it of any reservations the Commission may have had about whether that amendment brought the Luxembourg legislation into conformity with Directive 2006/112, and ought not to have remained silent for 18 months, before ultimately announcing, on 20 February 2014, that it had decided to bring an action before the Court.35The Commission submits that the Court’s case-law does not require the statement of the grounds for complaint in the reasoned opinion and the form of order sought in the application to be exactly the same. It submits that, contrary to what the Grand Duchy of Luxembourg contends, the first ground for complaint has the same subject matter and the same scope in the reasoned opinion and in the application.36As regards the principle of sincere cooperation, the Commission claims that it alone is competent to decide whether it is appropriate, at the end of the pre-litigation procedure, to bring an action before the Court for a declaration that the Member State concerned has failed to fulfil its obligations as alleged. It is for the Commission to choose when it will bring an action for failure to fulfil obligations and it is not required to act within a specific period, subject to situations in which the excessive duration of the pre-litigation procedure would be liable to affect adversely the rights of the defence, a point which it is for the Member State concerned to prove.– Findings of the Court 37It should be recalled, in the first place, that, according to the settled case-law of the Court, the subject matter of proceedings under Article 258 TFEU is delimited by the pre-litigation procedure provided for in that provision. Accordingly, the application must be based on the same grounds and pleas as the reasoned opinion. However, that requirement cannot go so far as to mean that in every case the formal statement of complaints in the operative part of the reasoned opinion and the form of order sought in the application must be exactly the same, provided that the subject matter of the proceedings, as defined in the reasoned opinion, has not been extended or altered (judgment of 9 April 2013, Commission v Ireland, C‑85/11, EU:C:2013:217, paragraph 17 and the case-law cited).38It must be held that, in the present case, the Commission has neither extended nor altered the subject matter of the proceedings as defined in the reasoned opinion. The Commission stated clearly, in both the reasoned opinion and in the application, that it considered the Luxembourg legislation to be contrary to Article 2(1)(c) and Article 132(1)(f) of Directive 2006/112, since it permits the exemption of the services of an IGP which are not directly necessary for the non-taxable or exempt activities of its members.39In the second place, it should be recalled that, according to the settled case-law of the Court, it is for the Commission to choose the point in time which it considers to be appropriate for bringing an action for failure to fulfil obligations. The considerations which determine that choice cannot affect the admissibility of the action. The rules laid down in Article 258 TFEU must be applied without any obligation on the Commission to act within a specific period, subject to situations in which the excessive duration of the pre-litigation procedure is liable to make it more difficult for the Member State concerned to refute the Commission’s arguments and thus to infringe the rights of the defence. It is for the Member State concerned to adduce evidence that it has been affected by such an excessive duration (see, to that effect, judgment of 16 April 2015, Commission v Germany, C‑591/13, EU:C:2015:230, paragraph 14).40It must be stated that, in the present case, the Grand Duchy of Luxembourg has not adduced evidence that it has been so affected.41Furthermore, the mere fact that the Grand Duchy of Luxembourg amended its regulation after the expiry of the period prescribed in the reasoned opinion, namely 27 March 2012, does not have the effect of preventing the Commission, under the principle of sincere cooperation, from bringing an action for failure to fulfil obligations after that date.42The first ground for complaint is therefore admissible. Substance 43The Commission observes that Article 1 of the Grand-Ducal Regulation defines the conditions for the application of Article 44(1)(y) of the Law on VAT. Under Article 2(a) and Article 3 of the Grand-Ducal Regulation, the services supplied by an IGP to its members are exempt from VAT provided that the members of that group who also carry out taxable activities generate a turnover excluding tax from those activities of no more than 30%, and even 45% in certain cases, of their total turnover excluding tax. Thus, the Grand-Ducal Regulation does not restrict the exemption from VAT to, solely, the services supplied by the IGP and directly necessary for the activities which are not liable to VAT or which are exempt undertaken by its members, contrary to Article 132(1)(f) of Directive 2006/112. Accordingly, in so far as those supplies of services do not satisfy the conditions set out in Article 132(1)(f) of Directive 2006/112, they ought to be taxed in accordance with Article 2(1) of that directive.44The Grand Duchy of Luxembourg contends that the Commission, in maintaining that the exemption at issue is reserved to members of IGPs carrying out exclusively activities which are exempt or not subject to VAT, added to Article 132(1)(f) of Directive 2006/112 a condition that is not set out therein. According to the Grand Duchy of Luxembourg, the fact, for the members of an IGP, of carrying out an activity which is exempt or in relation to which they are not taxable persons is a sufficient condition for the purposes of the application of the exemption set out in that provision. On the other hand, the exemption set out in Article 132(1)(f) of Directive 2006/112 is not reserved to members of IGPs carrying out exclusively such an activity.45The Grand Duchy of Luxembourg contends that the Luxembourg regime providing that the members of an IGP may carry out taxed activities up to 30% of turnover is designed to render workable in practice a regime which, if it was subject to other conditions of application, would become economically impracticable. In this connection, that Member State submits that the costs shared by the members of an IGP, through the latter, constitute general costs, and that requiring a difference in the treatment of the VAT applicable to the services rendered by the IGP depending on whether they relate to the part attributable to the members’ taxable activities or that attributable to the members’ exempt activities is unrealistic, in the light of the practical and administrative difficulties and burdens engendered by such a requirement.46The Grand Duchy of Luxembourg relies, in addition, on the fact that, following the Commission’s letter of 11 June 2012, the Grand-Ducal Regulation of 7 August 2012 amended the Grand-Ducal Regulation by supplementing Article 1 thereof with a new subparagraph.47As a preliminary point, it should be recalled that, according to the settled case-law of the Court, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in the Member State at the end of the period laid down in the reasoned opinion and that the Court cannot take account of any subsequent changes (judgment of 28 January 2016, Commission v Portugal, C‑398/14, EU:C:2016:61, paragraph 49).48In the present case, the period granted to the Grand Duchy of Luxembourg within which to bring its legislation into conformity with Directive 2006/112 expired on 27 March 2012. However, the amendment to Article 1 of the Grand-Ducal Regulation by the Grand-Ducal Regulation of 7 August 2012 took effect only at a later date. Consequently, that amendment is irrelevant to the analysis of the first ground for complaint.49It is therefore necessary to examine whether the Grand-Ducal Regulation is consistent with Article 2(1)(c) and Article 132(1)(f) of Directive 2006/112, in so far as it provides that the services supplied by an IGP to its members are exempt from VAT provided that the members of that group who also carry out taxable activities generate a turnover excluding tax from those activities of no more than 30%, or, in certain cases, even 45%, of their total turnover excluding tax.50In this connection, it is clear from the settled case-law of the Court that the terms used to specify the exemptions from VAT set out in Article 132 of Directive 2006/112 must be interpreted strictly since those exemptions constitute exceptions to the general principle that all services supplied for consideration by a taxable person are subject to that tax. Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principle of fiscal neutrality inherent in the common system of VAT. Accordingly, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 132 should be construed in such a way as to deprive the exemptions of their intended effects. It is not the purpose of the case-law of the Court to impose an interpretation which would make the exemptions concerned almost inapplicable in practice (see, to that effect, judgment of 11 December 2008, Stichting Centraal Begeleidingsorgaan voor de Intercollegiale Toetsing, C‑407/07, EU:C:2008:713, paragraph 30 and the case-law cited).51According to the wording of Article 132(1)(f) of Directive 2006/112, under certain conditions, the supply of services by independent groups ‘of persons, who are carrying on an activity which is exempt from VAT or in relation to which they are not taxable persons’ for the purpose of rendering their members the services ‘directly necessary for the exercise of that activity’ is to be exempt. Consequently, it follows from the wording of that provision that it does not provide for an exemption for the supply of services which are not directly necessary for the exercise of an IGP’s members’ exempt activities or those in relation to which they are not taxable persons.52Since such a supply of services does not fall within the scope of the exemption set out in Article 132(1)(f) of Directive 2006/112, Article 2(1)(c) of that directive requires that that supply of services for consideration within the territory of a Member State by a taxable person acting as such be subject to VAT.53Contrary to what the Grand Duchy of Luxembourg contends, that interpretation of Article 132(1)(f) of Directive 2006/112 does not result in the exemption provided for in that provision being deprived of its intended effect. In particular, the application of that exemption is not restricted to groups whose members exercise exclusively an activity which is exempt from VAT or in relation to which they are not taxable persons. Accordingly, the services rendered by an IGP whose members also carry out taxable activities may qualify for that exemption, but only in so far as those services are directly necessary for those members’ exempt activities or activities in relation to which they are not taxable persons.54The Grand Duchy of Luxembourg has not shown that that requirement would render the exemption set out in Article 132(1)(f) of Directive 2006/112 almost inapplicable in practice. First, as the Advocate General has observed in point 42 of her Opinion, the services supplied by an IGP to its members do not necessarily relate to their general costs and thus to the totality of their activities. Second, the Grand Duchy of Luxembourg has not shown why, if at all, it might be excessively difficult for the IGP to invoice its services excluding VAT, according to the share of its members’ activities in their totality represented by the activities which are exempt from that tax or in relation to which they are not taxable persons.55It follows that Article 44(1)(y) of the Law on VAT, read in conjunction with Article 2(a) and Article 3 of the Grand-Ducal Regulation, is contrary to Article 2(1)(c) and Article 132(1)(f) of Directive 2006/112, and that, therefore, the first ground for complaint is well founded. The second ground for complaint, alleging failure to comply with the second subparagraph of Article 1(2), Article 168(a) and Article 178(a) of Directive 2006/112 Arguments of the parties 56The Commission notes, in the first place, that, according to Article 4 of the Grand-Ducal Regulation, the members of an IGP who carry out transactions subject to VAT are entitled to deduct, from the VAT which they are liable to pay in respect of those taxed transactions, the tax invoiced to the IGP or payable by the latter in respect of the goods and services which the IGP received for the purposes of its own activities. However, according to the Commission, it is clear from Article 168(a) of Directive 2006/112 that the VAT may be deducted only by the taxable person who is the recipient of the goods or services subject to VAT and solely from the VAT which that taxable person is himself liable to pay.57In the second place, the Commission claims that it follows from Article 4 of the Grand-Ducal Regulation, read in conjunction with the administrative circular, that the right to deduct VAT may be exercised by the members of the IGP in respect of transactions in the absence of an invoice drawn up in their name, in breach of Article 178(a) of Directive 2006/112.58The Grand Duchy of Luxembourg contends that it is clear from the judgment of 18 July 2013, PPG Holdings (C‑26/12, EU:C:2013:526) that a taxable person may deduct the VAT on amounts invoiced to him for goods or services which benefit a separate entity, in so far as it is shown that those amounts are linked to the taxable activity of the taxable person. The Grand Duchy of Luxembourg infers from this that, for the purposes of determining whether there is a right of deduction, it is necessary to identify the entity which in fact bears those amounts and to determine whether there is a link between those amounts and the taxable activity of the taxable person. In this connection, the Grand Duchy of Luxembourg contends that, although technically invoiced to the IGP, the amounts and the VAT relating to them are borne by the members of the IGP in proportion to the interest held by them in the group.59Furthermore, to uphold the second ground for complaint relied on by the Commission would, according to the Grand Duchy of Luxembourg, effectively undermine the principle of fiscal neutrality. Should the members of the IGP be refused the right to deduct VAT and the IGP be unable to recover that tax, those members would bear an additional VAT cost.60As regards the requirements relating to holding an invoice, the Grand Duchy of Luxembourg states that the Court recognised, in its judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241), the right of a taxable person who does not hold an invoice in his own name to deduct VAT. According to the Grand Duchy of Luxembourg, the requirement to hold an invoice, to be satisfied by the taxable person claiming an exemption, is justified essentially by the low level of risk it is thereby possible to achieve as regards possible double deduction of VAT, fraud or abuse. In this connection, the Grand Duchy of Luxembourg contends that, since IGPs are not entitled to deduct VAT, there is therefore no risk of double deduction of VAT. Findings of the Court 61As a preliminary point, it should be noted that it follows from the exemption provided for in Article 132(1)(f) of Directive 2006/112 that the IGP is a taxable person in its own right, separate from its members. It is clear from the very wording of that provision that the IGP is independent, and that it therefore carries out its supplies of services independently, within the meaning of Article 9 of Directive 2006/112. Furthermore, if the services supplied by the IGP were not services supplied by a taxable person acting as such, those services would not be subject to VAT, under Article 2(1)(c) of Directive 2006/112. Those services would therefore not be capable of forming the subject matter of an exemption, such as that set out in Article 132(1)(f) of that directive, as the Advocate General has observed in point 50 of her Opinion.62It is in the light of those preliminary considerations that it must be determined whether the Grand-Ducal Regulation is contrary to the second subparagraph of Article 1(2), Article 168(a) and Article 178(a) of Directive 2006/112, in so far as it permits the members of an IGP who carry out transactions subject to VAT to deduct, from the VAT which they are liable to pay in respect of those taxed transactions, the tax invoiced to the IGP or payable by the latter in respect of the goods and services which the IGP received for the purposes of its own activities.63In the first place, it should be recalled that, first, under Article 168(a) of Directive 2006/112, a taxable person is entitled to deduct from the VAT which he is liable to pay the VAT due or paid in respect of supplies to him of goods or services carried out by another taxable person. It follows that it is contrary to that provision to permit the members of an IGP to deduct from the VAT which they are liable to pay the VAT due or paid in respect of goods and services supplied to the IGP.64That finding is not called in question by the judgment of 18 July 2013, PPG Holdings (C‑26/12, EU:C:2013:526), relied on by the Grand Duchy of Luxembourg, in which the Court held, in essence, in paragraphs 24 to 26 and 29 of that judgment, that a taxable person who had set up a pension fund in the form of a legally and fiscally separate entity, in accordance with an obligation imposed on that taxable person as an employer by national legislation, was entitled to deduct the VAT he had paid on services relating to the management and operation of that fund. As is apparent from paragraph 25 of that judgment, the taxable person itself in that case had acquired the services in question subject to VAT, for the purpose of the administration of its employees’ pensions and the management of the assets of the pension fund set up to safeguard those pensions. It cannot therefore be inferred from that judgment that the members of an IGP are entitled to deduct the VAT on the goods and services acquired by the group, since only the latter may possibly claim a right of deduction of that VAT.65Second, the line of argument of the Grand Duchy of Luxembourg alleging a breach of the principle of fiscal neutrality must be rejected. In accordance with that principle, the deduction system is meant to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his economic activities (judgment of 15 September 2016, Landkreis Potsdam-Mittelmark, C‑400/15, EU:C:2016:687, paragraph 35). The common system of VAT therefore ensures that all economic activities, provided that they are, in principle, themselves subject to VAT, are taxed in a neutral way (see, to that effect, judgment of 22 October 2015, PPUH Stehcemp, C‑277/14, EU:C:2015:719, paragraph 27).66Consequently, it is not contrary to the principle of fiscal neutrality to refuse, under Article 168(a) of Directive 2006/112, a right of deduction to the members of an IGP as regards the VAT borne by that group in respect of services provided by latter, which are exempt under Article 132(1)(f) of Directive 2006/112 and which, on that basis, do not give rise to any right of deduction. By contrast, in so far as such an IGP provides services which are not exempt, it must be held that, in accordance with that principle, the group in question, and not its members, is entitled in its own right to deduct the VAT charged on its input transactions.67In the second place, it is clear from Article 178(a) of Directive 2006/112, read in conjunction with Article 226(5) and Article 168(a) thereof, that, in order to exercise the right of deduction, the taxable person must hold an invoice on which his name appears as customer. Consequently, by permitting the members of an IGP to deduct from the VAT which they themselves are liable to pay, on the basis of an invoice drawn up in the name of that group, the VAT invoiced to the latter, the Luxembourg legislation is contrary to Article 178(a) of Directive 2006/112.68It should be observed that the reference made by the Grand Duchy of Luxembourg to the judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241), is irrelevant in this connection, since the factual circumstances of the case which gave rise to that judgment were very different from those at issue in the present case. It is clear, in particular, from paragraph 81 of that judgment, that, unlike an IGP, which has the status of a taxable person for the purposes of VAT and all the members of which carry out an economic activity, the community at issue in the case which gave rise to the judgment of 21 April 2005, HE (C‑25/03, EU:C:2005:241), constituted by the co-ownership in fact formed by the spouses, did not itself have the status of a taxable person for the purposes of VAT and only one of the spouses carried out an economic activity.69As to the remainder, however, it should be stated that the Commission has not shown that the Luxembourg legislation in question is contrary to the second subparagraph of Article 1(2) of Directive 2006/112, which sets out the principle that VAT is chargeable on each transaction, without, however, dealing specifically with the right of deduction guaranteed in Article 167 and Article 168(a) of that directive, under the conditions laid down, inter alia, in Article 178 thereof.70It follows from the foregoing considerations that Article 4 of the Grand-Ducal Regulation, read in conjunction with the administrative circular in so far as it comments on Article 4 of the Grand-Ducal Regulation, is contrary to Article 168(a) and Article 178(a) of Directive 2006/112 and that, to that extent, the second ground for complaint is well founded. As to the remainder, the second ground for complaint must be rejected. The third ground for complaint, alleging failure to comply with Article 14(2)(c) and Article 28 of Directive 2006/112 Admissibility of the third ground for complaint 71The Grand Duchy of Luxembourg contends that the third ground for complaint must be rejected as inadmissible since it relates exclusively to the COBMA note. It states that an action for failure to fulfil obligations must concern a failure to fulfil obligations attributable to the Member State concerned. It submits that the Commission has not shown that the COBMA is an organ of the State that exercises the prerogatives of a public authority.72The Commission submits that the wording of the COBMA note indicates that the Registration and Land Authority, which is an organ of the State, is the co-author of the document. In addition, it claims that the content of that note confirms that it does not concern mere recommendations or advice for operators, but rather the manner in which the legislation relating to IGPs is to be interpreted and applied in a harmonised way. In any event, the Commission submits that the COBMA note sets out the general practice of the Luxembourg tax authorities.73It should be recalled that an administrative practice of a Member State can be made the object of an action for failure to fulfil obligations when it is, to some degree, of a consistent and general nature (judgment of 22 September 2016, Commission v Czech Republic, C‑525/14, EU:C:2016:714, paragraph 14). The Grand Duchy of Luxembourg has, however, not disputed the Commission’s argument that the COBMA note sets out the general practice of the Luxembourg tax authorities.74It follows that the third ground for complaint relates to a failure to fulfil obligations attributable to the Grand Duchy of Luxembourg and that, therefore, the plea of inadmissibility regarding it must be rejected.75The Commission observes that, under the COBMA note, the allocation to the IGP, by one of its members, of expenses incurred by that member in his name but on behalf of the IGP is a transaction which is excluded from the scope of VAT.76However, according to the Commission, such a transaction does fall within the scope of VAT under Article 14(2)(c) and Article 28 of Directive 2006/112. According to the Commission, each acquisition of goods or services carried out on behalf of the IGP by one of its members in his own name must, for VAT purposes, be regarded as two identical supplies of goods or services, provided consecutively and which fall within the scope of VAT. In this connection, it relies on the judgment of 14 July 2011, Henfling and Others (C‑464/10, EU:C:2011:489).77As a preliminary point, the Grand Duchy of Luxembourg states that the passage in the COBMA note complained about does not concern IGPs which have legal personality, but only those which do not have such personality.78The Grand Duchy of Luxembourg contends that the analogy drawn by the Commission between the case which gave rise to the judgment of 14 July 2011, Henfling and Others (C‑464/10, EU:C:2011:489), and the present case is irrelevant, since the two situations are substantially different. In this connection, it states that an IGP which does not have legal personality cannot act independently, but only through a member acting on its behalf, and that the transactions between an IGP and that member are not necessarily transactions between two separate taxable persons. In that context, the Grand Duchy of Luxembourg draws a parallel with common funds, within the meaning of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ 2009 L 302, p. 32), which also may act only through their management company and are therefore excluded from the scope of VAT.79The Grand Duchy of Luxembourg submits that the relationship between the members of an IGP and the latter may, depending on the contractual stipulations of the IGP created, be analogous to that of the members of a consortium, such as found by the Court in the judgment of 29 April 2004, EDM (C‑77/01, EU:C:2004:243). In that case, the Court held that the operations performed in connection with a consortium ‘for its account’ by each of its members did not constitute taxable transactions.80As a preliminary point, as regards the scope of the disputed passage in the COBMA note, it must be stated that it is not unequivocally clear from the wording of that passage that it relates solely to the situation of IGPs which do not have legal personality, as the Grand Duchy of Luxembourg maintains. However, as the Commission maintains, the passage in that note, namely ‘where a direct relationship between the group and the third parties may not be entered into for commercial or legal reasons’, seems to indicate that that is not the case. Nevertheless, and in any event, whether that passage applies to IGPs which have legal personality has no bearing on the analysis of the third ground for complaint.81The third ground for complaint concerns the situation in which the member of an IGP acquires goods or services in his name but on behalf of the IGP.82As is clear from paragraph 61 of this judgment, the IGP is a taxable person in its own right, separate from its members, who are also taxable persons. Consequently, the transactions between the IGP, which acts independently, and one of its members are to be regarded as transactions between two taxable persons which fall within the scope of VAT. The argument of the Grand Duchy of Luxembourg that the transactions between an IGP and one of its members are not necessarily transactions between two separate taxable persons, since the former may act only through one of its members, and the parallel drawn in that context with common funds, are therefore irrelevant to the present case.83It follows that the allocation to the IGP, by one of its members, of expenses incurred by that member in his name but on behalf of the IGP is a transaction which falls within the scope of VAT.84That finding is confirmed by Article 14(2)(c) and Article 28 of Directive 2006/112, provisions which the Commission claims have been infringed under the third ground for complaint.85Article 28 of Directive 2006/112 provides that where a taxable person acting in his own name but on behalf of another person takes part in a supply of services, he is to be deemed to have received and supplied those services himself.86Accordingly, that provision creates the legal fiction of two identical supplies of services provided consecutively. Under that fiction, the operator, who takes part in the supply of services and who constitutes the commission agent, is considered to have, firstly, received the services in question from the operator on behalf of whom it acts, who constitutes the principal, before providing, secondly, those services to the client himself (judgment of 14 July 2011, Henfling and Others, C‑464/10, EU:C:2011:489, paragraph 35).87Since Article 28 of Directive 2006/112 comes under Title IV of that directive, entitled ‘Taxable transactions’, the two supplies of services concerned fall within the scope of VAT. It follows that, if the supply of services in which an operator takes part is subject to VAT, the legal relationship between that operator and the operator on behalf of whom it acts is also subject to VAT (see, by analogy, judgment of 14 July 2011, Henfling and Others, C‑464/10, EU:C:2011:489, paragraph 36).88The same reasoning applies as regards the acquisition of goods pursuant to a contract under which commission is payable on purchase, under Article 14(2)(c) of Directive 2006/112, which also comes under Title IV of that directive. That provision thus creates the legal fiction of two identical supplies of goods made consecutively, which fall within the scope of VAT.89Consequently, where the member of an IGP acquires, in his name but on behalf of the IGP, goods under Article 14(2)(c) of Directive 2006/112, or services under Article 28 thereof, the reimbursement by the group of the expenses relating thereto is a transaction which falls within the scope of VAT.90The analogy with the case which gave rise to the judgment of 29 April 2004, EDM (C‑77/01, EU:C:2004:243), relied on by the Grand Duchy of Luxembourg, must also be rejected. Unlike the consortium at issue in that case, the IGP is, as is clear from paragraphs 61 and 82 of this judgment, a taxable person separate from its members.91Consequently, by providing that the allocation to the IGP, by one of its members, of expenses incurred by that member in his name but on behalf of the IGP is a transaction which is excluded from the scope of VAT, the COBMA note is contrary to Article 14(2)(c) and Article 28 of Directive 2006/112, and, therefore, the third ground for complaint is well founded.92It follows from all the foregoing considerations that, by providing for the VAT regime applicable to IGPs, as defined, first, in Article 44(1)(y) of the Law on VAT, read in conjunction with Article 2(a) and Article 3 of the Grand-Ducal Regulation, second, in Article 4 of that regulation, read in conjunction with the administrative circular in so far as it comments on Article 4 of that regulation, and, third, in the COBMA note, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 2(1)(c), Article 132(1)(f), Article 168(a), Article 178(a), Article 14(2)(c) and Article 28 of Directive 2006/112.Costs93Under Article 138(1) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Grand Duchy of Luxembourg has been unsuccessful in the majority of its pleas, the latter must be ordered to pay the costs.On those grounds, the Court (Fourth Chamber) hereby:1. Declares that by providing for the value added tax (VAT) regime applicable to independent groups of persons, as defined, first, in Article 44(1)(y) of the consolidated text of the loi du 12 février 1979 concernant la taxe sur la valeur ajoutée (Law of 12 February 1979 on value added tax), read in conjunction with Article 2(a) and Article 3 of the règlement grand-ducal du 21 janvier 2004 relatif à l’exonération de la TVA des prestations de services fournies à leurs membres par des groupements autonomes de personnes (Grand-Ducal Regulation of 21 January 2004 on the exemption from VAT of supplies of services by independent groups of persons to their members), second, in Article 4 of that regulation, read in conjunction with circulaire administrative no707, du 29 janvier 2004 (administrative circular No 707 of 29 January 2004), in so far as it comments on Article 4 of that regulation, and, third, in the note of 18 December 2008 drafted by the working group within the comité d’observation des marchés (Market Observation Committee, COBMA) with agreement from the administration de l’Enregistrement et des Domaines (Registration and Land Authority), the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 2(1)(c), Article 132(1)(f), Article 168(a), Article 178(a), Article 14(2)(c) and Article 28 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2010/45/EU of 13 July 2010; 2. Dismisses the action as to the remainder; 3. Orders the Grand Duchy of Luxembourg to pay the costs. [Signatures]( *1 ) Language of the case: French. | ba0dc-fa9dbb5-4dbb | EN |
A general and absolute prohibition of any advertising for the provision of oral and dental care services is incompatible with EU law | 4 May 2017 ( *1 )‛Reference for a preliminary ruling — Article 56 TFUE — Freedom to provide services — Provision of oral and dental care — National legislation prohibiting, in absolute terms, advertising for oral and dental care services — Existence of a cross-border element — Protection of public health — Proportionality — Directive 2000/31/EC — Information society service — Advertising via an internet site — Member of a regulated profession — Professional rules — Directive 2005/29/EC — Unfair trading practices — National provisions relating to health — National provisions governing regulated professions’In Case C‑339/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Nederlandstalige rechtbank van eerste aanleg te Brussel, strafzaken (Dutch-language Court of First Instance, Criminal Section, Brussels, Belgium), made by decision of 18 June 2015, received at the Court on 7 July 2015, in the criminal proceedings brought against Luc Vanderborght THE COURT (Third Chamber),composed of L. Bay Larsen (Rapporteur), President of the Chamber, M. Vilaras, J. Malenovský, M. Safjan and D. Šváby, Judges,Advocate General: Y. Bot,Registrar: V. Tourrès, Administrator,having regard to the written procedure and further to the hearing on 7 July 2016,after considering the observations submitted on behalf of:—Luc Vanderborght, by S. Callens, M. Verhaege and L. Boddez, advocaten,the Verbond der Vlaamse Tandartsen VZW, by N. Van Ranst and V. Vanpeteghem, advocaten,the Belgian Government, by C. Pochet, J. Van Holm and J.‑C. Halleux, acting as Agents, and by A. Fromont et L. Van den Hole, advocaten,the Italian Government, by G. Palmieri, acting as Agent, and by W. Ferrante, avvocato dello Stato,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by D. Roussanov and F. Wilman, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 8 September 2016,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Articles 49 and 56 TFEU, Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council, and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘the Unfair Commercial Practices Directive’) (OJ 2005 L 149, p. 22), and Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) (OJ 2000 L 178, p. 1).2The request has been made in criminal proceedings brought against Mr Luc Vanderborght, a dentist established in Belgium, for contravening national rules prohibiting all advertising for the provision of oral and dental care services.Legal context EU law Directive 92/51/EEC 3Article 1 of Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of professional education and training to supplement Directive 89/48/EEC (OJ 1992 L 209, p. 25) provides:‘For the purpose of this Directive the following definitions shall apply:…(f)regulated professional activity: a professional activity the taking up or pursuit of which, or one of its modes of pursuit in a Member State, is subject, directly or indirectly, by virtue of laws, regulations or administrative provisions, to the possession of evidence of education and training or an attestation of competence. ……’ Directive 98/34/EC 4Article 1(2) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services (OJ 1998 L 204, p. 37), as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998 (OJ 1998 L 217, p. 18) (‘Directive 98/34’), defines ‘service’ as:‘Any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.For the purpose of this definition:“at a distance” means that the service is provided without the parties being simultaneously present,“by electronic means” means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means,“at the individual request of a recipient of services” means that the service is provided through the transmission of data on individual request. Directive 2000/31 5Recital 18 of Directive 2000/31 states:‘Information society services span a wide range of economic activities which take place online; … information society services are not solely restricted to services giving rise to online contracting but also, in so far as they represent an economic activity, extend to services which are not remunerated by those who receive them, such as those offering online information or commercial communications … activities which by their very nature cannot be carried out at a distance and by electronic means, such as the statutory auditing of company accounts or medical advice requiring the physical examination of a patient are not information society services.’6Article 2 of that directive, entitled ‘Definitions’, provides:‘For the purpose of this Directive the following terms shall bear the following meanings:(a)“Information Society services”: services within the meaning of Article 1(2) of Directive [98/34];“commercial communication”: any form of communication designed to promote, directly or indirectly, the goods, services or image of an undertaking, organisation or person engaged in commercial, industrial or craft activity or practising a regulated profession. …(g)“regulated profession”: any profession within the meaning of either Article 1(d) of Council Directive 89/48/EEC of 21 December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education and training of at least three-years’ duration … or of Article 1(f) of Council Directive [92/51] …;7Paragraphs (1) and (2) of Article 8 of that directive, entitled ‘Regulated professions’, are worded as follows:‘1. Member States shall ensure that the use of commercial communications which are part of, or constitute, an information society service provided by a member of a regulated profession is permitted subject to compliance with the professional rules regarding, in particular, the independence, dignity and honour of the profession, professional secrecy and fairness towards clients and other members of the profession.2. Without prejudice to the autonomy of professional bodies and associations, Member States and the Commission shall encourage professional associations and bodies to establish codes of conduct at Community level in order to determine the types of information that can be given for the purposes of commercial communication in conformity with the rules referred to in paragraph 1.’ Directive 2005/29 8Recital 9 of Directive 2005/29 states:‘This Directive is without prejudice to individual actions brought by those who have been harmed by an unfair commercial practice. It is also without prejudice to Community and national rules … on the health and safety aspects of products … The Member States will thus be able to retain or introduce restrictions and prohibitions of commercial practices on grounds of the protection of the health and safety of consumers in their territory wherever the trader is based, for example in relation to alcohol, tobacco or pharmaceuticals. …’9‘For the purposes of this Directive:(c)“product” means any goods or service including immovable property, rights and obligations;(d)“business-to-consumer commercial practices” (hereinafter also referred to as commercial practices) means any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers;10Article 3 of the directive provides:‘1. This Directive shall apply to unfair business-to-consumer commercial practices, as laid down in Article 5, before, during and after a commercial transaction in relation to a product.3. This Directive is without prejudice to Community or national rules relating to the health and safety aspects of products.8. This Directive is without prejudice to any conditions of establishment or of authorisation regimes, or to the deontological codes of conduct or other specific rules governing regulated professions in order to uphold high standards of integrity on the part of the professional, which Member States may, in conformity with Community law, impose on professionals.National law11Article 8d of the Koninklijk Besluit houdende reglement op de beoefening van de tandheelkunde (Royal Decree laying down rules for the practice of dentistry) of 1 June 1934 (Belgisch Staatsblad, 7 June 1934, p. 3220) provides the following:‘For the purpose of informing the public, it is permissible to affix only an inscription or a plaque of modest dimensions and appearance to the building in which a competent person practises dentistry, stating the name of the practitioner and possibly his legal designation, his sessions days and times, the name of the undertaking or health care organisation within which the practitioner carries out his professional activity; it may also state the branch of dentistry in which the practitioner specialises, such as surgical dentistry, oral prosthesis, orthodontics, dental surgery.12Pursuant to Article 1 of the Wet betreffende de publiciteit inzake tandverzorging (Law on advertising in dental care matters) of 15 April 1958 (Belgisch Staatsblad, 5 May 1958, p. 3542):‘No person may, whether directly or indirectly, engage in advertising of any kind with a view to treating or providing treatment, whether or not by a qualified person, in Belgium or abroad, for dental or oral ailments, injuries or abnormalities, by means, inter alia, of displays or signs, inscriptions or plaques liable to be misleading as to the lawful nature of the activity advertised, leaflets, circulars, hand-outs and brochures, via the medium of the press, broadcasting or cinema ...’The dispute in the main proceedings and the questions referred for a preliminary ruling13At the time of the events giving rise to the criminal proceedings brought against him, Mr Vanderborght worked as a qualified dental practitioner in Opwijk (Belgium). Those proceedings were brought against him on the ground that, between March 2003 and January 2014 at least, he advertised his dental services contrary to Belgian law.14It is clear from the order for reference that Mr Vanderborght installed a sign consisting of three printed faces, stating his name, his designation as a dentist, the address of his website and the telephone number of his practice.15In addition, Mr Vanderborght created a website in order to inform patients of the various types of treatment which he provides at his practice. Finally, he also placed some advertisements in local newspapers.16The criminal proceedings follow a complaint from the Verbond der Vlaamse Tandartsen VZW, a professional association.17On 6 February 2014, the Public Prosecutor’s Office sought to have the proceedings against Mr Vanderborght transferred to the criminal court. By order of 25 March 2014, the court sitting in chambers referred the proceedings to the Nederlandstalige rechtbank van eerste aanleg te Brussel, strafzaken (Dutch-language Court of First Instance, Criminal Section, Brussels, Belgium).18Before the referring court, Mr Vanderborght argues that Article 1 of the Law of 15 April 1958 on advertising in relation to dental care, which prohibits, in absolute terms, any advertising relating to oral and dental care, and Article 8d of the Royal Decree of 1 June 1934 laying down rules for the practice of dentistry, which establishes certain requirements of discretion with regard to signs of dental practices, are contrary to EU law, in particular, Directives 2005/29 and 2000/31, and Articles 49 and 56 TFEU.19The referring court holds that the main proceedings have a cross-border element, relying, inter alia, on information that Mr Vanderborght posts advertisements on the internet which may reach patients in other Member States and that he treats patients some of whom come from other Member States.20In those circumstances, the Nederlandstalige rechtbank van eerste aanleg te Brussel, strafzaken (Dutch-language Court of First Instance, Criminal Section, Brussels) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Should Directive [2005/29] be interpreted as precluding a national law — such as Article 1 of the Law of 15 April 1958 on advertising in dental care matters — which prohibits, in absolute terms, any advertising, by anyone, relating to oral or dental care?(2)Is a prohibition on advertising in respect of oral and dental care to be regarded as a “rule relating to the health and safety aspects of products” within the meaning of Article 3(3) of Directive [2005/29]?(3)Should Directive [2005/29] be interpreted as precluding a national provision — such as Article 8d of the Royal Decree of 1 June 1934 laying down rules for the practice of dentistry — which describes in detail the requirements in terms of discreetness to be met by a sign, intended for the public, at a dental practice?(4)Should Directive [2000/31] be interpreted as precluding a national law — such as Article 1 of the Law of 1958 on advertising in dental care matters — which prohibits, in absolute terms, any advertising, by anyone, relating to oral or dental care, including a prohibition on commercial advertising by electronic means (website)?(5)How should the term “information society services”, as defined in Article 2(a) of Directive 2000/31 by reference to Article 1(2) of Directive [98/34], be interpreted?(6)Should Articles 49 TFEU and 56 TFEU be interpreted as precluding national legislation such as that at issue in the main proceedings, whereby, in order to protect public health, a complete ban is imposed on advertising in respect of dental care?’Consideration of the questions referred Questions 1 to 3 21By its first three questions, which it is appropriate to examine together, the referring court asks, in essence, whether Directive 2005/29 must be interpreted to the effect that it precludes national legislation, such as that at issue in the main proceedings, which protects public health and the dignity of the profession of dentist, first, by imposing a general and absolute prohibition of any advertising relating to the provision of oral and dental care services and, secondly, by establishing certain requirements of discretion with regard to signs of dental practices.22In order to reply to the questions referred, it is necessary first of all to determine whether the advertisements which are the subject of the prohibition at issue in the main proceedings constitute commercial practices within the meaning of Article 2(d) of Directive 2005/29 and are therefore subject to the rules laid down by that directive (see, by analogy, judgment of 9 November 2010, Mediaprint Zeitungs- und Zeitschriftenverlag, C‑540/08, EU:C:2010:660, paragraph 16).23It must be recalled that Article 2(d) of that directive gives a particularly wide definition to the concept of ‘commercial practices’ as ‘any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers’ (judgment of 9 November 2010, Mediaprint Zeitungs- und Zeitschriftenverlag, C‑540/08, EU:C:2010:660, paragraph 17).24In addition, under Article 2(c) of that directive, the concept of a ‘product’ covers any goods or service.25It follows that the advertising of oral and dental care services such as that at issue in the main proceedings, whether through publications in advertising periodicals or on the internet, or through the use of signs, constitutes a ‘commercial practice’, for the purposes of Directive 2005/29.26However, according to Article 3(3), that directive is without prejudice to EU or national provisions relating to the health and safety aspects of products.27Moreover, it must be pointed out that, according to Article 3(8), that directive is without prejudice to the deontological codes of conduct or other specific rules governing regulated professions in order to uphold high standards of integrity on the part of the professional, which Member States may, in conformity with EU law, impose on professionals.28Thus, it follows from that provision that Directive 2005/29 does not call into question the national rules relating to the health and safety aspects of products or the specific provisions governing regulated professions.29It is apparent from the order for reference that the provisions of national legislation at issue in the main proceedings, that is to say, Article 1 of the Law of 15 April 1958 on advertising in relation to dental care and Article 8d of the Royal Decree of 1 June 1934 laying down rules for the practice of dentistry, protect, respectively, public health and the dignity of the profession of dentist, so that that legislation comes under Article 3(3) and (8) of Directive 2005/29.30In the light of all of the foregoing considerations, the answer to the first three questions is that Directive 2005/29 must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which protects public health and the dignity of the profession of dentist, first, by imposing a general and absolute prohibition of any advertising relating to the provision of oral and dental care services and, secondly, by establishing certain requirements of discretion with regard to signs of dental practices. Questions 4 and 5 31By its fourth and fifth questions, which it is appropriate to examine together, the referring court asks, in essence, whether Directive 2000/31 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a general and absolute prohibition of any advertising relating to the provision of oral and dental care services, inasmuch as it prohibits any form of electronic commercial communications, including by means of a website created by a dentist.32In that regard, it is important to note that Article 8(1) of that directive lays down the principle that Member States are to ensure that the use of commercial communications which are part of an information society service provided by a member of a regulated profession, or which constitutes such a service, is authorised.33It is clear from Article 2(g) of Directive 2000/31, read in conjunction with Article 1(f) of Directive 92/51 to which Article 2(g) refers, that a professional activity the taking up or pursuit of which is subject, by virtue of laws, regulations or administrative provisions, to the possession of evidence of education and training or an attestation of competence must, inter alia, be regarded as a ‘regulated profession’.34It is apparent from the order for reference that in Belgium the profession of dentist constitutes a regulated profession for the purposes of Article 2(g) of Directive 2000/31.35Moreover, pursuant to Article 2(a) of Directive 2000/31, read in conjunction with Article 1(2) of Directive 98/34, the concept of ‘information society services’ covers ‘any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’.36Recital 18 of Directive 2000/31 states that the concept of ‘information society services’ spans a wide range of economic activities which take place online and that it is not solely restricted to services giving rise to online contracting but also, in so far as those services represent an economic activity, extend to services which are not remunerated by those who receive them, such as those offering online information or commercial communications.37In those circumstances, it must be considered that online advertising may constitute an information society service for the purposes of Directive 2000/31 (see, to that effect, judgment of 15 September 2016, Mc Fadden, C‑484/14, EU:C:2016:689, paragraphs 41 and 42).38Furthermore, Article 2(f) of that directive stipulates that the concept of ‘commercial communication’ covers, inter alia, any form of communication designed to promote, directly or indirectly, the services of a person practising a regulated profession.39It follows that advertising relating to the provision of oral and dental care services by means of a website created by a member of a regulated profession constitutes a commercial communication which is part of an information society service or which constitutes such a service for the purposes of Article 8 of Directive 2000/31.40Therefore, it must be held that that provision, as the Advocate General stated in point 50 of his Opinion, means that Member States must ensure that those commercial communications are, as a rule, authorised.41In that regard, it is important to note that the contrary interpretation offered by the European Commission, that that provision covers only advertisements supplied by a member of a regulated profession where he acts as a supplier of online advertising, cannot be accepted, given that that interpretation would have the effect of excessively reducing the scope of that provision.42It should be recalled that the aim of Article 8(1) of Directive 2000/31 is to enable members of a regulated profession to use information society services in order to promote their activities.43That being the case, it is apparent from that provision that commercial communications such as those referred to in paragraph 39 above are only permitted subject to compliance with the professional rules regarding, in particular, the independence, dignity and honour of the regulated profession concerned, professional secrecy and fairness towards both clients and other members of that profession.44Nonetheless, the professional rules referred to in that provision cannot, without depriving it of practical effect and impeding the attainment of the objective pursued by the EU legislature, impose a general and absolute prohibition of any form of online advertising designed to promote the activity of a person practising a regulated profession.45That interpretation is supported by the fact that Article 8(2) of Directive 2000/31 provides that Member States and the Commission are to encourage the drawing-up of codes of conduct intended, not to prohibit that type of advertising, but rather to determine the types of information that can be given for the purposes of commercial communication in conformity with those professional rules.46It follows that, although the content and form of the commercial communications referred to in Article 8(1) of Directive 2000/31 may legitimately be subject to professional rules, such rules cannot include a general and absolute prohibition of that type of communication.47That consideration is equally valid as regards national legislation, such as that at issue in the main proceedings, which applies only to dentists.48It must be pointed out that the EU legislature has not excluded regulated professions from the principle of the permissibility of online commercial communications laid down in Article 8(1) of Directive 2000/31.49Therefore, although that provision makes it possible to take into account the particularities of health professions when the relevant professional rules are drawn up, by supervising, closely if necessary, the form and manner of the online commercial communications referred to in that provision with a view, in particular, to ensuring that the confidence which patients have in those professions is not undermined, the fact remains that those professional rules cannot legitimately impose a general and absolute prohibition of any form of online advertising designed to promote the activity of a person practising such a profession.50In view of the foregoing considerations, the answer to the fourth and fifth questions is that Directive 2000/31 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a general and absolute prohibition of any advertising relating to the provision of oral and dental care services, inasmuch as it prohibits any form of electronic commercial communications, including by means of a website created by a dentist. The sixth question 51By its sixth question, the referring court asks, in essence, whether Articles 49 and 56 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a general and absolute prohibition of any advertising relating to the provision of oral and dental care services.52As a preliminary point, it should be noted that, in the light of the reply given to the fourth and fifth questions, the sixth question must be seen as ultimately relating to the compatibility with Articles 49 and 56 TFEU of such national legislation inasmuch as it prohibits advertising which is not carried out by means of an information society service. Admissibility 53The Court has consistently held that the Treaty provisions guaranteeing the freedoms of movement cannot be applied to a situation which is confined in all respects within a single Member State (see to that effect, inter alia, judgments of 21 October 1999, Jägerskiöld, C‑97/98, EU:C:1999:515, paragraph 42, and of 11 July 2002, Carpenter, C‑60/00, EU:C:2002:434, paragraph 28).54It is true that the case in the main proceedings concerns criminal proceedings brought against a dentist who is a Belgian national, established in Belgium, and who practises in that Member State.55However, it is clear from the order for reference that a number of Mr Vanderborght’s patients come from other Member States.56The Court has already held that the fact that a number of the patients are EU citizens coming from other Member States could constitute a cross-border element involving the application of the Treaty provisions guaranteeing the freedoms of movement (see, to that effect, judgment of 11 June 2015, Berlington Hungary and Others, C‑98/14, EU:C:2015:386, paragraphs 25 and 26).57Therefore, the sixth question must be held to be admissible. Substance 58It should be observed that, when a national measure concerns both the freedom of establishment and the freedom to provide services, the Court will in principle examine the measure in dispute in relation to only one of those two freedoms if it appears, in the circumstances of the case, that one of them is entirely secondary in relation to the other and may be considered together with it (judgment of 26 May 2016, NN (L) International, C‑48/15, EU:C:2016:356, paragraph 39 and the case-law cited).59That is so in the present case.60Since the cross-border element which makes the Treaty provisions guaranteeing the freedoms of movement applicable is constituted by the movement of recipients of services established in another Member State (see, to that effect, judgment of 11 June 2015, Berlington Hungary and Others, C‑98/14, EU:C:2015:386, paragraph 26), it is appropriate to answer the sixth question with reference to Article 56 TFEU.61In that regard, it is clear from the Court’s settled case-law that all measures which prohibit, impede or render less attractive the exercise of the freedom to provide services must be regarded as restrictions of that freedom (see, to that effect, judgments of 17 July 2008, Corporación Dermoestética, C‑500/06, EU:C:2008:421, paragraph 32; of 22 January 2015, Stanley International Betting and Stanleybet Malta, C‑463/13, EU:C:2015:25, paragraph 45; and of 28 January 2016, Laezza, C‑375/14, EU:C:2016:60, paragraph 21).62It must also be recalled that, in particular, the concept of ‘restriction’ covers measures taken by a Member State which, although applicable without distinction, affect the free movement of services in other Member States (judgment of 12 September 2013, Konstantinides, C‑475/11 EU:C:2013:542, paragraph 45 and the case-law cited).63National legislation which imposes a general and absolute prohibition of any advertising for a certain activity is liable to restrict the possibility, for the persons carrying on that activity, of making themselves known to their potential clientèle and of promoting the services which they offer to their clientèle.64Consequently, that national legislation must be regarded as a restriction on the freedom to provide services.65As regards the justification for such a restriction, national measures which are liable to restrict the exercise of fundamental freedoms guaranteed by the Treaty may be allowed only if they pursue an objective in the public interest, are appropriate for ensuring the attainment of that objective and do not go beyond what is necessary to attain the objective pursued (judgment of 12 September 2013, Konstantinides, C‑475/11, EU:C:2013:542, paragraph 50 and the case-law cited).66In the present case, the referring court indicated that the national legislation at issue in the main proceedings aims to protect public health and the dignity of the profession of dentist.67It must be noted, in that regard, that the protection of the health is one of the objectives which may be regarded as overriding reasons in the public interest capable of justifying a restriction on the freedom to provide services (see, to that effect, judgments of 10 March 2009, Hartlauer, C‑169/07, EU:C:2009:141, paragraph 46, and of 12 September 2013, Konstantinides, C‑475/11, EU:C:2013:542, paragraph 51).68In addition, with regard to the importance of the relationship of trust which must prevail between a dentist and his patient, the protection of the dignity of the profession of dentist may also be regarded as being capable of constituting such an overriding reason in the public interest.69The extensive use of advertising or the selection of aggressive promotional messages, even such as to mislead patients as to the care being offered, by damaging the image of the profession of dentist, by distorting the relationship between dentists and their patients, and by promoting the provision of inappropriate and unnecessary care, may undermine the protection of health and compromise the dignity of the profession of dentist.70In that context, a general and absolute prohibition of any advertising is appropriate for attaining the objectives pursued by avoiding any use, by dentists, of advertising and promotional messages.71As regards the need for a restriction on the freedom to provide services such as that at issue in the main proceedings, account must be taken of the fact that the health and life of humans rank foremost among the assets and interests protected by the Treaty and that it is, in principle, for the Member States to determine the level of protection which they wish to afford to public health and the way in which that level is to be achieved. Since the level may vary from one Member State to another, Member States should be allowed a measure of discretion (see, to that effect, judgments of 2 December 2010, Ker-Optika, C‑108/09, EU:C:2010:725, paragraph 58, and of 12 November 2015, Visnapuu, C‑198/14, EU:C:2015:751, paragraph 118).72It must therefore be found that, notwithstanding that measure of discretion, the restriction resulting from the application of the national legislation at issue in the main proceedings, imposing a general and absolute prohibition of any advertising relating to the provision of oral and dental care services, exceeds what is necessary to attain the objectives pursued by that legislation, as referred to in paragraph 66 above.73All the advertising messages prohibited by that legislation are not, in themselves, likely to produce effects that are contrary to the objectives referred to in paragraph 69 above.74It must be pointed out further in that regard that, although the Court has already held in paragraph 57 of the judgment of 12 September 2013, Konstantinides (C‑475/11, EU:C:2013:542), that national legislation prohibiting advertising for medical services the content of which is contrary to professional ethics is compatible with Article 56 TFEU, it must be observed that the legislation at issue in the main proceedings has a much broader scope.75In those circumstances, it must be held that the objectives pursued by the legislation at issue in the main proceedings could be attained through the use of less restrictive measures supervising, closely if necessary, the form and manner which the communication tools used by dentists may legitimately have, without imposing on them a general and absolute prohibition of any form of advertising.76In the light of all of the foregoing considerations, the answer to the sixth question is that Article 56 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a general and absolute prohibition of any advertising relating to the provision of oral and dental care services.Costs77Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Third Chamber) hereby rules:1. Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘the Unfair Commercial Practices Directive’) must be interpreted as not precluding a national provision, such as that at issue in the main proceedings, which protects public health and the dignity of the profession of dentist, first, by imposing a general and absolute prohibition of any advertising relating to the provision of oral and dental care services and, secondly, by establishing certain requirements of discretion with regard to signs of dental practices. 2. Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a general and absolute prohibition of any advertising relating to the provision of oral and dental care services, inasmuch as it prohibits any form of electronic commercial communications, including by means of a website created by a dentist. 3. Article 56 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which imposes a general and absolute prohibition of any advertising relating to the provision of oral and dental care services. [Signatures]( *1 ) Language of the case: Dutch. | 7cd55-7e68fb4-457f | EN |
A collision between an aircraft and a bird is an extraordinary circumstance which may exempt the air carrier from its obligation to pay compensation in the event that a flight is delayed significantly | 4 May 2017 ( *1 )‛Reference for a preliminary ruling — Air transport — Regulation (EC) No 261/2004 — Article 5(3) — Compensation to passengers in the event of denied boarding and of cancellation or long delay of flights — Scope — Exemption from the obligation to pay compensation — Collision between an aircraft and a bird — Notion of ‘extraordinary circumstances’ — Notion of ‘reasonable measures’ to avoid extraordinary circumstances or the consequences thereof’In Case C‑315/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Obvodní soud pro Prahu 6 (Prague 6 District Court, Czech Republic), made by decision of 28 April 2015, received at the Court on 26 June 2015, in the proceedings Marcela Pešková Jiří Peška Travel Service a.s., THE COURT (Third Chamber),composed of L. Bay Larsen, President of the Chamber, M. Vilaras, J. Malenovský, M. Safjan and D. Šváby (Rapporteur), Judges,Advocate General: Y. Bot,Registrar: V. Tourrès, Administrator,having regard to the written procedure and further to the hearing on 13 July 2016,after considering the observations submitted on behalf of:—Ms Pešková and Mr Peška, by D. Sekanina, advokát,Travel Service a.s., by J. Bureš, advokát,the Czech Government, by M. Smolek and J. Vláčil, acting as Agents,the German Government, by M. Kall, acting as Agent,the Italian Government, by G. Palmieri, acting as Agent, and by F. Di Matteo, avvocato dello Stato,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by K. Simonsson and P. Ondrusek, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 28 July 2016,gives the following Judgment 1This reference for a preliminary ruling concerns the interpretation of Article 5(3) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (OJ 2004 L 46, p. 1).2The request has been made in proceedings between, on the one hand, Ms Marcela Pešková and Mr Jiří Peška and, on the other, Travel Service a.s., an air carrier, concerning Travel Service’s refusal to compensate those passengers for a long delay to their flight. Legal context 3Recitals 1, 7, 14 and 15 of Regulation No 261/2004 state:‘(1)In case of passenger delay, the air carrier is liable for damage unless it took all reasonable measures to avoid the damage or it was impossible to take such measures. Moreover, full account should be taken of the requirements of consumer protection in general.…(7)In order to ensure the effective application of this regulation, the obligations that it creates should rest with the operating air carrier who performs or intends to perform a flight, whether with owned aircraft, under dry or wet lease, or on any other basis.(14)As under the Montreal Convention, obligations on operating air carriers should be limited or excluded in cases where an event has been caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Such circumstances may, in particular, occur in cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating air carrier.(15)Extraordinary circumstances should be deemed to exist where the impact of an air traffic management decision in relation to a particular aircraft on a particular day gives rise to a long delay, an overnight delay, or the cancellation of one or more flights by that aircraft, even though all reasonable measures had been taken by the air carrier concerned to avoid the delays or cancellations.’4Article 5 of that regulation provides:‘1. In case of cancellation of a flight, the passengers concerned shall:(c)have the right to compensation by the operating air carrier in accordance with Article 7 …3. An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.…’5Article 7 of Regulation No 261/2004, headed ‘Right to compensation’, provides at paragraph 1:‘Where reference is made to this article, passengers shall receive compensation amounting to:(a)EUR 250 for all flights of 1500 kilometres or less;6Article 13 of Regulation No 261/2004, entitled ‘Right of redress’, provides:‘In cases where an operating air carrier pays compensation or meets the other obligations incumbent on it under this regulation, no provision of this regulation may be interpreted as restricting its right to seek compensation from any person, including third parties, in accordance with the law applicable. In particular, this regulation shall in no way restrict the operating air carrier’s right to seek reimbursement from a tour operator or another person with whom the operating air carrier has a contract. Similarly, no provision of this regulation may be interpreted as restricting the right of a tour operator or a third party, other than a passenger, with whom an operating air carrier has a contract, to seek reimbursement or compensation from the operating air carrier in accordance with applicable relevant laws.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 7The applicants in the main proceedings booked a flight from Burgas (Bulgaria) to Ostrava (Czech Republic) with Travel Service.8That flight was carried out on 10 August 2013 with a delay in arrival of 5 hours and 20 minutes.9That flight formed part of the following scheduled circuit: Prague — Burgas — Brno (Czech Republic) — Burgas — Ostrava.10During the flight from Prague to Burgas, a technical failure in a valve was found. Its repair took 1 hour and 45 minutes.11During the landing of the flight from Burgas to Brno, according to Travel Service, the aircraft collided with a bird and so the aircraft was subject to checks, although no damage was found. Nonetheless, a Travel Service technician was taken by private aircraft from Slaný (Czech Republic) to Brno to put the aircraft back in operation. He was told by the aircraft’s crew that the checks had already been performed by another firm but its authorisation to carry out the checks was not accepted by Sunwing, the owner of the aircraft. Travel Service once again checked the point of impact, which had earlier been cleaned, and found no traces on the engines or other parts of the aircraft.12The aircraft then flew from Brno to Burgas, then from Burgas to Ostrava, the flight taken by the applicants.13By application lodged on 26 November 2013 at the Obvodní soud pro Prahu 6 (Prague 6 District Court), the applicants in the main proceedings each claimed payment of a sum of around CZK 6825 (6825 Czech Crowns, approximately EUR 250) under Article 7(1)(a) of Regulation No 261/2004. By decision of 22 May 2014, that court upheld their claim on the ground that the facts of the case could not be considered ‘extraordinary circumstances’ within the meaning of Article 5(3) of that regulation since the choice of procedure to return an aircraft to service following a technical problem, such as a collision with a bird, lay with Travel Service. In that regard, the Obvodní soud pro Prahu 6 (Prague 6 District Court) added that Travel Service had not established that it had done all it could to prevent a delay to the flight, since it merely stated that ‘it was necessary’ after the aircraft suffered the collision with a bird to wait for the arrival of the authorised technician.14On 2 July 2014, Travel Service lodged an appeal against that decision. The Městský soud v Praze (Prague Municipal Court, Czech Republic) dismissed that appeal by an order of 17 July 2014, on the ground that it was inadmissible since the decision of the Obvodní soud pro Prahu 6 (Prague 6 District Court) ruled on two separate claims, neither of which exceeded CZK 10000 (approximately EUR 365).15On 18 August 2014, Travel Service appealed to the Ústavní soud (Constitutional Court, Czech Republic) against the decision of the Obvodní soud pro Prahu 6 (Prague 6 District Court) of 22 May 2014. By decision of 20 November 2014, the Ústavní soud (Constitutional Court) upheld the appeal and set aside the decision of the Obvodní soud pro Prahu 6 (Prague 6 District Court) on the ground that it had infringed Travel Service’s fundamental right to a fair hearing and the fundamental right to a hearing before the proper statutory court, since, as a court of last instance, it was required to refer a question for a preliminary ruling to the Court under Article 267 TFEU, given that the answer to the question of whether the collision of an aircraft with a bird, combined with other technical difficulties, should be classified as ‘extraordinary circumstances’ within the meaning of Article 5(3) of Regulation No 261/2004 was not clear from either that regulation or the Court’s case-law.16The case was referred back to the Obvodní soud pro Prahu 6 (Prague 6 District Court). That court is doubtful as to whether, if a collision between an aircraft and a bird is classified under the concept of an ‘event’ within the meaning of paragraph 22 of the judgment of 22 December 2008, Wallentin-Hermann (C‑549/07, EU:C:2008:771), or under that of ‘extraordinary circumstances’ within the meaning of recital 14 of that regulation, as interpreted by the judgment of 31 January 2013, McDonagh (C‑12/11, EU:C:2013:43), or whether those two concepts overlap. It entertains doubts, next, as to whether such events are inherent in the normal exercise of the activity of air transport, having regard, firstly, to their frequency and, secondly, to the fact that a carrier can neither foresee nor control them, that control being exercised by the managers of airports. It also asks whether technical failures consequent upon such a collision and the administrative and technical measures taken to deal with them must also be regarded as extraordinary circumstances and to what extent they may be regarded as necessary. Finally, it is doubtful as to how a delay of or greater than three hours is to be assessed when it is caused, as in the main proceedings, by a combination of several factors, namely the repair of a technical failure, then the checking procedures necessary after a collision with a bird.17In those circumstances, the Obvodní soud pro Prahu 6 (Prague 6 District Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘1.Is a collision between an aircraft and a bird an event within the meaning of paragraph 22 of the judgment of 22 December 2008, Wallentin-Hermann (C‑549/07, EU:C:2008:771), or does it constitute extraordinary circumstances within the meaning of recital 14 of [Regulation No 261/2004], or is it impossible to classify it under either of those concepts?2.If the collision between an aircraft and a bird constitutes extraordinary circumstances within the meaning of recital 14 of [Regulation No 261/2004], may preventative control systems established in particular around airports (such as sonic bird deterrents, cooperation with ornithologists, the elimination of spaces where birds typically gather or fly, using light as a deterrent and so on) be considered to be reasonable measures to be taken by the air carrier to avoid such a collision? What in this case constitutes the event within the meaning of paragraph 22 of [the judgment of 22 December 2008, Wallentin-Hermann (C‑549/07, EU:C:2008:771)]?3.If a collision between an aircraft and a bird is an event within the meaning of paragraph 22 of [the judgment of 22 December 2008, Wallentin-Hermann (C‑549/07, EU:C:2008:771)], may it also be considered to be an event within the meaning of recital 14 of [Regulation No 261/2004], and may, in such a case, the body of technical and administrative measures which an air carrier must implement following a collision between an aircraft and a bird which nevertheless did not result in damage to the aircraft be considered to constitute exceptional circumstances within the meaning of recital 14 of that regulation?4.If the body of technical and administrative measures taken following a collision between an aircraft and a bird which nevertheless did not result in damage to the aircraft constitutes exceptional circumstances within the meaning of recital 14 of [Regulation No 261/2004], is it permissible to require, as reasonable measures, the air carrier to take into consideration, when it schedules flights, the risk that it will be necessary to take such technical and administrative measures following a collision between an aircraft and a bird and to make provision for that fact in the flight schedule?5.How must the obligation on the air carrier to pay compensation, as provided for in Article 7 of [Regulation No 261/2004], be assessed where the delay is caused not only by administrative and technical measures adopted following a collision between the aircraft and a bird which did not result in damage to the aircraft, but also to a significant extent by repairing a technical problem unconnected with that collision?’ Consideration of the questions referred The first question 18By its first question, the referring court asks, in essence, whether Article 5(3) of Regulation No 261/2004, read in the light of recital 14 of that regulation, must be interpreted as meaning that a collision between an aircraft and a bird is classified under the concept of ‘extraordinary circumstances’ within the meaning of that provision.19As a preliminary point, it should be noted that the EU legislature has laid down the obligations of air carriers in the event of cancellation or long delay of flights (that is, a delay equal to or in excess of three hours) in Article 5(1) of Regulation No 261/2004 (judgments of 23 October 2012, Nelson and Others, C‑581/10 and C‑629/10, EU:C:2012:657, paragraph 40).20By way of derogation from Article 5(1) of Regulation No 261/2004, recitals 14 and 15 and Article 5(3) of that regulation state that an air carrier is to be released from its obligation to pay passengers compensation under Article 7 of Regulation No 261/2004 if the carrier can prove that the cancellation or delay is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken (see, to that effect, judgments of 19 November 2009, Sturgeon and Others, C‑402/07 and C‑432/07, EU:C:2009:716, paragraph 69, and of 31 January 2013, McDonagh, C‑12/11, EU:C:2013:43, paragraph 38).21In this respect, recital 14 of Regulation No 261/2004 states that such circumstances may, in particular, occur in cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an air carrier (see judgment of 22 December 2008, Wallentin-Hermann, C‑549/07, EU:C:2008:771, paragraph 21).22Thus, the Court has deduced therefrom that events may be classified as extraordinary circumstances, within the meaning of Article 5(3) of Regulation No 261/2004, if, by their nature or origin, they are not inherent in the normal exercise of the activity of the air carrier concerned and are outside that carrier’s actual control (see, to that effect, judgment of 22 December 2008, Wallentin-Hermann, C‑549/07, EU:C:2008:771, paragraph 23; of 31 January 2013, McDonagh, C‑12/11, EU:C:2013:43, paragraph 29; and of 17 September 2015, van der Lans, C‑257/14, EU:C:2015:618, paragraph 36).23Conversely, it is clear from the Court’s case-law that the premature failure of certain parts of an aircraft does not constitute extraordinary circumstances, since such a breakdown remains intrinsically linked to the operating system of the aircraft. That unexpected event is not outside the actual control of the air carrier, since it is required to ensure the maintenance and proper functioning of the aircraft it operates for the purposes of its business (see, to that effect, judgment of 17 September 2015, van der Lans, C‑257/14, EU:C:2015:618, paragraphs 41 and 43).24In the present case, a collision between an aircraft and a bird, as well as any damage caused by that collision, since they are not intrinsically linked to the operating system of the aircraft, are not by their nature or origin inherent in the normal exercise of the activity of the air carrier concerned and are outside its actual control. Accordingly, that collision must be classified as ‘extraordinary circumstances’ within the meaning of Article 5(3) of Regulation No 261/2004.25In that regard, it is irrelevant whether the collision actually caused damage to the aircraft concerned. The objective of ensuring a high level of protection for air passengers pursued by Regulation No 261/2004, as specified in recital 1 thereof, means that air carriers must not be encouraged to refrain from taking the measures necessitated by such an incident by prioritising the maintaining and punctuality of their flights over the objective of safety.26Having regard to the foregoing considerations, the answer to the first question is that Article 5(3) of Regulation No 261/2004, read in the light of recital 14 of that regulation, must be interpreted as meaning that a collision between an aircraft and a bird is classified under the concept of ‘extraordinary circumstances’ within the meaning of that provision. The second and third questions Preliminary observations27As has been recalled in paragraph 20 of this judgment, an air carrier is to be released from its obligation to pay passengers compensation under Article 5(1)(c) and Article 7 of Regulation No 261/2004 if the carrier can prove that the cancellation or delay of three hours or more is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.28Since not all extraordinary circumstances confer exemption, the onus is on the air carrier seeking to rely on them to establish that they could not, on any view, have been avoided by measures appropriate to the situation, that is to say, by measures which, at the time those extraordinary circumstances arise, meet, inter alia, conditions which are technically and economically viable for the air carrier concerned (see judgment of 12 May 2011, Eglītis and Ratnieks, C‑294/10, EU:C:2011:303, paragraph 25 and the case-law cited).29That air carrier must establish that, even if it had deployed all its resources in terms of staff or equipment and the financial means at its disposal, it would clearly not have been able, unless it had made intolerable sacrifices in the light of the capacities of its undertaking at the relevant time, to prevent the extraordinary circumstances with which it was confronted from leading to the cancellation of the flight or its delay equal to or in excess of three hours in arrival (see, to that effect, judgments of 19 November 2009, Sturgeon and Others, C‑402/07 and C‑432/07, EU:C:2009:716, paragraph 61, and of 12 May 2011, Eglītis and Ratnieks, C‑294/10, EU:C:2011:303, paragraph 25).30Thus, the Court therefore established an individualised and flexible concept of ‘reasonable measures’, leaving to the national court the task of assessing whether, in the circumstances of the particular case, the air carrier could be regarded as having taken measures appropriate to the situation (see, to that effect, 12 May 2011, Eglītis and Ratnieks, C‑294/10, EU:C:2011:303, paragraph 30).31It is in the light of the foregoing considerations that the second and third questions, by which the referring court asks as to the measures which an air carrier must take in order to be released from its obligation to pay compensation to passengers under Article 7 of Regulation No 261/2004, when a collision between an aircraft and a bird occurs which causes a delay to the flight equal to or in excess of three hours in arrival, must be answered.The third question32By its third question, which it is appropriate to examine first, the referring court asks, in essence, whether Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that cancellation or delay of a flight is due to extraordinary circumstances when that cancellation or delay is the result of the use by the air carrier of an expert of its choice to carry out fresh safety checks necessitated by a collision with a bird after those checks have already been carried out by an expert authorised under the applicable rules.33It is clear from the order for reference that, following a collision with a bird, the aircraft concerned, operated by Travel Service, underwent, after landing, a safety check carried out by an authorised firm without any damage being found on the aircraft. Nonetheless, Travel Service sent a technician to the location to carry out a second safety check, since the owner of the aircraft refused to recognise the authorisation of the firm which carried out the initial check.34In that regard, it must be noted that it is for the air carrier, faced with extraordinary circumstances, such as the collision of its aircraft with a bird, to adopt measures appropriate to the situation, deploying all its resources in terms of staff or equipment and the financial means at its disposal in order to avoid, as far as possible, the cancellation or delay of its flights.35Thus, although Regulation No 261/2004 does not infringe the freedom of air carriers to use the experts of their choice to carry out the checks necessitated by a collision with a bird, the fact remains that, when a check has already been carried out after such a collision by an expert authorised to do so under the applicable rules, which it is for the referring court to ascertain, the view cannot be taken that a second check inevitably leading to a delay equal to or in excess of three hours to the arrival of the flight concerned constitutes a measure appropriate to the situation for the purposes of the case-law cited in paragraph 28 of this judgment.36Furthermore, and insofar as it is apparent from the order for reference that the owner of the aircraft had refused to recognise the authorisation of the local firm which carried out the check of the aircraft concerned, it must be recalled that the obligations fulfilled by air carriers under Regulation No 261/2004 are so fulfilled without prejudice to that carrier’s right to seek compensation from any person who caused the delay, including third parties, as provided for in Article 13 of that regulation. Such compensation may accordingly reduce or even remove the financial burden borne by carriers in consequence of those obligations (judgment of 17 September 2015, van der Lans, C‑257/14, EU:C:2015:618, paragraph 46 and the case-law cited).37Having regard to the foregoing considerations, the answer to the third question is that Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that cancellation or delay of a flight is not due to extraordinary circumstances when that cancellation or delay is the result of the use by the air carrier of an expert of its choice to carry out fresh safety checks necessitated by a collision with a bird after those checks have already been carried out by an expert authorised under the applicable rules.The second question38By its second question, the referring court asks, in essence, whether Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that the ‘reasonable measures’ which an air carrier must take in order to reduce or even prevent the risks of collision with a bird and thus be released from its obligation to compensate passengers under Article 7 of that regulation, include control measures preventing the presence of such birds.39The referring court cites, as examples, sonic or light bird deterrents, cooperation with ornithologists or the elimination of spaces where birds typically gather or fly. Other technical devices typically fitted on board aircraft were, furthermore, referred to during the hearing before the Court.40It is also apparent from the order for reference and the arguments before the Court that anti-bird control measures could be the responsibility of various air transport operators, who are, inter alia, the air carriers, airport managers or even the Member States’ air traffic controllers.41It is in that context that the second question must be answered.42As is apparent from Article 5(3) of Regulation No 261/2004, read in conjunction with recital 7 thereof, the reasonable measures which must be taken in order to avoid the delay or cancellation of flights are the responsibility of the air carrier itself.43It follows therefrom that, in order to assess whether an air carrier has actually taken the necessary preventative measures in order to reduce and even prevent the risks of any collisions with birds enabling it to be released from its obligation of compensating passengers under Article 7 of that regulation, only those measures which can actually be its responsibility must be taken into account, excluding those which are the responsibility of other parties, such as, inter alia, airport managers or the competent air traffic controllers.44Thus, in the context of the individual examination which it must carry out in accordance with the case-law referred to in paragraph 30 of this judgment, the national court must, first of all, assess whether, in particular at the technical and administrative levels, the air carrier concerned was, in circumstances such as those in the main proceedings, actually in a position to take, directly or indirectly, preventative measures likely to reduce and even prevent the risks of possible collisions with birds.45If it is not, the air carrier is not required to compensate the passengers under Article 7 of Regulation No 261/2004.46If such measures could actually be taken by the air carrier concerned, it is for the national court, next, in accordance with the case-law recalled in paragraph 29 of this judgment, to ensure that the measures concerned did not require it to make intolerable sacrifices in the light of the capacities of its undertaking.47Finally, if such measures could be taken by the air carrier concerned without making intolerable sacrifices in the light of the capacities of its undertaking, it is for that carrier to show that those measures were actually taken as regards the flight affected by the collision with a bird.48It follows from the foregoing conclusions that the answer to the second question is that Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that the ‘reasonable measures’ which an air carrier must take in order to reduce or even prevent the risks of collision with a bird and thus be released from its obligation to compensate passengers under Article 7 of that regulation include control measures preventing the presence of such birds provided that, in particular at the technical and administrative levels, such measures can actually be taken by that air carrier, that those measures do not require it to make intolerable sacrifices in the light of the capacities of its undertaking and that that carrier has shown that those measures were actually taken as regards the flight affected by the collision with a bird, it being for the referring court to satisfy itself that those conditions have been met. The fifth question 49By its fifth question, which it is appropriate to examine next, the referring court asks, in essence, whether Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that, in the event of a delay to a flight equal to or in excess of three hours in arrival caused not only by extraordinary circumstances, which could not have been avoided by measures appropriate to the situation and which was subject to all reasonable measures by the air carrier to avoid the consequences thereof, but also in other circumstances not in that category, the delay caused by the first event must be deducted from the total length of the delay in arrival of the flight concerned in order to assess whether compensation for the delay in arrival of that flight must be paid as provided for in Article 7 of that regulation.50In a situation such as that at issue in the main proceedings where a delay equal to or in excess of three hours in arrival is caused not only by extraordinary circumstances but also by another event falling outside that category, it is for the national court to determine whether, with regard to that part of the delay which the air carrier claims is caused by extraordinary circumstances, that carrier has proved that that part of the delay was due to extraordinary circumstances and could not have been avoided even if all reasonable measures had been taken and in respect of which all reasonable measures had been taken by that carrier to avoid the consequences thereof. If so, that court must deduct from the total length of the delay in arrival of that flight the delay caused by those extraordinary circumstances.51In order to asses, in such a situation, whether compensation in respect of the delay in arrival of that flight must be paid under Article 7 of Regulation No 261/2004, the national court must thus take into consideration only the delay due to the event which was not part of the extraordinary circumstances, in respect of which compensation can be paid only if it is equal to or in excess of three hours in arrival of the flight concerned.52However, if it appears that, with regard to the delay which is alleged by the air carrier to be due to extraordinary circumstances, the cause of that delay was extraordinary circumstances which were not subject to measures satisfying the requirements set out in paragraph 50 of this judgment, the air carrier cannot rely on such an event and so deduct from the total length of the delay in arrival of the flight concerned the delay caused by those extraordinary circumstances.53In so doing, in order to assess whether Article 7 of Regulation No 261/2004 must be applied to such a situation, the national court must take into consideration not only the delay due to the event outside the extraordinary circumstances but also that due to those circumstances which were not subject to measures which satisfied those requirements.54Having regard to all the foregoing considerations, the answer to the fifth question is that Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that, in the event of a delay to a flight equal to or in excess of three hours in arrival caused not only by extraordinary circumstances, which could not have been avoided by measures appropriate to the situation and which was subject to all reasonable measures by the air carrier to avoid the consequences thereof, but also in other circumstances not in that category, the delay caused by the first event must be deducted from the total length of the delay in arrival of the flight concerned in order to assess whether compensation for the delay in arrival of that flight must be paid as provided for in Article 7 of that regulation. The fourth question 55By its fourth question, which it is appropriate to examine last, the referring court asks, in essence, whether Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that an air carrier, whose aircraft has collided with a bird, must, as part of the reasonable measures which it must take, provide, at the planning stage of its flights, for sufficient reserve time for the required safety checks to be made.56In the present case, it must be noted that it does not at all emerge from the description of the facts of the main proceedings made by the referring court that the delay equal to or in excess of three hours in arrival of the flight at issue could have been caused by any failure on the part of the air carrier concerned to provide for sufficient reserve time for the required safety checks to be made.57It is settled case-law that, despite the fact that, having regard to the division of competences in the preliminary ruling procedure, it is solely for the national court to determine the subject matter of the questions which it submits to the Court, the Court may nonetheless refuse to rule on a question referred for a preliminary ruling by a national court where the problem is purely hypothetical or where the Court does not have before it the factual material necessary to give a useful answer to the questions submitted to it (see, to that effect, judgment of 17 March 2016, Aspiro, C‑40/15, EU:C:2016:172, paragraph 17 and the case-law cited).58That is the case here.59There is therefore no need to answer the fourth question. Costs 60Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Third Chamber) hereby rules: 1. Article 5(3) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, read in the light of recital 14 thereof, must be interpreted as meaning that a collision between an aircraft and a bird is classified under the concept of ‘extraordinary circumstances’ within the meaning of that provision. 2. Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that cancellation or delay of a flight is not due to extraordinary circumstances when that cancellation or delay is the result of the use by the air carrier of an expert of its choice to carry out fresh safety checks necessitated by a collision with a bird after those checks have already been carried out by an expert authorised under the applicable rules. 3. Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that the ‘reasonable measures’ which an air carrier must take in order to reduce or even prevent the risks of collision with a bird and thus be released from its obligation to compensate passengers under Article 7 of Regulation No 261/2004 include control measures preventing the presence of such birds provided that, in particular at the technical and administrative levels, such measures can actually be taken by that air carrier, that those measures do not require it to make intolerable sacrifices in the light of the capacities of its undertaking and that that carrier has shown that those measures were actually taken as regards the flight affected by the collision with a bird, it being for the referring court to satisfy itself that those conditions have been met. 4. Article 5(3) of Regulation No 261/2004, read in the light of recital 14 thereof, must be interpreted as meaning that, in the event of a delay to a flight equal to or in excess of three hours in arrival caused not only by extraordinary circumstances, which could not have been avoided by measures appropriate to the situation and which were subject to all reasonable measures by the air carrier to avoid the consequences thereof, but also in other circumstances not in that category, the delay caused by the first event must be deducted from the total length of the delay in arrival of the flight concerned in order to assess whether compensation for the delay in arrival of that flight must be paid as provided for in Article 7 of that regulation. [Signatures]( *1 ) Language of the case: Czech. | aa0d7-262e526-44f1 | EN |
According to Advocate General Saugmandsgaard Øe, the German law on employee participation is compatible with EU law | 18 July 2017 ( *1 )(Reference for a preliminary ruling — Free movement of workers — Principle of non-discrimination — Election of workers’ representatives to the supervisory board of a company — National legislation restricting the right to vote and to stand as a candidate to employees of establishments located in the national territory)In Case C‑566/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Kammergericht (Berlin Higher Regional Court, Germany), made by decision of 16 October 2015, received at the Court on 3 November 2015, in the proceedings Konrad Erzberger v TUI AG, intervening parties: Vereinigung Cockpit e.V., Betriebsrat der Tui AG/Tui Group Services GmbH, Frank Jakobi, Andreas Barczewski, Peter Bremme, Dierk Hirschel, Michael Pönipp, Wilfried H. Rau, Carola Schwirn, Anette Stempel, Ortwin Strubelt, Marcell Witt, Wolfgang Flintermann, Stefan Weinhofer, ver.di -Vereinte Dienstleistungsgewerkschaft, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič and J.L. da Cruz Vilaça, Presidents of Chambers, A. Borg Barthet, J. Malenovský, E. Levits (Rapporteur), J.-C. Bonichot, A. Arabadjiev, C. Vajda, S. Rodin and F. Biltgen, Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 24 January 2017,after considering the observations submitted on behalf of:–Mr Erzberger, by J. Brandhoff, C. Behme and S. Richter, Rechtsanwälte, TUI AG, by C. Arnold and M. Arnold, Rechtsanwälte,the Vereinigung Cockpit e.V., by M. Fischer, Rechtsanwältin,the Betriebsrat der TUI AG/TUI Group Services GmbH and Others, by M. Schmidt, Rechtsanwältin,the German Government, by J. Möller and T. Henze, acting as Agents,the French Government, by R. Coesme, acting as Agent,the Luxembourg Government, by P. Kinsch, avocat,the Netherlands Government, by H. Stergiou, acting as Agent,the Austrian Government, by G. Eberhard, acting as Agent,the European Commission, by M. Kellerbauer and D. Martin, acting as Agents,the EFTA Surveillance Authority, by M. Moustakali and C. Zatschler, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 4 May 2017,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Articles 18 and 45 TFEU.2The request has been made in proceedings between Mr Konrad Erzberger and TUI AG, established in Germany, of which he is a shareholder, regarding the composition of the supervisory board, more particularly, concerning the right to vote and to stand as a candidate in elections of workers’ representatives to that board.Legal context3Paragraph 96 of the Aktiengesetz (Law on public limited companies) of 6 September 1965 (BGBl. 1965 I, p. 1089), provides:‘(1) The supervisory board shall be composedin the case of companies subject to the Law on employee participation, of members representing the shareholders and members representing the employees,…in the case of other companies, of members representing the shareholders alone.…’4Paragraph 1 of the Gesetz über die Mitbestimmung der Arbeitnehmer (Law on employee participation) of 4 May 1976 (BGBl. 1976 I, p. 1153) (‘the MitbestG’), entitled ‘‘Undertakings affected’, states:‘(1) In undertakings1.established in the form of a joint stock company, a limited partnership with shares, a limited liability company or a cooperative, and2.which normally employ more than 2000 persons,this Law shall confer on employees a right of participation.5Paragraph 3(1)(1) of the MitbestG provides:‘The following shall be regarded as employees within the meaning of this Lawpersons designated in Paragraph 5(1) of the Law on industrial relations …’6The first sentence of Paragraph 5(1) of the MitbestG states:‘Where an … undertaking is the dominant undertaking within a group …, the employees of the group shall be treated as employees of the dominant undertaking for the purposes of the application of this Law.’7Paragraph 7 of the MitbestG states:‘(1) The supervisory board of an undertaking3.with normally more than 20000 employees shall be composed of 10 members representing the shareholders and 10 members representing the employees.(2) The members of the supervisory board representing the employees shall includein a supervisory board containing 10 employees’ representatives, seven employees of the undertaking and three trade union representatives.8Paragraph 10 of the MitbestG is worded as follows:‘(1) In each establishment of the company, the employees shall elect delegates by secret ballot.(2) Employees of the undertaking who are 18 years of age or over shall be entitled to vote in the election of delegates, …(3) Employees referred to in the first sentence of subparagraph 2 who satisfy the conditions for eligibility to stand for election laid down in Paragraph 8 of the Law on industrial relations shall be eligible for election as delegates.9Paragraph 8 of the Betriebsverfassungsgesetz (Law on industrial relations) (BGBl. 2001 I, p. 2518) provides:‘(1) All employees with voting rights who have been employed in or principally worked for the establishment as homeworkers for six months shall be eligible for election. The said period of six months shall be deemed to include any immediately preceding period during which the employee was employed in another establishment belonging to the same company or group of companies …(2) If the establishment has been in existence for less than six months, such employees as are employed in the establishment and fulfil the other conditions for eligibility at the announcement of the election for the works council shall be eligible, as an exception to the requirement of six months’ service under subparagraph 1.’The dispute in the main proceedings and the questions referred for a preliminary ruling10Mr Erzberger is a shareholder of TUI, which is the parent company of a group of companies (‘the TUI group’), operating in the tourism sector.11The TUI group is a global operator. In the European Union, that group employs around 50000 persons, of which slightly more than 10000 work in Germany.12 Since TUI falls within the scope of application of the MitbestG, that company is managed by two organs, namely the management board, responsible for running the company, and the supervisory board, whose task is to supervise the management board with the participation of the workers. That supervisory board includes 20 members. Half of that board consists of shareholder representatives and half of representatives appointed by the employed workers. 13The referring court notes that, according to the majority opinion among German legal writers and in the case-law, the concept of worker, for the purpose of the application of the MitbestG, covers solely workers of undertakings located in the national territory. According to that majority opinion, the workers of a subsidiary of a group located outside the territory of Germany, inter alia in another Member State, are deprived of the right to vote and to stand as a candidate in elections of representatives to the supervisory board of the parent company of the group concerned. Moreover, any worker of the TUI group who carries out tasks within the supervisory board of the parent company of that group must give up those tasks where he takes up a post within one of the subsidiaries of that group located in a State other than the Federal Republic of Germany.14That approach is based not on the terms of the MitbestG but on the ‘principle of territoriality’, according to which the German social order cannot extend to the territory of other States, and on the origins of that law.15Mr Erzberger considers, by contrast, that TUI’s supervisory board is not properly constituted. Preventing workers employed by a subsidiary of the TUI group located in a Member State other than the Federal Republic of Germany, who it can be assumed are in general not German citizens, from participating in the composition of TUI’s supervisory board, infringes Article 18 TFEU. Moreover, the loss of membership in the supervisory board, in the case of a transfer to a Member State other than the Federal Republic of Germany, is, he claims, likely to dissuade workers from exercising their right to free movement throughout the territory of the Member States, provided for by Article 45 TFEU.16 Since TUI disputes that opinion, Mr Erzberger exercised his right, provided for under national legislation, to bring an action before a court in the event of a dispute as to the statutory provisions applicable to the composition of the supervisory board. 17The Landgericht Berlin (Berlin Regional Court, Germany) dismissed the latter’s action. There was neither discrimination on the grounds of nationality nor restriction of the freedom of movement of workers, since the loss of the right to vote in the case of a transfer is not decisive for the decision of workers to take a post in a Member State other than the Federal Republic of Germany.18On appeal, the Kammergericht (Berlin Higher Regional Court, Germany) held that there might be an infringement of EU law. According to that court, it is possible that the German legislation on employee participation gives rise to discrimination against employees based on nationality and restricts freedom of movement for workers.19First, unlike workers employed in Germany, those who are employed in another Member State, in this case approximately 80% of the employees of the TUI group, are not represented on TUI’s supervisory board.20Secondly, according to the Kammergericht (Berlin Higher Regional Court), risk of losing their membership on the supervisory board in the case of a transfer is likely to dissuade workers from applying for posts which are actually on offer in a Member State other than the Federal Republic of Germany and, to that end, from moving freely within the territory of the Union.21The referring court cannot identify any sufficient justification in that regard. In those circumstances, the Kammergericht (Berlin Higher Regional Court) decided to stay proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Is it compatible with Article 18 TFEU … and Article 45 TFEU … for a Member State to grant the right to vote and to stand as a candidate for election as the workers’ representatives in the supervisory body of a company only to those workers who are employed in establishments of the company or in affiliated companies that are within the national territory?’Consideration of the question referred Preliminary remarks 22In order to give a useful reply to the question posed by the referring court, it is necessary to take into account the range of situations affecting the different workers employed by a company belonging to the TUI group.23It should also be noted, as the representative of TUI stated at the hearing, that, outside Germany, the TUI group only has establishments with separate legal personality. The workers of the TUI group employed in a subsidiary established in a Member State other than the Federal Republic of Germany 24The referring court asks, first of all, in essence, whether Articles 18 and 45 TFEU must be interpreted as precluding Member State legislation, such as that at issue in the main proceedings, which provides that the employees of a group of companies employed in a subsidiary located in the territory of another Member State do not have the right to vote and to stand as a candidate in elections of workers’ representatives to the supervisory board of the parent company of that group.25According to settled case-law, noted by the Advocate General in point 39 of his Opinion, Article 18 TFEU, which enshrines the general principle of non-discrimination on grounds of nationality, is intended to apply independently only to situations governed by EU law in respect of which the Treaty lays down no specific prohibition of discrimination (judgment of 4 September 2014, Schiebel Aircraft, C‑474/12, EU:C:2014:2139, paragraph 20 and the case-law cited).26Article 45(2) TFEU provides, in favour of employees, for specific rules governing non-discrimination on the basis of nationality in respect of employment conditions.27It follows that the situation of employees referred to in paragraph 24 of the present judgment must be examined solely on the basis of Article 45 TFEU.28In that regard, it should be noted that, according to settled case-law, the Treaty rules governing freedom of movement for persons cannot be applied to activities which have no factor linking them with any of the situations governed by EU law. Therefore, those rules are not applicable to workers who have never exercised their freedom to move within the Union and who do not intend to do so (see, to that effect, judgment of 1 April 2008, Government of the French Community and Walloon Government, C‑212/06, EU:C:2008:178, paragraphs 33, 37 and 38).29As the Advocate General pointed out in points 49 and 55 of his Opinion, the fact that the subsidiary which employs the workers at issue is controlled by a parent company established in a Member State other than that in which that subsidiary is established is not relevant in order to establish a link with either of the situations contemplated by Article 45 TFEU.30It follows that the situation of employees referred to in paragraph 24 of the present judgment does not fall within the scope of Article 45 TFEU. The workers of the TUI group employed in Germany who leave that employment in order to be employed in a subsidiary belonging to the same group established in another Member State 31Next, the referring court asks, in essence, whether Articles 18 and 45 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, according to which the workers employed in the establishments of a group located in the territory of that Member State are deprived of the right to vote and to stand as a candidate in elections of workers’ representatives to the supervisory board of the parent company of that group, established in that Member State, and, as the case may be, the right to act or to continue to act as a representative on that board, where those workers leave their employment in such an establishment and are employed by a subsidiary belonging to the same group established in another Member State.32This refers to the situation of workers who, within the TUI group, make use of their right under Article 45 TFEU. Therefore, as the Advocate General pointed out in point 68 of his Opinion and as follows from paragraphs 25 and 26 of the present judgment, Article 18 TFEU does not apply to that situation.33According to the Court’s settled case-law, all the provisions of the Treaty on freedom of movement for persons are intended to facilitate the pursuit by Union nationals of occupational activities of all kinds throughout the EU, and preclude measures which might place Union nationals at a disadvantage when they wish to pursue an activity in the territory of a Member State other than their Member State of origin. In that context, nationals of the Member States have in particular the right, which they derive directly from the Treaty, to leave their Member State of origin to enter the territory of another Member State and reside there in order to pursue an activity there. As a result, Article 45 TFEU precludes any national measure which is capable of hindering or rendering less attractive the exercise by Union nationals of the fundamental freedoms guaranteed by that article (see, to that effect, judgments of 1 April 2008, Government of the French Community and Walloon Government, C‑212/06, EU:C:2008:178, paragraphs 44 and 45, and of 10 March 2011, Casteels, C‑379/09, EU:C:2011:131, paragraphs 21 and 22).34However, primary EU law cannot guarantee to a worker that moving to a Member State other than his Member State of origin will be neutral in terms of social security, since, given the disparities between the Member States’ social security schemes and legislation, such a move may be more or less advantageous for the person concerned in that regard (see, by analogy, judgments of 26 April 2007, Alevizos, C‑392/05, EU:C:2007:251, paragraph 76 and the case-law cited, and of 13 July 2016, Pöpperl, C‑187/15, EU:C:2016:550, paragraph 24).35Therefore, as the Advocate General in essence stated in points 75 and 78 of his Opinion, Article 45 TFEU does not grant to that worker the right to rely, in the host Member State, on the conditions of employment which he enjoyed in the Member State of origin under the national legislation of the latter State.36In that regard, it should be added that, in the absence of harmonisation or coordination measures at Union level in the field concerned, the Member States remain, in principle, free to set the criteria for defining the scope of application of their legislation, to the extent that those criteria are objective and non-discriminatory.37In that context, EU law does not, in the field of representation and collective defence of the interests of workers in the management or supervisory bodies of a company established under national law, a field which, to date, has not been harmonised or even coordinated at Union level, prevent a Member State from providing that the legislation it has adopted be applicable only to workers employed by establishments located in its national territory, just as it is open to another Member State to rely on a different linking factor for the purposes of the application of its own national legislation.38In the present case, the participation mechanism established by the MitBestG, which seeks to involve workers, by means of elected representatives, in the decision-making and strategic bodies of the company, is subject, in this respect, both to German company law and to German labour relations law, the scope of application of which the Federal Republic of Germany is entitled to limit to workers employed by establishments located in its territory, since such a delimitation is based on an objective and non-discriminatory criterion.39In the light of the above, the loss of the rights at issue in the main proceedings, incurred by the workers referred to in paragraph 31 of the present judgment, cannot be held to constitute an impediment to the free movement of workers guaranteed by Article 45 TFEU.40As regards in particular workers who, after having been granted a mandate as representative, during their period of employment in an establishment located in Germany, to the supervisory board of a German company, leave Germany in order to be employed by a company established in the territory of another Member State, the fact that those workers are required, in such circumstances, to give up the exercise of their mandate in Germany is merely the consequence of the Federal Republic of Germany’s legitimate choice to limit the application of its national legislation in the field of participation to workers employed by an establishment located in German territory.41In the light of the foregoing considerations, the answer to the question referred is that Article 45 TFEU must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, under which the workers employed in the establishments of a group located in the territory of that Member State are deprived of the right to vote and to stand as a candidate in elections of workers’ representatives to the supervisory board of the parent company of that group, which is established in that Member State, and as the case may be, of the right to act or to continue to act as representative on that board, where those workers leave their employment in such an establishment and are employed by a subsidiary belonging to the same group established in another Member State.Costs42Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 45 TFEU must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, under which the workers employed in the establishments of a group located in the territory of that Member State are deprived of the right to vote and to stand as a candidate in elections of workers’ representatives to the supervisory board of the parent company of that group, which is established in that Member State, and as the case may be, of the right to act or to continue to act as representative on that board, where those workers leave their employment in such an establishment and are employed by a subsidiary belonging to the same group established in another Member State. [Signatures]( *1 ) Language of the case: German. | fd9a3-af868b3-47a7 | EN |
According to Advocate General Wahl, a term of a loan agreement that provides for the repayment of the loan in the foreign currency in which the loan was granted does not necessarily constitute an unfair term | 20 September 2017 ( *1 )(Reference for a preliminary ruling — Consumer protection — Directive 93/13/EEC — Unfair terms in consumer contracts — Article 3(1) and Article 4(2) — Assessment of the unfairness of contractual terms — Loan agreement concluded in a foreign currency — Exchange rate risk born entirely by the consumer — Significant imbalance in the parties’ rights and obligations arising under the contract — Time at which the imbalance must be assessed — Scope of the concept of terms drafted in ‘plain intelligible language’ — Level of information to be procured by the bank)In Case C‑186/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Curtea de Apel Oradea (Court of Appeal, Oradea, Romania), made by decision of 3 March 2016, received at the Court on 1 April 2016, in the proceedings Ruxandra Paula Andriciuc and Others v Banca Românească SA, THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Prechal (Rapporteur), A. Rosas, C. Toader and E. Jarašiūnas, Judges,Advocate General: N. Wahl,Registrar: L. Carrasco Marco, Administrator,having regard to the written procedure and further to the hearing on 9 February 2017,after considering the observations submitted on behalf of:–Ruxandra Paula Andriciuc and Others, by G. Piperea, A. Dimitriu, L. Hagiu and C. Șuhan, avocaţi,Banca Românească SA, by R. Radu Tureac, V. Rădoi and D. Nedea, avocaţi,the Romanian Government, by R.-H. Radu, L. Liţu, M. Chicu and E. Gane, acting as Agents,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by C. Gheorghiu and G. Goddin and by D. Roussanov, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 27 April 2017,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 3(1) and Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29).2The request has been made in proceedings between Ms Ruxandra Paula Andriciuc and 68 other persons and Banca Românească SA (‘the Bank’) concerning the alleged unfair terms incorporated in loan agreements providing, in particular, for the repayment of loans in the same foreign currency as that in which they were disbursed.Legal contextEU law3Article 1 of Directive 93/13 provides:‘1. The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer.2. The contractual terms which reflect mandatory statutory or regulatory provisions and the provisions or principles of international conventions to which the Member States or the Community are party, particularly in the transport area, shall not be subject to the provisions of this Directive.’4Under Article 3(1) of the directive:‘A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.’5Article 4 of the directive is worded as follows:‘1. Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other, in so far as these terms are in plain intelligible language.’6Article 5 of that directive provides:‘In the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language. …’Romanian law7Article 1578 of the Cod Civil (Civil Code), in the version in force at the date on which the agreements at issue in the main proceedings were concluded, provides:‘The obligation arising from a money loan is always limited to the same numerical sum shown in the contract.Whenever the value of a currency increases or decreases, before the due date for payment, the debtor must return the sum lent and is obliged to return that sum only in the currency used at the time of payment.’The dispute in the main proceedings and the questions referred for a preliminary ruling8It is apparent from the order for reference that between 2007 and 2008 the applicants in the main proceedings who, during that period, received their income in Romanian lei (RON), concluded loan agreements with the Bank denominated in Swiss francs (CHF) with a view to acquiring immovable property, refinancing other credit arrangements or meeting personal needs.9Under Article 1(2) of each of those agreements, the applicants in the main proceedings were required to make monthly payments on the loans in the same currency as that in which they had been concluded, that is in Swiss francs, with the consequence that the risk of fluctuations requiring an increase in the monthly repayments if the exchange rate of the Romanian leu fell against the Swiss franc was born entirely by the applicants. Furthermore, those agreements contained two clauses, in Article 9(1) and Article 10(3)(9) respectively, authorising the Bank, once the monthly payments had fallen due or in the event that the borrower failed to comply with the obligations arising from the agreements, to debit the borrower’s account and, if necessary, to carry out any conversion of the balance available on the borrower’s account into the currency of the contract at the Bank’s exchange rate as it stood on the day of that operation. Pursuant to those terms, any difference in the exchange rate was borne entirely by the borrower.10According to the applicants in the main proceedings, the Bank was in a position to foresee the movement and fluctuations in the exchange rate for the Swiss franc. The exchange risk was not fully explained since, unlike other foreign currencies used as a reference currency for loans, the Bank did not point out that the Swiss franc fluctuated significantly against the Romanian leu.11More generally, the presentation was made in a biased manner, emphasising the advantages of that type of product and the currency used, while failing to point out the potential risks or the likelihood of those risks materialising. In that connection, the applicants in the main proceedings claim that by failing to inform them in a transparent manner about such fluctuations, the Bank acted in breach of its obligations to inform, warn and advise, and its duty to draft contractual terms in plain and intelligible language, so as to enable a borrower to understand the obligations arising from the contract which he has concluded.12Taking the view that the terms providing for the repayment of the loans in Swiss francs, in so far as they placed the exchange risk on the borrowers, were unfair terms, the applicants in the main proceedings brought an action before the Tribunalul Bihor (District Court, Bihor, Romania) seeking a declaration that those terms were completely invalid together with an order requiring the Bank to produce, for each loan agreement, a new repayment schedule providing for the conversion of the credit into Romanian lei, at the exchange rate which had been in force when the loan agreements at issue in the main proceedings were concluded.13By judgment of 30 April 2015, the Tribunalul Bihor (District Court, Bihor) dismissed the action. That court held that, even though it was not negotiated with the borrowers, the term providing for the repayment of loans in the same currency as that in which the loan agreements had been concluded was not unfair.14The applicants in the main proceedings brought an appeal against that decision before the referring court. They argue that the significant imbalance between the rights and obligations of the parties was caused by the depreciation of the Romanian leu against the Swiss franc which took place after the conclusion of the agreements, and that the Court has never given a ruling on a question of that nature in its judgments relating to the interpretation of Article 3(1) of Directive 93/13 on the definition of ‘significant imbalance’.15The referring court observes that, in the present case, from the moment when the loans at issue in the main proceedings were disbursed, the exchange rate of the Swiss franc has increased considerably and that the applicants in the main proceedings suffered the effects of that increase. Therefore, according to that court, it is important to know whether in accordance with the Bank’s duty to inform and advise it should have informed clients about a possible future increase or decrease in the exchange rate of the Swiss franc at the time of conclusion of the loan agreements, and whether the term at issue in the main proceedings, in order to be regarded as having been drafted in plain intelligible language within the meaning of Article 4(2) of Directive 93/13, was also required to set out all the consequences which might arise which would be likely to affect the price paid by the borrower, such as the exchange risk.16The referring court therefore considers that it is necessary to clarify the interpretation of Article 4(2) of Directive 93/13 which provides for an exception to the mechanism for reviewing the substance of unfair terms laid down under the system of consumer protection put in place by that directive.17In those circumstances, the Cortea d’Appel Oradea (Court of Appeal, Oradea, Romania) decided to stay proceedings and refer the following questions to the Court for a preliminary ruling:‘(1)Must Article 3(1) of Directive 93/13 be interpreted as meaning that the significant imbalance in the parties’ rights and obligations arising from the contract must be evaluated strictly by reference to the time when the contract was concluded or does that imbalance also extend to the case where, during the performance of the contract, whether it is performed at regular intervals or continuously, performance by the consumer has become excessively burdensome in comparison with the time when the contract was concluded because of significant variations in the exchange rate?(2)Must the plainness and intelligibility of a contractual term, within the meaning of Article 4(2) of Directive 93/13, be understood to mean that that term must provide not only for the grounds of its incorporation in the contract and the term’s method of operation, or must it also provide for all the possible consequences of the term as a result of which the price paid by the consumer may vary, for example, foreign exchange risk, and in the light of Directive 93/13 may it be considered that the bank’s obligation to inform the customer at the time of disbursement of the loan relates solely to the conditions of credit, namely, the interest, commissions, and guarantees required of the borrower, since such an obligation may not include the possible overvaluation or undervaluation of a foreign currency?(3)Must Article 4(2) of Directive 93/13 be interpreted as meaning that the expressions “the main subject matter of the contract” and “adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other” include a term incorporated in a [loan] agreement entered into in a foreign currency concluded between a seller or supplier and a consumer, which has not been negotiated individually, pursuant to which the credit must be repaid in the same currency?’Consideration of the questions referredAdmissibility of the questions referred for a preliminary ruling18The Bank challenges the admissibility of the questions referred for a preliminary ruling. The referring court does not need an interpretation of the provisions of Directive 93/13 for the resolution of the dispute in the main proceedings and in any event, as relevant case-law already exists, the interpretation of the rules of law at issue are now clear. Furthermore the questions are formulated in such a manner that, in reality, they seek an individual solution for the resolution of the specific dispute in the main proceedings.19In that regard, it is necessary to state at the outset that, in accordance with the settled case-law of the Court, in proceedings under Article 267 TFEU, which are based on a clear separation of functions between the national courts and the Court of Justice, the national court alone has jurisdiction to find and assess the facts in the case before it and to interpret and apply national law. Similarly, it is solely for the national court, before which the dispute has been brought and which must assume responsibility for the judicial decision to be made, to determine, in the light of the particular circumstances of the case, both the need for and the relevance of the questions that it submits to the Court. Consequently, where questions submitted concern the interpretation of EU law, the Court is bound, in principle, to give a ruling (judgment of 26 January 2017, Banco Primus, C‑421/14, EU:C:2017:60, paragraph 29 and the case-law cited).20In the context of the instrument of cooperation between the Court of Justice and national courts that is established by Article 267 TFEU, questions concerning EU law enjoy a presumption of relevance. The Court may refuse to give a ruling on a question referred by a national court for a preliminary ruling, under Article 267 TFEU, only where, for instance, the requirements concerning the content of a request for a preliminary ruling, set out in Article 94 of the Rules of Procedure, are not satisfied or where it is quite obvious that the interpretation of a provision of EU law, or the assessment of its validity, which is sought by the national court, bears no relation to the actual facts of the main action or to its purpose or where the problem is hypothetical (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 50 and the case-law cited).21In the present case, it need merely be recalled that, even when there is case-law of the Court resolving the point of law at issue, national courts remain entirely at liberty to bring a matter before the Court if they consider it appropriate to do so, and the fact that the provisions whose interpretation is sought have already been interpreted by the Court does not deprive the Court of jurisdiction to give a further ruling (judgment of 17 July 2014, Torresi, C‑58/13 and C‑59/13, EU:C:2014:2088, paragraph 32 and the case-law cited).22On the other hand, although it is for the national court alone to rule on the classification of allegedly unfair terms in accordance with the particular circumstances of the case, the fact remains that the Court has jurisdiction to elicit from the provisions of Directive 93/13, in this case Article 3(1) and Article 4(2), the criteria that the national court may or must apply when examining contractual terms with regard to those provisions (see, to that effect, judgments of 21 March 2013, RWE Vertrieb, C‑92/11, EU:C:2013:180, paragraph 48, and 23 April 2015, Van Hove, C‑96/14, EU:C:2015:262, paragraph 28).23The reference for a preliminary ruling is therefore admissible.The third question24By its third question, which it is appropriate to examine first, the referring court asks essentially whether Article 4(2) of Directive 93/13 must be interpreted as meaning that the expressions ‘main subject matter of the contract’ and ‘the adequacy of the price and remuneration on the one hand, as against the services or goods supplied in exchange, on the other’, within the meaning of that provision, cover a term, incorporated into a loan agreement denominated in a foreign currency which is concluded between a seller or supplier and a consumer and not individually negotiated, such as that at issue in the main proceedings, pursuant to which the loan must be repaid in the same currency.25It should be noted at the outset that the fact that the national court has, formally speaking, worded the question referred for a preliminary ruling with reference to certain provisions of EU law does not preclude the Court from providing to the national court all the elements of interpretation which may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to them in its questions (judgments of 10 September 2014, Kušionová, C‑34/13, EU:C:2014:2189, paragraph 71, and of 15 February 2017, W and V, C‑499/15, EU:C:2017:118, paragraph 45).26In the present case, in their written submissions the Romanian Government and the Bank relied on the possibility that the term at issue in the main proceedings merely reflects the principle of monetary nominalism enshrined in Article 1578 of the Romanian Civil Code, so that, pursuant to Article 1(2) of Directive 93/13, that term does not fall within its scope.27In that connection, it must be recalled that Article 1(2) of Directive 93/13 introduces an exclusion into the scope of the directive which covers terms which reflect mandatory statutory or regulatory provisions (judgment of 10 September 2014, Kušionová, C‑34/13, EU:C:2014:2189, paragraph 76, and, to that effect, judgment of 21 March 2013, RWE Vertrieb, C‑92/11, EU:C:2013:180, paragraph 25).28The Court has already held that that exclusion requires two conditions to be met. First, the contractual term must reflect a statutory or regulatory provision and, secondly, that provision must be mandatory (judgment of 10 September 2014, Kušionová, C‑34/13, EU:C:2014:2189, paragraph 78).29Thus, in order to establish whether a contractual term is excluded from the scope of Directive 93/13, it is for the national court to determine whether that term reflects provisions of national law that apply between the parties to the contract independently of their choice or which are supplementary in nature and therefore apply by default, that is to say in the absence of other arrangements established by the parties (see, to that effect, judgments of 21 March 2013, RWE Vertrieb, C‑92/11, EU:C:2013:180, paragraph 26, and of 10 September 2014, Kušionová, C‑34/13, EU:C:2014:2189, paragraph 79).30In the present case, as the Advocate General observed in point 59 of his Opinion, it is for the referring court to assess, having regard to the nature, the general scheme and the stipulations of the loan agreements concerned, as well as the legal and factual context in which those matters are to be viewed, whether the term in question, under which the loan must be repaid in the same currency as that in which it was advanced, reflects statutory provisions of national law, within the meaning of Article 1(2) of Directive 93/13.31In carrying out the necessary checks, the national court must take account of the fact that having regard to the purpose of that directive, namely the protection of consumers against unfair terms included in contracts concluded with consumers by sellers or suppliers, the exception provided for in Article 1(2) of the directive is to be strictly construed (see, to that effect, judgment of 10 September 2014, Kušionová, C‑34/13, EU:C:2014:2189, paragraph 77).32If the referring court were to find that the term at issue in the main proceedings is not covered by that exception, it must then examine whether it falls within the concept of ‘main subject matter of the contract’ or ‘the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other’, within the meaning of Article 4(2) of Directive 93/13.33Although it is true that that examination is for the national court alone, as stated in paragraph 22 of the present judgment, it is, however, for the Court of Justice to elicit from that provision the criteria applicable in that examination.34In that connection, the Court has ruled that Article 4(2) of Directive 93/13 lays down an exception to the mechanism for reviewing the substance of unfair terms, such as that provided for in the system of consumer protection put in place by that directive, that provision must be strictly interpreted (see, to that effect, judgments of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraph 42, and of 23 April 2015, Van Hove, C‑96/14, EU:C:2015:262, paragraph 31). Furthermore, the expressions ‘main subject matter of the contract’ and ‘the adequacy of the price and remuneration on the one hand, as against the services or goods supplied in exchange, on the other’, in Article 4(2) of Directive 93/13, must normally be given an autonomous and uniform interpretation throughout the European Union, which must take into account the context of that provision and the purpose of the legislation in question (judgment of 26 February 2015, Matei, C‑143/13, EU:C:2015:127, paragraph 50).35As far as concerns the category of contractual terms falling within the concept of ‘main subject matter of the contract’, within the meaning of Article 4(2) of Directive 93/13, those terms must be understood as being those that lay down the essential obligations of the contract and, as such, characterise it (judgments of 3 June 2010, Caja de Ahorros y Monte de Piedad de Madrid, C‑484/08, EU:C:2010:309, paragraph 34, and of 23 April 2015, Van Hove, C‑96/14, EU:C:2015:262, paragraph 33).36By contrast, terms ancillary to those that define the very essence of the contractual relationship cannot fall within the concept of ‘main subject matter of the contract’, within the meaning of that provision (judgments of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraph 50, and of 23 April 2015, Van Hove, C‑96/14, EU:C:2015:262, paragraph 33).37In the present case, a number of elements in the documents before the Court indicate that a term, such as that at issue in the main proceedings, incorporated into a loan agreement concluded in a foreign currency between a seller or supplier and a consumer without being individually negotiated, on terms by which the loan must be repaid in the same currency, is covered by the notion of ‘main subject matter of the contract’ within the meaning of Article 4(2) of Directive 93/13.38In that connection, it must be observed that, under a loan agreement, the lender undertakes, in particular, to make available to the borrower a certain sum of money and the latter undertakes, in particular, to repay that sum, usually with interest, on the scheduled payment dates. Therefore, the essential obligations of such a contract relate to a sum of money which must be determined by the stipulated currency in which it is paid and repaid. Thus, as the Advocate General observed in point 46 et seq. of his Opinion, the fact that a loan must be repaid in a certain currency relates, in principle, not to an ancillary repayment arrangement, but to very nature of the debtor’s obligation, thereby constituting an essential element of a loan agreement.39It is true that the Court held in paragraph 59 of the judgment of 30 April 2014, Kásler and Káslerné Rábai (C‑26/13, EU:C:2014:282) that the ‘main subject matter of the contract’ covers a term incorporated in a loan agreement denominated in a foreign currency concluded between a seller or supplier and a consumer which was not individually negotiated, pursuant to which the selling rate of exchange of that currency applies for the calculation of the loan repayments, only if it is established, which is for the national court to ascertain, that that term lays down an essential obligation of that agreement which, as such, characterises it.40However, as the referring court also pointed out, in the case which gave rise to the judgment of 30 April 2014, Kásler and Káslerné Rábai (C‑26/13, EU:C:2014:282), the loans, although denominated in foreign currency, had to be repaid in the national currency according to the selling rate of exchange applied by the bank, whereas in the case in the main proceedings, the loans must be repaid in the same foreign currency as that in which they were issued. As the Advocate General observes, in point 51 of his Opinion, loan agreements indexed to foreign currencies cannot be treated in the same way as loan agreements in foreign currencies, such as those at issue in the main proceedings.41In the light of those findings, the answer to the third question is that Article 4(2) of Directive 93/13 must interpreted as meaning that the concept of ‘main subject matter of the contract’ within the meaning of that provision, covers a contractual term, such as that at issue in the main proceedings, incorporated into a loan agreement denominated in a foreign currency which was not individually negotiated and according to which the loan must be repaid in the same foreign currency as that in which it was contracted, as that terms lays down an essential obligation characterising that contract. Therefore, that term cannot be regarded as being unfair, provided that it is drafted in plain intelligible language.The second question42By its second question, the referring court asks whether Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement that a contractual term must be drafted in plain intelligible language means that the terms of a loan agreement, under which that loan must be repaid in the same foreign currency as that in which it was contracted, must only set out the reasons for its incorporation in the contract and the way in which it is implemented, or whether it must also specify all the consequences it may have for the price paid by the consumer, such as the exchange risk, and whether, in the light of that directive, the Bank’s obligation to inform the borrower at the time the loan is issued is limited to the conditions of the loan, namely the interest rate, commission and the securities lodged by the borrower, without there being any obligation to mention the possibility of a rise or fall in the exchange rate of the foreign currency.43As a preliminary point, it must be recalled that the Court has already held that the requirement of plain and intelligible drafting applies even where a term falls within the definition of ‘main subject matter of the contract’ or the ‘ adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other’ within the meaning of Article 4(2) of Directive 93/13 (see, to that effect, judgment of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraph 68). The terms referred to in Article 4(2) escape the assessment as to whether they are unfair only in so far as the national court having jurisdiction should form the view, following a case-by-case examination, that they were drafted by the seller or supplier in plain, intelligible language (judgment of 3 June 2010, Caja de Ahorros y Monte de Piedad de Madrid, C‑484/08, EU:C:2010:309, paragraph 32).44As regards the requirement of transparency of contractual terms, as is clear from Article 4(2) of Directive 93/13, the Court has ruled that that requirement, also repeated in Article 5 thereof, cannot be reduced merely to their being formally and grammatically intelligible, but that, to the contrary, since the system of protection introduced by Directive 93/13 is based on the idea that the consumer is in a position of weakness vis-à-vis the seller or supplier, in particular as regards his level of knowledge, that requirement of plain and intelligible drafting of contractual terms and, therefore, the requirement of transparency laid down by the directive must be understood in a broad sense (see, to that effect, judgments of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraphs 71 and 72, and of 9 July 2015, Bucura, C‑348/14, not published, EU:C:2015:447, paragraph 52).45Therefore, the requirement that a contractual term must be drafted in plain intelligible language is to be understood as requiring also that the contract should set out transparently the specific functioning of the mechanism to which the relevant term relates and the relationship between that mechanism and that provided for by other contractual terms, so that that consumer is in a position to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him which derive from it (judgments of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraph 75, and of 23 April 2015, Van Hove, C‑96/14, EU:C:2015:262, paragraph 50).46That question must be examined by the referring court, in the light of all the relevant facts, including the promotional material and information provided by the lender in the negotiation of the loan agreement (see, to that effect, judgment of 26 February 2015, Matei, C‑143/13, EU:C:2015:127, paragraph 75).47More specifically, it is for the national court, when it considers all the circumstances surrounding the conclusion of the contract, to ascertain whether, in the case concerned, all the information likely to have a bearing on the extent of his commitment have been communicated to the consumer, enabling him to estimate in particular the total cost of his loan. First, whether the terms are drafted in plain intelligible language enabling an average consumer, that is to say a reasonably well-informed and reasonably observant and circumspect consumer to estimate such a cost and, second, the fact related to the failure to mention in the loan agreement the information regarded as being essential with regard to the nature of the goods or services which are the subject matter of that contract play a decisive role in that assessment (see, to that effect, judgment of 9 July 2015, Bucura, C‑348/14, not published, EU:C:2015:447, paragraph 66).48Furthermore, it is settled case-law that information, before concluding a contract, on the terms of the contract and the consequences of concluding it, is of fundamental importance for a consumer. It is on the basis of that information in particular that he decides whether he wishes to be bound by the terms previously drawn up by the seller or supplier (judgments of 21 March 2013, RWE Vertieb, C‑92/11, EU:C:2013:180, paragraph 44, and of 21 December 2016, Gutiérrez Naranjo and Others, C‑154/15, C‑307/15 and C‑308/15, EU:C:2016:980, paragraph 50).49In the present case, as regards loans in currencies like those at issue in the main proceedings, it must be noted, as the European Systematic Risk Board stated in its Recommendation ESRB/2011/1 of 21 September 2011 on lending in foreign currencies (OJ 2011 C 342, p. 1), that financial institutions must provide borrowers with adequate information to enable them to take well-informed and prudent decisions and should at least encompass the impact on instalments of a severe depreciation of the legal tender of the Member State in which a borrower is domiciled and of an increase of the foreign interest rate (Recommendation A — Risk awareness of borrowers, paragraph 1).50Thus, as the Advocate General observed in points 66 and 67 of his Opinion, first, the borrower must be clearly informed of the fact that, in entering into a loan agreement denominated in a foreign currency, he is exposing himself to a certain foreign exchange risk which will, potentially, be difficult to bear in the event of a fall in the value of the currency in which he receives his income. Second, the seller or supplier, in this case the bank, must be required to set out the possible variations in the exchange rate and the risks inherent in taking out a loan in a foreign currency, particularly where the consumer borrower does not receive his income in that currency. Therefore, it is for the national court to check that the seller or supplier has communicated to the consumers concerned all the relevant information enabling them to assess the economic consequences of a term, such as that at issue in the main proceedings, on their financial obligations.51In the light of the foregoing, the answer to the second question is that Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement that a contractual term must be drafted in plain intelligible language requires, in the case of loan agreements, financial institutions to provide borrowers with sufficient information to enable them to take prudent and well-informed decisions. In that connection, that requirement means that a term under which the loan must be repaid in the same foreign currency as that in which it was contracted must be understood by the consumer both at the formal and grammatical level, and also in terms of its actual effects, so that the average consumer, who is reasonably well informed and reasonably observant and circumspect, would be aware both of the possibility of a rise or fall in the value of the foreign currency in which the loan was taken out, and would also be able to assess the potentially significant economic consequences of such a term with regard to his financial obligations. It is for the national court to carry out the necessary checks in that regard.The first question52By its first question, which it is appropriate to answer last, the referring court asks essentially whether the significant imbalance that an unfair term creates between the rights and obligations of the parties arising under the contract within the meaning of Article 3(1) of Directive 93/13 is to be examined only at the time of conclusion of the contract.53In that connection, the Court has already held, as stated in Article 4 of Directive 93/13, that in order to determine whether a contractual term is to be regarded as unfair, the national court must take account of the nature of the goods or services which are the subject matter of the contract and must take account ‘at the time of conclusion of the contract’ of all the circumstances attending its conclusion (see, to that effect, judgment of 9 July 2015, Bucura, C‑348/14, not published, EU:C:2015:447, paragraph 48 and the case-law cited).54It follows, as the Advocate General observed in points 78, 80 and 82 of his Opinion, that the unfairness of a contractual term is to be assessed by reference to the time of conclusion of the contract at issue, taking account of all the circumstances which could have been known to the seller or supplier at that time, and which were of such a nature that they could affect the future performance of the contract, since a contractual term may give rise to an imbalance between the parties which only manifests itself during the performance of the contract.55In the present case it is clear from the order for reference that the term at issue in the main proceedings, incorporated into loan agreements denominated in a foreign currency, stipulates that the monthly repayments of the loan must be made in the same currency. In the event of the devaluation of the national currency against that currency, such a term therefore places all the exchange risk on the consumer.56In that connection, it is for the referring court to assess, having regard to all of the circumstances of the case in the main proceedings, taking account in particular of the expertise and knowledge of the seller or supplier, in the present case the bank, as far as concerns the possible variations in the rate of exchange and the inherent risks in contracting a loan in a foreign currency, first, the possible failure to observe the requirement of good faith and second, the existence of a significant imbalance within the meaning of Article 3(1) of Directive 93/13.57In order to ascertain whether a term, such as that at issue in the main proceedings, causes a ‘significant imbalance’ in the parties’ rights and obligations arising under the contract to the detriment of the consumer, contrary to the requirement of good faith, the national court must assess for those purposes whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations (see, to that effect, judgment of 14 March 2013, Aziz, C‑415/11, EU:C:2013:164, paragraphs 68 and 69).58In the light of the foregoing, the answer to the first question is that Article 3(1) of Directive 93/13 must be interpreted as meaning that the assessment of the unfairness of a contractual term must be made by reference to the time of conclusion of the contract at issue, taking account all of the circumstances which could have been known to the seller or supplier at that time, and which were such as to affect the future performance of that contract. It is for the referring court to assess, having regard to all of the circumstances of the case in the main proceedings, and taking account, in particular of the expertise and knowledge of the seller or supplier, in the present case the bank, with regard to the possible variations in the exchange rate and the risks inherent in taking out a loan in a foreign currency, of the existence of a possible imbalance within the meaning of that provision.Costs59Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must interpreted as meaning that the concept of ‘main subject matter of the contract’ within the meaning of that provision, covers a contractual term, such as that at issue in the main proceedings, incorporated into a loan agreement denominated in a foreign currency which was not individually negotiated and according to which the loan must be repaid in the same foreign currency as that in which it was contracted, as that terms lays down an essential obligation characterising that contract. Therefore, that clause cannot be regarded as being unfair, provided that it is drafted in plain intelligible language. 2. Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement that a contractual term must be drafted in plain intelligible language requires that, in the case of loan agreements, financial institutions must provide borrowers with sufficient information to enable them to take prudent and well-informed decisions. In that connection, that requirement means that a term under which the loan must be repaid in the same foreign currency as that in which it was contracted must be understood by the consumer both at the formal and grammatical level, and also in terms of its actual effects, so that the average consumer, who is reasonably well informed and reasonably observant and circumspect, would be aware both of the possibility of a rise or fall in the value of the foreign currency in which the loan was taken out, and would also be able to assess the potentially significant economic consequences of such a term with regard to his financial obligations. It is for the national court to carry out the necessary checks in that regard. 3. Article 3(1) of Directive 93/13 must be interpreted as meaning that the assessment of the unfairness of a contractual term must be made by reference to the time of conclusion of the contract at issue, taking account all of the circumstances which could have been known to the seller or supplier at that time, and which were such as to affect the future performance of that contract. It is for the referring court to assess, having regard to all of the circumstances of the case in the main proceedings, and taking account, in particular of the expertise and knowledge of the seller or supplier, in the present case the bank, with regard to the possible variations in the exchange rate and the risks inherent in taking out a loan in a foreign currency, of the existence of a possible imbalance within the meaning of that provision. [Signatures]( *1 ) Language of the case: Romanian. | 2fe36-2d9733c-43a8 | EN |
According to Advocate General Wahl, agricultural producer organisations and their associations may be held liable for agreements, decisions or concerted practices contrary to EU law | 14 November 2017 ( *1 )(Reference for a preliminary ruling — Common agricultural policy — Article 42 TFEU — Regulation (EC) No 2200/96 — Regulation (EC) No 1182/2007 — Regulation (EC) No 1234/2007 — Anticompetitive practices — Article 101 TFEU — Regulation No 26 — Regulation (EC) No 1184/2006 — Producer organisations — Associations of producer organisations — Responsibilities of those organisations and associations — Practice of fixing minimum sale prices — Practice of concertation on quantities placed on the market — Practice of exchanges of strategic information — French endive market)In Case C‑671/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour de cassation (Court of Cassation, France), made by decision of 8 December 2015, received at the Court on 14 December 2015, in the proceedings President of the Autorité de la concurrence v Association des producteurs vendeurs d’endives (APVE), Comité économique régional agricole fruits et légumes de Bretagne (Cerafel), Fraileg SARL, Prim’Santerre SARL, Union des endiviers, formerly Fédération nationale des producteurs d’endives (FNPE), Soleil du Nord SARL, Comité économique fruits et légumes du Nord de la France (Celfnord), Association des producteurs d’endives de France (APEF), Section nationale de l’endive (SNE), Fédération du commerce de l’endive (FCE), France endives société coopérative agricole, Cambrésis Artois-Picardie endives (CAP’Endives) société coopérative agricole, Marché de Phalempin société coopérative agricole, Primacoop société coopérative agricole, Coopérative agricole du marais audomarois (Sipema), Valois-Fruits union de sociétés coopératives agricoles, Groupe Perle du Nord SAS, Ministre de l’Économie, de l’Industrie et du Numérique, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, L. Bay Larsen, T. von Danwitz and J. Malenovský, Presidents of Chambers, E. Juhász, A. Borg Barthet, J.-C. Bonichot, D. Šváby (Rapporteur), F. Biltgen, K. Jürimäe, C. Lycourgos and M. Vilaras, Judges,Advocate General: N. Wahl,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 31 January 2017,after considering the observations submitted on behalf of:–the President of the Autorité de la concurrence (French Competition Authority), by H. Génin, S. Subrémon Lukasiewicz and I. de Silva, acting as Agents, and by J.-P. Duhamel, avocat,the Comité économique régional agricole fruits et légumes de Bretagne (Cerafel), the Comité économique fruits et légumes du Nord de la France (Celfnord), the Association des producteurs d’endives de France (APEF), the Section nationale de l’endive (SNE) and the Fédération du commerce de l’endive (FCE), by H. Calvet, P. Morrier, Y. Chevalier and A. Bouviala, avocats,Fraileg SARL and Prim’Santerre SARL, by J.-L. Fourgoux and L. Djavadi, avocats,France endives société coopérative agricole, Cambrésis Artois-Picardie endives (CAP’Endives) société coopérative agricole, Marché de Phalempin société coopérative agricole, Primacoop société coopérative agricole, Coopérative agricole du marais audomarois (Sipema) and Groupe Perle du Nord SAS, by B. Néouze, V. Ledoux and S. Pasquesoone, avocats,the French Government, by G. de Bergues, D. Colas, S. Horrenberger, C. David and J. Bousin, acting as Agents,the Spanish Government, by A. Gavela Llopis, acting as Agent,the Italian Government, by G. Palmieri, acting as Agent, and P. Gentili, avvocato dello Stato,the European Commission, by X. Lewis, A. Bouquet and B. Mongin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 6 April 2017,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 101 TFEU, read in conjunction with Article 2 of Regulation No 26 of the Council of 4 April 1962 applying certain rules of competition to production of and trade in agricultural products (OJ, English Special Edition, Series I Volume 1959-1962, p. 129-130), Article 11(1) of Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables (OJ 1996 L 297, p. 1), Article 2 of Council Regulation (EC) No 1184/2006 of 24 July 2006 applying certain rules of competition to the production of, and trade in, agricultural products (OJ 2006 L 214, p. 7), as amended by Council Regulation (EC) No 1234/2007 of 22 October 2007 (OJ 2007 L 299, p. 1) (‘Regulation No 1184/2006), Article 3(1) of Council Regulation (EC) No 1182/2007 of 26 September 2007 laying down specific rules as regards the fruit and vegetable sector, amending Directives 2001/112/EC and 2001/113/EC and Regulations (EEC) No 827/68, (EC) No 2200/96, (EC) No 2201/96, (EC) No 2826/2000, (EC) No 1782/2003 and (EC) No 318/2006 and repealing Regulation (EC) No 2202/96 (OJ 2007 L 273, p. 1), as well as the first paragraph of Article 122 and Article 176 of Regulation No 1234/2007, as amended by Council Regulation (EC) No 491/2009 of 25 May 2009 (OJ 2009 L 154, p. 1) (‘Regulation No 1234/2007’).2The request has been made in the context of proceedings between the Autorité de la concurrence (French Competition Authority) and the Association des producteurs vendeurs d’endives (APVE), the Comité économique régional agricole fruits et légumes de Bretagne (Cerafel), Fraileg SARL, Prim’Santerre SARL, the Union des endiviers, formerly the Fédération nationale des producteurs d’endives (FNPE), Soleil du Nord SARL, the Comité économique fruits et légumes du Nord de la France (Celfnord), the Association des producteurs d’endives de France (APEF), the Section nationale de l’endive (SNE), the Fédération du commerce de l’endive (FCE), France endives société coopérative agricole, Cambrésis Artois-Picardie endives (CAP’Endives) société coopérative agricole, Marché de Phalempin société coopérative agricole, Primacoop société coopérative agricole, Coopérative agricole du marais audomarois (Sipema), Valois-Fruits union de sociétés coopératives agricoles and Groupe Perle du Nord SAS as well as the ministre de l’Économie, de l’Industrie et du Numérique (French Minister for the Economy, Industry and the Digital Sector) concerning the decision of the Autorité de la concurrence (French Competition Authority) of 6 March 2012 by which, on the basis of, inter alia, Article 101(1) TFEU, it found, and imposed fines on, a complex and continuous cartel on the French endive market (‘the decision at issue’).Legal contextEU law3The provisions of secondary legislation establishing a common organisation of the fruit and vegetables market that apply to the facts in the main proceedings are laid down in Regulation No 2200/96, applicable until 31 December 2007, Regulation No 1182/2007, repealed by Council Regulation (EC) No 361/2008 of 14 April 2008 amending Regulation No 1234/2007 (OJ 2008 L 121, p. 1), and Regulation No 1234/2007. The latter regulation was repealed, as of 1 January 2014, by Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (OJ 2013 L 347, p. 671), which, however, does not apply to the facts in the main proceedings.4The provisions of secondary legislation governing the application of EU competition rules to the production of, and trade in, agricultural products in the fruit and vegetables market were adopted by the EU legislature in Regulation No 26, which was succeeded by Regulation No 1184/2006 and Articles 175 to 182 of Regulation No 1234/2007.Regulation No 265Article 1 of Regulation No 26 provides:‘From the entry into force of this Regulation, Articles [101 to 106 TFEU] and provisions made in implementation thereof shall, subject to Article 2 below, apply to all agreements, decisions and practices referred to in Articles [101(1) and 102 TFEU] which relate to production of or trade in the products listed in Annex II to the Treaty.’6Article 2(1) of that regulation is worded in the following terms:‘Article [101(1) TFEU] shall not apply to such of the agreements, decisions and practices referred to in the preceding Article as form an integral part of a national market organisation or are necessary for attainment of the objectives set out in Article [39 TFEU]. In particular, it shall not apply to agreements, decisions and practices of farmers, farmers’ associations, or associations of such associations belonging to a single member State which concern the production or sale of agricultural products or the use of joint facilities for the storage, treatment or processing of agricultural products, and under which there is no obligation to charge identical prices, unless the Commission finds that competition is thereby excluded or that the objectives of Article [39 TFEU] are jeopardised.’Regulation No 2200/967Recitals 7 and 16 of Regulation No 2200/96 state:‘(7)Whereas producer organisations are the basic elements in the common market organisation, the decentralised operation of which they ensure at their level; whereas, in the face of ever greater concentration of demand, the grouping of supply through these organisations is more than ever an economic necessity in order to strengthen the position of producers in the market; whereas such grouping must be effected on a voluntary basis and must prove its utility by the scope and efficiency of the services offered by producer organisations to their members; whereas the delivery of products to specialist producer organisations existing before the entry into force of this Regulation is not brought into question;…(16)Whereas to stabilise prices it is desirable that producer organisations should be able to intervene on the market, in particular by deciding not to put up for sale particular quantities at particular periods; whereas these withdrawal operations must not be regarded as an alternative outlet to the market itself; whereas Community financing of withdrawals should therefore be restricted to a set percentage of production and the Community compensation granted at a reduced level, though use of the operational funds for this purpose should be permitted; whereas for simplicity Community compensation should be at a single flat rate for each product; whereas, to achieve a comparable reduction for all products, certain differentiations are required’.8Article 11(1) of the regulation provides:‘For the purposes of this Regulation, “producer organisation” means any legal entity:(a)which is formed on the own initiative of growers of the following categories of product listed in Article 1(2):(iii)vegetables;(b)which has in particular the aim of:(1)ensuring that production is planned and adjusted to demand, particularly in terms of quality and quantity;(2)promoting concentration of supply and the placing on the market of the products produced by its members;(3)reducing production costs and stabilising producer prices;(4)promoting the use of cultivation practices, production techniques and environmentally sound waste-management practices in particular to protect the quality of water, soil and landscape and preserve and/or encourage biodiversity;…’9Under the heading ‘Intervention arrangements’, Article 23(1) of Regulation No 2200/96 states that ‘producer organisations and their associations may choose not to put up for sale products listed in Article 1(2) contributed by their members, both in quantities and for periods which they consider appropriate.’Regulation No 1184/200610Article 1a of Regulation No 1184/2006 provides:‘Articles [101 to 106 TFEU] and provisions made for their implementation shall, subject to Article 2 of this Regulation, apply to all agreements, decisions and practices referred to in Articles [101(1) and 102 TFEU] which relate to the production of, or trade in, the products referred to in Article 1.’11‘Article [101(1) TFEU] shall not apply to such of the agreements, decisions and practices referred to in Article 1a of this Regulation which form an integral part of a national market organisation or are necessary for attainment of the objectives set out in Article [39 TFEU].Regulation No 1182/200712Article 3(1) of Regulation No 1182/2007 provides:‘For the purposes of this Regulation, a producer organisation shall be any legal entity or clearly defined part of a legal entity which complies with the following requirements:it is formed on the initiative of farmers within the meaning of Article 2(a) of Regulation (EC) No 1782/2003, who are growers of one or more products listed in Article 1(2) of Regulation (EC) No 2200/96 and/or of such products intended solely for processing;it has the objective of the use of environmentally sound cultivation practices, production techniques and waste management practices, in particular to protect the quality of water, soil and landscape, and preserve or encourage biodiversity;(c)it has one or more of the following objectives:(i)(ii)concentration of supply and the placing on the market of the products produced by its members;optimising production costs and stabilising producer prices;(d)its articles of association provide for the specific requirements as laid down in paragraph 2; and(e)it has been recognised by the Member State concerned pursuant to Article 4.’Regulation No 1234/200713Article 103c(1) of Regulation No 1234/2007 states that operational programmes in the fruit and vegetables sector must have two or more of the objectives referred to in point (c) of the first paragraph of Article 122 of the regulation or of the objectives set out in Article 103c, including that of crisis prevention and management.14Under Article 103c(2)(a), crisis prevention and management must be related to avoiding and dealing with crises on the fruit and vegetable markets and to cover in this context, inter alia, market withdrawal.15The first paragraph of Article 122 of Regulation No 1234/2007 provides:‘Member States shall recognise producer organisations, which:are constituted by producers of one of the following sectors:fruit and vegetables in respect of farmers growing one or more products of that sector and/or of such products solely intended for processing;are formed on the initiative of the producers;pursue a specific aim which may in particular, or as regards the fruit and vegetables sector shall, include one or more of the following objectives:optimising production costs and stabilising producer prices.’16Article 123(1) and (3) of the regulation states:‘1. Member States shall recognise interbranch organisations which:are made up of representatives of economic activities linked to the production of, trade in, and/or processing of products in the following sectors:the olive oil and table olives sector;the tobacco sector;are formed on the initiative of all or some of the organisations or associations which constitute them;pursue a specific aim, which may, in particular relate to:concentrating and coordinating supply and marketing of the produce of the members;adapting production and processing jointly to the requirements of the market and improving the product;promoting the rationalisation and improvement of production and processing;(iv)carrying out research into sustainable production methods and market developments.3. Further to paragraph 1, Member States shall, with regard to the fruit and vegetables sector, and may, with regard to the wine sector, also recognise interbranch organisations which:carry out one, and in the case of the fruit and vegetables sector, two or more, of the following activities in one or more regions of the Community, taking into account the interests of consumers, and, without prejudice to other sectors, in the wine sector taking into account public health and the interests of consumers:improving knowledge and transparency of production and the market;helping to coordinate better the way the products of the fruit and vegetables and the wine sectors are placed on the market, in particular by means of research and market studies;drawing up standard forms of contract compatible with Community rules;exploiting to a fuller extent the potential of the fruit and vegetables produced, and the potential of production in the wine sector;(v)providing the information and carrying out the research necessary to adjust production towards products more suited to market requirements and consumer tastes and expectations, in particular with regard to product quality and protection of the environment;(vi)seeking ways of restricting the use of plant-health products and other inputs and ensuring product quality and soil and water conservation;(vii)developing methods and instruments for improving product quality at all stages of production and marketing and, as regards the wine sector, also vinification;(viii)exploiting the potential of organic farming and protecting and promoting such farming as well as designations of origin, quality labels and geographical indications;(ix)promoting integrated production or other environmentally sound production methods;(x)with regard to the fruit and vegetables sector, laying down rules, as regards the production and marketing rules referred to in points 2 and 3 of Annex XVIa, which are stricter than Community or national rules;17Article 125a(1) and (2) of the regulation provides:‘1. The rules of association of a producer organisation in the fruit and vegetables sector shall require its producer members, in particular, to:market their entire production concerned through the producer organisation;2. Notwithstanding paragraph 1(c), where the producer organisation so authorises and where this is in compliance with the terms and conditions laid down by the producer organisation, the producer members may:sell no more than a fixed percentage of their production and/or products directly on their holdings and/or outside their holdings to consumers for their personal needs, such percentages being fixed by Member States at not less than 10%;market themselves or through another producer organisation designated by their own organisation, quantities of products which are marginal in relation to the volume of marketable production of their organisation;market themselves or through another producer organisation designated by their own organisation products which, because of their characteristics, are not normally covered by the commercial activities of the producer organisation concerned.’18Article 125b(1)(c) and (g) of Regulation No 1234/2007 provides that Member States are to recognise as producer organisations (‘POs’) in the fruit and vegetables sector all legal entities or clearly defined parts of legal entities applying for such recognition, provided that there is sufficient evidence that they can carry out their activities properly, both over time and in terms of effectiveness and concentration of supply, and that they do not hold a dominant position on a given market unless this is necessary in pursuance of the objectives of Article 39 TFEU.19Article 125c of the regulation states:‘An association of [POs] in the fruit and vegetables sector shall be formed on the initiative of recognised [POs] and may carry out any of the activities of a [PO] referred to in this Regulation. To this end, Member States may recognise, on request, an association of [POs] where:the Member State considers that the association is capable of effectively carrying out those activities; andthe association does not hold a dominant position on a given market unless this is necessary in pursuance of the objectives of Article [39 TFEU].20Article 175 of Regulation No 1234/2007 is worded in the following terms:‘Save as otherwise provided for in this Regulation, Articles [101 to 106 TFEU] and implementation provisions thereof shall, subject to Articles 176 to 177 of this Regulation, apply to all agreements, decisions and practices referred to in Articles [101(1) and 102 TFEU] which relate to the production of, or trade in, the products covered by this Regulation.’21Article 176(1) of that regulation reads as follows:‘Article [101(1) TFEU] shall not apply to the agreements, decisions and practices referred to in Article 175 of this Regulation which are an integral part of a national market organisation or are necessary for the attainment of the objectives set out in Article [39 TFEU].In particular, Article [101(1) TFEU] shall not apply to agreements, decisions and practices of farmers, farmers’ associations, or associations of such associations belonging to a single member State which concern the production or sale of agricultural products or the use of joint facilities for the storage, treatment or processing of agricultural products, and under which there is no obligation to charge identical prices, unless the Commission finds that competition is thereby excluded or that the objectives of Article [39 TFEU] are jeopardised.’22Article 176a(1) and (4) of the regulation provides:‘1. Article [101(1) TFEU] shall not apply to the agreements, decisions and concerted practices of recognised interbranch organisations with the object of carrying out the activities referred to in Article 123(3)(c) of this Regulation.4. The following agreements, decisions and concerted practices shall in any case be declared incompatible with Community rules:agreements, decisions and concerted practices which may lead to the partitioning of markets in any form within the Community;agreements, decisions and concerted practices which may affect the sound operation of the market organisation;agreements, decisions and concerted practices which may create distortions of competition which are not essential to achieving the objectives of the common agricultural policy pursued by the interbranch organisation activity;agreements, decisions and concerted practices which entail the fixing of prices, without prejudice to activities carried out by interbranch organisations in the application of specific Community rules;agreements, decisions and concerted practices which may create discrimination or eliminate competition in respect of a substantial proportion of the products in question.’French law23Article L. 420-1 of the Code de commerce (Commercial Code) states:‘Concerted actions, agreements, express or tacit understandings or coalitions shall be prohibited, even through the direct or indirect intermediation of a company in the group established outside France, where they have the aim or may have the effect of preventing, restricting or distorting the free competition in a market, particularly when they are intended to:1.limit access to the market or the free exercise of competition by other undertakings;2.prevent price setting by the free play of market forces, by artificially encouraging the increase or reduction of prices;3.limit or control production, opportunities, investments or technical progress;4.share markets or sources of supply.’The dispute in the main proceedings and the questions referred for a preliminary ruling24Following inspection and seizure operations conducted by the direction générale de la concurrence, de la consommation et de la répression des fraudes (‘DGCCRF’) (Directorate-General for Competition, Consumer Affairs and the Prevention of Fraud, France) on 12 April 2007, the ministre de l’Économie, de l’Industrie et du Numérique (French Minister for the Economy, Industry and the Digital Sector) referred to the Conseil de la concurrence (the French Competition Council), now the Autorité de la concurrence (the French Competition Authority), practices applied in the endive production and marketing sector.25By the decision at issue of 6 March 2012, the French Competition Authority found that APVE, Cerafel, FNPE, Celfnord, APEF, SNE, FCE and Groupe Perle du Nord, as well as the POs Fraileg, Prim’Santerre, Soleil du Nord, France endives, CAP’Endives, Marché de Phalempin, Primacoop, Sipema and Valois-Fruits, had applied in the endive market a complex and continuous cartel prohibited by Article L. 420-1 of the code de commerce (French Commercial Code) and Article 101(1) TFEU, that had consisted of an agreement on the price of endives through different mechanisms — such as disseminating a minimum price on a weekly basis, setting a ‘cours pivot’ (central rate), establishing a trading exchange, setting a ‘prix cliquet’ (reserve price) and misusing the withdrawal price mechanism — of collusion on the quantities of endives placed on the market and of a system for the exchange of strategic information used for the purpose of price maintenance, those practices having been aimed at the collective fixing of a minimum producer price for endives and having allowed producers and several professional POs to maintain minimum sale prices during a period which started in January 1998 and was still ongoing on the date of the decision at issue. It consequently imposed on them fines totalling EUR 3970590.26In the decision at issue, the French Competition Authority rejected, in particular, the producers’ submission that the agreements in question should be regarded as necessary for the attainment of the objectives of the common agricultural policy, on the ground that the derogations provided for in Article 2(1) of Regulation No 1184/2006 and in Article 176 of Regulation No 1234/2007 were not applicable in the present case.27Several undertakings and organisations fined brought an action for annulment and, in the alternative, for variation of the decision at issue before the Cour d’appel de Paris (Court of Appeal, Paris, France).28By judgment of 15 May 2014, the Cour d’appel de Paris (Court of Appeal, Paris) varied all the provisions of the decision at issue and held that it had not been established that the provisions of Article L.420-1 of the French Commercial Code and Article 101(1) TFEU had been infringed. In that regard, it indicated, in particular, that, given the difficulties in the interpretation of the rules governing the common organisation of the markets in respect of the exact scope and limits of the responsibility of stabilising prices assigned to the organisations in question under the derogations from competition law resulting from the application of the rules of the common agricultural policy, it had not been established that the dissemination of minimum price instructions was, in every case, necessarily and definitively prohibited, so that it had not been indisputably established that the organisations in question had exceeded the bounds of the responsibilities lawfully assigned to them as regards price stabilisation.29The President of the French Competition Authority brought an appeal in cassation against that judgment. In support of his appeal, he claims, inter alia, in essence, that, outside the scope of the express derogations to the application of Article 101(1) TFEU, laid down by the regulations applying certain competition rules to the production of, and trade in, agricultural products, the fulfilment of the responsibilities assigned to POs and associations of POs (‘APOs’) is conceivable only in compliance with the rules on competition.30In those proceedings, the Commission submitted observations before the Cour de Cassation (Court of Cassation) pursuant to Article 15(3) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules of competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1). It explains that there are not only general derogations, adopted on the basis of Article 2 of Regulations Nos 26 and 1184/2006 and Article 176 of Regulation No 1234/2007, from the applicability of EU competition rules to the agricultural sector, but also, under Article 175 of Regulation No 1234/2007, specific derogations laid down in the various regulations on the common organisation of the markets, which impose on organisations active in the production of, and trade in, fruit and vegetables certain specific tasks which would normally be liable to be caught by the prohibitions laid down in the rules on competition. In the present case, according to the Commission, those are, for the period up to the end of 2007, Regulation No 2200/96 and, for the period from 1 January 2008, Regulation No 1182/2007, incorporated into Regulation No 1234/2007. The Commission considers, however, that the main conduct at issue in the main proceedings, namely the minimum price mechanisms agreed by the main APOs, does not form part of the specific tasks provided for by the common organisation of the market concerned and cannot be considered to be covered by those specific derogations.31In that regard, the Cour de cassation (Court of Cassation) notes that the Court of Justice, in the judgments of 9 September 2003, Milk Marque and National Farmers’ Union (C‑137/00, EU:C:2003:429), and of 19 September 2013, Panellinios Syndesmos Viomichanion Metapoiisis Kapnou (C‑373/11, EU:C:2013:567), found that Article 42 TFEU establishes the principle that the European rules on competition are applicable in the agricultural sector and that the maintenance of effective competition on the market for agricultural products is one of the objectives of the common agricultural policy, and yet also held that, even with regard to the competition rules of the FEU Treaty, that provision gives precedence to the objectives of the common agricultural policy over those relating to competition policy.32However, it is of the opinion that the Court of Justice has not yet ruled on the existence of the ‘specific derogations’ mentioned by the Commission nor has it indicated, as the case may be, how they interact with the ‘general derogations’ set out in the regulations applying the rules on competition in the agricultural sector.33The Cour de cassation (Court of Cassation) therefore decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Can agreements, decisions or practices of [POs], [APOs] and professional organisations which could be classified as anticompetitive under Article 101 TFEU escape the prohibition laid down in that article on the sole ground that they could be linked to the responsibilities assigned to those organisations under the common organisation of the market [concerned], even if they are not covered by any of the general derogations provided for in turn by Article 2 of Regulation [No 26] and [No 1184/2006], and by Article 176 of Regulation No 1234/2007 ...?If so, must Article 11(1) of Regulation No 2200/96, Article 3(1) of Regulation No 1182/2007 and [the first paragraph of] Article 122 of Regulation No 1234/2007, which include, among the objectives assigned to [POs and APOs], those of stabilising producer prices and adjusting production to demand, particularly in terms of quantity, be interpreted as meaning that practices whereby those organisations or their associations collectively fix minimum prices, concert on the quantities placed on the market or exchange strategic information escape the prohibition of anticompetitive agreements, decisions and practices in so far as they are aimed at achieving those objectives?’Consideration of the questions referred34By its questions, which should be considered together, the referring court asks, in essence, whether Article 101 TFEU, read in conjunction with Article 2 of Regulation No 26, Article 11(1) of Regulation No 2200/96, Article 2 of Regulation No 1184/2006, Article 3(1) of Regulation No 1182/2007, as well as the first paragraph of Article 122 and Articles 175 and 176 of Regulation No 1234/2007, must be interpreted as meaning that practices such as those at issue in the main proceedings, whereby POs, APOs and professional organisations intervening in the endive sector collectively fix minimum sale prices, concert on the quantities placed on the market and exchange strategic information, are excluded from the scope of the prohibition of agreements, decisions and concerted practices laid down in Article 101(1) TFEU.35As a preliminary point, it should be noted that endives fall into the ‘edible vegetables and certain roots and tubers’ category mentioned in Annex I to the FEU Treaty and, accordingly, are subject, pursuant to Article 38 TFEU, to the provisions of Articles 39 to 44 TFEU relating to the common agricultural policy.36Article 42 TFEU states that the provisions of the chapter relating to the rules on competition apply to the production of, and trade in, agricultural products only to the extent determined by the European Parliament and the Council of the European Union within the framework of Article 43(2) TFEU and in accordance with the procedure laid down therein, account being taken of the objectives set out in Article 39 TFEU. In that regard, Article 43(2) TFEU provides that the Parliament and the Council are to adopt, inter alia, the provisions necessary for the pursuit of the objectives of the common agricultural policy.37Accordingly, in pursuit of the objectives of introducing a common agricultural policy and establishing a system of undistorted competition, Article 42 TFEU recognises that the common agricultural policy takes precedence over the objectives of the Treaty in the field of competition and also recognises the EU legislature’s power to decide to what extent the rules on competition are to be applied in the agricultural sector (see, to that effect, judgments of 5 October 1994, Germany v Council, C‑280/93, EU:C:1994:367, paragraph 61, and of 12 December 2002, France v Commission, C‑456/00, EU:C:2002:753, paragraph 33).38It follows, as stated by the Advocate General in points 51 and 56 of his Opinion, that the EU legislature’s interventions in that respect, rather than being aimed at establishing derogations or justifications for prohibiting the practices referred to in Article 101(1) and Article 102 TFEU, seek to exclude from the scope of those provisions practices which, if they were to take effect in a sector other than that of the common agricultural policy, would come under those provisions.39With regard, in particular, to the fruit and vegetables sector, and for the periods at issue in the main proceedings, the EU legislature indicated, in turn, in Article 1 of Regulation No 26, Article 1a of Regulation No 1184/2006 and Article 175 of Regulation No 1234/2007, how the common agricultural policy interacts with the rules on competition.40Article 175 of Regulation No 1234/2007, which reproduces, in essence, the way in which that relationship was specified in Regulations Nos 26 and 1184/2006, states that, save as otherwise provided for in Regulation No 1234/2007, Articles 101 to 106 TFEU and the implementation provisions thereof are, subject to Articles 176 and 177 of the regulation, to apply to all agreements, decisions and practices referred to in Articles 101(1) and 102 TFEU which relate to the production of, or trade in, the products covered by the regulation.41In the fruit and vegetables sector, Articles 101 to 106 TFEU apply to the practices referred to in those articles, except for the practices referred to in Articles 176 and 176a of Regulation No 1234/2007 and except where otherwise provided for in the regulation, as laid down in Article 175 thereof.42It should be noted that, under the first paragraph of Article 122 of Regulation No 1234/2007, the provision succeeding Article 11(1) of Regulation No 2200/96, and under Article 125c of Regulation No 1234/2007, a PO or an APO intervening on the fruit and vegetables sector is responsible for ensuring that production is planned and adjusted to demand, particularly in terms of quality and quantity, concentrating supply and placing on the market the products produced by its members, and also, optimising production costs and stabilising producer prices.43A PO or an APO may, in order to achieve the objectives referred to in those provisions, have recourse to means different from those which govern normal market operations and, in particular, to certain forms of coordination and concertation between agricultural producers.44Therefore, and unless POs and APOs are to be deprived of the means to achieve the objectives assigned to them under the common market organisation in which they are involved — and in which, as recalled in recital 7 of Regulation No 2200/96, they are the basic elements — and, accordingly, unless the effectiveness of the regulations establishing a common organisation of the markets in the fruit and vegetables sector is to be called into question, the practices of those entities which are necessary in order to achieve one or more of those objectives must escape, inter alia, the prohibition of agreements, decisions and concerted practices laid down in Article 101(1) TFEU.45It follows that, in that sector, the cases in which Article 101(1) TFEU does not apply are not limited only to those practices referred to in Articles 176 and 176a of Regulation No 1234/2007, but extend also to the practices mentioned in the previous paragraph.46However, the scope of those exclusions is to be construed strictly.47As the Court has already held, the common organisations of the markets in agricultural products are not a competition-free zone (judgment of 9 September 2003, Milk Marque and National Farmers’ Union, C‑137/00, EU:C:2003:429, paragraph 61).48On the contrary, the maintenance of effective competition on the markets for agricultural products is one of the objectives of the common agricultural policy and of the common organisation of the markets (see, to that effect, judgment of 9 September 2003, Milk Marque and National Farmers’ Union, C‑137/00, EU:C:2003:429, paragraphs 57 and 58).49It is also important to observe that, in accordance with the principle of proportionality, the practices in question may not go beyond what is strictly necessary in order to achieve one or more of the objectives assigned to the PO or APO at issue under the rules governing the common organisation of the market concerned.50The Court will examine, in the light of those considerations, whether practices such as those at issue in the main proceedings, whereby POs, APOs and professional organisations intervening in the endive sector collectively fix minimum sale prices, concert on the quantities placed on the market and exchange strategic information, are excluded from the scope of the prohibition of agreements, decisions and concerted practices laid down in Article 101(1) TFEU.51In that respect, it has been recalled in paragraph 44 above that the POs and APOs are the basic elements that ensure, at their level, the decentralised operation of common market organisations.52Thus, point (c) of the first paragraph of Article 122 and Article 125c of Regulation No 1234/2007 provide that, in the fruit and vegetables sector, Member States are to recognise the POs and APOs that, inter alia, specifically take responsibility for one of the objectives defined by the EU legislature and listed in points (i) to (iii) of the first provision mentioned above.53It follows that, for EU competition rules to be inapplicable on the basis that the practice in question is necessary in order to achieve one or more of the objectives of the common organisation of the market concerned, that practice must have been implemented by an entity that is actually entitled to do so under the rules governing the common organisation of that market, and, therefore, has been recognised by a Member State.54A practice adopted within an entity not recognised by a Member State in pursuance of one of those objectives cannot therefore escape the prohibition of the practices referred to in Article 101(1) TFEU.55That is likely to be the case, inter alia, of the practices of professional organisations such as, in the main proceedings, APVE, SNE and FCE, in respect of which there is nothing in the case file and in the replies to the questions addressed by the Court to show that they have been recognised by the French authorities as POs, APOs or interbranch organisations, within the meaning of Article 123(1) of Regulation No 1234/2007, that being a matter for the referring court to ascertain.56Concerning the practices applied by a PO or an APO, it is important to note that such practices must remain within a single PO or APO.57Indeed, in accordance with, inter alia, point (c) of the first paragraph of Article 122 and Article 125b(1)(c) of Regulation No 1234/2007, the responsibilities for production planning, concentrating supply and placing on the market, optimising production costs and stabilising producer prices, which may be assigned to a PO or an APO under the rules applicable to the common organisation of the market concerned, may relate solely to the production and marketing of the products of the members of only the PO or APO in question. Accordingly, they can justify certain forms of coordination or concertation only between producers that are members of the same PO or APO recognised by a Member State.58Accordingly, agreements or concerted practices that are not agreed within a PO or an APO, but are agreed between POs or APOs, go beyond what is necessary in order to fulfil those responsibilities.59It follows from the considerations set out in paragraphs 51 to 58 above that practices established between such POs or APOs and, a fortiori, practices involving not only such POs or APOs, but also entities not recognised by a Member State in the context of the implementation of the common agricultural policy in the sector concerned, cannot escape the prohibition of the practices referred to in Article 101(1) TFEU.60To the extent that the practices at issue in the main proceedings were not adopted within the same PO or APO, but adopted between several POs, APOs and entities not recognised under the common organisation of the endive market, they could not be excluded from the scope of the prohibition of the agreements, decisions and concerted practices laid down in Article 101(1) TFEU.61Concerning, next, practices agreed between producers that are members of the same PO or APO recognised by a Member State, it should be recalled that, under the common agricultural policy in the fruit and vegetables sector, recognised POs and APOs must be responsible specifically for at least one of the three objectives referred to in point (c) of the first paragraph of Article 122 of Regulation No 1234/2007 and set out in paragraph 42 above.62It follows that, for EU competition rules in the fruit and vegetables sector to be inapplicable to a practice not covered by Articles 176 and 176a of Regulation No 1234/2007, the practice agreed within the PO or APO concerned must be actually and strictly connected to the pursuit of one or more of the objectives assigned to it in accordance with the rules governing the common organisation of the market concerned.63As regards the objectives mentioned in paragraphs 42 and 61 above, it should be observed that the objectives of ensuring that production is planned and adjusted to demand, of concentrating supply and placing on the market the products produced by members, and of stabilising producer prices, necessarily entail the exchange of strategic information between individual producers that are members of the PO or APO concerned, the purpose of which is, inter alia, to acquire knowledge of the characteristics of the products produced by the members. Therefore, exchanges of strategic information between producers within the same PO or APO are liable to be proportionate if they are in fact made for the purposes of one or more of the objectives assigned to that PO or APO and are limited only to the information that is strictly necessary for those purposes.64The objective of stabilising producer prices to ensure a fair standard of living for the agricultural community may also justify coordination between agricultural producers in the same PO or APO with regard to the quantities of agricultural products put on the market, as is clear from recital 16 of Regulation No 2200/96 and the intervention arrangements whose operating principle was laid down in Article 23 of that regulation and amended by Article 103c(2)(a) of Regulation No 1234/2007.65In addition, the objective of concentrating supply to strengthen the position of producers in the face of ever greater concentration of demand may also justify a certain form of coordination of the pricing policy of individual agricultural producers within a PO or an APO. That applies in particular where the PO or APO concerned has been assigned by its members the responsibility for marketing all their products, as required, save in special cases, by Article 125a(1)(c) of Regulation No 1234/2007, read in conjunction with Article 125c thereof.66By contrast, the collective fixing of minimum sale prices within a PO or an APO may not be considered, under the practices necessary in order to fulfil the responsibilities that have been assigned to them under the common organisation of the market concerned, to be proportionate to the objectives of stabilising prices and concentrating supply where it does not allow producers selling their own products themselves in the cases referred to in Article 125a(2) of Regulation No 1234/2007 to sell at a price below those minimum prices, since it has the effect of reducing the already low level of competition in the markets for agricultural products as a result, in particular, of the possibility given to producers to form POs and APOs in order to concentrate their supply.67In the light of the foregoing, the answer to the questions referred is that Article 101 TFUE, read in conjunction with Article 2 of Regulation No 26, Article 11(1) of Regulation No 2200/96, Article 2 of Regulation No 1184/2006, Article 3(1) of Regulation No 1182/2007, as well as the first paragraph of Article 122 and Articles 175 and 176 of Regulation No 1234/2007, must be interpreted as meaning that:practices that relate to the collective fixing of minimum sale prices, concertation on quantities put on the market or exchanges of strategic information, such as those at issue in the main proceedings, cannot escape the prohibition of the agreements, decisions and concerted practices laid down in Article 101(1) TFEU if they are agreed between a number of POs or APOs, or are agreed with entities not recognised by a Member State in order to achieve an objective defined by the EU legislature under the common organisation of the market concerned, such as professional organisations not having the status of PO, APO or interbranch organisation, within the meaning of EU legislation, andpractices that relate to a concertation on prices or quantities put on the market or exchanges of strategic information, such as those at issue in the main proceedings, may escape the prohibition of agreements, decisions and concerted practices laid down in Article 101(1) TFEU if they are agreed between the members of the same PO or the same APO recognised by a Member State and are strictly necessary for the pursuit of one or more of the objectives assigned to the PO or APO concerned in compliance with EU legislation.Costs68Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 101 TFEU, read in conjunction with Article 2 of Regulation No 26 of the Council of 4 April 1962 applying certain rules of competition to production of and trade in agricultural products, Article 11(1) of Council Regulation (EC) No 2200/96 of 28 October 1996 on the common organisation of the market in fruit and vegetables, Article 2 of Council Regulation (EC) No 1184/2006 of 24 July 2006 applying certain rules of competition to the production of, and trade in, agricultural products, as amended by Council Regulation (EC) No 1234/2007 of 22 October 2007, Article 3(1) of Council Regulation (EC) No 1182/2007 of 26 September 2007 laying down specific rules as regards the fruit and vegetable sector, amending Directives 2001/112/EC and 2001/113/EC and Regulations (EEC) No 827/68, (EC) No 2200/96, (EC) No 2201/96, (EC) No 2826/2000, (EC) No 1782/2003 and (EC) No 318/2006 and repealing Regulation (EC) No 2202/96, as well as the first paragraph of Article 122 and Articles 175 and 176 of Regulation No 1234/2007, as amended by Council Regulation (EC) No 491/2009 of 25 May 2009, must be interpreted as meaning that: practices that relate to the collective fixing of minimum sale prices, a concertation on quantities put on the market or exchanges of strategic information, such as those at issue in the main proceedings, cannot escape the prohibition of the agreements, decisions and concerted practices laid down in Article 101(1) TFEU if they are agreed between a number of producer organisations or associations of producer organisations, or are agreed with entities not recognised by a Member State in order to achieve an objective defined by the EU legislature under the common organisation of the market concerned, such as professional organisations not having the status of producer organisation, association of producer organisation or interbranch organisation, within the meaning of EU legislation, and practices that relate to a concertation on prices or quantities put on the market or exchanges of strategic information, such as those at issue in the main proceedings, may escape the prohibition of agreements, decisions and concerted practices laid down in Article 101(1) TFEU if they are agreed between the members of the same producer organisation or the same association of producer organisations recognised by a Member State and are strictly necessary for the pursuit of one or more of the objectives assigned to the producer organisation or association of producer organisations concerned in compliance with EU legislation. [Signatures]( *1 ) Language of the case: French. | 1bce9-dad07d0-4497 | EN |
According to Advocate General Bobek, Member States can adopt emergency measures regarding genetically modified food and feed only if they can establish, in addition to urgency, a clear and serious risk to health and the environment | 13 September 2017 ( *1 )(Reference for a preliminary ruling — Agriculture — Genetically modified food and feed — Emergency measures — National measure seeking to prohibit the cultivation of genetically modified maize MON 810 — Maintenance or renewal of the measure — Regulation (EC) No 1829/2003 — Article 34 — Regulation (EC) No 178/2002 — Articles 53 and 54 — Conditions of application — Precautionary principle)In Case C‑111/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunale di Udine (District Court, Udine, Italy), made by decision of 10 December 2015, received at the Court on 24 February 2016, in the criminal proceedings against Giorgio Fidenato, Leandro Taboga, Luciano Taboga, THE COURT (Third Chamber),composed of L. Bay Larsen (Rapporteur), President of the Chamber, M. Vilaras, J. Malenovský, M. Safjan and D. Šváby, Judges,Advocate General: M. Bobek,Registrar: R. Schiano, Administrator,having regard to the written procedure and further to the hearing on 9 February 2017,after considering the observations submitted on behalf of:–Giorgio Fidenato, Leandro Taboga and Luciano Taboga, by F. Longo, avvocato,the Italian Government, by G. Palmieri, acting as Agent, assisted by P. Gentili, avvocato dello Stato,the Greek Government, by G. Kanellopoulos and D. Ntourntoureka, acting as Agents,the European Commission, by C. Zadra and by K. Herbout-Borczak and C. Valero, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 30 March 2017,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 34 of Regulation (EC) No 1829/2003 of the European Parliament and of the Council of 22 September 2003 on genetically modified food and feed (OJ 2003 L 268, p. 1) and Articles 53 and 54 of Regulation (EC) No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety (OJ 2002 L 31, p. 1).2The request has been made in criminal proceedings brought against Giorgio Fidenato, Leandro Taboga and Luciano Taboga by which they are accused of cultivating genetically modified maize variety MON 810, in breach of national legislation prohibiting such cultivation.Legal contextRegulation No 1829/20033Recitals 1 to 3 of Regulation No 1829/2003 are worded as follows:‘(1)The free movement of safe and wholesome food and feed is an essential aspect of the internal market and contributes significantly to the health and well-being of citizens, and to their social and economic interests.(2)A high level of protection of human life and health should be ensured in the pursuit of Community policies.(3)In order to protect human and animal health, food and feed consisting of, containing or produced from genetically modified organisms … should undergo a safety assessment through a Community procedure before being placed on the market within the Community.’4Under Article 1(a) and (b) of Regulation No 1829/2003, the objective of that regulation is, in particular, in accordance with the general principles laid down in Regulation (EC) No 178/2002, to provide the basis for ensuring a high level of protection of human life and health, animal health and welfare, environment and consumer interests in relation to genetically modified food and feed, whilst ensuring the effective functioning of the internal market, and to lay down Community procedures for the authorisation and supervision of genetically modified food and feed.5Article 34 of that regulation, entitled ‘Emergency measures’, states:‘Where it is evident that products authorised by or in accordance with this Regulation are likely to constitute a serious risk to human health, animal health or the environment … measures shall be taken under the procedures provided for in Articles 53 and 54 of Regulation [No 178/2002].’Regulation No 178/20026Recitals 20 and 21 of Regulation No 178/2002 are worded as follows:‘(20)The precautionary principle has been invoked to ensure health protection in the Community, thereby giving rise to barriers to the free movement of food or feed. Therefore it is necessary to adopt a uniform basis throughout the Community for the use of this principle.(21)In those specific circumstances where a risk to life or health exists but scientific uncertainty persists, the precautionary principle provides a mechanism for determining risk management measures or other actions in order to ensure the high level of health protection chosen in the Community.’7Article 6 of that regulation provides:‘1. In order to achieve the general objective of a high level of protection of human health and life, food law shall be based on risk analysis except where this is not appropriate to the circumstances or the nature of the measure.2. Risk assessment shall be based on the available scientific evidence and undertaken in an independent, objective and transparent manner.3. Risk management shall take into account the results of risk assessment, and in particular, the opinions of the [European Food Safety] Authority referred to in Article 22, other factors legitimate to the matter under consideration and the precautionary principle where the conditions laid down in Article 7(1) are relevant, in order to achieve the general objectives of food law established in Article 5.’8Article 7 of that regulation, entitled ‘Precautionary principle’, provides:‘1. In specific circumstances where, following an assessment of available information, the possibility of harmful effects on health is identified but scientific uncertainty persists, provisional risk management measures necessary to ensure the high level of health protection chosen in the Community may be adopted, pending further scientific information for a more comprehensive risk assessment.2. Measures adopted on the basis of paragraph 1 shall be proportionate and no more restrictive of trade than is required to achieve the high level of health protection chosen in the Community, regard being had to technical and economic feasibility and other factors regarded as legitimate in the matter under consideration. The measures shall be reviewed within a reasonable period of time, depending on the nature of the risk to life or health identified and the type of scientific information needed to clarify the scientific uncertainty and to conduct a more comprehensive risk assessment.’9Article 53 of Regulation No 178/2002, entitled ‘Emergency measures for food and feed of Community origin or imported from a third country’, is worded as follows:‘1. Where it is evident that food or feed originating in the Community or imported from a third country is likely to constitute a serious risk to human health, animal health or the environment, and that such risk cannot be contained satisfactorily by means of measures taken by the Member State(s) concerned, the Commission, acting in accordance with the procedure provided for in Article 58(2) on its own initiative or at the request of a Member State, shall immediately adopt one or more of the following measures, depending on the gravity of the situation:(a)in the case of food or feed of Community origin:(i)suspension of the placing on the market or use of the food in question;(ii)suspension of the placing on the market or use of the feed in question;(iii)laying down special conditions for the food or feed in question;(iv)any other appropriate interim measure;(b)in the case of food or feed imported from a third country:suspension of imports of the food or feed in question from all or part of the third country concerned and, where applicable, from the third country of transit;laying down special conditions for the food or feed in question from all or part of the third country concerned;any other appropriate interim measure.2. However, in emergencies, the Commission may provisionally adopt the measures referred to in paragraph 1 after consulting the Member State(s) concerned and informing the other Member States.…’10Article 54 of that regulation, entitled ‘Other emergency measures’, provides:‘1. Where a Member State officially informs the Commission of the need to take emergency measures, and where the Commission has not acted in accordance with Article 53, the Member State may adopt interim protective measures. In this event, it shall immediately inform the other Member States and the Commission.2. Within 10 working days, the Commission shall put the matter before the [Standing Committee on the Food Chain and Animal Health] with a view to the extension, amendment or abrogation of the national interim protective measures.3. The Member State may maintain its national interim protective measures until the Community measures have been adopted.’11Under Article 58(1) of that regulation:‘The Commission shall be assisted by a Standing Committee on the Food Chain and Animal Health … composed of representatives of the Member States and chaired by the representative of the Commission. [That] Committee shall be organised in sections to deal with all relevant matters.’The dispute in the main proceedings and the questions referred for a preliminary ruling12By decision of 22 April 1998 concerning the placing on the market of genetically modified maize (Zea mays L. line MON 810), in accordance with Council Directive 90/220/EEC (OJ 1998 L 131, p. 32), the Commission authorised the placing on the market of maize MON 810.13On 11 April 2013, the Italian Government requested the Commission to adopt, in accordance with the procedure set out in Article 53 of Regulation No 178/2002, the emergency measures set out in Article 34 of Regulation No 1829/2003 seeking to prohibit the cultivation of that maize. In support of their request, the Italian Government submitted scientific studies carried out by the Consiglio per la ricerca e la sperimentazione in agricoltura (Agricultural Research Council, ‘the CRA’) and by the Istituto Superiore per la Protezione e la Ricerca Ambientale (Institute for Environmental Protection and Research, ‘the ISPRA’).14In its response of 17 May 2013, the Commission indicated that, after carrying out a preliminary assessment of the evidence submitted to it, it took the view that no urgent need had been established for adopting measures pursuant to Articles 53 and 54 of Regulation No 178/2002.15However, in order to carry out a more detailed analysis of the scientific evidence provided by that Member State, the Commission, on 29 May 2013, asked the European Food Safety Authority to evaluate that evidence before the end of September 2013.16By a Decreto Adozione delle misure d’urgenza ai sensi dell’art. 54 del regolamento (CE) no 178/2002, concernente la coltivazione di varietà di mais geneticamente modificato MON 810 (Decree prohibiting the cultivation of varieties of genetically modified maize MON 810 on the basis of Article 54 of Regulation No 178/2002) of 12 July 2013 (GURI No 187 of 10 August 2013), the Italian Government prohibited the cultivation of the genetically modified maize variety MON 810.17On 24 September 2013, the European Food Safety Authority issued Opinion No 3371 in which it is stated that the working group on genetically modified organisms (‘GMOs’) had not identified, in the documents provided by the Italian Government in support of the emergency measures relating to maize MON 810, any new science-based evidence which justified the emergency measures requested. Consequently, that working group took the view that its previous risk assessment conclusions relating to maize MON 810 remained applicable.18It is apparent from the file submitted to the Court and the clarifications provided by the Commission at the hearing that the Commission informed the Standing Committee on the Food Chain and Animal Health of the notification by the Italian Government of the interim protective measures it had taken, without however submitting to it a draft decision with a view to the extension, amendment or abrogation of the national interim protective measures in accordance with Article 54(2) of Regulation No 178/2002.19It was against this background that Giorgio Fidenato, Leandro Taboga and Luciano Taboga were prosecuted before the Tribunale di Udine (District Court, Udine) for having cultivated, at an unspecified date, a variety of genetically modified maize, namely variety MON 810, in breach of the national legislation prohibiting such cultivation.20The judge in charge of the preliminary investigation, attached to the Tribunale di Udine (District Court, Udine), issued, at an unspecified date, a penal order against Giorgio Fidenato, Leandro Taboga and Luciano Taboga.21Giorgio Fidenato, Leandro Taboga and Luciano Taboga lodged an opposition against that penal order, pleading the illegality of the national legislation on the basis of which it had been issued, on the ground that that legislation infringes Article 34 of Regulation No 1829/2003 and Articles 53 and 54 of Regulation No 178/2002.22In those circumstances, the Tribunale di Udine (District Court, Udine) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:When requested to do so by a Member State, is the Commission required, for the purposes of [Article] 54(1) of [Regulation] No 178/2002, to adopt emergency measures within the meaning of [Article] 53 of [Regulation] No 178/2002, even if in the Commission’s assessment in respect of certain food or feed there is no serious, evident risk to human and animal health or to the environment?Where the Commission notifies the Member State which had sought its assessment that its assessment is at odds with the Member State’s request — an assessment which in theory precludes the need to adopt emergency measures — and where, accordingly, the Commission does not adopt such emergency measures within the meaning of [Article] 34 [Regulation] No 1829/2003 as requested by that Member State, is the Member State which made the request authorised, pursuant to [Article 53] of [Regulation] No 178/2002, to adopt interim emergency measures?May considerations relating to the precautionary principle which go beyond the parameters of serious and evident risk to human or animal health or the environment in the use of food or feed justify the adoption of interim emergency measures by a Member State within the meaning of [Article] 34 of [Regulation] No 1829/2003?(4)Where it is clear and obvious that the European Commission has made the assessment that the substantive conditions for the adoption of emergency measures for food or feed are not met, which is later confirmed by a European Food Safety Authority Scientific Opinion, and where that assessment was notified in writing to the Member State which made the request, may that Member State continue to maintain in force its existing interim emergency measures and/or extend the validity of such interim emergency measures, when the interim period for which they were put in place has expired?’Consideration of the questions referredThe first question23By its first question, the referring court asks, in essence, whether Article 34 of Regulation No 1829/2003, read in conjunction with Article 53 of Regulation No 178/2002, must be interpreted as meaning that the Commission is required to adopt emergency measures within the meaning of Article 53 of Regulation No 178/2002 when a Member State officially informs the Commission, in accordance with Article 54(1) of that regulation, of the need to take such measures, although it is not clear that products authorised by Regulation No 1829/2003 or in accordance with that regulation are likely to constitute a serious risk to human health, animal health or the environment.24Regulations No 1829/2003 and No 178/2002 both seek, inter alia, to ensure a high level of protection of human health and consumers’ interest in relation to food, whilst ensuring the effective functioning of the internal market.25Furthermore, as is clear from recital 1 of Regulation No 1829/2003, even if the free movement of safe and wholesome food and feed is an essential aspect of the internal market, a prohibition or restriction of the cultivation of GMOs authorised under Regulation No 1829/2003 and listed in the common catalogue pursuant to Council Directive 2002/53/EC of 13 June 2002 on the common catalogue of varieties of agricultural plant species (OJ 2002 L 193, p. 1) may be adopted by a Member State in situations expressly provided for under EU law (see, to that effect, judgment of 6 September 2012, Pioneer Hi Bred Italia, C‑36/11, EU:C:2012:534, paragraphs 63 and 70).26Those exceptions include, inter alia, measures adopted pursuant to Article 34 of Regulation No 1829/2003.27As is apparent from the wording of Article 34 of Regulation No 1829/2003, where it is evident that products authorised by or in accordance with that regulation are likely to constitute a serious risk to human health, animal health or the environment, measures are to be adopted under the procedures provided for in Articles 53 and 54 of Regulation (EC) No 178/2002. In that regard, it should be recalled that Article 53 of Regulation No 178/2002 concerns emergency measures which may be taken by the Commission, with the adoption of such measures by the Member States coming under Article 54 of that regulation.28Consequently, where it is not evident that products authorised by or in accordance with Regulation No 1829/2003 are likely to constitute a serious risk to human health, animal health or the environment, the Commission is not required, pursuant to Article 34 of that regulation, read in conjunction with Article 53 of Regulation No 178/2002, to adopt emergency measures within the meaning of those provisions.29The fact that the adoption of such measures has been requested by a Member State has no effect on the Commission’s discretion in that regard.30In light of all the foregoing considerations, the answer to the first question is that Article 34 of Regulation No 1829/2003, read in conjunction with Article 53 of Regulation No 178/2002, must be interpreted as meaning that the Commission is not required to adopt emergency measures within the meaning of Article 53 of Regulation No 178/2002 when a Member State officially informs the Commission, in accordance with Article 54(1) of that regulation, of the need to take such measures, as long as it is not evident that products authorised by Regulation No 1829/2003 or in accordance with that regulation are likely to constitute a serious risk to human health, animal health or the environment.The second and fourth questions31By its second and fourth questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 34 of Regulation No 1829/2003, read in conjunction with Article 54 of Regulation No 178/2002, must be interpreted as meaning that a Member State may, after officially informing the Commission of the need to resort to emergency measures, and where the Commission has not acted in accordance with Article 53 of Regulation No 178/2002, first, adopt such measures at the national level and, second, maintain or renew such measures, so long as the Commission has not adopted, in accordance with Article 54(2) of that regulation, a decision requiring their extension, amendment or abrogation.32In that regard, it should be recalled that Article 34 of Regulation No 1829/2003 permits a Member State to adopt emergency measures under that provision, subject to compliance not only with the substantive conditions laid down in that article but also with the procedural conditions provided for in Article 54 of Regulation No 178/2002 (see, to that effect, judgment of 8 September 2011, Monsanto and Others, C‑58/10 to C‑68/10, EU:C:2011:553, paragraphs 66 to 69).33Under Article 54(1) of Regulation No 178/2002, where a Member State officially informs the Commission of the need to take emergency measures, and where the Commission has not acted in accordance with Article 53 of that regulation, that Member State may adopt interim protective measures.34The procedural conditions are laid down in Article 54(1) of Regulation No 178/2002, which requires Member States, first, to ‘officially’ inform the Commission of the need to take emergency measures and, second, if the Commission has not adopted any measures pursuant to Article 53 of that regulation, ‘immediately’ to inform the Commission and the other Member States of the national interim protective measures which have been adopted. Accordingly, in the light of the urgent nature of the intervention of the Member State concerned and the objective of public health protection pursued by Regulation No 1829/2003, Article 54(1) of Regulation No 178/2002 must be interpreted as requiring that, in the event of an emergency, the Commission be informed no later than the time at which the emergency measures are adopted by the Member State concerned (judgment of 8 September 2011, Monsanto and Others, C‑58/10 to C‑68/10, EU:C:2011:553, paragraph 73).35Article 54(3) of Regulation No 178/2002 states, moreover, that emergency measures adopted by the Member States may be maintained until EU measures have been adopted.36The reference in that article to the maintenance of those measures must be understood as also covering the renewal of those measures when they were adopted provisionally. First, that regulation does not show that the EU legislature intended to limit the means by which the Member State concerned is authorised to maintain in force the adopted measures and, second, a contrary interpretation would be such as to constitute an obstacle to the management of the risk for human health, animal health or the environment which food or feed originating in the Community or imported from a third country is likely to constitute.37However, as the Court pointed out in paragraph 78 of the judgment of 8 September 2011, Monsanto and Others (C‑58/10 to C‑68/10, EU:C:2011:553), in the light of the overall scheme provided for by Regulation No 1829/2003 and its objective of avoiding artificial disparities in the treatment of a serious risk, the assessment and management of a serious and evident risk must ultimately be the sole responsibility of the Commission and the Council of the European Union, subject to review by the EU judicature.38It follows that, at the stage of adoption and implementation by the Member States of the emergency measures referred to in Article 34 of Regulation No 1829/2003, as long as no decision has been adopted in that regard at Union level, the national courts before which actions have been brought to test the lawfulness of such measures have jurisdiction to assess the lawfulness of those measures, having regard to the substantive conditions provided for in Article 34 of Regulation No 1829/2003 and the procedural conditions laid down in Article 54 of Regulation No 178/2002, whilst the uniformity of EU law may be ensured by the Court of Justice under the preliminary ruling procedure since, if a national court has doubts as to the interpretation of a provision of EU law, it may, or must, in accordance with the second and third paragraphs of Article 267 TFEU, refer a question to the Court for a preliminary ruling (judgment of 8 September 2011, Monsanto and Others, C‑58/10 to C‑68/10, EU:C:2011:553, paragraph 79 and the case-law cited).39In that regard, it should be recalled that it follows from the written observations submitted to the Court by the Commission that no decision has been taken at Union Level, contrary to the requirements of Article 54(2) of Regulation No 178/2002, to extend, amend or abrogate that national interim protective measure.40It is clear from that provision that, within ten working days, the Commission is to put the matter before the Standing Committee on the Food Chain and Animal Health, established by Article 58(1) of Regulation No 178/2002, in accordance with the procedure set out in Article 58(2) of that regulation, with a view to the extension, amendment or abrogation of the national interim protective measures.41By contrast, when the Commission has referred a matter to the Standing Committee on the Food Chain and Animal Health and a decision has been adopted at Union level, the factual and legal assessments relating to that case and contained in such a decision are binding on all bodies of the Member State which is the addressee of such a decision, in accordance with Article 288 TFEU, including national courts which are called on to assess the lawfulness of measures adopted at national level (see, to that effect, judgment of 8 September 2011, Monsanto and Others, C‑58/10 to C‑68/10, EU:C:2011:553, paragraph 80 and the case-law cited).42In light of all the foregoing considerations, the answer to the second and fourth questions is that Article 34 of Regulation No 1829/2003, read in conjunction with Article 54 of Regulation No 178/2002, must be interpreted as meaning that a Member State may, after officially informing the Commission of the need to resort to emergency measures, and where the Commission has not acted in accordance with Article 53 of Regulation No 178/2002, first, adopt such measures at the national level and, second, maintain or renew such measures, so long as the Commission has not adopted, in accordance with Article 54(2) of that regulation, a decision requiring their extension, amendment or abrogation.The third question43By its third question, the referring court asks, in essence, whether Article 34 of Regulation No 1829/2003, read in conjunction with the precautionary principle, must be interpreted as meaning that it gives Member States the option of adopting, in accordance with Article 54 of Regulation No 178/2002, interim emergency measures solely on the basis of that principle, when the conditions set out in Article 34 of Directive No 1829/2003 are not satisfied.44In that regard, it should be noted that Article 7 of Regulation No 178/2002 defines the precautionary principle in the area of food law. Article 7(1) of that regulation states that, in specific circumstances where, following an assessment of available information, the possibility of harmful effects on health is identified but scientific uncertainty persists, provisional risk management measures necessary to ensure the high level of health protection chosen in the Union may be adopted, pending further scientific information for a more comprehensive risk assessment.45Article 34 of Regulation No 1829/2003, for its part, lays down, as recalled in paragraph 27 above, the conditions under which products authorised by that regulation or in accordance therewith may be the subject of emergency measures, thus specifically defining the level of requirement to which the adoption of those measures is subject.46Although, as the Advocate General noted in point 78 of his Opinion, the precautionary principle, as set out in Article 7 of Directive 178/2002, is a general principle of food law, the EU legislature established, in Article 34 of Regulation No 1829/2003, a precise rule for the adoption of emergency measures in accordance with the procedures set out in Articles 53 and 54 of Regulation No 178/2002.47Admittedly, as the Court pointed out in paragraph 71 of the judgment of 8 September 2011, Monsanto and Others (C‑58/10 to C‑68/10, EU:C:2011:553), the conditions set out in Article 54(1) of Regulation No 178/2002, to which the adoption of emergency measures is subject, must be interpreted in the light of, inter alia, the precautionary principle, in order to ensure a high level of protection of human life and health, whilst taking care to ensure the free movement of safe and wholesome food and feed, which is an essential aspect of the internal market.48Nevertheless, that principle cannot be interpreted as meaning that the provisions set out in Article 34 of Regulation No 1829/2003 may be disregarded or altered, in particular by relaxing them.49In that regard, it must be pointed out that, as was stated in paragraph 38 above, national courts before which actions have been brought to test the lawfulness of national emergency measures, referred to Article 34 of Regulation No 1829/2003, have jurisdiction to assess the lawfulness of those measures, having regard to the substantive conditions provided for in that provision and the procedural conditions laid down in Article 54 of Regulation No 178/2002,50Furthermore, it should be stated that, as the Advocate General noted, in essence, in point 68 of his Opinion, provisional risk management measures which may be adopted on the basis of the precautionary principle and the emergency measures taken pursuant to Article 34 of Regulation No 1829/2003 do not operate according to the same system. It is clear from Article 7 of Regulation No 178/2002 that the adoption of those provisional measures is subject to the condition that, following an assessment of available information, the possibility of harmful effects on health is identified but that scientific uncertainty persists. By contrast, Article 34 of Regulation No 1829/2003 permits the use of emergency measures when it is ‘evident’ that products authorised by that regulation are likely to constitute a ‘serious’ risk to human health, animal health or the environment.51On this point, the Court held, in paragraphs 76 and 77 of its judgment of 8 September 2011, Monsanto and Others (C‑58/10 to C‑68/10, EU:C:2011:553), that the terms ‘evidently’ and ‘serious risk’ within the meaning of Article 34 of Regulation No 1829/2003 must be understood as referring to a significant risk which clearly jeopardises human health, animal health or the environment. That risk must be established on the basis of new evidence based on reliable scientific data. Protective measures adopted under Article 34 of Regulation No 1829/2003 cannot validly be explained on a purely hypothetical approach to the risk based on mere assumptions which have not yet been scientifically verified. On the contrary, such protective measures, notwithstanding their temporary nature and even if they are preventive in nature, may be adopted only if they are based on a risk assessment which is as complete as possible in the particular circumstances of the individual case, which indicate that those measures are necessary.52Furthermore, it should be stated that, as the Advocate General noted in points 74 to 76 of his Opinion, the difference between the level of risk required, on the one hand, by Article 34 of Regulation No 1829/2003, and, on the other hand, by Article 7 of Regulation No 178/2002, should be read in the light of the procedural operation of those provisions, namely the application of Article 34 of Regulation No 1829/2003 to products authorised by that regulation and the application of Article 7 of Regulation No 178/2002 to the entire area of food law, which includes products that have never gone through an authorisation procedure.53Consequently, in order to prevent Article 7 of Regulation No 178/2002 failing to reduce the level of uncertainty required by the rule laid down in Article 34 of Regulation No 1829/2003 for the adoption of emergency measures, such an autonomous application of the precautionary principle, as laid down in Article 7 of Regulation No 178/2002, without the substantive conditions laid down by Article 34 of Regulation No 1829/2003 being satisfied in light of the adoption of the emergency measures set out in that article, cannot be accepted.54In light of the foregoing, the answer to the third question is that Article 34 of Regulation No 1829/2003, read in conjunction with the precautionary principle as set out in Article 7 of Regulation No 178/2002, must be interpreted as meaning that it does not give Member States the option of adopting, in accordance with Article 54 of Regulation No 178/2002, interim emergency measures solely on the basis of that principle, without the conditions set out in Article 34 of Directive No 1829/2003 being satisfied.Costs55Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Third Chamber) hereby rules: 1. Article 34 of Regulation (EC) No 1829/2003 of the European Parliament and of the Council of 22 September 2003 on genetically modified food and feed, read in conjunction with Article 53 of Regulation No 178/2002 of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety, must be interpreted as meaning that the European Commission is not required to adopt emergency measures within the meaning of Article 53 of Regulation No 178/2002 when a Member State officially informs the Commission, in accordance with Article 54(1) of that regulation, of the need to take such measures, as long as it is not evident that products authorised by Regulation No 1829/2003 or in accordance with that regulation are likely to constitute a serious risk to human health, animal health or the environment. 2. Article 34 of Regulation No 1829/2003, read in conjunction with Article 54 of Regulation No 178/2002, must be interpreted as meaning that a Member State may, after officially informing the European Commission of the need to resort to emergency measures, and where the Commission has not acted in accordance with Article 53 of Regulation No 178/2002, first, adopt such measures at the national level and, second, maintain or renew such measures, so long as the Commission has not adopted, in accordance with Article 54(2) of that regulation, a decision requiring their extension, amendment or abrogation. 3. Article 34 of Regulation No 1829/2003, read in conjunction with the precautionary principle as set out in Article 7 of Regulation No 178/2002, must be interpreted as meaning that it does not give Member States the option of adopting, in accordance with Article 54 of Regulation No 178/2002, interim emergency measures solely on the basis of that principle, without the conditions set out in Article 34 of Directive No 1829/2003 being satisfied. [Signatures]( *1 ) Language of the case: Italian. | 1d6e8-d8fcf71-4c6d | EN |
The restrictive measures adopted by the Council in response to the crisis in Ukraine against certain Russian undertakings, including Rosneft, are valid | 28 March 2017 ( *1 ) Table of contentsLegal contextThe EU and FEU TreatiesThe EU-Russia Partnership AgreementThe contested actsDecision 2014/512Regulation No 833/2014Facts in the main proceedings and the questions referred for a preliminary rulingThe request to have the written procedure reopenedConsideration of the questions referredQuestion 1AdmissibilitySubstanceQuestion 2(a)Whether Decision 2014/512 and Regulation No 833/2014 comply with Article 40 TEUThe validity of the restrictive measures against natural or legal persons, prescribed by Decision 2014/512 and Regulation No 833/2014– Preliminary observations– The compatibility of the contested acts with the EU-Russia Partnership Agreement– The obligation to state reasons and respect for the rights of the defence, the right to effective judicial protection and the right to access to the file– The principle of equal treatment– Misuse of powers– Contradiction between Decision 2014/512 and Regulation No 833/2014– The principle of proportionality and Rosneft’s fundamental rightsQuestion 2(b)Question 3(a)Question 3(b)Question 3(c)Costs‛Reference for a preliminary ruling — Common Foreign and Security Policy (CFSP) — Restrictive measures adopted in view of Russia’s actions destabilising the situation in Ukraine — Provisions of Decision 2014/512/CFSP and Regulation (EU) No 833/2014 — Validity — Jurisdiction of the Court — EU‑Russia Partnership Agreement — Obligation to state reasons — Principles of legal certainty and nulla poena sine lege certa — Access to capital markets — Financial assistance — Global Depositary Receipts — Oil sector — Request for interpretation of concepts of ‘shale’ and ‘waters deeper than 150 metres’ — Inadmissibility’In Case C‑72/15,REQUEST for a preliminary ruling under Article 267 TFEU from the High Court of Justice (England & Wales), Queen’s Bench Division (Divisional Court), made by decision of 9 February 2015, received at the Court on 18 February 2015, in the proceedings The Queen, on the application of: PJSC Rosneft Oil Company, formerly OJSC Rosneft Oil Company,v Her Majesty’s Treasury, Secretary of State for Business, Innovation and Skills, The Financial Conduct Authority, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič and J.L. da Cruz Vilaça, Presidents of Chambers, A. Rosas (Rapporteur), J.-C. Bonichot, A. Arabadjiev, C. Toader, M. Safjan, E. Jarašiūnas, C.G. Fernlund, C. Vajda, S. Rodin and F. Biltgen, Judges,Advocate General: M. Wathelet,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 23 February 2016,after considering the observations submitted on behalf of:—PJSC Rosneft Oil Company, formerly OJSC Rosneft Oil Company, represented initially by T. Beazley QC, P. Saini QC, and S. Tulip and P. Farmer, Barristers, and subsequently by L. Van Den Hende, advocaat, and M. Schonberg and K. Krissinel, Solicitors,the Financial Conduct Authority, by J. McClelland, Barrister, S. Tolaney QC, and A. Chapman, Solicitor,the United Kingdom Government, by V. Kaye, acting as Agent, and by G. Facenna, Barrister,the Czech Government, by M. Hedvábná, J. Vláčil, M. Smolek and E. Ruffer, acting as Agents,the German Government, by T. Henze and A. Lippstreu, acting as Agents,the Estonian Government, by K. Kraavi-Käerdi, acting as Agent,the French Government, by F. Fize, B. Fodda, G. de Bergues and D. Colas, acting as Agents,the Polish Government, by A. Miłkowska and B. Majczyna, acting as Agents,the Council of the European Union, by A. de Elera-San Miguel Hurtado and S. Boelaert, acting as Agents,the European Commission, by T. Scharf, L. Havas and D. Gauci, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 31 May 2016,gives the following Judgment 1This request for a preliminary ruling relates to the validity of certain provisions of Council Decision 2014/512/CFSP of 31 July 2014, concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 13), as amended by Council Decision 2014/872/CFSP of 4 December 2014 (OJ 2014 L 349, p. 58, and corrigendum, OJ 2014 L 350, p. 15) (‘Decision 2014/512’), and the validity and interpretation of Council Regulation (UE) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine (OJ 2014 L 229, p. 1, and corrigendum, OJ 2014 L 246, p. 59) as amended by Council Regulation (EU) No 1290/2014 of 4 December 2014 (OJ 2014 L 349, p. 20, and corrigendum, OJ 2014 L 246, p. 79) (‘Regulation No 833/2014’) (together, ‘the contested acts’).2The request has been made in proceedings between, on the one hand, PJSC Rosneft Oil Company, formerly OJSC Rosneft Oil Company (‘Rosneft’), a company registered in Russia, and, on the other, Her Majesty’s Treasury, The Secretary of State for Business, Innovation and Skills and the Financial Conduct Authority (‘the FCA’), concerning restrictive measures adopted by the European Union and imposed on certain Russian undertakings, including Rosneft. Legal context The EU and FEU Treaties 3Under Title III of the EU Treaty, headed ‘Provisions on the institutions’, Article 19 provides :‘1. The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed.Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law....3. The Court of Justice of the European Union shall, in accordance with the Treaties:(b)give preliminary rulings, at the request of courts or tribunals of the Member States, on the interpretation of Union law or the validity of acts adopted by the institutions;...’4Title V of the EU Treaty is headed ‘General provisions on the Union’s external action and specific provisions on the common foreign and security policy’. Within Chapter 2 of that title, headed specific provisions on the common foreign and security policy, the second subparagraph of Article 24(1) states:‘The common foreign and security policy is subject to specific rules and procedures. It shall be defined and implemented by the European Council and the Council acting unanimously, except where the Treaties provide otherwise. The adoption of legislative acts shall be excluded. The common foreign and security policy shall be put into effect by the High Representative of the Union for Foreign Affairs and Security Policy and by Member States, in accordance with the Treaties. The specific role of the European Parliament and of the Commission in this area is defined by the Treaties. The Court of Justice of the European Union shall not have jurisdiction with respect to these provisions, with the exception of its jurisdiction to monitor compliance with Article 40 of this Treaty and to review the legality of certain decisions as provided for by the second paragraph of Article 275 of [the FEU Treaty].’5Within the same chapter, Article 29 TEU provides:‘The Council shall adopt decisions which shall define the approach of the Union to a particular matter of a geographical or thematic nature. Member States shall ensure that their national policies conform to the Union positions.’6Again within Chapter 2, Article 40 TEU provides:‘The implementation of the common foreign and security policy shall not affect the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union competences referred to in Articles 3 to 6 of the Treaty on the Functioning of the European Union.Similarly, the implementation of the policies listed in those Articles shall not affect the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union competences under this Chapter.’7Part Five of the FEU Treaty concerns the Union’s external action. In Title IV of Part Five, headed ‘Restrictive measures’, Article 215 provides:‘1. Where a decision, adopted in accordance with Chapter 2 of Title V of [the EU Treaty], provides for the interruption or reduction, in part or completely, of economic and financial relations with one or more third countries, the Council, acting by a qualified majority on a joint proposal from the High Representative of the Union for Foreign Affairs and Security Policy and the Commission, shall adopt the necessary measures. It shall inform the European Parliament thereof.2. Where a decision adopted in accordance with Chapter 2 of Title V of [the EU Treaty] so provides, the Council may adopt restrictive measures under the procedure referred to in paragraph 1 against natural or legal persons and groups or non-State entities.8Part Six of the FEU Treaty contains institutional and financial provisions. Within Title I of Part Five, headed ‘Institutional Provisions’, Section 5, on the Court of Justice of the European Union, contains Article 267, which provides:‘The Court of Justice of the European Union shall have jurisdiction to give preliminary rulings concerning:(a)the interpretation of the Treaties;the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union.Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to give a ruling thereon.9Article 275 TFEU, again in Section 5, states:‘The Court of Justice of the European Union shall not have jurisdiction with respect to the provisions relating to the common foreign and security policy nor with respect to acts adopted on the basis of those provisions.However, the Court shall have jurisdiction to monitor compliance with Article 40 of the Treaty on European Union and to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the Treaty on European Union.’ The EU-Russia Partnership Agreement 10The Agreement on partnership and cooperation establishing a partnership between the European Communities and their Member States, of one part, and the Russian Federation, of the other part, signed in Corfu on 24 June 1994 and approved in the name of the European Communities by Council and Commission Decision 97/800/ECSC, EC, Euratom of 30 October 1997 (OJ 1997 L 327, p. 1; ‘the EU‑Russia Partnership Agreement’) contains a Title XI, headed ‘Institutional, general and final provisions’, Article 99 therein providing:‘Nothing in this Agreement shall prevent a Party from taking any measures:(1)which it considers necessary for the protection of its essential security interests:(d)in the event of serious internal disturbances affecting the maintenance of law and order, in time of war or serious international tension constituting threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security; The contested acts 11Decision 2014/512 was adopted under Article 29 TEU.12Recitals 1 to 8 of Decision 2014/512 set out the circumstances that preceded the adoption of the restrictive measures laid down in that decision.13Article 1(2) and (3) of that decision provide:‘2. The direct or indirect purchase or sale of, the direct or indirect provision of investment services for, or assistance in the issuance of, or any other dealing with bonds, equity, or similar financial instruments with a maturity exceeding 30 days, issued after 12 September 2014 by:entities established in Russia which are publicly controlled or with over 50% public ownership which have estimated total assets of over 1 trillion Russian Roubles and whose estimated revenues originate for at least 50% from the sale or transportation of crude oil or petroleum products as of 12 September 2014, as listed in Annex III [namely, Rosneft, Transneft and Gazprom Neft];(c)any legal person, entity or body established outside the Union owned for more than 50% by an entity within the category referred to [in point] ... (b); orany legal person, entity or body acting on behalf, or at the direction, of an entity within the category referred to in point (c) or listed in Annex ... III [namely, Rosneft, Transneft and Gazprom Neft].3. It shall be prohibited to directly or indirectly make or be part of any arrangement to make new loans or credit with a maturity exceeding 30 days to any legal person, entity or body referred to in paragraph … 2, after 12 September 2014 except for loans or credit that have a specific and documented objective to provide financing for non-prohibited direct or indirect imports or exports of goods and non-financial services between the Union and Russia or any other third State, or for loans that have a specific and documented objective to provide emergency funding to meet the solvency and liquidity criteria for legal persons established in the Union, whose proprietary rights are owned for more than 50% by an entity referred to in Annex I [namely, the principal credit institutions or financial development institutions established in Russia, wholly or more than 50% owned or controlled by the Russian State on 1 August 2014: Sberbank, VTB Bank, Gazprombank, Vnesheconombank and Rosselkhozbank].’14Article 4 of Decision 2014/512 provides:‘1. The direct or indirect sale, supply, transfer or export of certain equipment suited to the following categories of exploration and production projects in Russia, including its Exclusive Economic Zone and Continental Shelf, by nationals of Member States, or from the territories of Member States, or using vessels or aircraft under the jurisdiction of Member States, shall be subject to prior authorisation by the competent authority of the exporting Member State:oil exploration and production in waters deeper than 150 metres;oil exploration and production in the offshore area north of the Arctic Circle;projects that have the potential to produce oil from resources located in shale formations by way of hydraulic fracturing; it does not apply to exploration and production through shale formations to locate or extract oil from non‑shale reservoirs.The Union shall take the necessary measures in order to determine the relevant items to be covered by this paragraph.2. The provision of:technical assistance or other services related to the equipment referred to in paragraph 1;financing or financial assistance for any sale, supply, transfer or export of the equipment referred to in paragraph 1 or for the provision of related technical assistance or training;shall also be subject to prior authorisation by the competent authority of the exporting Member State.3. The competent authorities of the Member States shall not grant any authorisation for any sale, supply, transfer or export of the equipment or the provision of the services, as referred to in paragraphs 1 and 2, if they determine that the sale, supply, transfer or export concerned or the provision of the service concerned is destined for one of the categories of exploration and production referred to in paragraph 1.4. Paragraph 3 shall be without prejudice to the execution of contracts concluded before 1 August 2014 or ancillary contracts necessary for the execution of those contracts.5. An authorisation may be granted where the sale, supply, transfer or export of the items or the provision of the services, as referred to in paragraphs 1 and 2, is necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment. In duly justified cases of emergency, the sale, supply, transfer or export or the provision of services, as referred to in paragraphs 1 and 2, may proceed without prior authorisation, provided that the exporter notifies the competent authority within five working days after the sale, supply, transfer or export or the provision of services has taken place, providing detail about the relevant justification for the sale, supply, transfer or export or the provision of services without prior authorisation.’15Article 4a of that decision provides:‘1. The direct or indirect provision of associated services necessary for the following categories of exploration and production projects in Russia, including its Exclusive Economic Zone and Continental Shelf, by nationals of Member States, or from the territories of Member States, or using vessels or aircraft under the jurisdiction of Member States shall be prohibited:projects that have the potential to produce oil from resources located in shale formations by way of hydraulic fracturing; it does not apply to exploration and production through shale formations to locate or extract oil from non‑shale reservoirs.2. The prohibition set out in paragraph 1 shall be without prejudice to the execution of contracts or framework agreements concluded before 12 September 2014 or ancillary contracts necessary for the execution of such contracts.3. The prohibition set out in paragraph 1 shall not apply where the services in question are necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health or the environment.’16Article 7 of that decision provides:‘1. No claims in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under this Regulation, including claims for indemnity or any other claim of this type, such as a claim for compensation or a claim under a guarantee, notably a claim for extension or payment of a bond, guarantee or indemnity, particularly a financial guarantee or financial indemnity, of whatever form, shall be satisfied, if they are made by:entities referred to … in point (c) or (d) of Article 1(2), or listed in Annex ... III [namely, Rosneft, Transneft and Gazprom Neft] ...;any other Russian person, entity or body; orany person, entity or body acting through or on behalf of one of the persons, entities or bodies referred to in points (a) or (b) of this paragraph.2. In any proceedings for the enforcement of a claim, the onus of proving that satisfying the claim is not prohibited by paragraph 1 shall be on the person seeking the enforcement of that claim.3. This article is without prejudice to the right of persons, entities and bodies referred to in paragraph 1 to judicial review of the legality of the non-performance of contractual obligations in accordance with this Decision.’17Recital 2 of Regulation No 833/2014 states:‘… It is … considered appropriate to apply additional restrictive measures with a view to increasing the costs of Russia’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence and to promoting a peaceful settlement of the crisis ...’18Article 1(f)(i) of that regulation defines ‘transferable securities’ as meaning, inter alia, shares in companies and other securities equivalent to shares in companies, partnerships or other entities and depositary receipts in respect of shares.19Article 3 of that regulation provides:‘1. A prior authorisation shall be required for the sale, supply, transfer or export, directly or indirectly, of items as listed in Annex II, whether or not originating in the Union, to any natural or legal person, entity or body in Russia, including its Exclusive Economic Zone and Continental Shelf or in any other State, if such items are for use in Russia, including its Exclusive Economic Zone and Continental Shelf.2. For all sales, supplies, transfers or exports for which an authorisation is required under this Article, such authorisation shall be granted by the competent authorities of the Member State where the exporter is established and shall be in accordance with the detailed rules laid down in Article 11 of [Council Regulation (EC) No 428/2009 of 5 May 2009 setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items (recasting) (OJ 2009 L 134, p. 1)] The authorisation shall be valid throughout the Union.3. Annex II shall include certain items suited to the following categories of exploration and production projects in Russia, including its Exclusive Economic Zone and Continental Shelf:oil exploration and production in the offshore area north of the Arctic Circle; orprojects that have the potential to produce oil from resources located in shale formations by way of hydraulic fracturing; it does not apply to exploration and production through shale formations to locate or extract oil from non-shale reservoirs.4. Exporters shall supply the competent authorities with all relevant information required for their application for an export authorisation.5. The competent authorities shall not grant any authorisation for any sale, supply, transfer or export of the items included in Annex II, if they have reasonable grounds to determine that the sale, supply, transfer or export of the items are destined for any of the categories of exploration and production projects referred to in paragraph 3.The competent authorities may, however, grant an authorisation where the sale, supply, transfer or export concerns the execution of an obligation arising from a contract concluded before 1 August 2014, or ancillary contracts necessary for the execution of such a contract.The competent authorities may also grant an authorisation where the sale, supply, transfer or export of the items is necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment. In duly justified cases of emergency, the sale, supply, transfer or export may proceed without prior authorisation, provided that the exporter notifies the competent authority within five working days after the sale, supply, transfer or export has taken place, providing detail about the relevant justification for the sale, supply, transfer or export without prior authorisation.6. Under the conditions set out in paragraph 5, the competent authorities may annul, suspend, modify or revoke an export authorisation which they have granted.7. Where a competent authority refuses to grant an authorisation, or annuls, suspends, substantially limits or revokes an authorisation in accordance with paragraphs 5 or 6, the Member State concerned shall notify the other Member States and the Commission thereof and share the relevant information with them, while complying with the provisions concerning the confidentiality of such information in [Council Regulation (EC) No 515/97 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters (OJ 1997 L 82, p. 1)].8. Before a Member State grants an authorisation in accordance with paragraph 5 for a transaction which is essentially identical to a transaction which is the subject of a still valid denial issued by another Member State or by other Member States under paragraphs 6 and 7, it shall first consult the Member State or States which issued the denial. If, following such consultations, the Member State concerned decides to grant an authorisation, it shall inform the other Member States and the Commission thereof, providing all relevant information to explain the decision.’20Article 3a of that regulation provides:‘1. It shall be prohibited to provide, directly or indirectly, associated services necessary for the following categories of exploration and production projects in Russia, including its Exclusive Economic Zone and Continental Shelf:For the purposes of this paragraph, “associated services” shall mean:(i)drilling;(ii)well testing;iii)logging and completion services;(iv)supply of specialised floating vessels.2. The prohibitions in paragraph 1 shall be without prejudice to the execution of an obligation arising from a contract or a framework agreement concluded before 12 September 2014 or ancillary contracts necessary for the execution of such a contract.3. The prohibitions in paragraph 1 shall not apply where the services in question are necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment.The service provider shall notify the competent authority within five working days of any activity undertaken pursuant to this paragraph, providing detail about the relevant justification for the sale, supply, transfer or export.’21Article 4 of Regulation No 833/2014 is worded as follows:‘...3. The provision of the following shall be subject to an authorisation from the competent authority concerned:technical assistance or brokering services related to items listed in Annex II and to the provision, manufacture, maintenance and use of those items, directly or indirectly, to any natural or legal person, entity or body in Russia, including its Exclusive Economic Zone and Continental Shelf or, if such assistance concerns items for use in Russia, including its Exclusive Economic Zone and Continental Shelf, to any person, entity or body in any other State;financing or financial assistance related to items referred to in Annex II, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of those items, or for any provision of related technical assistance, directly or indirectly, to any natural or legal person, entity or body in Russia, including its Exclusive Economic Zone and Continental Shelf or, if such assistance concerns items for use in Russia, including its Exclusive Economic Zone and Continental Shelf, to any person, entity or body in any other State.In duly justified cases of emergency referred to in Article 3(5), the provision of services referred to in this paragraph may proceed without prior authorisation, on condition that the provider notifies the competent authority within five working days after the provision of services.’4. Where authorisations are requested pursuant to paragraph 2 of this Article, Article 3, and in particular paragraphs 2 and 5 thereof, shall apply mutatis mutandis.’22Article 5 of that regulation provides:2. It shall be prohibited to directly or indirectly purchase, sell, provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments with a maturity exceeding 30 days, issued after 12 September 2014 by:a legal person, entity or body established in Russia, which are publicly controlled or with over 50% public ownership and having estimated total assets of over 1 trillion Russian Roubles and whose estimated revenues originate for at least 50% from the sale or transportation of crude oil or petroleum products, as listed in Annex VI [namely, Rosneft, Transneft and Gazprom Neft];a legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned for more than 50% by an entity listed in point (a) or (b) of this paragraph; ora legal person, entity or body acting on behalf of or at the direction of an entity referred to in point (a), (b) or (c) of this paragraph.3. It shall be prohibited to directly or indirectly make or be part of any arrangement to make new loans or credit with a maturity exceeding 30 days to any legal person, entity or body referred to in paragraph 1 or 2, after 12 September 2014.The prohibition shall not apply to:loans or credit that have a specific and documented objective to provide financing for non-prohibited imports or exports of goods and non-financial services between the Union and any third State, including the expenditure for goods and services from another third State that is necessary for executing the export or import contracts; orloans that have a specific and documented objective to provide emergency funding to meet solvency and liquidity criteria for legal persons established in the Union, whose proprietary rights are owned for more than 50% by any entity referred to in Annex III [namely, Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) and Rosselkhozbank].23Article 8(1) of that regulation provides:‘Member States shall lay down the rules on penalties applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive.’24Article 11 of Regulation No 833/2014 provides:entities referred to in … points (c) and (d) of Article 5(2), or listed in [Annex] ... VI [namely, Rosneft, Transneft and Gazprom Neft];any other Russian person, entity or body;3. This Article is without prejudice to the right of the persons, entities and bodies referred to in paragraph 1 to judicial review of the legality of the non‑performance of contractual obligations in accordance with this Regulation.’25Annex II to Regulation No 833/2014 lists the items of which sale, supply, transfer or export to Russia is subject to the obtaining of a prior authorisation, in accordance with Article 3 of that regulation. Facts in the main proceedings and the questions referred for a preliminary ruling 26On 6 March 2014 the Heads of State or Government of the Member States of the European Union condemned the ‘unprovoked infringement of Ukrainian sovereignty and territorial integrity by the Russian Federation’, decided to suspend bilateral talks with the Russian Federation on visas and on the new comprehensive agreement which was to replace the EU-Russia Partnership Agreement, and declared that any further steps by the Russian Federation to destabilise the situation in Ukraine would lead to additional and far reaching consequences for relations in a broad range of economic areas between the European Union and its Member States, on the one hand, and the Russian Federation, on the other.27Thereafter, in the course of 2014, the Council established, within the framework of the Common Foreign and Security Policy (CFSP), a set of restrictive measures in response to the actions of the Russian Federation that were regarded as destabilising the situation in Ukraine. In view of the gravity of the situation in Ukraine notwithstanding the adoption, in March 2014, of travel restrictions and a freeze on the assets of certain natural and legal persons, the Council adopted, on 31 July 2014, Decision 2014/512, which was subsequently amended in September and December of 2014, in order to introduce targeted restrictive measures concerning the areas of access to capital markets, defence, dual‑use goods, and sensitive technologies, including in the energy sector.28The Council considered that the latter measures fell within the scope of the FEU Treaty and that their implementation required regulatory action at the Union level, and therefore adopted Regulation No 833/2014, which contains more detailed provisions to give effect, both at Union level and in the Member States, to the requirements of Decision 2014/512. Adopted initially on the same day as that decision, that regulation was adjusted in parallel with that decision so as to reflect the amendments subsequently made to that decision.29The declared objective of those restrictive measures was to increase the costs of the actions of the Russian Federation designed to undermine Ukraine’s territorial integrity, sovereignty and independence and to promote a peaceful settlement of the crisis. To that end, Decision 2014/512 established, in particular, prohibitions on the export of certain sensitive products and technologies to the oil sector in Russia and restrictions on the access of certain operators in that sector to the European capital market.30Rosneft is a company incorporated in Russia, specialising in the oil and gas sectors. According to the information provided by the referring court, 69.5% of the capital of that company is owned by OJSC Rosneftegaz, a body owned by the Russian State. A minority shareholding in Rosneft (19.75%) is owned by BP Russian Investments Ltd., a subsidiary of the British oil company BP plc. The remaining 10.75% of Rosneft’s issued share capital is publicly traded. According to the order for reference, the activities of Rosneft and its group companies include hydrocarbon exploration and production, upstream offshore projects, hydrocarbon refining and crude oil, gas and product marketing in Russia and abroad. Its exploration activities include operations in waters deeper than 150 metres, in the Arctic, and in shale formations.31Since 8 September 2014, Decision 2014/512 and, consequently, Regulation No 833/2014, have made specific reference to Rosneft in their annexes as an entity that is subject to some of the restrictions imposed by those acts.32Rosneft brought actions against the restrictive measures both before the Courts of the European Union and before the national courts in the United Kingdom. On 9 October 2014 Rosneft brought an action, currently pending, before the General Court of the European Union, seeking the annulment of the contested acts. Subsequently, on 20 November 2014 Rosneft brought an application for judicial review before the High Court of Justice (England & Wales), Queen’s Bench Division (Divisional Court). In the context of the latter proceedings, Rosneft claims that both the restrictive measures adopted by the Council and the national measures to implement them are invalid.33According to the referring court, the application for judicial review brought before it concerns, primarily, the national measures adopted by the defendants in the main proceedings in order to implement the European Union acts imposing the restrictive measures at issue. That judicial review concerns, first, the legality of the legislation imposing criminal penalties for breach of the provisions of Regulation No 833/2014 relating to financial services and the oil sector and, second, the accuracy of certain statements of the FCA concerning the concept of ‘financial assistance’ and the application of that regulation to transferable securities that are issued in the form of Global Depositary Receipts (‘GDRs’).34However, the referring court states that that action also concerns the validity of acts of EU law. In that regard, it considers, by reference to the judgment of 22 October 1987, Foto-Frost (314/85, EU:C:1987:452), that it has no jurisdiction to review the validity of those acts. While not wishing to express any view on the jurisdiction of the Court to carry out such a review with respect to, inter alia, acts adopted within the framework of the CFSP, the referring court states, however, that the measures adopted in that field can have a serious impact on natural and legal persons and that the principle of access to a court to review the legality of acts of the executive is a fundamental right.35According to the referring court, Rosneft considers, in essence, that: (i) the contested acts infringe a number of articles of the EU-Russia Partnership Agreement; (ii) they do not comply with the obligation to state reasons, laid down in Article 296 TFEU, and, consequently, the right to a fair hearing and to effective judicial protection; (iii) the provisions in those acts relating to the oil sector are incompatible with the principle of equal treatment and their adoption constitutes a misuse of powers by the Council; (iv) those provisions are disproportionate with respect to the objective pursued by those acts and interfere with Rosneft’s freedom to conduct business and right to property; (v) Regulation No 833/2014 fails to give proper effect to Decision 2014/512; (vi) to the extent that the Member States are obliged to impose penalties in order to ensure the implementation of the contested acts, the lack of clarity in their provisions is contrary to the principles of legal certainty and nulla poena sine lege certa.36In the event that the Court finds that the contested acts are valid, the referring court is doubtful as to their interpretation. The referring court considers that it is important to interpret the terms of the restrictive measures at issue in the main proceedings uniformly throughout the European Union and explains that it has discovered, in the course of the proceedings before it, that the practices of the authorities of other Member States diverge with respect to the interpretation to be adopted of certain provisions of the contested acts.37The referring court concludes by stating that it has examined the arguments of the parties in the main proceedings concerning the appropriateness of sending a request for a preliminary ruling to the Court in these proceedings, since, in particular, Rosneft had already brought an action before the General Court for the annulment of the contested acts. The referring court considers, however, that, pursuant to the case-law stemming from the judgment of 14 December 2000, Masterfoods and HB (C‑344/98, EU:C:2000:689), it falls to it to assess whether it should stay proceedings until a final decision is delivered on such an action for annulment or whether it should refer questions for a preliminary ruling to the Court.38In those circumstances, the High Court of Justice (England & Wales), Queen’s Bench Division (Divisional Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Having regard in particular to Article 19(1) TEU, Article 24 TEU, Article 40 TEU, Article 47 [of the Charter of Fundamental Rights of the European Union (‘the Charter’)] and the second paragraph of Article 275 TFEU, does the Court of Justice have jurisdiction to give a preliminary ruling under Article 267 TFEU on the validity of Article l(2)(b) to (d), Article 1(3), Article 4, Article 4(a) and Article 7 of, and Annex III to, Decision 2014/512?(2)Are one or more of the following provisions (“the Relevant Measures”) of Regulation No 833/2014 and, to the extent that the Court has jurisdiction, Decision 2014/512 invalid:Article 4 and Article 4a of Decision 2014/512;Articles 3, 3a, 4(3) and (4) of, and Annex II to, Regulation No 833/2014;(together, “the Oil Sector Provisions”) ;(iii)Articles l(2)(b) to (d) and 1(3) of, and Annex III to, Decision 2014/512;Articles 5(2)(b) to (d), 5(3) of, and Annex VI to, Regulation No 833/2014;(together, “the Securities and Lending Provisions”);(v)Article 7 of Decision 2014/512; and(vi)Article 11 of Regulation No 833/2014?In so far as the Relevant Measures are valid, is it contrary to the principles of legal certainty and nulla poena sine lege certa for a Member State to impose criminal penalties, pursuant to Article 8 of the EU Regulation, before the scope of the relevant offence has been sufficiently clarified by the Court of Justice?(3)In so far as the relevant prohibitions or restrictions referred to in Question 2(a) are valid:Does the term ‘financial assistance’ in Article 4(3) of Regulation No 833/2014 include the processing of a payment by a bank or other financial institution?Does Article 5 of Regulation No 833/2014 prohibit the issuing of, or other dealings with, Global Depositary Receipts (‘GDRs’) issued on or after 12 September 2014 under a deposit agreement with one of the entities listed in Annex VI, in respect of shares in one of those entities which were issued before 12 September 2014?If the Court considers that there is a lack of clarity which can appropriately be resolved by the Court providing further guidance, what is the correct interpretation of the terms “shale” and “waters deeper than 150 metres” in Article 4 of Decision 2014/512 and Article 3 and 3a of Regulation No 833/2014? In particular, if the Court considers it necessary and appropriate, can it provide a geological interpretation of the term “shale” to be used in implementing the regulation, and clarify whether the measurement of “waters deeper than 150 metres” is to be taken from the point of drilling or elsewhere?’ The request to have the written procedure reopened 39By document lodged on 10 August 2016, Rosneft requested the reopening of the oral procedure.40In support of that request, Rosneft argues, first, that the analysis carried out in this case by the Advocate General, in his Opinion of 31 May 2016, is in error with respect to the obligation incumbent on the Council to state reasons for the adoption of the restrictive measures at issue. That analysis also reveals a misunderstanding of the differences that exist between those restrictive measures and those adopted by the European Union in relation to the Iranian nuclear programme and it is therefore necessary that the Court seek further information on that subject. Further, the Advocate General’s analysis of the concept of ‘legislative acts’, within the meaning of Article 31 TEU, differs in its approach from that recommended in the Opinion of Advocate General Wahl in the case that gave rise to the judgment of 19 July 2016, H v Council and Commission (C‑455/14 P, EU:C:2016:212), delivered after the date of the oral hearing in the present case. Last, the oral procedure should be re-opened since both the jurisdiction of the Court and the enforceability of its judgments are likely to change rapidly following the result of the referendum which took place on 23 June 2016 in the United Kingdom on that State’s membership of the European Union.41It is a matter of settled case‑law that the Court may, of its own motion, on a proposal from the Advocate General, or at the request of the parties, order the reopening of the oral procedure under Article 83 of its Rules of Procedure, if it considers that it lacks sufficient information or that the case must be decided on the basis of an argument which has not been debated between the parties (judgment of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 19 and the case-law cited). However, the Statute of the Court of Justice of the European Union and the Rules of Procedure of the Court make no provision for parties to submit observations in response to the Advocate General’s Opinion (judgment of 16 December 2010, Stichting Natuur en Milieu and Others, C‑266/09, EU:C:2010:779, paragraph 28 and the case-law cited).42As regards the observations of Rosneft on the arguments contained in the Opinion of the Advocate General in the present case, it must be noted that those observations consist, primarily, in criticism of that Opinion. However, it follows from the case-law cited in the preceding paragraph that there is no provision in the texts governing procedure before the Court for the lodging of such observations.43As regards, further, the request to reopen the oral procedure because of the referendum of 23 June 2016 in the United Kingdom on that State’s membership of the European Union, Rosneft fails to explain how that event could, in itself, affect the jurisdiction of the Court or the binding nature of its judgments.44That being so, the Court considers, having heard the Advocate General, that it has, in this case, all the information necessary to enable it to reply to the questions put by the referring court, and that all the arguments required for the decision on this case have been debated by the parties.45The application for the oral procedure to be reopened must therefore be dismissed. Consideration of the questions referred Question 1 46By question 1, the referring court seeks, in essence, to ascertain whether Articles 19, 24 and 40 TEU, Article 275 TFEU, and Article 47 of the Charter must be interpreted as meaning that the Court has jurisdiction to give a preliminary ruling, under Article 267 TFEU, on the validity of an act adopted on the basis of provisions relating to the CFSP, such as Decision 2014/512.47Before giving a ruling on the substance of that question, the Court must examine the objections, made by a number of the interested parties, in respect of the question’s admissibility.48The Estonian and Polish Governments and the Council consider that Question 1 is inadmissible. They contend that the referring court has not explained the connection between that question and the legal proceedings at the national level, and are sceptical as to whether an answer to that question is necessary. Further, the Council argues that questions raised in the dispute in the main proceedings can be resolved in the light of Regulation No 833/2014 alone, there being no need to give a ruling on the validity of Decision 2014/512.49In that regard, it must be borne in mind that when a question on the validity of a measure adopted by the institutions of the European Union is raised before a national court or tribunal, it is for that court or tribunal to decide whether a preliminary ruling on the matter is necessary to enable it to give judgment and consequently whether it should ask the Court to rule on that question. Consequently, where the questions referred by the national court or tribunal concern the validity of a provision of EU law, the Court is, as a general rule, obliged to give a ruling (judgment of 3 June 2008, Intertanko and Others, C‑308/06, EU:C:2008:312, paragraph 31 and the case-law cited).50The Court may refuse to give a ruling on a question referred by a national court for a preliminary ruling, under Article 267 TFEU, only where, for instance, the requirements concerning the content of a request for a preliminary ruling, set out in Article 94 of the Rules of Procedure, are not satisfied or where it is quite obvious that the interpretation of a provision of European Union law, or the assessment of its validity, which is sought by the national court bears no relation to the actual facts of the main action or to its purpose or where the problem is hypothetical (see, to that effect, judgments of 10 December 2002, British American Tobacco (Investments) and Imperial Tobacco, C‑491/01, EU:C:2002:741, paragraph 35; of 5 July 2016, Ognyanov, C‑614/14, EU:C:2016:514, paragraph 19, and of 15 November 2016, Ullens de Schooten, C‑268/15, EU:C:2016:874, paragraph 54).51In this case, it is clear from the order for reference that the validity of certain provisions of Decision 2014/512 is challenged by Rosneft in the procedure at issue in the main proceedings. According to the referring court, the arguments made before it related, inter alia, to the proposition that, if the Court does not have jurisdiction to give a ruling on the validity of that decision, it is for the national court to ensure that there exist legal remedies sufficient to ensure effective judicial protection in the field of the CFSP, in accordance with the second subparagraph of Article 19(1) TEU.52Since the referring court considers that the analysis of its own jurisdiction must depend on that of the Court, the first question, which concerns the jurisdiction of the Court, has a direct connection to the subject matter of the main proceedings.53Further, it is clear that, if the Court were to examine solely the questions raised in the main proceedings in the light of Regulation No 833/2014, that would be likely to provide an inadequate answer to the concerns of the referring court with respect to the validity of the relevant restrictive measures.54The referring court considers that were decisions of the Council adopted within the framework of the CFSP not to be open to challenge, that could undermine the fundamental right of access to justice, and states that it is a requirement of Article 19 TEU that effective judicial protection be ensured in the fields covered by EU law.55Accordingly, since a prerequisite for the validity of a regulation adopted on the basis of Article 215 TFEU is the prior adoption of a valid decision in accordance with the provisions relating to the CFSP, the question of the validity of Decision 2014/512 is clearly relevant in the context of the present case.56It should be recalled, further, that the Member States must, pursuant to Article 29 TEU, ensure that their national policies conform to the Union position adopted under the CFSP. It follows that were Regulation No 833/2014 to be declared invalid, that would, as a matter of principle, have no effect on the obligation of Member States to ensure that their national policies conform to the restrictive measures established pursuant to Decision 2014/512. Accordingly, to the extent that the Court has jurisdiction to examine the validity of Decision 2014/512, such an examination is required in order to determine the scope of the obligations resulting from that decision, irrespective of whether Regulation No 833/2014 is valid.57It follows from all the foregoing that the first question submitted by the referring court is admissible.58The United Kingdom Government, the Czech, Estonian, French and Polish Governments, and the Council consider that, pursuant to the last sentence of the second subparagraph of Article 24(1) TEU and Article 275 TFEU, the Court does not have jurisdiction to give a preliminary ruling on the validity of Decision 2014/512.59According to the Commission, Article 24(1) TEU and Article 275 TFEU do not preclude the Court from also having jurisdiction to rule on the validity of Decision 2014/512 in the context of a request for a preliminary ruling. However, if the Court is to have jurisdiction in such a situation, it is necessary, first, that the applicant in the main proceedings who brings an action before the national court satisfies the conditions laid down in the fourth paragraph of Article 263 TFEU and, second, that the aim of the proceedings is to examine the legality of restrictive measures against natural or legal persons. The Commission considers that, in this case, those conditions are not met.60As a preliminary point, while, pursuant to the last sentence of the second subparagraph of Article 24(1) TEU and the first paragraph of Article 275 TFEU, the Court does not, as a general rule, have jurisdiction with respect to the provisions relating to the CFSP and the acts adopted on the basis of those provisions (see judgment of 19 July 2016, H v Council and Commission, C‑455/14 P, EU:C:2016:569, paragraph 39), it must however be recalled that the Treaties explicitly establish two exceptions to that rule. First, both the last sentence of the second subparagraph of Article 24(1) TEU and the second paragraph of Article 275 TFEU provide that the Court has jurisdiction to monitor compliance with Article 40 TEU. Second, the last sentence of the second subparagraph of Article 24(1) TEU confers on the Court jurisdiction to review the legality of certain decisions referred to in the second paragraph of Article 275 TFEU. The latter provision confers on the Court jurisdiction to give rulings on actions, brought subject to the conditions laid down in the fourth paragraph of Article 263 TFEU, concerning the review of the legality of Council decisions, adopted on the basis of provisions relating to the CFSP, which provide for restrictive measures against natural or legal persons.61Accordingly, the view can be taken that Question 1 encompasses, in essence, two issues. First, the question seeks to determine whether the Court has jurisdiction to monitor, pursuant to a request for a preliminary ruling submitted by a national court or tribunal under Article 267 TFEU, compliance, by the Council, with Article 40 TEU when the Council adopted Decision 2014/512. Second, the aim of the question is to ascertain whether the Court has jurisdiction to review the legality of restrictive measures against natural or legal persons, the adoption of those measures being prescribed by that decision, not only where those persons bring an action for the annulment of those measures before the Courts of the European Union, under Articles 256 and 263 TFEU, but also in circumstances where the Court is seised, under the preliminary ruling procedure provided for in Article 267 TFEU, of a request by a national court or tribunal which has doubts as to the validity of such measures.62In that regard, with respect, in the first place, to the jurisdiction of the Court to monitor compliance with Article 40 TEU, it must be observed that the Treaties do not make provision for any particular means by which such judicial monitoring is to be carried out. That being the case, that monitoring falls within the scope of the general jurisdiction that Article 19 TEU confers on the Court to ensure that in the interpretation and application of the Treaties the law is observed. In establishing this general jurisdiction, Article 19(3)(b) TEU states, further, that the Court is to give preliminary rulings, at the request of national courts or tribunals, on, inter alia, the validity of acts adopted by the institutions of the European Union.63Consequently, the Court has jurisdiction to give a ruling on a request for a preliminary ruling concerning the compliance of Decision 2014/512 with Article 40 TEU.64In the second place, the issue arises whether the Court has jurisdiction to give preliminary rulings on the validity of decisions adopted in relation to the CFSP, such as Decision 2014/512, where they prescribe restrictive measures against natural or legal persons.65In accordance with the wording of the last sentence of the second subparagraph of Article 24(1) TEU and the second paragraph of Article 275 TFEU, the Treaties have conferred on the Court the jurisdiction to review the legality of Council decisions providing for the imposition of restrictive measures on natural or legal persons. Accordingly, whereas Article 24(1) TEU empowers the Court to review the legality of certain decisions as provided for in the second paragraph of Article 275 TFEU, the latter article provides that the Court has jurisdiction to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 TFEU, concerning that review of legality.66The review of the legality of acts of the Union that the Court is to ensure under the Treaties relies, in accordance with settled case-law, on two complementary judicial procedures. The FEU Treaty has established, by Articles 263 and 277, on the one hand, and Article 267, on the other, a complete system of legal remedies and procedures designed to ensure judicial review of the legality of European Union acts, and has entrusted such review to the Courts of the European Union (judgments of 23 April 1986, Les Verts v Parliament, 294/83, EU:C:1986:166, paragraph 23; of 25 July 2002, Unión de Pequeños Agricultores v Council, C‑50/00 P, EU:C:2002:462, paragraph 40, and of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraph 92).67It is inherent in that complete system of legal remedies and procedures that persons bringing proceedings must, when an action is brought before a national court or tribunal, have the right to challenge the legality of provisions contained in European Union acts on which a decision or national measure adopted in respect of them is based, pleading the invalidity of that decision or measure, in order that the national court or tribunal, having itself no jurisdiction to declare such invalidity, consults the Court on that matter by means of a reference for a preliminary ruling, unless those persons unquestionably had the right to bring an action against those provisions on the basis of Article 263 TFEU and failed to exercise that right within the period prescribed (see, to that effect, judgments of 15 February 2001, Nachi Europe, C‑239/99, EU:C:2001:101, paragraphs 35 and 36, and of 29 June 2010, E and F, C‑550/09, EU:C:2010:382, paragraphs 45 and 46).68Accordingly, requests for preliminary rulings which seek to ascertain the validity of a measure constitute, like actions for annulment, a means for reviewing the legality of European Union acts (see judgments of 22 October 1987, Foto-Frost, 314/85, EU:C:1987:452, paragraph 16; of 21 February 1991, Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest, C‑143/88 and C‑92/89, EU:C:1991:65, paragraph 18; of 6 December 2005, ABNA and Others, C‑453/03, C‑11/04, C‑12/04 and C‑194/04, EU:C:2005:741, paragraph 103, and of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraph 95).69That essential characteristic of the system for judicial protection in the European Union extends to the review of the legality of decisions that prescribe the adoption of restrictive measures against natural or legal persons within the framework of the CFSP.70Neither the EU Treaty nor the FEU Treaty indicates that an action for annulment brought before the General Court, pursuant to the combined provisions of Articles 256 and 263 TFEU, constitutes the sole means for reviewing the legality of decisions providing for restrictive measures against natural or legal persons, to the exclusion, in particular, of a reference for a preliminary ruling on validity. In that regard, the last sentence of the second subparagraph of Article 24(1) TEU refers to the second paragraph of Article 275 TFEU in order to determine not the type of procedure under which the Court may review the legality of certain decisions, but rather the type of decisions whose legality may be reviewed by the Court, within any procedure that has as its aim such a review of legality.71However, given that the implementation of a decision providing for restrictive measures against natural or legal persons is in part the responsibility of the Member States, a reference for a preliminary ruling on the validity of a measure plays an essential part in ensuring effective judicial protection, particularly, where, as in the main proceedings, both the legality of the national implementing measures and the legality of the underlying decision adopted in the field of the CFSP itself are challenged within national legal proceedings. Having regard to the fact that the Member States must ensure that their national policies conform to the Union position enshrined in Council decisions, adopted under Article 29 TEU, access to judicial review of those decisions is indispensable where those decisions prescribe the adoption of restrictive measures against natural or legal persons.72As is apparent from both Article 2 TEU, which is included in the common provisions of the EU Treaty, and Article 21 TEU, concerning the European Union’s external action, to which Article 23 TEU, relating to the CFSP, refers, one of the European Union’s founding values is the rule of law (see, to that effect, judgment of 19 July 2016, H v Council and Commission, C‑455/14 P, EU:C:2016:569, paragraph 41 and the case-law cited).73It may be added that Article 47 of the Charter, which constitutes a reaffirmation of the principle of effective judicial protection, requires, in its first paragraph, that any person whose rights and freedoms guaranteed by EU law are violated should have the right to an effective remedy before a tribunal in compliance with the conditions laid down in that article. It must be recalled that the very existence of effective judicial review designed to ensure compliance with provisions of EU law is of the essence of the rule of law (see judgments of 18 December 2014, Abdida, C‑562/13, EU:C:2014:2453, paragraph 45, and of 6 October 2015, Schrems, C‑362/14, EU:C:2015:650, paragraph 95).74While, admittedly, Article 47 of the Charter cannot confer jurisdiction on the Court, where the Treaties exclude it, the principle of effective judicial protection nonetheless implies that the exclusion of the Court’s jurisdiction in the field of the CFSP should be interpreted strictly.75Since the purpose of the procedure that enables the Court to give preliminary rulings is to ensure that in the interpretation and application of the Treaties the law is observed, in accordance with the duty assigned to the Court under Article 19(1) TEU, it would be contrary to the objectives of that provision and to the principle of effective judicial protection to adopt a strict interpretation of the jurisdiction conferred on the Court by the second paragraph of Article 275 TFEU, to which reference is made by Article 24(1) TEU (see, by analogy, judgments of 27 February 2007, Gestoras Pro Amnistía and Others v Council, C‑354/04 P, EU:C:2007:115, paragraph 53; of 27 February 2007, Segi and Others v Council, C‑355/04 P, EU:C:2007:116, paragraph 53; of 24 June 2014, Parliament v Council, C‑658/11, EU:C:2014:2025, paragraph 70; of 12 November 2015, Elitaliana v Eulex Kosovo, C‑439/13 P, EU:C:2015:753, paragraph 42, and of 19 July 2016, H v Council and Commission, C‑455/14 P, EU:C:2016:569, paragraph 40).76In those circumstances, provided that the Court has, under Article 24(1) TEU and the second paragraph of Article 275 TFEU, jurisdiction ex ratione materiae to rule on the validity of European Union acts, that is, in particular, where such acts relate to restrictive measures against natural or legal persons, it would be inconsistent with the system of effective judicial protection established by the Treaties to interpret the latter provision as excluding the possibility that the courts and tribunals of Member States may refer questions to the Court on the validity of Council decisions prescribing the adoption of such measures.77Last, the Court must reject the argument that it falls to national courts and tribunals alone to ensure effective judicial protection if the Court has no jurisdiction to give preliminary rulings on the validity of decisions in the field of the CFSP that prescribe the adoption of restrictive measures against natural or legal persons.78The necessary coherence of the system of judicial protection requires, in accordance with settled case-law, that when the validity of acts of the European Union institutions is raised before a national court or tribunal, the power to declare such acts invalid should be reserved to the Court under Article 267 TFEU (see, to that effect, judgments of 22 October 1987, Foto-Frost, 314/85, EU:C:1987:452, paragraph 17, and of 6 October 2015, Schrems, C‑362/14, EU:C:2015:650, paragraph 62). The same conclusion is imperative with respect to decisions in the field of the CFSP where the Treaties confer on the Court jurisdiction to review their legality.79Moreover, the Court is best placed to give a ruling on the validity of acts of the Union, given that it is open to the Court, within the preliminary ruling procedure, on the one hand, to obtain the observations of Member States and the institutions of the Union whose acts are challenged and, on the other, to request that Member States and the institutions, bodies or agencies of the Union which are not parties to the proceedings provide all the information that the Court considers necessary for the purposes of the case before it (see, to that effect, judgment of 22 October 1987, Foto-Frost, 314/85, EU:C:1987:452, paragraph 18).80That conclusion is confirmed by the essential objective of Article 267 TFEU, which is to ensure that EU law is applied uniformly by the national courts and tribunals, that objective being equally vital both for the review of legality of decisions prescribing the adoption of restrictive measures against natural or legal persons and for other European Union acts. With respect to such decisions, differences between courts or tribunals of the Member States as to the validity of a European Union act would be liable to jeopardise the very unity of the European Union legal order and to undermine the fundamental requirement of legal certainty (see, by analogy, judgments of 22 February 1990, Busseni, C‑221/88, EU:C:1990:84, paragraph 15; of 6 December 2005, Gaston Schul Douane‑expediteur, C‑461/03, EU:C:2005:742, paragraph 21, and of 21 December 2011, Air Transport Association of America and Others, C‑366/10, EU:C:2011:864, paragraph 47).81In the light of the foregoing, the answer to Question 1 is that Articles 19, 24 and 40 TEU, Article 275 TFEU, and Article 47 of the Charter must be interpreted as meaning that the Court has jurisdiction to give preliminary rulings, under Article 267 TFEU, on the validity of an act adopted on the basis of provisions relating to the CFSP, such as Decision 2014/512, provided that the request for a preliminary ruling relates either to the monitoring of that decision’s compliance with Article 40 TEU, or to reviewing the legality of restrictive measures against natural or legal persons. Question 2(a) 82By question 2(a), the referring court seeks a ruling from the Court on the validity of Article 1(2)(b) to (d) and (3) and Articles 4, 4a and 7 of, and Annex III to, Decision 2014/512, and of Articles 3, 3a, Article 4(3) and (4), Article 5(2)(b) to (d) and (3), and Article 11 of, and Annexes II and VI to, Regulation No 833/2014.83It is apparent from the order for reference and from Rosneft’s written observations that Rosneft challenges the validity of those provisions on a number of grounds, the first being that the adoption of Decision 2014/512 was in breach of Article 40 TEU. The second ground is that those provisions are incompatible with the EU‑Russia Partnership Agreement. The third ground is that the Council, when it adopted those provisions, failed to respect the obligation to state reasons, the rights of the defence, the right to effective judicial protection and the right of access to the file. Rosneft’s fourth ground is that there was a breach of the principle of equal treatment. The fifth and sixth grounds are respectively that the provisions at issue in the main proceedings are invalid because of the Council’s misuse of powers and because the wording of Decision 2014/512 is contradicted by that of Regulation No 833/2014. The seventh ground is that the Council infringed the principle of proportionality and the fundamental rights on which Rosneft can rely, in particular its freedom to conduct business and its right to property.84Rosneft considers that the Council infringed Article 40 TEU when it defined, by means of Decision 2014/512, the Union position on the restrictive measures at issue in the main proceedings in excessive detail, thereby encroaching on the joint power of proposal of the High Representative of the Union for Foreign Affairs and Security Policy (‘the High Representative’) and the Commission.85As regards acts adopted on the basis of a provision relating to the CFSP, it is the task of the Court to ensure, in particular, under the first clause of the second paragraph of Article 275 TFEU and under Article 40 TEU, that the implementation of that policy does not impinge upon the application of the procedures and the extent of the powers of the institutions laid down by the Treaties for the exercise of the Union’s competences under the FEU Treaty (judgment of 14 June 2016, Parliament v Council, C‑263/14, EU:C:2016:435, paragraph 42).86In order to ascertain whether or not the adoption of Decision 2014/512 by the Council, under Article 29 TEU, a provision relating to the CFSP, encroaches on the powers and procedures provided under the FEU Treaty, the Court must examine the content of that decision in the light of the powers and procedures provided for in Article 215 TFEU.87It is clear, in that regard, that the content of Decision 2014/512 is certainly detailed. However, the objective of that decision was to introduce, as stated in recital 7, targeted restrictive measures concerning fields that are clearly technical in nature, such as access to capital markets, defence, dual-use goods and sensitive technologies, particularly in the energy sector.88It is apparent from Articles 24 and 29 TEU that, as a general rule, the Council is called upon, acting unanimously, to determine the persons and entities that are to be subject to the restrictive measures that the Union adopts in the field of the CFSP. Taking account of the wide scope of the aims and objectives of the CFSP, as set out in Article 3(5) TEU and Article 21 TEU and in the specific provisions relating to the CFSP, in particular, in Articles 23 and 24 TEU, the Council has a broad discretion in determining such persons and entities.89However, Article 215 TFEU, which serves as a bridge between the objectives of the EU Treaty in matters of the CFSP and the actions of the Union involving economic measures falling within the scope of the FEU Treaty (see, to that effect, judgment of 19 July 2012, Parliament v Council, C‑130/10, EU:C:2012:472, paragraph 59), permits the adoption of legislation by the Council, acting by a qualified majority on a joint proposal from the High Representative and the Commission, in order to give effect to restrictive measures where such measures fall within the scope of the FEU Treaty, and, in particular, to ensure their uniform application in all the Member States. With respect to Regulation No 833/2014, while it essentially reproduces the content of Decision 2014/512, it also contains definitions and clarification on the application of the restrictive measures prescribed by that decision.90Having regard to the different functions of those two types of act, the one declaring the Union’s position with respect to the restrictive measures to be adopted and the other constituting the instrument giving effect to those measures at Union level, the fact that a decision, adopted by the Council under Article 29 TEU, describes in detail the persons and entities that are to be subject to the restrictive measures cannot, as a general rule, be regarded as encroaching on the procedure, laid down in Article 215 TFEU, for the implementation of that decision. In particular, when the measures relate to a field where there is a degree of technicality, it may prove to be appropriate for the Council to use detailed wording when establishing restrictive measures. In such circumstances, the Council cannot be criticised for having predetermined, by the adoption of Decision 2014/512, part of the content of Regulation No 833/2014.91As regards, further, Rosneft’s argument that Decision 2014/512 does not comply with Article 40 TEU since that decision constitutes a ‘legislative act’, within the meaning of Articles 24 and 31 TEU, which preclude the adoption of such acts in CFSP matters, that argument must also be rejected. Article 289(3) TFEU provides that legal acts adopted by legislative procedure constitute legislative acts. The exclusion of the right to adopt legislative acts in the area of the CFSP reflects the intention that that policy should be subject to specific rules and procedures, as is clear from Article 24 TEU. Since those rules and procedures, defined by, inter alia, the provisions relating to the CFSP within Title V, Chapter 2, of the EU Treaty, establish a specific division of tasks among the institutions of the Union in that field, it follows that the adoption of legislative acts, within the meaning of Article 289(3) TFEU, is, in that context, necessarily excluded.92It is, however, common ground that Decision 2014/512 was adopted not under the FEU Treaty, but following the procedure laid down in Article 24 TEU. That decision is therefore not capable of being a legislative act. Consequently, in adopting that decision, the Council could not have infringed Article 40 TEU.93In the light of the foregoing, there is no reason to find that the determination by Decision 2014/512 of the persons and entities subject to the restrictive measures undermines the procedure provided for in Article 215 TFEU and the exercise of powers that that article confers on the High Representative and the Commission. That being the case, an examination of Decision 2014/512 in the light of Article 40 TEU has disclosed nothing capable of affecting the validity of that decision.94The Council submits that the Court has no jurisdiction to review the legality of the provisions of Decision 2014/512 and Regulation No 833/2014, since the essential objective of the claims of illegality relied on by Rosneft is to challenge the decision of principle taken by the Union to effect a partial interruption of its economic and financial relations with Russia. Similarly, the United Kingdom Government, the Estonian, French and Polish Governments, and the Commission dispute the argument that Decision 2014/512 contains restrictive measures against natural or legal persons, since, in their opinion, the measures contained in that decision apply to situations that are objectively determined and to a category of persons that is described in a general manner.95The Court must examine whether the provisions of Decision 2014/512 prescribe restrictive measures against natural or legal persons, within the meaning of the second paragraph of Article 275 TFEU.96As regards, in the first place, Articles 4 and 4a of Decision 2014/512, it is clear that those articles provide, on the one hand, for a system of prior authorisation for the sale, supply, transfer or export of certain technologies suited to specific categories of oil exploration and production projects in Russia and, on the other, a prohibition on the provision of associated services necessary for those projects.97Accordingly, those articles prescribe measures the scope of which is determined by reference to objective criteria, in particular, categories of oil exploration and production projects. On the other hand, those measures do not target identified natural or legal persons, but are applicable generally to all operators involved in the sale, supply, transfer or export of certain technologies that are subject to the prior authorisation requirement and to all the suppliers of associated services.98In those circumstances, as also stated by the Advocate General in point 85 of his Opinion, the measures provided for in Articles 4 and 4a of Decision 2014/512 do not constitute restrictive measures against natural or legal persons within the meaning of the second paragraph of Article 275 TFEU, but rather measures of general application.99Consequently, the Court has no jurisdiction to review the validity of those provisions.100In the second place, as regards the restrictive measures introduced pursuant to the other provisions of Decision 2014/512 that are at issue, namely Article 1(2)(b) to (d) and (3), Article 7 and Annex III, it is clear that the persons and entities subject to those measures are defined by reference to specific entities. Those provisions prohibit, inter alia, the carrying out of various financial transactions with respect to entities listed in Annex III to that decision, one of those entities being Rosneft.101In the opinion of the United Kingdom Government, the fact that there are only three energy undertakings which fall within the scope of those measures does not, however, mean that those measures target specified natural or legal persons within the meaning of the second paragraph of Article 275 TFEU. In particular, the fact that few such entities are listed, due to the very limited number of operators present in the sector of the Russian energy market concerned that can be characterised as an oligopoly, does not alter the fact that the restrictions are based on objective criteria. The entities listed in Annex III to Decision 2014/512 are those to whom those objective criteria apply, and that list is purely declaratory.102In that regard, it is necessary to bear in mind the Court’s settled case‑law that restrictive measures resemble both measures of general application, in that they impose on a category of addressees determined in a general and abstract manner a prohibition on making available funds and economic resources to entities listed in their annexes, and also individual decisions affecting those entities (see, to that effect, judgments of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 241 to 244, and of 23 April 2013, Gbagbo and Others v Council, C‑478/11 P to C-482/11 P, EU:C:2013:258, paragraph 56).103It must, moreover, be recalled that, as regards measures adopted on the basis of provisions relating to the CFSP, it is the individual nature of those measures which, in accordance with the second paragraph of Article 275 TFEU, permits access to the Courts of the European Union (see, to that effect, judgment of 23 April 2013, Gbagbo and Others v Council, C‑478/11 P to C‑482/11 P, EU:C:2013:258, paragraph 57).104In the main proceedings, by establishing the criteria laid down in Article 1(2)(b) to (d) of Decision 2014/512, allowing the identification of Rosneft, and by naming that company in Annex III to that decision, the Council adopted restrictive measures against the legal person concerned. Notwithstanding the fact that such measures may also target, individually, other entities in a particular industry in a non-Member State, the fact remains that it follows from the nature of those measures, as described in paragraphs 102 and 103 of this judgment, that, if the legality of those measures is challenged, it must be possible for those measures to be subject, in accordance with the second paragraph of Article 275 TFEU, to judicial review.105Last, the Court must reject the argument, advanced in particular by the Council, that the Court has no jurisdiction to review the legality of the provisions of Regulation No 833/2014 since the aim of the pleas of illegality raised by Rosneft is essentially to challenge the decisions of principle, falling entirely within the field of the CFSP, that the Council adopted by means of Decision 2014/512.106In that regard, it must be held, as stated by the Advocate General in point 103 of his Opinion, that the jurisdiction of the Court is in no way restricted with respect to a regulation, adopted on the basis of Article 215 TFEU, which gives effect to the positions adopted by the Union in the context of the CFSP. Such regulations constitute European Union acts, adopted on the basis of the FEU Treaty, and the Courts of the European Union must, in accordance with the powers conferred on them by the Treaties, ensure the review, in principle the full review, of the legality of those acts (see judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraph 326).107In the light of the foregoing, the Court has jurisdiction to rule on the validity of Article 1(2)(b) to (d) and (3) and Article 7 of, and Annex III to, Decision 2014/512. However, the Court does not have jurisdiction to review the validity of Articles 4 and 4a of that decision. As regards Regulation No 833/2014, the Court has jurisdiction to review the validity of all the provisions mentioned by the referring court in the request for a preliminary ruling. Within those limits on its jurisdiction, the Court must examine the validity of the provisions cited by the referring court.108It is apparent from the order for reference and from the observations submitted by Rosneft that it considers that certain provisions of the contested acts relating to the oil sector and to securities and lending, namely Article 1(2)(b) to (d) and (3) of, and Annex III to, Decision 2014/512, as well as Article 3(1), (3) and (5), Article 3a(1), and Article 5(2)(b) to (d) and (3) of, and Annexes II and VI to, Regulation No 833/2014, are in breach of the EU-Russia Partnership Agreement.109In that regard, contrary to the argument put forward by the United Kingdom Government, the Council and the Commission, the possibility for a litigant to rely on the provisions of that agreement cannot be automatically ruled out, even where no further implementing measures have been adopted (see, to that effect, judgment of 12 April 2005, Simutenkov, C‑265/03, EU:C:2005:213, paragraph 23), as also stated by the Advocate General in point 116 of his Opinion.110However, there is no need, in this case, to give a ruling on that question, since it suffices to state that, even if the restrictive measures at issue in the main proceedings were not compatible with certain provisions of that agreement, Article 99 of that agreement permits their adoption.111Under Article 99(1)(d) of the EU-Russia Partnership Agreement, nothing in that agreement is to prevent a party from taking measures that it considers necessary for the protection of its essential security interests, particularly in time of war or serious international tension constituting a threat of war or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security.112Further, the wording of that provision does not require that the ‘war’ or ‘serious international tension constituting a threat of war’ refer to a war directly affecting the territory of the European Union. Accordingly, events which take place in a country bordering the European Union, such as those which have occurred in Ukraine and which have given rise to the restrictive measures at issue in the main proceedings, are capable of justifying measures designed to protect essential European Union security interests and to maintain peace and international security, in accordance with the specified objective, under the first subparagraph of Article 21(1) and Article 21(2)(c) TEU, of the Union’s external action, with due regard to the principles and purposes of the Charter of the United Nations.113As regards the question whether the adoption of the restrictive measures at issue in the main proceedings was necessary for the protection of essential European Union security interests and the maintenance of peace and international security, it must be borne in mind that the Council has a broad discretion in areas which involve the making by that institution of political, economic and social choices, and in which it is called upon to undertake complex assessments (judgment of 1 March 2016, National Iranian Oil Company v Council, C‑440/14 P, EU:C:2016:128, paragraph 77 and the case-law cited).114As stated by the Advocate General in point 150 of his Opinion, at the time when the restrictive measures at issue in the main proceedings were adopted, the Council stated, in the preambles of the contested acts, that the Heads of State or Government of the European Union condemned the unprovoked infringement of Ukrainian sovereignty and territorial integrity by the Russian Federation, that the Council urged the Russian Federation actively to use its influence over the illegally armed groups in order, inter alia, to permit full, immediate, safe and secure access to the site of the downing of the Malaysia Airlines flight MH17 in Donetsk (Ukraine), and that the Union had previously adopted measures in response to the illegal annexation of the Crimea and Sebastopol (Ukraine). In view of those factors, the Council concluded, in recital 8 of Decision 2014/512, that the situation remained grave and that it was appropriate to adopt restrictive measures in response to the Russian Federation’s actions destabilising the situation in Ukraine.115Further, as is stated in recital (2) of Regulation No 833/2014, it is apparent from those statements that the aim of the restrictive measures prescribed by the contested acts was to promote a peaceful settlement of the crisis in Ukraine. That objective is consistent with the objective of maintaining peace and international security, in accordance with the objectives of the Union’s external action set out in Article 21 TEU.116In those circumstances, taking into consideration the broad discretion enjoyed by the Council in this area, that institution could take the view that the adoption of the restrictive measures at issue in the main proceedings was necessary for the protection of essential European Union security interests and for the maintenance of peace and international security, within the meaning of Article 99 of the EU‑Russia Partnership Agreement.117Consequently, an examination of the contested acts in the light of that agreement has disclosed nothing capable of affecting their validity.118It is apparent from the order for reference that, in Rosneft’s opinion, the Council was in breach of its obligation under the second subparagraph of Article 296 TFEU to state reasons for the contested acts.119In that regard, it should be noted that, while the restrictive measures concerning the oil sector, established by Articles 3 and 3a and Article 4(3) and (4) of, and Annex II to, Regulation No 833/2014, constitute acts of general application, it is apparent from, in particular, paragraph 100 of the present judgment that the provisions cited by the referring court relating to securities and lending, namely Article 1(2)(b) to (d) and (3) of, and Annex III to, Decision 2014/512, and Article 5(2)(b) to (d) and (3) of, and Annex VI to, Regulation No 833/2014, target individual entities.120It must, however, be recalled that, in accordance with settled case-law, the extent of the requirement to state reasons depends on the nature of the measure in question, and that, in the case of measures intended to have general application, the statement of reasons may be limited to indicating the general situation which led to the measure’s adoption, on the one hand, and the general objectives which it is intended to achieve, on the other (judgment of 19 November 1998, Spain v Council, C‑284/94, EU:C:1998:548, paragraph 28 and the case-law cited).121As regards restrictive measures affecting individuals, respect for the rights of the defence and the right to effective judicial protection requires that the competent Union authority disclose to the individual concerned the evidence against that person available to that authority and which is relied on as the basis of its decision (judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 111).122That said, while the statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review, that statement of reasons must, however, be adapted to the nature of the act at issue and to the context in which it was adopted. In that regard, it is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question and, in particular, in the light of the interest which the addressees of the measure may have in obtaining explanations. Consequently, the reasons given for a measure adversely affecting a person are sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (see, to that effect, judgment of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraphs 50, 53 and 54, and the case‑law cited).123It is clear that recitals 1 to 8 of Decision 2014/512 set out the relevant factors of the political context within which the restrictive measures at issue were adopted. Further, it is apparent from recital 2 of Regulation No 833/2014 that the declared objective of the contested acts was to increase the costs of the actions of the Russian Federation designed to undermine Ukraine’s territorial integrity, sovereignty and independence and to promote a peaceful settlement of the crisis. The contested acts accordingly describe the overall situation that led to their adoption and the general objectives they were intended to achieve.124Likewise, the Court must hold, as stated by the Advocate General in points 158 and 159 of his Opinion, that Rosneft, a major player in the Russian oil sector, whose share capital, on the date of adoption of Decision 2014/512, was predominantly owned by the Russian State, could not reasonably have been unaware of the reasons why the Council adopted measures targeted against it. In accordance with the objective of increasing the costs of the actions of the Russian Federation vis‑à‑vis Ukraine, Article 1(2)(b) of Decision 2014/512 establishes restrictions against certain oil sector entities controlled by the Russian State on the basis of, inter alia, their total assets, with an estimated value of 1000 billion Russian Roubles. Since both the political background at the time of the adoption of those measures and the importance of the oil sector for the Russian economy were also well known, the fact that the Council chose to adopt restrictive measures against the players in that industry can be readily understood in the light of the declared objective of those acts.125Consequently, the Council has, in this case, stated reasons for the contested acts that are sufficient.126In addition, Rosneft has argued before the referring court that there was an infringement of its right of access to the file and of its rights of defence and right to effective judicial protection. In that regard, it is clear from the written observations lodged with the Court that Rosneft submitted, to the Council, requests for access to documents, seeking, in particular, access to the file in order to be able to state its case in the action before the General Court for annulment of the restrictive measures at issue in the main proceedings. According to Rosneft, the Council was under an obligation to grant it access to all non‑confidential official documents concerning those measures on the basis of, inter alia, Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (OJ 2001 L 145, p. 43) and the case-law stemming from paragraphs 59 and 60 of the judgment of 28 November 2013, Council v Fulmen and Mahmoudian (C‑280/12 P, EU:C:2013:775), case-law which relates to respect for the rights of the defence, including the right of access to the file, subject to legitimate interests in maintaining confidentiality, and the right to effective judicial protection. The Council responded to those requests by granting partial access to the documents requested.127However, although Rosneft claims, in that regard, both an infringement of the rights of the defence and of the right to effective judicial protection and also an additional infringement of the obligation to state reasons, it is clear that the arguments that Rosneft puts forward are predominantly intended to challenge the validity of the decisions whereby the Council refused, on the basis of Regulation No 1049/2001, to grant it full access to all the documents requested.128As regards those decisions by the Council, adopted under Regulation No 1049/2001, Rosneft was the person to whom those decisions were addressed, within the meaning of the fourth paragraph of Article 263 TFEU. Since it is patent that an action by it for annulment of those decisions would have been admissible under that article, it cannot plead the invalidity of those decisions in the context of a preliminary ruling procedure (see, to that effect, judgments of 9 March 1994, TWD Textilwerke Deggendorf, C‑188/92, EU:C:1994:90, paragraphs 23 to 25; 15 February 2001, Nachi Europe, C‑239/99, EU:C:2001:101, paragraphs 36 and 37, and of 29 June 2010, E and F, C‑550/09, EU:C:2010:382, paragraph 46).129Last, while Rosneft also states that the Council ought not to have relied on Regulation No 1049/2001 when it analysed the request for access to the file, Rosneft does not, however, explain, in any way, how that error is such as to affect the validity of the provisions of the contested acts.130In the light of all the foregoing, an examination of the contested acts with regard to the obligation to state reasons, the rights of the defence, including the right of access to the file, and the right to effective judicial protection, has disclosed nothing capable of affecting the validity of those acts.131Rosneft has claimed before the referring court and in its written observations submitted to the Court that the Council infringed the principle of equal treatment when it targeted, by means of Articles 3 and 3a and Article 4(3) and (4) of, and Annex II to, Regulation No 833/2014, undertakings operating in certain parts of the oil sector but not undertakings operating in other sectors, and the declared objective of those restrictive measures does not explain or justify that difference in treatment.132As is stated in paragraph 88 of the present judgment, the Council has a broad discretion when it determines the purpose of restrictive measures, particularly where such measures prescribe, in accordance with Article 215(1) TFEU, the interruption or reduction, in whole or in part, of economic and financial relations with one or more third countries. In that regard, the Court concurs with the United Kingdom Government and holds that, with respect to the restrictive measures at issue in the main proceedings which target the oil sector, it is open to the Council, inter alia, to impose, if the Council deems it appropriate, restrictions which target undertakings active in specific sectors of the Russian economy in which products, technologies or services imported from the European Union are particularly significant. The choice of targeting undertakings or sectors that are reliant on cutting‑edge technology or expertise mainly available within the European Union is consistent with the objective of ensuring the effectiveness of the restrictive measures at issue in the main proceedings and ensuring that the effect of those measures is not offset by the importation, into Russia, of substitute products, technologies or services from third countries.133In the light of the above, an examination of the contested acts in the light of the principle of equal treatment has disclosed nothing capable of affecting the validity of those acts.134Rosneft has claimed before the referring court and in these proceedings that the Council, by adopting the restrictive measures at issue in the main proceedings, misused its powers when it stated that those measures were adopted, according to recital 2 of Regulation No 833/2014, with a view ‘to increasing the costs of Russia’s actions to undermine Ukraine’s territorial integrity, sovereignty and independence and to promoting a peaceful settlement of the crisis’, whereas the objective of those measures was, in reality, to cause long-term harm to the energy sector of the Russian Federation and thereby to reduce its power to threaten countries which depend on it for their energy supplies.135According to the Court’s settled case-law, a measure is vitiated by misuse of powers only if it appears, on the basis of objective, relevant and consistent evidence, to have been taken solely, or at the very least chiefly, for ends other than those for which the power in question was conferred or with the aim of evading a procedure specifically prescribed by the Treaties for dealing with the circumstances of the case (judgment of 16 April 2013, Spain and Italy v Council, C‑274/11 and C‑295/11, EU:C:2013:240, paragraph 33 and the case-law cited).136It is however clear that, in this case, with the exception of a reference by Rosneft, in its written observations, to a Commission Working Document, which is held to be irrelevant for the reasons stated by the Advocate General in points 180 to 182 of his Opinion, Rosneft has in no way substantiated its argument that the restrictive measures at issue in the main proceedings were adopted for ends other than those stated in the contested acts, still less provided objective, relevant and consistent evidence to that effect.137In the light of the foregoing, an examination of the question of an alleged misuse of powers by the Council has disclosed nothing capable of affecting the validity of the contested acts.138In the main proceedings, Rosneft claimed that the wording of Article 4(4) of Decision 2014/512 contradicts that of Article 3(5) of Regulation No 833/2014. While Article 4(4) does not allow the Member States any discretion with respect to the prohibition on refusing authorisations for the sale, supply, transfer or export of articles listed in Annex II to Regulation No 833/2014 with respect to contracts concluded before 1 August 2014, Article 3(5) permits them to authorise, and therefore refuse, the execution of an obligation stemming from such contracts.139As stated by Rosneft in its written observations, the wording of Article 4(4) of Decision 2014/512 differs from that of the second subparagraph of Article 3(5) of Regulation No 833/2014. Under Article 4(4) of Decision 2014/512, the prohibition imposed on the competent authorities with respect to the granting of authorisation for the sale, supply, transfer or export of certain equipment for certain categories of oil exploration and production projects ‘shall be without prejudice to the execution of contracts concluded before 1 August 2014 or ancillary contracts necessary for the execution of such contracts’.140Admittedly, the wording employed in Article 3(5) of Regulation No 833/2014 is not as categorical as that used in Decision 2014/512. That cannot however in itself entail that Article 3(5) of Regulation No 833/2014 is invalid.141Given that the objective of Regulation No 833/2014 is, in accordance with Article 215 TFEU, the adoption of measures necessary to give effect to Decision 2014/512, the terms of that regulation must be interpreted, so far as possible, in the light of that decision. In this instance, it is not obvious that the difference in wording of the two EU law instruments is such that they cannot be interpreted consistently. Accordingly, the words, in the second subparagraph of Article 3(5) of that regulation, to the effect that the competent authorities ‘may’ grant an authorisation, must be understood as meaning that those authorities must, when doing so, ensure that the application of the first subparagraph of Article 3(5) of that regulation is, inter alia, without prejudice to the execution of contracts concluded before 1 August 2014.142It follows that the difference in the wording of Article 4(4) of Decision 2014/512 and Article 3(5) of Regulation No 833/2014 cannot affect the validity of the latter provision.143According to the order for reference, Rosneft has claimed that Article 1(2)(b) to (d) and (3) and Article 7 of, and Annex III to, Decision 2014/512 as well as Articles 3 and 3a, Article 4(3) and (4), Article 5(2)(b) to (d) and (3), and Article 11 of, together with Annexes II and VI to, Regulation No 833/2014 are invalid on the ground that the restrictive measures that are imposed are disproportionate with respect to the declared objective and constitute a disproportionate interference in its freedom to conduct a business and in its right to property, enshrined, respectively, in Articles 16 and 17 of the Charter.144Referring to the judgments of 14 October 2009, Bank Melli Iran v Council (T‑390/08, EU:T:2009:401), and of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft (C‑348/12 P, EU:C:2013:776), Rosneft considers that the restrictive measures at issue in the main proceedings are neither necessary nor appropriate since there is no reasonable relationship between the aims pursued by those measures and the means for giving effect to them. Accordingly, those measures amount to a disproportionate interference in Rosneft’s freedom to conduct business.145Rosneft submits, further, that Article 7(1) of Decision 2014/512 and Article 11(1) of Regulation No 833/2014 permit the confiscation of its assets and interference with its accrued contractual rights, that is to say, with its property rights. Those provisions exceed what is necessary by providing, in essence, that non-Russian parties to contracts can be relieved of any obligations under contracts concluded with the entities that are subject to those provisions, even where the obligation involved is to supply a wide range of equipment of which only a small part relates to technologies referred to in Annex II to that regulation.146In so far as Rosneft challenges the proportionality of the general rules on the basis of which it was decided that it should be listed in the annexes to the contested acts, it must be noted, first, that, with regard to judicial review of compliance with the principle of proportionality, the Court has held that the European Union legislature must be allowed a broad discretion in areas which involve political, economic and social choices on its part, and in which it is called upon to undertake complex assessments. The Court has concluded that the legality of a measure adopted in those areas can be affected only if the measure is manifestly inappropriate having regard to the objective which the competent institution is seeking to pursue (judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 120 and the case-law cited).147Contrary to what is claimed by Rosneft, there is a reasonable relationship between the content of the contested acts and the objective pursued by them. In so far as that objective is, inter alia, to increase the costs to be borne by the Russian Federation for its actions to undermine Ukraine’s territorial integrity, sovereignty and independence, the approach of targeting a major player in the oil sector, which is moreover predominantly owned by the Russian State, is consistent with that objective and cannot, in any event, be considered to be manifestly inappropriate with respect to the objective pursued.148Second, the fundamental rights relied on by Rosneft, namely the freedom to conduct a business and the right to property, are not absolute, and their exercise may be subject to restrictions justified by objectives of public interest pursued by the European Union, provided that such restrictions in fact correspond to objectives of general interest and do not constitute, in relation to the aim pursued, a disproportionate and intolerable interference, impairing the very essence of the rights guaranteed (see, to that effect, judgments of 14 May 1974, Nold v Commission, 4/73, EU:C:1974:51, paragraph 14; of 30 July 1996, Bosphorus, C‑84/95, EU:C:1996:312, paragraph 21, and of 16 November 2011, Bank Melli Iran v Council, C‑548/09 P, EU:C:2011:735, paragraphs 113 and 114).149In that regard, it is clear, as the Court stated in the context of the implementation of the embargo against the Federal Republic of Yugoslavia (Serbia and Montenegro), that restrictive measures, by definition, have consequences which affect rights to property and the freedom to pursue a trade or business, thereby causing harm to persons who are in no way responsible for the situation which led to the adoption of the sanctions (see, to that effect, judgment of 30 July 1996, Bosphorus, C‑84/95, EU:C:1996:312, paragraph 22). That is a fortiori the case with respect to the consequences of targeted restrictive measures on the entities subject to those measures.150In the main proceedings, it must be observed that the importance of the objectives pursued by the contested acts, namely the protection of Ukraine’s territorial integrity, sovereignty and independence and the promotion of a peaceful settlement of the crisis in that country, the achievement of which, as is apparent from the factors mentioned in paragraphs 113 to 115 of the present judgment, is part of the wider objective of maintaining peace and international security, in accordance with the objectives of the Union’s external action stated in Article 21 TEU, is such as to justify the possibility that, for certain operators, the consequences may be negative, even significantly so. In those circumstances, and having regard, inter alia, to the fact that the restrictive measures adopted by the Council in reaction to the crisis in Ukraine have become progressively more severe, interference with Rosneft’s freedom to conduct a business and its right to property cannot be considered to be disproportionate.151In the light of all the foregoing, it must be held that an examination of Question 2(a) has disclosed nothing capable of affecting the validity of Article 1(2)(b) to (d) and (3) and Article 7 of, and Annex III to, Decision 2014/512, or of Articles 3 and 3a, Article 4(3) and (4), Article 5(2)(b) to (d) and (3), and Article 11 of, and Annexes II and VI to, Regulation No 833/2014. Question 2(b) 152By Question 2(b), the referring court seeks, in essence, to ascertain whether the principles of legal certainty and nulla poena sine lege certa must be interpreted as precluding a Member State from imposing criminal penalties that are to apply in the event of an infringement of the provisions of Regulation No 833/2014, in accordance with Article 8(1) of that regulation, before the scope of those provisions and, therefore, of the associated criminal penalties, has been clarified by the Court.153The United Kingdom Government and the Council submit that the reference of this question for a preliminary ruling is inadmissible. The United Kingdom Government considers that the question is hypothetical since Rosneft is not an EU exporter or service provider whose conduct is restricted by Regulation No 833/2014 and, consequently, Rosneft is not at risk of incurring any criminal penalty under the national legislation at issue in the main proceedings. The Council considers, moreover, that that question relates, in fact, to the validity of that legislation.154It must be observed, in that regard, that, in so far as the question referred for a preliminary ruling concerns the penalties to be imposed in the event of an infringement of the provisions of Regulation No 833/2014 and the principles of legal certainty and nulla poena sine lege certa, the question manifestly concerns not the validity of the national measures adopted by the United Kingdom Government, but the limitations that stem from those principles that must be respected by the Member States when implementing Article 8(1) of Regulation No 833/2014.155In addition to the conditions governing the admissibility of questions referred for a preliminary ruling set out in paragraph 50 of this judgment, it must be recalled that questions referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance (judgment of 29 January 2013, Radu, C-396/11, EU:C:2013:39, paragraph 22 and the case-law cited).156As regards the claim that this question is hypothetical, it must be observed, first, that Rosneft maintained, at the hearing before the Court, that, if there were an infringement of the restrictive measures, it could be held to be criminally liable as an accessory, an assertion that was not challenged by the other interested parties. Second, even if Rosneft could not be subject to criminal penalties laid down by the national legislation at issue in the main proceedings for an infringement of the provisions of Regulation No 833/2014, that does not necessarily mean that the question is hypothetical, since, as stated by the Advocate General in point 211 of his Opinion, it is not apparent from the order for reference that Rosneft has no right to challenge the measures adopted by the United Kingdom Government on the basis of Article 8(1) of Regulation No 833/2014.157In those circumstances, given that, inter alia, this question concerns the conditions governing the implementation of Article 8(1) of Regulation No 833/2014 and that it is not hypothetical, it is admissible.158It is apparent from the order for reference and from Rosneft’s written observations that Rosneft considers that the fact that certain provisions of Regulation No 833/2014 are not clear and precise means that individuals are not in a position to ascertain unequivocally what their rights and obligations are. That being the case, the Council was in breach of the principle of legal certainty and the principle of nulla poena sine lege certa by prescribing, in Article 8 of that regulation, that Member States must adopt penalties, including criminal penalties, necessary to ensure that the restrictive measures at issue in the main proceedings are implemented.159First, as regards the expression ‘waters deeper than 150 metres’, under Article 3(3)(a) and Article 3a(1)(a) of Regulation No 833/2014, it is claimed that it is unclear from what point a depth of 150 metres is to be measured. Second, as regards the concept of ‘shale’, under Article 3(3)(c) and Article 3a(1)(c) of that regulation, it is claimed there is no consensus, even among geologists, as to the scope of the term. Third, the expression ‘financial assistance’, as used in Article 4(3)(b) of that regulation, is alleged to be unclear, and, fourth, the expression ‘transferable securities’ in Article 5(2) of Regulation No 833/2014 allegedly renders impossible any confidence as to whether the prohibition imposed in that provision also affects GDRs that were issued after 12 September 2014, but represented shares that were issued before that date.160In any event, Rosneft claims that a Member State cannot impose criminal penalties that are to apply to an infringement of Regulation No 833/2014 before the Court has given a ruling on how the provisions of that regulation are to be interpreted.161As regards, first, the general principle of legal certainty, it must be recalled that this fundamental principle of EU law requires, in particular, that rules should be clear and precise, so that individuals may ascertain unequivocally what their rights and obligations are and may take steps accordingly (judgment of 10 January 2006, IATA and ELFAA, C‑344/04, EU:C:2006:10, paragraph 68 and the case‑law cited).162With respect to, second, the principle of nulla poena sine lege certa, cited by the referring court, it is clear that that principle, which falls within the scope of Article 49 of the Charter, headed ‘Principles of legality and proportionality of criminal offences and penalties’, and which, according to the Court’s case-law, constitutes a specific expression of the general principle of legal certainty (see judgment of 3 June 2008, Intertanko and Others, C‑308/06, EU:C:2008:312, paragraph 70), implies, inter alia, that legislation must clearly define offences and the penalties which they attract. That condition is met where the individual concerned is in a position, on the basis of the wording of the relevant provision and, if necessary, with the help of the interpretation made by the courts, to know which acts or omissions will make him criminally liable (judgment of 3 May 2007, Advocaten voor de Wereld, C‑303/05, EU:C:2007:261, paragraph 50).163It is apparent that, in this case, the expressions which Rosneft claims are unclear, as set out in paragraph 159 of the present judgment, are general in nature. However, the concept of ‘transferable securities’ is defined in Article 1(f) of Regulation No 833/2014, while examples of the concept of ‘financial assistance’ are given in Article 4(3)(b) of that regulation.164In accordance with the case-law of the European Court of Human Rights (‘ECtHR’) relating to Article 7 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, which establishes rights corresponding to those guaranteed in Article 49 of the Charter (judgment of 8 September 2015, Taricco and Others, C‑105/14, EU:C:2015:555, paragraph 57), since legislation must be of general application, its wording cannot be absolutely precise. It follows that, while the use of the legislative technique of referring to general categories, rather than to exhaustive lists, often leaves grey areas at the fringes of a definition, those doubts in relation to borderline cases are not sufficient, in themselves, to make a provision incompatible with Article 7 of that convention, provided that the provision proves to be sufficiently clear in the large majority of cases (see, to that effect, inter alia, ECtHR, 15 November 1996, Cantoni v. France, ECLI:CE:ECHR:1996:1115JUD001786291, §§ 31 and 32).165Since those considerations are equally valid, under Article 52(3) of the Charter, with respect to Article 49 of the Charter, the Court must hold that the choice made by the European Union legislature to use, in the provisions referred to by Rosneft, expressions or terms such as ‘financial assistance’, ‘waters deeper than 150 metres’, ‘shale’, or ‘transferable securities’, cannot, in itself, constitute a breach of the principle of nulla poena sine lege certa.166That conclusion is supported by the fact that the requirement that the law should be foreseeable does not mean that the persons concerned should not have to take appropriate legal advice in order to assess, to a degree that is reasonable in the particular circumstances, the consequences which a given action may entail (see ECtHR, 18 March 2014, Öcalan v. Turkey, ECLI:CE:ECHR:2014:0318JUD002406903, § 174 and the case‑law cited). In this case, the Court must hold that the terms which are claimed by Rosneft to be lacking in precision, while they are not absolutely precise, are not such that it is impossible for an individual to know for which acts and omissions he may be criminally liable.167Further, the case-law of the Court states that the principle of nulla poena sine lege certa cannot be interpreted as prohibiting the gradual clarification of rules of criminal liability by means of interpretations in the case-law, provided that those interpretations are reasonably foreseeable (see, to that effect, judgment of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraphs 217 and 218).168Accordingly, contrary to what is claimed by Rosneft, the fact that the terms used in Regulation No 833/2014 may be subject to clarification, gradually and subsequently, by the Court does not prevent a Member State from establishing penalties, on the basis of Article 8(1) of that regulation, in order to ensure its effective implementation.169Consequently, the Court must hold that, in this case, the expressions and terms in Regulation No 833/2014, referred to in paragraph 159 of the present judgment, do not preclude a Member State from imposing criminal penalties that are to be applied in the event of an infringement of the provisions of Regulation No 833/2014, in accordance with Article 8(1) of that regulation.170In the light of the foregoing, the answer to Question 2(b) is that the principles of legal certainty and nulla poena sine lege certa must be interpreted as meaning that they do not preclude a Member State from imposing criminal penalties that are to be applied in the event of an infringement of the provisions of Regulation No 833/2014, in accordance with Article 8(1) of that regulation, before the scope of those provisions and, therefore, the scope of the associated criminal penalties, has been clarified by the Court. Question 3(a) 171By Question 3(a), the referring court seeks to ascertain whether the expression ‘financial assistance’, in Article 4(3)(b) of Regulation No 833/2014, must be interpreted as including the processing of payments by a bank or other financial institution.172Rosneft and the German Government consider that, in using that expression, Regulation No 833/2014 refers not to acts which involve the mere processing of payments, but to acts of financing which provide active and substantive support. In that regard, the German Government argues, in particular, that payment services are services supplied to carry out payments on behalf of third party payers, as is apparent from the definition given in Article 4(3) of Directive 2007/64/EC of the European Parliament and the Council of 13 November 2007 on payment services in the internal market, amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (OJ 2007 L 319, p. 1), read together with the annex to that directive. By contrast, services the supply of which requires authorisation under Article 4(3) of Regulation No 833/2014, such as the provision of grants, loans and export credit insurance, are services which the bank concerned provides using its own funds to the benefit of a third party.173The German Government considers, moreover, that financial institutions do not have sufficient information, having regard in particular to Regulation (EC) No 1781/2006 of the European Parliament and of the Council of 15 November 2006 on information on the payer accompanying transfers of funds (OJ 2006 L 345, p. 1), to assess whether a payment does or does not in fact pursue an objective that is contrary to Regulation No 833/2014.174In the view of the United Kingdom Government, the Estonian Government and the Commission, the expression ‘financial assistance’ encompasses, on the contrary, payment services provided by a bank or other financial institution, and those services are prohibited where they are linked to a commercial transaction that is prohibited under Regulation No 833/2014. Referring to the Commission’s Guidance Note of 16 December 2014 on the implementation of certain provisions of Regulation (EU) No 833/2014 (C(2014) 9950 final), those interested parties consider that that expression must be interpreted broadly.175The French Government, for its part, considers that the concept of ‘financial assistance’ must be confined solely to transactions that constitute the provision of fresh resources by a financial institution. That concept may, however, include the processing of payments where those payments are linked to a commercial transaction that is prohibited under Regulation No 833/2014, provided that such processing of payments leads to the transfer of fresh resources by financial institutions to the recipients of those payments.176It must be noted that, pursuant to the restrictive measures established by Article 3 and Article 4(3) of Regulation No 833/2014, not only is any export to Russia of products intended for the oil industry, as listed in Annex II to that regulation, subject to the requirement of prior authorisation, but any supply of certain associated services in connection with the products concerned, including, inter alia, financing or financial assistance for the export of such products, must also be authorised by the competent authority. The restrictions concerning such associated services are addressed therefore, in particular, to financial institutions capable of providing financial assistance, including, inter alia, grants, loans and export credit insurance, to the exporters of those products.177Accordingly, in the light of the purpose of the restrictive measures at issue in the main proceedings, the Court must hold that, by Question 3(a), the referring court seeks, in essence, to ascertain whether Article 4(3) of Regulation No 833/2014, where it refers to ‘financial assistance’, must be interpreted as meaning that it imposes, on financial institutions among others, an obligation to obtain authorisation for the processing of any payment related to a transaction involving the sale, supply, transfer or export to Russia of products listed in Annex II to that regulation, particularly where those institutions find that the payment, the processing of which is requested, is related to such a transaction.178In that regard, it must be observed that none of the language versions of Article 4(3)(b) of Regulation No 833/2014 expressly refers to the ‘processing of payments’. That being the case, reference must be made to the general structure and objectives of that regulation.179The contextual interpretation of Article 4(3)(b) of Regulation No 833/2014 shows, as argued in particular by the German Government in its written observations, that, by the use of the expression ‘financial assistance’, the European Union legislature envisaged measures comparable to grants, loans and export credit insurance. While those measures require the financial institution concerned to use its own resources, payment services are provided, by contrast, by that institution acting as an intermediary, transmitting third party client funds to a particular recipient, without any commitment of that institution’s own resources.180In those circumstances, Article 4(3) of Regulation No 833/2014 cannot be interpreted as imposing on financial institutions an obligation to obtain, for the processing of any payment related to a sale, supply, transfer or export to Russia of products listed in Annex II to that regulation, an authorisation in addition to that required, under Article 3 of Regulation No 833/2014, for such transactions, where those institutions find that the payment, the processing of which is requested, constitutes, in whole or in part, the consideration for such a transaction.181Taking into consideration the fact that it is not the aim of Article 4(3)(b) of that regulation either to establish a freezing of assets or restrictions on the transfer of funds, the Court must hold that if the European Union legislature had intended that the processing of any bank transfer related to the products referred to in Annex II to Regulation No 833/2014 should be subject to a request for a further authorisation in addition to that required under Article 3 of Regulation No 833/2014 for a transaction of the kind mentioned in the preceding paragraph of the present judgment, it would have used an expression other than ‘financial assistance’ in order to establish and define such an obligation.182Finally, if one of the objectives of Regulation No 833/2014 is to increase the costs of the actions of the Russian Federation vis‑à‑vis Ukraine, it is clear that Article 4(3)(b) of that regulation is consistent with the pursuit of that objective by establishing restrictions on financial assistance for the export to Russia of products to be used in the oil industry, yet without subjecting the processing of payments as such to the prior authorisation requirement.183The foregoing interpretation is without prejudice to the prohibition that applies to any processing of payments that is related to a commercial transaction that is itself prohibited under Article 3(5) of Regulation No 833/2014.184In the light of the foregoing, the answer to Question 3(a) is that the expression ‘financial assistance’ in Article 4(3)(b) of Regulation No 833/2014 must be interpreted as meaning that it does not include the processing of a payment, as such, by a bank or other financial institution. Question 3(b) 185By Question 3(b), the referring court seeks, in essence, to ascertain whether Article 5(2) of Regulation No 833/2014 must be interpreted as meaning that it prohibits the issue, after 12 September 2014, of GDRs, pursuant to a depositary agreement concluded with one of the entities listed in Annex VI to that regulation, where those GDRs represent shares issued by one of those entities before 12 September 2014.186Rosneft considers that this question should be answered in the negative. According to Rosneft, an interpretation to the effect that the holders of shares in the entities targeted by the restrictive measures at issue in the main proceedings could not re-package their shares as GDRs would be at odds with the objective pursued by Regulation No 833/2014, which is to apply pressure on the Russian Federation by restricting the capacity of the targeted entities to raise capital, in so far as that interpretation affects, in particular, the shareholders of those entities.187It is stated in Article 5(2)(b) of Regulation No 833/2014, inter alia, that any transaction consisting in purchasing, selling, providing investment services or assistance in the issuance of certain transferable securities, issued after 12 September 2014, and any transaction consisting in dealing in such transferable securities, carried out by the entities listed in Annex VI to that regulation, one of those entities being Rosneft, is prohibited. In that regard, it must be noted that the expression ‘transferable securities’ includes, in accordance with the definition in Article 1(f) of Regulation No 833/2014, depositary receipts in respect of shares.188As regards Rosneft’s argument that that prohibition is contrary to the objective of that regulation in that it penalises the holders of shares in the entities listed in Annex VI to that regulation, the Court must concur with the view of the FCA that restrictive measures, in so far as they affect a company, are inherently liable to have a negative effect on the interests of that company’s shareholders. In this case, since the objective of those restrictive measures was precisely to increase the cost of the actions of the Russian Federation, which is Rosneft’s majority shareholder, that argument is wholly unfounded.189It may be added that it is plain that Article 5(2) of Regulation No 833/2014 prohibits the issuance, after 12 September 2014, of GDRs in respect of the shares of the entities listed in Annex VI to that regulation, irrespective of the date of issue of those shares.190In those circumstances, the answer to Question 3(b) is that Article 5(2) of Regulation No 833/2014 must be interpreted as meaning that it prohibits the issuance, after 12 September 2014, of GDRs pursuant to a depositary agreement concluded with one of the entities listed in Annex VI to that regulation, where those GDRs represent shares issued by one of those entities before 12 September 2014. Question 3(c) 191By Question 3(c), the referring court asks the Court to provide an interpretation, if considered necessary, of the concepts of ‘waters deeper than 150 metres’ and ‘shale’, in Articles 3 and 3a of Regulation No 833/2014.192On reading the order for reference, it is apparent that the submission of this question complements the submission to the Court of Question 2(b), whereby the referring court seeks to ascertain whether Regulation No 833/2014 is invalid because of an alleged lack of clarity. The referring court does no more than state, in this regard, that it is open to the Court, if the Court considers it appropriate, to provide the parties to the proceedings with more detailed definitions of those concepts.193The referring court does not, however, explain in what way the provision by the Court of precise definitions of those concepts is necessary for the resolution of the dispute before it.194In that regard, while it is true that questions referred for a preliminary ruling on EU law enjoy a presumption of relevance (judgment of 28 July 2011, Lidl & Companhia, C‑106/10, EU:C:2011:526, paragraph 25 and the case-law cited), it must be emphasised that, in accordance with settled case-law, the justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute (judgment of 20 January 2005, García Blanco, C‑225/02, EU:C:2005:34, paragraph 28 and the case‑law cited).195In this case, however, it is not clear from the order for reference in what way this question differs from, in particular, Question 2(b), whereby the referring court sought to ascertain whether Regulation No 833/2014 is invalid because of its alleged lack of clarity. Since the answer given to Question 2(b) is that an examination of Articles 3 and 3a of Regulation No 833/2014, in the light of the principles of legal certainty and nulla poena sine lege certa, disclosed nothing capable of calling into question the validity of those provisions, it is not apparent, on the basis of the information in the order for reference, that the referring court needs, in addition, an interpretation of the abovementioned concepts in order to make a decision on the dispute at issue in the main proceedings.196In the absence of further information on that point, there is no need to give a ruling on the requested interpretation. Costs 197Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Articles 19, 24 and 40 TEU, Article 275 TFEU, and Article 47 of the Charter of Fundamental Rights of the European Union must be interpreted as meaning that the Court of Justice of the European Union has jurisdiction to give preliminary rulings, under Article 267 TFEU, on the validity of an act adopted on the basis of provisions relating to the Common Foreign and Security Policy (CFSP), such as Council Decision 2014/512/CFSP of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, as amended by Council Decision 2014/872/CFSP of 4 December 2014, provided that the request for a preliminary ruling relates either to the monitoring of that decision’s compliance with Article 40 TEU, or to reviewing the legality of restrictive measures against natural or legal persons. 2. Examination of the second question has disclosed nothing capable of affecting the validity of Article 1(2)(b) to (d) and (3), and Article 7 of, and Annex III to, Decision 2014/512, as amended by Decision 2014/872, or of Articles 3 and 3a, Article 4(3) and (4), Article 5(2)(b) to (d) and (3), and Article 11 of, and Annexes II and VI to, Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, as amended by Council Regulation (EU) No 1290/2014 of 4 December 2014. The principles of legal certainty and nulla poena sine lege certa must be interpreted as meaning that they do not preclude a Member State from imposing criminal penalties that are to be applied in the event of an infringement of the provisions of Regulation No 833/2014, as amended by Regulation No 1290/2014, in accordance with Article 8(1) of that regulation, before the scope of those provisions and, therefore, the scope of the associated criminal penalties, has been clarified by the Court of Justice of the European Union. 3. The expression ‘financial assistance’ in Article 4(3)(b) of Regulation No 833/2014, as amended by Regulation No 1290/2014, must be interpreted as meaning that it does not include the processing of a payment, as such, by a bank or other financial institution. Article 5(2) of Regulation No 833/2014, as amended by Regulation No 1290/2014, must be interpreted as meaning that it prohibits the issuance, after 12 September 2014, of international certificates representative of share ownership (Global Depositary Receipts), pursuant to a depositary agreement concluded with one of the entities listed in Annex VI to Regulation No 833/2014, as amended by Regulation No 1290/2014, including cases where those certificates represent shares issued by one of those entities before that date.LenaertsTizzanoSilva de LapuertaIlešičDa Cruz VilaçaRosasBonichotArabadjievToaderSafjanJarašiūnasFernlundVajdaRodinBiltgenDelivered in open court in Luxembourg on 28 March 2017.A. Calot EscobarRegistrarK. LenaertsPresident( *1 ) Language of the case: English. | 2be37-d1da288-4a7e | EN |
A telephone subscriber’s consent to the publication of his data also covers its use in another Member State | 15 March 2017 ( 1 )‛Reference for a preliminary ruling — Electronic communications networks and services — Directive 2002/22/EC — Article 25(2) — Directory enquiry services and directories — Directive 2002/58/EC — Article 12 — Directories of subscribers — Making available personal data concerning subscribers for the purposes of the provision of publicly available directory enquiry services and directories — Subscriber’s consent — Distinction on the basis of the Member State in which publicly available directory enquiry services and directories are provided — Principle of non-discrimination’In Case C-536/15,REQUEST for a preliminary ruling under Article 267 TFEU from the College van Beroep voor het bedrijfsleven (Administrative Court of Appeal for Trade and Industry, Netherlands), made by decision of 3 July 2015, received at the Court on 13 October 2015, in the proceedings Tele2 (Netherlands) BV, Ziggo BV, Vodafone Libertel BV v Autoriteit Consument en Markt (ACM), intervening parties: European Directory Assistance NV, THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Prechal, A. Rosas, C. Toader and E. Jarašiūnas (Rapporteur), Judges,Advocate General: M. Y. Bot,Registrar: M. R. Schiano, Administrator,having regard to the written procedure and further to the hearing on 5 October 2016,after considering the observations submitted on behalf of:—Tele2 (Netherlands) BV, by Q.R. Kroes and M.P.F. Reker, advocaten,Ziggo BV, by W. Knibbeler and N. Lorjé, advocaten,Vodafone Libertel BV, by H.P. Wiersema, advocaat,the Netherlands Government, by M. de Ree and M. Bulterman and by J. Langer, acting as Agents,the European Commission, by H. Kranenborg and G. Braun and by L. Nicolae, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 9 November 2016,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 25(2) of Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive) (OJ 2002 L 108, p. 51), as amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 (OJ 2009 L 337, p. 11) (‘the Universal Service Directive’).2The request has been made in proceedings between Tele2 (Netherlands) BV, Ziggo BV and Vodafone Libertel BV, companies established in the Netherlands, on the one hand, and the Autoriteit Consument en Markt (ACM) (Authority for Consumers and Markets), on the other hand, concerning a decision taken by that authority in the context of proceedings between those undertakings and the European Directory Assistance NV (‘the EDA’), an undertaking established in another Member State, concerning the latter making data relating to their subscribers available, for the purposes of the provision of publicly available directory enquiry services and directories in the latter Member State and/or in other Member States. Legal context European Union law The Universal Service Directive 3Recitals 11 and 35 of the Universal Service Directive states:‘(11)… Directive 97/66/EC of the European Parliament and of the Council of 15 December 1997 concerning the processing of personal data and the protection of privacy in the telecommunications sector [(OJ 1998 L 24, p. 1)] ensures the subscribers’ right to privacy with regard to the inclusion of their personal information in a public directory.…(35)The provision of directory enquiry services and directories is already open to competition. The provisions of this Directive complement the provisions of Directive 97/66/EC by giving subscribers a right to have their personal data included in a printed or electronic directory. All service providers which assign telephone numbers to their subscribers are obliged to make relevant information available in a fair, cost-oriented and non-discriminatory manner.’4Article 1 of that directive, entitled ‘Subject-matter and scope’, provides in paragraph (1):‘Within the framework of Directive 2002/21/EC [of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) (OJ 2002 L 108, p. 33)], this Directive concerns the provision of electronic communications networks and services to end-users. The aim is to ensure the availability throughout the [European Union] of good-quality publicly available services through effective competition and choice and to deal with circumstances in which the needs of end-users are not satisfactorily met by the market. …’5Chapter II of the Universal Service Directive concerns universal service obligations. In that chapter, Article 5, entitled ‘Directory enquiry services and directories’, is worded as follows:‘(1) Member States shall ensure that:(a)at least one comprehensive directory is available to end-users in a form approved by the relevant authority, whether printed or electronic, or both, and is updated on a regular basis, and at least once a year;(b)at least one comprehensive telephone directory enquiry service is available to all end-users, including users of public pay telephones.(2) The directories referred to in paragraph 1 shall comprise, subject to the provisions of Article 12 of Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) [(OJ 2002 L 201, p. 37)], all subscribers of publicly available telephone services.…’6Chapter IV of the Universal Service Directive concerns end-user interests and rights. In that chapter, Article 25, entitled ‘Telephone directory enquiry services’, provides:‘(1) Member States shall ensure that subscribers to publicly available telephone services have the right to have an entry in the publicly available directory referred to in Article 5(1)(a) and to have their information made available to providers of directory enquiry services and/or directories in accordance with paragraph 2’;(2) Member States shall ensure that all undertakings which assign telephone numbers to subscribers meet all reasonable requests to make available, for the purposes of the provision of publicly available directory enquiry services and directories, the relevant information in an agreed format on terms which are fair, objective, cost oriented and non-discriminatory.(5) Paragraphs 1 to 4 shall apply subject to the requirements of [Union] legislation on the protection of personal data and privacy and, in particular, Article 12 of Directive 2002/58 …’ The Directive on privacy and electronic communications 7According to recital 39 of Directive 2002/58, as amended by Directive 2009/136 (‘the Directive on privacy and electronic communications’):‘(39)The obligation to inform subscribers of the purpose(s) of public directories in which their personal data are to be included should be imposed on the party collecting the data for such inclusion. Where the data may be transmitted to one or more third parties, the subscriber should be informed of this possibility and of the recipient or the categories of possible recipients. Any transmission should be subject to the condition that the data may not be used for other purposes than those for which they were collected. If the party collecting the data from the subscriber or any third party to whom the data have been transmitted wishes to use the data for an additional purpose, the renewed consent of the subscriber is to be obtained either by the initial party collecting the data or by the third party to whom the data have been transmitted.’8Article 1 of the Directive on privacy and electronic communications, entitled ‘Scope and aim’, provides in paragraph (1):‘This Directive provides for the harmonisation of the national provisions required to ensure an equivalent level of protection of fundamental rights and freedoms, and in particular the right to privacy and confidentiality, with respect to the processing of personal data in the electronic communication sector and to ensure the free movement of such data and of electronic communication equipment and services in the [Union].’9Article 12 of that directive, entitled ‘Directories of subscribers’, provides:‘(1) Member States shall ensure that subscribers are informed, free of charge and before they are included in the directory, about the purpose(s) of a printed or electronic directory of subscribers available to the public or obtainable through directory enquiry services, in which their personal data can be included and of any further usage possibilities based on search functions embedded in electronic versions of the directory.(2) Member States shall ensure that subscribers are given the opportunity to determine whether their personal data are included in a public directory, and if so, which, to the extent that such data are relevant for the purpose of the directory as determined by the provider of the directory, and to verify, correct or withdraw such data. Not being included in a public subscriber directory, verifying, correcting or withdrawing personal data from it shall be free of charge.(3) Member States may require that for any purpose of a public directory other than the search of contact details of persons on the basis of their name and, where necessary, a minimum of other identifiers, additional consent be asked of the subscribers. Netherlands law 10Under Article 1.1(e) of the Besluit universele dienstverlening en eindgebruikersbelangen (Decree on universal service provision and end-user interests) of 7 May 2004 (Stb. 2004, No 203) (‘the Bude’):‘A standard directory enquiry service means a publicly available directory enquiry service by means of which telephone numbers can be requested only on the basis of data relating to the name in conjunction with data relating to the address and house number, post code or town of the subscriber.’11Article 3.1 of the Bude is worded as follows:‘Any provider which assigns telephone numbers shall meet all reasonable requests to make available, for the purposes of the provision of publicly available telephone directories and publicly available directory enquiry services, the relevant information in an agreed format on terms which are fair, objective, cost oriented and non-discriminatory.’12Under Article 3.2 of the Bude:‘(1) Any provider of a publicly available telephone service which, before or when concluding a contract with a user, requests the latter’s name and address (street name and house number, post code and town), shall also seek his consent to that kind of personal data and the telephone numbers it has assigned appearing in any standard telephone directory and any directory of subscribers which is used for a standard directory enquiry service. The consent referred to in the preceding sentence shall be sought individually for every kind of personal data.(2) The consent given shall constitute relevant information within the meaning of Article 3.1.(3) Any provider of a publicly available telephone service which also seeks consent for inclusion in a telephone directory other than the standard telephone directory or in a directory of subscribers not exclusively used for a standard directory enquiry service shall ensure that the manner and form in which the consent referred to in paragraph 1 is sought is at least equivalent to the manner and form in which the original consent referred to in this paragraph is sought.’13Article 11.6 of the Telecommunicatiewet (Telecommunications Law) of 19 October 1998 (Stb. 1998, No 610) provides:‘(1) Any person who publishes a publicly available directory or who supplies information services about subscribers available to the public shall, prior to entering private data relating to subscribers in the directory or in the directory of subscribers used for a standard directory enquiry service, provide information free of charge to subscribers concerning:the purposes for which the directories and directory enquiry services at issue which concern subscribers are established and, with regard to electronic versions of the directory, the possibilities for use to be made of that information on the basis of search functions integrated into those versions, andthe types of personal data which can be included in the directories and directory enquiry services at issue which concern subscribers, in the light of the purposes for which they are established.(2) A directory available to the public and the directory of subscribers used for directory enquiry services shall reproduce the personal data of a subscriber only if the latter has given his consent and shall be limited to data provided for that purpose by the subscriber. No fee shall be charged for not being included in a directory or in a directory of subscribers used for directory enquiry services.(3) In so far as the processing of personal data included in a publicly available directory and in a directory of subscribers used for directory enquiry services pursues objectives other than the possibility of making a search for numbers in a database relating to a name associated with data such as the road, house number, postal code and town of the subscriber, the subscriber’s separate consent is required for each of those other objectives.(4) The subscriber shall have the right to verify, correct and delete, free of charge, the personal data relating to him in a publicly available directive or in a directory of subscribers used for directory enquiry services.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 14EDA is a company incorporated under Belgian law which offers directory enquiry services and directories accessible from Belgian territory. It requested the undertakings which assign telephone numbers to subscribers in the Netherlands (‘the Dutch undertakings’) to make available to it data relating to their subscribers. Since those undertakings refused to provide the data requested, on 18 January 2012, EDA submitted a dispute resolution request to ACM.15By decisions of 5 June 2013, ACM, as the national regulatory authority, took a decision on EDA’s request by adopting the following measures. First, EDA can rely on Article 3.1 of the Bude to the extent that it uses the numbers made available to it and the related information in order to place a standard telephone directory enquiry service about the subscribers on the market. Secondly, the Dutch undertakings must make available to EDA basic data relating to their subscribers (names, addresses, telephone numbers) on fair, objective, cost oriented and non-discriminatory terms. Third, the Dutch undertakings must ensure within a reasonable period of time that the consent which they seek from their subscribers when entering into contracts, with a view to including the data concerning them in any standard directory and any directory of subscribers which is used for a standard telephone directory enquiry service is compatible with the provisions of Article 3.2 of the Bude.16The Dutch undertakings brought an action against those decisions of ACM before the College van Beroep voor het bedrijfsleven (Administrative Court of Appeal for Trade and Industry, Netherlands).17The referring court states, in the first place, that, given that Article 3.1 of the Bude transposed into Netherlands law Article 25(2) of the Universal Service Directive, it is necessary to establish the scope of the latter provision in order to answer the question, which is disputed by the parties to the main proceedings, whether that Article 3.1 requires Dutch undertakings to make available to EDA data relating to their subscribers despite the fact that EDA is not established in the Netherlands.18It notes, in that regard, that the interpretation of Article 25(2) of that directive given by the Court in the judgment of 5 May 2011, Deutsche Telekom (C‑543/09, EU:C:2011:279), does not involve the cross-border provision of data relating to subscribers and does not, consequently, answer the question whether that provision must be interpreted as meaning that an undertaking is required to make its data relating to subscribers available to a provider of directory enquiry services and directories established in another Member State.19In the second place, the referring court notes, concerning obtaining the subscriber’s consent, that Article 3.2 of the Bude provides that the provider is to obtain that consent to the inclusion of personal data and telephone numbers use of which it has assigned, in any standard directory and any directory of subscribers which is used for a standard telephone directory enquiry service. It points out that, according to the explanatory notes to Article 3.2 of the Bude, ‘the reason for that is to avoid a situation where every provider of publicly available telephone directories and directory enquiry services would have to obtain the consent of every subscriber individually for a standard listing’.20The referring court notes that the parties to the main proceedings dispute whether, first, Article 3.2 of the Bude allows the consent of subscribers to the use of their personal data to be differentiated according to whether those data are intended for Dutch providers or for foreign providers of directory enquiry services and/or directories and, secondly, whether it is necessary to leave the subscribers with the choice whether or not to give their consent depending on the country in which the undertaking requesting information provides its services. In that regard, the referring court considers that the question arises, in essence, as to how to balance respect for the principle of non-discrimination and privacy in the context of that request for consent.21In those circumstances, the College van Beroep voor het bedrijfsleven (Administrative Court of Appeal for Trade and Industry) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Must Article 25(2) of the Universal Service Directive be interpreted as meaning that requests should be understood to include a request from an undertaking established in another Member State, which requests information for the purposes of the provision of publicly available telephone directory enquiry services and directories which are provided in that Member State and/or in other Member States?(2)If question 1 is answered in the affirmative: may a provider who makes telephone numbers available, and who is obliged under national legislation to request a subscriber’s consent prior to inclusion [of his data] in standard telephone directories and standard directory enquiry services, differentiate in the request for consent on the basis of the non-discrimination principle according to the Member State in which the undertaking requesting the information as referred to in Article 25(2) of Directive 2002/22/EC provides the telephone directory and directory enquiry service?’ Consideration of the questions referred The first question 22By its first question, the referring court asks, in essence, whether Article 25(2) of the Universal Service Directive must be interpreted as meaning that the concept of ‘requests’, in that article, covers also requests made by an undertaking, established in a Member State other than that in which the undertakings which assign telephone numbers to subscribers are established, which requests the relevant information possessed by those undertakings in order to provide publicly available telephone directory enquiry services and directories in that Member State and/or in other Member States.23Article 25 of the Universal Service Directive is in Chapter IV of that directive, which concerns end-user interests and rights. According to Article 25(1) thereof, the Member States are to ensure that subscribers to publicly available telephone services have the right to have an entry in the publicly available directory referred to in Article 5(1)(a) of that directive, and to have their information made available to providers of directory enquiry services and/or directories in accordance with Article 25(2) of that directive.24Concerning the making of information relating to subscribers available to providers of directory services and/or directories, it is apparent from the wording itself of Article 25(2) of the Universal Service Directive that that provision covers all reasonable requests to make available data for the purposes of the provision of publicly available directory enquiry services and directories. Moreover, that provision requires that that information be made available in a non-discriminatory manner.25It follows therefore from that wording that that provision makes no distinction according to whether the request to make available data relating to subscribers is made by an undertaking established in the same Member State as that in which is established the undertaking to which the request is addressed or whether it is made by an undertaking established in a Member State other than that of the undertaking which received that request.26That lack of distinction is compatible with the objective pursued by the Universal Service Directive, which, according to Article 1(1) thereof, seeks, in particular, to ensure the availability, throughout the European Union, of good quality publicly available services through effective competition and choice and to deal with circumstances in which the needs of end-users are not satisfactorily met by the market, and with the specific objective of Article 25(2) of the Universal Service Directive which seeks, in particular, to ensure compliance with the universal service obligation laid down in Article 5(1) of that directive (see, to that effect, judgment of 5 May 2011, Deutsche Telekom, C‑543/09, EU:C:2011:279, paragraph 35).27In that regard, the Court has already held, in paragraph 36 of the judgment of 5 May 2011, Deutsche Telekom (C‑543/09, EU:C:2011:279), referring to recital 35 of the Universal Service Directive, that, in a competitive market, the obligation under Article 25(2) of that directive for undertakings which assign telephone numbers to pass on data relating to their own subscribers in principle not only enables the designated undertaking to ensure compliance with the universal service obligation laid down in Article 5(1) of that directive, but also enables any provider of telephone services to establish an exhaustive data base and to become active in the market for telephone directory enquiry services and directories. In that connection, it is sufficient that the provider concerned ask each undertaking assigning telephone numbers for the relevant data relating to its subscribers.28An interpretation of Article 25(2) of the Universal Service Directive according to which that provision covers only reasonable requests made by undertakings established in the Member State in which the undertakings assigning telephone numbers to subscribers are established would be contrary to the objective of ensuring the availability, throughout the European Union, of good quality services to end-users thanks to effective competition and, in particular, to that of respecting the universal service obligation provided for in Article 5(1) of the Universal Service Directive, resulting, in particular, from the need to make at least one complete telephone directory available to end-users.29Moreover, as was stated in paragraph 24 of the present judgment, Article 25(2) of the Universal Service Directive requires undertakings assigning telephone numbers to subscribers to meet all reasonable requests to make available, for the purposes of the provision of publicly available directory enquiry services and directories, the relevant information in a non-discriminatory manner. The refusal of undertakings assigning telephone numbers to subscribers in the Netherlands to make data relating to their subscribers available to persons requesting that information on the sole ground that they are established in another Member State is incompatible with that requirement.30In the light of all the above considerations, the answer to the first question is that Article 25(2) of the Universal Service Directive must be interpreted as meaning that the concept of ‘requests’ in that article, covers also requests made by an undertaking, established in a Member State other than that in which the undertakings which assign telephone numbers to subscribers are established, which requests the relevant information possessed by those undertakings in order to provide publicly available telephone directory enquiry services and directories in that Member State and/or in other Member States. The second question 31By its second question, the referring court asks, in essence, whether Article 25(2) of the Universal Service Directive must be interpreted as precluding an undertaking which assigns telephone numbers to subscribers, and which is obliged under national legislation to request those subscribers’ consent to the use of data relating to them for the purposes of supplying directory enquiry services and directories, from differentiating in the request for those subscribers’ consent to that use according to the Member State in which the undertakings requesting the information referred to in that provision provide those services.32Under Article 25(2) of the Universal Service Directive, the Member States are to ensure that all undertakings which assign telephone numbers to subscribers meet all reasonable requests for information to be made available, for the purposes of the provision of telephone directory enquiry services and telephone directories, on terms that must be fair, objective, cost oriented and non-discriminatory. Moreover, it is apparent from Article 25(5) of that directive that Article 25(2) thereof is to apply ‘subject to the requirements of Union legislation on the protection of personal data and privacy and, in particular, Article 12 of [the Directive on privacy and electronic communications]’.33It follows that, in order to answer the second question, it is necessary to examine also whether Article 12(2) of that directive subjects the transfer, by an undertaking which assigns telephone numbers to its subscribers, of a subscriber’s personal data to a third-party undertaking whose activity consists in providing publicly available directory enquiry services and directories in a Member State other than that in which that subscriber resides, to the latter’s separate specific consent.34In that regard, it should be noted that the Court held, in paragraph 67 of the judgment of 5 May 2011, Deutsche Telekom (C‑543/09, EU:C:2011:279), that Article 12 of that directive must be interpreted as not precluding national legislation under which an undertaking publishing public directories must pass personal data in its possession relating to subscribers of other telephone service providers to a third-party undertaking whose activity consists in publishing a printed or electronic public directory or making such directories obtainable through directory enquiry services and which does not make the passing on of those data conditional on renewed consent from the subscribers. However, first, those subscribers must be informed, before the first inclusion of their data in a public directory, of the purpose of that directory and of the fact that those data may be communicated to another telephone service provider and, secondly, it must be guaranteed that those data will not, once passed on, be used for purposes other than those for which they were collected with a view to their first publication.35For the purposes of reaching that conclusion, the Court held, in the light of recital 39 and of the wording of Article 12(2) and (3) of the Directive on privacy and electronic communications, that, where a subscriber has been informed by the undertaking which assigned him a telephone number of the possibility that his personal data may be passed to a third-party undertaking, with a view to being published in a public directory, and where he has consented to the publication of those data in such a directory, renewed consent is not needed from the subscriber for the passing of those same data to another undertaking which intends to publish a printed or electronic public directory, or to make such directories available for consultation through directory enquiry services, if it is guaranteed that the data in question will not be used for purposes other than those for which the data were collected with a view to their first publication. The consent given under Article 12(2) of that directive, by a subscriber who has been duly informed, to the publication of his personal data in a public directory relates to the purpose of that publication and thus extends to any subsequent processing of those data by third-party undertakings active in the market for publicly available directory enquiry services and directories, provided that such processing pursues that same purpose. The Court has stated in that regard that the wording of Article 12(2) of the Directive on privacy and electronic communications does not support the inference that the subscriber has a selective right to decide in favour of certain providers of publicly available directory enquiry services and directories (see, to that effect, judgment of 5 May 2011, Deutsche Telekom, C‑543/09, EU:C:2011:279, paragraphs 62 to 65).36The Court has added that, where a subscriber has consented to the passing of his personal data to a given undertaking with a view to their publication in a public directory of that undertaking, the passing of the same data to another undertaking intending to publish a public directory without renewed consent having been obtained from that subscriber is not capable of substantively impairing the right to protection of personal data, as recognised by Article 8 of the Charter of Fundamental Rights of the European Union (see, to that effect, judgment of 5 May 2011, Deutsche Telekom, C‑543/09, EU:C:2011:279, paragraph 66).37It follows from the foregoing that it is the purpose of the first publication of the subscriber’s personal data to which he gave his consent which is decisive for the purposes of determining the scope of that consent. It should be noted, in that regard, that Article 12(3) of the Directive on privacy and electronic communications provides that the Member States may require the consent of subscribers to be obtained also in respect of any purpose of a public directory other than the simple search of contact details of persons on the basis of their name and, where necessary, a limited number of other identifiers.38Moreover, it should be noted that, regardless of where they are established in the European Union, undertakings which provide publicly available telephone directory enquiry services and directories operate within a highly harmonised regulatory framework making it possible to ensure throughout the European Union the same respect for requirements relating to the protection of subscribers’ personal data, resulting in particular from Article 25(5) of the Universal Service Directive and Article 1(1) and Article 12 of the Directive on privacy and electronic communications.39In those circumstances, as the Advocate General stated in points 40 and 41 of his Opinion, there is no need to establish a difference in treatment according to whether the undertaking requesting the transfer of personal data relating to subscribers is established in the territory of those subscribers’ Member State or in another Member State, since that undertaking collects that data for purposes identical to those for which it was collected with a view to its first publication and, consequently, that transfer is covered by the consent that was given by those subscribers.40Consequently, in the light of those considerations and those set out in paragraphs 23 to 30 of the present judgment, it is not necessary for the undertaking assigning telephone numbers to its subscribers to differentiate in the request for consent addressed to the subscriber according to the Member State to which the data concerning him could be sent.41In the light of all the above considerations, the answer to the second question is that Article 25(2) of the Universal Service Directive must be interpreted as precluding an undertaking which makes telephone numbers available to subscribers, and which is obliged under national legislation to request those subscribers’ consent to the use of data relating to them for the purposes of supplying directory enquiry services and directories, from differentiating in the request for those subscribers’ consent to that use according to the Member State in which the undertakings requesting the information referred to in that provision provide those services. Costs 42Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. Article 25(2) of Directive 2002/22/EC of the European Parliament and of the Council of 7 March 2002 on universal service and users’ rights relating to electronic communications networks and services (Universal Service Directive), as amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009, must be interpreted as meaning that the concept of ‘requests’ in that article, covers also requests made by an undertaking, established in a Member State other than that in which the undertakings which assign telephone numbers to subscribers are established, which requests the relevant information possessed by those undertakings in order to provide publicly available telephone directory enquiry services and directories in that Member State and/or in other Member States. 2. Article 25(2) of Directive 2002/22, as amended by Directive 2009/136, must be interpreted as precluding an undertaking which assigns telephone numbers to subscribers, and which is obliged under national legislation to request those subscribers’ consent to the use of data relating to them for the purposes of supplying directory enquiry services and directories, from differentiating in the request for those subscribers’ consent to that use according to the Member State in which the undertakings requesting the information referred to in that provision provide those services. [Signatures]( 1 ) Language of the case: Dutch. | d0a99-2263aee-46e8 | EN |
An internal rule of an undertaking which prohibits the visible wearing of any political, philosophical or religious sign does not constitute direct discrimination | 14 March 2017 ( *1 )‛Reference for a preliminary ruling — Social policy — Directive 2000/78/EC — Equal treatment — Discrimination based on religion or belief — Workplace regulations of an undertaking prohibiting workers from wearing visible political, philosophical or religious signs in the workplace — Direct discrimination — None — Indirect discrimination — Female worker prohibited from wearing an Islamic headscarf’In Case C‑157/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Hof van Cassatie (Court of Cassation, Belgium), made by decision of 9 March 2015, received at the Court on 3 April 2015, in the proceedings Samira Achbita, Centrum voor gelijkheid van kansen en voor racismebestrijding v G4S Secure Solutions NV, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič, L. Bay Larsen, M. Berger, M. Vilaras and E. Regan, Presidents of Chambers, A. Rosas, A. Borg Barthet, J. Malenovský, E. Levits, F. Biltgen (Rapporteur), K. Jürimäe and C. Lycourgos, Judges,Advocate General: J. Kokott,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 15 March 2016,after considering the observations submitted on behalf of:—the Centrum voor gelijkheid van kansen en voor racismebestrijding, by C. Bayart and I. Bosmans, advocaten,G4S Secure Solutions NV, by S. Raets and I. Verhelst, advocaten,the Belgian Government, by L. Van den Broeck and M. Jacobs, acting as Agents,the French Government, by G. de Bergues, D. Colas and R. Coesme, acting as Agents,the United Kingdom Government, by J. Kraehling, S. Simmons and C.R. Brodie, acting as Agents, and by A. Bates, Barrister,the European Commission, by G. Wils and D. Martin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 31 May 2016,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 2(2)(a) of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ 2000 L 303, p. 16).2The request has been made in proceedings between Ms Samira Achbita and the Centrum voor gelijkheid van kansen en voor racismebestrijding (Centre for Equal Opportunities and Combating Racism; ‘the Centrum’), and G4S Secure Solutions NV (‘G4S’), a company whose registered office is in Belgium, concerning the prohibition by G4S on its employees wearing any visible signs of their political, philosophical or religious beliefs in the workplace and on engaging in any observance of those beliefs. Legal context Directive 2000/78 3Recitals 1 and 4 of Directive 2000/78 state:‘(1)In accordance with Article 6 of the Treaty on European Union, the European Union is founded on the principles of liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law, principles which are common to all Member States and it respects fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and as they result from the constitutional traditions common to the Member States, as general principles of Community law.…(4)The right of all persons to equality before the law and protection against discrimination constitutes a universal right recognised by the Universal Declaration of Human Rights, the United Nations Convention on the Elimination of All Forms of Discrimination against Women, United Nations Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights and by the European Convention for the Protection of Human Rights and Fundamental Freedoms, to which all Member States are signatories. Convention No 111 of the International Labour Organisation (ILO) prohibits discrimination in the field of employment and occupation.’4Article 1 of Directive 2000/78 provides:‘The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.’5Article 2 of the directive provides:‘1. For the purposes of this Directive, the “principle of equal treatment” shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1.2. For the purposes of paragraph 1:(a)direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1;(b)indirect discrimination shall be taken to occur where an apparently neutral provision, criterion or practice would put persons having a particular religion or belief, a particular disability, a particular age, or a particular sexual orientation at a particular disadvantage compared with other persons unless:(i)that provision, criterion or practice is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary, …5. This Directive shall be without prejudice to measures laid down by national law which, in a democratic society, are necessary for public security, for the maintenance of public order and the prevention of criminal offences, for the protection of health and for the protection of the rights and freedoms of others.’6Article 3(1) of Directive 2000/78 states as follows:‘Within the limits of the areas of competence conferred on the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to:(c)employment and working conditions, including dismissals and pay;…’ Belgian law 7The purpose of the wet ter bestrijding van discriminatie en tot wijziging van de wet van 15 februari 1993 tot oprichting van een Centrum voor gelijkheid van kansen en voor racismebestrijding (Law to combat discrimination and amending the Law of 15 February 1993 establishing a Centre for Equal Opportunities and Combating Racism) of 25 February 2003 (Belgisch Staatsblad, 17 March 2003, p. 12844) was, inter alia, to implement the provisions of Directive 2000/78.8Article 2(1) of that law states:‘There is direct discrimination where a difference of treatment which is not objectively or reasonably justified is directly based on sex, alleged race, colour, background, national or ethnic origin, sexual orientation, marital status, birth, property, age, faith or belief, current or future state of health, disability or a physical characteristic.’9Article 2(2) of that law provides:‘There is indirect discrimination where an apparently neutral provision, criterion or practice, as such, has a detrimental effect on persons to whom one of the grounds of discrimination referred to in paragraph 1 applies, unless that provision, criterion or practice is objectively and reasonably justified.’ The dispute in the main proceedings and the question referred for a preliminary ruling 10G4S is a private undertaking which provides, inter alia, reception services for customers in both the public and private sectors.11On 12 February 2003, Ms Achbita, a Muslim, started to work for G4S as a receptionist. She was employed by G4S under an employment contract of indefinite duration. There was at that time an unwritten rule within G4S that workers could not wear visible signs of their political, philosophical or religious beliefs in the workplace.12In April 2006, Ms Achbita informed her line managers that she intended, in future, to wear an Islamic headscarf during working hours.13In response, the management of G4S informed Ms Achbita that the wearing of a headscarf would not be tolerated because the visible wearing of political, philosophical or religious signs was contrary to G4S’s position of neutrality.14On 12 May 2006, after a period of absence from work due to sickness, Ms Achbita notified her employer that she would be returning to work on 15 May and that she was going to wear the Islamic headscarf.15On 29 May 2006, the G4S works council approved an amendment to the workplace regulations, which came into force on 13 June 2006, according to which ‘employees are prohibited, in the workplace, from wearing any visible signs of their political, philosophical or religious beliefs and/or from engaging in any observance of such beliefs’.16On 12 June 2006, Ms Achbita was dismissed on account of her continuing insistence that she wished, as a Muslim, to wear the Islamic headscarf at work. She received a severance payment equivalent to three months’ salary and benefits acquired under the terms of her employment contract.17Following the dismissal of the action brought by Ms Achbita in the arbeidsrechtbank te Antwerpen (Labour Court, Antwerp, Belgium) against her dismissal from G4S, Ms Achbita lodged an appeal against that decision with the arbeidshof te Antwerpen (Higher Labour Court, Antwerp, Belgium). The appeal was denied on the ground, in particular, that the dismissal could not be considered unjustified since the blanket ban on wearing visible signs of political, philosophical or religious beliefs in the workplace did not give rise to direct discrimination, and no indirect discrimination or infringement of individual freedom or of freedom of religion was evident.18As regards the lack of direct discrimination, the arbeidshof te Antwerpen (Higher Labour Court, Antwerp) noted more specifically that it was common ground that Ms Achbita was dismissed not because of her Muslim faith but because she persisted in wishing to manifest that faith, visibly, during working hours, by wearing an Islamic headscarf. The provision of the workplace regulations infringed by Ms Achbita was of general scope in that it prohibited all workers from wearing visible signs of political, philosophical or religious beliefs in the workplace. There was nothing to suggest that G4S had taken a more conciliatory approach towards any other employee in a comparable situation, in particular as regards a worker with different religious or philosophical beliefs who consistently refused to comply with the ban.19The arbeidshof te Antwerpen (Higher Labour Court, Antwerp) rejected the argument that the prohibition, within G4S, on wearing visible signs of religious or philosophical beliefs constituted in itself direct discrimination against Ms Achbita as a religious person, holding that that prohibition concerned not only the wearing of signs relating to religious beliefs but also the wearing of signs relating to philosophical beliefs, thereby complying with the criterion of protection used by Directive 2000/78, which refers to ‘religion or belief’.20In support of her appeal on a point of law, Ms Achbita argues, in particular, that, by holding that the religious belief on which G4S’s ban is based is a neutral criterion and by failing to characterise the ban as the unequal treatment of workers as between those who wear an Islamic headscarf and those who do not, on the ground that the ban does not refer to a particular religious belief and is directed to all workers, the arbeidshof te Antwerpen (Higher Labour Court, Antwerp) misconstrued the concepts of ‘direct discrimination’ and ‘indirect discrimination’ as referred to in Article 2(2) of Directive 2000/78.21In those circumstances, the Hof van Cassatie (Court of Cassation) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Should Article 2(2)(a) of Directive 2000/78 be interpreted as meaning that the prohibition on wearing, as a female Muslim, a headscarf at the workplace does not constitute direct discrimination where the employer’s rule prohibits all employees from wearing outward signs of political, philosophical and religious beliefs at the workplace?’ Consideration of the question referred 22By its question, the referring court asks, in essence, whether Article 2(2)(a) of Directive 2000/78 must be interpreted as meaning that the prohibition on wearing an Islamic headscarf, which arises from an internal rule of a private undertaking imposing a blanket ban on the visible wearing of any political, philosophical or religious sign in the workplace, constitutes direct discrimination that is prohibited by that directive.23In the first place, under Article 1 of Directive 2000/78, the purpose of that directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.24Article 2(1) of Directive 2000/78 states that ‘the “principle of equal treatment” shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1’ of that directive. Article 2(2)(a) of the directive states that, for the purposes of Article 2(1), direct discrimination is to be taken to occur where one person is treated less favourably than another in a comparable situation, on any of the grounds, including religion, referred to in Article 1 of the directive.25As regards the meaning of ‘religion’ in Article 1 of Directive 2000/78, it should be noted that the directive does not include a definition of that term.26Nevertheless, the EU legislature referred, in recital 1 of Directive 2000/78, to fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), which provides, in Article 9, that everyone has the right to freedom of thought, conscience and religion, a right which includes, in particular, freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance.27In the same recital, the EU legislature also referred to the constitutional traditions common to the Member States, as general principles of EU law. Among the rights resulting from those common traditions, which have been reaffirmed in the Charter of Fundamental Rights of the European Union (‘the Charter’), is the right to freedom of conscience and religion enshrined in Article 10(1) of the Charter. In accordance with that provision, that right includes freedom to change religion or belief and freedom, either alone or in community with others and in public or in private, to manifest religion or belief, in worship, teaching, practice and observance. As is apparent from the explanations relating to the Charter of Fundamental Rights (OJ 2007 C 303, p. 17), the right guaranteed in Article 10(1) of the Charter corresponds to the right guaranteed in Article 9 of the ECHR and, in accordance with Article 52(3) of the Charter, has the same meaning and scope.28In so far as the ECHR and, subsequently, the Charter use the term ‘religion’ in a broad sense, in that they include in it the freedom of persons to manifest their religion, the EU legislature must be considered to have intended to take the same approach when adopting Directive 2000/78, and therefore the concept of ‘religion’ in Article 1 of that directive should be interpreted as covering both the forum internum, that is the fact of having a belief, and the forum externum, that is the manifestation of religious faith in public.29It is necessary, in the second place, to determine whether the internal rule at issue in the main proceedings gives rise to a difference in treatment of workers on the basis of their religion or their belief and, if so, whether that difference in treatment constitutes direct discrimination within the meaning of Article 2(2)(a) of Directive 2000/78.30In the present case, the internal rule at issue in the main proceedings refers to the wearing of visible signs of political, philosophical or religious beliefs and therefore covers any manifestation of such beliefs without distinction. The rule must, therefore, be regarded as treating all workers of the undertaking in the same way by requiring them, in a general and undifferentiated way, inter alia, to dress neutrally, which precludes the wearing of such signs.31It is not evident from the material in the file available to the Court that the internal rule at issue in the main proceedings was applied differently to Ms Achbita as compared to any other worker.32Accordingly, it must be concluded that an internal rule such as that at issue in the main proceedings does not introduce a difference of treatment that is directly based on religion or belief, for the purposes of Article 2(2)(a) of Directive 2000/78.33Nevertheless, according to settled case-law, the fact that the referring court’s question refers to certain provisions of EU law does not mean that the Court may not provide the referring court with all the guidance on points of interpretation which may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to those points in its question. It is, in this regard, for the Court of Justice to extract from all the information provided by the referring court, in particular from the grounds of the order for reference, the points of EU law which require interpretation in view of the subject matter of the dispute (see, inter alia, judgment of 12 February 2015, Oil Trading Poland, C‑349/13, EU:C:2015:84, paragraph 45 and the case-law cited).34In the present case, it is not inconceivable that the referring court might conclude that the internal rule at issue in the main proceedings introduces a difference of treatment that is indirectly based on religion or belief, for the purposes of Article 2(2)(b) of Directive 2000/78, if it is established — which it is for the referring court to ascertain — that the apparently neutral obligation it encompasses results, in fact, in persons adhering to a particular religion or belief being put at a particular disadvantage.35Under Article 2(2)(b)(i) of Directive 2000/78, such a difference of treatment does not, however, amount to indirect discrimination within the meaning of Article 2(2)(b) of the directive if it is objectively justified by a legitimate aim and if the means of achieving that aim are appropriate and necessary.36In that regard, it must be noted that, although it is ultimately for the national court, which has sole jurisdiction to assess the facts and to determine whether and to what extent the internal rule at issue in the main proceedings meets those requirements, the Court of Justice, which is called on to provide answers that are of use to the national court, may provide guidance, based on the file in the main proceedings and on the written and oral observations which have been submitted to it, in order to enable the national court to give judgment in the particular case pending before it.37As regards, in the first place, the condition relating to the existence of a legitimate aim, it should be stated that the desire to display, in relations with both public and private sector customers, a policy of political, philosophical or religious neutrality must be considered legitimate.38An employer’s wish to project an image of neutrality towards customers relates to the freedom to conduct a business that is recognised in Article 16 of the Charter and is, in principle, legitimate, notably where the employer involves in its pursuit of that aim only those workers who are required to come into contact with the employer’s customers.39An interpretation to the effect that the pursuit of that aim allows, within certain limits, a restriction to be imposed on the freedom of religion is moreover, borne out by the case-law of the European Court of Human Rights in relation to Article 9 of the ECHR (judgment of the ECtHR of 15 January 2013, Eweida and Others v. United Kingdom, CE:ECHR:2013:0115JUD004842010, paragraph 94).40As regards, in the second place, the appropriateness of an internal rule such as that at issue in the main proceedings, it must be held that the fact that workers are prohibited from visibly wearing signs of political, philosophical or religious beliefs is appropriate for the purpose of ensuring that a policy of neutrality is properly applied, provided that that policy is genuinely pursued in a consistent and systematic manner (see, to that effect, judgments of 10 March 2009, Hartlauer, C‑169/07, EU:C:2009:141, paragraph 55, and of 12 January 2010, Petersen, C‑341/08, EU:C:2010:4, paragraph 53).41In that respect, it is for the referring court to ascertain whether G4S had, prior to Ms Achbita’s dismissal, established a general and undifferentiated policy of prohibiting the visible wearing of signs of political, philosophical or religious beliefs in respect of members of its staff who come into contact with its customers.42As regards, in the third place, the question whether the prohibition at issue in the main proceedings was necessary, it must be determined whether the prohibition is limited to what is strictly necessary. In the present case, what must be ascertained is whether the prohibition on the visible wearing of any sign or clothing capable of being associated with a religious faith or a political or philosophical belief covers only G4S workers who interact with customers. If that is the case, the prohibition must be considered strictly necessary for the purpose of achieving the aim pursued.43In the present case, so far as concerns the refusal of a worker such as Ms Achbita to give up wearing an Islamic headscarf when carrying out her professional duties for G4S customers, it is for the referring court to ascertain whether, taking into account the inherent constraints to which the undertaking is subject, and without G4S being required to take on an additional burden, it would have been possible for G4S, faced with such a refusal, to offer her a post not involving any visual contact with those customers, instead of dismissing her. It is for the referring court, having regard to all the material in the file, to take into account the interests involved in the case and to limit the restrictions on the freedoms concerned to what is strictly necessary.44Having regard to all of the foregoing considerations, the answer to the question put by the referring court is as follows:Article 2(2)(a) of Directive 2000/78 must be interpreted as meaning that the prohibition on wearing an Islamic headscarf, which arises from an internal rule of a private undertaking prohibiting the visible wearing of any political, philosophical or religious sign in the workplace, does not constitute direct discrimination based on religion or belief within the meaning of that directive.By contrast, such an internal rule of a private undertaking may constitute indirect discrimination within the meaning of Article 2(2)(b) of Directive 2000/78 if it is established that the apparently neutral obligation it imposes results, in fact, in persons adhering to a particular religion or belief being put at a particular disadvantage, unless it is objectively justified by a legitimate aim, such as the pursuit by the employer, in its relations with its customers, of a policy of political, philosophical and religious neutrality, and the means of achieving that aim are appropriate and necessary, which it is for the referring court to ascertain. Costs 45Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 2(2)(a) of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation must be interpreted as meaning that the prohibition on wearing an Islamic headscarf, which arises from an internal rule of a private undertaking prohibiting the visible wearing of any political, philosophical or religious sign in the workplace, does not constitute direct discrimination based on religion or belief within the meaning of that directive. By contrast, such an internal rule of a private undertaking may constitute indirect discrimination within the meaning of Article 2(2)(b) of Directive 2000/78 if it is established that the apparently neutral obligation it imposes results, in fact, in persons adhering to a particular religion or belief being put at a particular disadvantage, unless it is objectively justified by a legitimate aim, such as the pursuit by the employer, in its relations with its customers, of a policy of political, philosophical and religious neutrality, and the means of achieving that aim are appropriate and necessary, which it is for the referring court to ascertain. [Signatures]( *1 ) * Language of the case: Dutch. | a4e20-dfc7c88-41d1 | EN |
Actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, may constitute ‘terrorist acts’ | 14 March 2017 ( *1 )‛Reference for a preliminary ruling — Common Foreign and Security Policy (CFSP) — Specific restrictive measures directed against certain persons and entities with a view to combating terrorism — Common Position 2001/931/CFSP — Framework Decision 2002/475/JHA — Regulation (EC) No 2580/2001 — Article 2(3) — Inclusion of the ‘Liberation Tigers of Tamil Eelam (LTTE)’ on the list of persons, groups and entities involved in terrorist acts — Question referred for a preliminary ruling concerning the validity of that inclusion — Compliance with international humanitarian law — Concept of ‘terrorist act’ — Actions by armed forces during periods of armed conflict’In Case C‑158/14,REQUEST for a preliminary ruling under Article 267 TFEU from the Raad van State (Council of State, Netherlands), made by decision of 2 April 2014, received at the Court on 4 April 2014, in the proceedings A, B, C, D v Minister van Buitenlandse Zaken, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič, L. Bay Larsen, E. Juhász and M. Vilaras, Presidents of Chambers, A. Rosas (Rapporteur), A. Borg Barthet, J. Malenovský, E. Levits, F. Biltgen and C. Lycourgos, Judges,Advocate General: E. Sharpston,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 8 March 2016,after considering the observations submitted on behalf of:—A and B, by A.M. van Eik, A. Eikelboom and T. Buruma, advocaten,C and D, by H. Seton and X.B. Sijmons, advocaten,the Netherlands Government, by M.K. Bulterman and J. Langer, acting as Agents,the Spanish Government, by M.A. Sampol Pucurull, L. Banciella Rodríguez-Miñón and M.J. García-Valdecasas Dorrego, acting as Agents,the United Kingdom Government, by S. Brandon, L. Christie and V. Kaye, acting as Agents, and by M. Lester, Barrister,the Council of the European Union, by F. Naert and G. Étienne, acting as Agents,the European Commission, by F. Castillo de la Torre, F. Ronkes Agerbeek and P. Van Nuffel, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 29 September 2016,gives the following Judgment 1This request for a preliminary ruling concerns, first, the interpretation of Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’), Council Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism (OJ 2002 L 164, p. 3), as amended by Council Framework Decision 2008/919/JHA of 28 November 2008 (OJ 2008 L 330, p. 21) (‘Framework Decision 2002/475’), Council Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism (OJ 2001 L 344, p. 93) and Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2001 L 344, p. 70, and corrigendum OJ 2010 L 52, p. 58), and, second, the validity of Council Implementing Regulation (EU) No 610/2010 of 12 July 2010 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 1285/2009 (OJ 2010 L 178, p. 1), in so far as it maintains the ‘Liberation Tigers of Tamil Eelam (LTTE)’ (‘the LTTE’) on the list of groups and entities referred to in Article 2(3) of Regulation No 2580/2001 (‘the list of those whose funds are to be frozen’).2The request has been made in the context of disputes between A, B, C and D (collectively, ‘A and Others’) and the minister van Buitenlandse Zaken (Netherlands Minister for Foreign Affairs) (‘the Minister’), concerning the imposing on those persons of restrictive measures under the Netherlands national legislation for the suppression of terrorist acts. Legal context International law Resolution 1373 (2001) of the United Nations Security Council3Following the terrorist attacks that took place on 11 September 2001 in New York, Washington and Pennsylvania (United States), on 28 September 2001 the United Nations Security Council adopted Resolution 1373 (2001).4The preamble to that resolution reaffirms, in particular, ‘the need to combat by all means, in accordance with the Charter of the United Nations, threats to international peace and security caused by terrorist acts’. It also emphasises the obligation for States ‘to complement international cooperation by taking additional measures to prevent and suppress, in their territories through all lawful means, the financing and preparation of any acts of terrorism’.5Under point 1 of the resolution, the United Nations Security Council:‘Decides that all States shall:(a)Prevent and suppress the financing of terrorist acts;(b)Criminalise the wilful provision or collection, by any means, directly or indirectly, of funds by their nationals or in their territories with the intention that the funds should be used, or in the knowledge that they are to be used, in order to carry out terrorist acts;…(d)Prohibit their nationals or any persons and entities within their territories from making any funds, financial assets or economic resources or financial or other related services available, directly or indirectly, for the benefit of persons who commit or attempt to commit or facilitate or participate in the commission of terrorist acts, of entities owned or controlled, directly or indirectly, by such persons and of persons and entities acting on behalf of or at the direction of such persons;…’The four Geneva Conventions of 12 August 1949 and their additional protocols6Article 2 common to the four Geneva Conventions of 12 August 1949, namely the Convention for the Amelioration of the Condition of the Wounded and Sick in Armed Forces in the Field (United Nations Treaty Series, Volume 75, p. 31) (‘the First Geneva Convention’), the Convention for the Amelioration of the Condition of Wounded, Sick and Shipwrecked Members of Armed Forces at Sea (United Nations Treaty Series, Volume 75, p. 85) (‘the Second Geneva Convention’), the Convention relative to the Treatment of Prisoners of War (United Nations Treaty Series, Volume 75, p. 135) (‘the Third Geneva Convention’), and the Convention relative to the Protection of Civilian Persons in Time of War (United Nations Treaty Series, Volume 75, p. 287) (‘the Fourth Geneva Convention’) (collectively, ‘the four Geneva Conventions’), stipulates:‘In addition to the provisions which shall be implemented in peacetime, the present convention shall apply to all cases of declared war or of any other armed conflict which may arise between two or more of the High Contracting Parties, even if the state of war is not recognised by one of them.The convention shall also apply to all cases of partial or total occupation of the territory of a High Contracting Party, even if the said occupation meets with no armed resistance.7According to Article 33 of the Fourth Geneva Convention:‘No protected person may be punished for an offence he or she has not personally committed. Collective penalties and likewise all measures of intimidation or of terrorism are prohibited. ...’8The four Geneva Conventions have been the subject of several additional protocols: the Protocol Additional to the four Geneva Conventions and relating to the Protection of Victims of International Armed Conflicts (Protocol I) of 8 June 1977 (United Nations Treaty Series, Volume 1125, p. 3), the Protocol Additional to the four Geneva Conventions and relating to the Protection of Victims of Non-International Armed Conflicts (Protocol II) of 8 June 1977 (United Nations Treaty Series, Volume 1125, p. 609), and the Protocol Additional to the four Geneva Conventions and relating to the Adoption of an Additional Distinctive Emblem (Protocol III) of 8 December 2005 (United Nations Treaty Series, Volume 2404, p. 261), (collectively, ‘the additional protocols’).9Under Article 1(3) and (4) of Protocol I:‘3. This protocol, which supplements [the four Geneva Conventions], shall apply in the situations referred to in Article 2 common to those conventions.4. The situations referred to in the preceding paragraph include armed conflicts in which peoples are fighting against colonial domination and alien occupation and against racist regimes in the exercise of their right of self-determination, as enshrined in the Charter of the United Nations and the Declaration on Principles of International Law concerning Friendly Relations and Co-operation among States in accordance with the Charter of the United Nations.’10Article 51(2) of that protocol is worded as follows:‘The civilian population as such, as well as individual civilians, shall not be the object of attack. Acts or threats of violence the primary purpose of which is to spread terror among the civilian population are prohibited.’11Under Article 1 of Protocol II:‘1. This protocol, which develops and supplements Article 3 common to [the four Geneva Conventions] without modifying its existing conditions of application, shall apply to all armed conflicts which are not covered by Article 1 of [Protocol I] and which take place in the territory of a High Contracting Party between its armed forces and dissident armed forces or other organised armed groups which, under responsible command, exercise such control over a part of its territory as to enable them to carry out sustained and concerted military operations and to implement this protocol.2. This protocol shall not apply to situations of internal disturbances and tensions, such as riots, isolated and sporadic acts of violence and other acts of a similar nature, as not being armed conflicts.’12The wording of Article 4(1) and (2) of that protocol is as follows:‘1. All persons who do not take a direct part or who have ceased to take part in hostilities, whether or not their liberty has been restricted, are entitled to respect for their person, honour and convictions and religious practices. They shall in all circumstances be treated humanely, without any adverse distinction. It is prohibited to order that there shall be no survivors.2. Without prejudice to the generality of the foregoing, the following acts against the persons referred to in paragraph 1 are and shall remain prohibited at any time and in any place whatsoever:acts of terrorism;(h)threats to commit any of the foregoing acts.’13Article 6 of that protocol states:‘1. This article applies to the prosecution and punishment of criminal offences related to the armed conflict.5. At the end of hostilities, the authorities in power shall endeavour to grant the broadest possible amnesty to persons who have participated in the armed conflict, or those deprived of their liberty for reasons related to the armed conflict, whether they are interned or detained.’14Article 13(2) of that protocol is worded as follows:15The European Union is not a party to the four Geneva Conventions or to the additional protocols. However, all the Member States are parties thereto.The International Convention for the Suppression of Terrorist Bombings16The final recital of the International Convention for the Suppression of Terrorist Bombings, signed in New York on 15 December 1997 (United Nations Treaty Series, Volume 2149, p. 256), reads as follows:‘Noting that the activities of military forces of States are governed by rules of international law outside the framework of this convention and that the exclusion of certain actions from the coverage of this convention does not condone or make lawful otherwise unlawful acts, or preclude prosecution under other laws,17Article 19(2) of that convention states:‘The activities of armed forces during an armed conflict, as those terms are understood under international humanitarian law, which are governed by that law, are not governed by this convention, and the activities undertaken by military forces of a State in the exercise of their official duties, inasmuch as they are governed by other rules of international law, are not governed by this convention.’18The European Union is not a party to that convention. However, all the Member States are parties thereto.The International Convention for the Suppression of the Financing of Terrorism19Article 2(1) of the International Convention for the Suppression of the Financing of Terrorism, signed in New York on 9 December 1999 (United Nations Treaty Series, Volume 2178, p. 197), provides:‘Any person commits an offence within the meaning of this convention if that person by any means, directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out:Any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organisation to do or to abstain from doing any act.’20Under Article 8(1) of that convention, the State Parties must adopt the appropriate measures, in accordance with their domestic legal principles, for identifying, detecting and freezing or seizing any funds used or allocated for the purpose of committing the offences referred to in Article 2 of that convention, together with the proceeds derived from such offences, for purposes of possible forfeiture.21According to Article 21 of that convention:‘Nothing in this convention shall affect other rights, obligations and responsibilities of States and individuals under international law, in particular the purposes of the Charter of the United Nations, international humanitarian law and other relevant conventions.’22The European Union is not a party to the International Convention for the Suppression of the Financing of Terrorism. However, all the Member States are parties thereto.The International Convention for the Suppression of Acts of Nuclear Terrorism23Article 4(2) of the International Convention for the Suppression of Acts of Nuclear Terrorism, signed in New York on 13 April 2005 (United Nations Treaty Series, Volume 2445, p. 89), is worded as follows:‘The activities of armed forces during an armed conflict, as those terms are understood under international humanitarian law, which are governed by that law are not governed by this convention, and the activities undertaken by military forces of a State in the exercise of their official duties, inasmuch as they are governed by other rules of international law, are not governed by this convention.’24The European Union is not a party to that convention. However, a large majority of the Member States are parties thereto.The Council of Europe Convention on the Prevention of Terrorism25Article 26(5) of the Council of Europe Convention on the Prevention of Terrorism, signed in Warsaw on 16 May 2005 (Council of Europe Treaty Series No 196), is worded as follows:‘The activities of armed forces during an armed conflict, as those terms are understood under international humanitarian law, which are governed by that law, are not governed by this convention, and the activities undertaken by military forces of a Party in the exercise of their official duties, inasmuch as they are governed by other rules of international law, are not governed by this convention.’26Under Council Decision (EU) 2015/1913 of 18 September 2015 on the signing, on behalf of the European Union, of the Council of Europe Convention on the Prevention of Terrorism (OJ 2015 L 280, p. 22), the European Union signed that convention as regards matters falling within its competence. The majority of the Member States also signed and ratified that convention. European Union law Common Position 2001/93127As is apparent from its recitals, the purpose of Common Position 2001/931 is to implement, by means of actions carried out both at EU level and at the level of the Member States, Resolution 1373 (2001), by which the United Nations Security Council decides that all States are to prevent and suppress the financing of terrorist acts.28Article 1 of that Common Position states:‘1. This Common Position applies in accordance with the provisions of the following Articles to persons, groups and entities involved in terrorist acts and listed in the Annex.2. For the purposes of this Common Position, “persons, groups and entities involved in terrorist acts” shall mean:persons who commit, or attempt to commit, terrorist acts or who participate in, or facilitate, the commission of terrorist acts,groups and entities owned or controlled directly or indirectly by such persons; and persons, groups and entities acting on behalf of, or under the direction of, such persons, groups and entities, including funds derived or generated from property owned or controlled directly or indirectly by such persons and associated persons, groups and entities.3. For the purposes of this Common Position, “terrorist act” shall mean one of the following intentional acts, which, given its nature or its context, may seriously damage a country or an international organisation, as defined as an offence under national law, where committed with the aim of:(i)seriously intimidating a population, or(ii)unduly compelling a Government or an international organisation to perform or abstain from performing any act, or(iii)seriously destabilising or destroying the fundamental political, constitutional, economic or social structures of a country or an international organisation:attacks upon a person’s life which may cause death;attacks upon the physical integrity of a person;(c)kidnapping or hostage taking;causing extensive destruction to a Government or public facility, a transport system, an infrastructure facility, including an information system, a fixed platform located on the continental shelf, a public place or private property, likely to endanger human life or result in major economic loss;(e)seizure of aircraft, ships or other means of public or goods transport;(f)manufacture, possession, acquisition, transport, supply or use of weapons, explosives or of nuclear, biological or chemical weapons, as well as research into, and development of, biological and chemical weapons;(g)release of dangerous substances, or causing fires, explosions or floods the effect of which is to endanger human life;interfering with or disrupting the supply of water, power or any other fundamental natural resource, the effect of which is to endanger human life;threatening to commit any of the acts listed under (a) to (h);(j)directing a terrorist group;(k)participating in the activities of a terrorist group, including by supplying information or material resources, or by funding its activities in any way, with knowledge of the fact that such participation will contribute to the criminal activities of the group.For the purposes of this paragraph, “terrorist group” shall mean a structured group of more than two persons, established over a period of time and acting in concert to commit terrorist acts. “Structured group” means a group that is not randomly formed for the immediate commission of a terrorist act and that does not need to have formally defined roles for its members, continuity of its membership or a developed structure.4. The list in the Annex shall be drawn up on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons, groups and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act based on serious and credible evidence or clues, or condemnation for such deeds. …Regulation No 2580/200129Under Article 1(4) of Regulation No 2580/2001, the definition of ‘terrorist act’ for the purposes of that regulation is to be the one contained in Article 1(3) of Common Position 2001/931.30Article 2 of that regulation states:‘1. Except as permitted under Articles 5 and 6:all funds, other financial assets and economic resources belonging to, or owned or held by, a natural or legal person, group or entity included in the list referred to in paragraph 3 shall be frozen;2. Except as permitted under Articles 5 and 6, it shall be prohibited to provide financial services to, or for the benefit of, a natural or legal person, group or entity included in the list referred to in paragraph 3.3. The Council, acting by unanimity, shall establish, review and amend the list of persons, groups and entities to which this Regulation applies, in accordance with the provisions laid down in Article 1(4), (5) and (6) of Common Position [2001/931]; such list shall consist of:natural persons committing, or attempting to commit, participating in or facilitating the commission of any act of terrorism;legal persons, groups or entities committing, or attempting to commit, participating in or facilitating the commission of any act of terrorism;31Under Article 3(1) of that regulation, the participation, knowingly and intentionally, in activities, the object or effect of which is, directly or indirectly, to circumvent Article 2 thereof is to be prohibited.32Article 9 of Regulation No 2580/2001 is worded as follows:‘Each Member State shall determine the sanctions to be imposed where the provisions of this Regulation are infringed. Such sanctions shall be effective, proportionate and dissuasive.’Framework Decision 2002/47533As is apparent from recitals 6 and 7 thereof, the purpose of Framework Decision 2002/475 is, inter alia, to approximate the definition of terrorist offences in all Member States, to provide penalties and sanctions which reflect the seriousness of such offences, and to establish jurisdictional rules to ensure that terrorist offences may be effectively prosecuted.34Recital 11 of that framework decision states:‘Actions by armed forces during periods of armed conflict, which are governed by international humanitarian law within the meaning of these terms under that law, and, inasmuch as they are governed by other rules of international law, actions by the armed forces of a State in the exercise of their official duties are not governed by this Framework Decision,35Article 1(1) of that framework decision, entitled ‘Terrorist offences and fundamental rights and principles’, states:‘Each Member State shall take the necessary measures to ensure that the intentional acts referred to below in points (a) to (i), as defined as offences under national law, which, given their nature or context, may seriously damage a country or an international organisation where committed with the aim of:unduly compelling a Government or international organisation to perform or abstain from performing any act, orseriously destabilising or destroying the fundamental political, constitutional, economic or social structures of a country or an international organisation,shall be deemed to be terrorist offences:causing extensive destruction to a Government or public facility, a transport system, an infrastructure facility, including an information system, a fixed platform located on the continental shelf, a public place or private property likely to endanger human life or result in major economic loss;release of dangerous substances, or causing fires, floods or explosions the effect of which is to endanger human life;threatening to commit any of the acts listed in (a) to (h).’36Article 2 of that framework decision, entitled ‘Offences relating to a terrorist group’, is worded as follows:‘1. For the purposes of this Framework Decision, “terrorist group” shall mean: a structured group of more than two persons, established over a period of time and acting in concert to commit terrorist offences. “Structured group” shall mean a group that is not randomly formed for the immediate commission of an offence and that does not need to have formally defined roles for its members, continuity of its membership or a developed structure.2. Each Member State shall take the necessary measures to ensure that the following intentional acts are punishable:participating in the activities of a terrorist group, including by supplying information or material resources, or by funding its activities in any way, with knowledge of the fact that such participation will contribute to the criminal activities of the terrorist group.’Decisions 2001/927/EC and 2006/379/EC37Council Decision 2001/927/EC of 27 December 2001 establishing the list provided for in Article 2(3) of Regulation No 2580/2001 (OJ 2001 L 344, p. 83) established an initial list of persons, groups and entities to which that regulation applies.38By Decision 2006/379/EC of 29 May 2006 implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2005/930/EC (OJ 2006 L 144, p. 21), the Council included the LTTE on that list. Subsequently, that entity remained included on that list under the successive decisions and implementing regulations replacing that list with a new list and repealing the previous decision or implementing regulation. The LTTE was thus included on the list of those whose funds are to be frozen appended to Implementing Regulation No 610/2010. Netherlands law 39Under Article 2(1) of the Sanctieregeling terrorisme 2007-II (Regulation on sanctions for the suppression of terrorism 2007-II) (‘the Sanctieregeling’), if, in his opinion, persons or organisations belong to the circle of persons or organisations referred to in Resolution 1373 (2001), the Minister may adopt a ‘designation order’ in respect of such persons or organisations.40Under Article 2(2) of that regulation, all resources belonging to the persons and organisations referred to in Article 2(1) thereof are to be frozen.41Article 2(3) of that regulation prohibits the providing of financial services to, or for the benefit of, the persons and organisations referred to in Article 2(1) thereof.42Under Article 2(4) of the Sanctieregeling, it is prohibited to make resources available, directly or indirectly, to the persons and organisations referred to in Article 2(1) thereof. The dispute in the main proceedings and the questions referred for a preliminary ruling 43It is apparent from the information provided by the referring court that, on 8 June 2010, the Minister adopted designation orders in respect of A and Others on the basis of the Sanctieregeling (‘the orders of 8 June 2010’), resulting in the freezing of their respective financial resources. By decisions of 10 January 2011, 8 December 2010 and 25 November 2010 respectively, the Minister rejected the complaints that those persons had brought against the orders of 8 June 2010. He based the rejection of those complaints on the fact that A and Others all belonged, in his opinion, to the circle of persons and organisations targeted by Resolution 1373 (2001). In addition, the Minister took into consideration an official memorandum of the Algemene Inlichtingen- en Veiligheidsdienst (Netherlands General Intelligence and Security Service) of 14 October 2008, according to which those persons had been involved in raising funds for the LTTE. The Minister also took into account the inclusion of that entity on the list of those whose funds are to be frozen. In addition, he relied on the fact that the public prosecution service had brought criminal proceedings against A and Others on grounds of participation in a terrorist organisation within the meaning of the Netherlands Criminal Code and of infringement, for the benefit of the LTTE, of the prohibitions set out in Article 2(1) and (2) and Article 3 of Regulation No 2580/2001.44By judgments of 20 December 2011, 18 January 2012 and 30 August 2012 respectively, the administrative law sections of the rechtbank Zwolle-Lelystad (District Court, Zwolle-Lelystad, Netherlands), the rechtbank ’s Gravenhage (District Court, The Hague, Netherlands) and the rechtbank Alkmaar (District Court, Alkmaar, Netherlands) declared that the actions brought by A and Others against the decisions of the Minister to maintain the orders of 8 June 2010 were unfounded. Those persons have brought appeals against those judgments before the referring court, the Raad van State (Council of State, Netherlands).45In those appeals, A and Others argue, inter alia, that the LTTE is not a terrorist organisation because the conflict between that entity and the Sri Lankan Government must be regarded as an armed conflict within the meaning of international humanitarian law. They assert that the inclusion of that entity on the list of those whose funds are to be frozen is, accordingly, unlawful.46In the first place, the referring court observes that Article 2 of the Sanctieregeling is intended to implement Resolution 1373 (2001) and that that provision refers neither to Regulation No 2580/2001 nor to Common Position 2001/931. However, that court considers that, inasmuch as the Minister expressly based his opinion that the LTTE is a terrorist organisation on that entity’s inclusion on the list of those whose funds are to be frozen, that inclusion constitutes the basis of the orders of 8 June 2010. According to the referring court, given that Common Position 2001/931 and Regulation No 2580/2001 refer to Resolution 1373 (2001), the Minister was required, in line with the principle of sincere cooperation laid down in Article 4(3) TEU, to consider that the entities included on that list are terrorist organisations. However, that court considers that it is permissible, in the light of the arguments put forward by A and Others, to question both the lawfulness of the acts of the Council of the European Union whereby it maintained the LTTE on the list of those whose funds are to be frozen that was in force at the time the orders of 8 June 2010 were adopted, and the validity of the subsequent acts of that institution by which it maintained the LTTE on that list.47In the second place, taking into consideration the judgments of 9 March 1994, TWD Textilwerke Deggendorf (C‑188/92, EU:C:1994:90), and of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), the referring court questions whether it is appropriate to recognise the right of A and Others to plead the unlawfulness of those acts before it, given that those persons have not requested the annulment of those acts before the Courts of the European Union. According to that court, A and Others are in a factual situation similar to that of the persons accused of being members of the Devrimci Halk Kurtulus Partisi-Cephesi (DHKP-C) in the case which gave rise to the judgment of 29 June 2010, E and F (C‑550/09, EU:C:2010:382), by which the Court of Justice held, in essence, that those persons did not unquestionably have standing to bring an action for annulment, on the basis of Article 230 EC, against the DHKP-C’s inclusion on the list referred to in Article 2(3) of Regulation No 2580/2001. The referring court raises the question whether the solution arrived at in that judgment may be applied by analogy under Article 263 TFEU, given that that provision has expanded the possibility for individuals to contest the legality of acts of the European Union. It observes, inter alia, that, if it were to be concluded that, having regard to Article 263 TFEU, persons in a situation such as that of A and Others may not plead, before national courts, that the inclusion of an organisation on the list of those whose funds are to be frozen referred to in Article 2(3) of Regulation No 2580/2001 is unlawful, any persons who fear that a national authority is taking anti-terrorist measures against them owing to their involvement, whether actual or suspected, in an organisation included on that list should bring actions against the inclusion of that organisation on that list as a precautionary measure. However, according to the referring court, such a situation would be incompatible with the right not to self-incriminate.48In the third place, in the event that the Court of Justice were to decide that an action for annulment of Implementing Regulation No 610/2010, brought by A and Others, would not unquestionably be admissible, the referring court questions whether the inclusion of the LTTE on the list of those whose funds are to be frozen is valid. First, it considers that, despite the wording of recital 11 of Framework Decision 2002/475, it is not inconceivable that actions by an armed force during periods of armed conflict, within the meaning of international humanitarian law, may be regarded as terrorist offences. However, in view of the discretion which appears to be granted by the definition of ‘terrorist offences’ laid down in Article 1(1) of that framework decision, it is possible, according to the referring court, to take into account, when determining whether it is appropriate to classify the activities engaged in by the LTTE as ‘terrorist offences’, the fact that that entity was acting as an armed force engaged in an armed conflict.49Secondly, that court notes that neither Common Position 2001/931 nor Regulation No 2580/2001 specifies whether it is necessary to have regard to the fact that the acts or offences which they mention have been committed by armed forces during periods of armed conflict within the meaning of international humanitarian law. It considers, however, that, in view of the fact that the definitions of ‘terrorist acts’ referred to in Article 1(3) of Common Position 2001/931 and ‘terrorist offences’ contained in Article 1(1) of Framework Decision 2002/475 coincide, if actions by armed forces during periods of armed conflict were to be regarded as falling outside the concept of ‘terrorist offences’ within the meaning of that framework decision, they could not then constitute ‘terrorist acts’ within the meaning of Common Position 2001/931 and Regulation No 2580/2001.50Thirdly, making reference to the four Geneva Conventions of 1949 and the additional protocols, Article 19(2) of the International Convention for the Suppression of Terrorist Bombings, Article 4(2) of the International Convention for the Suppression of Acts of Nuclear Terrorism, Article 26(5) of the Council of Europe Convention on the Prevention of Terrorism, and Article 12 of the International Convention Against the Taking of Hostages, the referring court finds that those international conventions on terrorism exclude actions by armed forces during periods of armed conflict from their scope, which would seem to indicate that there is an international consensus regarding the fact that actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, are not to be regarded as terrorist activities. However, the referring court also makes reference to Article 2(1)(b) of the International Convention for the Suppression of the Financing of Terrorism, Article 33 of the Fourth Geneva Convention and Article 4(2)(d) of Protocol II and notes that, according to those conventions, such actions should not be regarded as terrorist activities so long as they do not target civilians or other persons who do not take a direct part in hostilities.51Fourthly, the referring court finds that the Council provided reasons for the inclusion of the LTTE on the list of those whose funds are to be frozen by mentioning a series of attacks which that entity had carried out in Sri Lanka during the period from 12 August 2005 to 12 April 2009 and which, accordingly, had a connection with the conflict between that organisation and the Sri Lankan Government. In addition, it explains that the Minister considered, in a memorandum of August 2009, on the basis of the criteria set out in Article 1 of Protocol II, that, until 18 May 2009, that conflict was a non-international armed conflict. Furthermore, until July 2009, the United Nations High Commissioner for Refugees had classified that conflict as an ‘armed conflict’. Lastly, the referring court emphasises the importance, in its view, of determining whether the armed conflict is non-international within the meaning of international humanitarian law.52In those circumstances the Raad van State (Council of State) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Having regard to, inter alia, Article 47 of the [Charter], would an action for the annulment of Implementing Regulation No 610/2010, in so far as that regulation included the LTTE on the list [of those whose funds are to be frozen], brought before the General Court by [A and Others] in their own name on the basis of Article 263 TFEU, [unquestionably] have been admissible?(2)Having regard to, inter alia, recital 11 [of Framework Decision 2002/475], can actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, be terrorist offences within the meaning of that Framework Decision?If the answer to Question 2(a) is in the affirmative, can actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, be terrorist acts within the meaning of Common Position [2001/931] and of Regulation No 2580/2001?(3)Are the actions which formed the basis of Implementing Regulation No 610/2010, in so far as it included the LTTE on the list [of those whose funds are to be frozen], actions by armed forces during periods of armed conflict within the meaning of international humanitarian law?(4)Having regard to, inter alia, the answers to Questions 1, 2(a), 2(b) and 3, is Implementing Regulation No 610/2010 [invalid], in so far as the LTTE was thereby included on the list [of those whose funds are to be frozen]?(5)If the answer to Question 4 is in the affirmative, does that invalidity then also apply to the earlier and later Council decisions updating the list [of those whose funds are to be frozen], in so far as those decisions resulted in the inclusion of the LTTE on that list?’ Preliminary remarks 53By actions brought before the General Court of the European Union on 11 April 2011 (Case T‑208/11) and 28 September 2011 (Case T‑508/11), the LTTE requested the annulment of two implementing regulations in so far as those acts concern it by having included it on the list of those whose funds are to be frozen referred to in Article 2(3) of Regulation No 2580/2001. During the proceedings before the General Court, that entity modified its heads of claim by requesting the annulment of the implementing regulations concerning it, adopted after the actions were brought, which maintained its inclusion on that list.54By judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885), the General Court rejected the LTTE’s first plea in law, based on the contention that Regulation No 2580/2001 was not applicable to the conflict between the LTTE and the Sri Lankan Government, by which that entity argued that that regulation did not apply to situations of armed conflict because such situations could be governed only by international humanitarian law.55However, the General Court upheld some of the LTTE’s pleas in law, considering that the Council had infringed Article 1 of Common Position 2001/931 and, given that there was no reference in the grounds of those regulations to decisions of competent authorities concerning the acts imputed to that entity, had failed to fulfil its duty to provide a statement of reasons in respect of acts of the European Union. Consequently, the Court annulled the contested regulations in so far as they concern that entity.56By application lodged on 19 December 2014, the Council brought an appeal before the Court of Justice against the judgment of the General Court of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885).57In that regard, it should be noted that the present case relates to acts of the European Union, adopted between 2006 and 2010, which included the LTTE on the list of those whose funds are to be frozen, an inclusion which was based, as is apparent from paragraph 51 above, on a series of attacks carried out by that entity during the period from 12 August 2005 to 12 April 2009. By contrast, Case C‑599/14 P, relating to the Council’s appeal referred to in the preceding paragraph, relates to acts of the European Union adopted after 2010 which maintained the inclusion of that entity on the list of those whose funds are to be frozen.58In those circumstances, it is necessary to dismiss the Netherlands Government’s claim that the present case should be stayed pending the judgment of the Court in Case C‑599/14 P. Consideration of the questions referred Question 1 59By its first question, the referring court asks, in essence, whether it is obvious, within the meaning of the case-law based on the judgments of 9 March 1994, TWD Textilwerke Deggendorf (C‑188/92, EU:C:1994:90), and of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), that actions for annulment of Implementing Regulation No 610/2010 relating to the inclusion of the LTTE on the list of those whose funds are to be frozen, brought before the General Court by persons in a situation such as that of the appellants in the main proceedings, would have been admissible.60It should be noted at the outset that both the facts of the case in the main proceedings and the orders of 8 June 2010 predate the entry into force of Implementing Regulation No 610/2010. It is therefore appropriate to consider that the question concerns not only that implementing regulation but also the acts preceding it which included and then maintained the LTTE on the list of those whose funds are to be frozen.61It is apparent from the order for reference that the Raad van State is raising the question whether the case-law which emerges from the judgments of 9 March 1994, TWD Textilwerke Deggendorf (C‑188/92, EU:C:1994:90), and of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), may be applied by analogy to a case such as the one in the main proceedings.62In the case which gave rise to the judgment of 9 March 1994, TWD Textilwerke Deggendorf (C‑188/92, EU:C:1994:90), a national court had, by a request for a preliminary ruling submitted in 1992, put a question to the Court concerning the validity of a decision of the European Commission adopted in 1986 regarding State aid. That decision of the Commission had not been contested by the company receiving the aid concerned by that decision, although a copy thereof had been communicated to that company by the competent national authority and the latter had expressly informed the former that it was entitled to bring an action before the Court of Justice of the European Union against the Commission’s decision.63In the light of those circumstances, the Court held that it follows from the requirements of legal certainty that it is not possible for a recipient of aid, who could have contested the Commission’s decision relating to that aid and who has allowed the mandatory time limit laid down in that regard by the provisions of the Treaty to expire, to call in question the lawfulness of that decision before the national courts in an action brought against the measures taken by the national authorities to implement that decision (see, to that effect, judgment of 9 March 1994, TWD Textilwerke Deggendorf, C‑188/92, EU:C:1994:90, paragraphs 12 and 17).64In the case which gave rise to the judgment of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), the Court of Justice had, in 1999, received a request for a preliminary ruling concerning the validity of an anti-dumping regulation which had been adopted in 1992 and successfully contested by an action for annulment giving rise to the judgment of the General Court of 2 May 1995, NTN Corporation and Koyo Seiko v Council (T‑163/94 and T‑165/94, EU:T:1995:83), confirmed by the judgment of the Court of Justice of 10 February 1998, Commission v NTN and Koyo Seiko (C‑245/95 P, EU:C:1998:46), that action for annulment having been brought by a number of the manufacturers concerned by that anti-dumping regulation but not by Nachi Fujikoshi, the parent company of the applicant in the main proceedings in the case which gave rise to the judgment of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), namely Nachi Europe.65Having found, in paragraph 39 of the judgment of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), that Nachi Europe could be regarded as being directly and individually concerned by the provisions of that regulation, which imposed a specific anti-dumping duty concerning the goods manufactured by Nachi Fujikoshi, the Court of Justice held, in paragraph 40 of that judgment, that an importer of the goods covered by that regulation, such as Nachi Europe, which unquestionably had a right of action before the General Court to seek the annulment of the anti-dumping duty imposed on those goods, but which had not exercised that right, could not, subsequently, plead the invalidity of that anti-dumping duty before a national court.66As the Court has emphasised on several occasions, to accept that a person who would unquestionably have had standing to bring proceedings under the fourth paragraph of Article 263 TFEU for the annulment of an act of the European Union could, after the expiry of the time limit for bringing proceedings laid down in the sixth paragraph of Article 263 TFEU, contest the validity of that act before the national courts, would amount to enabling the person concerned to circumvent the fact that that act is final as against him once the time limit for his bringing an action has expired (see, to that effect, judgments of 9 March 1994, TWD Textilwerke Deggendorf, C‑188/92, EU:C:1994:90, paragraph 18; of 15 February 2001, Nachi Europe, C‑239/99, EU:C:2001:101, paragraph 30; of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 41; and of 5 March 2015, Banco Privado Português and Massa Insolvente do Banco Privado Português, C‑667/13, EU:C:2015:151, paragraph 28).67However, it is only in circumstances where the action for annulment would unquestionably have been admissible that the Court has held that a person may not plead the invalidity of an act of the European Union before a national court (see, to that effect, judgments of 9 March 1994, TWD Textilwerke Deggendorf, C‑188/92, EU:C:1994:90, paragraphs 17 to 25; of 30 January 1997, Wiljo, C‑178/95, EU:C:1997:46, paragraphs 15 to 25; of 15 February 2001, Nachi Europe, C‑239/99, EU:C:2001:101, paragraphs 29 to 40; and of 22 October 2002, National Farmers’ Union, C‑241/01, EU:C:2002:604, paragraphs 34 to 39). In numerous other cases, the Court has held that it was not established that the action would unquestionably have been admissible (see, inter alia, to that effect, judgments of 23 February 2006, Atzeni and Others, C‑346/03 and C‑529/03, EU:C:2006:130, paragraphs 30 to 34; of 8 March 2007, Roquette Frères, C‑441/05, EU:C:2007:150, paragraphs 35 to 48; of 29 June 2010, E and F, C‑550/09, EU:C:2010:382, paragraphs 37 to 52; of 18 September 2014, Valimar, C‑374/12, EU:C:2014:2231, paragraphs 24 to 38; and of 5 March 2015, Banco Privado Português and Massa Insolvente do Banco Privado Português, C‑667/13, EU:C:2015:151, paragraphs 27 to 32).68It is true that, in order to strengthen the judicial protection of natural or legal persons with regard to acts of the European Union, the Treaty of Lisbon broadened the conditions of admissibility of an action for annulment, through the adoption of the fourth paragraph of Article 263 TFEU, which authorises such an action against a regulatory act which directly concerns such a person and does not entail implementing measures.69However, that broadening of the conditions of admissibility of an action for annulment is not accompanied by any corresponding bar to calling in question, before a national court, the validity of an act of the European Union, where an action for annulment brought before the General Court by one of the parties to the dispute would not unquestionably have been admissible (see, to that effect, judgment of 9 June 2011, Comitato Venezia vuole vivere and Others v Commission, C‑71/09 P, C‑73/09 P and C‑76/09 P, EU:C:2011:368, paragraph 57).70It follows that a request for a preliminary ruling concerning the validity of an act of the European Union can be dismissed only in the event that, although the action for annulment of an act of the European Union would unquestionably have been admissible, the natural or legal person capable of bringing such an action abstained from doing so within the prescribed period and is pleading the unlawfulness of that act in national proceedings in order to encourage the national court to submit a request for a preliminary ruling to the Court of Justice concerning the validity of that act, thereby circumventing the fact that that act is final as against him once the time limit for his bringing an action has expired (see, to that effect, judgments of 9 March 1994, TWD Textilwerke Deggendorf, C‑188/92, EU:C:1994:90, paragraph 18, and of 15 February 2001, Nachi Europe, C‑239/99, EU:C:2001:101, paragraph 30).71That is not the situation in the present case.72First of all, the appellants in the main proceedings were not themselves included on the list of those whose funds are to be frozen.73Next, it is not obvious that they were ‘individually’ concerned by those acts for the purposes of the fourth paragraph of Article 263 TFEU. Indeed, the inclusion of the LTTE on the list of those whose funds are to be frozen is of general application with regard to persons other than that entity, in that it serves to impose on an indeterminate number of persons an obligation to comply with specific restrictive measures against that entity (see, to that effect, judgments of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 241 to 244; of 29 June 2010, E and F, C‑550/09, EU:C:2010:382, paragraph 51; and of 23 April 2013, Gbagbo and Others v Council, C‑478/11 P to C‑482/11 P, EU:C:2013:258, paragraph 56).74Lastly, the situation of the appellants in the main proceedings was directly affected, not by the acts of the European Union relating to that inclusion, but by the imposing of sanctions based solely on Netherlands law, which took into account, among other factors, that inclusion.75Consequently, the answer to the first question is that it is not obvious, within the meaning of the case-law based on the judgments of 9 March 1994, TWD Textilwerke Deggendorf (C‑188/92, EU:C:1994:90), and of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), that actions for annulment of Implementing Regulation No 610/2010 or the acts of the European Union preceding that implementing regulation and relating to the inclusion of the LTTE on the list of those whose funds are to be frozen, brought before the General Court by persons in a situation such as that of the appellants in the main proceedings, would have been admissible. Questions 2 to 4 76As a preliminary point, regarding the third question, which seeks, in essence, to ascertain whether the activities which were the reason for the inclusion and the maintenance, from 2006 to 2010, of the LTTE on the list of those whose funds are to be frozen constitute ‘actions by armed forces during periods of armed conflict’ within the meaning of international humanitarian law, it should be noted that, in the present case, the Court does not have sufficient information to enable it to give a ruling on that question.77By its second and fourth questions, which must be examined together, the Raad van State asks the Court, in essence, whether the inclusion, by Implementing Regulation No 610/2010 and the acts of the European Union preceding that implementing regulation, of the LTTE on the list of those whose funds are to be frozen is valid. It seeks to ascertain, in particular, whether actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, may constitute ‘terrorist offences’ for the purposes of Framework Decision 2002/475 or ‘terrorist acts’ for the purposes of Common Position 2001/931 and Regulation No 2580/2001.78The referring court questions, in that regard, whether it is possible to regard the activities of the LTTE which were the reason for its inclusion on the list of those whose funds are to be frozen as terrorist activities for the purposes of Common Position 2001/931 and Regulation No 2580/2001, when those acts should be read in conjunction with Framework Decision 2002/475, recital 11 of which specifies that it does not govern actions by armed forces during periods of armed conflict.79According to the case-law of the Court, a regulation providing for restrictive measures, such as Implementing Regulation No 610/2010 and the acts of the European Union preceding that implementing regulation and relating to the inclusion of the LTTE on the list of those whose funds are to be frozen, must be interpreted in the light not only of the decision adopted in the framework of the Common Foreign and Security Policy referred to in Article 215(2) TFEU, but also of the historical context in which the provisions were adopted by the European Union, that regulation being one such provision (judgment of 1 March 2016, National Iranian Oil Company v Council, C‑440/14 P, EU:C:2016:128, paragraph 78 and the case-law cited).80In that regard, it is necessary to distinguish the acts of the European Union concerned by Question 2(a) and Question 2(b) respectively, namely Framework Decision 2002/475 on the one hand and Common Position 2001/931 and Regulation No 2580/2001 on the other. Accordingly, it is not so much the concepts of ‘terrorist offences’ as referred to in Framework Decision 2002/475 and ‘terrorist acts’ as referred to in Common Position 2001/931 and Regulation No 2580/2001 that must be examined and compared, but rather the objectives of Framework Decision 2002/475, which falls within the sphere of Justice and Home Affairs (JHA), and those of Common Position 2001/931 and Regulation No 2580/2001, which essentially fall under the Common Foreign and Security Policy (CFSP).81The purpose of Framework Decision 2002/475 is, inter alia, to approximate the definition of terrorist offences in all Member States, to lay down penalties and sanctions which reflect the seriousness of such offences, and to establish jurisdictional rules to ensure that terrorist offences may be effectively prosecuted.82That body of legal rules imposing penalties for past conduct includes recital 11 to Framework Decision 2002/475, pursuant to which that framework decision does not govern actions by armed forces during periods of armed conflict, which are instead governed by international humanitarian law in accordance with the definition of those terms under that law; nor does it govern actions by the armed forces of a State in the exercise of their official duties which are governed by other rules of international law.83By contrast, the purpose of Common Position 2001/931 and Regulation No 2580/2001 is the implementation of Resolution 1373 (2001), adopted following the terrorist attacks carried out in the United States on 11 September 2001, and they mainly concern the prevention of terrorist acts by means of the adoption of measures for the freezing of funds in order to hinder acts preparatory to such acts, such as the financing of persons or entities liable to carry out terrorist acts.84In that context, the designation of the persons and entities who are to be included on the list referred to in Article 2(3) of Regulation No 2580/2001 does not constitute a sanction, but rather a preventative measure adopted according to a system operating on two levels, in the sense that, according to Article 1(4) of Common Position 2001/931, the Council may include on that list only persons and entities in respect of which a decision taken by a competent authority exists, whether it be a decision to proceed with an investigation or prosecution, based on serious and credible evidence or clues, relating to the perpetration, attempt to perpetrate, participation in or facilitation of a terrorist act, or a decision to convict someone of such offences.85It follows from the foregoing that recital 11 of Framework Decision 2002/475, the sole objective of which is, as was emphasised by the Commission, to clarify the boundaries of the scope of that framework decision, is irrelevant for the purposes of interpreting the concept of ‘terrorist acts’ as referred to in Common Position 2001/931 and Regulation No 2580/2001.86The referring court considers that various international conventions could be interpreted as meaning that actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, are not to be regarded as terrorist activities. As a result, it expresses doubts regarding the classification to be applied to the activities engaged in by the LTTE which, according to the Council, justified the acts of the European Union that were adopted between 2006 and 2010 and relate to the inclusion of that entity on the list of those whose funds are to be frozen.87It should, however, be pointed out that the European Union is not a party to those international conventions and that, in any event, those conventions do not prevent actions by armed forces during periods of armed conflict from constituting ‘terrorist acts’ for the purposes of Common Position 2001/931 and Regulation No 2580/2001, without there being any indication that those conventions contradict any rules of customary international law which are binding on the European Union.88First of all, regarding international humanitarian law, it should be pointed out that Article 33 of the Fourth Geneva Convention provides for the prohibition of any measure of intimidation or terrorism. Similarly, Article 51(2) of Protocol I and Article 13(2) of Protocol II state that acts or threats of violence the primary purpose of which is to spread terror among the civilian population are prohibited. Moreover, Article 4(2) of Protocol II provides that acts of terrorism against persons who do not take a direct part or who have ceased to take part in hostilities are prohibited at any time and in any place whatsoever.89It should also be emphasised that international humanitarian law pursues different aims from Common Position 2001/931 and Regulation No 2580/2001 and that it introduces different mechanisms.90In addition, as the Advocate General noted in points 107 to 109 of her Opinion, the rules laid down by international humanitarian law do not prohibit the adoption, outside the framework established by that law, of preventative measures such as those to which the LTTE has been subjected.91In those circumstances, the fact, even supposing that it were to be established, that some of the activities referred to in paragraph 86 above are not prohibited by international humanitarian law could not be decisive in any event, inasmuch as the application of Common Position 2001/931 and Regulation No 2580/2001 does not depend on classifications stemming from international humanitarian law (see, by analogy, judgment of 30 January 2014, Diakité, C‑285/12, EU:C:2014:39, paragraphs 24 to 26).92Next, regarding international law relating to terrorism, it should be pointed out that Article 2(1)(b) of the International Convention for the Suppression of the Financing of Terrorism provides for the criminalisation of ‘any … act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organisation to do or to abstain from doing any act’.93In addition, Article 8(1) of that convention lays down the obligation to adopt measures for the freezing of funds used for the purpose of committing the offences referred to in Article 2 thereof and does not prohibit the putting in place of measures for the freezing of funds concerning other terrorist offences.94It should also be noted that, under the final recital of the International Convention for the Suppression of Terrorist Bombings, the exclusion of actions by armed forces during periods of armed conflict from the scope of that convention ‘does not condone or make lawful otherwise unlawful acts, or preclude prosecution under other laws’. Accordingly, the fact that such actions do not fall within the scope of that convention does not prevent them from being regarded as unlawful acts liable to prosecution, such as ‘terrorist acts’ as referred to in Common Position 2001/931 and Regulation No 2580/2001.95Lastly, although some of the international conventions to which the Raad van State makes reference exclude from their scope actions by armed forces during periods of armed conflict within the meaning of international humanitarian law, they neither prohibit the State Parties from classifying some of those actions as ‘terrorist acts’ nor preclude them from taking steps to prevent the commission of such acts.96It should be borne in mind in that regard that the purpose of Common Position 2001/931 and Regulation No 2580/2001 is not to punish terrorist acts, but to combat terrorism by preventing the financing of acts of terrorism, as recommended by the United Nations Security Council in Resolution 1373 (2001).97It follows from all of the foregoing that Common Position 2001/931 and Regulation No 2580/2001 must be interpreted as meaning that actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, may constitute ‘terrorist acts’ for the purposes of those acts of the European Union.98In those circumstances, the answer to the second and fourth questions is that, as neither Common Position 2001/931 nor Regulation No 2580/2001 precludes actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, from constituting ‘terrorist acts’ for the purposes of those acts of the European Union, the fact that the activities of the LTTE may constitute such actions does not affect the validity of Implementing Regulation No 610/2010 or that of the acts of the European Union preceding that implementing regulation and relating to the inclusion of the LTTE on the list of those whose funds are to be frozen.99As the fifth question has been asked in the event that the acts referred to in the preceding paragraph are found to be invalid, there is no need to answer it. Costs 100Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. It is not obvious, within the meaning of the case-law based on the judgments of 9 March 1994, TWD Textilwerke Deggendorf (C‑188/92, EU:C:1994:90), and of 15 February 2001, Nachi Europe (C‑239/99, EU:C:2001:101), that actions for annulment of Council Implementing Regulation (EU) No 610/2010 of 12 July 2010 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 1285/2009 or the acts of the European Union preceding that implementing regulation and relating to the inclusion of the ‘Liberation Tigers of Tamil Eelam (LTTE)’ on the list referred to in Article 2(3) of Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism, brought before the General Court of the European Union by persons in a situation such as that of the appellants in the main proceedings, would have been admissible. 2. As neither Council Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism nor Regulation No 2580/2001 precludes actions by armed forces during periods of armed conflict, within the meaning of international humanitarian law, from constituting ‘terrorist acts’ for the purposes of those acts of the European Union, the fact that the activities of the ‘Liberation Tigers of Tamil Eelam (LTTE)’ may constitute such actions does not affect the validity of Implementing Regulation No 610/2010 or that of the acts of the European Union preceding that implementing regulation and relating to the inclusion referred to in point 1 of the present operative part. [Signatures]( *1 ) Language of the case: Dutch. | 29a62-994bc0b-4b03 | EN |
Member States may reserve to notaries the power to authenticate signatures appended to the documents necessary for the creation or transfer of rights to real property | 9 March 2017 ( *1 )‛Reference for a preliminary ruling — Freedom of lawyers to provide services — Possibility for Member States to reserve to prescribed categories of lawyers the drafting of formal documents for creating or transferring interests in land — Legislation of a Member State requiring that the authenticity of the signature on a request for entry in the land register be certified by a notary’In Case C‑342/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Oberster Gerichtshof (Supreme Court, Austria), made by decision of 19 May 2015, received at the Court on 8 July 2015, in the proceedings Leopoldine Gertraud Piringer, THE COURT (Fifth Chamber),composed of J.L. da Cruz Vilaça, President of the Chamber, A. Tizzano (Rapporteur), Vice-President of the Court, M. Berger, A. Borg Barthet and F. Biltgen, Judges,Advocate General: M. Szpunar,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 8 June 2016,after considering the observations submitted on behalf of:—Leopoldine Gertraud Piringer, by S. Piringer, W.L. Weh and S. Harg, Rechtsanwälte,the Austrian Government, by G. Eberhard, M. Aufner and C. Pesendorfer, acting as Agents,the Czech Government, by M. Smolek, J. Vláčil and M.D. Hadroušek, acting as Agents,the German Government, by T. Henze, J. Möller, D. Kuon and J. Mentgen, acting as Agents,the Spanish Government, by M. J. García-Valdecasas Dorrego and V. Ester Casas, acting as Agents,the French Government, by G. de Bergues, D. Colas and R. Coesme, acting as Agents,the Latvian Government, by I. Kalniņš and J. Treijs-Gigulis, acting as Agents,the Luxembourg Government, by D. Holderer, acting as Agent, and by F. Moyse, avocat,the Polish Government, by B. Majczyna, D. Lutostańska and A. Siwek, acting as Agents,the Slovenian Government, by B. Jovin Hrastnik, acting as Agent,the European Commission, by G. Braun and H. Støvlbæk, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 21 September 2016,gives the following Judgment 1The present request for a preliminary ruling concerns the interpretation of the second subparagraph of Article 1(1) of Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services (OJ 1977 L 78, p. 17) and of Article 56 TFEU.2The request has been made in proceedings between Ms Leopoldine Gertraud Piringer, an Austrian national, and the Bezirksgericht Freistadt (Freistadt District Court, Austria), concerning the latter’s refusal to enter a planned sale of property in the Austrian land register. Legal context EU law 3The second recital of Directive 77/249 reads as follows:‘... this Directive deals only with measures to facilitate the effective pursuit of the activities of lawyers by way of provision of services; ... more detailed measures will be necessary to facilitate the effective exercise of the right of establishment’.4Under Article 1(1) and (2) of that directive:‘1. This Directive shall apply, within the limits and under the conditions laid down herein, to the activities of lawyers pursued by way of provision of services.Notwithstanding anything contained in this Directive, Member States may reserve to prescribed categories of lawyers the preparation of formal documents for obtaining title to administer estates of deceased persons, and the drafting of formal documents creating or transferring interests in land.2. “Lawyer” means any person entitled to pursue his professional activities under one of the following designations:… Ireland: Barrister,Solicitor, United Kingdom: Advocate,Barrister,Solicitor,…’5Article 4 of that directive provides:‘1. Activities relating to the representation of a client in legal proceedings or before public authorities shall be pursued in each host Member State under the conditions laid down for lawyers established in that State, with the exception of any conditions requiring residence, or registration with a professional organisation, in that State.4. A lawyer pursuing activities other than those referred to in paragraph 1 shall remain subject to the conditions and rules of professional conduct of the Member State from which he comes without prejudice to respect for the rules, whatever their source, which govern the profession in the host Member State, especially those concerning the incompatibility of the exercise of the activities of a lawyer with the exercise of other activities in that State ... The latter rules are applicable only if they are capable of being observed by a lawyer who is not established in the host Member State and to the extent to which their observance is objectively justified to ensure, in that State, the proper exercise of a lawyer’s activities, the standing of the profession and respect for the rules concerning incompatibility.’6Recital 10 of Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 to facilitate practice of the profession of lawyer on a permanent basis in a Member State other than that in which the qualification was obtained (OJ 1998 L 77, p. 36) states:‘... provision should be made, as in Directive 77/249/EEC, for the option of excluding from the activities of lawyers practising under their home-country professional titles in the United Kingdom and Ireland the preparation of certain formal documents in the conveyancing and probate spheres; ... this Directive in no way affects the provisions under which, in every Member State, certain activities are reserved for professions other than the legal profession; ...’.7Article 5 of that directive, entitled ‘Area of activity’, provides, in paragraph 2 thereof:‘Member States which authorise in their territory a prescribed category of lawyers to prepare deeds for obtaining title to administer estates of deceased persons and for creating or transferring interests in land which, in other Member States, are reserved for professions other than that of lawyer may exclude from such activities lawyers practising under a home-country professional title conferred in one of the latter Member States.’ Austrian law 8Paragraph 31 of the Allgemeines Grundbuchsgesetz (Federal Law on the land register) of 2 February 1955, in the version applicable to the dispute in the main proceedings (BGBl. I, 87/2015 (‘the GBG’), provides:‘1. An entry in the land register may be made ... only on the basis of public instruments or such private instruments on which the signatures of the parties have been authenticated by a court or a notary and where, in the case of natural persons, the certificate of authenticity also contains their date of birth.3. The authentication of foreign instruments is governed by international treaties. Instruments authenticated by the Austrian representative authority under whose jurisdiction those instruments were prepared or authenticated, or by the national representative authority in the State in which they were prepared or authenticated, do not require additional authentication.9Paragraph 53 of the GBG provides:‘1. The owner is entitled to require that a planned sale or pledge be entered in the register in order to establish that the rights to be entered as a result of that sale or pledge have priority as of the date of the request for entry.3. However, entries relating to such requests may be granted only if, as the land register stands, entry of the right to be entered or deletion of the existing right would be permissible, and if the signature on the request has been authenticated by a court or a notary. The provisions of Paragraph 31(3) to (5) shall apply. The dispute in the main proceedings and the questions referred for a preliminary ruling 10Ms Piringer owns a half share in a property situated in Austria.11On 25 February 2009 she signed, in the Czech Republic, a request for entry in the Austrian land register of the planned sale of her share of that property with a view to establishing the priority of that entry. The applicant’s signature on that request was authenticated by a Czech lawyer who, in accordance with Czech law, issued a declaration for that purpose containing the applicant’s date of birth and specifying the documents submitted by her as proof of her identity. The lawyer who signed also confirms that Ms Piringer personally signed a single copy of that request in his presence.12On 15 July 2014 Ms Piringer submitted that request for entry to the Bezirksgericht Freistadt (Freistadt District Court, Austria), which is responsible for maintaining the land register. She attached to her request, inter alia, the Treaty between the Republic of Austria and the Czechoslovak Socialist Republic of 10 November 1961 on judicial cooperation in civil matters, the recognition of public instruments and the provision of legal information (BGBl. No 309/1962), which is still applicable in bilateral relations with the Czech Republic (BGBl. III No 123/1997 (‘the Austrian-Czech Treaty’)).13That court refused that request, by decision of 18 July 2014, on the ground that the signature of the applicant in the main proceedings had not been authenticated by a court or a notary, contrary to the requirements of Article 53(3) of the GBG. Moreover, according to that court, authentication of the signature by a Czech lawyer is not covered by the Austrian-Czech Treaty. In any event, it took the view that the endorsement submitted by Ms Piringer did not bear the stamp of an official seal, as required by Articles 21 and 22 of that treaty.14By an order of 25 November 2015, the Landesgericht Linz (Linz Regional Court, Austria) confirmed the decision delivered on 18 July 2014, finding in particular that, although the declaration of the authenticity of the signature constituted a public instrument under Czech law, the recognition of such a declaration in Austria was covered by Article 21(2) of the Austrian-Czech Treaty. Given that, under that provision, mutual recognition applies only to the certificate attesting the veracity of the signature of a private instrument that has been appended to that instrument by ‘a court, an administrative body or an Austrian notary’, extending the scope of its application to certificates appended by Czech lawyers would, it held, be contrary not only to Article 21(2) but to the intention of the contracting parties themselves.15The Oberster Gerichtshof (Supreme Court, Austria), before which Ms Piringer brought an appeal on a point of law (‘Revision’), finds in essence that the Austrian-Czech Treaty is not applicable in the present case, and expresses doubts as to whether the requirement for notarial certification laid down in Paragraph 53(3) of the GBG is compatible with EU law.16In those circumstances, the Oberster Gerichtshof (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Is Article 1(1), second sentence, of [Directive 77/249] to be interpreted as enabling a Member State to exclude certification of the authenticity of signatures on instruments which are necessary for the creation or transfer of rights to property from the freedom to provide services by lawyers and to reserve the provision of this service to public notaries?(2)Is Article 56 TFEU to be interpreted as not precluding a national provision of the State of registry (Austria) under which certification of the authenticity of signatures on instruments which are necessary for the creation or transfer of rights to property is reserved to public notaries, with the effect that a declaration of the authenticity of a signature by a lawyer established in the Czech Republic made in his State of establishment is not recognised in the State of registry, despite this declaration being accorded the legal effect of an official certification under Czech law,in particular because:(a)the question of the recognition of a declaration of the authenticity of a signature on a request for entry in the land register of the State of registry made in the Czech Republic by a lawyer established there relates to the provision of a service by a lawyer the content of which is not possible for lawyers established in the State of registry, and the refusal to recognise it is therefore not subject to the prohibition of restrictions on recognitionor(b)such a reservation is justified to ensure the legality and legal certainty of acts (instruments relating to legal transactions) and as a consequence is required for reasons of public interest and is also necessary to achieve this objective in the State of registry?’ The request for the oral procedure to be reopened 17In accordance with Article 82(2) of the Rules of Procedure of the Court, the oral part of the procedure was closed following the delivery of the Opinion of the Advocate General on 21 September 2016.18By document lodged at the Court Registry on 31 October 2016, Ms Piringer requested that the oral procedure be reopened. In essence, she disputed certainfindings in the Opinion of the Advocate General and claimed that a number of arguments, presented as being vital in the context of the present reference for a preliminary ruling, had not been the subject of debate between the interested parties.19In that regard, it follows from the second paragraph of Article 252 TFEU that it is the duty of the Advocate General, acting with complete impartiality and independence, to make, in open court, reasoned submissions on cases which require his involvement. The Court is not bound either by the Advocate General’s Opinion or by the reasoning on which it is based (judgment of 21 December 2016, Council v Front Polisario, C‑104/16 P, EU:C:2016:973, paragraph 60 and the case-law cited).20As a consequence, the fact that a party disagrees with that Opinion, irrespective of the questions examined therein, cannot in itself constitute grounds justifying the reopening of the oral procedure (judgment of 21 December 2016, Council v Front Polisario, C‑104/16 P, EU:C:2016:973, paragraph 61 and the case-law cited).21That said, it should be recalled that the Court, under Article 83 of the Rules of Procedure, may at any time, after hearing the Advocate General, order that the oral procedure be reopened, in particular if it considers that it lacks sufficient information or where the case must be decided on the basis of an argument that has not been debated between the parties or the interested persons referred to in Article 23 of the Statute of the Court of Justice of the European Union.22In the present case, however, the Court considers that it has all the information necessary to answer the questions referred and that that information was raised during the proceedings and debated between the parties.23In those circumstances, the Court, after hearing the Advocate General, takes the view that there is no need to order the reopening of the oral part of the procedure. Consideration of the questions referred The first question 24By its first question, the referring court asks, in essence, whether the second subparagraph of Article 1(1) of Directive 77/249 must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, under which authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property is reserved to notaries and as consequently excluding the possibility of recognising in that Member State such authentication carried out by a lawyer established in another Member State.25In order to answer that question, it is appropriate as a preliminary step to determine whether Directive 77/249 applies in circumstances such as those of the case in the main proceedings.26In this regard, it must be borne in mind that Directive 77/249, the purpose of which is to facilitate the effective exercise by lawyers of the freedom to provide services (judgment of 19 January 1988, Gullung, 292/86, EU:C:1988:15, paragraph 15), applies, in accordance with the wording of Article 1(1) thereof, to the activities of lawyers pursued by way of provision of services.27It is therefore necessary to verify, in the first place, whether the authentication of a signature appended to a request for entry in the land register, such as that at issue in the main proceedings, constitutes a ‘lawyer’s activity’ and, in the second place, whether that authentication was effected in the context of the free provision of services, within the meaning of that provision.28In the first place, it must be stated that Directive 77/249 does not expressly define what is covered by the term ‘lawyer’s activity’ within its meaning. Even though that directive draws a distinction between, on the one hand, activities relating to the representation of a client in legal proceedings or before public authorities and, on the other hand, all other activities, pursuant to, inter alia, Article 4(4) thereof (see judgment of 30 November 1995, Gebhard, C‑55/94, EU:C:1995:411, paragraph 14), it does not define the scope of those expressions.29However, with regard to the actual notion of ‘lawyer’, within the meaning of Directive 77/249, Article 1(2) thereof states that that notion is to be taken to mean ‘any person entitled to pursue his professional activities under one of the ... designations’ applicable in each Member State. By that definition, the EU legislature left it to the Member States to define that notion themselves and referred to the designations used in each Member State to identify the persons entitled to pursue those professional activities.30In those circumstances, the view must be taken that, so far as concerns also the definition of activities that may be pursued by lawyers, in the absence of any precise indication in Directive 77/249, the EU legislature wished to preserve the power of the Member States to determine the meaning of that notion by thus leaving them with a broad margin of discretion in that regard.31Accordingly, for the purposes of interpreting Directive 77/249, it should be noted that, contrary to what, among others, the Czech and Spanish Governments argue, the notion of ‘lawyer’s activity’ within the meaning of that directive covers not only the legal services typically provided by lawyers, such as legal advice or representing and defending a client in court, but may also cover other kinds of services, such as the authentication of signatures. The fact that those latter services are not provided by lawyers in all Member States is of no relevance in that respect.32Moreover, it must be made clear, as is apparent from the file submitted to the Court, that certain Member States, including the Czech Republic, have indeed provided for the possibility for lawyers established in their national territory to provide these other kinds of services.33In the second place, it is necessary to determine whether a lawyer’s activity consisting in authenticating a signature is subject to the rules on the freedom to provide services. The application of Directive 77/249 to lawyers’ activities is, according to Article 1(1) thereof, also subject to the condition that those activities be pursued ‘by way of provision of services’.34In that regard, it is necessary to recall, as the Court has held on numerous occasions, that, in order to enable services to be provided, the person providing the service may go to the Member State where the person for whom it is provided is established or else the latter may go to the State in which the person providing the service is established. Whilst the former case is explicitly mentioned in the third paragraph of Article 57 TFEU, which permits the person providing the service to pursue his activity temporarily in the Member State where the service is provided under the same conditions as are imposed by that State on its own nationals, the latter case, which fulfils the objective of making all gainful activity not covered by the free movement of goods, persons and capital subject to the freedom to provide services, is the necessary corollary thereof (see, inter alia, judgment of 24 September 2013, Demirkan, C‑221/11, EU:C:2013:583, paragraph 34).35Accordingly, it is the Court’s established case-law that the freedom to provide services conferred by Article 56 TFEU on Member State nationals, and thus on European Union citizens, includes ‘passive’ freedom to provide services, namely the freedom for recipients of services to go to another Member State in order to receive a service there, without being hindered by restrictions (see, inter alia, judgment of 24 September 2013, Demirkan, C‑221/11, EU:C:2013:583, paragraph 35 and the case-law cited).36It follows that, to the extent to which it seeks to facilitate the effective exercise by lawyers of the freedom to provide services, Directive 77/249 must be interpreted as applying both in the typical case of the lawyer travelling to a Member State other than that in which he or she is established in order to provide his or her services and in the case where that professional does not travel, namely where, as in the case in the main proceedings, it is the recipient of the service who travels outside his or her Member State of residence in order to visit another Member State and to avail of the services of a lawyer established there.37In view of the foregoing, as the conditions for the application of Directive 77/249 are satisfied in the present case, it must be held that that directive is capable of applying in the circumstances of a case such as that in the main proceedings.38That having been determined, it must be noted that the question posed by the Oberster Gerichtshof (Supreme Court) relates specifically to the interpretation of the second subparagraph of Article 1(1) of Directive 77/249. That provision authorises a derogation from the freedom of lawyers to provide services by providing that Member States have the option of reserving to ‘prescribed categories of lawyers’ the preparation of formal documents for, inter alia, creating or transferring rights to property.39In particular, by its question the referring court essentially seeks to ascertain whether such a derogation is capable of justifying a reservation established in favour of Austrian notaries for the authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property and of permitting the exclusion of lawyers from the exercise of such an activity.40It must be stated, however, that the derogation provided for in the second subparagraph of Article 1(1) of Directive 77/249 does not cover, in general terms, the various categories of legal professions, with the result that Member States would have the right, relying on that provision, to limit the pursuit of the activity of drafting formal documents for the creation or transfer of rights to property to certain categories of legal professionals — such as notaries — and thus to prohibit foreign lawyers from exercising the activities in question within the territory of those Member States.41By contrast, that provision provides for a derogation with a more limited scope aimed specifically at certain prescribed categories of lawyers, which are, moreover, explicitly identified in Article 1(2) of that directive itself.42In that regard, as the Commission and the German Government rightly note, the legislative history of Directive 77/249 provides an understanding of the origin and scope of that provision, which was inserted for the benefit of the United Kingdom and Ireland, to take into account the particular legal situation in those two Member States, in which there are different categories of lawyers, namely barristers and solicitors.43In particular, the derogation provided for in the second subparagraph of Article 1(1) of Directive 77/249 was designed to take into account the legislation applicable in those common-law countries, which provides for the exclusive competence of solicitors to draft certain legal instruments in the area of property law, whereas in the other Member States, at the time when that directive was adopted, the drafting of those instruments was reserved to notaries or to the courts. Moreover, it was undisputed that such activities did not come within the scope of Directive 77/249.44The purpose of that derogation, as the Advocate General notes in point 34 of his Opinion, is thus to prevent lawyers from other Member States from pursuing the activities concerned in the United Kingdom or in Ireland. That interpretation is supported by recital 10 of Directive 98/5, according to which provision should be made, as in Directive 77/249, for the option of excluding from the activities of lawyers practising under their home-country professional titles in the United Kingdom and Ireland the preparation of certain formal documents in the conveyancing and probate spheres.45Similarly, Article 5(2) of Directive 98/5 provides that ‘Member States which authorise in their territory a prescribed category of lawyers to prepare deeds for obtaining title to administer estates of deceased persons and for creating or transferring interests in land which, in other Member States, are reserved for professions other than that of lawyer may exclude from such activities lawyers practising under a home-country professional title conferred in one of the latter Member States’.46In those circumstances, given that the derogation introduced by the second subparagraph of Directive 77/249 is aimed only at prescribed categories of lawyers, authorised by the Member State concerned to pursue their professional activities under one of the designations specifically identified by the directive itself, and not at professions other than that of lawyer, it must be concluded that that provision does not apply in the circumstances of the case in the main proceedings.47In view of the foregoing, the answer to the first question is that the second subparagraph of Article 1(1) of Directive 77/249 must be interpreted as not applying to legislation of a Member State, such as that at issue in the main proceedings, under which authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property is reserved to notaries, and as consequently excluding the possibility of recognising in that Member State such authentication carried out by a lawyer established in another Member State. The second question 48By its second question, the referring court asks, in essence, whether Article 56 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, under which authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property is reserved to notaries and as consequently excluding the possibility of recognising in that Member State such authentication carried out, in accordance with his or her national law, by a lawyer established in another Member State.49In order to answer that question, it is necessary, in the first place, to bear in mind that Article 56 TFEU requires not only the elimination of all discrimination on grounds of nationality against providers of services who are established in another Member State, but also the abolition of any restriction on the freedom to provide services, even if that restriction applies without distinction to national providers of services and to those of other Member States, which is liable to prohibit, impede or render less attractive the activities of a service provider established in another Member State where it lawfully provides similar services (judgments of 18 July 2013, Citroën Belux, C‑265/12, EU:C:2013:498, paragraph 35 and the case-law cited, and of 11 June 2015, Berlington Hungary and Others, C‑98/14, EU:C:2015:386, paragraph 35).50In the present case, Paragraph 53(3) of the GBG confers on notaries and courts alone the power to authenticate signatures appended to the instruments necessary for the creation or transfer of rights to property. Application of that provision leads to the exclusion, in a non-discriminatory manner, of the possibility of recognising in Austria the authentication of such a signature both by a lawyer established in that State and by lawyers established in other Member States.51In so far as it does not permit recognition of signature authentication carried out by a lawyer established in another Member State, in this case the Czech Republic, where, in accordance with national law, that lawyer lawfully provides similar services, such a reservation of competence is liable to prevent such a professional from offering that kind of service to clients minded to avail of it in Austria. In addition, having regard to the case-law cited in paragraphs 34 and 35 of the present judgment, such a reservation of competence also restricts the freedom of an Austrian national, as the recipient of such a service, to travel to the Czech Republic in order to avail there of a service which cannot be used in Austria for the purposes of making an entry in the land register.52Therefore, it must be held that the national provision at issue in the main proceedings constitutes a restriction on the freedom to provide services guaranteed by Article 56 TFEU.53In the second place, it is appropriate to recall that, in accordance with the case-law of the Court, such a restriction may nevertheless be allowed as a derogation, on grounds of public policy, public security or public health, as expressly provided for under Articles 51 and 52 TFEU, which are also applicable in the area of freedom to provide services by virtue of Article 62 TFEU or may, if applied in a non-discriminatory manner, be justified by overriding reasons in the public interest (see judgment of 28 January 2016, Laezza, C‑375/14, EU:C:2016:60, paragraph 31 and the case-law cited), provided that it is appropriate for securing the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain it (see, inter alia, judgment of 17 March 2011, Peñarroja Fa, C‑372/09 and C‑373/09, EU:C:2011:156, paragraph 54 and the case-law cited).54In that regard, it must be noted, as the Advocate General does in point 48 of his Opinion, that the Court has already found, in its judgment of 24 May 2011, Commission v Austria (C‑53/08, EU:C:2011:338, paragraphs 91 and 92), that the activity of authentication pursued by notaries does not, as such, involve a direct and specific connection with the exercise of official authority within the meaning of the first paragraph of Article 51 TFEU. Moreover, the fact that some documents or agreements are subject to mandatory authentication, failing which they are void, cannot call that finding into question.55Consequently, the exception provided for in that provision of the FEU Treaty cannot be invoked in the circumstances of the present case, which, moreover, concern only the authentication of the applicant’s signature and not the content of the instrument to which that signature was appended.56At the same time, in view of the fact, alluded to in paragraph 50 of the present judgment, that the reservation of competence in favour of notaries provided for in Paragraph 53(3) of the GBG constitutes a non-discriminatory measure, it is necessary to determine whether it might not be justified, in accordance with the case-law cited in paragraph 53 of the present judgment, by overriding reasons in the public interest.57In the present case, the Austrian authorities argue that the national measure at issue in the main proceedings seeks to ensure the proper functioning of the land register system and to guarantee the legality and legal certainty of documents concluded between individuals.58First, however, as the Austrian and German Governments, among others, have noted, it should be stated that the land register is of crucial importance especially in certain Member States which operate a system of civil-law notaries, particularly in property transactions. In particular, each entry in a land register — such as the Austrian land register — alters rights, in so far as the rights of the person who has requested that entry arise only after the corresponding entry has been made therein. Maintaining the land register thus constitutes an essential component of the preventive administration of justice in the sense that it seeks to ensure proper application of the law and legal certainty of documents concluded between individuals, which are matters coming within the scope of the tasks and responsibilities of the State.59In those conditions, national provisions which require verification, by recourse to sworn professionals — such as notaries — of the accuracy of entries made in a land register contribute to guaranteeing the legal certainty of property transactions and the proper functioning of the land register and relate, more generally, to the safeguarding of the sound administration of justice, which, in accordance with the case-law of the Court, constitutes an overriding reason in the public interest (see, to that effect, judgment of 12 December 1996, Reisebüro Broede, C‑3/95, EU:C:1996:487, paragraph 36).60Second, it is necessary to recall that the Court has already held, in its judgment of 24 May 2011, Commission v Austria, (C‑53/08, EU:C:2011:338, paragraph 96), in relation to the freedom of establishment, that the fact that notarial activities pursue objectives in the public interest, in particular that of guaranteeing the legality and legal certainty of documents concluded between individuals, constitutes an overriding reason in the public interest capable of justifying restrictions of Article 49 TFEU resulting from the particular features of the activities of public notaries, such as the restrictions which derive from the procedures by which they are appointed, the limitation of their numbers and their territorial jurisdiction, or the rules governing their remuneration, independence, disqualification from other offices and protection against removal, provided that those restrictions make it possible for those objectives to be attained and are necessary for that purpose.61It must be considered, by analogy with what the Court held in that judgment, that such considerations also apply in relation to a restriction on the freedom to provide services, within the meaning of Article 56 TFEU.62Consequently, it must be held that the objectives invoked by the Austrian Government constitute an overriding reason in the public interest capable of justifying national legislation such as that at issue in the main proceedings.63It is, however, still necessary to verify whether the measure at issue in the main proceedings satisfies the requirement of proportionality within the meaning of the case-law set out in paragraphs 53 and 60 of the present judgment.64In the present case, as is apparent from the observations made by the Austrian authorities during the hearing, the notary’s involvement is important and necessary for the purposes of entry in the land register, since the participation of that professional is not limited to confirming the identity of a person who has appended a signature to an instrument, but also involves the notary’s becoming acquainted with the content of the instrument in question in order to ensure that the proposed transaction is lawful as well as verifying that the applicant enjoys legal capacity.65In those conditions, the act of reserving activities relating to the authentication of instruments for creating or transferring rights to property to a particular category of professionals in which there is public trust and over which the Member State concerned exercises particular control constitutes an appropriate measure for attaining the objectives of proper functioning of the land register system and for ensuring the legality and legal certainty of documents concluded between individuals.66Moreover, it is important to bear in mind that the activity of lawyers consisting in certifying the authenticity of signatures appended to instruments is not comparable to the authentication activity carried out by notaries and that stricter provisions govern the system of authentications.67In that regard, at the hearing in the present case, the Czech Government stated that, while a Czech lawyer is indeed authorised to certify the authenticity of a signature under precise conditions defined in specific legislation, it is nevertheless clear from the case-law of the Nejvyšší soud (Supreme Court, Czech Republic) that the certificate of authenticity of a signature appended by a Czech lawyer does not constitute a public instrument. Therefore, in the event of a dispute between parties, that certification will not have the same evidentiary value as authentication by a notary.68It follows, according to that Member State, that, if such a signature were to be recognised in Austria for the purposes of entry in the Austrian land register, that certification, in so far as it would be considered equivalent to authentication by a notary, would have the value of a public instrument. Accordingly, it would have a different strength in Austria to what it might have even in the Czech Republic.69In those circumstances, the act of dispensing in a general manner, for reasons relating to the freedom of lawyers to provide services, with State control functions and with an effective guarantee of control over entries in the land register would lead to disruption of the smooth functioning of the land register and of the legality and legal certainty of documents concluded between individuals.70It follows that the national measure at issue in the main proceedings does not go beyond what is necessary in order to attain the objectives invoked by the Austrian Government.71In view of the foregoing, the answer to the second question is that Article 56 TFEU must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, under which authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property is reserved to notaries, and as consequently excluding the possibility of recognition in that Member State of such authentication carried out, in accordance with his or her national law, by a lawyer established in another Member State. Costs 72Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fifth Chamber) hereby rules: 1. The second subparagraph of Article 1(1) of Council Directive 77/249/EEC of 22 March 1977 to facilitate the effective exercise by lawyers of freedom to provide services must be interpreted as not applying to legislation of a Member State, such as that at issue in the main proceedings, under which authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property is reserved to notaries, and as consequently excluding the possibility of recognising in that Member State such authentication carried out by a lawyer established in another Member State. 2. Article 56 TFEU must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, under which authentication of signatures appended to the instruments necessary for the creation or transfer of rights to property is reserved to notaries, and as consequently excluding the possibility of recognition in that Member State of such authentication carried out, in accordance with his or her national law, by a lawyer established in another Member State. [Signatures]( *1 ) Language of the case: German. | 6f05c-00abf62-4904 | EN |
The Court considers that there is no right to be forgotten in respect of personal data in the companies register | 9 March 2017 ( 1 )*‛Reference for a preliminary ruling — Personal data — Protection of individuals with regard to the processing of personal data — Directive 95/46/EC — Article 6(1)(e) — Data subject to disclosure in the companies register — First Directive 68/151/EEC — Article 3 — Winding-up of the company concerned — Restriction of access to that data by third parties’In Case C‑398/15REQUEST for a preliminary ruling under Article 267 TFEU from the Corte suprema di cassazione (Court of Cassation, Italy), made by decision of 21 May 2015, received at the Court on 23 July 2015, in the proceedings Camera di Commercio, Industria, Artigianato e Agricoltura di Lecce v Salvatore Manni, THE COURT (Second Chamber),composed of M. Ilešič (Rapporteur), President of the Chamber, A. Prechal, A. Rosas, C. Toader and E. Jarašiūnas, Judges,Advocate General: Y. Bot,Registrar: I. Illéssy, Administrator,having regard to the written procedure and further to the hearing on 15 June 2016,after considering the observations submitted on behalf of:—the Camera di Commercio, Industria, Artigianato e Agricoltura di Lecce, by L. Caprioli, avvocato,the Italian Government, by G. Palmieri, acting as Agent, and by E. De Bonis and P. Grasso, avvocati dello Stato,the Czech Government, by M. Smolek and J. Vláčil, acting as Agents,the German Government, by T. Henze and J. Möller, acting as Agents,Ireland, by E. Creedon, J. Quaney and by A. Joyce, acting as Agents, and by A. Carroll, barrister,the Polish Government, by B. Majczyna, acting as Agent,the Portuguese Government, by L. Inez Fernandes and M. Figueiredo and by C. Vieira Guerra, acting as Agents,the European Commission, by P. Costa de Oliveira and by D. Nardi and H. Støvlbæk, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 8 September 2016,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 3 of the First Council Directive 68/151/EEC of 9 March 1968 on co-ordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community (OJ 1968 L 65, p. 8), as amended by Directive 2003/58/EC of the European Parliament and of the Council of 15 July 2003 (OJ 2003 L 221, p. 13) (‘Directive 68/151’), and Article 6(1)(e) of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ 1995 L 281, p. 31).2The request has been made in proceedings between the Camera di Commercio, Industria, Artigianato e Agricoltura di Lecce (Chamber of Commerce, Industry, Crafts and Agriculture of Lecce, Italy, ‘the Chamber of Commerce of Lecce’) and Salvatore Manni concerning its refusal to delete certain personal data relating to Mr Manni from the companies register. Legal context EU law Directive 68/151 3As stated in recital 3 of Directive 2003/58, the aim of the directive was, inter alia, to modernise Directive 68/151 so as to make ‘company information more easily and rapidly accessible by interested parties, but should also simplify significantly the disclosure formalities imposed upon companies’.4The recitals of Directive 68/151 are worded as follows:‘Whereas the co-ordination provided for in Article 54(3)(g) [of the EEC Treaty] and in the General Programme for the abolition of restrictions on freedom of establishment is a matter of urgency, especially in regard to companies limited by shares or otherwise having limited liability, since the activities of such companies often extend beyond the frontiers of national territories;Whereas the co-ordination of national provisions concerning disclosure, the validity of obligations entered into by, and the nullity of, such companies is of special importance, particularly for the purpose of protecting the interests of third parties;Whereas in these matters Community provisions must be adopted in respect of such companies simultaneously, since the only safeguards they offer to third parties are their assets;Whereas the basic documents of the company should be disclosed in order that third parties may be able to ascertain their contents and other information concerning the company, especially particulars of the persons who are authorised to bind the company;Whereas the protection of third parties must be ensured by provisions which restrict to the greatest possible extent the grounds on which obligations entered into in the name of the company are not valid;Whereas it is necessary, in order to ensure certainty in the law as regards relations between the company and third parties, and also between members, to limit the cases in which nullity can arise and the retroactive effect of a declaration of nullity, and to fix a short time limit within which third parties may enter objection to any such declaration’.5Pursuant to Article 1 of Directive 68/151, the coordination measures prescribed by that directive apply to the laws, regulations and administrative provisions of the Member States relating to the forms of companies listed in that provision, including, for the Italian Republic, the società a responsabilità limitata (limited liability company).6Article 2 of that directive, which is set out in Section I thereof, entitled ‘Disclosure’, states:‘1. Member States shall take the measures required to ensure compulsory disclosure by companies of at least the following documents and particulars:…(d)the appointment, termination of office and particulars of the persons who either as a body constituted pursuant to law or as members of any such body:(i)are authorized to represent the company in dealings with third parties and in legal proceedings;(ii)take part in the administration, supervision or control of the company.(h)the winding-up of the company;(j)The appointment of liquidators, particulars concerning them, and their respective powers, unless such powers are expressly and exclusively derived from law or from the statutes of the company;(k)the termination of the liquidation and, in Member States where striking off the register entails legal consequences, the fact of any such striking off.’7Article 3 of that directive, which is also set out in that section, provides:‘1. In each Member State a file shall be opened in a central register, commercial register or companies register, for each of the companies registered therein.2. All documents and particulars which must be disclosed in pursuance of Article 2 shall be kept in the file or entered in the register; the subject matter of the entries in the register must in every case appear in the file.3. A copy of the whole or any part of the documents or particulars referred to in Article 2 must be obtainable on application. As from 1 January 2007 at the latest, applications may be submitted to the register by paper means or by electronic means as the applicant chooses.As from a date to be chosen by each Member State, which shall be no later than 1 January 2007, copies as referred to in the first subparagraph must be obtainable from the register by paper means or by electronic means as the applicant chooses. This shall apply in the case of all documents and particulars, irrespective of whether they were filed before or after the chosen date. However, Member States may decide that all, or certain types of, documents and particulars filed by paper means on or before a date which may not be later than 31 December 2006 shall not be obtainable from the register by electronic means if a specified period has elapsed between the date of filing and the date of the application submitted to the register. Such specified period may not be less than 10 years.…’8Directive 68/151 was repealed and replaced by Directive 2009/101/EC of the European Parliament and of the Council of 16 September 2009 on coordination of safeguards which, for the protection of the interests of members and third parties, are required by Member States of companies within the meaning of the second paragraph of Article 48 of the Treaty, with a view to making such safeguards equivalent (OJ 2009 L 258, p. 11), as amended by Directive 2012/17/EU of the European Parliament and of the Council of 13 June 2012 (OJ 2012 L 156, p. 1).9Directive 2012/17 introduced, inter alia, Article 7a into Directive 2009/101, which states:‘The processing of personal data carried out within the framework of this Directive shall be subject to Directive 95/46 ...’10However, bearing in mind the date of the facts, the main proceedings are still governed by Directive 68/151. Directive 95/46 11Directive 95/46, the object of which, according to Article 1, is to protect the fundamental rights and freedoms of natural persons, in particular their right to privacy with respect to the processing of personal data, and to remove obstacles to the free flow of personal data, states in recitals 10 and 25 thereof:‘(10)Whereas the object of the national laws on the processing of personal data is to protect fundamental rights and freedoms, notably the right to privacy, which is recognised both in Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms[, signed in Rome on 4 November 1950,] and in the general principles of Community law; whereas, for that reason, the approximation of those laws must not result in any lessening of the protection they afford but must, on the contrary, seek to ensure a high level of protection in the Community;(25)Whereas the principles of protection must be reflected, on the one hand, in the obligations imposed on persons … responsible for processing, in particular regarding data quality, technical security, notification to the supervisory authority, and the circumstances under which processing can be carried out, and, on the other hand, in the right conferred on individuals, the data on whom are the subject of processing, to be informed that processing is taking place, to consult the data, to request corrections and even to object to processing in certain circumstances’.12Article 2 of Directive 95/46 provides:‘For the purpose of this Directive:(a)“personal data” mean any information relating to an identified or identifiable natural person (data subject), whereby an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity;(b)“processing of personal data” (“processing”) shall mean any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organisation, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction;“controller” shall mean the natural or legal person, public authority, agency or any other body which alone or jointly with others determines the purposes and means of the processing of personal data; where the purposes and means of processing are determined by national or Community laws or regulations, the controller or the specific criteria for his nomination may be designated by national or Community law;13Article 3 of that directive, entitled ‘Scope’, states, in paragraph 1:‘This Directive applies to the processing of personal data wholly or partly by automated means, and to the processing other than by automated means of personal data which form part of a filing system or are intended to form part of a filing system.’14In Section I (entitled ‘Principles relating to data quality’) of Chapter II of Directive 95/46, Article 6 is worded as follows:‘1. Member States shall provide that personal data must be:processed fairly and lawfully;collected for specified, explicit and legitimate purposes and not further processed in a way incompatible with those purposes. Further processing of data for historical, statistical or scientific purposes is not to be considered as incompatible provided that Member States provide appropriate safeguards.(c)adequate, relevant and not excessive in relation to the purposes for which they are collected and/or further processed;accurate and, where necessary, kept up to date; every reasonable step must be taken to ensure that data which are inaccurate or incomplete, having regard to the purposes for which they were collected or for which they are further processed, are erased or rectified;(e)kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected or for which they are further processed. Member States must lay down appropriate safeguards for personal data stored for longer periods for historical, statistical or scientific use.2. It shall be for the controller to ensure that paragraph 1 is complied with.’15In Section II (entitled ‘Criteria for making data processing legitimate’) of Chapter II of Directive 95/46, Article 7 provides:‘Member States shall provide that personal data may be processed only if:processing is necessary for compliance with a legal obligation to which the controller is subject;orprocessing is necessary for the performance of a task carried out in the public interest or in the exercise of official authority vested in the controller or in a third party to whom the data are disclosed;(f)processing is necessary for the purposes of the legitimate interests pursued by the controller or by the third party or parties to whom the data are disclosed, except where such interests are overridden by the interests for fundamental rights and freedoms of the data subject which require protection under Article 1(1).’16Article 12 of that directive, entitled ‘Rights of access’, provides:‘Member States shall guarantee every data subject the right to obtain from the controller:as appropriate the rectification, erasure or blocking of data the processing of which does not comply with the provisions of this Directive, in particular because of the incomplete or inaccurate nature of the data;17Article 14 of Directive 95/46, entitled ‘The data subject’s right to object’, provides:‘Member States shall grant the data subject the right:at least in the cases referred to in Article 7(e) and (f), to object at any time on compelling legitimate grounds relating to his particular situation to the processing of data relating to him, save where otherwise provided by national legislation. Where there is a justified objection, the processing instigated by the controller may no longer involve those data;18Article 28 of Directive 95/46 provides for the establishment by the Member States of a supervisory authority responsible for supervising the application of the provisions adopted pursuant to that directive. Italian law 19Article 2188 of the codice civil (Civil Code) provides:‘A companies register shall be established for entries in the register required by law.The register shall be kept by the office of the companies register under the supervision of a judge appointed by the president of the court.The register shall be publicly available.’20Article 8(1) and (2) of legge n. 580 — Riordinamento delle camere di commercio, industria, artigianato e agricoltura (Law No 580 on the reorganisation of the chambers of commerce, industry, craft trades and agriculture) of 29 December 1993 (Ordinary Supplement to GURI No 7 of 11 January 1994), provides that it is the responsibility of the chambers of commerce, industry, craft trades and agriculture to keep the register.21Decreto del Presidente della Repubblica n. 581 — Regolamento di attuazione dell’articolo 8 della legge 29 dicembre 1993, n. 580, in materia di istituzione del registro delle imprese di cui all’articolo 2188 del codice civile (Decree No 581 of the President of the Republic, laying down implementing regulations for Article 8 of Law No 580, of 29 December 1993, concerning the establishment of the companies register referred to in Article 2188 of the Civil Code) of 7 December 1995 (GURI No 28 of 3 February 1996), governs certain details relating to the companies register.22Directive 95/46 has been transposed into Italian law by decreto legislativo n. 196 — Codice in materia di protezione dei dati personali (Legislative Decree No 196 on the personal data protection code) of 30 June 2003 (Ordinary Supplement to GURI No 174 of 29 July 2003). The dispute in the main proceedings and the questions referred for a preliminary ruling 23Mr Manni is the sole director of Italiana Costruzioni Srl, a building company which was awarded a contract for the construction of a tourist complex.24By an action commenced on 12 December 2007, Mr Manni brought proceedings against the Lecce Chamber of Commerce, claiming that the properties in that complex were not selling because it was apparent from the companies register that he had been the sole director and liquidator of Immobiliare e Finanziaria Salentina Srl (‘Immobiliare Salentina’), which had been declared insolvent in 1992 and struck off the companies register, following liquidation proceedings, on 7 July 2005.25In that action, Mr Manni alleged that the personal data concerning him, which appear in the companies register, had been processed by a company specialised in the collection and processing of market information and in risk assessment (‘rating’), and that, notwithstanding a request to remove it from the register, the Lecce Chamber of Commerce has not done so.26Mr Manni therefore sought an order requiring the Lecce Chamber of Commerce to erase, anonymise or block the data linking him to the liquidation of Immobiliare Salentina, together with an order that that chamber compensate him for the damage he suffered by reason of the injury to his reputation.27By judgment of 1 August 2011, the Tribunale di Lecce (Court of Lecce, Italy) upheld that claim, ordering the Lecce Chamber of Commerce to anonymise the data linking Mr Manni to the liquidation of Immobiliare Salentina and to pay compensation for the damage suffered by him, assessed at EUR 2000, together with interest and costs.28The Tribunale di Lecce (Court of Lecce) considered that ‘it is not permissible for entries in the register which link the name of an individual to a critical phase in the life of the company (such as its liquidation) to be permanent, unless there is a specific general interest in their retention and disclosure’. In the absence of any provision in the Civil Code laying down a maximum period of registration, that court held that, ‘after an appropriate period’ from the conclusion of the liquidation, and after the company has been removed from the register, stating the name of the person who was sole director of that company at the time of the liquidation ceased to be necessary and useful, for the purposes of Legislative Decree No 196, and the public interest in a ‘historical memory’ of the existence of the company and the difficulties it experienced [could] to a great extent be just as well effected by means of anonymous data’.29The Lecce Chamber of Commerce brought an appeal against that judgment before the Corte suprema di cassazione (Court of Cassation, Italy), which decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Must the principle of keeping personal data in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected or for which they are further processed, laid down in Article 6(1)(e) of Directive 95/46, transposed by Legislative Decree No 196 of 30 June 2003, take precedence over and, therefore, preclude the system of disclosure established by means of the companies register provided for by Directive 68/151 and by national law in Article 2188 of the Civil Code and Article 8 of Law No 580 of 29 December 1993, in so far as it is a requirement of that system that anyone may, at any time, obtain the data relating to individuals in those registers?(2)Consequently, is it permissible under Article 3 of Directive 68/151, by way of derogation from the principles that there should be no time limit and that anyone may consult the data published in the companies register, for the data no longer to be subject to “disclosure”, in both those regards, but to be available for only a limited period and only to certain recipients, on the basis of a case-by-case assessment by the data manager?’ Consideration of the questions referred 30By its questions, which should be considered together, the referring court asks, essentially, whether Article 3 of Directive 68/151 and Article 6(1)(e) of Directive 95/46 must be interpreted as meaning that Member States may, and indeed must, allow individuals, covered by Article 2(1)(d) and (j) of Directive 68/151, to request the authority responsible for maintaining the companies register to limit, after a certain period has elapsed from the dissolution of the company concerned and on the basis of a case-by-case assessment, access to personal data concerning them and entered in that register.31It should be noted at the outset that the case at issue in the main proceedings and the questions referred to the Court for a preliminary ruling do not concern the subsequent processing of the data at issue in this case by a specialised rating company, referred to in paragraph 25 of the present judgment, but rather the accessibility of such data held in the companies register by third parties.32In that regard, it must first be pointed out that, under Article 2(1)(d) of Directive 68/151, Member States must take the measures necessary to ensure compulsory disclosure by companies of at least the appointment, termination of office and particulars of the persons who either as a body constituted pursuant to law, or as members of any such body, are authorised to represent the company in dealings with third parties and in legal proceedings, or take part in the administration, supervision or control of that company. Moreover, according to Article 2(1)(j), the appointment of liquidators, particulars concerning them and, in principle, their respective powers must also be disclosed.33Pursuant to Article 3(1) to (3) of Directive 68/151, those particulars must be transcribed in each Member State either in a central register, commercial register or companies register (together, ‘the register’), and a copy of the whole or any part of those particulars must be obtainable by application.34It must be held that the particulars concerning the identity of the persons referred to in Article 2(1)(d) and (j) of Directive 68/151 constitute, as information relating to identified or identifiable natural persons, ‘personal data’ within the meaning of Article 2(a) of Directive 95/46. It is apparent from the Court’s case-law that the fact that that information was provided as part of a professional activity does not mean that it cannot be characterised as personal data (see judgment of 16 July 2015, ClientEarth and PAN Europe v EFSA, C‑615/13 P, EU:C:2015:489, paragraph 30 and the case-law cited).35Furthermore, by transcribing and keeping that information in the register and communicating it, where appropriate, on request to third parties, the authority responsible for maintaining that register carries out ‘processing of personal data’ for which it is the ‘controller’, within the meaning of the definitions set out Article 2(b) and (d) of Directive 95/46.36The processing of personal data which is thus carried out in the implementation of Article 2(1)(d) and (j) and Article 3 of Directive 68/151 is subject to Directive 95/46, under Articles 1 and 3 thereof. This is now expressly provided for in Article 7a of Directive 2009/101, as amended by Directive 2012/17, which, however, is only declaratory in that regard. As the European Commission stated at the hearing, the EU legislature considered it useful to recall that fact in the context of the legislative changes introduced by Directive 2012/17 and aimed at ensuring interoperability of registers of the Member States, since those changes suggested an increase in the intensity of the processing of personal data.37With regard to Directive 95/46, it should be remembered that, as is apparent from Article 1 and recital 10, that directive seeks to ensure a high level of protection of the fundamental rights and freedoms of natural persons, in particular their right to privacy, with respect to the processing of personal data (see judgment of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 66 and the case-law cited).38According to recital 25 of Directive 95/46, the principles of protection laid down by the directive are reflected, on the one hand, in the obligations imposed on persons responsible for processing data, in particular regarding data quality, technical security, notification to the supervisory authority and the circumstances under which processing can be carried out, and, on the other hand, in the rights conferred on individuals whose data are the subject of processing to be informed that such processing is taking place, to consult the data, to request corrections and even to object to processing in certain circumstances.39The Court has already held that the provisions of Directive 95/46, in so far as they govern the processing of personal data liable to infringe fundamental freedoms and, in particular, the right to respect for private life, must necessarily be interpreted in the light of the fundamental rights guaranteed by the Charter of Fundamental Rights of the European Union (‘the Charter’) (see judgment of 6 October 2015, Schrems, C‑362/14, EU:C:2015:650, paragraph 38 and the case-law cited).40Article 7 of the Charter therefore guarantees the right to respect for private life, whilst Article 8 of the Charter expressly proclaims the right to the protection of personal data. Article 8(2) and (3) states that such data must be processed fairly, for specific purposes and on the basis of the consent of the person concerned or some other legitimate basis laid down by law, that everyone has the right of access to data which has been collected concerning him or her and the right to have it rectified, and that compliance with those rules is to be subject to control by an independent authority. Those requirements are implemented inter alia in Articles 6, 7, 12, 14 and 28 of Directive 95/46.41With regard, in particular, to the general conditions of lawfulness imposed by Directive 95/46, it should be noted that, subject to the exceptions permitted under Article 13 of that directive, all processing of personal data must comply, first, with the principles relating to data quality set out in Article 6 of the directive and, secondly, with one of the criteria for making data processing legitimate listed in Article 7 of the directive (see, inter alia, judgment of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 71 and the case-law cited).42In that regard, as the Advocate General pointed out in point 52 of his Opinion, it should be noted that the processing of personal data by the authority responsible for keeping the register pursuant to Article 2(1)(d) and (j) and Article 3 of Directive 68/151 satisfies several grounds for legitimation provided for in Article 7 of Directive 95/46, namely those set out in subparagraph (c) thereof, relating to compliance with a legal obligation, subparagraph (e), relating to the exercise of official authority or the performance of a task carried out in the public interest, and subparagraph (f) relating to the realisation of a legitimate interest pursued by the controller or by the third parties to whom the data are disclosed.43With regard, inter alia, to the ground for legitimation provided for in Article 7(e) of Directive 95/46, it should be noted that the Court of Justice has already held that the activity of a public authority consisting in the storing, in a database, of data which undertakings are obliged to report on the basis of statutory obligations, permitting interested persons to search for that data and providing them with print-outs thereof, falls within the exercise of public powers (see judgment of 12 July 2012, Compass-Datenbank, C‑138/11, EU:C:2012:449, paragraphs 40 and 41). Moreover, such an activity also constitutes a task carried out in the public interest within the meaning of that provision.44In the present case, the parties to the main proceedings disagree as to whether the authority responsible for keeping the register should, after a certain period has elapsed since a company ceased to trade, and on the request of the data subject, either erase or anonymise that personal data, or limit their disclosure. In that context, the referring court asks in particular whether such an obligation flows from Article 6(1)(e) of Directive 95/46.45According to Article 6(1)(e) of Directive 95/46, Member States are to ensure that personal data are kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected or for which they are further processed. Where that data are stored for longer periods for historical, statistical or scientific use, Member States must lay down appropriate safeguards. Pursuant to paragraph 2 of that article, it is the responsibility of the controller to ensure compliance with those principles.46In the event of failure to comply with the condition laid down in Article 6(1)(e) of Directive 95/46, Member States guarantee the person concerned, pursuant to Article 12(b) thereof, the right to obtain from the controller, as appropriate, the erasure or blocking of the data concerned (see, to that effect, judgment of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 70).47Moreover, under subparagraph (a) of the first paragraph of Article 14 of Directive 95/46, Member States are to grant the data subject the right, inter alia in the cases referred to in Article 7(e) and (f) of that directive, to object at any time on compelling legitimate grounds relating to his particular situation to the processing of data relating to him, save where otherwise provided by national legislation. The balancing to be carried out under subparagraph (a) of the first paragraph of Article 14 thus enables account to be taken in a more specific manner of all the circumstances surrounding the data subject’s particular situation. Where there is a justified objection, the processing instigated by the controller may no longer involve those data (see judgment of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 76).48In order to determine whether Member States are required, under Article 6(1)(e) and Article 12(b), or under subsection (a) of the first subparagraph of Article 14 of Directive 95/46, to provide, for the natural persons referred to in Article 2(1)(d) and (j) of Directive 68/151, the right to apply to the authority responsible for keeping the register to erase or block the personal data entered in that register after a certain period of time, or to restrict access to it, it is first necessary to ascertain the purpose of that registration.49In that regard, it is apparent from the recitals and from the title of Directive 68/151 that the purpose of the disclosure provided for by that directive is to protect in particular the interests of third parties in relation to joint stock companies and limited liability companies, since the only safeguards they offer to third parties are their assets. To that end, the basic documents of the company concerned should be disclosed in order that third parties may be able to ascertain their contents and other information concerning the company, especially particulars of the persons who are authorised to bind the company.50The Court has already noted, moreover, that the purpose of Directive 68/151 is to guarantee legal certainty in relation to dealings between companies and third parties in view of the intensification of trade between Member States following the creation of the internal market and that, with that in mind, it is important that any person wishing to establish and develop trading relations with companies situated in other Member States should be able easily to obtain essential information relating to the constitution of trading companies and to the powers of persons authorised to represent them, which requires that all the relevant information should be expressly stated in the register (see, to that effect, judgment of 12 November 1974, Haaga, 32/74, EU:C:1974:116, paragraph 6).51Moreover, it is apparent from the case-law of the Court that the disclosure provided for in Article 3 of Directive 68/151 is intended to enable any interested third parties to inform themselves of these matters, without having to establish a right or an interest requiring to be protected. The Court noted, in that regard, that the very wording of Article 54(3)(g) of the EEC Treaty, on which that directive was based, refers to the need to protect the interests of third parties generally, without distinguishing or excluding any categories falling within the ambit of that term, and consequently the third parties referred to in that article cannot be limited in particular merely to creditors of the company concerned (see judgment of 4 December 1997, Daihatsu Deutschland, C‑97/96, EU:C:1997:581, paragraphs 19, 20 and 22, and the order of 23 September 2004, Springer, C‑435/02 and C‑103/03, EU:C:2004:552, paragraphs 29 and 33).52Furthermore, as to whether, in order to achieve the aim referred to in Article 3 of Directive 68/151, it is in principle necessary for the personal data of natural persons referred to in Article 2(1)(d) and (j) of that directive to remain on the register and/or accessible to any third party upon request also after the activity has ceased and the company concerned has been dissolved, it should be pointed out that the directive makes no express provision in that regard.53However, as the Advocate General also pointed out in points 73 and 74 of his Opinion, it is common ground that even after the dissolution of a company, rights and legal relations relating to it continue to exist. Thus, in the event of a dispute, the data referred to in Article 2(1)(d) and (j) of Directive 68/151 may be necessary in order, inter alia, to assess the legality of an act carried out on behalf of that company during the period of its activity or so that third parties can bring an action against the members of the organs or against the liquidators of that company.54Moreover, depending in particular on the limitation periods applicable in the various Member States, questions requiring such data may arise for many years after a company has ceased to exist.55In view of the range of possible scenarios, which may involve actors in several Member States, and the considerable heterogeneity in the limitation periods provided for by the various national laws in the various areas of law, highlighted by the Commission, it seems impossible, at present, to identify a single time limit, as from the dissolution of a company, at the end of which the inclusion of such data in the register and their disclosure would no longer be necessary.56In those circumstances, Member States cannot, pursuant to Article 6(1)(e) and Article 12(b) of Directive 95/46, guarantee that the natural persons referred to in Article 2(1)(d) and (j) of Directive 68/151 have the right to obtain, as a matter of principle, after a certain period of time from the dissolution of the company concerned, the erasure of personal data concerning them, which have been entered in the register pursuant to the latter provision, or the blocking of that data from the public.57That interpretation of Article 6(1)(e) and Article 12(b) of Directive 95/46 does not, moreover, result in disproportionate interference with the fundamental rights of the persons concerned, and particularly their right to respect for private life and their right to protection of personal data as guaranteed by Articles 7 and 8 of the Charter.58First, Article 2(1)(d) and (j) and Article 3 of Directive 68/151 require disclosure only for a limited number of personal data items, namely those relating to the identity and the respective functions of persons having the power to bind the company concerned to third parties and to represent it or take part in the administration, supervision or control of that company, or having been appointed as liquidator of that company.59Secondly, as pointed out in paragraph 49 of the present judgment, Directive 68/151 provides for disclosure of the data referred to in Article 2(1)(d) and (j) thereof, due, in particular, to the fact that the only safeguards that joint-stock companies and limited liability companies offer to third parties are their assets, which constitutes an increased economic risk for the latter. In view of this, it appears justified that natural persons who choose to participate in trade through such a company are required to disclose the data relating to their identity and functions within that company, especially since they are aware of that requirement when they decide to engage in such activity.60Finally, as regards subparagraph (a) of the first paragraph of Article 14 of Directive 95/46, it must be pointed out that, whereas it follows from the foregoing that, in the weighting to be carried out under that provision, in principle, the need to protect the interests of third parties in relation to joint-stock companies and limited liability companies and to ensure legal certainty, fair trading and thus the proper functioning of the internal market take precedence, it cannot be excluded, however, that there may be specific situations in which the overriding and legitimate reasons relating to the specific case of the person concerned justify exceptionally that access to personal data entered in the register is limited, upon expiry of a sufficiently long period after the dissolution of the company in question, to third parties who can demonstrate a specific interest in their consultation.61In that regard, however, it should be pointed out that, in so far as the application of subparagraph (a) of the first paragraph of Article 14 of Directive 95/46 is subject to the proviso that national law does not lay down a provision to the contrary, the final decision as to whether the natural persons referred to in Article 2(1)(d) and (j) of Directive 68/151 may apply to the authority responsible for keeping the register for such limitation of access to personal data concerning them, on the basis of a case-by-case assessment, is a matter for the national legislatures.62It is for the referring court to determine the provisions of its national law in that regard.63Assuming that such an examination reveals that national law permits such applications, it will be for the national court to assess, having regard to all the relevant circumstances and taking into account the time elapsed since the dissolution of the company concerned, the possible existence of legitimate and overriding reasons which, as the case may be, exceptionally justify limiting third parties’ access to the data concerning Mr Manni in the company register, from which it is apparent that he was the sole administrator and liquidator of Immobiliare Salentina. In that regard, it should be pointed out that the mere fact that, allegedly, the properties of a tourist complex built by Italiana Costruzioni, of which Mr Manni is currently the sole director, do not sell because of the fact that potential purchasers of those properties have access to that data in the company register, cannot be regarded as constituting such a reason, in particular in view of the legitimate interest of those purchasers in having that information.64In the light of all the foregoing considerations, the answer to the questions referred must be that Article 6(1)(e), Article 12(b) and subparagraph (a) of the first paragraph of Article 14 of Directive 95/46, read in conjunction with Article 3 of Directive 68/151, must be interpreted as meaning that, as EU law currently stands, it is for the Member States to determine whether the natural persons referred to in Article 2(1)(d) and (j) of that directive may apply to the authority responsible for keeping the register to determine, on the basis of a case-by-case assessment, if it is exceptionally justified, on compelling legitimate grounds relating to their particular situation, to limit, on the expiry of a sufficiently long period after the dissolution of the company concerned, access to personal data relating to them, entered in that register, to third parties who can demonstrate a specific interest in consulting that data. Costs 65Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: Article 6(1)(e), Article 12(b) and subparagraph (a) of the first paragraph of Article 14 of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, read in conjunction with Article 3 of the First Council Directive 68/151/EEC of 9 March 1968 on co-ordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community, as amended by Directive 2003/58/EC of the European Parliament and of the Council of 15 July 2003, must be interpreted as meaning that, as EU law currently stands, it is for the Member States to determine whether the natural persons referred to in Article 2(1)(d) and (j) of that directive may apply to the authority responsible for keeping, respectively, the central register, commercial register or companies register to determine, on the basis of a case-by-case assessment, if it is exceptionally justified, on compelling legitimate grounds relating to their particular situation, to limit, on the expiry of a sufficiently long period after the dissolution of the company concerned, access to personal data relating to them, entered in that register, to third parties who can demonstrate a specific interest in consulting that data. [Signatures]( 1 ) Language of the case: Italian. | d7360-05fb96d-4f59 | EN |
The Court upholds the fines imposed on Samsung SDI and Samsung SDI (Malaysia) for their participation in the cartel on the market for tubes for television sets and for computer monitors | JUDGMENT OF THE COURT (Eighth Chamber)9 March 2017 (*)(Appeal — Agreements, decisions and concerted practices — Global market for cathode ray tubes for television sets and computer monitors — Agreements and concerted practices on pricing, market sharing, customer allocation and output limitation — Fines — Guidelines on the method of setting fines (2006) — Point 13 — Determination of the value of sales relating to the infringement)In Case C‑615/15 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 18 November 2015, Samsung SDI Co. Ltd, established in Gyeonggi-do (Republic of Korea), Samsung SDI (Malaysia) Bhd, established in Negeri Sembilan Darul Khusus (Malaysia), represented by M. Struys, A. Fall, L. Eskenazi and C. Erol, avocats,appellants,the other party to the proceedings being: European Commission, represented by A. Biolan, G. Meessen and H. van Vliet, acting as Agents,defendant at first instance,THE COURT (Eighth Chamber),composed of M. Vilaras (Rapporteur), President of the Chamber, J. Malenovský and M. Safjan, Judges,Advocate General: M. Szpunar,Registrar: A. Calot Escobar,having regard to the written procedure,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion, gives the following Judgment 1 By their appeal, Samsung SDI Co. Ltd and Samsung SDI (Malaysia) Bhd ask the Court to set aside the judgment of the General Court of the European Union of 9 September 2015, Samsung SDI and Others v Commission (T‑84/13, not published, ‘the judgment under appeal’, EU:T:2015:611), by which the General Court dismissed their action for the annulment in part of Commission Decision C(2012) 8839 final of 5 December 2012 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case COMP/39.437 — TV and Computer Monitor Tubes) (‘the decision at issue’) in so far as it concerned them and for the reduction of the fine which had been imposed on them. Background to the dispute 2 It is apparent from paragraph 7 of the judgment under appeal that, by the decision at issue, the European Commission found that the main global producers of cathode ray tubes (‘CRTs’) had infringed Article 101 TFEU and Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3) by participating in two separate infringements, each constituting a single and continuous infringement. Those infringements concerned, on the one hand, the market for colour cathode ray tubes for computer monitors (colour display tubes, ‘CDTs’) and, on the other hand, the market for colour cathode ray tubes for television sets (colour picture tubes, ‘CPTs’). 3 As the General Court noted in paragraph 2 of the judgment under appeal, a CRT is an evacuated glass envelope containing an electron gun and a fluorescent screen, usually with internal or external means to accelerate and deflect the electrons. When electrons from the electron gun strike the fluorescent screen, light is emitted, creating an image on the screen. CDTs and CPTs were the only two types of CRT that existed at the time of the facts material to the decision at issue. 4 In paragraph 3 of the judgment under appeal, the General Court noted that, during the period in which the infringements penalised by the decision at issue were committed, the group of undertakings to which the appellants belonged manufactured and sold CRTs in the European Economic Area (EEA). As indicated in paragraph 1 of the judgment under appeal, Samsung SDI is the ultimate holding company of that group and owns 100% of the shares in Samsung SDI Germany GmbH and 68.59% of the shares in Samsung SDI (Malaysia). 5 As can be seen from paragraph 13 of the judgment under appeal, the Commission found, in the decision at issue, that Samsung SDI had participated in the CPT cartel directly and through its subsidiaries Samsung SDI Germany and Samsung SDI (Malaysia), and it had participated in the CDT cartel directly and through its subsidiary Samsung SDI (Malaysia). The procedure before the General Court and the judgment under appeal 6 By application lodged at the Registry of the General Court on 14 February 2013, Samsung SDI, Samsung SDI Germany and Samsung SDI (Malaysia) brought an action before the General Court. That action sought, as regards the infringement in relation to CPTs, primarily, the annulment of the decision at issue in so far as it concerned the three applicant companies and, in the alternative, a reduction of the fine imposed on them. As regards the infringement in relation to CDTs, that action sought the reduction of the fine imposed on them. 7 The General Court noted, as a preliminary point, in paragraph 26 of the judgment under appeal, that Samsung SDI Germany had been dissolved on 1 August 2014. It therefore concluded that there was no need to rule on the action in so far as it concerned that company. 8 The General Court examined, first of all, the single plea in law raised in support of the claims seeking the annulment of decision at issue, in so far as it concerned the infringement in relation to CPTs. It then examined the two pleas in law raised in support of the claims seeking the reduction of the fine imposed for that infringement. Lastly, it examined the three pleas in law raised in support of the claims seeking the reduction of the fine imposed for the infringement in relation to CDTs. 9 Having rejected all of those pleas in law, the General Court dismissed the action. The forms of order sought 10 The appellants claim that the Court should:– set aside the judgment under appeal and, consequently, annul Article 2(1)(b) and (2)(b) of the decision at issue in so far as it concerns the appellants and reduce the corresponding fines and– order the Commission to pay the costs of the appeal and of the proceedings at first instance. 11 The Commission claims that the Court should:– dismiss the appeal; and– order the appellants to pay the costs. The appeal 12 In support of their appeal, the appellants rely on four grounds of appeal alleging that (i) the General Court breached the obligation to state reasons and infringed the Commission’s Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 (OJ 2006 C 210, p. 2; ‘the Guidelines on the method of setting fines’), in that it rejected their line of argument that the sales of products to which the CPT cartel did not relate should have been excluded from the fine calculation without addressing that line of argument; (ii) the General Court breached the obligation to state reasons and the principle of equal treatment, in that it rejected, without stating reasons, their line of argument that the Commission could not set an end date for their participation in the CPT cartel subsequent to the dates set for the other parties to that cartel; (iii) the General Court erred in law, in that it approved the taking into account, in the calculation of the fine, of CDT sales to Samsung Electronics Co. Ltd (‘SEC’), even though those sales were negotiated in South Korea, and (iv) the General Court erred in law in examining their line of argument relating to the Commission’s refusal to grant them the maximum leniency reduction of 50% of the amount of the fine, in respect of the CDT cartel. The first ground of appeal, alleging that the General Court breached the obligation to state reasons and infringed the Guidelines on the method of setting fines as regards the taking into account, in the calculation of the fine, of CPT sales to which the cartel did not relate Arguments of the parties 13 The appellants submit that, in support of their claims made before the General Court seeking the annulment of the decision at issue, in so far as it concerned the CPT cartel, they had, inter alia, argued that the Commission could not take into account all CPT types and sizes in the calculation of the fine, since the scope of the cartel had evolved over time. The General Court ignored that line of argument entirely and did not address it. It follows, according to the applicant, that the General Court breached its obligation to state sufficient reasons for its judgment. 14 In addition, the appellants submit that, in paragraph 57 of the judgment under appeal, the General Court acknowledged, at the very least implicitly, that all CPT types and sizes had not been the subject of a cartel during the entirety of the period concerned by the decision at issue. Accordingly, in order to respect the principle of proportionality, the sales of products which had not been the subject of a cartel during a given year should have been excluded from the sales taken into account, for that year, in the calculation of the fine. 15 The Commission contends that the first part of the first ground of appeal is based on a misreading of the judgment under appeal. As can be seen from paragraphs 57 and 82 of the judgment under appeal, the General Court found that all CPTs had been the subject, to various degrees, of collusive contacts which constituted a single and continuous infringement. According to the Commission, that finding was sufficient to justify the rejection of the line of argument put forward by Samsung SDI and Samsung SDI (Malaysia) and the General Court did not have to give any additional reasons. The Commission takes the view that the second part of the first ground of appeal, alleging the infringement of the Guidelines on the method of setting fines, is also based on a misreading of the judgment under appeal and must be rejected. Findings of the Court 16 The first part of the first ground of appeal is based on a misreading of the judgment under appeal. In paragraph 57 of the judgment under appeal, the General Court noted, inter alia, the following:‘... contrary to what is suggested [by the appellants] in the application, all CPTs were the subject, to various degrees, of contacts between undertakings. [A]ll CPTs were the subject of either “hardcore discussions” or exchanges of sensitive information’. 17 Furthermore, in paragraph 82 of the judgment under appeal, the General Court noted that ‘all CPTs were the subject of collusive contacts which constituted a single and continuous infringement’. 18 It follows that the General Court rejected as unfounded the appellants’ line of argument raised in paragraph 13 of the present judgment, and gave sufficient reasons for that rejection. Moreover, since the General Court considered that the infringement had related, throughout its duration, to all CPTs, it was not required to annul or amend the fine, which was calculated on the basis of the sales of all CPT types throughout the duration of the infringement. Consequently, the appellants’ line of argument set out in paragraph 14 above must also be rejected. 19 As regards the second part of the first ground of appeal, the Court notes that, contrary to the appellants’ submissions, the General Court in no way found in paragraph 57 of the judgment under appeal that the various types and sizes of CPT were not the subject of a cartel during the entire duration of the cartel taken into account by the Commission, but merely noted that it could be seen from the table produced by the appellants that CPTs were the subject, to various degrees, of contacts between undertakings. It cannot be inferred from that finding that, as the appellants’ line of argument implies, the General Court considered that the infringement was not a single infringement, but rather a complex infringement. 20 In addition, in paragraph 52 of the judgment under appeal, the General Court noted that there was a link of complementarity between the various instances of conduct in question and that they formed part of an overall plan, with the result that the Commission was entitled to characterise them as a single infringement. It is settled case-law that, if the different actions form part of an overall plan because their identical object distorts competition within the internal market, the Commission is entitled to impute responsibility for those actions on the basis of participation in the infringement considered as a whole (see, inter alia, judgment of 6 December 2012, Commission v Verhuizingen Coppens, C‑441/11 P, EU:C:2012:778, paragraph 41). 21 In those circumstances, the appellants cannot reasonably maintain that the General Court should have excluded the sales figures of products which were not the subject of the cartel during each year concerned from the relevant annual sales. 22 Consequently, the appellants’ line of argument set out in paragraph 14 above must also be rejected. It follows that the first ground of appeal must be dismissed in its entirety. The second ground of appeal, alleging that the General Court breached the obligation to state reasons and the principle of equal treatment, as regards the end date of the appellants’ participation in the CPT cartel 23 By the second ground of appeal, which is divided into two parts, the appellants’ submit that the General Court breached the obligation to state reasons and the principle of equal treatment, in that it rejected, in paragraphs 153 to 164 of the judgment under appeal, their line of argument, put forward in support of their claims seeking the annulment or alteration of the decision at issue in so far as it concerned the CPT cartel, according to which the Commission could not set an end date for their participation in the CPT cartel, in this case 15 November 2006, subsequent to the dates set for all the other parties to the proceedings concerning the same cartel. 24 By the first part of the second ground of appeal, the appellants argue that the General Court rejected, without giving sufficient reasons, their argument that collusion requires the involvement of at least two undertakings. They submit that, in the decision at issue, the Commission set the end date of the participation of Matsushita Toshiba Picture Display Co. Ltd and its parent companies in the CPT cartel at 12 June 2006. Furthermore, the Commission chose not to initiate proceedings against the joint venture established by LG Electronics Inc. et Koninklijke Philips Electronics NV (‘LPD’) and instead brought proceedings against LPD’s parent companies, setting the end date of their participation in the CPT cartel at 30 January 2006 on the ground that, after that date, they could not be held liable for LPD’s conduct, since the latter had been declared bankrupt and placed under the control of a court-appointed administrator. It follows, according to the appellants, that the Commission could not hold them liable for participating in the CPT cartel during the period from 13 June to 15 November 2006. 25 By the second part of the second ground of appeal, the appellants contest paragraph 163 of the judgment under appeal, in which the General Court, referring to the Court’s case-law and the need to reconcile the principle of equal treatment with the principle of legality, rejected their argument that the Commission had discriminated against them by selecting, to their detriment, an end date for their participation in the CPT cartel subsequent to the end dates chosen for the other undertakings. According to the appellants, the General Court’s reasoning is difficult to understand and, in any event, manifestly erroneous. The appellants also cite, in support of their line of argument, paragraph 75 of the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C‑580/12 P, EU:C:2014:2363). 26 The appellants acknowledge that they have put forward, in that second part, some new arguments which were not raised before the General Court, but they submit that those arguments do not change the subject matter of the dispute and are therefore admissible. 27 The Commission submits, in response to the first part of the second ground of appeal, that it did not accuse the appellants of participating alone in a cartel. It states that, as is apparent from paragraph 164 of the judgment under appeal, the appellants themselves acknowledged that they had anticompetitive contacts in relation to the CPTs until 15 November 2006. The fact that the Commission did not initiate proceedings against the other participant in those contacts, namely LPD, does not mean that the decision at issue found that the appellants participated alone in a cartel. 28 The Commission submits that the second part of the second ground of appeal is, in part, inadmissible, since the appellants have put forward certain arguments which were not previously raised before the General Court, concerning, on the one hand, LPD and, on the other hand, the reduction of the fine granted by the Commission to another participant in the CPT cartel. In any event, the Commission submits that the General Court correctly applied the case-law cited in paragraph 163 of the judgment under appeal and that the arguments put forward by the appellants do not demonstrate the contrary. The Commission argues that the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C‑580/12 P, EU:C:2014:2363), cited by the appellants, relates to a completely different situation. 29 By the first part of the second ground of appeal, the appellants submit, in essence, that, by confirming, in paragraphs 154 to 160 of the judgment under appeal, the Commission’s conclusion, in the decision at issue, that the end date of their participation in the CPT cartel was subsequent to the dates selected for all the other cartel participants referred to in that decision, the General Court erred in law, since it essentially considered, illogically, that, during a certain period, the undertaking of which the appellants formed part had participated alone in a cartel. In addition, the appellants submit that the General Court breached its obligation to state reasons, in that it did not address, in the judgment under appeal, their argument that an undertaking cannot participate alone in a cartel. 30 It is true that, in their application before the General Court, the appellants had stated that ‘collusion requires at least two parties’ and that they ‘[could not] have colluded alone’. However, it does not follow from either the summary of the appellants’ line of argument in paragraphs 152 and 153 of the judgment under appeal, or their application before the General Court, contained in the file in the case at first instance transmitted to the Court pursuant to Article 167(2) of the Rules of Procedure of the Court, that the appellants alleged, before the General Court, that all the other participants in the CPT cartel had withdrawn from that cartel prior to 15 November 2006, with the result that the appellants’ participation had ended, since an undertaking cannot participate alone in a cartel. 31 Before the General Court, the appellants also submitted that other undertakings, in particular LPD and its subsidiaries, had participated in the cartel until 15 November 2006, the end date of their participation in the CPT cartel selected in the decision at issue. They repeated that assertion in their appeal. 32 All things considered, the General Court found that, until 15 November 2006, there were at least two undertakings — namely the undertaking of which the appellants formed part and the undertaking of which LPD and its subsidiaries formed part — which participated in the CPT cartel. The fact that the Commission chose not to include the second of those two undertakings in the procedure that led to the adoption of the decision at issue, on the ground that LPD had been declared bankrupt and had subsequently been placed under the control of a court-appointed administrator, is irrelevant, in that respect, since it does not mean that that undertaking did not continue to participate in the cartel. 33 It follows that the appellants are not justified in maintaining that the General Court failed to take into account, in the judgment under appeal, that during part of the duration of the CPT cartel the undertaking of which the appellants formed part had participated alone in the cartel. The appellants’ argument that the General Court erred in law in that it came to that conclusion is therefore based on an erroneous premiss and must be rejected. 34 The same is true of the argument alleging that the General Court breached the obligation to state reasons, in that it failed to address the appellants’ line of argument that the Commission should have considered that, during a certain period, the undertaking of which they formed part had participated alone in a cartel. As noted in paragraph 30 of the present judgment, the appellants did not raise that line of argument before the General Court. 35 The first part of the second ground of appeal must therefore be rejected as unfounded. 36 The second part of the second ground of appeal, by which the appellants allege, in essence, that the General Court erred in law in implementing the principle of equal treatment, on the ground that it rejected their line of argument that the Commission had discriminated against them by penalising them for their participation in the CPT cartel until 15 November 2006, whereas other participants in the same cartel were not penalised, in respect of part or all of their participation. 37 It must be recalled that, in paragraph 163 of the judgment under appeal, the General Court held that, where an undertaking has acted in breach of Article 101 TFEU, it cannot escape being penalised altogether on the ground that another undertaking has not been fined (judgments of 31 March 1993, Ahlström Osakeyhtiö and Others v Commission, C‑89/85, C‑104/85, C‑114/85, C‑116/85, C‑117/85 and C‑125/85 to C‑129/85, EU:C:1993:120, paragraph 197, and 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 160). 38 In doing so, the General Court did not err in law. An undertaking on which a fine has been imposed for its participation in a cartel, in breach of the competition rules, cannot request the annulment or reduction of that fine, on the ground that another participant in the same cartel was not penalised in respect of a part, or all, of its participation in that cartel (see, to that effect, judgment of 16 June 2016, Evonik Degussa and AlzChem v Commission, C‑155/14 P, EU:C:2016:446, paragraphs 58 and 59). 39 The appellants’ argument, based on the judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission (C‑580/12 P, EU:C:2014:2363), cannot lead to a different conclusion. 40 In that judgment, the Court, taking into account the case-law according to which, when the amount of the fine is determined, the application of different methods of calculation cannot result in discrimination between the undertakings which have participated in the same infringement of Article 101 TFEU (judgment of 19 July 2012, Alliance One International and Standard Commercial Tobacco v Commission and Commission v Alliance One International and Others, C‑628/10 P and C‑14/11 P, EU:C:2012:479, paragraph 58), reduced the fine imposed on a participant in an infringement, in order to take account of the fact that the Commission, by incorrectly applying the method it had chosen to determine the amount of the fine, had imposed on another participant in the same cartel a fine which reduced the relative size of that participant’s contribution to the infringement (judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission, C‑580/12 P, EU:C:2014:2363, paragraphs 70 to 80). 41 However, the appellants did not invoke, either before the General Court or before the Court, an erroneous application of the method of calculating fines. Accordingly, the case-law which they invoke is irrelevant. 42 In the light of the foregoing considerations and without it being necessary to rule on the Commission’s argument alleging the partial inadmissibility of the second part of the second ground of appeal, it is necessary to reject that part as unfounded and, consequently, to reject the second ground of appeal in its entirety. The third ground of appeal, alleging an error of law as regards the taking into account of CDT sales to SEC 43 The appellants submit that the General Court erred in law, in that it rejected, in paragraphs 189 to 208 of the judgment under appeal, their plea in law alleging the infringement of point 13 of the Guidelines on the method of setting fines, by which they argued that the Commission should not have taken into account, in calculating the fine that it imposed on them for their participation in the CDT cartel, Samsung SDI’s CDT sales to SEC. According to the appellants, since the prices and the quantities of CDT to be supplied had been negotiated in South Korea, directly between the management of Samsung SDI and that of SEC, those sales should not have been regarded as sales made in the EEA, for the purpose of point 13 of the Guidelines on the method of setting fines. 44 In that context, the appellants challenge the General Court’s rejection, in paragraph 195 of the judgment under appeal, of their argument that the concept of ‘sales’ in the EEA must be interpreted by reference to the place where competition was affected. The application of Article 101 TFEU and the Guidelines on the method of setting fines are intended, fundamentally, to safeguard competition within the EEA. Accordingly, the General Court erred and disregarded its own case-law in rejecting their line of argument, by referring, in order to determine the sales within the EEA used in the calculation of the fine, to the place of delivery of the CDTs sold to SEC, since the place where the sale was concluded is the place where competition was affected. 45 Lastly, the appellants state that the third ground of appeal does not concern the possible inappropriateness of the fine imposed on them, but rather concerns an error of law committed in the application of the Guidelines on the method of setting fines and is, accordingly, admissible. 46 The Commission contests, primarily, the admissibility of the third ground of appeal, since the appellants do not allege that the fine imposed on them is excessive to the point of being disproportionate. According to the Commission, it follows from the case-law of the Court (judgment of 10 July 2014, Telefónica et Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 205) that it is only in that situation that the Court would have to find an error of law committed by the General Court, on account of the inappropriateness of the fine. 47 In the alternative, the Commission argues that, contrary to the appellants’ assertions, the General Court did not commit, in paragraphs 192 to 197 of the judgment under appeal, any error of law in the application of point 13 of the Guidelines on the method of setting fines, in interpreting the concept of ‘sales ... within the EEA’ by taking account of the impact of the agreements or concerted practices in question in the EEA. The case-law of the Court invoked by the appellants does not justify a different conclusion. 48 Lastly, the Commission submits that the reference, in paragraph 196 of the judgment under appeal, to the principle of proportionality, merely recalls settled case-law, whereas the appellants’ line of argument relating to the damage that consumers in the EEA could have suffered as a result of a cartel outside the EEA is ineffective, since the General Court did not refer to such potential damage. 49 By the third ground of appeal, the appellants criticise the General Court, in essence, for considering that the Commission had not breached point 13 of its Guidelines on the method of setting fines, by taking account of the value of sales negotiated outside the EEA of goods delivered within the EEA, in calculating the fine imposed on them. The question whether the Commission correctly interpreted and applied its own guidelines and whether those guidelines comply with the provisions and principles governing the determination of the amount of the fine to be imposed for an infringement of the competition rules are questions of law, which may be raised before the Court at the appeal stage. Accordingly, the third ground of appeal is admissible. 50 However, with regard to its substance, that third ground of appeal cannot succeed. 51 It must be recalled that point 13 of the Guidelines on the method of setting fines pursues the objective of adopting as the starting point for the calculation of the fine imposed on an undertaking an amount which reflects the economic significance of the infringement and the size of the undertaking’s contribution to it (judgment of 9 July 2015, InnoLux v Commission, C‑231/14 P, EU:C:2015:451, paragraph 50 and the case-law cited). 52 Consequently, the concept of the ‘value of sales’, referred to in point 13 of the Guidelines on the method of setting fines, encompasses the sales made on the market concerned by the infringement in the EEA, and it is not necessary to determine whether those sales were genuinely affected by that infringement (judgment of 9 July 2015, InnoLux v Commission, C‑231/14 P, EU:C:2015:451, paragraph 51 and the case-law cited). 53 However, in paragraph 195 of the judgment under appeal, the General Court held that, in the present case, the place of delivery had a real impact on the level of sales made by the appellants. Although the prices and quantities of CDTs to be supplied were negotiated, for the most part, in South Korea, between the headquarters of Samsung SDI and those of SEC, the CDTs were delivered directly from the warehouses managed by Samsung SDI, located in the EEA, to SEC, in its warehouses also located in the EEA, and, moreover, SEC’s European subsidiaries ultimately had the possibility of changing their production plans and, accordingly, the number of CDTs that they needed. In that case, the level of sales finally made by Samsung SDI to SEC would be altered. 54 Consequently, the General Court did not err in law in considering that, in order to determine the amount of sales within the EEA, for the purpose of those guidelines, it was necessary to take account of all deliveries made in the EEA. 55 Furthermore, if the appellants’ argument were accepted, an undertaking participating in an infringement would merely have to negotiate its sales with its customers outside the EEA in order to ensure that those sales would not be taken into account in the calculation of a potential fine, which would therefore be much smaller (see, by analogy, judgment of 27 September 1988, Ahlström Osakeyhtiö and Others v Commission, 89/85, 104/85, 114/85, 116/85, 117/85 and 125/85 to 129/85, EU:C:1988:447, paragraph 16). 56 It follows from the foregoing that the third ground of appeal must be rejected as unfounded. The fourth ground of appeal, alleging that the General Court erred in law as regards the reduction of the fine under the leniency programme 57 The appellants submit that the General Court erred in law in rejecting, in paragraphs 217 to 223 of the judgment under appeal, their plea in law seeking the reduction of the fine imposed on them for their participation in the CDT cartel, by which they argued that a reduction of 50%, rather than 40%, of the fine should have been granted to them under the leniency programme. 58 In support of their ground of appeal, the appellants submit that the General Court erred in law, in that it referred, in paragraph 220 of the judgment under appeal, to its considerations concerning the reduction of the fine imposed for their participation in the CPT cartel, even though the CDT cartel was a separate infringement and had been examined, by the Commission, in a separate part of the decision at issue, which did not make any reference to the parts of that decision concerning the CPT cartel. 59 In addition, they argue that the General Court — by applying the leniency application incorrectly, in a manner contrary to its own case-law — confirmed, in paragraph 221 of the judgment under appeal, the Commission’s conclusion that they did not merit a reduction of 50% of the fine, since they had omitted to state, in their reply to the statement of objections, that market sharing was a core feature of the CDT cartel. However, the Commission could not criticise the appellants in that respect since responses to the statement of objections are only intended to allow the cartel participants to exercise their rights of defence and raise objections to the Commission’s allegations and since, as the General Court noted in paragraph 221 of the judgment under appeal, the appellants specified the market sharing aspects in the agreements relating to CDTs in a statement accompanying the reply to the statement of objections. 60 The Commission submits that the fourth ground of appeal is inadmissible, for reasons identical to those put forward in response to the third ground of appeal, set out in paragraph 46 above. It also cites, in support of its line of argument, paragraph 69 of the judgment of 5 December 2013, Solvay v Commission (C‑455/11 P, not published, EU:C:2013:796). It adds that the appellants’ have produced, in annex to their appeal, new documents, that were not produced before the General Court, which — like the argument to which they relate — must be rejected. 61 In any event, the Commission argues that the arguments put forward by the appellants in the fourth ground of appeal cannot succeed, with the result that this ground of appeal must be rejected as unfounded. 62 Even if the two parts of the ground of appeal were well founded, it must be borne in mind that it is not for the Court of Justice, when ruling on questions of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of EU law. Accordingly, only inasmuch as the Court of Justice considers that the level of the fine is not merely inappropriate, but also excessive to the point of being disproportionate, would it have to find that the General Court erred in law, on account of the inappropriateness of the amount of a fine (judgment of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 205 and the case-law cited). 63 In the present case, the appellants have not put forward any argument alleging that the fine imposed on them is disproportionate. 64 It follows from all the foregoing considerations that the fourth ground of appeal is ineffective. Accordingly, since all the grounds of appeal put forward by the appellants must be rejected, the appeal must be dismissed. Costs 65 In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to the costs. Under Article 138(1) of those rules, which apply to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 66 Since the Commission has applied for costs against the appellants and the appellants have been unsuccessful, they should be ordered to pay the costs.On those grounds, the Court (Eighth Chamber) hereby:1. Dismisses the appeal; 2. Orders Samsung SDI Co. Ltd and Samsung SDI (Malaysia) Bhd to pay the costs. Vilaras Malenovský Safjan Delivered in open court in Luxembourg on 9 March 2017.A. Calot Escobar M. VilarasRegistrar President of the Eighth Chamber ** Language of the case: English | a76d3-1a0f5da-4d80 | EN |
Notaries in Croatia, acting in enforcement proceedings on the basis of an ‘authentic document’, cannot be deemed to be ‘courts’ either within the meaning of the Regulation on the European Enforcement Order or for the purposes of the application of the Regulation on the recognition and enforcement of judgments in civil and commercial matters | 9 March 2017 ( *1 )*‛Reference for a preliminary ruling — Judicial cooperation in civil matters — Regulation (EC) No 805/2004 — European Enforcement Order for uncontested claims — Requirements for certification as a European Enforcement Order — Concept of ‘court’ — Notary who has issued a writ of execution based on an ‘authentic document’ — Authentic instrument’In Case C‑484/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Općinski sud u Novom Zagrebu — Stalna služba u Samoboru (Municipal Court of New Zagreb — Samobor Permanent Service, Croatia), made by decision of 7 September 2015, received at the Court on 11 September 2015, in the proceedings Ibrica Zulfikarpašić v Slaven Gajer, THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Prechal, A. Rosas, C. Toader (Rapporteur) and E. Jarašiūnas, Judges,Advocate General: Y. Bot,Registrar: M. Aleksejev, Administrator,having regard to the written procedure and further to the hearing on 14 July 2016,after considering the observations submitted on behalf of:—the Croatian Government, by A. Metelko-Zgombić, acting as Agent,the Spanish Government, by V. Ester Casas, acting as Agent,the European Commission, by C. Cattabriga, S. Ječmenica and M. Wilderspin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 8 September 2016,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims (OJ 2004 L 143, p. 15).2The request has been made in proceedings between Mr Ibrica Zulfikarpašić and Mr Slaven Gajer regarding an application for a European Enforcement Order certificate in respect of a writ of execution, adopted by a notary, in Croatia, based on an ‘authentic document’. Legal context EU law 3According to recitals 3, 5, 7, 10, 12 and 18 of Regulation No 805/2004:‘(3)The European Council meeting in Tampere on 15 and 16 October 1999 endorsed the principle of mutual recognition of judicial decisions as the cornerstone for the creation of a genuine judicial area.…(5)The concept of “uncontested claims” should cover all situations in which a creditor, given the verified absence of any dispute by the debtor as to the nature or extent of a pecuniary claim, has obtained either a court decision against that debtor or an enforceable document that requires the debtor’s express consent, be it a court settlement or an authentic instrument.(7)This Regulation should apply to judgments, court settlements and authentic instruments on uncontested claims and to decisions delivered following challenges to judgments, court settlements and authentic instruments certified as European Enforcement Orders.(10)Where a court in a Member State has given judgment on an uncontested claim in the absence of participation of the debtor in the proceedings, the abolition of any checks in the Member State of enforcement is inextricably linked to and dependent upon the existence of a sufficient guarantee of observance of the rights of the defence.(12)Minimum standards should be established for the proceedings leading to the judgment in order to ensure that the debtor is informed about the court action against him, the requirements for his active participation in the proceedings to contest the claim and the consequences of his non-participation in sufficient time and in such a way as to enable him to arrange for his defence.(18)Mutual trust in the administration of justice in the Member States justifies the assessment by the court of one Member State that all conditions for certification as a European Enforcement Order are fulfilled to enable a judgment to be enforced in all other Member States without judicial review of the proper application of the minimum procedural standards in the Member State where the judgment is to be enforced.’4Article 1of that regulation provides:‘The purpose of this Regulation is to create a European Enforcement Order for uncontested claims to permit, by laying down minimum standards, the free circulation of judgments, court settlements and authentic instruments throughout all Member States without any intermediate proceedings needing to be brought in the Member State of enforcement prior to recognition and enforcement.’5Article 3(1) of that regulation is worded as follows:‘This Regulation shall apply to judgments, court settlements and authentic instruments on uncontested claims.A claim shall be regarded as uncontested if:(a)the debtor has expressly agreed to it by admission or by means of a settlement which has been approved by a court or concluded before a court in the course of proceedings; or(b)the debtor has never objected to it, in compliance with the relevant procedural requirements under the law of the Member State of origin, in the course of the court proceedings; or(c)the debtor has not appeared or been represented at a court hearing regarding that claim after having initially objected to the claim in the course of the court proceedings, provided that such conduct amounts to a tacit admission of the claim or of the facts alleged by the creditor under the law of the Member State of origin; or(d)the debtor has expressly agreed to it in an authentic instrument.’6Article 4 of that regulation provides:‘For the purposes of this Regulation, the following definitions shall apply:1. “judgment”: any judgment given by a court or tribunal of a Member State, whatever the judgment may be called, including a decree, order, decision or writ of execution, as well as the determination of costs or expenses by an officer of the court;2. “claim”: a claim for payment of a specific sum of money that has fallen due or for which the due date is indicated in the judgment, court settlement or authentic instrument;3. “authentic instrument”:a document which has been formally drawn up or registered as an authentic instrument, and the authenticity of which:(i)relates to the signature and the content of the instrument; and(ii)has been established by a public authority or other authority empowered for that purpose by the Member State in which it originates;oran arrangement relating to maintenance obligations concluded with administrative authorities or authenticated by them;6. “court of origin”: the court or tribunal seised of the proceedings at the time of fulfilment of the conditions set out in Article 3(1)(a), (b) or (c);7. in Sweden, in summary proceedings concerning orders to pay (betalningsföreläggande), the expression “court” includes the Swedish enforcement service (kronofogdemyndighet).’7Article 5 of Regulation No 805/2004, entitled ‘Abolition of exequatur’, provides‘A judgment which has been certified as a European Enforcement Order in the Member State of origin shall be recognised and enforced in the other Member States without the need for a declaration of enforceability and without any possibility of opposing its recognition.’8Chapter III of that regulation, which contains Articles 12 to 19, sets out the minimum standards for uncontested claims procedures, in particular those relating to the service of the document instituting the proceedings or an equivalent document and to the provision of information to the debtor.9Article 12 of that regulation, entitled ‘Scope of application of minimum standards’, provides:‘1. A judgment on a claim that is uncontested within the meaning of Article 3(1)(b) or (c) can be certified as a European Enforcement Order only if the court proceedings in the Member State of origin met the procedural requirements as set out in this Chapter.2. The same requirements shall apply to the issuing of a European Enforcement Order certificate or a replacement certificate within the meaning of Article 6(3) for a decision following a challenge to a judgment where, at the time of that decision, the conditions of Article 3(1)(b) or (c) are fulfilled.’10Article 16 of Regulation No 805/2004, entitled ‘Provision to the debtor of due information about the claim’, provides:‘In order to ensure that the debtor was provided with due information about the claim, the document instituting the proceedings or the equivalent document must have contained the following:the names and the addresses of the parties;the amount of the claim;if interest on the claim is sought, the interest rate and the period for which interest is sought unless statutory interest is automatically added to the principal under the law of the Member State of origin;a statement of the reason for the claim.’11Article 25(1) of that regulation, relating to the certification of authentic instruments, states:‘An authentic instrument concerning a claim within the meaning of Article 4(2) which is enforceable in one Member State shall, upon application to the authority designated by the Member State of origin, be certified as a European Enforcement Order, using the standard form in Annex III.’12Article 30(1)(c) of that regulation provides that the Member States are obliged to notify the European Commission of ‘the lists of the authorities referred to in Article 25 … and any subsequent changes thereof.’13Pursuant to that provision, the Republic of Croatia notified the following list:‘Courts having jurisdiction, administrative authorities, notaries and natural and legal persons associated with public authorities who are authorised to issue enforceable documents or enforceable titles in respect of uncontested claims under the applicable national legislation.’ Croatian law 14Article 31 of the Ovršni zakon (Law on Enforcement, Narodne novine, br. 112/12, 25/13 and 93/14) provides:‘(1) Under this law, an authentic document means an invoice … an extract from accounting records, a legalised private document or any document considered to be an official document under specific rules. The calculation of interest is also regarded as an invoice.(2) An authentic document shall be enforceable if it includes reference to the identity of the creditor and of the debtor, as well as the subject matter, nature, scope and due date of the pecuniary obligation.(3) In addition to the information referred to in paragraph 2 of this article, an invoice sent to a natural person who does not carry on a registered activity must inform the debtor that, in the event of non-performance of the pecuniary obligation that has fallen due, the creditor may apply for enforcement based on an authentic document.…’15Article 278 of that law is worded as follows‘Notaries shall decide on applications for enforcement based on authentic documents in accordance with the provisions of this law.’16Article 281(1) of that law sets out the conditions under which notaries may adopt writs of execution based on an ‘authentic document’, while paragraphs 2 to 8 of that article relate to the procedure followed in the event that the notary does not adopt such a writ.17Article 282 of that law provides for an appeal, by way of opposition, against a notary’s writ of execution and establishes the procedure for examining such appeals.18Article 283(1) of the Law on Enforcement provides that the notary is to append, at the applicant’s request, the order for enforcement to an authenticated copy of the writ of execution that the notary has issued if, within eight days of expiry of the deadline for lodging an opposition, no opposition has been lodged.19Article 356 of that law states:‘The provisions of this chapter are governed by the procedure for the issue of a European Enforcement Order for uncontested claims in accordance with Regulation [805/2004] creating an enforcement procedure based on the European Enforcement Order.’20Article 357 of that law provides:‘In the Republic of Croatia, the following have the power to issue:certificates enforcing other official documents which are enforceable in the Republic of Croatia under the provisions of Article 25(1) of Regulation [No 805/2004],‘the courts, administrative authorities, notaries and natural and legal persons associated with public authorities who are authorised to issue enforceable copies of European Enforcement Orders handed down by a national court which relate to uncontested claims’.21Article 358 of that law provides:‘(1) The certificates referred to in Article 9(1), Article 24(1), Article 25(1) and Article 6(3) of the Regulation shall be issued without a prior hearing of the debtor.(2) The authority or person who issued the certificate shall be required to automatically provide an authenticated copy to the debtor.(4) if the notary finds that the conditions for the issuing of the certificates referred to in the first paragraph of this article are not fulfilled, he shall forward the application for certification, together with a copy of the relevant instruments or documents, to the municipal court of the place where the notary has his office in order to adopt a decision. The notary is obliged to explain why he considers that the necessary conditions for accepting the party’s application are not fulfilled.’ The dispute in the main proceedings and the question referred for a preliminary ruling 22Mr Zulfikarpašić, a lawyer, concluded an assistance and representation contract with Mr Gajer, his client, who failed to settle the invoice issued.23Mr Zulfikarpašić brought an application for enforcement before a notary against Mr Gajer, on the basis of that invoice, which was classified as an ‘authentic document’ under the Law on Enforcement. On 12 February 2014, the notary issued a writ of execution based on that document which became definitive in the absence of any objection by the debtor.24On 13 November 2014, Mr Zulfikarpašić applied to a notary for certification, as a European Enforcement Order, of that writ of execution.25That notary nonetheless took the view that the conditions required for the issuing of the certificate applied for had not been met. The notary observed that, according to Article 3(1) of Regulation No 805/2004, the claim must be regarded as uncontested. Pursuant, first, to Article 3(1)(a) to (c) of that regulation, only claims which have been the subject of court proceedings and second, to Article 3(1)(d), only those claims expressly agreed to in an authentic instrument, a term which, for the purposes of the provisions of that regulation, should cover the document drawn up by a notary such as the writ of execution issued on the basis of an ‘authentic document’, would be regarded as uncontested. However, such a writ would not fulfil the condition of the debtor’s express agreement to the claim.26That notary also observed that, although it is specifically provided, in Article 4(7) of Regulation No 805/2004 that, in Sweden, in summary proceedings concerning orders to pay, the expression ‘court’ includes the Swedish enforcement service, neither that provision, the other provisions of that regulation nor those of other EU legal instruments relating to enforcement proceedings place notaries in Croatia on the same footing as a ‘court’.27Accordingly, pursuant to Article 358(4) of the Law on Enforcement, the same notary referred the case in the main proceedings to the Općinski sud u Novom Zagrebu — Stalna služba u Samoboru (Municipal Court of New Zagreb — Samobor Permanent Service, Croatia) for that court to rule on the application for certification submitted by Mr Zulfikarpašić.28In those circumstances, the Općinski sud u Novom Zagrebu — Stalna služba u Samoboru (Municipal Court of New Zagreb — Samobor Permanent Service, Croatia) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘[Do] the provisions of the Law on Enforcement, concerning the European Enforcement Order, comply with Regulation No 805/2004, that is to say, in Croatia in relation to the issue of a writ of execution based on an authentic document in enforcement proceedings, [does] the term ‘court’ include notaries, [can] notaries … issue European Enforcement Orders in respect of definitive and enforceable writs of execution based on authentic documents when those writs have not been contested, and where the answer is in the negative, [can] the courts … issue European Enforcement Orders in respect of writs of execution based on an authentic document prepared by a notary, when the content of those writs relates to uncontested claims, and in such a case what form should be used?’ Consideration of the question referred 29The question referred may be divided into three parts. First part of the question 30By the first part of its question, the referring court asks, in essence, whether Regulation No 805/2004 must be interpreted as meaning that, in Croatia, notaries, acting within the framework of the powers conferred on them by national law in enforcement proceedings based on an ‘authentic document’, fall within the concept of ‘court’ within the meaning of that regulation.31The Croatian and Spanish Governments submit that an affirmative answer should be given to that question. The terms ‘court’ and ‘court proceedings’ used in that regulation cover not only courts in the strict sense, but also, in general, any authority where it exercises an essentially judicial function, which is the case here. For its part, the European Commission submits that the answer to that question should be in the negative.32As a preliminary point, it should be recalled that, according to settled case-law of the Court of Justice, the need for a uniform application of EU law and the principle of equality require that the wording of a provision of EU law which does not expressly refer to the law of Member States in order for its meaning and scope to be determined must normally be given an independent and uniform interpretation throughout the European Union; that interpretation must take into account the context of the provision and the objective pursued by the relevant legislation (see judgment of 13 October 2016, Mikołajczyk, C‑294/15, EU:C:2016:772, paragraph 44 and the case-law cited).33As regards the scheme of Regulation No 805/2004, it should be observed that, although that regulation makes several references to the concepts of ‘court’ and ‘court proceedings’, it does not specify the constituent elements thereof. Thus, Article 4(6) of that regulation defines the concept of ‘court of origin’ as ‘the court or tribunal seised of the proceedings at the time of fulfilment of the conditions set out in Article 3(1)(a), (b) or (c)’. Article 4(1) of that regulation defines the concept of ‘judgment’ as ‘any judgment given by a court or tribunal of a Member State’.34Article 4(7) of that regulation provides that, in Sweden, in summary proceedings concerning orders to pay (betalningsföreläggande), the expression ‘court’ includes the Swedish enforcement service (kronofogdemyndighet). Since that article relates specifically to the authority that it mentions, notaries, in Croatia, do not fall within that article.35It should also be noted that, unlike, for example, Regulation (EU) No 650/2012 of the European Parliament and of the Council of 4 July 2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession (OJ 2012 L 201, p. 107), whose Article 3(2) specifies that the term ‘court’, for the purposes of that regulation, encompasses not only the judicial authorities, but also any authority competent in that area which exercises judicial functions and which satisfies certain conditions listed in that provision, Regulation No 805/2004 does not include any general provision having such an effect.36That finding is supported by the case-law relating to Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2012 L 351, p. 1), according to which Article 3 of that regulation, which provides that the term ‘court’ encompasses the Swedish Enforcement Authority and notaries in Hungary, does not include notaries in Croatia (see, to that effect, the judgment delivered today, Pula Parking, C‑551/15, paragraph 46).37It is therefore necessary, as was noted in paragraph 32 of this judgment, to examine the concepts of ‘court’ and ‘court proceedings’ in the light of the objectives pursued by Regulation No 805/2004, the interpretation of which is requested by the referring court in the present case.38In that regard, it should be observed that it is apparent from the wording of Article 1 of that regulation that that regulation seeks to ensure, for uncontested claims, the free circulation of judgments throughout all Member States without any intermediate proceedings needing to be brought in the Member State of enforcement prior to recognition and enforcement.39According to recital 10 of that regulation, that objective cannot, however, be attained by undermining in any way the rights of the defence (see, by analogy, judgment of 14 December 2006, ASML, C‑283/05, EU:C:2006:787, paragraph 24 and the case-law cited).40Moreover, it is apparent from recital 3 of Regulation No 805/2004 that the principle of mutual recognition of judicial decisions constitutes the cornerstone for the creation of a genuine judicial area. That principle is based in particular on mutual trust in the administration of justice in the Member States to which recital 18 of that regulation refers.41The principle of mutual trust between the Member States is, in EU law, of fundamental importance given that it allows an area without internal borders to be created and maintained, founded on the high level of confidence which should exist between the Member States (judgment of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 78).42That principle results, under Article 5 of Regulation No 805/2004, in the recognition and enforcement of judgments which have been certified as European Enforcement Orders in the Member State of origin, in the other Member States.43The preservation of the principle of legitimate expectations, in a context of the free circulation of judgments as noted in paragraphs 38 and 39 of this judgment, requires a strict assessment of the defining elements of the concept of ‘court’, for the purposes of that regulation, in order to enable the national authorities to identify judgments delivered by other Member States’ courts. Compliance with the principle of mutual trust in the administration of justice in the Member States of the European Union which underlies that regulation requires, in particular, that judgments the enforcement of which is sought in a Member State other than that of the Member State of origin have been delivered in court proceedings offering guarantees of independence and impartiality and of compliance with the principle of audi alteram partem.44In the present case, it should be noted that, pursuant to the provisions of the Law on Enforcement, in Croatia, notaries have the power to give decisions by writ on applications for enforcement based on authentic documents. Once the writ has been served on the defendant, the latter may lodge objections. A notary before whom an admissible, well-founded opposition to a writ issued by that notary is raised in timely fashion is to transfer the file to the court with jurisdiction and the court must take a decision on the opposition.45It follows from those provisions that the writ of execution based on an ‘authentic document’, issued by the notary, is served on the debtor only after the writ has been adopted, without the application by which the matter is raised with the notary having been communicated to the debtor.46Although it is true that debtors have the opportunity to lodge objections against writs of execution issued by notaries and it appears that notaries exercise the responsibilities conferred on them in the context of enforcement proceedings based on an ‘authentic document’ subject to review by the courts, to which notaries must refer possible challenges, the fact remains that the examination, by notaries, in Croatia, of an application for a writ of execution on such a basis is not conducted on an inter partes basis.47According to Article 12 of Regulation No 805/2004, a judgment on a claim that is uncontested within the meaning of Article 3(1)(b) or (c) of that regulation can be certified as a European Enforcement Order only if the court proceedings in the Member State of origin have met the minimum standards referred to in Chapter III of that regulation.48Article 16 of that regulation, read in the light of recital 12 thereof, provides for the communication of ‘due’ information to the debtor in order to enable him to arrange for his defence and thus ensure the inter partes nature of the proceedings leading to the issuing of the enforcement order capable of giving rise to a certificate. Those minimum standards reflect the EU legislature’s intention to ensure that proceedings leading to the adoption of judgments on uncontested claims offer adequate guarantees of respect for the rights of the defence (see, to that effect, judgment of 16 June 2016, Pebros Servizi, C‑511/14, EU:C:2016:448, paragraph 44).49A national procedure whereby a writ of execution is adopted without service of the document instituting the proceedings or the equivalent document, and whereby information is provided, in that document, to the debtor about the claim, having the effect that a debtor is aware of the claim only when that writ is served on him, cannot be classified as inter partes.50In the light of the foregoing considerations, the answer to the first part of the question is that Regulation No 805/2004 must be interpreted as meaning that, in Croatia, notaries, acting within the framework of the powers conferred on them by national law in enforcement proceedings based on an ‘authentic document’, do not fall within the concept of ‘court’ within the meaning of that regulation. The second and third parts of the question 51By the second and third parts of the question, which it is appropriate to examine together, the referring court asks, in essence, first, whether Regulation No 805/2004 must be interpreted as meaning that a writ of execution prepared by a notary, in Croatia, based on an ‘authentic document’ and which has not been contested may be certified as a European Enforcement Order and, second, whether that regulation must be interpreted as meaning that the power to issue such a certificate lies with notaries or as meaning that that power lies with the national courts.52Article 3 of that regulation, headed ‘Enforcement titles to be certified as a European Enforcement Order’, lays down the conditions under which a claim is to be regarded as uncontested by distinguishing between the situations referred to in paragraph 1(a) to (c) of that article, which relates to claims established in the context of court proceedings, and those referred to in paragraph 1(d) of that article, which relates to claims expressly agreed to by the debtor in an authentic instrument.53While it is apparent from the answer to the first part of the question that the writ of execution adopted by a notary, in Croatia, based on an ‘authentic document’ cannot be classified as a court decision, on the ground that that national authority does not have the status of court and that, therefore, it cannot be considered that that writ is issued in the context of court proceedings, it must still be examined whether such a writ may be classified as an authentic instrument relating to an uncontested claim for the purposes of Article 3(1)(d) of Regulation No 805/2004.54In that regard, Article 4(3) of that regulation defines an authentic instrument either as a document which has been formally drawn up or registered as an authentic instrument, and the authenticity of which, relating to the signature and the content, has been established by any authority empowered for that purpose, or as an arrangement relating to maintenance obligations concluded with administrative authorities or authenticated by them.55It must be stated that, although, in the Croatian legal order, notaries are empowered to draw up authentic instruments, the uncontested nature of the claim established by a writ of execution adopted on the basis of an ‘authentic document’ is lacking.56In accordance with recital 5 of Regulation No 805/2004, Article 3(1)(d) of that regulation provides that an authentic instrument may be certified as a European Enforcement Order only to the extent that, in that instrument, the debtor has expressly agreed to the claim.57In the main proceedings, the notary issued a writ of execution based on an ‘authentic document’, namely the invoice issued by Mr Zulfikarpašić in respect of an assistance and representation contract, an invoice which was unilaterally drawn up by the lawyer. It is not apparent from the content of that writ that the debtor expressly agreed to the claim.58Moreover, the absence of any objection by the debtor cannot be placed on the same footing as express agreement to the claim, for the purposes of Article 3(1)(d) of Regulation No 805/2004 since that agreement must appear in the authentic instrument which is the subject of the certification.59In the light of the foregoing considerations, the answer to the second and third parts of the question is that Regulation No 805/2004 must be interpreted as meaning that a writ of execution adopted by a notary, in Croatia, based on an ‘authentic document’, and which has not been contested may not be certified as a European Enforcement Order since it does not relate to an uncontested claim within the meaning of Article 3(1) of that regulation. Costs 60Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims must be interpreted as meaning that, in Croatia, notaries, acting within the framework of the powers conferred on them by national law in enforcement proceedings based on an ‘authentic document’, do not fall within the concept of ‘court’ within the meaning of that regulation. 2. Regulation No 805/2004 must be interpreted as meaning that a writ of execution adopted by a notary, in Croatia, based on an ‘authentic document’, and which has not been contested may not be certified as a European Enforcement Order since it does not relate to an uncontested claim within the meaning of Article 3(1) of that regulation. [Signatures]( *1 ) Language of the case: Croatian. | 5f458-a8c3b85-4904 | EN |
Member States are not required, under EU law, to grant a humanitarian visa to persons who wish to enter their territory with a view to applying for asylum, but they remain free to do so on the basis of their national law | 7 March 2017 ( 1 )*[Text rectified by order of 24 March 2017]‛Reference for a preliminary ruling — Regulation (EC) No 810/2009 — Article 25(1)(a) — Visa with limited territorial validity — Issuing of a visa on humanitarian grounds or because of international obligations — Concept of ‘international obligations’ — Charter of Fundamental Rights of the European Union — European Convention for the Protection of Human Rights and Fundamental Freedoms — Geneva Convention — Issuing of a visa where a risk of infringement of Article 4 and/or Article 18 of the Charter of Fundamental Rights is established — No obligation’In Case C‑638/16 PPU,REQUEST for a preliminary ruling under Article 267 TFEU from the Conseil du Contentieux des Étrangers (Council for asylum and immigration proceedings, Belgium), made by decision of 8 December 2016, received at the Court on 12 December 2016, in the proceedings X and X v État belge, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, L. Bay Larsen, T. von Danwitz, J.L. da Cruz Vilaça and M. Berger (Rapporteur), Presidents of Chambers, A. Borg Barthet, A. Arabadjiev, C. Toader, M. Safjan, E. Jarašiūnas, C.G. Fernlund, C. Vajda, S. Rodin and F. Biltgen, Judges,Advocate General: P. Mengozzi,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 30 January 2017,after considering the observations submitted on behalf of:—X and X, by T. Wibault and P. Robert, avocats,the Belgian Government, by C. Pochet and M. Jacobs, acting as Agents, and by C. L’hoir, M. Van Regemorter and F. Van Dijck, experts, and by E. Derriks and F. Motulsky, avocats,the Czech Government, by M. Smolek, acting as Agent,the Danish Government, by N. Lyshøj and C. Thorning, acting as Agents,the German Government, by T. Henze, acting as Agent,the Estonian Government, by N. Grünberg, acting as Agent,the French Government, by E. Armoet, acting as Agent,the Hungarian Government, by M. Fehér, acting as Agent,the Maltese Government, by A. Buhagiar, acting as Agent,the Netherlands Government, by M. de Ree, acting as Agent,the Austrian Government, by J. Schmoll, acting as Agent,the Polish Government, by M. Kamejsza, M. Pawlicka and B. Majczyna, acting as Agents,the Slovenian Government, by V. Klemenc and T. Mihelič Žitko, acting as Agents,[as rectified by order of 24 March 2017] the Slovak Government, by M. Kianička, acting as Agent,the Finnish Government, by J. Heliskoski, acting as Agent,the European Commission, by C. Cattabriga and G. Wils, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 7 February 2017,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 25(1)(a) of Regulation (EC) No 810/2009 of the European Parliament and of the Council of 13 July 2009 establishing a Community Code on Visas (Visa Code) (OJ 2009 L 243 p. 1), as amended by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013 (OJ 2013 L 182, p. 1) (‘the Visa Code’), and of Articles 4 and 18 of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The reference has been made in proceedings between, on the one hand, X and X, and, on the other, the État belge (the Belgian State) concerning a refusal to issue visas with limited territorial validity. Legal context International law 3Article 1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950 (‘the ECHR’), headed ‘Obligation to respect Human Rights’, provides:‘The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section I of this [c]onvention.’4Article 3 of the ECHR, headed ‘Prohibition of torture’, which is in Section I thereof, provides:‘No one shall be subjected to torture or to inhuman or degrading treatment or punishment.’5Article 33(1) of the Convention relating to the Status of Refugees, signed at Geneva on 28 July 1951 (United Nations Treaty Series, Vol. 189, p. 150, No 2545 (1954)), as supplemented by the Protocol relating to the Status of Refugees, concluded in New York on 31 January 1967, which entered into force on 4 October 1967 (‘the Geneva Convention’), that article being headed ‘Prohibition of expulsion or return (“refoulement”)’, provides:‘No Contracting State shall expel or return (“refouler”) a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion.’ EU law The Charter 6Article 4 of the Charter, headed ‘Prohibition of torture and inhuman or degrading treatment or punishment’, provides:7Under Article 18 of the Charter, headed ‘Right to asylum’:‘The right to asylum shall be guaranteed with due respect for the rules of the [Geneva Convention] and in accordance with the Treaty on European Union and the Treaty on the Functioning of the European Union …’8Article 51(1) of the Charter, that article being headed ‘Field of application’, provides:‘The provisions of [the] Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law …’ The Visa Code 9Recital 29 of the Visa Code states:‘This Regulation respects fundamental rights and observes the principles recognised in particular by the [ECHR] and the [Charter].’10Article 1(1) of the Visa Code, that article being headed ‘Objective and Scope’, states:‘This Regulation establishes the procedures and conditions for issuing visas for transit through or intended stays on the territory of the Member States not exceeding 90 days in any 180-day period.’11Article 2 of that code provides:‘For the purpose of this Regulation the following definitions shall apply:…2.“visa” means an authorisation issued by a Member State with a view to:(a)transit through or an intended stay on the territory of the Member States of a duration of no more than 90 days in any 180-day period;(b)transit through the international transit areas of airports of the Member States;…’12Article 25 of the Visa Code, headed ‘Issuing of a visa with limited territorial validity’, provides:‘1. A visa with limited territorial validity shall be issued exceptionally, in the following cases:when the Member State concerned considers it necessary on humanitarian grounds, for reasons of national interest or because of international obligations,(i)to derogate from the principle that the entry conditions laid down [by Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2006 L 105, p. 1)] must be fulfilled;(ii)to issue a visa despite an objection by the Member State consulted in accordance with Article 22 to the issuing of a uniform visa; or(iii)to issue a visa for reasons of urgency …orwhen for reasons deemed justified by the consulate, a new visa is issued for a stay during the same 180-day period to an applicant who, over this 180-day period, has already used a uniform visa or a visa with limited territorial validity allowing for a stay of 90 days.2. A visa with limited territorial validity shall be valid for the territory of the issuing Member State. It may exceptionally be valid for the territory of more than one Member State, subject to the consent of each such Member State.4. When a visa with limited territorial validity has been issued in the cases described in paragraph 1(a), the central authorities of the issuing Member State shall circulate the relevant information to the central authorities of the other Member States without delay …5. The data … shall be entered into the [Visa Information System] when a decision on issuing such a visa has been taken.’13Article 32(1)(b) of the Visa Code, that article being headed ‘Refusal of a visa’, provides:‘Without prejudice to Article 25(1), a visa shall be refused:if there are reasonable doubts as to … [the applicant’s] intention to leave the territory of the Member States before the expiry of the visa applied for.’ Regulation (EU) 2016/399 14Article 4 of Regulation (EU) 2016/399 of the European Parliament and of the Council of 9 March 2016 on a Union Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2016 L 77, p. 1, ‘the Schengen Borders Code’), headed ‘Fundamental Rights’, is worded as follows:‘When applying this Regulation, Member States shall act in full compliance with relevant Union law, including the [Charter], relevant international law, including the [Geneva Convention], obligations related to access to international protection, in particular the principle of non-refoulement, and fundamental rights. In accordance with the general principles of Union law, decisions under this Regulation shall be taken on an individual basis.’15Article 6 of the Schengen Borders Code, headed ‘Entry conditions for third-country nationals’, provides:‘1. For intended stays on the territory of the Member States of a duration of no more than 90 days in any 180-day period …, the entry conditions for third-country nationals shall be the following:they are in possession of a valid travel document …they are in possession of a valid visa, if required …(c)they justify the purpose and conditions of the intended stay, and they have sufficient means of subsistence …(d)they are not persons for whom an alert has been issued … for the purposes of refusing entry …(e)they are not considered to be a threat to public policy, internal security, public health or the international relations of any of the Member States …5. By way of derogation from paragraph 1:third-country nationals who do not fulfil one or more of the conditions laid down in paragraph 1 may be authorised by a Member State to enter its territory on humanitarian grounds, on grounds of national interest or because of international obligations …’ Directive 2013/32/EU 16Article 3 of Directive 2013/32/EU of the European Parliament and of the Council of 26 June 2013 on common procedures for granting and withdrawing international protection (OJ 2013 L 180, p. 60) provides:‘1. This Directive shall apply to all applications for international protection made in the territory, including at the border, in the territorial waters or in the transit zones of the Member States, and to the withdrawal of international protection.2. This Directive shall not apply to requests for diplomatic or territorial asylum submitted to representations of Member States. Regulation (EU) No 604/2013 17Article 1 of Regulation (EU) No 604/2013 of the European Parliament and of the Council of 26 June 2013 establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person (OJ 2013 L 180, p. 31), headed ‘Subject matter’, provides:‘This Regulation lays down the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third‑country national or a stateless person …’18Article 3(1) of Regulation No 604/2013 provides:‘Member States shall examine any application for international protection by a third-country national or a stateless person who applies on the territory of any one of them, including at the border or in the transit zones …’ The dispute in the main proceedings and the questions referred for a preliminary ruling 19The applicants in the main proceedings — a married couple — and their three young, minor children are Syrian nationals and live in Aleppo (Syria). On 12 October 2016 they submitted, at the Belgian Embassy in Beirut (Lebanon), on the basis of Article 25(1)(a) of the Visa Code, applications for visas with limited territorial validity, before returning to Syria on the following day.20In support of their visa applications, the applicants in the main proceedings stated that the purpose of the visas they were seeking to obtain was to enable them to leave the besieged city of Aleppo in order to apply for asylum in Belgium. One of the applicants in the main proceedings claimed, inter alia, to have been abducted by a terrorist group, then beaten and tortured, and finally released following the payment of a ransom. The applicants in the main proceedings emphasised, in particular, the precarious security situation in Syria in general and in Aleppo especially, and the fact that, being Orthodox Christians, they were at risk of persecution on account of their religious beliefs. They added that it was impossible for them to register as refugees in neighbouring countries, having regard, inter alia, to the closure of the border between Lebanon and Syria.21By decisions of 18 October 2016, which were communicated to the applicants in the main proceedings on 25 October 2016, the Office des Étrangers (Immigration Office, Belgium) rejected their applications. The Immigration Office stated, inter alia, that the applicants intended to stay more than 90 days in Belgium, that Article 3 of the ECHR did not require States that are parties to the convention to admit into their respective territories ‘victims of a catastrophic situation’ and that Belgian diplomatic posts were not among the authorities to which a foreign national could submit an application for asylum. According to the Immigration Office, authorising the issue of an entry visa to the applicants in the main proceedings in order for them to be able to lodge an application for asylum in Belgium would amount to allowing such an application to be submitted to a diplomatic post.22The referring court, before which the applicants in the main proceedings challenge those decisions, explains that the applicants requested the implementation of those decisions to be suspended under the so-called ‘emergency’ national procedure. Since it is unclear whether that request is admissible under the applicable national provisions, the referring court decided to bring the matter before the Cour constitutionnelle (Constitutional Court, Belgium) for a ruling on that issue. Pending an answer from the Cour constitutionnelle (Belgian Constitutional Court), consideration of the main proceedings by the referring court continues under the emergency procedure.23Before the referring court, the applicants in the main proceedings claim, essentially, that Article 18 of the Charter imposes a positive obligation on the Member States to guarantee the right to asylum and that the granting of international protection is the only way to avoid any risk that Article 3 of the ECHR and Article 4 of the Charter will be infringed. In the present case, since the Belgian authorities have themselves taken the view that the applicants in the main proceedings are in a situation that is exceptional from a humanitarian point of view, the latter assert that, having regard to the international obligations of the Kingdom of Belgium, the conditions for applying Article 25(1)(a) of the Visa Code were satisfied, and they conclude therefore that they should have been issued, on humanitarian grounds, with the visas that they were seeking to obtain.24For its part, the Belgian State is of the opinion that it is under no obligation, whether on the basis of Article 3 of the ECHR or that of Article 33 of the Geneva Convention, to admit a third-country national into its territory, and that its only obligation in that regard is to refrain from deportation.25The referring court argues that it is apparent from Article 1 of the ECHR, as interpreted by the European Court of Human Rights, that the applicants in the main proceedings may rely on Article 3 of the ECHR only if they are within Belgian ‘jurisdiction’. However, the referring court asks whether the implementation of the visa policy may be regarded as the exercise of jurisdiction in that sense. Moreover, the referring court asks whether a right of entry could follow, as a corollary to the obligation to take preventative measures and to the principle of non-refoulement, from Article 3 of the ECHR and, mutatis mutandis, Article 33 of the Geneva Convention.26In addition, the referring court notes that the implementation of Article 4 of the Charter, unlike Article 3 of the ECHR, does not depend on the exercise of jurisdiction but on the application of EU law. However, it does not follow either from the Treaties or from the Charter that that implementation is territorially limited.27With regard to Article 25 of the Visa Code, the referring court notes that it provides, inter alia, that a visa must be issued when a Member State ‘considers’ it to be necessary because of international obligations. The referring court, however, questions the extent of Member States’ discretion in that respect and is of the opinion that, having regard to the binding nature of international obligations and those arising from the Charter, any such discretion can be ruled out in that respect.28In those circumstances, the Conseil du Contentieux des Étrangers (Council for asylum and immigration proceedings, Belgium) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Do the “international obligations” referred to in Article 25(1)(a) of the Visa Code cover all the rights guaranteed by the Charter, including, in particular, those guaranteed by Articles 4 and 18, and do they also cover obligations which bind the Member States, in the light of the ECHR and Article 33 of the Geneva Convention?(2)Depending on the answer given to the first question, must Article 25(1)(a) of the Visa Code be interpreted as meaning that, subject to its discretion with regard to the circumstances of the case, a Member State to which an application for a visa with limited territorial validity has been made is required to issue the visa applied for, where a risk of infringement of Article 4 and/or Article 18 of the Charter or another international obligation by which it is bound is established?Does the existence of links between the applicant and the Member State to which the visa application was made (for example, family connections, host families, guarantors and sponsors) affect the answer to that question?’ The urgent procedure 29The referring court has requested that the present reference for a preliminary ruling be dealt with under the urgent preliminary ruling procedure provided for in Article 107 of the Rules of Procedure of the Court.30In support of its request, the referring court relied, inter alia, upon the serious armed conflict in Syria, the young age of the children of the applicants in the main proceedings, their particular vulnerability, associated with their belonging to the Orthodox Christian community and, in any event, the fact that the matter was brought before it in the course of an ‘emergency’ suspension procedure.31The referring court explained, in that respect, that the present reference for a preliminary ruling had the effect of staying the proceedings before it.32In that regard, it should be noted, in the first place, that the present reference for a preliminary ruling, which concerns the interpretation of Article 25(1)(a) of the Visa Code, raises questions in the areas covered by Title V of Part Three of the TFEU, which relates to the area of freedom, security and justice. It may therefore be dealt with under the urgent preliminary ruling procedure, in accordance with Article 107(1) of the Rules of Procedure.33In the second place, it is not disputed that, at least at the time when the request that the present reference for a preliminary ruling should be dealt with under the urgent preliminary ruling procedure was examined, the applicants in the main proceedings were facing a real risk of being subjected to inhuman and degrading treatment, which must be regarded as an element of urgency justifying the application of Article 107 et seq. of the Rules of Procedure.34Taking the foregoing into account, the Fifth Chamber of the Court decided, on 15 December 2016, acting on a proposal from the Judge‑Rapporteur and after hearing the Advocate General, to grant the referring court’s request that the present reference for a preliminary ruling be dealt with under the urgent preliminary ruling procedure. It also decided to request that the Court assign the case to the Grand Chamber. Consideration of the questions referred The jurisdiction of the Court 35The Court’s jurisdiction to answer the questions put by the referring court is disputed, in particular, by the Belgian Government on the ground that Article 25(1) of the Visa Code, in respect of which interpretation is sought, does not apply to the applications at issue in the main proceedings.36Nevertheless, it is plain from the order for reference that the applications at issue were submitted on humanitarian grounds on the basis of Article 25 of the Visa Code.37As to whether that code applies to applications, such as those at issue in the main proceedings, that are intended to enable third-country nationals to lodge applications for asylum on the territory of a Member State, that question is inextricably linked to the answers to be given to the present request for a preliminary ruling. In those circumstances, the Court has jurisdiction to answer that request (see, to that effect, judgment of 10 September 2015, Wojciechowski, C‑408/14, EU:C:2015:591, paragraph 26 and the case-law cited).38By its first question the referring court asks, in essence, whether Article 25(1)(a) of the Visa Code must be interpreted as meaning that the international obligations referred to in that article include compliance by a Member State with all the rights guaranteed by the Charter, in particular, in Articles 4 and 18 thereof, by the ECHR and by Article 33 of the Geneva Convention. By its second question it asks, in essence, whether, depending on the answer given to its first question, Article 25(1)(a) of the Visa Code must be interpreted as meaning that the Member State to which an application for a visa with limited territorial validity was made is required to issue the visa applied for, where a risk of infringement of Article 4 and/or Article 18 of the Charter or another international obligation by which it is bound is established. If necessary, the referring court also seeks to ascertain whether the existence of links between the applicant and the Member State to which the visa application was made has any bearing in that regard.39It should be recalled at the outset that the Court has consistently held that the fact that a question submitted by the referring court refers only to certain provisions of EU law does not mean that the Court may not provide the national court with all the guidance on points of interpretation that may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to those points in its questions. It is, in this regard, for the Court to extract from all the information provided by the referring court, in particular from the grounds of the decision to make the reference, the points of EU law which require interpretation in view of the subject matter of the dispute (see, inter alia, judgment of 12 February 2015, Oil Trading Poland, C‑349/13, EU:C:2015:84, paragraph 45 and the case-law cited).40In the present case, it is important to note that the Visa Code was adopted on the basis of Article 62(2)(a) and (b)(ii) of the EC Treaty, pursuant to which the Council of the European Union is to adopt measures concerning visas for intended stays of no more than three months, including the procedures and conditions for issuing visas by Member States.41As set out in Article 1 of the Visa Code, the objective thereof is to establish the procedures and conditions for issuing visas for transit through or intended stays on the territory of the Member States not exceeding 90 days in any 180-day period. In Article 2(2)(a) and (b) of the code the concept of ‘visa’ is defined, for the purpose of the code, as meaning ‘an authorisation issued by a Member State’ with a view, respectively, to ‘transit through or an intended stay on the territory of the Member States for a duration of no more than 90 days in any 180‑day period’ and to ‘transit through the international transit areas of airports of the Member States’.42However, it is apparent from the order for reference and from the material in the file before the Court that the applicants in the main proceedings submitted applications for visas on humanitarian grounds, based on Article 25 of the Visa Code, at the Belgian embassy in Lebanon, with a view to applying for asylum in Belgium immediately upon their arrival in that Member State and, thereafter, to being granted a residence permit with a period of validity not limited to 90 days.43In accordance with Article 1 of the Visa Code, such applications, even if formally submitted on the basis of Article 25 of that code, fall outside the scope of that code, in particular Article 25(1)(a) thereof, the interpretation of which is sought by the referring court in connection with the concept of ‘international obligations’ mentioned in that provision.44In addition, since, as noted by the Belgian Government and the European Commission in their written observations, no measure has been adopted, to date, by the EU legislature on the basis of Article 79(2)(a) TFEU, with regard to the conditions governing the issue by Member States of long-term visas and residence permits to third-country nationals on humanitarian grounds, the applications at issue in the main proceedings fall solely within the scope of national law.45Since the situation at issue in the main proceedings is not, therefore, governed by EU law, the provisions of the Charter, in particular, Articles 4 and 18 thereof, referred to in the questions of the referring court, do not apply to it (see, to that effect, inter alia, judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 19, and of 27 March 2014, Torralbo Marcos, C‑265/13, EU:C:2014:187, paragraph 29 and the case-law cited).46The foregoing conclusion is not called into question by the fact that, under Article 32(1)(b) of the Visa Code, the existence of ‘reasonable doubts as to … [the applicant’s] intention to leave the territory of the Member States before the expiry of the visa applied for’ is a ground for refusal of a visa and not a reason not to apply that code.47Indeed, the defining feature of the situation at issue in the main proceedings is not the existence of such doubts, but the fact that the purpose of the application differs from that of a short-term visa.48It should be added that, to conclude otherwise, when the Visa Code is intended for the issuing of visas for stays on the territories of Member States not exceeding 90 days in any 180-day period, would be tantamount to allowing third‑country nationals to lodge applications for visas on the basis of the Visa Code in order to obtain international protection in the Member State of their choice, which would undermine the general structure of the system established by Regulation No 604/2013.49It is also important to note that to conclude otherwise would mean that Member States are required, on the basis of the Visa Code, de facto to allow third-country nationals to submit applications for international protection to the representations of Member States that are within the territory of a third country. Indeed, whereas the Visa Code is not intended to harmonise the laws of Member States on international protection, it should be noted that the measures adopted by the European Union on the basis of Article 78 TFEU that govern the procedures for applications for international protection do not impose such an obligation and, on the contrary, exclude from their scope applications made to the representations of Member States. Accordingly, it is apparent from Article 3(1) and (2) of Directive 2013/32 that that directive applies to applications for international protection made in the territory, including at the border, in the territorial waters or in the transit zones of the Member States, but not to requests for diplomatic or territorial asylum submitted to the representations of Member States. Similarly, it follows from Articles 1 and 3 of Regulation No 604/2013 that that regulation only imposes an obligation on Member States to examine any application for international protection made on the territory of a Member State, including at the border or in the transit zones, and that the procedures laid down in that regulation apply exclusively to such applications for international protection.50In those circumstances, the Belgian authorities were wrong to describe the applications at issue in the main proceedings as applications for short-term visas.51In the light of the foregoing, the answer to the questions referred is that Article 1 of the Visa Code must be interpreted as meaning that an application for a visa with limited territorial validity made on humanitarian grounds by a third-country national, on the basis of Article 25 of the code, to the representation of the Member State of destination that is within the territory of a third country, with a view to lodging, immediately upon his or her arrival in that Member State, an application for international protection and, thereafter, to staying in that Member State for more than 90 days in a 180-day period, does not fall within the scope of that code but, as European Union law currently stands, solely within that of national law. Costs 52Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 1 of Regulation (EC) No 810/2009 of the European Parliament and of the Council of 13 July 2009 establishing a Community Code on Visas (Visa Code), as amended by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013, must be interpreted as meaning that an application for a visa with limited territorial validity made on humanitarian grounds by a third-country national, on the basis of Article 25 of the code, to the representation of the Member State of destination that is within the territory of a third country, with a view to lodging, immediately upon his or her arrival in that Member State, an application for international protection and, thereafter, to staying in that Member State for more than 90 days in a 180-day period, does not fall within the scope of that code but, as European Union law currently stands, solely within that of national law. [Signatures]( 1 ) Language of the case: French. | f5498-14b0a1e-4f91 | EN |
The General Court annuls, on the ground of a procedural irregularity, the decision by which the Commission refused to authorise the merger between UPS and TNT in the express small package delivery services sector | 7 March 2017 ( *1 )‛Competition — Mergers — Regulation (EC) No 139/2004 — International express small package delivery services in the EEA — Acquisition of TNT Express by UPS — Decision declaring the merger incompatible with the internal market — Likely effects on prices — Econometric analysis — Rights of defence’In Case T‑194/13, United Parcel Service, Inc., established in Atlanta, Georgia (United States), represented initially by A. Ryan, B. Graham, Solicitors, W. Knibbeler and P. Stamou, lawyers, and then by A. Ryan, W. Knibbeler, P. Stamou, A. Pliego Selie, F. Hoseinian and P. van den Berg, lawyers,applicant,v European Commission, represented initially by T. Christoforou, N. Khan, A. Biolan, N. von Lingen and H. Leupold, and subsequently by T. Christoforou, N. Khan, A. Biolan and H. Leupold, acting as Agents,defendant,supported by FedEx Corp., established in Memphis, Tennessee (United States), represented initially by F. Carlin, Barrister, G. Bushell, Solicitor, and Q. Azau, lawyer, then by F. Carlin, G. Bushell and N. Niejahr, lawyer,intervener,APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2013) 431 of 30 January 2013 declaring a concentration incompatible with the internal market and the functioning of the EEA Agreement (Case COMP/M.6570 — UPS/TNT Express),THE GENERAL COURT (Fourth Chamber),composed of M. Prek, President, I. Labucka (Rapporteur) and V. Kreuschitz, Judges,Registrar: L. Grzegorczyk, Administrator,having regard to the written part of the procedure and further to the hearing on 6 April 2016,gives the following Judgment Background to the dispute 1. Parties to the concentration 1United Parcel Service, Inc. (‘UPS’ or ‘the applicant’) and TNT Express NV (‘TNT’) operate on a global level in the specialist transport and logistics services sector.2In the European Economic Area (EEA), UPS and TNT (together ‘the parties to the merger’) are present on the international express small package delivery markets.3Those services involve an undertaking by the service provider to deliver small packages to another country in one day.4They are provided by international air and land distribution networks which rely on the integration of a certain number of assets (in particular local sorting centres, land-based and air hubs, road vehicles and aeroplanes).5FedEx Corp. (‘FedEx’ or ‘the intervener’) and DHL also operate on the markets for those services in the EEA.2. Administrative procedure 6On 15 June 2012, the applicant notified the European Commission of its proposed acquisition of TNT (‘the merger’) under Article 4 of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1; ‘the Merger Regulation’), as implemented by Commission Regulation (EC) No 802/2004 of 21 April 2004 (OJ 2004 L 133, p. 1).7By the merger, UPS envisaged obtaining control over the whole of TNT, within the meaning of Article 3(1)(b) of the Merger Regulation, through a takeover bid under Netherlands law.8By decision of 20 July 2012, the Commission found that the merger gave rise to serious doubts as to its compatibility with the internal market and decided to initiate detailed investigation proceedings in accordance with Article 6(1)(c) of the Merger Regulation.9On 26 July and 5 September 2012, the Commission extended the period for adopting a final decision by ten working days, pursuant to the second subparagraph of Article 10(3) of the Merger Regulation.10On 19 October 2012, the Commission sent the parties to the merger a statement of objections (‘the SO’), in accordance with Article 18 of the Merger Regulation.11The parties to the merger replied to the SO on 6 November 2012.12On 12 November 2012, a hearing was held during which the applicant, assisted by its external economic counsel, was heard.13In addition, third parties demonstrating a sufficient interest, including DHL and FedEx, were allowed to submit their observations.14During the administrative procedure, FedEx also took part in a number of meetings with the Commission and submitted various observations and internal documents to it.15On 26 and 29 October 2012, the Commission authorised the applicant’s external legal counsel to examine, in a data room, confidential extracts from internal documents provided by FedEx.16On 29 November 2012, the applicant presented a first series of commitments, pursuant to Article 8(2) of the Merger Regulation, with a view to rendering the merger compatible with the internal market.17On 16 December 2012, the applicant proposed a second series of commitments.18On 21 December 2012, the Commission sent a letter of facts to the applicant.19On 3 January 2013, the applicant proposed a third series of commitments.20By Decision C(2013) 431 of 30 January 2013, the Commission declared that the notified merger was incompatible with the internal market and with the EEA agreement (Case COMP/M.6570 — UPS/TNT Express) (‘the contested decision’).3. The contested decision 21By the contested decision, the Commission declared the merger incompatible with the internal market and with the Agreement on the European Economic Area pursuant to Article 8(3) of the Merger Regulation, considering that the merger would constitute a significant impediment to effective competition (‘SIEC’) in 15 EEA Member States, but not in 14 other States.22In the contested decision, the Commission referred to considerations relating to the markets in question, to the effects of the merger on competition and to the commitments proposed by the parties to the merger. The markets Supply23In recitals 17 to 35 of the contested decision, the Commission considered that the merger would not cause a SIEC on the air freight, freight forwarding and contract logistics markets.24In the contested decision, the Commission described the small package transport industry (recitals 36 to 48) and analysed the economies of scale of the services in question in the light of network density and territorial coverage (recitals 49 to 56).25In recitals 57 to 60 of the contested decision, the Commission emphasised that the services in question were highly differentiated in terms of speed of delivery, geographic coverage at the place of origin and at the location of destination, and quality as regards reliability, security, pick up times, comprehensiveness and tracking.26In the contested decision, the Commission analysed the market for small package transport services on the supply side, and distinguished the integrators, which it described as follows:‘(62)Integrators are characterised by five basic elements: first, ownership of or full operational control over all transportation assets, including an air network with scheduled flights, through which a large proportion of the volumes handled by the company is carried. Second, a sufficient geographic coverage on a global level. Third, a hub and spoke operating model. Fourth, a proprietary IT network, such that all relevant data runs across one network. Fifth and finally, integrators have the reputation of credibly delivering parcels on time (so-called ‘end-to-end’ credibility). There are four integrators in the whole world, all of which operate in Europe: UPS, TNT, DHL and FedEx.(63)The main differentiation factor of an integrator is that it has operational control over the whole logistics of the small package delivery from origin to destination (including air transport) so that it can ensure delivery in accordance with a time commitment. The integrator deals with the sender of the consignment, uses its own resources to provide all the various steps in the cargo chain and delivers the consignment to the recipient. The ownership or at least an operational control of all the resources needed to make a delivery means that there are fewer steps in the otherwise very long chain of companies involved.’27In that category, the Commission placed UPS (recitals 64 to 67), TNT (recitals 68 to 71), DHL (recitals 73 to 77) and FedEx (recitals 78 to 81).28The Commission distinguished, first, the integrators, secondly, the incumbent postal operators, including Royal Mail, La Poste, PostNL and Austrian Post, which are also international network operators (recitals 82 to 84), thirdly, the national small package delivery companies, which also operate — to a lesser extent than the integrators and on the basis of partnerships — on the markets for the services in question (recitals 85 and 86), fourthly, the freight forwarders, which also operate on those markets, often by outsourcing those activities to the integrators (recital 87), fifthly, the smaller courier companies, which operate on the basis of close relationships with local customers (recital 88) and, sixthly, the intermediaries reselling the services in question (recital 89).Demand29In recitals 90 to 94 of the contested decision, the Commission analysed the market for small package transport services on the demand side and noted a great deal of fragmentation. It found that the demand was made up of occasional customers and large international customers, the latter representing a significant share of the revenues of suppliers on the markets in question. It also noted that the demand was made up of express services and deferred services and that it was very variable in terms of origin-destination country pairs. Lastly, it noted that the demand consisted in the use of one or more suppliers depending on the services in question and on the size and preferences of customers, smaller customers generally preferring to use a single supplier for all services (bundling), whereas larger customers used the same supplier for all services (bundling), different suppliers for different services, or different suppliers for the same services.30In recital 95 of the contested decision, the Commission stated that it was apparent from its market investigation that the use of a single supplier for all services (bundling) was not a prominent feature.31The Commission indicated, in recital 96 of the contested decision, that it had not reported the details of its market investigation in the SO because the results were inconclusive in identifying a general trend, with the exception of the fact that large customers tend to use different suppliers.32In recital 97 of the contested decision, the Commission rejected the arguments of the parties to the merger according to which the use of a single supplier for all services would generate competitive pressure on the price of each service.Price setting33In recitals 98 to 151 of the contested decision, the Commission examined the price setting process on the market for small package transport services.34It noted the existence of individual negotiations with the majority of customers (recitals 114 and 115), the importance of each customer’s profile (recitals 116 to 123), the consideration of competitive constraints and of customers’ willingness to pay (recitals 124 to 131) and the fact that the price differences could not be fully explained by cost differences (recitals 132 to 134).35After setting out the views of the parties to the merger (recitals 135 to 147), the Commission found that price discrimination occurred (recitals 148 to 151).Definition of the relevant market36In the contested decision, the Commission defined the relevant market, materially and geographically, as regards the services concerned, namely the transport of small packages — not freight — (recitals 152 to 164) from one country to another within the EEA — not domestic transport or international transport outside the EEA — (recitals 165 to 187), using express services — not deferred services — (recitals 188 to 226), irrespective of the distance travelled (recitals 227 to 231) or the quality of service (recitals 232 to 237), contracts being negotiated at the national level for this type of service (recitals 239 to 243).37Thus, the Commission found that the services in question were intra-EEA international express small package delivery services (‘the services in question’). The effects of the merger on competition 38By way of introduction, and in order to summarise its overall assessment, the Commission, in recital 244 of the contested decision, stated the following:‘(244)Although the relevant geographic markets are national, it is worth assessing the intra-EEA express deliveries market for small parcels first from a pan-European perspective. Intra-EEA express is a network industry — as acknowledged by UPS — requiring operators to ensure a presence in all countries. The required presence in turn entails investments in infrastructure all along the value chain (from pick-up, sorting, line-hauls, hubs, air network, planes and delivery). Although these investments can be reduced through outsourcing of parts of the value chain to third parties, outsourcing reduces the control over the network and ultimately the quality of the services rendered as well as operational efficiency. The companies offering high-end services in the EEA express delivery industry with a seamless express network covering all EEA countries, are the integrators that have the tightest control over their network. As such, the non-integrated players are unable to exert a sufficient competitive constraint on integrators. The smallest integrator on the European market, FedEx, is not a sufficient competitive constraint on the merging parties and DHL. In addition, no future entry of sufficient magnitude or possible expansion by existing players like FedEx appears likely and timely enough to defeat the harmful effects expected from the loss of competition caused by the transaction. In addition, neither buyer power nor efficiencies would appear sufficient to counter balance the loss of competition in the timeframe relevant for the assessment of this concentration.’The non-integrators39In recitals 245 to 510 of the contested decision, the Commission found that the companies without an integrated network for small package delivery (‘the non-integrators’) exerted weak competitive pressure.– The subsidiaries of La Poste and Royal Mail40As regards the subsidiary of La Post, DPD, and that of Royal Mail, GLS, the Commission noted their narrow geographic coverage (recitals 253 to 284), the perception of customers in terms of alternatives to the integrators (recitals 285 to 295), in particular as regards the quality of services (recitals 396 to 411), in relation inter alia to delivery times (recitals 412 to 420), their absence from long-haul markets (recitals 296 to 309) and their road transport networks which allowed them to provide express services only over short distances (recitals 310 to 318).41The Commission also considered that the supply of the services in question using sub-contractors for air transport revealed structural disadvantages vis-à-vis the integrators (recitals 319 to 374) and that an extension of the geographic coverage of the subsidiary of La Poste, DPD, and that of Royal Mail, GLS, was unlikely (recitals 375 to 395).42On the basis of its market investigation, the Commission found that the customers of the parties to the merger had used DPD and GLS for domestic and standard services (recitals 421 to 423), the information provided by the parties to the merger on multi-sourcing confirming the limited presence of the subsidiaries of La Poste and Royal Mail on the markets for the services in question (recitals 424 to 426).43In support of its analysis, the Commission referred to empirical evidence on the presence and activities of the subsidiaries of La Poste and Royal Mail, as provided by UPS (recitals 424 to 434), by TNT (recitals 435 to 439), by FedEx and by DHL (recitals 440 to 450), in order to support its conclusion concerning the weak competitive pressure exerted by the subsidiaries of La Poste and Royal Mail (recitals 451 and 452).– Other postal operators44In recitals 453 to 468 of the contested decision, the Commission stated that most, if not all, postal operators in Europe provided express small package delivery services, but that only the subsidiaries of La Poste and Royal Mail had developed a pan-European footprint allowing them to compete, to a limited extent, with the integrators on the markets for the services in question (recital 453), which was also the case as regards Austrian Post (recital 455), PostNL (recital 456), Posten Norge (recital 457) and PostNord (recital 458).45In recital 459 of the contested decision, the Commission noted that, although almost all the public postal operators were members of the Express Mail Services (EMS) cooperative which regroups postal administrations within the meaning of the Universal Postal Union (UPU) convention, the quality of their services depended on each individual operator and was in any event inferior to that provided by commercial operators.46The Commission emphasised that not every incumbent operator offered intra-EEA express services other than for letters and that the others resold the services of integrators (recitals 460 to 461).47In recitals 462 to 466 of the contested decision, the Commission referred to the market investigation showing that the resellers did not exert competitive pressure on the integrators.– Cooperative networks48In recitals 469 to 477 of the contested decision, the Commission referred to certain cooperative networks functioning in very different ways, such as NetExpress (recital 470) and EuroExpress (recital 471), the members of which remained independent, (recital 472) and which did not exert, in any event, competitive pressure on the parties to the merger on the markets for the services in question (recitals 473 to 477).– Freight forwarders49After noting UPS’s views (recitals 478 to 484), the Commission considered that, while the freight forwarders provided small package delivery services, and some provided intra-EEA deliveries, they did not constitute a strong competitive force on those markets and therefore did not exert competitive pressure on the markets for the services in question (recitals 487 to 507).– Conclusion on non-integrators50In recitals 508 and 510 of the contested decision, the Commission concluded that the ground based operators, incumbent operators, cooperative networks and freight forwarders exerted limited competitive pressure on the integrators on the markets for the services in question, both from a demand-side and a supply-side perspective, in view of inter alia their very small market shares in comparison with those of the integrators.The integrators– FedEx51The Commission stated, in recitals 511 to 625 of the contested decision, that, amongst the integrators, FedEx was a weak competitor in Europe, having regard to its revenue on the markets for the services in question and its coverage of the EEA (recitals 513 to 526), to its network in the EEA (recitals 528 to 533), to its cost disadvantage in the EEA (recitals 534 to 546), to its presence on the domestic and deferred markets (recitals 547 to 552), FedEx’s strength being mainly on extra-EEA markets (recital 553 to 564), and to the perception of FedEx on the part of customers (recitals 565 to 577) and on the part of competitors (recitals 578 to 589), FedEx being weaker on the markets for the services in question (recitals 590 to 598).52In recitals 599 to 622 of the decision under appeal, the Commission examined FedEx’s expansion in the EEA.53The Commission concluded, in recitals 623 to 625 of the contested decision, that FedEx was lagging behind competitively on the markets for the services in question and that this gap could not be closed, in the very short term, by its expansion plans aimed at increasing its coverage and network density in the EEA so as to counter the other integrators on their intra-EEA express delivery networks.– DHL54In recitals 626 to 630 of the contested decision, the Commission emphasised that, according to the parties to the merger, DHL was the most important competitor in Europe on the markets for the services in question, in terms of market shares (recital 626) and geographic coverage (recital 627) and because of the development and the density of its network in the EEA (recital 628).Closeness of competition– General considerations on the closeness of competition between UPS and TNT on a ‘differentiated market’55In recitals 631 to 635 of the contested decision, the Commission stated:‘(631)In the present section the Commission presents an analysis of closeness of competition, which demonstrates that TNT and UPS are indeed close competitors on the intra-EEA express shipments market. The analysis shows that DHL is also a close competitor to the Parties, whereas, as demonstrated in sections 7.3 and 7.2.1, FedEx and the leading non-integrated companies DPD and GLS are more distant competitors to the Parties.(632)The analysis is helpful to determine which firms active on the intra-EEA express market offer products that are close substitutes to each other, and is informative about the level of competitive constraint that these firms currently exercise.(633)This is particularly relevant on a differentiated market such as the one at hand, where the products/services have different characteristics. One of the most important differentiating factors of the intra-EEA express market is the coverage of origins and of destinations which are offered by a particular supplier — that means the EEA countries to and from which express small packages can be shipped, and the extent of the coverage of geographic territories within those countries. There are also other differentiating factors such as the qualitative features of the service (reliability, quality of track-and-trace, and the offering of specific services such as premium morning or noon deliveries or special handling).(634)The mix of various differentiating factors of the service together with the commercial approach of the suppliers within the bidding (or similar customer selection process) determines how close substitutes the various suppliers will be when they compete for customers. The Commission has therefore not only analysed the firms with regard to the key characteristics (such as coverage of their services), but also assessed the degree of their substitutability from the customers’ perspective on the basis of all available evidence, notably customers’ evaluation from the market investigation, bidding analysis and the analysis of TNT’s exit interviews.(635)The purpose of the analysis is not only to determine the level of rivalry between the two merging firms, but also to identify those other firms which are currently representing close substitutes to the merging parties on this differentiated market. This is particularly relevant in this case, as all available evidence suggests that within the differentiated market at hand, a very limited set of suppliers are currently competing closely with each other compared to other firms present on the market.’– Customers’ perception according to the market investigation56In recitals 636 to 652 of the contested decision, the Commission referred to customers’ replies to its questionnaires concerning the closeness of competition on the markets for the services in question, which, according to the Commission, clearly indicated close competition between the parties to the merger and DHL.– Comparison of destinations served and delivery coverage for different express services57In recital 653 of the contested decision, the Commission stated that one of the most important differentiating factors between the companies providing the services in question was the coverage of origin and destination countries, since this determined the ability of the customer to ship small packages by a given express service (early morning, noon or end-of-day) from a particular origin to a given destination.58In recitals 654 to 658, the Commission compared, first, the integrators themselves, and, secondly, the integrators and the subsidiaries of La Poste and Royal Mail, in order to conclude, in recital 659, that, for customers who required broad geographic coverage in the EEA for the services in question, the parties to the merger were very likely to be the closest in terms of substitutability of services.– Delivery times and premium services59In recitals 660 and 661 of the contested decision, the Commission noted that another factor differentiating the companies providing the services in question concerned the delivery times — the market being divided into three segments, namely the ‘pre-10:00 a.m.’ segment, the ‘pre-noon’ segment and the ‘end-of-day’ segment, in particular as regards certain products, the morning services being regarded as premium services.60On the basis of its analysis, the Commission considered that the parties to the merger competed closely with DHL, in contrast to the non-integrators’ relatively limited offering of premium services (recitals 662 to 665).– Quality of services61In recital 666 of the contested decision, the Commission stated that, ‘as main integrators, the qualitative features of the Parties’ services such as track-and-trace or various add-on services are similar to each other, in contrast with the non-integrated companies (such as DPD and GLS) which are distant substitutes to the Parties’ services with respect to various quality criteria, as has been explained in the section on non-integrators (notably in Section 7.2.1.7, explaining why La Poste and Royal Mail’ international intra-EEA express services are perceived as distant substitutes for the Parties’ services with respect to various quality criteria).’– Bidding62In recitals 667 to 684 of the contested decision, the Commission — on the basis of data from UPS (recitals 668 to 674), TNT (recitals 675 to 681) and DHL (recitals 682 to 684) — considered that the parties to the merger were, as regards bidding, competitively close, as was DHL, unlike FedEx and the non-integrators.– TNT’s customer captivity63The Commission examined, in recitals 685 to 701 of the contested decision, the content of interviews held by TNT with its customers concerning their reasons for switching suppliers.– Conclusion on the closeness of competition64In recitals 702 to 711 of the contested decision, the Commission considered, while responding to the observations submitted by the parties to the merger in response to the SO, that UPS and TNT were close competitors of DHL on the markets for the services in question.The effect of competitive pressure on ‘highly differentiated’ markets65In recitals 712 to 714 of the contested decision, the Commission found that, on some markets, the merger would reduce the number of suppliers of the services in question, including both integrators and non-integrators, from four to three.66In recitals 715 to 720 of the contested decision, the Commission considered that, on some markets, the merger would reduce the number of integrated suppliers of the services in question from three to two, in view of FedEx’s position.67In recitals 721 to 726 of the contested decision, the Commission measured the likely impact of the merger on prices and, in recitals 727 to 740, cited UPS’ analysis of the effects of the merger on prices.Barriers to entry and to expansion on the markets for the services in question68In recital 741 of the contested decision, the Commission found as follows:‘(741)Entry or expansion on the intra-EEA express market has to be considered under two different dimensions: the product offering and the geographic scope. Whatever the dimension, the barriers to entry/expansion are similar and can be summarized as follows: a new entrant on the intra-EEA express market would have to set up (i) an IT infrastructure, (ii) a sorting infrastructure all across the EEA and (iii) an air network. As it is evidenced by the absence of major entry over the last 20 years and the outcome of the market investigation, these barriers are very high and cannot be overcome through outsourcing.’69In support of its assessment, the Commission noted, first, that no major player had entered the market over the last 20 years (recitals 742 to 746), secondly, the assessment of the market under a product and a geographic dimension (recitals 747 to 750), thirdly, the fact that a new entrant on the markets for the services in question would have to build up infrastructure all across the EEA (recitals 751 and 752), fourthly, that it would have to have a proprietary IT system (recitals 753 to 759), fifthly, that it would to have a sorting infrastructure spread all across the EEA (recitals 760 to 765) and, sixthly, that it would have to have its own air transport network (recitals 766 to 780).70In conclusion, the Commission found the following in recitals 781 and 782:‘(781)The barriers to entry/expansion are cumulative since any new entrant on the intra-EEA express market would have to overcome them simultaneously in order to offer delivery services competing with the ones offered by the strongest players. To compete effectively requires setting up intra-EEA express network both in terms of product offering and geographic scope. Consequently, the new entrant would have to set up sophisticated infrastructure all across the EEA, including sorting centres, ensure an extensive and dense PUD [(Pick-Up & Delivery)] network, set-up an air network, ground network and line-hauls and a sophisticated IT network. This all entails significant costs, risks and time.(782)In addition, in order to ensure cost-efficiency and thus to provide effective competition, the entry/expansion should occur at sufficient scale and achieve a sufficient density of the network. As the small package delivery business is a network industry, economies of scale and density are key (as has been explained in section 6.1.3), and achieving those may require a very long time. Until sufficient economies of scale are achieved, operators would have to incur significant costs and risks, and may not be able to run the business profitably for a significant period of time before achieving a return on investments. This complexity underlines the difficulties of entry and expansion on this market.’The likelihood, timeliness and sufficiency of entries or of expansion to counter the potential anti-competitive effects of the merger71In the contested decision, the Commission considered that neither the expansion plans of FedEx (recital 783) nor those of other operators (recitals 784 to 787) were capable of countering any anti-competitive strategy set in place by the parties to the merger (recital 788).The existence of countervailing purchasing power72As regards the existence of countervailing purchasing power, the Commission, as a preliminary point, noted the following:‘(789)Countervailing buyer power is defined in the horizontal merger guidelines as “the bargaining strength that the buyer has vis-à-vis the seller in commercial negotiations due to its size, its commercial significance to the seller and its ability to switch to alternative suppliers”. It relates to the ability of large buyers to extract in concentrated downstream markets price concessions from suppliers.(790)The Guideline provides a non-exhaustive list of possible sources of countervailing buyer power, including the ability of a large buyer to switch, to sponsor entry or expansion or to refuse to purchase certain products from the merging parties if the merging parties raise the prices of the products for which the merger entails a lessening of competition.’73In recitals 791 to 799 of the contested decision, the Commission, after noting UPS’ views (recital 791), concluded that ‘customers do not have the ability to exert sufficient countervailing purchasing power to defeat price raises in the market for intra-EEA express delivery services after the merger’.TNT’s position in the absence of the merger74The Commission, in recitals 800 to 806 of the contested decision, considered that it was necessary to take into account TNT’s current coverage and competitiveness and rejected UPS’ argument as to the likely degradation of TNT’s position with regard to long-haul express services.Expected efficiency gains of the merger75As regards the expected efficiency gains of the merger, the Commission started by noting, in recitals 807 to 816 of the contested decision, the criteria set out in the Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations between undertakings (OJ 2004 C 31, p. 5).76In recitals 817 to 848 of the contested decision, the Commission analysed the claims of efficiency gains made by the parties to the merger, in terms of cost savings through operational synergies (recitals 822 to 831), air network synergies (recitals 832 to 837) and management and administration cost synergies (recital 838), as well as the arguments of the parties to the merger concerning the verifiability of their data (recitals 839 to 841) and the allocation of the expected costs savings by service and by geographic zone (recitals 842 to 848).77In recitals 849 to 921 of the contested decision, the Commission assessed the efficiency gains claimed by the parties to the merger and their verifiability (recitals 850 to 892), the benefits for consumers (recitals 893 to 906), the merger specificity (recitals 907 to 910) and the synergies calculation (recitals 911 to 921).Analysis by country78In recitals 923 to 939 of the contested decision, the Commission summarised its findings concerning the markets for the services in question.79In recitals 940 to 951 of the contested decision, the Commission found that the market share estimates provided by UPS were unreliable.80Next, the contested decision noted UPS’ views and the Commission’s assessment concerning the effects of the merger on the markets for the services in question by taking into account the likely effects of the merger on prices and the expected efficiency gains of the merger, as regards certain EEA countries, country-by-country, namely Bulgaria (recitals 952 to 1018), the Czech Republic (recitals 1019 to 1070), Denmark (recitals 1071 to 1148), Estonia (recitals 1149 to 1193), Finland (recitals 1194 to 1240), Hungary (recitals 1241 to 1317), Latvia (recitals 1318 to 1365), Lithuania (recitals 1366 to 1415), Malta (recitals 1416 to 1435), the Netherlands (recitals 1436 to 1563), Poland (recitals 1564 to 1633), Romania (recitals 1634 to 1679), Slovakia (recitals 1680 to 1743), Slovenia (recitals 1744 to 1798) and Sweden (recitals 1799 to 1849).The Commission’s general conclusion in the contested decision on the effects of the merger81In recital 1850 of the contested decision, the Commission concluded that the merger constituted a SIEC on the markets for the services in question in Bulgaria, the Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Malta, the Netherlands, Poland, Romania, Slovenia, Slovakia, Finland and Sweden, that is to say in 15 EEA Member States. The commitments proposed by the parties to the merger 82In recitals 1851 to 1942 of the contested decision, the Commission described the commitments proposed by the parties to the merger and, in recitals 1943 to 2106, its negative assessment of those commitments. Procedure and forms of order sought 83By application lodged at the Court Registry on 5 April 2013, the applicant brought the present action for annulment of the contested decision.84By letter accompanying the application, the applicant drew the Court’s attention to the fact that the application and its annexes were confidential and contained business secrets concerning it.85Accordingly, pursuant to Article 6(3) of the Instructions to the Registrar of the General Court, the applicant requested that that information be omitted from the documents relating to the case to which the public had access.86In addition, in the event of intervention by a third party, the applicant informed the Court of its intention to request the Court that its business secrets be omitted from any document sent to the intervener, under Article 116(2) of the Rules of Procedure of the General Court of 2 May 1991.87By a separate document lodged at the Court Registry on the same day, the applicant submitted an application for the case to be decided under an expedited procedure in accordance with Article 76a of the Rules of Procedure of 2 May 1991.88By letter lodged at the Court Registry on 12 April 2013, the Commission acknowledged receipt of the applicant’s application and its application for the case to be decided under an expedited procedure and requested an extension from the Court of the time limit for it to file its defence.89By document lodged at the Court Registry on 17 April 2013, the Commission submitted its observations on the applicant’s application for an expedited procedure.90By decision of 7 May 2013, the applicant’s application to decide the present case by expedited procedure was dismissed.91By decision of 7 May 2013, it was decided that there was no longer any need to adjudicate on the Commission’s application for an extension of the time limit for it to lodge its defence.92By letter lodged at the Court Registry on 15 May 2013, the Commission requested that the Court grant an extension of the time limit for it to lodge its defence.93On 27 May 2013, that application was granted.94By letter lodged at the Court Registry on 25 June 2013, the Commission once again requested that the Court grant an extension of the time limit for it to lodge its defence.95By document lodged at the Court Registry on 17 June 2013, FedEx requested leave to intervene in the dispute in support of the form of order sought by the Commission (‘the application for leave to intervene’).96By letters from the Court Registry of 25 June 2013, the applicant and the Commission were requested to submit their observations, at the latest by 18 July 2013, on the request for leave to intervene.97On 2 July 2013, the Commission was granted an extension of the time limit for it to lodge its defence.98By letter sent to the Court Registry on 5 July 2013, the applicant requested the Court to extend until 1 August 2013 the time limit set, in the context of its application for confidential treatment, to lodge the non-confidential version of the application for FedEx, having regard to the volume of the file and the amount of sensitive information and to the fact that the contested decision was not yet available to the public because the Commission was at that time handling a large number of applications for confidential treatment.99The Commission lodged its defence on 9 July 2013, and lodged its observations on the request for leave to intervene on 10 July 2013.100By letter from the Court Registry of 11 July 2013, the applicant’s request for an extension of the time limit for lodging the non-confidential version of the application for FedEx was granted.101The applicant submitted its observations on the application for leave to intervene on 17 July 2013.102By documents lodged at the Court Registry on 31 July 2013, the applicant requested that certain confidential information be removed from the procedural documents served on FedEx, including the application and annexes. The applicant produced a list and the non-confidential versions of those documents.103In its letter, the applicant stated, first of all, that, during the proceedings, it would extend its request for confidential treatment with regard to FedEx to other documents produced to the Court, such as the Commission’s defence and its reply.104Next, the applicant explained that the information in respect of which it was requesting confidentiality concerned the analysis of the effects of the merger as regards prices and increased efficiency, information on its operational and commercial strategies and data relating to the undertakings which it had proposed to the Commission during the administrative procedure.105Finally, the applicant drew the attention of the Court to the fact that certain documents in the file contained confidential information and business secrets concerning third parties, in particular TNT, in whose name it did not consider it could request confidential treatment, while indicating to the Court the documents in question concerning TNT.106By letter lodged at the Court Registry on 9 August 2013, the Commission submitted its observations on the application for confidential treatment, pointing out that certain documents in the file, but not its defence, contained confidential information concerning TNT and, in essence, that, if the applicant, which had adduced those documents during the administrative procedure, actually considered that it was not in a position to extend its request for confidential treatment in that regard, it should review the content of the application to that end.107By decision of the Registrar of 20 August 2013, the applicant was requested to put into order, by 5 September 2013, the non-confidential versions from which all information concerning TNT had been removed.108On 2 September 2013, the applicant lodged its reply.109By document lodged at the Court Registry on the same day, the applicant, citing Article 64(3)(e) and (4) and Article 65 of the Rules of Procedure of 2 May 1991, requested the Court, as measures of organisation of procedure or measures of inquiry, to order the Commission to produce the documents provided by FedEx during the administrative procedure.110The applicant stated that its request for measures of organisation of procedure or of inquiry related essentially to the plea in law alleging infringements of the rights of the defence.111On 5 September 2013, the applicant lodged at the Court Registry a non-confidential version, with regard to FedEx and covering TNT, of the application and its annexes, including Annex A.1, namely the contested decision.112On 5 September 2013, the applicant confirmed that its request of 31 July 2013 concerned different categories of information, without, however, stating the grounds for the allegedly confidential nature of that information.113By decision of the Court of 30 September 2013, the present case was re-allocated to the Fourth Chamber.114By order of the President of the Fourth Chamber of the Court of 21 October 2013, FedEx was granted leave to intervene in support of the form of order sought by the Commission.115FedEx received all the procedural documents served on the parties, including the non-confidential versions of the application and its annexes, as amended by the applicant on 5 September 2013.116By letter of 8 November 2013, the Commission submitted its observations on the applicant’s request for measures of organisation of procedure of 2 September 2013, contending that the request should be rejected in the light of its lateness and lack of usefulness to the proper conduct of the procedure.117By letter lodged at the Court Registry on 6 December 2013, the intervener raised detailed objections with regard to the applicant’s request for confidential treatment as sent to it by the Court Registry.118On 12 December 2013, the Court Registry informed the intervener that, following its objections to the request for confidential treatment, the time limit for lodging the statement in intervention had been extended sine die and that it would be fixed afresh after the adoption of an order on the confidential treatment.119On 30 January 2014 the Commission lodged its rejoinder.120On the same day, the applicant supplemented its request for confidential treatment with regard to the rejoinder.121On 20 March 2014, the applicant was requested, with regard to its request for confidential treatment of Annex A.1 to the application, namely the non-confidential version of the contested decision, to state, in respect of each piece of information removed, the grounds forming the basis of its request for confidential treatment.122In addition, the applicant was requested not to include in its response any information, concerning itself or TNT, which it considered to be confidential as regards the intervener.123In any event, the applicant was requested to remove from the confidential version of the contested decision only those passages strictly necessary to maintain confidentiality as regards the intervener.124By letters of 3 April 2014, the intervener was requested to submit its observations on the request for confidential treatment concerning it, as actually lodged by the applicant.125By facsimile sent to the Court Registry on 25 April 2014, the intervener stated that it did not object to the request for confidential treatment as actually lodged by the applicant.126By letter from the Registry of 8 May 2014, the parties were informed that the time limit for lodging the statement in intervention was set as 20 June 2014.127By document lodged at the Court Registry on 26 June 2014, the intervener lodged its statement in intervention.128The applicant submitted its observations on that pleading on 6 October 2014 and disputed its admissibility.129By document lodged at the Court Registry on 1 July 2015, the applicant requested that the present action be given priority treatment.130On 16 July 2015, pursuant to Article 89(2)(c) of the Rules of Procedure of the General Court, the Court requested the parties to reply in writing to some questions.131The parties complied with that request within the time allowed.132By decision of 4 August 2015, the Court granted the request for priority treatment, under Article 67(2) of the Rules of Procedure.133By letter of 4 August 2015 and pursuant to Article 89(2)(a) of the Rules of Procedure, the Court granted the applicant’s request for measures of organisation of procedure and asked the Commission to produce certain documents submitted by FedEx during the administrative procedure.134On 12 August 2015, the Commission refused to produce the documents requested to ensure their confidentiality.135By order dated 25 September 2015, the Fourth Chamber of the Court required the Commission, under Article 91(b), Article 92(3) and Article 103 of the Rules of Procedure, to produce the documents requested.136On 2 October 2015, the Commission produced the documents requested.137By order dated 27 October 2015, the Fourth Chamber of the Court required the Commission, under Article 91(b), Article 92(3) and Article 103 of the Rules of Procedure, to produce additional documents.138By order dated 11 December 2015, the Fourth Chamber of the Court, under Article 91(b), Article 92(3) and Article 103 of the Rules of Procedure, granted leave to the applicant’s representatives to consult a confidential document at the Court Registry, provided that they sign a confidentiality undertaking.139On 17 December 2015 the applicant’s representatives sent the signed confidentiality undertakings to the Court Registry.140Between 15 January 2016 and 12 February 2016, the applicant’s representatives were able to consult the confidential document at the Court Registry.141On 12 February 2016, the Court, under Article 89(2)(a) of the Rules of Procedure, requested the parties to send, within two weeks, their written observations, if any, on the confidential document.142On 26 and 29 February 2016, respectively, the applicant and the Commission submitted to the Court their observations on the content of the confidential document consulted in a data room.143Acting on a proposal from the Judge-Rapporteur, the Court decided to open the oral part of the procedure.144In accordance with Article 109 of the Rules of Procedure, the Court, by letter of 18 March 2016, invited the parties to submit their observations on whether it was necessary to hold part of the hearing in camera.145On 29 March 2016, the Commission replied to the Court’s invitation, stating that it was not necessary to hold the hearing in camera, unless the content of the document consulted in a data room by the applicant’s representatives as from 15 January 2016 were to be discussed.146On 31 March 2016, the applicant replied to the Court’s invitation, stating that it had no objection to the hearing being held in open court and that, to the extent that the content of the confidential document that its representatives had consulted in a data room as from 15 January 2016 would be discussed, it did not oppose a hearing being held in camera.147On the same day, the intervener submitted that it was necessary to hold the hearing entirely in camera, and not partly as the Court had suggested, because of the numerous differences between, on the one hand, the non-confidential version of the contested decision in the file and, on the other, the public version of the contested decision, those differences being set out in an appendix to the intervener’s observations.148On 5 April 2016, the Court decided, after hearing the parties, to hold the hearing entirely in camera.149The parties presented oral argument and replied to the Court’s oral questions at the hearing on 6 April 2016.150By measure of organisation of procedure of 11 April 2016, the Court, pursuant to Article 89(3)(a) and (d) of the Rules of Procedure, asked the Commission to produce certain documents to which it had referred at the hearing of 6 April 2016 and to reply to a question in writing.151On 26 April 2016, the Commission produced the documents requested and replied to the Court’s question within the prescribed period.152On 8 June 2016, the applicant submitted its observations on the documents and the reply submitted by the Commission on 26 April 2016.153By decision of 4 October 2016, the Court closed the oral part of the procedure.154In the application, the applicant claims that the Court should:—annul the contested decision;order the Commission to pay the costs.155The Commission contends that the Court should:dismiss the action in its entirety;order the applicant to pay the costs, including those of the intervener.156The intervener claims that the Court should:order the applicant to pay the costs. Law 157In support of its action, the applicant puts forward, in essence, three pleas in law. By the first, the applicant alleges errors of law and manifest errors of assessment, by the second, infringement of its rights of defence and, by the third, infringement of the obligation to state reasons.158The second plea in law, which it is appropriate to examine first, is essentially divided into four parts, alleging infringements of rights of the defence relating, respectively, to the likely effects of the merger on prices, to the expected efficiency gains as a result of the merger, to the future competitive position of FedEx and to the number of SIEC Member States.159In the context of the first part of the second plea in law, the applicant submits that, during the administrative procedure, it exchanged analyses of the merger in terms of prices and estimates in terms of efficiency gains with the Commission, calculating the expected net effects of the merger on the prices in various national markets.160According to the applicant, the analysis of the merger in terms of prices in the contested decision is materially different from all the versions that it was able to consult during the administrative procedure, which infringes its rights of defence.161In annex to the application, the applicant produces a report listing the changes which, in its view, were made to the model that it used and setting out the technical reasons why it was not able to replicate the results set out in the contested decision.162The applicant submits, in response to the Commission’s reply to the measure of organisation of procedure adopted by the Court after the hearing, that the econometric model used in the contested decision is a highly restrictive version of a non-linear approach, or even a ‘segmented linear’ approach, which was never discussed during the administrative procedure.163The applicant submits that the Commission used a linear model within each range.164Furthermore, it argues that it is contrary to standard economic practice to use two different concentration variables at the estimation stage and at the prediction stage, which constitute the two stages of the Commission’s econometric analysis.165In order to represent the degree of concentration on the market, at the estimation stage the Commission used a discrete concentration variable, in accordance with the applicant’s recommendations in that respect, whereas, at the prediction stage, it used a continuous variable.166Accordingly, the applicant submits that, by using such a variable at the prediction stage, the Commission did not analyse the price developments from one range to another, but merely the development of prices within each range.167The applicant adds that it did not draw up those ranges, rather they were chosen arbitrarily by the Commission.168The applicant therefore could not challenge effectively the reliability of the econometric model in question, chosen by the Commission in the contested decision, or the differences between the Commission’s results and those which the applicant calculated in its last econometric analysis sent to the Commission on 16 November 2012.169The fact that it cannot replicate the Commission’s results demonstrates that the Commission failed to hear the applicant before changing, substantially and to the applicant’s detriment, an econometric model vital to the conclusions contained in the contested decision.170If the Commission had heard the applicant on the changes in question before adopting the contested decision, the applicant would have been able to verify the results used in the contested decision and, above all, to express its views on the appropriateness of such a significant change.171In addition, while referring to the examination of the third part of the second plea in law, relating to FedEx’s future competitive position, the applicant submits, in essence, that it did not have access to FedEx’s 2015 coverage data sufficiently early in the administrative procedure and, accordingly, that it was not able to propose appropriate commitments.172The Commission, on the other hand, challenges, primarily, the admissibility of the applicant’s legal and economic arguments, on the ground that they were set out in an annex to the application, and the annexes have a purely evidential and instrumental function.173According to the Commission, the application contains no explanation of the alleged differences, except by reference to an annex, with the result that those arguments are inadmissible, pursuant to Article 44(1)(c) of the Rules of Procedure of 2 May 1991, since the essential elements of the plea in law are not set out in the application.174The applicant contests that claim of inadmissibility, arguing that the essential elements of its line of argument are clearly present in the body of the application and that the reference to Annex A.6 of the application was intended merely to support those main arguments by providing technical details.175It is indicated in the application that the econometric model in question is substantially different from all of the econometric models that the applicant was able to examine during the administrative phase and that this is supported inter alia by the fact that the applicant was not able to understand that model fully or to verify the results derived from it.176In the alternative, the Commission submits that the first part of the second plea in law is ineffective and, in any event, unfounded.177It argues, first of all, that its final analysis of the likely effects of the merger on prices is not materially different from that submitted by the applicant, as can be seen from an annex to its defence.178According to the Commission, as outlined in recitals 727 to 740 of the contested decision, the changes made concerned (i) the assumptions in the econometric model concerning the effects of increasing concentration on the initial price levels and (ii) the definition of the concentration variable.179Next, the Commission argues that it was not required to hear the applicant before adopting the econometric model in question.180In support of that argument, the Commission submits that the applicant presented five studies relatively late in the administrative procedure, but that, nevertheless, all the studies were extensively discussed at various state of play meetings. The Commission states that it also gave its preliminary views on the applicant’s last study, submitted on 16 November 2012, at the state of play meeting of 11 December 2012 and that, given the late date at which that last study was submitted, its ‘final assessment had to be left to the [contested] decision’.181Lastly, the Commission submits that its approach is in accordance with the case-law on the rights of the defence in the context of mergers, in that, since the decision need not be a copy of the SO, it is entitled to revise or supplement the elements of fact or law set out in support of its objections and to supplement the SO in the light of the responses made by the applicant during the administrative procedure, provided that the contested decision sets out the same objections as those set out in the SO, which is the case here.182In the reply, in the first place, the applicant submits that, if the Commission had erroneously considered that the applicant was barred from submitting updated studies in November 2012, the Commission should have used exactly the same price concentration analysis in the contested decision as it had used in the SO, enabling the applicant to challenge the substantive errors of that analysis before the Court, since it follows from the case-law that the Commission may reject the arguments raised in response to the SO on the basis of arguments and reasons not mentioned in the SO, but that it may not rely on elements other than those set out in the SO.183In the present case, the Commission could have, at most, rejected the studies submitted by the applicant in November 2012 without hearing the applicant further. However, according to the applicant, the Commission could not forgo hearing it, since it had tampered with the methodologies and results of those studies in order to use the new results to oppose the merger, as a counterweight to factors it had accepted after the SO, namely the efficiency gains and FedEx’s expansion plans.184In the second place, the ‘lateness’ of the applicant’s submissions, as alleged by the Commission, is the result of the Commission’s own conduct during the administrative procedure.185In the rejoinder, the Commission contends that the applicant’s rights of defence would be breached only where it could demonstrate that the Commission relied on the econometric analysis in question in order to support its objection and that that objection could be proved only by reference to that analysis. The Commission adds that the applicant would also have to show that its findings in the contested decision as regards the SIECs would have been different if that analysis had to be disallowed as evidence.186According to the Commission, it can be seen from the contested decision that, on the Danish and Netherlands markets, a SIEC would have been found even if the expected net effect of the econometric analysis in question were negative, with the result that the Commission’s findings, according to which a SIEC was likely on those markets, would not have been different if that analysis had to be disallowed as evidence.187In that respect, the Court notes that, in the first part of the second plea in law, the applicant does not contest the merits of the econometric analysis in question — which is the subject matter of the first part of the first plea in law — but rather questions whether the Commission could use the econometric model in question in the contested decision, since it was not presented to the applicant before the adoption of the contested decision, in breach of its right to be heard and, more generally, its rights of defence.188In that context, the parties disagree as to whether the econometric model in question, used by the Commission in the contested decision, differs from the last econometric model submitted to the applicant by the Commission during the administrative procedure and, if so, to what extent.189Before assessing the merits of the applicant’s line of argument, it is appropriate to verify its admissibility, which is contested by the Commission.1. Admissibility of the first part of the second plea in law 190The Commission disputes the admissibility of the first part of the second plea in law, alleging a breach of the applicant’s rights of defence as regards the likely effects of the merger on prices, on the ground that the requirements set out in Article 44(1)(c) of the Rules of Procedure of 2 May 1991 are not met.191In that regard, it must be noted that, under that provision, and moreover under Article 76(d) of the Rules of Procedure, an application must state the subject matter of the proceedings and a summary of the pleas in law, and that that statement must be sufficiently clear and precise as to enable the defendant to prepare its defence and the Court to rule on the application, if necessary without any other supporting information192It should also be noted that, in particular, it is necessary, for an action before the Court to be admissible, that the basic matters of law and fact relied on be indicated, at least in summary form, coherently and intelligibly in the application itself. Whilst the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which, in accordance with the above mentioned provisions, must appear in the application (judgment of 11 September 2014, MasterCard and Others v Commission, C‑382/12 P, EU:C:2014:2201, paragraph 40).193In the present case, the applicant submits that the Commission infringed its rights of defence by substantially changing — without hearing its views in that regard — the econometric model that it had submitted concerning the likely effects of the merger on prices.194It must be pointed out that the matters of fact and law on which the applicant bases the first part of its second plea in law are immediately intelligible from a reading of the application. Although the applicant indeed refers to Annex A.6 to the application in order to demonstrate the alleged changes, its line of argument criticising the use of the econometric analysis in question can be seen, albeit summarily, from the text of the application itself.195In addition, it must also be pointed out that the Commission was able, in its defence, to respond to the first part of the second plea in law raised by the applicant, which reinforces the point that, although it is true that the first part of the second plea in law is not set out in detail, the content of that part is clear.196Moreover, although the Court had to refer to Annex A.6 in order to assess the evidence supporting the first part of the second plea in law, it did not have to seek and identify in Annex A.6 to the application the arguments raised in support of the first part of the second plea in law.197It follows from the foregoing that the present part of the second plea in law is admissible having regard to the requirements of Article 76(d) of the Rules of Procedure.2. The merits of the first part of the second plea in law 198In order to assess the first part of the second plea in law, relating to the likely effects of the merger on prices, the Court must verify whether the applicant’s rights of defence were affected by the circumstances in which the econometric analysis in question was based on an econometric model different from that which had been the subject of an exchange of views and arguments during the administrative procedure.199In that regard, it must be recalled, as a preliminary point, that observance of the rights of the defence is a general principle of EU law enshrined in the Charter of Fundamental Rights of the European Union which must be guaranteed in all proceedings, including merger proceedings before the Commission (see, to that effect, judgment of 9 March 2015, Deutsche Börse v Commission, T‑175/12, not published, EU:T:2015:148, paragraph 247).200It has also been held that the right to a fair hearing, which forms part of the rights of the defence, requires that the undertaking concerned must have been afforded the opportunity, during the administrative procedure, to make known its views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim (see judgment of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 61 and the case-law cited).201In the present case, in the first place, it must be noted that, as can be seen from recitals 721 to 740 of the contested decision, the Commission relied inter alia on the econometric analysis in question in order to identify the number of SIEC States.202In that regard, the Commission adopted the final version of its econometric model on 21 November 2012, more than two months before the adoption of the contested decision on 30 January 2013, as is clear from the documents submitted by the Commission in annex to its rejoinder.203It is also clear from the documents in the file that the final version of the econometric model was not communicated to the applicant, since, according to the Commission, it was unnecessary to make such a communication because it was clear from the Commission’s numerous exchanges with the applicant during the administrative procedure.204The Commission emphasises, in essence, that the final model, as presented in the contested decision, is only marginally different from the models that were discussed with the applicant during the administrative procedure.205Although there are indeed numerous similarities between the final econometric model and those discussed during the administrative procedure, the changes made to the final model nevertheless cannot be regarded as negligible.206It can be seen from the observations of the Commission and of the applicant submitted after the hearing that the Commission relied on two different variables at the stage of the statistical estimation of the effects of the loss of a competitor on prices and at the stage of the prediction of the effects of the merger on prices.207Thus, the Commission relied on a discrete variable at the estimation stage and on a continuous variable at the prediction stage.208Although the use of a discrete variable had been discussed repeatedly during the administrative procedure, it does not appear from the file that that was also the case as regards the use of different variables at the different stages of the econometric analysis.209Accordingly, the Commission cannot claim that it was not required to communicate the final econometric analysis model to the applicant before adopting the contested decision.210Accordingly, the applicant’s rights of defence were infringed, with the result that the contested decision should be annulled, provided that it has been sufficiently demonstrated by the applicant not that, in the absence of that procedural irregularity, the contested decision would have been different in content, but that there was even a slight chance that it would have been better able to defend itself (see, to that effect, judgment of 25 October 2011, Solvay v Commission, C‑109/10 P, EU:C:2011:686, paragraph 57).211In that regard, first, it must be emphasised that the Commission relied on the econometric analysis in order to find that there were SIEC States.212When the SO was adopted, the Commission had, as it stated at the hearing, made a provisional finding that there were 29 SIEC States on the basis of an econometric analysis showing a significant increase in prices following the merger.213In addition, as the Commission expressly acknowledges, the subsequent results of the econometric analysis showing a less significant increase in prices also led it to decrease the number of SIEC States to 15 in the contested decision.214Secondly, the applicant was already able, during the administrative procedure, to have a significant influence on the development of the econometric model proposed by the Commission, since it raised technical problems to which it provided solutions, as the Commission expressly acknowledges.215Accordingly, in the light of the foregoing, it must be held that, during the administrative procedure that led to the adoption of the contested decision, the applicant might have been better able to defend itself if it had had at its disposal, before the adoption of that decision, the final version of the econometric model chosen by the Commission on 21 November 2012.216That conclusion cannot be called into question by the Commission’s claim that its findings were based on a wide range of information, both quantitative — including the econometric analysis — and qualitative.217As noted in paragraph 213 above, the Commission expressly acknowledges that it relied, inter alia, on the new results of the econometric analysis in order to reduce the number of SIEC States after the SO, so those results were capable, at least as regards certain States, of countering the qualitative information taken into account by the Commission.218Accordingly, it must be found that the applicant was deprived of information which, had it been communicated to the applicant in due time, could have allowed it to submit different results on the effects of the merger on prices, which might have given rise to a reassessment of the scope of the information taken into consideration by the Commission and, accordingly, a reduction in the number of SIEC States.219In the second place, when assessing alleged infringements of the rights of the defence in the context of merger control proceedings, it is indeed necessary to take into account the necessity for speed, which characterises the general scheme of the Merger Regulation (see, to that effect, judgment of 14 December 2005, General Electric v Commission, T‑210/01, EU:T:2005:456, paragraph 701).220Nevertheless, in the present case, as the Commission acknowledges in its written submissions, the econometric analysis was already very stable before the state of play meeting of 20 November 2012, more than two months before 30 January 2013, the date of the contested decision, with the result that the Commission was free, at the very least, to communicate the essential elements of the chosen econometric model to the applicant.221Accordingly, it must be concluded that the Commission infringed the applicant’s rights of defence by failing to communicate the final version of its econometric model to the applicant.222Consequently, the first part of the second plea in law of the action must be upheld and the contested decision must be annulled in its entirety, without it being necessary to examine the other parts of the second plea in law, or the other pleas in law put forward in the action. Costs 223Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has applied for costs and the Commission has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by the applicant. The intervener must be ordered to bear its own costs.On those grounds,THE GENERAL COURT (Fourth Chamber)hereby: 1. Annuls Commission Decision C(2013) 431 of 30 January 2013 declaring a concentration to be incompatible with the internal market and the functioning of the EEA Agreement (Case COMP/M.6570 — UPS/TNT Express); 2. Orders the European Commission to bear its own costs and to pay those incurred by United Parcel Service, Inc.; 3. Orders FedEx Corp. to bear its own costs. PrekLabuckaKreuschitzDelivered in open court in Luxembourg on 7 March 2017.E. CoulonRegistrarM. PrekPresident( *1 ) * Language of the case: English. | 1bfae-f1af69c-464a | EN |
The exclusion of digital books, newspapers and periodicals from the application of a reduced rate of VAT where they are supplied electronically is not contrary to the principle of equal treatment | 7 March 2017 ( *1 )‛Reference for a preliminary ruling — Taxation — Value added tax (VAT) — Directive 2006/112/EC — Point 6 of Annex III — Validity — Procedure — Amendment of a proposal for a Council directive after the Parliament has given an opinion — No fresh consultation of the Parliament — Article 98(2) — Validity — Reduced rate of VAT precluded from being applied to the supply of digital books electronically — Principle of equal treatment — Comparability of two situations — Supply of digital books electronically and on all physical means of support’In Case C‑390/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Trybunał Konstytucyjny (Constitutional Court, Poland), made by decision of 7 July 2015, received at the Court on 20 July 2015, in proceedings brought by Rzecznik Praw Obywatelskich (RPO) other parties: Marszałek Sejmu Rzeczypospolitej Polskiej, Prokurator Generalny, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta and L. Bay Larsen, Presidents of Chambers, J. Malenovský (Rapporteur), J.-C. Bonichot, A. Arabadjiev, C. Toader, M. Safjan, E. Jarašiūnas, C.G. Fernlund, C. Vajda and S. Rodin, Judges,Advocate General: J. Kokott,Registrar: M. Aleksejev, Administrator,having regard to the written procedure and further to the hearing on 14 June 2016,after considering the observations submitted on behalf of:—the Rzecznik Praw Obywatelskich (RPO), by A. Bodnar, Rzecznik Praw Obywatelskich, and M. Wróblewski and A. Grzelak, acting as Agents,the Prokurator Generalny, by R. Hernand, acting as Agent,the Polish Government, by B. Majczyna, A. Miłkowska and K. Maćkowska, acting as Agents,the Greek Government, by K. Georgiadis and S. Papaïoannou, acting as Agents,the Council of the European Union, by E. Moro, E. Chatziioakeimidou and K. Pleśniak, acting as Agents,the European Commission, by L. Lozano Palacios and M. Owsiany-Hornung, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 8 September 2016,gives the following Judgment 1This request for a preliminary ruling concerns the validity of Article 98(2) of, and point 6 of Annex III to, Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2009/47/EC of 5 May 2009 (OJ 2009 L 116, p. 18) (‘Directive 2006/112 as amended’).2The request has been made following the lodging by the Rzecznik Praw Obywatelskich (Commissioner for Civic Rights, Poland) of an application for a ruling that national provisions precluding the application of a reduced rate of value added tax (VAT) to the supply of books and other digital publications electronically do not comply with the Polish constitution. Legal context EU law The Sixth Directive 3Article 12(3)(a) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’), as amended by Council Directive 2001/4/EC of 19 January 2001 (OJ 2001 L 22, p. 17), provided:‘The standard rate of value added tax shall be fixed by each Member State as a percentage of the taxable amount and shall be the same for the supply of goods and for the supply of services. From 1 January 2001 to 31 December 2005, this percentage may not be less than 15%.…Member States may also apply either one or two reduced rates. These rates shall be fixed as a percentage of the taxable amount, which may not be less than 5%, and shall apply only to supplies of the categories of goods and services specified in Annex H.’4Article 1 of Council Directive 2002/38/EC of 7 May 2002 amending and amending temporarily Directive 77/388/EEC as regards the value added tax arrangements applicable to radio and television broadcasting services and certain electronically supplied services (OJ 2002 L 128, p. 41) provided:‘Directive 77/388/EEC is hereby temporarily amended as follows:1.in Article 9:(a)in paragraph (2)(e), a comma shall replace the final full stop and the following indents shall be added:“…electronically supplied services, inter alia, those described in Annex L.”2.in Article 12(3)(a), the following fourth subparagraph shall be added:“The third subparagraph shall not apply to the services referred to in the last indent of Article 9(2)(e).”’5The Sixth Directive was repealed and replaced by Directive 2006/112, which entered into force on 1 January 2007. Directive 2006/112 6Article 14(1) of Directive 2006/112 as amended provides:‘“Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner.’7Article 24(1) of Directive 2006/112 as amended states:‘“Supply of services” shall mean any transaction which does not constitute a supply of goods.’8Article 25 of Directive 2006/112 as amended states:‘A supply of services may consist, inter alia, in one of the following transactions:the assignment of intangible property, whether or not the subject of a document establishing title;…’9Article 96 of Directive 2006/112 as amended provides:‘Member States shall apply a standard rate of VAT, which shall be fixed by each Member State as a percentage of the taxable amount and which shall be the same for the supply of goods and for the supply of services.’10Article 98(1) and (2) of Directive 2006/112 as amended is worded as follows:‘1. Member States may apply either one or two reduced rates.2. The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III.The reduced rates shall not apply to electronically supplied services.’11Point 6 of Annex III to Directive 2006/112, in the version before Directive 2009/47 entered into force, referred to:‘Supply, including on loan by libraries, of books (including brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or predominantly devoted to advertising.’12On 7 July 2008, the European Commission presented a proposal for a Council Directive amending Directive 2006/112 as regards reduced rates of value added tax (COM(2008) 428 final; ‘the proposal for a directive’), which provided for the replacement of point 6 of Annex III to Directive 2006/112, in the version before Directive 2009/47 entered into force, by the following:‘Supply, including on loan by libraries, of books (including brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts, as well as audio books, CD, CD-ROMs or any similar physical support that predominantly reproduce the same information content as printed books), newspapers and periodicals, other than material wholly or predominantly devoted to advertising.’13By a legislative resolution of 19 February 2009, the European Parliament, after amending the proposal for a directive, approved that proposal. None of the amendments adopted by the Parliament related to the text proposed by the Commission to replace point 6 of Annex III to Directive 2006/112, in the version before Directive 2009/47 entered into force.14On 5 May 2009, the Council approved the final text of Directive 2009/47. Point 6 of Annex III to Directive 2006/112 as amended was from then on worded as follows:‘Supply, including on loan by libraries, of books on all physical means of support (including brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or predominantly devoted to advertising.’ Polish law 15Under Article 146 and Article 41(2) and (2a) of the ustawa o podatku od towarów i usług (Law on the tax on goods and services) of 11 March 2004, in the version applicable at the material time (Dz. U. of 2011, No 177, heading 1054; ‘the Law on VAT’), read in conjunction with items 72 to 75 of Annex 3 to that law and items 32 to 35 of Annex 10 thereto, supplies of publications that are printed or on a physical support are subject to a reduced rate of VAT. On the other hand, a reduced rate of VAT does not apply to the electronic transmission of publications. The dispute in the main proceedings and the questions referred for a preliminary ruling 16By application lodged on 6 December 2013, the Commissioner for Civic Rights requested the Trybunał Konstytucyjny (Constitutional Court, Poland) to rule that (i) items 72 to 75 of Annex 3 to the Law on VAT, read in conjunction with Article 41(2) thereof, and (ii) items 32 to 35 of Annex 10 to that law, read in conjunction with Article 41(2a) thereof, do not comply with the Polish constitution in that those provisions lay down that the reduced rates of VAT are to apply only to publications made available on a physical support, to the exclusion of publications transmitted electronically.17In the course of the main proceedings, the Marszałek Sejmu Rzeczypospolitej Polskiej (Speaker of the Lower House of the Parliament of the Republic of Poland) and the Prokurator Generalny (General Public Prosecutor, Poland) stated that, since the provisions of Polish law at issue were adopted in order to transpose Article 98(2) of Directive 2006/112 as amended and point 6 of Annex III thereto into domestic law, the Polish legislature could not depart from those provisions without infringing its obligations under EU law. The same view was taken by the members of the Polish Government invited by the national court to express their opinion in the case.18The national court considers that there are, however, reasons to doubt that those two provisions of Directive 2006/112 as amended are valid.19First, that court observes that Directive 2009/47, from which point 6 of Annex III to Directive 2006/112 as amended stems, could be vitiated by a procedural defect, since that point differs in its wording from the text of the proposal for a directive which had been submitted to the Parliament.20Secondly, it considers that Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, could be contrary to the principle of fiscal neutrality. Whilst digital books made available on a physical support and those transmitted electronically have similar properties and meet the same consumer needs, Article 98(2) permits a reduced rate of VAT to be applied only to the supply of digital books on a physical support.21Consequently, the Trybunał Konstytucyjny (Constitutional Court) decided to stay proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Is point 6 of Annex III to Directive 2006/112 as amended invalid on the ground that, during the legislative procedure, the essential formal requirement of consultation with the European Parliament was not complied with?(2)Is Article 98(2) of Directive 2006/112/EC as amended, in conjunction with point 6 of Annex III to that directive, invalid on the ground that it infringes the principle of fiscal neutrality to the extent to which it excludes the application of reduced tax rates to electronic books and other electronic publications?’ Consideration of the questions referred Question 1 22By its first question, the national court asks, in essence, whether point 6 of Annex III to Directive 2006/112 as amended is invalid on the ground that the legislative procedure that led to its adoption was vitiated by infringement of an essential procedural requirement. Since the wording of point 6 of Annex III to Directive 2006/112 as amended differs from the text which was set out in the proposal for a directive on the basis of which the Parliament was consulted, the national court wonders whether the Parliament should have been consulted afresh.23In this instance, it should be noted that, in accordance with Article 93 EC, now Article 113 TFEU, which prescribes a special legislative procedure, the Parliament had to be consulted before Directive 2009/47 was adopted and, consequently, before the replacement by that directive of point 6 of Annex III to Directive 2006/112.24Due consultation of the Parliament in the cases provided for by the EC Treaty, now the FEU Treaty, constitutes an essential formal requirement disregard of which means that the measure concerned is void (judgment of 10 May 1995, Parliament v Council, C‑417/93, EU:C:1995:127, paragraph 9).25Effective participation of the Parliament in the legislative process, in accordance with the procedures laid down by the Treaty, indeed represents an essential factor in the institutional balance intended by the Treaty, since the Parliament’s function reflects the fundamental democratic principle that the people should take part in the exercise of power through the intermediary of a representative assembly (see, to that effect, judgments of 5 July 1995, Parliament v Council, C‑21/94, EU:C:1995:220, paragraph 17, and of 10 June 1997, Parliament v Council, C‑392/95, EU:C:1997:289, paragraph 14).26The obligation to consult the Parliament during the legislative procedure in the cases laid down by the Treaty means that the Parliament is consulted afresh whenever the text finally adopted, taken as a whole, differs in essence from the text on which the Parliament has already been consulted, except in cases where the amendments substantially correspond to a wish of the Parliament itself (see, to that effect, judgment of 5 October 1994, Germany v Council, C‑280/93, EU:C:1994:367, paragraph 38 and the case-law cited).27Accordingly, it is necessary to examine whether point 6 of Annex III to Directive 2006/112 as amended differs in essence from the text that was set out in the proposal for a directive on the basis of which the Parliament was consulted.28The proposal for a directive envisaged that point 6 of Annex III to Directive 2006/112 would henceforth mention, among the supplies of goods and services to which the reduced rates of VAT may be applied, the ‘supply, including on loan by libraries, of books (including brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts, as well as audio books, CD, CD-ROMs or any similar physical support that predominantly reproduce the same information content as printed books), newspapers and periodicals, other than material wholly or predominantly devoted to advertising’.29However, point 6 of Annex III to Directive 2006/112 as amended refers to the ‘supply, including on loan by libraries, of books on all physical means of support (including brochures, leaflets and similar printed matter, children’s picture, drawing or colouring books, music printed or in manuscript form, maps and hydrographic or similar charts), newspapers and periodicals, other than material wholly or predominantly devoted to advertising’.30It is thus apparent on comparing the respective wording of the proposal for a directive and of point 6 of Annex III to Directive 2006/112 as amended that point 6 differs from the proposal inasmuch as it does not mention, as physical means of support that can give rise to the application of a reduced rate of VAT, ‘audio books, CDs [and] CD-ROMs’, which are listed by the proposal, or expressly relate, unlike the proposal, to books ‘that predominantly reproduce the same information content as printed books’, but makes reference to the supply of books on ‘all physical means of support’.31Nonetheless, it cannot be concluded from those differences that point 6 of Annex III to Directive 2006/112 as amended differs in essence from the text that was set out in the proposal for a directive.32Given that that proposal indicated that it also covered books supplied on ‘any … physical support [similar]’ to printed books, audio books, CDs and CD-ROMs, the list in the proposal must be regarded as not being exhaustive, but as being intended to illustrate the fact that all feasible physical means of support were covered, in line with what the Council finally decided upon in point 6 of Annex III to Directive 2006/112 as amended.33It is true that point 6 of Annex III to Directive 2006/112 as amended does not expressly specify that, in order for a reduced rate of VAT to be applied, the physical supports concerned must predominantly reproduce the same information content as printed books. However, since the wording indicates that only ‘books’ are concerned, a term which, in its ordinary meaning, refers to a printed work, it follows that, in order to fall within the scope of that provision, the physical supports concerned must predominantly reproduce the same information content as printed books.34Consequently, as the Court found in paragraph 53 of the judgment of 5 March 2015, Commission v Luxembourg (C‑502/13, EU:C:2015:143), the text of point 6 of Annex III to Directive 2006/112 as amended is nothing other than a simplification of the drafting of the text which was set out in the proposal for a directive and the substance of which has been fully preserved.35Accordingly, the Council was not required to consult the Parliament afresh.36It follows from the foregoing that point 6 of Annex III to Directive 2006/112 as amended is not invalid on the ground that the legislative procedure that led to its adoption was vitiated by infringement of an essential procedural requirement. Question 2 37By its second question, the national court asks whether Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, is invalid on the ground that it infringes the principle of fiscal neutrality by precluding the application of the reduced rates of VAT to the supply of electronic books and other electronic publications. Preliminary remarks 38First, although the national court refers in the wording of its question to the principle of fiscal neutrality, it is apparent from the order for reference that it raises in essence the question of the validity of Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, in the light of the principle of equal treatment as set out in Article 20 of the Charter of Fundamental Rights of the European Union (‘the Charter’).39Secondly, whilst in the wording of its question the national court mentions, in addition to electronic books, ‘other electronic publications’, it is also apparent from the order for reference that the doubts expressed by the national court relate only to whether there is any unequal treatment by Directive 2006/112 as amended of the supply of digital books according to whether they are transmitted using a physical support or electronically.40Accordingly, the national court asks, in essence, whether Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, is invalid on the ground that, by ruling out any possibility for the Member States of applying a reduced rate of VAT to the supply of digital books electronically, that article infringes the principle of equal treatment as set out in Article 20 of the Charter. Findings of the Court 41It should be recalled at the outset that the Court has consistently held that the principle of equal treatment requires that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified (judgments of 12 November 2014, Guardian Industries and Guardian Europe v Commission, C‑580/12 P, EU:C:2014:2363, paragraph 51, and of 4 May 2016, Pillbox 38, C‑477/14, EU:C:2016:324, paragraph 35).– Treatment of comparable situations 42In accordance with settled case-law of the Court, the factors which distinguish different situations, and the question whether those situations are comparable, must be determined and assessed in the light of the subject matter of the provisions in question and of the aim pursued by them, whilst account must be taken for that purpose of the principles and objectives of the field in question (see, to that effect, judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraph 26 and the case-law cited).43In the present instance, the different treatment referred to by the national court results from it not being possible for the Member States to provide that a reduced rate of VAT is to be applied to the supply of digital books electronically, although the application of a reduced rate is permitted in the case of the supply of digital books on all physical means of support. Consequently, the factors which characterise those two situations, and the question whether the situations are comparable, must be determined and assessed in the light of the objectives pursued by the legislature when it permitted the Member States to apply a reduced rate of VAT to the supply of digital books on all physical means of support.44In that regard, it should be pointed out that the power of the Member States to apply a reduced rate of VAT to the supply of printed books was laid down for the first time by Council Directive 92/77/EEC of 19 October 1992 supplementing the common system of value added tax and amending Directive 77/388/EEC (approximation of VAT rates) (OJ 1992 L 316, p. 1). Article 1 of that directive inserted into the Sixth Directive Annex H relating to the list of supplies of goods and services which may be subject to reduced rates of VAT, point 6 of which was reproduced in point 6 of Annex III to Directive 2006/112, in the version before Directive 2009/47 entered into force. That power was extended by Directive 2009/47 to the supply of books on ‘all physical means of support’.45As the Advocate General has observed in point 56 of her Opinion, the objective underlying the application of a reduced rate of VAT to the supply of books consists in the promotion of reading, whether of literature, non-fiction, newspapers or periodicals.46Thus, by permitting the Member States to apply reduced rates of VAT to the supply of books on all physical means of support, Directive 2006/112 as amended must be regarded as pursuing such an objective.47That conclusion is, moreover, supported by the fact that point 6 of Annex III to Directive 2006/112 as amended rules out the possibility of applying a reduced rate of VAT to the supply of ‘material wholly or predominantly devoted to advertising’. A feature of such material is that it does not in any way pursue the objective referred to in paragraph 45 of this judgment.48That said, in order that such an objective may be achieved, what matters is that citizens of the Union can have access to the content of books effectively, and the manner in which the books are supplied does not play a decisive role in that regard.49Consequently, it must be found that, in the light of the objective pursued by Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, the supply of digital books on all physical means of support and the supply of digital books electronically amount to comparable situations.50That conclusion is not called into question by the fact that, in accordance with Article 14(1) of Directive 2006/112 as amended, the supply of a digital book on a physical support constitutes, in principle, a supply of goods whereas, by virtue of Articles 24(1) and 25 of that directive, the supply of a digital book electronically constitutes a supply of services. As the rules on VAT are intended, in principle, to tax the consumption of goods and the consumption of services in the same way, that different classification does not appear decisive in the light of the objective, noted in paragraph 45 of this judgment, that is pursued by Article 98(2) of that directive, read in conjunction with point 6 of Annex III thereto.51Consequently, since Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, has the effect of precluding the application of a reduced rate of VAT to the supply of digital books electronically although application of a reduced rate is permitted for the supply of digital books on all physical means of support, those provisions must be regarded as establishing a difference in treatment between two situations that are, however, comparable in the light of the objective pursued by the EU legislature.– Justification 52Where a difference in treatment between two comparable situations is found, the principle of equal treatment is not infringed in so far as that difference is duly justified (see, to that effect, judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraph 46).53That is the case, according to settled case-law of the Court, where the difference in treatment relates to a legally permitted objective pursued by the measure having the effect of giving rise to such a difference and is proportionate to that objective (see, to that effect, judgments of 17 October 2013, Schaible, C‑101/12, EU:C:2013:661, paragraph 77, and of 22 May 2014, Glatzel, C‑356/12, EU:C:2014:350, paragraph 43).54In that respect, it is understood that, when the EU legislature adopts a tax measure, it is called upon to make political, economic and social choices, and to rank divergent interests or to undertake complex assessments. Consequently, it should, in that context, be accorded a broad discretion, so that judicial review of compliance with the conditions set out in the previous paragraph of this judgment must be limited to review as to manifest error (see, to that effect, judgments of 10 December 2002, British American Tobacco (Investments) and Imperial Tobacco, C‑491/01, EU:C:2002:741, paragraph 123, and of 17 October 2013, Billerud Karlsborg and Billerud Skärblacka, C‑203/12, EU:C:2013:664, paragraph 35).55In the present instance, it should be noted that the difference in treatment found in paragraph 51 of this judgment results from Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, which precludes the application of a reduced rate of VAT to the supply of all electronic services and, consequently, to the supply of digital books electronically, unlike the supply of books — which may be digital — on all physical means of support.56It is apparent from the preparatory documents for Directive 2002/38 that the amendments proposed by the Commission constituted, as regards the taxation of electronically supplied services, a first step in implementing a new policy on VAT, intended to simplify and strengthen the VAT system in order to encourage legitimate commercial transactions within the internal market. Indeed, according to the preparatory documents, e-commerce offers considerable potential for creating wealth and employment in the European Union, and the provision of a clear and definite regulatory environment is an essential prerequisite for creating the climate of confidence in which business will invest and trade.57As the Council and the Commission explained in reply to a written question asked by the Court and at the hearing, the ruling out, in Article 98(2) of Directive 2006/112 as amended, of the application of a reduced rate of VAT to the supply of digital books electronically must be viewed as forming part of a specific VAT regime for e-commerce. Indeed, it is apparent from their explanations that it was considered necessary to make electronically supplied services subject to clear, simple and uniform rules in order that the VAT rate applicable to those services may be established with certainty and, thus, that the administration of VAT by taxable persons and national tax authorities is facilitated.58Doubt cannot reasonably be cast on the fact that such an objective is legally permitted.59Indeed, the principle of legal certainty, which underlies that objective, requires that EU rules enable those concerned to know unequivocally the extent of their rights and obligations so that they are in a position to order their affairs with the benefit of full information (see, to that effect, judgment of 15 July 2010, Commission v United Kingdom, C‑582/08, EU:C:2010:429, paragraph 49 and the case-law cited).60Furthermore, the Court has already acknowledged the legitimacy of the objective consisting in the laying down by a legislature of general rules which can be easily applied by economic operators and are easily verified by the competent national authorities (see, to that effect, judgment of 24 February 2015, Sopora, C‑512/13, EU:C:2015:108, paragraph 33).61As regards whether the measure set out in Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, is appropriate for achieving the objective pursued, as specified in paragraphs 56 and 57 of this judgment, it does not appear that the assessment which the EU legislature carried out exceeded the discretion that it enjoys.62By precluding the application of a reduced rate of VAT to electronically supplied services, the EU legislature spares taxable persons and national tax authorities from an obligation to examine, for each type of electronic service that is supplied, whether it falls within one of the categories of services that qualify for such a rate under Annex III to Directive 2006/112 as amended.63Thus, the measure at issue must be regarded as being appropriate for achieving the objective of establishing with certainty the VAT rate applicable to electronically supplied services and thus of facilitating the administration of VAT by taxable persons and national tax authorities.64So far as concerns the requirement, associated with the proportionality condition, that the measure chosen must be the least restrictive among the appropriate measures that may be envisaged and that the disadvantages caused must not be disproportionate to the objectives pursued, it should be noted that the EU legislature might possibly have separated the supply of digital books electronically from electronic services as a whole and, accordingly, have permitted the application of a reduced rate of VAT to those books.65However, such a solution would be liable to run counter to the objective pursued by the EU legislature relating to the need to remedy the lack of legal certainty resulting from the constant developments to which all electronic services are subject, for which reason the EU legislature excluded all of those services from the list of transactions qualifying for a reduced rate of VAT under Annex III to Directive 2006/112 as amended.66To accept that the Member States are able to apply a reduced rate of VAT to the supply of digital books electronically, as is permitted for the supply of such books on all physical means of support, would effectively compromise the overall coherence of the measure intended by the EU legislature, consisting in the exclusion of all electronic services from the possibility of a reduced rate of VAT being applied.67As to the option of extending the possibility of applying a reduced rate of VAT to all electronic services, it should be pointed out that the adoption of such a measure would have introduced, generally, unequal treatment between non-electronic services, to which a reduced rate of VAT does not, as a rule, apply, and electronic services.68Consequently, the EU legislature was able to take the view, within the bounds of the discretion that it enjoys, that neither of those two theoretically feasible measures was appropriate for achieving the various objectives pursued by it.69It should be added that it is apparent from Articles 4 and 5 of Directive 2002/38 and Article 6 of Council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112 as regards the place of supply of services (OJ 2008 L 44, p. 11) that the Council envisaged re-examining the specific taxation system for electronically supplied services, in the light of experience acquired. Moreover, in a communication to the European Parliament, the Council and the European Economic and Social Committee on an action plan on VAT (COM(2016) 148 final), the Commission announced its intention to consider the drawing up of a proposal for a directive amending Directive 2006/112 as amended.70Accordingly, the difference in treatment — resulting from Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto — between the supply of digital books electronically and the supply of books on all physical means of support must be regarded as duly justified.71It must, therefore, be held that Article 98(2) of Directive 2006/112 as amended, read in conjunction with point 6 of Annex III thereto, which has the effect of ruling out the possibility for the Member States of applying a reduced rate of VAT to the supply of digital books electronically, while permitting them to apply a reduced rate of VAT to the supply of digital books on all physical means of support, does not infringe the principle of equal treatment as set out in Article 20 of the Charter.72It follows from the foregoing considerations that examination of the questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of point 6 of Annex III to Directive 2006/112 as amended or of Article 98(2) of that directive, read in conjunction with point 6 of Annex III thereto. Costs 73Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Examination of the questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of point 6 of Annex III to Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2009/47/EC of 5 May 2009, or of Article 98(2) of that directive, read in conjunction with point 6 of Annex III thereto. [Signatures]( *1 ) * Language of the case: Polish | 3cd84-542b96e-4ad0 | EN |
The cost of a call to an after-sales telephone number must not exceed the cost of a standard call | 2 March 2017 ( 1 )‛Reference for a preliminary ruling — Consumer protection — Directive 2011/83/EU — Article 21 — Communication by telephone — Operation of a telephone line by a trader to enable consumers to contact him in relation to a contract concluded — Prohibition on applying a rate higher than the basic rate — Concept of ‘basic rate’’In Case C‑568/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Landgericht Stuttgart (Regional Court, Stuttgart (Germany)), made by decision of 15 October 2015, received at the Court on 5 November 2015, in the proceedings Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV v comtech GmbH, THE COURT (Seventh Chamber),composed of A. Prechal (Rapporteur), President of the Chamber, C. Toader and E. Jarašiūnas, Judges,Advocate General: M. Szpunar,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:—Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV, by M. Ross and M. Hammer, Rechtsanwälte,the Estonian Government, by K. Kraavi-Käerdi, acting as Agent,the Lithuanian Government, by D. Kriaučiūnas and K. Mickutė, acting as Agents,the Netherlands Government, by J. Langer and M. Bulterman, acting as Agents,the Finnish Government, by S. Hartikainen, acting as Agent,the European Commission, by D. Roussanov and S. Grünheid, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 10 November 2016,gives the following Judgment 1This reference for a preliminary ruling concerns the interpretation of Article 21 of Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ 2011 L 304, p. 64).2The reference was made in the context of a dispute between Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main eV, an association for combatting unfair commercial practices, and comtech GmbH, a German company selling electronic and electrical equipment, concerning the telephone call rate applied by that company for its after-sales service. Legal context EU law 3Article 1 of Directive 2011/83 defines its object as follows:‘The purpose of this Directive is, through the achievement of a high level of consumer protection, to contribute to the proper functioning of the internal market by approximating certain aspects of the laws, regulations and administrative provisions of the Member States concerning contracts concluded between consumers and traders.’4Article 6(1) of that directive, entitled ‘Information requirements for distance and off-premises contracts’, provides:‘Before the consumer is bound by a distance or off-premises contract, or any corresponding offer, the trader shall provide the consumer with the following information in a clear and comprehensible manner:…(f)the cost of using the means of distance communication for the conclusion of the contract where that cost is calculated other than at the basic rate;…’5Under the first paragraph of Article 13(1) of the directive:‘The trader shall reimburse all payments received from the consumer, including, if applicable, the costs of delivery without undue delay and in any event not later than 14 days from the day on which he is informed of the consumer’s decision to withdraw from the contract in accordance with Article 11.’6Article 19 of Directive 2011/83 provides:‘Member States shall prohibit traders from charging consumers, in respect of the use of a given means of payment, fees that exceed the cost borne by the trader for the use of such means.’7Article 21 of that directive, entitled ‘Communication by telephone’, is worded as follows:‘Member States shall ensure that where the trader operates a telephone line for the purpose of contacting him by telephone in relation to the contract concluded, the consumer, when contacting the trader is not bound to pay more than the basic rate.The first subparagraph shall be without prejudice to the right of telecommunication services providers to charge for such calls.’ German law 8Paragraph 312a of the Bürgerliches Gesetzbuch (Civil Code, ‘the BGB’), entitled ‘General obligations and principles applying to consumer contracts; limits to agreements on charges’, states:‘…(5)An agreement under which a consumer is obliged to pay a charge for contacting the trader for the purpose of answering questions or providing explanations in relation to a contract concluded between them, via a telephone line that the trader provides for such purposes, shall be ineffective if the charges agreed upon exceed the charges for the mere use of the telecommunications service. Where an agreement is ineffective under the first sentence, the consumer shall also not be obliged to pay charges for the call to the telecommunications service provider. The telecommunications service provider shall be entitled to claim the charges for the use merely of the telecommunications service as such from the trader who concluded the ineffective agreement with the consumer. The dispute in the main proceedings and the questions referred for a preliminary ruling 9On its website, comtech displays the telephone number of a support service, inter alia, for customers who have already concluded a sales contract and wish to obtain information or make a complaint. That telephone number begins with the prefix 0180, which is generally used in Germany for support services at a national rate. Call charges to such a ‘non-geographic’ number are higher than those for a standard call to a ‘geographic’ landline or mobile phone number. According to the order for reference, call charges to comtech’s number with the prefix 0180 are EUR 0.14 per minute from a landline telephone network and EUR 0.42 per minute from a mobile telephone network.10Zentrale zur Bekämpfung unlauteren Wettbewerbs Frankfurt am Main claims that the provision of a telephone helpline at a rate higher than that charged for standard calls is an unfair commercial practice contrary to Paragraph 312a(5) of the BGB. On that basis, it called on comtech to discontinue the practice at issue and brought an action against comtech before the Landgericht Stuttgart (Regional Court, Stuttgart, Germany).11Before that court, comtech claims that Paragraph 312a(5) of the BGB, read in the light of Article 21 of Directive 2011/83, stipulates that the trader in question cannot make a profit through a telephone helpline. Those provisions do not therefore preclude the rate for calls to a helpline from exceeding that for ‘standard calls’, thereby allowing the trader to off-set the cost incurred in providing such a helpline, providing that he does not derive a profit as a result.12The referring court states that, in order to rule on the dispute in the main proceedings, an interpretation is required of the concept of ‘charges for the mere use of the telecommunications service’ set out in Paragraph 312a(5) of the BGB. Since telephone helpline rates such as the one at issue in the main proceedings have been harmonised at European level under Article 21 of Directive 2011/83, that provision must also be interpreted. However, according to the referring court, that provision provides that the consumer is not bound to pay more than the basic rate for telephone calls following the conclusion of a contract.13According to that court, the German legislature’s objective was to prevent the trader from making a profit from the provision of a non-geographic helpline. Such an interpretation of Article 21 of Directive 2011/83, and thus of Paragraph 312a(5) of the BGB, would not preclude the consumer from paying more for a call to a non-geographic line than for a standard call, provided that the sums thereby received do not exceed the cost of providing such a line.14However, the referring court is uncertain as to whether a more restrictive interpretation of the concept of ‘basic rate’ than that stated in the previous paragraph should be adopted in order to ensure a higher level of consumer protection. If so, the absence of profit would not suffice in so far as calls to a line such as that at issue in the main proceedings are always capable of being more expensive than those to standard lines. The wording of Article 21 of the directive and its purpose support such an interpretation.15Under those circumstances, the Landgericht Stuttgart (Regional Court, Stuttgart) decided to stay its proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Is the first paragraph of Article 21 of Directive [2011/83] to be interpreted as meaning that, where a trader operates a telephone line for the purpose of consumers contacting the trader by telephone in relation to contracts concluded with the trader, a consumer contacting the trader by telephone must not incur higher charges than those that the consumer would incur for calling a standard (geographic) landline or mobile number?(2)Does the first paragraph of Article 21 of Directive [2011/83] preclude national legislation according to which, where a trader operates a shared-cost service on an 0180 number for the purpose of consumers contacting the trader by telephone in relation to contracts concluded with the trader, a consumer must pay that which the telecommunications service provider charges the consumer for the use of that telecommunications service, even where those charges exceed those which the consumer would incur for calling a standard (geographic) landline or mobile number?Does the first paragraph of Article 21 of Directive [2011/83] not preclude such national legislation where the telecommunications service provider does not pass on to the trader part of the charges that he receives from the consumer for contacting the trader on the 0180 number?’ Consideration of the questions referred 16By its questions, which it is appropriate to consider together, the referring court asks, in essence, whether the concept of ‘basic rate’, referred to in Article 21 of Directive 2011/83, must be interpreted as meaning that charges, for a call relating to a contract concluded with a trader, to a telephone helpline operated by the trader may not exceed call charges to a standard geographic landline or mobile telephone line, and if it is relevant, in that regard, whether or not the trader makes a profit through that telephone helpline.17Under the first paragraph of Article 21 of Directive 2011/83, the Member States are to ensure that where the trader operates a telephone line for the purpose of contacting him by telephone in relation to the contract concluded, the consumer, when contacting the trader, is not to be bound to pay more than the basic rate.18However, the concept of a ‘basic rate’, referred to in that article, is not defined by Directive 2011/83.19In those circumstances, the meaning and scope of that concept must be determined by considering its usual meaning in everyday language, while also taking into account the context in which it occurs and the purposes of the rules of which it is part (see, to that effect, judgment of 5 October 2016, TMD, C‑412/15, EU:C:2016:738, paragraph 26 and the case-law cited).20As regards its usual meaning, the concept of ‘basic rate’ suggests the rate set for a standard call. It must be ascertained whether the context and aim of Article 21 of Directive 2011/83 permit the finding that the concept is being used in that article in that ordinary sense of the term.21As regards the context in which that article occurs, the Court notes that the concept of ‘basic rate’ is also referred to in Article 6(1)(f) of the directive. That provision provides that the trader must inform the consumer if the cost of the means of distance communication for the conclusion of the contract is calculated other than at the basic rate.22Failing indications to the contrary, it follows from that provision that the basic rate referred to in that provision corresponds to the standard cost of an ordinary call that a consumer would expect to incur and for which a trader is not required to inform the consumer of its amount.23Even though Article 6 of Directive 2011/83 refers to the pre-contractual stage, the fact remains that that interpretation of the concept of ‘basic rate’ is of guidance for the interpretation of the same concept, referred to in Article 21 of that directive, relating to the post-contractual stage of the contract. It is important for the consumer to be able to use a telephone line made available by the trader and incur ordinary charges, a fortiori after the conclusion of the contract, so that he may assert his rights.24In addition, it appears from several articles in Directive 2011/83 that, in principle, it is not for the consumer to bear charges other than ordinary charges if he exercises rights provided for by that directive, and that potential additional costs are therefore to be borne by the trader.25Thus, Article 19 of that directive provides, in respect of the use of a given means of payment, that ‘Member States shall prohibit traders from charging consumers … fees that exceed the cost borne by the trader for the use of such means.’26Article 13(1) of the directive provides, in turn, that, where the consumer exercises his right of withdrawal, all payments made by the consumer, including the costs of delivery, are to be reimbursed to him by the trader. The Court has previously held, with regard to the right of withdrawal as provided for in Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts (OJ 1997 L 144, p. 19), which preceded Directive 2011/83, that, in principle, in the case of withdrawal by a consumer within the withdrawal period, the seller may not claim compensation from the consumer for the value of the use of the consumer goods acquired under a distance contract (see, to that effect, judgment of 3 September 2009, Messner, C‑489/07, EU:C:2009:502, paragraph 29). In addition, a trader is not permitted to charge the costs of delivering the goods to the consumer where the latter exercises his right of withdrawal (see, to that effect, judgment of 15 April 2010, Heinrich Heine, C‑511/08, EU:C:2010:189, paragraph 59).27Thus, it follows from the context in which Article 21 of Directive 2011/83 occurs that the concept of ‘basic rate’ refers to an ordinary rate for a telephone call at no additional cost for the consumer.28As the Advocate General stated in paragraph 32 of his Opinion, such an interpretation also mirrors the aim pursued by Directive 2011/83 of achieving a high level of consumer protection, as referred to in recitals 3 to 5 and 7 and in Article 1 of that directive. In addition, consumer protection is enshrined in EU policies by Article 169 TFEU and Article 38 of the Charter of Fundamental Rights of the European Union.29An interpretation of the concept of ‘basic rate’ to the effect that traders are permitted to charge rates higher than that of a standard call to a geographic landline or mobile telephone line would be liable to discourage consumers from using a telephone helpline in order to obtain information in relation to the contract concluded with the trader or from asserting their rights relating to, inter alia, a guarantee or withdrawal.30The fact that, under the second paragraph of Article 21 of Directive 2011/83, telephone service providers are permitted to charge consumers for telephone calls is irrelevant to the previous considerations, provided that the amounts charged do not exceed the ordinary charges which consumers would incur for a standard call.31It follows that a trader may charge a consumer only up to the cost of a standard telephone call. Thus, provided that that limit is respected, the fact that a trader may or not make a profit through a non-geographic helpline is irrelevant.32It follows from all the foregoing considerations that the answer to the questions referred is that the concept of ‘basic rate’, referred to in Article 21 of Directive 2011/83, must be interpreted as meaning that charges for a call, relating to a contract concluded with a trader, to a telephone helpline operated by the trader may not exceed the cost of a call to a standard geographic landline or mobile telephone line. Provided that that limit is respected, the fact that the relevant trader makes or does not make a profit through that telephone helpline is irrelevant. Costs 33Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Seventh Chamber) hereby rules: The concept of ‘basic rate’ referred to in Article 21 of Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council, must be interpreted as meaning that call charges relating to a contract concluded with a trader to a telephone helpline operated by the trader may not exceed the cost of a call to a standard geographic landline or mobile telephone line. Provided that that limit is respected, the fact that the relevant trader makes or does not make a profit through that telephone helpline is irrelevant. [Signatures]( 1 ) Language of the case: German. | 1d726-7ed9b48-4de5 | EN |
The General Court confirms the validity of anti-dumping and anti-subsidy measures for imports of solar panels from China | JUDGMENT OF THE GENERAL COURT (Fifth Chamber)28 February 2017 (*)(Dumping — Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China — Definitive anti-dumping duty — Undertakings — Action for annulment — Interest in bringing proceedings — Admissibility —Exporting country — Scope of the investigation — Sampling — Normal value — Definition of the product concerned — Time limit for the adoption of a decision on a market economy treatment claim — Temporal application of new provisions — Injury — Causal link)In Case T‑157/14, JingAo Solar Co. Ltd, established in Ningjin (China), and the other applicants whose names appear in the annex, represented initially by A. Willems, S. De Knop and J. Charles, and subsequently by A. Willems and S. De Knop, lawyers,applicants,v Council of the European Union, represented by B. Driessen, acting as Agent, B. O’Connor, Solicitor, and S. Gubel, lawyer, defendant,supported by European Commission, represented initially by J.-F. Brakeland, T. Maxian Rusche, and A. Stobiecka-Kuik, and subsequently by J.-F. Brakeland, T. Maxian Rusche, and A. Demeneix, acting as Agents, intervener,APPLICATION under Article 263 TFEU for the annulment of Council Implementing Regulation (EU) No 1238/2013 of 2 December 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China (OJ 2013 L 325, p. 1), in so far as it applies to the applicants. THE GENERAL COURT (Fifth Chamber),composed of A. Dittrich, President, J. Schwarcz (Rapporteur) and V. Tomljenović, Judges,Registrar: C. Heeren, Administrator,having regard to the written part of the procedure and further to the hearing on 9 June 2016,gives the following Judgment Background to the dispute 1 The applicants, JingAo Solar Co. Ltd and the other applicants whose names appear in the annex, are all companies in the JA Solar group. JingAo Solar, Shanghai JA Solar Technology Co. Ltd, Yangzhou JA Solar Technology Co. Ltd, Hefei JA Solar Technology Co. Ltd and Shanghai JA Solar PV Technology Co. Ltd are exporting producers of crystalline silicon photovoltaic cells and modules (‘cells’ and ‘modules’ respectively). JA Solar GmbH is their associated importer in the European Union. 2 On 6 September 2012, the European Commission published in the Official Journal of the European Union a notice of initiation of an anti-dumping proceeding concerning imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in the People’s Republic of China (OJ 2012 C 269, p. 5). 3 The JA Solar group cooperated in that proceeding. 4 On 20 September 2012, the applicants asked to be included in the sample under Article 17 of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (OJ 2009 L 343, p. 51, ‘the basic regulation’). 5 The sample selected by the Commission consisted of seven groups of companies, including the three cooperating exporters with the largest volume of exports of modules, the two cooperating exporters with the largest volume of exports of cells and the two cooperating exporters with the largest volume of exports of wafers. The applicants were selected as one of the two groups of exporting producers that had registered with the largest volume of exports of cells. 6 Alongside this, on 8 November 2012, the Commission published in the Official Journal of the European Union a notice of initiation of an anti-subsidy proceeding concerning imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in the People’s Republic of China (OJ 2012 C 340, p. 13). 7 On 12 November 2012, the applicants, which are exporting producers, submitted market economy treatment (MET) claims pursuant to Article 2(7)(b) of the basic regulation. 8 On 28 November 2012, the applicants submitted their replies to the anti-dumping questionnaire. 9 On 12 December 2012, Regulation (EU) No 1168/2012 of the European Parliament and of the Council amending the basic regulation (OJ 2012 L 344, p. 1) was adopted. 10 Under Article 1 of Regulation No 1168/2012:‘[The basic regulation] is hereby amended as follows:(1) Article 2(7) is amended as follows:(a) in the penultimate sentence of subparagraph (c) the words “shall be made within three months of the initiation of the investigation” are replaced by the words “shall normally be made within seven months of, but in any event not later than eight months after, the initiation of the investigation”;(b) the following subparagraph is added:“(d) When the Commission has limited its examination in accordance with Article 17, a determination pursuant to subparagraphs (b) and (c) of this paragraph shall be limited to the parties included in the examination and any producer that receives individual treatment pursuant to Article 17(3).”(2) in Article 9(6), the first sentence is replaced by the following:“When the Commission has limited its examination in accordance with Article 17, any anti-dumping duty applied to imports from exporters or producers which have made themselves known in accordance with Article 17 but were not included in the examination shall not exceed the weighted average margin of dumping established with respect to the parties in the sample, irrespective of whether the normal value for such parties is determined on the basis of Article 2(1) to (6) or subparagraph (a) of Article 2(7).”’ 11 Under Articles 2 and 3 of Regulation No 1168/2012, the regulation applies to all new and to all pending investigations as from 15 December 2012 and it enters into force on the day following that of its publication in the Official Journal of the European Union. Publication took place on 14 December 2012. 12 On 1 March 2013, the Commission adopted Regulation (EU) No 182/2013 making imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in or consigned from the People’s Republic of China subject to registration (OJ 2013 L 61, p. 2). 13 On 15 March 2013, the Commission informed the applicants that their MET claim had been rejected. 14 On 4 June 2013, the Commission adopted Regulation (EU) No 513/2013 imposing a provisional anti-dumping duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in or consigned from the People’s Republic of China and amending Regulation (EU) No 182/2013 (OJ 2013 L 152, p. 5, ‘the provisional regulation’). 15 On 2 August 2013, the Commission adopted Decision 2013/423/EU accepting an undertaking offered in connection with the anti-dumping proceeding concerning imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in or consigned from the People’s Republic of China (OJ 2013 L 209, p. 26). That undertaking was offered by a group of Chinese cooperating exporting producers listed in annex to that decision, together with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME). 16 On the same day, the Commission adopted Regulation (EU) No 748/2013 amending the provisional regulation (OJ 2013 L 209, p. 1) in order to take account of Decision 2013/423. In essence, subject to the fulfilment of certain conditions, Article 6 of that regulation, as amended, provides, inter alia, that imports declared for release into free circulation for products currently falling within CN code ex 3818 00 10 (TARIC codes 3818 00 10 11 and 3818 00 10 19) and CN code ex 8541 40 90 (TARIC codes 8541 40 90 21, 8541 40 90 29, 8541 40 90 31 and 8541 40 90 39) which are invoiced by companies from which undertakings have been accepted by the Commission and whose names are listed in the annex to Decision 2013/423, are to be exempt from the provisional anti-dumping duty imposed by Article 1 of the regulation. 17 On 27 August 2013, the Commission disclosed the essential facts and considerations on the basis of which it intended to propose the imposition of anti-dumping duties on imports of modules and key components (cells) originating in or consigned from China. 18 According to recital 4 of Commission Implementing Decision 2013/707/EU of 4 December 2013 confirming the acceptance of an undertaking offered in connection with the anti-dumping and anti-subsidy proceedings concerning imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China for the period of application of definitive measures (OJ 2013 L 325, p. 214), following the adoption of the provisional anti-dumping measures, the Commission continued the investigation of dumping, injury and EU interest, as well as the parallel anti-subsidy proceeding. Wafers were excluded from the scope of both investigations and hence from the scope of the definitive measures. 19 According to recitals 7 to 10 and Article 1 of that decision, following the definitive disclosure of the anti-dumping and anti-subsidy findings, the exporting producers together with the CCCME submitted a notification to amend their initial undertaking offer. The Commission accepted the terms of the undertaking with a view also to eliminating any injurious effects of the subsidised imports. In addition, an additional number of exporting producers asked to participate in that undertaking. Furthermore, the CCCME and the exporting producers asked to revise the undertaking to take account of the exclusion of wafers from the scope of the investigation. 20 According to recital 5 of Implementing Decision 2013/707, the anti-dumping investigation confirmed the provisional findings of injurious dumping. 21 By virtue of Article 1 of Implementing Decision 2013/707, read in the light of recital 26 thereof, the amended undertaking was accepted by the Commission. 22 The definitive findings of the investigation are set out in Council Implementing Regulation (EU) No 1238/2013 of 2 December 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China (OJ 2013 L 325, p. 1, ‘the contested regulation’). Article 1 imposes a specific anti-dumping duty of 51.5% on JingAo Solar, Shanghai JA Solar Technology, Yangzhou JA Solar Technology, Hefei JA Solar Technology and Shanghai JA Solar PV Technology. Subject to the fulfilment of certain conditions, Article 3 of that regulation provides, in essence, that imports declared for release into free circulation for the products currently falling within CN code ex 8541 40 90 (TARIC codes 8541 40 90 21, 8541 40 90 29, 8541 40 90 31 and 8541 40 90 39) which are invoiced by companies from which undertakings have been accepted by the Commission, and whose names are listed in the annex to Implementing Decision 2013/707, are to be exempt from the anti-dumping duty imposed by Article 1 of the regulation. 23 On 2 December 2013, the Council of the European Union also adopted Implementing Regulation (EU) No 1239/2013 imposing a definitive countervailing duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People’s Republic of China (OJ 2013 L 325, p. 66). 24 After the date of lodging of the application, on 15 November 2016, the Commission adopted Implementing Regulation (EU) No 2016/1998 of 15 November 2016 withdrawing the acceptance of the undertaking for five exporting producers under Implementing Decision 2013/707 (OJ 2016 L 308, p. 8). Pursuant to Article 1(d) of that regulation, acceptance of the undertaking, as regards the companies JingAo Solar, Shanghai JA Solar Technology, JA Solar Technology Yangzhou, Hefei JA Solar Technology et Shanghai JA Solar PV Technology, and their associated company in the European Union, jointly covered by the additional TARIC code B794, is withdrawn. That regulation entered into force the day after its publication in the Official Journal of the European Union, that is to say, 17 November 2016. Procedure and forms of order sought 25 By application lodged at the Court Registry on 28 February 2014, the applicants brought the present action. 26 By document lodged at the Court Registry on 19 May 2014, the Commission applied for leave to intervene in the present proceedings in support of the form of order sought by the Council. 27 By document lodged at the Court Registry on 20 May 2014, the Council requested that the present case be joined with Yingli Energy (China) and Others v Council (T‑160/14) and Canadian Solar Emea and Others v Council (T‑162/14), concerning actions for annulment of the contested regulation, and with JingAo Solar and Others v Council (T‑158/14), Yingli Energy (China) and Others v Council (T‑161/14), and Canadian Solar Emea and Others v Council (T‑163/14) concerning actions for annulment of Implementing Regulation No 1239/2013. 28 By decision of 10 July 2014, the President of the Fifth Chamber of the Court refused that request. 29 By order of 14 July 2014, the President of the Fifth Chamber of the Court granted the Commission leave to intervene. 30 On a proposal from the Judge-Rapporteur, the Court decided to open the oral part of the procedure. The parties presented oral argument and their replies to the questions put by the Court at the hearing on 9 June 2016. 31 The applicants claim that the Court should:– declare the action admissible;– annul the contested regulation as far as it applies to them;– order the Council to pay the costs. 32 The Council contends that the Court should:– dismiss the action as inadmissible;– in the alternative, dismiss the action as unfounded;– in the alternative, annul Article 1 of the contested regulation, in the event that the first or second plea in law is upheld, in so far as it imposes a definitive anti-dumping duty on imports of modules and cells consigned from China and exported by the applicants, and, in the event that the sixth plea in law is upheld, in so far as it imposes an anti-dumping duty in excess of what is necessary to eliminate the injury caused by the dumped imports to the EU industry;– order the applicants to pay the costs. 33 The Commission contends that the Court should:– order the applicants to pay the costs, including those of the intervener. Law The objections of inadmissibility raised by the institutions 34 In the first place, the Council and the Commission (together ‘the institutions’) claim, in essence, that the imposition of definitive anti-dumping duties by Article 1 of the contested regulation, on the one hand, and the undertaking offered by certain Chinese exporting producers and accepted by the Commission in Implementing Decision 2013/707, which is reflected in the exemption of imports of certain products carried out by those producers from the anti-dumping duty under Article 3 of the contested regulation, on the other hand, form a non-severable whole. 35 According to settled case-law, partial annulment of an EU legal act is possible only if the element the annulment of which is sought may be severed from the remainder of the act. The requirement of severability, the test for which is objective, is not satisfied in the case where the partial annulment of an act would have the effect of altering its substance (judgments of 24 May 2005, France v Parliament and Council, C‑244/03, EU:C:2005:299, paragraphs 12 and 13, and of 6 December 2012, Commission v Verhuizingen Coppens, C‑441/11 P, EU:C:2012:778, paragraph 38). 36 The EU institutions maintain that they took the undertaking into account in their analysis leading to the contested regulation. In order to achieve the result that was sought by the group of exporting producers, including the applicants, when offering the undertaking, the institutions had to combine the decision relating to the undertaking — which includes a minimum import price (‘the MIP’) for those imports that fall within the ‘annual level’ and consent for payment of definitive duties for imports that exceed that level — and the contested regulation. By offering an undertaking, the applicants thus accepted that injury had been caused to the EU industry by their dumped imports and that it was in the interest of the European Union to take measures. 37 In the second place, the acceptance of that undertaking offer by the combination of the decision relating to the undertaking and the contested regulation is what the applicants had sought in the administrative procedure. Relying on case-law (order of 28 January 2004, Netherlands v Commission, C‑164/02, EU:C:2004:54, paragraphs 18 to 25; judgments of 17 September 1992, NBV and NVB v Commission, T‑138/89, EU:T:1992:95, paragraphs 30 to 35; of 22 March 2000, Coca-Cola v Commission, T‑125/97 and T‑127/97, EU:T:2000:84, paragraphs 77 to 109; of 30 January 2002, Nuove Industrie Molisane v Commission, T‑212/00, EU:T:2002:21, and of 14 April 2005, Sniace v Commission, T‑141/03, EU:T:2005:129 ), the institutions maintain that the applicants do not have an interest in challenging acts whose adoption they sought. 38 In the third place, if the application had sought the annulment of the contested regulation as a whole, it would be inadmissible, in so far as it does not contain any plea or argument contesting the undertaking and the minimum import price referred to in Article 3 of the contested regulation. Accordingly, the application prevents the Council from knowing the grounds on which those articles are challenged, thus preventing the Council from defending itself. 39 In the fourth place, according to the Commission, the annual level of imports of the product concerned was not reached either in 2013, 2014, or 2015. Therefore, the applicants have not concluded a single import transaction that would be subject to the definitive duties. For that reason, the Commission fails to see the interest of the applicants in having the contested regulation annulled. 40 The applicants dispute the institutions’ arguments. 41 It should first be borne in mind that, since the admissibility of an action must be assessed at the time when it is brought, that is to say when the application is lodged (see order of 14 February 2012, Grasso v Commission, T‑319/08, not published, EU:T:2012:71, paragraph 16 and the case-law cited), withdrawal of the acceptance of an undertaking under Regulation No 2016/1998 after the application has been lodged cannot affect the admissibility of the present action. 42 In that regard, first, the acceptance of the offer of an undertaking neither affects the admissibility of an action brought against an act imposing an anti-dumping duty nor the assessment of the grounds relied on in support of that application, since by accepting an undertaking proposed by an interested party, the institutions merely changed the type of definitive remedy to be adopted, while the reasons for adopting a remedy in the first place remain unaffected. It follows from recital 14, Article 8(1) and (6) and Article 9(4) of the basic regulation that acceptance of an undertaking offered by exporting producers and anti-dumping duties are two forms of definitive corrective measures which presuppose a positive conclusion as regards the existence of dumping and injury, as in the present case. That conclusion is consistent with the wording of the contested regulation itself, section H of which addresses undertakings under the heading ‘Form of the measures’. 43 Moreover, the admissibility of actions against regulations imposing definitive duties brought by interested parties whose undertaking had been accepted was, implicitly but necessarily, upheld in the judgment of 14 March 2007, Aluminium Silicon Mill Products v Council (T‑107/04, EU:T:2007:85) delivered in an action brought by parties which had entered into precisely the same type of undertaking as that in question, and in the judgments of 30 April 2013, Alumina v Council (T‑304/11, EU:T:2013:224, paragraph 11) and of 1 October 2014, Council v Alumina (C‑393/13 P, EU:C:2014:2245). The conditions for the admissibility of an action concern an absolute bar to proceeding with the action, which the Court must, if need be, consider of its own motion (see order of 6 October 2015, GEA Group v OHIM (engineering for a better world), T‑545/14, EU:T:2015:789, paragraph 14 and the case-law cited). Neither the General Court nor the Court of Justice found, on account of the undertaking or type of undertaking binding the applicants in those cases, that the actions for annulment they brought against Council Regulation (EC) No 2229/2003 of 22 December 2003 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of silicon originating [in] Russia (OJ 2003 L 339, p. 3) and Council Implementing Regulation (EU) No 464/2011 of 11 May 2011 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of zeolite A powder originating in Bosnia and Herzegovina (OJ 2011 L 125, p. 1) respectively were inadmissible. 44 In so far as exporting producers wish to dispute findings concerning the existence of dumping and injury contained in the regulation imposing definitive duties, the EU institutions cannot rely on the definitive form of the measure, which they adopted themselves, in order to exempt that regulation from judicial review. 45 The fact that the undertaking in question includes, in addition to the MIP, an annual limit above which anti-dumping duties become payable, and the parties concerned are unable to choose for themselves whether to sell the product concerned in accordance with the MIP or whether to set the price freely while paying a duty, is not capable of calling that analysis into question. It is merely a particular form of definitive remedy whose protective effect on the EU industry must be equivalent to the anti-dumping duties. That fact cannot affect the admissibility of an action for annulment of the contested regulation. As regards the institutions’ view that acceptance of that type of undertaking also requires the adoption of a definitive regulation imposing anti-dumping duties, it is sufficient to note that that was precisely the situation in the cases giving rise to the judgments of 14 March 2007, Aluminium Silicon Mill Products v Council (T‑107/04, EU:T:2007:85), of 30 April 2013, Alumina v Council (T‑304/11, EU:T:2013:224, paragraph 11) and of 1 October 2014, Council v Alumina (C‑393/13 P, EU:C:2014:2245), and it did not have any effect on the admissibility of the action. 46 Moreover, the applicants have sought annulment of that regulation in its entirety, in so far as it applies to them. In that regard, an error capable of invalidating the assessments made by the institutions leading to the adoption of Article 1 of the contested regulation would alter the very substance of that regulation. Article 3 of the contested regulation would automatically lapse, in so far as it sets out an exemption from the payment of the anti-dumping duties established by virtue of Article 1 of that regulation. It follows, also from point 9.1 of the undertaking offer, that that undertaking is only valid while the contested regulation is in force. 47 It is also incorrect to maintain, as the Commission does, that by seeking annulment of the contested regulation, the applicants are in fact seeking annulment of a measure whose adoption they requested. It is obvious that the applicants did not wish to be subject to the definitive measures laid down in the basic regulation, whether relating to anti-dumping duties or the application of a minimum price by virtue of an undertaking. Such measures hinder the economic freedom of the applicants. In particular, the companies would not be able to sell the product concerned on the EU market below a certain price and would have to fulfil many administrative requirements. Accordingly, the undertaking offer merely expressed a preference for one type of those definitive measures, in the event that the conditions for adopting those measures were fulfilled. 48 Finally, as regards the Commission’s argument concerning the applicants’ interest in bringing proceedings (see paragraph 39 above), it must be noted, as the applicants correctly claim, although subject to the Court’s findings in respect of the first three pleas in law (see paragraphs 75 and 84 below), that their interest in bringing proceedings in the light of the form of order sought in the application consists, in any event, of the fact that in the event of annulment of the contested regulation — in so far as it concerns the categories of products exported by the applicants during the investigation period and at the time of lodging of the application — all the definitive measures adopted by the Council would have no legal basis, and consequently the applicants would no longer be required to pay any anti-dumping duties on products not covered by the undertaking or exceeding the annual level or to adhere to the minimum price set out in the undertaking (see paragraph 46 above), which would be capable of boosting the competitiveness of their products on the EU market. 49 It follows that the objection of inadmissibility raised by the institutions must be dismissed. Substance 50 In support of their action, the applicants raise six pleas in law, alleging, first, infringement of Article 5(10) and (11) of the basic regulation, secondly, infringement of Articles 1 and 17 of the basic regulation, thirdly, infringement of Article 2 of the basic regulation, fourthly, infringement of Article 1(4) of the basic regulation, fifthly, infringement of Article 2(7)(c) of the basic regulation, and, sixthly, infringement of Article 3 and Article 9(4) of the basic regulation. The first and second pleas in law, alleging infringement of Article 1(1), Article 5(10) and (11) and Article 17 of the basic regulation 51 The applicants claim that anti-dumping duties were imposed in respect of cells originating in third countries but shipped from China, modules originating in third countries but consigned from China and modules originating in China but consigned from third countries, without their being investigated and even without the institutions selecting a representative sample of those products and, as far as the first two categories of those products are concerned, without being referred to in the notice of initiation. They maintain, in essence, that anti-dumping duties can be imposed only on the import of products which are explicitly identified in the notice of initiation and which have been investigated. The initiation of an anti-dumping investigation is conditional upon the publication of a notice of initiation, which is intended to inform interested parties of their procedural rights and of the scope of the investigation by reference to the targeted product types and countries. Without that information, interested parties are not given the opportunity to cooperate in the investigation, which leads the institutions to rely on partial evidence to reach their findings of dumping and injury. 52 In the present case, the applicants submit that the notice of initiation of the procedure leading to the adoption of the contested regulation referred exclusively to imports of modules and key components originating in China. However, the institutions first registered and then imposed anti-dumping measures on imports of modules and key components both originating in and consigned from China. 53 The applicants claim, in the first place, that a full reading of point 5 of the notice of initiation shows that at that stage the institutions’ intention was not to investigate the product concerned consigned from China but merely to address the origin rules applicable to modules and key components. This interpretation is confirmed by (i) the reasoning contained in recital 275 of the provisional regulation, but not maintained in the contested regulation, and (ii) the fact that the institutions ultimately defined specific origin rules for modules in Commission Implementing Regulation (EU) No 1357/2013 of 17 December 2013 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ 2013 L 341, p. 47). Consequently, contrary to what the institutions claim, exporting producers shipping goods from China were informed that special origin rules could be adopted for modules and key components but they were not given the opportunity to cooperate in the investigation. 54 In the second place, the applicants submit that Annex A to the notice of initiation limited its scope to modules and key components originating in China since, in accordance with that annex, exporting producers must indicate the turnover for sales of modules and key components ‘as defined in the notice of initiation’, which explicitly refers to modules and key components originating in China. Therefore, only exporting producers of modules and key components originating in China were requested to declare information in Annex A to the notice of initiation. 55 In the third place, the applicants claim that Annex A concerned only exporting producers of modules and key components originating in China. Thus, with reference to the judgments of 12 May 1989, Continentale Produkten-Gesellschaft (246/87, EU:C:1989:194, paragraph 12); of 11 July 1990, Sermes (C‑323/88, EU:C:1990:299, paragraph 29 et seq.), and of 30 March 2000, Miwon v Council (T‑51/96, EU:T:2000:92, paragraph 52), the applicants assert that the sample thus selected could not be representative of exporting producers of both modules and key components originating in and consigned from China, since the sample’s representativeness must be assessed on the date it is established. It is on the basis of the data provided by the sampled exporting producers, and the resulting findings of dumping, that the institutions applied both provisional (recital 272 of the provisional regulation) and definitive (recital 416 of the contested regulation) anti-dumping measures on imports of modules and components originating in or consigned from China. It is also clear from recital 416 that all individual company anti-dumping duty rates, on the basis of which the residual duty rate is defined for cooperating companies not included in the sample, are exclusively applicable to imports of products originating in China and produced by the sampled exporting producers. 56 In the fourth place, the scope of the investigation was defined by the notice of initiation and the fact that the questionnaire designated China as ‘country concerned’ and not ‘country of origin’ is of no relevance, contrary to the statement made in recital 54 of the contested regulation. The anti-dumping questionnaire was provided only to the sampled exporting producers. In addition, it is standard practice for the institutions to refer to the country of origin targeted by an anti-dumping investigation as the ‘country concerned’ in the anti-dumping questionnaires for exporting producers. 57 In the fifth place, after noting that, under the non-preferential origin rules, the place of production of cells determines their customs origin and that the customs origin of modules is established by reference to the origin of the majority of their component cells, the applicants claim that the investigation conducted by the Commission did not cover cells originating in third countries but consigned from China, modules consigned from China but originating in third countries and modules consigned from third countries but originating in China. Nor were those products represented in the sample. 58 The Commission did not even advise exporting producers, representative organisations and governments in other countries of the initiation of this investigation. The investigation was thus limited to modules and key components originating in and consigned from China, as can also be seen from recital 416 of the contested regulation. 59 Lastly, the applicants maintain that if these two pleas in law were considered to be well founded, the contested regulation would have to be annulled in its entirety. 60 The institutions dispute the applicants’ arguments. 61 First of all, it is necessary to bear in mind the rules for determining the origin and provenance of the goods concerned during the investigation. As regards cells, it is the place of their manufacture that determined their customs origin. The customs origin of the majority of the cells, in turn, determined the customs origin of the modules. 62 That rule, based on the application of the general rule that goods whose production involved more than one country are to be deemed to originate in the country where they underwent their last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture, laid down in Article 24 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), as amended, was given specific expression, in the field of the product concerned, in Implementing Regulation No 1357/2013, adopted after the adoption of the contested regulation (see paragraph 53 above). 63 Therefore, if cells are made in China and shipped to the European Union from China, it is a case of an import both originating in and consigned from China. If cells are produced in a third country, such as Malaysia, but exported to the European Union from China, such products are of Malaysian origin but consigned from China. The same is true where such a cell is subject in China to non-substantial processing or working within the meaning of Article 24 of Regulation No 2913/92, as amended. As regards modules comprising a majority of cells originating in China and shipped to the European Union from China, this is a case of a product which both originates in and is consigned from China. Modules manufactured (or assembled) in China, but in which the majority of cells are from a third country, are considered to be products originating in a third country, but consigned from China. Finally, a module is of Chinese origin, but is consigned from a third country, if the majority of the cells from which it is composed originate in China, but it was assembled in a third country. 64 In that regard, it is important to ascertain, as the Council requests, whether the applicants are entitled to claim that, first, the notice of initiation did not announce the initiation of an investigation with regard to the product concerned consigned from China, but originating in a third country, and, secondly, the product concerned consigned from China, but originating in a third country, and the modules of Chinese origin, but consigned from a third country, were subject to an anti-dumping duty, even though the investigation was not carried out with regard to them. The admissibility of those grounds should therefore be examined (see, to that effect, judgment of 15 March 1973, Marcato v Commission, 37/72, EU:C:1973:33, paragraphs 7 and 8). 65 In that regard, according to settled case law concerning an interest in bringing proceedings, an action for annulment brought by a natural or legal person is admissible only in so far as that person has an interest in having the contested act annulled. Such an interest requires that the annulment of that act must be capable, in itself, of having legal consequences and that the action may therefore, through its outcome, procure an advantage to the party which brought it (see judgment of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraph 55 and the case-law cited). 66 An applicant’s interest in bringing proceedings must be vested and current. It may not concern a future and hypothetical situation (see judgment of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraph 56 and the case-law cited). 67 That interest must, in the light of the purpose of the action, exist at the stage of lodging the action, failing which the action will be inadmissible, and continue until the final decision, failing which there will be no need to adjudicate (see judgment of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraph 57 and the case-law cited). 68 The applicant must prove that he has an interest bringing proceedings, which is an essential and fundamental prerequisite for any such proceedings. In particular, in order for an action for annulment of an act, submitted by a natural or legal person, to be admissible, the applicant must justify in a relevant manner his interest in the annulment of that act (see judgment of 4 June 2015, Andechser Molkerei Scheitz v Commission, C‑682/13 P, not published, EU:C:2015:356, paragraphs 27 and 28 and the case-law cited; see, to that effect, judgment of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraph 58 and the case-law cited). 69 By analogy, the same is true of an interest in raising a plea in law. 70 First, the applicants have not indicated anywhere in their pleadings what interest they might derive from the potential annulment of the contested regulation on the basis of the first two pleas in law. It is not apparent from those pleadings that, during the investigation and at the time when the action was lodged, they were producing and exporting to the European Union, or importing into the European Union, the product concerned originating in a third country, but consigned from China, or the modules originating in China, but consigned from a third country. Nor do those pleadings refer to any document in the annex which would be such as to demonstrate such a circumstance. 71 When questioned at the hearing, the applicants submitted that they were indeed producing and exporting to the European Union the product concerned originating in a third country, but consigned from China, and modules originating in China but consigned from a third country (see paragraph 63 above). However, they were not able to identify in their pleadings or in the annexes thereto the slightest evidence to that effect. They also acknowledged that they had not expressly specified in the application that they exported the two categories of the product concerned in question to the European Union. Accordingly, they have not proved their interest in challenging the establishment of an anti-dumping duty on imports of those categories of the product concerned. Therefore, the applicants have not in any way justified their interest in making an application to that effect, even if the burden of proof lay with them (see paragraph 68 above). 72 Consequently, the applicants have not demonstrated that they have an interest in claiming that, first, the notice of initiation did not announce the initiation of an investigation with regard to the product concerned consigned from China but originating in a third country and that, secondly, the product concerned consigned from China, but originating in a third country, and the modules of Chinese origin, but consigned from a third country, were subject to an anti-dumping duty, even though the investigation was not carried out with regard to them. 73 In any event, the applicants have provided no evidence at all before the Court that they duly drew the institutions’ attention during the administrative procedure to the fact that they were producing and exporting to the European Union, or importing into the European Union, the product concerned originating in a third country, but consigned from China, and modules originating in China, but consigned from a third country, during the investigation period and at the time when the application was lodged. Although the applicants claim, in essence, that they correctly informed the institutions in the light of the wording of the notice of initiation, it must be noted that point 5 of that notice states that companies which ship the product concerned from China but consider that part or even all of those exports do not have their customs origin in China are invited to come forward in the investigation and to furnish all relevant information, and that the origin of the product under investigation exported from the country concerned will be examined in the light of that and other information gathered in this investigation. That assessment is an integral part of the investigation. 74 Secondly, the applicants’ arguments seeking, in essence, to justify their interest in raising those two pleas in law by the fact that, in the future, they might export both categories in question of the product concerned to the European Union must be rejected, on the basis of the case-law cited in paragraphs 66 and 67 above, as referring to a hypothetical situation. 75 The first and second pleas in law must therefore be rejected as inadmissible. The third plea in law, alleging infringement of Article 2 of the basic regulation 76 By their third plea in law, the applicants assert, in essence, that the contested regulation was adopted in breach of Article 2 of the basic regulation in so far as it imposes anti-dumping measures calculated on the basis of a non-market economy methodology on products from market economies. 77 The basic regulation explicitly limits, in Article 2(7), recourse to the methodology for non-market economy countries to goods produced in those countries. For all other imports, the normal value must be calculated in accordance with the rules set out in Article 2(1) to (6) of the basic regulation. 78 The institutions calculated dumping margins only for cells and modules originating in and consigned from China. Thus, they did not calculate separate dumping margins for cells originating in third countries but consigned from China, modules originating in third countries but produced in China or modules originating in China but produced in third countries. Accordingly, the contested regulation applied the non-market economy methodology to calculate the normal value of products originating in China but produced in market economy countries. 79 If the institutions were to argue that the country of origin, rather than the country of production, defines the methodology to be used for calculating the normal value, the contested regulation would still have been adopted in breach of the basic regulation since it imposes anti-dumping measures on modules and cells that originate in market economy countries but are consigned from China, based on a normal value that was calculated using a non-market economy methodology. 80 The applicants assert, in that regard, that if the institutions choose to rely on the prices of an intermediate country rather than on those of the country of origin, they must do so for all the imports concerned by the investigation, which is uncontroversial and confirmed by the Commission’s consistent past practice. 81 The institutions dispute the applicants’ arguments. 82 It is common ground between the parties that the institutions used only the methodology provided for in Article 2(7)(a) of the basic regulation in order to establish the normal value for all the categories of the product concerned. Thus, they relied on the prices in a third analogous market economy country, namely India. 83 Nevertheless, it must, first of all, be ascertained whether the applicants are entitled to complain that the institutions did not calculate separate dumping margins for cells originating in third countries but consigned from China, modules originating in third countries, but consigned from China, or modules originating in China but produced in third countries. 84 For the reasons set out in paragraphs 64 to 74 above, it is necessary to consider that the applicants are not entitled to rely on that third plea in law. 85 Moreover, the applicants submit, in essence, that the institutions can make use of data from an analogous market economy country only in order to replace data from countries of production with no market economy. They also claim that if the institutions choose to rely on the prices of an intermediate country rather than on those of the country of origin, they must do the same for all the imports concerned by the investigation. 86 In that regard, in accordance with Article 1(2) of the basic regulation, a product is regarded as dumped if its export price to the European Union is less than a comparable price for the like product, in the ordinary course of trade, as established for the exporting country. Article 1(3) allows not only the country of origin but also an intermediate country to be regarded as the exporting country, except where, for example, the products are transhipped through that country, or the products concerned are not produced in that country, or there is no comparable price for them in that country. The intermediate country must therefore be a place where non-substantial processing or working within the meaning of Article 24 of Regulation No 2913/92, as amended, is carried out, that is to say an activity which does not confer origin. 87 In order to ensure that Article 1(3) of the basic regulation has practical effect, it is necessary to interpret Article 2(7)(a) of that regulation, which provides, inter alia, that in the case of imports from non-market economy countries, normal value is to be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including the European Union, in the light of that provision. 88 Whether the institutions may have recourse to a market-economy third country in order to determine the normal value of the product concerned in the exporting country thus depends on whether the exporting country as so established has no market economy. 89 By using, in Article 2(7)(a) of the basic regulation, the expression ‘in the case of imports from non-market economy countries’, the legislature did not intend to limit the use of data of market-economy third countries to countries where the latest, even non-substantial, processing or working took place, before export to the European Union, which the applicants appear to refer to under the term ‘country of manufacture’, namely the country of origin. By that expression, its intention was to refer to the ‘exporting country’, in accordance with Article 1(2) and (3) of the basic regulation. 90 That conclusion is borne out by recital 6 of the basic regulation, according to which when determining normal value for non-market economy countries, it appears prudent to set out rules for choosing the appropriate market-economy third country to be used for such purpose. That recital clearly refers to the country referred to in Article 1(2) and (3) of the basic regulation, namely the exporting country, whose normal value must be determined using the data of a market-economy third country. 91 Contrary to the applicants’ claim, it is not apparent from Article 1(3) of the basic regulation that the exporting country must be defined in the same way for all categories of the product concerned, irrespective of their origin. If the legislature had wished to lay down such a rule, it would have clearly stated it. In the absence of such a manifestation of its intention, the institutions must be entitled to a wide margin of discretion when determining the normal value (see, to that effect, judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraph 41 and the case-law cited). 92 It is not therefore contrary to Article 1(3) of the basic regulation to regard, first, — for cells and modules originating in and consigned from China and for modules originating in China but consigned from third countries — the exporting country as the country of origin, regardless of whether non-substantial processing or working took place in a third country from which the product was shipped to the European Union, and, secondly, the intermediate country as the exporting country for modules consigned from China but originating in a third country. 93 The institutions’ choice may be justified by their objective of examining the existence of potential dumping practices in China, and not in another country, which also falls within the scope of their broad discretion. 94 That finding cannot be called into question by the other arguments raised by the applicants. 95 First, the fact that Article 2(7)(c) of the basic regulation is addressed to producers does not prove the applicants’ claims in any way. A producer who wishes to show that he operates under market economy conditions may be established both in the country of origin and in an intermediate country. In the light of Article 1(3) of the basic regulation, this may be a producer which only carries out non-substantial processing or working. 96 Secondly, the applicants cannot successfully rely on the case-law of the Dispute Settlement Body of the World Trade Organization (WTO) relating to the second additional provision of Article VI(1) of the General Agreement on Tariffs and Trade (GATT), which constitutes, in the context of the WTO, the provision authorising recourse to the methodology corresponding to a non-market economy. It follows from the judgment of 16 July 2015, Commission v Rusal Armenal (C‑21/14 P, EU:C:2015:494, paragraphs 48 to 53) that Article 2(7) of the basic regulation is the expression of the EU legislature’s intention to adopt in that sphere an approach specific to the EU legal order. As is apparent from the preamble to Council Regulation (EC) No 2238/2000 of 9 October 2000 amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community (OJ 2000 L 257, p. 2), the rules laid down in Article 2(7) of the basic regulation and applicable to imports from non-market economy countries which are members of the WTO are based on the emergence, in those countries, following the economic reforms adopted, of firms for which market-economy conditions prevail. In so far as the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (GATT) (OJ 1994 L 336, p. 103) (‘the anti-dumping agreement), which appears in Annex 1A to the Agreement establishing the WTO (OJ 1994 L 336, p. 3), contains no specific rules relating to such a category of countries, a correlation cannot be established between, on the one hand, the rules in Article 2(7) of the basic regulation directed at the imports from non-market economy WTO member countries and, on the other, the rules set out in Article 2 of the anti-dumping agreement. It follows that that provision of the basic regulation cannot be considered to be a measure intended to ensure the implementation in the EU legal order of a particular obligation assumed in the context of the WTO. Article 2.7 of the anti-dumping agreement, read in conjunction with the second supplementary provision to paragraph 1 of Article VI of GATT, in Annex I thereto, to which Article 2.7 refers, cannot call such a finding into question. In addition to the fact that that second supplementary provision does not lay down any specific rule governing the calculation of normal value, it is directed only at cases where a country has a complete or substantially complete monopoly of its trade and where all domestic prices are fixed by the State. Nor is the finding called in question by the fact that recital 5 of the basic regulation states that the rules of the anti-dumping agreement should be brought into EU legislation ‘as far as possible’. That expression must be understood as meaning that, even if the EU legislature intended to take into account the rules of the anti-dumping agreement when adopting the basic regulation, it did not, however, show the intention of transposing all those rules in that regulation. The conclusion that the purpose of Article 2(7) of the basic regulation is to implement the particular obligations created by Article 2 of the anti-dumping agreement cannot therefore in any event rely in isolation on the wording of recital 5 of the basic regulation. In such circumstances, it must be held that the EU legislature exercised its regulatory competence, as regards the calculation of normal value in respect of imports from non-market economy countries which are members of the WTO, by taking an approach specific to the EU legal order and, therefore, it cannot be established that it was the EU legislature’s intention, by the adoption of Article 2(7) of the basic regulation, to implement the particular obligations created by Article 2 of the anti-dumping agreement. 97 It follows that the third plea in law must be rejected. The fourth plea in law, alleging infringement of Article 1(4) of the basic regulation 98 According to the applicants, the anti-dumping investigation may cover only one product or one group of closely resembling products. In the present case, the institutions did not regard cells and modules as a single product. 99 The applicants claim that case-law has defined a set of factors that determine whether different product types can be considered to form one single like product, in particular the physical, technical and chemical characteristics of the products; their end use; their interchangeability; the consumer perception; the distribution channels; and their manufacturing processes and costs of production) (judgments of 13 September 2010, Whirlpool Europe v Council, T‑314/06, EU:T:2010:390, paragraph 138; of 17 December 2010 in EWRIA and Others v Commission, T‑369/08, EU:T:2010:549, paragraph 82, and of 10 October 2012 in Gem-Year and Jinn-Well Auto-Parts (Zhejiang) v Council, T‑172/09, not published, EU:T:2012:532, paragraph 59). 100 According to the Court’s case law, a claim that the product concerned is ill defined must be based on arguments which show that either the institutions erred in their assessment with regard to the factors they held to be relevant or that the application of other more relevant factors required that the definition of the product concerned be restricted (judgment of 13 September 2010, Whirlpool Europe v Council, T‑314/06, EU:T:2010:390, paragraph 141). 101 The applicants observe in this regard that although the institutions claim that cells and modules form one single product, it is clear from recitals 50 to 98 of the provisional regulation and from recitals 76 to 216 of the contested regulation that they conducted separate standing, dumping and injury analyses for modules and cells. In addition, while the average sales price of a cell in the European Union ranges from EUR 0.95 to EUR 2.37, the average sales price of a module ranges from EUR 103 to EUR 361. 102 Furthermore, the institutions manifestly erred in their assessment with regard to the factors they held to be relevant in determining the product concerned. Contrary to the statements made by the contested regulation in recitals 32 to 34, 36, 37, 45 and 48, cells and modules do not share the same basic physical, technical and chemical characteristics, namely the ability to generate electricity from sunlight, or the same end use, namely potential sale for integration into solar photovoltaic systems. 103 First, with regard to physical characteristics, the applicants submit that cells and modules differ in their size, weight, thickness, mass, density or colour. 104 Secondly, the main chemical component of cells, namely polysilicon, accounts for a mere 20% of a module’s cost structure. The applicants claim that it is apparent from the institutions’ practice in that field that a common raw material is irrelevant in determining whether different products share the same physical, chemical, and technical characteristics. 105 Thirdly, according to the applicants, the principal technical characteristic of a module is to generate and transmit electricity, while a cell cannot transmit electricity. In any event, whether cells and modules both have the ability to generate electricity from sunlight cannot be deemed a decisive factor in the determination of the product concerned since the institutions initially excluded three products from the investigation which all have the ability to generate electricity from sunlight, namely solar chargers that consist of less than six cells, are portable and supply electricity to devices or charge batteries; thin-film photovoltaic products; and products that are permanently integrated into electrical goods, where the function of the electrical goods is other than power generation, and where those electrical goods consume the electricity generated by the integrated cells. 106 Fourthly, the applicants maintain that two products do not share the same end use where switching from one to another constitutes a technical and economic deterrent. Switching from a cell to a module constitutes a technical deterrent in so far as a cell is just one of numerous inputs used to manufacture a module. This also constitutes an economic deterrent because, as acknowledged in recital 40 of the contested regulation, these inputs amount to 40% of the total cost of a module. 107 Lastly, the application of other more relevant factors required that cells and modules be considered two distinct products. In the present case, the institutions acknowledged that cells and modules have different consumer perception (recital 39 of the provisional regulation), different distribution channels (recital 37 of the provisional regulation), different manufacturing processes and different costs of production (recital 32 of the provisional regulation). Furthermore, it is common knowledge that cells and modules are not interchangeable. 108 While the institutions contend that those factors are not relevant since the main criteria to define a single like product are the physical, chemical and technical characteristics and end uses (recitals 37, 39 and 46 of the provisional regulation and recital 42 of the contested regulation), the Court has already ruled that the physical, technical, and chemical characteristics of the product, although important factors, do not have priority over other factors (judgment of 13 September 2010, Whirlpool Europe v Council, T‑314/06, EU:T:2010:390, paragraph 141). 109 The institutions dispute the applicants’ arguments. 110 In that regard, it must be noted that the basic regulation does not specify how the product or range of products which may be subject to an anti-dumping investigation is to be defined; nor does it require an intricate classification to be made (see, to that effect, judgment of 25 September 1997, Shanghai Bicycle v Council, T‑170/94, EU:T:1997:134, paragraph 61). 111 According to settled case-law, to which the parties both refer, the purpose of the definition of the product concerned in an anti-dumping investigation is to assist in drawing up the list of the products which will, if necessary, be subject to the imposition of anti-dumping duties. For the purposes of that process, the institutions may take account of a number of factors, such as, inter alia, the physical, technical and chemical characteristics of the products, their use, interchangeability, consumer perception, distribution channels, manufacturing process, costs of production and quality (judgment of 13 September 2010, Whirlpool Europe v Council, T‑314/06, EU:T:2010:390, paragraph 138, and of 17 December 2010 in EWRIA and Others v Commission, T‑369/08, EU:T:2010:549, paragraph 82). 112 It necessarily follows that products which are not identical may be grouped together under the same definition of the product concerned and, together, be subject to an anti-dumping investigation (judgment of 10 October 2012, Gem-Year and Jinn-Well Auto-Parts (Zhejiang) v Council, T‑172/09, not published, EU:T:2012:532, paragraph 60) . 113 In those circumstances, the examination of whether a specific product has been validly included in the list of products which will, if necessary, be subject to the imposition of anti-dumping duties must be carried out in the light of the characteristics of the product concerned as defined by the institutions, not in the light of the characteristics of the products comprising the product concerned or its sub-categories (judgment of 18 November 2014, Photo USA Electronic Graphic v Council, T‑394/13, not published, EU:T:2014:964, paragraph 30). 114 Moreover, in the light of the indicative nature of the criteria referred to in paragraph 111 above, the institutions are not under any obligation to determine the product concerned using all of those criteria. Nor is it necessary for the analysis of each of those criteria to be capable of leading to the same result (see, to that effect, judgment of 18 November 2014, Photo USA Electronic Graphic v Council, T‑394/13, not published, EU:T:2014:964, paragraph 51). 115 It is necessary to ascertain, taking into account the above factors, whether the applicants are in a position to show either that the institutions made an error of assessment with regard to the factors which they decided were relevant, or that the application of other, more relevant factors would have required the exclusion of a product from the definition of the product concerned (see, to that effect, judgment of 10 October 2012, Gem-Year and Jinn-Well Auto-Parts (Zhejiang) v Council, T‑172/09, not published, EU:T:2012:532, paragraph 61). 116 In that review, account must be taken of the fact that, in the sphere of measures to protect trade, the EU institutions enjoy a wide discretion by reason of the complexity of the economic, political and legal situations which they have to examine and that, consequently, review by the Courts of the European Union of assessments made by the institutions must be limited to establishing whether the relevant procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated and whether there has been a manifest error of assessment of the facts or a misuse of power. In that regard, since it has already been held that the determination of the like product fell within the exercise of the wide discretion given to the institutions and was therefore subject to limited review (judgment of 25 September 1997, Shanghai Bicycle v Council, T‑170/94, EU:T:1997:134, paragraph 63), the same approach must be adopted when reviewing the merits of the definition of the product concerned (judgment of 10 October 2012, Gem-Year and Jinn-Well Auto-Parts (Zhejiang) v Council, T‑172/09, not published, EU:T:2012:532, paragraph 62; see, to that effect, judgment of 17 March 2016, Portmeirion Group, C‑232/14, EU:C:2016:180, paragraph 47). 117 In the present case, first, as regards the nature of the criteria chosen by the institutions, at the outset, it follows from recitals 22 to 25 and 48 of the provisional regulation, and from recitals 45 and 48 of the contested regulation, that the product concerned was defined in relation to its capacity to convert solar energy into electricity, which presupposes, in terms of end use, its installation in photovoltaic systems. 118 Next, it follows, in particular from recitals 32, 37, 42 and 48 of the contested regulation, that the criteria, on which the institutions rely, are physical, chemical and technical characteristics and the corresponding end use. 119 While the Council wrongly contends that some of the criteria referred to in paragraph 111 above, that is to say, those used, are in principle more decisive than others (judgment of 18 November 2014, Photo USA Electronic Graphic v Council, T‑394/13, not published, EU:T:2014:964, paragraph 41), it does not necessarily follow that the decision to rely on those criteria in the present case is vitiated by a manifest error of assessment. 120 It must be noted that the definition of the product concerned by its capacity to convert solar energy into electricity, which presupposes an end use of integration in photovoltaic systems, is objective and the applicants have neither claimed nor demonstrated that that criterion is arbitrary or that the institutions committed a manifest error of assessment in using that definition. In addition, it follows from the judgment of 10 October 2012, Gem-Year and Jinn-Well Auto-Parts (Zhejiang) v Council, T‑172/09, not published, EU:T:2012:532, paragraph 65) that the institutions may include products under the definition of the product concerned on the ground that they have, inter alia, the same basic function. 121 That basic criterion was moreover applied by the institutions in a consistent manner, since wafers were excluded from the definition of the product concerned as a result of the conclusion that, they do not convert, as such, solar energy into electricity. 122 Having regard to the decision, which was not challenged, to investigate products capable of converting solar energy to electricity, it was not manifestly unreasonable for the institutions to rely principally on the physical, chemical and technical characteristics and end use of the products. On the contrary, those criteria appear to be particularly relevant. 123 Furthermore, it is apparent both from the provisional regulation and the contested regulation that the institutions did not disregard the other criteria. Those criteria raised by the interested parties which participated in the administrative investigation were evaluated, but their assessment was not such as to modify the institutions’ conclusions as regards the determination of the product concerned. 124 Secondly, as regards the question whether the institutions committed a manifest error of assessment of the criteria they deemed relevant, it must be noted that while the applicants rightly claim that cells and modules are different in terms of physical characteristics, size, weight, thickness, mass, density, and indeed colour, that fact must be analysed in the light of the fact that cells are fundamental components of modules and that the characteristics of modules are broadly determined by the characteristics of the cells of which they are composed. The applicants’ arguments cannot therefore give reason to believe that the products are different, but rather that they are similar. 125 As regards the chemical characteristics of cells and modules, the parties do not dispute that the main chemical component, that is to say, the component conferring the essential technical characteristics is polysilicon. Even if that component accounts for a mere 20% of the price of a module, that fact, if it were established by the applicants, has no bearing on the conclusion relating to the similarity of the chemical characteristics of cells and modules. As has been stated, it is necessary to assess, in the present case, principally whether the two product categories contain the same essential component, that is to say a component conferring their essential technical characteristics. While the applicants claim that the Commission’s position as regards the relevance of the raw material was different in other investigations, it suffices to note that it is settled case-law that, where the institutions use the discretion conferred upon them by the basic regulation, they are not required to explain in detail and in advance the criteria that they intend to apply in every situation, even in cases where they create new policy options. Nor are economic operators justified in having a legitimate expectation that the criterion initially selected, which is capable of being altered by the EU institutions in the exercise of their discretion, will be maintained. Therefore, there is no need to rule on the earlier practice alleged by the applicant, as the existence of such a practice did not in itself deprive the institutions of the possibility of changing it subsequently (see, to that effect, judgments of 7 May 1987, Nippon Seiko v Council, 258/84, EU:C:1987:205, paragraphs 34 and 35, of 10 March 1992, Canon v Council, C‑171/87, EU:C:1992:106, paragraph 41, and of 17 July 1998, Thai Bicycle v Council, T‑118/96, EU:T:1998:184, paragraphs 68 and 69 and the case-law cited). 126 The relevance of the raw material depends principally on the basic criterion used by the institutions. In the present case, it is indisputable that the qualities of polysilicon are decisive both for cells and modules and that in their absence they cannot fulfil their function of converting solar energy into electricity. 127 Therefore, the applicants’ argument relating to chemical properties cannot succeed. 128 As regards technical characteristics, it is apparent from the provisional and contested regulations that the specific feature of cells and modules is their capacity to convert solar energy to electricity. There is no requirement in the basic regulation that other technical functionalities should be the same for all categories of products which fall within the definition of the product concerned. If that were so, all products covered by the definition of the product concerned would have to be practically identical, which the basic regulation does not require. Furthermore, as regards the applicants’ argument that three other products capable of converting solar energy into electricity were excluded from the investigation, it suffices to note that the applicants have not put forward any argument capable of demonstrating that the institutions would be obliged to investigate all products corresponding to the criteria they adopted, or to impose definitive measures with regard to them. It follows that the applicants’ arguments relating to technical characteristics must be rejected. 129 As regards the applicants claim that two products do not share the same purpose or the same use where switching from one to another constitutes a deterrent, it suffices to note that both the cells and modules are intended to be installed in photovoltaic systems (recital 28 of the provisional regulation and recitals 45 and 48 of the contested regulation), which the applicants do not deny. In the present case, it is also significant that neither of the two product categories has any use other than integration in those systems for the purposes of producing electricity. The applicants’ arguments seeking to show that cells and modules differ in terms of their purpose, or use, must therefore be rejected. 130 It is therefore necessary to conclude that the applicants have failed to show that the institutions committed any manifest error of assessment of the factors which they applied. 131 Thirdly, as regards the question whether the application of other more relevant criteria than those applied by the institutions would have led to the exclusion of a product type from the definition of the product concerned, it is necessary, at the outset, to point out that the application of those other criteria could call into question the conclusions drawn by the institutions in the light of the criteria applied, only if the applicants demonstrate first that those other criteria are manifestly more relevant. It must however be noted that the applicants have adduced no evidence to that effect in the present case. That is sufficient, in the light of the assessment of the earlier arguments, to reject the present plea in law. 132 In any event, as regards, first, the perception of consumers, recital 39 of the provisional regulation, to which the applicants, in essence, refer, indicates that the main criteria used to define a single product are the same physical, chemical and technical characteristics and the end uses of the product in question, and that, in accordance with those criteria, it was concluded, on the basis of recitals 27 to 29 of that regulation, that different perceptions on the part of consumers were not considered to be a decisive factor. The applicants have not explained why that finding should be regarded as manifestly incorrect. Nor have they explained how that criterion is more relevant than those applied by the institutions (see paragraph 131 above). It is for the applicants to adduce evidence to that effect. Furthermore, it does not follow either from the basic regulation or from case-law that the assessment of the similarity of the products in the light of each of the criteria must necessarily produce the same result each time (see paragraph 114 above). The applicants’ argument must therefore be rejected. 133 Secondly, as regards distribution channels, the applicants have not shown how that criterion was relevant in the light of the institutions’ decision to investigate products capable of converting solar energy into electricity, or manifestly more relevant than those applied by the institutions (see paragraph 131 above). In any event, the applicants are wrong to claim that, in recital 37 of the provisional regulation, the Commission acknowledged that cells and modules necessarily have different distribution channels. That recital indicates that the investigation showed that those channels are sometimes different and sometimes similar. The applicants have not analysed that fact in any way nor shown how it is manifestly such as to invalidate the institutions finding that the distribution channels had no effect on the definition of the product concerned in the present case. Consequently, their argument must be rejected. 134 Thirdly, the applicants have submitted no analysis, on the one hand, capable of substantiating the claim that the production costs of cells and modules are different and, on the other hand, concerning the potential consequences of such a circumstance in respect of the inclusion of cells and modules in the definition of the product concerned. Nor have the applicants proved that that criterion would be more relevant than those applied by the institutions (see paragraph 131 above). In any event, that argument has no basis in fact, since recital 32 of the provisional regulation indicates that the production of cells is the most sophisticated part of the production process and that, since the three production stages are linked, the added value does not derive from a particular stage. The question of production costs was not therefore addressed in the passage of the recital in question. 135 Fourthly, as is rightly stated in recital 36 of the provisional regulation, modules and cells, which are essential components of modules, both derive from the same production process, with the result that the question of interchangeability is not relevant in the present case. In any event, assuming that the lack of interchangeability is proved, the applicants have not shown that that was a more relevant criterion than those applied by the institutions in respect of their decision to carry out the investigation of devices capable of converting solar energy into electricity (see paragraph 131 above). 136 It follows that the applicants’ arguments seeking to demonstrate that other more relevant criteria than those applied by the institutions would have led to the conclusion that cells and modules would not be part of the same definition of the product concerned must be rejected. 137 In the fourth place, that finding cannot be called into question by the argument that the institutions carried out separate investigations for the two types of products. As the Council contends, the institutions carried out an investigation taking into account indicators on the basis of categories of products, which indeed corresponds to their established practice. Accordingly, the Commission compiled a single sample of exporting producers, which took into account the largest exporters in terms of volume of wafers, cells and modules, in order to ensure that the sample was representative. The institutions thus established a weighted average normal value and a weighted average export price for each sub-group, in such a way that differences between the product types were taken into account. 138 The argument must therefore be rejected. 139 As regards the argument alleging different prices, it is true that cells cost less than modules because they are their main components. However, it must also be noted that according to recital 40 of the contested regulation, which is not disputed by the applicants, cells account for 66% of the cost of a module. Likewise, it follows from recital 34 of the provisional regulation that there is a close correlation between the prices of cells and modules which depends on the prices of polysilicon. That argument cannot therefore succeed, since those circumstances tend instead to support the conclusion that cells and modules belong to the same definition of the product concerned. In any event, the applicants have not submitted any analysis of the relevance of that criterion. 140 Finally, it should be observed that it is the processing of wafers into cells and not cells to modules that constitutes the last substantial processing or working resulting in a new product or representing an important stage of manufacture, within the meaning of Article 24 of Regulation No 2913/92, as amended. That constitutes an additional and significant indication that cells and modules fall within the same definition of the product concerned. 141 It follows that the fourth plea in law must be rejected. The fifth plea in law, alleging infringement of Article 2(7)(c) of the basic regulation 142 According to the applicants, Article 2(7)(c) of the basic regulation provided, at the ‘material time’, that the MET determination had to be made within three months of the initiation of the investigation. The Court has repeatedly held that that deadline was intended, in particular, to ensure that MET determinations are not decided on the basis of their potential effect on the calculation of the dumping margin (judgments of 14 November 2006, Nanjing Metalink v Council, T‑138/02, EU:T:2006:343, paragraphs 43 and 44, and of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precision v Council, T‑299/05, EU:T:2009:72, paragraphs 128 and 138) and the Court of Justice has confirmed that compliance with that deadline is an essential procedural right, ‘the infringement of which vitiates the MET determination’ (judgments of 2 February 2012, Brosmann Footwear (HK) and Others v Council, C‑249/10 P, EU:C:2012:53, paragraphs 24, 39, 40 and 67, and of 15 November 2012, Zhejiang Aokang Shoes v Council, C‑247/10 P, not published, EU:C:2012:710, paragraph 31). 143 As the investigation was initiated on 6 September 2012, it follows that the deadline for making the MET determinations expired on 6 December 2012. It was by decision of 15 March 2013 that the institutions denied MET status to the applicants. 144 The applicants claim that the institutions’ reasoning in recitals 76 to 79 of the contested regulation, according to which they were not bound by the three-month deadline in view of Regulation No 1168/2012, which extended the deadline to make the MET determination to eight months for all new and to all pending investigations as from 15 December 2012, is erroneous. In their view, that regulation applies only to future investigations and to pending investigations where the deadline for making the MET determination has not yet expired. Any other interpretation would lead to an unlawful retroactive application of Regulation No 1168/2012. 145 According to the judgments of 9 January 1990, SAFA (C‑331/88, EU:C:1990:1, paragraph 12), of 13 November 1990, Fédesa and Others (C‑331/88, EU:C:990:391, paragraph 45), and of 29 June 2000, Medici Grimm v Council (T‑7/99, EU:T:2000:175, paragraphs 90 to 92), the principle of legal certainty precludes an EU act from having retroactive effect unless the legitimate expectations of the parties affected are respected. The applicants assert in that regard, with reference to the judgment of 15 February 1996, Duff and Others (C‑63/93, EU:C:1996:51, paragraphs 2 and 20), that that principle requires public authorities to exercise their powers to ensure that situations and relationships lawfully created are not affected in a manner which could not have been foreseen by a diligent person. 146 Interpreting Regulation No 1168/2012 as applying to pending investigations in which the parties concerned have a vested right to have their MET claim examined within three months would infringe the legitimate expectations of interested parties. In this case, Regulation No 1168/2012 cannot therefore apply to the applicants’ MET determination, with the result that only the version of the basic regulation as in force at the time of the expiry of the time limit referred to in Article 2(7)(c) is relevant in order to establish whether their material rights have been infringed. 147 The applicants provided the Commission with their reply to the anti-dumping questionnaire on 5 December 2012. The MET determination was adopted more than three months later. Consequently, the applicants assert that it cannot be ruled out that the MET determinations in respect of the applicants were decided on the basis of their potential effect on the calculation of their dumping margin. Therefore, the institutions irrevocably infringed their material rights, as protected by Article 2(7)(c) of the basic regulation. The applicants maintain, with reference to the judgments of 29 October 1980, van Landewyck and Others v Commission (209/78 to 215/78 and 218/78, not published, EU:C:1980:248, paragraph 47); of 23 April 1986, Bernardi v Parliament (150/84, EU:C:1986:167, paragraph 28) and of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precision v Council (T‑299/05, EU:T:2009:72, paragraph 138), that the contested regulation might have been substantively different in the absence of the alleged error. 148 As regards the Council’s argument that the applicants may not rely on the principle of protection of legitimate expectations, since they should have been fully aware of the upcoming amendments to Article 2(7) of the basic regulation, in so far as the proposal for Regulation No 1168/2012 was published by the Commission on 8 July 2012 and no precise, unconditional and consistent information indicating that their MET claim was to be examined had been provided to them, the applicants argue that in the judgment of 24 March 2011, ISD Polska and Others (C‑369/09 P, EU:C:2011:175, paragraphs 123 and 124), the Court of Justice ruled that legitimate expectations are primarily based on the applicable legal framework, not on legislative proposals. 149 The institutions dispute the applicants’ arguments. 150 As the Council rightly maintains, the applicants’ arguments do not seek to show that the legal basis of the decision refusing to grant MET, namely Regulation No 1168/2012, was unlawful but that the institutions interpreted that regulation incorrectly, in so far as they applied it to investigations in progress for which the three-month time limit provided for in Article 2(7)(c) of the basic regulation, in the version prior to that regulation, had already expired. In particular, the applicants ask that that regulation be interpreted in the light of the principle of non-retroactivity of EU acts, in conjunction with the principles of legal certainty and protection of legitimate expectations, so that it would not apply to anti-dumping investigations for which that time limit had already expired at the time of the entry into force of Regulation No 1168/2012. 151 In that regard, it is settled case-law that, when secondary EU law is to be interpreted, preference should be given as far as possible to an interpretation which is in conformity with the Treaty. An implementing regulation must also be given, if possible, an interpretation consistent with the basic regulation. However, that case-law does not apply in the case of a provision of an implementing regulation whose meaning is clear and unambiguous and therefore requires no interpretation (see judgment of 25 November 2009, Germany v Commission, T‑376/07, EU:T:2009:467, paragraph 22 and the case-law cited). The same necessarily applies to all acts of secondary legislation. 152 Furthermore, as the institutions also maintain, a conforming interpretation of secondary EU law cannot serve as the basis for an interpretation of that law that is contra legem (order of 17 July 2015, EEB v Commission, T‑685/14, not published, EU:T:2015:560, paragraph 31 and the case-law cited). It therefore follows in particular from the case-law cited in the above paragraph, that an interpretation in conformity with EU law may be made only if such an interpretation is possible. 153 In the present case, it follows clearly from the wording of Article 1 of Regulation No 1168/2012, applicable, by virtue of Article 2, to all new and to all pending investigations as from 15 December 2012, that is to say, as from the entry into force of that regulation, that the time limit of three months as from the initiation of the investigation, provided for in the second subparagraph of Article 2(7)(c) of the basic regulation, was extended to a time limit, in principle, of seven months but, in any event, of eight months at most. Since that regulation does not provide for any exception as regards investigations in progress for which the time limit for deciding whether to grant MET by virtue of the second subparagraph of Article 2(7)(c) of the basic regulation in the version applicable before 15 December 2012 had already expired, it therefore applied to the Commission decision of 15 March 2013 refusing to grant their MET claim submitted by the applicants. 154 The interpretation of Regulation No 1168/2012 advocated by the applicants would accordingly lead to a result contrary to its wording and the intention of the legislature. It cannot, therefore, be accepted. 155 Moreover, the present plea in law must be rejected, even if it were to be understood as meaning that the applicants claim that Regulation No 1168/2012 is unlawful, in so far as it also applies to investigations in progress for which the time limit for deciding to grant MET, by virtue of the second subparagraph of Article 2(7)(c) of the basic regulation in its version applicable before 15 December 2012, had already expired. 156 In that regard, the principle of legal certainty precludes an EU act from being applied retroactively — that is to say, it may not take effect from a point in time before its publication, and therefore apply to a situation established before its entry into force, irrespective of whether such application might produce favourable or unfavourable effects for the person concerned, save where, exceptionally, the purpose to be achieved so demands and where the legitimate expectations of those concerned are duly respected (see to that effect, judgment of 13 November 1990, Fédesa and Others, C‑331/88, EU:C:1990:391, paragraph 45; of 22 December 2010, Bayerischer Brauerbund, C‑120/08, EU:C:2010:798, paragraph 40; of 3 September 2015, A2A, C‑89/14, EU:C:2015:537, paragraph 37; and of 7 October 2015, Zentralverband des Deutschen Bäckerhandwerks v Commission, T‑49/14, not published, EU:T:2015:755, paragraph 26). 157 It should also be borne in mind that a new legal rule also applies from the entry into force of the act introducing it, and, while it does not apply to legal situations that have arisen and become definitive under the old law, it does apply to their future effects, and to new legal situations. It is otherwise — subject to the principle of the non-retroactivity of legal acts — only if the new rule is accompanied by special provisions which specifically lay down the conditions of its temporal application (judgment of 26 March 2015, Commission v Moravia Gas Storage, C‑596/13 P, EU:C:2015:203, paragraph 32). 158 In particular, according to settled case-law, procedural rules are generally taken to apply from the date on which they enter into force, as opposed to substantive rules, which are usually interpreted as applying to situations established before their entry into force only in so far as it clearly follows from their terms, their objectives or their general scheme that such an effect must be given to them (see judgment of 26 March 2015, Commission v Moravia Gas Storage, C‑596/13 P, EU:C:2015:203, paragraphs 33). 159 The Court of Justice has also held that the provision which forms the legal basis of an act and empowers an EU institution to adopt the act must be in force on the date on which the act is adopted (see judgment of 26 March 2015, Commission v Moravia Gas Storage, C‑596/13 P, EU:C:2015:203, paragraph 34). 160 In the present case, first, it suffices to notes that it follows from the case-law that the second subparagraph of Article 2(7)(c) of the basic regulation provides for a procedural time limit (judgment of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precision v Council, T‑299/05, EU:T:2009:72, paragraph 138), within which the Commission is required to decide upon any MET claims. That provision therefore sets out a procedural rule. 161 Accordingly, in accordance with the case-law referred to in paragraph 158 above, Regulation No 1168/2012, in so far as it amends that time limit by extending it, in principle to seven or, in any event, at most to eight months from the initiation of the investigation, applied immediately to the investigation in question. It was therefore possible for the Commission Decision of 15 March 2013 to be validly based on that regulation. 162 In the second place, and in any event, the Commission’s failure to comply with the time limit provided for in the second subparagraph of Article 2(7)(c) of the basic regulation, in its version prior to the entry into force of Regulation No 1168/2012, did not create, as the institutions rightly contend, a definitive situation within the meaning of the case-law referred to in paragraphs 156 to 158 above, so that that regulation did not have any retroactive effect. 163 In the present case, it suffices to note that the procedure for reaching a decision to impose an anti-dumping duty in accordance with the basic regulation and the anti-dumping agreement follows a step-by-step approach (Opinion of Advocate General Sharpston in Council v Gul Ahmed Textile Mills, C‑638/11 P, EU:C:2013:277, paragraph 36) and that the applicant’s situation was definitively determined, as the institutions rightly submit, only upon the entry into force of the contested regulation, by which the competent authority, namely the Council, adopted the Commission’s proposal. Until the contested regulation was adopted, the applicants had no certainty as regards their potential rights and obligations stemming from the application of the basic regulation (see, to that effect, judgment of 14 March 1990, Nashua Corporation and Others v Commission and Council, C‑133/87 and C‑150/87, EU:C:1990:115, paragraph 8). 164 Secondly, while the applicants claim that by the expiry of the time limit provided for in the second subparagraph of Article 2(7)(c) of the basic regulation they had acquired the right to have their MET claims examined within three months, it must be noted that that argument is contradictory. In fact, it amounts to a claim that it is on the day when the three-month time limit expired that they definitively acquired the right to have their request examined by that same day. It also amounts to imposing an impossible obligation on the Commission. 165 Thirdly, to the extent that the applicants submit that the failure to comply with that time limit affects the lawfulness of the decision on the MET claim, and accordingly the lawfulness of the contested regulation, which Regulation No 1168/2012 allegedly retroactively amended, it must be noted that that failure to comply did not, in itself, have any automatic impact on the lawfulness of the decision on a MET claim, nor does it constitute implied granting of that status. 166 While the applicants refer to the judgments of 2 February 2012, Brosmann Footwear (HK) and Others v Council (C‑249/10 P, EU:C:2012:53), and of 15 November 2012, Zhejiang Aokang Shoes v Council (C‑247/10 P, not published, EU:C:2012:710) in support of their position that such a failure to comply with the time limit automatically renders unlawful the definitive regulation adopted subsequently, the Court of Justice has already held that no indication was given in those judgments as to the consequences of failure to comply with the three-month time limit laid down in the second subparagraph of Article 2(7)(c) of the basic regulation, in its version prior to the entry into force of Regulation No 1168/2012 (judgment of 27 February 2014, Ningbo Yonghong Fasteners v Council, C‑601/12 P, not published, EU:C:2014:115, paragraph 35). Those judgments are therefore irrelevant in the present case. 167 It is apparent from the case-law that, while, as a rule, any MET decision should, in accordance with the wording of the second subparagraph of Article 2(7)(c) of the basic regulation in its version preceding the entry into force of Regulation No 1168/2012, be taken within three months of the initiation of the investigation, the fact nevertheless remains that the adoption of a decision outside that period does not, by virtue of that fact alone, entail the annulment of the regulation imposing an anti-dumping duty (judgment of 18 September 2012, Since Hardware (Guangzhou) v Council, T‑156/11, EU:T:2012:431, paragraph 167). 168 To the extent that the applicants claim that the fact that the Commission made a decision in respect of their MET claims after the three-month time limit had expired, or after more than three months following the receipt of the applicants’ answers to the anti-dumping questionnaire undermined their right to have their MET claim examined, without the Commission being in possession of the elements enabling calculation of their anti-dumping margins, that is to say, their right that that claim should not be examined in accordance with the potential effect on the calculation of their dumping margins, it must be noted that, in accordance with Article 2(7)(b) of the basic regulation, in anti-dumping investigations concerning imports from China, normal value is to be determined in accordance with paragraphs 1 to 6, if it is shown, on the basis of properly substantiated claims by one or more producers subject to the investigation and in accordance with the criteria and procedures set out in subparagraph (c) that market economy conditions prevail for this producer or producers in respect of the manufacture and sale of the like product concerned (judgment of 18 September 2012, Since Hardware (Guangzhou) v Council, T‑156/11, EU:T:2012:431, paragraph 158). 169 Accordingly, failure to comply with the time limit laid down in the second subparagraph of Article 2(7)(c) of the basic regulation can entail annulment of the contested regulation only if the applicants show that, in the absence of such failure, the Council might have adopted a different regulation more favourable to their interests (see, to that effect, judgments of 27 February 2014, Ningbo Yonghong Fasteners v Council, C‑601/12 P, not published, EU:C:2014:115, paragraphs 34 and 40 to 42; of 4 February 2016, C & J Clark International, C‑659/13 and C‑34/14, EU:C:2016:74, paragraphs 140 and 141, and of 18 March 2009, Shanghai Excell M&E Enterprise and Shanghai Adeptech Precision v Council, T‑299/05, EU:T:2009:72, paragraphs 138 and 139). 170 There is no immediate link between the three-month time limit laid down in the second subparagraph of Article 2(7)(c) of the basic regulation and any knowledge on the part of the Commission of the effect of a MET decision on an undertaking’s dumping margin. Moreover, the basic regulation does not require that the MET decision be adopted at a time when the Commission does not possess information enabling it to ascertain the effect of a MET decision on an undertaking’s dumping margin. In that regard, even where that time limit has not in any way been exceeded at the time the MET decision is adopted, the Commission might take such a decision, notwithstanding the fact that it is already in possession of information enabling it to calculate its effect on the dumping margin of the undertaking concerned (judgment of 18 September 2012, Since Hardware (Guangzhou) v Council, T‑156/11, EU:T:2012:431, paragraph 165). 171 Although the Commission’s decision on the MET claim was in fact adopted after the expiry of the three-month time limit as from the initiation of the investigation, and over three months after the applicants’ replies to the anti-dumping questionnaire were obtained, it suffices to note that the applicants do not indicate which aspects of that decision could have been assessed differently if the Commission’s decision had been taken within the three-month time limit or in the absence of any purported knowledge of the effect of that decision on its dumping margin (judgment of 18 September 2012, Since Hardware (Guangzhou) v Council, T‑156/11, EU:T:2012:431, paragraph 173). 172 It follows that the applicants have failed to show that the contested regulation could have been substantially different if the Commission’s decision on its MET claim had been adopted within the three-month period laid down in Article 2(7)(c) of the basic regulation, in its version in force before 15 December 2012, or in the absence of any knowledge on the part of the Commission enabling it to calculate its dumping margin. 173 Fourthly, while Article 2(7)(c) of the basic regulation provides that the MET determination is to remain in force throughout the investigation, it follows from the judgment of 1 October 2009, Foshan Shunde Yongjian Housewares & Hardware v Council (C‑141/08 P, EU:C:2009:598 paragraphs 111 and 112) that on the basis of the principles of compliance with the law and sound administration, and provided that the procedural safeguards provided for in the basic regulation are observed, the Court of Justice favours the correct application of the substantive criteria provided for in Article 2(7)(c) of the basic regulation over a requirement that a MET decision be unalterable, or that there be no knowledge of the effect of a MET decision on an undertaking’s dumping margin at the time when such a decision is adopted. The Court held in that judgment that Article 2(7)(c) of the basic regulation cannot be interpreted in such a manner as to oblige the Commission to propose to the Council definitive measures which would perpetuate an error made in the original assessment of the substantive criteria set out in that provision to the detriment of the undertaking concerned. Accordingly, if the Commission realises in the course of the investigation that, contrary to its original assessment, an undertaking meets the criteria laid down in the first subparagraph of Article 2(7)(c) of the basic regulation, it must take appropriate action, while at the same time ensuring that the procedural safeguards provided for in the basic regulation are observed (judgment of 18 September 2012, Since Hardware (Guangzhou) v Council, T‑156/11, EU:T:2012:431, paragraph 166). The same applies in the opposite case, where the party concerned is revealed, in the course of the investigation and possibly after the imposition of provisional measures, not to be operating under market-economy conditions within the meaning of Article 2(7)(c) of the basic regulation, contrary to what the Commission’s view might have been in its initial MET decision (judgment of 14 November 2006, Nanjing Metalink v Council, T‑138/02, EU:T:2006:343, paragraph 45). 174 It follows that the applicants have not proved in any way that the failure to comply with the three-month time limit as from the initiation of the investigation created a definitively established situation or that as a result of that time limit being exceeded they had any acquired right. 175 On 15 December 2012, at the time of the entry into force of Regulation No 1168/2012, the applicants were, therefore, indisputably in a provisional situation, so that by applying that regulation immediately to the investigation in question, the Commission did not, by its decision of 15 March 2013, infringe either the principle of the non-retroactivity, or the principles of legal certainty or protection of legitimate expectations. 176 It also follows that the applicants cannot properly rely in the present case on the principles of the protection of legitimate expectations and of legal certainty, since those principles concern situations established before the entry into force of new provisions (see, to that effect, judgment of 18 November 2004, Ferriere Nord v Commission, T‑176/01, EU:T:2004:336, paragraph 139). 177 In the third place, and in any event, the applicants are not justified in claiming that Regulation No 1168/2012 was adopted in breach of the principles of protection of legitimate expectations and legal certainty. In so far as they rely in support of that claim on the unforeseeable nature of a change to their rights, it should be noted that, at the time of the initiation of the investigation, they could and should have foreseen the adoption of Regulation No 1168/2012. As found in the judgment of 14 March 2013, Agrargenossenschaft Neuzelle (C‑545/11, EU:C:2013:169, paragraph 26), if a prudent and alert economic operator can foresee the adoption of an EU measure likely to affect his interests, he cannot plead the principle of protection of legitimate expectations if the measure is adopted. As the applicants also agree, the proposal for amending Article 2(7) of the basic regulation was published by the Commission on 8 July 2012, before the initiation of the investigation leading to the adoption of the contested regulation. Interested parties, including the applicants who were represented in the administrative procedure by a legal adviser should have been aware of the intention to amend Article 2(7) of the basic regulation by extending the three-month period. 178 Moreover, in the judgment of 24 March 2011, ISD Polska and Others (C‑369/09 P, EU:C:2011:175, paragraph 124), the Court of Justice held that a proposal for a decision from the Commission submitted to the Council cannot provide the foundation for any legitimate expectation that the aid in question will comply with the legal rules of the European Union. It follows, as the Council maintains, that a legitimate expectation claim cannot be based on a proposal, but that does not mean that a party cannot use a Commission proposal to contest the application of the principle of protection of legitimate expectations, as in the present case. 179 It follows that the fifth plea in law must be rejected. The sixth plea in law, alleging infringement of Article 3(1) and Article 9(4) of the basic regulation 180 The applicants claim that the contested regulation was adopted in breach of Article 3 of the basic regulation since the injury caused by the dumped imports and that caused by other known factors were not examined separately. Consequently, that regulation was also adopted in breach of Article 9(4) of that regulation, since the level of duty imposed is in excess of what is necessary to remove the injury caused by dumped imports. Relying in particular on the judgment of 23 May 1985, Allied Corporation and Others v Council (53/83, EU:C:1985:227, paragraph 18), they argue that that illegality should result in the annulment of the contested regulation in its entirety. 181 They submit that it is settled case-law that Article 3(2) and (7) of the basic regulation requires that the institutions (i) examine and quantify separately the injurious effects of the dumped imports and the injurious effects of other known factors; (ii) ensure that the injury on which they intend to base their conclusions derives only from the dumped imports; and (iii) disregard any injury deriving from other factors. Failing such examination, there is no means of knowing whether injury ascribed to dumped imports was, in reality, caused by factors other than the dumped imports and whether the level of the anti-dumping measures imposed under Article 9(4) of the basic regulation does not go beyond what is necessary to offset the injury caused by the dumped imports (judgments of 16 May 1991, Extramet Industrie v Council, C‑358/89, EU:C:1991:214, paragraphs 16, 17, and 20; of 28 February 2008, AGST Draht- und Biegetechnik, C‑398/05, EU:C:2008:126, paragraph 35; of 3 September 2009, Moser Baer India v Council, C‑535/06 P, EU:C:2009:498, paragraphs 87 and 88; and of 25 October 2011, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, T‑192/08, EU:T:2011:619, paragraphs 31 and 116 to 120). 182 In the present case, the institutions identified five factors, other than the allegedly dumped imports, causing injury to the EU industry, namely imports of cells from Taiwan, the reduction in Member State support schemes, including feed-in tariffs (FIT), raw material prices, imports of wafers, cells or modules from China by EU producers, and the financial crisis. 183 Nevertheless, the institutions failed to quantify and properly separate and distinguish the effects of those factors from the effects of the dumped imports. They merely assessed whether that injury was sufficient to break the causal link between the dumped imports and the injury suffered by the EU industry. In doing so, the institutions imposed duties at the level deemed necessary to remove all injury suffered by the EU industry, including the injury caused by the other factors. That duty was therefore in excess of what was necessary to remove the injury to the EU industry caused by dumped imports alone. 184 In reply to the Council’s argument that, for the purpose of the injury margin determination, the institutions make their calculation on the basis of prices, profits and cost of production of the EU industry, without taking into account known factors other than the dumped imports that might have contributed to the injury of the EU industry, as those known factors have relevance only at the stage of the application of Article 3(7) of the basic regulation, and not Article 9(4) of that regulation, the applicants contend, in essence, that it is not possible that the abovementioned factors could have caused injury to the EU industry without affecting the EU industry’s prices, profits and cost of production. The Council’s reasoning is therefore inconsistent. 185 The institutions dispute the applicants’ arguments. 186 In that regard, Article 1(1) of the basic regulation provides that an anti-dumping duty may be applied to any dumped product whose release for free circulation in the European Union causes injury. Injury is defined in Article 3(1) of that regulation as material injury caused to the EU industry, threat of material injury to the EU industry or material retardation of the establishment of an EU industry. 187 In accordance with Article 3(2) of the basic regulation, a determination of injury is to be based on positive evidence and is to involve an objective examination of, in particular, the volume of the dumped imports (judgment of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 61). 188 Article 3(5) of the basic regulation states that the examination of the impact of dumped imports on the EU industry concerned is to include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry. That provision contains a list of factors which may be taken into account and states that that list is not exhaustive and that decisive guidance is not necessarily given by any one or more of those factors (see judgments of 28 November 2013, CHEMK and KF v Council, C‑13/12 P, not published, EU:C:2013:780, paragraph 56, of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 20, and of 16 April 2015, TMK Europe, C‑143/14, EU:C:2015:236, paragraph 32). 189 By virtue of Article 3(6) and (7), the institutions are, first, under an obligation to consider whether the injury on which they intend to base their conclusions actually derives from dumped imports. That is what is known as the ‘attribution analysis’. Secondly, they must disregard any injury deriving from other factors, in order to ensure that the injury caused by those other factors is not attributed to the dumped imports. That is what is known as the ‘non-attribution analysis’(judgments of 28 February 2008, AGST Draht- und Biegetechnik, C‑398/05, EU:C:2008:126, paragraph 35, of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 23, and of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 76). 190 In that regard, it is for the institutions to ascertain, in the first place, whether the effects of those other factors were not such as to break the causal link between the imports in question and the injury suffered by the EU industry (see judgment of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 24 and the case-law cited). 191 If the EU institutions find that, despite such factors, the injury caused by the dumped imports is material, pursuant to Article 3(1) of the basic regulation, the causal link between those imports and the injury suffered by the EU industry can consequently be established (judgment of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 25; see, also, by analogy, judgments of 3 September 2009, Moser Baer India v Council, C‑535/06 P, EU:C:2009:498, paragraphs 91, and of 16 April 2015, TMK Europe, C‑143/14, EU:C:2015:236, paragraph 37). 192 The EU institutions may attribute responsibility for injury to the dumped imports, even if their effects are only a part of wider injury attributable to other factors. The fact that an EU producer is facing difficulties, whether or not attributable in part to causes other than dumping, is not a reason for depriving that producer of all protection against the injury caused by the dumped imports. That is why it is possible to impose anti-dumping duties, even if they leave intact problems posed for the EU industry by other factors (see, to that effect, judgments of 5 October 1988, Brother Industries v Council, 250/85, EU:C:1988:464, paragraph 42; of 5 October 1988, Canon and Others v Council, 277/85, EU:C:1988:467, paragraphs 62 and 63, and of 29 January 1998, Sinochem v Council, T‑97/95, EU:T:1998:9, paragraphs 99 and 100 to 103). 193 In the second place, the EU institutions must also verify that the injury attributable to those other factors is not taken into account in the determination of injury within the meaning of Article 3(7) of the basic regulation and, consequently, that the anti-dumping duty imposed does not go beyond what is necessary to offset the injury caused by the dumped imports. Even if another factor is such as to break the causal link between the imports examined and the injury suffered by the EU industry, it may cause the EU industry separate injury (see, to that effect, judgment of 3 September 2009, Moser Baer India v Council, C‑535/06 P, EU:C:2009:498, paragraph 88; see, also, judgment of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 24 and the case-law cited; judgments of 16 April 2015, TMK Europe, C‑143/14, EU:C:2015:236, paragraph 36, and of 17 December 2008, HEG and Graphite India v Council, T‑462/04, EU:T:2008:586, paragraph 145). The institutions must take into account the findings in that regard when determining the level of any anti-dumping duty (Opinions of Advocate General Trstenjak in Moser Baer India v Council, C‑535/06 P, EU:C:2008:532, paragraph 171, and of Advocate General Sharpston in Council v Gul Ahmed Textile Mills, C‑638/11 P, EU:C:2013:277, paragraph 36). 194 As the Courts of the European Union have already held, the objective of Article 3(6) and (7) of the basic regulation is, first, to ensure that the EU institutions separate and distinguish the injurious effects of the dumped imports from the injurious effects of other known factors, since if they do not separate and distinguish the impact of the various factors, they cannot legitimately conclude that dumped imports caused injury to the EU industry. The purpose of those rules is, second, to avoid granting the EU industry protection beyond that which is necessary (see, to that effect, judgments of 3 September 2009, Moser Baer India v Council, C‑535/06 P, EU:C:2009:498, paragraph 90; of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 39, and of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 63). 195 However, it is not necessary in this context that the precise effects of the factor at issue should be set out, or quantified or monetised (see, to that effect, judgment of 4 October 2006, Moser Baer India v Council, T‑300/03, EU:T:2006:289, paragraph 269, and Opinion of Advocate General Trstenjak in Moser Baer India v Council, C‑535/06 P, EU:C:2008:532, paragraph 160). 196 It must again be recalled that it is for the parties pleading the illegality of the regulation at issue to adduce evidence to show that those factors could have had such an impact that the existence of injury caused to the EU industry and of the causal link between that injury and the dumped imports was no longer reliable in terms of the obligation of those institutions to disregard any injury resulting from other factors (judgments of 28 November 2013, CHEMK and KF v Council, C‑13/12 P, not published, EU:C:2013:780, paragraph 75, and of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 28). 197 As regards the determination of the definitive anti-dumping duty, Article 9(4) of the basic regulation provided at the time of the adoption of the contested regulation that ‘where the facts as finally established show that there is dumping and injury caused thereby, and the [EU] interest calls for intervention ..., a definitive anti-dumping duty shall be imposed by the Council ... The amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the [EU] industry’. It follows clearly from that provision, read in the light of Article 3(7) of the basic regulation, as interpreted by the Courts of the European Union, and of Article 8(1) of that regulation, that the reference to injury in the last sentence must be understood as a reference to injury arising from dumping, as specified in the first sentence of that provision. That conclusion is supported by Article 21(1) of the basic regulation, according to which in the context of examining the EU interest, particular attention is to be paid to the need to eliminate the trade distorting effects of injurious dumping. 198 In so far as the anti-dumping duty imposed pursuant to Article 9(4) of the basic regulation may not in any case exceed the dumping margin or what is necessary to counter the harmful effects of the dumped imports (see paragraphs 193 and 194 above), that provision balances the interests of the exporting producers, importers, industry and consumers of the European Union and expresses, in respect of EU trade defence measures, the general principle of proportionality (judgments of 29 September 2000, International Potash Company v Council, T‑87/98, EU:T:2000:221, paragraphs 39, 40 and 42; of 9 September 2010, Usha Martin v Council and Commission, T‑119/06, EU:T:2010:369, paragraphs 44 and 53; and Opinion of Advocate General Trstenjak in Moser Baer India v Council, C‑535/06 P, EU:C:2008:532, paragraph 170,). 199 While, with the exception of the limits regarding the maximum rate referred to in paragraphs 197 and 198 above, Article 9(4) of the basic regulation does not indicate a specific calculation of the anti-dumping duty, and does not impose any specific methodology on the institutions in order to ensure that the anti-dumping duty does not exceed what is necessary to counter the injurious effects of the dumped imports of the product concerned (see, to that effect, judgment of 6 September 2013, Godrej Industries and VVF v Council, T‑6/12, EU:T:2013:408, paragraph 81), it must be recalled (see paragraphs 193 and 194 above) that those institutions must, in that context, take into account the conclusions they reached as regards attribution and non-attribution analyses (see paragraph 189 above). 200 If that were not so, there would be a risk of the trade defence measures in question going beyond what is necessary in the light of their objective, that is to say, in the case in point, removal of the injurious effects of dumping, so that they may also confer protection against the negative effects of factors other than dumped imports. 201 Moreover, contrary to what the Council claims in the present case, it follows from the institutions’ decision-making practice that they do in fact take account of the findings concerning attribution and non-attribution analyses when determining the rate of an anti-dumping duty or accepting a price undertaking (see, inter alia, Commission Decision 91/392/EEC of 21 June 1991 accepting undertakings given in connection with the anti-dumping proceeding concerning imports of certain asbestos cement pipes originating in Turkey, and terminating the investigation (OJ 1991 L 209, p. 37), recitals 26 to 29; Commission Regulation (EC) No 2376/94 of 27 September 1994 imposing a provisional anti-dumping duty on imports of colour television receivers originating in Malaysia, the people’s Republic of China, the Republic of Korea, Singapore and Thailand (OJ 1994 L 255, p. 50), recital 141; Council Regulation (EC) No 710/95 of 27 March 1995 imposing a definitive anti-dumping duty on imports of colour television receivers originating in Malaysia, the People’s Republic of China, the Republic of Korea, Singapore and Thailand and collecting definitively the provisional duty imposed (OJ 1995 L 73, p. 3), recital 49, and Council Regulation (EC) No 1331/2007 of 13 November 2007 imposing a definitive anti-dumping duty on imports of dicyandiamide originating in the People’s Republic of China (OJ 2007 L 296, p. 1), recitals 128 to 134). That conclusion was, moreover, confirmed by the Commission at the hearing. 202 Furthermore, Articles 1, 8 and 15 of Council Regulation (EC) No 597/2009 of 11 June 2009 on protection against subsidised imports from countries not members of the European Community (OJ 2009 L 188, p. 93) are worded in a similar way to Articles 1, 3 and 9 of the basic regulation. Accordingly, the Court’s interpretation of those provisions concerning subsidies is to apply mutatis mutandis to the area of anti-dumping (see, to that effect, judgments of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraph 28; and of 17 December 2008, HEG and Graphite India v Council, T‑462/04, EU:T:2008:586, paragraph 119). 203 It should also be recalled that, it is settled case-law that, in the sphere of measures to protect trade, the EU institutions enjoy a wide discretion by reason of the complexity of the economic, political and legal situations which they have to examine. It follows that review by the Court of the assessments made by the institutions must be confined to ascertaining whether the procedural rules have been complied with, whether the facts on which the contested decision is based have been accurately stated and whether there has been any manifest error of assessment of the facts or any misuse of powers. While the Court of Justice has expressly recognised that that is the case as regards the determination of factors causing injury to the EU industry in the context of an anti-dumping investigation, the same must be true for the same reasons as regards the determination of final measures. However, where the EU institutions have a wide power of appraisal, respect for the rights guaranteed by the EU legal order in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see judgment of 22 May 2014, Guangdong Kito Ceramics and Others v Council, T‑633/11, not published, EU:T:2014:271, paragraphs 41 to 43 and the case-law cited; see, also, to that effect, judgment of 28 February 2008, AGST Draht- und Biegetechnik, C‑398/05, EU:C:2008:126, paragraph 34). 204 The merits of the applicants’ arguments must be examined in the light of those principles. 205 In the present case, having established that there is a causal link between the injury suffered by the EU industry and the dumped imports from China (recitals 161 to 163 of the provisional regulation, and recitals 228 to 235 of the contested regulation), the institutions assessed in a detailed and comprehensive manner other possible causes of injury, such as imports from third countries, including Taiwan (recitals 164 to 167 of the provisional regulation, and recitals 236 to 238 of the contested regulation), the development of consumption in the European Union (recitals 168 and 169 of the provisional regulation, and recitals 239 to 244 of the contested regulation), FITs (recitals 170 to 182 of the provisional regulation, and recitals 245 to 265 of the contested regulation), other financial support granted to the EU industry (recitals 183 and 184 of the provisional regulation, and recital 266 of the contested regulation), overcapacity (recitals 185 to 190 of the provisional regulation, and recitals 267 to 274 of the contested regulation), the impact of raw material prices (recitals 191 to 194 of the provisional regulation, and recitals 275 to 283 of the contested regulation), self-inflicted injury, including imports of the product concerned by the EU industry (recitals 204 to 210 of the provisional regulation, and recitals 284 to 294 of the contested regulation), competition from thin film products (recitals 207 to 210 of the provisional regulation, and recitals 295 to 300 of the contested regulation), the financial crisis and its effects (recitals 211 to 213 of the provisional regulation, and recitals 301 to 306 of the contested regulation), export performance of the EU industry (recitals 213 to 215 of the provisional regulation, and recital 305 of the contested regulation), the discovery of shale gas deposits in the European Union (recitals 216 et 217 of the provisional regulation, and recital 308 of the contested regulation), management decisions (recitals 220 and 221 of the provisional regulation, and recitals 310 and 311 of the contested regulation), the European Union’s Emissions Trading Scheme (recitals 218 and 219 of the provisional regulation, and recital 309 of the contested regulation), other government policies (recital 222 of the provisional regulation, and recital 312 of the contested regulation), and the forerunner disadvantage. 206 The effects of those factors on the situation of the EU industry were duly distinguished and separated from the injurious effects of the dumped imports. 207 None of those factors was considered capable of breaking the causal link established between the dumped imports from China and the material injury suffered by the EU industry. 208 That finding is not disputed by the applicants, who claim rather, in essence, that the effects of the five other factors to which they referred should have been quantified or monetised, failing which they might have been taken into account in determining the injury within the meaning of Article 3(7) of the basic regulation and led, as a consequence, to an increase in the anti-dumping duty in excess of what was necessary to eliminate the injury caused by the dumped imports. 209 In that regard, in the first place, it must be recalled that, on the one hand, neither the basic regulation nor the case-law envisage an obligation, on the part of the institutions, to set out in detail, or to quantify or to monetise, the effects of the factor at issue (see, to that effect, judgment of 4 October 2006, Moser Baer India v Council, T‑300/03, EU:T:2006:289, paragraph 269 and Opinion of Advocate General Trstenjak in Moser Baer India v Council, C‑535/06 P, EU:C:2008:532, paragraph 160,). 210 On the other hand, the Council indicated in recital 220 of the contested regulation that it was not even possible to quantify the effects of other known factors. That assertion has not been disputed, let alone proved to be incorrect, by the applicants. 211 Moreover, when the applicants put forward their argument, during the administrative procedure, that the effects of other factors were not quantified, if it was their view that such quantification of other factors was possible, they ought then to have proposed, at least in general terms, an appropriate method. The applicants have not asserted that they proposed any such method. 212 In so far as the present plea in law is essentially based on the institutions’ alleged failure to fulfil their obligation to quantify the effects of other factors, it must be rejected. 213 In the second place, and in addition, as regards whether the applicants have proved that other factors were taken into account in determining the injury within the meaning of Article 3(7) of the basic regulation and that, consequently, the anti-dumping duty was imposed at a rate in excess of what was necessary to eliminate the injury caused by the dumped imports, contrary to what settled case-law requires in the matter (see paragraph 196 above), the applicants have not put forward any argument before the Court, or any evidence, capable of showing that the factors to which they referred had an effect of such significance that the existence of injury caused to the EU industry, and that of the causal link between that injury and the dumped imports, were no longer reliable in terms of the obligation of those institutions to disregard any injury resulting from other factors. In particular, they did not submit any analysis of the findings relating to the causal link in the definitive regulation. 214 In the third place, and in any event, examination of the relevant passages of the provisional and contested regulations does not reveal that factors other than dumped imports were taken into account in determining the injury. This is reinforced by the fact that the applicants have not invoked any manifest error of assessment in so far as concerns the analysis of those factors. 215 As regards the claim of self-inflicted injury on account of the purchase of the product concerned by the EU producers for resale on the EU market as their own, the Council considered in recital 290 of the contested regulation that those imports were complementary in nature as well as limited in terms of volume when compared to the total EU production and therefore their effect, if any, would only be marginal and could not be considered as breaking the causal link between the dumped imports and the injury suffered by the EU industry. 216 As regards the four other factors referred to by the applicants, the Council sets out in recitals 315 to 320 of the contested regulation, a cumulative assessment of their effects on the injury to the EU industry, along with its conclusions concerning the causal link. 217 While those recitals state, first, that those four factors contributed (recital 318 of the contested regulation) or could have contributed (recital 319 of the contested regulation) to the injury suffered by the EU industry, it also follows from them that the injurious effects of imports from Taiwan and raw-material supply contracts were simply hypothetical, or at most marginal, and that access to capital was rendered difficult not on account of the financial crisis, but rather on account of the dumped imports (recitals 315 to 318 of the contested regulation). According to the Council, the FIT levels were not so low that they would have prevented EU producers from selling the product concerned at non-injurious prices. The institutions take the view that reductions in FIT levels may explain reduced demand, as investments in certain locations were no longer viable. However, that reduction was not, according to the Council, capable of breaking the causal link, even together with other factors which could have contributed to the injury. Consequently, the cumulative effect of those four factors which possibly contributed to the injury, could not have broken the causal link between the dumping and injury. 218 Under those circumstances, it is important to recall that different conclusions set out in a definitive regulation cannot be interpreted alone, but in the light of all the reasoning developed therein (see, to that effect, judgments of 14 July 1995, Koyo Seiko v Council, T‑166/94, EU:T:1995:140, paragraph 79, and of 4 October 2006, Moser Baer India v Council, T‑300/03, EU:T:2006:289, paragraph 264). 219 As regards imports of the product concerned from Taiwan, it is clear from recitals 164 to 167 of the provisional regulation and recitals 236 to 238 of the definitive regulation that their effects were considered random, and at most marginal. 220 The FIT cutbacks, according to the Council, contributed to the decline in demand and profitability of the EU industry (see, inter alia, recitals 246, 254 and 259 of the contested regulation), but it appears, on the one hand, that the contribution of that factor to the injury suffered by the EU industry was not found to be absolutely certain, as, first, on the basis of information collected from Germany and Italy, which together account for approximately 75% of the EU market in 2011, the reduction in the average sales price was greater than the FIT cutbacks during the investigation period, secondly, the data collected show that, in certain countries such as Italy, even when the FITs were very high, the EU industry had to significantly lower its prices, third, during the investigation period, the EU producers had to sell at prices below their cost of production, which was mainly a consequence of the fact that the Chinese exporting producers had 80% of the EU market and therefore the power to influence the price-setting mechanism, fourthly, FIT cutbacks may also have been the result of the decreasing prices and not vice versa, and fifthly, current installations depend less and less on the FITs as photovoltaic grid parity is likely to have been reached for certain types of installations in several regions in Europe (see, inter alia, recitals 246, 247 and 260 of the contested regulation). On the other hand, even though those effects were established, they were considered limited. It was mainly the dumped imports from China that caused the prices to fall to unsustainable levels (see, inter alia, recital 249 of the contested regulation). 221 As regards the impact of raw material prices, the Council explained that it could only be rather marginal as any effect on the cost of production of cells and modules was diluted through the value chain. Furthermore, the EU industry was capable of renegotiating not only the prices provided for in the long-term contracts, but also the relevant contractual penalties (see, inter alia, recitals 276 and 279 of the contested regulation). Thus, as is apparent from recital 194 of the provisional regulation, confirmed by recital 283 of the contested regulation, even if some specific EU producers may have been affected by long term contracts for the supply of polysilicon, the EU industry, overall, did not suffer from these long term contracts and was able to fully benefit from the price decrease in polysilicon prices. The long-term contracts were therefore not found to contribute to the material injury suffered by the EU industry. The impact of that factor was, at most, minimal (recital 279 of the contested regulation). 222 Finally, as regards the financial crisis, it follows from recitals 302 to 305 of the contested regulation, which refers to recital 212 of the provisional regulation, that the ability of the EU industry to raise capital decreased significantly during the period considered. While the economic recession had a certain impact on the situation of the EU industry, the investigation showed that, despite the growth observed on the EU market between 2009 and 2011, the situation of the EU industry deteriorated as a result of the dumped imports from China heavily undercutting the EU industry’s sales prices. It was therefore concluded that the potential effects of the financial crisis were aggravated by the increase of dumped imports from China, the limited access to finance was largely a consequence of the negative market climate, and that the situation and prospects of the EU industry a consequence of the dumped imports. Therefore, while the financial crises had a certain impact on the situation of the EU industry, it could not break the causal link between the dumped imports and the injury suffered by the EU industry. Thus, the dumped imports were considered to be the cause of the EU industry’s financial difficulties, rather than the financial crisis itself. 223 It follows that while the influence of certain factors was deemed hypothetical, no factor had, in any event, any more than limited effect on the injury to the EU industry. It also follows from recital 220 of the contested regulation that ‘the effects of other factors on the Union’s industry’s negative development were considered to be limited’. 224 Therefore, it is not apparent from the contested regulation that those factors were the source of any significant injury that the institutions would have had to ensure were not attributed to the imports examined (judgment of 17 December 2008, HEG and Graphite India v Council, T‑462/04, EU:T:2008:586, paragraph 157). 225 It also follows from the case-law that the failure to take into account an insignificant factor cannot call into question the institutions’ findings in their examination under Article 3(7) of the basic regulation (see, to that effect, judgment of 19 December 2013, Transnational Company ‘Kazchrome’ and ENRC Marketing v Council, C‑10/12 P, not published, EU:C:2013:865, paragraphs 27 to 29). Consequently, the same applies to the assessment under Article 9(4) of that regulation. 226 It follows that the sixth plea in law must be rejected. 227 Consequently, the action must be dismissed in its entirety. Costs 228 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. In accordance with Article 138(1) of those rules, institutions which have intervened in the proceedings are to bear their own costs. 229 As the applicants have been unsuccessful, they must be ordered to bear their own costs and pay those incurred by the Council in accordance with the form of order sought by the Council. The Commission is to bear its own costs.On those grounds,THE GENERAL COURT (Fifth Chamber)hereby:1. Dismisses the action; 2. Orders JingAo Solar Co. Ltd, and the other applicants whose names appear in the annex to bear their own costs and to pay those incurred by the Council of the European Union; 3. Orders the European Commission to bear its own costs. DittrichSchwarczTomljenović Delivered in open court in Luxembourg on 28 February 2017.RegistrarPresidentE. Coulon H. Kanninen * Language of the case: English. | c1c2d-fcd7a50-429f | EN |
In the view of Advocate General Kokott, tax exemptions for Church-run schools do not, as a rule, breach the prohibition on State aid | 27 June 2017 ( *1 )‛Reference for a preliminary ruling — State aid — Article 107(1) TFEU — Meaning of ‘State aid’ — Meaning of ‘undertaking’ and ‘economic activity’ — Other conditions for the application of Article 107(1) TFEU — Article 108(1) and (3) TFEU — Meaning of ‘new aid’ and ‘existing aid’ — Agreement of 3 January 1979 between the Kingdom of Spain and the Holy See — Tax on construction, installations and works — Exemption for buildings belonging to the Catholic Church’In Case C‑74/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Juzgado de lo Contencioso-Administrativo No 4 de Madrid (Administrative Court No 4, Madrid, Spain), made by decision of 26 January 2016, received at the Court on 10 February 2016, in the proceedings Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, M. Ilešič, L. Bay Larsen, T. von Danwitz, E. Juhász, M. Berger, A. Prechal, M. Vilaras and E. Regan, Presidents of Chambers, A. Rosas, A. Arabadjiev (Rapporteur), M. Safjan, D. Šváby and E. Jarašiūnas, Judges,Advocate General : J. Kokott,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 10 January 2017,after considering the observations submitted on behalf of:—the Congregación de Escuelas Pías Provincia Betania, by M. Muñoz Pérez and A. Fanjul Guerricaechevarría, abogados,the Ayuntamiento de Getafe, by L. López Díez, abogada,the Spanish Government, by M.A. Sampol Pucurull and A. Rubio González, acting as Agents,the European Commission, by G. Luengo, P. Němečková and F. Tomat, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 16 February 2017,gives the followingJudgment1This request for a preliminary ruling concerns the interpretation of Article 107(1) TFEU.2The request has been made in proceedings between (i) the Congregación de Escuelas Pías Provincia Betania (Comunidad de Casa de Escuelas Pías de Getafe, PP. Escolapios) (Congregation of the schools of a religious order in Spain (Community of religious schools in Getafe, Piarists), ‘the Congregación’) and (ii) the ayuntamiento de Getafe (Municipality of Getafe, Spain; ‘the Municipality’) concerning the latter’s refusal of the Congregación’s application for a refund of the amount it had paid in respect of the tax on construction, installations and works (‘ICIO’).Legal context International law 3Article IV of the Agreement of 3 January 1979 between the Spanish State and the Holy See concerning financial matters (‘the Agreement of 3 January 1979’) provides:‘1. The Holy See, the Bishops’ Conference, dioceses, parishes and other territorial units, religious orders and congregations and “institutes of consecrated life” and their provinces and houses shall be entitled to the following exemptions:...(B)full and permanent exemption from taxes on property and earnings from property, as regards income and assets.This exemption shall not apply to income arising from economic activities or from assets belonging to the Church in respect of which use has been assigned to third parties; nor shall it apply to capital gains or to income which is subject to deduction at source of income tax....’4Under Article VI of the Agreement of 3 January 1979:‘The Holy See and the Spanish Government shall endeavour to resolve, by common agreement, any doubts or difficulties which may arise in the interpretation or application of the terms of this Agreement, drawing for that purpose on the principles underlying it.’ Spanish law 5ICIO is a municipal tax which was introduced by Ley 39/1988 reguladora de las Haciendas Locales (Law 39/1988 on local finances) of 28 December 1988 (BOE No 313 of 30 December 1988, p. 36636). At the material time, ICIO was governed by Articles 100 to 103 of Real Decreto Legislativo 2/2004 por el que se aprueba el texto refundido de la Ley Reguladora de las Haciendas Locales (Royal Legislative Decree 2/2004 approving the consolidated text of the Law on local finances) of 5 March 2004 (BOE No 59 of 9 March 2004, p. 10284; ‘the consolidated Law on local finances’).6Article 100(1) of the consolidated Law on local finances provides:‘[ICIO] is an indirect tax the chargeable event for which shall be the carrying out, in the municipal area, of any building, installation or construction work for which a permit must be obtained, regardless of whether or not the permit has been obtained, or for which a declaration as to the person responsible for the work or a prior notification must be filed, provided that the issue of the permit, or the supervision concerned, is the responsibility of the municipal authority imposing the tax.’7According to Article 101(1) of the consolidated Law on local finances:‘The tax shall be imposed on, and paid by, natural persons, legal persons or entities … who undertake building, installation or construction works, whether or not the persons concerned are the owners of the building on which the works are carried out.For the purposes of the preceding subparagraph, the person or entity who is responsible for meeting the expenses or the cost of carrying out the building, installation or construction works shall be regarded as the person or entity undertaking the works.’8By the Orden por la que se aclara la inclusión del Impuesto sobre Construcciones, Instalaciones y Obras en la letra B) del apartado l del articulo IV del Acuerdo entre el Estado Español y la Santa Sede sobre Asuntos Económicos, de 3 de enero de 1979 (Order making clear that the tax on construction, installations and works is within the scope of Article IV(1)(B) of the Agreement of 3 January 1979 between the Spanish State and the Holy See concerning financial matters), of 5 June 2001 (BOE No 144 of 16 June 2001, p. 21427; ‘the Order of 5 June 2001’), the Spanish Ministry of Finance stated, in the first point of the operative part of the order, that ICIO ‘is included among the taxes on property and earnings from property referred to in Article IV(1)(B) of the Agreement of 3 January 1979’ and, in the second point of the operative part, that ‘the Holy See, the Bishops’ Conference, dioceses, parishes and other territorial units, religious orders and congregations and “institutes of consecrated life” and their provinces and houses shall be entitled to full and permanent exemption from [ICIO]’.9As the referring court has explained, the order of 5 June 2001 granted the Catholic Church full exemption from ICIO in relation to buildings belonging to the Church, regardless of the nature of the activities for which those buildings were used.10The Orden EHA/2814/2009 por la que se modifica la Orden de 5 de junio de 2001, por la que se aclara la inclusión del Impuesto sobre Construcciones, Instalaciones y Obras en la letra B) del apartado 1 del artículo IV del Acuerdo entre el Estado Español y la Santa Sede sobre asuntos económicos, de 3 de enero de 1979 (Order EHA/2814/2009 amending the Order of 5 June 2001 making clear that the tax on construction, installation and building works is within the scope of Article IV(1)(B) of the Agreement of 3 January 1979 between the Spanish State and the Holy See concerning financial matters), of 15 October 2009 (BOE No 254 of 21 October 2009, p. 88046, ‘the Order of 15 October 2009’), replaced the second point of the operative part of the Order of 5 June 2001 by the following:‘The Holy See, the Bishops’ Conference, dioceses, parishes and other territorial units, religious orders and congregations and “institutes of consecrated life” and their provinces and houses shall be entitled to full and permanent exemption from [ICIO] in respect of all buildings which are exempted from the urban property tax (now, the tax on immovable property).’11According to the information provided by the referring court, the consequence of that amendment was that the Catholic Church’s exemption from ICIO applied only to buildings used for exclusively religious purposes.12The referring court explains that the Order of 15 October 2009 was annulled by a judgment of 9 December 2013 of the Administrative Division of the Audiencia Nacional (National High Court, Spain) and that the annulment was upheld by a judgment of 19 November 2014 of the Administrative Division of the Tribunal Supremo (Supreme Court, Spain), on the ground, inter alia, that the order reduced the scope of the exemption provided for in Article IV(1)(B) of the Agreement of 3 January 1979.The dispute in the main proceedings and the question referred for a preliminary ruling13The Congregación is entered in the register of religious entities kept by the Spanish Ministry of Justice and the Agreement of 3 January 1979 applies to it. It is the owner of a complex of buildings in Getafe and the school ‘La Inmaculada’, which is run by the Congregación, is part of that complex.14On 4 March 2011, the Congregación applied for planning permission to renovate and extend the building used by the school as a hall for, amongst other things, meetings, courses and conferences, with a view to providing seating for 450 persons. Permission was granted on 28 April 2011 and the Congregación paid EUR 23730.41 by way of ICIO.15Subsequently, the Congregación applied for a refund of the tax paid, taking the view that it was exempt from ICIO by virtue of the Order of 5 June 2001, which implements Article IV(1)(B) of the Agreement of 3 January 1979.16The Órgano de Gestión Tributaria (municipal tax office) refused that application by decision of 6 November 2013: it took the view that the exemption did not apply since it had been requested in respect of an activity of the Catholic Church which had no religious purpose.17The Congregación has challenged that decision, which was upheld in an administrative review procedure, in the action brought before the referring court. It argues that it was not liable for the amount paid by way of ICIO since Article IV(1)(B) of the Agreement of 3 January 1979 must be interpreted as exempting it from that tax irrespective of the intended use of the immovable property forming the basis of assessment for the tax.18The Municipality contends that under the Order of 15 October 2009 the exemption from ICIO applies solely to buildings which, because they are intended to be used for religious purposes of the Catholic Church, are exempted from the tax on immovable property. It submits that, in the absence of such a limitation, an exemption of this kind could be incompatible with EU law on State aid –– given the scale on which the Church carries on economic activities (the running of schools, hospitals etc.).19The referring court notes that, although the question of the compatibility with EU law of the Catholic Church’s exemption from ICIO has never been raised before the Spanish courts, it has been taken up with the European Commission but the latter has not adopted a final position on the matter. The referring court explains in that regard that, contrary to the Commission’s view, the exemption is not limited to installations, buildings and works belonging to the Catholic Church which are used for exclusively religious purposes.20Referring also to paragraphs 19 to 23 of the judgment of 9 October 2014, Ministerio de Defensa and Navantia (C‑522/13, EU:C:2014:2262), the national court is uncertain whether the exemption from ICIO to which Catholic Church is entitled –– even when the property concerned by that measure is used by it for the purpose of an economic activity –– might amount to State aid within the meaning of Article 107(1) TFEU.21In those circumstances, the Juzgado de lo Contencioso-Administrativo No 4 de Madrid (Administrative Court No 4, Madrid), decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Is the exemption of the Catholic Church from [ICIO] contrary to Article 107(1) TFEU, where the exemption relates to work on buildings intended to be used for economic activities that do not have a strictly religious purpose?’Consideration of the question referred Admissibility of the request for a preliminary ruling 22The Spanish Government contends that the request for a preliminary ruling is inadmissible. It submits, first, that the question referred to the Court is hypothetical since it is seeking to obtain a general advisory opinion concerning the Catholic Church’s exemption from ICIO in the light of the State aid rules, without establishing any connection with the actual facts of the main action or its purpose.23Secondly, it maintains that the request for a preliminary ruling contains significant omissions as regards the description of the factual and legal matters necessary to enable the Court to give a constructive answer to the question referred. The order for reference fails to describe either the Congregación’s activity, in particular in relation to the building concerned by the tax exemption at issue in the main proceedings, or its structure and economic organisation. The referring court has also failed to set out the precise reasons why it considers it necessary to refer the question to the Court for a preliminary ruling.24In that regard, it should be recalled that, according to the Court’s settled case-law, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle required to give a ruling (judgment of 21 December 2016, Vervloet and Others, C‑76/15, EU:C:2016:975, paragraph 56 and the case-law cited).25It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to give a ruling on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to enable it to give a useful answer to the questions submitted to it (judgment of 21 December 2016, Vervloet and Others, C‑76/15, EU:C:2016:975, paragraph 57).26Concerning the last point, the Court recalls that the need to provide an interpretation of EU law which will be of use to the national court requires that the national court define the factual and legal context of the questions it is asking or, at the very least, that it explain the factual circumstances on which those questions are based. Those requirements are of particular importance in the area of competition, where the factual and legal situations are often complex (judgment of 21 November 2013, Deutsche Lufthansa, C‑284/12, EU:C:2013:755, paragraph 20).27According to the Court’s case-law, it is also important for the national court to set out the precise reasons why it was unsure as to the interpretation of EU law and why it considered it necessary to refer questions to the Court for a preliminary ruling (judgment of 21 November 2013, Deutsche Lufthansa, C‑284/12, EU:C:2013:755, paragraph 21).28In the present case, first, it is clear from the order for reference that one of the issues before the referring court is whether Article 107 TFEU precludes the exemption of the Congregación under the order of 5 June 2001, which implements Article IV(1)(B) of the Agreement of 3 January 1979, from the tax at issue in the main proceedings.29It is apparent from the order for reference that the national court considers that, in order to decide upon the case before it, it must ascertain whether an exemption of that kind is compatible with Article 107 TFEU. Its uncertainties in that regard are made plain in the order for reference.30In those circumstances, it is not obvious that the interpretation of EU law that is sought by the referring court concerns a hypothetical question or bears no relation to the actual facts of the main action or its purpose.31Secondly, as the Advocate General has observed at point 25 of her Opinion, the order for reference sets out the relevant provisions of the Agreement of 3 January 1979 and of Spanish tax law and describes the administrative practice and national case-law relating thereto, while the Spanish Government has not identified any matter that would assist in understanding the case which the referring court has failed to mention.32Thirdly, as regards the description of the factual background, the order for reference contains sufficient information for an understanding both of the question referred for a preliminary ruling and of its scope.33It must therefore be held that the order for reference contains the factual and legal material necessary to enable the Court to give a useful answer to the referring court. The order has, moreover, allowed the interested persons referred to in the second paragraph of Article 23 of the Statute of the Court of Justice of the European Union to submit observations as provided for in that provision.34The request for a preliminary ruling is therefore admissible. Substance 35By its question, the referring court asks, in essence, whether a tax exemption such as that at issue in the main proceedings, to which a congregation of the Catholic Church is entitled in respect of works on a building intended to be used for activities that do not have a strictly religious purpose, may fall under the prohibition in Article 107(1) TFEU.36A preliminary point to make is that, according to the Court’s settled case-law, in the procedure laid down in Article 267 TFEU, which provides for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to decide the case before it. To that end, the Court may have to reformulate the questions referred to it. The fact that a national court has, formally speaking, worded a question referred for a preliminary ruling with reference to certain provisions of EU law does not prevent the Court from providing the national court with all the points of interpretation which may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to them in its questions. In that regard, it is for the Court of Justice to extract from all the information provided by the national court, in particular from the grounds of the decision referring the questions, the points of EU law which require interpretation, having regard to the subject matter of the dispute (judgment of 15 October 2015, Biovet, C‑306/14, EU:C:2015:689, paragraph 17 and the case-law cited).37In the present case, having regard in particular to the observations submitted by the Kingdom of Spain and by the Commission, the Court, so as to provide the referring court with such points of interpretation, will, in replying to the question raised, consider not only Article 107(1) TFEU but also Article 108(1) and (3) TFEU. The concept of ‘State aid’ within the meaning of Article 107(1) TFEU 38The Court has consistently held that classification as ‘State aid’ within the meaning of Article 107(1) TFEU requires all the conditions mentioned in that provision to be fulfilled. Thus, first, there must be intervention by the State or through State resources. Second, the intervention must be liable to affect trade between Member States. Third, it must confer a selective advantage on the recipient. Fourth, it must distort or threaten to distort competition (judgments of 21 December 2016, Commission v Hansestadt Lübeck, C‑524/14 P, EU:C:2016:971, paragraph 40, and of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981, paragraph 53).39In addition, EU competition law and, in particular, the prohibition laid down in Article 107(1) TFEU concern the activities of undertakings (see, to that effect, judgments of 23 March 2006, Enirisorse, C‑237/04, EU:C:2006:197, paragraphs 27 and 28, and of 5 March 2015, Commission and Others v Versalis and Others, C‑93/13 P and C‑123/13 P, EU:C:2015:150, paragraph 88).40Accordingly, it is necessary to consider in the present case (i) whether the Congregación may be classified as an ‘undertaking’ for the purposes of Article 107(1) TFEU, (ii) whether the tax exemption at issue in the main proceedings confers a selective economic advantage on the Congregación, (iii) whether that measure represents intervention by the Spanish State or through resources of that Member State and (iv) whether the exemption is liable to affect trade between Member States and distort or threaten to distort competition within the internal market. The concepts of ‘undertaking’ and ‘economic activity’ 41According to settled case-law of the Court, in the sphere of EU competition law, the concept of ‘undertaking’ covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed (judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraph 107).42It follows that the public or private status of the entity engaged in the activity in question has no bearing on the question as to whether or not that entity is an ‘undertaking’.43Moreover, in so far as the activity in question may be classified as ‘economic’, the fact that it is carried on by a religious community does not preclude the application of the rules of the Treaty, including those governing competition law (see, to that effect, judgment of 5 October 1988, Steymann, 196/87, EU:C:1988:475, paragraphs 9 and 14).44In order to determine whether the activities in question are those of an ‘undertaking’ within the meaning of EU competition law, it is necessary to ascertain what the nature of those activities is: each of the different activities of a given entity must thus be examined to determine whether it falls to be classified as an ‘economic activity’ (see, to that effect, judgments of 24 October 2002, Aéroports de Paris v Commission, C‑82/01 P, EU:C:2002:617, paragraph 75, and of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 25).45Any activity consisting in offering goods or services on a given market is an economic activity (judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraph 108).46The fact that the offer of goods or services is made on a not-for-profit basis does not prevent the entity which carries out those operations on the market from being considered an undertaking, since that offer exists in competition with that of other operators which do seek to make a profit (judgment of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 27).47Services normally provided for remuneration are services that may be classified as ‘economic activities’. The essential characteristic of remuneration lies in the fact that it constitutes consideration for the service in question (see, by analogy, judgment of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraphs 37 and 38 and the case-law cited).48Accordingly, courses provided by educational establishments financed essentially by private funds that do not come from the provider itself constitute services, since the aim of such establishments is to offer a service for remuneration (see, by analogy, judgments of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraph 40, and of 11 September 2007, Commission v Germany, C‑318/05, EU:C:2007:495, paragraph 69).49It is not necessary for that private financing to be provided principally by the pupils or their parents, as the economic nature of an activity does not depend on the service concerned being paid for by those for whom it is performed (see, by analogy, judgments of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraph 41, and of 11 September 2007, Commission v Germany, C‑318/05, EU:C:2007:495, paragraph 70).50The same cannot be said, however, of courses provided by certain establishments which are integrated into a system of public education and financed, entirely or mainly, by public funds. Indeed, in establishing and maintaining such a system of public education, which is, as a general rule, financed from public funds and not by pupils or their parents, the State is not seeking to engage in gainful activity, but is fulfilling its social, cultural and educational obligations towards its population (see, by analogy, judgments of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraph 39, and of 11 September 2007, Commission v Germany, C‑318/05, EU:C:2007:495, paragraph 68).51In that context, it is possible that a single establishment may carry on a number of activities, both economic and non-economic, provided that it keeps separate accounts for the different funds that it receives so as to exclude any risk of cross-subsidisation of its economic activities by means of public funds received for its non-economic activities.52In the present case, it is not disputed that the Congregación is engaged in three types of activity at ‘La Inmaculada’ school: strictly religious activities, education subsidised by the Spanish State and non-compulsory education receiving no financial support from the Spanish State. The Congregación also provides catering and transport services for its pupils.53However, given that the tax exemption at issue in the main proceedings concerns the renovation and extension of the school hall at ‘La Inmaculada’ and that the Congregación stated, at the hearing before the Court, that the hall is used only for the educational activities it offers, that exemption appears to have no connection with either the strictly religious activities of the Congregación or the complementary services mentioned in the preceding paragraph.54In that situation, for the purpose of ascertaining whether the prohibition in Article 107(1) TFEU is applicable to the exemption, the referring court will have to determine, in the light of the guidance set out in paragraphs 41 to 51 of the present judgment, which, if any, of the Congregación’s educational activities are economic in nature.55In that regard, the Congregación, the Municipality and the Spanish Government all provided information at the hearing before the Court which was consistent and showed that the educational activities subsidised by the Spanish State are integrated in Spain’s system of public primary and secondary education, given that education at ‘La Inmaculada’ is provided pursuant to an agreement between the Congregación and the Autonomous Community of Madrid and in accordance with the conditions laid down therein and is financed in full from public funds.56If that information were to prove to be correct –– which it is for the referring court to determine –– the educational activities of the Congregación that are subsidised by the Spanish State could not, according to the Court’s case-law set out in paragraphs 41 to 50 of the present judgment, be classified as ‘economic’.57By contrast, it would seem from the information provided by the Congregación, the Municipality and the Spanish Government at the hearing before the Court that the Congregación’s educational activities that are not financed by the Spanish State, corresponding to early-years teaching, extracurricular activities and post-compulsory education, meet all the criteria set out in paragraphs 44 to 49 of the present judgment for classification as ‘economic activities’, a matter which it is nonetheless for the referring court to verify.58According to that information, those activities are not funded by the Spanish State. Rather, they are organised by the Congregación itself and are financed essentially by private contributions, especially from students and their parents, to school costs.59If, following that verification, the referring court were to consider that the educational activities of the Congregación that are not subsidised by the Spanish State constitute an ‘economic activity’, it would then have to ascertain whether the school hall at ‘La Inmaculada’ is used exclusively for one or other of those educational activities or whether its use is mixed.60If the hall were used solely for educational activities subsidised by the Spanish State and meeting all the criteria set out in paragraph 50 of the present judgment, the tax exemption at issue in the main proceedings would not fall under the prohibition in Article 107(1) TFEU.61If, on the other hand, the school hall were used exclusively for the educational activities provided by the Congregación without financial support from the Spanish State and meeting the criteria set out in paragraphs 44 to 49 of the present judgment, the exemption at issue in the main proceedings might well fall under that prohibition.62If there is mixed use of that hall, the tax exemption at issue in the main proceedings might be caught by the prohibition in so far as the hall is used for activities meeting the criteria set out in paragraphs 44 to 49 and 51 of the present judgment.63It follows from all the foregoing considerations that the prohibition in Article 107(1) TFEU can only apply to the tax exemption at issue in the main proceedings if (i) at least some of the educational activities carried on by the Congregación at ‘La Inmaculada’ school have to be classified as ‘economic activities’ within the meaning of the case-law referred to in paragraphs 44 to 49 of the present judgment and (ii) the hall is used, at least in part, for such economic activities.64The following examination of whether, in a situation such as that at issue in the main proceedings, the four conditions set out in paragraph 38 of the present judgment are met will therefore be relevant only if the referring court finds, on an assessment of the facts, that the Congregación uses the school hall for activities which must be classified as ‘economic’. The concept of ‘selective economic advantage’ 65Concerning the question whether the tax exemption at issue in the main proceedings must be regarded as conferring an advantage on its beneficiary, it should be recalled that, according to settled case-law of the Court, measures which, whatever their form, are likely directly or indirectly to favour certain undertakings, or which fall to be regarded as an economic advantage that the recipient undertaking would not have obtained under normal market conditions, are regarded as State aid (judgment of 9 October 2014, Ministerio de Defensa and Navantia, C‑522/13, EU:C:2014:2262, paragraph 21).66Thus, measures which, in various forms, mitigate the charges that are normally included in the budget of an undertaking and which therefore, without being subsidies in the strict meaning of the word, are similar in character and have the same effect are considered to constitute aid (judgment of 19 March 2013, Bouygues and Bouygues Télécom v Commission and Others and Commission v France and Others, C‑399/10 P and C‑401/10 P, EU:C:2013:175, paragraph 101).67In the present case, it is apparent from the order for reference, first, that, in accordance with Article 100(1) and Article 101(1) of the consolidated Law on local finances, all undertakings which carry out works such as those at issue in the main proceedings are subject to ICIO and that the Congregación paid the tax due. The order for reference also makes clear that the tax exemption at issue in the main proceedings would result in the Congregación receiving a refund of the tax already paid by it.68In those circumstances, it must be held that ICIO is a tax that is normally payable by all taxpayers who carry out the construction or renovation works to which that tax applies and that the exemption at issue in the main proceedings would have the effect of mitigating the charges that are included in the Congregación’s budget. Consequently, a tax exemption of that nature would confer an economic advantage on the Congregación.69Furthermore, it follows from the order of 5 June 2001 that the Holy See, the Bishops’ Conference, dioceses, parishes and other territorial units, religious orders and congregations and institutes for certain Catholic communities and their provinces and houses are entitled to full and permanent exemption from ICIO.70Accordingly, it would appear that that order is not a general measure applicable without distinction to all economic operators but is rather a measure that is prima facie selective.71Nevertheless, according to settled case-law of the Court, ‘State aid’ does not cover State measures which differentiate between undertakings –– and which are, therefore, prima facie selective –– where that differentiation arises from the nature or overall structure of the system of which they are part, which it is for the Member State concerned to demonstrate (judgment of 9 October 2014, Ministerio de Defensa and Navantia, C‑522/13, EU:C:2014:2262, paragraph 42).72In the present case, however, there is nothing in the documents before the Court which suggests that the tax exemption provided for by the order of 5 June 2001 derives directly from the founding or guiding principles of the Kingdom of Spain’s tax system or that it is necessary for the functioning and efficiency of that system.73In view of all the foregoing considerations, it must be held that, in the present case, the condition concerning the existence of a selective economic advantage is likely to be satisfied. The concept of ‘aid granted by the State or through State resources’ 74For it to be possible to classify advantages as aid within the meaning of Article 107(1) TFEU, first, they must be granted directly or indirectly through State resources and, secondly, that grant must be attributable to the State (judgment of 19 December 2013, Association Vent De Colère! and Others, C‑262/12, EU:C:2013:851, paragraph 16).75As regards, in the first place, the condition that the measure be attributable to the State, it is sufficient to note that the tax exemption at issue in the main proceedings derives directly from the order of 5 June 2001 (which was adopted by the Ministry of Finance of the Spanish State) and stems originally from the Agreement of 3 January 1979, which was entered into and implemented by the Kingdom of Spain.76Concerning, in the second place, the condition that the advantage be conferred directly or indirectly through State resources, it is not disputed that the corollary of the exemption at issue in the main proceedings, which entails the removal of a charge which would ordinarily be borne by the Congregación, is a corresponding reduction in the revenue of the Municipality.77In those circumstances, the condition concerning intervention through State resources would appear to be satisfied. The concept of aid which ‘affects trade between Member States’ and ‘distorts or threatens to distort competition’ 78As regards the conditions relating to the effect of an economic advantage on trade between Member States and the distortion of competition that may be entailed, the Court recalls that for the purpose of categorising a national measure as State aid, it is necessary, not to establish that the aid has a real effect on trade between Member States and that competition is actually being distorted, but only to examine whether that aid is liable to affect such trade and distort competition (judgment of 21 December 2016, Vervloet and Others, C‑76/15, EU:C:2016:975, paragraph 102).79In particular, when aid granted by a Member State strengthens the position of certain undertakings as compared with that of other undertakings competing in trade between Member States, such trade must be regarded as affected by the aid. In that regard, it is not necessary that the beneficiary undertakings themselves be involved in trade between Member States. Where a Member State grants aid to undertakings, internal activity may be maintained or increased as a result, so that the opportunities for undertakings established in other Member States to penetrate the market in that Member State are thereby reduced (judgment of 21 December 2016, Vervloet and Others, C‑76/15, EU:C:2016:975, paragraph 104).80With regard to the condition concerning distortion of competition, the point should be made that, in principle, aid intended to release an undertaking from costs which it would normally have to bear in its day-to-day management or normal activities distorts the conditions of competition (judgment of 26 October 2016, Orange v Commission, C‑211/15 P, EU:C:2016:798, paragraph 66).81In the case before the referring court, it is possible that the exemption from ICIO for which the Congregación may qualify might make the educational services it provides more attractive by comparison with the services provided by establishments that are also active on the same market.82That said, in accordance with Article 2 of Commission Regulation (EC) No 1998/2006 of 15 December 2006 on the application of Articles [107 and 108 TFEU] to de minimis aid (OJ 2006 L 379, p. 5), read in the light of recital 8 thereof, aid not exceeding a ceiling of EUR 200000 over any period of three years is deemed not to affect trade between Member States and not to distort or threaten to distort competition; such measures are therefore excluded from the concept of State aid (judgment of 8 May 2013, Libert and Others, C‑197/11 and C‑203/11, EU:C:2013:288, paragraph 81).83In that regard, it is for the referring court to determine whether that threshold is reached in the present case, bearing in mind that, for the purposes of the necessary calculation, only the advantages that the Congregación has obtained in respect of any economic activities it may carry on can be taken into account, since non-economic activities have to be excluded from that calculation, as indicated in paragraphs 41 to 63 of the present judgment.84It is therefore for the referring court to determine in fact, in the light of the foregoing points of interpretation and on the basis of all the relevant circumstances of the case before it, whether trade between Member States is liable to be affected by the exemption at issue in the main proceedings and whether Regulation No 1998/2006 applies to this case.85In that regard, if the referring court were to have doubts or difficulties concerning the determination of the amount of aid which the Congregación may have received in respect of any possible economic activity, it may, in addition to seeking the cooperation of other bodies of the Member State concerned, request the assistance of the Commission for this purpose, in accordance with the principle of sincere cooperation, as is apparent in particular from paragraphs 77 to 96 of the Commission notice on the enforcement of State aid law by national courts (OJ 2009 C 85, p. 1) (see, to that effect, judgment of 13 February 2014, Mediaset, C‑69/13, EU:C:2014:71, paragraph 30). The concepts of ‘existing aid’ and ‘new aid’ for the purposes of paragraphs 1 and 3 of Article 108 TFEU respectively 86The Spanish Government has argued in its observations before the Court that, in view of the fact that the Agreement of 3 January 1979 was concluded before the Kingdom of Spain’s accession to the European Union and that that agreement is the basis for the exemption at issue in the main proceedings, the exemption in any event constitutes existing aid. It should be recalled in that regard that in the context of the State aid control system, established in Articles 107 and 108 TFEU, the procedure differs according to whether the aid is existing or new. Whereas existing aid may, in accordance with Article 108(1) TFEU, be lawfully implemented so long as the Commission has made no finding of incompatibility, Article 108(3) TFEU provides that plans to grant new aid or alter existing aid must be notified, in due time, to the Commission and may not be put into effect until the procedure has resulted in a final decision (judgment of 26 October 2016, DEI and Commission v Alouminion tis Ellados, C‑590/14 P, EU:C:2016:797, paragraph 45).87Without prejudice to the Act of Accession of the Member State concerned, ‘existing aid’ is all aid which existed prior to the entry into force of the Treaty in that Member State, that is to say, aid schemes and individual aid put into effect before, and still applicable after, the entry into force of the Treaty (see, to that effect, judgment of 18 July 2013, P, C‑6/12, EU:C:2013:525, paragraph 42).88In the present case, whilst it is true that Article IV(1)(B) of the Agreement of 3 January 1979, which provides that the Spanish Catholic Church is to be generally exempted from property taxes, dates from before the Kingdom of Spain’s accession to the European Union, the fact remains that ICIO was introduced into Spanish legislation only after that accession and the tax exemption at issue in the main proceedings came into being as a result of the order of 5 June 2001.89In those circumstances, if the referring court were to find that State aid has been granted to the Congregación, that aid could only be new aid for the purposes of Article 108(3) TFEU.90In view of all the foregoing considerations, the answer to the question raised is that a tax exemption such as that at issue in the main proceedings, to which a congregation belonging to the Catholic Church is entitled in respect of works on a building intended to be used for activities that do not have a strictly religious purpose, may fall under the prohibition in Article 107(1) TFEU if, and to the extent to which, those activities are economic, a matter which it is for the referring court to determine.Costs91Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: A tax exemption such as that at issue in the main proceedings, to which a congregation belonging to the Catholic Church is entitled in respect of works on a building intended to be used for activities that do not have a strictly religious purpose, may fall under the prohibition in Article 107(1) TFEU if, and to the extent to which, those activities are economic, a matter which it is for the referring court to determine. [Signatures]( *1 ) Language of the case: Spanish. | 3aa3c-c8a2a12-487a | EN |
The Court of Justice delivers its judgment in the case involving breast implants made of inferior quality industrial silicone | 16 February 2017 ( *1 )‛Reference for a preliminary ruling — Approximation of laws — Industrial policy — Directive 93/42/EEC — Checks on the conformity of medical devices — Notified body appointed by the manufacturer — Obligations of that body — Defective breast implants — Implants manufactured using silicone — Liability of the notified body’In Case C‑219/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesgerichtshof (Federal Court of Justice, Germany), made by decision of 9 April 2015, received at the Court on 13 May 2015, in the proceedings Elisabeth Schmitt v TÜV Rheinland LGA Products GmbH, THE COURT (First Chamber),composed of R. Silva de Lapuerta, President of the Chamber, E. Regan, J.-C. Bonichot, C.G. Fernlund (Rapporteur) and S. Rodin, Judges,Advocate General : E. Sharpston,Registrar: C. Strömholm, Administrator,having regard to the written procedure and further to the hearing on 26 May 2016,after considering the observations submitted on behalf of:—Mrs Schmitt, by R. Schultze-Zeu, Rechtsanwältin, and H. Riehn, Rechtsanwalt,TÜV Rheinland LGA Products GmbH, by I. Brock, Rechtsanwältin, M. Schweiger, Rechtsanwalt, and D. Anderson QC,the German Government, by T. Henze, J. Möller and K. Petersen, acting as Agents,Ireland, by E. Creedon, L. Williams and A. Joyce, acting as Agents, and C. Toland, Barrister-at-Law,the French Government, by G. de Bergues, D. Colas, F. Gloaguen and J. Traband, acting as Agents,the European Commission, by M. Kellerbauer and P. Mihaylova, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 15 September 2016,gives the following Judgment 1This reference for a preliminary ruling concerns the interpretation of Article 11(1)(a) of Council Directive 93/42/EEC of 14 June 1993 concerning medical devices (OJ 1993 L 169, p. 1), as amended by Regulation (EC) No 1882/2003 of the European Parliament and of the Council of 29 September 2003 (OJ 2003 L 284, p. 1) (‘Directive 93/42’), and sections 3.3, 4.3, 5.3 and 5.4 of Annex II to the directive.2The request has been made in proceedings between Mrs Elisabeth Schmitt and TÜV Rheinland LGA Products GmbH (‘TÜV Rheinland’) concerning the latter’s liability, as notified body, for the harm caused to Mrs Schmitt by defective breast implants made of silicone. Legal context EU law Directive 93/423Directive 93/42 was amended by Directive 2007/47/EC of the European Parliament and of the Council of 5 September 2007 (OJ 2007 L 247, p. 21). However, those amendments relate to provisions that were to be applied from 21 March 2010 and are therefore irrelevant for the purpose of the present proceedings.4The third recital of Directive 93/42 states that ‘national provisions for the safety and health protection of patients, users and, where appropriate, other persons, with regard to the use of medical devices should be harmonised in order to guarantee the free movement of such devices within the internal market’.5The fifth recital of Directive 93/42 states that ‘medical devices should provide patients, users and third parties with a high level of protection and attain the performance levels attributed to them by the manufacturer; … therefore, the maintenance or improvement of the level of protection attained in the Member States is one of the essential objectives of this Directive’.6Article 2 of Directive 93/42 provides that ‘Member States shall take all necessary steps to ensure that devices may be placed on the market and/or put into service only if they comply with the requirements laid down in this Directive when duly supplied and properly installed, maintained and used in accordance with their intended purpose’.7Article 11(1)(a) of Directive 93/42 sets out one of the alternatives for the conformity assessment procedure for Class III devices, other than custom-made devices and those intended for clinical investigations, which the manufacturer must choose in order to affix the CE marking. In practice, that alternative entails following the procedure relating to the EC declaration of conformity set out in Annex II (full quality assurance).8It is apparent from Article 11(9) of Directive 93/42 that, where the conformity assessment procedure requires the involvement of a notified body, the manufacturer may apply to a body of its choice within the framework of the tasks for which the body has been notified. Article 11(10) provides that that body may require, where duly justified, any information or data which is necessary for establishing and maintaining the attestation of conformity in view of the chosen procedure.9Article 16(6) of Directive 93/42 is worded as follows:‘Where a notified body finds that pertinent requirements of this Directive have not been met or are no longer met by the manufacturer or where a certificate should not have been issued, it shall, taking account of the principle of proportionality, suspend or withdraw the certificate issued or place any restrictions on it unless compliance with such requirements is ensured by the implementation of appropriate corrective measures by the manufacturer. In the case of suspension or withdrawal of the certificate or of any restriction placed on it or in cases where an intervention of the competent authority may become necessary, the notified body shall inform its competent authority thereof. The Member State shall inform the other Member States and the Commission.’10Annex II to Directive 93/42, headed ‘EC declaration of conformity’, provides in Section 1 thereof that ‘the manufacturer must ensure application of the quality system approved for the design, manufacture and final inspection of the products concerned, as specified in Section 3, and is subject to audit, as laid down in Sections 3.3 and 4, and to Community surveillance, as specified in Section 5.’11Section 3.2 of that annex states as follows:‘Application of the quality system must ensure that the products conform to the provisions of this Directive which apply to them at every stage, from design to final inspection. All the elements, requirements and provisions adopted by the manufacturer for his quality system must be documented in a systematic and orderly manner in the form of written policies and procedures such as quality programmes, quality plans, quality manuals and quality records.…’12Section 3.3 of that annex is worded as follows:‘The notified body must audit the quality system to determine whether it meets the requirements referred to in section 3.2. It must presume that quality systems which implement the relevant harmonized standards conform to these requirements.The assessment team must include at least one number with past experience of assessments of the technology concerned. The assessment procedure must include an inspection on the manufacturer’s premises and, in duly substantiated cases, on the premises of the manufacturer’s suppliers and/or subcontractors to inspect the manufacturing processes.The manufacturer shall be notified of the decision. It must contain the conclusions of the inspection and a reasoned assessment.’13Section 4.1 of Annex II to Directive 93/42 provides as follows:‘In addition to the obligations imposed by Section 3, the manufacturer must lodge with the notified body an application for examination of the design dossier relating to the product which he plans to manufacture …’14Section 4.2 of that annex states as follows:‘The application must describe the design, manufacture and performances of the product in question. It must include the documents needed to assess whether the product conforms to the requirements of this Directive …’15Section 4.3 of the annex provides as follows:‘The notified body must examine the application and, if the product conforms to the relevant provisions of this Directive, issue the application with an EC design-examination certificate. The notified body may require the application to be completed by further tests or proof to allow assessment of conformity with the requirements of the Directive. The certificate shall contain the conclusions of the examination, the conditions of validity, the data needed for identification of the approved design and, where appropriate, a description of the intended purpose of the product.16Section 5.1 of Annex II to Directive 93/42 is worded as follows:‘The aim of surveillance is to ensure that the manufacturer duly fulfils the obligations imposed by the approved quality system.’17Section 5.2 of that annex provides as follows:‘The manufacturer must authorise the notified body to carry out all the necessary inspections and supply it with all relevant information, in particular:the documentation on the quality system,the data stipulated in the part of the quality system relating to design, such as the results of analyses, calculation, tests, etc.,- the data stipulated in the part of the quality system relating to manufacture, such as inspection reports and test data, calibration data, qualification reports of the personnel concerned, etc.’18According to Section 5.3 of the annex, the notified body ‘must periodically carry out appropriate inspections and assessments to make sure that the manufacturer applies the approved quality system and must supply the manufacturer with an assessment report’. In addition, Section 5.4 provides that that body ‘may pay unannounced visits to the manufacturer [during which it] may, where necessary, carry out or ask for tests in order to check that the quality system is working properly’.19Annex XI to Directive 93/42 lays down ‘Criteria to be met for the designation of notified bodies’, including those relating to greater independence and scientific expertise. In particular, it is apparent from Section 3 of the annex that a notified body must have ‘sufficient scientific staff … who possess experience and knowledge sufficient to assess the medical functionality and performance of devices for which it has been notified, having regard to the requirements of this Directive’. Moreover, Section 6 of that annex states that such a body ‘must take out civil liability insurance, unless liability is assumed by the State under domestic legislation or the Member State itself carries out the inspections directly.’Directive 2003/12/EC20Under Article 1 of Commission Directive 2003/12/EC of 3 February 2003 on the reclassification of breast implants in the framework of Directive 93/42 (OJ 2003 L 28, p. 43), such implants are to be classified as Class III medical devices.21That directive entered into force on 1 September 2003. It is apparent from Articles 2 and 3 of the directive that breast implants placed on the market before that date were to be subject to a conformity reassessment procedure as Class III medical devices before 1 March 2004. German law 22It is apparent from the order for reference that Directive 93/42 was transposed into German law by the Medizinproduktegesetz (Law on medical devices) (‘the MPG’) and the Medizinprodukt-Verordnung (the Order on medical devices).23In accordance with the first sentence of Paragraph 6(2) and Paragraph 37(1) of the MPG and point 1 of Paragraph 7(1) of the Order on medical devices, Class III medical devices may be placed on the market only if the requirements of the conformity assessment procedure laid down in Annex II to Directive 93/42 are met.24It is clear from various provisions of the Bürgereliches Gesetzbuch (German Civil Code), as interpreted in German case-law, first, that civil liability may be incurred for breach of a rule conferring legal protection and, second, that the scope of the duty to exercise due diligence and take all due care under a contract may, in certain cases, extend to third parties. The dispute in the main proceedings and the questions referred for a preliminary ruling 25On 1 December 2008, Mrs Schmitt had breast implants manufactured in France fitted in Germany.26The manufacturer of those implants, which became insolvent after that date, had appointed TÜV Rheinland to assess its quality system. It is apparent from the order for reference that, in the course of its involvement during the period 1998 to 2008, that notified body made eight visits to the manufacturer’s premises, all of which were announced in advance. During that period, TÜV Rheinland never inspected business records or ordered that the devices be inspected.27In 2010, the competent French authority established that the manufacturer in question had produced breast implants using industrial silicone which did not comply with quality standards. Accordingly, Mrs Schmitt had the implants removed in 2012.28Taking the view that TÜV Rheinland had not fulfilled its obligations satisfactorily, Mrs Schmitt claimed EUR 40000 by way of compensation for non-material damage from that notified body before the German courts. She also sought a declaration that that body was liable for any future material damage. In support of her claims, Mrs Schmitt argued that an inspection of the delivery notes and invoices would have enabled TÜV Rheinland to ascertain that the manufacturer had not used an approved form of silicone.29Those claims were rejected at first instance and also by the appeal court.30First, the appeal court found that there could be no liability on the part of TÜV Rheinland for infringement of an obligation under a contract for the benefit of third parties, as the contract concluded between the notified body and the manufacturer fell to be assessed exclusively by reference to private law and did not include Mrs Schmitt. According to that court, it is neither the purpose nor the intention of TÜV Rheinland’s involvement to protect third parties, as the activities connected with certification serve only to ensure compliance with the requirements for placing medical devices on the market. The inclusion of a third party within the scope of the contract, contrary to the intention of the parties to the contract and in the absence of any legitimate interest in that regard, would have the effect of extending the notified body’s liability indefinitely.31Second, the appeal court found that TÜV Rheinland was not liable under civil liability law either, as the purpose of that notified body’s activity was not to protect patients. Moreover, that court found that no fault could be established as TÜV Rheinland had made regular announced visits, which must be deemed sufficient in the absence of any suspicion of improper production practices.32Mrs Schmitt brought an appeal on a point of law before the referring court.33In the view of the referring court, how the dispute will be resolved under German law depends, essentially, on the purpose of the involvement of a notified body in the conformity assessment procedure and on that body’s obligations under that procedure.34The referring court has indicated that the answer to the question whether the first sentence of Paragraph 6(2) of the MPG is to be regarded as a provision conferring legal protection on individual interests depends essentially on the content and purpose of Directive 93/42 in general, and Annex II thereto in particular. Under German law, a provision should be regarded as conferring legal protection where, having regard to its purpose and content, it is intended to protect individuals or certain groups of persons against the infringement of a particular legal interest. It would be helpful in that regard to ascertain whether the legislature which adopted the provision in question specifically intended, if only as a secondary aim, to afford to certain groups of individuals the legal protection sought on account of the infringement alleged. It is also appropriate to ascertain, as part of a comprehensive assessment of the legislative context in which the provision in question applies, whether the legislature might have intended to make infringement of the protected interest result in the tortious liability of the party infringing that interest.35Furthermore, the referring court explains, with regard to any benefit that may accrue to a third party to the contract concluded between the manufacturer in question and TÜV Rheinland, that such benefits may arise where certain conditions are met, inter alia where the manufacturer has a protectable interest in the scope of the contractual obligations of the notified body being extended to a third party, such as Mrs Schmitt. In interpreting that contract in accordance with German law, the objectives pursued by Directive 93/42 in general through the conformity assessment procedure and, in particular, through the involvement of the notified body via that contract are of crucial importance.36In any event, in order for TÜV Rheinland to incur liability, that notified body must have infringed either a rule conferring legal protection or a contractual obligation. In order to establish whether there was such an infringement, the referring court would like to ascertain the specific content of the obligations arising under Sections 3.3, 4.3, 5.3 and 5.4 of Annex II to Directive 93/42. That court entertains doubts as to the precise nature of the obligations which a body such as TÜV Rheinland is under, in particular with regard to the level of supervision and scrutiny required of that body when it carries out inspection visits at the manufacturer’s premises.37In those circumstances, the Bundesgerichtshof (Federal Court of Justice, Germany) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Is it the purpose and intention of Directive 93/42 that, in the case of Class III medical devices, the notified body responsible for auditing the quality system, examining the design of the product and surveillance acts in order to protect all potential patients and may therefore, in the event of a culpable infringement of an obligation, have direct and unrestricted liability towards the patients concerned?(2)Does it follow from Sections [3.3, 4.3, 5.3 and 5.4] of Annex II to Directive 93/42 that, in the case of Class III medical devices, the notified body responsible for auditing the quality system, examining the design of the product and surveillance is subject to a general obligation to examine devices, or at least to examine them where there is due cause?(3)Does it follow from the aforementioned sections of Annex II to Directive 93/42 that, in the case of Class III medical devices, the notified body responsible for auditing the quality system, examining the design of the product and surveillance is subject to a general obligation to examine the manufacturer’s business records and/or to carry out unannounced inspections, or at least to do so where there is due cause?’ Consideration of the questions referred The second and third questions 38By its second and third questions, which it is appropriate to answer first and together, the referring court seeks to ascertain, in essence, whether the provisions of Annex II to Directive 93/42 are to be interpreted as meaning that the notified body is required in general, or at least where there is due cause, to carry out unannounced inspections, to examine devices and/or to examine the manufacturer’s business records.39It should be noted in that regard that some of the obligations the notified body is under pursuant to Annex II to Directive 93/42 are undoubtedly specific in terms of specific action to be taken. Thus, in auditing the manufacturer’s quality system, the notified body is required to carry out an inspection on the manufacturer’s premises, in accordance with Section 3.3 of that annex. Moreover, in carrying out ‘surveillance’ of the manufacturer’s activities, the notified body must periodically undertake appropriate inspections and assessments, in accordance with Section 5.3 of the annex.40However, the provisions of Annex II to Directive 93/42 do not impose a general obligation on the notified body to carry out unannounced inspections, to examine devices and/or to examine the manufacturer’s business records.41That being so, it should be recalled that the notified body is under an obligation, pursuant to Sections 3.2, 3.3 and 4.1 to 4.3 of Annex II to Directive 93/42, first, to analyse the application for examination of the design dossier lodged by the manufacturer, which must describe the design, manufacture and performance of the product in question and, second, to ascertain whether the application of the quality system contemplated by the manufacturer ensures that the products fulfil the relevant requirements under that directive. Moreover, it is apparent from Section 5.1 of that annex that the notified body must satisfy itself that the manufacturer duly fulfils the obligations imposed by the approved quality system.42Annex II to Directive 93/42 expressly lays down various measures enabling the notified body to fulfil its surveillance obligations. It is apparent from Section 5.4 of the annex that the notified body may pay unannounced visits to the manufacturer during which it may, where necessary, carry out or ask for tests in order to check that the quality system is working properly.43Moreover, it is clear from Article 11(10) of Directive 93/42 that the notified body may require, where duly justified, any information or data which is necessary for establishing and maintaining the attestation of conformity in view of the chosen procedure. Accordingly, in the procedure relating to the EC declaration of conformity, the manufacturer must allow that body to carry out all the inspections necessary and provide it with all relevant information, in accordance with Section 5.2 of Annex II to the directive.44Several of the interested parties which have submitted observations to the Court have argued that it follows from the wording and overall scheme of Directive 93/42 that all the above measures are optional and that notified bodies should be allowed a broad degree of discretion in that regard.45It is true, as the Advocate General observed in point 44 of her Opinion, that those bodies must be allowed an appropriate degree of discretion, in view of the stringent requirements which they must satisfy under Annex XI to Directive 93/42 as regards their independence and scientific expertise. However, the obligations laid down in Article 16(6) of the directive and those set out in paragraph 41 above would be a dead letter if the degree of discretion knew no limits. The notified body would not be able to fulfil its function under the procedure relating to the EC declaration of conformity if it were free not to take any steps in the face of evidence indicating that a medical device might not comply with the requirements laid down in Directive 93/42.46Consequently, as they are required to establish whether EU certification may be maintained pursuant to Article 16(6) of Directive 93/42, notified bodies are under a general obligation to act with all due diligence when engaged in a procedure relating to the EC declaration of conformity.47It follows, as the Advocate General observed in point 54 of her Opinion, that a notified body is under a duty to be alert, with the result that, in the face of evidence indicating that a medical device may not comply with the requirements laid down in Directive 93/42, that body must take all steps necessary to ensure that it fulfils its obligations under Article 16(6) of the directive, as well as those set out in paragraph 41 above.48In the light of the foregoing considerations, the answer to the second and third questions is that the provisions of Annex II to Directive 93/42, read in the light of Article 11(1) and (10) and Article 16(6) of the directive, are to be interpreted as meaning that the notified body is not under a general obligation to carry out unannounced inspections, to examine devices and/or to examine the manufacturer’s business records. However, in the face of evidence indicating that a medical device may not comply with the requirements laid down in Directive 93/42, the notified body must take all the steps necessary to ensure that it fulfils its obligations under Article 16(6) of the directive and Sections 3.2, 3.3, 4.1 to 4.3 and 5.1 of Annex II to the directive. The first question 49By its first question, the referring court seeks to ascertain, in essence, whether Directive 93/42 is to be interpreted as meaning, first, that in the procedure relating to the EC declaration of conformity, the purpose of the notified body’s involvement is to protect the end users of medical devices and, second, that a culpable failure by that body to comply with its obligations is therefore liable to give rise to liability on its part vis-à-vis such users.50It should be observed that the Court has previously held, on the basis of, inter alia, the third and fifth recitals of Directive 93/42, that the aim of the directive is not only the protection of health stricto sensu, but also the safety of persons and that it does not concern only patients and users of medical devices but, more generally, ‘third parties’ or ‘other persons’ (judgment of 19 November 2009, Nordiska Dental, C‑288/08, EU:C:2009:718, paragraph 29). It follows that the actual aim of that directive is to protect the end users of medical devices.51While it is incumbent on the manufacturer, in the first place, to ensure that the medical device complies with the requirements laid down in Directive 93/42, it is clear that that directive also imposes obligations to that end on the Member States and notified bodies.52In that regard, it should be noted, first, that in addition to the obligation on Member States under Article 2 of Directive 93/42 to take all necessary steps to ensure that devices may be placed on the market and/or put into service only if they comply with the requirements laid down in the directive, the latter imposes specific obligations on the Member States as regards surveillance of the market. As the Court held in paragraphs 35 to 38 of its judgment of 24 November 2016, Lohmann & Rauscher International (C‑662/15, EU:C:2016:903), the combination of those obligations in connection with the procedures for safeguarding, vigilance and health surveillance, all of which are laid down by the directive, ensures protection for the health and safety of persons.53Second, with regard to the involvement of the notified body in the procedure relating to the EC declaration of conformity, it is apparent from the wording and overall scheme of Directive 93/42 that the purpose of that procedure is to ensure protection for the health and safety of persons.54In the light of the foregoing, it is necessary to determine whether, under Directive 93/42, a culpable infringement of its obligations by a notified body in the course of its involvement in the procedure in question may render it liable vis-à-vis the end users of medical devices.55It should be noted at the outset that the Court has previously stated that it does not necessarily follow from the fact that a directive imposes surveillance obligations on certain bodies or the fact that one of the objectives of the directive is to protect injured parties that the directive seeks to confer rights on such parties in the event that those bodies fail to fulfil their obligations, and that is the case especially if the directive does not contain any express rule granting such rights (see, to that effect, judgment of 12 October 2004, Paul and Others, C‑222/02, EU:C:2004:606, paragraphs 38 to 40).56Similarly, it should be noted that, in the absence of any mention in Directive 93/42 of the manner in which the civil liability of notified bodies may be incurred, it cannot be maintained that the purpose of the directive is to govern the conditions under which the end users of medical devices may be able to obtain compensation for culpable failure by those bodies to fulfil their obligations.57In any event, the mere fact that Section 6 of Annex XI to Directive 93/42 requires notified bodies to take out civil liability insurance is not sufficient, in the absence of any further detail in that regard, for it to be concluded that the directive requires Member States to confer on the end users of medical devices who have suffered injury as a result of culpable failure on the part of notified bodies to fulfil their obligations a right to look to those bodies for compensation.58It is established case-law that the system of rules put in place by Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (OJ 1985 L 210, p. 29) does not preclude the application of other systems of contractual or non-contractual liability based on other grounds, such as fault (see, to that effect, judgment of 10 January 2006, Skov and Bilka, C‑402/03, EU:C:2006:6, paragraph 47).59It follows that, under EU law as it currently stands, the conditions under which culpable failure on the part of a notified body to fulfil its obligations under the procedure relating to the EC declaration of conformity laid down by Directive 93/42 may give rise to liability on its part vis-à-vis the end users of medical devices are governed by national law, subject to the principles of equivalence and effectiveness.60In the light of the foregoing considerations, the answer to the first question is that Directive 93/42 is to be interpreted as meaning that in the procedure relating to the EC declaration of conformity, the purpose of the notified body’s involvement is to protect the end users of medical devices. The conditions under which culpable failure by that body to fulfil its obligations under the directive in connection with that procedure may give rise to liability on its part vis-à-vis those end users are governed by national law, subject to the principles of equivalence and effectiveness. The request that the effects of the present judgment be limited in time 61In its observations, Ireland has requested the Court to limit the temporal effects of the present judgment, if the Court were to conclude that Directive 93/42 provides that, in the event of culpable failure to comply with its obligations in connection with a Class III medical device, the notified body has direct and unrestricted liability towards the users of the device.62It is sufficient to observe that it follows from the answer to the first question that Directive 93/42 does not impose such liability.63Accordingly, there is no need to limit the temporal effects of the present judgment. Costs 64Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (First Chamber) hereby rules: 1. The provisions of Annex II to Council Directive 93/42/EEC of 14 June 1993 concerning medical devices, as amended by Regulation (EC) No 1882/2003 of the European Parliament and of the Council of 29 September 2003, read in the light of Article 11(1) and (10) and Article 16(6) of the directive, are to be interpreted as meaning that the notified body is not under a general obligation to carry out unannounced inspections, to examine devices and/or to examine the manufacturer’s business records. However, in the face of evidence indicating that a medical device may not comply with the requirements laid down in Directive 93/42, as amended by Regulation No 1882/2003, the notified body must take all the steps necessary to ensure that it fulfils its obligations under Article 16(6) of the directive and Sections 3.2, 3.3, 4.1 to 4.3 and 5.1 of Annex II to the directive. 2. Directive 93/42, as amended by Regulation No 1882/2003, is to be interpreted as meaning that, in the procedure relating to the EC declaration of conformity, the purpose of the notified body’s involvement is to protect the end users of medical devices. The conditions under which culpable failure by that body to fulfil its obligations under the directive in connection with that procedure may give rise to liability on its part vis-à-vis those end users are governed by national law, subject to the principles of equivalence and effectiveness. [Signatures]( *1 ) Language of the case: German. | 9ef32-9492167-441f | EN |
According to Advocate General Mengozzi, Members States must issue a visa on humanitarian grounds where substantial grounds have been shown for believing that a refusal would place persons seeking international protection at risk of torture or inhuman or degrading treatment | 7 March 2017 ( 1 )*[Text rectified by order of 24 March 2017]‛Reference for a preliminary ruling — Regulation (EC) No 810/2009 — Article 25(1)(a) — Visa with limited territorial validity — Issuing of a visa on humanitarian grounds or because of international obligations — Concept of ‘international obligations’ — Charter of Fundamental Rights of the European Union — European Convention for the Protection of Human Rights and Fundamental Freedoms — Geneva Convention — Issuing of a visa where a risk of infringement of Article 4 and/or Article 18 of the Charter of Fundamental Rights is established — No obligation’In Case C‑638/16 PPU,REQUEST for a preliminary ruling under Article 267 TFEU from the Conseil du Contentieux des Étrangers (Council for asylum and immigration proceedings, Belgium), made by decision of 8 December 2016, received at the Court on 12 December 2016, in the proceedings X and X v État belge, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, L. Bay Larsen, T. von Danwitz, J.L. da Cruz Vilaça and M. Berger (Rapporteur), Presidents of Chambers, A. Borg Barthet, A. Arabadjiev, C. Toader, M. Safjan, E. Jarašiūnas, C.G. Fernlund, C. Vajda, S. Rodin and F. Biltgen, Judges,Advocate General: P. Mengozzi,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 30 January 2017,after considering the observations submitted on behalf of:—X and X, by T. Wibault and P. Robert, avocats,the Belgian Government, by C. Pochet and M. Jacobs, acting as Agents, and by C. L’hoir, M. Van Regemorter and F. Van Dijck, experts, and by E. Derriks and F. Motulsky, avocats,the Czech Government, by M. Smolek, acting as Agent,the Danish Government, by N. Lyshøj and C. Thorning, acting as Agents,the German Government, by T. Henze, acting as Agent,the Estonian Government, by N. Grünberg, acting as Agent,the French Government, by E. Armoet, acting as Agent,the Hungarian Government, by M. Fehér, acting as Agent,the Maltese Government, by A. Buhagiar, acting as Agent,the Netherlands Government, by M. de Ree, acting as Agent,the Austrian Government, by J. Schmoll, acting as Agent,the Polish Government, by M. Kamejsza, M. Pawlicka and B. Majczyna, acting as Agents,the Slovenian Government, by V. Klemenc and T. Mihelič Žitko, acting as Agents,[as rectified by order of 24 March 2017] the Slovak Government, by M. Kianička, acting as Agent,the Finnish Government, by J. Heliskoski, acting as Agent,the European Commission, by C. Cattabriga and G. Wils, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 7 February 2017,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 25(1)(a) of Regulation (EC) No 810/2009 of the European Parliament and of the Council of 13 July 2009 establishing a Community Code on Visas (Visa Code) (OJ 2009 L 243 p. 1), as amended by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013 (OJ 2013 L 182, p. 1) (‘the Visa Code’), and of Articles 4 and 18 of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The reference has been made in proceedings between, on the one hand, X and X, and, on the other, the État belge (the Belgian State) concerning a refusal to issue visas with limited territorial validity. Legal context International law 3Article 1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950 (‘the ECHR’), headed ‘Obligation to respect Human Rights’, provides:‘The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section I of this [c]onvention.’4Article 3 of the ECHR, headed ‘Prohibition of torture’, which is in Section I thereof, provides:‘No one shall be subjected to torture or to inhuman or degrading treatment or punishment.’5Article 33(1) of the Convention relating to the Status of Refugees, signed at Geneva on 28 July 1951 (United Nations Treaty Series, Vol. 189, p. 150, No 2545 (1954)), as supplemented by the Protocol relating to the Status of Refugees, concluded in New York on 31 January 1967, which entered into force on 4 October 1967 (‘the Geneva Convention’), that article being headed ‘Prohibition of expulsion or return (“refoulement”)’, provides:‘No Contracting State shall expel or return (“refouler”) a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationality, membership of a particular social group or political opinion.’ EU law The Charter 6Article 4 of the Charter, headed ‘Prohibition of torture and inhuman or degrading treatment or punishment’, provides:7Under Article 18 of the Charter, headed ‘Right to asylum’:‘The right to asylum shall be guaranteed with due respect for the rules of the [Geneva Convention] and in accordance with the Treaty on European Union and the Treaty on the Functioning of the European Union …’8Article 51(1) of the Charter, that article being headed ‘Field of application’, provides:‘The provisions of [the] Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law …’ The Visa Code 9Recital 29 of the Visa Code states:‘This Regulation respects fundamental rights and observes the principles recognised in particular by the [ECHR] and the [Charter].’10Article 1(1) of the Visa Code, that article being headed ‘Objective and Scope’, states:‘This Regulation establishes the procedures and conditions for issuing visas for transit through or intended stays on the territory of the Member States not exceeding 90 days in any 180-day period.’11Article 2 of that code provides:‘For the purpose of this Regulation the following definitions shall apply:…2.“visa” means an authorisation issued by a Member State with a view to:(a)transit through or an intended stay on the territory of the Member States of a duration of no more than 90 days in any 180-day period;(b)transit through the international transit areas of airports of the Member States;…’12Article 25 of the Visa Code, headed ‘Issuing of a visa with limited territorial validity’, provides:‘1. A visa with limited territorial validity shall be issued exceptionally, in the following cases:when the Member State concerned considers it necessary on humanitarian grounds, for reasons of national interest or because of international obligations,(i)to derogate from the principle that the entry conditions laid down [by Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2006 L 105, p. 1)] must be fulfilled;(ii)to issue a visa despite an objection by the Member State consulted in accordance with Article 22 to the issuing of a uniform visa; or(iii)to issue a visa for reasons of urgency …orwhen for reasons deemed justified by the consulate, a new visa is issued for a stay during the same 180-day period to an applicant who, over this 180-day period, has already used a uniform visa or a visa with limited territorial validity allowing for a stay of 90 days.2. A visa with limited territorial validity shall be valid for the territory of the issuing Member State. It may exceptionally be valid for the territory of more than one Member State, subject to the consent of each such Member State.4. When a visa with limited territorial validity has been issued in the cases described in paragraph 1(a), the central authorities of the issuing Member State shall circulate the relevant information to the central authorities of the other Member States without delay …5. The data … shall be entered into the [Visa Information System] when a decision on issuing such a visa has been taken.’13Article 32(1)(b) of the Visa Code, that article being headed ‘Refusal of a visa’, provides:‘Without prejudice to Article 25(1), a visa shall be refused:if there are reasonable doubts as to … [the applicant’s] intention to leave the territory of the Member States before the expiry of the visa applied for.’ Regulation (EU) 2016/399 14Article 4 of Regulation (EU) 2016/399 of the European Parliament and of the Council of 9 March 2016 on a Union Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2016 L 77, p. 1, ‘the Schengen Borders Code’), headed ‘Fundamental Rights’, is worded as follows:‘When applying this Regulation, Member States shall act in full compliance with relevant Union law, including the [Charter], relevant international law, including the [Geneva Convention], obligations related to access to international protection, in particular the principle of non-refoulement, and fundamental rights. In accordance with the general principles of Union law, decisions under this Regulation shall be taken on an individual basis.’15Article 6 of the Schengen Borders Code, headed ‘Entry conditions for third-country nationals’, provides:‘1. For intended stays on the territory of the Member States of a duration of no more than 90 days in any 180-day period …, the entry conditions for third-country nationals shall be the following:they are in possession of a valid travel document …they are in possession of a valid visa, if required …(c)they justify the purpose and conditions of the intended stay, and they have sufficient means of subsistence …(d)they are not persons for whom an alert has been issued … for the purposes of refusing entry …(e)they are not considered to be a threat to public policy, internal security, public health or the international relations of any of the Member States …5. By way of derogation from paragraph 1:third-country nationals who do not fulfil one or more of the conditions laid down in paragraph 1 may be authorised by a Member State to enter its territory on humanitarian grounds, on grounds of national interest or because of international obligations …’ Directive 2013/32/EU 16Article 3 of Directive 2013/32/EU of the European Parliament and of the Council of 26 June 2013 on common procedures for granting and withdrawing international protection (OJ 2013 L 180, p. 60) provides:‘1. This Directive shall apply to all applications for international protection made in the territory, including at the border, in the territorial waters or in the transit zones of the Member States, and to the withdrawal of international protection.2. This Directive shall not apply to requests for diplomatic or territorial asylum submitted to representations of Member States. Regulation (EU) No 604/2013 17Article 1 of Regulation (EU) No 604/2013 of the European Parliament and of the Council of 26 June 2013 establishing the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third-country national or a stateless person (OJ 2013 L 180, p. 31), headed ‘Subject matter’, provides:‘This Regulation lays down the criteria and mechanisms for determining the Member State responsible for examining an application for international protection lodged in one of the Member States by a third‑country national or a stateless person …’18Article 3(1) of Regulation No 604/2013 provides:‘Member States shall examine any application for international protection by a third-country national or a stateless person who applies on the territory of any one of them, including at the border or in the transit zones …’ The dispute in the main proceedings and the questions referred for a preliminary ruling 19The applicants in the main proceedings — a married couple — and their three young, minor children are Syrian nationals and live in Aleppo (Syria). On 12 October 2016 they submitted, at the Belgian Embassy in Beirut (Lebanon), on the basis of Article 25(1)(a) of the Visa Code, applications for visas with limited territorial validity, before returning to Syria on the following day.20In support of their visa applications, the applicants in the main proceedings stated that the purpose of the visas they were seeking to obtain was to enable them to leave the besieged city of Aleppo in order to apply for asylum in Belgium. One of the applicants in the main proceedings claimed, inter alia, to have been abducted by a terrorist group, then beaten and tortured, and finally released following the payment of a ransom. The applicants in the main proceedings emphasised, in particular, the precarious security situation in Syria in general and in Aleppo especially, and the fact that, being Orthodox Christians, they were at risk of persecution on account of their religious beliefs. They added that it was impossible for them to register as refugees in neighbouring countries, having regard, inter alia, to the closure of the border between Lebanon and Syria.21By decisions of 18 October 2016, which were communicated to the applicants in the main proceedings on 25 October 2016, the Office des Étrangers (Immigration Office, Belgium) rejected their applications. The Immigration Office stated, inter alia, that the applicants intended to stay more than 90 days in Belgium, that Article 3 of the ECHR did not require States that are parties to the convention to admit into their respective territories ‘victims of a catastrophic situation’ and that Belgian diplomatic posts were not among the authorities to which a foreign national could submit an application for asylum. According to the Immigration Office, authorising the issue of an entry visa to the applicants in the main proceedings in order for them to be able to lodge an application for asylum in Belgium would amount to allowing such an application to be submitted to a diplomatic post.22The referring court, before which the applicants in the main proceedings challenge those decisions, explains that the applicants requested the implementation of those decisions to be suspended under the so-called ‘emergency’ national procedure. Since it is unclear whether that request is admissible under the applicable national provisions, the referring court decided to bring the matter before the Cour constitutionnelle (Constitutional Court, Belgium) for a ruling on that issue. Pending an answer from the Cour constitutionnelle (Belgian Constitutional Court), consideration of the main proceedings by the referring court continues under the emergency procedure.23Before the referring court, the applicants in the main proceedings claim, essentially, that Article 18 of the Charter imposes a positive obligation on the Member States to guarantee the right to asylum and that the granting of international protection is the only way to avoid any risk that Article 3 of the ECHR and Article 4 of the Charter will be infringed. In the present case, since the Belgian authorities have themselves taken the view that the applicants in the main proceedings are in a situation that is exceptional from a humanitarian point of view, the latter assert that, having regard to the international obligations of the Kingdom of Belgium, the conditions for applying Article 25(1)(a) of the Visa Code were satisfied, and they conclude therefore that they should have been issued, on humanitarian grounds, with the visas that they were seeking to obtain.24For its part, the Belgian State is of the opinion that it is under no obligation, whether on the basis of Article 3 of the ECHR or that of Article 33 of the Geneva Convention, to admit a third-country national into its territory, and that its only obligation in that regard is to refrain from deportation.25The referring court argues that it is apparent from Article 1 of the ECHR, as interpreted by the European Court of Human Rights, that the applicants in the main proceedings may rely on Article 3 of the ECHR only if they are within Belgian ‘jurisdiction’. However, the referring court asks whether the implementation of the visa policy may be regarded as the exercise of jurisdiction in that sense. Moreover, the referring court asks whether a right of entry could follow, as a corollary to the obligation to take preventative measures and to the principle of non-refoulement, from Article 3 of the ECHR and, mutatis mutandis, Article 33 of the Geneva Convention.26In addition, the referring court notes that the implementation of Article 4 of the Charter, unlike Article 3 of the ECHR, does not depend on the exercise of jurisdiction but on the application of EU law. However, it does not follow either from the Treaties or from the Charter that that implementation is territorially limited.27With regard to Article 25 of the Visa Code, the referring court notes that it provides, inter alia, that a visa must be issued when a Member State ‘considers’ it to be necessary because of international obligations. The referring court, however, questions the extent of Member States’ discretion in that respect and is of the opinion that, having regard to the binding nature of international obligations and those arising from the Charter, any such discretion can be ruled out in that respect.28In those circumstances, the Conseil du Contentieux des Étrangers (Council for asylum and immigration proceedings, Belgium) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Do the “international obligations” referred to in Article 25(1)(a) of the Visa Code cover all the rights guaranteed by the Charter, including, in particular, those guaranteed by Articles 4 and 18, and do they also cover obligations which bind the Member States, in the light of the ECHR and Article 33 of the Geneva Convention?(2)Depending on the answer given to the first question, must Article 25(1)(a) of the Visa Code be interpreted as meaning that, subject to its discretion with regard to the circumstances of the case, a Member State to which an application for a visa with limited territorial validity has been made is required to issue the visa applied for, where a risk of infringement of Article 4 and/or Article 18 of the Charter or another international obligation by which it is bound is established?Does the existence of links between the applicant and the Member State to which the visa application was made (for example, family connections, host families, guarantors and sponsors) affect the answer to that question?’ The urgent procedure 29The referring court has requested that the present reference for a preliminary ruling be dealt with under the urgent preliminary ruling procedure provided for in Article 107 of the Rules of Procedure of the Court.30In support of its request, the referring court relied, inter alia, upon the serious armed conflict in Syria, the young age of the children of the applicants in the main proceedings, their particular vulnerability, associated with their belonging to the Orthodox Christian community and, in any event, the fact that the matter was brought before it in the course of an ‘emergency’ suspension procedure.31The referring court explained, in that respect, that the present reference for a preliminary ruling had the effect of staying the proceedings before it.32In that regard, it should be noted, in the first place, that the present reference for a preliminary ruling, which concerns the interpretation of Article 25(1)(a) of the Visa Code, raises questions in the areas covered by Title V of Part Three of the TFEU, which relates to the area of freedom, security and justice. It may therefore be dealt with under the urgent preliminary ruling procedure, in accordance with Article 107(1) of the Rules of Procedure.33In the second place, it is not disputed that, at least at the time when the request that the present reference for a preliminary ruling should be dealt with under the urgent preliminary ruling procedure was examined, the applicants in the main proceedings were facing a real risk of being subjected to inhuman and degrading treatment, which must be regarded as an element of urgency justifying the application of Article 107 et seq. of the Rules of Procedure.34Taking the foregoing into account, the Fifth Chamber of the Court decided, on 15 December 2016, acting on a proposal from the Judge‑Rapporteur and after hearing the Advocate General, to grant the referring court’s request that the present reference for a preliminary ruling be dealt with under the urgent preliminary ruling procedure. It also decided to request that the Court assign the case to the Grand Chamber. Consideration of the questions referred The jurisdiction of the Court 35The Court’s jurisdiction to answer the questions put by the referring court is disputed, in particular, by the Belgian Government on the ground that Article 25(1) of the Visa Code, in respect of which interpretation is sought, does not apply to the applications at issue in the main proceedings.36Nevertheless, it is plain from the order for reference that the applications at issue were submitted on humanitarian grounds on the basis of Article 25 of the Visa Code.37As to whether that code applies to applications, such as those at issue in the main proceedings, that are intended to enable third-country nationals to lodge applications for asylum on the territory of a Member State, that question is inextricably linked to the answers to be given to the present request for a preliminary ruling. In those circumstances, the Court has jurisdiction to answer that request (see, to that effect, judgment of 10 September 2015, Wojciechowski, C‑408/14, EU:C:2015:591, paragraph 26 and the case-law cited).38By its first question the referring court asks, in essence, whether Article 25(1)(a) of the Visa Code must be interpreted as meaning that the international obligations referred to in that article include compliance by a Member State with all the rights guaranteed by the Charter, in particular, in Articles 4 and 18 thereof, by the ECHR and by Article 33 of the Geneva Convention. By its second question it asks, in essence, whether, depending on the answer given to its first question, Article 25(1)(a) of the Visa Code must be interpreted as meaning that the Member State to which an application for a visa with limited territorial validity was made is required to issue the visa applied for, where a risk of infringement of Article 4 and/or Article 18 of the Charter or another international obligation by which it is bound is established. If necessary, the referring court also seeks to ascertain whether the existence of links between the applicant and the Member State to which the visa application was made has any bearing in that regard.39It should be recalled at the outset that the Court has consistently held that the fact that a question submitted by the referring court refers only to certain provisions of EU law does not mean that the Court may not provide the national court with all the guidance on points of interpretation that may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to those points in its questions. It is, in this regard, for the Court to extract from all the information provided by the referring court, in particular from the grounds of the decision to make the reference, the points of EU law which require interpretation in view of the subject matter of the dispute (see, inter alia, judgment of 12 February 2015, Oil Trading Poland, C‑349/13, EU:C:2015:84, paragraph 45 and the case-law cited).40In the present case, it is important to note that the Visa Code was adopted on the basis of Article 62(2)(a) and (b)(ii) of the EC Treaty, pursuant to which the Council of the European Union is to adopt measures concerning visas for intended stays of no more than three months, including the procedures and conditions for issuing visas by Member States.41As set out in Article 1 of the Visa Code, the objective thereof is to establish the procedures and conditions for issuing visas for transit through or intended stays on the territory of the Member States not exceeding 90 days in any 180-day period. In Article 2(2)(a) and (b) of the code the concept of ‘visa’ is defined, for the purpose of the code, as meaning ‘an authorisation issued by a Member State’ with a view, respectively, to ‘transit through or an intended stay on the territory of the Member States for a duration of no more than 90 days in any 180‑day period’ and to ‘transit through the international transit areas of airports of the Member States’.42However, it is apparent from the order for reference and from the material in the file before the Court that the applicants in the main proceedings submitted applications for visas on humanitarian grounds, based on Article 25 of the Visa Code, at the Belgian embassy in Lebanon, with a view to applying for asylum in Belgium immediately upon their arrival in that Member State and, thereafter, to being granted a residence permit with a period of validity not limited to 90 days.43In accordance with Article 1 of the Visa Code, such applications, even if formally submitted on the basis of Article 25 of that code, fall outside the scope of that code, in particular Article 25(1)(a) thereof, the interpretation of which is sought by the referring court in connection with the concept of ‘international obligations’ mentioned in that provision.44In addition, since, as noted by the Belgian Government and the European Commission in their written observations, no measure has been adopted, to date, by the EU legislature on the basis of Article 79(2)(a) TFEU, with regard to the conditions governing the issue by Member States of long-term visas and residence permits to third-country nationals on humanitarian grounds, the applications at issue in the main proceedings fall solely within the scope of national law.45Since the situation at issue in the main proceedings is not, therefore, governed by EU law, the provisions of the Charter, in particular, Articles 4 and 18 thereof, referred to in the questions of the referring court, do not apply to it (see, to that effect, inter alia, judgments of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 19, and of 27 March 2014, Torralbo Marcos, C‑265/13, EU:C:2014:187, paragraph 29 and the case-law cited).46The foregoing conclusion is not called into question by the fact that, under Article 32(1)(b) of the Visa Code, the existence of ‘reasonable doubts as to … [the applicant’s] intention to leave the territory of the Member States before the expiry of the visa applied for’ is a ground for refusal of a visa and not a reason not to apply that code.47Indeed, the defining feature of the situation at issue in the main proceedings is not the existence of such doubts, but the fact that the purpose of the application differs from that of a short-term visa.48It should be added that, to conclude otherwise, when the Visa Code is intended for the issuing of visas for stays on the territories of Member States not exceeding 90 days in any 180-day period, would be tantamount to allowing third‑country nationals to lodge applications for visas on the basis of the Visa Code in order to obtain international protection in the Member State of their choice, which would undermine the general structure of the system established by Regulation No 604/2013.49It is also important to note that to conclude otherwise would mean that Member States are required, on the basis of the Visa Code, de facto to allow third-country nationals to submit applications for international protection to the representations of Member States that are within the territory of a third country. Indeed, whereas the Visa Code is not intended to harmonise the laws of Member States on international protection, it should be noted that the measures adopted by the European Union on the basis of Article 78 TFEU that govern the procedures for applications for international protection do not impose such an obligation and, on the contrary, exclude from their scope applications made to the representations of Member States. Accordingly, it is apparent from Article 3(1) and (2) of Directive 2013/32 that that directive applies to applications for international protection made in the territory, including at the border, in the territorial waters or in the transit zones of the Member States, but not to requests for diplomatic or territorial asylum submitted to the representations of Member States. Similarly, it follows from Articles 1 and 3 of Regulation No 604/2013 that that regulation only imposes an obligation on Member States to examine any application for international protection made on the territory of a Member State, including at the border or in the transit zones, and that the procedures laid down in that regulation apply exclusively to such applications for international protection.50In those circumstances, the Belgian authorities were wrong to describe the applications at issue in the main proceedings as applications for short-term visas.51In the light of the foregoing, the answer to the questions referred is that Article 1 of the Visa Code must be interpreted as meaning that an application for a visa with limited territorial validity made on humanitarian grounds by a third-country national, on the basis of Article 25 of the code, to the representation of the Member State of destination that is within the territory of a third country, with a view to lodging, immediately upon his or her arrival in that Member State, an application for international protection and, thereafter, to staying in that Member State for more than 90 days in a 180-day period, does not fall within the scope of that code but, as European Union law currently stands, solely within that of national law. Costs 52Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 1 of Regulation (EC) No 810/2009 of the European Parliament and of the Council of 13 July 2009 establishing a Community Code on Visas (Visa Code), as amended by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013, must be interpreted as meaning that an application for a visa with limited territorial validity made on humanitarian grounds by a third-country national, on the basis of Article 25 of the code, to the representation of the Member State of destination that is within the territory of a third country, with a view to lodging, immediately upon his or her arrival in that Member State, an application for international protection and, thereafter, to staying in that Member State for more than 90 days in a 180-day period, does not fall within the scope of that code but, as European Union law currently stands, solely within that of national law. [Signatures]( 1 ) Language of the case: French. | 7b242-87be3d6-4e0a | EN |
The General Court annuls the Commission decision refusing registration of the proposed European citizens’ initiative entitled ‘Minority SafePack - one million signatures for diversity in Europe’ | 3 February 2017 ( *1 )‛Law governing the institutions — European citizens’ initiative — Protection of national and linguistic minorities and strengthening of cultural and linguistic diversity in the European Union — Refusal of registration — Commission manifestly lacking legislative powers — Obligation to state reasons — Article 4(2)(b) and (3) of Regulation (EU) No 211/2011’In Case T‑646/13, Bürgerausschuss für die Bürgerinitiative Minority SafePack — one million signatures for diversity in Europe, represented initially by E. Johansson, J. Lund and C. Lund, and subsequently by E. Johansson and T. Hieber, lawyers,applicant,supported by Hungary, represented by M. Fehér, A. Pálfy and G. Szima, acting as Agents,intervener,v European Commission, represented by H. Krämer, acting as Agent,defendant, Slovak Republic, represented by B. Ricziová, acting as Agent,and by Romania, represented by R. Radu, R. Haţieganu, D. Bulancea and A. Wellman, acting as Agents,interveners,APPLICATION pursuant to Article 263 TFEU and seeking annulment of Commission Decision C(2013) 5969 final of 13 September 2013 rejecting the request for registration of the proposed European citizens’ initiative entitled ‘Minority SafePack — one million signatures for diversity in Europe’,THE GENERAL COURT (First Chamber),composed of H. Kanninen, President, I. Pelikánová and E. Buttigieg (Rapporteur), Judges,Registrar: S. Bukšek Tomac, Administrator,having regard to the written part of the procedure and further to the hearing on 16 September 2016,gives the following Judgment Background to the dispute 1On 15 July 2013, the applicant, Bürgerausschuss für die Bürgerinitiative Minority SafePack — one million signatures for diversity in Europe, consisting of Mr Hans Heinrich Hansen, Mr Hunor Kelemen, Mr Karl-Heinz Lambertz, Ms Jannewietske Annie De Vries, Mr Valentin Inzko, Mr Alois Durnwalder and Ms Anke Spoorendonk, submitted to the European Commission the proposed European citizens’ initiative entitled ‘Minority SafePack — one million signatures for diversity in Europe’ (‘the proposed ECI’), the aim of which was, according to the minimum information provided pursuant to the first subparagraph of Article 4(1) of Regulation (EU) No 211/2011 of the European Parliament and of the Council of 16 February 2011 on the citizens’ initiative (OJ 2011 L 65, p. 1), read in conjunction with Annex II to that regulation (‘the required information’), to call upon ‘the EU to improve the protection of persons belonging to national and linguistic minorities and strengthen cultural and linguistic diversity in the Union’. It follows from that information provided as part of the required information that the objectives pursued by the European citizens’ initiative (ECI) consist of calling upon the European Union ‘to adopt a set of legal acts to improve the protection of persons belonging to national and linguistic minorities and strengthen cultural and linguistic diversity [within its territory]’ and that those acts ‘shall include policy actions in the areas of regional and minority languages, education and culture, regional policy, participation, equality, audiovisual and other media content, and also regional (state) support’.2It follows, moreover, from the more detailed information that was annexed to the information provided as part of the required information (‘the additional information’) in accordance with the final paragraph of Annex II to Regulation No 211/2011 that the aim of the proposal is to secure the adoption of a series of legal acts listed and described in sections 2 to 7 of the additional information. In section 8 of that information, headed ‘Safeguard clause’, the organisers note that, for each of the proposals for legal acts concerned, the proposed ECI suggests, by way of indication, the legal basis and the type of act to be adopted that seem the most appropriate to them, that each of those proposals should be examined separately and that the inadmissibility of one or more of them should not lead to the inadmissibility of the other proposals that come within the area of competence of the Commission.3By its Decision C(2013) 5969 final of 13 September 2013 (‘the contested decision’), the Commission refused to register the proposed ECI on the ground that it manifestly fell outside the powers enabling the Commission to submit a proposal for the adoption of a legal act of the European Union for the purpose of implementing the Treaties. Procedure and forms of order sought 4By application lodged at the Registry of the General Court on 25 November 2013, the applicant brought the present action.5The applicant claims that the Court should:—annul the contested decision;order the Commission to pay the costs;6The Commission contends that the Court should:dismiss the action as unfounded;order the applicant to pay the costs.7By order of the President of the First Chamber of 4 September 2014, Hungary was granted leave to intervene in support of the form of order sought by the applicant, and the Slovak Republic and Romania were granted leave to intervene in support of the form of order sought by the Commission. Law 8In support of its action, the applicant raises two pleas in law alleging, first, infringement of the obligation to state reasons laid down in the second paragraph of Article 296 TFEU and in the second subparagraph of Article 4(3) of Regulation No 211/2011 and, secondly, infringement of Article 11 TEU, of the first paragraph of Article 24 TFEU and of Article 4(2)(b) of Regulation No 211/2011.9The applicant, supported by Hungary, criticises the Commission on the ground that it merely stated in the contested decision, without further specification, that some of the themes on which it was invited, in the annex to the proposed ECI, to submit proposals for a legal act of the European Union fell within the framework of its powers to then conclude that the registration of the proposed ECI must be refused in its entirety on the ground that the partial registration of a proposed ECI is not provided for in Regulation No 211/2011. Respect for the obligation to state reasons is, it submits, all the more important because, first, the ECI is a means of democratic participation of citizens in the legislative process that should be accessible and easy to implement and, secondly, the organisers of ECI proposals are not, generally speaking, legal professionals.10In the first place, the applicant submits, the Commission should have specified the proposals among those set out in the annex to the proposed ECI which, in its view, fell outside the framework of its powers. In the second place, it should have stated the reasons for which it came to that conclusion in respect of each of the proposals at issue. In the absence of reasons, the organisers cannot know which parts of the proposed ECI should demonstrate that their application is well founded and they are prevented from adapting, if need be, the proposed ECI to the position expressed by the Commission in order to submit a new proposal to it. Furthermore, the Commission’s attitude incited the authors of the proposal to submit the 11 measures provided for in it separately, which is contrary to the principle of procedural economy and does little to encourage participation by citizens and make the European Union more accessible, within the meaning of recital 2 of Regulation No 211/2011.11In this context, the applicant claims that, contrary to the position expressed by the Commission, the information relating to the subject matter of a proposed ECI, which is included in the annex to the latter, in the present case information concerning 11 specific proposals for the adoption of legal acts, has the same importance as the information provided pursuant to the second paragraph of Annex II to Regulation No 211/2011. In accordance with Annex II, the description of the subject matter included in the body of the application for registration may contain ‘no more than 200 characters’, while the organisers of a proposed ECI have the opportunity to ‘provide more detailed information … in an annex’ to it, in particular, on its ‘subject’.12In the third place, according to the applicant, the contested decision should have stated the reasons that led the Commission to consider that Regulation No 211/2011 did not permit it to register only part of a proposed ECI. Neither the text of the regulation nor the Treaties support such an interpretation. This is all the more so as the proposed ECI expressly stated that its authors requested that the Commission examine individually each of the 11 proposals referred to in the annex and that the inadmissibility of one of them should not affect the admissibility of the other proposals. The exercise of their rights by citizens, who are not specialised legal professionals, and the importance of the ECI as an instrument of direct democracy impose such an obligation on the Commission.13According to the Commission, supported by the Slovak Republic and Romania, the contested decision states the main reasons for refusing the registration with regard to the subject matter of the proposed ECI, as formulated in the body of the proposal, namely, the protection of minorities and the promotion of cultural and linguistic diversity. It is clear from the overall scheme of Annex II to Regulation No 211/2011 that the subject matter of a proposal is fixed definitively in its body, whereas the explanations given in the annex to the proposed ECI are purely indicative and informative, being incapable of expanding or limiting that subject matter. That conclusion cannot be called into question by the fact that, in the annex to the proposed ECI, its authors invited the Commission to examine whether the proposal was manifestly inadmissible with regard to each of the themes referred to in that annex.14Furthermore, the contested decision indicated clearly that a proposed ECI cannot be registered when part of it falls, as in the present case, outside the framework of the powers of the Commission under which it may propose the adoption of a legal act for the purpose of implementing the Treaties. In this context, that institution is not required to state the reasons for the interpretation of Article 4(2)(b) of Regulation No 211/2011 on which it bases its decision, except if, unlike the position in the present case, legal arguments to the contrary had been raised in the course of the procedure for the adoption of the contested decision.15According to settled case-law, the purpose of the obligation, under the second paragraph of Article 296 TFEU, to state the reasons for an individual decision is to provide the person concerned with sufficient information to make it possible to determine whether the decision is well founded or whether it is vitiated by an error which may make it possible for its validity to be contested, and to enable the Courts of the European Union to review its lawfulness. The second subparagraph of Article 4(3) of Regulation No 211/2011, which provides that the Commission is to inform the organisers of the reasons for any refusal to register a proposed ECI, gives specific expression to that obligation to state reasons in so far as citizens’ initiatives are concerned (judgment of 30 September 2015, Anagnostakis v Commission, T‑450/12, at present under appeal, EU:T:2015:739, paragraphs 22 and 23).16It is also settled case-law that the statement of reasons required by Article 296 TFEU must be appropriate to the nature of the measure in question. The requirement to state reasons must be appraised by reference to the circumstances of each case, in particular the content of the measure and the nature of the reasons given. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons for a measure meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context (judgment of 30 September 2015, Anagnostakis v Commission, T‑450/12, at present under appeal, EU:T:2015:739, paragraph 24).17In this case, the refusal to register the proposed ECI is an action that may impinge upon the very effectiveness of the right of citizens to submit a citizens’ initiative that is enshrined in the first paragraph of Article 24 TFEU. Consequently, such a decision must disclose clearly the grounds justifying the refusal (see, to that effect, judgment of 30 September 2015, Anagnostakis v Commission, T‑450/12, at present under appeal, EU:T:2015:739, paragraph 25).18A citizen who has submitted a proposed ECI must be placed in a position to be able to understand the reasons for which it was not registered by the Commission, with the result that it is incumbent on the Commission, when it receives such a proposal, to appraise it and also to state the different reasons for any refusal to register it, given the effect of such a refusal on the effective exercise of the right enshrined in the Treaty. This follows from the very nature of this right which, as is pointed out in recital 1 of Regulation No 211/2011, is intended to reinforce citizenship of the Union and to enhance the democratic functioning of the European Union through the participation of citizens in its democratic life (judgment of 30 September 2015, Anagnostakis v Commission, T‑450/12, at present under appeal, EU:T:2015:739, paragraph 26).19In the contested decision, the Commission stated that the main objective of the proposed ECI is the adoption of a series of legal acts of the European Union for the purpose of improving the protection of persons belonging to national and linguistic minorities and to strengthen cultural and linguistic diversity in the European Union. The Commission further notes that the proposed ECI suggests, to that end, Articles 19 TFEU, 20 TFEU, 25 TFEU, 62 TFEU, 79 TFEU, 107 TFEU to 109 TFEU, 118 TFEU, 165 TFEU, 167 TFEU, 173 TFEU, 177 TFEU to 178 TFEU and 182 TFEU, Articles 2 TEU and 3 TEU and Articles 21 and 22 of the Charter of Fundamental Rights of the European Union (‘the Charter’) as possible legal bases.20In that regard, the contested decision indicates that, even though respect for the rights of persons belonging to minorities is a value of the European Union referred to in Article 2 TEU, no provision of the Treaties provides a legal basis for the adoption of legislative acts aiming at promoting those rights. Furthermore, even if, in accordance with Article 3(3) TEU, the EU institutions must respect cultural and linguistic diversity and are bound, pursuant to Article 21(1) of the Charter, to refrain from all discrimination based on membership of a national minority, none of those provisions confers a legal basis in view of any such action of the institutions for those purposes.21The Commission adds that some of the acts requested in the annex to the proposed initiative, likely to contribute to achieving the main objective of protecting persons belonging to minorities, could, taken individually, fall within the framework of powers under which it may submit a proposal for a legal act of the European Union for the purpose of implementing the Treaties, but that the regulation on the citizens’ initiative does not provide for the registration of one or several parts of a proposed initiative. The Commission accordingly concludes that the Treaties provide no legal basis for the purpose of submitting a complete series of proposals as established in the application for registration and that, therefore, the proposed ECI manifestly falls outside the framework of powers under which it may submit a proposal for a legal act of the European Union for the purpose of implementing the Treaties.22While it thus follows clearly from the contested decision that the Commission rejects the registration of the proposed ECI because of non-fulfilment of the condition laid down in Article 4(2)(b) of Regulation No 211/2011 and that it sets out, to that effect, its reasons, it must be held that its reasoning is manifestly inadequate in view of the case-law cited in paragraphs 17 and 18 above, taking into account, in particular, the additional information provided by the organisers, in the annex to the proposed ECI, for the purpose of adopting specific legal acts of the European Union in the different areas listed in that annex in order to achieve the purpose of the proposal at issue.23The annex to the proposed ECI contains detailed additional information, divided into eight sections, on the specific scope of that proposal, which were submitted pursuant to the final paragraph of Annex II to Regulation No 211/2011, which states that organisers may provide more detailed information on the subject, objectives and background to their proposed ECI in an annex and may, if they wish, submit draft legal acts.24Thus, after a first section dedicated to the importance given by the EU to respect for, and the protection of, minorities and respect for cultural and linguistic diversity through, in particular, a certain number of provisions contained in the Treaties, such as Articles 1 TEU to 3 TEU and Articles 9 TFEU and 10 TFEU, sections 2 to 7 of the annex to the proposed ECI outline 11 areas in which the proposed acts should be developed by the institutions of the European Union and give, to that end, precise suggestions on the types of act to adopt, the content of those acts and the corresponding legal bases in the FEU Treaty.25The proposed ECI seeks, more specifically, the adoption of:a recommendation of the Council ‘on the protection and promotion of cultural and linguistic diversity in the Union’ on the basis of the second indent of Article 167(5) TFEU and the second indent of Article 165(4) TFEU [section 2.1];a proposal for a decision or a regulation of the European Parliament and of the Council on the basis of the first indent of Article 167(5) TFEU and the first indent of Article 165(4) TFEU, the subject matter of which is to adapt ‘funding programmes so that they become accessible for small regional and minority language communities’ [section 2.2];a proposal for a decision or a regulation of the European Parliament and of the Council on the basis of the first indent of Article 167(5) TFEU and the first indent of Article 165(4) TFEU, the subject matter of which is to create a centre for linguistic diversity that will strengthen awareness of the importance of regional and minority languages and will promote diversity at all levels and be financed mainly by the European Union [section 2.3];a proposal for a regulation of the European Parliament and of the Council on the basis of Articles 177 TFEU and 178 TFEU, the subject matter of which is to adapt the common provisions relating to EU regional funds in such a way that the protection of minorities and the promotion of cultural and linguistic diversity are included therein as thematic objectives [section 3.1];a proposal for a regulation of the European Parliament and of the Council on the basis of Article 173(3) TFEU and Article 182(1) TFEU, the subject matter of which is to change the regulation relating to the ‘Horizon 2020’ programme for the purposes of improving research on the added value that national minorities and cultural and linguistic diversity may bring to social and economic development in regions of the EU [section 3.2];a proposal for a Council directive, regulation or decision on the basis of Article 20(2) TFEU and Article 25 TFEU, for the purpose of strengthening within the EU the place of citizens belonging to a national minority, with the aim of ensuring that their legitimate concerns are taken into consideration in the election of Members of the European Parliament [section 4];proposals for effective measures to address discrimination and to promote equal treatment, including for national minorities, in particular through a revision of the existing Council directives on the subject of equal treatment, on the basis of Article 19(1) TFEU [section 5.1];proposals for the amendment of the EU legislation in order to guarantee approximately equal treatment for stateless persons and citizens of the Union, on the basis of Article 79(2) TFEU [section 5.2];a proposal for a regulation of the European Parliament and of the Council on the basis of Article 118 TFEU, in order to introduce a unitary copyright so that the whole EU can be considered an internal market in the field of copyright [section 6.1];a proposal for amendment of Directive 2010/13/EU of the European Parliament and of the Council of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (OJ 2010 L 95, p. 1), for the purpose of ensuring the freedom to provide services and the reception of audiovisual content in regions where national minorities reside, on the basis of Article 53(1) TFEU and Article 63 TFEU [section 6.2]; anda proposal for a Council or Commission regulation or a proposal for a Council decision, with a view to the block exemption of projects promoting national minorities and their culture, on the basis of Article 109 TFEU, Article 108(4) TFEU or Article 107(3)(e) TFEU [section 7].26In a final section, the organisers state that the adoption of all of the proposals for legal acts referred to in the previous sections would represent a significant improvement in minority protection in the EU and that the suggestions relating to the type of acts and the legal bases are intended only for guidance purposes. The organisers state that, even if, in their view, all of those proposals fall within the framework of the Commission’s powers, they expect that each proposal would be examined individually and that the possible inadmissibility of one proposal decided by the Commission would have no effect on the other proposals that were deemed admissible.27It is clear from the contested decision that the Commission failed to identify in any way which of the 11 proposals for legal acts manifestly did not, in its view, fall within the framework of powers under which it is entitled to submit a proposal for a legal act of the European Union and also failed to provide any reasons in support of that assessment, notwithstanding the precise suggestions provided by the organisers on the proposed type of act as well as the respective legal bases and the content of those acts.28Even though, as follows from paragraph 19 of the present judgment, the contested decision recalls the different legal bases mentioned by the organisers in the additional information provided in support of their proposed ECI and subsequently indicates that, for some of the acts referred to in that information, the Commission may be entitled to submit a proposal for an act of the European Union, that decision merely addresses Article 2 TEU and Article 3(3) TEU and Article 21(1) of the Charter, referred to in section 1 of the annex to that proposal, before concluding that, in so far as the Commission cannot register parts of a proposed ECI, the application had to be rejected in its entirety.29In so doing, and even assuming that the position expressed by the Commission on the substance, according to which a proposed ECI cannot, whatever its content, be registered if it is deemed in part inadmissible by that institution, is well founded, the organisers were not, in any event, placed in a position to be able to identify those of the proposals set out in the annex to the proposed ECI which, according to that institution, fell outside the framework of its powers, within the meaning of Article 4(2)(b) of Regulation No 211/2011, or to know the reasons which led to that assessment and, therefore, were prevented from challenging the merits of that assessment, just as the Court is prevented from exercising its review of the legality of the Commission’s assessment. Moreover, failing any complete statement of reasons, the possible introduction of a new proposed ECI, taking into account the Commission’s objections on the admissibility of certain proposals, would be seriously compromised, as would also be the achievement of the objectives, referred to in recital 2 of Regulation No 211/2011, of encouraging participation by citizens in democratic life and of making the European Union more accessible.30That is the case, in particular, as the Commission itself acknowledged during the hearing, where the information contained in the ‘body’ of the application for registration, namely, the information provided as being the information required, is not the only information that must be taken into account by that institution for the purposes of determining whether the proposal in dispute meets the conditions for registration laid down in Article 4(2)(b) of Regulation No 211/2011.31Annex II to Regulation No 211/2011, entitled ‘Required information for registering a proposed citizens’ initiative’, to which Article 4(2) of that regulation refers and which has binding force identical to that of the regulation (judgment of 10 May 2016, Izsák and Dabis v Commission, T‑529/13, at present under appeal, EU:T:2016:282, paragraph 45), provides that the information which must be provided in order to register a proposed citizens’ initiative on the Commission’s online register concerns, in particular, its ‘subject matter, in no more than 200 characters’ and ‘a description of the objectives of the proposed citizens’ initiative on which the Commission is invited to act, in no more than 500 characters’, while making clear that the organisers ‘may provide more detailed information on the subject, objectives and background to the proposed citizens’ initiative in an annex’ and that they ‘may also, if they wish, submit a draft legal act’.32Contrary to the position expressed by the Commission in its written pleadings, the ‘information set out in Annex II’ to Regulation No 211/2011, to which Article 4 of that regulation refers, is not therefore limited to the minimum information which must be provided under that annex for the purpose of registering the application (judgment of 10 May 2016, Izsák and Dabis v Commission, T‑529/13, at present under appeal, EU:T:2016:282, paragraph 48). The right under Annex II to Regulation No 211/2011 of the organisers of the proposed initiative to provide additional information, and even a draft legal act of the European Union, has as a corollary an obligation for the Commission to consider that information as any other information provided pursuant to that annex, in accordance with the principle of sound administration, including the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case (see, to that effect, judgment of 10 May 2016, Izsák and Dabis v Commission, T‑529/13, at present under appeal, EU:T:2016:282, paragraphs 49, 50, 56 and 57) and, therefore, to state the reasons, in accordance with the requirements set out in paragraphs 17 and 18 above and subject to review by the Courts of the European Union, for its decision in the light of all of that information.33In the light of the foregoing considerations, it must be held that the contested decision manifestly does not contain sufficient elements to enable the applicant to ascertain the reasons for the refusal to register the proposed ECI with regard to the various information contained in that proposal and to react accordingly, and to enable the Court to review the lawfulness of the refusal to register.34Consequently, without it being necessary to reply to the applicant’s complaint that the Commission should, moreover, have stated the grounds in support of its interpretation that a proposed ECI cannot be registered if a part of the proposed measures does not fall within the framework of the powers of that institution under which it may present a legal act of the European Union for the purpose of implementing the Treaties, it must be concluded that the Commission has failed to comply with its obligation to state reasons by not indicating those of the measures which, among those set out in the annex to the proposed ECI, did not fall within its competence, nor the reasons in support of that conclusion, and that, therefore, for that reason alone, the action must be upheld, without any need to examine the second plea. Costs 35Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to pay the costs incurred by the applicant, in accordance with the form of order sought by the latter, in addition to bearing its own costs. Under Article 138(1) of the Rules of Procedure, the Member States which intervened in the proceedings are to bear their own costs.On those grounds,hereby: 1. Annuls Commission Decision C(2013) 5969 final of 13 September 2013 rejecting the request for registration of the proposed European citizens’ initiative entitled ‘Minority SafePack — one million signatures for diversity in Europe’; 2. Orders the European Commission to bear its own costs and to pay those incurred by Bürgerausschuss für die Bürgerinitiative Minority SafePack — one million signatures for diversity in Europe; 3. Orders Hungary, the Slovak Republic and Romania to bear their own respective costs. KanninenPelikánováButtigiegDelivered in open court in Luxembourg on 3 February 2017.[Signatures]( *1 ) Language of the case: German. | d2b7b-34aa66a-4e48 | EN |
An application for asylum can be rejected if the asylum seeker has participated in the activities of a terrorist network | 31 January 2017 ( *1 )‛Reference for a preliminary ruling — Area of freedom, security and justice — Asylum — Directive 2004/83/EC — Minimum standards for the qualification and status of third country nationals or stateless persons as refugees — Article 12(2)(c) and Article 12(3) — Exclusion from being a refugee — Concept of ‘acts contrary to the purposes and principles of the United Nations’ — Scope — Member of the leadership of a terrorist organisation — Criminal conviction of participation in the activities of a terrorist group — Individual assessment’In Case C‑573/14,REQUEST for a preliminary ruling under Article 267 TFEU from the Conseil d’État (Council of State, Belgium), made by decision of 13 November 2014, received at the Court on 11 December 2014, in the proceedings Commissaire général aux réfugiés et aux apatrides v Mostafa Lounani, THE COURT (Grand Chamber),composed of K. Lenaerts, President, M. Ilešič, L. Bay Larsen, J.L. da Cruz Vilaça, E. Juhász, M. Berger and E. Regan, Presidents of Chambers, A. Rosas (Rapporteur), A. Borg Barthet, J. Malenovský, E. Levits, K. Jürimäe and C. Lycourgos, Judges,Advocate General: E. Sharpston,Registrar: V. Tourrès, Administrator,having regard to the written procedure and further to the hearing on 16 February 2016,after considering the observations submitted on behalf of:—the Commissaire général aux réfugiés et aux apatrides, by E. Derriks, avocat,Mr Lounani, by C. Marchand and D. Alamat, avocats,the Belgian Government, by C. Pochet, M. Jacobs and S. Vanrie, acting as Agents, and by D. Matray, C. Piront and N. Schynts, avocats,the Greek Government, by M. Michelogiannaki, acting as Agent,the Spanish Government, by A. Rubio González and L. Banciella Rodríguez-Miñón, acting as Agents,the French Government, by F.-X. Bréchot and D. Colas, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and by M. Salvatorelli, avvocato dello Stato,the Hungarian Government, by M. Z. Fehér and M. Tátrai, acting as Agents,the Polish Government, by B. Majczyna, acting as Agent,the United Kingdom Government, by M. Holt, S. Brandon and V. Kaye, acting as Agents, and by D. Blundell, Barrister,the European Commission, by M. Condou-Durande and R. Troosters, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 31 May 2016,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 12(2)(c) and Article 12(3) of Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted (OJ 2004 L 304, p. 12, and corrigenda OJ 2005 L 204, p. 24, and OJ 2011 L 278, p. 13).2The request has been made in proceedings between the Commissaire général aux réfugiés et aux apatrides (the Belgian Commissioner General for Refugees and Stateless Persons; ‘the CGRA’) and Mr Mostafa Lounani, a Moroccan national, concerning the question whether Mr Lounani should be excluded from being a refugee on the ground that he was guilty of acts contrary to the purposes and principles of the United Nations. Legal context International law The Charter of the United Nations 3Article 1, points 1 and 3, of the Charter of the United Nations, signed in San Francisco (United States) on 26 June 1945, state:‘The Purposes of the United Nations are:1.To maintain international peace and security, and to that end: to take effective collective measures for the prevention and removal of threats to the peace, and for the suppression of acts of aggression or other breaches of the peace, and to bring about by peaceful means, and in conformity with the principles of justice and international law, adjustment or settlement of international disputes or situations which might lead to a breach of the peace;…3.To achieve international cooperation in solving international problems of an economic, social, cultural, or humanitarian character, and in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language, or religion.’ The Geneva Convention 4The Convention relating to the Status of Refugees, signed in Geneva on 28 July 1951 (United Nations Treaty Series, vol. 189, p. 150, No 2545 (1954)), entered into force on 22 April 1954. It was supplemented by the Protocol Relating to the Status of Refugees, concluded in New York on 31 January 1967, which itself entered into force on 4 October 1967 (‘the Geneva Convention’).5Article 1 of the Geneva Convention, following the definition, in section A, of the term ‘refugee’ for the purposes of that convention, states in section F:‘The provisions of this Convention shall not apply to any person with respect to whom there are serious reasons for considering that:(c)He has been guilty of acts contrary to the purposes and principles of the United Nations.’ The resolutions of the United Nations Security Council 6On 28 September 2001 the United Nations Security Council (‘the Security Council’) adopted Resolution 1373 (2001), the preamble of which reaffirms, inter alia, ‘the need to combat by all means, in accordance with the Charter of the United Nations, threats to international peace and security caused by terrorist acts’.7Under point 3(f) and (g) of that resolution, all States are called upon to, on the one hand, ‘take appropriate measures in conformity with the relevant provisions of national and international law, including international standards of human rights, before granting refugee status, for the purpose of ensuring that the asylum-seeker has not planned, facilitated or participated in the commission of terrorist acts’ and, on the other, ‘ensure, in conformity with international law, that refugee status is not abused by the perpetrators, organizers or facilitators of terrorist acts …’.8In point 5 of that resolution, the Security Council declares that ‘acts, methods and practices of terrorism are contrary to the purposes and principles of the United Nations and that knowingly financing, planning and inciting terrorist acts are also contrary to the purposes and principles of the United Nations’.9On 12 November 2001 the Security Council adopted Resolution 1377 (2001), in which it ‘[s]tresses that acts of international terrorism are contrary to the purposes and principles of the Charter of the United Nations, and that the financing, planning and preparation of, as well as any other form of support for acts of international terrorism, are similarly contrary to the purposes and principles of [that Charter]’.10Resolution 1624 (2005), adopted on 14 September 2005 by the Security Council, recalls, inter alia, that ‘all States must cooperate fully in the fight against terrorism, in accordance with their obligations under international law, in order to find, deny safe haven and bring to justice … any person who supports, facilitates, participates or attempts to participate in the financing, planning, preparation or commission of terrorist acts or provides safe havens’.11In point 1 of Resolution 1624 (2005), the Security Council calls upon ‘all States to adopt such measures as may be necessary and appropriate and in accordance with their obligations under international law, to:(a)prohibit by law incitement to commit a terrorist act or acts;(b)prevent such conduct;deny safe haven to any persons with respect to whom there is credible and relevant information giving serious reasons for considering that they have been guilty of such conduct’.12Resolution 2178 (2014), adopted by the Security Council on 24 September 2014, states, in point 5, that ‘Member States shall… prevent and suppress the recruiting, organizing, transporting or equipping of individuals who travel to a State other than their States of residence or nationality for the purpose of the perpetration, planning, or preparation of, or participation in, terrorist acts or the providing or receiving of terrorist training, and the financing of their travel and of their activities’.13In point 6 of Resolution 2178 (2014), the Security Council recalls:‘… its decision, in resolution 1373 (2001), that all Member States shall ensure that any person who participates in the financing, planning, preparation or perpetration of terrorist acts or in supporting terrorist acts is brought to justice, and decides that all States shall ensure that their domestic laws and regulations establish serious criminal offenses sufficient to provide the ability to prosecute and to penalize in a manner duly reflecting the seriousness of the offense:the wilful organization, or other facilitation, including acts of recruitment, by their nationals or in their territories, of the travel of individuals who travel to a State other than their States of residence or nationality for the purpose of the perpetration, planning, or preparation of, or participation in, terrorist acts or the providing or receiving of terrorist training;…’. EU law Directive 2004/83 14According to recital (3) of Directive 2004/83, the Geneva Convention provides the cornerstone of the international legal regime for the protection of refugees.15Recitals 16, 17 and 22 of that directive are worded as follows:‘(16)Minimum standards for the definition and content of refugee status should be laid down to guide the competent national bodies of Member States in the application of the Geneva Convention.(17)It is necessary to introduce common criteria for recognising applicants for asylum as refugees within the meaning of Article 1 of the Geneva Convention.’(22)Acts contrary to the purposes and principles of the United Nations are set out in the Preamble and Articles 1 and 2 of the Charter of the United Nations and are, amongst others, embodied in the United Nations Resolutions relating to measures combating terrorism, which declare that “acts, methods and practices of terrorism are contrary to the purposes and principles of the United Nations” and that “knowingly financing, planning and inciting terrorist acts are also contrary to the purposes and principles of the United Nations”.’16Article 12(2) and (3) of Directive 2004/83, that article being headed ‘Exclusion’ and forming part of Chapter III of that directive, itself headed ‘Qualification for being a refugee’, provide:‘2. A third country national or a stateless person is excluded from being a refugee, where there are serious reasons for considering that:he or she has been guilty of acts contrary to the purposes and principles of the United Nations as set out in the Preamble and Articles 1 and 2 of the Charter of the United Nations.3. Paragraph 2 applies to persons who instigate or otherwise participate in the commission of the crimes or acts mentioned therein.’ Framework Decision 2002/475/JHA 17Recital 6 of Council Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism (OJ 2002, L 164, p. 3) states:‘The definition of terrorist offences should be approximated in all Member States, including those offences relating to terrorist groups. Furthermore, penalties and sanctions should be provided for natural and legal persons having committed or being liable for such offences, which reflect the seriousness of such offences.’18Article 1(1) of that Framework Decision, that article being headed ‘Terrorist offences and fundamental rights and principles’, provides:‘Each Member State shall take the necessary measures to ensure that the intentional acts referred to below in points (a) to (i), as defined as offences under national law, which, given their nature or context, may seriously damage a country or an international organisation [shall be deemed to be terrorist offences]:attacks upon a person’s life which may cause death;attacks upon the physical integrity of a person;kidnapping or hostage taking;(d)causing extensive destruction to a Government or public facility, a transport system, an infrastructure facility…;(e)seizure of aircraft, ships …;(f)manufacture, possession, acquisition, transport, supply or use of weapons, explosives …;(g)release of dangerous substances, or causing fires, floods or explosions the effect of which is to endanger human life;(h)interfering with or disrupting the supply of water, power or any other fundamental natural resource …;(i)threatening to commit any of the acts listed in (a) to (h)’.19Article 2 of that Framework Decision, headed ‘Offences relating to a terrorist group’, provides:‘1. For the purposes of this Framework Decision, “terrorist group” shall mean: a structured group of more than two persons, established over a period of time and acting in concert to commit terrorist offences. “Structured group” shall mean a group that is not randomly formed for the immediate commission of an offence and that does not need to have formally defined roles for its members, continuity of its membership or a developed structure.’2. Each Member State shall take the necessary measures to ensure that the following intentional acts are punishable:directing a terrorist group;participating in the activities of a terrorist group, including by supplying information or material resources, or by funding its activities in any way, with knowledge of the fact that such participation will contribute to the criminal activities of the terrorist group.’20Articles 3 and 4 of Framework Decision 2002/475 were amended by Framework Decision 2008/919/JHA (OJ 2008 L 330, p. 21), recital 10 of which states that ‘the definition of terrorist offences, including offences linked to terrorist activities, should be further approximated in all Member States, so that it covers public provocation to commit a terrorist offence, recruitment for terrorism and training for terrorism, when committed intentionally’.21Article 3(1) and (2) of Framework Decision 2002/475, as amended by Framework Decision 2008/919, that article being headed ‘Offences linked to terrorist activities’, provide:‘1. For the purposes of this Framework Decision:“recruitment for terrorism” shall mean soliciting another person to commit one of the offences listed in Article 1(1)(a) to (h), or in Article 2(2);2. Each Member State shall take the necessary measures to ensure that offences linked to terrorist activities include the following intentional acts:recruitment for terrorism;drawing up false administrative documents with a view to committing one of the offences listed in Article 1(1)(a) to (h), or in Article 2(2)(b).’22Article 4 of Framework Decision 2002/475, as amended by Framework Decision 2008/919, relates to acts constituting incitement to commit certain offences described in Articles 1 to 3 of Framework Decision 2002/475, aiding or abetting those offences, and attempting to commit those offences. Belgian law 23Article 55/2 of the loi du 15 décembre 1980 sur l’accès au territoire, le séjour, l’établissement et l’éloignement des étrangers (Moniteur belge of 31 December 1980, page 14584, [Law of 15 December 1980 on entry to Belgian territory, residence, establishment and the expulsion of foreign nationals; ‘Law of 15 December 1980’) provides:‘A foreign national shall be excluded from being a refugee where he or she falls within the scope of Article 1, section D, E or F of the Geneva Convention. That exclusion extends to individuals who instigate offences or acts listed in Article 1, section F, of the Geneva Convention, or who otherwise participate in such offences or acts’.24The loi du 19 décembre 2003 relative aux infractions terroristes (Moniteur belge of 29 December 2003, p. 61689), [Law of 19 December 2003 on terrorist offences; ‘the Law of 19 December 2003’] adopted in order to transpose into Belgian law Framework Decision 2002/475, inserted, in Book II of the Belgian Criminal Code, Title 1c, headed ‘Terrorist offences’, that title containing Articles 137 to 141c of that code.25Article 137(1) of the Criminal Code, as amended by the Law of 19 December 2003 (‘the amended Criminal Code’), provides:‘A terrorist offence is defined to include offences specified in paragraphs 2 and 3 which, by their very nature or due to their context, may seriously damage a country or an international organisation, and are committed intentionally with the aim of seriously intimidating a population or improperly compelling a government or international organisation to perform or abstain from performing any act, or seriously destabilising or destroying the fundamental political, constitutional, economic or social structures of a country or international organisation.’26The first paragraph of Article 139 of the amended Criminal Code states:‘A terrorist group is defined as a structured group of more than two persons, established over a period of time, and acting in concert to commit terrorist offences referred to in Article 137.’27Article 140 of the amended Criminal Code, which corresponds to Article 2 of Framework Decision 2002/475, provides:‘1. Any person who participates in the activities of a terrorist group, including by supplying information or material resources to the terrorist group, or by funding the activities of the terrorist group in any way, with knowledge of the fact that that participation will contribute to the commission by the terrorist group of an offence, shall be liable on conviction to a period of imprisonment of not less than five and not more than ten years and a fine of not less than EUR 100 and not more than EUR5 000.2. Any person who directs a terrorist group shall be liable on conviction to a period of imprisonment of not less than 15 and not more than 20 years and a fine of not less than EUR 1000 and not more than EUR200 000.’ The facts in the main proceedings and the questions referred for a preliminary ruling 28Mr Lounani left Morocco in 1991 and travelled to Germany where he submitted an application for asylum, which was rejected. In 1997 he arrived in Belgium, where he has resided illegally since then.29By a judgment of 16 February 2006, Mr Lounani was convicted by the tribunal correctionnel de Bruxelles (Criminal Court, Brussels, Belgium) of participation in the activities of a terrorist group, namely the Belgian cell of the ‘groupe islamique des combattants marocains’ [the Moroccan Islamic Combatant Group; ‘the MICG’], as a member of its leadership, as well as for criminal conspiracy, use of forged documents, and illegal residence, and sentenced, under, inter alia, Article 140 of the amended Criminal Code, to a period of six years imprisonment.30The findings of fact made by the tribunal correctionnel de Bruxelles (Criminal Court, Brussels) in support of its finding that Mr Lounani was guilty of participation in the activities of a terrorist group were summarised as follows in the order for reference: ‘providing logistical support to a terrorist group by the provision of, inter alia, material resources or information’; ‘forgery of passports’ and ‘fraudulent transfer of passports’, ‘active participation in the organisation of a network for sending volunteers to Iraq’. In particular, the fraudulent transfer of passports was described in the judgment of 16 February 2006 as ‘an act of participation in the activities of a cell providing logistical support to a terrorist movement’.31On 16 March 2010 Mr Lounani applied to the Belgian authorities for refugee status, claiming that he feared persecution in the event of his being returned to Morocco because of the likelihood that he would be regarded by the Moroccan authorities as a radical Islamist and jihadist, following his conviction in Belgium. A decision was made on that application on 8 December 2010 by the CGRA, whereby Mr Lounani was excluded from refugee status under Article 55/2 of the Law of 15 December 1980 and Article 1F(c) of the Geneva Convention.32On 24 December 2010 Mr Lounani brought an action seeking the annulment of that decision before the Conseil du contentieux des étrangers (Council for asylum and immigration proceedings; ‘the CCE’ Belgium). By a judgment of 13 January 2011, the CCE annulled the decision of 8 December 2010 and referred the case back to the CGRA, on the ground that the documents before it did not contain essential information, in the absence of which the CCE was not in a position to uphold or vary that decision without further enquiries having been made.33On 2 February 2011 the CGRA adopted a second decision excluding Mr Lounani from refugee status. An action for annulment of that second decision having been brought on 18 February 2011, the CCE, by a judgment of 3 March 2011, annulled that decision and referred the case back to the CGRA, holding that the CGRA had not made genuine further enquiries.34On 24 May 2011 the CGRA adopted a third decision excluding Mr Lounani from refugee status. On 14 June 2011 Mr Lounani brought before the CCE an action seeking variation of that decision and recognition of his refugee status. By judgment of 1 July 2011, the CCE held that Mr Lounani ought to be granted refugee status.35An administrative appeal against that judgment on a point of law having been brought before it, the Conseil d’État (Council of State, Belgium), by a judgment of 13 July 2012, set aside that judgment and referred the case back to the CCE, sitting in a different composition.36The CCE, in its ruling on the case referred back to it, held that the acts of which Mr Lounani was specifically convicted did not constitute terrorist offences as such because, in its judgment of 16 February 2006, the tribunal correctionnel de Bruxelles (Criminal Court, Brussels) had found Mr Lounani to be guilty of belonging to a terrorist group, but had not convicted him of committing or participating in a terrorist act, as defined in Article 137 of the amended Criminal Code. According to the CCE, no specific act by the MICG, even in inchoate form, falling within the scope of that type of offence, had been established, nor had the fact of any personal conduct on the part of Mr Lounani giving rise to his individual liability for the performance of such an act, been established.37Since the CCE therefore held that none of the acts with respect to which Mr Lounani had been convicted reached the required degree of gravity to be categorised as ‘acts contrary to the purposes and principles of the United Nations’, within the meaning of Article 12(2)(c) of Directive 2004/83, by judgment of 12 February 2013 the CCE varied the decision of the CGRA of 24 May 2011 and granted Mr Lounani refugee status.38The CGRA brought an administrative appeal on a point of law against that judgment before the Conseil d’État (Council of State).39In those circumstances, the Conseil d’État (Council of State) decided to stay the proceedings and to refer to the Court the following questions for a preliminary ruling:‘(1)Is Article 12(2)(c) of Directive 2004/83 to be interpreted as necessarily implying that, for the exclusion clause provided for therein to be applied, the asylum seeker must have been convicted of one of the terrorist offences referred to in Article 1(1) of Framework Decision 2002/475?(2)If the first question is answered in the negative, can acts such as those … of which Mr Lounani was found guilty by the Tribunal correctionnel de Bruxelles (Criminal Court, Brussels) on 16 February 2006 and of which he was convicted with respect to his participation in a terrorist organisation, be considered to be acts contrary to the purposes and principles of the United Nations within the meaning of Article 12(2)(c) of Directive 2004/83?(3)For the purposes of considering the exclusion, on the grounds of his participation in a terrorist organisation, of a person seeking international protection, is the judgment convicting him of being a member of the leadership of a terrorist organisation, which finds that the person seeking international protection has not committed, attempted to commit or threatened to commit a terrorist act, sufficient for a finding of the existence of an act of participation or instigation within the meaning of Article 12(3) of Directive 2004/83 imputable to that person, or is it necessary for an individual examination of the facts of the case to be made and participation demonstrated in the commission of a terrorist offence or instigation of a terrorist offence as defined in Article 1 of Framework Decision 2002/475?(4)For the purposes of considering the exclusion, on the grounds of his participation, possibly as a leader, in a terrorist organisation, of a person seeking international protection, must the act of instigation or participation referred to in Article 12(3) of Directive 2004/83 relate to the commission of a terrorist offence as defined in Article 1 of Framework Decision 2002/475, or may it relate to participation in a terrorist group as referred to in Article 2 of that framework decision?(5)So far as terrorism is concerned, is the exclusion from international protection provided for in Article 12(2)(c) of Directive 2004/83 possible when there has been no commission or instigation of, or participation in, a violent act of a particularly cruel nature, as referred to in Article 1 of Framework Decision 2002/475?’ Consideration of the questions referred The first question 40By this question, the referring court seeks, in essence, to ascertain whether Article 12(2)(c) of Directive 2004/83 must be interpreted as meaning that a prerequisite for the ground for exclusion of refugee status specified in that provision to be held to be established is that an applicant for international protection should have been convicted of one of the terrorist offences referred to in Article 1(1) of Framework Decision 2002/475.41In that regard, it must be noted that it is clear from recitals 3, 16 and 17 of Directive 2004/83 that the Geneva Convention constitutes the cornerstone of the international legal regime for the protection of refugees and that the provisions of that directive for determining who qualifies for refugee status and the content of that status were adopted to guide the competent authorities of the Member States in the application of that convention on the basis of common concepts and criteria (judgment of 2 December 2014, A and Others, C‑148/13 to C‑150/13, EU:C:2014:2406, paragraph 45).42The provisions of Directive 2004/83 must, consequently, be interpreted in the light of its general scheme and purpose, and in a manner consistent with the Geneva Convention and the other relevant treaties referred to in Article 78(1) TFEU (judgments of 9 November 2010, B and D, C‑57/09 and C‑101/09, EU:C:2010:661, paragraph 78, and of 2 December 2014, A and Others, C‑148/13 to C‑150/13, EU:C:2014:2406, paragraph 46).43In that regard, Article 12(2)(c) of Directive 2004/83 corresponds, in essence, to Article 1F(c) of the Geneva Convention, which states that the provisions of that convention are not to apply to any person with respect to whom there are serious reasons for considering that he has been guilty of acts contrary to the purposes and principles of the United Nations.44Article 12(2)(c) of Directive 2004/83 refers, more specifically, to acts contrary to the purposes and principles of the United Nations ‘as set out in the Preamble and Articles 1 and 2 of the Charter of the United Nations’.45As stated in recital 22 of Directive 2004/83, acts contrary to the purposes and principles of the United Nations, covered by Article 12(2)(c) of that directive, are set out in, inter alia, ‘the United Nations Resolutions relating to “measures combating terrorism”, which declare that “acts, methods and practices of terrorism are contrary to the purposes and principles of the United Nations” and that “knowingly financing, planning and inciting terrorist acts are also contrary to the purposes and principles of the United Nations”.’46One of those resolutions is Security Council Resolution 1377 (2001), from which it is apparent that not only are ‘acts of international terrorism’ contrary to the purposes and principles stated in the Charter of the United Nations, but so are ‘the financing, planning and preparation of, as well as any other form of support for, acts of international terrorism’.47Further, it can be inferred from Security Council Resolution 1624 (2005) that acts contrary to the purposes and principles of the United Nations are not confined to ‘acts, methods and practices of terrorism’. The Security Council, in that resolution, calls upon all States, in order to fight against terrorism, in accordance with their obligations under international law, to deny safe haven to and bring to justice ‘any person who supports, facilitates, participates or attempts to participate in the financing, planning, preparation or commission of terrorist acts, or provides safe haven’. Moreover, in point 1(c), that resolution calls upon all States to deny a safe haven to any persons with respect to whom there is credible and relevant information giving serious reasons for considering that they have been guilty of incitement to commit a terrorist act or acts.48It follows that the concept of ‘acts contrary to the purposes and principles of the United Nations’, to be found in Article 1F(c) of the Geneva Convention and in Article 12(2)(c) of Directive 2004/83, cannot be interpreted as being confined to the commission of terrorist acts as specified in the Security Council Resolutions (hereafter: ‘terrorist acts’).49A fortiori, contrary to what is claimed by Mr Lounani, that concept cannot be interpreted as applying solely to terrorist offences specified in Article 1(1) of Framework Decision 2002/475, or, therefore, as requiring the existence of a criminal conviction imposing punishment for such offences.50It must, in that regard, be observed that, as is apparent from recital 6 of Framework Decision 2002/475, the objective of that framework decision is that, in all the Member States, the definition of terrorist offences, including those relating to terrorist groups, should be approximated.51As noted by the European Commission, Framework Decision 2002/475 lists, for that purpose, various forms of conduct which may fall within the scope of the general concept of terrorism and classifies them within four categories of offences: ‘terrorist offences’ (Article 1); ‘offences relating to a terrorist group’ (Article 2); ‘offences linked to terrorist activities’ (Article 3), and, last, ‘inciting, aiding or abetting, or attempting to commit some of those offences’ (Article 4).52If the EU legislature had intended to restrict the scope of Article 12(2)(c) of Directive 2004/83, and to confine the concept of ‘acts contrary to the purposes and principles of the United Nations’ solely to the offences listed in Article 1(1) of Framework Decision 2002/475, it could easily have done so, by expressly stipulating those offences or by referring to that framework decision.53Article 12(2)(c) of Directive 2004/83 makes no reference, however, either to Framework Decision 2002/475, although that framework decision was in existence when Article 12(2)(c) was drafted, or to any other European Union instrument adopted in the context of the fight against terrorism.54The answer therefore to the first question is that Article 12(2)(c) of Directive 2004/83 must be interpreted as meaning that it is not a prerequisite for the ground for exclusion of refugee status specified in that provision to be held to be established that an applicant for international protection should have been convicted of one of the terrorist offences referred to in Article 1(1) of Framework Decision 2002/475. The second and third questions Admissibility 55The CGRA and the Belgian Government maintain that the third question, as formulated by the referring court, is inadmissible, in that, first, it does not set out to the requisite standard the reasons why that court considers that an answer to that question is required to resolve the dispute in the main proceedings and, second, an answer to that question provides no assistance in resolving that dispute. In this case, Mr Lounani has not only been convicted, on the basis of Article 140 of the amended Criminal Code, as a member of the leadership of a terrorist organisation, but also of other acts, classed as criminal offences under Belgian law, committed with terrorist intent.56In that regard, it should be noted that questions on the interpretation of EU law referred by a national court, in the factual and legislative context which that court is responsible for defining and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 14 April 2016, Polkomtel, C‑397/14, EU:C:2016:256, paragraph 37; of 6 September 2016, Petruhhin, C‑182/15, EU:C:2016:630, paragraph 20, and of 13 October 2016, Prezes Urzędu Komunikacji Elektronicznej and Petrotel, C‑231/15, EU:C:2016:769, paragraph 16).57That does not, however, apply in this case.58It must, in that regard, be observed that the referring court has referred the second and third questions against the background of an administrative appeal on a point of law against the judgment of 12 February 2013, in which the CCE held that the acts of which the defendant in the main proceedings was specifically convicted do not reach a level of gravity that is sufficient to classify them as ‘acts contrary to the purposes and principles of the United Nations’, within the meaning of Article 12(2)(c) of Directive 2004/83. According to that judgment, Mr Lounani’s conviction by the tribunal correctionnel de Bruxelles (Criminal Court, Brussels) by reason of his participation in the activities of a terrorist group, even as a member of the leadership of that group, while no responsibility for terrorist offences as such was imputed to him, is not sufficient ground to hold that it can be said of Mr Lounani that there are serious reasons for considering that he committed acts contrary to the purposes and principles of the United Nations.59It is against that background that the referring court seeks, in essence, to ascertain whether the acts in respect of which Mr Lounani was convicted may in themselves be considered to be contrary to the purposes and principles of the United Nations within the meaning of Article 12(2)(c) of Directive 2004/83 and, if not, whether Mr Lounani’s conviction as a member of the leadership of a terrorist group is sufficient ground for the finding that there are serious reasons for considering that he instigated acts contrary to the purposes and principles of the United Nations or that he otherwise participated in such acts, within the meaning of Article 12(3) of that directive.60The order for reference accordingly makes it plain that the referring court seeks to determine the extent to which the participation in the activities of a terrorist group of which Mr Lounani was convicted is capable of justifying the application of the ground for exclusion laid down in Article 12(2)(c) of Directive 2004/83 and asks itself, in that context, whether a conviction by reason of his participation in the activities of that group as a member of its leadership may result in the exclusion of refugee status pursuant to Article 12(2)(c) and Article 12(3) of that directive, read together.61The third question is, consequently, admissible. Substance 62By its second and third questions, which can be examined together, the referring court seeks, in essence, to ascertain whether Article 12(2)(c) of Directive 2004/83 and Article 12(3) of Directive 2004/83 must be interpreted as meaning that acts constituting participation in the activities of a terrorist group, such as the acts of which the defendant in the main proceedings was convicted, can fall within the scope of the ground for exclusion laid down in those provisions, even though the person concerned did not commit, attempt to commit, or threaten to commit a terrorist act.63As regards the acts of which Mr Lounani was convicted by a criminal court, it is apparent from the order for reference that that conviction is based, in particular, on Article 140 of the amended Criminal Code, that article representing the transposition into Belgian law of Article 2 of Framework Decision 2002/475, which defines the offences relating to terrorist groups and includes, in Article 2(2)(b), participation in the activities of a terrorist group.64More specifically, in order to find Mr Lounani guilty of those offences, the tribunal correctionnel de Bruxelles (Criminal Court, Brussels) stated, in its judgment of 16 February 2006, that he had participated, as a member of the leadership, in the activities of the Belgian cell of the MICG, providing to that group logistical support through, inter alia, the supply of information or material resources, engaging in forgery and the fraudulent transfer of passports, and participating actively in the organisation of a network for sending volunteers to Iraq.65Accordingly, no finding was made that Mr Lounani personally committed terrorist acts, or instigated such acts, or participated in their commission.66Nonetheless, it is clear from the relevant Security Council resolutions, as indicated in paragraph 48 of the present judgment, that the concept of ‘acts contrary to the purposes and principles of the United Nations’ is not confined to terrorist acts.67It must, in particular, be observed that, in Resolution 2178 (2014), the Security Council expressed its ‘grave concern over the acute and growing threat posed by foreign terrorist fighters, namely individuals who travel to a State other than their States of residence or nationality for the purpose of the perpetration, planning or preparation of … terrorist acts’ and its concern with regard to the international networks established by terrorist entities enabling them to move, between States, fighters of all nationalities and the resources to support them.68Among the measures to be adopted to counter this phenomenon, States must ensure the prevention and suppression of activities consisting in the recruitment, organisation, transportation or equipment of individuals who travel to a State other than their States of residence or nationality for the purpose of, inter alia, the perpetration, planning or preparation of terrorist acts.69It follows that application of the ground for exclusion of refugee status laid down in Article 12(2)(c) of Directive 2004/83 cannot be confined to the actual perpetrators of terrorist acts, but can also extend to those who engage in activities consisting in the recruitment, organisation, transportation or equipment of individuals who travel to a State other than their States of residence or nationality for the purpose of, inter alia, the perpetration, planning or preparation of terrorist acts.70Moreover, it is apparent from reading together Article 12(2)(c) and Article 12(3) of Directive 2004/83 that the exclusion from refugee status laid down in Article 12(2)(c) of that directive is also applicable to persons with respect to whom there are serious reasons for considering that they have instigated acts contrary to the purposes and principles of the United Nations, or that they have otherwise participated in such acts. In the light of what is held in paragraphs 48 and 66 of the present judgment, it is not a prerequisite for the application of those provisions, read together, that an applicant for international protection should have instigated a terrorist act or should have otherwise participated in the commission of such an act.71In that regard, the Commission correctly observes that participation in the activities of a terrorist group can cover a wide range of conduct, of varying degrees of seriousness.72In those circumstances, the competent authority of the Member State concerned may apply Article 12(2)(c) of Directive 2004/83 only after undertaking, for each individual case, an assessment of the specific facts brought to its attention with a view to determining whether there are serious reasons for considering that the acts committed by the person in question, who otherwise satisfies the qualifying conditions for refugee status, fall within the scope of that particular exclusion (see, to that effect, judgment of 9 November 2010, B and D, C‑57/09 and C‑101/09, EU:C:2010:661, paragraphs 87 and 94).73As regards the question whether conduct such as that of which Mr Lounani was found guilty may fall within the scope of acts contrary to the purposes and principles of the United Nations within the meaning of Article 12(2)(c) of Directive 2004/83, or constitute instigating or otherwise participating in such acts, within the meaning of Article 12(3) of that directive, the final assessment of an application for international protection falls to the competent national authorities, subject to review by the national courts.74As to the factors to be taken into consideration, it should be observed that the order for reference indicates that Mr Lounani was a member of the leadership of a terrorist group that operated internationally, was registered, on 10 October 2002, on the United Nations list which identifies certain individuals and entities that are subject to sanctions, and continues to be named on that list, as updated since that date. His logistical support to the activities of that group has an international dimension in so far as he was involved in the forgery of passports and assisted volunteers who wanted to travel to Iraq.75Such conduct may justify the exclusion of refugee status.76In that regard, it must be recalled that, as was stated in paragraphs 12, 13 and 67 to 69 of the present judgment, the Security Council Resolutions, in particular Resolution 2178(2014), in points 5 and 6(c), identify, among the activities to be combated by States as part of the fight against international terrorism, the wilful organisation of the travel of individuals who travel to a State other than their State of residence or nationality, for the purpose of the perpetration, planning or preparation of terrorist acts.77Consequently, the fact, were it to be established as such, that the group of which Mr Lounani was one of the leaders may not have perpetrated any terrorist acts or that the volunteers who wanted to travel to Iraq and were helped by that group may not ultimately have committed such acts, is not, in any event, such as to preclude the conduct of Mr Lounani from falling to be regarded as contrary to the purposes and principles of the United Nations. The same is true, in the light of what is stated in paragraphs 41 to 54 and 66 to 70 of the present judgment, of the fact, mentioned by the referring court in its third question, that Mr Lounani has not committed, nor attempted to commit, nor threatened to commit terrorist offences, within the meaning of Article 1(1) of Framework Decision 2002/475. For the same reasons, the application of Article 12(3) of Directive 2004/83 does not require it to be established that Mr Lounani instigated such offences or that he otherwise participated in such offences.78Further, the fact that Mr Lounani was convicted by the courts of a Member State on a charge of participation in the activities of a terrorist group and that that conviction has become final is, in the context of the individual assessment that must be undertaken by the competent authority, of particular importance.79In the light of all the foregoing, the answer to the second and third questions is that Article 12(2)(c) and Article 12(3) of Directive 2004/83 must be interpreted as meaning that acts constituting participation in the activities of a terrorist group, such as those of which the defendant in the main proceedings was convicted, may justify exclusion of refugee status, even though it is not established that the person concerned committed, attempted to commit or threatened to commit a terrorist act. For the purposes of the individual assessment of the facts that may be grounds for a finding that there are serious reasons for considering that a person has been guilty of acts contrary to the purposes and principles of the United Nations, has instigated such acts or has otherwise participated in such acts, the fact that that person was convicted by the courts of a Member State on a charge of participation in the activities of a terrorist group is of particular importance, as is a finding that that person was a member of the leadership of that group, and there is no need to establish that that person himself or herself instigated a terrorist act or otherwise participated in it. The fourth and fifth questions 80In the light of the answer given to the first three questions, there is no need to answer the fourth and fifth questions. Costs 81Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Article 12(2)(c) of Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted must be interpreted as meaning that it is not a prerequisite for the ground for exclusion of refugee status specified in that provision to be held to be established that an applicant for international protection should have been convicted of one of the terrorist offences referred to in Article 1(1) of Council Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism. 2. Article 12(2)(c) and Article 12(3) of Directive 2004/83 must be interpreted as meaning that acts constituting participation in the activities of a terrorist group, such as those of which the defendant in the main proceedings was convicted, may justify exclusion of refugee status, even though it is not established that the person concerned committed, attempted to commit or threatened to commit a terrorist act as defined in the resolutions of the United Nations Security Council. For the purposes of the individual assessment of the facts that may be grounds for a finding that there are serious reasons for considering that a person has been guilty of acts contrary to the purposes and principles of the United Nations, has instigated such acts or has otherwise participated in such acts, the fact that that person was convicted, by the courts of a Member State, on a charge of participation in the activities of a terrorist group is of particular importance, as is a finding that that person was a member of the leadership of that group, and there is no need to establish that that person himself or herself instigated a terrorist act or otherwise participated in it. [Signatures]( *1 ) Language of the case: French. | 3d7ab-5392a1d-41a8 | EN |
The Court of Justice dismisses the majority of the appeals brought by companies that participated in the cartel on the bathroom fixtures and fittings market | 26 January 2017 ( *1 )‛Appeal — Agreements, decisions and concerted practices — Bathroom fittings and fixtures markets of Belgium, Germany, France, Italy, the Netherlands and Austria — Coordination of selling prices and exchange of sensitive business information — Regulation (EC) No 1/2003 — Article 23(2) — Ceiling of 10% of turnover — 2006 Guidelines on the method of setting fines — Principle of non-retroactivity — Exercise of unlimited jurisdiction — Excessive duration of the proceedings’In Case C‑604/13 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 25 November 2013, Aloys F. Dornbracht GmbH & Co. KG, established in Iserlohn (Germany), represented by H. Janssen and T. Kapp, Rechtsanwälte,appellant,the other parties to the proceedings being: European Commission, represented by F. Castillo de la Torre and L. Malferrari, acting as Agents, and by A. Böhlke, Rechtsanwalt, with an address for service in Luxembourg,defendant at first instance, Council of the European Union, intervener at first instance,THE COURT (First Chamber),composed of A. Tizzano, Vice-President of the Court, acting as President of the First Chamber, M. Berger, E. Levits, S. Rodin (Rapporteur) and F. Biltgen, Judges,Advocate General: M. Wathelet,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 10 September 2015,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1By its appeal, Aloys F. Dornbracht GmbH & Co. KG (‘Aloys F. Dornbracht’ or ‘the appellant’) asks the Court of Justice to set aside the judgment of the General Court of the European Union of 16 September 2013, Dornbracht v Commission (T‑386/10, ‘the judgment under appeal’, EU:T:2013:450), by which the General Court dismissed its action for annulment of Commission Decision C(2010) 4185 final of 23 June 2010 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case COMP/39092 — Bathroom Fittings and Fixtures) (‘the decision at issue’), in so far as that decision related to it, or, in the alternative, to reduce the amount of the fine imposed on it in that decision. Legal context Regulation (EC) No 1/2003 2Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1) provides, in Article 23(2) and (3):‘2. The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:(a)they infringe Article [101] or [102 TFEU]……For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year.3. In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’ The 2006 Guidelines 3The Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2; ‘the 2006 Guidelines’) state, in point 2, that, so far as concerns the setting of fines, ‘the Commission must have regard both to the gravity and to the duration of the infringement’ and that ‘the fine imposed may not exceed the limits specified in Article 23(2), second and third subparagraphs, of Regulation No 1/2003’.4Points 19, 21, 23 and 37 of the 2006 Guidelines state:‘19.The basic amount of the fine will be related to a proportion of the value of sales, depending on the degree of gravity of the infringement, multiplied by the number of years of infringement.21.As a general rule, the proportion of the value of sales taken into account will be set at a level of up to 30% of the value of sales.23.Horizontal price-fixing … agreements …, which are usually secret, are, by their very nature, among the most harmful restrictions of competition. As a matter of policy, they will be heavily fined. Therefore, the proportion of the value of sales taken into account for such infringements will generally be set at the higher end of the scale.37.Although these Guidelines present the general methodology for the setting of fines, the particularities of a given case or the need to achieve deterrence in a particular case may justify departing from such methodology or from the limits specified in point 21.’ Background to the dispute and the decision at issue 5The background to the dispute was set out in paragraphs 1 to 29 of the judgment under appeal and may be summarised as follows.6The appellant is a company governed by German law which manufactures, inter alia, taps and fittings.7On 15 July 2004, Masco Corp. and its subsidiaries, including Hansgrohe AG, which manufactures taps and fittings, and Hüppe GmbH, which manufactures shower enclosures, informed the Commission of the existence of a cartel in the bathroom fittings and fixtures sector and submitted an application for immunity from fines under the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3) or, in the alternative, for a reduction of any fines that might be imposed on them.8On 9 and 10 November 2004, the Commission conducted unannounced inspections at the premises of various companies and national industry associations operating in the bathroom fittings and fixtures sector. Between 15 November 2005 and 16 May 2006, the Commission sent requests for information to those companies and associations, including the appellant. It then, on 26 March 2007, adopted a statement of objections. The statement of objections was notified, inter alia, to the appellant.9Following a hearing held from 12 to 14 November 2007, the sending, on 9 July 2009, of a letter of facts and, subsequently, further requests for information that were addressed to, amongst others, the appellant, the Commission, on 23 June 2010, adopted the decision at issue. By that decision, it found that there had been an infringement of Article 101(1) TFEU and Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3) in the bathroom fittings and fixtures sector. That infringement, in which 17 undertakings had allegedly participated, was said to have taken place over various periods between 16 October 1992 and 9 November 2004 and to have taken the form of anticompetitive agreements or concerted practices covering the territory of Belgium, Germany, France, Italy, the Netherlands and Austria. According to the decision at issue, the products covered by the cartel were bathroom fittings and fixtures belonging to the following three product sub-groups: taps and fittings, shower enclosures and accessories, and ceramic sanitary ware (ceramics).10As regards, more specifically, the appellant, which manufactures items belonging to the first of those three product sub-groups, the Commission found, in Article 1(2) of the decision at issue, that the infringement consisted in the participation, from 6 March 1998 to 9 November 2004, in a continuing agreement or concerted practice in the bathroom fittings and fixtures sector covering the territory of Germany and Austria.11On that ground, the Commission imposed a fine of EUR 12517671 on the appellant in Article 2(6) of the decision at issue.12For the purpose of calculating that fine, the Commission took into account the 2006 Guidelines, in particular points 20 to 24 thereof. Proceedings before the General Court and the judgment under appeal 13By application lodged at the General Court Registry on 8 September 2010, Aloys F. Dornbracht brought an action for annulment of the decision at issue before the General Court, relying on eight pleas in law.14The first plea alleged that the Commission had made an error of assessment, in the light of Article 23(3) of Regulation No 1/2003, in the finding of the infringement alleged to have been committed and the fixing of the amount of the fine imposed on Aloys F. Dornbracht. The second plea alleged infringement of Article 23(3) of that regulation, resulting from the misapplication of the 10% ceiling laid down in Article 23(2) of that regulation. The third plea alleged a failure to take into account the individual nature of Aloys F. Dornbracht’s participation in the infringement found, in breach of the principle of equal treatment. The fourth plea alleged a failure to take into account other, earlier Commission decisions, in breach of the principle of equal treatment. The fifth plea alleged a failure to take into account Aloys F. Dornbracht’s limited economic capacity, in breach of the principle of proportionality. The sixth plea alleged breach of the principle of non-retroactivity as a result of the application of the 2006 Guidelines. The seventh plea alleged breach by Article 23(3) of Regulation No 1/2003 of the principle nullum crimen, nulla poena sine lege. The eighth plea alleged that the 2006 Guidelines are unlawful, in that they afford the Commission too much discretion.15By the judgment under appeal, the General Court dismissed the action in its entirety. The forms of order sought before the Court of Justice 16The appellant claims that the Court should:—set aside the judgment under appeal;annul the decision at issue in so far as it concerns the appellant;in the alternative, reduce in an appropriate manner the amount of the fine imposed on the appellant in the decision at issue; andorder the Commission to pay the costs.17The Commission contends that the Court should:dismiss the appeal; andorder the appellant to pay the costs. The appeal 18The appellant puts forward six grounds in support of its appeal. The first ground of appeal alleges infringement of Article 23(3) of Regulation No 1/2003 and breach of the principle nullum crimen, nulla poena sine lege and of the principles of equal treatment and of proportionality as a result of the misapplication of the ceiling provided for in Article 23(2) of that regulation. By its second ground of appeal, the appellant criticises the judgment under appeal in that the General Court wrongly, it claims, rejected the plea of illegality raised against the 2006 Guidelines. The third ground of appeal alleges that the General Court failed to penalise the Commission’s infringement of point 37 of the 2006 Guidelines. By its fourth ground of appeal, the appellant relies on a breach of the principle of non-retroactivity arising from the application of the 2006 Guidelines to the present case. The fifth ground of appeal alleges errors of law in the calculation of the amount of the fine imposed on the appellant. Lastly, the sixth ground of appeal alleges breach of the principle that the proceedings must be concluded within a reasonable time. The first ground of appeal, alleging the misapplication of the 10% limit laid down in Article 23(2) of Regulation No 1/2003 Arguments of the parties19By its first ground of appeal, directed against paragraphs 213 to 227 of the judgment under appeal, the appellant complains that the General Court infringed Article 23(3) of Regulation No 1/2003, as well as the principle nullum crimen, nulla poena sine lege and the principles of equal treatment and of proportionality, when it held that the 10% limit laid down in Article 23(2) of that regulation imposes a ceiling which applies only to the final amount of the fine, thus denying that the determination of the amount of the fine imposed by the Commission in the present case was unlawful and making it impossible for the General Court itself to reduce it. Such an interpretation would mean that a fine of 10% of the total turnover of the undertaking concerned would be imposed in virtually every case, irrespective of the gravity and duration of the infringement at issue.20Referring, in particular, to a decision of the Kartellsenat of the Bundesgerichtshof (Cartel Panel of the Federal Court of Justice, Germany), the appellant submits that the 10% limit provided for in Article 23(2) of Regulation No 1/2003 imposes no such ceiling but sets the upper limit of the scale of fines, which should be applied only in respect of the most serious infringements. Such an approach would enable appropriate account to be taken of the gravity and duration of an infringement, as provided for in Article 23(3) of that regulation.21According to the Commission, the first ground of appeal must be rejected as inadmissible or, in any event, as entirely unfounded.Findings of the Court22In so far as, on the one hand, by its first ground of appeal, the appellant essentially complains that the General Court misinterpreted Article 23(2) of Regulation No 1/2003 in holding that it imposes a ceiling, it must be noted that the General Court, without adopting that position, correctly stated in paragraph 216 of the judgment under appeal that it is apparent from the settled case-law of the Court of Justice that it is only the final amount of the fine imposed which must comply with that upper limit of 10% of turnover referred to in that provision, and that that provision does not prohibit the Commission from arriving, during the various stages of calculation of the fine, at an intermediate amount higher than that limit, provided that the final amount of the fine does not exceed that limit (see, in particular, judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraphs 277 and 278; of 29 June 2006, SGL Carbon v Commission, C‑308/04 P, EU:C:2006:433, paragraph 82; and of 12 July 2012, Cetarsa v Commission, C‑181/11 P, not published, EU:C:2012:455, paragraph 80).23On the other hand, as regards the complaints that the General Court infringed Article 23(3) of Regulation No 1/2003 and, therefore, the principle nullum crimen, nulla poena sine lege and the principles of equal treatment and of proportionality on the ground that it failed to take into account in an appropriate manner the gravity and duration of the infringements, it should be borne in mind that the Court has consistently held that the fact that, owing to the application of the limit of 10% of turnover referred to in the second subparagraph of Article 23(2) of that regulation, certain factors such as the gravity and duration of the infringement are not actually reflected in the amount of the fine imposed is merely a consequence of the application of that upper limit to the final amount (see, in particular, judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 279, and of 12 July 2012, Cetarsa v Commission, C‑181/11 P, not published, EU:C:2012:455, paragraph 81).24That upper limit seeks to prevent fines being imposed which it is foreseeable that the undertakings, owing to their size, as determined, albeit approximately and imperfectly, by their total turnover, will not be able to pay (judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 280, and of 12 July 2012, Cetarsa v Commission, C‑181/11 P, not published, EU:C:2012:455, paragraph 82).25The limit is therefore one which is uniformly applicable to all undertakings and arrived at according to the size of each of them, and seeks to ensure that the fines are not excessive or disproportionate. That upper limit thus has a distinct and autonomous objective by comparison with the criteria of gravity and duration of the infringement (judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraphs 281 and 282, and of 12 July 2012, Cetarsa v Commission, C‑181/11 P, not published, EU:C:2012:455, paragraph 83).26It follows that the arguments to the effect that insufficient account was taken of the gravity and duration of the infringements, owing to the application of the upper limit provided for in Article 23(2) of Regulation No 1/2003, must be rejected.27In those circumstances, the first ground of appeal must be rejected as unfounded. The second ground of appeal, raising a plea of illegality against the 2006 Guidelines 28By its second ground of appeal, the appellant submits that the General Court infringed Article 23(3) of Regulation No 1/2003 by rejecting the plea of illegality raised against the 2006 Guidelines on the basis that they do not take into consideration the criteria of the duration and gravity of infringements committed by ‘mono-product’ undertakings.29In that regard, referring to the arguments set out in the application at first instance, the appellant maintains that the 2006 Guidelines are unlawful on the ground that they breach the principles of legality and of legal certainty and that, in any event, they make no special provision for ‘mono-product’ undertakings.30The appellant observes that, unlike the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) [CS] (OJ 1998 C 9, p. 3; ‘the 1998 Guidelines’), the 2006 Guidelines result, as a general rule, in the 10% limit being exceeded, particularly in the case of non-diversified ‘mono-product’ undertakings. The application of the method of setting fines described by the 2006 Guidelines means that the criteria of the duration and gravity of infringements committed by those undertakings, to which Article 23(3) of Regulation No 1/2003 refers, are not, therefore, taken into account in an appropriate manner. The virtually automatic imposition of fines amounting to 10% of turnover is also contrary to the principle of equal treatment.31According to the Commission, the second ground of appeal must be rejected as inadmissible or, in any event, as unfounded.32According to the settled case-law of the Court of Justice, it follows from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) and Article 169(2) of the Rules of Procedure of the Court of Justice that an appeal must indicate precisely the contested elements of the judgment or order which the appellant seeks to have set aside and also the legal arguments specifically advanced in support of the appeal. Where, without even including an argument specifically identifying the error of law allegedly vitiating the judgment under appeal, an appeal merely reproduces verbatim the pleas in law and arguments previously submitted to the General Court, including those based on facts expressly rejected by that Court, it fails to satisfy the requirement to state reasons under those provisions. In reality, such an appeal amounts to no more than a request for re-examination of the application submitted to the General Court, which falls outside the jurisdiction of the Court of Justice (see, in particular, judgments of 30 June 2005, Eurocermex v OHIM, C‑286/04 P, EU:C:2005:422, paragraphs 49 and 50, and of 12 September 2006, Reynolds Tobacco and Others v Commission, C‑131/03 P, EU:C:2006:541, paragraphs 49 and 50).33It must be held that, in so far as the second ground of appeal advanced by the appellant is a complaint that the General Court rejected the plea of illegality raised against the 2006 Guidelines, it merely reproduces the arguments already put forward at first instance.34Consequently, this ground of appeal must be rejected as inadmissible. The third ground of appeal, alleging that, by fixing set amounts, the Commission failed to take account of the appellant’s individual participation, contrary to the principle of equal treatment 35By the third ground put forward in support of its appeal, the appellant complains that the General Court, in essence, erred in law in its examination of the exercise by the Commission of its discretion in the setting of fines, described in point 37 of the 2006 Guidelines.36It must be held that, by this ground of appeal, the appellant fails to identify the paragraphs of the judgment under appeal which are allegedly vitiated by such an error.37Consequently, in accordance with the case-law cited in paragraph 32 of the present judgment, this ground must also be rejected as inadmissible. The fourth ground of appeal, alleging breach of the principle of non-retroactivity 38By its fourth ground of appeal, the appellant complains that the General Court infringed the principle of non-retroactivity, notably in paragraphs 87 and 90 of the judgment under appeal, when it held that the Commission’s setting of the fine on the basis of the 2006 Guidelines was lawful, although the alleged infringement was committed under the 1998 Guidelines.39The appellant submits in this regard that it is true that the Court ruled in its judgment of 28 June 2005, Dansk Rørindustri and Others v Commission (C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 231), that the Commission could, without disregarding the principle of non-retroactivity, calculate the amount of the fine on the basis of the 1998 Guidelines, even though they had been adopted after the infringement at issue in that case was committed, since those guidelines and the new method of calculation they contained were reasonably foreseeable at the time when that infringement was committed. However, according to the appellant, in the case giving rise to that judgment, there were no guidelines at the time when the infringement was committed, and therefore the question that arose was whether or not the fine had to be calculated on the basis of the new guidelines which the Commission first adopted in 1998. Contrary to what the General Court found in the judgment under appeal, that situation should, in the appellant’s submission, be distinguished from a situation in which guidelines were applicable at the time when the infringement was committed but have been replaced or amended by new guidelines since that infringement. In the latter situation, the question arises as to which guidelines, the old or the new, should be applied for the purposes of calculating the amount of the fine. The General Court’s application in the second situation of the approach adopted in the judgment of 28 June 2005, Dansk Rørindustri and Others v Commission (C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408), is, the appellant claims, contrary to the principles of equal treatment and of the protection of legitimate expectations.40In any event, if the guidelines could be amended at any time with retroactive effect, as the General Court held, they would be unable to fulfil the function which, according to the case-law of the Court of Justice, has been conferred on them of ensuring legal certainty on the part of undertakings.41The Commission contends that the fourth ground of appeal should be rejected. It maintains, in particular, that the proper application of EU competition rules requires that the Commission may at any time adjust the level of fines to the needs of that policy.42It should be noted that it follows from well-established case-law that the application, for the purpose of calculating fines imposed for competition infringements, of new guidelines, such as the 2006 Guidelines, and in particular of a new method of calculating the amount of a fine contained therein, even to infringements committed before the adoption or the amendment of those guidelines, does not breach the principle of non-retroactivity in so far as those new guidelines and that new method were reasonably foreseeable at the time when the infringements in question were committed (see, to that effect, in particular, judgments of 28 June 2005, Dansk Rørindustri and Others v Commission (C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraphs 217, 218, and 227 to 232; of 18 May 2006, Archer Daniels Midland and Archer Daniels Midland Ingredients v Commission, C‑397/03 P, EU:C:2006:328, paragraph 25; of 18 July 2013, Schindler Holding and Others v Commission, C‑501/11 P, EU:C:2013:522, paragraph 75; and of 14 September 2016, Ori Martin and SLM v Commission, C‑490/15 P and C‑505/15 P, not published, EU:C:2016:678, paragraphs 82 to 94).43In holding, in paragraph 90 of the judgment under appeal, that the Commission had not breached the principle of non-retroactivity by applying the 2006 Guidelines in order to calculate the fine for the infringement committed by the appellant before those guidelines were adopted, the General Court did not, therefore, make any error of law.44It follows that the fourth ground of appeal must be rejected as unfounded. The fifth ground of appeal, relating to errors of law in the calculation of the amount of the fine 45By its fifth ground of appeal, which is in three parts, the appellant submits that the General Court made errors of law in the calculation of the amount of the fine imposed on the appellant.46By the first part of that ground of appeal, the appellant submits, in the first place, that, having found in paragraphs 165 to 168 of the judgment under appeal that the Commission ought, when calculating the amount of the fine imposed on the appellant, to have taken into account the fact that the geographic scope of the infringement covered the territories of two Member States and not of six, the General Court was not entitled to apply, in paragraphs 249 and 250 of the judgment under appeal, the same multipliers for the ‘gravity of the infringement’ and for the ‘additional amount’ as those set by the Commission in the decision at issue and as those applied to other members of the present cartel who participated in the infringement in three to six Member States. In so doing, the General Court failed to make the penalties imposed on the undertakings concerned specific to the offender.47In the second place, the appellant argues that the General Court made an error of assessment in paragraph 249 of the judgment under appeal by taking into account the duration of the infringement in the context of the assessment of its gravity, even though it would have been appropriate to take into account the gravity and the duration of the infringement separately. In so doing, the General Court had attributed excessive significance to the criterion of the duration of the infringement.48In the third place, the matters taken into account by the General Court in determining the amount of the fine imposed did not appear in the judgment under appeal, thus preventing any review of that amount; therefore, the judgment under appeal is, in the appellant’s submission, vitiated by a failure to state reasons.49By the second part of the fifth ground of appeal, the appellant complains that the General Court failed to identify a number of errors of assessment on the part of the Commission and failed to take certain matters into account in relation to the setting of the amount of the fine, including the fact that the products of the appellant covered by the infringement belong to only one of the three groups of products covered by the agreements at issue. Accordingly, the General Court should, in paragraphs 168 to 179 of the judgment under appeal, have taken into account the fact that an infringement is less serious if the undertaking participates in it only in respect of products belonging to just one of the three groups concerned. Furthermore, the finding in paragraph 114 of the judgment under appeal that the appellant delayed in disputing its awareness of the fact that the infringement concerned three product groups is inaccurate.50By the third part of that ground of appeal, concerning paragraphs 192 to 200 of the judgment under appeal, the appellant complains that the General Court failed, contrary to the requirements of the 1998 Guidelines, to take into account the fact that the appellant played only a ‘follow-my-leader’ role in bringing about the infringement.51The Commission contests the merits of the fifth ground of appeal.52As a preliminary point, it must be noted that the system of judicial review of Commission decisions relating to proceedings under Articles 101 and 102 TFEU consists in a review of the legality of the acts of the institutions for which provision is made in Article 263 TFEU, which may be supplemented, pursuant to Article 261 TFEU and at the request of applicants, by the General Court’s exercise of unlimited jurisdiction with regard to the penalties imposed in that regard by the Commission (see, to that effect, judgments of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 42, and of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 71).53The scope of that unlimited jurisdiction of the General Court is strictly limited, unlike the review of legality provided for in Article 263 TFEU, to determining the amount of the fine. It concerns solely the assessment by that Court of the fine imposed by the Commission, to the exclusion of any alteration of the constituent elements of the infringement lawfully determined by the Commission in the decision under examination by the General Court (see, to that effect, judgment of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraphs 76 and 77).54Thus, in so far as the fifth ground of appeal relates to errors of law which the General Court is said to have made in calculating the amount of the fine imposed on the appellant, it concerns the exercise by the General Court of its unlimited jurisdiction as regards the setting of that fine, in particular in paragraphs 244 to 251 of the judgment under appeal.– The second and third parts of the fifth ground of appeal55With regard to the second and third parts of the fifth ground of appeal, which it is appropriate to examine first, and by which the appellant complains that the General Court failed to take into account, for the purposes of setting the amount of the fine, the fact that the appellant had participated in the infringement only in respect of products in just one of the three groups concerned and had merely played a ‘follow-my-leader’ role in bringing about that infringement, it must be noted that, in its review of the legality of the decision at issue, notably in paragraphs 114, 169 to 173 and 192 to 200 of the judgment under appeal, the General Court rejected the arguments put forward by the appellant on that basis.56It follows that the General Court cannot be criticised for having failed to assess those circumstances when, in the exercise of its unlimited jurisdiction, it set the amount of the fine to be imposed.57In any event, in so far as the fifth ground of appeal, or the second and third parts thereof, concerns the findings of the General Court in the context of its review of the legality of the decision at issue, culminating in the rejection of the appellant’s arguments relating to those very circumstances, it cannot succeed.58As regards, first, the argument put forward in the second part of that ground of appeal, alleging that the General Court made an error of assessment as to the product groups to which the infringement the appellant is said to have committed related, it must be noted, as the General Court stated in paragraph 51 of the judgment under appeal, that, in accordance with Article 44(1)(c) of the Rules of Procedure of the General Court, in the version in force at the date of the judgment under appeal, the subject matter of the dispute and a summary of the pleas in law relied on constitute two essential elements which must be included in the application initiating proceedings, and that, under Article 48(2) of those rules of procedure, no new plea in law may be introduced in the course of proceedings unless it is based on matters of law or fact which have come to light in the course of the procedure (see, to that effect, judgments of 12 November 2009, SGL Carbon v Commission, C‑564/08 P, not published, EU:C:2009:703, paragraph 21, and of 3 April 2014, France v Commission, C‑559/12 P, EU:C:2014:217, paragraph 38). As the General Court found, however, the appellant disputed its awareness of the fact that the infringement covered three product sub-groups only in its reply before the General Court, and that argument did not amplify a complaint made in the application at first instance. Consequently, the General Court was fully entitled to reject it as being out of time, in paragraphs 53, 54, 114 and 171 of the judgment under appeal.59In those circumstances, the appellant cannot put that argument forward at the stage of the appeal before the Court of Justice.60In so far as, by the second part of its fifth ground of appeal, the appellant maintains that the General Court should have taken into account the fact that its activity was limited to only one of the three product sub-groups, suffice it to note that the General Court did in fact take that into account. Thus, in paragraph 154 of the judgment under appeal, the General Court stated that that fact had been taken into account by the Commission when calculating the value of sales on the basis of which the fine was calculated.61Accordingly, the second part of the fifth ground of appeal is, in part, inadmissible and, in part, unfounded.62Secondly, with regard to the complaint raised in the third part of this ground of appeal, according to which the General Court did not draw the appropriate conclusions from the appellant’s exclusively ‘follow-my-leader’ role when it set the fine to be imposed, it must be noted that that complaint is based on the premiss that the 1998 Guidelines, not those of 2006, were required to be applied in the present case. Since, in this case, the Commission applied the 2006 Guidelines, on which the General Court decided to draw in paragraph 246 of the judgment under appeal, and those guidelines do not provide for account to be taken of an exclusively passive or ‘follow-my-leader’ role in bringing about the infringement, that complaint must be rejected.63Thus, the General Court was fully entitled to consider, in paragraph 194 of the judgment under appeal, that the exclusively passive or ‘follow-my-leader’ role of an undertaking no longer constituted a mitigating circumstance according to those guidelines, and to find, in paragraph 197 of that judgment, that, in the light of the third indent of point 29 of the 2006 Guidelines, in order to be given the benefit of mitigating circumstances, the appellant would have been required to prove that it had refrained from applying the offending agreements, which, however, it had failed to do.64It follows from the foregoing that the third part of the fifth ground of appeal is unfounded.– The first part of the fifth ground of appeal65As regards, in the first place, the appellant’s arguments alleging that the General Court made errors of assessment in relation in particular to the geographic scope of the infringement when determining, in the exercise of its unlimited jurisdiction, the amount of the fine, it should be noted at the outset that the General Court alone has jurisdiction to examine how in each particular case the Commission assessed the gravity of unlawful conduct. In an appeal, the purpose of review by the Court of Justice is, first, to examine to what extent the General Court took into consideration, in a legally correct manner, all the essential factors to assess the gravity of particular conduct in the light of Article 101 TFEU and Article 23 of Regulation No 1/2003 and, secondly, to consider whether the General Court responded to a sufficient legal standard to all the arguments raised in support of the claim for cancellation or reduction of the fine (see, inter alia, judgments of 17 December 1998, Baustahlgewebe v Commission, C‑185/95 P, EU:C:1998:608, paragraph 128; of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 244; and of 5 December 2013, Solvay Solexis v Commission, C‑449/11 P, not published, EU:C:2013:802, paragraph 74).66On the other hand, it must be borne in mind that it is not for the Court of Justice, when ruling on questions of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of EU law (judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 245, and of 11 July 2013, Gosselin Group v Commission, C‑429/11 P, not published, EU:C:2013:463, paragraph 87).67It should also be recalled that, according to the settled case-law of the Court, in setting the amount of fines, regard must be had to the duration of the infringement and to all the factors capable of affecting the assessment of the gravity of that infringement (judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 240, and of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 98).68The factors capable of affecting the assessment of the gravity of the infringements include the conduct of each of the undertakings, the role played by each of them in the establishment of the cartel, the profit which they were able to derive from it, their size, the value of the goods concerned and the threat that infringements of that type pose to the objectives of the European Union (judgments of 28 June 2005, Dansk Rørindustri and Others v Commission, C‑189/02 P, C‑202/02 P, C‑205/02 P to C‑208/02 P and C‑213/02 P, EU:C:2005:408, paragraph 242, and of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 100).69In the present case, so far as concerns the application by the General Court of the same multipliers for the ‘gravity of the infringement’ and for the ‘additional amount’ as those set by the Commission in the decision at issue (15%), even though the General Court found that the geographic scope of the infringement covered two, not six, Member States, it should be noted that, having identified, in paragraphs 156 to 168 of the judgment under appeal, the errors made by the Commission in its assessment of that geographic scope, the General Court, in the exercise of its unlimited jurisdiction (as is apparent, in particular, from paragraphs 242 and 244 to 251 of that judgment), assessed the conclusions to be drawn from the Commission’s errors as regards the setting of the amount of the fine imposed.70First of all, in paragraph 246 of the judgment under appeal, the General Court found that it was appropriate in the present case to draw on the 2006 Guidelines in recalculating the fine.71Next, the General Court considered, in paragraph 247 of that judgment, that the Commission’s errors of assessment, which lay in the fact that the Commission had set the ‘gravity of the infringement’ and the ‘additional amount’ multipliers at 15% on the basis that the geographic scope of the infringement covered the territories of six Member States, required only that it substitute its own assessment for the Commission’s in so far as setting those multipliers was concerned, in the light, in particular, of the geographic scope of the infringement, which had to be limited to the territories of two Member States. In the light of paragraphs 57 to 64 of the present judgment, the General Court was fully entitled, however, not to take into account for that purpose the appellant’s assertion that the infringement concerned only one of the three product sub-groups or the ‘follow-my-leader’ role of the appellant.72In order to calculate the fine, the General Court considered, in paragraph 248 of the judgment under appeal, that the Commission was fully entitled to find, in Article 1(2) and recitals 872 and 873 of the decision at issue, that the appellant had participated, from 6 March 1998 to 9 November 2004, in a single and continuous infringement consisting of a secret cartel to coordinate future price increases in the three product sub-groups at issue, in the territories of Germany and Austria.73Lastly, in paragraph 249 of the judgment under appeal, in view not only of the very nature of that infringement, but also its geographic scope — the territory of two Member States — and its long duration, the General Court found that the infringement was among the most harmful restrictions and considered that, having regard to point 23 of the 2006 Guidelines, for such an infringement, the proportion of the value of sales of 15% corresponded to a minimum.74Consequently, in paragraph 250 of the judgment under appeal, the General Court considered it appropriate, for the calculation of the basic amount of the fine imposed on the appellant, to set both the ‘gravity of the infringement’ multiplier and the ‘additional amount’ multiplier at 15%.75It follows from the foregoing that, contrary to what is claimed by the appellant, the General Court did take into account the fact that the geographic scope of the infringement covered only two Member States and not six. However, the General Court found that, despite the more limited geographic scope, a rate of 15% was appropriate in the light, inter alia, of the nature of the infringement. It should be pointed out in that respect that, having regard to point 23 of the 2006 Guidelines, on which the General Court decided to draw in this case, the 15% multipliers for the ‘gravity of the infringement’ and for the ‘additional amount’ were warranted in view of the very nature of the infringement at issue, since, as the General Court noted, it is among the most harmful restrictions of competition for the purpose of point 23 of the 2006 Guidelines and that rate is the lowest rate on the scale of penalties prescribed for such infringements under those guidelines (in that regard, see, to that effect, judgments of 11 July 2013, Ziegler v Commission, C‑439/11 P, EU:C:2013:513, paragraphs 124 and 125, and of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 125). Accordingly, the appellant is wrong to criticise the General Court for having failed to take into account the geographic scope of the infringement when determining the multipliers for the ‘gravity of the infringement’ and the ‘additional amount’, and for having set those multipliers at 15%.76That conclusion cannot be called into question on the ground that the rate is the same as that set for other undertakings whose participation in the infringement covered a larger geographic area than that established in the appellant’s case, which, according to the appellant, is contrary to the principle of equal treatment.77It will be recalled that that principle is a general principle of EU law enshrined in Articles 20 and 21 of the Charter of Fundamental Rights of the European Union. According to settled case-law, that principle requires that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified (see, inter alia, judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission, C‑580/12 P, EU:C:2014:2363, paragraph 51).78Observance of that principle is binding, in particular, on the General Court not only in the exercise of its review of the legality of the Commission’s decision imposing fines but also in the exercise of its unlimited jurisdiction. When the amount of the fines imposed is determined, the exercise of such jurisdiction cannot result in discrimination between undertakings which have participated in an agreement or concerted practice contrary to Article 101(1) TFEU (see, to that effect, judgment of 18 December 2014, Commission v Parker Hannifin Manufacturing and Parker-Hannifin, C‑434/13 P, EU:C:2014:2456, paragraph 77).79It follows from the case-law of the Court of Justice, however, that the taking into account, by virtue of the principle of equal treatment, of differences between the undertakings that have participated in a single cartel (in particular with regard to the geographic scope of their respective involvement) need not necessarily occur when the multipliers for the ‘gravity of the infringement’ and for the ‘additional amount’ are set but may occur at another stage in the setting of the fine, such as when the basic amount of the fine is adjusted in the light of mitigating and aggravating circumstances under points 28 and 29 of the 2006 Guidelines (see, to that effect, judgments of 11 July 2013, Gosselin Group v Commission, C‑429/11 P, not published, EU:C:2013:463, paragraphs 96 to 100, and of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraphs 104 and 105).80As the Commission has observed, such differences may also be reflected by means of the value of sales that is used in calculating the basic amount of the fine inasmuch as that value reflects, for each participating undertaking, the scale of its involvement in the infringement in question, in accordance with point 13 of the 2006 Guidelines, under which it is possible to take as a starting point for the calculation of the fines an amount which reflects the economic significance of the infringement and the size of the undertaking’s contribution to it (see, to that effect, judgment of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 76).81Consequently, since it is not disputed that the basic amount of the fine imposed on the appellant was determined by reference to the value of its sales, the General Court could, in paragraph 250 of the judgment under appeal, set the multipliers for the ‘gravity of the infringement’ and for the ‘additional amount’ at 15% of that value without infringing the principle of equal treatment.82As regards, in the second place, the argument that the General Court erred, in paragraph 249 of the judgment under appeal, in assessing the gravity of the infringement in the light of the duration of Aloys F. Dornbracht’s participation in the infringement, this must be rejected as ineffective, in view of the findings in paragraph 75 of the present judgment.83In any event, it cannot be inferred from the fact that the General Court mentioned in that paragraph, among other criteria such as the nature of the infringement at issue, the long duration of the infringement, that the General Court thus attributed excessive significance to the latter criterion.84As regards, in the third place, the complaint as to a failure to state reasons, it should be borne in mind that the obligation to state the reasons on which a judgment is based, to which the General Court is subject under Article 36 of the Statute of the Court of Justice of the European Union, which applies to the General Court by virtue of the first paragraph of Article 53 of the Statute, and Article 81 of the Rules of Procedure of the General Court, in the version in force at the date of the judgment under appeal, requires the General Court clearly and unequivocally to disclose its reasoning in such a way as to enable the persons concerned to ascertain the reasons for the decision taken and the Court of Justice to exercise its power of review (see, in particular, judgments of 26 September 2013, Alliance One International v Commission, C‑679/11 P, not published, EU:C:2013:606, paragraph 98, and of 28 January 2016, Quimitécnica.com and de Mello v Commission, C‑415/14 P, not published, EU:C:2016:58, paragraph 56).85As this Court has already held, the General Court is bound to comply with that obligation when exercising its unlimited jurisdiction (see, to that effect, judgment of 18 December 2014, Commission v Parker Hannifin Manufacturing and Parker-Hannifin, C‑434/13 P, EU:C:2014:2456, paragraph 77).86According to well established case-law, that obligation to state reasons does not, however, require the General Court to provide an account that follows exhaustively and one by one all the arguments articulated by the parties to the case. The reasoning may therefore be implicit, on condition that it enables the persons concerned to know why the General Court has not upheld their arguments and provides the Court of Justice with sufficient material for it to exercise its power of review (see, to that effect, in particular, judgments of 2 April 2009, Bouygues and Bouygues Télécom v Commission, C‑431/07 P, EU:C:2009:223, paragraph 42, and of 22 May 2014, Armando Álvarez v Commission, C‑36/12 P, EU:C:2014:349, paragraph 31).87In the present case, it must be observed that, in response to the appellant’s arguments in favour of a reduction of the amount of the fine imposed, the General Court ruled, first, in paragraphs 245 to 251 of the judgment under appeal, on the conclusions to be drawn from the errors made by the Commission in relation to the amount of the fine, and, secondly, in paragraphs 252 to 259 of that judgment, on the additional arguments put forward by the appellant in support of a reduction of the fine, before going on to conclude in the exercise of its unlimited jurisdiction, in paragraph 260 of that judgment, that it was appropriate to set the fine at the same amount as that set by the Commission in the decision at issue. Contrary to what is maintained by the appellant, the General Court listed, in paragraph 249 of the judgment under appeal, the factors it took into account in order to determine the multipliers for the ‘gravity of the infringement’ and for the ‘additional amount’ and stated that, under point 23 of the 2006 Guidelines and in view of the scale from 0% to 30% provided for therein, the infringement at issue, which was among the most harmful, warranted a rate of 15%.88In so doing, the General Court set out the reasons that caused it to decide on that rate and, consequently, to set a fine in the amount specified in paragraph 251 of the judgment under appeal.89In those circumstances, the appellant’s argument concerning an alleged failure to state reasons in the judgment under appeal must be rejected.90Accordingly, since none of the arguments raised in support of the first part of the fifth ground of appeal has been upheld, it must be held that that part is unfounded.91It follows from all the foregoing considerations that the fifth ground of appeal must be rejected as, in part, inadmissible and, in part, unfounded. The sixth ground of appeal, alleging that the duration of the proceedings before the General Court was excessive 92By its sixth ground of appeal, the appellant claims that the General Court infringed its obligation to adjudicate on the cases before it within a reasonable time. It observes that the proceedings before the General Court commenced on 8 September 2010 and ended more than three years later, namely on 16 September 2013, the date on which the judgment under appeal was delivered. That period is, it claims, in the light of the relevant case-law and having regard to the particular circumstances of that case, particularly long and excessive.93The Commission contends that, even on the assumption that the duration of the proceedings was not reasonable, that ground cannot be upheld.94In so far as the appellant, by its sixth ground of appeal, asks the Court, in the first place, to set aside the judgment under appeal on account of the excessive duration of the proceedings before the General Court, it should be noted that, in the absence of any evidence that the excessive duration of those proceedings had an effect on the outcome of the dispute, failure on the part of the General Court to adjudicate within a reasonable time cannot lead to the judgment under appeal being set aside. Indeed, where failure to adjudicate within a reasonable time has no effect on the outcome of the dispute, the setting aside of the judgment under appeal would not provide a remedy for any infringement by the General Court of the principle of effective judicial protection (judgments of 26 November 2013, Gascogne Sack Deutschland v Commission, C‑40/12 P, EU:C:2013:768, paragraphs 81 and 82; of 26 November 2013, Kendrion v Commission, C‑50/12 P, EU:C:2013:771, paragraphs 82 and 83; and of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 64).95In the present case, the appellant has not provided any evidence to this Court from which it may be inferred that the excessive duration of the proceedings before the General Court could have had an effect on the outcome of the dispute before it.96It follows that the sixth ground of appeal cannot lead to the judgment under appeal being set aside in its entirety.97In so far as, by its sixth ground of appeal, the appellant seeks, in the second place and in the alternative, a reduction of the fine imposed on it, it should be noted that the sanction for a breach, by a court of the European Union, of its obligation under the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union to adjudicate on the cases before it within a reasonable time must be an action for damages brought before the General Court, since such an action constitutes an effective remedy. Accordingly, a claim for compensation for the damage caused by the failure on the part of the General Court to adjudicate within a reasonable time may not be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself (judgments of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 66; of 9 October 2014, ICF v Commission, C‑467/13 P, not published, EU:C:2014:2274, paragraph 57; and of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 55).98Where a claim for damages is brought before the General Court, which has jurisdiction under Article 256(1) TFEU, it must determine such a claim sitting in a different composition from that which heard the dispute giving rise to the procedure whose duration is criticised (see, to that effect, judgments of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 67; of 9 October 2014, ICF v Commission, C‑467/13 P, not published, EU:C:2014:2274, paragraph 58; and of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 56).99Nonetheless, where it is evident, without it being necessary for the parties to adduce additional evidence in that regard, that the General Court has breached, in a sufficiently serious manner, its duty to adjudicate within a reasonable period, the Court of Justice can find accordingly (see, to that effect, judgments of 9 October 2014, ICF v Commission, C‑467/13 P, not published, EU:C:2014:2274, paragraph 59; and of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 57).100However, in the present case, having regard in particular to the nature and the degree of complexity of the case and the number of actions brought against the decision at issue, it does not appear that the duration of the proceedings before the General Court — approximately three years — was manifestly unreasonable.101It follows from the foregoing considerations that the sixth ground of appeal must be rejected.102Since none of the grounds of appeal raised by the appellant has been upheld, the appeal must be dismissed in its entirety. Costs 103Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs.104Under Article 138(1) of those rules, which applies to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the appellant has been unsuccessful and the Commission has applied for costs against it, the appellant must be ordered to pay the costs relating to the present appeal.On those grounds, the Court (First Chamber) hereby: 1. Dismisses the appeal; 2. Orders Aloys F. Dornbracht GmbH & Co. KG to pay the costs. [Signatures]( *1 ) * Language of the case: German | 1f59b-ffd83e6-4702 | EN |
The authorities responsible for executing a European arrest warrant must, in the event of force majeure being established, set a third surrender date where the first two surrender attempts have failed on account of the resistance put up by the requested person | 25 January 2017 ( 1 )‛Reference for a preliminary ruling — Police and judicial cooperation in criminal matters — Framework Decision 2002/584/JHA — European arrest warrant — Article 23 — Time limit for surrender of the requested person — Possibility of agreeing on a new surrender date on a number of occasions — Resistance of the requested person to his surrender — Force majeure’In Case C‑640/15,REQUEST for a preliminary ruling under Article 267 TFEU from the Court of Appeal (Ireland), made by decision of 24 November 2015, received at the Court on 2 December 2015, in proceedings relating to the execution of a European arrest warrant in respect of Tomas Vilkas, THE COURT (Third Chamber),composed of L. Bay Larsen (Rapporteur), President of the Chamber, M. Vilaras, J. Malenovský, M. Safjan and D. Šváby, Judges,Advocate General: M. Bobek,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 20 July 2016,after considering the observations submitted on behalf of:—Mr Vilkas, by M. Kelly QC, M. Lynam, Barrister-at-Law, B. Coveney, J. Wood and T. Horan, Solicitors,Ireland, by E. Creedon, D. Curley and E. Pearson, acting as Agents, S. Stack, Senior Counsel, and J. Benson, Barrister-at-Law,the French Government, by D. Colas and F.-X. Bréchot, acting as Agents,the Lithuanian Government, by D. Kriaučiūnas, R. Krasuckaitė and J. Nasutavičienė, acting as Agents,the Austrian Government, by C. Pesendorfer, acting as Agent,the Polish Government, by B. Majczyna, acting as Agent,the United Kingdom Government, by S. Brandon, acting as Agent, and J. Holmes, Barrister,the European Commission, by R. Troosters and S. Grünheid, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 27 October 2016,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 23 of Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States (OJ 2002 L 190, p. 1), as amended by Council Framework Decision 2009/299/JHA of 26 February 2009 (OJ 2009 L 81, p. 24) (‘the Framework Decision’).2The request has been made in connection with the execution in Ireland of European arrest warrants issued by a Lithuanian court in respect of Tomas Vilkas. Legal context EU law The Convention on simplified extradition procedure3Article 11(3) of the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on simplified extradition procedure between the Member States of the European Union, signed on 10 March 1995 (OJ 1995 C 78, p. 2; ‘the Convention on simplified extradition procedure’), provides:‘Should surrender of the person within the deadline laid down … be prevented by circumstances beyond its control, the authority concerned … shall so inform the other authority. The two authorities shall agree on a new surrender date. In that event, surrender will take place within 20 days of the new date thus agreed. If the person in question is still being held after expiry of this period, he shall be released.’The Framework Decision4Recitals 5 and 7 of the Framework Decision are worded as follows:‘(5)The objective set for the Union to become an area of freedom, security and justice leads to abolishing extradition between Member States and replacing it by a system of surrender between judicial authorities. Further, the introduction of a new simplified system of surrender of sentenced or suspected persons for the purposes of execution or prosecution of criminal sentences makes it possible to remove the complexity and potential for delay inherent in the present extradition procedures. Traditional cooperation relations which have prevailed up till now between Member States should be replaced by a system of free movement of judicial decisions in criminal matters, covering both pre-sentence and final decisions, within an area of freedom, security and justice....(7)Since the aim of replacing the system of multilateral extradition built upon the European Convention on Extradition of 13 December 1957 cannot be sufficiently achieved by the Member States acting unilaterally and can therefore, by reason of its scale and effects, be better achieved at Union level, the Council may adopt measures in accordance with the principle of subsidiarity as referred to in Article 2 [EU] and Article 5 [EC]. In accordance with the principle of proportionality, as set out in the latter Article, this Framework Decision does not go beyond what is necessary in order to achieve that objective.’5Article 1 of the Framework Decision, headed ‘Definition of the European arrest warrant and obligation to execute it’, provides in paragraphs 1 and 2:‘1. The European arrest warrant is a judicial decision issued by a Member State with a view to the arrest and surrender by another Member State of a requested person, for the purposes of conducting a criminal prosecution or executing a custodial sentence or detention order.2. Member States shall execute any European arrest warrant on the basis of the principle of mutual recognition and in accordance with the provisions of this Framework Decision.’6Article 12 of the Framework Decision, headed ‘Keeping the person in detention’, provides:‘When a person is arrested on the basis of a European arrest warrant, the executing judicial authority shall take a decision on whether the requested person should remain in detention, in accordance with the law of the executing Member State. The person may be released provisionally at any time in conformity with the domestic law of the executing Member State, provided that the competent authority of the said Member State takes all the measures it deems necessary to prevent the person absconding.’7Article 15(1) of the Framework Decision states:‘The executing judicial authority shall decide, within the time limits and under the conditions defined in this Framework Decision, whether the person is to be surrendered.’8Article 23 of the Framework Decision, headed ‘Time limits for surrender of the person’, provides:‘1. The person requested shall be surrendered as soon as possible on a date agreed between the authorities concerned.2. He or she shall be surrendered no later than 10 days after the final decision on the execution of the European arrest warrant.3. If the surrender of the requested person within the period laid down in paragraph 2 is prevented by circumstances beyond the control of any of the Member States, the executing and issuing judicial authorities shall immediately contact each other and agree on a new surrender date. In that event, the surrender shall take place within 10 days of the new date thus agreed.4. The surrender may exceptionally be temporarily postponed for serious humanitarian reasons, for example if there are substantial grounds for believing that it would manifestly endanger the requested person’s life or health. The execution of the European arrest warrant shall take place as soon as these grounds have ceased to exist. The executing judicial authority shall immediately inform the issuing judicial authority and agree on a new surrender date. In that event, the surrender shall take place within 10 days of the new date thus agreed.5. Upon expiry of the time limits referred to in paragraphs 2 to 4, if the person is still being held in custody he shall be released.’ Irish law 9Section 16(1) and (2) of the European Arrest Warrant Act, 2003, in the version applicable to the dispute in the main proceedings, governs the making by the High Court (Ireland) of orders directing that persons in respect of whom a European arrest warrant has been issued be surrendered.10Section 16(3A) of the Act provides that a person to whom such an order applies is, in principle, to be surrendered to the issuing Member State not later than 10 days after the order takes effect.11Section 16(4) and (5) of the Act is worded as follows:‘(4)Where the High Court makes an order under subsection (1) or (2), it shall, unless it orders postponement of surrender under section 18—(b)order that that person be detained in a prison … for a period not exceeding 25 days pending the carrying out of the terms of the order, and(c)direct that the person be again brought before the High Court—(i)if he or she is not surrendered before the expiration of the time for surrender under subsection (3A), as soon as practicable after that expiration, or(ii)if it appears to the Central Authority in the State that, because of circumstances beyond the control of the State or the issuing state concerned, that person will not be surrendered on the expiration referred to in subparagraph (i), before that expiration.(5)Where a person is brought before the High Court pursuant to subsection (4)(c), the High Court shall—(a)if satisfied that, because of circumstances beyond the control of the State or the issuing state concerned, the person was not surrendered within the time for surrender under subsection (3A) or, as the case may be, will not be so surrendered—with the agreement of the issuing judicial authority, fix a new date for the surrender of the person, andorder that the person be detained in a prison … for a period not exceeding 10 days after the date fixed under subparagraph (i), pending the surrender,andin any other case, order that the person be discharged.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 12Mr Vilkas was the subject of two European arrest warrants, issued by a Lithuanian court.13By two orders of 9 July 2015, the High Court decided that Mr Vilkas was to be surrendered to the Lithuanian authorities not later than 10 days after the orders took effect, that is to say, not later than 3 August 2015.14On 31 July 2015 the Irish authorities attempted to surrender Mr Vilkas to the Lithuanian authorities by using a commercial flight. Resistance put up by Mr Vilkas caused that first surrender attempt to fail, as the aircraft pilot refused to have him on board the flight.15The High Court then ordered that Mr Vilkas be surrendered to the Lithuanian authorities not later than 10 days after 6 August 2015. On 13 August 2015 a fresh surrender attempt failed on account of Mr Vilkas’s behaviour.16The Minister for Justice and Equality (Ireland) consequently applied to the High Court for authorisation for a third attempt at surrendering Mr Vilkas to the Lithuanian authorities, this time by sea and over land. The High Court held, however, on 14 August 2015 that it lacked jurisdiction to hear this application and ordered Mr Vilkas’s release.17The Minister for Justice and Equality brought an appeal against that judgment before the referring court.18In those circumstances, the Court of Appeal (Ireland) decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling:‘1.Does Article 23 of the Framework Decision contemplate or and allow for the agreement of a new surrender date on more than one occasion?2.If so, does it do so in any, or all, of the following situations: i.e., where the surrender of the requested person within the period laid down in [Article 23(2)] has already been prevented by circumstances beyond the control of any of the Member States, leading to the agreement of a new surrender date, and such circumstances:are found to be ongoing; orhaving ceased, are found to be reoccurring; or(iii)having ceased, different such circumstances have arisen which have prevented, or are likely to prevent, surrender of the requested person within the required period referable to the said new surrender date?’ Consideration of the questions referred 19By its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 23 of the Framework Decision must be interpreted as precluding, in a situation such as that at issue in the main proceedings, the executing and issuing judicial authorities from agreeing on a new surrender date under Article 23(3) of the Framework Decision where the repeated resistance of the requested person has prevented his surrender within 10 days of a first new surrender date agreed on pursuant to that provision.20Article 15(1) of the Framework Decision provides, generally, that the executing judicial authority is to decide whether the requested person is to be surrendered ‘within the time limits and under the conditions defined in this Framework Decision’.21So far as concerns, in particular, the final phase of the surrender procedure, Article 23(1) of the Framework Decision provides that the requested person is to be surrendered as soon as possible on a date agreed between the authorities concerned.22This principle is given concrete expression in Article 23(2) of the Framework Decision, which states that the requested person is to be surrendered no later than 10 days after the final decision on the execution of the European arrest warrant.23The EU legislature nevertheless authorised certain exceptions to that rule by providing, first, that the authorities concerned are to agree on a new surrender date in certain situations defined in Article 23(3) and (4) of the Framework Decision and, secondly, that the surrender of the requested person is then to take place within 10 days of the new date thus agreed.24More specifically, the first sentence of Article 23(3) of the Framework Decision states that the executing and issuing judicial authorities are to agree on a new surrender date if the surrender of the requested person within the period laid down in Article 23(2) is prevented by circumstances beyond the control of any of the Member States [‘force majeure’ in the French version of the Framework Decision].25It is thus apparent that Article 23(3) of the Framework Decision does not expressly limit the number of new surrender dates that may be agreed on between the authorities concerned where the surrender of the requested person within the period laid down is prevented by circumstances beyond one of the Member States’ control.26That said, the referring court observes that the first sentence of Article 23(3) of the Framework Decision refers explicitly only to a situation where the surrender of the requested person is prevented, by circumstances beyond one of the Member States’ control, ‘within the period laid down in [Article 23(2) of the Framework Decision]’, that is to say, ‘no later than 10 days after the final decision on the execution of the European arrest warrant’.27Therefore, the referring court questions whether the rule set out in the first sentence of Article 23(3) of the Framework Decision is applicable to situations where circumstances beyond one of the Member States’ control arising on a date after the expiry of that period have prevented the requested person from being surrendered within 10 days of a first new surrender date agreed on pursuant to that provision.28In that regard, it must be stated, first, that a literal interpretation of Article 23(3) of the Framework Decision does not necessarily preclude such applicability.29As the Advocate General has observed in point 25 of his Opinion, where the surrender of the requested person within 10 days of a first new surrender date agreed on pursuant to Article 23(3) of the Framework Decision is prevented by circumstances beyond one of the Member States’ control, the condition that the surrender of that person within 10 days after the final decision on the execution of the European arrest warrant has been prevented must, by definition, have been fulfilled in order for that first new surrender date to have been set.30Secondly, according to the Court’s settled case-law, for the purpose of interpreting a provision of EU law it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgments of 19 December 2013, Koushkaki , C‑84/12, EU:C:2013:862, paragraph 34, and of 16 November 2016, Hemming and Others , C‑316/15, EU:C:2016:879, paragraph 27).31In this connection, it should be recalled that the Framework Decision seeks, by the establishment of a new simplified and more effective system for the surrender of persons convicted or suspected of having infringed criminal law, to facilitate and accelerate judicial cooperation with a view to contributing to the objective set for the European Union of becoming an area of freedom, security and justice, on the basis of the high level of confidence which should exist between the Member States (judgments of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 28, and of 5 April 2016, Aranyosi and Căldăraru , C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 76).32In that context, Article 23 of the Framework Decision is designed in particular, like Articles 15 and 17 thereof, to accelerate judicial cooperation by imposing time limits for adopting decisions relating to a European arrest warrant which the Member States are obliged to comply with (see, to that effect, judgments of 30 May 2013, F , C‑168/13 PPU, EU:C:2013:358, paragraph 58, and of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraphs 29 and 33).33To hold that the executing judicial authority cannot be granted a new period for surrendering the requested person where, in practice, his surrender within 10 days of a first new surrender date agreed on pursuant to Article 23(3) of the Framework Decision is prevented by circumstances beyond one of the Member States’ control would be tantamount to making that authority subject to an obligation that is impossible to fulfil and would not contribute in the slightest to the objective pursued of accelerating judicial cooperation.34Furthermore, account should also be taken of Article 23(5) of the Framework Decision when interpreting Article 23(3).35Article 23(5) of the Framework Decision provides that, upon expiry of the time limits referred to in Article 23(2) to (4), if the requested person is still being held in custody he is to be released.36It follows that, if Article 23(3) of the Framework Decision were to be interpreted as meaning that the rule set out in its first sentence is not applicable where the surrender of the requested person within 10 days of a first new surrender date agreed on pursuant to that provision is prevented by circumstances beyond one of the Member States’ control, that person would, in such a situation, necessarily have to be released if he were still being held in custody, irrespective of the circumstances of the case, because the time limit referred to in that provision would have expired.37Therefore, that interpretation would be such as to limit appreciably the effectiveness of the procedures provided for by the Framework Decision and, accordingly, to prevent full achievement of the objective pursued by it, which consists in facilitating judicial cooperation by the establishment of a more effective system for the surrender of persons convicted or suspected of having infringed criminal law.38Moreover, that interpretation could lead to the release of the requested person in situations where the extension of the duration of his detention does not result from a lack of diligence of the executing authority and the total duration of his detention is not excessive in the light, in particular, of any contribution on his part to the delay in the procedure, of the sentence potentially faced by him and of the existence, as the case may be, of a risk of absconding (see, to that effect, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 59).39Accordingly, Article 23(3) of the Framework Decision is to be interpreted as requiring the authorities concerned also to agree on a new surrender date under that provision where the surrender of the requested person within 10 days of a first new surrender date agreed on pursuant to that provision is prevented by circumstances beyond one of the Member States’ control.40That conclusion is not called into question by the obligation to interpret Article 23(3) of the Framework Decision in conformity with Article 6 of the Charter of Fundamental Rights of the European Union, which provides that everyone has the right to liberty and security of person (see, to that effect, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 54).41It is true that the interpretation of Article 23(3) of the Framework Decision set out in paragraph 39 of the present judgment means that the executing judicial authority is not necessarily required to release the requested person if he is still being held in custody where his surrender within 10 days of a first new surrender date agreed on pursuant to that provision is prevented by circumstances beyond one of the Member States’ control.42Nevertheless, as the Advocate General has noted in point 37 of his Opinion, that interpretation does not require the requested person to be held in custody, since Article 12 of the Framework Decision states that it is for the executing judicial authority to take a decision on whether the requested person should remain in detention, in accordance with the law of the executing Member State, and that the person may be released provisionally at any time in conformity with that law, provided that the competent authority takes all the measures it deems necessary to prevent the person absconding.43In that context, where the authorities concerned agree on a second new surrender date pursuant to Article 23(3) of the Framework Decision, the executing judicial authority will be able to decide to hold the requested person in custody, in accordance with Article 6 of the Charter of Fundamental Rights, only in so far as the surrender procedure has been carried out in a sufficiently diligent manner and in so far as, consequently, the duration of the custody is not excessive. In order to ensure that that is indeed the case, that authority will be required to carry out a concrete review of the situation at issue, taking account of all of the relevant factors (see, to that effect, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraphs 58 and 59).44Accordingly, it must be determined whether the executing and issuing judicial authorities have to agree on a second new surrender date under Article 23(3) of the Framework Decision in a situation such as that at issue in the main proceedings, where the repeated resistance of the requested person has prevented his surrender within 10 days of a first new surrender date agreed on pursuant to that provision.45In this connection, it is to be noted that there is a certain divergence between the various language versions of Article 23(3) of the Framework Decision as regards the conditions for applying the rule set out in the first sentence of that provision.46Whilst the Greek, French, Italian, Portuguese, Romanian and Finnish versions of that provision make the application of the rule conditional on it not being possible to carry out the surrender by reason of a case of force majeure in one of the Member States concerned, other language versions of the same provision, such as the Spanish, Czech, Danish, German, Greek, English, Dutch, Polish, Slovak and Swedish versions, refer instead to it not being possible to carry out the surrender on account of circumstances beyond the control of the Member States concerned.47The need for a uniform interpretation of a provision of EU law makes it impossible for the text of a provision to be considered, in case of doubt, in isolation but requires, on the contrary, that it should be interpreted on the basis of both the actual intention of the legislature and the objective pursued by the latter, in the light, in particular, of the versions drawn up in all languages (see, to that effect, judgments of 20 November 2001, Jany and Others , C‑268/99, EU:C:2001:616, paragraph 47, and of 19 September 2013, van Buggenhout and van de Mierop , C‑251/12, EU:C:2013:566, paragraphs 26 and 27).48In this context, it should be pointed out that the wording used in Article 23(3) of the Framework Decision has its origin in Article 11(3) of the Convention on simplified extradition procedure.49Whilst the English and Swedish versions of Article 11(3) of the Convention referred to circumstances beyond the control of the Member States concerned, the Spanish, Danish, German, Greek, French, Italian, Dutch, Portuguese and Finnish versions of that provision referred to the occurrence of a case of force majeure.50Also, it is apparent from the explanatory report relating to the Convention, in its various language versions, that the expression used in Article 11(3) had to be interpreted strictly, as referring to a situation which could not have been foreseen and could not have been prevented. That explanation tends to indicate that the contracting parties to the Convention ultimately had the intention of referring to the concept of force majeure as usually understood, a fact which is confirmed by the list of examples that are set out in the explanatory report.51Furthermore, in its various language versions, the explanatory memorandum to the Commission’s proposal (COM(2001) 522 final) that led to the adoption of the Framework Decision refers to the Convention on simplified extradition procedure and reproduces the explanations, referred to in the preceding paragraph of the present judgment, that are set out in the explanatory report. The Spanish, Danish, German, English, Dutch, and Swedish versions of the explanatory memorandum even refer explicitly to the concept of force majeure in order to specify the scope of the concept of circumstances beyond the control of the Member States concerned.52These various factors contribute to demonstrating that the use in various language versions of that latter concept does not indicate that the EU legislature intended to make the rule set out in the first sentence of Article 23(3) of the Framework Decision applicable to situations other than those where the surrender of the requested person proves impossible by reason of a case of force majeure in one or other of the Member States.53It is apparent from settled case-law, established in various spheres of EU law, that the concept of force majeure must be understood as referring to abnormal and unforeseeable circumstances which were outside the control of the party by whom it is pleaded and the consequences of which could not have been avoided in spite of the exercise of all due care (see, to that effect, judgments of 18 December 2007, Société Pipeline Méditerranée et Rhône , C‑314/06, EU:C:2007:817, paragraph 23; of 18 March 2010, SGS Belgium and Others , C‑218/09, EU:C:2010:152, paragraph 44; and of 18 July 2013, Eurofit , C‑99/12, EU:C:2013:487, paragraph 31).54However, it is also settled case-law that, since the concept of force majeure does not have the same scope in the various spheres of application of EU law, its meaning must be determined by reference to the legal context in which it is to operate (judgments of 18 December 2007, Société Pipeline Méditerranée et Rhône , C‑314/06, EU:C:2007:817, paragraph 25; of 18 March 2010, SGS Belgium and Others , C‑218/09, EU:C:2010:152, paragraph 45; and of 18 July 2013, Eurofit , C‑99/12, EU:C:2013:487, paragraph 32).55Therefore, so far as concerns the concept of force majeure as provided for in Article 23(3) of the Framework Decision, it is necessary to take account of the general scheme and the purpose of the Framework Decision in order to interpret and apply the constituent elements of force majeure, as derived from the Court’s case-law (see, by analogy, judgment of 18 December 2007, Société Pipeline Méditerranée et Rhône , C‑314/06, EU:C:2007:817, paragraph 26).56In that regard, it is to be recalled that Article 23(3) of the Framework Decision constitutes an exception to the rule laid down in Article 23(2). Accordingly, the concept of force majeure as provided for in Article 23(3) must be interpreted strictly (see, by analogy, judgments of 14 June 2012, CIVAD , C‑533/10, EU:C:2012:347, paragraphs 24 and 25, and of 18 July 2013, Eurofit , C‑99/12, EU:C:2013:487, paragraph 37).57Furthermore, it is apparent from the wording of Article 23(3) of the Framework Decision that the occurrence of a case of force majeure can justify extending the period for surrendering the requested person only in so far as that case of force majeure means that his surrender within the period laid down is ‘prevented’. The mere fact that his surrender is simply made more difficult cannot therefore justify application of the rule set out in the first sentence of that provision.58In that context, it is admittedly evident that the resistance put up by a requested person to his surrender may properly be regarded as an abnormal circumstance outside the control of the authorities concerned.59On the other hand, the fact that certain requested persons put up resistance to their surrender cannot, in principle, be classified as an unforeseeable circumstance.60A fortiori, in a situation such as that at issue in the main proceedings, where the requested person has already resisted a first surrender attempt, the fact that he also resists a second surrender attempt cannot normally be regarded as unforeseeable. The same is, moreover, true, as the Advocate General has noted in point 71 of his Opinion, of the refusal of the pilot of an aircraft to let on board a passenger behaving violently.61As regards the condition that a circumstance can be covered by force majeure only if its consequences could not have been avoided in spite of the exercise of all due care, it should be pointed out that the authorities concerned have means enabling them more often than not to overcome resistance put up by a requested person.62Thus, it cannot be ruled out that, in order to cope with resistance put up by a requested person, those authorities have recourse to certain coercive measures, under the conditions laid down by their national law and in compliance with that person’s fundamental rights.63It is also possible, generally speaking, to envisage recourse to means of transport whose use cannot be effectively prevented by the requested person’s resistance. It is indeed apparent from the order for reference that such a solution was finally proposed by the authorities concerned in the main proceedings.64That said, it cannot be entirely ruled out that, on account of exceptional circumstances, it is objectively apparent that the resistance put up by the requested person to his surrender could not be foreseen by the authorities concerned and that the consequences of the resistance for the surrender could not be avoided in spite of the exercise of all due care by those authorities. In that case, the rule set out in the first sentence of Article 23(3) of the Framework Decision would apply.65It is thus for the referring court to ascertain whether the existence of such circumstances has been established in the main proceedings.66In addition, since it is possible for the referring court to conclude that the repeated resistance of the requested person in the main proceedings cannot be classified as a case of force majeure as provided for in Article 23(3) of the Framework Decision, it should be determined whether that conclusion means that the executing and issuing authorities are no longer required to agree on a new surrender date, on account of the expiry of the time limits prescribed in Article 23 of the Framework Decision.67Whilst Article 15(1) of the Framework Decision clearly provides that the executing judicial authority is to decide within the time limits defined in the Framework Decision whether the person is to be surrendered, the wording of that provision is not sufficient to determine whether a European arrest warrant must still be executed once those time limits have expired and, in particular, whether the executing judicial authority is required to carry out the surrender once the time limits prescribed in Article 23 of the Framework Decision have expired and whether it must, for that purpose, agree on a new surrender date with the issuing judicial authority (see, by analogy, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 34).68In this connection, it should be pointed out that it follows from settled case-law of the Court that the principle of mutual recognition, which is the ‘cornerstone’ of judicial cooperation, means, pursuant to Article 1(2) of the Framework Decision, that Member States are in principle obliged to give effect to a European arrest warrant (see, by analogy, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 36).69Therefore, in the light, first, of the central function of the obligation to execute the European arrest warrant in the system put in place by the Framework Decision and, secondly, of the absence of any explicit indication in the Framework Decision as to a limitation of the temporal validity of that obligation, the rule set out in Article 15(1) of the Framework Decision cannot be interpreted as meaning that, once the time limits prescribed in Article 23 of the Framework Decision have expired, the executing judicial authority is no longer able to agree on a new surrender date with the issuing judicial authority or that the executing Member State is no longer required to carry on with the procedure for execution of the European arrest warrant (see, by analogy, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 37).70Moreover, whilst the EU legislature expressly specified, in Article 23(5) of the Framework Decision, that expiry of the time limits referred to in Article 23(2) to (4) means that the requested person is to be released if he is still being held in custody, it did not confer any other effect on the expiry of those time limits and did not, in particular, provide that their expiry deprives the authorities concerned of the possibility of agreeing on a surrender date pursuant to Article 23(1) of the Framework Decision or that it releases the executing Member State from the obligation to give effect to a European arrest warrant (see, by analogy, judgment of 16 July 2015,Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 38).71Furthermore, an interpretation of Articles 15(1) and 23 of the Framework Decision to the effect that the executing judicial authority should no longer surrender the requested person or agree, for that purpose, on a new surrender date with the issuing judicial authority after the time limits referred to in Article 23 of the Framework Decision have expired would run counter to the objective pursued by the Framework Decision of accelerating and simplifying judicial cooperation, since such an interpretation could, in particular, force the issuing Member State to issue a second European arrest warrant in order to enable a new surrender procedure to take place within the time limits laid down by the Framework Decision (see, by analogy, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 40).72It follows from the foregoing that the mere expiry of the time limits prescribed in Article 23 of the Framework Decision cannot relieve the executing Member State of its obligation to carry on with the procedure for executing a European arrest warrant and to surrender the requested person, and the authorities concerned must agree, for that purpose, on a new surrender date (see, by analogy, judgment of 16 July 2015, Lanigan , C‑237/15 PPU, EU:C:2015:474, paragraph 42).73Nonetheless, in such a situation, it follows from Article 23(5) of the Framework Decision that, on account of the expiry of the time limits prescribed in Article 23, the requested person must be released if he is still being held in custody.74In the light of all the foregoing considerations, the answer to the questions referred is as follows:Article 23(3) of the Framework Decision must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, the executing and issuing judicial authorities agree on a new surrender date under that provision where the surrender of the requested person within 10 days of a first new surrender date agreed on pursuant to that provision proves impossible on account of the repeated resistance of that person, in so far as, on account of exceptional circumstances, that resistance could not have been foreseen by those authorities and the consequences of the resistance for the surrender could not have been avoided in spite of the exercise of all due care by those authorities, which is for the referring court to ascertain.Articles 15(1) and 23 of the Framework Decision must be interpreted as meaning that those authorities remain obliged to agree on a new surrender date if the time limits prescribed in Article 23 have expired. Costs 75Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Third Chamber) hereby rules: Article 23(3) of Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States, as amended by Council Framework Decision 2009/299/JHA of 26 February 2009, must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, the executing and issuing judicial authorities agree on a new surrender date under that provision where the surrender of the requested person within 10 days of a first new surrender date agreed on pursuant to that provision proves impossible on account of the repeated resistance of that person, in so far as, on account of exceptional circumstances, that resistance could not have been foreseen by those authorities and the consequences of the resistance for the surrender could not have been avoided in spite of the exercise of all due care by those authorities, which is for the referring court to ascertain. Articles 15(1) and 23 of Framework Decision 2002/584, as amended by Framework Decision 2009/299, must be interpreted as meaning that those authorities remain obliged to agree on a new surrender date if the time limits prescribed in Article 23 have expired. Bay LarsenVilarasMalenovskýSafjanŠvábyDelivered in open court in Luxembourg on 25 January 2017.A. Calot EscobarRegistrarL. Bay LarsenPresident of the Third Chamber( 1 ) Language of the case: English. | 00f55-01efd7f-4273 | EN |
The General Court upholds the freezing of funds of the Russian company Almaz-Antey | JUDGMENT OF THE GENERAL COURT (Ninth Chamber)25 January 2017 (*)(Common foreign and security policy — Restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine — Freezing of funds — Legal person supporting, materially or financially, actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine — Proportionality — Obligation to state reasons — Rights of the defence — Right to effective judicial protection — Fundamental rights — Manifest error of assessment)In Case T‑255/15, Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp., formerly OAO Concern PVO Almaz-Antey, established in Moscow (Russia), represented by A. Haak, C. Stumpf, M. Brüggemann and B. Thiemann, lawyers,applicant,v Council of the European Union, represented initially by N. Rouam and J.-P. Hix, and subsequently by J.-P. Hix and P. Mahnič Bruni, acting as Agents,defendant,APPLICATION, based on Article 263 TFEU, for annulment of Council Decision (CFSP) 2015/432 of 13 March 2015 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2015 L 70, p. 47), Council Implementing Regulation (EU) 2015/427 of 13 March 2015 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2015 L 70, p. 1), Council Decision (CFSP) 2015/1524 of 14 September 2015 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2015 L 239, p. 157), Council Implementing Regulation (EU) 2015/1514 of 14 September 2015, implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2015 L 239, p. 30), Council Decision (CFSP) 2016/359 of 10 March 2016 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2016 L 67, p. 37), Council Implementing Regulation (EU) 2016/353 of 10 March 2016 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2016 L 67, p. 1) and the Council’s letter of 31 July 2015, in so far as those measures concern the applicant and retain it on the list of entities subject to restrictive measures. THE GENERAL COURT (Ninth Chamber),composed of G. Berardis (Rapporteur), President, V. Tomljenović and D. Spielmann, Judges,Registrar: L. Grzegorczyk, Administrator, having regard to the written part of the procedure and further to the hearing on 13 September 2016,gives the following Judgment Background to the dispute 1 The applicant, Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp., formerly OAO Concern PVO Almaz-Antey, is a joint-stock company established in Moscow, Russia, operating, inter alia, in the defence sector and manufacturing, inter alia, anti-aircraft weaponry, including surface-to-air missiles. 2 On 17 March 2014, the Council of the European Union adopted, on the basis of Article 29 TEU, Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 16). Article 6 of that decision provided initially that it would apply until 17 September 2014. 3 On the same date, the Council adopted, on the basis of Article 215(2) TFEU, Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (OJ 2014 L 78, p. 6). 4 Subsequently, on 18 July 2014, the Council adopted Decision 2014/475/CFSP amending Decision 2014/145 (OJ 2014 L 214, p. 28) and Regulation (EU) No 783/2014 amending Regulation No 269/2014 (OJ 2014 L 214, p. 2), so as to extend the listing criteria to legal persons, entities or bodies materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. 5 Article 2(1) and (2) of Decision 2014/145, as amended, reads as follows: ‘1. All funds and economic resources belonging to, or owned, held or controlled by:(a) natural persons responsible for, actively supporting or implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine, or which obstruct the work of international organisations in Ukraine, and natural or legal persons, entities or bodies associated with them;(b) legal persons, entities or bodies supporting, materially or financially, actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine;(c) legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons, entities or bodies which have benefited from such a transfer,as listed in the Annex, shall be frozen.2. No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies listed in the Annex.’ 6 The detailed rules for the freezing of those funds are set out in the subsequent paragraphs of that article. 7 Regulation No 269/2014, as amended, requires the adoption of measures freezing funds and sets out the detailed rules for such freezing in terms essentially identical to those of Decision 2014/145, as amended. Article 3(1) of that regulation restates the same listing criteria as those laid down in Article 2(1) of that decision. 8 By Council Decision 2014/508/CFSP of 30 July 2014 amending Decision 2014/145 (OJ 2014 L 226, p. 23) and Council Implementing Regulation (EU) No 826/2014 of 30 July 2014 implementing Regulation No 269/2014 (OJ 2014 L 226, p. 16), the applicant’s name was added to the list of persons, entities and bodies subject to restrictive measures appearing in the annex to Decision 2014/145, on the following grounds:‘Almaz-Ante[y] is a Russian state-owned company. It manufactures anti-aircraft weaponry including surface-to-air missiles which it supplies to the Russian army. The Russian authorities have been providing heavy weaponry to separatists in Eastern Ukraine, contributing to the destabilization of Ukraine. These weapons are used by the separatists, including for shooting down airplanes. As a state-owned company, Almaz-Ante[y] therefore contributes to the destabilization of Ukraine.’ 9 By letter of 30 July 2014, the Council informed the applicant of the restrictive measures adopted, stating the reasons justifying those measures with regard to the applicant and informing it of the possibility of submitting a request for reconsideration to the Council and of challenging the measures adopted before the EU Courts. 10 By Council Decision 2014/658/CFSP of 8 September 2014, amending Decision 2014/145 (OJ 2014 L 271, p. 47), the application of the restrictive measures at issue was extended until 15 March 2015. 11 By Decision (CFSP) 2015/432 of 13 March 2015, amending Decision 2014/145 (OJ 2015 L 70, p. 47) and extending the restrictive measures at issue until 15 September 2015, on the one hand, and Implementing Regulation (EU) 2015/427 of 13 March 2015, implementing Regulation No 269/2014 (OJ 2015 L 70, p. 1), on the other (‘the March 2015 measures’), the Council maintained the applicant’s name on the lists at issue on the same grounds as those mentioned in paragraph 8 above. 12 By letter of 16 March 2015, the Council informed the applicant of the adoption of the March 2015 measures and drew its attention to the possibility of submitting a request for reconsideration to the Council and of challenging the measures adopted before the EU Courts. 13 By letter of 19 May 2015, the applicant asked the Council, through its lawyers, to provide it with the documents supporting the inclusion of its name on the list of designated persons and entities and requested it to review its assessment of the facts. 14 By application lodged at the Registry of the General Court on the same day, the applicant brought the present action. 15 By letter of 31 July 2015, the Council informed the applicant, in response to its letter of 19 May 2015, that it continued to meet the criteria for designation under Decision 2014/145 and Regulation No 269/2014 and that the restrictive measures were to be maintained against it. In an attachment to that letter, the Council also provided access to a series of documents concerning the applicant’s listing. 16 On 14 September 2015, by Decision (CFSP) 2015/1524 amending Decision 2014/145 (OJ 2015 L 239, p. 157) and by Implementing Regulation (EU) 2015/1514 implementing Regulation No 269/2014 (OJ 2015 L 239, p. 30) (‘the September 2015 measures’), the application of the restrictive measures at issue was extended by the Council up to 15 March 2016, without any amendment to the statement of reasons in respect of the applicant’s listing. 17 By letter of 15 September 2015, the Council informed the applicant of the adoption of the September 2015 measures and drew its attention to the possibility of submitting a request for reconsideration to the Council and of challenging the measures adopted before the EU Courts. 18 By email of 25 September 2015 addressed to the applicant’s lawyers, the General Secretariat of the Council, in response to a request from the applicant in that regard, confirmed that the documents sent to the applicant and attached to the letter of 31 July 2015 could be used as evidence in proceedings before national or EU courts. 19 On 10 March 2016, by Decision (CFSP) 2016/359 amending Decision 2014/145 (OJ 2016 L 67, p. 37) and by Implementing Regulation (EU) 2016/353 implementing Regulation No 269/2014 (OJ 2016 L 67, p. 1) (‘the March 2016 measures’), the application of the restrictive measures at issue was extended by the Council up to 15 September 2016, without any amendment to the statement of reasons in respect of the applicant. 20 By letter of 14 March 2016, the Council informed the applicant of the adoption of the March 2016 measures and drew its attention to the possibility of submitting a request for reconsideration to the Council and of challenging the measures adopted before the EU Courts. Procedure and forms of order sought 21 By application lodged at the Registry of the General Court on 19 May 2015, the applicant brought an action for annulment of the March 2015 measures, in so far as they concerned the applicant. 22 By document lodged at the Court Registry on 12 October 2015, the applicant requested leave to amend the form of order sought in order to include annulment of the September 2015 measures, in so far as they concerned the applicant, and the Council’s letter of 31 July 2015. 23 The Council submitted observations on that application by document lodged at the Court Registry on 4 November 2015. 24 By document lodged at the Court Registry on 19 May 2016, the applicant requested leave to amend the form of order sought in order to include annulment of the March 2016 measures, in so far as they concerned the applicant, and the Council’s letter of 31 July 2015. 25 The Council submitted observations on that application by document lodged at the Court Registry on 20 June 2016. 26 The applicant claims that the Court should:– annul the March 2015 measures, the September 2015 measures and the March 2016 measures (‘the contested measures’), in so far as they concern the applicant;– declare that the Council has infringed the treaties by adopting the contested measures in so far as they concern the applicant;– annul the Council’s letter of 31 July 2015;– order the Council to pay the costs. 27 The Council contends that the Court should: – dismiss the application;– order the applicant to pay the costs; Law 28 In support of its action the applicant advances three pleas in law, the first alleging infringement of the principle of proportionality, the second alleging infringement of the legal rules applicable to restrictive measures, and the third alleging infringement of the second paragraph of Article 296 TFEU and of the fundamental rights enshrined in the Charter of Fundamental Rights of the European Union (‘the Charter’). 29 Before examining the substance of those various pleas, it is appropriate to examine the admissibility, partially contested by the Council, of the applicant’s various heads of claim as they appear in the application and the various applications to amend the form of order sought. Admissibility 30 In the first place, it should be observed that the action must be declared admissible inasmuch as it seeks annulment of the March 2016 measures, in so far as those measures concern the applicant, by maintaining its name on the list of persons subject to restrictive measures, and extend the application of those measures until 15 September 2016, since the admissibility of the action is not contested inasmuch as it seeks annulment of those measures. 31 On the other hand, the applicant’s request in its applications to amend the form of order sought, asking the Court to declare that the Council infringed the treaties by adopting the contested measures, in so far as those measures concern the applicant, must be rejected at the outset. It is settled case-law that the Court does not have jurisdiction, in the context of a review of legality under Article 263 TFEU, to issue declaratory judgments (see judgment of 12 February 2015, Akhras v Council, T‑579/11, not published, EU:T:2015:97, paragraph 51 and the case-law cited). 32 For the rest, it is appropriate to examine separately the March 2015 and September 2015 measures, on the one hand, and the Council’s letter of 31 July 2015, on the other. The admissibility of the applications to amend the form of order sought by the applicant in so far as they are directed against the Council’s letter of 31 July 2015. 33 In its observations on both the applicant’s statements seeking to amend the form of order sought, the Council observes that the letter of 31 July 2015, even though it might constitute a challengeable act, was not covered by the applicant’s initial action, nor does it modify or replace a measure covered by the application, for the purposes of Article 86 of the Rules of Procedure of the General Court. The applications to amend the form of order sought by the applicant must therefore be declared inadmissible in so far as they refer to that letter. 34 When questioned on this issue at the hearing, the applicant stated that it wished to maintain its application to annul the letter of 31 July 2015, given that, in its opinion, that letter constitutes a decision which confirms that the restrictive measures against the applicant are to be maintained. 35 It must be recalled that Article 86(1) of the Rules of Procedure provide that, where a measure the annulment of which is sought is replaced or amended by another measure with the same subject matter, the applicant may, before the oral part of the procedure is closed, or before the decision of the Court to rule without an oral part of the procedure, modify the application to take account of that new factor. 36 In accordance with the case-law, it would be contrary to the principle of due administration of justice and to the requirements of procedural economy to oblige the applicant to make a fresh application. Moreover, it would be inequitable if the institution in question were able, in order to counter criticisms of a measure contained in an application to the Courts of the European Union, to amend the contested measure or to substitute another for it and to rely in the proceedings on such an amendment or substitution in order to deprive the other party of the opportunity of extending its original pleadings to the later measure or of submitting supplementary pleadings directed against that measure (see judgment of 3 July 2014, Alchaar v Council, T‑203/12, not published, EU:T:2014:602, paragraph 62 and the case-law cited). 37 In the present case, however, as the Council rightly points out, the letter of 31 July 2015 neither replaces nor amends any measure covered by the initial application, but rather is intended to reply to the applicant’s letter of 19 May 2015 in which it sought, inter alia, access to information on which the listing of its name was based, whilst disputing that listing (see paragraphs 13 and 15 above). 38 Although it is true that, in its letter, the Council stated that it confirmed its position in relation to the applicant continuing to meet the criteria laid down in Decision 2014/145 and Regulation No 269/2014, and that the restrictive measures had to be maintained against it, that letter merely confirmed its assessment and was not intended either to replace or amend the reasons for listing referred to in the March 2015 measures (see, to that effect, judgment of 3 July 2014, Alchaar v Council, T‑203/12, not published, EU:T:2014:602, paragraphs 58 and 59 and the case-law cited). 39 It must be held, therefore, that both applications to amend the form of order sought by the applicant must be declared inadmissible in so far as they seek annulment of the Council’s letter of 31 July 2015. The admissibility of the application relating to the March 2015 and September 2015 measures 40 The Council states that, in both statements seeking to amend the form of order sought, the applicant seeks annulment of the March 2015 and September 2015 measures ‘in so far as they relate to the applicant and they still produce legal effects’. The action is therefore inadmissible in so far as it is directed against those measures which ceased to produce effects with regard to the applicant. 41 As a preliminary point, it must be recalled that the contested measures, in particular the March 2015 measures, are not the first measures to include the applicant’s name on the lists of persons and entities subject to restrictive measures. The first listing of the applicant’s name took place on 30 July 2014 through Decision 2014/508 and Implementing Regulation No 826/2014 (see paragraph 8 above), which the applicant did not challenge. 42 The applicant therefore challenges the contested measures inasmuch as those measures maintained its name on the list of persons and entities subject to restrictive measures by extending their application. 43 Even in a case in which the party concerned is not mentioned by name by a subsequent act amending the list on which its name has been entered, and even if that subsequent act does not alter the ground on which that party’s name was initially entered on the list, such an act must be understood as evidence of the Council’s intention to maintain the applicant’s name on the list, which has the consequence that its funds remain frozen, given that the Council has a duty to examine that list at regular intervals (see judgment of 9 July 2014, Al-Tabbaa v Council, T‑329/12 and T‑74/13, not published, EU:T:2014:622, paragraph 44 and the case-law cited). 44 Furthermore, it is clear from the case-law that, if recognition of the alleged illegality of an act imposing restrictive measures is such as to procure an advantage for the applicant, it establishes that the applicant’s interest in bringing proceedings for annulment is retained even where the contested act has ceased to have effect after it brought its action (see, to that effect, judgments of 28 May 2013, Abdulrahim v Council and Commission, C‑239/12 P, EU:C:2013:331, paragraph 79 and the case-law cited, and of 6 June 2013, Ayadi v Commission, C‑183/12 P, not published, EU:C:2013:369, paragraphs 68 to 70). 45 Thus, the applicant retains an interest in bringing proceedings arising from the fact that recognition of the illegality of the March 2015 measures may form the basis of a subsequent action for compensation for material and non-material damage suffered as a result of those acts during the period of their application (see judgment of 28 January 2016, Stavytskyi v Council, T‑486/14, not published, EU:T:2016:45, paragraphs 28 to 30 and the case-law cited). 46 In addition it must be recalled that, in the present case, the Council informed the applicant of the adoption of the March 2015 and September 2015 measures and drew its attention to the possibility of submitting a request for reconsideration to the Council and of challenging the measures adopted before the EU Courts (see paragraphs 12 and 17 above). 47 Finally, it must be noted that, in response to a question from the Court at the hearing, the applicant confirmed that it wished to pursue its application for annulment of the March 2015 and September 2015 measures, despite the fact that they no longer produce legal effects and despite the unfortunate wording of that head of claim in the documents amending the form of order sought. 48 Therefore, the present action must be declared admissible in so far as it relates to the annulment of the contested measures. Substance 49 The Court considers it appropriate in the present case to examine, first of all, the third plea in law, then the first, and finally the second. Third plea in law, alleging, in essence, infringement of the duty to state reasons and the rights enshrined in the Charter. 50 By its third plea, the applicant relies, in essence, first, on infringement of the obligation to state reasons, secondly, on infringement of the rights of defence and of its right of access to the file, thirdly, on infringement of the right to effective judicial protection, and fourthly, on lack of justification and infringement of the principle of proportionality in the restrictions placed on its fundamental rights. 51 It is appropriate to examine those various complaints in turn, while jointly examining the complaints alleging infringement of the rights of defence and of the right to effective judicial protection.– The complaint alleging breach of the obligation to state reasons 52 The applicant submits that the reasons stated by the Council as justification for continuing to include its name in the annexes to Decision 2014/145 and Regulation No 269/2014 are altogether insufficient and cannot be regarded as proportionate. In particular, it argues that the Council failed to specify the exact type of weaponry which the applicant manufactured and which was supplied to the Russian Federation, or the dates or places of any incident demonstrating that it was or had been involved in the destabilisation of Ukraine. 53 The Council disputes those arguments. 54 It should be borne in mind that the purpose of the obligation to state the reasons for an act adversely affecting a person, as provided for in the second paragraph of Article 296 TFEU and in Article 41(2)(c) of the Charter, is, first, to provide the person concerned with sufficient information to make it possible to determine whether the act is well founded or whether it is vitiated by an error permitting its validity to be contested before the EU Courts and, second, to enable those Courts to review the lawfulness of the act. The obligation to state reasons thus laid down constitutes an essential principle of EU law which may be derogated from only for compelling reasons. The statement of reasons must therefore in principle be notified to the person concerned at the same time as the act adversely affecting him, for failure to state the reasons cannot be remedied by the fact that the person concerned learns the reasons for the act during the proceedings before the EU Courts (see judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 85 and the case-law cited). 55 Consequently, unless there are compelling reasons touching on the security of the European Union or of its Member States or the conduct of their international relations which prevent the disclosure of certain information, the Council is required to inform the person or entity covered by restrictive measures of the actual and specific reasons why it considers that those measures had to be adopted. It must thus state the matters of fact and law which constitute the legal basis of the measures concerned and the considerations which led it to adopt them (see judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 86 and case-law cited). 56 Further, the statement of reasons must be appropriate to the measure at issue and the context in which it was adopted. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary that the statement of reasons specify all the relevant matters of fact and law, inasmuch as the adequacy or otherwise of the reasons is to be evaluated with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. In particular, the reasons given for a measure adversely affecting a person are sufficient if it was adopted in circumstances known to that person which enable him to understand the scope of the measure concerning him (see judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 87 and the case-law cited). 57 In the first place, it must be pointed out that, in the present case, the Council set out the general context which led it to adopt the sanctions regime in the recitals of Decision 2014/145 and in recitals 1 to 3 of Regulation No 269/2014. In recital 2 of Decision 2014/475, it explained the reasons which had led it to extend the scope ratione personae of the restrictive measures adopted to legal persons, entities or bodies materially or financially supporting actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. Since those measures are published in the Official Journal of the European Union and are explicitly referred to in the contested measures which were communicated individually to the applicant, it cannot claim that it was unaware of the context and of the general criteria for maintaining its name on the list. 58 In the second place, it must be pointed out that the specific reasons relied on against the applicant for its name being maintained on the list by the contested measures coincide with those set out in Decision 2014/508 and Implementing Regulation No 826/2014 which are the first measures to include its name on the list of persons and entities subject to the restrictive measures at issue (see paragraph 8 above). 59 Although those reasons do not expressly define the general criterion which the Council relied on in order to maintain the applicant’s name on the lists at issue, it is sufficiently clear from the wording of those reasons that it is the criterion laid down in Article 2(1)(b) of Decision 2014/145 and in Article 3(1)(b) of Regulation No 269/2014, as amended (‘the criterion at issue’), in that it refers to legal persons, entities or bodies materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine (see paragraphs 5 and 7 above). 60 Therefore, it must be held that the reasons for the applicant’s name being maintained on the lists by the contested measures is sufficient to enable the applicant to understand the reasons for his name being maintained on the lists and to enforce its rights, and to enable the EU Courts to exercise their power of review. 61 Inasmuch as the applicant contests the merits or proportionate nature of those reasons, it must be pointed out that the obligation to state the reasons on which an act is based is an essential procedural requirement, to be distinguished from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. The reasoning of a decision consists in a formal statement of the grounds on which that decision is based. If those grounds are vitiated by errors, those errors will vitiate the substantive legality of that measure, but not the statement of reasons, which may be adequate even though it sets out reasons which are incorrect (see, to that effect, judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 96 and the case-law cited). 62 The present ground of complaint must therefore be rejected.– The complaints alleging infringement of the rights of the defence and of the right to effective judicial protection 63 The applicant maintains that it enjoys full protection of the fundamental rights guaranteed by the Charter, which applies equally to foreign legal entities coming within its scope. It submits that, in order to safeguard the applicant’s rights of defence, the Council should have given it access to the file and provided it with sufficient information supporting the measures taken against it. It argues that, by failing to identify any specific actions of the applicant that might have contributed to the destabilisation of Ukraine, the Council infringed those rights. 64 According to the applicant, the Council is required, additionally, in order to ensure effective judicial protection, to inform it of the grounds for the restrictive measures taken against it and the reasons for prolonging those measures. In the present case, it argues, those reasons are insufficient and based on mere speculation. 65 The Council disputes those arguments. 66 It must be recalled that respect for the rights of the defence and the right to effective judicial protection are fundamental rights which form an integral part of the European Union legal order, in the light of which the Courts of the European Union must ensure the review, in principle the full review, of the lawfulness of all EU acts (see, to that effect, judgment of 24 May 2016, Good Luck Shipping v Council, T‑423/13 and T‑64/14, EU:T:2016:308, paragraphs 47 to 48 and the case-law cited). 67 Respect for the rights of the defence, which is expressly laid down in Article 41(2)(a) of the Charter, includes, in a procedure preceding the adoption of restrictive measures, the right to be heard and the right to have access to the file, subject to legitimate interests in maintaining confidentiality (see, to that effect, judgment of 28 November 2013, Council v Fulmen and Mahmoudian, C‑280/12 P, EU:C:2013:775, paragraph 60 and the case-law cited). 68 The right to effective judicial protection, which is affirmed in Article 47 of the Charter, requires that the party concerned must be able to ascertain the reasons upon which the decision taken in relation to it is based, either by reading the decision itself or by requesting and obtaining disclosure of those reasons, without prejudice to the power of the court having jurisdiction to require the authority concerned to disclose that information, so as to make it possible for that party to defend its rights in the best possible conditions and to decide, with full knowledge of the relevant facts, whether there is any point in its applying to the court having jurisdiction, and in order to put the latter fully in a position to review the lawfulness of the decision in question (see judgment of 24 May 2016, Good Luck Shipping v Council, T‑423/13 and T‑64/14, EU:T:2016:308, paragraph 50 and case-law cited). 69 When that disclosure takes place, the competent EU authority must ensure that that individual is placed in a position in which it may effectively make known its views on the grounds advanced against it (see, to that effect, judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 112). 70 The case-law states that, as regards a decision to maintain the listing of the name of the individual concerned in the annex to the act containing restrictive measures, compliance with that dual procedural obligation must, contrary to the position in respect of an initial listing, precede the adoption of that decision (see, to that effect, judgment of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 113). 71 The Court of Justice considered that, in the case of a subsequent decision to freeze funds by which the inclusion of the name of a person or entity already appearing on the list was maintained, the surprise effect was no longer necessary in order to ensure that the measure was effective, with the result that the adoption of such a decision must, in principle, be preceded by notification of the incriminating evidence and by allowing the person or entity concerned an opportunity of being heard (judgment of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 62). 72 However, that right to a prior hearing has to be respected where the Council has admitted new evidence against the person who is subject to the restrictive measures and who is maintained on the list at issue (see, to that effect, judgments of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 63, and of 13 September 2013, Makhlouf v Council, T‑383/11, EU:T:2013:431, paragraph 43). 73 In that context, it must be noted that, in the present case, Article 3(2) and (3) of Decision 2014/145 and Article 14(2) and (3) of Regulation No 269/2014 provide that the Council is to communicate its decision, including the grounds for listing, to the natural or legal person, entity or body concerned, either directly, if the address is known, or by the publication of a notice, providing the opportunity to present observations. Where observations are submitted, or where substantial new evidence is presented, the Council shall review its decision and inform the natural or legal person, entity or body accordingly. In addition, it must be pointed out that, in accordance with the third paragraph of Article 6 of Decision 2014/145, that decision is kept under constant review. 74 In the present case, it is clear from the correspondence between the applicant and the Council which was produced in the proceedings before the Court that, first of all, the Council informed the applicant of the adoption of the first restrictive measures against it by letter of 30 July 2014. 75 Next, by letter of 16 March 2015, the Council informed the applicant that its name was being maintained on the lists of persons and entities subject to the restrictive measures following the adoption of the March 2015 measures. The applicant made observations by letter of 19 May 2015. The Council replied to that correspondence by letter of 31 July 2015 in which it set out the reasons why it considered that the applicant’s name should remain on the list of persons subject to the restrictive measures, and provided it with supporting evidence. 76 Following the adoption of the September 2015 measures, the Council notified the applicant of those measures and informed it again of the possibility of submitting a request for the Council to reconsider its decision to include its name on the lists and to challenge those measures before the Court. 77 Furthermore, by email of 25 September 2015 addressed to the applicant’s lawyers, the General Secretariat of the Council confirmed that the documents sent to the applicant and attached to the letter of 31 July 2015 could be used as evidence in proceedings before national or EU courts. 78 Finally, by letter of 14 March 2016, the Council notified the applicant of the March 2016 measures and informed it again of the possibility of submitting a request for the Council to reconsider its decision to include its name on the lists and to challenge those measures before the Court. 79 It must be held, therefore, that the Council respected the applicant’s rights of defence in the present case in the light of the case-law referred to in paragraph 72 above, in that the Council’s decision in the contested measures to maintain the restrictive measures against the applicant did not rely on any new information and was based on the same reasons as those which had been used against it at the time of the initial listing of its name in September 2014 (see paragraph 8 above). In such a situation, the Council was entitled, therefore, merely to inform the applicant of the adoption of new measures confirming the listing of its name, without hearing the applicant beforehand, as it did in the present case by the letters of 16 March 2015, 15 September 2015 and 14 March 2016, informing it of the adoption, respectively, of the March 2015, September 2015 and March 2016 measures. 80 As regards, in particular, access to the documents and to the evidence supporting the listing of the applicant’s name, communicated by the Council as an attachment to the letter of 31 July 2015, it must be recalled that, when sufficiently precise information has been communicated, enabling the person concerned effectively to state its point of view on the evidence adduced against it by the Council, the principle of respect for the rights of the defence does not mean that that institution is obliged spontaneously to grant access to the documents in its file. It is only on the request of the party concerned that the Council is required to provide access to all non-confidential official documents concerning the measure at issue (see judgment of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 97 and the case-law cited; see also, to that effect, judgment of 16 November 2011, Bank Melli Iran v Council, C‑548/09 P, EU:C:2011:735, paragraph 92). 81 In accordance with that case-law, the Council allowed access to the documents in its file justifying the listing of the applicant’s name by letter of 31 July 2015, in reply to the applicant’s observations and request to that effect in its letter of 19 May 2015. 82 Therefore, the communication of the documents in the file, enclosed with the letter of 31 July 2015, was not late and was sufficient to enable the applicant to exercise its rights in the light of the statement of reasons in the contested measures (see paragraph 8 above). 83 In any event, it must be recalled that, before an infringement of the rights of the defence can result in the annulment of an act, it must be demonstrated that, had it not been for that irregularity, the outcome of the procedure might have been different. In the present case, the applicant has not explained what arguments and evidence it could have relied on if it had received the documents in question earlier, nor has it demonstrated that such arguments and evidence could have led to a different result in its case, that is to say, to the restrictive measures in question not being renewed (see, to that effect and by analogy, judgment of 18 September 2014, Georgias and Others v Counciland Commission, T‑168/12, EU:T:2014:781, paragraphs 106 to 108 and the case-law cited). Thus, the present plea in law could not in any event lead to the annulment of the March 2015 measures, and still less the September 2015 and March 2016 measures, since the applicant had in its possession the documents attached to the Council’s letter of 31 July 2015 when the latter measures were adopted. 84 As regards the right to effective judicial protection, it must be noted that it also requires that the EU Courts are to ensure that the decision which affects the person or entity concerned individually is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or at the very least, one of those reasons, deemed sufficient in itself to support that decision, is substantiated (see judgment of 24 May 2016, Good Luck Shipping v Council, T‑423/13 and T‑64/14, EU:T:2016:308, paragraph 51 and case-law cited). 85 The question whether the Council’s decision to maintain the applicant’s name on the list of persons and entities subject to restrictive measures was taken on a sufficiently solid factual basis will be examined under the second plea below. 86 The present complaint must, therefore, also be rejected.– The complaint alleging lack of justification in the restrictions placed on the applicant’s fundamental rights and infringement of the principle of proportionality 87 The applicant asserts that the restrictions on its fundamental rights are not justified on the basis that they do not accord with the principle of proportionality. It argues that, in the present case, it is impossible to know whether the continuation of the restrictive measures would in fact assist in preventing the destabilisation of Ukraine, given that the Council failed to specify the applicant’s involvement in any action directed against Ukraine or the international order as such. Therefore, the restrictions on its rights do not comply with Article 52(1) of the Charter. 88 The Council disputes those claims. 89 It must be observed, as was submitted by the Council, that, by this complaint, the applicant merely reiterates the arguments already presented under the other complaints in the present plea and in the first and second pleas. 90 As regards, in particular, the principle of proportionality of the restrictive measures in the present case, it is necessary to refer to the examination of the first plea below. As regards respect for the rights of the defence and the right to effective judicial protection, it is necessary to refer to paragraphs 66 to 86 above. 91 Therefore, subject to the examination of the proportionality of the restrictive measures in the present case, which will be examined under the first plea below, it is necessary also to reject the present complaint and the third plea in its entirety. First plea in law, alleging, in essence, infringement of the principle of proportionality 92 In relation to its first plea, the applicant claims that the Council infringed the principle of proportionality and exceeded its powers in accusing it of having contributed to the destabilisation of Ukraine. It submits that the requirement that restrictive measures be necessary must be interpreted as meaning that sanctions may be imposed only on bodies or persons that are known to have an influence on the policy of the country and are known to have, or at least very probably have, been involved in the destabilisation of Ukraine. Accordingly, the applicant argues that measures against a person who is not responsible are not suitable for attaining the objective of imposing sanctions on those responsible and preventing the destabilisation of Ukraine. 93 The Council contests those claims. 94 By the present plea, it appears that the applicant seeks to call into question the proportionality of the general criteria, laid down by the Council, for imposing restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, in particular the criterion at issue laid down in Article 2(1)(b) of Decision 2014/145 and in Article 3(1)(b) of Regulation No 269/2014, as amended (see paragraphs 5 and 7 above), whereby the funds of legal persons, entities or bodies materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine are frozen. That criterion thus broadly covers all entities which materially or financially support actions that may have been committed by third parties which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, and not merely entities which have been proven to be directly responsible for such actions. 95 It should be borne in mind in that regard that, according to the case-law, as regards the general rules defining the procedures for giving effect to the restrictive measures, the Council has a broad discretion as to what to take into consideration for the purpose of adopting economic and financial sanctions on the basis of Article 215 TFEU, consistent with a decision adopted on the basis of Chapter 2 of Title V of the EU Treaty, in particular Article 29 TEU. Because the EU Courts may not substitute their assessment of the evidence, facts and circumstances justifying the adoption of such measures for that of the Council, the review which those Courts carry out must be restricted to checking that the rules governing procedure and the statement of reasons have been complied with, that the facts are materially accurate and that there has been no manifest error of assessment of the facts or misuse of power. That limited review applies, especially, to the assessment of the considerations of appropriateness on which such measures are based (see judgment of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 127 and the case-law cited). 96 As the Council makes clear, it has never accused the applicant of having directly contributed to the destabilisation of Ukraine by selling arms to the separatists, but included its name, then maintained its name, on the lists on the ground that it supplied arms to the Russian Federation, thus materially supporting the Russian Federation and its actions aimed at undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. 97 The idea of ‘support’ under Decision 2014/475 and Regulation No 783/2014, amending respectively Decision 2014/145 and Regulation No 269/2014, is wider than that of ‘actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine’ and was introduced by those measures specifically to extend the criteria for listing legal persons, entities or bodies materially or financially ‘supporting’ actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. 98 Since the criterion at issue, set out in Article 2(1)(b) of Decision 2014/145 and Article 3(1)(b) of Regulation No 269/2014, as amended (see paragraphs 5 and 7 above), forms part of a legal framework clearly delimited by the objectives pursued by the rules governing the restrictive measures against Russia, the applicant is wrong in submitting that the Council had to demonstrate that the applicant had individually threatened or undermined, and that it continued to threaten or undermine, directly the territorial integrity, sovereignty and independence of Ukraine for the Council to be able to include its name on the list of persons subject to the restrictive measures (see, to that effect, judgment of 1 March 2016, National Iranian Oil Company v Council, C‑440/14 P, EU:C:2016:128, paragraphs 79 to 83). 99 However, although the Council has a broad discretion as regards the general criteria to be taken into consideration for the purpose of adopting restrictive measures, it is for the Court to ascertain, where appropriate, whether those general criteria, as interpreted and implemented by the EU institutions, comply with the general principles of EU law and the treaties and, in particular, the objective of preserving peace, preventing conflicts and strengthening international security, laid down in Article 21(2)(c) TEU. A consequence of that interpretation is that the broad discretion enjoyed by the Council in relation to the definition of the general listing criteria can be respected, while the review, in principle the full review, of the lawfulness of EU acts in the light of fundamental rights is ensured. 100 In that regard, it must be recalled that the principle of proportionality is one of the general principles of EU law and requires that measures implemented through provisions of EU law be appropriate for attaining the legitimate objectives pursued by the legislation at issue and do not go beyond what is necessary to achieve them (see judgment of 21 January 2016, Makhlouf v Council, T‑443/13, not published, EU:T:2016:27, paragraph 106 and the case-law cited). 101 It is appropriate, therefore, to examine, in accordance with the case-law referred to in paragraph 95 above, whether the criterion at issue, applied to the applicant in the present case, is not manifestly unsuitable to achieve its objectives set out under Article 21 TEU, as applied to the particular situation in Ukraine, and whether it does not go manifestly beyond what is necessary to achieve those objectives. 102 In the present case, first, it must be observed that the criterion at issue pursues one of the objectives of the common foreign and security policy. The adoption of the restrictive measures against, in particular, persons materially or financially supporting actions of the Russian Government which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine meets the objective set out in Article 21(2)(c) TEU of preserving peace, preventing conflicts and strengthening international security, in accordance with the purposes and principles of the United Nations Charter. In that respect, it must be pointed out that, on 27 March 2014, the United Nations General Assembly adopted Resolution 68/262, entitled ‘Territorial integrity of Ukraine’, in which it recalled the obligation of all States, under Article 2 of the UN Charter, to refrain in their international relations from the threat or use of force against the territorial integrity and political independence of any state, and to settle international disputes by peaceful means. It welcomed the continued efforts, in particular, by international and regional organisations to support de-escalation of the situation in Ukraine. In the operative part of that resolution, the General Assembly, inter alia, reaffirmed the importance of the sovereignty, political independence, unity and territorial integrity of Ukraine within its internationally recognised borders and urged all parties to pursue immediately the peaceful resolution of the situation with respect to Ukraine, to exercise restraint, to refrain from unilateral actions that may increase tensions and to engage fully with international mediation efforts. 103 In addition, it must be recalled that, in the present case, while Decision 2014/145 initially provided that the restrictive measures should be imposed on persons responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine and against persons or entities associated with them, recital 2 of Decision 2014/475 amending Decision 2014/145 states, inter alia, that, in view of the gravity of the situation in Ukraine, the conditions for freezing of funds and economic resources should be expanded to target legal persons, entities or bodies materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. 104 It is therefore as a result of the persistence, even worsening, of the situation in Ukraine following the first restrictive measures adopted that the Council took the view that it had to extend the circle of persons and entities covered by those measures in order to achieve the objectives pursued. It follows from that approach, which is based on the progressive impairment of rights according to the effectiveness of the measures, that the proportionality of those measures is established (judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 126). 105 Therefore, the Court shares the Council’s view that the criterion at issue does not appear to be manifestly inappropriate in order to reach the objective to prevent the escalation of the conflict in Ukraine and actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. By applying also to persons and entities materially or financially supporting actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, the Council could legitimately expect that such actions cease or that they become more costly for those who undertake them, in order to promote a peaceful settlement of the crisis (see, to that effect, Opinion of Advocate General Wathelet in Rosneft, C‑72/15, EU:C:2016:381, points 146 and 147). 106 Secondly, the criterion at issue and the restrictive measures deriving from it are necessary in order to achieve and implement the objectives referred to in Article 21 TEU, given that alternative and less restrictive measures, such as a system of prior authorisation or an obligation to justify, a posteriori, how the funds transferred were used, are not as effective in achieving the goal pursued, particularly given the possibility of circumventing such restrictions (see, to that effect, judgment of 21 January 2016, Makhlouf v Council, T‑443/13, not published, EU:T:2016:27, paragraph 112 and the case-law cited). 107 Thirdly, it must be recalled that the contested measures, which implement the criterion at issue as regards the applicant, contain all the guarantees enabling the applicant to exercise its rights of defence. 108 Thus, the Council’s letters addressed to the applicant, informing it of the adoption of the new measures maintaining its name on the list of persons covered by restrictive measures, referred to in paragraphs 12, 17 and 20 above, expressly informed it of the possibility of submitting a request for reconsideration of its inclusion on the lists at issue and of bringing an action for annulment before the Court. Moreover, the applicant was able to bring such an action in accordance with the conditions laid down in the second paragraph of Article 275 TFEU and the fourth and sixth paragraphs of Article 263 TFEU. 109 In addition, it must be noted that Decision 2014/145 and Regulation No 269/2014, as amended, provide for the possibility to grant specific authorisation to unfreeze funds, other financial assets or other economic resources and to revise periodically the inclusion of the names of the persons or entities concerned on the lists at issue so as to allow the removal from those lists of persons or entities no longer meeting the necessary criteria for inclusion. 110 Finally, it must be recalled that the restrictive measures adopted under Article 215 TFEU are not penalties, but prospective precautionary measures (see, to that effect, judgment of 13 September 2013, Anbouba v Council, T‑592/11, not published, EU:T:2013:427, paragraph 40 and the case-law cited). Therefore, the mere existence of a risk that an entity may act reprehensibly may be sufficient to impose restrictive measures on that entity (see, to that effect, judgment of 28 November 2013, Council v Manufacturing Support & Procurement Kala Naft, C‑348/12 P, EU:C:2013:776, paragraph 85). 111 In the light of all the foregoing considerations, it does not appear that the criterion at issue as defined by the Council in Article 2(1)(b) of Decision 2014/145 and in Article 3(1)(b) of Regulation No 269/2014, as amended (see paragraphs 5 and 7 above), is manifestly disproportionate in the light of the objectives pursued, in accordance with Article 21 TEU, of preventing the escalation of the conflict in Ukraine and actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. 112 The first plea in law must therefore be dismissed. Second plea in law, alleging infringement of the legal principles applicable to the restrictive measures 113 By its second plea, the applicant claims, in the first place, that the grounds on which it was included in the annexes to Decision 2014/145 and Regulation No 269/2014 do not meet the standards for the quality of grounds required for the inclusion of a legal person’s name on the lists. It expresses the view in this regard that those acts aim solely to sanction natural or legal persons that are — as evidenced by robust facts — responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. 114 The applicant argues that, given the intensity of the measures and their objective of preventing the further destabilisation of Ukraine, the Council would have needed to show that the applicant had in fact undermined or threatened the territorial integrity, sovereignty and independence of Ukraine, or still undermines and threatens its territorial integrity, sovereignty or independence, mere speculation and guesswork being insufficient in this regard. 115 The Council disputes those arguments. 116 As regards the proportionality of the criterion at issue, it is clear from the examination of the first plea above that the Council did not infringe the principle of proportionality by providing in Article 2(1)(b) of Decision 2014/145 and in Article 3(1)(b) of Regulation No 269/2014, as amended (see paragraphs 5 and 7 above), that the funds of legal persons, entities or bodies which materially or financially support actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine were frozen. 117 The applicant’s reading of the criterion at issue is thus erroneous in requiring the Council to demonstrate that the applicant is responsible for actions undermining or threatening the territorial integrity, sovereignty or independence of Ukraine or that it actually undermined or threatened the territorial integrity, sovereignty and independence of Ukraine, in order for it to be able to include the applicant’s name on the list of persons and entities covered by the restrictive measures. 118 In the second place, the applicant challenges the soundness of the grounds stated in the contested measures in relation to it, as set out in paragraph 8 above. 119 First, while it acknowledges that its sole shareholder is the Russian Federation, it asserts that it is a separate legal entity and that the Russian Government cannot exert a decisive influence on decision-making in relation to its daily commercial activities. Under Russian law, the majority of decisions are taken by executive bodies consisting of a Director General and a Management Board, not by the General Meeting of Shareholders, the approval of which is required only for major transactions representing more than 25% of the book value of the applicant’s assets. Shareholder rights are exercised in practice by the Rosimushchestvo (Federal Agency for State Property Management, Russian Federation), which is totally independent of the Ministry of Defence and is also responsible for selecting the professional directors on the applicant’s Board of Directors. In the area of exports of military goods, the function of the State organs, that is to say, the Government of the Russian Federation and the Federal Service for Military and Technical Cooperation, is limited to granting authorisation for any export of military goods by the applicant. 120 Secondly, while it acknowledges that it manufactures, inter alia, anti-aircraft weaponry such as surface-to-air missiles, it asserts that it also delivers military products to countries and customers other than the Russian Federation, and that over 30% of its production is represented by a range of products for civil use. It further states that it did not begin manufacturing until 2002, with the result that the production or sale of older weapons, such as the BUK surface-to-air missile, cannot be imputed to it. 121 Thirdly, while it admits supplying weaponry to Russian governmental authorities, it states that it has never delivered weapons on Ukrainian territory since its establishment in 2002. It further states that orders for military goods and equipment from the Russian State must be approved by the Duma and ratified by the President of the Russian Federation, and that the suppliers and prices of the goods ordered are determined on a competitive basis. As far as the export of military goods and equipment is concerned, a list of the countries to which such goods and equipment may be exported has been established by a federal law and a decree of the President of the Russian Federation. The export of military goods to countries not appearing on those lists must be approved by the Russian President himself. In consequence, it is prohibited for a Russian company such as the applicant to supply military goods to any person or body not appearing on those lists, let alone to paramilitary organisations. 122 Fourthly, the applicant denies supplying or having supplied weapons to Russian separatists in Eastern Ukraine or to any recipient in Ukrainian territory. It states that the BUK anti-aircraft missiles used by the Ukrainian army pre-date 1997 and thus cannot have been produced by the applicant. 123 Fifthly, the applicant denies having supplied any weaponry used by separatists, and particularly any weaponry used to shoot down aircraft. In particular, it denies any involvement in the flight incident concerning Malaysia Airlines flight MH17 from Amsterdam (Netherlands) to Kuala Lumpur (Malaysia) and states that there is no evidence of any such involvement. The precise causes of the destruction of that aircraft remain unknown and, even if it were ultimately established that a BUK surface-to-air missile was involved, this would not necessarily point to any involvement on the part of the applicant, given that, first, none of the military equipment which it manufactures has been used in Ukraine and, secondly, the Ukrainian army is still in possession of older models of BUK missiles. On that basis, until the findings of the official investigation are published, the possibility that the aircraft was brought down by such weapons cannot be excluded. 124 The Council contests those claims. 125 It must be recalled that, by the contested measures, the applicant’s name was maintained on the list of persons and entities covered by restrictive measures for the same reasons as those set out in paragraph 8 above. 126 The applicant claims, in essence, that the grounds advanced against it are not sufficiently supported by evidence and that they do not justify the inclusion of its name on the lists of persons and entities covered by the restrictive measures. 127 In that regard, it should be recalled that, although the Council has a broad discretion as regards the general criteria to be taken into consideration for the purpose of adopting restrictive measures, the effectiveness of the judicial review guaranteed by Article 47 of the Charter requires that, as part of the review of the lawfulness of the grounds which are the basis of the decision to include or to maintain a person’s name on the list of entities subject to restrictive measures, the Courts of the European Union are to ensure that that decision, which affects that person individually, is taken on a sufficiently solid factual basis. That entails a verification of the factual allegations in the summary of reasons underpinning that decision, with the consequence that judicial review cannot be restricted to an assessment of the cogency in the abstract of the reasons relied on, but must concern whether those reasons, or at the very least, one of those reasons, deemed sufficient in itself to support that decision, are substantiated by sufficiently specific and concrete evidence (judgment of 26 October 2015, Portnov v Council, T‑290/14, EU:T:2015:806, paragraph 38; see, to that effect, judgment of 21 April 2015, Anbouba v Council, C‑605/13 P, EU:C:2015:248, paragraphs 41 and 45). 128 It is for the competent European Union authority to establish, in the event of challenge, that the reasons relied on against the person concerned are well founded, and not the task of that person to adduce evidence of the negative, that those reasons are not well founded (judgments of 18 July 2013, Commission and Others v Kadi, C‑584/10 P, C‑593/10 P and C‑595/10 P, EU:C:2013:518, paragraph 121, and of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraph 128). 129 In the first place, as regards the grounds that the applicant is a Russian state-owned company which manufactures anti-aircraft weaponry, including surface-to-air missiles, which it supplies to the Russian army, it is sufficient to state, as the Council did, that the applicant does not deny being owned by the Russian State, or manufacturing anti-aircraft weaponry, such as surface-to-air missiles, which it supplies to the Russian army. 130 First, the fact that the General Meeting of Shareholders did not have a dominant position by virtue to Article 47 of the federalnij zakon ob akcionernih obshestvah (Russian Law on Joint-Stock Companies, No 208-FZ, 26.12.1995) is not such as to call into question the finding that the applicant is a Russian state-owned company, owned and controlled by the Russian State. As the applicant itself admits, the General Meeting is made up of representatives of the Russian Federation, as sole shareholder, and is responsible, not only for approving the applicant’s annual reports and annual accounts, but also for giving its agreement to every transaction of more than 25% of the book value of the applicant’s assets. The fact that the Russian Federation’s shareholder rights are in practice exercised by the Federal Agency of State Property Management confirms that the Russian Government controls the applicant, irrespective of the State Department which is directly responsible in that regard. 131 In addition, as a company active in the defence sector, the applicant is particularly dependent on the Russian Federation for all exports of military equipment, since the exports have to be authorised by the Russian Government or by the President of the Russian Federation directly where those exports are to a country which is not on the list of recipient countries approved by the Russian Parliament. As the Council submitted at the hearing, it is clear from Article 2 of the applicant’s new statutes that its corporate purpose is, inter alia, to ensure national defence and the security of the Russian Federation. That demonstrates that the applicant, in fact, has very limited freedom of action compared with the Russian Federation and that the applicant is largely dependent on it for its activities. 132 Secondly, the documents which the Council forwarded to the applicant, attached to the letter of 31 July 2015 also demonstrate that it manufactures anti-aircraft weaponry, including BUK M1-2 and M2E surface-to-air missiles and Aistenok radars. That information is taken directly from the applicant’s website. The fact that the applicant is also active in the civil sector is irrelevant in that respect, given that, as the applicant admits, the share of products for civilian use does not exceed 30% of its total production. 133 Thirdly, the documents provided by the Council also demonstrate that the applicant supplies the Russian Federation with weaponry, something which it also acknowledges in the present proceedings. 134 It is therefore sufficiently clear from the evidence provided by the Council that the applicant is a Russian state-owned company and that it manufactures anti-aircraft weaponry, including surface-to-air missiles, which it supplies to the Russian army, as is indicated in the statement of reasons for the applicant’s name being maintained on the lists by the contested measures. 135 In any event, the fact that the applicant is a Russian state-owned company cannot be decisive as regards the legality of the inclusion of its name on the list of persons and entities covered by restrictive measures, since, as was acknowledged by the parties at the hearing, the determining factor was that, by manufacturing weapons and military equipment and supplying them to Russia, the applicant materially supports actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. 136 In the second place, as regards the ground that the Russian authorities supplied heavy weaponry to separatists in Eastern Ukraine, contributing to the destabilisation of Ukraine, it must be observed that the applicant does not in any way call into question that conclusion, but merely denies that it was itself responsible for supplying the separatists or any recipient in Ukrainian territory. 137 As the Council rightly states, the reason relied on against the applicant in the contested measures is not based on the fact that the applicant delivered weapons directly to the separatists in Ukraine, but rather on the fact that, by selling arms to the Russian Federation which itself supplies weapons to the separatists in Eastern Ukraine, the applicant materially supports actions taken by the Russian Federation seeking to undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. 138 In that regard, the documents provided by the Council are sufficient to demonstrate that the Russian Federation actually supplied weapons to the separatists in Eastern Ukraine. Thus it is clear, in particular from what the US European Command Commander, NATO Supreme Allied Commander, declared at a press briefing on 30 June 2014, that several types of heavy weaponry had crossed the border between Russia and Ukraine and had been used on the western side of that border. 139 In addition, it is clear from the documents provided by the Council that the Pantsir S-1/SA-22 Greyhound, which is one of the latest air defence systems, has been seen in the Donetsk region of Ukraine and has been used by the separatists. Since that air defence system has been ordered and exported from Russia only to Jordan, Syria and the United Arab Emirates, it is very likely that the one which has been seen in Eastern Ukraine came from Russia, as is submitted by the Council. 140 The applicant, however, denies that the Pantsir system is manufactured by it or by any of its subsidiaries, as is alleged by the Council. The applicant claims that it is in fact produced by another company, which is apparent from the documents provided by the Council. 141 In that regard, the Court shares the Council’s view that it is irrelevant that the Pantsir which was seen in Eastern Ukraine is actually manufactured by the applicant or by another company, given that the grounds for maintaining its name on the list of persons and entities covered by restrictive measures are not based on the applicant’s direct involvement in the actions seeking to destabilise Ukraine or on the applicant delivering weapons to the separatists, but on the fact that the applicant is a Russian state-owned company manufacturing heavy weaponry which it supplies to the Russian Federation, which in turn supplies weapons to the separatists, and that, accordingly, it materially supports actions taken by the Russian Federation seeking to undermine or threaten the territorial integrity, sovereignty and independence of Ukraine (see paragraphs 5, 8 and 59 above). The fact that the Pantsir system seen in Eastern Ukraine is not included in the range of the applicant’s products is, therefore, irrelevant in that regard. 142 It must be stated, in any event, that other Russian weaponry and military equipment have been seen in the Donetsk region of Eastern Ukraine, or crossing the border between Russia and Ukraine, including the Aistenok radar station, which is manufactured by the applicant and has been used by the separatists, as is apparent from the documents provided by the Council. 143 The Council therefore did not err in its assessment when it stated in the grounds for listing the applicant that ‘the Russian authorities [had] supplied heavy weaponry to separatists in Eastern Ukraine, contributing to the destabilisation of Ukraine’. 144 In the third place, it is necessary to examine whether the third ground in the contested measures, that is to say, the fact that the weapons supplied by the Russian Federation are used by the separatists, including for shooting down aeroplanes (see point 8 above), is founded on a sufficiently solid factual basis. 145 In that regard, the Council produced numerous press articles reporting on the shooting down of Ukrainian army aircraft and helicopters by the separatists, including, in particular, a military cargo-plane transporting 49 soldiers. It is clear from those articles that, in some cases, the separatists claimed direct responsibility for those acts. 146 The applicant, however, disputes the reliability and objectivity of those articles. 147 It must be pointed out in that regard that, as is clear from the case-law, press articles may be used in order to corroborate the existence of certain facts — in the present case the fact that the weapons provided by Russia were used by the separatists in Eastern Ukraine, including for shooting down aeroplanes — where they come from several different sources and they are sufficiently specific, precise and consistent as regards the facts there described, as in the present case (see, to that effect, judgments of 5 November 2014, Mayaleh v Council, T‑307/12 and T‑408/13, EU:T:2014:926, paragraphs 141 and 142, and of 22 September 2015, First Islamic Investment Bank v Council, T‑161/13, EU:T:2015:667, paragraph 59). 148 It would be excessive and disproportionate to require the Council itself, as the applicant seeks, to investigate on the ground the accuracy of facts which are re-laid by numerous media. Although it is possible to accept, as the applicant does, that the media coverage of the Ukrainian conflict by the western media may also be partially biased, genuine objectivity is impossible, and the fact remains that the press articles provided by the Council corroborate the existence of Russian involvement in the Ukrainian conflict, including the supply of weapons and military equipment to the separatists in Eastern Ukraine. Moreover, the applicant has not called into question the purely factual information reported in those articles in that regard, nor has it even sought to establish in what way they are manifestly incorrect. 149 Finally, as regards the applicant’s argument that the Council has not in any way demonstrated that weapons which it produced had been used by separatists, it is important to recall again that the grounds relied on against it are not in any way based on the existence of such a link between the applicant and the separatists, but on the fact that it supplies weapons to the Russian government, which itself contributes to the destabilisation of Ukraine by supplying weapons, of all kinds, to the separatists (see paragraphs 8 and 137 above). 150 It must also be pointed out, as was observed by the parties at the hearing, that there was no final conclusion concerning the causes of the destruction of Malaysia Airlines flight MH17 killing 298 people when the contested measures were adopted. Although it is true that the contention that the aeroplane was shot down by separatists in Eastern Ukraine was a serious line of enquiry followed by the investigators, the investigation was still ongoing and no final report had been adopted by the time the restrictive measures were adopted, and subsequently maintained, concerning the applicant, as the Council rightly observes. 151 It is important to recall that the evidence which the Council relies on in order to justify the inclusion of the applicant’s name on the list of persons and entities covered by restrictive measures must necessarily have been available and brought to the attention of the Council at the latest when it adopted the restrictive measures concerning the applicant, otherwise the effective control exercised by the Court over the legality of that listing would be deprived of its substance (see, to that effect, judgments of 26 October 2012, Oil Turbo Compressor v Council, T‑63/12, EU:T:2012:579, paragraph 29, and of 26 October 2015, Portnov v Council, T‑290/14, EU:T:2015:806, paragraph 47). 152 In any event, it must be pointed out, in that regard, that the applicant’s argument that Malaysia Airlines flight MH17 was shot down by the Ukrainian army, and not by the separatists, given that it also possesses outdated BUK missiles which caused the destruction of the aeroplane, according to the report from the Dutch Safety Board published in October 2015, is irrelevant, given that that evidence is not decisive for the purposes of listing its name. 153 In the grounds for listing the applicant’s name, the Council considered only that ‘these weapons [supplied by the Russian Federation to the separatists were] used by the separatists, including for shooting down airplanes’ (see paragraph 8 above). 154 The merits of that ground are sufficiently supported by the numerous documents provided by the Council in that regard, from which it is clear that several aeroplanes were shot down by the separatists and that, in some cases, the separatists claimed responsibility for those acts. 155 Therefore, it must be held that the ground that ‘these weapons are used by the separatists, including for shooting down airplanes’ is founded on a sufficiently solid factual basis and that the Council committed no error of assessment in that regard. 156 In the fourth place, it is still necessary to ascertain whether the Council was fully entitled to conclude from all the grounds set out above that ‘as a state-owned company, Almaz-Ante[y] therefore contribute[d] to the destabilization of Ukraine’. 157 As the Council submits, it is necessary to read that ground with reference to the preceding grounds, inasmuch as it constitutes the logical conclusion of those grounds. It is not merely in its capacity as a state-owned company that the applicant is subject to the restrictive measures, but as a state-owned company supplying weapons, such as surface-to-air missiles, to the Russian Federation, which itself supplies weapons to the separatists in Eastern Ukraine, who in turn use them in particular to shoot down aeroplanes. 158 Consequently, since the other grounds are substantiated by sufficiently specific and concrete evidence and are founded on a sufficiently solid factual basis, the Council was fully entitled to conclude that the applicant contributed to the destabilisation of Ukraine, in that it materially supported Russia’s actions seeking to undermine the territorial integrity, sovereignty and independence of Ukraine. That ground must be read in the light of the objectives of the restrictive measures at issue, as set out in recital 2 and in Article 1 of Decision 2014/475 which, in amending Decision 2014/145, makes provision for the freezing of funds of legal persons, entities or bodies which materially or financially support actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine (see paragraph 4 above). 159 In that regard, it is important to note that, contrary to what the applicant claims, the Council was not required to demonstrate positively that the weapons which the applicant produced had been used in Ukraine by the separatists. Such evidence would be difficult to provide, in particular in a conflict situation where it is sometimes difficult to establish exactly the specific responsibilities and the types of weapons used by each of the warring parties. 160 In addition, according to the case-law, the existence merely of a risk that an entity may act reprehensibly may be sufficient to impose restrictive measures (see paragraph 110 above). 161 Therefore, it must be held that the Council has not committed any error of assessment by including, then maintaining, the applicant’s name on the list of persons and entities subject to restrictive measures, given that that assessment meets the listing criteria provided for in Article 2(1)(b) of Decision 2014/145 and in Article 3(1)(b) of Regulation No 269/2014, as amended. 162 In view of the foregoing, the second plea must be rejected and the application dismissed in its entirety. Costs 163 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the Council.On those grounds,THE GENERAL COURT (Ninth Chamber)hereby:1. Dismisses the action; 2. Orders Joint-Stock Company ‘Almaz-Antey’ Air and Space Defence Corp. to pay the costs. BerardisTomljenovićSpielmannDelivered in open court in Luxembourg on 25 January 2017.E. Coulon G. BerardisRegistrar President * Language of the case: English. | ef4fb-9968322-4a6c | EN |
The Court confirms the fine of €82 million imposed jointly and severally on Toshiba and Panasonic/MTPD for their participation in the cartel on the market for tubes for television sets | 18 January 2017 ( *1 )‛Appeal — Agreements, decisions and concerted practices — Global market for cathode ray tubes for television sets and computer monitors — Agreements and concerted practices on pricing, market sharing, customer allocation and output limitation — Concept of ‘economic unit’ between two companies — Concept of ‘decisive influence’ — Joint control by two parent companies — Distortion of evidence’In Case C‑623/15 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 20 November 2015, Toshiba Corp., established in Tokyo (Japan), represented by J.F. MacLennan, Solicitor, A. Schulz, Rechtsanwalt, J. Jourdan, avocat, and A. Kadri, Solicitor,appellant,the other party to the proceedings being: European Commission, represented by A. Biolan and V. Bottka, acting as Agents,defendant at first instance,THE COURT (Eighth Chamber),composed of M. Vilaras (Rapporteur), President of the Chamber, J. Malenovský and D. Šváby, Judges,Advocate General: M. Szpunar,Registrar: A. Calot Escobar,having regard to the written procedure,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1By its appeal, Toshiba Corp. asks the Court to set aside the judgment of the General Court of the European Union of 9 September 2015, Toshiba v Commission (T‑104/13, ‘the judgment under appeal’, EU:T:2015:610), by which the General Court only partially upheld its action, primarily, for the annulment of Commission Decision C(2012) 8839 final of 5 December 2012 relating to a proceeding under Article 101 TFEU and Article 53 of the EEA Agreement (Case COMP/39.437 — TV and Computer Monitor Tubes) (‘the decision at issue’) in so far as that decision concerned it and, in the alternative, for a reduction of the amount of the fine which had been imposed on it. Background to the dispute 2As noted in paragraph 1 of the judgment under appeal, Toshiba is a global undertaking which manufactures and sells electronic and electrical products, including cathode ray tubes (‘CRTs’).3According to paragraph 2 of the judgment under appeal, a CRT is an evacuated glass envelope containing an electron gun and a fluorescent screen, usually with internal or external means to accelerate and deflect the electrons. When electrons from the electron gun strike the fluorescent screen, light is emitted, creating an image on the screen. At the material time, there were two types of CRT, namely colour cathode ray tubes for computer monitors (‘colour display tubes’) and colour cathode ray tubes for television sets (‘colour picture tubes’, ‘CPTs’).4According to paragraph 3 of the judgment under appeal, Toshiba was involved in the production and sales of CRTs, both directly and through its subsidiaries located in Europe, Asia and North America. A subsidiary of Toshiba was the European branch in charge of Toshiba’s electronic components business and was also its exclusive distributor of colour cathode ray tubes for computer monitors and CPTs in the European Economic Area (EEA) from 1995 until 31 March 2003.5It can be seen from paragraph 4 of the judgment under appeal that on 31 March 2003 Toshiba transferred its entire CRT business to a joint venture, Matsushita Toshiba Picture Display Co. Ltd (‘the joint venture’), created with Matsushita Electric Industrial Co. Ltd (‘MEI’). Until 31 March 2007, the joint venture was held as to 64.5% by MEI and as to 35.5% by Toshiba; on that date the latter transferred its shareholding to MEI. MEI changed its name to Panasonic Corporation on 1 October 2008.6It is apparent from paragraphs 14 and 15 of the judgment under appeal that, by the decision at issue, the European Commission found that the main global producers of CRTs had infringed Article 101 TFEU and Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3) by participating in two separate infringements, each constituting a single and continuous infringement. Those infringements related, first, to the colour cathode ray tubes for computer monitors market and, secondly, to the CPT market (‘the CPT cartel’). Toshiba’s action before the General Court related only to the CPT cartel. According to the decision at issue, the CPT cartel occurred between 3 December 1997 and 15 November 2006.7As regards Toshiba’s involvement in the CPT cartel, first, the Commission stated that Toshiba had participated directly in that cartel by maintaining bilateral contacts, between 16 May 2000 and 11 April 2002, with the majority of the undertakings forming the core of the cartel, and also by participating, from 12 April 2002, in regular multilateral meetings between the undertakings participating in that cartel. Secondly, the Commission stated that, as from 1 April 2003, the joint venture, over which MEI and Toshiba had exercised decisive influence, had continued its participation in the CPT cartel uninterruptedly. Consequently, the Commission concluded that Toshiba was liable, first, for the infringement committed directly by it, before the creation of the joint venture, and, secondly, jointly and severally with Panasonic for the infringement committed by the joint venture from the time at which that undertaking was set up.8The Commission therefore found, in Article 1(2)(d) of the decision at issue, that Toshiba had participated in the CPT cartel from 16 May 2000 to 12 June 2006. In Article 2(2)(g) and (h), respectively, the Commission, first, imposed a fine of EUR 28048000 on Toshiba and, secondly, imposed a fine of EUR 86738000 on MEI, Toshiba and the joint venture, as jointly and severally liable. The procedure before the General Court and the judgment under appeal 9By application lodged at the Registry of the General Court on 20 February 2013, the appellant brought an action, primarily for annulment of the decision at issue in so far as that decision concerned it and, in the alternative, for a reduction of the fine imposed on it.10In support of its primary claim for the annulment in part of the decision at issue, Toshiba put forward five pleas in law. The first three pleas alleged errors of law vitiating the decision at issue in that, by that decision, the Commission had found that the appellant was liable for the infringement committed during the periods from 16 May 2000 until 11 April 2002, from 12 April 2002 until 31 March 2003 and from 1 April 2003 until 12 June 2006. The fourth plea alleged errors vitiating the decision at issue in that, by that decision, the Commission had found that the appellant was jointly and severally liable for the joint venture’s participation in the infringement committed during the period from 1 April 2003 until 12 June 2006. The fifth plea, raised in the alternative, alleged an error vitiating the decision at issue in that, by that decision, the Commission had found that the joint venture was liable for having participated in the infringement committed during the period from 1 April 2003 until 12 June 2006.11The General Court first of all assessed and upheld, respectively, the first plea, in paragraphs 42 to 79 of the judgment under appeal, and the second plea, in paragraphs 80 to 87 of that judgment.12The General Court then went on to examine the fourth plea, which, as noted in paragraph 88 of the judgment under appeal, was divided into three parts, the first alleging a failure to state reasons, the second alleging an error of assessment as regards the exercise of decisive influence by Toshiba over the joint venture’s conduct, and the third, alleging infringement of Toshiba’s rights of defence.13The General Court began by examining the second part of that plea, in paragraphs 90 to 123 of the judgment under appeal. Toshiba’s appeal concerns this part of the judgment under appeal.14After setting out, in paragraphs 93 to 102 of the judgment under appeal, the case-law on the imputation to a parent company of its subsidiary’s unlawful conduct, the General Court first of all assessed the findings made in the decision at issue in the light of that case-law. In the context of that assessment, the General Court considered, first, in paragraph 106 of that judgment, that the Commission had been entitled to find, in that decision, that both parent companies of the joint venture had veto rights with respect to matters of strategic importance that were essential for the pursuit of the joint venture’s activities, which proved the exercise of joint control over that undertaking. In paragraphs 107 to 113 of that judgment, the General Court set out the reasons justifying that conclusion and rejected Toshiba’s arguments to the contrary.15Secondly, the General Court added, in paragraph 114 of the judgment under appeal, that other circumstances referred to by the Commission in the decision at issue permitted the inference that the appellant was in a position to exercise decisive influence over the joint venture’s conduct on the market. Those circumstances were:—the fact that one of the 4 directors appointed by Toshiba out of the 10 who formed the joint venture’s Board of Directors simultaneously occupied a management position within Toshiba, noted in paragraph 115 of the judgment under appeal;the fact that Toshiba was to appoint one of the two directors entitled to represent the joint venture, who was also the vice-president of the joint venture and the fact that the two vice-presidents appointed by Toshiba during the existence of the joint venture had previously acted at a high management level within Toshiba and subsequently returned to it, which, according to paragraph 116 of the judgment under appeal, showed that they necessarily had thorough knowledge of Toshiba’s policy and its commercial objectives and were in a position to cause the joint venture’s policy and Toshiba’s interests to converge; andthe fact that the joint venture was the preferred supplier of its parent companies for the production of television sets and that, at the same time, those companies were the preferred suppliers of CRT components for the joint venture, which, according to paragraph 119 of the judgment under appeal, constituted an additional indication of Toshiba’s involvement in the joint venture’s management and revealed the existence of close and lasting economic ties between them.16Thirdly, the General Court noted, in paragraph 120 of the judgment under appeal, that it was apparent from the evidence on which the Commission had relied in the decision at issue that Toshiba was involved in the joint venture’s management, inter alia by giving its consent to the closure of two of its subsidiaries in Europe and the United States in November 2005, without which that closure could not have happened.17The General Court therefore concluded, in paragraph 122 of the judgment under appeal, that, having regard to all the economic, legal and organisational links between the appellant and the joint venture, the Commission had not erred in finding that the appellant, as the joint venture’s parent company, had exercised, together with Panasonic, decisive influence over the joint venture’s conduct on the CPT market. In view of that conclusion, the General Court rejected the second part of the fourth plea in law.18The General Court then examined and rejected the first and third parts of the fourth plea in law, as well as the third and fifth pleas in law, as can be seen from, respectively, paragraphs 125, 132, 140 and 172 of the judgment under appeal.19Lastly, in paragraphs 175 to 234 of the judgment under appeal, the General Court examined Toshiba’s alternative head of claim seeking the cancellation or reduction of the fine, and the single plea in law, divided into two parts, put forward in support of that head of claim. Following that examination, the General Court concluded, in paragraph 235 of the judgment under appeal, that the second part of that single plea in law should be upheld solely in so far as it sought to benefit from the reduction of the amount of the fine imposed on it jointly and severally with Panasonic and the joint venture, granted by the judgment of 9 September 2015, Panasonic and MT Picture Display v Commission (T‑82/13, EU:T:2015:612), which had set the amount of that fine at EUR 82826000, and that Toshiba’s request for cancellation of the fine or for a reduction of its amount had to be rejected as to the remainder.20Consequently, the General Court annulled, in paragraphs 1 and 2 of the operative part of the judgment under appeal, respectively, Article 1(2)(d) of the decision at issue in so far as the Commission had thereby found that Toshiba had participated in a global cartel in the market for CPTs from 16 May 2000 until 31 March 2003, and Article 2(2)(g) of that decision in so far as the Commission had thereby imposed a fine of EUR 28048000 on Toshiba for its direct participation in that cartel and, in addition, in paragraph 3 of the operative part of the judgment under appeal, set the amount of the fine imposed on Toshiba in Article 2(2)(h) of the decision at issue, jointly and severally with Panasonic and the joint venture, at EUR 82826000. By paragraph 4 of the operative part of the judgment under appeal, the General Court dismissed Toshiba’s action as to the remainder and, by paragraph 5 of that operative part, ordered each party to bear its own costs. Forms of order sought by the parties before the Court of Justice 21The appellant claims that the Court should:set aside paragraphs 3, 4 and 5 of the operative part of the judgment under appeal;annul Article 1(2)(d) of the decision at issue and Article 2(2)(h) of that decision, in so far as it applies to the appellant and imposes a fine on it jointly and severally with Panasonic and the joint venture; andorder the Commission to pay the costs of both the appeal and the proceedings at first instance.22The Commission contends that the Court should:dismiss the appeal as inadmissible and, in any event, as unfounded;in the alternative, dismiss the action for annulment of the decision at issue; andorder Toshiba to bear the entirety of the costs of both the appeal proceedings and the proceedings at first instance. The appeal 23Toshiba relies on a single ground of appeal, alleging an error of law in the application of the concept of undertaking, within the meaning of Article 101 TFEU. That ground of appeal is divided into two parts, formally presented as alleging (i) that the General Court erred in law by characterising certain elements as evidence either of Toshiba’s ability to exercise, or Toshiba’s actual exercise of, decisive influence over the joint venture and (ii) that the General Court erred in law in concluding that the sum of these elements was sufficient to support a finding that Toshiba had exercised decisive influence over the joint venture’s conduct and thus that the two entities formed a single economic unit.24Since those parts are closely connected, it is appropriate to consider them together. Arguments of the parties 25In support of the first part of its single ground of appeal, Toshiba submits, in the first place, that the General Court erred in law and vitiated the judgment under appeal by failing to state reasons, since it held, in paragraph 111 of that judgment, that the holding of a veto right over the joint venture’s business plan was in itself sufficient for it to be considered that Toshiba had actually exercised decisive influence over the joint venture, without examining the reasons for the prolongation of the start-up period during which that right was applicable.26In that context, Toshiba submits that paragraph 70 of the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (OJ 2008 C 95, p. 1; ‘the Consolidated Jurisdictional Notice’), to which the General Court referred in paragraph 111 of the judgment under appeal, does not indicate that the holding of a veto right over a business plan is sufficient to justify such a conclusion, but merely that it may be sufficient in that regard. In addition, Toshiba argues that, in accordance with the General Court’s case-law, approval rights over the budget and business plan of a joint venture are not sufficient to prove the exercise of decisive influence, and it is necessary, in that respect, to assess also whether the parent companies of a joint subsidiary influenced the latter’s operational management.27In the second place, Toshiba contests the inferences that the General Court drew from Article 21.2 and Article 23.2 of the agreement creating the joint venture (‘the BIA’), according to which certain decisions taken by the joint venture required the approval of both parent companies and others required the consent of at least one director appointed by each of the parent companies. Toshiba submits, first of all, that, in paragraph 108 of the judgment under appeal, the General Court took account of its veto right on material investments, without examining, as required by paragraph 71 of the Consolidated Jurisdictional Notice, whether the investments constituted an essential feature of the relevant market. Next, according to Toshiba, the abovementioned provisions show, at most, that it was in a position to exercise decisive influence over the joint venture, but not that it actually exercised such influence, as the General Court wrongly concluded, in paragraph 112 of the judgment under appeal. Lastly, the rights mentioned in Article 21.2 of the BIA concern the protection of minority shareholders, as acknowledged in paragraph 66 of the Consolidated Jurisdictional Notice, and cannot be regarded as constituting indications of Toshiba’s capacity to exercise decisive influence over that undertaking, contrary to what the General Court held in paragraph 113 of the judgment under appeal.28In addition, Toshiba submits that the General Court distorted the meaning of Article 23.2 of the BIA. According to Toshiba, contrary to the assertion in paragraph 108 of the judgment under appeal, that provision did not grant it a veto right. It merely made the adoption of the measures envisaged in that provision subject to the affirmative vote of one of the directors appointed by Toshiba, which could not control how those directors might vote and did not have the right to dismiss them.29According to Toshiba, the General Court also distorted the meaning of Article 22.3 of the BIA, which granted Toshiba the right to appoint one of the two directors entitled to represent the joint venture, who was also the joint venture’s vice-president. Toshiba argues that, contrary to what the General Court held in paragraph 116 of the judgment under appeal, the vice-president of the joint venture was not in a position to cause the joint venture’s commercial policy and Toshiba’s interests to converge, since it was the president of the joint venture, appointed by Panasonic, who was responsible for the operational management of that undertaking.30In the third place, Toshiba submits that the General Court erred in law in that it established, in paragraph 101 of the judgment under appeal, a presumption of the actual exercise of decisive influence by parent companies over a joint subsidiary’s conduct on the market, by basing itself on the statutory or contractual provisions relating to the management of that subsidiary.31Lastly, Toshiba argues that the General Court wrongly held, respectively in paragraphs 115, 116, 120 and 119 of the judgment under appeal, that the following elements confirmed the conclusion that it was in a position to exercise decisive influence over the joint venture:the fact that a director of the joint venture appointed by Toshiba simultaneously occupied a management post within Toshiba;the fact that two vice-presidents of the joint venture appointed by Toshiba had acted at a high management level within Toshiba prior to their appointment as vice-presidentsand had returned to Toshiba at the end of their term of office;the fact that Toshiba had consented to the closure of two subsidiaries of the joint venture;Article 28.3 of the BIA, providing that the joint venture would be the preferred supplier of the parent companies for the production of television sets and that, at the same time, those companies would be the preferred suppliers of CRT components for the joint venture.32In that context, Toshiba submits, first, that the accumulation of posts within both the parent company and the subsidiary must concern more than one individual in order to be relevant and, secondly, that the General Court substituted its own assessment for that of the Commission, which had not mentioned, in the decision at issue, the thorough knowledge, on the part of the two vice-presidents of the joint venture appointed by Toshiba, of the latter’s policy and objectives, to which the General Court referred in paragraph 116 of the judgment under appeal.33In addition, Toshiba argues that the General Court distorted the evidence in that it concluded, first, in paragraph 116 of the judgment under appeal, that the vice-president of the joint venture was in a position to cause the joint venture’s policy to converge with Toshiba’s interests and, secondly, in paragraph 119 of the judgment under appeal, that the joint venture had used another company, owned by Toshiba, as a sales channel in the European Union. In that regard, Toshiba submits that the General Court failed to take account of the fact that this arrangement was only in place for a transitory period of one year after the creation of the joint venture.34Toshiba also invokes an absence of, or inadequate statement of, reasons for the judgment under appeal, in that the General Court did not explain why it had rejected Toshiba’s explanations, supported by evidence, according to which its consent to the closure of subsidiaries of the joint venture was a means of protecting its financial interests and came within the scope of minority shareholder rights which, in accordance with paragraph 66 of the Consolidated Jurisdictional Notice, do not confer joint control.35By the second part of its single ground of appeal, Toshiba submits that, even if the General Court did not err in law by holding that each of the elements referred to in the first part of that ground of appeal could be itself characterised as a relevant piece of evidence for the purpose of establishing whether Toshiba was in a position to exercise, or had actually exercised, decisive influence over the joint venture, quod non, the General Court erred in law in that it held, in paragraph 122 of the judgment under appeal, that the sum of those elements was sufficient to justify the conclusion that Toshiba and the joint venture formed part of a single economic unit.36The Commission primarily contests the admissibility of Toshiba’s single ground of appeal. It submits that the appeal actually seeks to have the Court of Justice reassess the General Court’s findings of facts, without demonstrating any distortion of the evidence or any error of law committed by the General Court. Furthermore, Toshiba merely reiterates its arguments rejected by the General Court, in order for the Court of Justice to reassess those arguments.37In any event, the Commission submits that the two parts of Toshiba’s single ground of appeal must be rejected as unfounded. It submits that the General Court did not err in law and that it provided sufficient reasons for the judgment under appeal. In addition, Toshiba is not able to show that the General Court distorted the evidence adduced before it. Findings of the Court Admissibility38Contrary to the Commission’s submission, the appeal cannot be dismissed at the outset as being inadmissible in its entirety.39It must be borne in mind that, in an appeal, the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence which the General Court accepted in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the Rules of Procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence produced to it. Save where the evidence adduced before the General Court has been distorted, that assessment therefore does not constitute a point of law which is subject to review by the Court of Justice. However, the jurisdiction of the Court of Justice to review the findings of fact by the General Court extends, inter alia, to the question whether the rules relating to the burden of proof and the taking of evidence have been observed (judgment of 19 December 2013, Siemens and Others v Commission, C‑239/11 P, C‑489/11 P and C‑498/11 P, not published, EU:C:2013:866, paragraphs 38 and 39 and the case-law cited). In particular, the question whether the General Court has taken the right legal criteria as the basis for its appraisal of the facts and evidence is a question of law, which is amenable to review by the Court of Justice in an appeal (judgment of 11 July 2013, Commission v Stichting Administratiekantoor Portielje, C‑440/11 P, EU:C:2013:514, paragraph 59 and the case-law cited).40With regard, in particular, to the distortion of evidence and facts, the Court has repeatedly held that there is such distortion where, without having recourse to new evidence, the assessment of the existing evidence appears to be clearly incorrect or manifestly at odds with its wording (see, to that effect, judgments of 18 January 2007, PKK and KNK v Council, C‑229/05 P, EU:C:2007:32, paragraph 37, and of 19 December 2013, Siemens and Others v Commission, C‑239/11 P, C‑489/11 P and C‑498/11 P, not published, EU:C:2013:866, paragraph 44).41In the present case, first, as can be seen from paragraphs 28, 29 and 33 of the present judgment, Toshiba submits, inter alia, that the General Court distorted several pieces of evidence. The question of the material accuracy of those allegations forms part of the examination of the substance of Toshiba’s single ground of appeal, and not of its admissibility.42Secondly, as can be seen from paragraphs 25 and 34 of the present judgment, Toshiba submits, inter alia, that the General Court failed to state reasons, or failed to state adequate reasons, for the judgment under appeal. In that respect, it must be borne in mind that the question whether the grounds of a judgment of the General Court are inadequate is a question of law which is amenable, as such, to review in an appeal (judgment of 5 July 2011, Edwin v OHIM, C‑263/09 P, EU:C:2011:452, paragraph 63 and the case-law cited).43Thirdly, as noted in paragraph 32 of the present judgment, Toshiba argues, inter alia, that the General Court substituted its own reasoning for that of the decision at issue. The Court of Justice has jurisdiction to review, in an appeal, whether the General Court exceeded the limits of its jurisdiction by carrying out such a substitution of reasoning (see, to that effect, judgment of 24 January 2013, Frucona Košice v Commission, C‑73/11 P, EU:C:2013:32, paragraphs 88 and 89 and the case-law cited).44Finally, it must be noted that, by its arguments summarised in paragraphs 25, 30, 31 and 32 of the present judgment, Toshiba submits, inter alia, that the General Court applied incorrect legal criteria and breached the rules relating to the burden of proof and the taking of evidence in its analysis of the question of Toshiba’s liability for the infringement committed by the joint venture between 1 April 2003 and 12 June 2006. Those arguments also raise questions that the Court has jurisdiction to examine in an appeal.Substance45It should be pointed out that, according to settled case-law, liability for the conduct of a subsidiary can be imputed to its parent company in particular where, although it has separate legal personality, that subsidiary does not decide independently on its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities (judgment of 16 June 2016, Evonik Degussa and AlzChem v Commission, C‑155/14 P, EU:C:2016:446, paragraph 27 and the case-law cited).46In examining whether the parent company is able to exercise decisive influence over the market conduct of its subsidiary, account must be taken of all the relevant factors relating to the economic, organisational and legal links which tie the subsidiary to its parent company and, therefore, account must be taken of the economic reality (judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 76 and the case-law cited).47Moreover, the exercise of decisive influence by a parent company over its subsidiary’s conduct may be inferred from a body of consistent evidence, even if some of that evidence, taken in isolation, is insufficient to establish the existence of such influence (judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 77 and the case-law cited).48Lastly, the Court has previously held that the exercise of joint control, by two parent companies which are independent of each other, of their subsidiary does not, in principle, preclude a finding by the Commission of the existence of an economic unit comprising one of those parent companies and the subsidiary concerned (judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416 paragraph 78 and the case-law cited). It has also held that two parent companies each having a 50% shareholding in a joint venture may both be regarded as exercising decisive influence over the joint venture, in so far as the Commission has demonstrated it on the basis of factual evidence (see, to that effect, judgments of 26 September 2013, EI du Pont de Nemours v Commission, C‑172/12 P, not published, EU:C:2013:601, paragraph 47, and of 26 September 2013, The Dow Chemical Company v Commission, C‑179/12 P, not published, EU:C:2013:605, paragraph 58).49The General Court, in essence, referred to those considerations, in paragraphs 93 to 95, 98 and 99 of the judgment under appeal, and, taking them into account, it analysed, in paragraphs 104 to 121 of that judgment, the various elements invoked by the Commission in order to justify its conclusion relating to Toshiba’s liability for the infringement committed by the joint venture. That analysis led the General Court to the conclusion, set out in paragraph 122 of the judgment under appeal, that, during the infringement period from 1 April 2003 to 12 June 2006, Toshiba had exercised, together with Panasonic, decisive influence over the joint venture’s conduct on the market and that, consequently, the Commission had not erred in taking the view that Toshiba and Panasonic could be held jointly and severally liable for the joint venture’s infringing conduct.50In that regard, it is necessary to reject, in the first place, Toshiba’s argument that the General Court erred in law and disregarded the rules relating to the burden of proof and the taking of evidence in establishing a presumption of actual exercise of decisive influence by a parent company over a subsidiary’s conduct on the market, as that argument is based on an incorrect and out-of-context reading of paragraph 101 of the judgment under appeal.51It is apparent from a combined reading of paragraphs 100 to 102 of the judgment under appeal that the General Court took the view, in essence, that, where it follows from the statutory provisions or contractual stipulations governing a joint venture that the conduct on the market of that subsidiary is determined jointly by its parent companies, it may reasonably be concluded that that conduct was indeed determined jointly, with the result that the parent companies must be regarded as having exercised decisive influence over their subsidiary, unless there is concrete evidence showing that the decisions in relation to the latter’s conduct were actually taken by other procedures.52In so ruling, the General Court correctly applied the case-law of the Court of Justice according to which, as regards liability for an infringement of the competition rules, the factual evidence on which a party relies may be of such a kind as to require the other party to provide an explanation or justification, failing which it is permissible to conclude that the burden of proof has been discharged (judgment of 1 July 2010, Knauf Gips v Commission, C‑407/08 P, EU:C:2010:389, paragraph 80 and the case-law cited), and it did not establish a presumption not laid down in the case-law.53In the second place, Toshiba’s allegations that the General Court distorted several pieces of evidence cannot succeed.54In that respect, it should be noted that such distortion must be obvious from the documents in the file, without there being any need to carry out a new assessment of the facts and the evidence (order of 29 June 2016, Ombudsman v Staelen, C‑337/15 P, not published, EU:C:2016:670, paragraph 20). Furthermore, in accordance with Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court, an appellant must indicate precisely the evidence alleged to have been distorted by the General Court and show the errors of appraisal which, in its view, led to that distortion (see, to that effect, judgment of 17 March 2016, Naazneen Investments v EUIPO, C‑252/15 P, not published, EU:C:2016:178, paragraph 69).55First, as regards Toshiba’s allegation mentioned in paragraph 28 of the present judgment, it must be observed that the General Court did not interpret Article 23.2 of the BIA in a manifestly erroneous manner. In paragraph 107 of the judgment under appeal, the General Court noted that, in accordance with that provision, the adoption of certain decisions listed therein required the consent of at least one director appointed by each of the parent companies, that is to say, that it interpreted that provision exactly as Toshiba did.56Moreover, the conclusion set out in paragraph 106 of the judgment under appeal, according to which both parent companies of the joint venture had veto rights with respect to matters of strategic importance which were essential for the pursuit of the joint venture’s activities, which proved the exercise of joint control of that joint venture, is supported to the requisite legal standard by the references, made in paragraphs 107 and 109 of that judgment, to the provisions of Articles 21.2 and 27.1 of the BIA. It follows that Toshiba’s argument that the reference, in paragraph 108 of that judgment, to the veto rights conferred on Toshiba by Article 23.2 of the BIA shows a distortion, by the General Court, of the latter provision, is in any event ineffective, since, even if that distortion were proved, it would not be capable of calling into question the abovementioned conclusion, set out in paragraph 106 of the judgment under appeal.57Secondly, Toshiba’s arguments, summarised in paragraph 27 of the present judgment, concerning the inferences drawn by the General Court from Article 22.3 of the BIA, in paragraph 116 of the judgment under appeal, do not reveal any distortion of that provision by the General Court, but are actually intended to call into question the General Court’s assessment of the facts. Those arguments are, consequently, inadmissible.58In particular, the argument in paragraph 33 of the present judgment that the General Court distorted the evidence in that it concluded, also in paragraph 116 of the judgment under appeal, that the vice-presidents of the joint venture were in a position to cause the latter’s policy to converge with Toshiba’s interests must also be rejected as inadmissible, since Toshiba has in no way specified the evidence to which that argument relates or shown how the General Court distorted it.59Finally, it is also necessary to reject Toshiba’s allegation that the General Court distorted the evidence before it when it stated, in paragraph 119 of the judgment under appeal, that the joint venture had used another company, owned by Toshiba, as a sales channel in the European Union. Toshiba does not dispute the substantive accuracy of that statement, but submits that the General Court failed to take account of the fact that the use of its subsidiary as a sales channel for the joint venture had lasted for only one year. That submission, even if it is correct, does not show that the General Court made a manifestly erroneous interpretation of any evidence before it, since the General Court never stated that that use had lasted for more than one year. That circumstance is capable, at most, of calling into question the substance of the factual findings that the General Court made on the basis of its interpretation, in itself correct, of the evidence in question. However, as is apparent from the case-law cited in paragraph 39 of the present judgment, those findings cannot be re-examined by the Court at the appeal stage.60In the third place, Toshiba’s arguments relating to errors of law allegedly committed by the General Court and alleged inadequacies in the reasoning for the judgment under appeal must also be rejected.61First, the arguments summarised in paragraph 25 of the present judgment, criticising paragraph 111 of the judgment under appeal, cannot succeed.62That paragraph forms part of the reasons set out by the General Court in order to justify the conclusion, in paragraph 106 of the judgment under appeal, that the Commission had rightly found that Toshiba and Panasonic, the two parent companies of the joint venture, had veto rights with respect to matters of strategic importance that were essential for the pursuit of the joint venture’s activities, which proved the exercise of joint control of the latter.63In that respect, the General Court noted, in paragraph 109 of the judgment under appeal, that, in accordance with Article 27.1 of the BIA, during a start-up period, the end of which was fixed at 31 March 2005, the initial business plan for the joint venture would be adopted by the parent companies and that, subsequently, the annual business plans for the joint venture would be drawn up by the joint venture itself, following consultation with the parent companies. However, the General Court indicated that, by a subsequent agreement, the parent companies prolonged the start-up period, with the result that they had to agree on the business plan for the joint venture and its subsequent revisions throughout the existence of the joint venture.64On the basis of those elements, the General Court found, in paragraph 110 of the judgment under appeal, that the Commission had been entitled to take the view that the BIA and the business plan, which contained the joint venture’s main operational and financial objectives and its essential strategic planning, had been decided by its parent companies, including Toshiba.65The General Court therefore concluded, in paragraph 111 of the judgment under appeal, that the prolongation of the start-up period had the effect of conferring on Toshiba a veto right over the joint venture’s business plan for the entire duration of its existence, and that the holding of such a right was in itself sufficient for the view to be taken, for the purpose of paragraph 70 of the Consolidated Jurisdictional Notice, that Toshiba had indeed exercised decisive influence over the joint venture.66In so doing, the General Court correctly applied the case-law set out in paragraphs 45 to 48 of the present judgment and — contrary to Toshiba’s assertions — did not err in law. In particular, it follows from paragraph 46 of the present judgment that, in order to ascertain whether a subsidiary determines its conduct on the market independently, account must be taken of all the relevant factors relating to the economic, organisational and legal links between the subsidiary and its parent company, which may vary from case to case and cannot therefore be set out in an exhaustive list (see, also, judgment of 1 July 2010, Knauf Gips v Commission, C‑407/08 P, EU:C:2010:389, paragraph 100). It follows that, contrary to what, in essence, Toshiba argues, the General Court was not required to determine whether Toshiba had influenced the joint venture’s operational management, in order to conclude that those two companies formed part of a single economic unit.67In addition, although it is true that the Consolidated Jurisdictional Notice concerns a different issue, that of the control of concentrations between undertakings, and that, in addition, as a Commission notice, it is not binding on the General Court, it must be pointed out that the reference made by the General Court, in paragraph 111 of the judgment under appeal, to point 70 of that notice, was incidental, such that, even if the General Court misconstrued the meaning of that point, that alone is not sufficient to bring about the annulment of the judgment under appeal. In any event, as is apparent from paragraph 26 of the present judgment, Toshiba itself acknowledges that the point in question indicates that the holding of a veto right may justify the conclusion arrived at by the General Court in the judgment under appeal.68Lastly, having considered, in its assessment of the facts, in respect of which the General Court alone has jurisdiction, that, because it had a veto right over the joint venture’s business plan for the entire duration of the joint venture’s existence, Toshiba, together with Panasonic, had taken all the decisions necessary for the joint venture’s essential strategic planning, the General Court had no reason to analyse the reasons which had led to the prolongation of the period of validity of that veto right. What mattered, for the purpose of the analysis carried out by the General Court, was the fact that that right had been prolonged.69Consequently, it is also necessary to reject Toshiba’s argument that the General Court breached the obligation to state reasons for the judgment under appeal by failing to rule on the reasons given by Toshiba to justify the prolongation of the period of validity of its veto right.70Secondly, Toshiba’s arguments summarised in paragraph 27 of the present judgment also do not prove that the General Court used incorrect legal criteria in its assessment of whether Toshiba was in a position to exercise decisive influence over the joint venture and whether it actually exercised such influence.71In paragraph 108 of the judgment under appeal, the General Court referred to Toshiba’s veto rights over not only the joint venture’s material investments, but also over capital participation in or acquisition of a company or other business and over the provision of loans to subsidiary companies. According to the General Court, that right was applicable to outlays of one billion Japanese yen (JPY) (approximately EUR 8486000) or more, an amount which is not excessive in the light of Toshiba’s initial investment in the joint venture, amounting to JPY 26.5 billion (approximately EUR 224834000). In view of those elements, the General Court took the view that a veto right in that respect could constitute an indication that Toshiba was in a position to exercise decisive influence over the joint venture’s conduct.72In doing so, the General Court did not err in law. The fact that a parent company may prohibit its subsidiary from taking decisions such as those mentioned in the preceding paragraph of the present judgment, when they involve outlays which, while not insignificant, nevertheless appear relatively modest in the light of that subsidiary’s capital and the parent company’s contribution to that capital, constitutes, as the General Court held, an indication of the capacity to exercise decisive influence over that subsidiary, irrespective of the market concerned. Toshiba’s reference to the content of the Consolidated Jurisdictional Notice, which is not binding on the General Court, cannot lead to a different conclusion, irrespective of whether Toshiba’s interpretation of that notice is correct.73Toshiba’s criticisms of paragraph 112 of the judgment under appeal must be rejected. As the General Court pointed out, in essence, the holder of a right of veto over certain decisions of an undertaking must necessarily be consulted before the adoption of any decisions which it is capable of vetoing and must approve those decisions. Accordingly, the mere fact that it never exercised its right of veto does not allow the conclusion that it did not exercise decisive influence over the conduct of the undertaking in question.74As regards, lastly, paragraph 113 of the judgment under appeal, suffice it to note that the General Court merely found that the rights listed in Article 21.2 of the BIA, namely the rights concerning the issues requiring special resolutions of the assembly of shareholders under commercial law and the issues relating to the issuing of new shares and the distribution of dividends constituted an additional indication that Toshiba was in a position to exercise decisive influence over the joint venture’s conduct. The mere fact that the rights in question, or some of them, concern the protection of minority shareholders is not, by itself, sufficient to call into question that finding.75Thirdly, the General Court also did not err in law in taking into account the elements mentioned in paragraph 31 of the present judgment as indications of Toshiba’s capacity to exercise decisive influence over the joint venture.76In particular, contrary to Toshiba’s assertions, it is in no way necessary for the accumulation of posts within both the parent company and the subsidiary to concern more than one individual in order to constitute one indication among others of that capacity.77Toshiba’s argument, according to which the General Court substituted its own assessment for that of the Commission, when it considered that the vice-presidents of the joint venture were in a position to cause the joint venture’s commercial policy and Toshiba’s interests to converge, must also be rejected. It is apparent from paragraph 116 of the judgment under appeal that, like the Commission, the General Court took the view that the fact that, in accordance with the BIA, Toshiba was to appoint one of the two directors entitled to represent the joint venture, who was also the vice-president of the joint venture, was an indication of Toshiba’s capacity to exercise decisive influence over the joint venture’s conduct. The reference to the thorough knowledge, on the part of the vice-presidents of the joint venture, of Toshiba’s policy and commercial objectives serves as grounds for that statement.78It must also be emphasised that, contrary to Toshiba’s assertions, it cannot be excluded that the fact that a parent company and its subsidiary have a preferential supplier relationship constitutes an indication of the former’s capacity to exercise decisive influence over the latter’s conduct (see, by analogy, judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 90), since the question of the weight to be attached to such an indication in assessing whether the parent company and its subsidiary form a single economic unit ultimately comes within the scope of the General Court’s assessment of the facts, which cannot be called into question at the appeal stage.79Finally, the General Court did not err in taking the view, in essence, in paragraph 120 of the judgment under appeal, that the mere fact that the closure of two subsidiaries of the joint venture required Toshiba’s consent, which was given by the latter, constitutes an indication that Toshiba was able to exercise decisive influence over the joint venture, irrespective of the reasons for that consent. Since that conclusion cannot be called into question by either the assessment of those reasons or by Toshiba’s assertion, referred to in paragraph 34 of the present judgment, that the requirement for that consent related to the protection of minority shareholders, the allegation that the General Court failed to state reasons, or failed to state adequate reasons, for the judgment under appeal, because it did not specifically assess Toshiba’s line of argument with regard to those questions, cannot succeed.80In the fourth place, as regards the second part of Toshiba’s single ground of appeal, it must be noted that the question whether a parent company was in a position to exercise decisive influence over its subsidiary’s conduct on the market, like the question whether that influence was actually exercised, ultimately comes within the scope of the assessment of the facts. In that respect, it follows from the case-law cited in paragraph 47 of the present judgment that such an assessment may be inferred from a body of consistent evidence.81As can be seen from the case-law cited in paragraph 39 of the present judgment, the appraisal of the facts, as such, cannot be called into question on appeal before the Court, save where the evidence has been distorted. All of Toshiba’s allegations concerning distortion of the evidence by the General Court have already been examined and rejected.82Furthermore, it is apparent from all of the foregoing considerations that the General Court did not err in law in its application of the case-law relating to the imputation, to a parent company, of liability for an infringement of the competition rules committed by its subsidiary or, more generally, in the legal characterisation of the facts. It is also apparent from those considerations that the General Court did not breach the rules relating to the burden of proof and the taking of evidence.83In those circumstances, by submitting, in the second part of its single ground of appeal, that the various indications mentioned by the General Court in the judgment under appeal were not sufficient to justify the conclusion that it formed a single economic unit with the joint venture and could be held liable for the infringement committed by the latter, Toshiba is in fact seeking to have the Court carry out a new assessment of the facts, something which goes beyond the powers of the Court in the context of an appeal.84It follows that the second part of the single ground of appeal is inadmissible.85It follows from all of the foregoing that Toshiba’s single ground of appeal must be rejected, and that the appeal must be dismissed in its entirety. Costs 86In accordance with Article 184(2) of its Rules of Procedure, where the appeal is unfounded, the Court is to make a decision as to costs. Under Article 138(1) of those rules, which apply to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.87Since the Commission has applied for costs and Toshiba has been unsuccessful, Toshiba must be ordered to pay the costs.On those grounds, the Court (Eighth Chamber) hereby: 1. Dismisses the appeal; 2. Orders Toshiba Corp. to pay the costs. VilarasMalenovskýŠvábyDelivered in open court in Luxembourg on 18 January 2017.A. Calot EscobarRegistrarM. VilarasPresident of the Eighth Chamber( *1 ) Language of the case: English. | 3a081-3def67d-4f91 | EN |
The Court confirms the fine of nearly €60 million imposed on the Roullier group regarding the phosphates cartel | 12 January 2017 ( *1 )‛Appeal — Agreements, decisions and concerted practices — European market for animal feed phosphates — Allocation of sales quotas, coordination of prices and conditions of sale and exchange of commercially sensitive information — Appellants’ withdrawal from the settlement procedure — Unlimited jurisdiction — Protection of legitimate expectations and of equal treatment — Reasonable length of proceedings’In Case C‑411/15 PAPPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 27 July 2015, Timab Industries, established in Dinard (France), represented by N. Lenoir, avocate au barreau de Paris, Cie financière et de participations Roullier (CFPR), established in Saint-Malo (France), represented by N. Lenoir, avocate au barreau de Paris,appellants,the other party to the proceedings being: European Commission, represented by C. Giolito and B. Mongin, acting as Agents, and also by N. Coutrelis, avocate au barreau de Paris, with an address for service in Luxembourg,defendant at first instance,THE COURT (Tenth Chamber),composed of M. Berger (Rapporteur), President of the Chamber, E. Levits and F. Biltgen, Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: A. Calot Escobar,having regard to the written procedure,after hearing the Opinion of the Advocate General at the sitting on 28 July 2016,gives the following Judgment 1By their appeal, the appellants Timab Industries (‘Timab’) and Cie financière et de participations Roullier (‘CFPR’) request, primarily, the Court to set aside the judgment of the General Court of the European Union of 20 May 2015 in Timab Industries and CFPR v Commission (T‑456/10, EU:T:2015:296, ‘the judgment under appeal) by which that Court dismissed their action for annulment of Commission Decision C(2010) 5001 final of 20 July 2010 relating to a proceeding under Article 101 [TFEU] and Article 53 of the EEA Agreement (Case COMP/38866 — Animal feed phosphates) (‘the contested decision’) and that the case be referred back to the General Court in order to reduce by the appropriate amount the fine imposed on them. In the alternative, they seek a declaration that, by virtue of the unreasonable length of the judicial proceedings, the General Court infringed their right to a fair trial. Legal context Regulation (EC) No 1/2003 2Article 7(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1) provides:‘Where the Commission, acting on a complaint or on its own initiative, finds that there is an infringement of Article [101] or of Article [102 TFEU], it may by decision require the undertakings and associations of undertakings concerned to bring such infringement to an end. For this purpose, it may impose on them any behavioural or structural remedies which are proportionate to the infringement committed and necessary to bring the infringement effectively to an end …’3The wording of Article 23(2) and (3) of that regulation is as follows:‘2. The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:(a)they infringe Article [101] or [102 TFEU] ……For each undertaking and association of undertakings participating in the infringement, the fine shall not exceed 10% of its total turnover in the preceding business year.3. In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement.’ Regulation (EC) No 773/2004 4During 2008, the settlement procedure was established by the adoption of Commission Regulation (EC) No 622/2008 of 30 June 2008 amending Regulation No 773/2004, as regards the conduct of settlement procedures in cartel cases (OJ 2008 L 171, p. 3). The arrangements for implementing that regulation were set out in the Commission Notice of 2 July 2008 on the conduct of settlement procedures in view of the adoption of decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases (OJ 2008 C 167, p. 1, ‘the settlements notice’).5Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101] and [102 TFEU] (OJ 2004 L 123, p. 18), as amended by Regulation No 622/2008 (‘Regulation No 773/2004’), provides in Article 10a, entitled ‘Settlement procedure in cartel cases’ as follows:‘1. After the initiation of proceedings pursuant to Article 11(6) of Regulation No 1/2003, the Commission may set a time limit within which the parties may indicate in writing that they are prepared to engage in settlement discussions with a view to possibly introducing settlement submissions. The Commission shall not be obliged to take into account replies received after the expiry of that time limit.2. Parties taking part in settlement discussions may be informed by the Commission of:the objections it envisages to raise against them;(b)the evidence used to determine the envisaged objections;(c)non-confidential versions of any specified accessible document listed in the case file at that point in time, in so far as a request by the party is justified for the purpose of enabling the party to ascertain its position regarding a time period or any other particular aspect of the cartel; and(d)the range of potential fines.Should settlement discussions progress, the Commission may set a time limit within which the parties may commit to follow the settlement procedure by introducing settlement submissions reflecting the results of the settlement discussions and acknowledging their participation in an infringement of Article [101 TFEU] as well as their liability. Before the Commission sets a time limit to introduce their settlement submissions, the parties concerned shall be entitled to have the information specified in Article 10a(2), first subparagraph disclosed to them, upon request, in a timely manner. The Commission shall not be obliged to take into account settlement submissions received after the expiry of that time limit.3. When the statement of objections notified to the parties reflects the contents of their settlement submissions, the written reply to the statement of objections by the parties concerned shall, within a time limit set by the Commission, confirm that the statement of objections addressed to them reflects the contents of their settlement submissions. The Commission may then proceed to the adoption of a Decision pursuant to Article 7 and Article 23 of Regulation [No 1/2003] after consultation of the Advisory Committee on Restrictive Practices and Dominant Positions pursuant to Article 14 of Regulation [No 1/2003].4. The Commission may decide at any time during the procedure to discontinue settlement discussions altogether in a specific case or with respect to one or more of the parties involved, if it considers that procedural efficiencies are not likely to be achieved.’ The settlements notice 6Paragraph 1 of the settlements notice states as follows:‘This Notice sets out the framework for rewarding cooperation in the conduct of proceedings commenced in view of the application of Article [101 TFEU] to cartel cases. … The cooperation covered by this Notice is different from the voluntary production of evidence to trigger or advance the Commission’s investigation, which is covered by the Commission Notice on Immunity from fines and reduction of fines in cartel cases … Provided that the cooperation offered by an undertaking qualifies under both Commission Notices, it can be cumulatively rewarded accordingly.’7Part 2.1. of that Notice, entitled ‘Initiation of proceedings and exploratory steps regarding settlement’ provides, in paragraph 11:‘Should the Commission consider it suitable to explore the parties’ interest to engage in settlement discussions, it will set a time-limit of no less than two weeks pursuant to Articles 10a(1) and 17(3) of Regulation [No 773/2004] within which parties to the same proceedings should declare in writing whether they envisage engaging in settlement discussions in view of possibly introducing settlement submissions at a later stage. This written declaration does not imply an admission by the parties of having participated in an infringement or of being liable for it.’8Paragraphs 15 to 17 and 19 of the settlements notice, which are included in part 2.2 of that notice, entitled ‘Commencing the settlement procedure: settlement discussions’, provides as follows:‘15.The Commission retains discretion to determine the appropriateness and the pace of the bilateral settlement discussions with each undertaking. In line with Article 10a(2) of Regulation [No 773/2004], this includes determining, in view of the progress made overall in the settlement procedure, the order and sequence of the bilateral settlement discussions as well as the timing of the disclosure of information, including the evidence in the Commission file used to establish the envisaged objections and the potential fine. Information will be disclosed in a timely manner as settlement discussions progress.16.Such an early disclosure in the context of settlement discussions pursuant to Article 10a(2) … of Regulation [No 773/2004] will allow the parties to be informed of the essential elements taken into consideration so far, such as the facts alleged, the classification of those facts, the gravity and duration of the alleged cartel, the attribution of liability, an estimation of the range of likely fines, as well as the evidence used to establish the potential objections. This will enable the parties effectively to assert their views on the potential objections against them and will allow them to make an informed decision on whether or not to settle. …17.When the progress made during the settlement discussions leads to a common understanding regarding the scope of the potential objections and the estimation of the range of likely fines to be imposed by the Commission, and the Commission takes the preliminary view that procedural efficiencies are likely to be achieved in view of the progress made overall, the Commission may grant a final time-limit of at least 15 working days for an undertaking to introduce a final settlement submission …19.Should the parties concerned fail to introduce a settlement submission, the procedure leading to the final decision in their regard will follow the general provisions … instead of those regulating the settlement procedure.’9Part 2.3 of the settlements notice, entitled ‘Settlement submissions’, provides in paragraph 20 that parties opting for a settlement procedure must introduce a formal request to settle in the form of a settlement submission. That submission should contain, inter alia, an acknowledgement in clear and unequivocal terms of the parties’ liability with respect to the infringement, together with the confirmation by those parties that they do not envisage requesting access to the file or requesting to be heard again in an oral hearing, unless the Commission does not reflect their settlement submissions in the statement of objections and the decision.10Paragraph 21 of the settlements notice, which is also included in part 2.3, states :‘The acknowledgments and confirmations provided by the parties in view of settlement constitute the expression of their commitment to cooperate in the expeditious handling of the case following the settlement procedure. However, those acknowledgments and confirmations are conditional upon the Commission meeting their settlement request, including the anticipated maximum amount of the fine.’11Part 2.4 of that notice, entitled ‘Statement of objections and reply’ provides in paragraphs 23, 24 and 26 as follows:‘23.Pursuant to Article 10(1) of Regulation [773/2004], the notification of a written statement of objections to each of the parties against whom objections are raised is a mandatory preparatory step before adopting any final decision. Therefore, the Commission will issue a statement of objections also in a settlement procedure.24.For the parties’ rights of defence to be exercised effectively, the Commission should hear their views on the objections against them and supporting evidence before adopting a final decision and take them into account by amending its preliminary analysis, where appropriate. The Commission must be able not only to accept or reject the parties’ relevant arguments expressed during the administrative procedure, but also to make its own analysis of the matters put forward by them in order to either abandon such objections because they have been shown to be unfounded or to supplement and reassess its arguments both in fact and in law, in support of the objections which it maintains.26.Should the statement of objections reflect the parties’ settlement submissions, the parties concerned should within a time-limit … set by the Commission … reply to it by simply confirming (in unequivocal terms) that the statement of objections corresponds to the contents of their settlement submissions and that they therefore remain committed to follow the settlement procedure …’12Part 2.5 of the settlements notice, entitled ‘Commission decision and settlement reward’, states in paragraphs 28, 30, 32 and 33:‘28.Upon the parties’ replies to the statement of objections confirming their commitment to settle, Regulation (EC) No 773/2004 allows the Commission to proceed, without any other procedural step, to the adoption of the subsequent final decision pursuant to Articles 7 and/or 23 of Regulation (EC) No 1/2003 … In particular, this implies that no oral hearing or access to the file may be requested by those parties once their settlement submissions have been reflected by the statement of objections …30.The final amount of the fine in a particular case is determined in the decision finding an infringement pursuant to Article 7 and imposing a fine pursuant to Article 23 of Regulation (EC) No 1/2003.32.Should the Commission decide to reward a party for settlement in the framework of this Notice, it will reduce by 10% the amount of the fine to be imposed after the 10% cap has been applied having regard to the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 …33.When settled cases involve also leniency applicants, the reduction of the fine granted to them for settlement will be added to their leniency reward.’ The 2006 Guidelines 13The Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 (OJ 2006 C 210, p. 2, ‘the 2006 Guidelines’) determine the methodology used by the Commission for setting the fine to be imposed on undertakings and associations of undertakings where, intentionally or negligently, they infringe the provisions of Articles 101 or 102 TFEU.14In accordance with points 10 and 11 of the 2006 Guidelines:‘10.First, the Commission will determine a basic amount for each undertaking or association of undertakings …11.Second, it may adjust that basic amount upwards or downwards …’15Point 27 of the 2006 Guidelines, which is included in Part 2 of thereof, entitled ‘Adjustments to the basic amount’, states:‘In setting the fine, the Commission may take into account circumstances that result in an increase or decrease in the basic amount … It will do so on the basis of an overall assessment which takes account of all the relevant circumstances.’16Point 29 of the 2006 Guidelines, which begins Part B of those Guidelines, entitled ‘Mitigating circumstances’, states:‘The basic amount may be reduced where the Commission finds that mitigating circumstances exist, such as:—where the undertaking concerned has effectively cooperated with the Commission outside the scope of the Leniency Notice and beyond its legal obligation to do so;…’ The leniency notice 17Under points 20 to 23 of the Commission notice on immunity from fines and reduction of fines in cartel cases (OJ 2002 C 45, p. 3) (‘the leniency notice’), included in Part B of that notice, entitled ‘Reduction of a fine’:‘20.Undertakings that do not meet the conditions under section A above may be eligible to benefit from a reduction of any fine that would otherwise have been imposed.21.In order to qualify, an undertaking must provide the Commission with evidence of the suspected infringement which represents significant added value with respect to the evidence already in the Commission’s possession and must terminate its involvement in the suspected infringement no later than the time at which it submits the evidence.22.The concept of “added value” refers to the extent to which the evidence provided strengthens, by its very nature and/or its level of detail, the Commission’s ability to prove the facts in question. In this assessment, the Commission will generally consider written evidence originating from the period of time to which the facts pertain to have a greater value than evidence subsequently established. Similarly, evidence directly relevant to the facts in question will generally be considered to have a greater value than that with only indirect relevance.23.The Commission will determine in any final decision adopted at the end of the administrative procedure:whether the evidence provided by an undertaking represented significant added value with respect to the evidence in the Commission’s possession at that same time;the level of reduction an undertaking will benefit from, relative to the fine which would otherwise have been imposed, as follows. For the:first undertaking to meet point 21: a reduction of 30-50%,second undertaking to meet point 21: a reduction of 20-30%,subsequent undertakings that meet point 21: a reduction of up to 20%.In order to determine the level of reduction within each of these bands, the Commission will take into account the time at which the evidence fulfilling the condition in point 21 was submitted and the extent to which it represents added value. It may also take into account the extent and continuity of any cooperation provided by the undertaking following the date of its submission.In addition, if an undertaking provides evidence relating to facts previously unknown to the Commission which have a direct bearing on the gravity or duration of the suspected cartel, the Commission will not take these elements into account when setting any fine to be imposed on the undertaking which provided this evidence.’ Background to the dispute 18The background to the dispute and the contested decision, as set out in paragraphs 1 to 28 of the judgment under appeal, may be summarised as follows.19Timab, subsidiary of the Roullier group of which CFPR is the holding company, produces and sells chemical products, namely animal feed phosphates (‘AFP’).20The Kemira Group was the first to inform the Commission of a secret AFP cartel, by way of an application for immunity from fines under the leniency notice of 28 November 2003. That application concerned the period between 1989 and 2003.21The information provided by the Kemira group enabled the Commission to carry out inspections on 10 and 11 February 2004 in France and Belgium, on the premisses of a number of undertakings active in the AFP sector, inter alia in those of Timab.22Three other companies then applied for immunity from fines under the leniency notice.23Thus, on 18 February 2004, Tessenderlo Chemie NV made such an application for immunity, this time covering the whole period from 1969 to 2004.24On 27 March 2007, Quimitécnica.com-Comércia e Indústria Química SA and its parent company José de Mello SGPS SA applied, in turn, for immunity under the leniency notice.25On 14 October 2008, the appellants also lodged an application for immunity, completed on 28 October 2009.26By letters of 19 February 2009, the Commission informed the participants in the cartel, including Timab, of the initiation of proceedings for the adoption of a decision under Chapter III of Regulation No 1/2003 and gave them a period of two weeks within which to inform it in writing whether they were willing to take part in settlement discussions within the meaning of Article 10a of Regulation No 773/2004.27After several bilateral meetings between the Commission and the undertakings concerned, including Timab, during which the substance of the objections and the evidence underpinning them were presented, the Commission determined the range of potential fines. That estimate, namely a range of fines from EUR 41 million to EUR 44 million for Timab’s participation in a single and continuous infringement from 31 December 1978 to 10 February 2004, was communicated to the Commission on 16 September 2009.28Subsequently, the Commission gave the undertakings concerned, including Timab, time to submit formal proposals for a settlement pursuant to Article 10a(2) of Regulation No 772/2004. All the participants in the cartel submitted proposals for a settlement within the allotted time limit, except for the appellants, who decided to withdraw from the settlement procedure.29On 23 November 2009, the Commission adopted a set of six statements of objections addressed to the appellants on the one hand, and to each of the participants in the cartel accepting the settlement on the other.30After having obtained access to the file, the appellants responded to the statement of objections on 2 February 2010 and took part in a hearing which was held on 24 February 2010.31On 20 July 2010 the Commission adopted the contested decision, in which it found that there was a single and continuous infringement of Article 101 TFEU and Article 53 of the EEA Agreement in the AFP sector. According to the Commission, that single and continuous infringement took place from 16 September 1993 to 10 February 2004 and consisted in the sharing of a large part of the European market for AFPs by the allocation of sales quotas and customers to the participants in the cartel, in the coordination of prices and, to the extent necessary, of the conditions of sale.32In essence, it is apparent from the contested decision that the original agreement, concluded during 1969 between the top five producers of AFP at the time, was intended to resolve a situation of overcapacity in the European market. The constituent arrangements of the cartel were named ‘CEPA’ (Centre d’étude des phosphates alimentaires — Centre for the Study of feed phosphates). In order to ensure the functioning and the permanence of the cartel, the agreement is alleged to have resulted in additional specific agreements and other regional sub-arrangements. The participation of the French producers in CEPA was confirmed as from 1970. After a reorganisation, by the cartel participants, into three sub-arrangements, those participants contemplated, at the beginning of the 1990s, a return to a single structure, the ‘Super CEPA’, encompassing, first, the undertakings located in the five countries of Central Europe, namely Belgium, Germany, the Netherlands, Austria and Switzerland and, secondly, Denmark, Ireland, Hungary, Poland, Finland, Sweden, the UK and Norway. The discussions are alleged to have been held at two levels: the ‘central meetings’ or meetings ‘at European level’, during which general policy decisions were taken, and ‘expert meetings’, during which more in-depth discussions were allegedly held at national or regional level by the participants in the cartel which were active in a country or region.33With respect, more specifically, to the participation of the appellants, it is apparent from the contested decision that Timab was integrated into the ‘Super CEPA’ regional framework in addition to its participation in the French part of the cartel, when it began to export large quantities of AFP from France. Timab is alleged to have started participating in the ‘Super CEPA’ arrangements in September 1993. Furthermore, in parallel with the meetings of the Super CEPA, it allegedly participated in the meetings concerning France and those concerning Spain.34Thus, after finding, in Article 1 of the contested decision, the infringement, committed by the appellants, of Articles 101 TFEU and Article 53 of the EEA Agreement in the AFP sector, the Commission, under Article 2 of that decision, imposed jointly and severally on Timab and CFPR a fine of EUR 59850000. For the purpose of calculating that fine, the Commission relied on the 2006 Guidelines.35On 20 July 2010, the Commission also adopted Decision C(2010) 5004 final, concerning the same matter, addressed to the parties who had agreed to take part in the settlement procedure and made a proposal for a settlement. The procedure before the General Court and the judgment under appeal 36By application lodged at the Registry of the General Court on 1 October 2010, Timab and CFPR brought an action for the annulment in part of the contested decision and, in the alternative, for the annulment of Article 1 of the contested decision, in so far as the Commission stated that they had taken part in practices relating to the conditions of sale and in a system of compensation. In any event, the appellants requested an alteration of Article 2 of the contested decision and a substantial reduction in the amount of the fine imposed on them jointly and severally.37The appellants raised a number of pleas in support of their claim for annulment of the contested decision, which can be divided into three groups. The first group of those pleas concerned the settlement procedure. The appellants claimed, in essence, that the Commission had applied to an undertaking that withdrew from the settlement procedure a fine higher than the maximum figure of the range envisaged during those settlement discussions.38The second group of those pleas concerned certain practices constituting elements of the cartel in question, namely the compensation mechanism and the conditions of sale. As part of this second group of pleas, the appellants considered, in essence, that the Commission had wrongly attributed all the alleged practices to all of the undertakings without distinguishing the different periods of the infringement and the different forms of conduct. Thus, the Commission deprived the appellants of the right to usefully assert their arguments with respect to the unfounded objections that they participated in some of those practices, namely the compensation mechanism and the concerted fixing of conditions of sale.39The third group of pleas concerned several aspects of the calculation of the amount of the fine. In the third group of pleas, the appellants criticise, in essence, several aspects of the amount of the fine and the rules applied to that amount, alleging a breach of Article 23 of Regulation No 1/2003, a manifest error of assessment of the gravity of the impugned practices, a manifest error of assessment of the mitigating circumstances, a disproportionate decrease in the reduction for leniency and a manifest error of assessment of the ability to pay. Furthermore, the appellants maintained that the Commission had infringed the principles of equal treatment, the principle that penalties should be tailored to the individual and proportionality.40In support of their claims, made in the alternative, that the amount of the fine should be reduced, the appellants relied principally on two arguments. By the first of those arguments, they sought, in essence, a reduction in the ‘gravity rate’. By the second, they requested that, in addition to a reduction for their cooperation under the leniency notice, a supplementary reduction should be granted for their cooperation outside the framework of that notice, in the light of the fact that they do not dispute the facts from 16 September 1993 onwards.41In the judgment under appeal, the General Court dismissed the action in its entirety. Forms of order sought by the parties before the Court of Justice 42Timab and CFPR claim that the Court should:set aside the judgment under appeal;refer the case back to the General Court for the purpose of reducing the amount of the fine as appropriate;as an incidental point, find that, by virtue of the unreasonable length of the judicial proceedings, the General Court infringed the right to a fair trial, andorder the Commission to pay the costs.43The Commission contends that the Court should:dismiss the appeal; andorder the appellants to pay the costs. The application to open the oral part of the procedure 44Following the presentation of the Advocate General’s Opinion, the appellants, by a letter received by the Court on 1 September 2016, applied, pursuant to Article 83 of the Rules of Procedure of the Court, for the oral part of the procedure to be reopened.45In support of that application, the appellants claim, in essence, that the Court lacks sufficient information regarding, in the first place, the circumstances in which they withdrew from the settlement procedure and hence the relationship between that procedure and the standard administrative procedure and, in the second place, the scope of certain grounds of appeal. In that context, the appellants claim, in particular, that contrary to the observations of the Advocate General in points 51 and 52 of his Opinion, they have in no way been inspired by any intention to divert the settlement procedure for their own benefit and that, contrary to the arguments of the Advocate General in those submissions, the grounds of appeal include a distortion of the facts and of the evidence.46Furthermore, they consider that certain legal arguments relating to the calculation of the fine and, in particular, to the question relating to the reductions for cooperation have not been debated.47In that regard, it should be recalled that the Court may at any moment, having heard the Advocate General, order the reopening of the oral procedure under Article 83 of its Rules of Procedure if, inter alia, it considers that it lacks sufficient information or that the case must be dealt with on the basis of an argument which has not been debated between the parties or the parties concerned referred to in Article 23 of the Statute of the Court of Justice of the European Union (judgment of 9 July 2015, InnoLux v Commission, C‑231/14 P, EU:C:2015:451, paragraph 29 and the case-law cited).48In the present case, the Court considers, having heard the Advocate General, that it has sufficient information to give a ruling and that the present case does not need to be decided on the basis of arguments which have not been debated between the parties.49The application for the oral procedure to be reopened must therefore be dismissed. The appeal The first ground of appeal, alleging failure to have regard to the rules relating to the burden of proof and an infringement of the rights of the defence Arguments of the parties50By their first ground of appeal, the appellants complain that the General Court disregarded the burden of proof and infringed the rights of the defence in so far as it held, in paragraphs 114 and 117 of the judgment under appeal, that they were required to prove, during the settlement procedure, that they had not participated in the cartel before 1993.51By finding, in paragraph 114 of the judgment under appeal, that ‘the Commission was entitled to believe that the appellants were involved in a single and continuous infringement from 1978 onwards’, whereas that concept is a legal classification which the appellants did not have to prove or disprove, in the context of the settlement procedure, the General Court did not meet the required standard of proof.52In that regard, they state that the standard of proof imposed on the Commission cannot vary according to whether it is in the context of the settlement procedure or the standard procedure. In so far as it validates the Commission’s reasoning based on a standard of proof that is lower than required, the judgment under appeal should be set aside.53According to the Commission, that first ground of appeal must be dismissed, principally, as inoperative or, in the alternative, as inadmissible and, in any event, as unfounded.54That ground of appeal is, first of all, ineffective, since the contested decision, the legality of which was upheld by the General Court, was taken in the context of the ordinary procedure following the withdrawal of Timab from the settlement. That first ground of appeal relates to the period from 1978 to 1993, which was not used against Timab. Thus, even if that ground of appeal was well founded, it would have no bearing on the outcome of the case, which concerns the fine imposed on Timab by the Commission following a standard administrative procedure for the period from 1993 to 2004.55The Commission then states that the General Court did not at any time consider that it was for the appellants to prove their non-participation in the cartel between 1978 and 1993 and that, in any event, the findings made by that Court in paragraphs 114 and 117 of the judgment under appeal constitute a sovereign assessment of the facts, which are not subject to review by the Court.56Finally, the Commission states that it is not disputed that it has the burden of proof in both the standard procedure and the settlement procedure. According to the Commission, since the appellants do not criticise an initial assessment made by the Commission in the light of the evidence before it, that institution would be justified in concluding that its analysis was accepted, a fortiori where that evidence emanates from the companies’ own statements in their leniency application and their responses to requests for information. It was in the light of those basic principles that the General Court considered that the Commission could legitimately believe that Timab had participated in the single and continuous infringement since 1978.57In that context, the Commission adds that the General Court also recalled that, following the arguments put forward by the appellants in their reply to the statement of objections, it had carried out a new assessment of the evidence in its possession and had come to the conclusion that that evidence did not serve to prove the appellants’ participation in the cartel before 1993. Accordingly, the General Court was right to find that the Commission had complied with the rules applicable to the standard of proof by taking into account, at each stage of the procedure, all the information at its disposal.Findings of the Court58It should be recalled that, according to consistent case-law, an alleged failure to have regard to the rules of evidence is a question of law which is admissible in an appeal (see, to that effect, judgments of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 44 and the case-law cited, and of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraph 25 and the case-law cited).59Accordingly, it is for the Court of Justice to ascertain whether the General Court, in its assessment of the facts and evidence, made an error of law by infringing general principles of law, such as the presumption of innocence and the applicable rules of evidence, such as those relating to the burden of proof (see, to that effect, judgments of 8 July 1999, Hüls v Commission, C‑199/92 P, EU:C:1999:358, paragraph 65 and the case-law cited, and of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraph 36 and the case-law cited).60Therefore, contrary to what the Commission contends, that ground of appeal is admissible.61As to substance, it should be borne in mind that, as is apparent, inter alia, from paragraph 48 of the judgment under appeal, in the application before the General Court, the appellants invoked a manifest error of law and of the assessment of the facts by the Commission in so far as it initially considered that they had participated in a single and continuous infringement as from 1978. According to the appellants, in the light of the documents at its disposal, the Commission should have concluded that they had not participated in the overall cartel before 1993. That error of characterisation, it is claimed, resulted from an insufficient analysis of the file and thus demonstrates that the Commission failed to comply with its duty to examine with care and impartiality the cases submitted to it.62In reply to that complaint, the General Court analysed, at paragraphs 108 to 118 of the judgment under appeal, the question whether the Commission had initially examined the appellants’ file in sufficient detail, having regard to the alleged infringement or whether it had misinterpreted the information provided by them.63In that regard, after examining, in paragraphs 109 to 112 of the judgment under appeal, the appellants’ request for immunity under the leniency notice and their replies to the requests for information, and then finding, in paragraph 113 of the judgment under appeal, that it is common ground that, in their reply to the statement of objections, the appellants had indicated that Timab had not participated in a single and continuous infringement between 1978 and 1993, the General Court concluded, in paragraph 114 of the judgment under appeal, that, having regard to the documents at its disposal, ‘the Commission could legitimately believe that the applicants were involved in the single and continuous infringement from 1978 onwards’.64Even if it were well founded in considering that, by endorsing a mere belief of the Commission, the General Court placed on the appellants the burden, which was not theirs, to prove that they had not joined the cartel before 1993, that first ground of appeal would not make it possible to set aside the judgment under appeal, or even the contested decision.65As is recalled, in particular, in paragraph 1 of the judgment under appeal, the appellants were penalised for having participated in a single and continuous infringement from 1993 to 2004. The complaint put forward by the appellants before the General Court, as referred to in paragraph 61 of the present judgment, was intended to show that, in the light of the evidence at its disposal, the Commission should have concluded that they did not participate in the cartel before 1993. Thus, that complaint could not, in any event, have any bearing on the dispute in the main proceedings, since it relates to a period for which the appellants have not been penalised. Accordingly, the General Court should have dismissed that complaint as being ineffective.66It follows that the decision of the General Court, set out in paragraph 118 of the judgment under appeal and dismissing the complaint alleging that the Commission had erred in its investigation of the case, appears well founded, in accordance with paragraph 65 of the present judgment, on other legal grounds. It is therefore appropriate to replace those grounds of appeal.67Consequently, the first ground of appeal cannot be upheld. The second ground of appeal, alleging infringement of the right not to incriminate oneself and the rights of the defence and failure to exercise the unlimited jurisdiction of the General Court 68The second ground of appeal, directed against paragraphs 94 and 190 of the judgment under appeal, is divided into three limbs.69By the first limb of the second ground of appeal, the appellants consider that the General Court infringed their rights of defence in that it infringed their right not to incriminate themselves.70In support of that first limb, the appellants point out, first of all, that the information communicated, both in the settlement procedure and in the application for leniency, cannot be characterised as ‘admissions’. They then state that acknowledgement of participation in an infringement cannot be mechanically deduced from an application for leniency, since the author can always contest the facts and their assessment by the Commission. Finally, according to the appellants, acknowledgement of liability in an infringement in the context of a settlement procedure only arises by way of a formal settlement proposal, which the appellants did not wish to make. Thus, by automatically treating as ‘admissions’ the statements formulated in their leniency application and in the context of the settlement procedure, the General Court infringed their rights of defence in so far as it infringed their right not to incriminate themselves.71By the second limb of the second ground of appeal, the appellants submit that the General Court failed to exercise its unlimited jurisdiction by not verifying whether the Commission was obliged to provide evidence to support its characterisation as ‘admissions’, whereas such a characterisation was not apparent at any time from the documents available to that institution. That classification had a considerable impact on the determination of the duration of their participation in the infringement and, consequently, on the assessment of the amount of the fine and the corresponding reductions.72In that regard, the appellants allege, first, that an analysis of the information communicated by them to the Commission and of the documents adduced before the Court by other undertakings made it possible to determine that their participation in meetings was only sporadic and that, on the other hand, the existence of those alleged ‘admissions’ was contradicted by a very large number of documents in the file.73By the third limb of the second ground of appeal, the appellants allege an infringement of the rights of the defence by the General Court.74In that third limb, the appellants state that the General Court relied on internal memoranda of the minutes of three bilateral meetings which took place between them and the Commission during 2009. In particular, the General Court relied on the second internal memorandum stating that they had made ‘admissions’ concerning their alleged participation in the infringement for the period from 1978 to 1992. One of those internal memoranda was communicated only after the written procedure had been closed and in breach of the principle of adversarial proceedings. It is settled case-law, it is claimed, that failure to communicate a document during the administrative procedure constitutes an infringement of the rights of the defence, since the Commission relied on that document to substantiate its complaint relating to the existence of an infringement and that that complaint could only be proved by reference to that document, as occurred in the present case. According to the appellants, even if the Commission could rely on those internal memoranda, the General Court, in so far as it did not verify compliance with the standard of proof, infringed the rights of the defence.75In their reply, the appellants add that the judgment under appeal must be censured since the General Court, in breach of its unlimited jurisdiction, was satisfied that the Commission could have held a ‘legitimate belief’ regarding the guilt of Timab, even though that guilt was based solely on allegedly uncontested ‘admissions’.76On the basis of the arguments already raised in the context of the first ground of appeal, as set out in paragraph 54 of the present judgment, the Commission submits that the second ground of appeal is ineffective. In that regard, it states that the appellants assume that the disputed ‘admissions’ have ‘had a decisive influence on the amount of the fine’. However, that finding, it is contended, is erroneous in so far as those admissions relate to a period prior to that which was sanctioned.77In the alternative, the Commission contends that the second ground of appeal must be rejected in its three limbs as being in part inadmissible and in part unfounded.78With regard to the first limb of the second ground of appeal, the Commission contends that applications for leniency concern, by definition, undertakings which have participated in a cartel and which acknowledge this. Consequently, and without changing the position of the undertaking, which is possible at any time, the Commission is justified in considering that an application for leniency implies, on the part of the undertaking concerned, acknowledgment of its participation in the alleged infringement, whether that acknowledgment is characterised as an ‘admission’ or another term. Such a finding does not, it is contended, constitute an infringement of the right not to incriminate oneself, since the self-incriminatory statements are, in the present case, voluntary.79In that context, the Commission considers that the appellants’ argument, relied on in the context of that first limb, arises from confusion between the settlement procedure and that relating to an application for leniency. Indeed, the evidence on which it relied to consider that Timab had participated in the infringement before 1993 was not based on an alleged acknowledgment under the settlement, but was based on statements made within the framework of the application for leniency. It is on that basis that, in the absence of contradiction, the Commission conducted the discussions in order to reach a settlement. It was, therefore, without infringing the rights of the defence that the Commission, in the course of the settlement procedure, and then the General Court, in paragraph 94 of the judgment under appeal, were able to treat Timab’s statements in the period between 1978 and 1993 as ‘admissions’, in so far as those statements had not been the subject of any further clarification.80The Commission adds that, as soon as Timab changed position, it took account of the new evidence adduced, so that the ‘admissions’ received in respect of the application for leniency did not have any intangible value. Accordingly, it contends that the rights of the defence have been respected at all times and there can be no finding of an infringement of the right not to incriminate oneself.81As regards the second limb of the second ground of appeal, the Commission essentially submits that the considerations put forward by the appellants in support of the assertion that it should have concluded that Timab had not participated in the cartel continuously since 1978 constitute facts and are therefore beyond the jurisdiction of the Court. Moreover, according to the Commission, the General Court correctly examined the characterisation as ‘admissions’ and had drawn all the consequences thereof.82As regards the third limb of the second ground of appeal, the Commission states that the appellant’s argument concerning its internal notes, which allegedly served as a basis for the characterisation as ‘admissions’, is irrelevant. In the first place, those documents allegedly ‘not disclosed’ did not serve as a basis of the decision in so far as that decision does not refer precisely to the period which was the subject of the ‘admissions’ in question. In the second place, those ‘admissions’ did not arise from the settlement discussions, but from statements made in support of the application for leniency, a procedure which necessarily implies acknowledgment of participation in the infringement in respect of the facts in question.83Concerning the first limb of the second ground of appeal, it should be recalled, as the General Court did in paragraph 120 of the judgment under appeal, that, according to settled case-law, the Commission is entitled to compel an undertaking to provide all necessary information concerning such facts as may be known to it but may not compel that undertaking to provide it with answers which might involve an admission on its part of the existence of an infringement which it is incumbent upon the Commission to prove (see judgment of 14 July 2005, ThyssenKrupp v Commission, C‑65/02 P and C‑73/02 P, EU:C:2005:454, paragraph 49 and the case-law cited).84However, as the General Court has also held in the abovementioned paragraph 120 of the judgment under appeal, while the Commission cannot compel an undertaking to admit its participation in an infringement, it is not thereby prevented from taking account, when setting the amount of the fine, of the assistance given by that undertaking, of its own volition, in order to establish the existence of the infringement (see judgment of 14 July 2005 in ThyssenKrupp v Commission, C‑65/02 P and C‑73/02 P, EU:C:2005:454, paragraph 50).85The Court has already had occasion to state that the Commission may, for the purpose of fixing the amount of a fine, take account of the assistance given to it by the undertaking concerned to establish the existence of the infringement with less difficulty and, in particular, of the fact that an undertaking admitted its participation in the infringement (see judgment of 14 July 2005, ThyssenKrupp v Commission, C‑65/02 P and C‑73/02 P, EU:C:2005:454, paragraph 51 and the case-law cited).86It follows that, in order to establish an infringement of the right not to give self-incriminating evidence, it is necessary for the undertaking concerned to be effectively compelled to provide information or evidence capable of proving the infringement (see, to that effect, judgment of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraph 275).87In the present case, it is apparent from paragraphs 94 and 190 of the judgment under appeal that the statements made by the appellants in the leniency notice, in the context of the settlement procedure, are purely voluntary on their part. Furthermore, in paragraph 120 of the judgment under appeal, the General Court noted that it did not in any way follow from the file before it that the Commission had attempted to influence the appellants’ choices.88Consequently, the General Court did not fail to have regard to the appellant’s rights of defence. Consequently, the first limb of the second ground of appeal must be rejected as unfounded.89With regard to the second limb of the second ground of appeal, it must be borne in mind that, under the second paragraph of Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, an appeal is limited to points of law. The General Court, consequently, has exclusive jurisdiction to find and appraise the relevant facts and the evidence submitted to it. The assessment of those facts and that evidence does not therefore, save where it distorts those facts and evidence, constitute a point of law which is, as such, subject upon appeal to review by the Court (see, inter alia, order of 11 June 2015, Faci v Commission, C‑291/14 P, not published, EU:C:2015:398, paragraph 31 and the case-law cited, and, to that effect, judgment of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 46 and the case-law cited). Such distortion must be obvious from the documents on the Court’s file, without there being any need to carry out a new assessment of the facts and the evidence (see, inter alia, order of 11 June 2015, Faci v Commission, C‑291/14 P, not published, EU:C:2015:398, paragraph 32 and the case-law cited).90In the present case, under the guise of an alleged failure by the General Court to exercise its unlimited jurisdiction, the appeal in reality asks the Court to re-examine the evidence in the case-file, communicated to the Commission by the appellants and the other members of the cartel during the administrative procedure, without pointing out any distortion of that evidence. Accordingly, that second limb of the second ground of appeal must be rejected as inadmissible.91With regard to the third limb of the second ground of appeal, the appellants claim, in essence, that by attributing, in paragraph 94 of the judgment under appeal, decisive probative value to the internal memoranda of the bilateral meetings held as part of the settlement procedure, in particular, the second of those memoranda, according to which the appellants made admissions concerning their participation in the infringement for the period from 1978 to 1992, and finding, in paragraph 114 of the judgment under appeal, that the Commission ‘was entitled to believe that the applicants were involved in a single and continuous infringement from 1978 onwards’, without verifying compliance with the standard of proof, the General Court infringed their rights of defence and failed to exercise its unlimited jurisdiction.92Thus, by that third limb of the second ground of appeal, the appellants rely, as they did in the first ground of appeal, on a failure to observe the rules regarding the burden of proof and an infringement of the rights of the defence.93Even if it were well founded in considering that, by attributing decisive significance to the internal memoranda of the minutes of the three bilateral meetings which took place in the context of the settlement procedure and by endorsing a mere belief of the Commission relating to the appellants’ participation in the infringement since 1978, the General Court did not verify the standard of proof required and thus failed to have regard to the rights of the defence, that third limb of the second ground of appeal cannot succeed.94As noted in paragraph 65 of the present judgment, the appellants were penalised for having participated in a single and continuous infringement from 1993 to 2004. The complaint put forward by the appellants before the General Court, as referred to in paragraph 61 of the present judgment, was intended to show that, in the light of the evidence at its disposal, the Commission should have concluded that they did not participate in the cartel before 1993. Thus, that complaint could not, in any event, succeed since it relates to a period for which the appellants have not been penalised. Accordingly, the General Court should have dismissed that complaint as being ineffective.95As was found in paragraph 66 of this judgment, it follows that the decision of the General Court, in paragraph 118 of the judgment under appeal, to reject the complaint alleging that the Commission had erred in its investigation of the case, appears well founded on other legal grounds. It is therefore appropriate to substitute those grounds of appeal.96Consequently, that third limb of the third ground of appeal must be rejected as unfounded. The third ground of appeal and the second part of the first and second limbs of the fourth ground of appeal, alleging that the General Court failed to exercise its unlimited jurisdiction and vitiated its judgment with contradictory reasoning Failure by the General Court to exercise its unlimited jurisdiction– Arguments of the parties97By the third ground of appeal and the second part of the first and second limbs of the fourth ground of appeal, which refer mainly to paragraphs 78 and 90 to 96 of the judgment under appeal and which should be examined together, the appellants claim, in essence, that, by upholding the contested decision and by thus failing to carry out a sufficient investigation of all the elements of the fine imposed on them by the contested decision, the General Court misconstrued the scope of its unlimited jurisdiction and, in that context, vitiated its judgment with contradictory reasoning.98In the third ground of appeal, the appellants state, more specifically, that the General Court failed to appropriately exercise its unlimited jurisdiction in so far as it considered that alleged ‘new elements’ which enabled the Commission to impose a considerably higher fine for an infringement of a very significantly reduced duration consisted of the withdrawal of their alleged ‘admissions’ after their withdrawal from the settlement procedure, without having verified the materiality of those ‘new elements’. According to the appellants, no new facts were added to the case file after that withdrawal. The only new element, if any, it is claimed, was a closer examination of the facts by the Commission, which led it to acknowledge that the appellants had not participated in the infringement at issue since 1978, whereas it should have arrived at this finding as early as the settlement stage.99The Commission contends, primarily, that this ground must be rejected as ineffective on the ground that it is based on an irrelevant comparison between the situation existing during the settlement procedure and that which followed the adoption of the contested decision, whereas, as the General Court correctly pointed out, once the settlement had been abandoned, the decision reached following the standard procedure should have been assessed solely on its own merits. It adds that the appellants misrepresent the position of the General Court in their statements regarding the judgment under appeal. According to that institution, the new element referred to by the General Court in paragraph 90 of the judgment under appeal is not the new analysis of the situation which it carried out on its own initiative, but the different light shed by Timab, for the first time in reply to the statement of objections, the specific purpose of the latter being to give undertakings the opportunity to state their views in order to ensure compliance with the adversarial principle in the ordinary procedure.100In the alternative, the Commission raises the inadmissibility of the ground in question, on the ground that the General Court examined the legality of the contested decision by examining all the factors taken into account in calculating the fine, which falls within its unlimited jurisdiction and an assessment of facts which cannot be the subject of an appeal.101In the second part of the first limb of the fourth ground of appeal, the appellants claim that the General Court also failed to exercise its unlimited jurisdiction by failing to set aside any errors, contradictions or inconsistencies allegedly present in the Commission’s assessment of the infringement. They criticise the General Court for having thereby wrongly validated the withdrawal of almost all the fine reductions granted under the leniency programme or those which could be granted on the basis of point 29 of the 2006 Guidelines.102The Commission considers that the complaints made by the appellants must be rejected, on the ground that the General Court carried out an in-depth review of the calculation of the fine made by the Commission and, in particular, of the reductions granted in respect of their cooperation. Moreover, the alleged contradictions or inconsistencies raised in this context are, it is alleged, unfounded.103In support of the second part of the second limb of the fourth ground of appeal, the appellants state that the Commission should have indicated, at the settlement stage, what it classified as ‘new evidence’, namely the impossibility of establishing a single and continuous infringement from 1978. Thus, by failing to take account of the errors made by the Commission in its assessment of the infringement at the settlement procedure stage, and thus endorsing the withdrawal of almost all the fine reductions, the General Court, it is claimed, failed to exercise its unlimited jurisdiction.– Findings of the Court104It is settled case-law that, with regard to judicial review of decisions whereby the Commission imposes a fine or periodic penalty payment for infringement of the competition rules, in addition to the review of legality provided for in Article 263 TFEU, the European Union judicature has the unlimited jurisdiction which it is afforded by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU, and which empowers it to substitute its own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or periodic penalty payment imposed (see, inter alia, judgment of 9 June 2016, Repsol Lubricantes y Especialidades and Others v Commission, C‑617/13 P, EU:C:2016:416, paragraph 84 and the case-law cited).105It should also be noted that it is not for the Court, when ruling on questions of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of EU law (see, inter alia, judgment of 9 June 2016 in Repsol Lubricantes y Especialidades and Others v Commission, C‑617/13 P, EU:C:2016:416, paragraph 81 and the case-law cited).106It is only inasmuch as the Court considers that the level of the penalty is not merely inappropriate, but also excessive to the point of being disproportionate, that it would have to find that the General Court erred in law, on account of the inappropriateness of the amount of a fine (see, inter alia, judgment of 9 June 2016, Repsol Lubricantes y Especialidades and Others v Commission, C‑617/13 P, EU:C:2016:416, paragraph 82 and the case-law cited).107In the present case, as the Advocate General pointed out in point 23 of his Opinion, the question before the General Court was not so much whether it was justified in imposing a higher fine for an infringement of a shorter duration, as the appellants argue, in essence, but whether the Commission had properly stated its reasons for the calculation of the fine imposed by the contested decision and had taken into account, for that purpose, all the elements in its possession when it made its decision.108In that regard, it must be pointed out that, although the General Court, in paragraphs 75 to 107 of the judgment under appeal, did ensure that all the arguments by which the appellants had criticised the Commission for having applied, to an undertaking which had withdrawn from the settlement procedure, a fine higher than the maximum in the range envisaged during the settlement discussions, and for a considerably reduced period of infringement, such an analysis is subject to compliance with the principles of sound administration of justice and transparency. The General Court cannot therefore be criticised for having carried out such a comprehensive examination in the context of a dispute which, for the first time, led it to rule on a situation in which an undertaking, after engaging in a settlement procedure, had finally withdrawn from it.109That being so, in the present case it is important to note that the General Court fully exercised its unlimited jurisdiction by carrying out an in-depth review both of the legality of the contested decision and of whether the amount of the fine set out in that decision was appropriate.110Thus, as the Advocate General stated in point 24 of his Opinion, the General Court duly verified the merits of the Commission’s analysis having regard to all the circumstances present when the contested decision was adopted and, in particular, in paragraphs 90 to 107 of the judgment under appeal, in view of the extent of the cooperation of the appellants after their withdrawal from the settlement procedure, and hence during the ordinary procedure.111In paragraphs 142 to 220 of the judgment under appeal, the General Court also systematically examined the factors adopted by the Commission to calculate the amount of the fine imposed in the contested decision. In particular, it carried out a detailed examination of the way in which the Commission took account of the factors allowing it to grant reductions of that fine or otherwise, under the leniency notice, in paragraphs 170 to 195 of that judgment, or in respect of cooperation, in accordance with point 29 of the 2006 Guidelines, in paragraphs 95, 188 and 189 of that judgment.112Moreover, as the Advocate General also pointed out in point 26 of his Opinion, it must be held that the appellants have failed to demonstrate how the amount of the fine imposed on them is excessive, to the extent of being disproportionate, within the meaning of the case-law referred to in paragraphs 105and 106 of the present judgment.113It follows from the foregoing that the General Court did not misconstrue the scope of its unlimited jurisdiction. Consequently, the third ground of appeal, the second part of the first and second limbs of the fourth ground of appeal, in so far as they refer to failure to exercise the unlimited jurisdiction of the General Court, must be dismissed as unfounded.The contradictory reasoning alleged by the appellants114In the context of both the third ground of appeal and the second part of the first limb of the fourth ground of appeal, the appellants maintain, in essence, that the General Court’s judgment is vitiated by various contradictions of reasoning, which resulted in an infringement of their fundamental rights, namely that of being able to discuss freely with the Commission in the settlement procedure and to freely leave that procedure, and that of defending oneself in ordinary proceedings without being bound by an allegedly previously adopted ‘position’.115In the first place, the appellants complain that the General Court considered that their withdrawal from the settlement procedure led to a situation of ‘tabula rasa’, erasing what had gone on before and yet, at the same time, found that they had ‘altered their position’ in the reply which they had given to the statement of objections in the course of the standard procedure. Thus, the General Court should not have accepted the Commission’s argument that a ‘new element’ had appeared at the stage of that reply and justified a review of the amount of the fine.116Secondly, the appellants submit that the judgment under appeal is vitiated by contradictory reasoning in so far as the General Court held, on the one hand, in paragraph 96 of the judgment under appeal, that the Commission was not bound by the range of fines communicated during the discussions held in the context of the settlement procedure, which it is claimed, have therefore become irrelevant after their withdrawal from that procedure, whereas, on the other hand, the General Court referred, in paragraph 91 of the judgment under appeal, to a simple ‘adjustment of the method of calculation of the fine’ on the basis of that same range.117Finally, the General Court could not, on the one hand, confirm that, under the settlements notice, the Commission does not negotiate the question of the existence of the infringement and, on the other, attribute to the informal discussions the value of negotiations characterised by the appellants’ alleged admission of their participation in the infringement before 1993.118According to the Commission, the contradictions in the reasons given are, inter alia, a distortion of the General Court’s arguments or a misreading of the documents produced during the proceedings before that Court and cannot, therefore, be upheld.119As regards the first two alleged contradictions in the reasons given, which concern, in essence, the link between the settlement procedure and the standard procedure in the particular situation of the present case, in which the appellants decided to interrupt the settlement discussions, it must be held that the General Court was right to dissociate, in paragraphs 90 to 96 and paragraphs 104 and 105 of the judgment under appeal, the course of that settlement procedure which, in the present case, has not been completed, and that of the standard procedure, which resulted in the contested decision.120In that regard, it should be borne in mind that, under paragraph 19 of the settlements notice, if the undertakings concerned do not submit a settlement proposal, the procedure leading to the final decision in their regard will follow the general provisions, in particular Articles 10(2), 12(1) and 15(1) of Regulation (EC) No 773/2004, instead of those regulating the settlement procedure121Moreover, as the Advocate General pointed out in point 25 of his Opinion, it was precisely that change in procedural circumstances that enabled the appellants to have full access to the case-file, to receive a full statement of objections, to reply to that statement of objections and to have the benefit of a hearing, at which stage they were able to reply and formally dispute, for the first time, their involvement in the alleged infringement during the period prior to 1993. Consequently, the appellants were in no way legally harmed by that approach, in which the elements, described as ‘new’, which then existed were taken into account.122As regards, more specifically, the second alleged contradiction in the reasons alleged by the appellants, according to which the General Court considered that the Commission was not bound by the range of fines indicated during discussions as part of the settlement procedure, whereas it also referred to a simple ‘adjustment of the method of calculation of the fine’ from that range, the appellants misrepresent the statements of the General Court by wrongly taking the words ‘adjustment of the method of calculation of the fine’, in paragraph 91 of the judgment under appeal, out of context.123As the Advocate General pointed out in point 37 of his Opinion, on a reading of paragraph 91 as a whole, and those paragraphs surrounding it in the judgment under appeal, it is clear that the General Court found that, having taken the alteration in the appellants’ position regarding the duration of their participation in the infringement into account, the Commission proceeded to ‘review’ the fine which it had fixed on the basis of the rules contained in the leniency notice and the 2006 Guidelines, albeit following the same methodology it had used for the range of fines which it had indicated to the appellants.124In the light of the foregoing, the first two arguments relating to contradictory reasoning must be rejected as unfounded.125As regards the third contradiction in reasoning alleged by the appellants, according to which the General Court could not, on the one hand, confirm that, under the settlements notice, the Commission does not negotiate the question of the existence of the infringement and, on the other, attributes to the informal discussions the value of negotiations characterised by the appellants’ alleged admission of their participation in the infringement before 1993, it must be borne in mind that, in accordance with Article 169(2) of the Rules of Procedure of the Court of Justice, the pleas in law and legal arguments relied on must identify precisely those points in the grounds of the decision of the General Court which are contested.126That alleged contradictory reasoning, relied on by the appellants for the first time in the reply and attached by those appellants to the third ground of appeal, does not relate to the points in the grounds of the judgment under appeal. Therefore, that argument cannot be accepted.127It follows from the foregoing that the third ground of appeal and the second part of the first limb of the fourth ground of appeal, alleging that the judgment is vitiated by contradictory reasoning, must be rejected as being in part inadmissible and in part unfounded. The first part of the first and second limbs of the fourth ground of appeal, alleging that the General Court infringed the principles of the protection of legitimate expectations and equal treatment and committed an error of law in its assessment of the effect of the withdrawal from the settlement procedure The first part of the first limb of the fourth ground of appeal, alleging that the General Court infringed the principles of legitimate expectations and equal treatment128As regards, first, the argument alleging infringement of the principle of legitimate expectations, the appellants point out that, contrary to what the General Court maintains, they could not reasonably have anticipated that, by deciding to withdraw from the settlement procedure, the reductions for cooperation granted to them would go from 52% in the framework of the settlement procedure, to 5% in the contested decision. In their view, the Commission made a ‘reversal’ with the ‘paradoxical’ effect of increasing the amount of the fine considerably while, at the same time, the duration of the infringement had been significantly reduced.129The appellants claim that such a decision was not justified since (i) the same standard of proof and the same rules for calculating the fine applied both to the standard procedure and to the settlement procedure, (ii) no new evidence was added to the case file as a result of their withdrawal from the settlement procedure and, (iii) the effects of the leniency proceedings continued in spite of that withdrawal. Thus, in those circumstances, they would not have been able to make an ‘informed’ decision on whether or not to settle.130The Commission claims that the appellants’ allegations are ineffective since they are based on a comparison between the indications which they gave during the settlement procedure and the decision taken following the standard procedure. Thus, according to that institution, the appellants seek to confuse their withdrawal from the settlement procedure and the defence which they developed in reply to the statement of objections.131In that regard, the Commission contends that the event giving rise to the new amount of the fine adopted in the contested decision lies not in the appellants’ decision to withdraw from the settlement procedure, but only in the defence which they developed in their reply to that statement of objections, a defence which henceforth consisted of denying their participation in the cartel before 1993. Moreover, according to the Commission, the revision of that fine could have been anticipated by the appellants, since the amount imposed resulted from a strict application of the relevant calculation rules in the light of the factors which existed on the date when that decision was taken. If the interested parties misjudged the consequences of their positions, they could only attribute the error to themselves, and not to any lack of information.132The appellants consider, in the second place, that the General Court infringed the principle of equal treatment. Having been unable to withdraw from the settlement procedure in full knowledge of the facts and confronted with a result that was at least ‘paradoxical’, they were, it is claimed, treated less favourably than the other parties who, in a position to anticipate the amount of the fine that would be imposed on them, agreed to enter into a settlement proposal.133The Commission considers that it is clear from the information provided in the contested decision, summarised in paragraphs 17 to 26 of the judgment under appeal, that there has been no discrimination between the appellants and the other parties to the cartel, since the same criteria were applied in fixing all the fines and the only difference was the 10% reduction granted to the undertakings that had settled.134As regards, in the first place, the argument according to which the General Court infringed the principle of the protection of legitimate expectations, it should be noted that, according to settled case-law, the principle of the protection of legitimate expectations is among the fundamental principles of EU law and any economic operator whom an institution has, by giving him precise insurances, caused to entertain justified expectations may rely on that principle (judgment of 24 October 2013, Kone and Others v Commission, C‑510/11 P, not published, EU:C:2013:696, paragraph 76 and the case-law cited).135Furthermore, the Court has already had occasion to explain that the Commission cannot, in the procedural stage preceding the adoption of the final decision, give any precise assurance as to any reduction of, or immunity from, fines and that the participants in the cartel cannot therefore entertain a legitimate expectation in that regard (see judgment of 24 October 2013, Kone and Others v Commission, C‑510/11 P, not published, EU:C:2013:696, paragraph 78 and the case-law cited).136It should also be borne in mind, first, as is apparent from paragraph 73 of the judgment under appeal, that the settlement procedure is an alternative administrative procedure distinct from the standard procedure and which has certain special features such as, inter alia, notification of a likely range of fines. Secondly, as the General Court points out in paragraph 104 of the judgment under appeal, if the undertaking does not put forward a proposal for a settlement, the procedure leading to the final decision is governed by the general provisions of Regulation No 773/2004, instead of those governing the settlement procedure. Thirdly, as the General Court points out in paragraph 96 of the judgment under appeal, as regards that standard procedure, in which liabilities have yet to be determined, the Commission is only bound by the statement of objections, which does not set a range of fines, and is required to take into consideration the new information brought to its attention during that procedure.137In the present case, as the General Court states, inter alia in paragraphs 90 and 124 of the judgment under appeal, the appellants withdrew from the settlement procedure and it was only after that withdrawal that they put forward, in the context of the standard procedure, evidence of reduction of the duration of their participation in the alleged infringement.138Consequently, as the Advocate General pointed out in point 48 of his Opinion, the appellants could not rely on any legitimate expectation that the estimates transmitted to them by the Commission during the settlement procedure, in the form of likely ranges of fines fixed in the light of the factors taken into consideration at that stage of the procedure, namely for a period of participation in the infringement from 1978 to 2004, would be maintained.139Moreover, it must be held that, when the appellants withdrew from the settlement procedure, they were in possession of all the information they required to foresee that disputing their involvement in the infringement during the period prior to 1993 would necessarily have an effect on the reductions they might be granted both in the context of the leniency notice and under point 29 of the 2006 Guidelines. Such a conclusion follows unequivocally from paragraphs 90 to 95 and 122 of the judgment under appeal. Accordingly, the General Court cannot be accused of any breach of the principle of the protection of legitimate expectations.140As regards, in the second place, the argument according to which the General Court infringed the principle of equal treatment, it should be noted that, according to settled case-law, it is apparent from Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice that an appeal must indicate precisely the contested elements of the judgment under appeal and also the legal arguments specifically advanced in support of the appeal, failing which the appeal or the ground of appeal in question will be dismissed as inadmissible (see judgments of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraphs 47 and 51 and the case-law cited, and of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 43 and the case-law cited).141Accordingly, a ground of appeal supported by an argument that is not sufficiently precise and substantiated to enable the Court to exercise its powers of judicial review does not satisfy those conditions and must be declared inadmissible (judgment of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 44 and the case-law cited).142The argument alleging infringement of the principle of equal treatment is based on a general assertion without any legal argumentation to support it. It must, therefore, be rejected as inadmissible.143It follows from all the foregoing that the first part of the first limb of the fourth ground of appeal, alleging that the General Court infringed the principles of the protection of legitimate expectations and equal treatment must be rejected as being in part inadmissible and in part unfounded.The first part of the second limb of the fourth ground of appeal, alleging an error of law in assessing the effect of withdrawal from the settlement procedure144The appellants claim, in essence, that it was on the basis of an error of law that the General Court considered that they had been informed by the Commission of the impact of their withdrawal from the settlement procedure which, they allege, would support the assertion that they were not able to exercise their right to choose whether or not to settle ‘in full knowledge of the facts’, as the settlements notice requires. In their view, the General Court erred in law, in paragraph 125 of the judgment under appeal, in the way it conveyed the content of the exchanges which took place at the hearing on 24 February 2010. At that hearing, the Commission stated that it would take account, not in the context of Timab’s ‘cooperation’, as set out in the judgment under appeal in that paragraph, but in the context of ‘leniency’, the fact that the appellants had not joined the cartel before 1993. According to the appellants, while the concept of ‘cooperation’ covers the periods covered by both the leniency notice and those not covered by that notice, the concept of ‘leniency’ refers, in the present case, only to the reduction of 17% of the fine imposed. Thus, the Commission never explicitly mentioned, in the course of the standard procedure, the elimination of the reduction of 35% in the fine for cooperation outside the scope of the leniency notice.145The Commission considers that this argument is ineffective. According to the Commission, it stems from a confusion perpetuated by the appellants between their withdrawal from the settlement and their change in position in the reply to the statement of objections. In view of the new defence adopted by the appellants in that reply, which contradicted the positions they had taken in the context of their application for leniency, the Commission drew their attention to the possible consequences of that new defence.146As the Commission states in its defence, the complaint relating to an error of law in assessing the effect of the appellant’s withdrawal from the settlement procedure stems from a confusion between, on the one hand, the effects of the withdrawal from the settlement decided by the appellants and, on the other, the possible consequences of the change of position concerning the length of their participation in the infringement which the latter adopted in their reply of 2 February 2010 to the statement of objections. In paragraph 125 of the judgment under appeal, the General Court, as the Advocate General pointed out in point 60 of his Opinion, simply refers to the Commission’s warning to the appellants, in the course of the standard proceedings, regarding that change in position, and not as a consequence of their withdrawal from the settlement procedure, as they allege.147It must therefore be held that that complaint, which is based on a false premiss, cannot succeed. Consequently, the first part of the second limb of the fourth ground of appeal must be rejected. The fifth ground of appeal, alleging that the General Court failed to exercise its unlimited jurisdiction and infringed the principles of equal treatment and the principle that penalties should be tailored to the individual. 148By the fifth ground of appeal, the appellants complain that the General Court, in paragraphs 137, 140 and 168 of the judgment under appeal, failed to exercise its power of unlimited jurisdiction and infringed the principles of equal treatment and the principle that penalties should be tailored to the individual.149In that regard, the appellants claim that, by accepting the failure to take into account, in assessing the gravity of the infringement, the lack of evidence of Timab’s participation in the practices relating to the conditions of sale and the compensation mechanisms, the General Court failed to exercise its power of unlimited jurisdiction. Since that Court had doubts as to the reality of the appellants’ participation in those two practices for the period from 1993 to 2004, it should have taken that into account, in accordance with the principle in dubio pro reo (when in doubt, for the defence). Since it failed to do so, the General Court vitiated its judgment by breach of the principles of equal treatment and that penalties should be tailored to the individual.150In their reply, the appellants add that the General Court also refused to take into account, in breach of the principles of equal treatment and individualisation of the penalty, in its assessment of the gravity of the infringement, other factors such as the pressure on prices resulting from competition from similar products, the absence of effect of the practices complained of, and the duration and intensity of each practice.151Furthermore, the General Court infringed those same principles by failing to carry out an in-depth review either of the gravity rate applied when setting the basic amount of the fine or of the Commission’s refusal to grant mitigating circumstances to Timab. Thus, the General Court merely adopted the contested decision without making its own assessment.152According to the Commission, the fifth ground of appeal is inadmissible, since it seeks no more than re-examination of the application submitted to the General Court. In any event, it submits, that ground of appeal is without foundation.153It should be recalled, first, that the General Court has exclusive jurisdiction to find and appraise the relevant facts and, in principle, to examine the evidence it accepts in support of those facts. Provided that the evidence has been properly obtained and the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence produced to it. Save where the clear sense of the evidence has been distorted, that appraisal does not therefore constitute a point of law which is subject as such to review by the Court of Justice (see, inter alia, judgments of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraph 25 and the case-law cited, and of 16 June 2016, Evonik Degussa and AlzChem v Commission, C‑155/14 P, EU:C:2016:446, paragraph 23 and the case-law cited). Moreover, such a distortion must be obvious from the documents on the Court’s file, without there being any need to carry out a new assessment of the facts and evidence (judgment of 16 June 2016, Evonik Degussa and AlzChem v Commission, C‑155/14 P, EU:C:2016:446, paragraph 23 and the case-law cited).154Secondly, it should be noted that an appeal is inadmissible in so far as it merely repeats the pleas in law and arguments previously submitted to the General Court, including those based on facts expressly rejected by it. Such an appeal amounts in reality to no more than a request for re-examination of the application submitted to the General Court, which the Court of Justice does not have jurisdiction to undertake on appeal (judgment of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraph 26 and the case-law cited).155By contrast, provided that the appellant challenges the interpretation or application of EU law by the General Court, the points of law examined at first instance may be discussed again in the course of an appeal. Indeed, if an appellant could not thus base his appeal on pleas in law and arguments already relied on before the General Court, that appeal would be deprived of part of its purpose (judgment of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraph 27 and the case-law cited).156With regard to the fifth ground of appeal, although the latter is characterised by the appellants as a ‘ground of appeal relating to a question of law’, namely the failure of the General Court to observe the principles of equal treatment and that penalties should be tailored to the individual as well as its power of unlimited jurisdiction, it must be held that that fifth ground of appeal ultimately amounts to calling into question the General Court’s assessment of the facts and evidence produced before it at first instance as part of the second and third pleas in law.157Far from claiming distortion of the facts or evidence, the appellants merely maintain that the General Court erred in not taking account, in assessing the gravity of the infringement, various elements, namely the absence of evidence of their participation in the practices relating to the conditions of sale and the compensation mechanisms. Thus, the appellants merely reproduce arguments to show that a lower rate should have been applied in respect of the gravity of the infringement, which have nevertheless already been submitted to the General Court and rejected by it. The fifth ground of appeal, therefore, in so far as it concerns failure by the General Court to observe the principles of equal treatment and that penalties should be tailored to the individual as well as its power of unlimited jurisdiction, is inadmissible.158As regards, more particularly, the argument put forward by the appellants that the General Court did not carry out an in-depth review of the gravity rate applied when setting the basic amount of the fine, or of the refusal to grant mitigating circumstances in respect of Timab’s competitive behaviour, it suffices to note that, in paragraphs 149 to 164 of the judgment under appeal, the General Court gave a detailed account of the factors which it took into account in assessing the gravity of the infringement. In the same way, it is clear from paragraphs 165 to 168 of the judgment under appeal that the General Court carefully considered the question of mitigating circumstances. Accordingly, that argument must be held to be unfounded. The mere fact that the General Court confirmed, in that regard, in the exercise of its unlimited jurisdiction, a number of factors from the assessment made by the Commission in the contested decision cannot call that conclusion into question (see, judgment of 8 May 2013, Eni v Commission, C‑508/11 P, EU:C:2013:289, paragraph 99 and the case-law cited).159In the light of the foregoing, the fifth ground of appeal must be rejected as being in part inadmissible and in part unfounded. On the incidental submissions, alleging infringement of the right to a fair trial given the unreasonable length of the proceedings 160By their incidental submissions, the appellants submit that the General Court infringed the right to a fair trial, as provided for in Article 47(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’), interpreted in the light of Article 6(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, as it failed to adjudicate within a reasonable time.161In that regard, they state that the judgment under appeal was delivered four years and eight and a half months after the originating application was lodged, on 1 October 2010, that the opening of the oral procedure by the General Court did not take place until 14 May 2014 and that eleven months elapsed between the closure of that oral procedure, that is, after the hearing of 11 July 2014, and the delivery of the judgment.162According to the appellants, the complexity of the case did not justify such a lengthy procedure, since they were the only applicants in that case and their conduct was not dilatory.163The Commission states, in essence, that, having regard, inter alia, to the judgment of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), only a claim for damages brought against the European Union pursuant to Article 268 TFEU and the second paragraph of Article 340 TFEU, may be considered by an undertaking calling into question an allegedly excessive length of the proceedings.164Since the appellants have not made such an application for damages, the incidental submissions are, first and foremost, inadmissible.165It should be recalled that the sanction for a breach, by a Court of the European Union, of its obligation under the second paragraph of Article 47 of the Charter to adjudicate on the cases before it within a reasonable time must be an action for damages brought before the General Court, since such an action constitutes an effective remedy. It follows that a claim for compensation in respect of the damage caused by the General Court’s failure to adjudicate within a reasonable period may not be made directly to the Court of Justice in the context of an appeal, but must be brought before the General Court itself (judgments of 30 April 2014, FLSmidth v Commission, C‑238/12 P, EU:C:2014:284, paragraph 116 and the case-law cited; of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 55 and the case-law cited; and of 9 June 2016, Repsol Lubricantes y Especialidades and Others v Commission, C‑617/13 P, EU:C:2016:416, paragraph 98 and the case-law cited).166Where a claim for damages is brought before the General Court, which has jurisdiction under Article 256(1) TFEU, it must determine such a claim sitting in a different composition from that which heard the dispute giving rise to the procedure the duration of which is criticised (judgments of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 56 and the case-law cited, and of 9 June 2016, Repsol Lubricantes y Especialidades and Others v Commission, C‑617/13 P, EU:C:2016:416, paragraph 99 and the case-law cited).167That said, where it is clear, without any need for the parties to adduce additional evidence in that regard, that the General Court infringed, in a sufficiently serious manner, its obligation to adjudicate on the case within a reasonable time, the Court of Justice may note that fact (judgments of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 57 and the case-law cited, and of 9 June 2016, Repsol Lubricantes y Especialidades and Others v Commission, C‑617/13 P, EU:C:2016:416, paragraph 100 and the case-law cited). Consequently, the Court may, in the context of the appeal, find that there has been a breach of the right to a fair trial, as guaranteed by the second paragraph of Article 47 of the Charter, given the unreasonable length of the proceedings before the General Court.168As regards the criteria for assessing whether the General Court has observed the reasonable time principle, it must be borne in mind that the reasonableness of the period for delivering judgment is to be appraised in the light of the circumstances specific to each case, such as the complexity of the case and the conduct of the parties (judgment of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraph 85 and the case-law cited).169The Court has held in that regard that the list of relevant criteria is not exhaustive and that the assessment of the reasonableness of a period does not require a systematic examination of the circumstances of the case in the light of each of them, where the duration of the proceedings appears justified in the light of one of them. Thus, the complexity of the case or the dilatory conduct of the appellant may be deemed to justify a duration which is prima facie too long (judgment of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraph 86 and the case-law cited).170In the present case, and in the absence of any additional evidence submitted by the parties, the Court considers that it is not clear that the General Court breached sufficiently its obligation to adjudicate on the case within a reasonable time.171In the light of the foregoing, the incidental submissions of the appeal must be dismissed.172Since none of the grounds of appeal raised by the appellants in support of their appeal can be upheld, the appeal must be dismissed in its entirety. Costs 173Under Article 184(2) of the Rules of Procedure of the Court of Justice, where the appeal is unfounded, the Court is to make a decision as to the costs. Under Article 138(1) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since Timab and CFPR have been unsuccessful and the Commission has applied for costs against those companies, they must be ordered to pay the costs of the present appeal.On those grounds, the Court hereby: 1. Dismisses the appeal; 2. Orders Timab Industries and Cie financière et de participations Roullier (CFPR) to pay the costs. [Signatures]( *1 ) Language of the case: French. | 2eb1d-636867f-46b0 | EN |
The EU is ordered to pay more than €50 000 in damages to the companies Gascogne Sack Deutschland and Gascogne as a result of the excessive length of the proceedings before the General Court | 10 January 2017 ( *1 )‛Non-contractual liability — Precision of the application — Limitation of actions — Admissibility — Article 47 of the Charter of Fundamental Rights — Obligation to adjudicate within a reasonable time — Material damage — Losses incurred — Interest on the amount of the outstanding fine — Bank guarantee charges — Loss of opportunity — Non-material damage — Causal link’In Case T‑577/14, Gascogne Sack Deutschland GmbH, established in Wieda (Germany), Gascogne, established in Saint-Paul-les-Dax (France),represented by F. Puel, E. Durand and L. Marchal, lawyers,applicants,v European Union, represented by the Court of Justice of the European Union, represented initially by A. Placco, and subsequently by J. Inghelram and S. Chantre, acting as Agents,defendant,supported by European Commission, represented by N. Khan, V. Bottka and P. van Nuffel, acting as Agents,intervener,APPLICATION pursuant to Article 268 TFEU for compensation for the damage allegedly suffered by the applicants as a result of the length of the proceedings before the General Court in the cases which gave rise to the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674),THE GENERAL COURT (Third Chamber, Extended Composition)composed of S. Papasavvas, President, I. Labucka, E. Bieliūnas (Rapporteur), V. Kreuschitz and I.S. Forrester, Judges,Registrar: G. Predonzani, Administrator,having regard to the written stage of the procedure and further to the hearing on 28 June 2016,gives the following Judgment Background to the dispute 1By applications lodged at the General Court Registry on 23 February 2006, Sachsa Verpackung GmbH, now Gascogne Sack Deutschland GmbH, on the one hand, and Groupe Gascogne SA, now Gascogne, on the other hand, each brought an action against Commission Decision C(2005) 4634 of 30 November 2005 relating to a proceeding pursuant to Article [101 TFEU] (Case COMP/F/38.354 — Industrial bags) (‘Decision C(2005) 4634’). In their applications, they claimed, in essence, that the Court should annul that decision in so far as it applied to them or, in the alternative, reduce the amount of the fine which had been imposed on them.2By judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674), the General Court dismissed those actions.3By applications lodged on 27 January 2012, Gascogne Sack Deutschland and Groupe Gascogne brought appeals against the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674).4By judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), the Court of Justice dismissed those appeals. Procedure and forms of order sought 5By application lodged at the General Court Registry on 4 August 2014, the applicants, Gascogne Sack Deutschland and Gascogne, brought the present action against the European Union, represented by the Court of Justice of the European Union.6By separate document, lodged at the General Court Registry on 17 November 2014, the Court of Justice of the European Union raised an objection of inadmissibility pursuant to Article 114(1) of the Rules of Procedure of the General Court of 2 May 1991.7By order of 2 February 2015, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, not published, EU:T:2015:80), the General Court rejected the objection of inadmissibility raised by the Court of Justice of the European Union and reserved the costs.8By application lodged at the Registry of the Court of Justice on 11 March 2015, the Court of Justice of the European Union brought an appeal, registered as Case C‑125/15 P, against the order of 2 February 2015, Gascogne Sack DeutschlandandGascogne v European Union (T‑577/14, not published, EU:T:2015:80).9By order of 14 April 2015, the President of the Third Chamber of the General Court, at the request of the Court of Justice of the European Union, suspended the proceedings in the present case pending the final decision of the Court of Justice in Case C‑125/15 P, Court of Justice v Gascogne Sack Deutschland and Gascogne.10By order of 18 December 2015, Court of Justice v Gascogne Sack Deutschland and Gascogne (C‑125/15 P, not published, EU:C:2015:859), the case was removed from the register of the Court of Justice.11Following the resumption of the proceedings in the present case, the European Commission, by document lodged at the General Court Registry on 15 January 2016, applied for leave to intervene in support of the form of order sought by the Court of Justice of the European Union.12On 17 February 2016, the Court of Justice of the European Union lodged its defence.13On the same date, the General Court assigned the present case to the Third Chamber (Extended Composition).14On 2 March 2016, the General Court decided that a second exchange of pleadings was unnecessary. Furthermore, by way of a measure of organisation of procedure as provided for in Article 89 of the Rules of Procedure, the General Court asked the Court of Justice of the European Union to indicate whether it had requested and obtained permission from the applicants and the Commission in order to be able to produce certain documents in the annexes to the defence that related to the case which had given rise to the judgment of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671, ‘Case T‑72/06’) and the case which had given rise to the judgment of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674, ‘Case T‑79/06’).15By order of 15 March 2016, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, not published, EU:T:2016:189), the President of the Third Chamber (Extended Composition) of the General Court granted the Commission’s application for leave to intervene in support of the form of order sought by the Court of Justice of the European Union and stated that the rights enjoyed by the Commission would be those provided for in Article 116(6) of the Rules of Procedure of 2 May 1991.16On 18 March 2016, the Court of Justice of the European Union answered the question referred to in paragraph 14 above. It contended that the General Court should take the view, principally, that the Court of Justice of the European Union was under no duty to seek and obtain permission from the applicants and the Commission in order to be able to produce the documents relating to Cases T‑72/06 and T‑79/06 and, in the alternative, that the applicants and the Commission had given that permission implicitly. In the further alternative, the Court of Justice of the European Union requested that its response be treated as an application for a measure of organisation of procedure aimed at seeking from the General Court, in the present action, an order requiring the production of the documents constituting the case files in Cases T‑72/06 and T‑79/06 and, in particular, the documents annexed to the defence.17On 4 April 2016, the President of the Third Chamber (Extended Composition) of the General Court decided, first, to remove from the file the documents in the annexes to the defence lodged in the present case that related to Cases T‑72/06 and T‑79/06. That decision was justified by the fact, on the one hand, that the Court of Justice of the European Union had neither sought nor obtained permission from the parties in Cases T‑72/06 and T‑79/06 in order to be able to produce the documents in question and, on the other hand, that it had not requested access to the files in those cases pursuant to Article 38(2) of the Rules of Procedure. Secondly, the President of the Third Chamber (Extended Composition) decided, pursuant to Article 88(3) of the Rules of Procedure, to invite the applicants to comment on the application for a measure of organisation of procedure which had been made in the further alternative by the Court of Justice of the European Union in its reply of 18 March 2016, referred to in paragraph 16 above.18On 20 April 2016, the applicants claimed that the General Court should refuse the application for a measure of organisation of procedure made by the Court of Justice of the European Union, on the ground that that application did not satisfy the conditions laid down in Article 88 of the Rules of Procedure and would have had the effect of circumventing the rules on the production of evidence and access to the case file contained in those provisions.19On 27 April 2016, the General Court held that the preparation and settlement of the present case made it necessary, in the light of its subject matter, for the files in Cases T‑72/06 and T‑79/06 to be made available to it. Thus, by way of a measure of organisation of procedure as provided for in Article 89 of the Rules of Procedure, the Court decided to enter in the file in the present case the files in Cases T‑72/06 and T‑79/06.20On 8 and 20 June 2016 respectively, the Court of Justice of the European Union and the applicants requested service of the files in Cases T‑72/06 and T‑79/06.21The parties presented oral argument and answered the questions put to them by the General Court at the hearing on 28 June 2016.22The applicants claim that the General Court should:—declare that the European Union is non-contractually liable for the proceedings before the General Court which failed to have regard to the requirements linked to compliance with the obligation to adjudicate within a reasonable time;order the European Union to pay full and sufficient compensation for the material and non-material damage which they suffered as a result of its unlawful conduct, corresponding to payment of the following amounts, together with compensatory and default interest at the rate applied by the European Central Bank (ECB) to its main refinancing operations, increased by two percentage points, starting from the date when the application was submitted:EUR 1193467 for losses suffered as a result of paying the additional legal interest applied to the nominal amount of the fine imposed by the Commission beyond a reasonable period;EUR 187571 for losses suffered as a result of making additional bank guarantee payments beyond a reasonable period;EUR 2000000 for profits lost or losses suffered as a result of ‘the throes of uncertainty’;EUR 500000 for the non-material damage suffered;In the alternative, if the Court finds that the amount of damage suffered needs to be re-assessed, it should order the commissioning of an expert’s report in accordance with Article 65(d), Article 66(1) and Article 70 of the Rules of Procedure of the General Court of 2 May 1991;order the European Union to pay the costs.23The Court of Justice of the European Union, supported by the Commission, contends that the General Court should:principally, dismiss the action as inadmissible;in the alternative, dismiss the claim for compensation for the alleged material and non-material damage as unfounded;in the further alternative, dismiss as unfounded the claim for compensation in so far as it relates to the material damage alleged and award the applicants compensation for the non-material damage alleged of EUR 5000 at most;order the applicants to pay the costs. Law A – Admissibility 24The Court of Justice of the European Union raises two pleas of inadmissibility, the first alleging that the application lacks clarity and precision, and the second alleging that the claim for compensation for non-material damage is time-barred. 1. The principal plea of inadmissibility, alleging that the application lacks clarity and precision 25Under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union, read with the first paragraph of Article 53 thereof, and Article 44(1) of the Rules of Procedure of 2 May 1991, an application must set out the subject matter of the proceedings and a summary of the pleas in law on which it is based. That statement must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action, if necessary, without any further information. In order to guarantee legal certainty and the sound administration of justice it is necessary, in order for a plea to be admissible, that the essential matters of law and fact relied on are stated, at least in summary form, coherently and intelligibly in the application itself. More specifically, in order to satisfy those requirements, an application for compensation for damage said to have been caused by an EU institution must indicate the evidence from which the conduct which the applicant alleges against the institution can be identified, the reasons why the applicant considers that there is a causal link between the conduct and the damage which it claims to have sustained, and the nature and extent of that damage (see judgment of 7 October 2015, Accorinti and Others v ECB, T‑79/13, EU:T:2015:756, paragraph 53 and the case-law cited).26The arguments put forward by the Court of Justice of the European Union must be assessed in the light of those considerations. a) The identity of the victim of the material and non-material damage alleged 27The Court of Justice of the European Union submits that the action must be declared inadmissible on the ground that the application lacks clarity and precision with respect to the identity of the victim of the material and non-material damage alleged.28In that regard, in the first place, it is apparent from the presentation of the application and the documents accompanying it that the action was brought by both Gascogne and Gascogne Sack Deutschland. Furthermore, the application seeks an order awarding compensation for the material and non-material damage suffered by the applicants as a result of the time taken to adjudicate in Cases T‑72/06 and T‑79/06, which concerned Gascogne and Gascogne Sack Deutschland respectively.29In the second place, as regards the material damage alleged, the Court of Justice of the European Union simply submits that the applicants do no demonstrate that they have each suffered such damage. The arguments put forward by the Court of Justice of the European Union with respect to the identification of the victim of the material damage alleged will therefore have to be examined, if appropriate, when it comes to assessing whether the present action is well founded.30In the third place, as regards the non-material damage alleged, it is true that the wording of the application is not without its ambiguities. However, in the light of the content of the application as a whole, and taking into account the explanations provided by the applicants at the hearing, on which the Court of Justice of the European Union had an opportunity to comment, it is appropriate to find that the application seeks compensation for the non-material damage suffered by each of the two applicants.31Thus, as regards the victim of the damage alleged, the content of the application allowed the Court of Justice of the European Union to prepare its defence and enables the General Court to rule on the action.32The allegation made by the Court of Justice of the European Union to the effect that the application lacks clarity and precision in relation to the identity of the victim of the damage claimed must therefore be rejected. Furthermore, and for the same reasons, the allegation made by the Court of Justice of the European Union to the effect that Gascogne Sack Deutschland has no interest in bringing proceedings must also be rejected. b) The cause, substance and extent of the non-material damage alleged 33The Court of Justice of the European Union submits that the action must be declared inadmissible on the ground that the application lacks clarity and precision in relation to the cause, substance and extent of the non-material damage alleged.34In that regard, it should be noted, in the first place, that the argument put forward by the Court of Justice of the European Union to the effect that the application suggests that the non-material damage claimed might be the consequence of the general economic context or the difficulty experienced by the applicants in finding a buyer, falls to be considered as part of the assessment of the merits of the action, and, more specifically, the question as to whether there is a causal link between the breach claimed and the non-material damage alleged.35In the second place, as regards the substance of the non-material damage claimed, it is true that the applicants’ line of argument is brief when it comes to listing the forms of non-material damage they say they have suffered. That line of argument nonetheless appears to be sufficient in the light of the explanations and references contained in the application. Moreover, the confusion which the Court of Justice of the European Union claims to exist between the material damage alleged, consisting in a loss of opportunity, and the non-material damage alleged, and the risk that the same damage will be compensated for twice, fall to be considered as part of the assessment of the merits of the action.36In the third place, as regards the extent of the non-material damage alleged, the applicants are correct in submitting that, by definition, the non-material damage they claim to have suffered does not lend itself to precise calculation. Furthermore, they provide contextual information which, in their contention, justifies the amount of compensation sought. They also assess the amount of the damage caused to them. Lastly, at the hearing, the applicants specified the period during which they suffered the non-material damage they allege. That fact did not prevent the Court of Justice of the European Union from defending itself. First, the latter had an opportunity to comment on that question at the hearing. Secondly, it has raised a plea of inadmissibility to the effect that the claim for compensation for the non-material damage alleged is time-barred. Thirdly, it contends that the applicants have not provided proof of the existence of non-material damage or of a causal link. Fourthly, that institution submits, in the alternative, that the non-material damage suffered by the applicant should be assessed at EUR 5000 at most.37The applicants thus provided enough information to make it possible to assess the cause, substance and extent of the non-material damage they claim to have suffered, and, therefore, allowed the Court of Justice of the European Union to defend itself. That information also enables the General Court to give a ruling.38The argument put forward by the Court of Justice of the European Union to the effect that the application lacks clarity and precision in relation to the cause, substance and extent of the non-material damage alleged must therefore be rejected.39In the light of all of the foregoing, the first plea of inadmissibility must be dismissed in its entirety. 2. The plea of inadmissibility raised in the alternative, alleging that the claim for compensation for the non-material damage claimed is time-barred 40The Court of Justice of the European Union submits that the action is inadmissible in that it seeks compensation for non-material damage suffered more than five years before the present action was brought, that is to say prior to 4 August 2009.41In that regard, it should be recalled that Article 46 of the Statute of the Court of Justice of the European Union, applicable to proceedings before the General Court pursuant to the first paragraph of Article 53 of that same Statute, provides as follows:‘Proceedings against the Union in matters arising from non-contractual liability shall be barred after a period of five years from the occurrence of the event giving rise thereto. The period of limitation shall be interrupted if proceedings are instituted before the Court of Justice or if prior to such proceedings an application is made by the aggrieved party to the relevant institution of the Union …’42It follows from the case-law that the function of the limitation period is to reconcile protection of the rights of the aggrieved person and the principle of legal certainty. The length of the limitation period was determined by taking into account, in particular, the time that the party which has allegedly suffered harm needs to gather the appropriate information for the purpose of a possible action and to verify the facts likely to provide the basis of that action (judgment of 8 November 2012, Evropaïki Dynamiki v Commission, C‑469/11 P, EU:C:2012:705, paragraph 33; see also, to that effect, order of 18 July 2002, Autosalone Ispra dei Fratelli Rossi v Commission, C‑136/01 P, EU:C:2002:458, paragraph 28).43In accordance with settled case-law, the limitation period begins to run once the requirements governing the obligation to provide compensation for damage are satisfied (see judgment of 8 November 2012, Evropaïki Dynamiki v Commission, C‑469/11 P, EU:C:2012:705, paragraph 34 and the case-law cited).44It is, admittedly, appropriate to interpret Article 46 of the Statute of the Court of Justice of the European Union as meaning that limitation cannot constitute a valid defence to a claim by a person who has suffered damage in the case where that person only belatedly became aware of the event giving rise to it and thus could not have had a reasonable time in which to submit his application before the expiry of the limitation period. However, the conditions to which the obligation to pay compensation for damage referred to in the second paragraph of Article 340 TFEU is subject and, therefore, the rules on limitation periods which govern actions relating to that compensation for such damage may be based only on strictly objective criteria (see judgment of 8 November 2012, Evropaïki Dynamiki v Commission, C‑469/11 P, EU:C:2012:705, paragraphs 35 and 36 and the case-law cited).45Furthermore, in accordance with settled case-law, the subjective appraisal of the reality of the damage by the victim cannot be taken into consideration for the purpose of determining the moment at which the limitation period begins to run in proceedings brought against the European Union for non-contractual liability (see judgment of 8 November 2012, Evropaïki Dynamiki v Commission, C‑469/11 P, EU:C:2012:705, paragraph 37 and the case-law cited; judgment of 28 February 2013, Inalca and Cremonini v Commission, C‑460/09 P, EU:C:2013:111, paragraph 70).46In the present case, it is important to note that ‘the event giving rise’ to the present ‘proceedings against the European Union’ is a procedural irregularity in the form of an alleged failure to comply with the requirements linked to compliance with the obligation to adjudicate within a reasonable time (‘obligation to adjudicate within a reasonable time’) that is incumbent on an EU court. That fact must therefore be taken into account when it comes to determining the starting point of the five-year limitation period provided for in Article 46 of the Statute of the Court of Justice of the European Union. In particular, the limitation period cannot start to run from a date on which the event giving rise to the proceedings is still ongoing and the starting point for that period must be set as a date on which the event giving rise to the proceedings has fully materialised.47Thus, in the specific case of an action for damages aimed at securing compensation for damage allegedly suffered as a result of a possible failure to adjudicate within a reasonable time, the starting point for the five-year limitation period referred to in Article 46 of the Statute of the Court of Justice of the European Union must, in the event that the contested time taken to adjudicate has been brought to an end by a decision, be determined as being the date on which that decision was adopted. This, after all, is a definite date determined on the basis of objective criteria. It guarantees compliance with the principle of legal certainty and serves to protect the rights of the applicants.48In the present case, the applicants seek compensation for the damage they claim to have suffered as a result of the time taken to adjudicate in Cases T‑72/06 and T‑79/06. Those cases were closed by judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674). The limitation period therefore started to run on 16 November 2011.49Furthermore, the applicants brought their action in the present case and thus interrupted the limitation period on 4 August 2014, that is to say before the expiry of the five-year period provided for in Article 46 of the Statute of the Court of Justice of the European Union. The present action is therefore not time-barred.50In the light of the foregoing, the second plea of inadmissibility must be dismissed. B – Substance 51Under the second paragraph of Article 340 TFEU, in the case of non-contractual liability, the Union must, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties.52It is settled case-law that the second paragraph of Article 340 TFEU is to be interpreted as meaning that the non-contractual liability of the European Union and the exercise of the right to compensation for damage suffered depend on the satisfaction of a number of conditions, namely the unlawfulness of the conduct of which the institutions are accused, the fact of damage and the existence of a causal link between that conduct and the damage complained of (judgments of 29 September 1989, Oleifici Mediterranei v EEC, 26/81, EU:C:1982:318, paragraph 16, and of 9 September 2008, FIAMM and Others v Council and Commission, C‑120/06 P and C‑121/06 P, EU:C:2008:476, paragraph 106).53If any one of those conditions is not satisfied, the entire action must be dismissed in its entirety and it is unnecessary to consider the other conditions for non-contractual liability on the part of the European Union (judgment of 14 October 1999, Atlanta v European Community, C‑104/97 P, EU:C:1999:498, paragraph 65; see also, to that effect, judgment of 15 September 1994, KYDEP v Council andCommission, C‑146/91, EU:C:1994:329, paragraph 81). Moreover, the EU judicature is not required to examine those conditions in any particular order (judgment of 18 March 2010, Trubowest Handel and Makarov v Council and Commission, C‑419/08 P, EU:C:2010:147, paragraph 42; see also, to that effect, judgment of 9 September 1999, Lucaccioni v Commission, C‑257/98 P, EU:C:1999:402, paragraph 13).54In the present case, the applicants submit, first, that the length of the proceedings in Cases T‑72/06 and T‑79/06 was in breach of the obligation to adjudicate within a reasonable time. Secondly, they claim that that breach caused them damage for which they must be compensated. 1. The alleged breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 55The applicants claim that the length of the proceedings in Cases T‑72/06 and T‑79/06 was in breach of the obligation to adjudicate within a reasonable time, which constitutes a sufficiently serious infringement of a rule of EU law intended to confer rights upon individuals. They go on to say that the length of the proceedings in each of those cases exceeded the reasonable time for adjudication by 30 months, given the average time it takes the General Court to deal with cases relating to the application of competition law, on the one hand, and the specific circumstances of those cases, on the other.56The Court of Justice of the European Union disputes those allegations.57In its contention, it cannot be claimed that the reasonable time for adjudication in Cases T‑72/06 and T‑79/06 was exceeded solely on the basis of a comparison between the length of the proceedings in each of those two cases and the average length of proceedings before the General Court between 2006 and 2010. In any event, an examination of the relevant statistics shows that the total length of the proceedings in Cases T‑72/06 and T‑79/06 exceeded by only 16 months the average length of proceedings in cases relating to the application of competition law between 2006 and 2015. Similarly, the time that elapsed between the end of the written part of the procedure and the opening of the oral part of the procedure in Cases T‑72/06 and T‑79/06 exceeded by only 16 months the average length of that stage of the procedure in cases relating to the application of competition law between 2007 and 2010.58It further contends that the total length of the proceedings in Cases T‑72/06 and T‑79/06 and the period between the end of the written part of the procedure and the opening of the oral part of the procedure in those cases are justified by the complexity of the latter, the limited importance of the dispute to the applicants, the conduct of the applicants, the limited term of office of the judges and the long period of sickness of one of the members of the chamber to which the two cases at issue had been allocated.59In that regard, it should be noted that the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union provides in particular that ‘everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law’.60Such a right, the existence of which had been affirmed before the entry into force of the Charter of Fundamental Rights as a general principle of EU law, was held to be applicable in the context of proceedings brought against a Commission decision (see judgment of 16 July 2009, Der Grüne Punkt — Duales System Deutschland v Commission, C‑385/07 P, EU:C:2009:456, paragraph 178 and the case-law cited).61In the present case, it follows from a detailed examination of the files in Cases T‑72/06 and T‑79/06 respectively that, as the Court of Justice rightly pointed out in the judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), the length of the proceedings in Cases T‑72/06 and T‑79/06, which ran to almost five years and nine months, cannot be justified by any of the specific circumstances of those cases.62In the first place, it is important to observe that Cases T‑72/06 and T‑79/06 concerned disputes relating to the existence of an infringement of the competition rules and that, in accordance with case-law, the fundamental requirement of legal certainty on which economic operators must be able to rely and the aim of ensuring that competition is not distorted in the internal market are of considerable importance not only for an applicant himself and his competitors but also for third parties, in view of the large number of persons concerned and the financial interests involved (judgment of 16 July 2009, Der Grüne Punkt — Duales System Deutschland v Commission, C‑385/07 P, EU:C:2009:456, paragraph 186).63In the second place, it should be noted that, in both Case T‑72/06 and Case T‑79/06, a period of some three years and 10 months, that is to say 46 months, elapsed between the end of the written part of the procedure as marked by the lodgement of the rejoinder on 20 February 2007, on the one hand, and the opening of the oral part of the procedure in December 2010, on the other.64The steps taken during that period include summarising the arguments of the parties, preparing the cases, analysing the facts and law of the disputes and preparing the oral part of the procedure. The length of that period depends, in particular, on the complexity of the dispute, the conduct of the parties and the occurrence of any procedural incidents.65As regards the complexity of the dispute, it should be recalled that Cases T‑72/06 and T‑79/06 concerned actions brought against a Commission decision relating to a proceeding under Article 101 TFEU.66As is apparent from the files in Cases T‑72/06 and T‑79/06 respectively, actions concerning the application of competition law by the Commission exhibit a greater degree of complexity than other types of case, given, in particular, the length of the contested decision, the size of the case file and the need to carry out a detailed assessment of many complex facts which are often spread over long periods and distances.67Thus, a period of 15 months between the end of the written part of the procedure and the opening of the oral part of the procedure is, in principle, an appropriate length of time for dealing with cases concerning the application of competition law such as Cases T‑72/06 and T‑79/06.68Next, account must be taken of the fact that several actions had been brought against Decision C(2005) 4634.69Actions brought against a single decision adopted by the Commission pursuant to EU competition law need, in principle, to be dealt with in parallel, including where those actions are not joined. The parallel processing of such actions is justified in particular by the connection between them and the need to ensure consistency in their analysis and in the response to be given to them.70Thus, the parallel processing of connected cases may be a justification for extending by a period of one month for each additional connected case the interval between the end of the written part of the procedure and the opening of the oral part of that procedure.71In the present case, 15 actions had been brought against Decision C(2005) 4634. However, one applicant had withdrawn its action against that decision (order of 6 July 2006, Cofira-Sac v Commission, T‑43/06, not published, EU:T:2006:192), and two actions brought against Decision C(2005) 4634 had culminated in the delivery of the judgments of 13 September 2010, Trioplast Wittenheim v Commission (T‑26/06, not published, EU:T:2010:387), and of 13 September 2010, Trioplast Industrier v Commission (T‑40/06, EU:T:2010:388).72In those circumstances, the need to deal with the other 12 cases relating to actions brought against Decision C(2005) 4634 justified an extension of the proceedings by 11 months in Case T‑72/06 and Case T‑79/06.73Consequently, a period of 26 months (15 months plus 11 months) between the end of the written part of the procedure and the opening of the oral part of the procedure was an appropriate length of time for dealing with Cases T‑72/06 and T‑79/06.74Finally, the degree of factual, legal and procedural complexity in Cases T‑72/06 and T‑79/06 is no justification for longer proceedings in this instance. In that regard, it should be noted in particular that, between the end of the written part of the procedure and the opening of the oral part of the procedure in Cases T‑72/06 and T‑79/06, the procedure was neither interrupted nor delayed by the Court’s adoption of any measure in respect of its organisation.75As regards the conduct of the parties and the occurrence of procedural incidents in Cases T‑72/06 and T‑79/06, the fact that, in October 2010, the applicants requested the reopening of the oral part of the procedure is no justification for the three years and eight months which had already elapsed since the rejoinder was lodged. Furthermore, the fact that the applicants were notified in December 2010 that a hearing would be held in February 2011 indicates that that incident can have had only minimal effect on the length of time between the end of the written part of the procedure and the opening of the oral part of the procedure in those cases.76Consequently, in the light of the circumstances of Cases T‑72/06 and T‑79/06, the fact that 46 months elapsed between the end of the written part of the procedure and the opening of the oral part of the procedure shows that there was a period of unjustified inactivity of 20 months in each of those cases.77In the third place, an examination of the files in Cases T‑72/06 and T‑79/06 respectively has not revealed anything that would support the conclusion that there was a period of unjustified inactivity between the date of lodging the applications and the date of lodging the rejoinders, or between the opening of the oral part of the procedure and the delivery of the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674).78It follows that the procedure followed in Cases T‑72/06 and T‑79/06, which culminated in the delivery of the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674), infringed the second paragraph of Article 47 of the Charter of Fundamental Rights in that it exceeded by 20 months the reasonable time for adjudicating, which constitutes a sufficiently serious breach of a rule of EU law intended to confer rights on individuals. 2. The damage alleged and the purported causal link 79It is settled case-law that the damage for which compensation is sought in an action to establish non-contractual liability on the part of the European Union must be actual and certain, which it is for the applicant to prove (see judgment of 9 November 2006, Agraz and Others v Commission, C‑243/05 P, EU:C:2006:708, paragraph 27 and the case-law cited). It falls to the applicant to adduce conclusive proof both of the existence and of the extent of the damage he alleges (see judgment of 16 September 1997, Blackspur DIY and Others v Council andCommission, C‑362/95 P, EU:C:1997:401, paragraph 31 and the case-law cited).80It is also settled case-law that the condition under the second paragraph of Article 340 TFEU relating to a causal link concerns a sufficiently direct causal nexus between the conduct of the institutions and the damage (judgments of 18 March 2010, Trubowest Handel and Makarov v Council and Commission, C‑419/08 P, EU:C:2010:147, paragraph 53, and of 14 December 2005, Beamglow v Parliament and Others, T‑383/00, EU:T:2005:453, paragraph 193; see also, to that effect, judgment of 4 October 1979, Dumortier and Others v Council, 64/76, 113/76, 167/78, 239/78, 27/79, 28/79 and 45/79, EU:C:1979:223, paragraph 21). It is for the applicant to adduce proof of the existence of a causal link between the conduct complained of and the damage alleged (see judgment of 30 September 1998, Coldiretti and Others v Council and Commission, T‑149/96, EU:T:1998:228, paragraph 101 and the case-law cited).81In the present case, the applicants submit that the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 caused them material and non-material damage. a) The material damage alleged and the purported causal link 82The applicants claim that the serious breach of the obligation to adjudicate within a reasonable time caused them material damage on two counts. First, they suffered losses both as a result of paying, beyond a reasonable period, the charges connected with the bank guarantee which they had provided so as not to have to effect immediate settlement of the amount of the fine imposed by Decision C(2005) 4634 (‘the bank guarantee charges’), and as a result of paying, beyond a reasonable period, legal interest applied to the nominal amount of the fine imposed by Decision C(2005) 4634 (‘the interest on the amount of the fine’). Secondly, the ‘throes of uncertainty’ deprived them of the opportunity to find an investor sooner and, therefore, the opportunity to make a profit or avoid a loss.83It is appropriate to examine, as a first step, the damage claimed and the purported causal link in relation to the alleged loss of the opportunity to find an investor sooner, and, as a second step, the damage claimed and the purported causal link in relation to the alleged losses sustained as a result of paying interest on the amount of the fine and as a result of paying bank guarantee charges. The alleged loss of the opportunity to find an investor sooner 84The applicants submit that the group had been experiencing financial difficulties since 2011. Having made representations to its creditors which proved fruitless, the group began to look for new investors. If Decision C(2005) 4634 had become final sooner, the climate of uncertainty with respect to the final amount of the fine, and, more specifically, the risk that the fine would be increased, would not have existed and an investor could have been found more quickly. In that regard, the fact that an agreement in principle was concluded between Groupe Gascogne and a consortium of investors led by the company Biolandes Technologies only a few days after the judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770) were delivered shows that the uncertainty with respect to the amount of the fine had a negative impact on the conduct of the group’s affairs. Lastly, the chronology of events makes unambiguously apparent the crucial link between the allegedly unreasonable time taken to adjudicate and the difficulties experienced by the Gascogne group in finding investors whose contribution was key to resolving the company’s financial predicament.8586In the present case, it is important to assess whether the applicants have demonstrated, with a sufficient degree of probability, that Gascogne had an opportunity to find an investor ‘sooner’. In other words, it must be examined whether the applicants have demonstrated that Gascogne had an actual and serious opportunity to find an investor sooner.87In that regard, first of all, it is apparent from the documents before the Court that Gascogne received, at most, five expressions of interest when it began its search for investors. In the annex to the application, the applicants include an email of 8 November 2012 from a potential investor in the United Kingdom. Furthermore, the independent expert’s report drawn up as part of Gascogne SA’s reserved capital increase plan, dated 16 May 2014, referred to in the application, explains that, following a call for tenders launched by Gascogne in January and February 2013, four expressions of interest were received from investment funds. Of the five expressions of interest received by Gascogne, only two mentioned the fine imposed by Decision C(2005) 4634 as a factor to be taken into account prior to any decision to invest.88Secondly, as regards the two potential investors that mentioned the fine imposed by Decision C(2005) 4634, there is nothing in the documents before the Court to indicate that removal of the uncertainty with respect to a possible increase in the total amount of the fine featured among the conditions for any investment.89With regard to the email of 8 November 2012 from the potential UK investor, it is apparent from reading that email that it was the existence of the fine that was liable to stand in the way of any investment. More specifically, that potential investor demanded that the French Republic bear the cost of the fine or speak to the Commission with a view to persuading it to abandon the case. A condition of any investment was thus that the debt linked to that fine should be waived altogether, not that there should be certainty that the amount of the fine would not increase.90With regard to the other expression of interest that mentioned the existence of the fine imposed by Decision C(2005) 4634, the independent expert’s report drawn up as part of Gascogne SA’s reserved capital increase plan, dated 16 May 2014, explains that that expression of interest made any investment conditional upon the waiver, in particular, of the debt linked to the fine imposed by the Commission. A condition of any investment was thus, once again, the very existence of the fine, not the certainty that the amount of that fine would not increase.91Thirdly, the documents produced or mentioned by the applicants in the application show that the waiver of the debt linked to the fine was one of a number of conditions attached to any investment. It is apparent from the email of 8 November 2012 that agreement on the part of the potential UK investor was subject to the satisfaction of a number of conditions such as the disposal of a line of business, the waiver of loans, a restructuring process and a social plan. Similarly, each of the expressions of interest mentioned in the independent expert’s report drawn up as part of Gascogne SA’s reserved capital increase project, dated 16 May 2014, included a number of cumulative conditions of investment (disposal of lines of business, waiver of receivables, rescheduling or complete waiver of debt). The applicants do not seek to demonstrate that they were in a position to satisfy all of the conditions set out in those expressions of interest. It should also be noted that the opportunity to find a buyer sooner depended on Gascogne’s willingness to accept the multiple conditions attached to any investment and the business plan associated with that investment.92Fourthly, it should be pointed out that the application contains several unsubstantiated assertions. In particular, the applicants simply submit that the finding that the new investors in Gascogne finalised their agreement only a matter of weeks after delivery of the judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770) is in itself ‘sufficient’ to demonstrate that, if the Court’s judgments had been delivered within a normal timeframe, the applicants’ situation would have been made a great deal easier and the company’s take-over would have happened much sooner. It has thus not been established that the investment which did go ahead came about as a result of a clarification of the applicants’ situation with respect to a possible increase in the amount of the fine.93It follows that the applicants have not shown that Gascogne had a serious opportunity to find an investor ‘sooner’. Neither, therefore, have they shown that Gascogne lost a serious opportunity to find an investor sooner or that that loss of opportunity constitutes actual and certain damage to Gascogne.94In the light of the foregoing, the claim for compensation for an alleged loss of an opportunity to find an investor sooner must be dismissed. The alleged losses sustained as a result of paying interest on the amount of the fine and as a result of paying the bank guarantee charges 95In the first place, the applicants submit that, at the time when they brought their actions in Cases T‑72/06 and T‑79/06, they decided not to effect immediate payment of the fine which had been imposed on them by Decision C(2005) 4634. The applicants explain that, in return, they had to agree to pay interest at a rate of 3.65% on the amount of the fine as from 15 March 2006, and to provide a bank guarantee.96In the second place, they claim that, if there had not been a breach of the obligation to adjudicate within a reasonable time, the judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), would have been delivered about 30 May 2011. They infer from this that the interest on the amount of the fine and the bank guarantee charges which they paid between 30 May 2011, the date when Decision C(2005) 4634 should have been final, and 12 December 2013, the date when the fine was actually paid, can be regarded as having been unduly paid and must be refunded.97In the third place, point 135 of the Opinion of Advocate General Sharpston in Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:360) shows that there is a direct link between the breach of the obligation to adjudicate within a reasonable time and the additional costs of paying interest on the amount of the fine and paying the bank guarantee charges.98The Court of Justice of the European Union disputes those arguments.99First, it contends that the interest which the applicants had to pay for the period between 30 May 2011 and 12 December 2013 cannot be classified as damage.100Secondly, it considers that there is no sufficiently direct causal link between the material damage relating to the bank guarantee charges and the interest on the amount of the fine, on the one hand, and the breach of the obligation to adjudicate within a reasonable time, on the other hand. To begin with, that material damage was an outcome of the applicants’ own choosing. Next, the existence of a causal link cannot be established solely on the basis of the finding that, if the reasonable time for adjudication had not been exceeded, the applicants would not have been obliged to pay bank guarantee charges and interest on the amount of the fine for the period of that overrun. Finally, the fact that the applicants did not have sufficient funds to pay the fine at the time when Decision C(2005) 4634 was adopted renders the causal link between the material damage claimed and the alleged breach of the obligation to adjudicate within a reasonable time insufficiently direct. Moreover, the applicants did not make an application for interim measures aimed at suspending the operation of Decision C(2005) 4634.– Preliminary observations 101It should be noted that Article 2 of Decision C(2005) 4634 provided that the fines imposed by that decision had to be paid within three months of the date of its notification. Pursuant to Article 86 of Commission Regulation (EC, Euratom) No 2342/2002 of 23 December 2002 laying down detailed rules for the implementation of Council Regulation (EC, Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European Communities (OJ 2002 L 357, p. 1), Article 2 of that decision stated that, after expiry of that three-month period, interest was to be automatically payable at the interest rate applied by the ECB to its main refinancing operations on the first day of the month in which the Decision was adopted, plus 3.5 percentage points, namely 5.56%.102In accordance with the first paragraph of Article 299 TFEU, Decision C(2005) 4634 was enforceable, since Article 2 thereof imposed a pecuniary obligation on the applicants. Furthermore, the fact that an action for annulment was brought against that decision, pursuant to Article 263 TFEU, did not call into question the enforceability of that decision, in so far as, under Article 278 TFEU, actions brought before the Court of Justice of the European Union are not to have suspensory effect.103On 15 December 2005, the Commission notified Decision C(2005) 4634 to the applicants. In so doing, it stated that, if the applicants instituted proceedings before the General Court or the Court of Justice, no recovery measures would be taken as long as the case was pending, provided that two conditions were satisfied before the date of expiry of the time for payment. Pursuant to Article 86(5) of Regulation No 2342/2002, those two conditions were, first, that the amount receivable by the Commission was to produce interest from the date of expiry of the time for payment at a rate of 3.56%, and, secondly, that a bank guarantee acceptable to the Commission, covering both the debt and the interest on or increased amount of the debt, had to be provided before the payment deadline.104In their application in the present case, the applicants explain that they decided not to effect immediate payment of the amount which had been imposed on them and to provide a bank guarantee, in accordance with the option made available to them by the Commission in return for the payment of interest at a rate of 3.56%.105The material damage alleged and the purported causal link between that damage and the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 must be examined in the light of those observations.– Payment of interest on the amount of the fine 106In the first place, it is important to note that, as a result of the combined application of the first paragraph of Article 299 and Article 278 TFEU, referred to in paragraph 102 above, the amount of the fine imposed by Decision C(2005) 4634 was owed to the Commission despite the fact that an action for annulment had been brought against that decision. Thus, the interest on the amount of the fine, the rate of which was 3.65%, must be classified as default interest.107In the second place, it should be pointed out that, during the proceedings in Cases T‑72/06 and T‑79/06, the applicants paid neither the amount of the fine nor the default interest. Thus, during the proceedings in those cases, the applicants were in possession of the sum corresponding to the amount of that fine plus default interest.108The applicants have adduced no evidence to show that, during the period by which the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded, the amount of the default interest that was later paid to the Commission was greater than the advantage conferred on them by possession of the sum equal to the amount of the fine plus default interest. In other words, the applicants have not demonstrated that the interest on the amount of the fine that accrued during the period by which the reasonable time for adjudication was exceeded was greater than the advantage conferred on them by not paying the fine plus the interest due on the date on which the breach of the obligation to adjudicate within a reasonable time was committed and the interest that fell due while that breach was ongoing.109It follows that the applicants have not demonstrated that, during the period by which the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded, they suffered actual and certain damage as a result of paying default interest on the amount of the fine imposed in Decision C(2005) 4634.110Consequently, the claim for compensation for the alleged damage consisting in losses sustained as a result of paying interest on the amount of the fine beyond a reasonable period must be dismissed, there being no need to assess which applicant actually paid default interest or whether the causal link claimed was present.– Payment of the bank guarantee charges 111In the first place, as regards the damage, it is apparent from the documents before the Court that the guarantee of payment of the total amount of the fine plus default interest was provided by the bank of Groupe Gascogne, now Gascogne. Moreover, the documents before the Court show that Gascogne paid bank guarantee charges, in the form of quarterly commissions, during the proceedings in Cases T‑72/06 and T‑79/06.112It follows that Gascogne Sack Deutschland has not demonstrated that the damage which it claims to have suffered, consisting in losses sustained as a result of paying bank guarantee charges beyond a reasonable time, was actual and certain.113The claim for compensation for the alleged damage consisting in losses sustained by Gascogne Sack Deutschland as a result of paying bank guarantee charges beyond a reasonable time must therefore be dismissed.114However, in the light of the documents before the Court, it must be found that Gascogne has demonstrated that it suffered actual and certain damage consisting in a loss sustained as a result of paying bank guarantee charges during the period by which the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded.115In the second place, as regards the causal link, it should be noted that, if the length of the proceedings in Cases T‑72/06 and T‑79/06 had not exceeded the reasonable time for adjudication, Gascogne would not have had to pay any bank guarantee charges during that excess period.116Thus, there is a causal link between the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 and the occurrence of the damage suffered by Gascogne in the form of a loss sustained as a result of its having paid bank guarantee charges during the period by which the reasonable time for adjudication was exceeded.117It should also be noted that the conduct complained of must, it is true, be the determining cause of the damage (order of 31 March 2011, Mauerhofer v Commission, C‑433/10 P, not published, EU:C:2011:204, paragraph 127, and judgment of 10 May 2006, Galileo International Technology and Others v Commission, T‑279/03, EU:T:2006:121, paragraph 130; see also, to that effect, judgment of18 March 2010, Trubowest Handel and Makarov v Council and Commission, C‑419/08 P, EU:C:2010:147, paragraph 61). In other words, even in the case of a possible contribution by the institutions to the damage for which compensation is sought, that contribution might be too remote because of some responsibility resting on others, possibly the applicant (judgment of 18 March 2010, Trubowest Handel and Makarov v Council and Commission, C‑419/08 P, EU:C:2010:147, paragraph 59, and order of 31 March 2011, Mauerhofer v Commission, C‑433/10 P, not published, EU:C:2011:204, paragraph 132).118Furthermore, it has already been held that alleged damage consisting in bank guarantee charges incurred by a company penalised by a Commission decision later annulled by the General Court was not the direct consequence of the unlawfulness of that decision, on the ground that that damage was the consequence of that company’s own decision to provide a bank guarantee so as not to comply with the obligation to pay the fine within the period stipulated in the contested decision [see, to that effect, judgment of 21 April 20015, Holcim (Deutschland) v Commission, T‑28/03, EU:T:2005:139, paragraph 123, and order of 12 December 2007, Atlantic Container Line and Others v Commission, T‑113/04, not published, EU:T:2007:377, paragraph 38].119In the present case, however, it should be noted, first, that, at the time when the applicants brought their actions in Cases T‑72/06 and T‑79/06, on 23 February 2006, and at the time when Gascogne provided a bank guarantee, in March 2006, the breach of the obligation to adjudicate within a reasonable time was unforeseeable. Furthermore, Gascogne could legitimately expect those actions to be dealt with within a reasonable time.120Secondly, the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded after Gascogne’s initial decision to provide a bank guarantee.121Thus, the facts of the present case differ substantially from those established in the judgment of 21 April 2005, Holcim (Deutschland) v Commission (T‑28/03, EU:T:2005:139), and the order of 12 December 2007, Atlantic Container Line and Others v Commission (T‑113/04, not published, EU:T:2007:377), referred to in paragraph 118 above. The link between the fact that the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded and the payment of bank guarantee charges during that excess period cannot, therefore, contrary to the claim made by the Court of Justice of the European Union, have been severed by Gascogne’s initial decision not to effect immediate payment of the fine imposed by Decision C(2005) 4634 and to provide a bank guarantee.122It follows that there is a sufficiently direct causal link between the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 and the loss sustained by Gascogne as a result of paying bank guarantee charges during the period by which that time was exceeded.123In the third place, the applicants submit that they suffered damage during the period between 30 May 2011, the date on which Decision C(2005) 4634 should have been final, and 12 December, the date on which the fine was actually paid.124In that regard, first of all, it should be noted that, in their action, the applicants allege a breach of the obligation to adjudicate within a reasonable time only in Cases T‑72/06 and T‑79/06. They do not therefore allege a breach of the obligation to adjudicate within a reasonable time as a result of the total length of the proceedings, in Case T‑72/06 inasmuch as that case gave rise to the judgment of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), and in Case T‑79/06 inasmuch as that case gave rise to the judgment of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768).125Thus, in the present case, it has been established only that the proceedings in Cases T‑72/06 and T‑79/06 breached the obligation to adjudicate within a reasonable time (see paragraph 78 above).126Next, the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 came to an end with the delivery of the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674).127Thus, from 16 November 2011 onwards, the applicants were in a position to assess both the existence of a breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 and the damage which Gascogne had suffered in the form of a loss sustained as a result of paying bank guarantee charges during the period by which that time was exceeded.128Furthermore, in the appeals which they brought on 27 January 2012 against the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674), the applicants claimed that the excessive length of the proceedings in Cases T‑72/06 and T‑79/06 had had onerous financial repercussions for them and, on that account, sought, a reduction of the fine for which they were jointly and severally liable.129Lastly, Decision C(2005) 4634, which imposed a fine on the applicants, did not become final until 26 November 2013 and the option given by the Commission of providing a bank guarantee expired on that date because the applicants decided to appeal against the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674).130It follows that payment of the bank guarantee charges after the delivery of the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674), which brought to an end the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06, does not exhibit a sufficiently direct causal link with that breach, since the payment of such charges is the consequence of the personal and independent decision which the applicants took, after that breach, not to pay the fine, not to request suspension of the operation of Decision C(2005) 4634 and to appeal against the aforementioned judgments.131It follows from all of the foregoing that there is a sufficiently direct causal link between the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06, on the one hand, and the damage suffered by Gascogne before the delivery of the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674), consisting in the payment of bank guarantee charges during the period by which that reasonable time was exceeded, on the other hand. Assessment of the material damage suffered 132In the first place, it is important to recall that the length of the proceedings in Cases T‑72/06 and T‑79/06 exceeded by 20 months the reasonable time for adjudicating in each of those cases (see paragraph 78 above).133In the second place, the applicants claim that they suffered damage during the period between 30 May 2011, the date on which Decision C(2005) 4634 should have been final, and 12 December 2013, the date on which the fine was actually paid.134In that regard, the applicants state in the application that all of the bank guarantee charges which they paid ‘beyond 30 May 2011’ must be regarded as losses sustained. In support of their claim for compensation, they produce bank transaction notices starting from the second quarter of 2011.135Thus, when read in the light of the grounds of the application, the request for compensation made by the applicants under their second head of claim, in the amount of EUR 184571, relates to the payment of the bank guarantee charges incurred from 30 May 2011.136It follows from the rules governing the procedure before the Courts of the European Union, in particular Article 21 of the Statute of the Court of Justice of the European Union and Article 44(1) of the Rules of Procedure of 2 May 1991, that the dispute is in principle determined and circumscribed by the parties and that the Courts of the European Union may not rule ultra petita (judgments of 10 December 2013, Commission v Ireland and Others, C‑272/12 P, EU:C:2013:812, paragraph 27, and of 3 July 2014, Electrabel v Commission, C‑84/13 P, not published, EU:C:2014:2040, paragraph 49).137Thus, the Court cannot deviate from the applicants’ claim and decide of its own motion to make good damage suffered before 30 May 2011, that is to say damage suffered during a period chronologically different from that during which they claim to have suffered damage.138Moreover, the bank guarantee charges paid by Gascogne after 16 November 2011 do not exhibit a sufficiently direct causal link with the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 (see paragraph 130 above).139In the present case, therefore, the compensable damage corresponds to the bank guarantee charges paid by Gascogne between 30 May 2011 and 16 November 2011.140In the third place, it is apparent from the documents produced by the applicants that the bank guarantee charges were paid by Gascogne on a quarterly basis and that a quarterly commission was payable in full if the bank guarantee continued into a new quarter. Those documents also show that, for the second, third and fourth quarters of 2011, the bank guarantee charges paid by Gascogne amounted to EUR 19 945.21, EUR 20 120.38 and EUR 20 295.55 respectively.141The bank guarantee charges incurred by Gascogne were therefore EUR 6 648.40 in June 2011, EUR 20 120.38 for the third quarter of 2011 and EUR 20 295.55 for the fourth quarter of 2011.142It follows that the bank guarantee charges paid by Gascogne during the period between 30 May 2011 and 16 November 2011 amounted to EUR 47 064.33.143In the light of the foregoing, it is appropriate to award Gascogne compensation in the amount of EUR 47 064.33 by way of reparation for the material damage caused to it by the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 and consisting in the payment of additional bank guarantee charges. b) The non-material damage alleged and the purported causal link 144The applicants claim that the breach of the obligation to adjudicate within a reasonable time gave rise to non-material damage of several kinds, namely harm to the company’s reputation, uncertainty in decision-making, difficulties in managing the business itself and, lastly, anxiety and inconvenience experienced by the members of the company’s executive bodies and employees. In their submission, moreover, there is a direct causal link between the breach of the obligation to adjudicate within a reasonable time and the non-material damage alleged. The applicants estimate the non-material damage caused to them to be EUR 500000 at least.145In response, the Court of Justice of the European Union contends, in the first place, that the applicants have not spelled out the constituent elements of the non-material damage caused to them and have not shown that they suffered actual and certain damage. In the second place and in the alternative, the applicants have not proved the existence of a causal link between the breach of the obligation to adjudicate within a reasonable time and the non-material damage which they allege. In the third place and in the further alternative, the non-material damage should be assessed at EUR 5000 at most.146It is appropriate to assess, first, the non-material damage allegedly suffered by the members of the applicants’ executive bodies and employees and, secondly, the non-material damage allegedly suffered by the applicants themselves. The non-material damage allegedly suffered by the members of the applicants’ executive bodies and employees 147It should be noted that the relief sought in the application relates only to the applicants’ own interests, not to the personal interests of their executives or employees. Furthermore, the applicants do not cite any transfer of rights or explicit authority that would entitle them to assert a claim for compensation for the damage suffered by their executives and employees.148Thus, the claim for compensation for the non-material damage allegedly suffered by the applicants’ executives and employees must be rejected as inadmissible, on the ground that there is nothing in the documents before the Court to indicate that the applicants were authorised by their executives and employees to bring an action for damages on their behalf (see, to that effect, order of 12 May 2010, CPEM v Commission, C‑350/09 P, not published, EU:C:2010:267, paragraph 61, and judgment of 30 June 2009, CPEM v Commission, T‑444/07, EU:T:2009:227, paragraphs 39 and 40).149In any event, the existence of damage suffered by the applicants’ executives or employees has not been established. For one thing, the applicants argue by way of assertion only and do not adduce any specific evidence of the anxiety and inconvenience experienced by their executives and employees as a result of the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06. What is more, the applicants have not demonstrated that their executives and employees suffered direct personal harm separate from the damage which they themselves claim to have suffered.150Consequently, the claim for compensation for the non-material damage allegedly suffered by the members of the applicants’ executive bodies and employees must be rejected as inadmissible and, in any event, unfounded. The non-material damage allegedly suffered by the applicants 151It follows from case-law that, where an applicant has put forward nothing to show the existence of its non-material damage or to establish its extent, it falls to it, at the very least, to prove that the conduct of which it complains was, by reason of its gravity, such as to cause it damage of that kind (see, to that effect, judgments of 16 July 2009, SELEX Sistemi Integrati v Commission, C‑481/07 P, not published, EU:C:2009:461, paragraph 38; of 28 February 1999, BAI v Commission, T‑230/95, EU:T:1999:11, paragraph 39; and of 16 October 2014, Evropaïki Dynamiki v Commission, T‑297/12, not published, EU:T:2014:888, paragraphs 31, 46 and 63).152In that regard, it should be noted in the first place that the application simply refers to damage to the applicants’ reputation, without providing any further details.153Consequently, the applicants have not demonstrated that the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 was such as to harm their reputation.154In any event, in the present case, the finding in paragraph 78 above that there has been a breach of the obligation to adjudicate within a reasonable time would, in the light of the gravity of that breach, be sufficient to make good the reputational harm alleged by the applicants.155In the second place, the fact that the applicants were put in a position of uncertainty, in particular as regards whether their actions against Decision C(2005) 4634 would be successful, is an inherent feature of any court proceedings. Moreover, the applicants were necessarily aware that Cases T‑72/06 and T‑79/06 involved some degree of complexity and that that complexity was linked both to the number of parallel actions brought in succession before the Court, in different procedural languages, against Decision C(2005) 4634, and to the need for that Court to carry out a detailed preliminary analysis of large case files, in particular the need to establish the facts and undertake a material examination of the dispute.156However, the proceedings in Cases T‑72/06 and T‑79/06, which lasted five years and nine months, were longer than the applicants could have anticipated that they would be, in particular at the time when they brought their actions. Furthermore, it is apparent from the proceedings in Cases T‑72.06 and T‑79/06 that a period of three years and 10 months elapsed between the end of the written part of the procedure and the opening of the oral part of the procedure. Those periods are not in any way justified by the adoption of measures of organisation of procedure or measures of inquiry or the occurrence of procedural incidents.157In those circumstances, the failure to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 was such as to put the applicants in a position of uncertainty greater than that normally engendered by court proceedings. That prolonged state of uncertainty inevitably had an impact on decision-making and the running of those businesses and therefore constituted non-material damage.158In the third place, in the circumstances of the present case, the non-material damage suffered by the applicants as a result of the prolonged state of uncertainty in which they were placed is not fully compensated by the finding of a breach of the obligation to adjudicate within a reasonable time.159In that regard, the applicants claim that the non-material damage caused to them must be assessed at EUR 500000‘at least’, in the light of the circumstances.160However, first, the applicants have not adduced any evidence to justify a claim in the amount of EUR 500000‘at least’ by way of compensation for the non-material damage caused to them. It should also be noted that the amount sought by the applicants is intended as reparation for several heads of non-material damage, in particular for reputational harm, which has not been demonstrated and which, in any event, is sufficiently compensated by the finding of a breach of the obligation to adjudicate within a reasonable time (see paragraphs 152 to 154 above).161Secondly, the Court of Justice has held that, having regard to the need to ensure that the competition rules of EU law are complied with, the Court of Justice cannot allow an appellant to reopen the question of the validity or amount of a fine, on the sole ground that there was a failure to adjudicate within a reasonable time, where all of its pleas directed against the findings concerning the amount of that fine and the conduct that it penalises have been rejected (judgment of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraph 78; see also, to that effect, judgments of 16 July 2009, Der Grüne Punkt — Duales System Deutschland v Commission, C‑385/07 P, EU:C:2009:456, paragraph 194, and of 8 May 2014, Bolloré v Commission, C‑414/12 P, not published, EU:C:2014:301, paragraph 105).162It follows that the failure to adjudicate within a reasonable time when examining a legal action brought against a Commission decision imposing a fine on an undertaking for infringing the EU law competition rules cannot lead to the annulment, in whole or in part, of the fine imposed by that decision (judgments of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraph 7[9], and of 26 November 2013, Kendrion v Commission, C‑50/12 P, EU:C:2013:771, paragraph 88; see also, to that effect, judgment of 8 May 2014, Bolloré v Commission, C‑414/12 P, not published, EU:C:2014:301, paragraph 107).163Given the extent of it, the compensation sought by the applicants as reparation for the non-material damage they have suffered would, if awarded, have the effect of reopening the question of the amount of the fine imposed on the applicants by Decision C(2005) 4634, even though it has not been established that the failure to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 had any bearing on the amount of that fine.164Thus, the amount sought by the applicants cannot be regarded as a relevant criterion for the purposes of assessing the amount of compensation that they are entitled to claim.165Consequently, taking into account the findings made in paragraphs 155 to 164 above, in particular the extent of the failure to adjudicate within a reasonable time, the applicants’ conduct and the need to ensure that the rules of EU competition law are complied with and the present action is effective, it must be decided ex aequo et bono that an award of compensation of EUR 5000 to each of the applicants constitutes adequate reparation for the damage they suffered as a result of the prolonged state of uncertainty in which they each found themselves during the proceedings in Cases T‑72/06 and T‑79/06. c) Interest 166The applicants have asked the Court to order that any amount of compensation that it may award to them bear compensatory and default interest at the rate applied by the ECB to its main refinancing operations, increased by two percentage points, starting from the date when the application was made.167In that regard, a distinction must be drawn between compensatory interest and default interest (judgment of 27 January 2000, Mulder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:2000:38, paragraph 55).168In the first place, as regards compensatory interest, it should be recalled that the adverse consequences of a lapse of time between the occurrence of the actionable event and the assessment of the compensation cannot be disregarded, inasmuch as the effects of inflation must be taken into account (see, to that effect, judgments of 3 February 1994, Grifoni v Commission, C‑308/87, EU:C:1994:38, paragraph 40, and of 13 July 2005, Camar v Council and Commission, T‑260/97, EU:T:2005:283, paragraph 138). Compensatory interest is designed to compensate for the time that passes before the judicial assessment of the amount of damage, irrespective of any delay attributable to the debtor (judgment of 12 February 2015, Commission v IPK International, C‑336/13 P, EU:C:2015:83, paragraph 37).169The end of the period for which such monetary revaluation is available must, in principle, coincide with the date of delivery of the judgment establishing the obligation to make good the damage suffered by the applicant (see, to that effect, judgments of 19 May 1992, Mulder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:1992:217, paragraph 35; of 13 July 2005, Camar v Council and Commission, T‑260/97, EU:T:2005:283, paragraphs 142 and 143; and of 26 November 2008, Agraz and Others v Commission, T‑285/03, not published, EU:T:2008:526, paragraphs 54 and 55).170In the present case, the compensation awarded to each of the applicants as reparation for the non-material damage which they have each suffered covers the period prior to the date of delivery of the present judgment and there is therefore no need to award compensatory interest for the period preceding that date.171Moreover, as regards the compensation due to Gascogne as reparation for the material damage which that company has suffered, it follows from the case-law cited in paragraph 168 above that the applicants would be entitled to request that that compensation bear compensatory interest from 30 May 2011.172However, by their second head of claim, the applicants ask, as they confirmed at the hearing, that the amount of compensation to which they are entitled bear compensatory interest ‘from the date when the application was made’ in the present case.173Consequently, the compensatory interest to be borne by the compensation due to Gascogne as reparation for the material damage which it suffered, runs from 4 August 2014, in accordance with the claim in the application.174Furthermore, the applicants claim to have sustained a loss but do not supply any evidence to show that the bank guarantee charges paid by Gascogne between 30 May 2011 and 16 November 2011 could have produced interest at the rate applied by the ECB to its main refinancing operations, increased by two percentage points (see, to that effect, judgments of 27 January 2000, Mulder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:2000:38, paragraph 219, and of 26 November 2008, Agraz and Others v Commission, T‑285/03, not published, EU:T:2008:526, paragraph 49).175Thus, Gascogne cannot seek the application of compensatory interest calculated on the basis of the rate applied by the ECB to its main refinancing operations, increased by two percentage points.176The monetary depreciation linked to the passage of time, on the other hand, is reflected by the annual rate of inflation determined, for the period in question, by Eurostat (the European Union’s statistical office) in the Member State where Gascogne is established (see, to that effect, judgments of 27 January 2000, Mulder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:2000:38, paragraphs 220 and 221; of 13 July 2005, Camar v Council and Commission, T‑260/97, EU:T:2005:283, paragraph 139; and of 26 November 2008, Agraz and Others v Commission, T‑285/03, not published, EU:T:2008:526, paragraph 50).177Consequently, the rate of compensatory interest to be borne by the compensation due to Gascogne as reparation for the material damage which it suffered corresponds to the annual rate of inflation determined by Eurostat in the Member State where that company is established, for the period between 4 August 2014 and the date of delivery of the present judgment, up to a value not exceeding that claimed by the applicants.178In the second place, as regards the default interest, it follows from case-law that the obligation to pay such interest arises, in principle, on the date of the judgment establishing the obligation to make good the damage (see, to that effect, judgment of 26 June 1990, Sofrimport v Commission, C‑152/88, EU:C:1990:259, paragraph 32 and the case-law cited).179For the purposes of determining the default interest rate, it is appropriate to take into account Article 83(2)(b) and Article 111(4)(a) of Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (OJ 2012 L 362, p. 1). Pursuant to those provisions, the interest rate for amounts receivable not repaid within the periods stipulated is to be the rate applied by the ECB to its principal refinancing operations, as published in the C series of the Official Journal of the European Union, in force on the first calendar day of the month in which the deadline falls, increased by three and a half percentage points.180In the present case, the compensation referred to in paragraphs 143 and 165 above, including the compensatory interest borne by the compensation due as reparation for the material damage suffered by Gascogne, must be increased by default interest, starting from the date of delivery of the present judgment until full payment.181Moreover, the rate of that increase must not exceed that claimed by the applicants (see, to that effect, judgments of 19 May 1992, Mulder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:1992:217, paragraph 35, and of 8 May 2007, Citymo v Commission, T‑271/04, EU:T:2007:128, paragraph 184).182The rate of the default interest will therefore be that set by the ECB for its main refinancing operations, increased by two percentage points, in accordance with the applicants’ claim. d) Conclusion with respect to the amount of compensation and the interest 183In the light of all of the foregoing, the present action must be partially upheld in so far as it seeks compensation for the damage suffered by the applicants as a result of the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06, there being no need to order the commissioning of the expert’s report sought by the applicants in the alternative.184The compensation due to Gascogne as reparation for the damage which it suffered as a result of paying additional bank guarantee charges amounts to EUR 47 064.33, increased by compensatory interest, starting from 4 August 2014 until delivery of the present judgment, at the annual rate of inflation determined by Eurostat in the Member State where that company is established.185The compensation due to each applicant as reparation for the non-material damage caused to it amounts to the sum of EUR 5000.186The amount of the compensation referred to in paragraphs 184 and 185 above, including the compensatory interest borne by the compensation due as reparation for the material damage suffered by Gascogne, will be increased by default interest in the manner defined in paragraphs 180 and 182 above.187The action is dismissed as to the remainder. Costs 188Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. In the order of 2 February 2015, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, not published, EU:T:2015:80), the objection of inadmissibility raised by the Court of Justice of the European Union was rejected and the costs were reserved. The European Union, represented by the Court of Justice of the European Union, must therefore be ordered to bear not only its own costs but also those incurred by the applicants in connection with the objection of inadmissibility that gave rise to the order of 2 February 2015, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, not published, EU:T:2015:80).189Under Article 134(3) of the Rules of Procedure, the parties are to bear their own costs where each party succeeds on some and fails on other heads. However, if it appears justified in the circumstances of the case, the General Court may order that one party, in addition to bearing his own costs, pay a proportion of the costs of the other party.190In the present case, the applicants have been successful in their heads of claim on the substance of the case. However, they have largely failed in their claim for compensation. For that reason, and taking into account all of the circumstances of the case, it is appropriate to decide that each party is to bear its own costs.191In accordance with Article 138(1) of the Rules of Procedure, Member States and institutions which have intervened in the proceedings are to bear their own costs. It is appropriate to decide that the Commission must bear its own costs.On those grounds,hereby: 1. Orders the European Union, represented by the Court of Justice of the European Union, to pay compensation of EUR 47 064.33 to Gascogne for the material damage suffered by that company as a result of the breach of the obligation to adjudicate within a reasonable time in the cases giving rise to the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674). That compensation is to be reassessed by applying compensatory interest, starting from 4 August 2014 and continuing up to the date of delivery of the present judgment, at the annual rate of inflation determined, for the period in question, by Eurostat (the European Union’s statistical office) in the Member State where they are established; 2. Orders the European Union, represented by the Court of Justice of the European Union, to pay compensation of EUR 5000 to Gascogne Sack Deutschland GmbH and compensation of EUR 5000 to Gascogne for the non-material damage which those companies have each suffered as a result of the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06; 3. Each of the compensatory sums referred to in points (1) and (2) above is to bear default interest, starting from the date of delivery of the present judgment and continuing until full payment, at the rate set by the ECB for its principal refinancing operations, increased by two percentage points; 4. The action is dismissed as to the remainder; 5. Orders the European Union, represented by the Court of Justice of the European Union, to bear not only its own costs but also the costs incurred by Gascogne Sack Deutschland and by Gascogne in connection with the objection of inadmissibility which gave rise to the order of 2 February 2015, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, not published, EU:T:2015:80 ); 6. Orders Gascogne Sack Deutschland and Gascogne, on the one hand, and the European Union, represented by the Court of Justice of the European Union, on the other hand, to bear their own costs in connection with the appeal which gave rise to the present judgment; 7. Orders the European Commission to bear its own costs. PapasavvasLabuckaBieliūnasKreuschitzForresterDelivered in open court in Luxembourg on 10 January 2017.[Signatures]( *1 ) Language of the case: French. | 149a4-7c53498-45c4 | EN |
Advocate General Bobek: the operator of a website embedding a third party plugin such as the Facebook Like button, which causes the collection and transmission of the users’ personal data, is jointly responsible for that stage of the data processing | 29 July 2019 ( *1 )(Reference for a preliminary ruling — Protection of individuals with regard to the processing of personal data — Directive 95/46/EC — Article 2(d) — Notion of ‘controller’ — Operator of a website who has embedded on that website a social plugin that allows the personal data of a visitor to that website to be transferred to the provider of that plugin — Article 7(f) — Lawfulness of data processing — Taking into account of the interest of the operator of the website or of that of the provider of the social plugin — Article 2(h) and Article 7(a) — Consent of the data subject — Article 10 — Informing the data subject — National legislation allowing consumer-protection associations to bring or defend legal proceedings)In Case C‑40/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany), made by decision of 19 January 2017, received at the Court on 26 January 2017, in the proceedings Fashion ID GmbH & Co. KG v Verbraucherzentrale NRW eV, interveners: Facebook Ireland Ltd, Landesbeauftragte für Datenschutz und Informationsfreiheit Nordrhein-Westfalen, THE COURT (Second Chamber),composed of K. Lenaerts, President of the Court, acting as President of the Second Chamber, A. Prechal, C. Toader, A. Rosas (Rapporteur) and M. Ilešič, Judges,Advocate General: M. Bobek,Registrar: D. Dittert, Head of Unit,having regard to the written procedure and further to the hearing on 6 September 2018,after considering the observations submitted on behalf of:–Fashion ID GmbH & Co. KG, by C.-M. Althaus and J. Nebel, Rechtsanwälte,Verbraucherzentrale NRW eV, by K. Kruse, C. Rempe and S. Meyer, Rechtsanwälte,Facebook Ireland Ltd, by H.-G. Kamann, C. Schwedler and M. Braun, Rechtsanwälte, and by I. Perego, avvocatessa,Landesbeauftragte für Datenschutz und Informationsfreiheit Nordrhein-Westfalen, by U. Merger, acting as Agent,the German Government, initially by T. Henze and J. Möller, and subsequently by J. Möller, acting as Agents,the Belgian Government, by P. Cottin and L. Van den Broeck, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and P. Gentili, avvocato dello Stato,the Austrian Government, initially by C. Pesendorfer, and subsequently by G. Kunnert, acting as Agents,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by H. Krämer and H. Kranenborg, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 19 December 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 2, 7, 10 and 22 to 24 of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ 1995 L 281, p. 31).2The request has been made in proceedings between Fashion ID GmbH & Co. KG and Verbraucherzentrale NRW eV concerning Fashion ID’s embedding of a social plugin provided by Facebook Ireland Ltd on the website of Fashion ID. Legal context European Union law 3With effect from 25 May 2018, Directive 95/46 was repealed and replaced by Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (OJ 2016 L 119, p. 1). However, in the light of the date of the facts in the dispute in the main proceedings, it is Directive 95/46 that is applicable to that dispute.4Recital 10 of Directive 95/46 states:‘Whereas the object of the national laws on the processing of personal data is to protect fundamental rights and freedoms, notably the right to privacy, which is recognised both in Article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms[, signed in Rome on 4 November 1950,] and in the general principles of [EU] law; whereas, for that reason, the approximation of those laws must not result in any lessening of the protection they afford but must, on the contrary, seek to ensure a high level of protection in the [European Union]’.5Article 1 of Directive 95/46 provides:‘1. In accordance with this Directive, Member States shall protect the fundamental rights and freedoms of natural persons, and in particular their right to privacy with respect to the processing of personal data.2. Member States shall neither restrict nor prohibit the free flow of personal data between Member States for reasons connected with the protection afforded under paragraph 1.’6Article 2 of that directive provides:‘For the purposes of this Directive:(a)“personal data” shall mean any information relating to an identified or identifiable natural person (“data subject”); an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity;(b)“processing of personal data” (“processing”) shall mean any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organisation, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction;…(d)“controller” shall mean the natural or legal person, public authority, agency or any other body which alone or jointly with others determines the purposes and means of the processing of personal data; where the purposes and means of processing are determined by national or [EU] laws or regulations, the controller or the specific criteria for his nomination may be designated by national or [EU] law;(f)“third party” shall mean any natural or legal person, public authority, agency or any other body other than the data subject, the controller, the processor and the persons who, under the direct authority of the controller or the processor, are authorised to process the data;(g)“recipient” shall mean a natural or legal person, public authority, agency or any other body to whom data are disclosed, whether a third party or not; however, authorities which may receive data in the framework of a particular inquiry shall not be regarded as recipients;(h)“the data subject’s consent” shall mean any freely given specific and informed indication of his wishes by which the data subject signifies his agreement to personal data relating to him being processed.’7Article 7 of that directive states:‘Member States shall provide that personal data may be processed only if:the data subject has unambiguously given his consent; orprocessing is necessary for the purposes of the legitimate interests pursued by the controller or by the third party or parties to whom the data are disclosed, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection under Article 1(1).’8Article 10 of Directive 95/46, headed ‘Information in cases of collection of data from the data subject’, provides:‘Member States shall provide that the controller or his representative must provide a data subject from whom data relating to himself are collected with at least the following information, except where he already has it:the identity of the controller and of his representative, if any;the purposes of the processing for which the data are intended;(c)any further information such asthe recipients or categories of recipients of the data,whether replies to the questions are obligatory or voluntary, as well as the possible consequences of failure to reply,the existence of the right of access to and the right to rectify the data concerning himin so far as such further information is necessary, having regard to the specific circumstances in which the data are collected, to guarantee fair processing in respect of the data subject.’9Article 22 of Directive 95/46 is worded as follows:‘Without prejudice to any administrative remedy for which provision may be made, inter alia before the supervisory authority referred to in Article 28, prior to referral to the judicial authority, Member States shall provide for the right of every person to a judicial remedy for any breach of the rights guaranteed him by the national law applicable to the processing in question.’10Article 23 of that directive states:‘1. Member States shall provide that any person who has suffered damage as a result of an unlawful processing operation or of any act incompatible with the national provisions adopted pursuant to this Directive is entitled to receive compensation from the controller for the damage suffered.2. The controller may be exempted from this liability, in whole or in part, if he proves that he is not responsible for the event giving rise to the damage.’11Article 24 of that directive provides:‘The Member States shall adopt suitable measures to ensure the full implementation of the provisions of this Directive and shall in particular lay down the sanctions to be imposed in case of infringement of the provisions adopted pursuant to this Directive.’12Article 28 of Directive 95/46 states:‘1. Each Member State shall provide that one or more public authorities are responsible for monitoring the application within its territory of the provisions adopted by the Member States pursuant to this Directive.These authorities shall act with complete independence in exercising the functions entrusted to them.3. Each authority shall in particular be endowed with:the power to engage in legal proceedings where the national provisions adopted pursuant to this Directive have been violated or to bring these violations to the attention of the judicial authorities.4. Each supervisory authority shall hear claims lodged by any person, or by an association representing that person, concerning the protection of his rights and freedoms in regard to the processing of personal data. The person concerned shall be informed of the outcome of the claim.…’13Article 5(3) of Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) (OJ 2002 L 201, p. 37), as amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 (OJ 2009 L 337, p. 11), (‘Directive 2002/58’) provides:‘Member States shall ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information, in accordance with Directive [95/46], inter alia, about the purposes of the processing. This shall not prevent any technical storage or access for the sole purpose of carrying out the transmission of a communication over an electronic communications network, or as strictly necessary in order for the provider of an information society service explicitly requested by the subscriber or user to provide the service.’14Article 1(1) of Directive 2009/22/EC of the European Parliament and of the Council of 23 April 2009 on injunctions for the protection of consumers’ interests (OJ 2009 L 110, p. 30), as amended by Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 (OJ 2013 L 165, p. 1), (‘Directive 2009/22’) provides:‘The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to actions for an injunction referred to in Article 2 aimed at the protection of the collective interests of consumers included in the Union acts listed in Annex I, with a view to ensuring the smooth functioning of the internal market.’15‘1. Member States shall designate the courts or administrative authorities competent to rule on proceedings commenced by qualified entities within the meaning of Article 3 seeking:an order with all due expediency, where appropriate by way of summary procedure, requiring the cessation or prohibition of any infringement;16‘This Directive shall not prevent Member States from adopting or maintaining in force provisions designed to grant qualified entities and any other person concerned more extensive rights to bring action at national level.’17Article 80 of Regulation 2016/679 reads as follows:‘1. The data subject shall have the right to mandate a not-for-profit body, organisation or association which has been properly constituted in accordance with the law of a Member State, has statutory objectives which are in the public interest, and is active in the field of the protection of data subjects’ rights and freedoms with regard to the protection of their personal data to lodge the complaint on his or her behalf, to exercise the rights referred to in Articles 77, 78 and 79 on his or her behalf, and to exercise the right to receive compensation referred to in Article 82 on his or her behalf where provided for by Member State law.2. Member States may provide that any body, organisation or association referred to in paragraph 1 of this Article, independently of a data subject’s mandate, has the right to lodge, in that Member State, a complaint with the supervisory authority which is competent pursuant to Article 77 and to exercise the rights referred to in Articles 78 and 79 if it considers that the rights of a data subject under this Regulation have been infringed as a result of the processing.’ German law 18Paragraph 3(1) of the version of the Gesetz gegen den unlauteren Wettbewerb (Law against unfair competition) applicable to the dispute in the main proceedings (‘the UWG’) provides:‘Unfair commercial practices shall be prohibited.’19Paragraph 3a of the UWG is worded as follows:‘A person shall be regarded as acting unfairly where he infringes a statutory provision that is also intended to regulate market behaviour in the interests of market participants and the infringement is liable to have a significantly adverse effect on the interests of consumers, other market participants or competitors.’20Paragraph 8 of the UWG provides:‘(1) Any commercial practice which is unlawful under Paragraph 3 or Paragraph 7 may give rise to an order to cease and desist and, where there is a risk of recurrence, to a prohibition order. An application for a prohibition order may be made as from the time at which there is a risk of such unlawful practice within the meaning of Paragraph 3 or Paragraph 7 occurring.(3) Applications for the orders referred to in subparagraph (1) may be lodged by:3. qualified entities which prove that they are registered on the list of qualified entities pursuant to Paragraph 4 of the Unterlassungsklagegesetz [(Law on injunctions)] or on the list of the European Commission pursuant to Article 4(3) of Directive [2009/22];21Paragraph 2 of the Law on injunctions provides:‘(1) Any person who infringes the provisions in place to protect consumers (consumer-protection laws), other than in the application or recommendation of general conditions of sale, may have an order to cease and desist and a prohibition order imposed on him in the interests of consumer protection. …(2) For the purposes of this provision, “consumer-protection laws” shall mean, in particular:11. the provisions that regulate the lawfulnessof the collection of a consumer’s personal data by a trader, orof the processing or use of personal data collected about a consumer by a traderif the data are collected, processed or used for the purposes of publicity, market and opinion research, operation of a credit agency, preparation of personality and usage profiles, address trading, other data trading or comparable commercial purposes.’22Paragraph 12(1) of the Telemediengesetz (Law on telemedia) (‘the TMG’) is worded as follows:‘A service provider may collect and use personal data to make telemedia available only in so far as this Law or another legislative provision expressly relating to telemedia so permits or the user has consented to it.’23Paragraph 13(1) of the TMG states:‘At the beginning of the use operation the service provider shall inform the user, in a generally understandable way, regarding the nature, extent and purpose of the collection and use of personal data and the processing of his data in States outside the scope of application of Directive [95/46] unless the user has already been informed thereof. In the case of an automated process allowing subsequent identification of the user and which prepares the collection or use of personal data, the user shall be informed at the beginning of this process. The content of the information conveyed to the user must be retrievable for the user at any time.’24Paragraph 15(1) of the TMG provides:‘A service provider may collect and use the personal data of a user only to the extent necessary in order to facilitate, and charge for, the use of telemedia (data concerning use). Data concerning use include, in particular:1. features allowing identification of the user,2. information about the beginning, end and extent of the particular use, and3. information about the telemedia used by the user.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 25Fashion ID, an online clothing retailer, embedded on its website the ‘Like’ social plugin from the social network Facebook (‘the Facebook “Like” button’).26It is apparent from the order for reference that one feature of the internet is that, when a website is visited, the browser allows content from different sources to be displayed. Thus, for example, photos, videos, news and the Facebook ‘Like’ button at issue in the present case can be linked to a website and appear there. If a website operator intends to embed such third-party content, he places a link to the external content on that website. When the browser of a visitor to that website encounters such a link, it requests the content from the third-party provider and adds it to the appearance of the website at the desired place. For this to occur, the browser transmits to the server of the third-party provider the IP address of that visitor’s computer, as well as the browser’s technical data, so that the server can establish the format in which the content is to be delivered to that address. In addition, the browser transmits information relating to the desired content. The operator of a website embedding third-party content onto that website cannot control what data the browser transmits or what the third-party provider does with those data, in particular whether it decides to save and use them.27With regard, in particular, to the Facebook ‘Like’ button, it seems to be apparent from the order for reference that, when a visitor consults the website of Fashion ID, that visitor’s personal data are transmitted to Facebook Ireland as a result of that website including that button. It seems that that transmission occurs without that visitor being aware of it regardless of whether or not he or she is a member of the social network Facebook or has clicked on the Facebook ‘Like’ button.28Verbraucherzentrale NRW, a public-service association tasked with safeguarding the interests of consumers, criticises Fashion ID for transmitting to Facebook Ireland personal data belonging to visitors to its website, first, without their consent and, second, in breach of the duties to inform set out in the provisions relating to the protection of personal data.29Verbraucherzentrale NRW brought legal proceedings for an injunction before the Landgericht Düsseldorf (Regional Court, Düsseldorf, Germany) against Fashion ID to force it to stop that practice.30By decision of 9 March 2016, the Landgericht Düsseldorf (Regional Court, Düsseldorf) upheld in part the requests made by Verbraucherzentrale NRW, after having found that it has standing to bring proceedings under Paragraph 8(3)(3) of the UWG.31Fashion ID brought an appeal against that decision before the referring court, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany). Facebook Ireland intervened in that appeal in support of Fashion ID. Verbraucherzentrale NRW brought a cross-appeal seeking an extension of the ruling made against Fashion ID at first instance.32Fashion ID argues before the referring court that the decision of the Landgericht Düsseldorf (Regional Court, Düsseldorf) is incompatible with Directive 95/46.33First, Fashion ID claims that Articles 22 to 24 of that directive envisage granting legal remedies only to data subjects whose personal data are processed and the competent supervising authorities. Consequently, it argues, the action brought by Verbraucherzentrale NRW is inadmissible due to the fact that that association does not have standing to bring or defend legal proceedings under Directive 95/46.34Second, Fashion ID asserts that the Landgericht Düsseldorf (Regional Court, Düsseldorf) erred in finding that it was a controller, within the meaning of Article 2(d) of Directive 95/46, since it has no influence either over the data transmitted by the visitor’s browser from its website or over whether and, where applicable, how Facebook Ireland uses those data.35In the first place, the referring court has doubts whether Directive 95/46 gives public-service associations the right to bring or defend legal proceedings in order to defend the interests of persons who have suffered harm. It takes the view that Article 24 of that directive does not preclude associations from being a party to legal proceedings, since, pursuant to that article, Member States are required to adopt ‘suitable measures’ to ensure the full implementation of that directive. Thus, the referring court concludes that national legislation allowing associations to bring legal proceedings in the interest of consumers may constitute such a ‘suitable measure’.36That court notes, in this regard, that Article 80(2) of Regulation 2016/679, which repealed and replaced Directive 95/46, expressly authorises the bringing of legal proceedings by such an association, which would tend to confirm that the latter directive did not preclude such an action.37Further, that court is uncertain whether the operator of a website, such as Fashion ID, that embeds on that website a social plugin allowing personal data to be collected can be considered to be a controller within the meaning of Article 2(d) of Directive 95/46 despite the latter having no control over the processing of the data transmitted to the provider of that plugin. In this context, the referring court refers to the case that gave rise to the judgment of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein (C‑210/16, EU:C:2018:388), which dealt with a similar question.38In the alternative, in the event that Fashion ID is not to be considered to be a controller, the referring court is uncertain whether that directive exhaustively regulates that notion, such that it precludes national legislation that establishes civil liability for a third party who infringes data protection rights. The referring court asserts that it would be possible to envisage Fashion ID being liable on this basis under national law as a ‘disrupter’ (‘Störer’).39If Fashion ID had to be considered to be a controller or was at least liable as a ‘disrupter’ for any data protection infringements by Facebook Ireland, the referring court is uncertain whether the processing of the personal data at issue in the main proceedings is lawful and whether the duty to inform the data subject under Article 10 of Directive 95/46 rests with Fashion ID or with Facebook Ireland.40Thus, first, with regard to the conditions for the lawfulness of the processing of data as provided for in Article 7(f) of Directive 95/46, the referring court expresses uncertainty as to whether, in a situation such as that at issue in the main proceedings, it is appropriate to take into account the legitimate interest of the operator of the website or that of the provider of the social plugin.41Second, that court is unsure who is required to obtain the consent of and inform the data subjects whose personal data are processed in a situation such as that at issue in the main proceedings. The referring court takes the view that the matter of who is obliged to inform the persons concerned, as provided for in Article 10 of Directive 95/46, is particularly important given that any embedding of third-party content on a website gives rise, in principle, to the processing of personal data, the scope and purpose of which are, however, unknown to the person embedding that content, namely the operator of the website concerned. That operator could not, therefore, provide the information required, to the extent that it is required to, meaning that the imposition of an obligation on the operator to inform the data subjects would, in practice, amount to a prohibition on the embedding of third-party content.42In those circumstances, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Do the rules in Articles 22, 23 and 24 of Directive [95/46] preclude national legislation which, in addition to the powers of intervention conferred on the data-protection authorities and the remedies available to the data subject, grants public-service associations the power to take action against the infringer in the event of an infringement in order to safeguard the interests of consumers?If Question 1 is answered in the negative:(2)In a case such as the present one, in which someone has embedded a programming code in his website which causes the user’s browser to request content from a third party and, to this end, transmits personal data to the third party, is the person embedding the content the “controller” within the meaning of Article 2(d) of Directive [95/46] if that person is himself unable to influence this data-processing operation?(3)If Question 2 is answered in the negative: Is Article 2(d) of Directive [95/46] to be interpreted as meaning that it definitively regulates liability and responsibility in such a way that it precludes civil claims against a third party who, although not a “controller”, nonetheless creates the cause for the processing operation, without influencing it?(4)Whose “legitimate interests”, in a situation such as the present one, are the decisive ones in the balancing of interests to be undertaken pursuant to Article 7(f) of Directive [95/46]? Is it the interests in embedding third-party content or the interests of the third party?(5)To whom must the consent to be declared under Articles 7(a) and 2(h) of Directive [95/46] be given in a situation such as that in the present case?(6)Does the duty to inform under Article 10 of Directive [95/46] also apply in a situation such as that in the present case to the operator of the website who has embedded the content of a third party and thus creates the cause for the processing of personal data by the third party?’ Consideration of the questions referred The first question 43By its first question the referring court asks, in essence, whether Articles 22 to 24 of Directive 95/46 must be interpreted as precluding national legislation which allows consumer-protection associations to bring or defend legal proceedings against a person allegedly responsible for an infringement of the laws protecting personal data.44As a preliminary point, it should be noted that, under Article 22 of Directive 95/46, Member States are required to provide for the right of every person to a judicial remedy for any breach of the rights guaranteed him by the national law applicable to the processing in question.45The third indent of Article 28(3) of Directive 95/46 states that a supervisory authority that is responsible under Article 28(1) of that directive for monitoring the application within the territory of a Member State of the provisions adopted by that Member State pursuant to that directive is endowed with, inter alia, the power to engage in legal proceedings where the national provisions adopted pursuant to that directive have been violated or to bring those violations to the attention of the judicial authorities.46Article 28(4) of Directive 95/46 provides that a supervisory authority is to hear claims lodged by an association representing a data subject, within the meaning of Article 2(a) of that directive, concerning the protection of his rights and freedoms in regard to the processing of personal data.47However, no provision of that directive obliges Member States to provide, or expressly empowers them to provide, in their national law that an association can represent a data subject in legal proceedings or commence legal proceedings on its own initiative against the person allegedly responsible for an infringement of the laws protecting personal data.48Nevertheless, it does not follow from the above that Directive 95/46 precludes national legislation allowing consumer-protection associations to bring or defend legal proceedings against the person allegedly responsible for such an infringement.49Under the third paragraph of Article 288 TFEU, the Member States are required, when transposing a directive, to ensure that it is fully effective, but they retain a broad discretion as to the choice of ways and means of ensuring that it is implemented. That freedom of choice does not affect the obligation imposed on all Member States to which the directive is addressed to adopt all the measures necessary to ensure that the directive concerned is fully effective in accordance with the objective which it seeks to attain (judgments of 6 October 2010, Base and Others, C‑389/08, EU:C:2010:584, paragraphs 24 and 25, and of 22 February 2018, Porras Guisado, C‑103/16, EU:C:2018:99, paragraph 57).50In this regard, it must be noted that one of the underlying objectives of Directive 95/46 is to ensure effective and complete protection of the fundamental rights and freedoms of natural persons, and in particular their right to privacy, with respect to the processing of personal data (see, to that effect, judgments of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 53, and of 27 September 2017, Puškár, C‑73/16, EU:C:2017:725, paragraph 38). Recital 10 of Directive 95/46 adds that the approximation of the national laws applicable in this area must not result in any lessening of the protection which they afford but must, on the contrary, seek to ensure a high level of protection in the European Union (judgments of 6 November 2003, Lindqvist, C‑101/01, EU:C:2003:596, paragraph 95, of 16 December 2008, Huber, C‑524/06, EU:C:2008:724, paragraph 50, and of 24 November 2011, Asociación Nacional de Establecimientos Financieros de Crédito, C‑468/10 and C‑469/10, EU:C:2011:777, paragraph 28).51The fact that a Member State provides in its national legislation that it is possible for a consumer-protection association to commence legal proceedings against a person who is allegedly responsible for an infringement of the laws protecting personal data in no way undermines the objectives of that protection and, in fact, contributes to the realisation of those objectives.52Nevertheless, Fashion ID and Facebook Ireland submit that, since Directive 95/46 fully harmonised national provisions on data protection, any legal proceedings not expressly provided for by that directive are precluded. They argue that Articles 22, 23 and 28 of Directive 95/46 provide for legal proceedings brought only by data subjects and data protection supervisory authorities.53That argument, however, cannot be accepted.54Directive 95/46 does indeed amount to a harmonisation of national legislation on the protection of personal data that is generally complete (see, to that effect, judgments of 24 November 2011, Asociación Nacional de Establecimientos Financieros de Crédito, C‑468/10 and C‑469/10, EU:C:2011:777, paragraph 29, and of 7 November 2013, IPI, C‑473/12, EU:C:2013:715, paragraph 31).55The Court has thus held that Article 7 of that directive sets out an exhaustive and restrictive list of cases in which the processing of personal data can be regarded as being lawful and that Member States cannot add new principles relating to the lawfulness of the processing of personal data to that article or impose additional requirements that have the effect of amending the scope of one of the six principles provided for in that article (judgments of 24 November 2011, Asociación Nacional de Establecimientos Financieros de Crédito, C‑468/10 and C‑469/10, EU:C:2011:777, paragraphs 30 and 32, and of 19 October 2016, Breyer, C‑582/14, EU:C:2016:779, paragraph 57).56The Court has, however, also held that Directive 95/46 lays down rules that are relatively general since it has to be applied to a large number of very different situations. Those rules have a degree of flexibility and, in many instances, leave to the Member States the task of deciding the details or choosing between options, meaning that, in many respects, Member States have a margin of discretion in implementing that directive (see, to that effect, judgments of 6 November 2003, Lindqvist, C‑101/01, EU:C:2003:596, paragraphs 83, 84 and 97, and of 24 November 2011, Asociación Nacional de Establecimientos Financieros de Crédito, C‑468/10 and C‑469/10, EU:C:2011:777, paragraph 35).57This is also the case for Articles 22 to 24 of Directive 95/46, which, as the Advocate General noted in point 42 of his Opinion, are worded in general terms and do not amount to an exhaustive harmonisation of the national provisions stipulating the judicial remedies that can be brought against a person allegedly responsible for an infringement of the laws protecting personal data (see, by analogy, judgment of 26 October 2017, I, C‑195/16, EU:C:2017:815, paragraphs 57 and 58).58In particular, although Article 22 of that directive requires Member States to provide for the right of every person to a judicial remedy for any breach of the rights guaranteed him by the national law applicable to the personal data processing in question, that directive does not, however, contain any provisions specifically governing the conditions under which that remedy may be exercised (see, to that effect, judgment of 27 September 2017, Puškár, C‑73/16, EU:C:2017:725, paragraphs 54 and 55).59In addition, Article 24 of Directive 95/46 provides that Member States are to adopt ‘suitable measures’ to ensure the full implementation of the provisions of that directive, without defining such measures. It seems that a provision making it possible for a consumer-protection association to commence legal proceedings against a person who is allegedly responsible for an infringement of the laws protecting personal data may constitute a suitable measure, within the meaning of that provision, that contributes, as observed in paragraph 51 above, to the realisation of the objectives of that directive, in accordance with the Court’s case-law (see, to that effect, judgment of 6 November 2003, Lindqvist, C‑101/01, EU:C:2003:596, paragraph 97).60Moreover, contrary to what is claimed by Fashion ID, the fact that a Member State can provide for such a possibility in its national legislation does not appear to be such as to undermine the independence with which the supervisory authorities must perform the functions entrusted to them under Article 28 of Directive 95/46, since that possibility affects neither those authorities’ freedom to take decisions nor their freedom to act.61In addition, although it is true that Directive 95/46 does not appear among the measures listed in Annex I to Directive 2009/22, the fact nonetheless remains that, under Article 7 of the latter directive, that directive did not provide for an exhaustive harmonisation in that respect.62Last, the fact that Regulation 2016/679, which repealed and replaced Directive 95/46 and has been applicable since 25 May 2018, expressly authorises, in Article 80(2) thereof, Member States to allow consumer-protection associations to bring or defend legal proceedings against a person who is allegedly responsible for an infringement of the laws protecting personal data does not mean that Member States could not grant them that right under Directive 95/46, but confirms, rather, that the interpretation of that directive in the present judgment reflects the will of the EU legislature.63In the light of all the findings above, the answer to the first question is that Articles 22 to 24 of Directive 95/46 must be interpreted as not precluding national legislation which allows consumer-protection associations to bring or defend legal proceedings against a person allegedly responsible for an infringement of the protection of personal data. The second question 64By its second question, the referring court asks, in essence, whether the operator of a website, such as Fashion ID, that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider the personal data of the visitor can be considered to be a controller, within the meaning of Article 2(d) of Directive 95/46, despite that operator being unable to influence the processing of the data transmitted to that provider as a result.65In this regard, it should be noted that, in accordance with the aim pursued by Directive 95/46, namely to ensure a high level of protection of the fundamental rights and freedoms of natural persons, in particular their right to privacy, with respect to the processing of personal data, Article 2(d) of that directive defines the concept of ‘controller’ broadly as the natural or legal person, public authority, agency or any other body which alone or jointly with others determines the purposes and means of the processing of personal data (see, to that effect, judgment of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraphs 26 and 27).66As the Court has held previously, the objective of that provision is to ensure, through a broad definition of the concept of ‘controller’, effective and complete protection of data subjects (judgments of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 34, and of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraph 28).67Furthermore, since, as Article 2(d) of Directive 95/46 expressly provides, the concept of ‘controller’ relates to the entity which ‘alone or jointly with others’ determines the purposes and means of the processing of personal data, that concept does not necessarily refer to a single entity and may concern several actors taking part in that processing, with each of them then being subject to the applicable data-protection provisions (see, to that effect, judgments of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraph 29, and of 10 July 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 65).68The Court has also held that a natural or legal person who exerts influence over the processing of personal data, for his own purposes, and who participates, as a result, in the determination of the purposes and means of that processing, may be regarded as a controller within the meaning of Article 2(d) of Directive 95/46 (judgment of 10 July 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 68).69Furthermore, the joint responsibility of several actors for the same processing, under that provision, does not require each of them to have access to the personal data concerned (see, to that effect, judgments of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraph 38, and of 10 July 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 69).70That said, since the objective of Article 2(d) of Directive 95/46 is to ensure, through a broad definition of the concept of ‘controller’, the effective and comprehensive protection of the persons concerned, the existence of joint liability does not necessarily imply equal responsibility of the various operators engaged in the processing of personal data. On the contrary, those operators may be involved at different stages of that processing of personal data and to different degrees, with the result that the level of liability of each of them must be assessed with regard to all the relevant circumstances of the particular case (see, to that effect, judgment of 10 July 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 66).71In this regard, it should be pointed out, first, that Article 2(b) of Directive 95/46 defines ‘processing of personal data’ as ‘any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organisation, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction’.72It is apparent from that definition that the processing of personal data may consist in one or a number of operations, each of which relates to one of the different stages that the processing of personal data may involve.73Second, it follows from the definition of the concept of ‘controller’ in Article 2(d) of Directive 95/46 that, as is noted in paragraph 65 above, where several operators determine jointly the purposes and means of the processing of personal data, they participate in that processing as controllers.74Accordingly, as the Advocate General noted, in essence, in point 101 of his Opinion, it appears that a natural or legal person may be a controller, within the meaning of Article 2(d) of Directive 95/46, jointly with others only in respect of operations involving the processing of personal data for which it determines jointly the purposes and means. By contrast, and without prejudice to any civil liability provided for in national law in this respect, that natural or legal person cannot be considered to be a controller, within the meaning of that provision, in the context of operations that precede or are subsequent in the overall chain of processing for which that person does not determine either the purposes or the means.75In this case, subject to the investigations that it is for the referring court to carry out, it is apparent from the documents before the Court that, by embedding on its website the Facebook ‘Like’ button, Fashion ID appears to have made it possible for Facebook Ireland to obtain personal data of visitors to its website and that such a possibility is triggered as soon as the visitor consults that website, regardless of whether or not the visitor is a member of the social network Facebook, has clicked on the Facebook ‘Like’ button or is aware of such an operation.76In view of that information, it should be pointed out that the operations involving the processing of personal data in respect of which Fashion ID is capable of determining, jointly with Facebook Ireland, the purposes and means are, for the purposes of the definition of the concept of ‘processing of personal data’ in Article 2(b) of Directive 95/46, the collection and disclosure by transmission of the personal data of visitors to its website. By contrast, in the light of that information, it seems, at the outset, impossible that Fashion ID determines the purposes and means of subsequent operations involving the processing of personal data carried out by Facebook Ireland after their transmission to the latter, meaning that Fashion ID cannot be considered to be a controller in respect of those operations within the meaning of Article 2(d).77With regard to the means used for the purposes of the collection and disclosure by transmission of certain personal data of visitors to its website, it is apparent from paragraph 75 above that Fashion ID appears to have embedded on its website the Facebook ‘Like’ button made available to website operators by Facebook Ireland while fully aware of the fact that it serves as a tool for the collection and disclosure by transmission of the personal data of visitors to that website, regardless of whether or not the visitors are members of the social network Facebook.78Moreover, by embedding that social plugin on its website, Fashion ID exerts a decisive influence over the collection and transmission of the personal data of visitors to that website to the provider of that plugin, Facebook Ireland, which would not have occurred without that plugin.79In these circumstances, and subject to the investigations that it is for the referring court to carry out in this respect, it must be concluded that Facebook Ireland and Fashion ID determine jointly the means at the origin of the operations involving the collection and disclosure by transmission of the personal data of visitors to Fashion ID’s website.80As to the purposes of those operations involving the processing of personal data, it appears that Fashion ID’s embedding of the Facebook ‘Like’ button on its website allows it to optimise the publicity of its goods by making them more visible on the social network Facebook when a visitor to its website clicks on that button. The reason why Fashion ID seems to have consented, at least implicitly, to the collection and disclosure by transmission of the personal data of visitors to its website by embedding such a plugin on that website is in order to benefit from the commercial advantage consisting in increased publicity for its goods; those processing operations are performed in the economic interests of both Fashion ID and Facebook Ireland, for whom the fact that it can use those data for its own commercial purposes is the consideration for the benefit to Fashion ID.81In such circumstances, it can be concluded, subject to the investigations that it is for the referring court to perform, that Fashion ID and Facebook Ireland determine jointly the purposes of the operations involving the collection and disclosure by transmission of the personal data at issue in the main proceedings.82Further, as is apparent from the case-law referred to in paragraph 69 above, the fact that the operator of a website, such as Fashion ID, does not itself have access to the personal data collected and transmitted to the provider of the social plugin with which it determines jointly the means and purposes of the processing of personal data does not preclude it from being a controller within the meaning of Article 2(d) of Directive 95/46.83Moreover, it must be emphasised that a website, such as that of Fashion ID, is visited both by those who are members of the social network Facebook, and who therefore have an account on that social network, and by those who do not have one. In that latter case, the responsibility of the operator of a website, such as Fashion ID, for the processing of the personal data of those persons appears to be even greater, as the mere consultation of such a website featuring the Facebook ‘Like’ button appears to trigger the processing of their personal data by Facebook Ireland (see, to that effect. judgment of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraph 41).84Accordingly, it seems that Fashion ID can be considered to be a controller within the meaning of Article 2(d) of Directive 95/46, jointly with Facebook Ireland, in respect of the operations involving the collection and disclosure by transmission of the personal data of visitors to its website.85In the light of the findings above, the answer to the second question is that the operator of a website, such as Fashion ID, that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider the personal data of the visitor can be considered to be a controller, within the meaning of Article 2(d) of Directive 95/46. That liability is, however, limited to the operation or set of operations involving the processing of personal data in respect of which it actually determines the purposes and means, that is to say, the collection and disclosure by transmission of the data at issue. The third question 86In view of the answer given to the second question, there is no need to answer the third question. The fourth question 87By its fourth question, the referring court asks, in essence, whether, in a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, it is appropriate, for the purposes of the application of Article 7(f) of Directive 95/46, to take into consideration a legitimate interest pursued by that operator or a legitimate interest pursued by that provider.88As a preliminary point, it should be noted that, according to the Commission, this question is irrelevant for the resolution of the dispute in the main proceedings, since consent was not obtained from the data subjects as is required by Article 5(3) of Directive 2002/58.89In that regard, it should be pointed out that Article 5(3) of Directive 2002/58 provides that Member States are to ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is allowed only on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information, in accordance with Directive 95/46, inter alia, about the purposes of the processing.90It is for the referring court to investigate whether, in a situation such as that at issue in the main proceedings, the provider of a social plugin, such as Facebook Ireland, gains access, as is maintained by the Commission, from the operator of the website to information stored in the terminal equipment, within the meaning of Article 5(3) of Directive 2002/58, of a visitor to that website.91In such circumstances, and since the referring court seems to have concluded that, in the present case, the data transmitted to Facebook Ireland are personal data, within the meaning of Directive 95/46, which, moreover, are not necessarily limited to information stored in the terminal equipment, which it is for that court to confirm, the Commission’s views are insufficient to call into question the relevance of the fourth question referred for the resolution of the dispute in the main proceedings, which concerns the potentially lawful processing of the data at issue in the main proceedings, as was pointed out by the Advocate General in point 115 of his Opinion.92Consequently, it is necessary to examine what legitimate interest must be taken into account for the purposes of the application of Article 7(f) of that directive to the processing of those data.93In this regard, it should be noted at the outset that, according to the provisions of Chapter II of Directive 95/46, headed ‘General rules on the lawfulness of the processing of personal data’, subject to the derogations permitted under Article 13 of that directive, all processing of personal data must comply, inter alia, with one of the criteria for making data processing legitimate listed in Article 7 of that directive (see, to that effect, judgments of 13 May 2014, Google Spain and Google, C‑131/12, EU:C:2014:317, paragraph 71, and of 1 October 2015, Bara and Others, C‑201/14, EU:C:2015:638, paragraph 30).94Under Article 7(f) of Directive 95/46, the interpretation of which is sought by the referring court, personal data may be processed if processing is necessary for the purposes of the legitimate interests pursued by the controller or by the third party or parties to whom the data are disclosed, except where such interests are overridden by the interests or fundamental rights and freedoms of the data subject which require protection under Article 1(1) of Directive 95/46.95Article 7(f) of that directive thus lays down three cumulative conditions for the processing of personal data to be lawful, namely, first, the pursuit of a legitimate interest by the data controller or by the third party or parties to whom the data are disclosed; second, the need to process personal data for the purposes of the legitimate interests pursued; and third, the condition that the fundamental rights and freedoms of the data subject whose data require protection do not take precedence (judgment of 4 May 2017, Rīgas satiksme, C‑13/16, EU:C:2017:336, paragraph 28).96Given that, in the light of the answer to the second question, it seems that, in a situation such as that at issue in the main proceedings, the operator of a website that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider the personal data of the visitor can be considered to be a controller responsible, jointly with that provider, for operations involving the processing of the personal data of visitors to its website in the form of collection and disclosure by transmission, it is necessary that each of those controllers should pursue a legitimate interest, within the meaning of Article 7(f) of Directive 95/46, through those processing operations in order for those operations to be justified in respect of each of them.97In the light of the findings above, the answer to the fourth question is that, in a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, it is necessary that that operator and that provider each pursue a legitimate interest, within the meaning of Article 7(f) of Directive 95/46, through those processing operations in order for those operations to be justified in respect of each of them. The fifth and sixth questions 98By its fifth and sixth questions, which it is appropriate to examine together, the referring court wishes to know, in essence, first, whether Article 2(h) and Article 7(a) of Directive 95/46 must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, the consent referred to in those provisions must be obtained by that operator or by that provider and, second, whether Article 10 of that directive must be interpreted as meaning that, in such a situation, the duty to inform provided for in that provision is incumbent on that operator.99As is apparent from the answer to the second question, the operator of a website that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor can be considered to be a controller, within the meaning of Article 2(d) of Directive 95/46, despite that liability being limited to the operation or set of operations involving the processing of personal data in respect of which it actually determines the purposes and means.100It thus appears that the duties that may be incumbent on that controller under Directive 95/46, such as the duty to obtain the consent of the data subject under Article 2(h) and Article 7(a) of that directive and the duty to inform under Article 10 thereof, must relate to the operation or set of operations involving the processing of personal data in respect of which it actually determines the purposes and means.101In the present case, while the operator of a website that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider the personal data of the visitor can be considered to be a controller, jointly with that provider, in respect of operations involving the collection and disclosure by transmission of the personal data of that visitor, its duty to obtain the consent from the data subject under Article 2(h) and Article 7(a) of Directive 95/46 and its duty to inform under Article 10 of that directive relate only to those operations. By contrast, those duties do not cover operations involving the processing of personal data at other stages occurring before or after those operations which involve, as the case may be, the processing of personal data at issue.102With regard to the consent referred to in Article 2(h) and Article 7(a) of Directive 95/46, it appears that such consent must be given prior to the collection and disclosure by transmission of the data subject’s data. In such circumstances, it is for the operator of the website, rather than for the provider of the social plugin, to obtain that consent, since it is the fact that the visitor consults that website that triggers the processing of the personal data. As the Advocate General noted in point 132 of his Opinion, it would not be in line with efficient and timely protection of the data subject’s rights if the consent were given only to the joint controller that is involved later, namely the provider of that plugin. However, the consent that must be given to the operator relates only to the operation or set of operations involving the processing of personal data in respect of which the operator actually determines the purposes and means.103The same applies in regard to the duty to inform under Article 10 of Directive 95/46.104In that regard, it follows from the wording of that provision that the controller or his representative must provide, as a minimum, the information referred to in that provision to the subject whose data are being collected. It thus appears that that information must be given by the controller immediately, that is to say, when the data are collected (see, to that effect, judgments of 7 May 2009, Rijkeboer, C‑553/07, EU:C:2009:293, paragraph 68, and of 7 November 2013, IPI, C‑473/12, EU:C:2013:715, paragraph 23).105It follows that, in a situation such as that at issue in the main proceedings, the duty to inform under Article 10 of Directive 95/46 is incumbent also on the operator of the website, but the information that the latter must provide to the data subject need relate only to the operation or set of operations involving the processing of personal data in respect of which that operator actually determines the purposes and means.106In the light of the findings above, the answer to the fifth and sixth questions is that Article 2(h) and Article 7(a) of Directive 95/46 must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, the consent referred to in those provisions must be obtained by that operator only with regard to the operation or set of operations involving the processing of personal data in respect of which that operator determines the purposes and means. In addition, Article 10 of that directive must be interpreted as meaning that, in such a situation, the duty to inform laid down in that provision is incumbent also on that operator, but the information that the latter must provide to the data subject need relate only to the operation or set of operations involving the processing of personal data in respect of which that operator actually determines the purposes and means. Costs 107Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. Articles 22 to 24 of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data must be interpreted as not precluding national legislation which allows consumer-protection associations to bring or defend legal proceedings against a person allegedly responsible for an infringement of the protection of personal data. 2. The operator of a website, such as Fashion ID GmbH & Co. KG, that embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor can be considered to be a controller, within the meaning of Article 2(d) of Directive 95/46. That liability is, however, limited to the operation or set of operations involving the processing of personal data in respect of which it actually determines the purposes and means, that is to say, the collection and disclosure by transmission of the data at issue. 3. In a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, it is necessary that that operator and that provider each pursue a legitimate interest, within the meaning of Article 7(f) of Directive 95/46, through those processing operations in order for those operations to be justified in respect of each of them. 4. Article 2(h) and Article 7(a) of Directive 95/46 must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, in which the operator of a website embeds on that website a social plugin causing the browser of a visitor to that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, the consent referred to in those provisions must be obtained by that operator only with regard to the operation or set of operations involving the processing of personal data in respect of which that operator determines the purposes and means. In addition, Article 10 of that directive must be interpreted as meaning that, in such a situation, the duty to inform laid down in that provision is incumbent also on that operator, but the information that the latter must provide to the data subject need relate only to the operation or set of operations involving the processing of personal data in respect of which that operator actually determines the purposes and means. [Signatures]( *1 ) Language of the case: German. | 8b611-74923fc-4905 | EN |
Poland must immediately suspend the application of the provisions of national legislation relating to the lowering of the retirement age for Supreme Court judges | 24 June 2019 ( *1 )(Failure of a Member State to fulfil obligations — Second subparagraph of Article 19(1) TEU — Rule of law — Effective judicial protection in the fields covered by Union law — Principles of the irremovability of judges and judicial independence — Lowering of the retirement age of Supreme Court judges — Application to judges in post — Possibility of continuing to carry out the duties of judge beyond that age subject to obtaining authorisation granted by discretionary decision of the President of the Republic)In Case C‑619/18,ACTION under Article 258 TFEU for failure to fulfil obligations, brought on 2 October 2018, European Commission, represented by K. Banks, H. Krämer and S.L. Kalėda, acting as Agents,applicant,v Republic of Poland, represented by B. Majczyna, K. Majcher and S. Żyrek, acting as Agents,defendant,supported by: Hungary, represented by M.Z. Fehér, acting as Agent,intervener,THE COURT (Grand Chamber),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, A. Prechal (Rapporteur), M. Vilaras and E. Regan, Presidents of Chambers, E. Juhász, M. Ilešič, J. Malenovský, L. Bay Larsen, D. Šváby, C. Vajda, P.G. Xuereb, N. Piçarra, L.S. Rossi and I. Jarukaitis, Judges,Advocate General: E. Tanchev,Registrar: M. Aleksejev, Head of Unit,having regard to the written procedure and further to the hearing on 12 February 2019,after hearing the Opinion of the Advocate General at the sitting on 11 April 2019,gives the following Judgment 1By its application, the European Commission requests that the Court declare that, first, by lowering the retirement age of the judges appointed to the Sąd Najwyższy (Supreme Court, Poland) and by applying that measure to the judges in post appointed to that court before 3 April 2018 and, secondly, by granting the President of the Republic the discretion to extend the period of judicial activity of judges of that court beyond the newly fixed retirement age, the Republic of Poland has failed to fulfil its obligations under the combined provisions of the second subparagraph of Article 19(1) TEU and Article 47 of the Charter of Fundamental Rights of the European Union (‘the Charter’). Legal context European Union law The EU Treaty 2Article 2 TEU reads as follows:‘The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.’3Article 19(1) TEU provides:‘The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed.Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.’ The Charter 4Title VI of the Charter, headed ‘Justice’, includes Article 47 thereof, entitled ‘Right to an effective remedy and to a fair trial’, which states as follows:‘Everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy before a tribunal in compliance with the conditions laid down in this Article.Everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal previously established by law. ……’5As provided in Article 51 of the Charter:‘1. The provisions of this Charter are addressed to the institutions, bodies, offices and agencies of the Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing Union law. They shall therefore respect the rights, observe the principles and promote the application thereof in accordance with their respective powers and respecting the limits of the powers of the Union as conferred on it in the Treaties.2. The Charter does not extend the field of application of Union law beyond the powers of the Union or establish any new power or task for the Union, or modify powers and tasks as defined in the Treaties.’ Polish law The Constitution 6Article 183(3) of the Constitution provides that the First President of the Sąd Najwyższy (Supreme Court) is appointed for a 6-year term.7Article 186(1) of the Constitution states:‘The Krajowa Rada Sądownictwa [National Council of the Judiciary] is the guardian of the independence of courts and judges.’8Article 187 of the Constitution provides as follows:‘1. The National Council of the Judiciary is composed of:(1)the First President of the [Sąd Najwyższy (Supreme Court)], the Minister for Justice, the President of the [Naczelny Sąd Administracyjny (Supreme Administrative Court)] and a person designated by the President of the Republic,(2)15 elected members from among the judges of the [Sąd Najwyższy (Supreme Court)], the ordinary law courts, the administrative courts and the military courts,(3)4 members elected by [the Sejm (the lower chamber of the Polish Parliament)] from among the deputies and 2 members elected by the Senate from among the senators.…3. The elected members of the National Council of the Judiciary shall have a mandate of 4 years.4. The regime applicable to the National Council of the Judiciary, its field of activity, its working procedure and the procedure by which its members are elected shall be laid down by law.’ The New Law on the Supreme Court 9Article 30 of the ustawa o Sądzie Najwyższym (Law on the Supreme Court), of 23 November 2002 (Dz. U. of 2002, heading 240), set the retirement age for judges of the Sąd Najwyższy (Supreme Court) at 70. Under that provision, the judges of that court also had the possibility, no later than 6 months before reaching the age of 70, to submit a declaration to the First President of that court indicating their wish to continue to carry out their duties and to present a certificate confirming that their health was no impediment to carrying out the duties of a judge, in which case they were legally entitled to carry out their duties until the age of 72.10On 20 December 2017, the President of the Republic signed the ustawa o Sądzie Najwyższym (Law on the Supreme Court) of 8 December 2017 (Dz. U. of 2018, heading 5) (‘the New Law on the Supreme Court’), which entered into force on 3 April 2018. That Law was amended on several occasions, inter alia by the ustawa o zmianie ustawy — Prawo o ustroju sądów powszechnych, ustawy o Sądzie Najwyższym oraz niektórych innych ustaw (Law amending the Law on the organisation of the ordinary courts, the Law on the Supreme Court and certain other laws), of 10 May 2018 (Dz. U. of 2018, heading 1045) (‘the Amending Law of 10 May 2018’).11Under Article 37 of the New Law on the Supreme Court:‘1. A judge of the [Sąd Najwyższy (Supreme Court)] shall retire on the day of his 65th birthday, unless, not later than 6 months before that day and not earlier than 12 months before that day, he submits a declaration that he is willing to continue to carry out his duties and presents a certificate confirming that his health is no impediment to carrying out the duties of a judge, issued in accordance with the rules specified for candidates applying for the office of judge, and the President of the Republic of Poland grants authorisation for him to continue to carry out his duties at the [Sąd Najwyższy (Supreme Court)].1a Prior to granting authorisation for a judge to continue to carry out his duties as a judge of the [Sąd Najwyższy (Supreme Court)], the President of the Republic of Poland shall consult the National Council of the Judiciary. The National Council of the Judiciary shall provide the President of the Republic of Poland with an opinion within 30 days of the date on which the President of the Republic of Poland requests submission of such an opinion. If the opinion is not submitted within the period referred to in the second sentence, the National Council of the Judiciary shall be deemed to have submitted a positive opinion.1b. When drafting the opinion referred to in paragraph 1a, the National Council of the Judiciary shall take into account the interest of the system of justice or an important social interest, in particular the rational use of the staff of the [Sąd Najwyższy (Supreme Court)] or the needs arising from the workload of individual chambers of the [Sąd Najwyższy (Supreme Court)].2. The declaration and certificate referred to in paragraph 1 shall be submitted to the First President of the [Sąd Najwyższy (Supreme Court)], who shall promptly submit them, together with his or her opinion, to the President of the Republic of Poland. The First President of the [Sąd Najwyższy (Supreme Court)] shall submit his declaration and certificate together with the opinion of the College of the [Sąd Najwyższy (Supreme Court)] to the President of the Republic of Poland.3. The President of the Republic of Poland may grant authorisation for a judge of the [Sąd Najwyższy (Supreme Court)] to continue to carry out his duties within 3 months of the date of receipt of the opinion of the National Council of the Judiciary referred to in paragraph 1a, or within 3 months of the expiry of the period for the submission of that opinion. Failure to grant authorisation within the period referred to in the first sentence shall be tantamount to the judge retiring on the day of his 65th birthday. If the proceedings related to the extension of the mandate of a judge of the [Sąd Najwyższy (Supreme Court)] are not completed after the age referred to in paragraph 1 has been reached, the judge shall remain in his post until the proceedings are completed.4. The authorisation referred to in paragraph 1 shall be granted for a period of 3 years, no more than twice. The provisions of paragraph 3 shall apply mutatis mutandis. …’12Article 39 of that Law provides as follows:‘The President of the Republic of Poland shall ascertain the date on which a judge of the [Sąd Najwyższy (Supreme Court)] retires or is retired.’13Article 111 of that Law provides as follows:‘1. Judges of the [Sąd Najwyższy (Supreme Court)] who by the date of entry into force of this Law have reached the age of 65 or who will have reached the age of 65 within 3 months of the date of entry into force of this Law shall retire on the day following the expiry of 3 months from the date of entry into force of this Law, unless they submit the declaration and certificate referred to in Article 37(1) within 1 month of the date of entry into force of this Law and the President of the Republic of Poland grants authorisation for the judge of the [Sąd Najwyższy (Supreme Court)] to continue to carry out his duties. The provisions of Article 37(2) to (4) shall apply mutatis mutandis.1a Judges of the [Sąd Najwyższy (Supreme Court)] who reach the age of 65 between 3 and 12 months after the date of entry into force of this Law shall retire 12 months from the date of entry into force of this Law, unless they submit the declaration and certificate referred to in Article 37(1) within that period and the President of the Republic of Poland grants authorisation for the judge of the [Sąd Najwyższy (Supreme Court)] to continue to carry out his duties. The provisions of Article 37(1a) to (4) shall apply mutatis mutandis.’14The Amending Law of 10 May 2018 contains, in addition to provisions amending the New Law on the Supreme Court, certain autonomous provisions governing the procedure for the extension of the period of judicial activity of the judges of the Sąd Najwyższy (Supreme Court) who have reached the retirement age no later than 3 July 2018. Article 5 of that Amending Law is worded as follows:‘The President of the Republic of Poland shall transmit immediately to the National Council of the Judiciary for the purposes of obtaining its opinion the declarations referred to in Article 37(1) and Article 111(1) of the [New Law on the Supreme Court] which he has not examined by the date of entry into force of this Law. The National Council of the Judiciary shall deliver its opinion within 30 days from the date on which the President of the Republic of Poland invited it to present its opinion. The President of the Republic of Poland may authorise a judge of [Sąd Najwyższy (Supreme Court)] to continue to carry out his duties within 60 days from the date of receipt of the opinion of the National Council of the Judiciary or the expiry of the deadline for the submission of this opinion. The provisions of Article 37(2) to (4) of the [New Law on the Supreme Court], as amended by this Law, shall apply mutatis mutandis.’ Pre-litigation procedure 15Taking the view that, by the adoption of the New Law on the Supreme Court and the subsequent Laws amending that Law, the Republic of Poland had failed to fulfil its obligations under the combined provisions of the second subparagraph of Article 19(1) TEU and Article 47 of the Charter, the Commission, on 2 July 2018, sent that Member State a letter of formal notice. The Republic of Poland replied by a letter dated 2 August 2018 in which it disputed all the allegations of infringement of EU law.16On 14 August 2018, the Commission issued a reasoned opinion in which it maintained that the national legislation mentioned in the preceding paragraph infringed those provisions of EU law. Consequently, that institution invited the Republic of Poland to take the measures necessary to comply with that reasoned opinion within 1 month of receiving it. That Member State replied to that reasoned opinion by a letter dated 14 September 2018 in which it denied the alleged infringements.17In those circumstances, the Commission decided to bring the present action. Procedure before the Court 18By separate document lodged at the Court Registry on 2 October 2018, the Commission lodged an application for interim measures under Article 279 TFEU and Article 160(2) of the Rules of Procedure of the Court of Justice, seeking an order that the Republic of Poland was, pending the judgment of the Court in the main action:–to suspend application of Article 37(1) to (4) and of Article 111(1) and (1a) of the New Law on the Supreme Court, of Article 5 of the Amending Law of 10 May 2018 and all other measures adopted in application of those provisions;to adopt all necessary measures to ensure that the judges of the Sąd Najwyższy (Supreme Court) affected by those provisions may carry out their duties in the same posts which they held at the date when the New Law on the Supreme Court came into force, namely 3 April 2018, while benefiting from the same staff regulations, the same rights and employment conditions as those under which they were employed until 3 April 2018;to refrain from any measure appointing judges to the Sąd Najwyższy (Supreme Court) in the place of those affected by those provisions, and any measure to appoint the new First President of that court or to indicate the person responsible for leading that court in the place of its First President until the appointment of the new First President; andto communicate to the Commission, at the latest 1 month after service of the order of the Court granting the interim measures sought and then regularly, each month, details of all the measures which it has adopted in order to comply fully with that order.19The Commission also requested, pursuant to Article 160(7) of the Rules of Procedure, that the interim measures mentioned in the preceding paragraph be granted before the defendant had submitted its observations, in view of the immediate risk of serious and irreparable damage for the principle of effective judicial protection in the context of the application of EU law.20By her order of 19 October 2018, Commission v Poland (C‑619/18 R, not published, EU:C:2018:852), the Vice-President of the Court provisionally granted that latter request pending the adoption of an order terminating the proceedings for interim measures.21On 23 October 2018, the Vice-President of the Court, in accordance with Article 161(1) of the Rules of Procedure, referred the application for interim measures to the Court which, having regard to its importance, assigned it to the Grand Chamber in accordance with Article 60(1) of the Rules of Procedure.22By order of 17 December 2018, Commission v Poland (C‑619/18 R, EU:C:2018:1021), the Court granted the Commission’s application for interim measures until delivery of the final judgment in the present case.23In addition, by his order of 15 November 2018, Commission v Poland (C‑619/18, EU:C:2018:910), the President of the Court, at the request of the Commission, decided that the present case was to be determined under the expedited procedure provided for in Article 23a of the Statute of the Court of Justice of the European Union and Article 133 of the Rules of Procedure.24By order of 9 January 2019, the President of the Court granted Hungary leave to intervene in support of the form of order sought by the Republic of Poland. The action 25In its action, the Commission puts forward two complaints alleging infringement of the obligations on the Member States under the combined provisions of the second subparagraph of Article 19(1) TEU and Article 47 of the Charter.26By its first complaint, the Commission alleges that the Republic of Poland failed to comply with those obligations inasmuch as the New Law on the Supreme Court, in breach of the principle of judicial independence and, in particular, of the principle of the irremovability of judges, provided that the measure lowering the retirement age of judges of the Sąd Najwyższy (Supreme Court) was to apply to judges in post who were appointed to that court before 3 April 2018, the date on which that Law entered into force. By its second complaint, the Commission alleges that that Member State failed to comply with those obligations by granting under that Law to the President of the Republic, in breach of the principle of judicial independence, the discretion to extend, twice, each time for a 3-year term, the period of judicial activity of judges of the Sąd Najwyższy (Supreme Court) beyond the newly fixed retirement age. Whether the proceedings have become devoid of purpose 27At the hearing, the Republic of Poland submitted that all the national provisions challenged by the Commission in its action have been repealed, and their effects eliminated, by the ustawa o zmianie ustawy o Sądzie Najwyższym (Law amending the New Law on the Supreme Court), of 21 November 2018 (Dz. U. of 2018, heading 2507), signed by the President of the Republic on 17 December 2018 and which entered into force on 1 January 2019.28According to that Member State, under that Law the serving judges of the Sąd Najwyższy (Supreme Court) who had previously been affected by the lowering of the retirement age under the New Law on the Supreme Court have been retained or re-instated in that court, under the conditions in force before the adoption of that latter law, the performance of their duties moreover being deemed to have continued without interruption. The provisions allowing the President of the Republic to authorise the extension of the period during which a judge of the Sąd Najwyższy (Supreme Court) may carry out his or her duties when the judge has reached the normal retirement age have also been repealed. In those circumstances, the present proceedings seeking a declaration of failure to fulfil obligations have, according to the Republic of Poland, become devoid of purpose.29The Commission, for its part, stated at the hearing that it was maintaining its action.30In this connection it must be recalled that it is settled case-law that the question whether there has been a failure to fulfil obligations must be examined on the basis of the position in which the Member State at issue found itself at the end of the period laid down in the reasoned opinion, and the Court cannot take account of any subsequent changes (see, inter alia, judgment of 6 November 2012, Commission v Hungary, C‑286/12, EU:C:2012:687, paragraph 41 and the case-law cited).31In the present case, it is common ground that at the date at which the time limit set by the Commission in its reasoned opinion expired, the provisions of the New Law on the Supreme Court which the Commission is challenging by the present action were still in force. It follows that it is necessary for the Court to rule on that action, even if the effect of the entry into force of the Law amending the New Law on the Supreme Court, of 21 November 2018, were to eliminate with retroactive effect all the effects of the national provisions challenged by the Commission, it not being open to the Court to take into account any such event since it took place after the expiry of the time limit set out in the reasoned opinion (see, to that effect, judgment of 6 November 2012, Commission v Hungary, C‑286/12, EU:C:2012:687, paragraph 45). The scope of the action 32At the hearing, the Commission stated that, by its action, it is seeking, in essence, a declaration that the second subparagraph of Article 19(1) TEU, read in the light of Article 47 of the Charter, has been infringed. According to the Commission, the concept of effective legal protection referred to in the second subparagraph of Article 19(1) TEU must be interpreted having regard to the content of Article 47 of the Charter and, in particular, the guarantees essential to the right to an effective remedy laid down in that latter provision, and accordingly the first of those provisions entails that the preservation of the independence of a body such as the Sąd Najwyższy (Supreme Court), which is entrusted, inter alia, with the task of interpreting and applying EU law, must be guaranteed.33For the purposes of ruling on the present action, it is therefore necessary to examine whether the Republic of Poland has failed to fulfil its obligations under the second subparagraph of Article 19(1) TEU. The applicability and the scope of the second subparagraph of Article 19(1) TEU Arguments of the parties 34Relying, in particular, on the judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses (C‑64/16, EU:C:2018:117), and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice) (C‑216/18 PPU, EU:C:2018:586), the Commission submits that, to meet the obligation imposed on them by the second subparagraph of Article 19(1) TEU to provide for a system of legal remedies sufficient to ensure effective legal protection in the fields covered by Union law, the Member States are required, inter alia, to ensure that the national bodies which may rule on issues in relation to the application or interpretation of EU law meet the requirement in respect of judicial independence, that requirement being a key part of the fundamental right to a fair trial as guaranteed, inter alia, by the second paragraph of Article 47 of the Charter.35It submits that, since the Sąd Najwyższy (Supreme Court) constitutes such a body, the national provisions governing the composition, the organisational structure and the working method of that court should ensure that it meets that independence requirement.36That requirement concerns not only the way in which an individual case is conducted, but also the way in which the justice system is organised. The consequence of a national measure affecting, in general, the independence of the national courts is that an effective legal remedy is no longer guaranteed, inter alia when those courts apply or interpret EU law.37The Republic of Poland, supported in this connection by Hungary, submits that national rules such as those challenged by the Commission in the present action cannot be the object of a review in the light of the second subparagraph of Article 19(1) TEU and Article 47 of the Charter.38First, those provisions of EU law do not include any derogation from the principle of conferral which governs the competences of the European Union and which follows from Article 4(1) and Article 5(1) and (2) and Article 13(2) TEU. It is common ground that the organisation of the national justice system constitutes a competence reserved exclusively to the Member States, so that the EU cannot arrogate competences in that domain.39Secondly, the second subparagraph of Article 19(1) TEU and Article 47 of the Charter, like general principles of EU law such as the principle of judicial independence, are applicable only in situations governed under EU law.40According to the Republic of Poland, the national rules called into question by the Commission in the present case have no link with EU law and in this respect can be distinguished from the national legislation which was the subject matter of the judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses (C‑64/16, EU:C:2018:117), legislation which, for its part, was connected with the grant of financial assistance by the European Union to a Member State in the context of combatting excessive budget deficits and which, consequently, was adopted pursuant to EU law.41Nor is Article 47 of the Charter applicable in the present case, having regard to the absence of any situation in which EU law is being implemented, within the meaning of Article 51(1) of the Charter. Moreover, it follows from Article 6(1) TEU, Article 51(2) of the Charter and Protocol No 30 on the application of the Charter to Poland and to the United Kingdom (OJ 2010 C 83, p. 313) that the Charter does not extend the scope of application of EU law beyond the European Union’s competences. Findings of the Court 42As is apparent from Article 49 TEU, which provides the possibility for any European State to apply to become a member of the European Union, the European Union is composed of States which have freely and voluntarily committed themselves to the common values referred to in Article 2 TEU, which respect those values and which undertake to promote them, EU law being based on the fundamental premiss that each Member State shares with all the other Member States, and recognises that those Member States share with it, those same values (see, to that effect, judgment of 10 December 2018, Wightman and Others, C‑621/18, EU:C:2018:999, paragraph 63 and the case-law cited).43That premiss both entails and justifies the existence of mutual trust between the Member States and, in particular, their courts that those values upon which the European Union is founded, including the rule of law, will be recognised, and therefore that the EU law that implements those values will be respected (see, to that effect, judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 30, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 35).44Likewise, it is important to recall that, in order to ensure that the specific characteristics and the autonomy of the EU legal order are preserved, the Treaties have established a judicial system intended to ensure consistency and uniformity in the interpretation of EU law (judgment of 6 March 2018, Achmea, C‑284/16, EU:C:2018:158, paragraph 35 and the case-law cited).45In particular, the judicial system as thus conceived has as its keystone the preliminary ruling procedure provided for in Article 267 TFEU, which, by setting up a dialogue between one court and another, specifically between the Court of Justice and the courts and tribunals of the Member States, has the object of securing that consistency and that uniformity in the interpretation of EU law, thereby serving to ensure its full effect and its autonomy as well as, ultimately, the particular nature of the law established by the Treaties (see, to that effect, judgment of 6 March 2018, Achmea, C‑284/16, EU:C:2018:158, paragraph 37).46Lastly, as is apparent from settled case-law, the European Union is a union based on the rule of law in which individuals have the right to challenge before the courts the legality of any decision or other national measure concerning the application to them of an EU act (judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 31 and the case-law cited, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 49).47In that context, Article 19 TEU, which gives concrete expression to the value of the rule of law affirmed in Article 2 TEU, entrusts the responsibility for ensuring the full application of EU law in all Member States and judicial protection of the rights of individuals under that law to national courts and tribunals and to the Court of Justice (see, to that effect, judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 32, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 50 and the case-law cited).48In that regard, as provided for by the second subparagraph of Article 19(1) TEU, Member States are to provide remedies sufficient to ensure effective judicial protection for individuals in the fields covered by EU law. It is, therefore, for the Member States to establish a system of legal remedies and procedures ensuring effective judicial review in those fields (judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 34 and the case-law cited).49The principle of the effective judicial protection of individuals’ rights under EU law, referred to in the second subparagraph of Article 19(1) TEU, is a general principle of EU law stemming from the constitutional traditions common to the Member States, which has been enshrined in Articles 6 and 13 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and which is now reaffirmed by Article 47 of the Charter (judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 35 and the case-law cited).50As regards the material scope of the second subparagraph of Article 19(1) TEU, that provision moreover refers to ‘the fields covered by Union law’, irrespective of whether the Member States are implementing Union law within the meaning of Article 51(1) of the Charter (judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 29).51Contrary to what has been claimed by the Republic of Poland and Hungary in this respect, the fact that the national salary reduction measures at issue in the case which gave rise to the judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses (C‑64/16, EU:C:2018:117) were adopted due to requirements linked to the elimination of the excessive budget deficit of the Member State concerned and in the context of an EU financial assistance programme for that Member State did not, as is apparent from paragraphs 29 to 40 of that judgment, play any role in the interpretation which led the Court to conclude that the second subparagraph of Article 19(1) TEU was applicable in the case in question. That conclusion was reached on the basis of the fact that the national body which that case concerned, namely the Tribunal de Contas (Court of Auditors, Portugal), could, subject to verification to be carried out by the referring court in that case, rule, as a court or tribunal, on questions concerning the application or interpretation of EU law and which therefore fell within the fields covered by EU law (see, to that effect, judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 40).52Furthermore, although, as the Republic of Poland and Hungary point out, the organisation of justice in the Member States falls within the competence of those Member States, the fact remains that, when exercising that competence, the Member States are required to comply with their obligations deriving from EU law (see, by analogy, judgments of 13 November 2018, Raugevicius, C‑247/17, EU:C:2018:898, paragraph 45, and of 26 February 2019, Rimšēvičs and ECB v Latvia, C‑202/18 and C‑238/18, EU:C:2019:139, paragraph 57) and, in particular, from the second subparagraph of Article 19(1) TEU (see, to that effect, judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 40). Moreover, by requiring the Member States thus to comply with those obligations, the European Union is not in any way claiming to exercise that competence itself nor is it, therefore, contrary to what is alleged by the Republic of Poland, arrogating that competence.53Lastly, in respect of Protocol (No 30), it must be observed that it does not concern the second subparagraph of Article 19(1) TEU and it should also be recalled that it does not call into question the applicability of the Charter in Poland, nor is it intended to exempt the Republic of Poland from the obligation to comply with the provisions of the Charter (see, to that effect, judgment of 21 December 2011, N.S. and Others, C‑411/10 and C‑493/10, EU:C:2011:865, paragraphs 119 and 120).54It follows from all of the foregoing that the second subparagraph of Article 19(1) TEU requires Member States to provide remedies that are sufficient to ensure effective legal protection, within the meaning in particular of Article 47 of the Charter, in the fields covered by EU law (judgment of 14 June 2017, Online Games and Others, C‑685/15, EU:C:2017:452, paragraph 54 and the case-law cited).55More specifically, every Member State must, under the second subparagraph of Article 19(1) TEU, ensure that the bodies which, as ‘courts or tribunals’ within the meaning of EU law, come within its judicial system in the fields covered by EU law meet the requirements of effective judicial protection (judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 37, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 52).56In the present case, it is common ground that the Sąd Najwyższy (Supreme Court) may be called upon to rule on questions concerning the application or interpretation of EU law and that, as a ‘court or tribunal’, within the meaning of EU law, it comes within the Polish judicial system in the ‘fields covered by Union law’ within the meaning of the second subparagraph of Article 19(1) TEU, so that that court must meet the requirements of effective judicial protection (order of 17 December 2018, Commission v Poland, C‑619/18 R, EU:C:2018:1021, paragraph 43).57To ensure that a body such as the Sąd Najwyższy (Supreme Court) is in a position to offer such protection, maintaining its independence is essential, as confirmed by the second paragraph of Article 47 of the Charter, which refers to access to an ‘independent’ tribunal as one of the requirements linked to the fundamental right to an effective remedy (see, to that effect, judgments of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 41, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 53).58That requirement that courts be independent, which is inherent in the task of adjudication, forms part of the essence of the right to effective judicial protection and the fundamental right to a fair trial, which is of cardinal importance as a guarantee that all the rights which individuals derive from EU law will be protected and that the values common to the Member States set out in Article 2 TEU, in particular the value of the rule of law, will be safeguarded (see, to that effect, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraphs 48 and 63).59Having regard to the foregoing, the national rules called into question by the Commission in its action may be reviewed in the light of the second subparagraph of Article 19(1) TEU and it is therefore necessary to examine whether the infringements of that provision alleged by that institution are established. The first complaint 60By its first complaint, the Commission alleges that the Republic of Poland infringed the second subparagraph of Article 19(1) TEU by reason of the fact that the New Law on the Supreme Court provided that the measure lowering the retirement age of judges of the Sąd Najwyższy (Supreme Court) was to apply to judges in post who were appointed to that court before 3 April 2018, the date on which that Law entered into force. In doing so, it claims, that Member State infringed the principle of judicial independence and, in particular, the principle of the irremovability of judges.61The Commission observes in this connection that, as a result of Article 37(1) and Article 111(1) and (1a) of the New Law on the Supreme Court, the judges of that court who reached the age of 65 before the date on which that Law entered into force, namely 3 April 2018 or, at the latest, 3 July 2018, theoretically retire on 4 July 2018, and those whose 65th birthday takes place between 4 July 2018 and 3 April 2019 must, theoretically, retire on 3 April 2019. In respect of the judges who reach the age of 65 after 3 April 2019, they should, theoretically, retire once they have reached the age of 65.62The Commission also points out that those national provisions have affected, immediately, 27 of the 72 judges of the Sąd Najwyższy (Supreme Court) who were in post at the date of the entry into force of the New Law on the Supreme Court, one of whom was the First President of that court. That institution also observes that, as regards the latter, in accordance with Article 183(3) of the Constitution, she was appointed on a 6-year mandate which was, in the present case, to have expired on 30 April 2020.63The Commission submits that, by thus lowering the retirement age applicable to judges in post within the Sąd Najwyższy (Supreme Court) while moreover enabling, under Articles 112 and 112a of the New Law on the Supreme Court, the President of the Republic to decide of his own motion, until 3 April 2019, to increase the number of posts within that court, the Republic of Poland has rendered possible a profound and immediate change in that court’s composition, infringing the principle of the irremovability of judges as a guarantee essential to their independence and, therefore, infringing the second subparagraph of Article 19(1) TEU.64The Commission takes the view that, while lowering the retirement age of judges cannot be entirely ruled out, appropriate measures, such as a transitional period or a phased approach, which prevent such lowering being used covertly as a means to change the composition of judicial bodies are, on any view, necessary in order, in particular, to avoid giving any impression that the reason for shortening the term of office of the judges concerned is in fact the actions carried out by those judges during their period of judicial activity and in order not to undermine their confidence in their security of tenure.65According to the Republic of Poland, the second subparagraph of Article 19(1) TEU does not require, in a case where the retirement age is lowered, that a transitional period must be provided for with regard to judges in post with a view to ensuring their independence. Since such a retirement age is generally and automatically applicable to all the judges concerned, it is not such as to give rise to pressure which could influence the persons concerned in the performance of their judicial office.66In the Polish legal order, the guarantees as to the independence of the judiciary are primarily linked to the protection of the permanent nature of judicial activity, including the guarantee of irremovability, to immunity, to proper remuneration, to the secrecy of deliberations, to incompatibility between holding judicial office and other public office, to the obligation to remain politically neutral and to the prohibition on exercising another economic activity. Dismissal of a judge is authorised only in the event of a disciplinary infringement of the most serious nature or a criminal conviction which has become final. The retirement of a judge does not constitute a dismissal, since the person concerned retains the title of judge and, in that capacity, still enjoys immunity and the right to proper remuneration, while continuing to be subject to various rules of professional conduct.67Furthermore, it follows from the judgments of 21 July 2011, Fuchs and Köhler (C‑159/10 and C‑160/10, EU:C:2011:508), and of 27 February 2018, Associação Sindical dos Juízes Portugueses (C‑64/16, EU:C:2018:117), that the Member States retain the option to adapt the employment conditions applicable to judges and, thus, their retirement age, in particular in order, as in the present case, to bring that retirement age into line with that provided for in the general retirement scheme, while improving the age structure of officers of the court concerned.68Lastly, were it necessary to find that the age at which a judge retires must depend on the law in force at the date as of which the person concerned began to carry out their duties, account would have to be taken, in the present case, of the fact that there was a reform to the retirement age of judges of the Sąd Najwyższy (Supreme Court) in 2002, re-establishing it at 70 years of age after it had been fixed at 65 years of age between 1990 and 2002. Yet, 17 of the 27 judges in post who were affected by the lowering of the retirement age resulting from the New Law on the Supreme Court were appointed between 1990 and 2002 so that, so far as they are concerned, there has been no shortening of the initial duration of their period in post.69Accepting as a criterion for the purposes of determining the retirement age of a judge of the Sąd Najwyższy (Supreme Court) the date at which that judge was appointed would, furthermore, lead to a risk of discrimination between the judges of that court, some of them, in particular those who were appointed after the entry into force of the New Law on the Supreme Court, being called upon to retire earlier than others who, for their part, were appointed prior to the entry into force of that Law at a time when the retirement age was 70.70According to Hungary, the Commission has not proved that the lowering of the retirement age of the judges of the Sąd Najwyższy (Supreme Court) and the retirement of some of the judges of that court which followed from that measure would be such as to affect that court’s capacity to guarantee effective judicial protection in the fields covered by European Union law.71The requirement that courts be independent, a requirement which the Member States must — under the second subparagraph of Article 19(1) of the TEU and as is apparent from paragraphs 42 to 59 of the present judgment — ensure is observed in respect of national courts which, like the Sąd Najwyższy (Supreme Court), are called upon to rule on issues linked to the interpretation and application of EU law, has two aspects to it.72The first aspect, which is external in nature, requires that the court concerned exercise its functions wholly autonomously, without being subject to any hierarchical constraint or subordinated to any other body and without taking orders or instructions from any source whatsoever, thus being protected against external interventions or pressure liable to impair the independent judgment of its members and to influence their decisions (judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses, C‑64/16, EU:C:2018:117, paragraph 44 and the case-law cited).73The second aspect, which is internal in nature, is for its part linked to impartiality and seeks to ensure that an equal distance is maintained from the parties to the proceedings and their respective interests with regard to the subject matter of those proceedings. That aspect requires objectivity and the absence of any interest in the outcome of the proceedings apart from the strict application of the rule of law (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 65 and the case-law cited).74Those guarantees of independence and impartiality require rules, particularly as regards the composition of the body and the appointment, length of service and grounds for abstention, rejection and dismissal of its members, that are such as to dispel any reasonable doubt in the minds of individuals as to the imperviousness of that body to external factors and its neutrality with respect to the interests before it (judgments of 19 September 2006, Wilson, C‑506/04, EU:C:2006:587, paragraph 53 and the case-law cited, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 66 and the case-law cited).75In particular, that freedom of the judges from all external intervention or pressure, which is essential, requires, as the Court has held on several occasions, certain guarantees appropriate for protecting the individuals who have the task of adjudicating in a dispute, such as guarantees against removal from office (see, to that effect, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 64 and the case-law cited).76The principle of irremovability requires, in particular, that judges may remain in post provided that they have not reached the obligatory retirement age or until the expiry of their mandate, where that mandate is for a fixed term. While it is not wholly absolute, there can be no exceptions to that principle unless they are warranted by legitimate and compelling grounds, subject to the principle of proportionality. Thus it is widely accepted that judges may be dismissed if they are deemed unfit for the purposes of carrying out their duties on account of incapacity or a serious breach of their obligations, provided the appropriate procedures are followed.77In that latter respect, it is apparent, more specifically, from the Court’s case-law that the requirement of independence means that the rules governing the disciplinary regime and, accordingly, any dismissal of those who have the task of adjudicating in a dispute must provide the necessary guarantees in order to prevent any risk of that disciplinary regime being used as a system of political control of the content of judicial decisions. Thus, rules which define, in particular, both conduct amounting to disciplinary offences and the penalties actually applicable, which provide for the involvement of an independent body in accordance with a procedure which fully safeguards the rights enshrined in Articles 47 and 48 of the Charter, in particular the rights of the defence, and which lay down the possibility of bringing legal proceedings challenging the disciplinary bodies’ decisions constitute a set of guarantees that are essential for safeguarding the independence of the judiciary (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 67).78In the present case, it must be held that the reform being challenged, which provides that the measure lowering the retirement age of judges of the Sąd Najwyższy (Supreme Court) is to apply to judges already serving on that court, results in those judges prematurely ceasing to carry out their judicial office and is therefore such as to raise reasonable concerns as regards compliance with the principle of the irremovability of judges.79In those circumstances, and having regard to the cardinal importance of that principle, recalled in paragraphs 75 to 77 above, such an application is acceptable only if it is justified by a legitimate objective, it is proportionate in the light of that objective and inasmuch as it is not such as to raise reasonable doubt in the minds of individuals as to the imperviousness of the court concerned to external factors and its neutrality with respect to the interests before it.80In the present case the Republic of Poland claims that the decision to lower to 65 the retirement age of the judges of the Sąd Najwyższy (Supreme Court) was taken with the goal of standardising that age with the general retirement age applicable to all workers in Poland and, in doing so, of improving the age balance among senior members of that court.81It must be stated in this connection, in the first place, that the Court has admittedly acknowledged that employment policy objectives such as those seeking, on the one hand, to standardise, in the context of professions in the public sector, the age limits for mandatorily ceasing activity and, on the other hand, to encourage the establishment of a more balanced age structure by facilitating the access for young people to, inter alia, the profession of judge may be regarded as legitimate (see, to that effect, judgments of 21 July 2011, Fuchs and Köhler, C‑159/10 and C‑160/10, EU:C:2011:508, paragraph 50, and of 6 November 2012, Commission v Hungary, C‑286/12, EU:C:2012:687, paragraphs 61 and 62).82However, it must be observed, first, that, as the Commission points out and as has already been observed by the European Commission for Democracy through Law (‘Venice Commission’), in points 33 and 47 of its Opinion No. 904/2017 (CDL-AD(2017)031), the explanatory memorandum to the draft New Law on the Supreme Court contains information that is such as to raise serious doubts as to whether the reform of the retirement age of serving judges of the Sąd Najwyższy (Supreme Court) was made in pursuance of such objectives, and not with the aim of side-lining a certain group of judges of that court.83Secondly, it is important to note that the lowering of the retirement age of the judges of the Sąd Najwyższy (Supreme Court) who were in post at the date of the entry into force of the New Law on the Supreme Court was accompanied in the present case by the implementation of a new mechanism allowing the President of the Republic to decide, on a discretionary basis, to extend the thus-shortened period during which a judge carries out his or her duties by two consecutive 3-year periods.84On the one hand, the introduction of that possibility of extending by 6 years the period for which the judge carries out his or her duties at the same time as the lowering by 5 years of the retirement age of judges of the Sąd Najwyższy (Supreme Court) who were in post upon the entry into force of the New Law on the Supreme Court is such as to raise doubts as to the fact that the reform made genuinely seeks to standardise the retirement age of those judges with that applicable to all workers and to improve the age balance among senior members of that court.85On the other hand, the combination of those two measures is also such as to reinforce the impression that in fact their aim might be to exclude a pre-determined group of judges of the Sąd Najwyższy (Supreme Court), since the President of the Republic, notwithstanding the application of the measure lowering the retirement age to all the judges of that court who were in post when the New Law on the Supreme Court came into force, retains the discretion to maintain in their post some of the persons concerned.86Thirdly, it must be held that the measure lowering by 5 years the retirement age of the judges of the Sąd Najwyższy (Supreme Court) who were in post at the time of the entry into force of the New Law on the Supreme Court and the shortening of the period during which those judges carry out their duties that resulted therefrom affected, immediately, almost a third of the serving members of that court, including, in particular, the First President of that court, whose 6-year mandate, guaranteed under the Constitution, was also shortened as a consequence. As the Commission submits, that finding demonstrates the potentially considerable impact of the reform at issue on the composition and the functional continuity of the Sąd Najwyższy (Supreme Court). As the Advocate General observed in point 76 of his Opinion, such a major restructuring of the composition of a supreme court, through a reform specifically concerning that court, may itself prove to be such as to raise doubts as to the genuine nature of such a reform and as to the aims actually pursued by it.87The doubts that thus surround the true aims of the reform being challenged and that result from all the considerations set out in paragraphs 82 to 86 above cannot be dispelled by the arguments put forward by the Republic of Poland according to which (a) some of the serving judges of the Sąd Najwyższy (Supreme Court) affected by that reform were appointed to that post at a time when the retirement age for judges of that court was fixed at 65 years of age and (b) such judges, once retired, nevertheless retain their judicial titles, continue to enjoy immunity and to receive emoluments and remain subject to various rules of professional conduct.88Those facts, even if they are taken to be established, are not such as to call into question the fact that the retirement of the judges concerned means the immediate and, in relation to that which was envisaged before the adoption of the reform being challenged, premature cessation of their period of judicial office.89In the second place, as the Republic of Poland confirmed at the hearing, the general retirement age for workers, with which that Member State stated it wished to bring into line the retirement age of the judges of the Sąd Najwyższy (Supreme Court), does not entail the automatic retirement of those workers but only the right, and not the obligation, for them to cease their professional activity and to receive, in that case, a retirement pension.90In those circumstances, the Republic of Poland has not demonstrated that the measure being challenged constitutes an appropriate means for the purposes of reducing the diversity of the age limits for the mandatory cessation of activities in respect of all the professions concerned. In particular, that Member State has not put forward any objective reason why, for the purposes of bringing the retirement age of judges of the Sąd Najwyższy (Supreme Court) into line with the general retirement age applicable to all workers in Poland, it was necessary to provide for the automatic retirement of those judges subject to a decision made on a discretionary basis by the President of the Republic to allow them to continue to carry out their duties whereas, for other workers, retirement at the age provided for by law is optional.91In the third place, it is important to note, with regard to the objective of standardising the retirement age, that the Court has already held that national provisions immediately and significantly lowering the age limit for compulsorily ceasing to serve as a judge, without introducing transitional measures of such a kind as to protect the legitimate expectations of the persons concerned who are in post upon the entry into force of those provisions, do not comply with the principle of proportionality (see, to that effect, judgment of 6 November 2012, Commission v Hungary, C‑286/12, EU:C:2012:687, paragraphs 68 and 80).92As regards the judgment of 27 February 2018, Associação Sindical dos Juízes Portugueses (C‑64/16, EU:C:2018:117), to which the Republic of Poland also referred for the purposes of justifying the lawfulness of the national measure being challenged by the Commission in its first complaint, that judgment concerned a measure reducing the amount of the judges’ remuneration. In that judgment, the court held, after observing that that salary reduction measure was both limited, in terms of the amount, and temporary and that it had not been specifically adopted in respect of the members of the Tribunal de Contas (Court of Auditors, Portugal) but was, on the contrary, a measure of general application, that Article 19 TEU must be interpreted as meaning that the principle of judicial independence does not preclude the application of such a measure.93Seen from the perspective of the protection of judicial independence, the effects of that limited and temporary salary reduction are in no way comparable to the effects of a measure which consists in lowering the retirement age of serving judges which, for its part, has the result of ending, prematurely and definitively, the judicial career of the persons concerned.94In the fourth place, neither can the immediate application of the reform being challenged to the judges of the Sąd Najwyższy (Supreme Court) in post at the date of the entry into force of the New Law on the Supreme Court be justified by the concern, expressed by the Republic of Poland, to prevent any discrimination, in terms of the duration of judges’ period of judicial activity, between those judges and the judges who are appointed to that court after that date.95As the Commission contends, those two categories of judge are not in analogous situations, since only the career of the former category is shortened while they are in post within the Sąd Najwyższy (Supreme Court), the latter category, for their part, being required to be appointed to that court under the new legislation providing for a statutory retirement age of 65. Furthermore, and in so far as the Republic of Poland also suggests in its arguments that the judges already in post within the Sąd Najwyższy (Supreme Court) will not be granted, unlike their colleagues appointed after the entry into force of the New Law on the Supreme Court, the possibility of benefiting from the new retirement age introduced by that Law, it must be pointed out, as it was by the Commission, that it would have been possible to have provided for the option for the persons concerned to agree voluntarily to cease their period of judicial activity when they reach that new retirement age without therefore requiring them to do so.96Having regard to all the foregoing considerations, it must be held that the application of the measure lowering the retirement age of the judges of the Sąd Najwyższy (Supreme Court) to the judges in post within that court is not justified by a legitimate objective. Accordingly, that application undermines the principle of the irremovability of judges, which is essential to their independence.97It follows that the Commission’s first complaint, alleging breach of the second subparagraph of Article 19(1) TEU, must be upheld. The second complaint 98By its second complaint, the Commission alleges that the Republic of Poland infringed the second subparagraph of Article 19(1) TEU by granting, under the New Law on the Supreme Court, to the President of the Republic, the discretion to extend, twice, each time for a 3-year term, the period of judicial activity of judges of the Sąd Najwyższy (Supreme Court) beyond the new retirement age fixed in that Law.99According to the Commission, in the absence both of binding criteria governing the decision as to whether or not to grant such extensions to the period during which a judge carries out his or her duties and of the obligation to give reasons for such decisions and the possibility of their judicial review, the President of the Republic is in a position to exercise influence over the judges of the Sąd Najwyższy (Supreme Court). The prospect of having to apply to the President of the Republic for such extensions and then, once such applications have been introduced, waiting for the latter’s decision would be likely to create, for the judge concerned, pressure such as to lead him or her to comply with any wishes of the President of the Republic so far as the cases before that judge are concerned, including where he or she is called upon to interpret and apply provisions of EU law.100The obligation on the President of the Republic to consult the National Council of the Judiciary, provided for in Article 37(1a) and (1b), and Article 111a of the New Law on the Supreme Court and in Article 5 of the Amending Law of 10 May 2018, does not affect the foregoing conclusion. The criteria assigned to that Council for the purposes of issuing its opinion are too general and that opinion does not bind the President of the Republic. In addition, having regard to the recent reform of the ustawa o Krajowej Radzie Sądownictwa (Law on the National Council of the Judiciary), of 12 May 2011 (Dz. U. of 2011, heading 714), made by the ustawa o zmianie ustawy o Krajowej Radzie Sądownictwa oraz niektórych innych ustaw (Law amending the Law on the National Council of the Judiciary and certain other Laws), of 8 December 2017 (Dz. U. of 2018, heading 3), the 15 members of that Council who, out of the 27 members of which it is composed, must be elected from amongst the judges, would henceforth be elected not by their peers as previously but by the lower chamber of the Polish Parliament, so that doubt may be cast on their independence.101Lastly, the Commission submits that, so far as the judges of the Sąd Najwyższy (Supreme Court) who will reach the age of 65 after 3 July 2018 are concerned, no time limit has been set within which the President of the Republic must consult the National Council of the Judiciary, which has the potential effect of increasing the period during which the President of the Republic effectively has discretion over the retaining of the judge concerned in his or her post.102Those various factors are such as to lead to a situation in which the Sąd Najwyższy (Supreme Court) will no longer be regarded as providing the guarantee that it acts, in all circumstances, impartially and independently.103The Republic of Poland submits that the authorisation conferred on the President of the Republic to decide as to whether to allow the judges of the Sąd Najwyższy (Supreme Court) to continue to carry out their duties once they have reached retirement age constitutes a power derived from the prerogative to appoint judges conferred on him under the Constitution. That prerogative, the specific purpose of which is to protect the judiciary both from interference by the legislative authority and from that by the executive authority, should be exercised personally by the President of the Republic subject solely to constitutional rules and principles, and it is settled case-law that decisions of the President of the Republic refusing to appoint a candidate to a post as judge constitute acts which do not fall within the sphere of administrative activity and cannot be the subject of judicial proceedings.104Nevertheless, it contends, the opinions forwarded to the President of the Republic by the National Council of the Judiciary take into account, as is apparent from Article 37(1b) of the New Law on the Supreme Court, the interest of the system of justice or an important social interest, in particular the rational use of the staff of the Sąd Najwyższy (Supreme Court) or the needs resulting from the workload of individual chambers of that court. In addition, although such opinions cannot be binding on the President of the Republic without undermining the constitutional prerogatives of the latter mentioned in the preceding paragraph, it is obvious that, in practice, the President of the Republic will take those opinions into account. It is likewise clear that, even though that Law does not provide for any time limit in this connection, the President of the Republic will request the opinion of the National Council of the Judiciary as soon as he has received an application made by a judge of the Sąd Najwyższy (Supreme Court) for an extension to the period during which he or she may carry out his or her duties.105So far as the composition of the National Council of the Judiciary is concerned, the Republic of Poland states that it does not share the Commission’s concerns. It also submits that such concerns are of no relevance for the purposes of the assessment of the present case since the Commission in essence criticises that Member State for leaving the decision as to whether or not to authorise a judge of the Sąd Najwyższy (Supreme Court) to continue to carry out his or her duties beyond the statutory retirement age to the discretion of the President of the Republic, without there being any possibility of judicial review of that decision, and since the opinion of the National Council of the Judiciary is, for its part, in any event not binding upon the President of the Republic.106Lastly, the Republic of Poland takes the view that the judges of the Sąd Najwyższy (Supreme Court) will not, in practice, be influenced by the President of the Republic with the sole aim of extending the period during which they carry out their duties instead of retiring with the advantage of a good pension, given that the rule that deliberations are in secret will prevent the President from having any information as to the way in which each judge voted. Moreover, the period within which the President of the Republic must decide upon the application made by a judge to continue to carry out his or her duties, namely approximately 4 months, is relatively short.107Similar systems for the extension of the period of judicial activity beyond the normal retirement age furthermore exist in Member States other than the Republic of Poland and the renewal of the mandate of a judge of the Court of Justice of the European Union also itself depends upon the discretion of the government of the Member State of the judge concerned.108As pointed out in paragraphs 72 to 74 above, the guarantees of the independence and impartiality of the courts require that the body concerned exercise its functions wholly autonomously, being protected against external interventions or pressure liable to impair the independent judgment of its members and to influence their decisions, with due regard for objectivity and in the absence of any interest in the outcome of proceedings. The rules seeking to guarantee that independence and impartiality must be such that they enable any reasonable doubt in the minds of individuals as to the imperviousness of that body to external factors and its neutrality with respect to the interests before it to be precluded.109Here, it must be observed at the outset that the national rule which the Commission’s second complaint concerns does not deal with the process for the appointment of candidates to carry out the duties of judge, but with the possibility, for serving judges who thus enjoy guarantees essential to carrying out those duties, to continue to carry them out beyond the normal retirement age, and that that rule thereby concerns the conditions under which their careers progress and end.110Furthermore, although it is for the Member States alone to decide whether or not they will authorise such an extension to the period of judicial activity beyond normal retirement age, the fact remains that, where those Member States choose such a mechanism, they are required to ensure that the conditions and the procedure to which such an extension is subject are not such as to undermine the principle of judicial independence.111In that connection, the fact that an organ of the State such as the President of the Republic is entrusted with the power to decide whether or not to grant any such extension is admittedly not sufficient in itself to conclude that that principle has been undermined. However, it is important to ensure that the substantive conditions and detailed procedural rules governing the adoption of such decisions are such that they cannot give rise to reasonable doubts, in the minds of individuals, as to the imperviousness of the judges concerned to external factors and as to their neutrality with respect to the interests before them.112To that end, it is necessary, in particular, that those conditions and procedural rules are designed in such a way that those judges are protected from potential temptations to give in to external intervention or pressure that is liable to jeopardise their independence (see, to that effect, judgment of 31 January 2013, D. and A., C‑175/11, EU:C:2013:45, paragraph 103). Such procedural rules must thus, in particular, be such as to preclude not only any direct influence, in the form of instructions, but also types of influence which are more indirect and which are liable to have an effect on the decisions of the judges concerned (see, by analogy, judgments of 16 October 2012, Commission v Austria, C‑614/10, EU:C:2012:631, paragraph 43, and of 8 April 2014, Commission v Hungary, C‑288/12, EU:C:2014:237, paragraph 51).113In the present case, the conditions and the detailed procedural rules provided for under the New Law on the Supreme Court with regard to a potential extension beyond normal retirement age of the period for which a judge of the Sąd Najwyższy (Supreme Court) carries out his or her duties do not satisfy those requirements.114In that respect, in the first place, under the New Law on the Supreme Court, such an extension is now subject to a decision of the President of the Republic, which is discretionary inasmuch as its adoption is not, as such, governed by any objective and verifiable criterion and for which reasons need not be stated. In addition, any such decision cannot be challenged in court proceedings.115In the second place, with regard to the fact that the New Law on the Supreme Court provides that the National Council of the Judiciary is required to deliver an opinion to the President of the Republic before the latter adopts his or her decision, it is admittedly true that the intervention of such a body, in the context of a procedure for extending the period during which a judge carries out his or her duties beyond the normal retirement age, may, in principle, be such as to contribute to making that procedure more objective.116However, that is only the case in so far as certain conditions are satisfied, in particular in so far as that body is itself independent of the legislative and executive authorities and of the authority to which it is required to deliver its opinion, and in so far as such an opinion is delivered on the basis of criteria which are both objective and relevant and is properly reasoned, such as to be appropriate for the purposes of providing objective information upon which that authority can take its decision.117It is sufficient to note in this connection, as the Republic of Poland confirmed at the hearing, that the National Council of the Judiciary, when required to deliver such opinions to the President of the Republic, has, as a general rule and in the absence of any rule obliging it to state reasons for them, merely delivered opinions, whether positive or negative, for which sometimes no reasons at all have been stated or for which sometimes purely formal reasons have been stated which simply make general reference to the terms in which the criteria fixed in Article 37(1b) of the New Law on the Supreme Court are set out. In those circumstances, without it even being necessary to determine whether criteria such as those mentioned in that provision are sufficiently transparent, objective and verifiable, it must be stated that such opinions are not such as to be apt to provide the President of the Republic with objective information with regard to the exercise of the power with which he is entrusted for the purposes of authorising, or refusing to allow, a judge of the Sąd Najwyższy (Supreme Court) to continue to carry out his or her duties after he or she has reached the normal retirement age.118Having regard to the foregoing, it must be held that the discretion held by the President of the Republic for the purposes of authorising, twice and each time for a 3-year term, between the ages of 65 and 71, a judge of a national supreme court such as the Sąd Najwyższy (Supreme Court) to continue to carry out his or her duties is such as to give rise to reasonable doubts, inter alia in the minds of individuals, as to the imperviousness of the judges concerned to external factors and as to their neutrality with respect to any interests before them.119Lastly, the Republic of Poland’s argument as to an alleged similarity between the national provisions thus challenged and the procedures applicable in other Member States or applicable at the time of any renewal of the mandate of a judge of the Court of Justice of the European Union cannot succeed.120First, even if a procedure laid down in another Member State were to contain, from the perspective of the second subparagraph of Article 19(1) TEU, similar defects to those which have been noted with regard to the national provisions at issue in the present case, which has not been proven, the fact remains that a Member State cannot rely on a possible infringement of EU law by another Member State to justify its own default (see, to that effect, judgment of 6 June 1996, Commission v Italy, C‑101/94, EU:C:1996:221, paragraph 27 and the case-law cited).121Secondly, unlike members of the national judicial personnel, who are appointed until they reach statutory retirement age, the appointment of judges within the Court of Justice occurs, as provided for in Article 253 TFEU, for a 6-year fixed term. Moreover, under that article, a new appointment to such a post held by a judge whose mandate is coming to an end requires, as was the case in respect of the initial appointment of that judge, the common accord of the Governments of the Member States, after consultation of the panel provided for in Article 255 TFEU.122The conditions thus set under the Treaties cannot modify the scope of the obligations imposed on the Member States pursuant to the second subparagraph of Article 19(1) TEU.123It follows that the Commission’s second complaint, alleging breach of the second subparagraph of Article 19(1) TEU, and, accordingly, the action in its entirety, must be upheld.124Having regard to all the foregoing considerations, it must be held that, first, by providing that the measure consisting in lowering the retirement age of the judges of the Sąd Najwyższy (Supreme Court) is to apply to judges in post who were appointed to that court before 3 April 2018 and, secondly, by granting the President of the Republic the discretion to extend the period of judicial activity of judges of that court beyond the newly fixed retirement age, the Republic of Poland has failed to fulfil its obligations under the second subparagraph of Article 19(1) TEU. Costs 125Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party must be ordered to pay the costs if they have been applied for in the other party’s pleadings. Since the Commission has applied for costs and the Republic of Poland has been unsuccessful, the latter must be ordered to pay the costs.126In accordance with Article 140(1) of the Rules of Procedure, Hungary is to bear its own costs.On those grounds, the Court (Grand Chamber) hereby: 1. Declares that, first, by providing that the measure consisting in lowering the retirement age of the judges of the Sąd Najwyższy (Supreme Court, Poland) is to apply to judges in post who were appointed to that court before 3 April 2018 and, secondly, by granting the President of the Republic the discretion to extend the period of judicial activity of judges of that court beyond the newly fixed retirement age, the Republic of Poland has failed to fulfil its obligations under the second subparagraph of Article 19(1) TEU; 2. Orders the Republic of Poland to pay the costs; 3. Declares that Hungary is to bear its own costs. [Signatures]( *1 ) Language of the case: Polish. | 8809f-98d9b24-453f | EN |
The General Court dismisses the action brought by Hamas against the decisions to maintain the freezing of its funds as an entity involved in acts of terrorism | 14 December 2018 ( *1 )(Common foreign and security policy – Restrictive measures taken against certain persons and entities with a view to combating terrorism – Freezing of funds – Possibility for an authority of a third country to be classified as a competent authority within the meaning of Common Position 2001/931/CFSP – Factual basis of the decisions to freeze funds – Obligation to state reasons – Error of assessment – Right to effective judicial protection – Rights of the defence – Right to property)In Case T‑400/10 RENV, Hamas, established in Doha (Qatar), represented by L. Glock, lawyer,applicant,v Council of the European Union, represented by B. Driessen, M. Bishop and A. Sikora-Kalėda, acting as Agents,defendant,supported by French Republic, represented by D. Colas and F. Fize, acting as Agents,and by European Commission, represented initially by F. Castillo de la Torre, M. Konstantinidis and R. Tricot, and subsequently by F. Castillo de la Torre, L. Baumgart and C. Zadra, acting as Agents,interveners,ACTION under Article 263 TFEU seeking annulment, first, of the Council Notice for the attention of the persons, groups and entities whose names were included on the list provided for in Article 2(3) of Council Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2010 C 188, p. 13), of Council Decision 2010/386/CFSP of 12 July 2010 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism (OJ 2010 L 178, p. 28) and of Council Implementing Regulation (EU) No 610/2010 of 12 July 2010 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation (EU) No 1285/2009 (OJ 2010 L 178, p. 1), in so far as those measures concern the applicant; secondly, of Council Decision 2011/70/CFSP of 31 January 2011 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism (OJ 2011 L 28, p. 57) and of Council Implementing Regulation (EU) No 83/2011 of 31 January 2011 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation No 610/2010 (OJ 2011 L 28, p. 14), in so far as those measures concern the applicant; thirdly, of Council Decision 2011/430/CFSP of 18 July 2011 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism (OJ 2011 L 188, p. 47) and of Council Implementing Regulation (EU) No 687/2011 of 18 July 2011 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulations No 610/2010 and No 83/2011 (OJ 2011 L 188, p. 2), in so far as those measures concern the applicant; fourthly, of Council Decision 2011/872/CFSP of 22 December 2011 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Decision 2011/430 (OJ 2011 L 343, p. 54) and of Council Implementing Regulation (EU) No 1375/2011 of 22 December 2011 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation (EU) No 687/2011 (OJ 2011 L 343, p. 10), in so far as those measures concern the applicant; fifthly, of Council Decision 2012/333/CFSP of 25 June 2012 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Decision 2011/872 (OJ 2012 L 165, p. 72) and of Council Implementing Regulation (EU) No 542/2012 of 25 June 2012 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation No 1375/2011 (OJ 2012 L 165, p. 12), in so far as those measures concern the applicant; sixthly, of Council Decision 2012/765/CFSP of 10 December 2012 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Implementing Decision 2012/333 (OJ 2012 L 337, p. 50) and of Council Implementing Regulation (EU) No 1169/2012 of 10 December 2012 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation No 542/2012 (OJ 2012 L 337, p. 2), in so far as those measures concern the applicant; seventhly, of Council Decision 2013/395/CFSP of 25 July 2013 updating and amending the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Decision 2012/765 (OJ 2013 L 201, p. 57) and of Council Implementing Regulation (EU) No 714/2013 of 25 July 2013 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation No 1169/2012 (OJ 2013 L 201, p. 10), in so far as those measures concern the applicant; eighthly, of Council Decision 2014/72/CFSP of 10 February 2014 updating and amending the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Decision 2013/395 (OJ 2014 L 40, p. 56) and of Council Implementing Regulation (EU) No 125/2014 of 10 February 2014 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation No 714/2013 (OJ 2014 L 40, p. 9), in so far as those measures concern the applicant; ninthly, of Council Decision 2014/483/CFSP of 22 July 2014 updating and amending the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Decision 2014/72 (OJ 2014 L 217, p. 35) and of Council Implementing Regulation (EU) No 790/2014 of 22 July 2014 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation No 125/2014 (OJ 2014 L 217, p. 1), in so far as those measures concern the applicant; and, tenthly, of Council Decision (CFSP) 2017/1426 of 4 August 2017 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931/CFSP on the application of specific measures to combat terrorism and repealing Decision (CFSP) 2017/154 (OJ 2017 L 204, p. 95) and of Council Implementing Regulation (EU) 2017/1420 of 4 August 2017 implementing Article 2(3) of Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism and repealing Implementing Regulation (EU) 2017/150 (OJ 2017 L 204, p. 3), in so far as those measures concern the applicant,THE GENERAL COURT (First Chamber, Extended Composition),composed of I. Pelikánová, President, V. Valančius, P. Nihoul (Rapporteur), J. Svenningsen and U. Öberg, Judges,Registrar: P. Cullen, Administrator,having regard to the written part of the procedure and further to the hearing on 11 July 2018,gives the following Judgment I. Background to the dispute and events subsequent to the bringing of the present action A. Resolution 1373 (2001) of the United Nations Security Council 1On 28 September 2001, the United Nations Security Council adopted Resolution 1373 (2001) laying out wide-ranging strategies to combat terrorism and in particular the financing of terrorism. Paragraph 1(c) of that resolution provides, inter alia, that all States are to freeze without delay funds and other financial assets or economic resources of persons who commit, or attempt to commit, terrorist acts or participate in or facilitate the commission of terrorist acts; of entities owned or controlled by such persons; and of persons and entities acting on behalf of, or at the direction of, such persons and entities.2That resolution does not provide a list of persons, entities or groups to whom those restrictive measures must be applied. B. EU Law 3On 27 December 2001, as it took the view that action by the European Union was necessary in order to implement Resolution 1373 (2001), the Council of the European Union adopted Common Position 2001/931/CFSP on the application of specific measures to combat terrorism (OJ 2001 L 344, p. 93). In particular, Article 2 of Common Position 2001/931 provides for the freezing of the funds and other financial assets or economic resources of persons, groups and entities involved in terrorist acts and set out on the list in the annex to that common position.4On the same day, in order to implement at EU level the measures set out in Common Position 2001/931, the Council adopted Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism (OJ 2001 L 344, p. 70) and Decision 2001/927/EC establishing the list provided for in Article 2(3) of Regulation No 2580/2001 (OJ 2001 L 344, p. 83).5The name ‘Hamas-Izz al-Din al-Qassem (terrorist wing of Hamas)’ appeared on the lists annexed to Common Position 2001/931 and Decision 2001/927. Those two measures were regularly updated, in accordance with Article 1(6) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001, and the name ‘Hamas-Izz al-Din al-Qassem (terrorist wing of Hamas)’ remained on those lists.6On 12 September 2003, the Council adopted Common Position 2003/651/CFSP updating Common Position 2001/931 (OJ 2003 L 229, p. 42) and Decision 2003/646/EC implementing Article 2(3) of Regulation No 2580/2001 and repealing Decision 2003/480/EC (OJ 2003 L 229, p. 22). The name of the organisation included on the lists annexed to those measures is ‘Hamas (including Hamas-Izz al-Din al-Qassem)’.7The name of that organisation has continued to be included on the lists annexed to subsequent measures. C. Contested measures 1. July 2010 measures 8On 12 July 2010, the Council adopted Decision 2010/386/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 (OJ 2010 L 178, p. 28) and Implementing Regulation (EU) No 610/2010 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 1285/2009 (OJ 2010 L 178, p. 1) (together, ‘the July 2010 measures’).9The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ continued to be included on the lists annexed to those measures (‘the July 2010 lists at issue’).10On 13 July 2010, the Council published in the Official Journal of the European Union the notice for the attention of the persons, groups and entities on the list provided for in Article 2(3) of Regulation No 2580/2001 (OJ 2010 C 188, p. 13; ‘the July 2010 notice’).11By that notice, the Council, inter alia, informed the persons and entities concerned, first, that it had determined that the reasons for including their names on the lists adopted under Regulation No 2580/2001 were still valid, and therefore it had decided to maintain their name on the July 2010 lists at issue; secondly, that they could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs; thirdly, that they could submit a request to the Council to obtain the statement of reasons for maintaining their name on those lists; fourthly, that they could submit at any time a request to the Council that the decision to include their name on the lists in question should be reconsidered; fifthly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted within two months from the date of publication of that notice; and, sixthly, that they had the possibility of bringing an action before the EU Courts.12The applicant did not respond to that notice. 2. January 2011 measures 13By a notice published in the Official Journal of the European Union of 20 November 2010, the Council informed the persons, groups and entities concerned by Implementing Regulation No 610/2010 that it had been provided with new information relevant to those listings and that it had amended the statement of reasons concerning that regulation accordingly. According to that notice, a request to obtain the statement of reasons could be submitted to the Council within two weeks from the date of publication of the notice.14By letter of 10 December 2010, the Council, which, as a result of the bringing of the present action, on 12 September 2010, had the applicant’s lawyer’s address, sent that lawyer its statement of reasons as to why it intended to maintain the applicant’s name on the fund-freezing lists and indicated to the lawyer that she could, within one month from the date of that letter, submit observations to the Council regarding that retention and send to it any supporting documents.15The applicant did not respond to that notice or to that letter.16On 31 January 2011, the Council adopted Decision 2011/70/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 (OJ 2011 L 28, p. 57) and Implementing Regulation (EU) No 83/2011 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 610/2010 (OJ 2011 L 28, p. 14) (together, ‘the January 2011 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the January 2011 lists at issue’).17By letter of 2 February 2011, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the January 2011 lists at issue.18That statement of reasons was set out as follows.19First, the Council summarised the history of the activities of ‘Hamas (including Hamas-Izz al-Din al-Qassem)’. In particular, that organisation was said to have committed a number of attacks against Israeli targets from 1988 to 2010 which were classified as terrorist acts within the meaning of Article 1(3) of Common Position 2001/931.20Secondly, the Council stated that, during 2001, ‘Hamas-Izz al-Din al-Qassem’ had been the subject of two decisions adopted by the authorities of the United Kingdom of Great Britain and Northern Ireland and of two decisions adopted by the authorities of the United States of America.21The first decision taken by the United Kingdom authorities came from the Secretary of State for the Home Department (‘the Home Secretary’). That decision of 29 March 2001 was adopted under the UK Terrorism Act 2000 and proscribed Hamas-Izz al-Din al-Qassem, which was considered to be an organisation involved in acts of terrorism (‘the Home Secretary’s decision’). The second decision taken by the United Kingdom authorities came from the UK Treasury. By that decision of 6 December 2001, the UK Treasury froze the assets of Hamas-Izz al-Din al-Qassem and issued instructions in that regard in accordance with the powers conferred on it by article 4 of the Terrorism (United Nations Measures) Order 2001. The Council stated that the Home Secretary’s decision had been reviewed regularly by an internal government committee and that the order that formed the basis of the UK Treasury’s decision contained provisions regarding the judicial review of that decision and actions against it.22The decisions of the United States authorities consisted, first, in a government decision designating Hamas as a ‘foreign terrorist organisation’, pursuant to section 219 of the US Immigration and Nationality Act, as amended, and, secondly, in a decision designating Hamas as ‘an entity expressly identified as an international terrorist entity’, pursuant to Executive Order No 13224) (together, ‘the United States decisions’). The Council observed that the first designation was amenable to judicial review and the second to administrative and judicial review, in accordance with United States legislation.23The Council classified those decisions as ‘decisions of competent authorities’, in accordance with Article 1(4) of Common Position 2001/931.24Thirdly, the Council found that those decisions were still in force and took the view that the reasons for including ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the fund-freezing lists remained valid.25In its letter of 2 February 2011, the Council stated, first, that the applicant could submit to it at any time a request for reconsideration of the January 2011 lists at issue under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to the Council within two months from the date of that letter; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs. 3. July 2011 measures 26On 30 May 2011, the Council sent to the applicant’s lawyer a letter informing her that it had been provided with new information relevant to the listing of persons, groups and entities subject to the restrictive measures provided for in Regulation No 2580/2001 and that it had amended the statement of reasons accordingly. It accorded the applicant a period of three weeks in which to submit its observations.27The applicant did not respond to that letter.28On 18 July 2011, the Council adopted Decision 2011/430/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 (OJ 2011 L 188, p. 47) and Implementing Regulation (EU) No 687/2011 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulations (EU) No 610/2010 and No 83/2011 (OJ 2011 L 188, p. 2) (together, ‘the July 2011 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the July 2011 lists at issue’).29By letter of 19 July 2011, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the July 2011 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it within two months from the date of that letter; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.30That statement of reasons was the same as that relating to the January 2011 measures, except that the reference to the UK Treasury’s decision had been removed.31 4. December 2011 measures 32On 15 November 2011, the Council sent to the applicant’s lawyer a letter informing her that it had been provided with new information relevant to the listing of persons, groups and entities subject to the restrictive measures provided for in Regulation No 2580/2001 and that it had amended the statement of reasons accordingly. It accorded a period of two weeks in which to submit observations.3334On 22 December 2011, the Council adopted Decision 2011/872/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision 2011/430 (OJ 2011 L 343, p. 54) and Implementing Regulation (EU) No 1375/2011 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 687/2011 (OJ 2011 L 343, p. 10) (together, ‘the December 2011 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the December 2011 lists at issue’).35By letter of 3 January 2012, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the December 2011 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 29 February 2012; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.36In that statement of reasons, the Council supplemented the statement of facts used to classify the applicant (including Hamas-Izz al-Din al-Qassem) as a terrorist organisation with three new facts, dating from 2011.37 5. June 2012 measures 38On 25 June 2012, the Council adopted Decision 2012/333/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision 2011/872 (OJ 2012 L 165, p. 72) and Implementing Regulation (EU) No 542/2012 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 1375/2011 (OJ 2012 L 165, p. 12) (together, ‘the June 2012 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the June 2012 lists at issue’).39By letter of 26 June 2012, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the June 2012 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 27 August 2012; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.40That statement of reasons was identical to that concerning the December 2011 measures.41 6. December 2012 measures 42On 10 December 2012, the Council adopted Decision 2012/765/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision 2012/333 (OJ 2012 L 337, p. 50) and Implementing Regulation (EU) No 1169/2012 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 542/2012 (OJ 2012 L 337, p. 2) (‘the December 2012 measures’). ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the December 2012 lists at issue’).43By letter of 11 December 2012, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the December 2012 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 11 February 2013; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.44That statement of reasons was identical to that concerning the June 2012 measures.45 7. July 2013 measures 46On 25 July 2013, the Council adopted Decision 2013/395/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision 2012/765 (OJ 2013 L 201, p. 57) and Implementing Regulation (EU) No 714/2013 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) No 1169/2012 (OJ 2013 L 201, p. 10) (‘the July 2013 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the July 2013 lists at issue’).47By letter of 26 July 2013, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the July 2013 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 10 September 2013; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.48That statement of reasons was identical to that concerning the December 2012 measures.49 8. February 2014 measures 50On 10 February 2014, the Council adopted Decision 2014/72/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision 2013/395 (OJ 2014 L 40, p. 56) and Implementing Regulation (EU) No 125/2014 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation No 714/2013 (OJ 2014 L 40, p. 9) (together, ‘the February 2014 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the February 2014 lists at issue’).51By letter of 11 February 2014, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the February 2014 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 28 February 2014; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.52That statement of reasons was identical to that concerning the July 2013 measures.53 9. July 2014 measures 54On 22 July 2014, the Council adopted Decision 2014/483/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision 2014/72 (OJ 2014 L 217, p. 35) and Implementing Regulation (EU) No 790/2014 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation No 125/2014 (OJ 2014 L 217, p. 1) (together, ‘the July 2014 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the July 2014 lists at issue’).55By letter of 23 July 2014, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the July 2014 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 30 September 2014; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.56In the statement of reasons, the Council added that the classification of the applicant as a foreign terrorist organisation by the United States decision based on section 219 of the US Immigration and Nationality Act had been maintained by a decision of 18 July 2012.57 10. August 2017 measures 58On 4 August 2017, the Council adopted Decision (CFSP) 2017/1426 updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 and repealing Decision (CFSP) 2017/154 (OJ 2017 L 204, p. 95) and Implementing Regulation (EU) 2017/1420 implementing Article 2(3) of Regulation No 2580/2001 and repealing Implementing Regulation (EU) 2017/150 (OJ 2017 L 204, p. 3) (together, ‘the August 2017 measures’). The name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ was maintained on the lists annexed to those measures (‘the August 2017 lists at issue’).59By letter of 7 August 2017, the Council sent to the applicant’s lawyer the statement of reasons justifying the retention of the name ‘Hamas (including Hamas-Izz al-Din al-Qassem)’ on the August 2017 lists at issue, informing her, first, that the applicant could submit to it at any time a request for reconsideration of those lists under Article 2(3) of Regulation No 2580/2001 and Article 1(6) of Common Position 2001/931; secondly, that, in order for requests to be considered at the next review, in accordance with Article 1(6) of Common Position 2001/931, they had to be submitted to it before 4 September 2017; thirdly, that the applicant had the possibility of bringing an action before the EU Courts; and, fourthly, that it could make an application to the competent national authorities to obtain an authorisation to use frozen funds for certain needs.60That statement of reasons underwent significant amendments in relation to those for previous measures.61 II. Procedure and forms of order sought before referral back 62By application lodged at the Court Registry on 12 September 2010, the applicant brought the present action.63In the application, the applicant claimed that the Court should:–annul the July 2010 notice;annul the July 2010 measures;order the Council to pay the costs.64By document lodged at the Court Registry on 21 December 2010, the European Commission applied for leave to intervene in the proceedings in support of the form of order sought by the Council. By order of 7 February 2011, the President of the Second Chamber of the General Court granted that leave to intervene.65By letter of 17 February 2011, lodged at the Court Registry on the same day, the applicant referred to the January 2011 measures and to the letter of 2 February 2011. It stated that it maintained the pleas in the application against those ‘measures’ and that, in the reply, it would develop its criticisms against the reasons for maintaining its name on the January 2011 lists at issue, as notified by the letter of 2 February 2011.66After hearing the other parties, the Court, by letter from the Registry of 15 June 2011 addressed to the applicant, authorised the applicant to amend, in its reply, the pleas in law and form of order sought in its action with respect to the January 2011 measures, if appropriate in the light of the reasons set out in the letter of 2 February 2011. However, the Court did not authorise the applicant to amend the form of order sought in so far as the letter of 2 February 2011 was concerned. The time limit for lodging the reply was set at 27 July 2011.67By letter of 27 July 2011, the applicant referred to the July 2011 measures and to the letter of 19 July 2011 as replacing the measures initially contested. It stated that the publication or notification of those measures caused a new two-month period for bringing an action to begin to run and stated the reasons why the reply had not been lodged.68The letter of 27 July 2011 was placed on the file as an application for an extension of the period for lodging the reply.69By letters from the Registry of 16 September 2011, the Court informed the parties that it had decided not to accede to that application for an extension and set at 2 November 2011 the time limit for the Commission to lodge the statement in intervention.70On 28 September 2011, the applicant lodged a supplementary pleading at the Court Registry. In that pleading, the applicant stated that it ‘was extending the form of order seeking annulment to include [the July 2011 measures]’, in so far as they concerned it, including Hamas-Izz al-Din al-Qassem. It also stated that, in the light of the initial application, the letter of 17 February 2011 and the supplementary pleading, the present action should henceforth be considered to be brought against the July 2010 measures as well as against the January and July 2011 measures. The applicant added that the claims submitted against the July 2010 notice were also maintained and made clear that its applications for annulment related to the measures at issue solely in so far as they concerned the applicant.71On 28 October 2011, the Commission lodged the statement in intervention.72By decision of the Court of 8 December 2011, the supplementary pleading was placed on the file.73By letter of 20 December 2011, the Court informed the parties that, since the period within which an action for annulment of the January 2011 measures could be brought had expired before the supplementary pleading was lodged, the amendment of the form of order sought in the action to include those measures, which was in itself admissible, since it had already been requested and put into effect to the requisite legal standard by the applicant’s letter of 17 February 2011, would be examined solely in the light of the pleas and arguments put forward by that party before the expiry of the period within which an action for annulment of those measures could be brought, that is to say, the pleas and arguments put forward in the application initiating the proceedings.74The Court set 17 February 2012 as the deadline by which the Council and the Commission were to lodge their observations on the amendment of the form of order sought to include the January 2011 measures and, on 5 March 2012, it extended until 3 April 2012 the deadline by which those parties had to lodge their observations on the supplementary pleading.75By letter lodged at the Court Registry on 1 February 2012, the applicant amended the form of order sought in order to take account of the December 2011 measures, in so far as they concerned it, including Hamas-Izz al-Din al-Qassem.76By documents lodged at the Court Registry on 13 and 16 February 2012, the Commission and the Council, at the Court’s invitation, lodged their observations on the amendment of the form of order sought to include the January 2011 measures, in so far as they concerned the applicant, including Hamas-Izz al-Din al-Qassem.77By documents lodged at the Court Registry on 3 April 2012, the Council and the Commission, at the Court’s invitation, lodged their observations on the supplementary pleading.78By document lodged at the Court Registry on 28 June 2012, the applicant, at the Court’s invitation, lodged its observations in response to the observations of the Council and the Commission of 3 April 2012.79By document lodged at the Court Registry on 10 July 2012, the applicant amended the form of order sought in order to take account of the June 2012 measures, in so far as they concerned Hamas, including Hamas-Izz al-Din al-Qassem.80By documents lodged at the Court Registry on 20 and 23 July 2012, the Commission and the Council, at the Court’s invitation, lodged their observations on the amendment of the form of order sought in order to include the June 2012 measures.81By documents lodged at the Court Registry on 5 and 6 September 2012, the Commission and the Council, at the Court’s invitation, replied to the applicant’s observations of 28 June 2012.82By letter lodged at the Court Registry on 11 February 2013, the applicant amended the form of order sought in order to take account of the December 2012 measures, in so far as they concerned it, including Hamas-Izz al-Din al-Qassem.83By documents lodged at the Court Registry on 11 and 13 March 2013, the Commission and the Council, at the Court’s invitation, lodged their observations on the amendment of the form of order sought in order to include the December 2012 measures.84By letter of 24 September 2013, the applicant amended the form of order sought in the present action in order to take account of the July 2013 measures, in so far as they concerned Hamas, including Hamas-Izz al-Din al-Qassem.85By letter of 4 October 2013, the Court invited the Council, which complied with that request by document of 28 October 2013, to produce certain documents, and put certain questions to the parties with a view to the hearing.86By documents lodged at the Court Registry on 28 and 30 October 2013, the Council and the Commission, at the Court’s invitation, lodged their observations on the amendment of the form of order sought in order to include the July 2013 measures.87On 28 February 2014, the applicant amended the form of order sought in the present action in order to take account of the February 2014 measures, in so far as they concerned Hamas, including Hamas-Izz al-Din al-Qassem.88By documents lodged at the Court Registry on 4 and 5 March 2014, the Commission and the Council, at the Court’s invitation, lodged their observations on the amendment of the form of order sought in order to include the February 2014 measures.89On 21 September 2014, the applicant amended the form of order sought in order to take account of the July 2014 measures, in so far as they concerned it, including Hamas-Izz al-Din al-Qassem.90By documents lodged at the Court Registry on 23 October and 3 November 2014, the Council and the Commission, at the Court’s invitation, lodged their observations on the amendment of the form of order sought in order to include the July 2014 measures.91It is clear from the foregoing considerations that, by the present action, the applicant claimed that the Court should:annul the July 2010 notice and the July 2010 to July 2014 measures, in so far as they concern it, including Hamas-Izz al-Din al-Qassem;92The Council, supported by the Commission, contended that the Court should:dismiss the action;order the applicant to pay the costs.93By judgment of 17 December 2014, Hamas v Council (T‑400/10, EU:T:2014:1095, ‘the initial judgment’), the Court:declared the application for annulment of the July 2010 notice inadmissible;annulled the July 2010 to July 2014 measures, in so far as they concerned the applicant (including Hamas-Izz al-Din al-Qassem);maintained the effects of the July 2014 measures for three months from delivery of that judgment or, if an appeal were to be lodged within the period prescribed in the first paragraph of Article 56 of the Statute of the Court of Justice of the European Union, until the Court of Justice were to give judgment on that appeal;ordered the Council, in addition to bearing its own costs, to pay the costs of the applicant, the Commission being ordered to bear its own costs.94In order to rule to that effect, the Court upheld the fourth and sixth pleas raised against the July 2011 to July 2014 measures, alleging, respectively, the failure to take sufficient account of the development of the situation owing to the passage of time and a breach of the obligation to state reasons. The Court held, in paragraphs 101 and 125 of the initial judgment, that the list of terrorist acts which the applicant was said to have committed since 2005, set out in the statements of reasons relating to the July 2011 to July 2014 measures, had played a decisive role in the Council’s decision to continue to freeze its funds. In paragraphs 110 and 127 of the initial judgment, the Court held that the reference to any new terrorist act which the Council had inserted in its statement of reasons during a review pursuant to Article 1(6) of Common Position 2001/931 had to be the subject of an examination and a national decision adopted by a competent authority. Having found, inter alia in paragraphs 109 and 131 of the initial judgment, that the Council had based its allegations concerning terrorist acts which the applicant is said to have committed from 2005 onwards not on such decisions but on information which it had obtained from the press and the Internet, the Court annulled the July 2011 to July 2014 measures accordingly.95In paragraph 141 of the initial judgment, the Court also annulled the July 2010 and January 2011 measures on the ground that they likewise contained no reference to decisions of competent authorities relating to the facts imputed to the applicant and that they were therefore vitiated by the same breach of the obligation to state reasons.96By document lodged at the Registry of the Court of Justice on 20 February 2015, the Council brought an appeal against the initial judgment, which was registered as Case C‑79/15 P.97By document lodged at the Registry of the Court of Justice on 11 May 2015, the French Republic applied for leave to intervene in support of the form of order sought by the Council. The Court of Justice granted that leave to intervene.98By judgment of 26 July 2017, Council v Hamas (C‑79/15 P, EU:C:2017:584, ‘the judgment on appeal’), the Court of Justice set aside the initial judgment.99In the judgment on appeal, the Court of Justice held that:the General Court had not erred in law in considering that the United States decisions and/or the Home Secretary’s decision did not in themselves constitute a sufficient basis for the July 2010 to July 2014 measures (paragraph 33);the General Court had erred in law in ruling that the Council had infringed Article 1 of Common Position 2001/931 by relying, in the statements of reasons relating to the July 2010 to July 2014 measures, on material from sources other than national decisions adopted by competent authorities (paragraph 50);accordingly, the General Court had erred in law in its finding that the Council had infringed the obligation to state reasons (paragraph 53).100Since the General Court had ruled only on the fourth and sixth pleas in law in the application made by the applicant for annulment of the July 2011 to July 2014 measures, and since the other pleas in law relied on before the General Court raised, in part, questions relating to the assessment of facts, the Court of Justice, in the judgment on appeal, referred the case back to the General Court and reserved the costs (paragraph 56). III. Procedure and forms of order sought following the referral back 101The case referred back to the General Court was registered under number T‑400/10 RENV at the Court Registry and was, on 27 September 2017, assigned to the First Chamber.102By documents lodged at the Court Registry on 3 September, and on 4 and 5 October 2017 respectively, the applicant, the Council and the Commission submitted their observations on the remainder of the procedure, in accordance with Article 217(1) of the Rules of Procedure of the General Court.103In its observations, the applicant claims that the Court should:annul the July 2010 to July 2014 measures, in so far as they concern it, ‘including Hamas-Izz al-Din al-Qassem’;order the Council to pay all the costs, including those incurred in connection with the proceedings before the Court of Justice.104In their observations, the Commission and the Council contend that the Court should:dismiss the action as manifestly unfounded;105By separate document lodged at the Registry on 3 October 2017, the applicant, on the basis of Article 86 of the Rules of Procedure, lodged a statement for the modification of the application designed to take account of the August 2017 measures.106By documents lodged at the Court Registry on 27 October and 23 November 2017, the Council and the Commission, at the Court’s invitation, lodged their observations on the statement of modification of 3 October 2017.107The Council, supported by the Commission, submits that the Court should:reject the statement of modification as manifestly inadmissible;in the alternative, reject it as unfounded;order the applicant to pay the costs incurred by the Council at first instance, in the appeal and in the present proceedings following referral back.108On 27 March 2018, the General Court (First Chamber), in accordance with Article 89 of the Rules of Procedure, put written questions to the main parties and invited them to produce certain documents. The parties complied with those requests within the period prescribed.109On 15 May 2018, the Court allowed the applicant to submit its observations on the responses given by the Council. The applicant replied within the period prescribed.110On the proposal of the First Chamber, the Court decided, in accordance with Article 28 of the Rules of Procedure, to refer the case to the First Chamber in Extended Composition.111The parties presented oral argument and answered the questions put to them by the Court at the hearing on 11 July 2018. IV. Law A. Preliminary remarks concerning the subject matter of the action and the scope and admissibility of the applicant’s observations of 28 June 2012 1. The requests to amend the form of order sought in the action in respect of the July 2010 to July 2014 measures 112As is apparent from the statement of facts, the July 2010 measures were repealed and replaced, successively, by the January, July and December 2011, June and December 2012, July 2013 and then the February and July 2014 measures.113The applicant successively modified the initial form of order sought in such a way that its action seeks the annulment of those various measures.114In addition, it expressly maintained its claims seeking annulment of the repealed measures.115Under Article 86(1) of the Rules of Procedure, where a measure the annulment of which is sought is replaced or amended by another measure with the same subject matter, the applicant may, before the oral part of the procedure is closed, modify the application in order to take account of that new factor. In accordance with Article 86(2) of the Rules of Procedure, that request must be made within the time limit laid down in the sixth paragraph of Article 263 TFEU.116In the present case, the requests to modify the application referred to in paragraph 112 above concern measures which repeal and replace measures the annulment of which had previously been sought in the context of the action. Moreover, those requests were made before the date on which the oral part of the procedure before referral back closed, 20 November 2014, and within the time limit laid down in the sixth paragraph of Article 263 TFEU. The requests to modify the application are therefore admissible.117In accordance with settled case-law in the field of actions brought against successive fund-freezing measures, and contrary to what the Commission asserts in its statement in intervention with regard to the July 2010 measures, an applicant retains an interest in securing annulment of a decision imposing restrictive measures which has been repealed and replaced by a subsequent decision, in so far as the repeal of an act of an institution does not constitute recognition of the unlawfulness of that act and has only prospective effect, unlike a judgment annulling an act, by which the annulled act is eliminated retroactively from the legal order and is deemed never to have existed (judgment of 12 December 2006, Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, EU:T:2006:384, paragraph 35; see, also, judgments of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraphs 45 to 48 and the case-law cited, and of 30 September 2009, Sison v Council, T‑341/07, EU:T:2009:372, paragraphs 47 and 48 and the case-law cited).118Consequently, the applicant retains an interest in bringing proceedings against the July 2010 to July 2014 measures, even though these have been repealed and replaced in the course of the proceedings.119The present action is therefore admissible in so far as it concerns the July 2010 to July 2014 measures. 2. The admissibility of the application for annulment directed against the July 2010 notice 120The Council, supported by the Commission, contends that the application for annulment of the July 2010 notice is inadmissible since that notice does no more than invite persons and entities to exercise their rights without affecting their legal situation. It is therefore not, in their view, a challengeable act for the purposes of Article 263 TFEU, as interpreted by the case-law.121In accordance with the first paragraph of Article 263 TFEU, acts against which an action may be brought are acts ‘intended to produce legal effects vis-à-vis third parties’.122According to settled case-law, only measures the legal effects of which are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in its legal position are acts or decisions which may be the subject of an action for annulment (see order of 14 May 2012, Sepracor Pharmaceuticals v Commission, C‑477/11 P, not published, EU:C:2012:292, paragraphs 50 and 51 and the case-law cited).123In the present case, the applicant’s name was maintained on the July 2010 lists at issue by the July 2010 measures.124As is clear from paragraph 11 above, the sole purpose of the July 2010 notice, published in the Official Journal on the day following the adoption of the July 2010 measures, was to inform the persons and entities whose funds remained frozen pursuant to those measures of the possibilities provided to them to ask the competent national authorities to authorise use of the frozen funds for certain needs, to ask the Council to state the reasons for maintaining their name on the July 2010 lists at issue, to ask that institution to review its decision to maintain them on that list and, lastly, to bring an action before the Courts of the European Union.125In those circumstances, the 2010 notice did not produce legal effects which were binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in its legal position.126The action must therefore be declared inadmissible in so far as it concerns the 2010 notice. 3. The scope and admissibility of the applicant’s observations of 28 June 2012 127On 28 June 2012, the applicant, in response to an invitation by the Court, lodged its observations on the observations of the Council and the Commission of 3 April 2012 relating to the supplementary pleading.128As the applicant had entitled its observations ‘Reply’, the Council, in its observations of 6 September 2012, raised the objection that the applicant could not be authorised to lodge a reply covering the entire case, as initially brought by the lodging of the application and in respect of which it had not lodged a reply within the period prescribed.129The Council took the view that the exchanges of pleadings relating to the substance of the case ought to have come to an end when the applicant lodged the supplementary pleading and the Council lodged its observations on that pleading.130It should be observed that the applicant’s observations of 28 June 2012, lodged at the Court’s invitation, cannot indeed constitute a reply, within the meaning of Article 83(1) of the Rules of Procedure of the General Court, in the present case.131As is clear from paragraphs 67 to 70 above, the applicant did not, in the present case, lodge a reply within the prescribed period and the application for an extension of the time limit for lodging a reply, which the Court inferred from the applicant’s letter of 27 July 2011, was rejected.132The fact, however, remains that, although the observations of 28 June 2012 cannot be taken into consideration in the present action in so far as they seek annulment of the July 2010 and January 2011 measures (see, in the latter regard, paragraph 73 above), they are admissible in the context of the application for annulment of the July 2011 measures (introduced by the lodging of the supplementary pleading), in so far as they respond to the Council’s observations on the new pleas in the supplementary pleading directed against the July 2011 measures, and also in the context of the applications for annulment of the Council’s subsequent measures.133Furthermore, it is precisely because the Court considered it necessary to allow the applicant to respond, in that context, to the Council’s observations of 3 April 2012 on the supplementary pleading that it invited the applicant to submit observations.134Lastly, it follows from the actual wording of paragraph 1 of the observations of 28 June 2012 that they seek only to respond to the Council’s observations of 3 April 2012 on the supplementary pleading.135In the light of that explanation as to the scope of the observations of 28 June 2012, the Council’s objections to the admissibility of those observations must be rejected. 4. The application to modify the form of order sought in the action in respect of the August 2017 measures 136By a statement of modification dated 3 October 2017, the applicant requested that the action be extended to the August 2017 measures.137In its observations on that statement, the Council submitted that that request was inadmissible on the ground, first, that, contrary to the provision made in Article 86(1) of the Rules of Procedure, to which Article 218 of those rules referred, the application was modified after the oral part of the procedure had closed, on 21 November 2014, and, secondly, that the August 2017 measures did not replace the measures contested in the present case.138At the hearing, the Council stated that, with regard to that plea of inadmissibility, it deferred to the assessment of the Court.139In any event, it should be noted that, being a matter of public policy, the General Court may examine the admissibility of actions of its own motion (see, to that effect, judgment of 22 February 2006, Standertskjöld-Nordenstam and Heyraud v Commission, T‑437/04 and T‑441/04, EU:T:2006:62, paragraph 28 and the case-law cited).140In accordance with Article 218 of the Rules of Procedure, where the Court of Justice sets aside a judgment of the General Court and refers the case back to the General Court, the procedure before the General Court, which is seized of the case by the decision so referring it, is to be conducted, subject to the provisions of Article 217 of those rules, in accordance with the provisions of Title III or of Title IV of those rules, as the case may be.141Since Title IV of the Rules of Procedure concerns proceedings relating to intellectual-property rights, reference in the present case should be made to Title III of the Rules of Procedure. In Title III of the Rules of Procedure, Article 86(1) sets out two conditions which must be satisfied in order for a request seeking to modify the application to be admissible. First, the modification of the application must have been requested before the oral part of the procedure was closed. Secondly, the measures covered by the request for modification must replace and amend one or several measures the annulment of which has been sought previously.142Without it being necessary to rule on the first condition, it should be noted that the second condition has not been satisfied in the present case. The measures repealed by the August 2017 measures were not covered by the request or by the statements of modification lodged previously.143The applicant submits that a different conclusion should be drawn on the basis of the judgment of 28 January 2016, Klyuyev v Council (T‑341/14, EU:T:2016:47, paragraph 33), in which the Court granted a request for modification submitted in a similar situation.144In that regard, it should be noted that the judgment cited by the applicant is irrelevant on this point since, in that case, unlike the present case, the second condition laid down in Article 86 of the Rules of Procedure was satisfied as the measures covered by the statement of modification amended measures which had indeed been contested in the document initiating the proceedings.145It is clear from those factors that the request to modify the application made by the applicant on 3 October 2017 must be rejected as inadmissible. B. The application for annulment of the July 2010 measures 146In support of its application for annulment of the July 2010 measures, the applicant puts forward, in the application, four pleas in law, alleging, first, a manifest error of assessment, secondly, an infringement of the rights of the defence, thirdly, an infringement of the right to property and, fourthly, an infringement of the obligation to state reasons. 1. The first plea in law, alleging a manifest error of assessment as regards whether the fund-freezing measures apply to the applicant 147In its first plea, the applicant submits that, like States and legitimate governments, it is exempt, as a matter of principle, from the possibility of being included on fund-freezing lists.148In that regard, the applicant points out that it has obtained its legitimacy from the ballot box, that it constitutes a political party which is currently in power and that, in 2007, it participated in a government of national unity, those three factors implying that it too must benefit from the exemption recognised in respect of States and legitimate governments.149The Council, supported by the Commission, takes issue with the merits of that plea.150It should be noted that, according to Article 1(1) of Common Position 2001/931, the measures taken concerning the freezing of funds apply to persons, groups and entities involved in terrorist acts.151According to Article 1(3) of Common Position 2001/931, the term ‘terrorist act’ is to mean an intentional act which, given its nature or its context, may seriously damage a country or an international organisation, as defined as an offence under national law, where committed with the aim of seriously intimidating a population, or unduly compelling a government or an international organisation to perform or abstain from performing any act, or of seriously destabilising or destroying the fundamental political, constitutional, economic or social structures of a country or an international organisation.152Among the acts which are deemed to have been committed with the aim of seriously destabilising or destroying the fundamental political, constitutional, economic or social structures of a country or an international organisation, Article 1(3) of Common Position 2001/931 mentions, inter alia, attacks upon a person’s life which may cause death, attacks upon the physical integrity of a person, kidnapping or hostage taking, as well as the manufacture, possession, acquisition, transport, supply or use of weapons.153It follows from those provisions that, according to Common Position 2001/931, the relevant factor in determining whether the rules contained therein should be applied to a person or entity is connected to the acts that they perform and not to the nature of that person or that entity.154In those circumstances, the factors mentioned by the applicant, namely the holding of power following elections, the political nature of the organisation or the participation in a government, cannot be regarded as allowing exemption from the application of the rules contained in Common Position 2001/931.155In any event, even on the assumption that the applicant’s argument that the fund-freezing measures provided for by Common Position 2001/931 may not be applied to States or to legitimate governments is well founded, the applicant is not in a position which enables it to claim that that alleged exception applies.156The applicant is not a State within the meaning of international law since that concept is used, in that area of law, to designate territorial entities and not organisations of the kind which it has created.157As regards legitimate-government status, this provides governments, where appropriate, with some protection; however, this cannot be extended to groups and organisations to which some of their members are delegated, as the applicant claims to be (see, by analogy, judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 69 and the case-law cited).158In those circumstances, the first plea in law must be rejected as being unfounded. 2. The second plea in law, alleging infringement of the rights of the defence 159By its second plea, the applicant submits that the Council infringed the principle of respect for the rights of the defence by failing to communicate to it, before adopting the July 2010 measures, the evidence that had been used against it, and by not allowing it to be heard, in accordance with Article 6(3) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), and with Article 41(2)(a) of the Charter of Fundamental Rights of the European Union.160The Council, supported by the Commission, disputes the merits of the plea.161In that regard, it should be noted that, according to the case-law, a distinction must be drawn between, on the one hand, the inclusion of the name of a person or entity on a fund-freezing list and, on the other, maintaining that listing, in order to determine the obligations required by the principle of respect for the rights of the defence.162When it includes, for the first time, the name of a person or entity on a list referred to in Article 2(3) of Regulation No 2580/2001, the Council is not obliged to inform that person or entity beforehand of the grounds on which it intends to rely (see, to that effect, judgment of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 61).163That rule is due to the fact that, in order to be effective, such a decision must be able to take advantage of a surprise effect (see, to that effect, judgment of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 61).164Thus, in the context of a first listing, it is, in principle, sufficient to communicate to the person or entity referred to the reasons for the decision at the same time as, or immediately after, that decision is adopted, allowing that person or entity to be heard at that point (see, to that effect, judgment of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 61).165The situation is different in respect of decisions to maintain the inclusion of the name of a person or entity on such a list since, in that case, a surprise effect is no longer necessary.166In accordance with the case-law, the obligations differ, in respect of such decisions, depending on whether or not the statement of reasons contains new evidence.167Where there is new evidence, the adoption of the measure must be preceded by the disclosure, to the person or entity referred to, of the incriminating evidence, allowing that person or entity to be heard in relation to that evidence (see, to that effect, judgments of 21 December 2011, France v People’s Mojahedin Organization of Iran, C‑27/09 P, EU:C:2011:853, paragraph 63, and of 28 July 2016, Tomana and Others v Council and Commission, C‑330/15 P, not published, EU:C:2016:601, paragraph 67).168By contrast, that obligation does not apply in the absence of such evidence (see, to that effect, judgments of 13 September 2013, Makhlouf v Council, T‑383/11, EU:T:2013:431, paragraphs 43 and 44, and of 18 September 2017, Uganda Commercial Impex v Council, T‑107/15 and T‑347/15, not published, EU:T:2017:628, paragraph 97), since the person or entity referred to is deemed to have been informed of the earlier reasons and to have had the opportunity to submit its observations.169In the present case, it appears that the July 2010 measures come into the latter category since the reasons underpinning those measures are no different from those mentioned in the statement of reasons relating to the measures adopted on 22 December 2009, namely Council Decision 2009/1004/CFSP updating the list of persons, groups and entities subject to Articles 2, 3 and 4 of Common Position 2001/931 (OJ 2009 L 346, p. 58) and Council Implementing Regulation (EU) No 1285/2009 implementing Article 2(3) of Regulation (EC) No 2580/2001 and repealing Regulation (EC) No 501/2009 (OJ 2009 L 346, p. 39), which was made available to the applicant by the notice concerning Implementing Regulation No 1285/2009, published in the Official Journal of 23 December 2009 (OJ 2009 C 315, p. 11, ‘the December 2009 notice’).170With regard to the December 2009 notice, it is important to note that publication in the Official Journal of the operative part of the decision and a general statement of reasons has been held to be sufficient, having regard to the fact that a detailed publication of the complaints put forward against the persons and entities concerned might conflict with overriding considerations of public interest, but might also jeopardise their legitimate interests, it being understood, however, that the actual, specific statement of reasons for that decision must, moreover, be formalised and brought to the knowledge of the parties concerned by any other appropriate means (see, to that effect, judgment of 12 December 2006, Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, EU:T:2006:384, paragraph 147).171In the case of restrictive measures, those other means must in principle consist in an individual notification since such measures are such as to affect significantly the persons or entities concerned and may restrict the exercise of their fundamental rights (see, to that effect, judgment of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 86).172In that regard, the Council submits that it was unable to send an individual notification as it could not identify an address to which a letter could have been sent to the applicant. Moreover, the applicant had never given the Council a contact address and had never asked it to explain why its name had been included on the fund-freezing lists.173In that regard, the applicant’s lawyer stated, at the hearing, in response to questions put to her by the Court, that she could not inform the Council of that address since, for security reasons, she did not have it herself.174For its part, the Commission noted that, even for the proceedings brought before the Court, the applicant had not provided an actual address.175In that regard, it should be noted that the obligation to notify a specific and precise statement of reasons individually to the persons and entities against whom restrictive measures are adopted is essentially intended to supplement the publication of a notice in the Official Journal, the latter informing the persons or entities concerned that restrictive measures have been adopted against them and inviting them to request that the statement of reasons for those measures be communicated by providing the exact address to which that request may be sent. Therefore, notifying the persons and entities concerned individually is not the only mechanism used in order to inform them of the measures taken against them.176Moreover, it is clear from the case-law that the obligation to notify individually the statement of reasons for the restrictive measures does not apply in all cases, but only where it is possible (see, to that effect, judgment of 16 July 2014, Hassan v Council, T‑572/11, EU:T:2014:682, paragraph 37).177In the present case, however, it appears that, even in the present proceedings, the applicant’s address is still unknown since the only information that the applicant has provided to the Court is limited to the name of a city and a country and, in addition, those details have changed twice since the application was lodged (Beirut in Lebanon, then Damascus in Syria, and finally Doha in Qatar).178Furthermore, at the hearing, the applicant stated that since the European Union has a network of representatives abroad, the Council had the means to identify the address to which an individual notification could have been made and that it was up to that institution, and not up to the applicant, to take initiatives in that respect since the measures adopted in the July 2010 measures were capable of producing negative effects for the applicant.179In that regard, it should be noted that the obligation imposed on the institutions, within the limits noted in paragraph 176 above, of individual notification cannot have the effect of exempting the applicant from every procedure enabling it to find out about its legal position and, in particular, to identify the complaints which have been raised against it. As is clear from paragraphs 4 and 5 above, the applicant’s name has been included on the fund-freezing lists since December 2001. Given that discussions had taken place within the Council with regard to the retention of its name on those lists, the applicant had the option to make the necessary approaches to that institution in order to obtain specific and precise information concerning the reasons justifying the measures to which it was subject, by designating, where appropriate, a lawyer to represent it, which it did so, moreover, in the proceedings which it has brought before the General Court and to defend it in an appeal before the Court of Justice. As it did not make use of that option, the applicant cannot rely, as against the Council, on the consequences of its own inaction.180The Council was therefore able, without infringing the principle of respect for the rights of the defence, to combine the publication of the December 2009 measures in the Official Journal with the publication of a notice inviting the applicant to request from it the statement of reasons relating to those measures, without individually notifying it, since, in the circumstances of the present case, such a notification did not appear to be possible.181In those circumstances, the second plea in law must be rejected as being unfounded. 3. The third plea in law, alleging infringement of the right to property 182In its third plea, the applicant submits that the freezing of funds by the July 2010 measures infringes the right to property guaranteed by Article 17 of the Charter of Fundamental Rights and by Article 1 of Protocol No 1 to the ECHR. It refers, in that regard, to the judgments of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461), and of 11 June 2009, Othman v Council and Commission (T‑318/01, EU:T:2009:187).183The Council disputes the merits of this plea and is supported on this point by the Commission.184In this regard, it should be recalled that fundamental rights, including the right to property, do not enjoy absolute protection under EU law. The exercise of those rights may be restricted, provided, first, that those restrictions are duly justified by objectives of public interest pursued by the European Union and, secondly, that they do not constitute, in relation to those objectives, a disproportionate and intolerable interference, impairing their substance (see, to that effect, judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 121 and the case-law cited).185As regards the first condition, it should be recalled that the freezing of the funds, financial assets and other economic resources of the persons and entities identified in accordance with the rules laid down in Regulation No 2580/2001 and by Common Position 2001/931 as being involved in the financing of terrorism pursues an objective of general interest since it forms part of the fight against the threats to international peace and security posed by acts of terrorism (see, to that effect, judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 123 and the case-law cited).186With regard to the second condition, it should be noted that the measures establishing the freezing of funds and, in particular, maintaining the applicant’s name on the July 2010 lists at issue do not appear to be disproportionate, intolerable or to impair the substance of the fundamental rights or of some of them.187That type of measure is necessary in a democratic society in order to combat terrorism (see, to that effect, judgment of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraph 129 and the case-law cited).188Furthermore, the measures establishing the freezing of funds are not absolute, but provide for the possibility, first, to authorise the use of frozen funds in order to meet essential needs or to satisfy certain commitments and, secondly, to grant specific authorisation, under certain specific conditions, to unfreeze funds, other financial assets or other economic resources (see judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 127 and the case-law cited).189In addition, the maintenance of the names of persons and entities on the fund-freezing lists is subject to periodic review so as to ensure that those who no longer meet the necessary criteria for inclusion are removed (judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 129).190Those factors are not affected by the case-law developed in the judgments cited by the applicant.191In those judgments, the Court of Justice found that an unjustified restriction had taken place on the ground that the restrictive measures had been decided on by the United Nations Security Council against the applicant without the latter having had the benefit of the procedural safeguards enabling it to submit its observations before the UN authorities responsible for their adoption or, within the European Union, before the Council, which had implemented those measures in the territory of the Member States.192Such a situation is different from that in the present case, in which the July 2010 measures do not concern an initial listing and are not based on a United Nations Security Council resolution and in which, as a result of the publication of the December 2009 notice, the applicant had the opportunity to submit its observations on the evidence used against it (see paragraphs 170 to 180 above).193In those circumstances, the third plea in law must be rejected as being unfounded. 4. The fourth plea in law, alleging infringement of the obligation to state reasons 194By its fourth plea, the applicant accuses the Council of having failed to include, in the July 2010 measures as published in the Official Journal, the reasons for maintaining its name on the July 2010 lists at issue.195The Council, supported by the Commission, disputes the merits of that plea.196In that regard, it should be pointed out that, on 13 July 2010, the Council published in the Official Journal, first, the operative part of and the general reasons for the July 2010 measures and, secondly, the July 2010 notice inviting the persons and entities concerned to request from it the statement of reasons relating to those measures.197As stated in paragraph 170 above, it has already been held that, in the case of restrictive measures, the Council was able, without infringing the obligation to state reasons and the principle of respect for the rights of the defence, to limit the publication in the Official Journal of the acts containing restrictive measures to the operative part and to a general statement of reasons, since the actual, specific statement of reasons had to be formalised and brought to the knowledge of the parties concerned by any other appropriate means.198In those circumstances, contrary to the applicant’s submissions, the Council was not required to include in the July 2010 measures, as published in the Official Journal, the actual and specific reasons for their adoption.199The applicant submits, however, that the statement of reasons concerning the July 2010 measures should have been notified to it and should not have been the subject of a notice published in the Official Journal. It also notes that, as that notice did not expressly mention it, it was difficult for the applicant to access it. Finally, it claims that that notice reduced to two months the period in which the statement of reasons for the July 2010 measures could have been requested from the Council, which, in its view, was not a reasonable period of time.200In that regard, it should be recalled that, as is clear from paragraphs 176 to 180 above, since the Council did not have the applicant’s exact address, it was prevented from individually notifying the applicant of the statement of reasons for the July 2010 measures and was for that reason able to limit itself to publication of the July 2010 notice.201Moreover, the fact that the July 2010 notice did not expressly cite the names of the persons and entities whom it concerned cannot be regarded, in itself, as an infringement of the obligation to state reasons since that notice referred to the July 2010 regulation in which those names were mentioned.202Finally, it is incorrect that, according to the July 2010 notice, the request to obtain the statement of reasons for the measures concerned had to be made within two months of its publication. Contrary to what the applicant claims, the July 2010 notice did not limit to two months the period in which the statement of reasons for the July 2010 measures could have been requested, but specified only that the Council would review regularly the fund-freezing lists in accordance with Article 1(6) of Common Position 2001/931 and that, if the persons and entities concerned made a request for reconsideration of the decision and wished that that request be considered at the next review, that request had to be submitted to the Council within two months from the date of publication of that notice.203In the light of the foregoing considerations, it must be held that the Council complied with the obligation to state reasons and that the fourth plea in law must therefore be rejected as being unfounded. 5. Conclusion 204In the light of the foregoing considerations, the action must be dismissed in so far as it concerns the July 2010 measures. C. The application for annulment of the January 2011 measures 205It is clear from paragraph 73 above that, in support of the application for annulment of the January 2011 measures, the applicant puts forward the same pleas for annulment as those raised against the July 2010 measures. 1. The first plea in law, alleging a manifest error of assessment 206Since the first plea is the same as that invoked against the July 2010 measures and the assessment of that plea is not dependent on the specific circumstances in which those measures were adopted, it must be rejected for the same reasons as those set out in paragraphs 150 to 157 above.207The first plea in law is therefore rejected. 2. The second plea in law, alleging infringement of the principle of respect for the rights of the defence 208In this second plea, the applicant takes the view that the principle of respect for the rights of the defence has been infringed on the ground that the evidence used against it, in order to form the basis of the January 2011 measures, was not communicated to it before those measures were adopted.209210In the present case, it must be pointed out that, prior to the adoption of the January 2011 measures, the Council published in the Official Journal of 20 November 2010 a notice informing the persons and entities concerned by Implementing Regulation No 610/2010 that, as a result of new information, it had amended the statement of reasons concerning that regulation and inviting those persons and entities to request from it that statement of reasons (see paragraph 13 above).211In paragraphs 176 to 180 above, it has been held that the failure to notify the applicant individually of the statement of reasons concerning Implementing Regulation No 1285/2009 could not, due to the circumstances of the case, be regarded as an infringement of the principle of respect for the rights of the defence. The same must also apply in respect of the statement of reasons concerning the January 2011 measures.212The applicant states that, by the letter dated 10 December 2010 referred to in paragraph 14 above, the Council sent to the applicant’s lawyer the statement of reasons which led it to consider maintaining the applicant’s name on the January 2011 lists at issue. The applicant takes the view that such a letter should have been sent to it and not to its lawyer, who had not been given a mandate authorising her to receive such letters.213When questioned on this matter at the hearing, the Council acknowledged that it had sent that letter to the applicant’s lawyer for the purpose of informing the applicant, without there being any need to regard that letter as an individual notification.214In that regard, it should be noted that, according to the case-law recalled in paragraph 176 above, an individual notification is required only where such a notification is possible, which was not the case here, as stated in paragraphs 177 to 180 above, since there appeared to be no address, or no address had been given to the Council, and the applicant had not come forward to obtain the statement of reasons.215That conclusion is not affected by the fact that a letter was addressed to the applicant’s lawyer without the lawyer having been given by the applicant a mandate authorising her to receive it. The absence of a mandate does not contradict, but rather confirms, the finding in the preceding paragraph that the Council had no means by which to notify the applicant individually of the statement of reasons.216217Since the plea is the same as that invoked against the July 2010 measures, it must be rejected for the same reasons as those set out in paragraphs 184 to 189 above.218With regard to the reference to the judgments of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission (C‑402/05 P and C‑415/05 P, EU:C:2008:461), and of 11 June 2009, Othman v Council and Commission (T‑318/01, EU:T:2009:187), it should be noted that the circumstances of the present case are also different from those which gave rise to those judgments, since, as is clear from paragraphs 210 to 215 above, the statement of reasons for the January 2011 measures was duly made available to the applicant prior to their adoption.219The third plea in law must therefore be rejected.220In its fourth plea, the applicant accuses the Council of not having included the explicit reasons for maintaining its name on the January 2011 lists at issue in the January 2011 measures, as published in the Official Journal.221In this regard, it was recalled in paragraphs 170 and 197 above that, according to the case-law, it is acceptable, in respect of fund-freezing measures, for the version of the acts containing those measures published in the Official Journal to contain only the operative part and a general statement of reasons, it being understood that the actual, specific statement of reasons for those measures must be brought to the knowledge of the parties concerned by any appropriate means.222In paragraph 200 above, it was acknowledged that, in respect of the July 2010 measures, the Council was able, for the reasons set out in paragraphs 176 to 180, to satisfy the requirements stemming from the case-law by bringing the actual, specific statement of reasons for the restrictive measures to the applicant’s knowledge by the publication of a notice in the Official Journal inviting the applicant to request from it that statement of reasons. The same must also apply in respect of the January 2011 measures.223For the reason given in paragraph 215 above, the impossibility of making a notification was not affected, in the circumstances of the present case, by the fact that a letter was sent to the applicant’s lawyer without that lawyer having been given a mandate by the applicant to receive communications of that kind.224Consequently, the fourth plea in law must be rejected as being unfounded.225In the light of the foregoing considerations, the action must be dismissed in so far as it concerns the January 2011 measures. D. The application for annulment of the July 2011 to July 2014 measures 226In support of the application for annulment of the July 2011 to July 2014 measures, the applicant puts forward, in the supplementary pleading and the statements of modification, eight pleas for annulment, alleging respectively:infringement of Article 1(4) of Common Position 2001/931;errors as to the accuracy of the facts;an error of assessment as to the terrorist nature of the applicant;failure to take sufficient account of the development of the situation owing to the passage of time;infringement of the principle of non-interference;infringement of the obligation to state reasons;infringement of the principle of respect for the rights of the defence and of the right to effective judicial protection;infringement of the right to property.227First of all, the first plea must be examined, and then the sixth plea and the second plea, in so far as that latter plea alleges infringement of the obligation to state reasons, then the second plea, in so far as it alleges an error as to the accuracy of the facts, and finally the third, fourth, fifth, seventh and eighth pleas. 1. The first plea in law, alleging infringement of Article 1(4) of Common Position 2001/931 228In the context of the first plea, the applicant, after having commented on the identification of the organisations covered by the decisions of the United Kingdom and United States authorities, criticises the Council on the ground that it infringed Article 1(4) of Common Position 2001/931 by classifying those decisions as decisions taken by competent authorities within the meaning of that provision.229The retention of the name of a person or entity on the fund-freezing list is, in essence, an extension of the original listing and presupposes, therefore, that there is an ongoing risk of the person or entity concerned being involved in terrorist activities, as initially established by the Council on the basis of the national decision on which that original listing was based (judgments of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 61, and Council v Hamas, C‑79/15 P, EU:C:2017:584, paragraph 39).230The plea is therefore effective.231In the light of the judgment on appeal, it is necessary, first of all, to determine the organisations covered by the respective decisions of the United Kingdom and United States authorities, and then to examine, in the first place, the criticisms that are specific to the decisions of the United States authorities and, in the second place, the criticisms that are common to the decisions of the United Kingdom and United States authorities. (a) The identification of the organisations referred to by the decisions of the United Kingdom authorities and those of the United States authorities 232The applicant notes that, according to the statements of reasons supplied by the Council, the July 2011 to July 2014 measures are based on a decision of the Home Secretary proscribing Hamas-Izz al-Din al-Qassem, the armed wing of Hamas, and on two United States decisions, which refer to Hamas without providing further details.233The applicant doubts whether the United States authorities intended to list Hamas in its entirety and expresses the view that the Council, in considering that they did so intend, gave their decisions a broad interpretation which did not follow clearly from the lists published by the authorities of that State.234In that regard, it should be noted that the United States decisions explicitly mention Hamas, that designation being supplemented, in the decision designating it as a foreign terrorist organisation, by a dozen or so other names, including ‘Izz al-Din Al-Qassam Brigades’, by which Hamas was also known.235That fact cannot be interpreted, contrary to the applicant’s suggestion, as meaning that the United States authorities thereby intended to restrict the designation to ‘Hamas-Izz al-Din al-Qassem’ alone. First of all, those additional names include names that refer to Hamas as a whole, such as ‘Islamic Resistance Movement’, which is the English translation of ‘Harakat Al-Muqawama Al-Islamia’, another name that is included and of which ‘Hamas’ is the acronym. Further, the references to those various names are merely intended to ensure that the measure adopted in respect of Hamas is actually effective, by making it possible for that measure to reach Hamas through all of its known names and branches.236It follows from those considerations that the Home Secretary’s decision relates to Hamas-Izz al-Din al-Qassem, whereas the United States decisions relate to Hamas, including Hamas-Izz al-Din al-Qassem. (b) The criticisms specific to the decisions of the United States authorities 237According to the applicant, the Council was not entitled to base the July 2011 to July 2014 measures on the decisions of the United States authorities because the United States is a third State and, as a matter of principle, the authorities of such States are not ‘competent authorities’ within the meaning of Article 1(4) of Common Position 2001/931.238On that point, the applicant submits, principally, that the system established by Article 1(4) of Common Position 2001/931 is underpinned by confidence in national authorities, a confidence which is based on the principle of sincere cooperation between the Council and the Member States of the European Union, the sharing of common values enshrined in the Treaties, and the fact of being subject to shared rules, including the ECHR and the Charter of Fundamental Rights. It argues that the authorities of third States cannot enjoy that confidence.239Alternatively, in the event that it is accepted that the authority of a third State may be a competent authority within the meaning of Article 1(4) of Common Position 2001/931, the applicant submits that it is for the Council to carry out various checks, something which it did not do in the present case.240Thus, when it relies on a decision by an authority of a third State, the Council should check whether that authority has respected the rights of the defence and the right to effective judicial protection, the first of those principles meaning that the reasoning for the decision by the authority of a third State is notified to the party concerned as soon as possible and that that party is afforded the opportunity to make known its views on that decision.241According to the applicant, the examination of the relevant United States provisions reveals that the national procedure does not meet EU standards. Those provisions, it argues, do not lay down any obligation to notify the decisions adopted, let alone to communicate the statement of reasons, or even to state reasons, while, moreover, the time limits for bringing proceedings are very short. As they are not informed of the reasons for, or even the existence of, decisions taken in their regard, the persons concerned are unable to make their views known or to decide whether to institute proceedings. That was the case with regard to the applicant, which did not receive any notification or information concerning its classification as a foreign terrorist organisation and as an entity expressly identified as an international terrorist entity and was not given an opportunity to assert its rights.242Moreover, the United States legislation does not provide for any right of access to the file and the possibilities for an administrative review of the situation of the persons concerned are very limited. Infringement of the rights of the defence in administrative appeals cannot be offset by access to the file in judicial proceedings since the court must rely on the file compiled by the authority, the parties concerned have only a short period within which to adduce evidence and that evidence may be rejected by the authority. Even in judicial proceedings, the right to have access to the file is very partial and the parties concerned may plead infringement of their constitutional rights only if they have a particular connection to the United States.243The Council takes issue with that line of argument.244In this regard, it must be noted, in respect of the main argument raised by the applicant, that, in the judgment of 26 July 2017, Council v LTTE, (C‑599/14 P, EU:C:2017:583, paragraph 22), the Court of Justice held that the term ‘competent authority’ used in Article 1(4) of Common Position 2001/931 was not limited to the authorities of Member States but was capable, in principle, of also including the authorities of third States.245The interpretation adopted by the Court of Justice is justified, first, by the wording of Article 1(4) of Common Position 2001/931, which does not limit the concept of ‘competent authorities’ to the authorities of the Member States, and, secondly, by the objective of that common position, which was adopted in order to implement United Nations Security Council Resolution 1373 (2001), which seeks to intensify the global fight against terrorism through the systematic and close cooperation of all States (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 23).246With regard to the argument put forward in the alternative, it must be held that, when the Council acts on the basis of the decision taken by a third State, it must first verify whether that decision was adopted in accordance with the rights of the defence and the right to effective judicial protection and must provide, in the statements of reasons relating to its decisions, the particulars from which it may be concluded that it has carried out that check (see, to that effect, judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 31).247For that purpose, the Council must, if only briefly, refer in the statement of reasons relating to a decision to freeze funds to the reasons why it considers the decision of the third State on which it intends to rely to have been adopted in accordance with the rights of the defence and the right to effective judicial protection (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 33).248In paragraph 36 of the judgment of 26 July 2017, Council v LTTE, (C‑599/14 P, EU:C:2017:583), the Court of Justice assessed, in the light of those rules, the statement of reasons relating to Implementing Regulation No 790/2014, in which the Council, first, had stated that the Indian Government had proscribed the Liberation Tigers of Tamil Eelam (LTTE) in 1992 under the Unlawful Activities Act 1967 and had subsequently included them on the list of terrorist organisations in the schedule to the Unlawful Activities Prevention (Amendment) Act 2004 and, secondly, had mentioned that Sections 36 and 37 of the Unlawful Activities Act 1967 included provisions concerning the review and revision of the Indian list of persons and entities subject to restrictive measures, that the decision proscribing the LTTE as an unlawful association had been periodically reviewed by the Indian Home Affairs Minister, that the last revision had taken place on 14 May 2012, and that, following a revision by the tribunal established under the Unlawful Activities Act 1967, the designation of the LTTE as an entity involved in terrorist acts had been confirmed by the Indian Home Affairs Minister on 11 December 2012.249In the light of that information, the Court of Justice took the view, in paragraph 37 of the judgment of 26 July 2017, Council v LTTE, (C‑599/14 P, EU:C:2017:583), that Implementing Regulation No 790/2014 did not refer to anything that might suggest that the Council had verified whether the Indian decisions had been adopted in compliance with the rights of the defence and the right to effective judicial protection and that, therefore, the statement of reasons for that regulation did not disclose whether the Council had fulfilled its obligation to carry out a verification.250In the July 2011 to July 2014 measures, in respect of all information in that regard, the Council claims that the classification of the applicant as a foreign terrorist organisation ‘is amenable to judicial review in accordance with United States legislation’ and that its classification as an entity expressly identified as an international terrorist entity ‘is amenable to administrative and judicial review in accordance with United States legislation’.251The fact remains that, as in the case that gave rise to the judgment of 26 July 2017, Council v LTTE, (C‑599/14 P, EU:C:2017:583), those claims do not make it possible to take the view that the Council verified that the United States decisions had been adopted in compliance with the rights of the defence and the right to effective judicial protection of the persons and entities concerned.252In those circumstances, the United States decisions cannot serve as a basis for the July 2011 to July 2014 measures.253However, since Article 1(4) of Common Position 2001/931 does not require Council measures to be based on several decisions of competent authorities, the July 2011 to July 2014 measures could have referred to the Home Secretary’s decision alone and it is therefore appropriate for the examination of the action to proceed in so far as the July 2011 to July 2014 measures are based on that decision. (c) The criticisms that are common to the decisions of the United States and United Kingdom authorities 254The applicant submits that, for three reasons, the decisions of the United States and United Kingdom authorities on which the July 2011 to July 2014 measures are based are not ‘decisions of competent authorities’ for the purposes of Article 1(4) of Common Position 2001/931.255Those reasons will be examined below in so far as they concern the Home Secretary’s decision, in accordance with paragraph 253 above. (1) The preference to be given to judicial authorities 256The applicant maintains that, according to Article 1(4) of Common Position 2001/931, the Council can rely on administrative decisions only if the judicial authorities have no jurisdiction in the fight against terrorism. However, it submits, that is not the case here, since, in the United Kingdom, the judicial authorities do have jurisdiction in that area. The Home Secretary’s decision could not, therefore, have been taken into consideration by the Council in the July 2011 to July 2014 measures.257258In this regard, it should be noted that, according to the case-law, the administrative and non-judicial nature of a decision is not decisive for the application of Article 1(4) of Common Position 2001/931, since the actual wording of that provision expressly provides that a non-judicial authority may be classified as a competent authority for the purposes of that provision (judgments of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraphs 144 and 145, and of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 105).259Even if the second subparagraph of Article 1(4) of Common Position 2001/931 contains a preference for decisions from judicial authorities, it in no way excludes the taking into account of decisions from administrative authorities where (i) those authorities are actually vested, in national law, with the power to adopt restrictive decisions against groups involved in terrorism and (ii) those authorities, although only administrative, may nevertheless be regarded as ‘equivalent’ to judicial authorities (judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 107).260According to the case-law, administrative authorities must be regarded as equivalent to judicial authorities if their decisions are open to judicial review (judgment of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraph 145).261Consequently, the fact that courts of the relevant State have powers concerning the suppression of terrorism does not preclude the Council from taking account of decisions made by the national administrative authority entrusted with the adoption of restrictive measures in relation to terrorism (see, to that effect, judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 108).262In the present case, it is apparent from the information provided by the Council that appeals against decisions of the Home Secretary may be brought before the Proscribed Organisations Appeal Commission (POAC) (United Kingdom), which determines the matter in the light of judicial-review principles, and that either party may bring an appeal on a question of law against the decision of the POAC before an appellate court with the permission of the POAC or, if permission is refused, of the appellate court (see, to that effect, judgment of 12 December 2006, Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, EU:T:2006:384, paragraph 2).263In those circumstances, it appears that decisions of the Home Secretary are open to judicial review and therefore that, in accordance with the case-law referred to in paragraphs 259 and 260 above, that administrative authority must be regarded as equivalent to a judicial authority and thus as a competent authority, as contended by the Council, within the meaning of Article 1(4) of Common Position 2001/931, as has repeatedly been held in the case-law (judgments of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, and of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885).264The applicant acknowledges that, in a number of judgments, the Court has accepted that the Home Secretary had the capacity of a competent authority, but emphasises that, in those cases, the Home Secretary’s decisions were coupled with a judicial decision, which the applicant submits is not the case here.265It must be noted in this regard that, contrary to what is asserted by the applicant, the decisions of the administrative authorities in question were not accompanied, in every case of a judgment concerning acts based on a decision of the Home Secretary, by a judicial decision. Thus, there was no such decision in the case that gave rise to the judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 107). In the case that gave rise to the judgment of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461), the Court referred to a judicial decision in addition to the administrative decision. However, that reference was made in a very particular context in which the administrative decision had been challenged at national level by the applicant, which is not the case here.266It follows from the foregoing considerations that the July 2011 to July 2014 measures cannot be annulled on the basis that, in the statement of reasons for those measures, the Council referred to a decision of the Home Secretary, who is an administrative authority. (2) The fact that the Home Secretary’s decision consists of a list of terrorist organisations 267In addition, the applicant submits that the action taken by the competent authorities concerned by the July 2011 to July 2014 measures, including the Home Secretary, consists, in practice, in drawing up lists of terrorist organisations in order to impose a restrictive regime on them. This listing activity does not, in the applicant’s submission, constitute a criminal jurisdiction akin to the ‘instigation of investigations or prosecution’ or to ‘condemnation’, to cite the powers which, according to Article 1(4) of Common Position 2001/931, the ‘competent authority’ should have.268269It should be noted in this regard that, according to the case-law, Common Position 2001/931 does not require the decision of the competent authority to be taken in the context of criminal proceedings stricto sensu, provided that, in the light of the objectives of Common Position 2001/931 in implementing United Nations Security Council Resolution 1373 (2001), the purpose of the national proceedings in question is to combat terrorism in the broad sense (judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 113).270In that sense, the Court of Justice has held that protection of the persons concerned is not called into question if the decision taken by the national authority did not form part of a procedure seeking to impose criminal sanctions, but of a procedure aimed at the adoption of preventive measures (judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 70).271In a similar vein, the Court has held that a decision to ‘instigat[e] investigations or prosecut[e]’ should, if the Council is validly to invoke it, form part of national proceedings seeking, directly and primarily, the imposition on the person concerned of measures of a preventive or punitive nature, in connection with the combating of terrorism and by reason of that person’s involvement in terrorism (judgment of 30 September 2009, Sison v Council, T‑341/07, EU:T:2009:372, paragraph 111).272In the present case, the Home Secretary’s decision imposes measures proscribing organisations considered to be terrorist organisations.273Such a decision does not, strictly speaking, constitute a decision for the ‘instigation of investigations or prosecutions for an act of terrorism’ or ‘condemnation for such deeds’, within the strict criminal sense of the term, but leads to the ban on the applicant in the United Kingdom and therefore forms part, as required by the case-law, of national proceedings seeking, primarily, the imposition on the applicant of measures of a preventive or punitive nature, in connection with the fight against terrorism (see, to that effect, judgment of 16 October 2014, LTTE v Council (T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 115).274As to the fact that the activity of the authority in question results in the establishment of a list of persons or entities involved in terrorism, it should be pointed out that this does not mean, in itself, that that authority did not carry out an individual appraisal in respect of each of those persons or entities prior to their inclusion in those lists, or that that appraisal must necessarily be arbitrary or unfounded (see, to that effect, judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 118).275Thus, it is not so much the fact that the activity of the authority in question leads to the establishment of a list of persons or entities involved in terrorism that is at issue, but the question whether that activity is carried out with sufficient safeguards to allow the Council to rely on it in order to found its own listing decision (see, to that effect, judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 118).276Consequently, the applicant is wrong to claim that acknowledgement that a listing power may characterise a competent authority would, as a matter of principle, be inconsistent with Common Position 2001/931.277That position is not invalidated by the other arguments put forward by the applicant.278In the first place, the applicant maintains that, according to Article 1(4) of Common Position 2001/931, only lists drawn up by the United Nations Security Council may be taken into account by the Council.279That argument cannot be accepted since the purpose of the last sentence of the first subparagraph of Article 1(4) of Common Position 2001/931 is solely to afford the Council an additional listing possibility alongside the listings which it is able to make on the basis of decisions of competent national authorities.280In the second place, the applicant points out that, in so far as it reproduces lists put forward by the competent authorities, the EU list can be described as a list of lists and as thus coming within the scope of national administrative measures adopted, in some cases, by the authorities of third States without the relevant persons being informed and without those persons being in a position to defend themselves effectively.281In that regard, it should be noted that, as the applicant indicates, the Council, when it identifies the persons or entities to be made subject to fund-freezing measures, relies on the findings made by competent authorities.282In the context of Common Position 2001/931, a specific form of cooperation was introduced between the authorities of the Member States and the EU institutions, giving rise, for the Council, to an obligation to defer as far as possible to the assessment carried out by the competent national authorities (see judgments of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraph 133, and of 4 December 2008, People’s Mojahedin Organization of Iran v Council, T‑284/08, EU:T:2008:550, paragraph 53).283As a rule, it is not for the Council to decide whether the fundamental rights of the party concerned were observed by the authorities of the Member States, that being a power that belongs to the competent national courts (see, to that effect, judgment of 11 July 2007, Sison v Council, T‑47/03, not published, EU:T:2007:207, paragraph 168).284It is only exceptionally, in the case where the applicant disputes, on the basis of concrete evidence, that authorities of the Member States observed fundamental rights, that the Court must ascertain whether those rights were indeed respected.285By contrast, in the case where authorities of third States are involved, the Council is required, as has been noted in paragraphs 246 and 247 above, to satisfy itself of its own motion that those safeguards were in fact applied and to give reasons for its decision on that point. (3) The failure to indicate the serious and credible evidence and clues underpinning the Home Secretary’s decision 286The applicant considers that, in so far as it relied on an administrative decision and not on a judicial decision, the Council had an obligation to establish, in the July 2011 to July 2014 measures, that that decision was ‘based on serious and credible evidence or clues’, as required by Article 1(4) of Common Position 2001/931.287Since that argument does not concern the classification of a ‘decision taken by a competent authority’ within the meaning of Article 1(4) of Common Position 2001/931, which is the subject of the present plea, but the statement of reasons for the July 2011 to July 2014 measures, that argument will be examined in the context of the sixth plea, in which it is also invoked. (d) Conclusion 288It is apparent from paragraphs 246 to 252 above that the United States decisions cannot serve as a basis for the July 2011 to July 2014 measures, since the Council failed to fulfil its obligation to state reasons with regard to verification that the principle of the rights of the defence and that of the right to effective judicial protection had been observed in the United States.289In addition, it is evident from paragraphs 234 to 236 above that the decisions of the United States authorities to which that plea relates concerned Hamas as a whole, whereas the decision of the United Kingdom authorities related only to Hamas-Izz al-Din al-Qassem.290According to the applicant, this means that the July 2011 to July 2014 measures must be annulled in so far as they concern Hamas and can be maintained only in so far as they relate to Hamas-Izz al-Din al-Qassem.291For its part, the Council contends that no distinction can be made between those two ‘movements’ or ‘parts of a movement’, the applicant having presented its organisation as encompassing both of them.292In that regard, it should be noted that, according to paragraphs 7 and 8 of the application:‘Hamas has a Political Bureau and an armed wing: the Ezzedine Al-Qassam Brigades … “Although the armed wing is relatively independent, it is still subject to the general strategies drawn up by the Political Bureau”. The Political Bureau takes the decisions, and the Brigades comply with them because of the strong sense of solidarity engendered by the religious component of the movement.’293That statement has a strong probative value, since, first, as the Council points out, it is made by the applicant and, secondly, the applicant put it at the forefront of its arguments in the application.294In the remainder of its pleadings, the applicant explained that, in fact, the two ‘movements’ or ‘parts of a movement’ could not be confused or even associated with each other, as they operate entirely independently.295In the context of measures of organisation of procedure, the Court requested the applicant to provide proof of its assertions, but the applicant was unable to produce any document in that regard.296In those circumstances, it cannot be concluded, for the purpose of determining the effects of the response given to the first plea in the present action, that Hamas-Izz al-Din al-Qassem is an organisation that is separate from Hamas (see, to that effect, judgments of 29 April 2015, National Iranian Gas Company v Council, T‑9/13, EU:T:2015:236, paragraphs 163 and 164, and Bank of Industry and Mine v Council, T‑10/13, EU:T:2015:235, paragraphs 182, 183 and 185).297That is particularly so since, although it has been subject to fund-freezing measures for several years, Hamas did not seek to demonstrate to the Council that it was not in any way involved in the acts which triggered the adoption of those measures, by dissociating itself unequivocally from Hamas-Izz al-Din al-Qassem, which, according to the applicant, was solely responsible for them.298It follows that the plea must be rejected. 2. The sixth plea in law and the second plea in law, in so far as that latter plea alleges infringement of the obligation to state reasons 299It is clear from paragraphs 19 to 24 above that the Council based the retention of the applicant’s name on the July and December 2011, June and December 2012, July 2013 and February and July 2014 lists at issue (‘the July 2011 to July 2014 lists at issue’), first, on the fact that decisions classified as decisions of competent authorities in accordance with Article 1(4) of Common Position 2001/931 remained in force and, secondly, on its own assessments of a series of incidents attributed to the applicant and classified as terrorist acts within the meaning of Article 1(3) of Common Position 2001/931.300The Court will examine the criticisms regarding the obligation to state reasons which relate, first, to the decisions of the competent authorities and, secondly, to the subsequent facts invoked by the Council. (a) The decisions of the competent authorities 301As already indicated in paragraph 286 above, the applicant submits that, in the July 2011 to July 2014 measures, the Council ought to have indicated ‘the serious and credible evidence and clues’ on which the decisions of the competent authorities were based.302The Council, supported by the Commission, considers that argument to be unfounded.303In the light of paragraph 253 above, this plea must be examined only in so far as it concerns the Home Secretary’s decision.304In that regard, it must be noted that, according to the first subparagraph of Article 1(4) of Common Position 2001/931, fund-freezing lists are to be drawn up on the basis of precise information or material in the relevant file which indicates that a decision has been taken by a competent authority in respect of the persons and entities concerned, irrespective of whether it concerns the instigation of investigations or prosecution for a terrorist act, an attempt to perpetrate, participate in or facilitate such an act, ‘based on serious and credible evidence or clues’, or condemnation for such deeds.305It follows from the wording of that provision that the requirement for the decisions of competent authorities to be ‘based on serious and credible evidence or clues’ concerns decisions to instigate investigations or prosecution, but does not apply to decisions concerning condemnations (see, to that effect, judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 64).306In decisions concerning the instigation of investigations or prosecution, that requirement protects the persons concerned by ensuring that the inclusion of their name in the fund-freezing lists has a sufficiently solid factual basis (see, to that effect, judgment of 15 November 2012, Al-Aqsa v Council and Netherlands v Al-Aqsa, C‑539/10 P and C‑550/10 P, EU:C:2012:711, paragraph 68), whereas, in condemnation decisions, that requirement need no longer apply since the evidence gathered previously during the investigation or prosecutions has in principle been examined in detail.307In the present case, the Home Secretary’s decision is final in the sense that it does not have to be followed by an investigation. Furthermore, as is apparent from the Council’s answer to a question put by the Court, its purpose is to ban the applicant in the United Kingdom, with consequences under criminal law for anyone maintaining any kind of link with the applicant.308In those circumstances, the Home Secretary’s decision does not constitute a decision in respect of the instigation of investigations or prosecution, and must be treated as a condemnation decision, with the result that, pursuant to Article 1(4) of Common Position 2001/931, the Council was not required to indicate, in the statement of reasons relating to the July 2011 to July 2014 measures, the serious evidence and clues underpinning that authority’s decision.309In that regard, the fact that the Home Secretary is an administrative authority is irrelevant, since, as is apparent from paragraphs 262 and 263 above, the Home Secretary’s decisions are open to judicial review and, accordingly, the Home Secretary must be regarded as equivalent to a judicial authority. (b) The deeds invoked independently by the Council 310In the context of its second plea, the applicant submits that the deeds invoked independently by the Council in the July 2011 to July 2014 measures are too imprecise to be capable of forming the basis of a retention decision since some are undated, do not state locations or are not imputed to it.311In that regard, it should be noted that, in paragraph 32 of the judgment on appeal, the Court of Justice considered that, in certain situations, on account of the passage of time or the circumstances of the case, the mere fact that the national decision that served as the basis for the original listing remains in force no longer supports the conclusion that there is an ongoing risk of the person or entity concerned being involved in terrorist activities.312In the same paragraph of that judgment, the Court of Justice held that, in such situations, the Council is obliged to base the retention of that person or entity on the fund-freezing list on an up-to-date assessment of the situation, and to take into account more recent facts which demonstrate that that risk continues to exist.313The Court of Justice also took the view, in paragraph 33 of the judgment on appeal, that, in that case, a significant period of time had elapsed between, on the one hand, the adoption of the national decisions, dating from 2001, which served as the basis for the original inclusion of the applicant’s name on the fund-freezing lists and, on the other, the adoption of the July 2010 to July 2014 measures.314The Court of Justice therefore took the view that the Council was obliged to base the retention of the applicant’s name on those lists on more recent evidence demonstrating that that organisation was still involved in terrorist activities and that that material could be derived from sources other than national decisions adopted by competent authorities (see, to that effect, the judgment on appeal, paragraph 33 and paragraphs 35 to 50; see also, to that effect, judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraphs 55 and 57 to 72).315In the July 2011 to July 2014 measures, in order to maintain the applicant’s name on the fund-freezing lists, the Council, in addition to maintaining the decisions of the United States and United Kingdom authorities, relied on the following deeds:‘from 1988 onwards, Hamas, (including Hamas-Izz al-Din al-Qassem) carried out, and acknowledged responsibility for, regular attacks against Israeli targets, including kidnapping, stabbing and shooting attacks against civilians, and suicide bomb attacks on public transport and in public places. Hamas mounted attacks in both “Green Line” Israel and Occupied Territories’ (July 2011 to July 2014 measures);‘on 21 September 2005 a Hamas cell kidnapped and later killed an Israeli. In a video statement Hamas claimed to have kidnapped the man in an attempt to negotiate the release of Palestinian prisoners held by Israel’ (July 2011 to July 2014 measures);‘Hamas militants have taken part in the firing of rockets from Gaza into southern Israel’ (July 2011 to July 2014 measures);‘for the purpose of carrying out terrorist attacks against civilians in Israel, Hamas has in the past recruited suicide bombers by offering support to their families’ (July 2011 to July 2014 measures);‘in June 2006, Hamas (including Hamas-Izz al-Din-al-Qassem) was involved in the operation which led to the kidnap of an Israeli soldier, Gilad Shalit, who remains a hostage’ (July 2011 measures). ‘On 18 October 2011, Hamas released Gilad Shalit, after holding him for five years, as part of a prisoner swap deal with Israel’ (December 2011 to July 2014 measures);‘on 20 August 2011, Hamas claims responsibility for the firing of rockets into southern Israel which injured two Israeli citizens’ (December 2011 to July 2014 measures);‘on 7 April 2011, a rocket attack by Hamas against a school bus killed a civilian’ (December 2011 to July 2014 measures);‘on 2 September 2010, a vehicle was shot at, injuring two Israelis’ (July 2011 to July 2014 measures);‘on 31 August 2010, four Israeli settlers were assassinated by inhabitants of Hebron’ (July 2011 to July 2014 measures);‘on 14 June 2010, an attack by an alleged Hamas cell killed a police officer and injured two others in the Southern Hebron Hills’ (July 2011 to July 2014 measures);‘on 26 March 2010, two Israeli soldiers were killed in the Gaza Strip’ (July 2011 to July 2014 measures);‘on 5 January 2010, an Egyptian border guard was killed in armed clashes in the northern part of Sinai’ (July 2011 to July 2014 measures).316With regard to those deeds, it should be recalled that the Court of Justice has held that the Courts of the European Union are required to determine, in particular, whether the obligation to state reasons laid down in Article 296 TFEU has been complied with and, therefore, whether the reasons relied on are sufficiently detailed and specific (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 70, and the judgment on appeal, paragraph 48).317It is settled case-law that the statement of reasons required by Article 296 TFEU must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the act in such a way as to enable the person concerned to ascertain the reasons for the measures and to enable the court having jurisdiction to exercise its power of review (judgment of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 50 and the case-law cited).318It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficient must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter (judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 53, and of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 82).319In particular, the reasons given for a measure adversely affecting a person will be sufficient if that measure was adopted in a context which was known to that person and which enables him to understand the scope of the measure concerning him (judgments of 15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 54, and of 14 October 2009, Bank Melli Iran v Council, T‑390/08, EU:T:2009:401, paragraph 82).320In the present case, since they took place in a known context, it must be held that the deeds mentioned by the Council in the July 2011 to July 2014 measures are described in a sufficiently detailed and specific way to be challenged by the applicant and reviewed by the Court, even if the precise location where they took place is not stated.321Moreover, the link between those deeds and Hamas or Hamas-Izz al-Din al-Qassem may be taken to be established, since it is clear from the wording before those deeds are listed that they must be attributed to ‘Hamas (including Hamas-Izz al-Din al-Qassem)’.322The only exceptions to that finding are the deeds mentioned in the first, third and fourth places in paragraph 315 above, which are undated, and therefore the applicant would find it difficult to contest them and the General Court would find it difficult to carry out the review required by the Court of Justice, since the date is a key factor in identifying certain actions.323However, the deeds other than those mentioned in the first, third and fourth places in paragraph 315 above provide an independent and sufficient statement of reasons for the July 2011 to July 2014 measures.324Although, of those, the deeds in 2005 and 2006 may be regarded as rather old, this is not the case with regard to the deeds in 2010 mentioned in the July 2011 measures and the deeds in 2010 and 2011 which are mentioned in the December 2011 to July 2014 measures.325Consequently, the sixth plea in law and the second plea in law, in so far as that latter plea alleges infringement of the obligation to state reasons, must be rejected as being unfounded. 3. The second plea in law, in so far as it alleges an error as to the accuracy of the facts 326In the supplementary pleading, the applicant states that it is for the Council to prove the accuracy of the facts set out in the July 2011 to July 2014 measures and listed in paragraph 315 above. However, that proof has not, in its view, been furnished in the present case. Certain deeds have been attributed to Hamas militants without any indication as to how that status has been established. Moreover, restrictive measures cannot be taken against it on account of those deeds.327In particular, the applicant denies that it committed the deed which took place on 5 January 2010 on the ground that Hamas intervened only to maintain order after the death of the official. It also disputes the deed which took place on 14 June 2010, which is imputed to an ‘alleged’ Hamas cell, on the ground that that assumption is insufficient.328At the hearing, the applicant’s lawyer confirmed that Hamas disputed all of the deeds mentioned by the Council in the July 2011 to July 2014 measures and set out in paragraph 315 above.329In response to a question put by the Court in the context of a measure of organisation of procedure, the Council provided a number of articles and publications to demonstrate the reality of the deeds mentioned in paragraph 315 above and their attribution to Hamas or Hamas-Izz al-Din al-Qassem.330In that regard, it should be pointed out that, in the case of subsequent fund-freezing decisions, the Court of Justice takes the view that the Courts of the European Union are required to determine not only whether the obligation to state reasons has been complied with, as addressed in the preceding plea, but also whether those reasons are substantiated (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 70, and the judgment on appeal, paragraph 48).331The Court of Justice also takes the view that the person or entity concerned may, in the action challenging the retention of his or its name on the lists at issue, dispute all the material relied on by the Council to demonstrate that the risk of his or its involvement in terrorist activities is ongoing, irrespective of whether that material is derived from a national decision adopted by a competent authority or from other sources (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 71, and the judgment on appeal, paragraph 49).332The Court of Justice adds that, in the event of challenge, it is for the Council to establish that the facts alleged are well founded and for the Courts of the European Union to determine whether they are made out (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 71, and the judgment on appeal, paragraph 49).333In that regard, it should be noted that, if the evidence adduced by one party is challenged by the other party, that other party must satisfy two cumulative requirements.334In the first place, its challenge may not be made in general terms, but must be specific and detailed (see, to that effect, judgment of 16 September 2013, Duravit and Others v Commission, T‑364/10, not published, EU:T:2013:477, paragraph 55).335In the second place, challenges relating to the accuracy of the facts must feature clearly in the first procedural document concerning the contested measure (see, to that effect, judgment of 22 April 2015, Tomana and Others v Council and Commission, T‑190/12, EU:T:2015:222, paragraph 261). This means, in the present case, that only the challenges set out in the supplementary pleading and in the subsequent statements of modification can be taken into consideration. Those pleadings are, in fact, the first procedural documents in which the applicant set out its pleas contesting the July 2011 to July 2014 measures.336In the present case, among the deeds mentioned in paragraph 315 above, only those which took place on 5 January and 14 June 2010 have been the subject of challenges by the applicant which satisfy those two requirements.337However, those challenges are ineffective, since, even if they prove to be well founded, the other acts mentioned by the Council in the July 2010 to July 2014 measures are sufficient to prove the persistent nature of the risk of the applicant’s participation in terrorist activities. This is the case, in particular, with regard to the deeds listed in paragraph 315 above which are dated 26 March 2010, 31 August 2010, 7 April 2011 and 20 August 2011.338Those deeds are also sufficiently recent to justify the measures adopted between July 2011 and July 2014.339As to the assertion that they have not been clearly imputed to Hamas or to Hamas-Izz al-Din al-Qassem, that argument is also irrelevant, since, as is clear from paragraphs 292 to 297 above, those two entities must be regarded, at this stage, as one and the same organisation for the purpose of applying the rules on combating terrorism.340The second plea in law, in so far as it alleges an error as to the accuracy of the facts, must therefore be rejected as unfounded. 4. The third plea in law, alleging an error of assessment as to the terrorist nature of the applicant 341The applicant takes the view that, in adopting the July 2011 to July 2014 measures, the Council made an error of assessment as regards the applicant’s classification as a terrorist organisation. In its opinion, the Court’s jurisdiction extends to verification of the Council’s classification of the deeds which it invokes as acts of terrorism, and that verification is required both in respect of the deeds invoked independently by the Council and in respect of those invoked in the decisions of the competent authorities.342So far as concerns the deeds invoked in the decisions of the competent authorities, the Court should, according to the applicant, verify that the classification adopted is based on the definition of terrorism in Common Position 2001/931. In the present case, it submits, that check could not be undertaken because of the Council’s failure to provide information concerning that classification.343In view of the answer given to the first plea, this part of the plea will be considered only in so far as it concerns the Home Secretary’s decision.344Since, in response to the first and sixth pleas, it has been held that the evidence and clues on which that decision is based do not have to be indicated in the statement of reasons for the July 2011 to July 2014 measures, the Council cannot be required to verify the national authority’s classification of those deeds and to indicate in those measures the outcome of that classification.345In the present case, that is particularly so since the decision emanates from a Member State for which Article 1(4) of Common Position 2001/931 and Article 2(3) of Regulation No 2580/2001 introduced a specific form of cooperation with the Council, entailing, for that institution, the obligation to defer as far as possible to the assessment conducted by the competent national authority (judgments of 23 October 2008, People’s Mojahedin Organization of Iran v Council, T‑256/07, EU:T:2008:461, paragraph 133, and of 4 December 2008, People’s Mojahedin Organization of Iran v Council, T‑284/08, EU:T:2008:550, paragraph 53).346In the statements of reasons for the July 2011 to July 2014 measures, the Council classified the deeds mentioned in paragraph 315 above as terrorist acts within the meaning of Article 1(3)(iii)(a), (b), (c), (d), (f) and (g) of Common Position 2001/931 for the purpose of achieving the aims set out in Article 1(3)(i), (ii) and (iii) of that common position.347In the first place, the applicant considers that classification to be too general and imprecise.348That argument cannot be accepted, since, in the light of the provisions concerned, that statement of reasons, although concise, is sufficiently clear to enable the applicant to understand the reasons why its name had been maintained on the July 2011 to July 2014 lists at issue and to dispute the merits of that classification, which, moreover, it did in the remainder of this plea in law.349In the second place, the applicant submits that the Council erred in classifying the deeds concerned as terrorist acts. First, the fact that the acts in question all took place in the context of the war of occupation conducted by Israel in Palestine should have caused the Council not to accept that classification in the applicant’s case. Next, even if those deeds were established, it would not follow that they were committed with the aims referred to by the Council and mentioned in Article 1(3)(i), (ii) and (iii) of Common Position 2001/931.350Those two arguments relate to the question whether, when classifying the deeds mentioned in paragraph 315 above, the Council should have taken into consideration the fact that the Israeli-Palestinian conflict came within the scope of the law governing armed conflict.351In that regard, it must be noted that, according to settled case-law, the existence of an armed conflict within the meaning of international humanitarian law does not exclude the application of provisions of EU law concerning the prevention of terrorism, such as Common Position 2001/931 and Regulation No 2580/2001, to any acts of terrorism committed in that context (judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 57; see also, to that effect, judgment of 14 March 2017, A and Others, C‑158/14, EU:C:2017:202, paragraphs 95 to 98).352Common Position 2001/931 makes no distinction as regards its scope according to whether or not the act in question is committed in the context of an armed conflict within the meaning of international humanitarian law. Moreover, the objectives of the European Union and its Member States are to combat terrorism, whatever form it may take, in accordance with the objectives of current international law (judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 58).353It is notably in order to implement, at EU level, United Nations Security Council Resolution 1373 (2001) (see paragraph 1 above), which ‘reaffirm[s] the need to combat by all means, in accordance with the Charter of the United Nations, threats to international peace and security caused by terrorist acts’ and which ‘calls on Member States to complement international cooperation by taking additional measures to prevent and suppress, in their territories through all lawful means, the financing and preparation of any acts of terrorism’, that the Council adopted Common Position 2001/931 (see recitals 5 to 7 thereof) and subsequently, in accordance with that common position, Regulation No 2580/2001 (see recitals 3, 5 and 6 of that regulation) (judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 59).354Accordingly, the third plea in law must be rejected as being unfounded. 5. The fourth plea in law, alleging failure to take sufficient account of the development of the situation owing to the passage of time 355The applicant criticises the Council on the ground that it failed to take sufficient account, in the July 2011 to July 2014 measures, of the development of the situation owing to the passage of time. According to the applicant, the Council should have studied the national decisions taken in re-examination procedures, and checked whether those decisions were based on serious and credible evidence or clues and that the alleged deeds should still have been classified as terrorist acts within the meaning of Common Position 2001/931.356In view of the response given to the first plea, only the Home Secretary’s decision must be taken into consideration for the purpose of assessing this fourth plea in law.357In that regard, it should be noted that, in the judgment of 26 July 2017, Council v LTTE (C‑599/14 P, EU:C:2017:583, paragraph 51), and the judgment on appeal (paragraph 29), the Court of Justice held that, in the context of a review pursuant to Article 1(6) of Common Position 2001/931, the Council was able to maintain the name of the person or entity concerned on the fund-freezing lists if it concluded that there was an ongoing risk of that person or entity being involved in the terrorist activities which justified the initial listing.358In those judgments, the Court of Justice added that, in the process of verifying whether the risk of the person or entity concerned being involved in terrorist activities is ongoing, the subsequent fate of the national decision that served as the basis for the original entry of that person or entity on the lists for the freezing of funds should be duly taken into consideration, in particular the repeal or withdrawal of that national decision as a result of new facts or material or any modification of the competent national authority’s assessment (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 52, and the judgment on appeal, paragraph 30).359In the present case, it is clear from the July 2011 to July 2014 measures that the Council respected the approach imposed by the Court of Justice when it stated that the Home Secretary’s decision remained in force.360It does not follow from the judgments of the Court of Justice cited in paragraphs 357 and 358 above or from Article 1(6) of Common Position 2001/931 that the Council should have set out, in the fund-freezing decisions, the detailed rules for reviewing the decisions of the competent authorities.361Moreover, since it has been held that the Council was not required to indicate, in its decisions, the deeds which formed the basis for the decisions of the competent authorities justifying the inclusion of the applicant’s name (see paragraphs 304 to 309 above), or to verify the classification of those deeds as terrorist acts within the meaning of Common Position 2001/931 (see paragraphs 344 and 345 above), the Council cannot be obliged to indicate the deeds underpinning the review decisions, or to verify the classification of those deeds.362Finally, the confirmation that the decisions of the competent authorities remained in force was sufficient to enable the applicant to launch a challenge and the EU Courts to exercise their power of review, with the result that there has been compliance with the obligation to state reasons.363In those circumstances, it must be considered that, contrary to what is asserted by the applicant, the Council duly took into consideration, in the July 2011 to July 2014 measures, the subsequent fate of the national decision that had served as the basis for the original inclusion of the applicant’s name on the fund-freezing lists and that those measures contain sufficient reasoning in that regard.364The fourth plea in law must therefore be rejected as being unfounded. 6. The fifth plea in law, alleging infringement of the principle of non-interference 365The applicant claims that, by adopting the July 2011 to July 2014 measures, the Council infringed the principle of non-interference which stems from Article 2 of the Charter of the United Nations and constitutes a principle of jus cogens that flows from the sovereign equality of States in international law and which precludes a State, as well as the government of a State, from being regarded as a terrorist entity.366The applicant submits that it is not merely a non-governmental organisation, and much less an informal movement, but a legitimate political movement that won the elections in Palestine and forms the heart of the Palestinian Government. Since Hamas has had to assume functions going beyond those of an ordinary political party, its actions in Gaza are in fact tantamount to those of a State authority and cannot therefore be censured from the aspect of antiterrorist measures. The applicant is the only one among the individuals and entities included in the July 2011 to July 2014 lists at issue to be in such a situation.367In that regard, it should be noted that the principle of non-interference, which is a principle of customary international law, also called the principle of non-intervention, concerns the right of any sovereign State to conduct its affairs without external interference and is a corollary of the principle of sovereign equality of States.368As the Council points out, that principle of international law is set out for the benefit of sovereign States, and not for the benefit of groups or movements (see judgment of 16 October 2014, LTTE v Council, T‑208/11 and T‑508/11, EU:T:2014:885, paragraph 69 and the case-law cited).369Since it is neither a State nor the government of a State, Hamas cannot benefit from the principle of non-interference.370The fifth plea in law must therefore be rejected as being unfounded. 7. The seventh plea in law, alleging infringement of the principle of respect for the applicant’s rights of defence and of the right to effective judicial protection 371The seventh plea comprises two parts. (a) The first part 372In the first part of the seventh plea, the applicant submits, in the event that the Court should hold, in response to the first plea, that the United States procedures adequately protect procedural rights and that the United States Government may therefore be regarded as a competent authority within the meaning of Article 1(4) of Common Position 2001/931, that, in the present case, its rights of defence and its right to effective judicial protection were infringed during the part of the procedure in the United States, namely during the part which led to the adoption of the United States decisions relating to it. Consequently, the July 2011 to July 2014 measures should, it argues, be annulled on the ground that they infringe the principle of respect for the applicant’s rights of defence and that of the right to effective judicial protection.373There is no need to rule on the first part of the seventh plea inasmuch as it is raised as an alternative to the first plea, which has been upheld as regards the United States decisions. (b) The second part 374In the second part of the seventh plea, the applicant submits that, for two reasons, the principle of respect for the rights of the defence was infringed during the European part of the procedure which led to the adoption by the Council of the July 2011 to July 2014 measures.375In the first place, the applicant criticises the Council on the ground that it did not send it the serious evidence and clues underpinning the decisions of the competent authorities on which it relied.376In view of the answer given to the first plea, this argument must be considered only in so far as it concerns the Home Secretary’s decision.377Therefore, it is appropriate to examine whether that decision had to be communicated by the Council to the applicant.378In this regard, in accordance with the case-law, it follows from Article 1(4) of Common Position 2001/931 and from the obligation to state reasons laid down in Article 296 TFEU that the Council must indicate, in its measures, the precise information and material in the file which show that a decision was taken by a competent authority in respect of the parties concerned (see, to that effect, judgment of 12 December 2006, Organisation des Modjahedines du peuple d’Iran v Council, T‑228/02, EU:T:2006:384, paragraph 120).379By contrast, when sufficiently precise information has been disclosed, enabling the party concerned properly to state its point of view on the evidence adduced against it by the Council, the principle of respect for the rights of the defence does not mean that that institution is obliged spontaneously to grant access to the documents in its file.380It is only on the request of the party concerned that the Council is required to provide access to all non-confidential official documents concerning the measure at issue (see, to that effect, judgments of 16 November 2011, Bank Melli Iran v Council, C‑548/09 P, EU:C:2011:735, paragraph 92; of15 November 2012, Council v Bamba, C‑417/11 P, EU:C:2012:718, paragraph 87; and of 28 July 2016, Tomana and Others v Council and Commission, C‑330/15 P, not published, EU:C:2016:601, paragraph 66 and the case-law cited).381In the present case, the Council set out, in the statements of reasons sent to the applicant, the reference for the Home Secretary’s decision.382It must be inferred from this that the applicant had in its possession sufficiently precise information within the meaning of the case-law referred to in paragraph 378 above.383In those circumstances, if it wished to obtain the Home Secretary’s decision, it was for the applicant, in accordance with that case-law, to request that the Council send the decision to it, something which it did not do.384In the second place, with regard to the deeds used independently by the Council, the applicant criticises that institution for failing to communicate to it, prior to the adoption of the July 2011 to July 2014 measures, the information that was available to it. Consequently, the applicant claims, it was unable to submit its observations in respect of that information.385In that regard, it must be borne in mind that the material in the file used by the Council to maintain the name of a person or entity on fund-freezing lists must be communicated to that person or entity prior to the retention decision only if it contains something new in relation to the material contained in the statement of reasons for the previous measures (see paragraph 167 above).386Among the July 2011 to July 2014 measures, only the statements of reasons relating to the July 2011 and December 2011 measures contained modifications in relation to those relating to the preceding measures.387The drafts of those statements of reasons were notified by the Council to the applicant’s lawyer by letters dated 30 May and 15 November 2011, and thus prior to the adoption of the July and December 2011 measures.388Contrary to what is asserted by the applicant, there was no requirement for that communication to be accompanied by the evidence that was in the Council’s possession. In accordance with the case-law referred to in paragraph 380 above, if the applicant wished to obtain that evidence, it had to request it from the Council, something which it did not do.389Furthermore, for the reasons given in paragraphs 214 and 215, the Council also cannot be criticised for having sent those draft statements of reasons to the applicant’s lawyer.390For those reasons, the second part and, consequently, the seventh plea in law must therefore be rejected as being unfounded. 8. The eighth plea in law, alleging infringement of the right to property 391The applicant submits that the freezing of funds by the July 2011 to July 2014 measures constitutes an interference with its right to property that is unjustified since those measures are unlawful for the reasons explained in the preceding pleas. Accordingly, it contends, those measures should be annulled on the ground that they infringe the right to property.392The Council, supported by the Commission, takes issue with that position.393It does not follow from the responses to the previous pleas that the July 2011 to July 2014 measures are unlawful. The right to property cannot, therefore, be considered to be infringed for that reason.394Furthermore, for the reasons given in the examination of the third plea in respect of the July 2010 measures (see paragraphs 184 to 192 above), it cannot be claimed that the July 2011 to July 2014 measures infringe the applicant’s right to property.395Consequently, the eighth plea in law is rejected as being unfounded. 9. Conclusion 396It follows from all of the foregoing that the action must be dismissed in so far as it concerns the July 2011 to July 2014 measures.397The action must therefore be dismissed in its entirety. V. Costs 398Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.399Since the applicant has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Council, in accordance with the form of order sought by the latter.400Moreover, in accordance with Article 138(1) of the Rules of Procedure, Member States and institutions which have intervened in the proceedings are to bear their own costs.401Consequently, the French Republic and the Commission must bear their own costs.On those grounds,THE GENERAL COURT (First Chamber, Extended Composition)hereby: 1. Dismisses the action; 2. Orders Hamas to bear its own costs and to pay those incurred by the Council of the European Union; 3. Orders the French Republic and the European Commission to bear their own costs. PelikánováValančiusNihoulSvenningsenÖbergDelivered in open court in Luxembourg on 14 December 2018.[Signatures]Table of contentsI. Background to the dispute and events subsequent to the bringing of the present actionA. Resolution 1373 (2001) of the United Nations Security CouncilB. EU LawC. Contested measures1. July 2010 measures2. January 2011 measures3. July 2011 measures4. December 2011 measures5. June 2012 measures6. December 2012 measures7. July 2013 measures8. February 2014 measures9. July 2014 measures10. August 2017 measuresII. Procedure and forms of order sought before referral backIII. Procedure and forms of order sought following the referral backIV. LawA. Preliminary remarks concerning the subject matter of the action and the scope and admissibility of the applicant’s observations of 28 June 20121. The requests to amend the form of order sought in the action in respect of the July 2010 to July 2014 measures2. The admissibility of the application for annulment directed against the July 2010 notice3. The scope and admissibility of the applicant’s observations of 28 June 20124. The application to modify the form of order sought in the action in respect of the August 2017 measuresB. The application for annulment of the July 2010 measures1. The first plea in law, alleging a manifest error of assessment as regards whether the fund-freezing measures apply to the applicant2. The second plea in law, alleging infringement of the rights of the defence3. The third plea in law, alleging infringement of the right to property4. The fourth plea in law, alleging infringement of the obligation to state reasons5. ConclusionC. The application for annulment of the January 2011 measures1. The first plea in law, alleging a manifest error of assessment2. The second plea in law, alleging infringement of the principle of respect for the rights of the defenceD. The application for annulment of the July 2011 to July 2014 measures1. The first plea in law, alleging infringement of Article 1(4) of Common Position 2001/931(a) The identification of the organisations referred to by the decisions of the United Kingdom authorities and those of the United States authorities(b) The criticisms specific to the decisions of the United States authorities(c) The criticisms that are common to the decisions of the United States and United Kingdom authorities(1) The preference to be given to judicial authorities(2) The fact that the Home Secretary’s decision consists of a list of terrorist organisations(3) The failure to indicate the serious and credible evidence and clues underpinning the Home Secretary’s decision(d) Conclusion2. The sixth plea in law and the second plea in law, in so far as that latter plea alleges infringement of the obligation to state reasons(a) The decisions of the competent authorities(b) The deeds invoked independently by the Council3. The second plea in law, in so far as it alleges an error as to the accuracy of the facts4. The third plea in law, alleging an error of assessment as to the terrorist nature of the applicant5. The fourth plea in law, alleging failure to take sufficient account of the development of the situation owing to the passage of time6. The fifth plea in law, alleging infringement of the principle of non-interference7. The seventh plea in law, alleging infringement of the principle of respect for the applicant’s rights of defence and of the right to effective judicial protection(a) The first part(b) The second part8. The eighth plea in law, alleging infringement of the right to property9. ConclusionV. Costs( *1 ) Language of the case: French | e4353-586d72b-44fa | EN |
The German broadcasting contribution is compatible with EU law | 13 December 2018 ( *1 )(Reference for a preliminary ruling — State aid — Article 107(1) TFEU — Article 108(3) TFEU — Public broadcasting institutions — Financing — Legislation of a Member State under which all adults possessing a dwelling within the country are required to pay a contribution to public broadcasters)In Case C‑492/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Landgericht Tübingen (Regional Court, Tübingen, Germany), made by decision of 3 August 2017, received at the Court on 11 August 2017, in the proceedings Südwestrundfunk v Tilo Rittinger, Patrick Wolter, Harald Zastera, Dagmar Fahner, Layla Sofan, Marc Schulte, THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Seventh Chamber, acting as President of the Fourth Chamber, K. Jürimäe (Rapporteur), C. Lycourgos, E. Juhász and C. Vajda, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 4 July 2018,after considering the observations submitted on behalf of:–Südwestrundfunk, by H. Kube, Hochschullehrer,the German Government, by T. Henze and J. Möller, acting as Agents,the Swedish Government, by A. Falk, H. Shev, C. Meyer-Seitz, L. Zettergren and A. Alriksson, acting as Agents,the European Commission, by K. Blanck-Putz, K. Herrmann, C. Valero and G. Braun, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 26 September 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 49, 107 and 108 TFEU, Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 (‘the ECHR’), and of the principles of equal treatment and non-discrimination.2The request has been made in proceedings between Südwestrundfunk (SWR), a Land broadcasting institution governed by public law, and Tilo Rittinger, Patrick Wolter, Harald Zastera, Marc Schulte, Lydia Sofan and Dagmar Fahner concerning enforcement instruments issued against them by SWR for recovery of the broadcasting contributions they failed to pay. Legal context EU law Regulation (EC) No 659/1999 3Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1) provided:‘For the purpose of this Regulation:(a)“aid” shall mean any measure fulfilling all the criteria laid down in Article [107](1) of the [FEU] Treaty;(b)“existing aid” shall mean:(i)… all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;(ii)authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;…(c)“new aid” shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;…’4Regulation No 659/1999 was repealed by Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9). That regulation contains the same definitions as those cited in the preceding paragraph of this judgment. Regulation (EC) No 794/2004 5Article 4 of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Regulation No 659/1999 (OJ 2004 L 140, p. 1, and corrigendum OJ 2005 L 25, p. 74), headed ‘Simplified notification procedure for certain alterations to existing aid’, provides:‘1. For the purposes of Article 1(c) of Regulation … No 659/1999, an alteration to existing aid shall mean any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the common market. However an increase in the original budget of an existing aid scheme by up to 20% shall not be considered an alteration to existing aid.2. The following alterations to existing aid shall be notified on the simplified notification form set out in Annex II:increases in the budget of an authorised aid scheme exceeding 20%;prolongation of an existing authorised aid scheme by up to six years, with or without an increase in the budget;tightening of the criteria for the application of an authorised aid scheme, a reduction of aid intensity or a reduction of eligible expenses;The Commission shall use its best endeavours to take a decision on any aid notified on the simplified notification form within a period of one month. German law 6On 31 August 1991 the Länder concluded the Staatsvertrag für Rundfunk und Telemedien (State Treaty for broadcasting and telemedia) (GBl. 1991, p. 745), last amended by the 19. Rundfunkänderungsstaatsvertrag (19th Amending State Broadcasting Treaty) of 3 December 2015 (GBl. 2016, p. 126). Paragraph 12 of the State Broadcasting Treaty, headed ‘Appropriate financial provision, principle of financial equalisation’, reads as follows:‘(1) The financial provision must put public-law broadcasting in a position to perform its constitutional and statutory tasks; it must in particular guarantee the maintenance and development of public-law broadcasting.(2) Financial equalisation between the broadcasting institutions of the Länder is a component of the financing system of the [Arbeitsgemeinschaft der öffentlich-rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland (Consortium of public-law broadcasting institutions of the Federal Republic of Germany) (ARD)]; it guarantees in particular the proper performance of tasks by the institutions Saarländer Rundfunk (Saarland Radio) and Radio Bremen. The extent of the financial equalisation fund and its adjustment to the broadcasting contribution shall be determined in accordance with the Rundfunkfinanzierungsstaatsvertrag (State Treaty on Broadcasting Financing).’7Under Paragraph 13 of the State Broadcasting Treaty, headed ‘Financing’:‘Public-law broadcasting shall be financed by broadcasting contributions, income from advertising and other income; the primary source of financing shall be the broadcasting contribution. Programmes and offers within its mandate in return for special payment are not permitted; …’8Paragraph 14 of the State Broadcasting Treaty, headed ‘Financial needs of public-law broadcasting’, provides:‘(1) The financial needs of public-law broadcasting shall be examined and ascertained on a regular basis, in accordance with the principles of economy and thrift, including the associated rationalisation potential, on the basis of statements of need from the broadcasting institutions of the Länder which are members of the ARD, from [Zweites Deutsches Fernsehen (ZDF)] and from the public-law corporation “Deutschlandradio”, by the independent Kommission zur Überprüfung und Ermittlung des Finanzbedarfs der Rundfunkanstalten (Commission for examining and ascertaining the financial needs of broadcasting institutions).(2) The basis of examination and ascertainment of the financial needs shall be, in particular:1.the competitive continuation of existing broadcasting programmes, and the television programmes authorised by State treaty of all the Länder (existing needs),2.new broadcasting programmes, permitted under the law of the Länder, which participate in new technical broadcasting possibilities in the production and for the diffusion of broadcast programmes, and the possibility of organising new forms of broadcasting (development needs),3.the general development of costs and the specific development of costs in the media sector,4.the development of income from contributions, advertising income and other income,5.the investment, interest yield and targeted application of surpluses arising from the total annual income of the broadcasting institutions of the Länder which are members of the ARD, of ZDF or of Deutschlandradio exceeding total expenditure for the performance of their tasks.(4) The contribution shall be set by State treaty.’9The Land of Baden-Württemberg (Germany), by the Baden-Württembergisches Gesetz zur Geltung des Rundfunkbeitragsstaatsvertrags (Law of Baden-Württemberg on the application of the State Treaty on the Broadcasting Contribution) of 18 October 2011, last amended by Article 4 of the 19th Amending State Broadcasting Treaty of 3 December 2015 (‘the Law on the broadcasting contribution’), implemented the State Treaty on the Broadcasting Contribution which abolished the previous fee on 31 December 2012 and replaced it by the contribution. The law sets out the rules for collection of the contribution, payment of which became compulsory for those liable to pay it from 1 January 2013. It provides in Paragraph 1:‘The broadcasting contribution serves the appropriate provision of finance for public-law broadcasting within the meaning of Paragraph 12(1) of the State Broadcasting Treaty and the financing of the tasks set out in Paragraph 40 of the State Broadcasting Treaty.’10Paragraph 2 of the Law on the broadcasting contribution, headed ‘Broadcasting contribution in the private sphere’, provides:‘(1) In the private sphere, a broadcasting contribution is payable for each dwelling by its owner (the contribution debtor).(2) An owner of a dwelling is every adult who lives in the dwelling himself. Every person is presumed to be an owner whois registered there in accordance with the law on registration oris named as the lessee in the lease for the dwelling.(3) Where there are several contribution debtors, they shall be jointly and severally liable in accordance with Paragraph 44 of the Abgabenordnung (Code of taxation). …(4) No broadcasting contribution shall be payable by contribution debtors who enjoy privileges on the basis of Article 2 of the Gesetz zu dem Wiener Übereinkommen vom 18. April 1961 über diplomatische Beziehungen (Law on the Vienna Convention of 18 April 1961 on diplomatic relations) of 6 August 1964 (BGBl. 1964 II, p. 957) or equivalent provisions of law.’11Under Paragraph 10 of the Law on the broadcasting contribution:‘(1) The revenue from the broadcasting contribution shall belong to the Land broadcasting institution and, to the extent defined in the State Treaty on Broadcasting Financing, to [ZDF], Deutschlandradio and the Land media institution in whose territory the dwelling or business premises of the contribution debtor are situated or the vehicle is registered.(5) Arrears of broadcasting contributions shall be determined by the competent Land broadcasting institution. …(6) Payment notices shall be enforced by the administrative enforcement procedure. …(7) Each Land broadcasting institution shall itself assume the tasks allocated to it under this State Treaty and the associated rights and duties wholly or partly through the unit of the public-law Land broadcasting institutions operated within the framework of a public-law joint administrative body without legal capacity. The Land broadcasting institution is authorised to transfer to third parties individual activities in connection with collecting the contribution and ascertaining contribution debtors and to lay down detailed rules by the regulation under Paragraph 9(2). …’12Since the detailed rules on administrative recovery of debts (Beitreibung) are also within the competence of the Länder, the Land of Baden-Württemberg on 12 March 1974 adopted the Verwaltungsvollstreckungsgesetz für Baden-Württemberg, Landesverwaltungsvollstreckungsgesetz (Law of Baden-Württemberg on administrative enforcement). The disputes in the main proceedings and the questions referred for a preliminary ruling 13The applicants in the main proceedings are persons owing the broadcasting contribution (Rundfunkbeitrag) who did not pay it or did not pay it in full.14In 2015 and 2016 SWR, the competent Land broadcasting institution, sent the contribution debtors enforcement instruments for the purpose of recovering the unpaid amounts for the period from January 2013 to the end of 2016.15When the contribution debtors still did not pay the contribution, SWR sought to enforce its claims on the basis of those instruments.16According to the order for reference, the debtors brought proceedings before the courts with territorial jurisdiction over them, namely the Amtsgericht Reutlingen (Local Court, Reutlingen, Germany), the Amtsgericht Tübingen (Local Court, Tübingen, Germany) and the Amtsgericht Calw (Local Court, Calw, Germany), against the enforcement procedures concerning them.17The Amtsgericht Tübingen (Local Court, Tübingen) allowed the three applications brought before it by the debtors concerned. The actions brought before the Amtsgericht Reutlingen (Local Court, Reutlingen) and the Amtsgericht Calw (Local Court, Calw) were dismissed.18According to the documents before the Court, the parties whose claims were dismissed all appealed to the referring court against the judgments dismissing their claims.19The referring court, which has joined the cases, states that the disputes in the main proceedings essentially concern questions regarding the law on the enforcement of unpaid debts, but those questions are closely connected with the applicable provisions of substantive law.20The referring court takes the view that the provisions of the legislation in question are contrary to EU law.21First, the court observes that German public broadcasting is partly financed by the broadcasting contribution. The contribution must in principle be paid, on pain of a fine, by all adults living in Germany, and in the Land of Baden-Württemberg is paid in particular to the public broadcasters SWR and ZDF. The contribution constitutes State aid within the meaning of Article 107(1) TFEU in favour of those broadcasters which should have been notified to the Commission pursuant to Article 108(3) TFEU.22The court notes that the previous broadcasting fee, which was payable on the basis of possession of a receiving device, was substantially altered on 1 January 2013 with the entry into force of the obligation to pay the broadcasting contribution, in that it is now payable by every owner of a dwelling. It recalls that the German system of financing public broadcasting was assessed by the Commission in the context of the permanent examination of aid schemes existing in the Member States, under Article 108(1) TFEU. In this respect, it appears from the documents before the Court that, in the Commission’s decision of 24 April 2007 (C(2007) 1761 final — State aid E 3/2005 (ex CP 2/2003, CP 232/2002, CP 43/2003, CP 243/2004 and CP 195/2004) — Financing of public service broadcasters in Germany (ARD/ZDF)) (‘the decision of 24 April 2007’) concerning that system, the Commission found that the broadcasting fee was to be classified as existing aid. The referring court further considers that, because of the substantial amendments made to the financing of broadcasting by the Law on the broadcasting contribution, the new system of financing should have been notified. Furthermore, the resulting State aid is not compatible with the internal market in accordance with Article 107(3) TFEU.23Second, the broadcasting contribution is contrary to EU law, in so far as the revenue from that contribution is used to finance the establishment of a new terrestrial digital broadcasting system, DVB-T2, the use of which by foreign broadcasters is not provided for. In the referring court’s view, the situation is similar to that of the case in which judgment was given on 15 September 2011, Germany v Commission (C‑544/09 P, not published, EU:C:2011:584), concerning the transition from analogue to digital transmission technology.24The referring court considers that the contribution at issue in the main proceedings should in fact be equated to a special purpose tax (Zwecksteuer). The replacement of the broadcasting fee previously levied by a person-based broadcasting contribution was an essential change to the public broadcasting financing system. Thus, unlike the previous system of financing, payment of this contribution did not give rise to an individual counterpart for those liable to pay it. The entire adult population possessing a dwelling in Germany thus contributed to the financing of the public broadcasting service, as in the case of taxes. It is financing by the most part from the State within the meaning of the judgment of the Court of 13 December 2007, Bayerischer Rundfunk and Others (C‑337/06, EU:C:2007:786). The present system of contributions thus constitutes unlawful aid for the introduction of the DVB-T2 system, financed by taxation.25Third, as a result of the legislation at issue, public broadcasters enjoy a number of advantages not available to private broadcasters, which constitute an economic advantage and, in view of the general nature of the obligation to pay the broadcasting contribution, State aid. Those advantages consist in particular in the exceptions to the ordinary law which allow public broadcasters themselves to issue the enforcement instruments for the enforcement of those debts. That method of issuing enforcement instruments is quicker, simpler and cheaper than having recourse to judicial proceedings for the recovery of debts. Moreover, it is disadvantageous for users, in that their opportunity to bring proceedings and have a court review the case before the enforcement instrument is issued and enforced is excluded or made extremely difficult.26Fourth, the Law on the broadcasting contribution, in particular Paragraphs 2 and 3, infringes the freedom of information mentioned in Article 11 of the Charter and Article 10 of the ECHR. The broadcasting contribution is deliberately structured as an obstacle to access to all kinds of information transmitted by satellite, cable or mobile telephone network. The broadcasting contribution is payable by an individual regardless of whether he actually makes use of the public broadcasters’ programmes.27Fifth, according to the referring court, the broadcasting contribution is contrary to freedom of establishment. It also infringes the principle of equal treatment and produces discrimination against women. On that last point, the referring court observes that the contribution is payable per dwelling regardless of the number of persons living there, so that the amount of the contribution to be paid by an adult varies considerably according to the number of persons in the household. Single parents, a majority of whom are women, are disadvantaged compared to adults living together.28In those circumstances, the Landgericht Tübingen (Regional Court, Tübingen, Germany) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Is the [Law on the broadcasting contribution] … incompatible with EU law because the contribution unconditionally levied since 1 January 2013 in principle from every adult living in the German Land of Baden-Württemberg to finance the public service broadcasters SWR and ZDF constitutes preferential aid that infringes EU law for the exclusive benefit of those public service broadcasting bodies compared to private broadcasting organisations? Are Articles 107 and 108 TFEU to be interpreted as meaning that the Law on the broadcasting contribution should have been approved by the Commission and is invalid without that approval?(2)Are Articles 107 and 108 TFEU to be interpreted as encompassing the provision laid down in the [Law on the broadcasting contribution] under which a contribution for the exclusive benefit of official/public-law service broadcasters is unconditionally levied in principle from every adult living in Baden-Württemberg, because that contribution contains preferential aid that infringes EU law with the effect that broadcasters from EU States are excluded for technical reasons, as the contributions are used to set up a competing transmission method (DVB-T2 monopoly) whose use by foreign broadcasters is not provided for? Are Articles 107 and 108 TFEU to be interpreted as encompassing not only direct financial aid but also other privileges with economic relevance (right to issue enforcement instruments, authority to act both as an economic undertaking and also as an official body, better position in the calculation of debts)?(3)Is it compatible with the principle of equal treatment and the prohibition of preferential aid if, under a national Baden-Württemberg law, a German television broadcaster which is organised under public law and takes the form of a public body but which at the same time competes with private broadcasters in the advertising market is put in a privileged position compared to them, in that, unlike its private competitors, it does not have to go through the ordinary courts to obtain an enforcement instrument for its claims against viewers before being able to enforce these claims, but is entitled itself to create an instrument equally entitling it to enforcement without the need for a court?(4)Is it compatible with Article 10 of the ECHR/Article 11 of the Charter … that a Member State provides in a national Baden-Württemberg law that a television broadcaster which takes the form of a public body is entitled to demand a contribution, on pain of an administrative fine, to finance precisely that broadcaster from every adult living within the broadcasting territory, regardless of whether he even possesses a receiving device or uses only other broadcasters, namely foreign or private ones?(5)Is the [Law on the broadcasting contribution], in particular Paragraphs 2 and 3, compatible with the principle of equal treatment and the prohibition of discrimination in EU law if the contribution payable unconditionally by every resident for the purpose of financing a public-law television broadcaster burdens a single parent much more per head than a member of a shared household? Is [Council Directive 2004/113/EC of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services (OJ 2004 L 373, p. 37)] to be interpreted as also encompassing the contribution at issue and as meaning that an indirect disadvantage is sufficient when it is 90% women who are more heavily burdened in the actual circumstances?(6)Is the [Law on the broadcasting contribution], in particular Paragraphs 2 and 3, compatible with the principle of equal treatment and the prohibition of discrimination in EU law if the contribution payable unconditionally by every resident for the purpose of financing a public-law television broadcaster is twice as high for persons who need a second home for work reasons than for other workers?(7)Is the [Law on the broadcasting contribution], in particular Paragraphs 2 and 3, compatible with the principle of equal treatment in EU law, the prohibition of discrimination in EU law and the freedom of establishment in EU law if the contribution payable unconditionally by every resident for the purpose of financing a public service television broadcaster is organised as regards persons in such a way that, where the reception is the same, a German living immediately before the border with a neighbouring EU State owes the contribution solely because of the location of his place of residence, but a German living immediately beyond the border does not owe the contribution, and similarly a foreign EU citizen who for work reasons has to settle immediately beyond an internal EU border is charged the contribution while an EU citizen immediately before the border is not, even if neither is interested in receiving the German broadcaster?’ Admissibility of the request for a preliminary ruling 29SWR submits that, in accordance with the national procedural rules, the referring court, which consists of a single judge, should have transferred the proceedings to a formation of the court with several judges, so that the single judge was not entitled to make a reference to the Court for a preliminary ruling under Article 267 TFEU.30On this point, it suffices to recall that by virtue of the second paragraph of Article 267 TFEU, whenever a question that is capable of being the subject of a reference for a preliminary ruling is raised in a case pending before a court of a Member State, that court may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to rule on it.31In this connection, it must be pointed out that the functioning of the system of cooperation between the Court of Justice and the national courts established by Article 267 TFEU requires, as does the principle of primacy of EU law, the national court to be free, at whatever point during the proceedings it considers appropriate, to refer to the Court for a preliminary ruling any question that it considers necessary (see, to that effect, judgment of 4 June 2015, Kernkraftwerk Lippe-Ems, C‑5/14, EU:C:2015:354, paragraph 35 and the case-law cited).32Furthermore, it should be recalled that it is not for the Court to determine whether the decision to make the reference was taken in accordance with the national rules on the organisation of the courts and their procedure (order of 6 September 2018, Di Girolamo, C‑472/17, not published, EU:C:2018:684, paragraph 24 and the case-law cited).33SWR’s argument based on an alleged failure to comply with the national rules on the organisation of the courts is not therefore capable of preventing the referring court from requesting the Court for a preliminary ruling under Article 267 TFEU.34The request for a preliminary ruling is therefore admissible. Consideration of the questions referred Admissibility 35SWR and the German Government submit essentially that, as regards most of the questions referred, the interpretation of EU law sought by the referring court bears no relation to the actual facts or purpose of the main actions and the problem raised is hypothetical. Only the questions relating to the public broadcaster’s privileges in connection with enforcement are relevant in this respect.36It must be recalled that, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgment of 26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraph 23 and the case-law cited).37Nonetheless, the Court cannot rule on a question submitted by a national court where it is quite obvious that the interpretation sought by that court of a rule of EU law bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 31 January 2008, Centro Europa 7, C‑380/05, EU:C:2008:59, paragraph 53).38It must be recalled that the need to provide an interpretation of EU law which will be of use to the national court means that the national court is bound to observe scrupulously the requirements concerning the content of a request for a preliminary ruling, expressly set out in Article 94 of the Rules of Procedure of the Court of Justice, of which the referring court should be aware (judgment of26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraph 27). Those requirements are, moreover, stated in the Court’s Recommendations to national courts and tribunals in relation to the initiation of preliminary ruling proceedings (OJ 2018 C 257, p. 1).39Thus it is essential, as is stated in Article 94(c) of the Rules of Procedure, that the reference for a preliminary ruling itself must contain a statement of the reasons which prompted the national court to inquire about the interpretation or validity of certain provisions of EU law, and the relationship between those provisions and the national legislation applicable to the case before the referring court. It is also essential, as is provided for in Article 94(a) of the Rules of Procedure, that the order for reference itself contains, at least, an account of the facts on which the questions are based. In accordance with the case-law of the Court, those requirements are of particular importance in the area of competition, where the factual and legal situations are often complex (judgment of 26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraphs 28 and 29).40In the present case, first, by Questions 1 to 3 the referring court essentially questions the Court on the interpretation of Articles 107 and 108 TFEU, in order to determine whether the Commission should have been notified, pursuant to Article 108(3) TFEU, of the alteration to the German broadcasting finance system made by the Law on the broadcasting contribution, and whether Articles 107 and 108 TFEU preclude such a system.41Contrary to the submissions of SWR and the German Government, the fact that the disputes in the main proceedings concern the recovery of the broadcasting contribution does not rule out the possibility of the referring court having to interpret and apply the concept of aid in Article 107(1) TFEU, in particular to determine whether or not the broadcasting contribution should have been subjected to the advance review procedure under Article 108(3) TFEU and, if necessary, to ascertain whether the Member State concerned complied with that obligation.42It follows from the direct effect of Article 108(3) TFEU that national courts must guarantee to individuals that all the appropriate conclusions will be drawn from an infringement of that provision, in accordance with their national law, as regards the validity of implementing measures, the recovery of financial support granted in disregard of that provision and possible interim measures (see, to that effect, judgments of 11 July 1996, SFEI and Others, C‑39/94, EU:C:1996:285, paragraphs 39 and 40; of 16 April 2015, Trapeza Eurobank Ergasias, C‑690/13, EU:C:2015:235, paragraph 52; and of 11 November 2015, Klausner Holz Niedersachsen, C‑505/14, EU:C:2015:742, paragraphs 23 and 24).43Moreover, the Court can give the referring court full guidance on the interpretation of EU law in order to enable it to assess the compatibility of a national measure with that law for the purposes of deciding the case before it. In the case of State aid, the Court can in particular give the referring court guidance on interpretation in order to enable it to determine whether a national measure may be classified as State aid under EU law (judgment of 10 June 2010, Fallimento Traghetti del Mediterraneo, C‑140/09, EU:C:2010:335, paragraph 24) or whether that measure constitutes existing aid or new aid (see, to that effect, judgment of 19 March 2015, OTP Bank, C‑672/13, EU:C:2015:185, paragraph 60).44Consequently, with respect to the purpose of the disputes in the main proceedings, Questions 1 to 3 do not appear manifestly irrelevant, in that they concern the interpretation of Articles 107 and 108 TFEU.45Next, it must be stated that by the first part of Question 2 the referring court raises more specifically the question whether the broadcasting contribution at issue is compatible with Articles 107 and 108 TFEU, in so far as that contribution might involve State aid for the introduction of a transmission system using the DVB-T2 standard whose use by broadcasters established in other EU Member States is not provided for.46However, the order for reference does not contain the factual or legal material to enable the Court to give a useful answer to the referring court’s questions in this respect. In particular, while the referring court states that the broadcasting contribution enabled that system to be financed for the sole benefit of broadcasters in Germany, it does not explain the conditions of financing of that system or the reasons why other broadcasters are excluded from using the system.47Consequently, the first part of Question 2 is inadmissible. Questions 1 to 3 are otherwise admissible.48Second, by Questions 4 to 7 the referring court questions the Court on the interpretation of the right of freedom of expression and information laid down in Article 11 of the Charter and Article 10 of the ECHR, the provisions of Directive 2004/113, the principles of equal treatment and non-discrimination, and freedom of establishment.49However, the referring court provides no explanation as to the connection it finds between the provisions of EU law to which it directs those questions and the disputes in the main proceedings. In particular, it has not produced any specific element from which it might be considered that the persons in question in the main proceedings are in one of the situations referred to in those questions.50According to settled case-law of the Court, the justification for making a request for a preliminary ruling is not that it enables advisory opinions to be delivered on general or hypothetical questions, but rather that it is necessary for the effective resolution of a dispute concerning EU law (judgment of 21 December 2016, Tele2 Sverige and Watson and Others, C‑203/15 and C‑698/15, EU:C:2016:970, paragraph 130 and the case-law cited).51Questions 4 to 7 are therefore inadmissible.52In the light of all the above factors, only Question 1, the second part of Question 2, and Question 3 are admissible. Substance Question 1 53It should be recalled, as a preliminary point, that, as the Advocate General observes in point 45 of his Opinion, it is common ground that the adoption of the Law on the broadcasting contribution altered existing aid within the meaning of Article 1(c) of Regulation No 659/1999.54In those circumstances, it must be understood that by Question 1 the referring court is asking essentially whether Article 1(c) of Regulation No 659/1999 must be interpreted as meaning that an alteration to the system of financing the public broadcasting of a Member State which, like that at issue in the main proceedings, consists in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable in particular on the basis of occupation of a dwelling or business premises constitutes an alteration to existing aid within the meaning of that provision which should be notified to the Commission under Article 108(3) TFEU.55It must be recalled that the first sentence of Article 4(1) of Regulation No 794/2004 provides that, for the purposes of Article 1(c) of Regulation No 659/1999, an alteration to existing aid means any change, other than modifications of a purely formal or administrative nature which cannot affect the compatibility of the aid measure with the internal market. In that respect, the second sentence of Article 4(1) of Regulation No 794/2004 specifies that an increase in the original budget of an existing aid scheme by up to 20% is not to be considered an alteration to existing aid.56In order to provide the referring court with a useful answer, it must therefore be determined whether the Law on the broadcasting contribution, in that it alters the basis of the obligation to pay the contribution whose purpose is to finance public broadcasting in Germany by providing that it is no longer payable on the basis of possession of a receiving device but on the basis in particular of occupation of a dwelling, constitutes an alteration to existing aid within the meaning of the provisions referred to in the preceding paragraph.57That question ultimately means that it must be determined whether the adoption of the Law on the broadcasting contribution entails a substantial alteration to the existing aid that was the subject of the decision of 24 April 2007, or whether that law is confined to making a modification of a purely formal or administrative nature which cannot affect the compatibility of the aid measure with the internal market.58As SWR, the German and Swedish Governments and the Commission argued in the observations they submitted to the Court, and as also follows from material in the documents before the Court, the substitution of the broadcasting contribution for the broadcasting fee is no more than an alteration to the existing aid which was the subject of the decision of 24 April 2007, and that alteration cannot be classified as substantial.59The alteration to the basis of payment of the broadcasting contribution did not affect the constituent elements of the system of financing German public broadcasting, as assessed by the Commission in connection with the decision of 24 April 2007.60Thus, first, it is common ground that the Law on the broadcasting contribution did not change the objective pursued by the system of financing German public broadcasting, since the broadcasting contribution, like the broadcasting fee it replaced, is still intended to finance the public broadcasting service.61Second, it is also common ground that the class of beneficiaries of the system is identical to that which existed previously.62Third, it does not appear from the points raised in oral argument before the Court that the Law on the broadcasting contribution altered the public service task assigned to the public broadcasters or the activities of those broadcasters capable of being subsidised by the broadcasting contribution.63Fourth, the Law on the broadcasting contribution altered the basis of liability to pay the contribution.64However, as pointed out inter alia by SWR, the German Government and the Commission, the alteration at issue in the main proceedings pursued essentially an objective of simplifying the conditions of levying the broadcasting contribution, in a context of evolving technologies for receiving the public broadcasters’ programmes.65In addition, as the German Government and the Commission argued in the observations they submitted to the Court, and as the Advocate General observes in point 55 of his Opinion, the replacement of the broadcasting fee by the broadcasting contribution did not lead to a substantial increase in the compensation received by the public broadcasters to cover the costs associated with the public service tasks entrusted to them.66In those circumstances, in the light of the documentation available to the Court, it has not been shown that the Law on the broadcasting contribution entailed a substantial alteration to the system of financing public broadcasting in Germany which required the Commission to be notified of its adoption, pursuant to Article 108(3) TFEU.67In the light of the above, the answer to Question 1 is that Article 1(c) of Regulation No 659/1999 must be interpreted as meaning that an alteration to the system of financing the public broadcasting of a Member State which, like that at issue in the main proceedings, consists in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable in particular on the basis of occupation of a dwelling or business premises does not constitute an alteration to existing aid within the meaning of that provision which should be notified to the Commission under Article 108(3) TFEU. Second part of Question 2 and Question 3 68By the second part of Question 2 and Question 3, which should be considered together, the referring court essentially asks whether Articles 107 and 108 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which confers on public broadcasters powers, as exceptions to the general law, allowing those broadcasters themselves to enforce claims in respect of unpaid broadcasting contributions.69As SWR and the German Government emphasised in the observations they submitted to the Court, the public authority rights enjoyed by public broadcasters in relation to recovery of the broadcasting contribution were taken into account by the Commission in its examination of the system of financing public broadcasting, and more particularly of that contribution, in connection with the decision of 24 April 2007. In the light of that decision, those rights, the aim of which is precisely to recover the contribution, must be regarded as an integral part of the existing aid constituted by the contribution.70As the Advocate General observes in point 87 of his Opinion, the Law on the broadcasting contribution made no alteration to those rights.71In those circumstances, it must be found that the Law on the broadcasting contribution is not liable to affect the assessment made by the Commission in connection with the decision of 24 April 2007 as regards those rights.72Moreover, as the Commission submitted in its written observations, and as the Advocate General stated in point 84 of his Opinion, the public authority rights enjoyed by public broadcasters in connection with the recovery of the broadcasting contribution are inherent in their public service tasks.73Consequently, the answer to the second part of Question 2 and to Question 3 is that Articles 107 and 108 TFEU must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which confers on public broadcasters powers, as exceptions to the general law, allowing those broadcasters themselves to enforce claims in respect of unpaid broadcasting contributions. Costs 74Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fourth Chamber) hereby rules: 1. Article 1(c) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] must be interpreted as meaning that an alteration to the system of financing the public broadcasting of a Member State which, like that at issue in the main proceedings, consists in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable in particular on the basis of occupation of a dwelling or business premises does not constitute an alteration to existing aid within the meaning of that provision which should be notified to the Commission under Article 108(3) TFEU. 2. Articles 107 and 108 TFEU must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which confers on public broadcasters powers, as exceptions to the general law, allowing those broadcasters themselves to enforce claims in respect of unpaid broadcasting contributions. [Signatures]( *1 ) Language of the case: German. | a3776-356d16c-4f39 | EN |
During their minimum period of annual leave guaranteed by EU law, workers are entitled to their normal remuneration, in spite of prior periods of short-time working | 13 December 2018 ( *1 )(Reference for a preliminary ruling — Social policy — Organisation of working time — Directive 2003/88/EC — Right to paid annual leave — Article 7(1) — Legislation of a Member State under which collective agreements may provide for account to be taken of periods of short-time working when calculating remuneration to be paid in respect of annual leave — Temporal effects of judgments ruling on interpretation)In Case C‑385/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Arbeitsgericht Verden (Labour Court, Verden, Germany), made by decision of 19 June 2017, received at the Court on 26 June 2017, in the proceedings Torsten Hein v Albert Holzkamm GmbH & Co. KG, THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Seventh Chamber, acting as President of the Fourth Chamber, K. Jürimäe, C. Lycourgos (Rapporteur), E. Juhász and C. Vajda, Judges,Advocate General: M. Bobek,Registrar: R. Șereș, Administrator,having regard to the written procedure and further to the hearing on 14 June 2018,after considering the observations submitted on behalf of:–Mr Hein, by S. Eidinger, Rechtsanwältin,Albert Holzkamm GmbH & Co. KG, by C. Brehm and I. Witten, Rechtsanwältinnen,the German Government, by T. Henze and J. Möller, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and by L. Fiandaca, avvocato dello Stato,the European Commission, by T.S. Bohr and M. van Beek, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 5 September 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 7(1) of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ 2003 L 299, p. 9) and of Article 31 of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The request has been made in proceedings between Mr Torsten Hein and Albert Holzkamm GmbH & Co. KG (‘Holzkamm’) concerning the calculation of remuneration for annual leave, namely the payment to which Mr Hein is entitled in respect of his paid annual leave. Legal context EU law 3Article 31 of the Charter, entitled ‘Fair and just working conditions’, provides:‘1. Every worker has the right to working conditions which respect his or her health, safety and dignity.2. Every worker has the right to limitation of maximum working hours, to daily and weekly rest periods and to an annual period of paid leave.’4Article 1 of Directive 2003/88, entitled ‘Purpose and scope’, provides:‘1. This Directive lays down minimum safety and health requirements for the organisation of working time.2. This Directive applies to:(a)minimum periods of … annual leave ……’5Article 2(1) of that directive defines ‘working time’ as ‘any period during which the worker is working, at the employer’s disposal and carrying out his activity or duties, in accordance with national laws and/or practice’. Article 2(2) of the directive defines ‘rest period’ as ‘any period which is not working time’.6Article 7 of Directive 2003/88, entitled ‘Annual leave’, provides:‘1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.’7Article 15 of that directive reads as follows:‘This Directive shall not affect Member States’ right to apply or introduce laws, regulations or administrative provisions more favourable to the protection of the safety and health of workers or to facilitate or permit the application of collective agreements or agreements concluded between the two sides of industry which are more favourable to the protection of the safety and health of workers.’ German law Federal Law on leave 8Paragraph 3(1) of the Mindesturlaubsgesetz für Arbeitnehmer (Law on minimum leave entitlement for workers) of 8 January 1963 (BGBl. I, 1963, p. 2), in the version applicable at the material time (‘the Federal Law on leave’), states:‘Annual leave shall amount to at least 24 working days each year.’9Paragraph 11 of the Federal Law on leave, entitled ‘Payment for annual leave’, provides in paragraph 1:‘Payment for annual leave shall be calculated on the basis of the average earnings that the worker received in the last 13 weeks prior to the start of the leave, not including earnings additionally received for overtime. … Reductions in earnings occurring in the period of calculation as a result of short-time work, loss of working hours or non-culpable absence from work shall not affect the calculation of the payment for annual leave. ...’10Paragraph 13 of the law provides:‘1. Collective agreements may derogate from the above provisions, with the exception of Paragraphs 1, 2 and 3(1). …2. In the construction industry or other economic sectors in which, as a consequence of frequent changes of location of the work to be performed by firms, employment relationships shorter than one year in duration are normal to a considerable degree, a collective agreement may derogate from the above provisions to a greater extent than is provided for in the first sentence of Paragraph 13(1), provided this is necessary in order to safeguard unbroken annual leave for all workers. … The Federal collective agreement for the construction industry 11Paragraph 8 of the Bundesrahmentarifvertrag für das Baugewerbe (Federal collective framework agreement for the construction industry) of 4 July 2002, in the version applicable at the material time (‘the BRTV-Bau’), stipulates:‘1. Entitlement to annual leave and duration of leave1.1 A worker shall be entitled to 30 working days’ paid holiday in each calendar year (leave year).…1.3 Saturdays shall not be regarded as working days.1.4 The duration of leave shall be determined by the number of days of employment completed in firms in the construction industry.2. Calculation of the duration of leave2.2 A worker shall acquire an entitlement to one day of leave after every 12 — in the case of severely disabled persons after every 10.3 — days of employment.2.3 Days of employment shall include all calendar days on which an employment relationship exists in firms in the construction industry during the leave year. They shall exclude days on which the worker is absent from work without authorisation and days of unpaid leave where the latter’s duration is longer than 14 days.4. Remuneration for annual leave4.1 For annual leave pursuant to point 1, a worker shall receive remuneration for annual leave.The remuneration for annual leave shall amount to 14.25% of the gross wage or 16.63% for severely disabled persons within the meaning of the statutory provisions. The remuneration for annual leave shall consist of the statutory payment for annual leave of 11.4% of the gross wage — 13.3% for severely disabled persons — and additional holiday pay. Additional holiday pay shall amount to 25% of the statutory payment for annual leave. It may be credited against additional holiday pay granted by the company.4.2 “Gross wage” means:the gross pay on which the calculation of income tax is based and which is entered in the income tax statement, including remuneration in kind not taxed at a flat rate pursuant to Paragraph 40 of the Einkommensteuergesetz (Law on income tax),The gross wage shall not include the collectively agreed 13th month pay or company payments having the same character (for example Christmas bonus and annual bonus), allowances in lieu of leave pursuant to point 6 or settlements paid in respect of the termination of the employment relationship.4.3 The remuneration for annual leave in respect of partially claimed annual leave shall be calculated by dividing the remuneration for annual leave determined pursuant to point 4.1 by the total number of days of leave determined pursuant to point 2 and multiplying it by the number of days of leave claimed.4.5 At the end of the leave year, residual entitlements to remuneration for annual leave shall be carried over to the following calendar year.5. Minimum remuneration for annual leave5.1 For each hour lost by reason of non-culpable incapacity for work as a result of sickness, for which there was no wage entitlement, the remuneration for annual leave determined pursuant to point 4.1 shall be increased by 14.25% of the gross wage last notified pursuant to point 1 of the first sentence of Paragraph 6(1) of the [Tarifvertrag über das Sozialkassenverfahren im Baugewerbe (Collective agreement on social fund procedures in the construction industry; ‘the VTV’)].5.2 For each hour lost in the period from 1 December to 31 March for which the worker receives seasonal short-time working allowance, the remuneration for annual leave determined pursuant to point 4.1 shall be increased, after the end of that period, by 14.25% of the gross wage last notified pursuant to point 1 of the first sentence of Paragraph 6(1) of the VTV. The first 90 hours lost in receipt of seasonal short-time working allowance shall be disregarded. The dispute in the main proceedings and the questions referred for a preliminary ruling 12Mr Hein is employed by Holzkamm as a concrete worker. Their employment relationship is governed by the provisions of the BRTV-Bau. In 2015, Mr Hein was on short-time work for a total of 26 weeks. In 2015 and 2016 he took 30 days of leave which he had accrued in 2015.13As is clear from the request for a preliminary ruling, Paragraph 11(1) of the Federal Law on leave provides that the statutory payment for annual leave is to be calculated on the basis of the average earnings received by the worker during the reference period (also ‘the period of calculation’), namely the last 13 weeks prior to the start of the leave. According to that provision, reductions in earnings occurring in the reference period as a result of short-time work, loss of working hours or non-culpable absence from work are not to affect the calculation of the statutory payment for annual leave.14Paragraph 13(1) and (2) of the Federal Law on leave allows derogation from the provisions of that law by collective agreement. The employers and workers in the construction industry have exercised that option and have laid down in the BRTV-Bau special rules governing, inter alia, accrual of entitlement to annual leave and the remuneration received during that leave (‘remuneration for annual leave’).15Remuneration for annual leave is calculated on the basis of the gross wages received during the reference period, which are calculated on an annual basis. Although, under point 4.1 of Paragraph 8 of the BRTV-Bau, remuneration for annual leave is 25% higher than the statutory payment for annual leave provided for in Paragraph 11(1) of the Federal Law on leave, and is, thus, for persons without a disability, 14.25% of the gross annual wages, the calculation of remuneration for annual leave on the basis of gross wages received during the reference period leads to a reduction of that remuneration when the worker had periods of short-time working during the reference period, since the reduced wages received as a result of those periods of short-time working are taken into account for the calculation of that remuneration.16Having regard to Mr Hein’s periods of short-time working during 2015, Holzkamm calculated the amount of his remuneration for annual leave on the basis of a gross hourly wage that was lower than his normal hourly wage. However, Mr Hein believes that periods of short-time work during the reference period cannot have the effect of reducing his entitlement to remuneration for annual leave and he claims, in that regard, a total amount of EUR 2 260.27.17According to the referring court, the Court’s answer to the questions referred is necessary since if EU law precludes the domestic legal regime, under which reductions in earnings resulting from short-time working during the reference period are taken into account when calculating remuneration for annual leave, Holzkamm would have based its calculation of Mr Hein’s entitlement to remuneration for annual leave on too low an hourly rate. It states that the claim made by Mr Hein concerns, at least in part, the remuneration for annual leave due on account of the minimum four weeks of annual leave provided for in Article 7 of Directive 2003/88.18According to the referring court, it follows from the case-law of the Court that workers must receive their normal remuneration for the duration of annual leave within the meaning of Directive 2003/88. Normal remuneration must be determined on the basis of an average calculated over a reference period considered to be representative and in the light of the principle that the right to annual leave and to a payment for that leave are two aspects of a single right.19The referring court considers that the issue in the present case — namely, whether national legislation under which collective agreements may provide for account to be taken of any losses of earnings that occur in the reference period as a result of short-time work, leading to a reduction of remuneration for annual leave, is in conformity with EU law — has not been decided in the case-law of the Court.20In those circumstances, the Arbeitsgericht Verden (Labour Court, Verden, Germany) decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:‘(1)Are Article 31 of the [Charter] and Article 7(1) of [Directive 2003/88] to be interpreted as precluding national legislation under which it may be provided in collective agreements that reductions in earnings occurring in the period of calculation as a result of short-time work affect the calculation of the payment for annual leave with the result that the worker receives a lower remuneration for annual leave for the duration of the period of annual leave of at least four weeks, or receives a lower allowance in lieu of leave after the employment relationship has ended, than he would receive if the calculation of the remuneration for annual leave were based on the average earnings which the worker would have received in the period of calculation without such reductions in earnings? If so, what is the maximum percentage, with reference to the worker’s full average earnings, that a collectively agreed reduction, permitted by national legislation, of the remuneration for annual leave may have as a result of short-time work in the period of calculation in order for the interpretation of that national legislation to be regarded as in conformity with EU law?(2)If Question 1 is answered in the affirmative: Do the general principle of legal certainty laid down by EU law and the principle of non-retroactivity require that the possibility of relying on the interpretation which the Court places, in the preliminary ruling to be given in the present case, on Article 31 of the [Charter] and on Article 7(1) of [Directive 2003/88] be limited in time, with effect for all parties, because the highest national courts have previously ruled that the relevant national legislation and collectively agreed rules are not amenable to an interpretation in conformity with EU law? If the Court answers this question in the negative: Is it compatible with EU law if, on the basis of national law, the national courts grant protection of legitimate expectations to employers who have relied on the continued application of the case-law developed by the highest national courts, or is the grant of protection of legitimate expectations reserved for the Court of Justice of the European Union?’ Consideration of the questions referred The first question 21By its first question the referring court asks, in essence, whether Article 7(1) of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which, for the purpose of calculating remuneration for annual leave, allows collective agreements to provide for account to be taken of reductions in earnings resulting from the fact that during the reference period there were days when no work was actually performed owing to short-time working, with the consequence that the worker receives, for the duration of the minimum period of annual leave to which he is entitled under Article 7(1) of the directive, remuneration for annual leave that is lower than the remuneration which he would have received had it been calculated on the basis of his average pay during the reference period without taking into account those reductions in earnings. If the answer to that question is in the affirmative, that court is uncertain, in the context of the interpretation of the national legislation in accordance with EU law which it could have to carry out, as to the level to which remuneration for annual leave may be reduced without infringing EU law.22By way of preliminary matters, it should be noted, first, that, as is apparent from the very wording of Article 7(1) of Directive 2003/88 — a provision from which the directive allows no derogation — every worker is entitled to paid annual leave of at least four weeks, a right which, according to the Court’s established case-law, must be regarded as a particularly important principle of EU social law (judgment of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 25 and the case-law cited).23That right, which is enjoyed by all workers, is expressly set out in Article 31(2) of the Charter, which Article 6(1) TEU recognises as having the same legal value as the Treaties (judgments of 8 November 2012, Heimann and Toltschin, C‑229/11 and C‑230/11, EU:C:2012:693, paragraph 22; of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 33; and of 4 October 2018, Dicu, C‑12/17, EU:C:2018:799, paragraph 25).24Second, it must be noted that Directive 2003/88 treats entitlement to annual leave and to a payment on that account as being two aspects of a single right (judgments of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 60, and of 15 September 2011, Williams and Others, C‑155/10, EU:C:2011:588, paragraph 26).25Therefore, in order to provide a useful answer to the first part of the first question, it is necessary to examine, in the first place, the duration of the minimum period of annual leave which is conferred by EU law in circumstances such as those of the main proceedings and, in the second place, the remuneration to which that worker is entitled during that leave.26As regards, in the first place, the duration of the minimum period of annual leave, it must be recalled that the purpose of the right to paid annual leave, conferred on every worker by Article 7 of Directive 2003/88, is to enable the worker both to rest from carrying out the work he is required to do under his contract of employment and to enjoy a period of relaxation and leisure (see, inter alia, judgments of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 25, and of 4 October 2018, Dicu, C‑12/17, EU:C:2018:799, paragraph 27).27That purpose, which distinguishes paid annual leave from other types of leave having different purposes, is based on the premiss that the worker actually worked during the reference period. The objective of allowing the worker to rest presupposes that the worker has been engaged in activities which justify, for the protection of his safety and health, as provided for in Directive 2003/88, his being given a period of rest, relaxation and leisure. Accordingly, entitlement to paid annual leave must, in principle, be calculated by reference to the periods of actual work completed under the employment contract (judgment of 4 October 2018, Dicu, C‑12/17, EU:C:2018:799, paragraph 28).28In the present case, it is clear from the documents before the Court and the observations made at the hearing that, in a situation such as that of Mr Hein in the main proceedings, during periods of short-time working the employment relationship between the employer and worker continues but the worker does not perform actual work for his employer.29It follows from the case-law cited in paragraph 27 above that a worker in such a position may acquire entitlement to paid annual leave pursuant to Article 7(1) of Directive 2003/88 only for the periods during which he performed actual work, and thus no entitlement to leave is acquired under that provision in respect of periods of short-time working during which such work has not been performed. Thus, in the present case, since, in 2015, Mr Hein did not perform actual work for 26 weeks, it is apparent that, in principle, only two weeks of leave are governed by Article 7(1), but the exact duration of that period of leave is a matter for the referring court to determine.30However, as appears expressly from the wording of Article 1(1) and (2)(a) and of Article 7(1) and Article 15 of Directive 2003/88, that directive merely lays down minimum safety and health requirements for the organisation of working time and it does not affect the Member States’ right to apply national provisions more favourable to the protection of workers.31As a result, that directive does not preclude national legislation or a collective agreement from giving workers the right to more paid annual leave than that guaranteed by the directive, irrespective of their working time having being reduced on account of short-time working (see, to that effect, judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraphs 47 and 48).32Regarding, in the second place, the remuneration that must be paid to a worker in respect of the minimum period of annual leave guaranteed by EU law, the Court has already stated that the term ‘paid annual leave’ in Article 7(1) of Directive 2003/88 means that, for the duration of ‘annual leave’ within the meaning of that directive, remuneration must be maintained and that, in other words, workers must receive their normal remuneration for that period of rest (judgments of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 50, and of 15 September 2011, Williams and Others, C‑155/10, EU:C:2011:588, paragraph 19).33The purpose of the requirement of payment for that leave is to put the worker, during such leave, in a position which is, as regards remuneration, comparable to periods of work (judgments of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 58, and of 15 September 2011, Williams and Others, C‑155/10, EU:C:2011:588, paragraph 20).34Although the structure of the ordinary remuneration of a worker is determined, as such, by the provisions and practices governed by the law of the Member States, that structure cannot affect the worker’s right to enjoy, during his period of rest and relaxation, economic conditions which are comparable to those relating to the exercise of his employment (judgment of 15 September 2011, Williams and Others, C‑155/10, EU:C:2011:588, paragraph 23).35In the present case, it is clear from points 4.1, 4.2 and 5.2 of Paragraph 8 of the BRTV-Bau that that collective agreement takes into account, if only partially, periods of short-time working for the purpose of calculating remuneration paid in respect of annual leave. In the case of Mr Hein, the referring court notes that this results in a significant reduction in such remuneration compared to what he would have received if those periods had not been taken into account. Indeed, in 2015, which, according to the referring court, is the reference period during which Mr Hein acquired his entitlement to the annual leave at issue in the main proceedings, Mr Hein was on short-time working for 26 weeks, which is half of the reference period.36As a result of such rules, periods of short-time working during which the worker has not performed actual work are taken into account for the purpose of calculating the remuneration due, inter alia, for the days of annual leave resulting from Article 7(1) of Directive 2003/88.37It follows that a worker in a position such as that of Mr Hein will receive, for his days of annual leave, remuneration which does not correspond to the normal remuneration he receives during periods of actual work — contrary to the requirements, noted in paragraphs 33 and 34 above, under which the worker must enjoy, during the periods of rest and relaxation which he is guaranteed by Article 7(1) of Directive 2003/88, economic conditions which are comparable to those relating to the exercise of his employment.38In that regard, Holzkamm and the German Government state, in essence, that the objective pursued by the BRTV-Bau is to allow undertakings in the construction industry more flexibility so that they can avoid dismissing their workers for economic reasons during periods of low demand by the use of short-time working. Such a benefit for workers would risk being jeopardised if undertakings had to pay the full amount of remuneration for annual leave that the workers would be entitled to if they had worked throughout the year. According to Holzkamm, dismissal would have much more pronounced negative consequences for the workers concerned than the consequences liable to result from a reduction in remuneration for annual leave.39Furthermore, Holzkamm states that the rules provided for by the BRTV-Bau are necessary in order to ensure that all workers have unbroken paid annual leave, even if their employment relationships are short in length, thereby guaranteeing that days of leave not already taken are transferred and granted to the worker even under a new employment relationship. In addition, Holzkamm claims that the number of days of paid annual leave to which workers are entitled is not reduced if short-time working has been previously decided upon. As a result, Holzkamm maintains that the legislation at issue in the main proceedings does not lead to a reduction of the total remuneration for annual leave received by the workers each year to an amount less than the minimum required by Article 7(1) of Directive 2003/88, since the workers benefit from a greater number of leave days.40Lastly, remuneration paid for overtime worked by the workers is fully taken into account when calculating remuneration for annual leave.41In that regard, it must be noted, first, that Article 7(1) of Directive 2003/88 does not require the normal remuneration referred to in the case-law cited in paragraphs 32 to 34 above to be granted for the entire duration of the annual leave to which the worker is entitled under national law. Pursuant to Article 7(1), the employer is required to grant such remuneration only for the minimum period of annual leave provided for in that provision, such leave being acquired by the worker, as is noted in paragraph 29 above, only for periods of actual work.42Next, although, as is clear from paragraphs 30 and 31 above, Directive 2003/88 does not preclude employers and workers from adopting, by collective agreement pursuant to national legislation, rules aiming to contribute generally to an improvement of workers’ working conditions, the detailed implementing rules must, however, respect the limits flowing from that directive (see, to that effect, judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 57).43In that regard, an increase in the entitlement to paid annual leave beyond the minimum required by Article 7(1) of Directive 2003/88 or the possibility of obtaining entitlement to unbroken paid annual leave are measures favourable to workers which go beyond the minimum requirements laid down in that provision and, as a result, are not governed by it. Those measures cannot serve to compensate for the negative effect that a reduction in the remuneration due for annual leave has on the worker without undermining the right to paid annual leave under that provision, an integral part of which is the right for the worker to enjoy, during his period of rest and relaxation, economic conditions which are comparable to those relating to the exercise of his employment.44It should be borne in mind, in that regard, that the purpose of normal remuneration being received during the period of paid annual leave is to allow the worker actually to take the days of leave to which he is entitled (see, to that effect, judgments of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 49, and of 22 May 2014, Lock, C‑539/12, EU:C:2014:351, paragraph 20). When the remuneration paid on account of the entitlement to paid annual leave provided for by Article 7(1) of Directive 2003/88 is, as in the situation at issue in the main proceedings, less than the normal remuneration that the worker receives during periods actually worked, the worker might well be encouraged not to take his paid annual leave, at least during periods of actual work, as it would lead to a reduction in his remuneration during those periods.45It should be added, in that regard, that although point 1.1 of Paragraph 8 of the BRTV-Bau sets the amount of annual leave at 30 days, irrespective of periods of short-time working during which actual work has not been performed by the worker, it is clear from point 4.3 of Paragraph 8 of that agreement that, in the event that leave is taken in part, the remuneration for annual leave is reduced proportionately. Accordingly, the BRTV-Bau has the effect that a worker who does not take all the leave to which he is entitled under that agreement, but only the leave to which he is entitled under Article 7 of Directive 2003/88, in the light of the periods of short-time working, receives remuneration for annual leave that is less than the amount to which he is entitled under Article 7.46Lastly, as for the rule that overtime worked by the worker is to be taken into account for the purpose of calculating the remuneration due in respect of paid annual leave entitlement, it should be noted that, given its exceptional and unforeseeable nature, remuneration received for overtime does not, in principle, form part of the normal remuneration that the worker may claim in respect of the paid annual leave provided for in Article 7(1) of Directive 2003/88.47However, when the obligations arising from the employment contract require the worker to work overtime on a broadly regular and predictable basis, and the corresponding pay constitutes a significant element of the total remuneration that the worker receives for his professional activity, the pay received for that overtime work should be included in the normal remuneration due under the right to paid annual leave provided for by Article 7(1) of Directive 2003/88, in order that the worker may enjoy, during that leave, economic conditions which are comparable to those that he enjoys when working. It is for the referring court to verify whether that is the case in the main proceedings.48Regarding the role of the national court when called on to give judgment in proceedings between individuals in which it is apparent that the national legislation at issue is contrary to EU law, it should again be borne in mind that it is for that court to provide the legal protection which individuals derive from the provisions of EU law and to ensure that those provisions are fully effective (judgments of 19 January 2010, Kücükdeveci, C‑555/07, EU:C:2010:21, paragraph 45, and of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraph 29).49In that regard, the Member States’ obligation arising from a directive to achieve the result envisaged by that directive and their duty to take all appropriate measures, whether general or particular, to ensure the fulfilment of that obligation are binding on all the authorities of the Member States, including, for matters within their jurisdiction, the courts (judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraph 30 and the case-law cited).50It follows that, in applying national law, national courts called upon to interpret that law are required to consider the whole body of rules of national law and to apply methods of interpretation that are recognised by those rules in order to interpret it, so far as possible, in the light of the wording and the purpose of the directive concerned in order to achieve the result sought by the directive and, consequently, to comply with the third paragraph of Article 288 TFEU (judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraph 31 and the case-law cited).51Although the obligation on the national courts to refer to EU law when they interpret and apply the relevant rules of national law is limited by general principles of law, and although that obligation cannot serve as the basis for an interpretation of national law contra legem, the requirement to interpret national law in conformity with EU law does, however, entail the obligation for national courts to change established case-law, where necessary, if it is based on an interpretation of national law that is incompatible with the objectives of a directive (see, to that effect, judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraphs 32 and 33 and the case-law cited).52In a dispute such as that in the main proceedings, which is between private persons, namely Mr Hein and Holzkamm, the referring court is required to interpret its national legislation in a way that is in accordance with Article 7(1) of Directive 2003/88. Such an interpretation should result in the remuneration for annual leave paid to workers in respect of the minimum annual leave provided for by that provision not being lower than the average normal remuneration received by those workers during periods of actual work. By contrast, the provision does not require national legislation to be interpreted as giving entitlement to a collectively agreed additional payment on top of that average normal remuneration, or the right that pay received for overtime work be taken into account, unless the conditions set out in paragraph 47 above are satisfied.53In the light of the foregoing, the answer to the first part of the first question is that Article 7(1) of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which, for the purpose of calculating remuneration for annual leave, allows collective agreements to provide for account to be taken of reductions in earnings resulting from the fact that during the reference period there were days when no work was actually performed owing to short-time working, with the consequence that the worker receives, for the duration of the minimum period of annual leave to which he is entitled under Article 7(1) of the directive, remuneration for annual leave that is lower than the normal remuneration which he receives during periods of work. It is for the referring court to interpret the national legislation, so far as possible, in the light of the wording and the purpose of Directive 2003/88, in such a way that the remuneration for annual leave paid to workers in respect of the minimum annual leave provided for in Article 7(1) is not less than the average of the normal remuneration received by those workers during periods of actual work.54In view of the answer to the first part of the first question, it is unnecessary to answer the second part of that question. The second question 55By its second question, the referring court asks, in essence, whether it is possible to limit the temporal effects of the present judgment in the event that the Court rules that Article 7(1) of Directive 2003/88 and Article 31 of the Charter must be interpreted as precluding national legislation such as that at issue in the main proceedings. In the event that such a limitation is refused, the referring court asks the Court, in essence, whether EU law must be interpreted as precluding national courts from protecting, on the basis of national law, the legitimate expectation of employers that the case-law of the highest national courts, which confirmed the lawfulness of the provisions concerning paid annual leave in the BRTV-Bau, will continue to apply.56It should be recalled that, according to settled case-law of the Court, the interpretation which, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, the Court gives to a rule of EU law clarifies and defines the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its entry into force. It follows that the rule as thus interpreted may, and must, be applied by the courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that rule before the courts having jurisdiction are satisfied (judgments of 6 March 2007, Meilicke and Others, C‑292/04, EU:C:2007:132, paragraph 34, and of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 59).57It is only quite exceptionally that the Court may, in application of the general principle of legal certainty inherent in the EU legal order, be moved to restrict, for any person concerned, the opportunity of relying on a provision which it has interpreted with a view to calling into question legal relationships established in good faith. Two essential criteria must be fulfilled before such a limitation can be imposed, namely that those concerned should have acted in good faith and that there should be a risk of serious difficulties (judgment of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 60 and the case-law cited).58More specifically, the Court has taken that step only in quite specific circumstances, notably where there was a risk of serious economic repercussions owing in particular to the large number of legal relationships entered into in good faith on the basis of rules considered to be validly in force and where it was apparent that individuals and national authorities had been led to adopt practices which did not comply with EU law by reason of objective, significant uncertainty regarding the implications of EU provisions, to which the conduct of other Member States or the European Commission may even have contributed (judgments of 15 March 2005, Bidar, C‑209/03, EU:C:2005:169, paragraph 69; of 13 April 2010, Bressol and Others, C‑73/08, EU:C:2010:181, paragraph 93; and of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 61).59In the present case, there is nothing in the file to suggest that the condition as to serious economic repercussions is satisfied.60It follows from those considerations that it is not appropriate to limit the temporal effects of the present judgment.61As to whether EU law allows national courts to protect, on the basis of national law, the legitimate expectation of employers that the case-law of the highest national courts confirming the lawfulness of the provisions on paid annual leave in the BRTV-Bau will continue to apply, it must be noted that the application of the principle of the protection of legitimate expectations as contemplated by the referring court would, in practice, have the effect of limiting the temporal effects of the Court’s interpretation of the provisions of EU law since, by those means, that interpretation would not be applicable in the main proceedings (see, to that effect, judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraph 39).62Save in exceptional circumstances, which, as is clear from the assessment in paragraph 59 above, have not been established, EU law as thus interpreted must be applied by the courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects, as was noted in paragraph 56 above, the conditions for bringing a dispute relating to the application of that law before the courts having jurisdiction are satisfied (see, to that effect, judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraph 40 and the case-law cited).63It follows from the above considerations that the answer to the second question is that it is not appropriate to limit the temporal effects of the present judgment and that EU law must be interpreted as precluding national courts from protecting, on the basis of national law, the legitimate expectation of employers that the case-law of the highest national courts, which confirmed the lawfulness of the provisions concerning paid annual leave in the BRTV-Bau, will continue to apply. Costs 64Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fourth Chamber) hereby rules: 1. Article 7(1) of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time and Article 31(2) of the Charter of Fundamental Rights of the European Union must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which, for the purpose of calculating remuneration for annual leave, allows collective agreements to provide for account to be taken of reductions in earnings resulting from the fact that during the reference period there were days when no work was actually performed owing to short-time working, with the consequence that the worker receives, for the duration of the minimum period of annual leave to which he is entitled under Article 7(1) of the directive, remuneration for annual leave that is lower than the normal remuneration which he receives during periods of work. It is for the referring court to interpret the national legislation, so far as possible, in the light of the wording and the purpose of Directive 2003/88, in such a way that the remuneration for annual leave paid to workers in respect of the minimum annual leave provided for in Article 7(1) is not less than the average of the normal remuneration received by those workers during periods of actual work. 2. It is not appropriate to limit the temporal effects of the present judgment and EU law must be interpreted as precluding national courts from protecting, on the basis of national law, the legitimate expectation of employers that the case-law of the highest national courts, which confirmed the lawfulness of the provisions concerning paid annual leave in the Bundesrahmentarifvertrag für das Baugewerbe (Federal collective framework agreement for the construction industry), will continue to apply. [Signatures]( *1 ) Language of the case: German. | f169d-c38390b-4e8b | EN |
The Schengen Borders Code precludes Germany from requiring coach transport operators of cross-border services to check the passports and residence permits of passengers before entering or leaving German territory | 13 December 2018 ( *1 )(Reference for a preliminary ruling — Area of freedom, security and justice — Regulation (EC) No 562/2006 — Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) — Articles 20 and 21 — Abolition of internal border controls in the Schengen area — Checks within the territory of a Member State — Measures having an effect equivalent to border checks — Rules of a Member State requiring a coach travel operator on routes crossing the internal borders of the Schengen area to check passengers’ passports and residence permits — Penalty — Threat to impose a recurring fine)In Joined Cases C‑412/17 and C‑474/17,TWO REQUESTS for a preliminary ruling under Article 267 TFEU from the Bundesverwaltungsgericht (Federal Administrative Court, Germany), made by decisions of 1 June 2017, received at the Court on 10 July 2017 (C‑412/17) and on 8 August 2017 (C‑474/17), in the proceedings Bundesrepublik Deutschland v Touring Tours und Travel GmbH (C‑412/17), Sociedad de Transportes SA (C‑474/17),THE COURT (Second Chamber),composed of J.-C. Bonichot, President of the First Chamber, acting as President of the Second Chamber, A. Prechal (Rapporteur), C. Toader, A. Rosas and M. Ilešič, Judges,Advocate General: Y. Bot,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 7 June 2018,after considering the observations submitted on behalf of–the Bundesrepublik Deutschland, by W. Roth, Rechtsanwalt,the German Government, by S. Eisenberg and T. Henze, acting as Agents,the European Commission, by C. Cattabriga and G. Wils, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 6 September 2018,gives the following Judgment 1These requests for a preliminary ruling concern the interpretation of Article 67(2) TFEU, and Articles 20 and 21 of Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2006 L 105, p. 1), as amended by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013 (OJ 2013 L 182, p. 1) (‘Regulation No 562/2006’).2The requests were made in proceedings between, in Case C‑412/17, Touring Tours und Travel GmbH, and, in Case C‑474/17, Sociedad de Transportes SA, two coach travel operators established, respectively, in Germany and in Spain (‘the transporters in question’), and the Bundesrepublik Deutschland (Federal Republic of Germany), represented by the Bundespolizeipräsidium (Directorate of the Federal Police, Germany), concerning the legality of decisions taken by the latter preventing them, subject to the imposition of a recurring fine, from transporting third-country nationals not in possession of the requisite passport or residence permit to the territory of the Federal Republic of Germany. Legal context International law 3The Protocol against the Smuggling of Migrants by Land, Sea and Air, supplementing the United Nations Convention against Transnational Organised Crime was signed by the European Community on 12 December 2000, in accordance with Council Decision 2001/87/EC of 8 December 2000 (OJ 2001 L 30, p. 44, ‘the Additional Protocol’). That protocol was approved by Council Decision 2006/616/EC of 24 July 2006 (OJ 2006 L 262, p. 24), in so far as the provisions of the Additional Protocol fall within the scope of Articles 179 and 181A EC, and by Council Decision 2006/617/EC of 24 July 2006 (OJ 2006 L 262, p. 34), in so far as those provisions fall within the scope of Part Three, Title IV of the EC Treaty.4According to Article 3 of the Additional Protocol:‘For the purposes of the present Protocol:(a)“smuggling of migrants” shall mean the procurement, in order to obtain, directly or indirectly, a financial or other material benefit, of the illegal entry of a person into a State Party of which the person is not a national or a permanent resident;(b)“illegal entry” shall mean crossing borders without complying with the necessary requirements for legal entry into the receiving State;…’5Article 6(1)(a) of that protocol provides:‘Each State Party shall adopt such legislative and other measures as may be necessary to establish as criminal offences, when committed intentionally and in order to obtain, directly or indirectly, a financial or other material benefit:the smuggling of migrants’.6Under Article 11 of that protocol, entitled ‘Border measures’:‘…2. Each State Party shall adopt legislative or other appropriate measures to prevent, to the extent possible, means of transport operated by commercial carriers from being used in the commission of the offence established in accordance with article 6, paragraph 1(a), of this Protocol.3. Where appropriate, and without prejudice to applicable international conventions, such measures shall include establishing the obligation of commercial carriers, including any transportation company or the owner or operator of any means of transport, to ascertain that all passengers are in possession of the travel documents required for entry into the receiving State.4. Each State Party shall take the necessary measures, in accordance with its domestic law, to provide for sanctions in cases of violation of the obligation set forth in paragraph 3 of this article. EU law The CISA 7Article 26 of the Convention implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders (OJ 2000 L 239, p. 19), signed in Schengen on 19 June 1990 and entered into force on 26 March 1995 (‘the CISA’), provides:‘1. The Contracting Parties undertake, subject to the obligations resulting from their accession to the Geneva Convention relating to the Status of Refugees of 28 July 1951, as amended by the New York Protocol of 31 January 1967, to incorporate the following rules into their national law:If aliens are refused entry into the territory of one of the Contracting Parties, the carrier which brought them to the external border by air, sea or land shall be obliged immediately to assume responsibility for them again. …The carrier shall be obliged to take all the necessary measures to ensure that an alien carried by air or sea is in possession of the travel documents required for entry into the territories of the Contracting Parties.2. The Contracting Parties undertake, subject to the obligations resulting from their accession to the Geneva Convention relating to the Status of Refugees of 28 July 1951, as amended by the New York Protocol of 31 January 1967, and in accordance with their constitutional law, to impose penalties on carriers which transport aliens who do not possess the necessary travel documents by air or sea from a Third State to their territories.3. Paragraphs 1(b) and 2 shall also apply to international carriers transporting groups overland by coach, with the exception of border traffic.’8Article 27 of the CISA, repealed by Article 5 of Council Directive 2002/90/EC of 28 November 2002 defining the facilitation of unauthorised entry, transit and residence (OJ 2002 L 328, p. 17) was worded as follows:‘1. The Contracting Parties undertake to impose appropriate penalties on any person who, for financial gain, assists or tries to assist an alien to enter or reside within the territory of one of the Contracting Parties in breach of that Contracting Party’s laws on the entry and residence of aliens.2. If a Contracting Party is informed of actions as referred to in paragraph 1 which are in breach of the law of another Contracting Party, it shall inform the latter accordingly.3. Any Contracting Party which requests another Contracting Party to prosecute, on the grounds of a breach of its own laws, actions as referred to in paragraph 1 must specify, by means of an official report or a certificate from the competent authorities, the provisions of law that have been breached.’ Directive 2001/51/EC 9Recitals 2 and 4 of Council Directive 2001/51/EC of 28 June 2001 supplementing the provisions of Article 26 of the Convention implementing the Schengen Agreement of 14 June 1985 (OJ 2001 L 187, p. 45) provides:‘(2)This measure is among the general provisions aimed at curbing migratory flows and combating illegal immigration.…(4)The freedom of the Member States to retain or introduce additional measures or penalties for carriers, whether referred to in this Directive or not, should not be affected.’ Directive 2002/90 10Recitals 1 to 4 of Directive 2002/90 state:‘(1)One of the objectives of the European Union is the gradual creation of an area of freedom, security and justice, which means, inter alia, that illegal immigration must be combated.(2)Consequently, measures should be taken to combat the aiding of illegal immigration both in connection with unauthorised crossing of the border in the strict sense and for the purpose of sustaining networks which exploit human beings.(3)To that end it is essential to approximate existing legal provisions, in particular, on the one hand, the precise definition of the infringement in question and the cases of exemption, which is the subject of this Directive and, on the other hand, minimum rules for penalties, liability of legal persons and jurisdiction, which is the subject of Council Framework Decision 2002/946/JHA of 28 November 2002 on the strengthening of the penal framework to prevent the facilitation of unauthorised entry, transit and residence [(OJ 2002 L 328, p. 1)].The purpose of this Directive is to provide a definition of the facilitation of illegal immigration and consequently to render more effective the implementation of Framework Decision [2002/946] in order to prevent that offence.’11Article 1 of Directive 2002/90, entitled ‘General infringement’, provides in paragraph 1:‘Each Member State shall adopt appropriate sanctions on:any person who intentionally assists a person who is not a national of a Member State to enter, or transit across, the territory of a Member State in breach of the laws of the State concerned on the entry or transit of aliens;any person who, for financial gain, intentionally assists a person who is not a national of a Member State to reside within the territory of a Member State in breach of the laws of the State concerned on the residence of aliens.’12Article 2 of that directive, entitled ‘ Instigation, participation and attempt’, provides:‘Each Member State shall take the measures necessary to ensure that the sanctions referred to in Article 1 are also applicable to any person who:is the instigator of,is an accomplice in an infringement as referred to in Article 1(1)(a) or (b) …13Article 3 of that directive, entitled ‘Sanctions’ provides that each Member State is to take the measures necessary to ensure that the infringements referred to in Articles 1 and 2 thereof are subject to effective, proportionate and dissuasive sanctions. Framework Decision 2002/946 14Article 1 of Framework Decision 2002/946 provides the following:‘1. Each Member State shall take the measures necessary to ensure that the infringements defined in Articles 1 and 2 of Directive [2002/90] are punishable by effective, proportionate and dissuasive criminal penalties which may entail extradition.2. Where appropriate, the criminal penalties covered in paragraph 1 may be accompanied by the following measures:confiscation of the means of transport used to commit the offence,a prohibition on practising directly or through an intermediary the occupational activity in the exercise of which the offence was committed,15Article 2 of that framework decision, entitled ‘Liability of legal persons’, provides:‘1. Each Member State shall take the measures necessary to ensure that legal persons can be held liable for the infringements referred to in Article 1(1) and which are committed for their benefit by any person, acting either individually or as part of an organ of the legal person, who has a leading position within the legal person, …2. Apart from the cases already provided for in paragraph 1, each Member State shall take the necessary measures to ensure that a legal person can be held liable where the lack of supervision or control by a person referred to in paragraph 1 has made possible the commission of the infringements referred to in Article 1(1) for the benefit of that legal person by a person under its authority.3. Liability of a legal person under paragraphs 1 and 2 shall not exclude criminal proceedings against natural persons who are perpetrators or instigators of or accessories in the offences referred to in paragraph 1.’16Article 3 of that framework decision, entitled ‘Sanctions for legal persons’ provides:‘1. Each Member State shall take the measures necessary to ensure that a legal person held liable pursuant to Article 2(1) is punishable by effective, proportionate and dissuasive sanctions, which shall include criminal or non-criminal fines and may include other sanctions …2. Each Member State shall take the measures necessary to ensure that a legal person held liable pursuant to Article 2(2) is punishable by effective, proportionate and dissuasive sanctions or measures.’ Regulation No 562/2006 17Regulation No 562/2006, applicable at the material time, was repealed and replaced by Regulation (EU) 2016/399 of the European Parliament and of the Council of 9 March 2016 on a Union Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2016 L 77, p. 1).18According to Article 2(9) to (11) and (14) of Regulation No 562/2006:‘For the purposes of this Regulation:(9)“border control” means the activity carried out at a border, in accordance with and for the purposes of this Regulation, in response exclusively to an intention to cross or the act of crossing that border, regardless of any other consideration, consisting of border checks and border surveillance;(10)“border checks” means the checks carried out at border crossing points, to ensure that persons, including their means of transport and the objects in their possession, may be authorised to enter the territory of the Member States or authorised to leave it;(11)“border surveillance” means the surveillance of borders between border crossing points and the surveillance of border crossing points outside the fixed opening hours, in order to prevent persons from circumventing border checks;(14)“carriers” mean any natural or legal person whose profession it is to provide transport of persons’.19Article 5 of that regulation, entitled ‘Entry conditions for third-country nationals’, provides in paragraph 1:‘For intended stays on the territory of the Member States of a duration of no more than 90 days in any 180-day period, which entails considering the 180-day period preceding each day of stay, the entry conditions for third-country nationals shall be the following:they are in possession of a valid travel document entitling the holder to cross the border satisfying the following criteria:(i)its validity shall extend at least three months after the intended date of departure from the territory of the Member States. In a justified case of emergency, this obligation may be waived;(ii)it shall have been issued within the previous 10 years;they are in possession of a valid visa, if required, except where they hold a valid residence permit or a valid long-stay visa;20Article 20 of Regulation No 562/2006, entitled ‘Crossing internal borders’, provides:‘Internal borders may be crossed at any point without a border check on persons, irrespective of their nationality, being carried out.’21Article 21 of that regulation, entitled ‘Checks within the territory’, was worded as follows:‘The abolition of border control at internal borders shall not affect:the exercise of police powers by the competent authorities of the Member States under national law, insofar as the exercise of those powers does not have an effect equivalent to border checks; that shall also apply in border areas. Within the meaning of the first sentence, the exercise of police powers may not, in particular, be considered equivalent to the exercise of border checks when the police measures:do not have border control as an objective;are based on general police information and experience regarding possible threats to public security and aim, in particular, to combat cross-border crime;(iii)are devised and executed in a manner clearly distinct from systematic checks on persons at the external borders;(iv)are carried out on the basis of spot-checks;security checks on persons carried out at ports and airports by the competent authorities under the law of each Member State, by port or airport officials or carriers, provided that such checks are also carried out on persons travelling within a Member State;(c)the possibility for a Member State to provide by law for an obligation to hold or carry papers and documents;(d)the possibility for a Member State to provide by law for an obligation on third-country nationals to report their presence on its territory pursuant to the provisions of Article 22 of the [CISA].’ German law 22Paragraph 13 of the Gesetz über den Aufenthalt, die Erwerbstätigkeit und die Integration von Ausländern im Bundesgebiet (Law on residence, employment and integration of foreign nationals in the Federal Territory) of 30 July 2004 (BGBl. 2004 I, p. 1950), in the version applicable to the facts in the main proceedings (‘the AufenthG’), entitled ‘Crossing borders’ contains, in subparagraph 1, the obligation for all foreign nationals to have in their possession a recognised valid passport or a document replacing a passport on entering or leaving the national territory and to submit to police checks on cross-border traffic.23Paragraph 63 of the AufenthG, entitled ‘Obligations of transport undertakings’, provides:‘1. A carrier may bring foreign nationals into the territory of the Federal Republic of Germany only if they are in possession of the requisite passport or residence permit.2. The Federal Ministry of the Interior or the authority designated by it may, with the agreement of the Federal Ministry of Transport and Digital Infrastructure, prohibit a carrier from bringing foreign nationals into the territory of the Federal Republic of Germany in breach of subparagraph 1 and threaten that carrier with recurring fines in the event of infringement. …3. The amount of the recurring fines imposed on the carrier shall be at least EUR 1000 and not more than EUR 5000 per foreign national carried by that undertaking in breach of an order adopted in accordance with subparagraph 2. …4. The Federal Ministry of the Interior or the authority designated by it may reach an agreement with carriers on the rules intended to implement the obligation referred to in subparagraph 1.’24Paragraph 63(1) and (2) of the Allgemeine Verwaltungsvorschrift zum Aufenthaltsgesetz (General Administrative Instructions concerning the Law on residence) of 26 October 2009 (GMBl. 2009, p. 878), is worded as follows:‘63.1 Control and security obligations63.1.1 [Paragraph 63 of the AufenthG] prohibits transporters from transporting to the territory of the Federal Republic of Germany foreign nationals who are not in possession of the requisite travel documents. That prohibition relates to transport by air, sea and land, with the exception of cross border rail traffic. … The legal prohibition on transporting foreign nationals to the territory of the Federal Republic of Germany, when they are not in possession of the requisite passport or visa due to their nationality, simultaneously entails an obligation on the part of the transporter to carry out adequate checks of the passport and visa. The obligation to carry out checks is intended to ensure that foreign nationals satisfy the requisite conditions in Paragraph 13(1) for crossing the border. …63.1.3.1 The obligation to carry out checks under Paragraph 63(1) requires the transporter to verify whether the foreign national is in possession of the requisite documents …63.2 Prohibition on transport and recurring fines63.2.0 The prohibition on transport and the threat, setting and enforcement of recurring fines are intended to force the transporter to verify compliance, in all cases, with the requirement to be in possession of a passport or visa.’ The disputes in the main proceedings and the questions referred for a preliminary ruling 25The transporters in question provide coach services and operate, inter alia, regular services to the Federal Republic of Germany, which cross the borders between Germany and the Netherlands and between Germany and Belgium.26Having decided that those undertakings had transported to Germany a large number of third-country nationals who were not in possession of the requisite travel documents in breach of Paragraph 63(1) of the AufenthG, the Directorate of the Federal Police, first, sent them, in November 2013 and in March 2014 respectively, a ‘warning’ listing the cases of unauthorised transport and stating that, if the infringement continued, a prohibition order would be issued in accordance with Paragraph 63(2) of the AufenthG.27Subsequently, having found that the transporters in question were persisting in their unlawful conduct, the Directorate of the Federal Police issued those prohibition orders, on 26 September 2014 and 18 November 2014 respectively, which were accompanied by a fine in the sum of EUR 1000 for each new infringement.28Those orders required the transporters in question, under Paragraph 63(1) of the AufenthG, to do everything in their power to prevent the entry into German territory of any foreign national who was not in possession of the requisite travel documents. To that end, the transporters would be required to check those documents, when checking tickets as the passengers boarded the coach, and would have to refuse access to third-country nationals not in possession of the requisite travel documents.29In an action brought by the transporters in question against those orders, the Verwaltungsgericht (Administrative Court, Germany) annulled those orders, holding, in essence, that, in the light of the primacy of EU law, Paragraph 63(2) of the AufenthG should not be applied, since its application to undertakings transporting nationals from third countries to Germany across an internal border of the Schengen area was contrary to Article 67(2) TFEU and Articles 20 and 21 of Regulation No 562/2006. The controls imposed on those undertakings would have to be classified as measures having an ‘effect equivalent to border checks’, for the purposes of Article 21 of Regulation No 562/2006, bearing in mind, inter alia, their systematic nature and the fact that they had to be carried out before the border is crossed.30The Federal Republic of Germany brought an appeal on a point of law against that judgment before the referring court, the Bundesverwaltungsgericht (Federal Administrative Court, Germany), arguing, inter alia, that EU law and specifically Directive 2002/90 and Framework Decision 2002/946, which are special provisions compared with those in Regulation No 562/2006, require the imposition of penalties for infringements of transport prohibitions such as those laid down in Paragraph 63 of the AufenthG.31In any event, according to the Federal Republic of Germany, the checking of travel documents required by that provision of national law cannot be classified as a measure having an ‘effect equivalent to border checks’, for the purposes of Article 21(a) of Regulation No 562/2006. The objective pursued is not to control the crossing of the border, but to enforce provisions relating to entry into the territory. Moreover, since those checks were carried out, not by public officials but by the staff of a private undertaking, they were not as in-depth as those at the borders. Thus, it is not possible for those members of staff to use coercive measures or to carry out a search in the event of a refusal by the interested parties to undergo those checks.32Against that background, the Bundesverwaltungsgericht (Federal Administrative Court) decided to stay the proceedings and to refer the following questions, which are worded identically in Case C‑412/17 and Case C‑474/17, to the Court of Justice for a preliminary ruling:Do Article 67(2) TFEU and Articles [20 and 21 of Regulation No 562/2006] preclude a provision of national law of a Member State which has the effect of requiring coach transport undertakings operating regular services across a Schengen internal border to check their passengers’ travel documents before crossing an internal border in order to prevent foreign nationals not in possession of a passport or residence permit from being brought into the territory of the Federal Republic of Germany?In particular:Does the general statutory duty, or the administrative obligation directed at individual carriers, not to bring into federal territory foreign nationals not in possession of a passport or residence permit as required, which is properly discharged only if carriers check all passengers’ travel documents before crossing an internal border, constitute, or fall to be treated as, a check on persons at internal borders within the meaning of Article [20 of Regulation No 562/2006]?Is the imposition of the duties referred to in question 1 to be assessed by reference to Article [21(a) of Regulation No 562/2006], even though carriers do not exercise “police powers” within the meaning of that provision and, moreover, do not formally enjoy any powers of public authority by virtue of the State-imposed obligation to carry out checks?If the answer to question 1(b) is in the affirmative, do the checks which carriers are required to carry out, taking into account the criteria laid down in the second sentence of Article [21(a) of Regulation No 562/2006], constitute an unlawful measure having an effect equivalent to border checks?Is the imposition of the duties referred to in question 1, in so far as it concerns coach transport undertakings operating regular services, to be assessed by reference to Article [21(b) of Regulation No 562/2006], which provides that the absence of border control at internal borders is not to affect the power of carriers to carry out security checks on persons at ports and airports? Does it follow from this that checks for the purposes of question 1 are not permissible even when carried out other than at ports and airports if they do not constitute security checks and are not also carried out on persons travelling within a Member State?Do Articles [20 and 21 of Regulation No 562/2006] permit provisions of national law under which, for the purposes of ensuring compliance with that duty [to carry out checks as referred to in question 1], an order imposing a prohibition and a threat of a recurring fine against a coach transport undertaking in cases where the failure to carry out checks has enabled even foreign nationals not in possession of a passport or residence permit to be brought into the territory of the Federal Republic of Germany?’33By decision of 24 April 2018, the Court of Justice decided to join Cases C‑412/17 and C‑474/17 for the purposes of the written procedure, the oral procedure and the judgment. Consideration of the questions referred 34By those two questions in each of the joined cases, which should be examined together, the referring court asks, in essence, whether Article 67(2) TFEU and Articles 20 and 21 of Regulation No 562/2006 must be interpreted to the effect that they preclude legislation of a Member State, such as that at issue in the main proceedings, which requires every coach transport undertaking providing a regular cross-border service within the Schengen area to the territory of that Member State to check the passports and residence permits of passengers before they cross an internal border in order to prevent the transport of third-country nationals not in possession of those travel documents to the national territory, and which allows, for the purposes of complying with that obligation to carry out checks, the police authorities to issue orders prohibiting such transport, accompanied by a threat of a recurring fine, against transport undertakings which have been found to have conveyed to that territory third-country nationals who were not in possession of those travel documents.35As a preliminary point in relation to the scope of the questions referred for a preliminary ruling, it should be noted that they are limited to an examination of the provision in Paragraph 63 of the AufenthG in the light of Article 67(2) TFEU and Articles 20 and 21 of Regulation No 562/2006.36However, the Federal Republic of Germany, as a party to the main proceedings, submitted, both in its written observations and at the hearing before the Court of Justice, that the transporters’ obligation to carry out checks, subject to the imposition of a recurring fine, under Paragraph 63 of the AufenthG, does not contravene EU law. Some provisions of Directive 2002/90, of Framework Decision 2002/946, of the Additional Protocol and of Directive 2001/51 require Member States to impose obligations on passenger carriers to carry out checks such as those laid down in Paragraph 63 of the AufenthG and to impose appropriate sanctions on transporters which knowingly help third-country nationals to enter the territory of a Member State, to pass through the territory of a Member State or to reside unlawfully in that territory.37However, it is clear from the requests for a preliminary ruling that the referring court, in reply to that line of argument already put to that court by the Federal Republic of Germany in support of its appeal on a point of law, expressly stated that it did not need clarification regarding the possible effect of Directive 2002/90, of Framework Decision 2002/946 and of Directive 2001/51 on the reply which had to be given to the questions asked, explaining clearly why it was of that opinion.38Therefore, it must be stated that the referring court did not refer, in its questions submitted for a preliminary ruling, to any of those three provisions of EU law or, indeed, to the Additional Protocol.39In that regard, it should be recalled that it is for the referring court alone to determine and formulate the questions to be referred for a preliminary ruling concerning the interpretation of EU law which are necessary in order to resolve the dispute in the main proceedings (judgment of 18 July 2013, Consiglio Nazionale dei Geologi, C‑136/12, EU:C:2013:489, paragraph 31).40Thus, although the referring court is at liberty to request the parties to the dispute before it to suggest wording suitable for the question to be referred, the fact remains that it is for that court alone ultimately to decide both its form and content (judgment of 21 July 2011, Kelly, C‑104/10, EU:C:2011:506, paragraph 65).41It is also clear from the case-law of the Court of Justice that, if the referring court expressly stated in its order for reference that it did not consider it necessary to ask a question or if it implicitly refused to submit to the Court of Justice a question raised by one of the parties, the Court of Justice may not answer that question or take it into account in the reference for a preliminary ruling (see, to that effect, judgments of 5 October 1988, Alsatel, 247/86, EU:C:1988:469, paragraph 8; of 2 June 1994, AC-ATEL Electronics Vertriebs, C‑30/93, EU:C:1994:224, paragraph 19; and of 26 September 2000, Engelbrecht, C‑262/97, EU:C:2000:492, paragraphs 21 and 22).42In those circumstances, the Court of Justice may not, in the present case, extend the scope of the questions asked by examining them in the light, not only of Articles 20 and 21 of Regulation No 562/2006, but also of the provisions of Directive 2002/90, Framework Decision 2002/946 and Directive 2001/51.43Furthermore, it may be stated that, even if, under certain conditions, a Member State may, in principle, be obliged, under some of the provisions of those three acts or provisions of the Additional Protocol, to require, subject to the imposition of penalties, including criminal penalties, undertakings transporting by coach third-country nationals to the territory of that Member State to check the travel documents which they must be in possession of, that obligation must be implemented as part of the Schengen Borders Code in the version amended by Regulation No 562/2006.44With regard to the substance of the questions asked and, therefore, the compatibility of a provision of national law such as Paragraph 63 of the AufenthG with the provisions of Regulation No 562/2006, it must be pointed out that it does not have to be examined in the light of Article 20 of Regulation No 562/2006.45It is clear from the case-law of the Court of Justice that, where the checks at issue in the main proceedings are carried out, not ‘at borders’ or ‘when the border is crossed’, but, in principle, inside the territory of a Member State, in the present case the one in which the travellers board the coach at the start of the cross-border journey, those checks do not amount to border checks prohibited by Article 20 of Regulation No 562/2006, but checks within the territory of a Member State, referred to in Article 21 of that regulation (see, by analogy, judgments of 22 June 2010, Melki and Abdeli, C‑188/10 and C‑189/10, EU:C:2010:363, paragraph 68, and of 19 July 2012, Adil, C‑278/12 PPU, EU:C:2012:508, paragraph 56).46Therefore, it is necessary to examine whether checks within the territory of a Member State, such as those devised and carried out under Paragraph 63 of the AufenthG, are prohibited under Article 21(a) of Regulation No 562/2006. That would be the case if those checks, in fact, had an effect equivalent to border checks, within the meaning of that provision (see, by analogy, judgment of 19 July 2012, Adil, C‑278/12 PPU, EU:C:2012:508, paragraph 57).47However, before carrying out that examination, there is the preliminary issue of the applicability of Article 21(a) of Regulation No 562/2006 to checks such as those at issue in the main proceedings, in that they must be carried out, not by the police or similar service, but by the staff employed by private law transporters without public authority powers, when Article 21(a) refers to the ‘the exercise of police powers by the competent authorities of the Member States under national law’ and to ‘police measures’.48In that regard, it is important to note that, in the present case, the requirement to check travel documents imposed on the transporters in question arises both under the general legal obligation laid down in Paragraph 63(1) of the AufenthG and the specific legal obligation stemming from the orders, subject to the imposition of a recurring fine, issued against them by the Directorate of the Federal Police on the basis of Paragraph 63(2) of the AufenthG.49It is therefore the competent authorities of the Member State concerned which, under national law, require transport undertakings to carry out, if necessary subject to the imposition of a recurring fine, the checks of travel documents which are normally carried out by the police or similar authorities. Thus, even though those undertakings do not have powers conferred by public law, they must carry out those checks on the instruction and under the control of authorities which are vested with such powers.50Therefore, even if they are carried out by transporters, those checks still fall within the scope of Article 21(a) of Regulation No 562/2006. If that were not the case, that provision could easily be circumvented and its effectiveness compromised.51With regard to Article 21(a), it should be recalled, in the first place, that the Court has already held that that provision cannot be interpreted to the effect that it includes a condition requiring that police checks in a border area be identical, in terms of their methods and purposes, to those carried out throughout the national territory. That interpretation is supported by the fact, on the one hand, that the European Commission’s proposal to introduce such a condition was not adopted by the EU legislature and, on the other, that it is expressly provided for in Article 21(b) of that regulation in relation to security checks carried out in ports and airports which are authorised only if they are also carried out on persons travelling within a Member State (see, to that effect, judgment of 19 July 2012, Adil, C‑278/12 PPU, EU:C:2012:508, paragraph 73).52In reply to question 1(d) asked by the referring court, it also follows that, although Article 21(b) of Regulation No 562/2006 expressly covers ‘transporters’, it cannot be inferred, a contrario, from that provision that checks such as those carried out under Paragraph 63 of the AufenthG are prohibited solely because they do not satisfy the requirements laid down by that provision and that therefore they are neither security checks carried out in ports or airports, nor checks on persons travelling within the Member State concerned.53As is apparent, in particular, from the case-law of the Court cited in paragraph 51 above, the provisions of Article 21(a) and those of Article 21(b) of Regulation No 562/2006 have their own scope and application conditions.54In the second place, it is apparent from the case-law of the Court that the indicia listed in the second sentence of Article 21(a) of Regulation No 562/2006 are indicators of the existence of an effect equivalent to border checks. If some of those indicators are present, the checks in question will be authorised only if they are carried out within a framework, in national legislation identifying those checks, which is governed by detailed rules and limitations, which are themselves sufficiently precise and detailed with regard to the intensity, frequency and selectivity of those checks. Thus, the more extensive the indicia reflected in that national legislation, in relation to the objective pursued by the checks carried out in a border area, the territorial scope of those checks and the existence of a distinction between the basis of those checks and that of the checks carried out in the remainder of the territory of the Member State concerned, the greater the need for those detailed rules and limitations to be strict and strictly observed (judgment of 21 June 2017, A, C‑9/16, EU:C:2017:483, paragraphs 38 to 41).55In the present case, with regard to the examination of Paragraph 63(2) of the AufenthG against, in the first place, the indicator in the second sentence of Article 21(a), item (i), of Regulation No 562/2006, according to which the exercise of police powers cannot be regarded as ‘equivalent to the exercise of border checks’, in particular where the checks provided for in that national legislation ‘do not have border control as an objective’, the Court has already held that it is clear from Article 2(9) to (11) of that regulation that that objective aims, first, to ensure that persons may be authorised to enter the territory of the Member State or to leave it and, secondly, to prevent persons from circumventing border checks. The checks concerned may be carried out systematically (judgment of 19 July 2012, Adil, C‑278/12 PPU, EU:C:2012:508, paragraph 61).56It is clear from the General Administrative Instructions concerning the Law on residence that the requirement to check travel documents arising out Paragraph 63(1) of the AufenthG is intended to ensure that the third-country nationals concerned ‘satisfy the requisite conditions in Paragraph 13(1) [of the AufenthG] for crossing the border’.57Paragraph 13, entitled ‘Crossing borders’, contains, in subparagraph 1, the obligation for all foreign third-country nationals to have in their possession a recognised valid passport or a document replacing a passport on entering or leaving the national territory and to submit to police checks on cross-border traffic.58It must therefore be stated that the objective of the checks at issue in the main proceedings is ‘border control’, for the purposes of the second sentence of Article 21(a), item (i), of Regulation No 562/2006, since they are intended to verify that the conditions for entering the Member States that make up the Schengen area, listed in Article 5(1)(a) of Regulation No 562/2006, are satisfied as regards the requisite travel documents, which provision is reproduced in Paragraph 13(1) of the AufenthG.59As the Advocate General made clear in point 85 of his Opinion, the sole purpose of the checks which have to be carried out under Paragraph 63 of the AufenthG is therefore to ensure that the persons on board the coach in question who intend to cross the border of the Member State of destination are actually permitted to enter the territory of that Member State. Thus, the purpose of those checks is to prevent passengers from entering the territory of that State if they do not have the requisite travel documents, which is the same as the purpose of the checks carried out by the border police in connection with the crossing of external borders.60In the second place, with regard to the examination of Paragraph 63(2) of the AufenthG in the light of the indicator in the second sentence of Article 21(a), item (i), of Regulation No 562/2006, it may be considered that the checks imposed by the orders adopted under Paragraph 63(2) of the AufenthG on the transporters operating certain cross-border coach services are based on general police information or experience regarding possible threats to public order, in that those orders are issued after a warning has been sent to the transporters concerned on the ground that it has been established that foreign nationals are entering German territory without being in possession of the requisite travel documents by using certain coach services which they operate.61On the other hand, that would not be the case for checks imposed on the basis of the obligation under Paragraph 63(1) of the AufenthG, since that obligation is of a general character, covering all cross-border services, irrespective of the conduct of the persons concerned or of circumstances giving rise to a risk to public order (see, by analogy, judgment of 21 June 2017, A, C‑9/16, EU:C:2017:483, paragraph 55).62In the third place, with regard to the indicator in the second sentence of Article 21(a), items (iii) and (iv), of Regulation No 562/2006, it is true that the checking of travel documents carried out by the transporters’ staff under Paragraph 63 of the AufenthG is, by its very nature, less in-depth than that carried out by the police, not least because the staff have neither the expertise, nor the resources, such as access to databases, nor the powers, conferred by public law, of the police or similar authorities. Thus, only obvious forgeries of passports could be spotted by those members of staff.63However, as the referring court stated, it is clear from the national legislation at issue in the main proceedings that checks on travel documents must be carried out systematically on all persons travelling on all cross-border coach services.64Paragraph 63(1) of the AufenthG contains neither detailed rules nor limitations in relation to the intensity, frequency and selectivity of the checks which have to be carried out on that legal basis (see, by analogy, judgment of 21 June 2017, A, C‑9/16, EU:C:2017:483, paragraphs 57 and 59).65In that context, it is also common ground that the checks at issue in the main proceedings are not carried out on the basis of spot checks.66In the fourth place, with regard to the factors which may, as was pointed out in paragraph 54 above, serve as indicators of the existence of an effect equivalent to border checks, in particular those concerning the territorial scope of the checks and the distinction between the basis of those checks and the basis of checks carried out in the rest of Germany, it must be stated, as was pointed out by the Commission in its written observations, without being contradicted on that point at the hearing before the Court, that the checks which have to be carried out under Paragraph 63 of the AufenthG are characterised by the fact that they are triggered precisely by the crossing of an internal border.67That essential characteristic of the checks at issue in the cases in the main proceedings, also pointed out by the Advocate General in point 85 of his Opinion, differentiates them from the checks at issue in other cases which gave rise to judgments of the Court concerning the interpretation of Article 21(a) of Regulation No 562/2006, more particularly, the judgments of 22 June 2010, Melki and Abdeli (C‑188/10 and C‑189/10, EU:C:2010:363), of 19 July 2012, Adil (C‑278/12 PPU, EU:C:2012:508), and of 21 June 2017, A (C‑9/16, EU:C:2017:483), which concerned police checks in border areas not exceeding 20, or even 30, kilometres from a border inside the Schengen area.68The fact that, in the present case, the checks at issue in the main proceedings are characterised by the particularly close connection which they have with the crossing of an internal border, inasmuch as that is specifically the event which triggers those checks, is particularly indicative of an ‘effect equivalent to border checks’ for the purposes of Article 21(a) of Regulation No 562/2006.69That is all the more true since the checks imposed under Paragraph 63 of the AufenthG and those carried out in the rest of Germany have distinct legal bases, where the second type of check may concern internal services covering a distance comparable to the cross-border journeys covered by the first type of check. According to the case-law recalled in paragraph 54 above, that circumstance must be taken into consideration in the overall assessment required in order to classify a provision requiring checks to be carried out as a measure having an ‘effect equivalent to border checks’ for the purposes of Article 21(a) of Regulation No 562/2006.70As was also pointed out by the referring court, Paragraph 63 of the AufenthG applies only to coach transport services crossing a border within the Shengen area and does not cover those which are confined to German territory alone, which may, however, be of a distance equal to, or even greater than, those cross-border services.71In those circumstances, in view of the presence of a number of indicators listed in the second sentence of Article 21(a) of Regulation No 562/2006, of an assessment of their relative weight and of the absence in the national legislation at issue in the main proceedings of sufficient detailed rules and limitations with regard to the intensity, frequency and selectivity of the checks imposed under Paragraph 63(1) of the AufenthG, such checks must be classified as a measure having an ‘effect equivalent to border checks’, prohibited by the first sentence of Article 21(a) of that regulation.72It also follows that Article 21(a) of Regulation No 562/2006 precludes the provision in Paragraph 63(2) of the AufenthG in so far as it penalises an infringement of the general obligation to carry out checks in Paragraph 63(1) of the AufenthG by way of an order prohibiting transport, together with a threat to impose a recurring fine. Such a penalty provision is not compatible with Article 21(a), inasmuch as it is imposed in order to ensure compliance with the obligation to carry out checks which itself does not comply with that provision.73In view of the foregoing, the answer to the questions asked is that Article 67(2) TFEU and Article 21 of Regulation No 562/2006 must be interpreted to the effect that they preclude legislation of a Member State, such as that at issue in the main proceedings, which requires every coach transport undertaking providing a regular cross-border service within the Schengen area to the territory of that Member State to check the passports and residence permits of passengers before they cross an internal border in order to prevent the transport of third-country nationals not in possession of those travel documents to the national territory, and which allows, for the purposes of complying with that obligation to carry out checks, the police authorities to issue orders prohibiting such transport, accompanied by a threat of a recurring fine, against transport undertakings which have been found to have conveyed to that territory third-country nationals who were not in possession of those travel documents. Costs 74Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: Article 67(2) TFEU and Article 21 of Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code), as amended by Regulation (EU) No 610/2013 of the European Parliament and of the Council of 26 June 2013, must be interpreted to the effect that they preclude legislation of a Member State, such as that at issue in the main proceedings, which requires every coach transport undertaking providing a regular cross-border service within the Schengen area to the territory of that Member State to check the passports and residence permits of passengers before they cross an internal border in order to prevent the transport of third-country nationals not in possession of those travel documents to the national territory, and which allows, for the purposes of complying with that obligation to carry out checks, the police authorities to issue orders prohibiting such transport, accompanied by a threat of a recurring fine, against transport undertakings which have been found to have conveyed to that territory third-country nationals who were not in possession of the requisite travel documents. [Signatures]( *1 ) Language of the case: German. | b481b-4cff433-408f | EN |
The Court sets aside the damages imposed on the EU by the General Court on account of bank guarantee charges incurred by several undertakings in the context of excessively long proceedings before the General Court | 13 December 2018 ( *1 )(Appeal — Actions for damages — Second paragraph of Article 340 TFEU — Excessive duration of the proceedings in two cases before the General Court of the European Union — Damage allegedly suffered by the applicants — Material damage — Bank guarantee charges — Causal link — Default interest — Non‑material damage)In Joined Cases C‑138/17 P and C‑146/17 P,TWO APPEALS pursuant to Article 56 of the Statute of the Court of Justice of the European Union, brought, respectively, on 17 and 22 March 2017, European Union, represented by the Court of Justice of the European Union, represented by J. Inghelram and Á.M. Almendros Manzano, acting as Agents (C‑138/17 P),appellant,the other parties to the proceedings being: Gascogne Sack Deutschland GmbH, formerly Sachsa Verpackung GmbH, established in Wieda (Germany), Gascogne SA, established in Saint-Paul-lès-Dax (France),represented by F. Puel and E. Durand, avocats,applicants at first instance, European Commission, represented by C. Urraca Caviedes, S. Noë and F. Erlbacher, acting as Agents,intervener at first instance,and Gascogne Sack Deutschland GmbH, established in Wieda, Gascogne SA, established in Saint-Paul-lès-Dax,represented by F. Puel and E. Durand, avocats (C‑146/17 P),appellants, European Union, represented by the Court of Justice of the European Union, represented by J. Inghelram and Á.M. Almendros Manzano, acting as Agents,defendant at first instance,European Commission,THE COURT (First Chamber),composed of R. Silva de Lapuerta (Rapporteur), Vice-President, acting as President of the First Chamber, J.-C. Bonichot, E. Regan, C.G. Fernlund and S. Rodin, Judges,Advocate General: N. Wahl,Registrar: A. Calot Escobar,having regard to the written procedure,after hearing the Opinion of the Advocate General at the sitting on 25 July 2018,gives the following Judgment 1By their respective appeals, the European Union, on the one hand, and Gascogne Sack Deutschland GmbH and Gascogne SA, on the other hand, seek the partial setting aside of the judgment of the General Court of the European Union of 10 January 2017, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, ‘the judgment under appeal’, EU:T:2017:1), by which the General Court ordered the European Union to pay Gascogne compensation in the amount of EUR 47 064.33 for the material damage suffered by that company as a result of the breach of the obligation to adjudicate within a reasonable time in the cases which gave rise to the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674) (‘Cases T‑72/06 and T‑79/06’), and compensation of EUR 5000 to Gascogne Sack Deutschland and compensation of EUR 5000 to Gascogne for the non-material damage that those companies each suffered as a result of that breach, and dismissed the action as to the remainder. Background to the disputes 2By applications lodged at the Registry of the General Court on 23 February 2006, on the one hand, Sachsa Verpackung GmbH, now Gascogne Sack Deutschland, and, on the other hand, Groupe Gascogne SA, now Gascogne, each brought an action against Commission Decision C(2005) 4634 of 30 November 2005 relating to a proceeding pursuant to Article [101 TFEU] (Case COMP/F/38.354 — Industrial bags) (‘Decision C(2005) 4634’). In their applications, they claimed, in essence, that the General Court should annul that decision in so far as it applied to them or, in the alternative, reduce the amount of the fine which had been imposed on them.3By judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674), the General Court dismissed those actions.4By applications lodged on 27 January 2012, Gascogne Sack Deutschland and Groupe Gascogne brought appeals against the judgments of 16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674).5By judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), the Court of Justice dismissed those appeals. The procedure before the General Court and the judgment under appeal 6By application lodged at the Registry of the General Court on 4 August 2014, Gascogne Sack Deutschland and Gascogne brought an action under Article 268 TFEU against the European Union, represented by the Court of Justice of the European Union, for compensation for the damage that those companies claim to have suffered as a result of the excessive duration of the proceedings, before the General Court, in Cases T‑72/06 and T‑79/06.7By the judgment under appeal, the General Court:‘(1)Orders the European Union, represented by the Court of Justice of the European Union, to pay compensation of EUR 47 064.33 to Gascogne for the material damage suffered by that company as a result of the breach of the obligation to adjudicate within a reasonable time in [Cases T‑72/06 and T‑79/06]. That compensation is to be reassessed by applying compensatory interest, starting from 4 August 2014 and continuing up to the date of delivery of the present judgment, at the annual rate of inflation determined, for the period in question, by Eurostat (the European Union’s statistical office) in the Member State where [that company is] established;(2)Orders the European Union, represented by the Court of Justice of the European Union, to pay compensation of EUR 5000 to Gascogne Sack Deutschland and compensation of EUR 5000 to Gascogne for the non-material damage which those companies have each suffered as a result of the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06;(3)[Orders that e]ach of the compensatory sums referred to in points (1) and (2) above is to bear default interest, starting from the date of delivery of the present judgment and continuing until full payment, at the rate set by the ECB for its principal refinancing operations, increased by two percentage points;(4)[Dismisses the action] as to the remainder;(5)Orders the European Union, represented by the Court of Justice of the European Union, to bear not only its own costs but also the costs incurred by Gascogne Sack Deutschland and by Gascogne in connection with the objection of inadmissibility which gave rise to the order of 2 February 2015, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, not published, EU:T:2015:80);(6)Orders Gascogne Sack Deutschland and Gascogne, on the one hand, and the European Union, represented by the Court of Justice of the European Union, on the other hand, to bear their own costs in connection with the appeal which gave rise to the present judgment;(7)Orders the European Commission to bear its own costs.’ Forms of order sought by the parties 8By its appeal in Case C‑138/17 P, the European Union claims that the Court should:–set aside point 1 of the operative part of the judgment under appeal;dismiss as unfounded Gascogne Sack Deutschland’s and Gascogne’s claim at first instance, seeking a sum of EUR 187571 for losses allegedly suffered as a result of making additional bank guarantee payments beyond a reasonable period; andorder Gascogne Sack Deutschland and Gascogne to pay the costs.9Gascogne Sack Deutschland and Gascogne contend that the Court of Justice should:dismiss the appeal; andorder the appellant to pay the costs.10The European Commission contends that the Court should uphold the appeal in its entirety.11By their appeal in Case C‑146/17 P, Gascogne Sack Deutschland and Gascogne claim that the Court of Justice should:set aside in part the judgment under appeal;give final judgment on the financial compensation for material and non-material damage suffered by the appellants in the exercise of its unlimited jurisdiction, in accordance with their requests at first instance; andorder the European Union to pay the costs.12The European Union contends that the Court of Justice should:dismiss the appeal as in part ineffective and in part unfounded and, in any event, as unfounded;order the appellants to pay the costs.13By decision of the President of the First Chamber of 17 April 2018, Cases C‑138/17 P and C‑146/17 P were joined for the purposes of the Opinion and the judgment. Concerning the appeals 14In support of its appeal in Case C‑138/17 P, the European Union raises three grounds of appeal.15The appeal in Case C‑146/17 P is based on seven grounds of appeal. The first ground of appeal in Case C‑138/17 P Arguments of the parties 16By its first ground of appeal, the European Union, the appellant in Case C‑138/17 P, submits that, by finding that there is a sufficiently direct causal link between the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 and the loss sustained by Gascogne as a result of paying bank guarantee charges during the period by which that time was exceeded, the General Court erred in law by misinterpreting the notion of ‘causal link’.17In particular, the European Union submits that the General Court relied on the erroneous premiss that the decision to provide a bank guarantee is made at a single point in time, namely at the time of the ‘initial decision’ to provide that guarantee. However, since the obligation to pay the fine existed throughout the proceedings before the Courts of the European Union, and even beyond that period, since the fine was not annulled, the applicants at first instance had the possibility of paying the fine and thus complying with their obligation in this regard. Since the applicants at first instance had the possibility of paying the fine at any time, their own decision to replace that payment by a bank guarantee is a continuous decision, which they have maintained throughout the proceedings. Accordingly, the determining cause of the payment of the bank guarantee charges lies in their own decision not to pay the fine and to replace that payment by a bank guarantee and not in the breach of the obligation to adjudicate within a reasonable time.18The Commission supports the arguments put forward by the European Union.19Gascogne Sack Deutschland and Gascogne, respondents in the appeal in Case C‑138/17 P, contend (i) that the General Court was right not to apply to the present case the case-law stemming in particular from the judgment of 21 April 2005, Holcim (Deutschland) v Commission (T‑28/03, EU:T:2005:139, paragraphs 121 to 123), and from the order of 12 December 2007, Atlantic Container Line and Others v Commission (T‑113/04, not published, EU:T:2007:377, paragraphs 39 and 40), since the facts of the present case differ substantially from those of the cases to which that case-law relates, as the General Court found in paragraph 121 of the judgment under appeal, and (ii) that that judgment found, to the requisite legal standard, the existence of a causal link between the fault committed by the General Court and the damage suffered by Gascogne.20Moreover, Gascogne Sack Deutschland and Gascogne state that the fact that the European Union calls into question the very principle of compensation by rejecting any head of damage suffered by them, whereas, in its judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), the Court of Justice itself acknowledged both the excessive duration of the proceedings and the principle of the existence of damage resulting from that duration constitutes an ‘abuse of procedure’.21Gascogne Sack Deutschland and Gascogne thus contend that this ground of appeal should be rejected. Findings of the Court 22It should be recalled that, as the Court has previously stated, the condition under the second paragraph of Article 340 TFEU relating to a causal link concerns a sufficiently direct causal nexus between the conduct of the EU institutions and the damage, the burden of proof of which rests on the applicant, so that the conduct complained of must be the determining cause of the damage (see order of 31 March 2011, Mauerhofer v Commission, C‑433/10 P, not published, EU:C:2011:204, paragraph 127 and the case-law cited).23It is therefore necessary to ascertain whether the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 is the determining cause of the damage resulting from the payment of bank guarantee charges during the period by which that time was exceeded in order to establish the existence of a direct relationship of cause and effect between the conduct alleged against the Court of Justice of the European Union and the damage complained of.24In that regard, it must be observed that, in an action for damages brought against the Commission, for the purposes, in particular, of reimbursement of the guarantee charges incurred by the applicants in order to obtain the suspension of the decisions to recover the refunds at issue in the main proceedings, decisions which were subsequently withdrawn, the Court held that, when a decision requiring the payment of a fine is coupled with the option of lodging a security intended to ensure that payment along with interest on late payment, pending the outcome of an action brought against that decision, the loss consisting of the guarantee fees results, not from that decision, but from the interested party’s own choice to lodge a security rather than to fulfil its repayment obligation immediately. In those circumstances, the Court established that there is no direct causal link between the conduct complained of and the damage alleged (see, to that effect, judgment of 28 February 2013, Inalca and Cremonini v Commission, C‑460/09 P, EU:C:2013:111, paragraphs 118 and 120).25The General Court found, in paragraph 121 of the judgment under appeal, that the link between the fact that the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded and the payment of bank guarantee charges during that excess period cannot have been severed by Gascogne’s initial decision not to effect immediate payment of the fine imposed by Decision C(2005) 4634 and to provide a bank guarantee.26In particular, as is apparent from paragraphs 119 and 120 of the judgment under appeal, the two circumstances on which the General Court relied in reaching the conclusion set out in paragraph 121 of that judgment are (i) that at the time when Gascogne provided a bank guarantee, the breach of the obligation to adjudicate within a reasonable time was unforeseeable and that that company could legitimately expect those actions to be dealt with within a reasonable time, and (ii) that the reasonable time for adjudicating in Cases T‑72/06 and T‑79/06 was exceeded after Gascogne’s initial decision to provide that bank guarantee.27However, the two circumstances referred to by the General Court in paragraphs 119 and 120 of the judgment under appeal cannot be relevant for finding that the causal link between the breach of the obligation to adjudicate within a reasonable time, in Cases T‑72/06 and T‑79/06, and the damage suffered by Gascogne as a result of paying bank guarantee charges during the period by which that time was exceeded cannot have been severed by the decision of that undertaking to provide that guarantee.28That would be the case only if it were compulsory to maintain the bank guarantee, so that the undertaking which brought an action against a Commission decision imposing a fine on it, and which chose to provide a bank guarantee in order not to comply immediately with that decision, was not entitled, before the date on which the judgment on that action was delivered, to pay that fine and put an end to the bank guarantee that it had provided.29As the Advocate General noted in points 37, 49 and 50 of his Opinion, like the provision of the bank guarantee, the maintenance of that guarantee is a matter for the discretion of the undertaking concerned in the light of its financial interests. Nothing prevents, as a matter of EU law, that undertaking from terminating, at any time, the bank guarantee that it has provided and paying the fine imposed, where, in view of the evolution of the circumstances in relation to those existing on the date when that guarantee was provided, that undertaking deems that option more advantageous for it. That might be the case, in particular, where the conduct of the proceedings before the General Court leads the undertaking in question to take the view that the judgment will be delivered at a date later than that which it had initially envisaged and that, consequently, the cost of the bank guarantee will be higher than the cost that it had initially envisaged when providing that guarantee.30In this case, given that (i) in September 2009, namely 43 months after the applications in Cases T‑72/06 and T‑79/06 were brought, the oral proceedings in those cases had still not begun, as is apparent from the General Court’s findings in paragraph 63 of the judgment under appeal, and that (ii) the period which Gascogne itself considered, in its application at first instance, as being the normal period for dealing with actions for annulment in competition matters, is indeed 43 months, it must be held that, by September 2009 at the latest, Gascogne could not have been unaware that the duration of the proceedings in those cases would considerably exceed that which it had initially envisaged, and that it could have reconsidered the appropriateness of maintaining the bank guarantee, having regard to the extra costs that maintaining that guarantee might entail.31In those circumstances, the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 cannot be the determining cause of the damage suffered by Gascogne as a result of paying bank guarantee charges during the period by which that time was exceeded. As the Advocate General noted in point 58 of his Opinion, such damage is the consequence of Gascogne’s own decision to maintain the bank guarantee throughout the proceedings in those cases, despite the financial consequences which that entailed.32It follows from the foregoing considerations that, by finding that there is a sufficiently direct causal link between the breach of the obligation to adjudicate within a reasonable time in Cases T‑72/06 and T‑79/06 and the loss sustained by Gascogne as a result of paying bank guarantee charges during the period by which that time was exceeded, the General Court erred in law by misinterpreting the notion of ‘causal link’.33Lastly, the respondents’ line of argument that, in Case C‑138/17 P, the appellant’s action could be classified as an ‘abuse of procedure’ cannot call that finding into question.34Although, in its judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768, paragraph 102), and of 26 November 2013, Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770, paragraph 96), the Court of Justice found that the General Court failed to have regard to the requirement that the case be dealt with within a reasonable time in Cases T‑72/06 and T‑79/06, the fact remains that, as the Advocate General observed in point 60 of his Opinion, and contrary to what the respondents contend, in those judgments, the Court of Justice did not however acknowledge the existence of any damage deriving from such a breach.35On the contrary, the Court of Justice held that a claim for compensation for the damage caused by the failure by the General Court to adjudicate within a reasonable time has to be brought before the General Court itself, and that it is for the General Court to assess both the actual existence of the harm alleged and the causal connection between that harm and the excessive length of the legal proceedings in dispute by examining the evidence submitted for that purpose (see, to that effect, judgments of 26 November 2013, Gascogne Sack Deutschland v Commission, C‑40/12 P, EU:C:2013:768, paragraphs 90 and 94, and of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraphs 84 and 88).36Consequently, since this ground of appeal must be upheld, point 1 of the operative part of the judgment under appeal must be set aside, without there being any need to rule on the second and third grounds of appeal put forward by the European Union in support of its appeal in Case C‑138/17 P. The first three grounds of appeal in Case C‑146/17 P 37By the first to third grounds of appeal in Case C‑146/17 P, it is submitted that the General Court erred in law when interpreting and applying the prohibition of ruling ultra petita, set out two contradictory grounds as regards compensation for the material damage suffered, and infringed the appellants’ rights of defence.38Since those grounds of appeal relate to the amount of compensation awarded by the General Court for the material damage suffered as a result of Gascogne’s paying bank guarantee charges during the period by which the reasonable time for adjudicating was exceeded, and, as is apparent from paragraph 36 of this judgment, point 1 of the operative part of the judgment under appeal has been set aside, it is no longer necessary to examine those grounds of appeal. The fourth and fifth grounds of appeal in Case C‑146/17 P 39By their fourth ground of appeal, Gascogne Sack Deutschland and Gascogne, the appellants in Case C‑146/17 P, submit that, by finding that it was not appropriate to grant their claim for compensation for the non-material damage suffered on the ground that, according to the case-law of the Court of Justice stemming from the judgments of 26 November 2013, Gascogne Sack Deutschland v Commission (C‑40/12 P, EU:C:2013:768), and of 26 November 2013Groupe Gascogne v Commission (C‑58/12 P, EU:C:2013:770), the European Union Courts, hearing an action for damages, cannot call in question the amount of the fine as a result of the failure to adjudicate within a reasonable time, the General Court manifestly erred in law in interpreting that case-law.40In the appellants’ submission, it is apparent from the judgments of the Court of Justice referred to in paragraph 39 of this judgment that the excessive duration of the proceedings before the General Court is not such as to permit annulment or reduction of the fine in an action in which unlimited jurisdiction is exercised, since compensation for the damage arising from that duration must be the subject of ad hoc proceedings, in so far as the excessive duration is independent of what formed the basis of the sanction. Those judgments therefore make no link between the amount of the compensation which may be awarded as a result of damage suffered on account of the excessive duration of the proceedings before the General Court, in the action for damages, and the amount of the fine imposed on account of the anticompetitive practices. On the contrary, the very basis of the position adopted in those judgments by the Court of Justice lies in the ‘absolute imperviousness’ between those two elements.41By their fifth ground of appeal, Gascogne Sack Deutschland and Gascogne submit that, by refusing to grant their claim for compensation for the non-material damage suffered on the ground that, given the extent of it, such compensation would, if awarded, have the effect of reopening the question of the amount of the fine imposed on them, the General Court deprived of effectiveness and infringed Articles 256(1) and 340(2) TFEU, which are intended specifically to establish an effective remedy for victims of damage caused by the EU institutions, and, in particular, those resulting from the excessive duration of proceedings before a European Union Court, and to enable them to obtain full and adequate reparation for the damage suffered, as well as the right to an effective remedy.42The European Union, the respondent in Case C‑146/17 P, contends that those grounds of appeal are ineffective and, in any event, unfounded.43By its fourth and fifth grounds of appeal, the appellants dispute the General Court’s finding in paragraph 163 of the judgment under appeal.44However, as is apparent from paragraphs 155 to 165 of the judgment under appeal, that finding constitutes a ground included for the sake of completeness in that judgment, since the decision of the General Court not to grant the claim for compensation in the amount of EUR 500000 for the non-material damage suffered is adequately reasoned by paragraph 160 of that judgment, whose content is not challenged by the appellants.45In that regard, it should be borne in mind that, according to settled case-law, arguments directed against grounds included in a decision of the General Court purely for the sake of completeness cannot lead to the decision being set aside and are therefore ineffective ab initio (judgment of 14 December 2016, SV Capital v ABE, C‑577/15 P, EU:C:2016:947, paragraph 65 and the case-law cited).46Consequently, the fourth and fifth grounds of appeal must be rejected as ineffective. The sixth ground of appeal in Case C‑146/17 P 47By their sixth ground of appeal, Gascogne Sack Deutschland and Gascogne submit that that, by awarding each of them compensation in the amount of EUR 5000 for the non-material damage suffered, whereas the General Court (i) found that compensation for non-material damage could not have the effect of reopening the question, even partially, of the amount of the fine imposed by the Commission, and (ii) expressly acknowledged the existence of non-material damage suffered by the appellants that it was necessary, as was stated in paragraph 165 of the judgment under appeal, to compensate in the light of ‘the extent of the failure to adjudicate within a reasonable time’ and of the need to ensure that ‘the present action is effective’, the General Court formally contradicted itself.48The European Union contends that this ground of appeal is ineffective and, in any event, unfounded.49By their sixth ground of appeal, the appellants submit that the statement of reasons for the judgment under appeal is contradictory on two counts.50As regards, in the first place, the line of argument that there is a contradiction between, on the one hand, paragraphs 161 to 164 of the judgment under appeal, and, on the other hand, paragraph 165 of that judgment, it is sufficient to note that the operative part thereof, so far as concerns the award to the appellants of compensation in an amount less than EUR 500000 is, as is apparent from paragraph 44 of this judgment, adequately reasoned by paragraph 160 of the judgment under appeal. Accordingly, that line of argument, which seeks to challenge paragraphs 161 to 165 of the judgment under appeal, is ineffective, and must, therefore, in accordance with the case-law referred to in paragraph 45 of this judgment, be rejected.51As regards, in the second place, the line of argument that there is a contradiction in paragraph 165 of the judgment under appeal, it must be pointed out that the fact that the compensation awarded by the General Court, for the non-material damage suffered by the appellants because of uncertainty in decision-making and in the management of the companies, amounts only to EUR 5000 does not mean that the General Court failed to take into account the extent of the failure to adjudicate within a reasonable time and the effectiveness of the present action.52Paragraph 165 of the judgment under appeal does not therefore contain any contradiction.53Consequently, the sixth ground of appeal must be rejected as in part ineffective and in part unfounded. The seventh ground of appeal in Case C‑146/17 P 54By their seventh ground of appeal, Gascogne Sack Deutschland and Gascogne submit that, by merely asserting, without any supporting evidence, in the first place, in paragraph 154 of the judgment under appeal, that ‘the finding … that there has been a breach of the obligation to adjudicate within a reasonable time would, in the light of the [object and] gravity of that breach, be sufficient to make good the reputational harm alleged’, and, in the second place, in paragraph 165 of the judgment under appeal, that an ‘an award of compensation of EUR 5000 to each of the applicants constitutes adequate reparation for the damage they suffered as a result of the prolonged state of uncertainty in which they each found themselves during the proceedings’, the General Court unquestionably failed to comply with its duty to state reasons.55The European Union contends that this ground of appeal should be rejected.56By their seventh ground of appeal, the appellants complain that the General Court failed to provide a sufficient statement of reasons for the judgment under appeal.57As regards, in the first place, the complaint intended to dispute paragraph 154 of the judgment under appeal, it is apparent from paragraphs 151 to 154 of that judgment, relating to alleged damage to reputation pleaded by the appellants, and, in particular the words ‘in any event’ in paragraph 154 of that judgment, that the finding set out in that latter paragraph constitutes a ground included for the sake of completeness, since the ground set out in paragraph 153 of the judgment under appeal is sufficient to reject the claim for compensation so far as concerns such alleged harm to reputation.58In accordance with the case-law referred to in paragraph 45 of this judgment, that complaint is therefore ineffective and must accordingly be rejected.59As regards, in the second place, the complaint intended to dispute paragraph 165 of the judgment under appeal, it should be borne in mind that, according to settled case-law, the statement of the reasons on which a judgment is based must clearly and unequivocally disclose the General Court’s reasoning, so that the persons concerned can ascertain the reasons for the decision taken and the Court of Justice can exercise its power of review (judgment of 2 April 2009, France Télécom v Commission, C‑202/07 P, EU:C:2009:214, paragraph 29 and the case-law cited).60Moreover, it should be recalled that, in the particular context of actions for damages, the Court has repeatedly held that, once the General Court has found the existence of damage, it alone has jurisdiction to assess, within the confines of the claim, the means and extent of compensation for the damage. However, in order for the Court of Justice to be able to review the judgments of the General Court, those judgments must be sufficiently reasoned and, as regards the assessment of the damage, indicate the criteria taken into account for the purposes of determining the amount decided upon (see judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraphs 50 and 51 and the case-law cited).61As the Advocate General noted, in point 100 of his Opinion, the General Court first of all adequately set out, in paragraphs 147 to 157 of the judgment under appeal, the reasons which led it to find that certain heads of non-material damage alleged by the appellants had been sufficiently established by them whereas other heads had not. Next, in paragraph 158 of the judgment under appeal, the General Court observed that, having regard to the circumstances of the case, the non-material damage established, namely the damage suffered as a result of the prolonged state of uncertainty in which the appellants each found themselves in Cases T‑72/06 and T‑79/06, could not be fully compensated by the finding of a breach of the obligation to adjudicate within a reasonable time. Lastly, in paragraphs 159 to 164 of the judgment under appeal, the General Court set out the criteria taken into account in order to determine the amount of the compensation.62In those circumstances, the appellants cannot complain that the General Court failed to comply with its obligation to state reasons when it held, in paragraph 165 of the judgment under appeal, that compensation in the amount of EUR 5000, awarded to each of the appellants, constitutes, given, in particular, the extent of the failure to adjudicate within a reasonable time, their conduct, the need to ensure that the rules of competition law are complied with and that the action at first instance is effective, adequate reparation for the damage they suffered as a result of the prolonged state of uncertainty in which they each found themselves during the proceedings in Cases T‑72/06 and T‑79/06.63Consequently, the seventh ground of appeal must be rejected as in part ineffective and in part unfounded.64It follows from all the foregoing considerations that the appeal in Case C‑146/17 P must be dismissed in its entirety. The action before the General Court 65In accordance with the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the appeal is well founded, the Court of Justice is to quash the decision of the General Court. It may itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court for judgment.66In the present case, the Court considers that it should give final judgment on the action for damages brought by Gascogne Sack Deutschland and Gascogne before the General Court inasmuch as it is intended to obtain compensation for the damage allegedly suffered as a result of paying bank guarantee charges beyond a reasonable time for adjudicating in Cases T‑72/06 and T‑79/06.67In that regard, it should be recalled that, in accordance with settled case-law, the European Union may incur non-contractual liability under the second paragraph of Article 340 TFEU only if a number of conditions are fulfilled, namely the unlawfulness of the conduct alleged against the EU institution, the fact of damage and the existence of a causal link between the conduct of the institution and the damage complained of (judgment of 20 September 2016, Ledra Advertising and Others v Commission and ECB, C‑8/15 P to C‑10/15 P, EU:C:2016:701, paragraph 64 and the case-law cited).68As the General Court pointed out in paragraph 53 of the judgment under appeal, if any one of those conditions is not satisfied, the action must be dismissed in its entirety and it is unnecessary to consider the other conditions for non-contractual liability on the part of the European Union (judgment of 14 October 1999, Atlanta v European Community, C‑104/97 P, EU:C:1999:498, paragraph 65 and the case-law cited). Moreover, the EU judicature is not required to examine those conditions in any particular order (judgment of 18 March 2010, Trubowest Handel and Makarov v Council and Commission, C‑419/08 P, EU:C:2010:147, paragraph 42 and the case-law cited).69For the reasons set out in paragraphs 22 to 32 of this judgment, the action for damages brought by Gascogne Sack Deutschland and Gascogne before the General Court, inasmuch as it is intended to obtain compensation in the amount of EUR 187571 for the alleged material damage consisting in the payment of bank guarantee charges beyond a reasonable time for adjudicating in Cases T‑72/06 and T‑79/06, must be dismissed. Costs 70Under Article 184(2) of the Rules of Procedure of the Court of Justice, where an appeal is well founded and the Court of Justice itself gives final judgment in the case, it is to make a decision as to costs.71Under Article 138(1) of those rules, applicable to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs, if they have been applied for in the successful party’s pleadings.72Since the European Union has applied for costs against Gascogne Sack Deutschland and Gascogne and the latter have been unsuccessful, both in the appeal in Case C‑138/17 P and in that in Case C‑146/17 P, those companies must be ordered to bear their own costs and to pay all the costs incurred by the European Union in those appeals.73Under Article 138(3) of the Rules of Procedure, on the one hand, the European Union, and, on the other hand, Gascogne Sack Deutschland and Gascogne must be ordered to bear their own costs in relation to the proceedings at first instance.74Article 140(1) of the Rules of Procedure, which is applicable to appeal proceedings by virtue of Article 184(1) thereof, provides that the Member States and institutions which intervene in the proceedings are to bear their own costs. Moreover, in accordance with Article 184(4) of the Rules of Procedure, where, without having brought the appeal itself, an intervener at first instance has participated in the written or oral part of the proceedings before the Court of Justice, the latter may decide that he is to bear his own costs.75The Commission, which was an intervener at first instance and which participated in the written part of the proceedings of the appeal in Case C‑138/17 P, is to bear its own costs both at first instance and in the appeal in Case C‑138/17 P.On those grounds, the Court (First Chamber) hereby: 1. Sets aside point 1 of the operative part of the judgment of the General Court of the European Union of 10 January 2017, Gascogne Sack Deutschland and Gascogne v European Union (T‑577/14, EU:T:2017:1); 2. Dismisses the appeal in Case C‑146/17 P brought by Gascogne Sack Deutschland GmbH and Gascogne SA; 3. Dismisses the claim for damages brought by Gascogne Sack Deutschland GmbH and Gascogne SA inasmuch as it seeks to obtain compensation in the amount of EUR 187571 for the alleged material damage consisting in the payment of bank guarantee charges beyond a reasonable time for adjudicating in the cases which gave rise to the judgments of16 November 2011, Groupe Gascogne v Commission (T‑72/06, not published, EU:T:2011:671), and of 16 November 2011, Sachsa Verpackung v Commission (T‑79/06, not published, EU:T:2011:674); 4. Orders Gascogne Sack Deutschland GmbH and Gascogne SA to bear their own costs and to pay all the costs incurred by the European Union, represented by the Court of Justice of the European Union, in relation to the present appeals, and to bear their own costs at first instance; 5. Orders the European Union, represented by the Court of Justice of the European Union, to bear its own costs incurred at first instance; 6. Orders the Commission to bear its own costs of both the proceedings at first instance and of the appeal in Case C‑138/17 P. [Signatures]( *1 ) Language of the case: French. | 97963-78534c5-4666 | EN |
The General Court upholds the actions brought by the cities of Paris, Brussels and Madrid and annuls in part the Commission’s regulation setting excessively high oxides of nitrogen emission limits for the tests for new light passenger and commercial vehicles | 13 December 2018 ( *1 )(Environment — Regulation (EU) 2016/646 — Pollutant emissions from light passenger and commercial vehicles (Euro 6) — Setting of the not-to-exceed (NTE) values for emissions of oxides of nitrogen during the real driving emission (RDE) tests — Action for annulment — Powers of a municipal authority in the field of environmental protection to limit the circulation of certain vehicles — Direct concern — Admissibility — Lack of competence on the part of the Commission — Compliance with higher-ranking legal rules — Temporal adjustment of the effects of an annulment — Non-contractual liability — Compensation for the alleged harm to image and reputation)In Joined Cases T‑339/16, T‑352/16 and T‑391/16, Ville de Paris (France), represented by J. Assous, lawyer,applicant in Case T‑339/16, Ville de Bruxelles (Belgium), represented by M. Uyttendaele and S. Kaisergruber, lawyers,applicant in Case T‑352/16, Ayuntamiento de Madrid (Spain), represented by F. Zunzunegui Pastor, lawyer,applicant in Case T‑391/16,v European Commission, represented by A.C. Becker, E. Sanfrutos Cano and J.-F. Brakeland, acting as Agents,defendant,APPLICATION based, first, on Article 263 TFEU and seeking annulment of Commission Regulation (EU) 2016/646 of 20 April 2016 amending Regulation (EC) No 692/2008 as regards emissions from light passenger and commercial vehicles (Euro 6) (OJ 2016 L 109, p. 1) and, second, on Article 268 TFEU and seeking compensation for the harm caused to the City of Paris as a result of the adoption of the same regulation,THE GENERAL COURT (Ninth Chamber, Extended Composition),composed of S. Gervasoni, President, L. Madise (Rapporteur), R. da Silva Passos, K. Kowalik-Bańczyk and C. Mac Eochaidh, Judges,Registrar: M. Marescaux, Administrator,having regard to the written part of the procedure and further to the hearing on 17 May 2018,gives the following Judgment 1Commission Regulation (EU) 2016/646 of 20 April 2016 amending Regulation (EC) No 692/2008 as regards emissions from light passenger and commercial vehicles (Euro 6) (OJ 2016 L 109, p. 1, ‘the contested regulation’) supplements the requirements for the real driving emission (RDE) tests intended to measure the pollutant emissions from light passenger and commercial vehicles as part of the procedures prior to the authorisation to place new vehicles on the market. Those tests seek to better reflect the level of pollutant emissions under real driving conditions than the laboratory tests. More specifically, in the contested regulation, the Commission set, in relation to emissions of oxides of nitrogen, not-to-exceed (NTE) values for the RDE tests; those values resulted from the application of CF pollutant conformity factors to the pollutant emission limits laid down for the Euro 6 standard in Regulation (EC) No 715/2007 of the European Parliament and of the Council of 20 June 2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information (OJ 2007 L 171, p. 1). The applicants, namely the ville de Paris (City of Paris), the ville de Bruxelles (City of Brussels) and the Ayuntamiento de Madrid (Municipality of Madrid), seek the annulment of the contested regulation because, in their view, the European Commission was unable to adopt the NTE values for emissions of oxides of nitrogen applied, which are higher than the limits on those emissions laid down for the Euro 6 standard. The Commission contests both the admissibility and the substance of the applicants’ actions for annulment. Furthermore, the City of Paris seeks symbolic compensation of one euro for the harm caused to it as a result of the contested regulation, a request which the Commission considers equally inadmissible and unfounded. Background to the disputes 2Directive 2007/46/EC of the European Parliament and of the Council of 5 September 2007 establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles (Framework Directive) (OJ 2007 L 263, p. 1), which is the result of the consolidation of various instruments, provides that the technical requirements applicable to systems, components, separate technical units and vehicles must be harmonised and specified in ‘regulatory acts’ which primarily seek to ensure a high level of road safety, health protection, environmental protection, energy efficiency and protection against unauthorised use. Its provisions organise a Community type-approval system for all categories of vehicles. In that regard, and as is apparent from Article 3 of that directive, where a Member State grants ‘EC type-approval’ to a type of vehicle, it certifies that that type of vehicle satisfies the relevant administrative provisions and technical requirements of that directive and of the ‘regulatory acts’ listed in annex thereto. Such ‘regulatory acts’, within the meaning of the same directive, may be inter alia other directives or separate regulations, and each of those ‘regulatory acts’ relates to a specific aspect.3As is clear from Annex IV to the directive in question, EC type-approval of a type of vehicle assumes that that vehicle type is compatible with the provisions of dozens of ‘regulatory acts’ relating, for example, to the prevention of fire risks, steering equipment, braking or, as far as the present cases are concerned, pollutant emissions. The ‘regulatory act’ concerned in relation to the last aspect, in the case of light passenger and commercial vehicles, is Regulation No 715/2007.4According to the second subparagraph of Article 4(3) of Directive 2007/46, a Member State is not to ‘prohibit, restrict or impede the registration, sale, entry into service or circulation on the road of vehicles … on grounds related to aspects of their construction and functioning covered by this Directive, if they satisfy the requirements of the latter’.5The recitals of Regulation No 715/2007 provide insight into its context. Recital 2 of that regulation, which refers to Council Directive 70/156/EEC of 6 February 1970 on the approximation of the laws of the Member States relating to the type approval of motor vehicles and their trailers (OJ, English Special Edition 1970(I), p. 96), replaced by Directive 2007/46, states that that regulation is one of the ‘regulatory acts’ applicable under the type approval procedure provided for in the latter directive. In addition, according to recital 4 of the same regulation, that regulation contributes to the implementation of the Clean Air For Europe programme, launched by the Commission in 2001, the ‘thematic strategy’ of which provides that further reductions in emissions from the transport sector (air, maritime and land transport), from households and from the energy, agricultural and industrial sectors are needed to achieve EU air quality objectives, and that, in that regard, the Euro 5 and 6 standards for vehicles number amongst the measures designed to reduce emissions of particulate matter and ozone precursors such as nitrogen oxide and hydrocarbons. Lastly, recitals 5 and 6 of the regulation in question state that emissions of oxides of nitrogen from diesel vehicles must continue to be reduced significantly by reaching ambitious limit values at the Euro 6 stage without being obliged to forego the advantages of diesel engines in terms of fuel consumption and hydrocarbon and carbon monoxide emissions, but that an interim stage for reducing nitrogen oxide (Euro 5 stage) must be defined to provide long-term planning security for vehicle manufacturers.6Article 10 of Regulation No 715/2007, entitled ‘Type approval’, provides, inter alia, in relation to passenger vehicles and vehicles for the carriage of persons, that the limits of the Euro 5 standard will apply from 1 September 2009 for type approval, that from 1 January 2011 new vehicles which do not comply with that standard may no longer be registered, sold or entered into service, that the limits of Euro 6 standard will apply from 1 September 2014 for type approval and that from 1 September 2015 new vehicles which do not comply with that standard may no longer be registered, sold or entered into service. For example, Tables 1 and 2 of Annex I to Regulation No 715/2007 set the limit on emissions of oxides of nitrogen for a diesel passenger vehicle or vehicle for the carriage of persons at 180 mg/km for the Euro 5 standard and at 80 mg/km for the Euro 6 standard.7In Article 4 of Regulation No 715/2007, entitled ‘Manufacturers’ obligations’, paragraph 1 requires vehicle manufacturers to ensure that all their new vehicles intended for registration, sale or entry into service within the European Union are type approved in accordance with that regulation and its implementing measures, in particular by meeting the emission limits set out in Annex I to that regulation. The second subparagraph of paragraph 2 of the same article states that vehicle manufacturers must ensure that the tailpipe and evaporative emissions are effectively limited throughout the life of the vehicle under normal conditions of use. It is clarified in this regard that in-service conformity measures are to be checked for a period of up to five years or 100000 km. The third subparagraph of the same paragraph states that ‘in-service conformity shall be checked, in particular, for tailpipe emissions as … against emission limits set out in [that annex]’ and that, ‘in order to improve control of evaporative emissions and low ambient temperature emissions, the test procedures shall be reviewed by the Commission’. Paragraph 4 of the same article provides in particular that the specific procedures and requirements for the implementation of the provisions cited above are to be established in accordance with the procedure referred to in Article 15(2) of the same regulation, which now corresponds to the comitology ‘examination’ procedure described in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the rules and general principles concerning mechanisms for control by Member States of the Commission’s exercise of implementing powers (OJ 2011 L 55, p. 13), pursuant to Article 13 of the latter regulation.8In Article 5 of Regulation No 715/2007, entitled ‘Requirements and tests’, paragraph 1 provides first of all that ‘the manufacturer shall equip vehicles [so as to enable them], in normal use, to comply with this Regulation and its implementing measures’. Paragraph 2 of that article goes on to provide that, save in specific situations, the use of defeat devices that reduce the effectiveness of emission control systems is to be prohibited. Finally, paragraph 3 states:‘The specific procedures, tests and requirements for type approval set out in this paragraph, as well as requirements for the implementation of paragraph 2, which are designed to amend non-essential elements of this Regulation, by supplementing it, shall be adopted in accordance with the … procedure … referred to in Article 15(3). This shall include establishing the requirements relating to:(a)tailpipe emissions, including test cycles, low ambient temperature emissions, emissions at idling speed, smoke opacity and correct functioning and regeneration of after-treatment systems;…(c)OBD systems and in-use performance of pollution control devices;(d)durability of pollution control devices, replacement pollution control devices, in-service conformity, conformity of production and roadworthiness;…’9The procedure mentioned, by reference to Article 15(3) of Regulation No 715/2007, corresponds to the comitology ‘regulatory procedure with scrutiny’ provided for in Article 5a of Council Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise of implementing powers conferred on the Commission (OJ 1999 L 184, p. 23), the effects of which were maintained for the purposes of the acts making reference thereto, pursuant to Article 12 of Regulation No 182/2011.10Article 14(3) of Regulation No 715/2007 provides:‘The Commission shall keep under review the procedures, tests and requirements referred to in Article 5(3) as well as the test cycles used to measure emissions. If the review finds that these are no longer adequate or no longer reflect real world emissions, they shall be adapted so as to adequately reflect the emissions generated by real driving on the road. The necessary measures, which are designed to amend non-essential elements of this Regulation, by supplementing it, shall be adopted in accordance with the regulatory procedure with scrutiny referred to in Article 15(3).’11Commission Regulation (EC) No 692/2008 of 18 July 2008 implementing Regulation No 715/2007 (OJ 2008 L 199, p. 1) was adopted, in particular, for the purposes of applying Articles 4 and 5 of the latter regulation. Recital 2 of Regulation No 692/2008 states that new light-duty vehicles must comply with new emission limits, that those technical requirements take effect in two stages, Euro 5 starting from 1 September 2009 and Euro 6 from 1 September 2014, and that, therefore, the Regulation aims at setting the requirements necessary for the type approval of Euro 5 and Euro 6 specification vehicles. Recital 9 of the same regulation explains that the measures provided for are in accordance with the opinion of the Technical Committee — Motor Vehicles mentioned in Article 40 of Directive 2007/46.12Article 3(1) of Regulation No 692/2008 provides that EC type-approval is granted with regard, inter alia, to pollutant emissions if the manufacturer demonstrates that the vehicles concerned comply with the test procedures specified in Annexes III to VIII, X to XII, XIV, XVI and XX. Article 3(2) of the same regulation clarifies, in essence, that, depending on their characteristics, vehicles are to be subject to different types of tests listed in Figure 1.2.4 of Annex I, which are themselves described in various annexes. For example, the type 1 test comes under Annex III, entitled ‘Verifying average exhaust emissions at ambient conditions’, and the type 4 test under Annex VI, entitled ‘Determination of evaporative emissions’. Article 3(5) of that regulation states that ‘the manufacturer shall take technical measures so as to ensure that the tailpipe and evaporative emissions are effectively limited, in accordance with this Regulation, throughout the normal life of the vehicle and under normal conditions of use’.13In the wake of various studies, as well as high-profile events in the media, showing that the type 1 tests performed did not reflect the actual level of real driving pollutant emissions on the road, the Commission amended Regulation No 692/2008 by supplementing it, on the basis of Article 5(3) of Regulation No 715/2007, that is to say in accordance with the comitology ‘regulatory procedure with scrutiny’ provided for in Article 5a of Decision 1999/468, to which reference is made in paragraph 9 above. It adopted the contested regulation to that end. Recitals 3 to 10 of the contested regulation state inter alia:‘(3)The Commission has performed a detailed analysis of the procedures, tests and requirements for type-approval that are set out in [Regulation No 692/2008] on the basis of own research and external information and found that emissions generated by real driving of Euro 5/6 vehicles on the road substantially exceed the emissions measured on the regulatory new European driving cycle (NEDC) [applied for type 1 tests], in particular with respect to … emissions [of oxides of nitrogen from] diesel vehicles.(5)“Defeat devices” as defined in Article 3(10) of [Regulation No 715/2007] reducing the level of emission control are prohibited. Recent events have highlighted the need to strengthen the enforcement in this respect. …(7)The Commission has established in January 2011 a working group involving all interested stakeholders for developing a real driving emission (RDE) test procedure better reflecting emissions measured on the road. For this purpose, and after thorough technical discussions, the option suggested in [Regulation No 715/2007], i.e. the use of portable emission measurement systems (PEMS) and … (NTE) limits, has been followed.(9)The RDE test procedures were introduced by [Commission Regulation (EU) 2016/427 of 10 March 2016 amending Regulation … No 692/2008 as regards emissions from light passenger and commercial vehicles (Euro 6) (OJ 2016 L 82, p. 1)]. It is now necessary to establish the quantitative RDE requirements in order to limit tailpipe emissions under all normal conditions of use pursuant to the emission limits set out in [Regulation No 715/2007]. For that purpose, statistical and technical uncertainties of the measurement procedures should be taken into account.(10)In order to allow manufacturers to gradually adapt to the RDE rules, the final quantitative RDE requirements should be introduced in two subsequent steps. In the first step, which should start applying four years after the dates of mandatory application of the Euro 6 standards, a conformity factor of 2.1 should apply. The second step should follow one year and four months after the first step and should require full compliance with the emission limit value for [oxides of nitrogen] of 80 mg/km set out in [Regulation No 715/2007] plus a margin taking into account the additional measurement uncertainties related to the application of portable emission measurement systems (PEMS).’14As is apparent from recitals 3 to 10 of the contested regulation, a test procedure was previously introduced by Regulation 2016/427 to verify vehicle emissions under real driving conditions. To that end, Regulation No 692/2008 was supplemented by an Annex IIIA, entitled ‘Verifying real driving emissions’, which describes the process of an additional test, called a type 1A or RDE test, intended to measure the real driving exhaust emissions using a portable emissions measurement system (PEMS). In point 2.1 of that annex, Regulation 2016/427 gives expression to the principle that the result of an RDE test is to regarded as consistent with the provisions of Regulation No 715/2007 if the emissions recorded during that test do not exceed NTE values throughout the normal life of the vehicle which are calculated as follows: ‘NTE pollutant = CF pollutant x Euro 6, where Euro 6 is the [relevant] emission limit [given the nature of the vehicle, as set out in Regulation No 715/2007 (in Table 2 of Annex I to that regulation, as set out in paragraph 6 above) and where] CF pollutant is a conformity factor [applied] for the respective pollutant’. Under the provisions of Regulation 2016/427, so long as the values of the conformity factors were not determined, the RDE tests would be performed for new type approvals but only for monitoring purposes (Article 3(10) of Regulation No 692/2008, as a result of Regulation 2016/427).15In that context and as regards those aspects of the contested regulation linked to the complaints put forward by the applicants, the adoption of the contested regulation essentially consisted, first, in setting an end date for the period during which the RDE tests were to be used solely for monitoring purposes by specifying the dates of application of the NTE values in the context of those tests for the purposes of granting or refusing type approval and then the registration, sale or entry into service of new vehicles (for example, from 1 September 2017, type approval for passenger vehicles and vehicles for the carriage of persons may be granted only if the RDE test is successful, and from 1 September 2019 new vehicles in those categories may no longer be registered, sold or put into service if their type has not successfully undergone such a test) and, second, in determining the CF pollutant conformity factor for oxides of nitrogen (and not for other pollutants at this stage). In that regard, the value of that factor is set at 2.1 as an option open to manufacturers for a transitional period of two years and four months from the date on which compliance with those tests is required for type approval and for a transitional period of one year and four months from the date on which compliance with those same tests is required for new vehicles to be registered, sold or put into service. The normal value of the CF pollutant conformity factor for oxides of nitrogen, dubbed the ‘final’ value, is set at 1.5.16Thus, for example, in the case of a diesel passenger vehicle or vehicle for the carriage of persons, the NTE value for emissions of oxides of nitrogen during the RDE tests in order to be granted type approval is 168 mg/km from 1 September 2017 to 31 December 2019, and then 120 mg/km from 1 January 2020, for a emission limit set at 80 mg/km under the Euro 6 standard, as is apparent from a combined reading of the third subparagraph of Article 3(10) and of points 2.1, 2.1.1 and 2.1.2 of Annex IIIA to Regulation No 692/2008, as amended by the contested regulation. It is those provisions of the contested regulation which set, in relation to emissions of oxides of nitrogen, the values of the CF pollutant conformity factors and the resultant NTE values which are called into question by the applicants.17Account should also be taken, within the sectoral legal framework but in more general terms, of Directive 2008/50/EC of the European Parliament and of the Council of 21 May 2008 on ambient air quality and cleaner air for Europe (OJ 2008 L 152, p. 1). As set out in Article 1(5) of that directive, the purpose of the directive is to maintain ambient air quality where it is good and to improve it in other cases. Limit values, target values, critical levels, alert thresholds, information thresholds or assessment thresholds as well as other data are defined in the directive in relation to the various pollutants likely to affect the ambient air, and in particular for nitrogen dioxide. Provision is made therein for the division of the territories of the Member States into zones for the purposes of air quality assessment and management; the directive further states that an agglomeration may be a zone.18Amongst other provisions relating to air quality management, Article 13 of Directive 2008/50 provides that Member States are to ensure that, throughout their zones and agglomerations, the limit values of various pollutants are not exceeded, inter alia in relation to nitrogen dioxide. Article 23 states that, ‘where, in given zones or agglomerations, the levels of pollutants in ambient air exceed any limit value or target value … Member States shall ensure that air quality plans are established for those zones and agglomerations in order to achieve the related limit value or target value’. The same article states that those plans may themselves contain short-term action plans. In this regard, Article 24(2) of the same directive provides:‘The short-term action plans … may, depending on the individual case, provide for effective measures to control and, where necessary, suspend activities which contribute to the risk of the respective limit values or target values or alert thresholds being exceeded. Those action plans may include measures in relation to motor-vehicle traffic …’ Procedure and forms of order sought 19The City of Paris, the City of Brussels and the Municipality of Madrid lodged their applications, respectively, on 26 June (Case T‑339/16), 29 June (Case T‑352/16) and 19 July 2016 (Case T‑391/16).20By separate documents lodged on 28 September, 23 September and 5 October 2016, the Commission, on the basis of Article 130(1) of the Rules of Procedure of the General Court, raised pleas of inadmissibility against the actions, asking that the Court make a decision without going to the substance of the case.21The City of Paris, the City of Brussels and the Municipality of Madrid lodged their observations on the pleas of inadmissibility raised by the Commission on 15 November, 16 November and 15 November 2016 respectively.22By orders of 20 March 2017, the Court joined the pleas of inadmissibility raised by the Commission to the substance of the actions.23The Commission lodged the defences on 2 May 2017.24On 16 May 2017, the Court invited the parties to express their views, in the replies and rejoinders, on the potential impact of the provisions of the second subparagraph of Article 4(3) of Directive 2007/46 on the admissibility of the actions for annulment.25The City of Paris, the City of Brussels and the Municipality of Madrid lodged the replies, including the expression of views sought by the Court, on 28 June 2017.26The Commission lodged the rejoinders, including the expression of views sought by the Court, on 15 September 2017.27By decision of 6 March 2018, the plenary meeting of the Court referred the cases back to the Ninth Chamber (Extended Composition).28By decision of the President of the Ninth Chamber (Extended Composition) of the General Court of 10 April 2018, Cases T‑339/16, T‑352/16 and T‑391/16 were joined for the purposes of the oral procedure and the decision closing the proceedings.29The City of Paris, the City of Brussels and the Commission presented oral argument and answered the written and oral questions put by the Court at the hearing on 17 May 2018. The Municipality of Madrid did not attend that hearing.30The City of Paris claims that the Court should:–dismiss the Commission’s plea of inadmissibility, declare its action for annulment and its claim for damages admissible and order the Commission to present argument on the substance of the case;annul the contested regulation;order the Commission to pay symbolic damages of one euro as compensation for the harm caused to it as a result of the adoption of that regulation;order the Commission to pay all the costs.31The City of Brussels claims that the Court should:declare its application admissible and well founded;order the Commission to pay the costs.32The Municipality of Madrid claims that the Court should:dismiss the plea of inadmissibility raised by the Commission;declare its action admissible, examine the substance of the action and assess and uphold the pleas of annulment raised in its application;declare the contested regulation null and void as regards emissions from light passenger and commercial vehicles (Euro 6);33The Commission contends that the Court should:dismiss the actions in their entirety as inadmissible, without consideration of the substance of the case;alternatively, in relation to the actions brought by the City of Paris and the City of Brussels, dismiss the actions for annulment and the action for damages brought by the City of Paris as unfounded;in the alternative, in relation to the action brought by the Municipality of Madrid, dismiss that action as unfounded;order the applicants to pay the costs of the proceedings. Law The actions for annulment Admissibility of the actions for annulment 34Under the fourth paragraph of Article 263 TFEU, ‘any natural or legal person may … institute proceedings against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures’.35In the present case, the parties are in agreement that the admissibility of the actions for annulment must be assessed in the light of the third scenario provided for in the fourth paragraph of Article 263 TFEU, namely that concerning actions against regulatory acts which are of direct concern to the applicant and do not entail implementing measures. The parties also agree that the contested regulation must be regarded as a regulatory act and that it does not entail implementing measures within the meaning of that provision in relation to each of those two aspects. The dispute between them relates solely to whether the contested regulation is of direct concern to the applicants, which the Commission contests, whereas the applicants submit that that is the case since that regulation limits their powers to regulate the circulation of vehicles within the context of air pollution abatement measures.36However, since the admissibility of the actions is a matter of public policy which is not within the discretion of the parties, it is nevertheless necessary, in the present case, for an express ruling to be made first of all on whether the contested regulation is indeed a regulatory act which does not entail implementing measures within the meaning of the fourth paragraph of Article 263 TFEU (see, to that effect, judgment of 23 April 1986, Les Verts v Parliament, 294/83, EU:C:1986:166, paragraph 19).37It has been held that acts of general application other than legislative acts, that is to say other than those adopted following the ordinary legislative procedure described in Article 294 TFEU or a special legislative procedure, such as that defined in Article 289(2) TFEU, which involve the European Parliament with the participation of the Council of the European Union or vice versa, satisfy the definition of such a regulatory act (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraphs 51 to 61).38The contested regulation was adopted by the Commission on the basis of Article 5(3) of Regulation No 715/2007, that is to say in accordance with the comitology ‘regulatory procedure with scrutiny’ provided for in Article 5a of Decision 1999/468, as stated in paragraph 9 above. It is not therefore a legislative act. Furthermore, as a regulation, it has general application in accordance with Article 288 TFEU. It covers situations which are determined objectively and produces legal effects for categories of persons envisaged in a general and abstract manner (see, to that effect, judgment of 2 February 1988, Kwekerij van der Kooy and Others v Commission, 67/85, 68/85 and 70/85, EU:C:1988:38, paragraph 15). It is indeed therefore a regulatory act within the meaning of the fourth paragraph of Article 263 TFEU.39With regard to the existence, or non-existence, of implementing measures of the contested regulation, it should be recalled that, in order to determine whether or not a regulatory act being challenged entails such measures for the purposes of assessing the admissibility of an action for annulment brought against that act on the basis of the third scenario provided for in the fourth paragraph of Article 263 TFEU, reference should be made to the position of the person bringing the action and the subject matter of that action (see, to that effect, judgment of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraphs 30 and 31).40However, it is apparent that the contested regulation does not require any implementing measures in relation to the applicants for it to be incorporated into the legal order applicable to them, even though it does entail in relation to other persons a number of implementing decisions, resulting for example in type approvals or registrations of vehicles, or decisions refusing such approvals and registrations, on the basis of the regulation’s provisions. Such basic implementing decisions must not be confused with the implementing measures referred to in the third scenario provided for in the fourth paragraph of Article 263 TFEU. If all implementing decisions, in particular those which ‘impose penalties’ or are ‘negative’ and are intended to sanction the failure to comply with a regulatory act, were also to be regarded as being implementing measures, the introduction in the FEU Treaty of the third scenario provided for in the fourth paragraph of Article 263 TFEU would often be deprived of effect even though it was introduced specifically in response to the concern to prevent persons being required to trigger measures which ‘impose penalties’ on them or are ‘negative’ in relation to them in order to be able to obtain a review of the legality of that regulatory act by means of a preliminary ruling, as is made clear inter alia in the judgment of 19 December 2013, Telefónica v Commission (C‑274/12 P, EU:C:2013:852, paragraph 27).41Finally, with regard to whether the contested regulation is of direct concern to the applicants, it follows from settled case-law that, if the contested act directly affects the applicant’s legal situation and leaves no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting solely from EU law without the application of other intermediate rules, that act is of direct concern to the applicant within the meaning of the fourth paragraph of Article 263 TFEU (judgments of 5 May 1998, Dreyfus v Commission, C‑386/96 P, EU:C:1998:193, paragraph 43, and of 17 September 2009, Commission v Koninklijke FrieslandCampina, C‑519/07 P, EU:C:2009:556, paragraph 48; see also, to that effect, judgment of 13 May 1971, International Fruit Company and Others v Commission, 41/70 to 44/70, EU:C:1971:53, paragraphs 23 to 29). That assessment was unchanged by the entry into force, on 1 December 2009, of the Treaty of Lisbon, which introduced the third scenario in which the natural or legal persons referred to in the fourth paragraph of Article 263 TFEU have standing to bring proceedings (see, to that effect, judgments of 25 October 2011, Microban International and Microban (Europe) v Commission, T‑262/10, EU:T:2011:623, paragraph 32, and of 7 July 2015, Federcoopesca and Others v Commission, T‑312/14, EU:T:2015:472, paragraph 32).42In the present case, the Commission contends inter alia that the applicants’ powers to regulate the circulation of vehicles with a view to reducing air pollution are in no way affected by the contested regulation, which therefore has no effect on their legal situation, contrary to the applicants’ claims. In that regard, the Commission argues that the emission limits for oxides of nitrogen resulting from the Euro standards to which the applicants refer, where applicable on account of the national legislation laying down the detailed rules to restrict the circulation of vehicles according to their pollutant emissions, are in no way amended by that regulation, in particular those resulting from the Euro 6 standard currently applied to new vehicles. The existence of such national legislation and the lack of any amendment to the limits resulting from that standard establish, on two counts, that that regulation is not of direct concern to the applicants. The Commission observes in this regard that the City of Brussels concedes that the same regulation does not prevent it from deciding on ‘car-free days’. The provisions of that regulation lay down obligations concerning pollutant tailpipe emissions during RDE tests only on vehicle manufacturers. Since, moreover, the applicants are not involved in the procedures for those tests, nor more generally in the procedures for vehicle type approval, their legal situation is entirely unaffected by the regulation in question.43With regard to any impact in that regard as a result of the second subparagraph of Article 4(3) of Directive 2007/46, which provides that ‘[Member States] shall not prohibit, restrict or impede the registration, sale, entry into service or circulation on the road of vehicles, components or separate technical units, on grounds related to aspects of their construction and functioning covered by this Directive, if they satisfy the requirements of the latter’, on which the Court asked the parties to express their views, the Commission argues as follows.44Putting forward, first of all, a teleological analysis, the Commission points out that Directive 2007/46, like all past and present European legislation on type approval for motor vehicles, has as its legal basis Article 114 TFEU or the equivalent articles of the Treaties which preceded the FEU Treaty. That article concerns ‘measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market’. Such a legal basis does not allow interference in transport or environmental policy, and Directive 2007/46, like those which preceded it, is essentially intended to facilitate the placement on the market, in each Member State, of vehicles from the other Member States, thereby preventing a fragmentation of the internal market on account of the disparities in the requirements and controls governing the sale of vehicles which would have persisted in the absence of such harmonising legislation. However, the scope of that legislation goes no further. In particular, it is by no means intended to limit the policing powers of the Member States’ authorities in relation to the circulation of vehicles once those vehicles are being used by their drivers.45The Commission refers in this regard to various recitals of Directives 70/156 and 2007/46, and of its proposal for a directive to replace Directive 2007/46. It also points out that that harmonising legislation concerns only type approval for new types of vehicles and the entry into service of new vehicles, and not the circulation of vehicles already in service. In the Commission’s view, if the view were to be taken that Directive 2007/46 and its secondary ‘regulatory acts’ restrict the powers to govern circulation enjoyed by the Member States’ authorities, the latter would no longer have any powers in that field, since the harmonisation at issue would be total, which demonstrates, ad absurdum, that such an interpretation is flawed. Furthermore, even if the European Union were to adopt measures of general application relating to circulation on the road, on the basis of Article 91 or 192 TFEU, with a view to improving transport safety or to ensure the quality of the environment and the protection of human health, for example a uniform speed limit in urban areas for lorries, such measures could be incompatible with the principle of subsidiarity.46Next, advancing an analysis which it terms ‘contextual’, the Commission contends that the expression ‘circulation on the road’ contained in the second subparagraph of Article 4(3) of Directive 2007/46 has no independent scope, and that it must be understood as falling within the ‘category of “the registration, sale, entry into service”’ referred to in that provision.47The Commission observes that, in Regulation (EU) No 167/2013 of the European Parliament and of the Council of 5 February 2013 on the approval and market surveillance of agricultural and forestry vehicles (OJ 2013 L 60, p. 1), which is likewise based on Article 114 TFEU, the corresponding provision states that ‘Member States shall not prohibit, restrict or impede the placing on the market, registration or entry into service of vehicles … on grounds related to aspects of their construction and functioning covered by this Regulation, if they satisfy its requirements’, without mentioning any prohibitions, restrictions or obstacles in relation to circulation on the road. It points out in that connection that recital 7 of the same regulation states that ‘this Regulation should be without prejudice to measures at national or Union level regarding the use of agricultural and forestry vehicles on the road, such as specific driver’s licence requirements, limitations of maximum speed or measures regulating the access to certain roads’. It makes similar observations concerning Regulation (EU) No 168/2013 of the European Parliament and of the Council of 15 January 2013 on the approval and market surveillance of two- or three-wheel vehicles and quadricycles (OJ 2013 L 60, p. 52) and Regulation (EU) 2016/1628 of the European Parliament and of the Council of 14 September 2016 on requirements relating to gaseous and particulate pollutant emission limits and type-approval for internal combustion engines for non-road mobile machinery, amending Regulations (EU) No 1024/2012 and No 167/2013, and amending and repealing Directive 97/68/EC (OJ 2016 L 252, p. 53).48According to the Commission, the origin of Directive 2007/46 confirms that the expression ‘circulation on the road’, contained in the second subparagraph of Article 4(3), has no independent scope. The version of that provision in the Commission’s initial proposal read: ‘the Member States shall register or permit the sale or entry into service only of such vehicles … as satisfy the requirements of this Directive’. In the course of the legislative debate of the text, that provision evolved for the following reasons set out in an amended Commission proposal: ‘in order to ensure that the provisions on the approval of motor vehicles laid down in this Directive and in the separate regulatory acts are not undermined by the imposition of national construction and functioning requirements on vehicles after they have been sold, registered and/or put into service, a free circulation clause has been introduced in the third paragraph of Article 4’. Accordingly, the purpose of adding the expression ‘circulation on the road’ was not to expand the scope of the legislation being drawn up but rather to prevent the circumvention of the prohibition, on the Member States, to oppose the placing on the market, the registration or the entry into service of new vehicles which comply with the provisions of that legislation. The same type of ‘anti-circumvention’ provision previously appeared in Directive 70/156, which referred to ‘use’ rather than to ‘circulation on the road’. The Commission states that, like the comparable German and Netherlands provisions, Article 9 of Décret du Premier ministre français no 2009-497, du 30 avril 2009, relatif aux réceptions et homologations des véhicules et modifiant le code de la route (Decree of the French Prime Minister No 2009-497 of 30 April 2009 on type-approvals and approvals of vehicles and amending the Highway Code (JORF of 3 May 2009, p. 7472)), which transposes Directive 2007/46, does not refer to the ‘circulation on the road’ of vehicles, but to them being ‘put into circulation’, an expression which relates to access to the market.49In addition, Directive 2008/50, which concerns ambient air quality, the main elements of which have been set out in paragraph 17 above, affords the Member States complete freedom to adopt air pollution abatement measures. In particular, the short-term action plans for which that directive provides may contain measures relating to the circulation of motor vehicles, which shows that Directive 2007/46 and its secondary ‘regulatory acts’ in no way restrict the actions of the authorities of the Member States in such matters.50It should be recalled, first of all, that it follows from settled case-law that the fact that an act of the European Union prevents a public legal person from exercising its own powers as it sees fit has a direct effect on its legal position, and that, therefore, that act is of direct concern to it. This has been found to be the case, for example, in cases concerning the grant of public aid by infra-State bodies (see, to that effect, judgments of 8 March 1988, Exécutif régional wallon and Glaverbel v Commission, 62/87 and 72/87, EU:C:1988:132, paragraphs 6 and 8; of 30 April 1998, Vlaamse Gewest v Commission, T‑214/95, EU:T:1998:77, paragraph 29; and of 26 November 2015, Comunidad Autónoma del País Vasco and Itelazpi v Commission, T‑462/13, EU:T:2015:902, paragraph 34). The same conclusion was also reached in a case concerning obligations in the field of agriculture and charges applicable to agricultural products imposed on a future Member State prior to its accession (see, to that effect, judgment of 10 June 2009, Poland v Commission, T‑257/04, EU:T:2009:182, paragraphs 56 to 58). An act of the European Union is of even greater direct concern to an infra-State body since it affects its own legislative powers (in the present cases in relation to regulating the circulation of vehicles) and not just its power to adopt individual decisions within a pre-defined framework.51Next, it is apparent in the present case that certain types of legislation governing the circulation of vehicles which can be adopted by public authorities of the Member States, in particular those which fall within the category of infra-State bodies, cannot in fact be affected by the contested regulation, without prejudice to the question of their compatibility with other provisions of EU law.52In this regard, the second subparagraph of Article 4(3) of Directive 2007/46, within the context of which the contested regulation falls, provides ‘[Member States] shall not prohibit, restrict or impede the registration, sale, entry into service or circulation on the road of vehicles, components or separate technical units, on grounds related to aspects of their construction and functioning covered by this Directive, if they satisfy the requirements of the latter’. Only legislation which takes into account, with a view to defining its scope, aspects related to the construction or functioning of the vehicles covered by provisions of that directive, of its ‘regulatory acts’ and of the secondary acts of such acts can therefore fall foul of that provision. This is not the case with legislation governing circulation which covers all vehicles, or indeed a category of vehicles defined in relation to other criteria (for example, vehicles over 3.5 tonnes generally), because the scope of such legislation is not defined in relation to aspects concerned with the construction or functioning of the vehicles in question covered by the directive, its ‘regulatory acts’ and the secondary acts of such acts. To that extent, most legislation pertaining to the ‘Highway Code’ or adopted under that code and measures restricting circulation which cover all vehicles, such as those which establish pedestrian zones, ‘car-free days’ or alternating traffic arrangements in the event of a peak in pollution, in particular cannot be affected by such acts of the European Union. Accordingly, the Commission rightly observed that the City of Brussels was at liberty, in the light of the contested regulation, to introduce ‘car-free days’.53Similarly, a public authority of a Member State could currently, without infringing the second subparagraph of Article 4(3) of Directive 2007/46, impose restrictions on circulation based on the level of pollutant emissions in respect of vehicles falling into the category covered by Regulation No 715/2007 and which, at best, comply only with the Euro 5 standard, since that standard and the previous Euro standards are no longer in force for the purposes of the application of that directive. As stated in paragraph 6 above, under Article 10 of that regulation, the Euro 6 standard has applied since 1 September 2014 for the type approval of new passenger vehicles and vehicles for the carriage of persons and since 1 September 2015 for the registration or the authorisation to sell or put into service those vehicles; those dates are deferred by one year for most light commercial vehicles, whereas heavy duty commercial vehicles are covered by another regulation. It may be recalled in this regard that, in the judgment of 21 December 2011, Commission v Austria (C‑28/09, EU:C:2011:854), the Court of Justice stated that, rather than imposing a sectoral traffic prohibition applicable to lorries regardless of which Euro class into which they fell, contrary to the rules of the EC Treaty on the free movement of goods, a Member State which, in order to combat pollution of the ambient air, had already prohibited the circulation of lorries falling into, at best, an earlier Euro class could simply have extended the initial prohibition to those lorries falling into the Euro class which followed the class initially covered in order to ensure compliance with those rules.54By contrast, in the case of traffic legislation adopted by the public authorities of the Member States which impose restrictions on circulation based on the level of pollutant emissions on vehicles which fall into the category covered by Regulation No 715/2007 and which comply with the Euro 6 standard or, during the RDE tests, with the NTE values, the situation is different since the pollutant emission limits defined for that standard or under those values are in force for the purposes of the application of Directive 2007/46.55It is true that the introduction of traffic legislation likewise falls within the powers derived from national law, as the Commission essentially points out, even though the Member States and the public authorities of the Member States may also be encouraged to enact such legislation in order to comply with their obligations under Directive 2008/50 to guarantee ambient air quality and even though, as the case may be, that legislation uses the Euro standards in order to determine the scope of the restrictions which it lays down.56The question is therefore whether traffic legislation adopted by the public authorities of the Member States, in so far as it covers the vehicles referred to in paragraph 54 above, falls foul — in relation to such vehicles — of the requirements under Directive 2007/46, in particular the second subparagraph of Article 4(3) thereof.57In that regard, it should be borne in mind that, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgments of 17 November 1983, Merck, 292/82, EU:C:1983:335, paragraph 12, and of 19 July 2012, ebookers.com Deutschland, C‑112/11, EU:C:2012:487, paragraph 12). Reference is made in this connection, respectively, to the literal, contextual (or systematic) and teleological interpretations.58The sphere of autonomy enjoyed by national law, referred to in paragraph 55 above, is indeed, in the light of the wording of the second subparagraph of Article 4(3) of Directive 2007/46 circumscribed, preventing the public authorities of the Member States from restricting, on grounds based on the level of pollutant emissions, the circulation of vehicles which satisfy the relevant European requirements in force, since that provision states that Member States are not to ‘prohibit, restrict or impede the … circulation on the road of vehicles … on grounds related to aspects of their construction and functioning covered by this Directive, if they satisfy the requirements of the latter’.59More specifically, on a literal interpretation of the second subparagraph of Article 4(3) of Directive 2007/46, a public authority of a Member State, in particular an infra-State body, could not impose restrictions on circulation based on the level of pollutant vehicle emissions in respect of vehicles which fall into the category covered by Regulation No 715/2007 and comply with the Euro 6 standard, since that standard is in force and, therefore, such vehicles satisfy the requirements under that directive. Similarly, since the contested regulation defines the values of pollutant emissions of oxides of nitrogen which may not be exceeded during the RDE tests, such an authority could not impose restrictions on circulation based on the level of pollutant vehicle emissions in respect of those vehicles which fall into the category covered by Regulation No 715/2007 and comply with those NTE values during such tests. It should be recalled that those tests and limits have been applied with binding effect since 1 September 2017, as set out in paragraph 15 above.60It is, however, necessary to examine whether the arguments advanced by the Commission on the basis of teleological and contextual interpretations of the second subparagraph of Article 4(3) of Directive 2007/46 call that interpretation into question.61In essence, with regard to the teleological interpretation of the second subparagraph of Article 4(3) of Directive 2007/46, the Commission states that the sole purpose of that directive and of its ‘regulatory acts’ and the secondary acts of those acts is to ensure that new vehicles satisfying the harmonised requirements of that legislation may be placed on the market without obstacles in the Member States, within the context of the principles applicable in the internal market.62That statement is in itself well founded, but it is incapable of calling into question the literal interpretation of the second subparagraph of Article 4(3) of Directive 2007/46 set out in paragraph 59 above.63The legal basis of Directive 2007/46 is Article 95 EC (the substantive provisions of which were reproduced in Article 114 TFEU). Article 95 EC does indeed relate to the achievement of the objectives set out in Article 14 EC (the provisions of which were essentially reproduced in Article 26 TFEU), namely the establishment of the internal market (Article 14(1) EC), which ‘comprises an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the [EC Treaty]’ (Article 14(2) EC). In addition, as the Commission argues, that legal basis does not allow the European Union to harmonise all aspects relating to goods and services on the ground of the establishment of the internal market. Article 95 EC allowed the adoption of ‘the measures for the approximation of the provisions laid down by law, regulation or administrative action in Member States which have as their object the establishment and functioning of the internal market’ and, in the judgment of 5 October 2000, Germany v Parliament and Council (C‑376/98, EU:C:2000:544, paragraph 83), upon which the Commission relies, it was held that that provision did not vest in the European Union legislature a general power to regulate the internal market. As is set out in essence in paragraphs 84 and 85 of that judgment, the power derived from Article 95 EC is restricted to situations in which it is in fact necessary to remedy obstacles to the free movement of the goods, services and capital concerned between Member States.64In the present case, recital 2 of Directive 2007/46 states that, ‘for the purposes of the establishment and operation of the internal market of the Community, it is appropriate to replace the Member States’ approval systems with a Community approval procedure based on the principle of total harmonisation’. Article 1 of that directive, entitled ‘Subject matter’, provides that the directive ‘establishes a harmonised framework containing the administrative provisions and general technical requirements for approval of all new vehicles within its scope … with a view to facilitating their registration, sale and entry into service within the [European Union]’. It is therefore true that the main object of that directive is the placement on the market of new motor vehicles, that is to say the free movement of certain goods between the Member States, that it does not seek in general terms to provide a framework for legislation governing circulation on the road covering such vehicles and laid down by the public authorities of the Member States, and that it does not fall within the scope of the transport or environmental policy of the European Union, even though it must incorporate in that regard the requirement of a high level of protection referred to in Article 95 EC.65However, this does not mean that any provision on the circulation on the road of new motor vehicles would have no place in Directive 2007/46. It is common for a directive, or another directive adopted under that first directive, to contain provisions which do not come under the main objective stated but which are intended to ensure that the provisions adopted have practical effect with a view to achieving that objective. Thus, the objective of the directives on the award of public contracts is to facilitate the free movement of goods and the freedom to provide services within the context of public procurement. However, in order to guarantee that objective, that is to say to ensure that those directives have practical effect, provisions have been adopted in specific directives to guarantee that the decisions of the contracting authorities and bodies are open to effective remedies, which in particular are as swift as possible, even though the object of the directives on the award of public contracts was by no means the harmonisation of judicial remedies in the various Member States (see, to that effect, judgment of 11 June 2009, Commission v France, C‑327/08, not published, EU:C:2009:371, paragraphs 2 to 9). Similarly, directives intended to ensure the free movement of information services (press, radio, television, internet) contain, with a view to ensuring such free movement, decisions harmonising prohibitions on advertising in respect of tobacco products which meet an objective of public health protection (see, to that effect, judgment of 12 December 2006, Germany v Parliament and Council, C‑380/03, EU:C:2006:772, paragraphs 3 to 11).66In addition, it has been consistently held that, where a provision of EU law is open to several interpretations, preference must be given to that interpretation which ensures that the provision retains its effectiveness (judgments of 6 October 1970, Grad, 9/70, EU:C:1970:78, paragraphs 12 and 13; of 22 September 1988, Land de Sarre and Others, 187/87, EU:C:1988:439, paragraph 19; and of 24 February 2000, Commission v France, C‑434/97, EU:C:2000:98, paragraph 21). The reference to circulation on the road would have no practical effect if, as the Commission submits, it had the same scope or meaning as ‘the registration, sale and entry into service’ of the vehicles.67It is for this reason that the provision contained in the second subparagraph of Article 4(3) of Directive 2007/46 cannot, specifically in the context of a teleological approach, be interpreted as being limited, in essence, to meaning that the new owner of a new motor vehicle which complies with the requirements of that directive is indeed entitled to purchase, register and put it into service and to get behind the wheel, without prejudice to what follows. The practical effect of that directive would be undermined as a result because the placement on the market of the vehicles potentially concerned would be impeded by the fear that it may not be possible to use them normally. For example, if a driver using a vehicle to travel to Paris (France), Brussels (Belgium) or Madrid (Spain) were to anticipate that the applicants were going to prohibit, entirely or partly, the circulation of vehicles in their territory which do not comply with the limits of the Euro 6 standard during RDE tests, even if those vehicles do comply with the NTE values, such a driver might opt not to purchase such a new petrol or diesel motor vehicle in such a situation. The problem would be even greater if, in the name of combating air pollution, a number of infra-State bodies were to adopt a similar approach within the European Union, as was pointed out at the hearing. Furthermore, in its contextual line of argument, the Commission states that the insertion of the reference to circulation on the road in that subparagraph amounts to the insertion of an ‘anti-circumvention’ provision intended to ensure the unimpeded placement on the market of the vehicles concerned.68The Commission also stated at the hearing that it would be inconsistent to take the view that the public authorities of the Member States cannot restrict the circulation of vehicles which comply with the most recent requirements on air pollution abatement on grounds related to their level of pollutant emissions, but that they could restrict the circulation of the vehicles on the basis of considerations not taken into account within the context of Directive 2007/46 or restrict the circulation of less recent vehicles which fully complied with the requirements on the limitation of pollutant emissions when they were placed on the market. The response to that argument should be that it is on the contrary consistent, from a teleological perspective, first, that that directive does not cover the question of restrictions on circulation laid down on the basis of criteria independent from the technical aspects forming the subject matter of its provisions (see paragraph 52 above) and, second, that nor does that directive cover the question of the circulation of vehicles which do not comply with the requirements now in force under its provisions, even where, as the case may be, when they were placed on the market they did comply with requirements of the same kind then in force (see paragraph 53 above). By definition, those vehicles are either new vehicles which may no longer generally be placed on the market in the European Union or used vehicles, for example new or used vehicles which would comply with the Euro 5 standard but not with the Euro 6 standard. Both categories of vehicles fall outside the protective scope established by the directive, which covers new motor vehicles to be sold in the European Union. The teleological interpretation of the second subparagraph of Article 4(3) of Directive 2007/46 is likewise in agreement in this regard with the literal interpretation of that provision.69With regard to the contextual interpretation of the second subparagraph of Article 4(3) of Directive 2007/46, the Commission argues that the reference, in that provision, to the prohibition on limiting circulation on the road is not found in the similar provisions of the legislation concerning types of vehicle or machinery other than those covered by that directive and was added to that directive only in the course of the legislative debate of the text, which demonstrates that that reference is not different in scope from the references to the registration, sale and entry into service of the vehicles. However, that argument appears to be almost identical to the argument advanced by the Commission with regard to the teleological interpretation of that provision. The fact that, in one piece of legislation, it is explicitly stated that, in the circumstances set out above, the circulation on the road of vehicles compatible with the requirements under that legislation must not be limited, and that, in another piece of legislation, mention was made of use rather than circulation on the road and in other legislation again there are no such references in no way changes the fact that it is inherent in a situation resulting from complete harmonisation, such as that resulting from that directive, that Member States and the public authorities of the Member States cannot, save in particular circumstances, oppose the ordinarily intended use of a product which satisfies the requirements laid down in the harmonising arrangements, since they would otherwise undermine the practical effect of those arrangements.70It is true that that principle is without prejudice to the possibility, on the part of the Member States, to rely on the provisions contained in Article 114(4) et seq. TFEU, which under certain circumstances allow derogation from a harmonising measure, inter alia on grounds of health and environmental protection. However, use may be made of that exceptional possibility only subject to the immediate and close monitoring of the Commission, with the result that the view cannot be taken that, in view of that possibility, the powers of the Member States and the authorities of the Member States are unaffected by the harmonising measure.71Mention was also made at the hearing of Article 8(3) and Article 29 of Directive 2007/46 itself, which provide respectively:‘If a Member State finds that a type of vehicle …, albeit in conformity with the required provisions, presents a serious risk to road safety or seriously harms the environment or seriously harms public health, it may refuse to grant EC type-approval . In this case, it shall immediately send the other Member States and the Commission a detailed file explaining the reasons for its decision and setting out the evidence for its findings.’‘1. If a Member State finds that new vehicles, systems, components or separate technical units, albeit in compliance with the applicable requirements or properly marked, present a serious risk to road safety, or seriously harm the environment or public health, that Member State may, for a maximum period of six months, refuse to register such vehicles or to permit the sale or entry into service in its territory of such vehicles, components or separate technical units.In such cases, the Member State concerned shall immediately notify the manufacturer, the other Member States and the Commission accordingly …[Followed by a procedure which may result either in the amendment of the legislation or in measures intended to ensure better compliance with such legislation].’72However, in addition to observations in the same vein as those made in relation to Article 114(4) et seq. TFEU, it may be stated that the only possible outcomes of the application of Article 8(3) and Article 29 of Directive 2007/46 are, in essence, a refusal of EC type-approval, thus preventing any sale of the type of vehicle concerned, or a review of the legislation; such measures are very different from the targeted restrictions on circulation envisaged by the applicants within their territories.73Nor are the other arguments advanced by the Commission capable of rebutting the findings based on the literal and teleological interpretations of the second subparagraph of Article 4(3) of Directive 2007/46.74The fact that Directive 2008/50 provides that Member States are required to take measures to combat air pollution, in particular within the context of the short-term action plans introduced in that directive, does not release the Member States from their obligations under other rules of EU law (see, to that effect, judgment of 21 December 2011, Commission v Austria, C‑28/09, EU:C:2011:854, paragraph 111). Thus, only if the literal and teleological interpretations of the second subparagraph of Article 4(3) of Directive 2007/46 were to render impossible or excessively difficult the adoption, under Directive 2008/50, of any effective measure to restrict the circulation of vehicles with a view to combating air pollution could those interpretations be called into question on the basis of a contextual interpretation of that provision. In addition, as has been set out in paragraphs 52 and 53 above, the Member States and the public authorities of the Member States retain the power to adopt measures to restrict circulation covering all vehicles or categories of vehicles determined on the basis of very general criteria or even targeted at vehicles which no longer fall within the scope of the provisions in force in Directive 2007/46, its ‘regulatory acts’ and the secondary acts of those acts. In particular, if the literal and teleological interpretations of that provision actually limit the powers of the competent authorities of the Member States to adopt targeted measures to restrict circulation which would encompass vehicles compatible with the requirements in force in that directive, its ‘regulatory acts’ and the secondary acts of such acts (for example, a restriction covering vehicles which, during the RDE tests, exceed the limits of the Euro 6 standard but remain below the NTE values), that provision does nonetheless afford them significant leeway to adopt measures which contribute to achieving the objectives laid down in Directive 2008/50, even though, from the perspective of those authorities, those measures would perhaps not be the most appropriate (for example, a general restriction or a restriction covering all vehicles which at best comply only with the Euro 5 standard).75Finally, the fact that the measures transposing Directive 2007/46 in certain Member States refer to the ‘entry into circulation’ and not the ‘circulation on the road’ cannot in the present case constitute a factor to be taken into account with a view to interpreting the second subparagraph of Article 4(3) of that directive. As has been held on a number of occasions, the terms of a provision of EU law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union, which must take into account the context of that provision and the purpose of the legislation in question (see, to that effect, judgment of 21 December 2016, Associazione Italia Nostra Onlus, C‑444/15, EU:C:2016:978, paragraph 66 and the case-law cited). Although it has sometimes also been held that, even in the absence of an express reference to the law of the Member States, the application of EU law may necessitate a reference to the law of the Member States where the court cannot identify in EU law or in its general principles criteria enabling it to define the meaning and scope of the provision of EU law at issue by way of independent interpretation (judgment of 18 December 1992, Díaz García v Parliament, T‑43/90, EU:T:1992:120, paragraph 36), that is not the case here, as is clear from the preceding analysis.76The literal, teleological and contextual interpretations of Directive 2007/46, and more specifically of the second subparagraph of Article 4(3) thereof, are therefore along the same lines, that is to say that that directive actually prevents the public authorities of the Member States, without affording them any discretion, from prohibiting, restricting or impeding the circulation on the road of vehicles on grounds related to aspects of their construction and functioning covered by the directive if they satisfy the requirements of the latter, which means that, on account of the adoption of the contested regulation, the applicants may not, as they claim, actually limit, within the context of a targeted measure taking into account the pollutant emission levels of vehicles, the circulation of those vehicles which during the RDE tests do not comply with the emission limits for oxides of nitrogen laid down in the Euro 6 standard, but which do nevertheless comply during those tests with the NTE values for emissions of oxides of nitrogen defined in that regulation, which are higher than the emission limits.77In this regard, the City of Paris and the City of Brussels stated at the hearing that a national administrative court seized of proceedings, brought for example by a unhappy driver, against one of their acts restricting, in the circumstances referred to in paragraph 76 above, the circulation of vehicles would not fail to annul such an act on the ground that it is contrary to Directive 2007/46 and the contested regulation.78Without prejudice to any decisions of the courts or tribunals of the Member States, it should be recalled that the concern to ensure that directives have practical effect, which is essential for the construction of Europe, gave rise to the theory of the direct effect of their provisions which seek to confer rights on individuals, upon which those individuals may rely as against public authorities (judgment of 4 December 1974, van Duyn, 41/74, EU:C:1974:133, paragraph 12). The provision contained in the second subparagraph of Article 4(3) of Directive 2007/46, under which a Member State is not to ‘prohibit, restrict or impede the registration, sale, entry into force or circulation on the road of vehicles … on grounds related to aspects of their construction and functioning covered by this Directive, if they satisfy the requirements of the latter’, is capable of conferring rights on individuals since it is unconditional, clear and precise, even though the Commission was able to discuss its scope (see, to that effect, judgments of 6 October 1970, Grad, 9/70, EU:C:1970:78, paragraph 9, and of 4 December 1974, van Duyn, 41/74, EU:C:1974:133, paragraph 14). It should also be recalled that, under the second paragraph of Article 288 TFEU, regulations are to have general application, be binding in their entirety and directly applicable in all Member States, and may therefore be invoked by individuals.79Furthermore, nor are the Kingdom of Belgium, the Kingdom of Spain and the French Republic protected from an action for failure to fulfil obligations brought on the basis of Article 258 or 259 TFEU if one or other of the applicants were to adopt the acts referred to in paragraph 77 above. On that basis, Member States must answer for the infringements of EU law by all their public authorities (judgment of 5 May 1970, Commission v Belgium, 77/69, EU:C:1970:34, paragraph 15). As a general rule, pursuant to the principle of sincere cooperation laid down in Article 4(3) TEU, Member States are to take any appropriate measure to ensure fulfilment of the obligations arising out of the Treaties or resulting from acts of the institutions of the Union and to refrain from any measure which could jeopardise the attainment of the Union’s objectives. That principle applies to all the authorities of a Member State, whether it be the central authorities of the State or the authorities of a federated State or other territorial authorities (see, to that effect, judgments of 12 June 1990, Germany v Commission, C‑8/88, EU:C:1990:241, paragraph 13, and of 13 April 2010, Wall, C‑91/08, EU:C:2010:182, paragraph 69). Pursuant to that principle, the applicants should therefore themselves refrain from adopting the measures to restrict circulation described in paragraph 76 above.80In addition, the limitation of the powers also mentioned in paragraph 76 is real for the applicants.81In this regard, the applicants have not only proven that under national law they enjoyed powers to protect the environment and health, in particular to combat air pollution, including the power to restrict the circulation of vehicles to that end. The Commission does not contest this.82The applicants also gave examples of measures which they had already adopted. Thus, the City of Paris has, inter alia, introduced, by two successive decrees of the Mayor and the Police Commissioner, a restricted traffic area corresponding to the entirety of its ‘intra-muros’ territory, successively prohibiting, on 1 September 2015 and then on 1 July 2017, from 8.00 to 20.00 on weekdays, save in specific circumstances, the circulation of vehicles which do not comply with at least a given Euro standard, for example at present the Euro 3 standard for a diesel passenger vehicle. In 2020, the minimum standard to be met in order to be able to drive a vehicle will be the Euro 5 standard, and the ‘Climate-Air-Energy Plan’ of that city provides for the prohibition of the circulation of diesel vehicles in 2024 and of petrol vehicles in 2030, as is clear from documents in the file. The City of Brussels has created an extensive pedestrian zone in its centre and, as already mentioned, has introduced ‘car-free days’. In 2015 and 2016, by decrees of the Delegate of the Sector of Government responsible for the Environment and Mobility, the Municipality of Madrid imposed traffic restrictions during periods of high pollution, as provided for in the 2011-2015 Air Quality Plan and the measurement protocol adopted by the city which is to be initiated during periods of high nitrogen dioxide pollution.83The applicants have also produced various documents and studies on the quality of the air in their territories, showing worrying levels of pollution (despite a fall in emissions of oxides of nitrogen over a decade in Paris and Madrid) and pointed to infringement proceedings brought by the Commission against the Kingdom of Belgium, the Kingdom of Spain and the French Republic for failing to comply with Directive 2008/50, including in relation to the level of oxides of nitrogen to which the Commission referred, in a press release annexed by the City of Brussels to its pleadings, stating that ‘most emissions result[ed] from traffic and diesel cars in particular’. At the hearing of oral argument in the present cases, on 17 May 2018, the representative of the City of Paris added, without being contradicted, that the Commission announced by a press release of the same day that infringement proceedings would be brought before the Court of Justice against several Member States for exceeding limit values laid down in that directive in relation to the concentration of nitrogen dioxide in the air, including proceedings involving the French Republic, since very high concentrations had been recorded, particularly in Paris (press release IP/18/3450).84It thus follows from the legal aspects and the facts analysed above, in particular as regards the applicants’ powers to restrict the circulation of vehicles in order to protect air quality and the use which they make of those powers, that it is established that the applicants’ legal situation is affected by the contested regulation and that that regulation is therefore of direct concern to them, within the meaning of the fourth paragraph of Article 263 TFEU. Furthermore, since the contested regulation is a regulatory act which does not entail implementing measures, within the meaning of that same provision, as set out in paragraphs 38 and 40 above, it follows that the actions for annulment brought by the City of Paris, the City of Brussels and the Municipality of Madrid are admissible and that the pleas of inadmissibility raised by the Commission must be dismissed. The substance of the actions for annulment 85The applicants put forward pleas in law alleging that the Commission lacked the competence to adopt the provisions of the contested regulation which they criticise as well as pleas in law alleging infringement, in substantive terms, of various provisions of EU law which can be grouped into three categories: provisions of Regulation No 715/2007 and, more generally, of acts of secondary law which contribute to guaranteeing air quality; provisions of the EU and FEU Treaties and of the Charter of Fundamental Rights of the European Union; and, lastly, various legal principles. In addition, they submit that, by adopting the contested regulation, the Commission misused its powers.– The pleas alleging that the Commission lacked competence 86As set out in paragraphs 7 and 8 above, Regulation No 715/2007 provides that the Commission is authorised to adopt various implementing measures to ensure the application of its provisions within the context of procedures now laid down in Regulation No 182/2011. In the present case, the contested regulation refers explicitly, in its recitals, to Article 5(3) of Regulation No 715/2007, which states that the specific procedures, tests and requirements for type approval relating to a certain number of elements, inter alia tailpipe emissions, are to be defined by the Commission in accordance with the regulatory procedure with scrutiny, which is itself described in Article 5a of Decision 1999/468, the effects of which have been maintained for the purposes of the acts making reference thereto pursuant to Article 12 of Regulation No 182/2011.87The applicants claim that, in the present case, the conditions subject to which the Commission may supplement the provisions of Regulation No 715/2007 within the context of the regulatory procedure with scrutiny are not met. They advance, inter alia, the following arguments.88The applicants state that recital 7a of Decision 1999/468 states that ‘it is necessary to follow the regulatory procedure with scrutiny as regards measures of general scope which seek to amend non-essential elements of a basic instrument adopted [jointly by the Parliament and the Council], inter alia by deleting some of those elements or by supplementing the instrument by the addition of new non-essential elements[, but] the essential elements of a legislative act may only be amended by the legislator on the basis of the Treaty’. The City of Brussels adds that recital 25 of Regulation No 715/2007 expresses a similar view by stating that, ‘in particular, power should be conferred on the Commission to introduce particle number based limit values in Annex I, as well as to recalibrate the particulate mass based limit values set out in that Annex’, and that, ‘since those measures are of general scope and are designed to amend non-essential elements of this Regulation, they should be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of [this decision]’. Along the same lines, the Municipality of Madrid makes mention of recital 26 of the same regulation, which states that ‘power should also be conferred on the Commission to establish specific procedures, tests and requirements for type approval, as well as a revised measurement procedure for particulates and a particle number based limit value, and to adopt measures concerning the use of defeat devices, access to vehicle repair and maintenance information and test cycles used to measure emissions’, and that, ‘since those measures are of general scope and are designed to supplement this Regulation by the addition of new non-essential elements, they should be adopted in accordance with the regulatory procedure with scrutiny provided for in Article 5a of [this decision]’.89Pointing to the differences between the regulatory procedure with scrutiny and the legislative procedure resulting in an act of the Parliament and of the Council, the applicants further submit that, by introducing, for the RDE tests, NTE values of emissions of oxides of nitrogen higher than the limits on those emissions defined for the Euro 6 standard in Annex I to Regulation No 715/2007, even though up until that point those limits had been continually reduced, the Commission amended essential elements of that regulation without having the power to do so. The City of Brussels clarifies that it does not dispute that the Commission is authorised, on the basis of Article 5(3) of Regulation No 715/2007, to define new tests. It does not therefore call into question Regulations No 692/2008 and 2016/427 prior to the incorporation of the provisions of the contested regulation. However, it does contest the introduction of new quantitative limits on emissions of oxides of nitrogen by the contested regulation which are more relaxed than those laid down in Annex I to Regulation No 715/2007, adopted by the Parliament and the Council. Those new limits, which are the result of the determination of the CF pollutant conformity factor in the contested regulation, deprive the limits laid down in the Euro 6 standard contained in that annex of their practical effect. Since the Commission states that the CF pollutant conformity factors applied are justified by the discrepancies likely to be observed between the data from the RDE tests and the data from the laboratory tests, relaxing the limits applied for the first type of tests actually amounts to abandoning the Euro 6 limits laid down in Annex I to Regulation No 715/2007.90The City of Paris and the Municipality of Madrid add that, in so doing, the Commission infringed essential procedural requirements. In their view, the normal intervention of the ‘co-legislators’, in particular that of the Parliament, would have provided procedural safeguards and necessarily influenced the content of the act to be adopted which, at the very least, would have been subject to a number of amendments.91As a preliminary point, the Commission recalls the legislative and regulatory context into which the contested regulation falls and seeks to show that, contrary to the applicants’ claims, that regulation contributes to the improved protection of the health of European citizens and of the environment.92The Commission explains that the type approval process for a new vehicle is as follows. The manufacturer submits a prototype to the competent authorities, which must ensure that that prototype satisfies the conditions laid down in Annex IV to Directive 2007/46, in particular those which follow from Regulation No 715/2007 in relation to pollutant emissions. Once the ‘type’ is approved, the manufacturer begins its industrial production and every vehicle sold must comply with the type.93The Commission points out that Annex I to Regulation No 715/2007, which contains the limits on pollutant emissions defined for the Euro 5 and Euro 6 standards, in particular those relating to oxides of nitrogen, has never been amended and that it ‘still forms part, as such, of EU law’.94The Commission also states that Regulation No 715/2007 does not itself define the procedure for monitoring compliance with the limits on pollutant emissions laid down in Annex I thereto, even though Article 5(2) of that regulation does however contain the rule prohibiting, save in the exceptional cases listed, defeat devices which may distort the measurement of pollutant emissions.95According to the Commission, the power to define the specific procedures, tests and requirements for type approval, by supplementing Regulation No 715/2007 and amending its non-essential elements, itself falls within the scope of the regulatory procedure with scrutiny, as is stated in Article 5(3) of that regulation. It likewise takes the view that Article 14(3) of the regulation also assigns it responsibility for the subsequent review of those procedures, tests and requirements as well as the test cycles used to measure emissions, and confers on it, under the same conditions, the duty of adapting them when they are no longer adequate or no longer accurately reflect the real pollutant emissions generated by driving on the road.96The Commission states that, within that context, it adopted Regulation No 692/2008 with a view — inter alia — to establishing the procedures to monitor pollutant emissions from light passenger and commercial vehicles using a type of laboratory test called the ‘New European Driving Cycle’ (NEDC), corresponding to the technology available at the time (type 1 test mentioned in paragraph 12 above). It takes the view that, as is stated in recital 15 of Regulation No 715/2007, the EU legislature was aware of the possible inadequacy of that type of test to reflect real pollutant emissions and explicitly tasked the Commission with examining whether that test needed to be updated or replaced.97The Commission argues that it therefore pursued two lines of action, as set out in paragraph 10 of its Communication on the application and future development of Community legislation concerning vehicle emissions from light-duty vehicles and access to repair and maintenance information (Euro 5 and 6) (OJ 2008 C 182, p. 17).98First, the Commission was involved, as part of the work undertaken by the United Nations Economic and Social Council, in the design of a new type of laboratory test called the ‘Worldwide Harmonised Light Vehicles Test Procedure’ (WLTP), which better reflects real pollutant emissions than the NEDC test. In this connection, the NEDC test was replaced by the WLTP test by the adoption of Commission Regulation (EU) 2017/1151 of 1 June 2017 supplementing Regulation No 715/2007, amending Directive 2007/46, Regulation No 692/2008 and Commission Regulation (EU) No 1230/2012 and repealing Regulation No 692/2008 (OJ 2017 L 175, p. 1).99Second, the Commission developed a procedure for measuring pollutant emissions under real driving conditions, involving all relevant stakeholders in its work, including some environmental protection organisations. The procedure was introduced into EU legislation in March 2016 for light passenger and commercial vehicles with the adoption, by the Commission, of Regulation 2016/427, amending Regulation No 692/2008. It is Regulation 2016/427 and not the contested regulation, which introduced the concept of NTE values. A similar approach had been adopted as early as 2011 for heavy duty commercial vehicles.100The Commission explains that the laboratory tests and the RDE tests complement one another. The former provide more information, whereas the latter, on account inter alia of their duration and the variety of the conditions in which they are performed, have the advantage of enabling the detection of any repeated inconsistencies with the results of the laboratory tests which may point to the use, by vehicle manufacturers, of defeat devices during those laboratory tests, devices which distort the results of those tests as compared with the results when the vehicle is used normally. It is for this reason that provision was made in Regulation 2016/427 that, even during the transitional period preceding the determination of the NTE values, beginning on 20 April 2016, the RDE tests were to be performed ‘for monitoring purposes’.101The Commission goes on to explain, in essence, that the varied conditions of the on-road trips to be performed in order to validate an RDE test, like the use of PEMS, give rise to statistical and technical uncertainties which justify establishing CF pollutant conformity factors to be applied to the limits on Euro 6 emissions of oxides of nitrogen, in order to avoid results which are invalid vis-à-vis compliance with those limits when conducting those tests, and also entail subsequent unlawful refusals of type approval. At the hearing, the Commission thus explained that an RDE test conducted in Estonia on a summer afternoon and an RDE test conducted in Luxembourg in the early morning in winter using the same vehicle could give markedly different results given the significantly different conditions. Similarly, since the RDE tests last for between one and a half and two hours, their variable duration may influence the results. The PEMS themselves measure three sets of data which have to be combined to determine the mass of the oxides of nitrogen emitted per kilometre, and each of those three measurements carries with it a degree of uncertainty. In addition, the operation of the PEMS may be affected during the tests. The CF pollutant conformity factors were provided for in Regulation 2016/427 in order to take account of such uncertainties, even though the values of those factors were not yet specified therein. Provision had already been made for such factors in earlier legislation in relation to heavy duty commercial vehicles.102The adoption of the contested regulation, which entered into force on 15 May 2016, led to the amendment of the legal scope of the RDE tests, since such a test which is unsuccessful having regard to the NTE values now fixed as a result of the determination of the CF pollutant conformity factors entails, with effect from the dates of application of those limits, the refusal pure and simple of type approval for the vehicle type in question. The Commission observes that, in accordance with the findings of the consultations conducted for several years with stakeholders and with the statement made in recital 5 of Regulation 2016/427, two consecutive phases were established for the NTE values and the CF pollutant conformity factors relating to oxides of nitrogen. Thus, as regards type approval of passenger vehicles, over the period from 1 September 2017 to 31 December 2019, a temporary CF pollutant conformity factor, applicable at the manufacturer’s request, was set at 2.1. The normal, or ‘final’, CF pollutant conformity factor mandatory for all such vehicles with effect from 1 January 2020 was in turn set at 1.5.103The Commission explains that the normal, or ‘final’, CF pollutant conformity factor is 1, increased by a margin of technical uncertainty of 0.5 justified in view of the performance level of current PEMS. According to the Commission, that margin of uncertainty will be subject to an annual review and revised in line with improvements in the quality of the measurements taken. It states that the temporary CF pollutant conformity factor of 2.1, which may be used on request, is justified not only by that margin of technical uncertainty but also by the statistical uncertainty associated with the various possible trips which may be undertaken when conducting the RDE tests. It was calculated as lying within a range of between 1.6 and 2.2, a range identified by the Joint Research Centre (JRC) using modelling, since the feedback available when the contested regulation was being drafted was not yet sufficient. According to the Commission, that statistical uncertainty should ‘decrease since new vehicle types will factor in the mandatory performance of the RDE [tests]’, in the same way that technical uncertainty will be reduced on account of improvements made to the PEMS. In this regard, a draft amending regulation currently under examination provides for a margin of technical uncertainty which is reduced to 0.43 and thus a normal, or ‘final’, CF pollutant conformity factor of 1.43.104The Commission infers from the legal and historical context in which the contested regulation was adopted that that regulation in no way constitutes a ‘licence to pollute’ or a decline in the level of environmental protection, but on the contrary that it bolsters the legal arsenal to combat air pollution by preventing the type approval of vehicles equipped with prohibited defeat devices.105In order to address more specifically the pleas advanced by the applicants alleging that it lacked the competence to adopt the contested regulation, the Commission explains first of all that the recitals of acts are not provisions on the basis of which the legality of that regulation may be reviewed.106The Commission goes on to observe that the contested regulation was adopted on the basis of Article 5(3) of Regulation No 715/2007. It charts the course of its adoption, within the framework of the comitology regulatory procedure with scrutiny, and points out that neither the Parliament nor the Council opposed the draft.107The Commission denies that, by the contested regulation, it amended an essential element of Regulation No 715/2007, here the limits on pollutant emissions laid down in the Euro 6 standard contained in Annex I to that regulation, as the applicants claim. In that regard, it agrees that Article 5(3) of Regulation No 715/2007 does not allow it to amend or replace the limits contained in Annex I to that regulation.108However, first, the limits contained in Annex I to Regulation No 715/2007 continue to apply in full to the laboratory tests, which are the ‘cornerstone’ of the type approval system of the vehicles in question and which cannot be replaced by the RDE tests, which are ‘less stable, less comprehensive and are based on a different technology’.109Second, the limits contained in Annex I to Regulation No 715/2007 are likewise applicable to the RDE tests and the CF pollutant conformity factors do not amend them; those factors merely allow comparisons to be made, for reasons associated with the statistical and technical uncertainties set out in paragraphs 101 and 102 above, with the laboratory results with a view to detecting defeat devices. The RDE tests procedure, which is conducted in addition to the laboratory tests and organised as set out above, does not therefore have the effect of amending essential elements of that regulation; on the contrary, it ensures greater compliance with them. In the light of the foregoing, the Commission disputes in particular the argument advanced by the City of Brussels in its reply, namely that the NTE values resulting from the application of the CF pollutant conformity factors deprive the Euro 6 limits on pollutant emissions contained in that annex of their practical effect.110With regard more specifically to the arguments advanced by the City of Paris and the Municipality of Madrid which seek to demonstrate that the Commission infringed essential procedural requirements, the Commission takes the view that, since it had the power to adopt the contested regulation if it complied with the procedure laid down for that purpose, namely the comitology regulatory procedure with scrutiny, it necessarily complied with the essential procedural requirements. In that regard, it recalls the course of the procedure which led to the adoption of the contested regulation and observes that the draft was not opposed by a majority in the Parliament, which was sufficient, in the light of the applicable rules, for the procedure to be continued, regardless of the fact that the majority in favour was slim.111Finally, with regard to claims that the procedure followed lacked transparency, the Commission states that the power, on the part of the legislature, to authorise the Commission to amend or supplement the provisions of a basic act by means of implementing provisions which do not concern essential elements has been acknowledged by the European Union judicature (judgment of 17 December 1970, Köster, Berodt & Co., 25/70, EU:C:1970:115) and is now enshrined in Articles 290 and 291 TFEU. In the present case, account was taken, in any event, of public consultations and the opinion of experts in connection with the establishment of the RDE tests.112It should be observed that, as is confirmed by its recitals, the contested regulation was adopted by the Commission on the basis of Article 5(3) of Regulation No 715/2007. That provision allows the Commission, as stated in paragraph 8 above, to define specific procedures, tests and requirements for the purposes of the type approval of vehicles, in particular in relation to tailpipe emissions and defeat devices, by amending non-essential elements of Regulation No 715/2007 and supplementing it if necessary.113Even though it is not cited in the recitals of the contested regulation, Article 14(3) of Regulation No 715/2007, cited in paragraph 10 above, which is essentially concerned with the development of the elements forming the subject matter of Article 5(3) of the same regulation, must also be taken into consideration. The contested regulation in fact makes the successful performance of the RDE tests a new requirement for the type approval of a vehicle, that is to say that it seeks to satisfy the objective of adapting the tests prior to that approval ‘so as to adequately reflect the emissions generated by real driving on the road’, as provided for in Article 14(3) of that regulation.114According to those two provisions, both Article 5(3) and Article 14(3) of Regulation No 715/2007, the Commission must thus act within the framework of the regulatory procedure with scrutiny defined in Article 5a of Decision 1999/468, as set out in paragraph 9 above. Recital 7a of that decision, relied on by the applicants, which clarifies the scope of Article 5a of the decision, itself states, as explained in paragraph 88 above, that the regulatory procedure with scrutiny must be followed ‘as regards measures of general scope which seek to amend non-essential elements of a basic instrument adopted in accordance with the procedure referred to in Article 251 [EC], inter alia by deleting some of those elements or by supplementing the instrument by the addition of new non-essential elements[, but that] the essential elements of a legislative act may only be amended by the legislator on the basis of the Treaty’.115Since the applicants submit that, by the contested regulation, the Commission amended an essential element of Regulation No 715/2007, namely the limits on emissions of oxides of nitrogen laid down in relation to the Euro 6 standard, contained in Annex I to that regulation, the first question to be resolved is whether or not those limits constitute an essential element of that regulation which the Commission may not amend on the basis of Article 5(3) and Article 14(3) of the same regulation, read in conjunction with Article 5a of Decision 1999/468. If that is the case, consideration will have to be given to the second question, namely whether, by defining in the contested regulations the NTE values for emissions of oxides of nitrogen to be observed during the RDE tests and by determining CF pollutant conformity factors, the Commission amended the limits on those emissions laid down for the Euro 6 standard.116With regard to the first question, it may be observed, from a contextual and teleological point of view, that recital 3 of Regulation No 715/2007 states that ‘this Regulation lays down the fundamental provisions on vehicle emissions, whereas the technical specifications will be laid down by implementing measures adopted following comitology procedures’. Recital 4 of that regulation goes on to state that ‘further reductions in emissions from the transport sector … from households and from the energy, agricultural and industrial sectors are needed to achieve EU air quality objectives’, that, ‘in this context, the task of reducing vehicle emissions should be approached as part of an overall strategy’ and that ‘the Euro 5 and 6 standards are one of the measures designed to reduce emissions of particulate matter and ozone precursors such as nitrogen oxides and hydrocarbons’. Recital 5 of that regulation clarifies that ‘achieving EU air quality objectives requires a continuing effort to reduce vehicle emissions’, that, ‘for that reason, industry should be provided with clear information on future emission limit values’ and that ‘this is why this Regulation includes, in addition to Euro 5, the Euro 6 stage of emission limit values’. Recital 6 of the same regulation adds that, ‘in particular, a considerable reduction in nitrogen oxide emissions from diesel vehicles is necessary to improve air quality and comply with limit values for pollution’ and that ‘this requires reaching ambitious limit values at the Euro 6 stage …’.117Furthermore, account must be taken of the following provisions of Regulation No 715/2007. Article 1 states that ‘this Regulation establishes common technical requirements for the type approval of motor vehicles … with regard to their emissions’. Article 4(1) provides that ‘manufacturers shall demonstrate that all new vehicles sold, registered or put into service in the Community are type approved in accordance with this Regulation and its implementing measures’ and that ‘these obligations include meeting the emission limits set out in Annex I and the implementing measures referred to in Article 5’. Article 4(2) states that ‘the technical measures taken by the manufacturer must be such as to ensure that the tailpipe and evaporative emissions are effectively limited, pursuant to this Regulation, throughout the normal life of the vehicles under normal conditions of use’ and that ‘in-service conformity shall be checked, in particular, for tailpipe emissions as tested against emission limits set out in Annex I’. Article 10 requires the Member States, in accordance with the timescale laid down therein taking into account the various categories of vehicle, to refuse type approval or the registration, sale or entry into service of new vehicles where they ‘do not comply with this Regulation and its implementing measures, and in particular with the [Euro 5 or Euro 6] limit values set out in … Annex I’.118It follows from the recitals and provisions cited in paragraphs 116 and 117 above that the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, as stated in Annex I to Regulation No 715/2007, are indeed an essential element of that regulation, and in fact the central element, since the sole purpose of the inclusion of all the provisions of the regulation is to ensure that those limits are observed — with other provisions relating to other pollutant emissions — throughout the normal life of the vehicles under normal conditions of use and that the limits on emissions of oxides of nitrogen are defined in the regulation itself (in Annex I, which is an integral part thereof), that they were defined from the outset by the Parliament and the Council and that no provision of the regulation expressly authorises the Commission to amend them as part of the exercise of implementing powers.119In this regard, conversely, in the case of particulate pollutants, defined in Article 3(5) of Regulation No 715/2007 as non-gaseous pollutants present in exhaust gas, Article 14(2) of the same regulation states that, after completion of a particulate measurement programme conducted within the framework of the United Nations Economic Commission for Europe, and at the latest upon entry into force of Euro 6, the Commission will have to ‘recalibrate’ the particulate mass based limit values set out in Annex I and introduce particle number based limit values in that annex. The lack of a similar provision in relation to the limit values on emissions of oxides of nitrogen confirms that the Parliament and the Council did not intend to entrust to the Commission the power to amend those limit values. The exceptional nature of the provision concerning particulate pollutants is further confirmed by other provisions of Article 14 of that regulation, namely paragraphs 4 and 5 thereof, under which any introduction of emission limits for additional pollutants or the amendment of the carbon monoxide and hydrocarbon tailpipe emission limits after a cold start test must involve the Commission presenting proposals to the Parliament and to the Council. Accordingly, save in relation to particulate pollutants, the setting or the amendment of the limit values on pollutant emissions, including oxides of nitrogen, by the vehicles covered by that regulation falls to the Parliament and the Council.120The limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, are therefore an essential element of that regulation which cannot be amended by the Commission as part of the comitology regulatory procedure with scrutiny, as moreover the Commission itself agrees, as stated in paragraph 107 above.121With regard to the second question, the Commission contends that, by having defined in the contested regulation the NTE values for emissions of oxides of nitrogen to be observed during the RDE tests by means of the determination of the CF pollutant conformity factors, it did not amend the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007. By way of a reminder, the CF pollutant conformity factors applied in the contested regulation for oxides of nitrogen are 2.1, at the request of the vehicle manufacturer concerned for a transitional period ending, depending on the categories of vehicles and the nature of the acts requested, between 31 December 2019 and 31 December 2021, and, normally, 1.5. Used as a factor multiplying the Euro 6 emission limits, they allow the NTE emission values to be determined. In essence, the Commission argues that the limits on emissions of oxides of nitrogen laid down in the Euro 6 standard still apply not only to the laboratory tests but also now to the RDE tests, and that the CF pollutant conformity factors are merely statistical and technical corrective elements.122In this regard, it should be observed, first of all, that it is clear from the second subparagraph of Article 4(2) of Regulation No 715/2007, under which ‘the technical measures taken by the manufacturer must be such as to ensure that the tailpipe and evaporative emissions are effectively limited, pursuant to this Regulation, throughout the normal life of the vehicles under normal conditions of use’, that the limits on emissions of oxides of nitrogen laid down in the Euro 6 standard contained in Annex I to that regulation must be observed under real driving conditions and, therefore, during the official tests under real driving conditions prior to type approval. The Commission does not dispute this, since it contends that this is the case.123To that extent, the Commission’s argument that the limits on emissions of oxides of nitrogen laid down in the Euro 6 standard, contained in Annex I to Regulation No 715/2007, continue to apply in full in relation to the laboratory tests, although it is true, is irrelevant, since those limits must likewise be observed during the RDE tests. As for the argument that the laboratory tests are the ‘cornerstone’ of the monitoring of pollutant emissions from vehicles, as mentioned in paragraph 108 above, that argument is at odds with the fact, specifically, that the conditions of such tests are too far removed from real driving conditions for them to be able to ensure on their own compliance with the rules on pollutant emissions from vehicles laid down in the regulation, as was already hinted at by recital 15 of that regulation and as is explicitly stated in recitals 1, 2 and 4 of Regulation 2016/427, which introduced the RDE tests into legislation, just like in recitals 3 and 7 of the contested regulation. Although the laboratory tests do provide very detailed and useful information about the ‘behaviour’ of vehicles, in particular since the replacement of the NEDC tests with the WLTP tests, they do not therefore confine the RDE tests to a secondary status.124In this regard, even though the RDE tests do present specific constraints, in particular as regards the management of certain margins of uncertainty, as the Commission explains, they are designed to provide a better understanding of the normal conditions of use of vehicles than the laboratory tests, as is set out in the recitals of Regulation 2016/427 and of the contested regulation referred to in paragraph 123 above. In particular, recital 4 of Regulation 2016/427 states that the objective of the work which resulted in the RDE tests defined in that regulation was to ‘[develop] a … [RDE] test procedure better reflecting emissions measured on the road’.125The importance of the RDE tests has been further reinforced since the legal scope of those tests was amended by the contested regulation, under which — as the Commission has set out — from the dates of application of the NTE values for emissions of oxides of nitrogen which it defines those tests are no longer to be conducted merely ‘for monitoring purposes’, rather their results determine whether type approval may be obtained and, consequently, whether the vehicles concerned may be registered, sold, put into service and driven on the road.126Accordingly, the parallel existence of the laboratory tests and the RDE tests has no impact on the obligation to comply with the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, under real driving conditions and, therefore, during the RDE tests.127In those circumstances, the setting by the Commission alone, using CF pollutant conformity factors, of NTE values for emissions of oxides of nitrogen not to be exceeded during the RDE tests which are higher than the limits on those emissions laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, cannot be permitted as the applicable law stands.128This results in the de facto amendment of the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, for the RDE tests, even though those limits are to apply to those tests, as is clear from paragraph 122 above.129It must be noted in this regard that the system which seeks to introduce a coefficient (the CF pollutant conformity factor), a multiplier of the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, necessarily entails the amendment of that standard itself, unlike a system which takes account of the performance and possible errors of the measuring equipment by making corrections to the measurements themselves, but not to the limits which must be observed. If the margins of error of the measurements taken remain within sufficiently narrow parameters, the second type of system allows compliance with the limits to be verified with a reasonable degree of reliability.130However, since the amendment of the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, is — as stated in paragraph 120 above — the amendment of an essential element of that regulation, the Commission did not have the power to make such an amendment in the context of its implementing powers exercised as part of the comitology regulatory procedure with scrutiny, powers which it enjoys as a result of Article 5(3) and Article 14(3) of that regulation.131That finding is not called into question by the fact that provision was made for the CF pollutant conformity factors and NTE values for emissions of oxides of nitrogen in Regulation 2016/427, against which an action for annulment has not been brought. First, that regulation, which is also a Commission regulation, cannot ‘block’ the application of the provisions of Regulation No 715/2007, examined in paragraphs 112 to 120 above, which determine the scope of the Commission’s related implementing powers, and, second, it is indeed the contested regulation itself which results in the application, in relation to emissions of oxides of nitrogen and during the RDE tests, of NTE values higher than the limits laid down for the Euro 6 standard and in place of those limits, by making those values a binding requirement to determine the success or failure of those tests.132The pleas for annulment advanced by the applicants alleging a lack of competence on the part of the Commission must therefore be upheld in so far as they concern the CF pollutant conformity factors applied in the contested regulation, from which the NTE values for emissions of oxides of nitrogen follow.133Furthermore, even assuming that, contrary to the finding made above, the Commission may nevertheless determine CF pollutant conformity factors with a view to taking account of certain uncertainties, it must be stated that it could not, in any event, adopt the levels contained in the contested regulation whilst observing the scope of its implementing powers. Those levels do not enable, with a reasonable degree of reliability, compliance with the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, to be verified during the RDE tests, although its limits must apply to those tests, in the light of the findings made in paragraph 122 above.134In view of the very high value of the CF pollutant conformity factors, 2.1 and 1.5, the levels of emissions of oxides of nitrogen measured during the RDE tests may be, respectively, up to more than two times greater and up to one and a half times greater than the limits on those emissions laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, without a test being regarded as having been failed. To use an example given by the applicants, this means that a diesel passenger vehicle, the emissions of oxides of nitrogen from which are limited under the Euro 6 standard to 80 mg/km, may pass the RDE test if it remains below a measurement of 168 mg/km during the transitional stage and below a measurement of 120 mg/km after that stage. By way of reminder, the limit laid down for the Euro 5 standard was 180 mg/km for the same type of vehicle.135In addition, even if all the explanations provided by the Commission regarding the margins of technical and statistical uncertainty which justified the CF pollutant conformity factors applied in the contested regulation were held to be accurate, the NTE values for emissions of oxides of nitrogen resulting from them do not make it possible to verify, with a reasonable degree of reliability, whether or not the limits of those emissions laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, are observed by a vehicle during an RDE test.136In fact, even applying just the normal, or ‘final’, CF pollutant conformity factor of 1.5, which is explained by the existence of a margin of technical uncertainty of 0.5, that is to say of 50%, it must be observed that a margin of error of 50% represents half the value which is supposed to be measured and that, if that margin is converted into a real margin of error as compared with the measurement by the equipment, this results in a margin of 33% (it being acknowledged that a measurement of 120 mg/km may correspond in reality to emissions of 80 mg/km, that is one third less than the value measured). This means that it is impossible to determine following an RDE test whether or not the vehicle being tested complies with those limits or is even close to them. Thus, taking into account such a factor, if a PEMS displays, on the return of a diesel passenger vehicle from an RDE test, a level of emissions of oxides of nitrogen of 120 mg/km, this may mean the following three things: either the equipment provides accurate measurements and the vehicle does indeed emit 120 mg/km of oxides of nitrogen, that is to say one and a half times more than the Euro 6 standard allows; or the equipment may in fact make erroneous measurement on a scale corresponding to the margin of technical uncertainty advanced by the Commission and this may mean that in reality the vehicle emits only 80 mg/km of oxides of nitrogen, that is to say that it just complies with the standard; or, on the contrary, if the equipment makes the opposite error, that the vehicle in fact emits 160 mg/km of oxides of nitrogen, that is to say two times greater than that standard allows. In addition, contrary to the statements made in essence by the Commission at the hearing in response to a written question put by the Court, there is nothing to guarantee that the laboratory test will necessarily ‘catch’ a vehicle emitting excessive levels of pollutants which has successfully passed the RDE test stage thanks to the margin of technical uncertainty. There is nothing to guarantee, for example, that a diesel passenger vehicle ‘measured’ at 100 mg/km during the RDE test and which did in fact emit oxides of nitrogen at that level or at a higher level during that test will record more than 80 mg/km of emissions of oxides of nitrogen during the laboratory test. If the laboratory tests were that reliable, there would be no need for the RDE tests. A fortiori, the problems identified above exist if the temporary CF pollutant conformity factor of 2.1 is used.137Accordingly, the scale of the uncertainty resulting from the value of the CF pollutant conformity factors contained in the contested regulation under no circumstances allows, contrary to the Commission’s claims, the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, to be applied during the RDE tests, given the potentially very great discrepancies between those limits and the actual volumes of oxides of nitrogen emitted during the tests, even though the NTE values of those emissions are not exceeded according to the measurements taken by the PEMS. The scale of the uncertainty thus results in the de facto amendment of those limits for those tests, even though — according to the provisions of Regulation No 715/2007 — those limits must be observed under real driving conditions and, therefore, during official tests under real driving conditions prior to type approval, as stated in paragraph 122 above. For those reasons, the Commission therefore also exceeded the limits of its power in that regard as set out in paragraph 132 above.138Furthermore, it may be observed, with regard to the explanations provided by the Commission to justify specifically the temporary CF pollutant conformity factor of 2.1, citing a margin of statistical uncertainty of 0.6 plus the margin of technical uncertainty of 0.5 applied in relation to the normal, or ‘final’, CF pollutant conformity factor, that those explanations are unconvincing in the light of the objective which the Commission declares to be following of ensuring compliance with the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, during the RDE tests.139In this regard, in the Commission’s view, the temporary margin of statistical uncertainty of 60% is linked to the various possible trips which may be undertaken by test drivers. It is true that, in the absence of specific instructions, the results from the different drivers to whom one and the same vehicle is entrusted to be driven on the road for a certain time would vary greatly according to their driving style, the routes actually taken and the traffic conditions. However, generally speaking, any bias or statistical uncertainties (the risk that the results may be unrepresentative as compared with the overall reality) are corrected by work to ensure the representativeness of the sample or of the testing (here: the representativeness of the test) or by the volume of testing (here: the number of tests), and not by stating that the results may be subject to a margin of error of 60%. In the present case, it is by requiring that the trip is sufficiently representative of the actual average use of a vehicle (types of use; highway, city, motorway driving; traffic conditions) and by requiring that an ‘average’ driving style be adopted that major errors in relation to such use can be avoided. Furthermore, at the hearing, the Commission itself referred to several factors taken from Annex IIIA to Regulation No 692/2008, which defines the RDE test conditions: thus, the three types of trips — highway, city, motorway — must be roughly equal in duration, the tests must take place on a working day at an altitude of less than 700 metres and provision is made for speed parameters. In those circumstances, the random variation of the overall trip length between one and a half and two hours, which is intended to circumvent the operation or the deactivation at a specific moment of any defeat device, should not give rise to markedly different results according to the actual duration of the tests.140Furthermore, even though it is possible, as the Commission stated at the hearing, that a trip on a summer afternoon in Estonia gives ‘better’ results than a trip on a winter morning in Luxembourg, first, the provisions of Annex IIIA should guarantee that there cannot be too many differences between the characteristics of the two trips (a test that is too extreme — excessively cold temperature, too much congestion — would be disregarded), and, secondly, Regulation No 715/2007, which lays down the limit values of emissions of oxides of nitrogen for the Euro 6 standard, does not provide that those limits are higher in Luxembourg than in Estonia. They must be observed throughout the European Union as ‘maximum limits’. The very purpose of the RDE tests is to ensure that that is the case in conditions which, without being extreme, must be representative of the reality of the vehicle’s use, including in Luxembourg.141In addition, as the Commission confirmed at the hearing in response to a written question put by the Court, one and the same type of vehicle must not be subject to a whole series of RDE tests the results of which are amalgamated in the hope that they are statistically representative. A second test may indeed be conducted if a particular issue arose during the first test, and there may be an RDE test for type approval and then, at a later stage, additional tests to verify the continued compliance, throughout the life of the vehicle, with the limits on emissions of oxides of nitrogen (such in-service-conformity testing is not yet conducted). Furthermore, since they are quite complicated and expensive, the RDE tests are conducted on ‘test families’ which may include several related types of vehicles, placed in the same ‘family’ by the manufacturer and from which only a selection of the types actually undergoes the tests, as provided for in the second subparagraph of Article 3(10) of Regulation No 692/2008, read in conjunction with appendix 7 of Annex IIIA thereto. In those circumstances, more specifically, at most several vehicles in the same ‘family’ simultaneously undergo RDE tests; a whole series of RDE tests is not conducted for one and the same vehicle, a type of vehicle or even a ‘family’ of vehicle types from which some kind of statistical ‘average’ would be drawn. Each of the vehicles undergoing the test, as the sole representative of a different type within the ‘family’, must satisfy the RDE test in order for all the ‘family’ to which it belongs to be regarded as having successfully passed the RDE tests, as is clear from points 4.1.1 and 4.1.2 of the abovementioned appendix 7. Moreover, this confirms the fact that the limits of pollutant emissions defined for the Euro standards are not values which must be achieved as part of a holistic approach, rather they are limits with which each vehicle must comply.142On the basis of all the foregoing, the Court has doubts whether the Commission’s reliance on possible statistical errors is well founded. The factors highlighted by the Commission appear to call into question the ability of an RDE test to reflect real driving on the road. However, without claiming to be a technical expert, the Court observes that the RDE tests have ‘matured’ over a long period of time, since the Commission states, in its written submissions, that the work on those tests began in January 2011, that tests of the same kind have been conducted operationally from that same year on heavy duty commercial vehicles, and that those tests were conducted solely ‘for monitoring purposes’ in relation to the vehicles covered by Regulation No 715/2007 only for a short period of time: between 20 April 2016, the date on which Regulation 2016/427 entered into force, and, in the case of certain vehicles, 1 September 2017, the first day of the actual application of the NTE values for emissions of oxides of nitrogen within the context of type approvals. In those circumstances, it would be surprising if the Commission had not had the time to clarify and standardise the RDE tests sufficiently so that they are representative of real driving conditions on the road in order to prevent in that regard a 60% degree of uncertainty as to their results. Furthermore, the main focus of Regulation 2016/427, which inserted Annex IIIA into Regulation No 692/2008, and in particular of point 4 et seq. of that annex and its 11 appendices, which run to around 120 pages in the consolidated online version in the EUR-Lex database, is to describe in very specific detail the components of an RDE test and how it is to be conducted. Moreover, even if some variations in results persist after the RDE tests on several types of vehicles belonging to the same ‘family’, or if such variations were to exist between two tests on the same vehicle, this is inherent in the very concept of testing of this kind.143Since the 60% margin of uncertainty linked to the temporary CF pollutant conformity factor of 2.1 does not appear to be justified by the statistical issues invoked by the Commission, the Commission has therefore, in any event, failed to demonstrate that that temporary factor allowed compliance with the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, to be verified during the RDE tests.144Accordingly, for the reasons set out in paragraphs 138 to 143 above, it must therefore be further confirmed that the introduction of the temporary CF pollutant conformity factor of 2.1 results, de facto, in the amendment of those limits in relation to the RDE tests, although in accordance with the provisions of Regulation No 715/2007 those limits must be observed under real driving conditions and, therefore, during official tests under real driving conditions prior to type approval, as stated in paragraph 122 above. For those reasons, the Commission therefore also exceeded the limits of its power in that regard, as set out in paragraph 132 above.145However, the pleas alleging the lack of competence on the part of the Commission were not argued in relation to the other aspects of the contested regulation which, furthermore, in general terms, are not criticised by the applicants. They could therefore be upheld in relation to those other aspects only if those aspects cannot be severed from the CF pollutant conformity factors applied in the contested regulation. That question will be examined below as part of the examination of the scope of the annulment to be ordered.– The other pleas advanced by the applicants 146As stated in paragraph 85 above, the applicants have also advanced pleas alleging infringement, in substantive terms, of various provisions of EU law and claimed that the Commission misused its powers.147Like the pleas alleging that a lack of competence on the part of the Commission, all these pleas seek solely to call into question the CF pollutant conformity factors applied in the contested regulation and the NTE values for emissions of oxides of nitrogen which follow from them. As far as the other aspects of the contested regulation are concerned, their well-founded nature is therefore also dependent on the severable, or non-separable, nature of the various provisions.148In so far as the pleas call into question the CF pollutant conformity factors applied in the contested regulation and the NTE values for emissions of oxides of nitrogen which follow from them, it may be observed that the fact that the Commission has been found to lack the competence to apply such factors given the limits on the implementing powers which it derives from Regulation No 715/2007 necessarily means that the Commission has infringed that regulation.149In that regard, all three applicants claim infringement of Annex I to Regulation No 715/2007. That annex is mentioned in Article 4(1) of that regulation, which states that the emission limits in that annex must be met. The applicants submit that, by defining CF pollutant conformity factors in the contested regulation, factors which result in NTE values for emissions of oxides of nitrogen during RDE testing which are higher than the limits on those emissions laid down for the Euro 6 standard in that annex, the Commission infringed Article 4(1) of that regulation. The conclusion reached by the analysis conducted above in paragraphs 122 to 144 as part of the examination of the pleas alleging a lack of competence on the part of the Commission is that the Commission did in fact amend the limits on emissions of oxides of nitrogen in relation to the RDE tests although those limits must be applied under real driving conditions, in particular when conducting those tests. To that extent, the Commission necessarily infringed the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, and, therefore, the provisions of Article 4(1) of the same regulation under which those limits must be met.150It is true that the Commission also advanced, in its defence on the merits, the argument that a legal amendment of the limits on emissions of oxides of nitrogen laid down for the Euro 6 standard, contained in Annex I to Regulation No 715/2007, was not made, since the applicants point to merely ‘specific’ or ‘practical’ amendments. Those limits are not in fact subject to legal amendment in that annex, but it is for that precise reason that the failure to comply with them in the case of the RDE tests, resulting specifically or in practice from the application in their place of the higher NTE values for emissions of oxides of nitrogen following from the CF pollutant conformity factors applied in the contested regulation, is unlawful.151The infringement of Regulation No 715/2007 may therefore also be accepted.152As for the remainder, in the light of the finding reached by the Court in paragraphs 132, 137, 144 and 151 above, there is no need to examine the other pleas and arguments advanced.– The scope of the annulment 153The Commission pleads that the applicants have submitted arguments only against point 2 of Annex II to the contested regulation, which determines the value of the final and temporary CF pollutant conformity factors for oxides of nitrogen. That annex itself amends Annex IIIA to Regulation No 692/2008, which sets out the rules governing the RDE tests. In the Commission’s view, the actions for annulment should therefore be declared inadmissible on the basis of Article 76(d) of the Rules of Procedure, which requires that arguments are presented in support of pleas in law, in so far as the actions are directed against other provisions of the contested regulation, which are severable from those called into question. The City of Paris and the Municipality of Madrid submit in response that the annulment of point 2 of Annex II to the contested regulation would deprive that regulation as a whole of any legal cause or reason, thus justifying its annulment in full.154It is essential in the present case to rule directly on the question of the severable nature of the various provisions of the contested regulation, meaning that it is necessary to examine whether the fact that the CF pollutant conformity factors in relation to oxides of nitrogen applied in the contested regulation are unlawful must automatically entail the annulment of other provisions of that regulation which cannot be severed from those unlawful elements (see, to that effect, judgment of 11 December 2008, Commission v Département du Loiret, C‑295/07 P, EU:C:2008:707, paragraphs 104 and 105). The Commission argues that the provisions of the contested regulation other than those determining those factors may be severed from the latter provisions.155The provision determining the factors at issue, which must be annulled, appears, as the Commission states, in point 2 of Annex II to the contested regulation, which amends Annex IIIA to Regulation No 692/2008 by inserting into that annex, after point 2.1, new points 2.1.1 and 2.1.2 in which the value of the final conformity factor and the value of the temporary conformity factor for the mass of the oxides of nitrogen are stated, respectively, to be ‘1 + margin with margin = 0.5’ and ‘2.1’ and in which the period during which the temporary conformity factor may be used is defined. However, point 2 of Annex II to the contested regulation also inserts into Annex IIIA to Regulation No 692/2008 a new point 2.1.3 concerning a ‘transfer function’, which is involved in the calculation of the NTE value, is set for now at 1 and therefore currently has no impact on that calculation, and has not been criticised by the applicants. Point 2.1.3 of Annex IIIA to Regulation No 692/2008 may thus be severed from points 2.1.1 and 2.1.2 thereof, and in particular from the value of the CF pollutant conformity factors for oxides of nitrogen mentioned therein, and there is no need to annul point 2 of Annex II to the contested regulation in so far as it inserts that provision.156Furthermore, Article 1(2) and (3) of the contested regulation, which amends the third subparagraph of Article 3(10) of Regulation No 692/2008, is indeed linked to the determination of the CF pollutant conformity factors for oxides of nitrogen. The amended version of that provision reads: ‘until three years after the dates specified in Article 10(4) and four years after the dates specified in Article 10(5) of [Regulation No 715/2007] [that is, for example, until 31 August 2017 for type approval of passenger vehicles and until 31 August 2019 for their individual entry into circulation] the following provisions shall apply: (a) the requirements of point 2.1 of Annex IIIA shall not apply [the requirements in question are those which set out the formula for calculation of the NTE value and which state that that value must not be exceeded during the RDE tests]’. That provision determines, a contrario, the point from which the CF pollutant conformity factors, including those criticised by the applicants, apply in relation to the RDE tests, that is to say from when those tests are no longer conducted simply for monitoring purposes. However, that provision may also relate to pollutants other than the oxides of nitrogen in relation to which CF pollutant conformity factors were determined after those factors for those oxides, as was the case in relation to fine particulate matter. In addition, nor is its annulment necessary for the criticised CF pollutant conformity factors for oxides of nitrogen to cease to apply. The absence of a value in the tables of final and temporary CF pollutant conformity factors contained in points 2.1.1 and 2.1.2 of Annex IIIA to Regulation No 692/2008 alone is sufficient to that end. Article 1(2) and (3) of the contested regulation, which amends the third subparagraph of Article 3(10) of Regulation No 692/2008, may thus be severed from the value of the CF pollutant conformity factors for oxides of nitrogen mentioned in points 2.1.1 and 2.1.2 of Annex IIIA to the latter regulation and there is therefore no need to annul it.157The other provisions of the contested regulation, which are primarily intended to supplement or amend Annex IIIA to Regulation No 692/2008 in order to detail the RDE test conditions, retain their purpose, contrary to the views expressed by the City of Paris and the Municipality of Madrid, even if the CF pollutant conformity factors for oxides of nitrogen applied in the contested regulation are annulled. In particular, the entire process laid down in relation to those tests, which has not been criticised, may remain in place regardless of the CF pollutant conformity factors defined for the various pollutants. In addition, even if the CF pollutant conformity factors for oxides of nitrogen applied in the contested regulation are annulled, as things stand the CF pollutant conformity factors for the number of particles defined since the adoption of Regulation 2017/1154 must be applied within the context of the process laid down for the RDE tests.158It follows from the foregoing that the only provision which must be annulled is point 2 of Annex II to the contested regulation, in so far as it sets, in points 2.1.1 and 2.1.2 of Annex IIIA to Regulation No 692/2008, the value of the final CF pollutant conformity factor and the value of the temporary CF pollutant conformity factor for the mass of the oxides of nitrogen. It also follows from the foregoing that, in accordance with the statements made in paragraphs 145 and 147 above, the various pleas advanced in the actions must be dismissed in so far as they concern the other provisions of the contested regulation and that there is therefore no need to rule on the question of admissibility raised by the Commission in that regard (see, to that effect, judgment of 26 February 2002, Council v Boehringer, C‑23/00 P, EU:C:2002:118, paragraph 52).159Since the Commission pointed out at the hearing that Regulation No 692/2008, as amended inter alia by the contested regulation, was replaced by Regulation 2017/1151, the Court recalls that, in order to comply with a judgment annulling a measure and to implement it fully, the institution which adopted the provision annulled must eliminate it from the subsequent measures adopted by it in which that provision was reproduced and exclude it from the measures to be introduced by it, having regard not only to the operative part of the judgment but also the grounds which led to the judgment and constitute its essential basis (see, to that effect, judgment of 26 April 1988, Asteris and Others v Commission, 97/86, 99/86, 193/86 and 215/86, EU:C:1988:199, paragraphs 26 to 31).– The temporal effects of the annulment 160The second paragraph of Article 264 TFEU provides that, if the European Union judicature considers this necessary, it is to state which of the effects of the act which it has declared void are to be considered as definitive. That provision has been interpreted inter alia as allowing, on grounds of legal certainty but also on grounds seeking to prevent a lack of continuity or a decline in the implementation of policies conducted or supported by the European Union, such as in the fields of environmental protection or public health, the effects of an act declared void to be maintained for a reasonable period (see, to that effect, judgments of 25 February 1999, Parliament v Council, C‑164/97 and C‑165/97, EU:C:1999:99, paragraphs 22 to 24, and of 16 April 2015, Parliament v Council, C‑317/13 and C‑679/13, EU:C:2015:223, paragraphs 72 to 74).161In the present case, when asked by the Court at the hearing about a possible temporal adjustment of the effects of the annulment which could be ordered, the City of Paris and the City of Brussels stated that they were opposed to such adjustment, explaining in essence that, even if, for a certain time, there was no NTE value for emissions of oxides of nitrogen to be observed during the RDE tests, in view of the prospect of more stringent requirements in that regard in the relatively near future vehicle manufacturers would not take advantage of that fact to obtain type approval for vehicles emitting higher levels of oxides of nitrogen than at present, since their industrial processes cannot embrace such hitches. The City of Brussels added that it was particularly opposed to a restriction of the effects into the future. For its part, the Commission replied that a temporal adjustment of the effects of the annulment would be of interest only if the Court were to find in essence that the provisions criticised should have been adopted by the Parliament and the Council.162However, the Court is of the view that simply annulling the provisions criticised ex tunc could pose two kinds of problem. First of all, with regard to the ‘past’, that is to say from the point at which the RDE tests were no longer conducted solely ‘for monitoring purposes’ (for example, 1 September 2017 for the type approval of passenger vehicles and vehicles for the carriage of persons) up until the point at which the present judgment will take effect in the light of the provisions of the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union, legal uncertainty would exist vis-à-vis the validity of the type approvals of vehicles granted or the refusals of such approvals during that period. The lack of a CF pollutant conformity factor for emissions of oxides of nitrogen could be interpreted either as not requiring any NTE value in that regard during those tests or, on the contrary, as meaning that the limits defined for the Euro 6 standard must be applied as such. With regard to the future, that is to say from the point at which the present judgment will take effect up until the point at which the Commission or the Parliament and the Council gives effect, as the case may be, to the judgment by specifying the rule applicable during those tests, the same legal uncertainty would persist. If the interpretation were to prevail amongst the authorities responsible for the type approval of vehicles that during that period there are no limits on emissions of oxides of nitrogen which cannot be exceeded during those same tests, this could result in vehicles exceeding even the NTE values for emissions of oxides of nitrogen set in the contested regulation obtaining type approval and thus lead to a retrograde development vis-à-vis the related objectives of environmental and health protection pursued.163Failing to effect a temporal adjustment of the annulment could therefore undermine both the legitimate economic interests of the automotive industry which has complied with the applicable legislation, and as the case may be those of consumers who acquired vehicles which complied with that legislation, as well as the policies of the European Union on the environment and health. The decision must therefore be taken, first, that the effects of the provision annulled are definitive in respect of the ‘past’, as defined in paragraph 162 above, and that they are maintained in respect of the future for a reasonable period which allows the related legislation to be amended; that period must not exceed 12 months from the date on which the present judgment takes effect, that is to say, in the light of the provisions of the second paragraph of Article 60 of the Statute of the Court of Justice of the European Union, from the expiry of the period for bringing an appeal if an appeal is not brought against the present judgment or, if an appeal is brought, as from the date of dismissal of the appeal. The claim for damages made by the City of Paris 164As stated in paragraph 30 above, the City of Paris claims that the Commission should be ordered to pay to it symbolic compensation of one euro for the harm caused to it as a result of the contested regulation. That claim is based on the second paragraph of Article 340 TFEU, which provides that, ‘in the case of non-contractual liability, the Union shall, in accordance with the general principles common to the laws of the Member states, make good any damage caused by its institutions’. The City of Paris relies in that regard on the illegality of that regulation, which follows from a serious breach of higher-ranking rules of law than the regulation, the existence of actual and certain harm occasioned by the cost of the measures which it would be required to implement in order to offset the increase in vehicular pollution, Paris’ loss of appeal from the perspective of tourism and the reduced effectiveness of its campaigns to raise awareness amongst the city’s inhabitants of the risks caused by pollutant emissions and, finally, the direct causal link between the Commission’s conduct and that damage. It does, however, limit its claim for damages to the symbolic amount of one euro, which would enable reparation to be made for the damage to its image and to the legitimacy of its action on environmental matters.165The Commission contests the admissibility of the claim for damages made by the City of Paris, inter alia because the latter has failed to produce evidence substantiating the reality of the damage allegedly suffered or the existence of a causal link between the adoption of the contested regulation and that damage.166However, the Court may, in the circumstances of the case brought before it, dismiss an action on the merits without ruling on the plea of inadmissibility raised against that action if the proper administration of justice justifies such dismissal (see, to that effect, judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 193 and the case-law cited).167In the present case, no evidence has been produced of the only damage, damage ‘to image and legitimacy’, for which the City of Paris seeks symbolic compensation of one euro. No evidence supports the applicant’s claims of the loss of appeal to tourists or of the difficulties in raising awareness amongst the city’s inhabitants of the risks caused by pollutant emissions which could constitute harm to image or legitimacy. Similarly, there is no evidence to support the claim that such circumstances, assuming they were proven to exist, are the result of the Commission’s adoption of the contested regulation.168In addition, it has been held that the annulment of the act which caused non-material damage to an individual’s reputation may, depending on the circumstances, be sufficient reparation for that damage (see, to that effect, judgments of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraphs 47 to 49, and of 7 October 2015, European Dynamics Luxembourg and Others v OHIM, T‑299/11, EU:T:2015:757, paragraph 155).169Accordingly, in any event, the damage to image and legitimacy claimed by the City of Paris provides a particularly good example of how symbolic and sufficient reparation can consist simply in the annulment of the provision of the contested regulation which it called into question.170The claim for damages made by the City of Paris should therefore be dismissed. Costs 171Under Article 134(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, the parties are to bear their own costs. However, if it appears justified in the circumstances of the case, the Court may order that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party.172Since the Commission has failed on several heads of claim, it should be ordered, in addition to bearing its own costs, to pay half the applicants’ costs.On those grounds,THE GENERAL COURT (Ninth Chamber, Extended Composition)hereby: 1. Annuls point 2 of Annex II to Commission Regulation (EU) 2016/646 of 20 April 2016 amending Regulation (EC) No 692/2008 as regards emissions from light passenger and commercial vehicles (Euro 6), in so far as it sets, in points 2.1.1 and 2.1.2 of Annex IIIA to Commission Regulation (EC) No 692/2008 of 18 July 2008 implementing Regulation (EC) No 715/2007, the value of the final CF pollutant conformity factor and the value of the temporary CF pollutant conformity factor for the mass of the oxides of nitrogen; 2. Dismisses the actions as to the remainder; 3. Orders the effects of the provision annulled pursuant to paragraph 1 of the operative part of this judgment to be maintained pending the adoption, within a reasonable period, of new legislation replacing those provisions; that period may not exceed 12 months from the date on which the present judgment takes effect; 4. Orders the European Commission to bear its own costs and to pay half the costs incurred by the ville de Paris, the ville de Bruxelles and the Ayuntamiento de Madrid. GervasoniMadiseda Silva PassosKowalik-BańczykMac EochaidhDelivered in open court in Luxembourg on 13 December 2018.[Signatures]( *1 ) Languages of the case: French and Spanish. | b5b09-f900670-4aeb | EN |
Advocate General Hogan: the Court should rule that the new German rules prohibiting search engines from providing excerpts of press products without prior authorisation by the publisher must not be applied | 12 September 2019 ( *1 )(Reference for a preliminary ruling — Industrial policy — Approximation of laws — Directive 98/34/EC — Procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services — Article 1(11) — Concept of ‘technical regulation’)In Case C‑299/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Landgericht Berlin (Regional Court, Berlin, Germany), made by decision of 8 May 2017, received at the Court on 23 May 2017, in the proceedings VG Media Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH v Google LLC, successor in law to Google Inc.,THE COURT (Fourth Chamber),composed of M. Vilaras, President of the Chamber, K. Jürimäe, D. Šváby (Rapporteur), S. Rodin and N. Piçarra, Judges,Advocate General: G. Hogan,Registrar: D. Dittert, Head of Unit,having regard to the written procedure and further to the hearing on 24 October 2018,after considering the observations submitted on behalf of:–VG Media Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH, by U. Karpenstein, M. Kottmann, R. Heine and J. Hegemann, Rechtsanwälte,Google LLC, successor in title to Google Inc., by A. Conrad, W. Spoerr and T. Schubert, Rechtsanwälte,the German Government, by T. Henze, M. Hellmann and M. Kall, acting as Agents,the Greek Government, by E.-M. Mamouna and N. Dafniou, acting as Agents,the Spanish Government, by L. Aguilera Ruiz and by V. Ester Casas, acting as Agents,the Portuguese Government, by L. Inez Fernandes and M. Figueiredo, acting as Agents,the European Commission, by K. Petersen, Y. Marinova and J. Samnadda, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 13 December 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 1(2), (5) and (11) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services (OJ 1998 L 204, p. 37), as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998 (OJ 1998 L 217, p. 18) (‘Directive 98/34’).2The request has been made in proceedings between VG Media Gesellschaft zur Verwertung der Urheber- und Leistungsschutzrechte von Medienunternehmen mbH (‘VG Media’) and Google LLC concerning the alleged infringement by Google of rights related to copyright. Legal context Directive 98/34 3Article 1(2) to (5) and (11) of Directive 98/34 provides:‘For the purposes of this Directive, the following meanings shall apply:…2.“service”, any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.For the purposes of this definition:“at a distance” means that the service is provided without the parties being simultaneously present,“by electronic means” means that the service is sent initially and received at its destination by means of electronic equipment for the processing (including digital compression) and storage of data, and entirely transmitted, conveyed and received by wire, by radio, by optical means or by other electromagnetic means,“at the individual request of a recipient of services” means that the service is provided through the transmission of data on individual request.An indicative list of services not covered by this definition is set out in Annex V.3.“technical specification”, a specification contained in a document which lays down the characteristics required of a product such as levels of quality, performance, safety or dimensions, including the requirements applicable to the product as regards the name under which the product is sold, terminology, symbols, testing and test methods, packaging, marking or labelling and conformity assessment procedures.The term “technical specification” also covers production methods and processes used in respect of agricultural products as referred to Article 38(1) of the Treaty, products intended for human and animal consumption, and medicinal products as defined in Article 1 of Directive 65/65/EEC …, as well as production methods and processes relating to other products, where these have an effect on their characteristics;4.“other requirements”, a requirement, other than a technical specification, imposed on a product for the purpose of protecting, in particular, consumers or the environment, and which affects its life cycle after it has been placed on the market, such as conditions of use, recycling, reuse or disposal, where such conditions can significantly influence the composition or nature of the product or its marketing;5.“rule on services”, requirement of a general nature relating to the taking-up and pursuit of service activities within the meaning of point 2, in particular provisions concerning the service provider, the services and the recipient of services, excluding any rules which are not specifically aimed at the services defined in that point.a rule shall be considered to be specifically aimed at Information Society services where, having regard to its statement of reasons and its operative part, the specific aim and object of all or some of its individual provisions is to regulate such services in an explicit and targeted manner,a rule shall not be considered to be specifically aimed at Information Society services if it affects such services only in an implicit or incidental manner.11.“technical regulation”, technical specifications and other requirements or rules on services, including the relevant administrative provisions, the observance of which is compulsory, de jure or de facto, in the case of marketing, provision of a service, establishment of a service operator or use in a Member State or a major part thereof, as well as laws, regulations or administrative provisions of Member States, except those provided for in Article 10, prohibiting the manufacture, importation, marketing or use of a product or prohibiting the provision or use of a service, or establishment as a service provider. De facto technical regulations include:laws, regulations or administrative provisions of a Member State which refer either to technical specifications or to other requirements or to rules on services, or to professional codes or codes of practice which in turn refer to technical specifications or to other requirements or to rules on services, compliance with which confers a presumption of conformity with the obligations imposed by the aforementioned laws, regulations or administrative provisions,voluntary agreements to which a public authority is a contracting party and which provide, in the general interest, for compliance with technical specifications or other requirements or rules on services, excluding public procurement tender specifications,technical specifications or other requirements or rules on services which are linked to fiscal or financial measures affecting the consumption of products or services by encouraging compliance with such technical specifications or other requirements or rules on services; technical specifications or other requirements or rules on services linked to national social security systems are not included.This comprises technical regulations imposed by the authorities designated by the Member States and appearing on a list to be drawn up by the [European] Commission before 5 August 1999, in the framework of the Committee referred to in Article 5.The same procedure shall be used for amending this list.’4The first subparagraph of Article 8(1) of that directive provides:‘Subject to Article 10, Member States shall immediately communicate to the Commission any draft technical regulation, except where it merely transposes the full text of an international or European standard, in which case information regarding the relevant standard shall suffice; they shall also let the Commission have a statement of the grounds which make the enactment of such a technical regulation necessary, where these have not already been made clear in the draft.’5Directive 98/34 was repealed by Directive (EU) 2015/1535 of the European Parliament and of the Council of 9 September 2015 laying down a procedure for the provision of information in the field of technical regulations and of rules on Information Society services (OJ 2015 L 241, p. 1), which came into force on 7 October 2015 which was subsequent to the events at issue in the main proceedings. German law 6By the achtes Gesetz zur Änderung des Urheberrechtsgesetzes (Eight Law amending the Law on copyright) of 7 May 2013 (BGBl. 2013 I, p. 1161), Section 7 headed ‘Protection of publishers of newspapers and magazines’, concerning rights related to publishers of newspapers and magazines, was inserted, with effect from 1 August 2013, in Part 2 of the Gesetz über Urheberrecht und verwandte Schutzrechte (Law on copyright and related rights, ‘the UrhG’). Section 7 contains the following three paragraphs.7Paragraph 87f of the UrhG entitled ‘Publishers of newspapers and magazines’ provides:‘1. The publishers of newspapers and magazines shall have the exclusive right to make the newspaper or magazine or parts thereof available to the public for commercial purposes, unless it consists of individual words or very short text excerpts. Where the newspaper or magazine has been produced within a company, the owner of the company shall be the publisher.2. A newspaper or magazine is defined as the editorial and technical preparation of journalistic contributions which are compiled and published periodically on any media under one title, which, following an assessment of the overall circumstances, is to be regarded as largely typical for the publishing house and the overwhelming majority of which does not serve self-advertising purposes. Journalistic contributions are, more specifically, articles and illustrations which serve to disseminate information, form opinions or entertain.’8Paragraph 87g of the UrhG, entitled ‘Transferability, expiry of and limitations on the right’, is worded as follows:‘1. The right of publishers of newspapers and magazines referred to in Paragraph 87f(1), first sentence, shall be transferable. Paragraphs 31 and 33 shall apply mutatis mutandis.2. The right shall expire one year after publication of the newspaper or magazine.3. The right of publishers of newspapers and magazines may not be asserted to the detriment of the author or the holder of a right related to copyright whose work or subject matter protected under the present legislation is contained in the newspaper or magazine.4. It shall be permissible to make the newspaper or magazine or parts thereof available to the public unless this is done by commercial operators of search engines or commercial operators of services that similarly publish content. Moreover, the provisions of Section 6 of Part 1 shall apply mutatis mutandis.’9Paragraph 87h of the UrhG entitled ‘Right of participation of the author’ provides:‘The author shall be entitled to an equitable share of the remuneration.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 10VG Media is a collective management organisation, authorised in Germany, that defends copyright and rights related to copyright of television channels and private radio stations, as well as rights to digital editorial content. Against this background, VG Media concludes with rights holders the ‘administration agreement for television, radio and publishers’, in which those rights holders grant it, for exclusive administration, their current rights as well as those accruing to them during the term of the agreement, in respect of the newspapers or magazines produced by them.11Google operates several internet search engines including, in particular, the search engine of the same name, together with an automated news site (‘Google News’). On the ‘Google’ search engine, after the search term has been entered and the search function has been initiated, a short text or text excerpt (‘the Snippet’) appears with a thumbnail image that is intended to enable users to gauge the relevance of the displayed website in the light of the information they are looking for. As regards the news site ‘Google News’, it displays news from a limited number of news sources in a format akin to that of a magazine. The information on that site is collected by computers by means of an algorithm using a large number of sources of information. On that site, ‘the Snippet’ appears in the form of a short summary of the article from the website concerned, often containing the introductory sentences of that article.12In addition, Google publishes, by means of its online services, third-party advertisements on its own websites and on third party websites for a fee.13VG Media brought an action for damages against Google before the referring court in which it disputes, in essence, the use by Google, since 1 August 2013, of text excerpts, images and animated images produced by its members, without paying a fee in return for displaying search results and news summaries.14The referring court seeks to ascertain whether Paragraphs 87f and 87g of the UrhG are applicable to the dispute in the main proceedings. That court seeks guidance on whether those provisions, arising from the amendment, with effect from 1 August 2013, to the UrhG, should have been notified to the Commission during their drafting stage as foreseen in the first subparagraph of Article 8(1) of Directive 98/34. In that connection, the referring court relies on the case-law of the Court according to which the provisions adopted in breach of the duty of notification under that provision are inapplicable and are, therefore, unenforceable against individuals.15In those circumstances, the Landgericht Berlin (Regional Court, Berlin, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Does a national rule which prohibits only commercial operators of search engines and commercial service providers which edit content, but not other users, including commercial users, from making press products or parts thereof (excluding individual words and very short text excerpts) available to the public constitute, under Article 1(2) and (5) of [Directive 98/34], a rule which is not specifically aimed at the services defined in [Article 1(2)],and, if that is not the case,(2)does a national rule which prohibits only commercial operators of search engines and commercial service providers which edit content, but not other users, including commercial users, from making press products or parts thereof (excluding individual words and very short text excerpts) available to the public constitute a technical regulation within the meaning of Article 1(11) of [Directive 98/34], namely a compulsory rule on the provision of a service?’ The request to have the oral procedure reopened 16Following the delivery of the Opinion of the Advocate General, VG Media, by documents lodged at the Court Registry on 16 January and 18 February 2019, applied for the oral procedure to be reopened.17In support of its request, VG Media claims, in essence, first, that the Advocate General, in particular in points 34 and 38 of his Opinion, made incorrect assessments of the national provisions at issue in the main proceedings and relied on facts that required a more detailed discussion. Secondly, VG Media claims that the political agreement between the European Parliament, the Council of the European Union and the Commission, which preceded the adoption of Directive (EU) 2019/790 of the European Parliament and of the Council of 17 April 2019 in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC (OJ 2019 L 130, p. 92), must be taken into account by the Court of Justice for the purpose of the answers to the questions referred for a preliminary ruling.18Pursuant to Article 83 of its Rules of Procedure, the Court may at any time, after hearing the Advocate General, order the oral part of the procedure to be reopened, in particular if it considers that it lacks sufficient information or where a party has, after the close of that part of the procedure, submitted a new fact which is of such a nature as to be a decisive factor for the decision of the Court, or where the case must be decided on the basis of an argument which has not been debated between the parties or the interested persons referred to in Article 23 of the Statute of the Court of Justice of the European Union.19In that regard, it should be noted that, in his Opinion, the Advocate General relied on the matters of fact and of law as submitted to the Court by the referring court. In proceedings under Article 267 TFEU, which are based on a clear division of responsibilities between the national courts and the Court of Justice, the national court alone has jurisdiction to find and assess the facts in the case before it and to interpret and apply national law (judgment of 26 April 2017, Farkas, C‑564/15, EU:C:2017:302, paragraph 37 and the case-law cited).20Moreover, it is apparent from the documents before the Court that the facts of the case in the main proceedings predate the entry into force of Directive 2019/790, which is therefore not applicable ratione temporis to the dispute in the main proceedings.21Accordingly, the Court considers that it has all the information necessary to rule on the request for a preliminary ruling and that none of the evidence relied on by VG Media in support of its request justifies the reopening of the oral part of the procedure, in accordance with Article 83 of the Rules of Procedure.22In those circumstances, the Court, after hearing the Advocate General, considers that there is no need to order that the oral part of the procedure be reopened. Consideration of the questions referred 23It should be observed as a preliminary point that, according to settled case-law, in the procedure laid down by Article 267 TFEU, providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court may have to reformulate the questions referred to it. Further, the Court may decide to take into consideration rules of EU law to which the national court has made no reference in the wording of its question (judgment of 1 February 2017, Município de Palmela, C‑144/16, EU:C:2017:76, paragraph 20 and the case-law cited).24In the present case, by its two questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 1(11) of Directive 98/34 must be interpreted as meaning that a provision of national law, such as that at issue in the main proceedings, which prohibits only commercial operators of search engines and commercial service providers that similarly publish content from making newspapers or magazines or parts thereof (excluding individual words and very short text excerpts) available to the public, constitutes a ‘technical regulation’ within the meaning of that provision, the draft of which is subject to prior notification to the Commission pursuant to the first subparagraph of Article 8(1) of that directive.25It should be recalled that the concept of a ‘technical regulation’ extends to four categories of measures, namely, (i) the ‘technical specification’, within the meaning of Article 1(3) of Directive 98/34; (ii) ‘other requirements’, as defined in Article 1(4) of that directive; (iii) the ‘rule on services’, covered in Article 1(5), of that directive, and (iv) the ‘laws, regulations or administrative provisions of Member States prohibiting the manufacture, importation, marketing or use of a product or prohibiting the provision or use of a service, or establishment as a service provider’, under Article 1(11) of that directive (judgment of 26 September, Van Gennip and Others, C‑137/17, EU:C:2018:771, paragraph 37 and the case-law cited).26In that connection, it must be stated that in order for a national measure to fall within the first category of technical regulations that is referred to in Article 1(3) of Directive 98/34, that is to say, within the concept of ‘technical specification’, that measure must necessarily refer to the product or its packaging as such and thus lay down one of the characteristics required of a product (judgment of 19 July 2012, Fortuna and Others, C‑213/11, C‑214/11 and C‑217/11, EU:C:2012:495, paragraph 28 and the case-law cited). Moreover, the concept of ‘other requirements’ within the meaning of Article 1(4) of that directive concerns the life cycle of a product after it has been placed on the market (judgment of 4 February 2016, Ince, C‑336/14, EU:C:2016:72, paragraph 72).27In the present case, the national provision at issue in the main proceedings does not fall within the first and second categories of measures mentioned in paragraph 25 of the present judgment. That provision does not refer to products themselves, in this case newspapers or magazines, but, as the Advocate General observed in point 22 of his Opinion, to the prohibition on commercial operators of internet search engines or commercial service providers that similarly publish content from making newspapers or magazines available to the public.28As regards the question whether the national provision at issue in the main proceedings is a ‘rule on services’, within the meaning of Article 1(5) of Directive 98/34, it must first be recalled that, under Article 1(2) of that directive, a ‘service’ is defined as ‘any Information Society service, that is to say, any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services’.29In that regard, it is apparent from the order for reference and from the wording of the first question that the referring court takes the view that the national provision at issue in the main proceedings is a ‘rule on services’, without explaining its reasoning. It merely states that search engine providers supply — at a distance, by electronic means and at the individual request of the recipient of services, who initiates the search after entering a search term — an information society service within the meaning of Article 1(2) of that directive.30As regards the services provided by commercial operators of internet search engines, there is in fact no doubt that they constitute such services. By contrast, that is not necessarily the case for services provided by commercial service providers that similarly publish content. As the Commission points out, the similar publication of the contents of newspapers or magazines can be done other than via the internet or by means of electronic communications, such as, for example, on paper.31Next, in order to determine whether a rule can be classified as a ‘rule on services’, the definition in Article 1(5) of Directive 98/34 requires that rule to be ‘specifically’ aimed at information society services.32In that regard it should be noted that under the first indent of Article 1(5) of that directive, a rule shall be considered as specifically aimed at information society services having regard to both its statement of reasons and its operative part. Under that same provision, moreover, it is not required that ‘the specific aim and object’ of all of the rule in question be to regulate information society services, as it is sufficient that the rule pursue that aim or object in some of its provisions (judgment of 20 December 2017, Falbert and Others, C‑255/16, EU:C:2017:983, paragraph 32).33In addition, even where it is not apparent solely from the wording of a national rule that it is aimed, at least in part, at regulating information society services specifically, that object may nevertheless be gleaned quite readily from the stated reasons given for the rule, as they appear, in accordance with the relevant national rules of interpretation in that regard, inter alia from the travaux préparatoires for the rule (see, to that effect, judgment of 20 December 2017, Falbert and Others, C‑255/16, EU:C:2017:983, paragraph 33).34In the present case, first, it should be noted that Paragraph 87g(4) of the UrhG expressly refers, inter alia, to the commercial providers of search engines for which it is common ground that they provide services falling within the scope of Article 1(2) of Directive 98/34.35Secondly, it appears that the national rule at issue in the main proceedings has as its specific aim and object the regulation of information society services in an explicit and targeted manner.36Although the referring court does not provide any clear indications as to the specific aim and object of the national legislation at issue in the main proceedings, it is, however, apparent from the observations submitted by the German Government at the hearing before the Court that, initially, the amendment of the UrhG specifically concerned internet search engine providers. Moreover, the parties to the main proceedings and the Commission state, in their written observations, that the purpose of that legislation was to protect the legitimate interests of publishers of newspapers and magazines in the digital world. It appears, therefore, that the main aim and object of the national provision at issue in the main proceedings was to protect those publishers from copyright infringements by online search engines. In that context, protection appears to have been considered necessary only for systematic infringements of works of online publishers by information society service providers.37It is true that the prohibition on making newspapers or magazines available to the public, provided for in Paragraph 87g(4) of the UrhG, relates not only to online service providers but also to offline service providers. However, it is apparent from recitals 7 and 8 of Directive 98/48, by which Directive 98/34 was amended, that the purpose of Directive 94/48 was to adapt existing national legislation to take account of new information society services and avoid restrictions on the freedom to provide services and freedom of establishment leading to ‘refragmentation of the internal market’. It would, however, run counter to that objective to exclude a rule, the aim and object of which is in all probability to regulate online services relating to newspapers or magazines, from classification as a rule specifically targeting such services within the meaning of Article 1(5) of Directive 98/34 on the sole ground that its wording not only refers to online services, but also to services provided offline (see, to that effect, judgment of 20 December 2017, Falbert and Others, C‑255/16, EU:C:2017:983, paragraphs 34 and 35).38Moreover, the fact that Paragraph 87g(4) of the UrhG forms part of national legislation on copyright or rights related to copyright is not such as to call that assessment into question. Technical rules on intellectual property are not expressly excluded from the scope of Article 1(5) of Directive 98/34, unlike those forming the subject matter of European legislation in the field of telecommunications services or financial services. In addition, it is apparent from the judgment of 8 November 2007, Schwibbert (C‑20/05, EU:C:2007:652) that provisions of national intellectual property legislation may constitute a ‘technical regulation’ subject to notification pursuant to Article 8(1) of that directive.39In so far as a rule, such as that at issue in the main proceedings, is specifically aimed at information society services, the draft technical regulation must be subject to prior notification to the Commission pursuant to Article 8(1) of Directive 98/34. Failing that, according to settled case-law, the inapplicability of a technical regulation that has not been notified in accordance with that provision may be relied upon in proceedings between individuals (judgment of 27 October 2016, James Elliott Construction, C‑613/14, EU:C:2016:821, paragraph 64 and the case-law cited).40In the light of the foregoing, the answer to the questions referred is that Article 1(11) of Directive 98/34 must be interpreted as meaning that a provision of national law, such as that at issue in the main proceedings, which prohibits only commercial operators of search engines and commercial service providers that similarly publish content from making newspapers or magazines or parts thereof (excluding individual words and very short text excerpts) available to the public, constitutes a ‘technical regulation’ within the meaning of that provision, the draft of which is subject to prior notification to the Commission pursuant to the first subparagraph of Article 8(1) of that directive. Costs 41Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fourth Chamber) hereby rules: Article 1(11) of Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations and of rules on Information Society services (as amended by Directive 98/48/EC of the European Parliament and of the Council of 20 July 1998), must be interpreted as meaning that a provision of national law, such as that at issue in the main proceedings, which prohibits only commercial operators of search engines and commercial service providers that similarly publish content from making newspapers or magazines or parts thereof (excluding individual words and very short text excerpts) available to the public, constitutes a ‘technical regulation’ within the meaning of that provision, the draft of which is subject to prior notification to the Commission pursuant to the first subparagraph of Article 8(1) of Directive 98/34, as amended by Directive 98/48. [Signatures]( *1 ) Language of the case: German. | 727fb-8fa99a5-460a | EN |
The General Court partially annuls the Commission decision relating to anticompetitive practices on the Slovakian telecommunications market | 13 December 2018 ( *1 )(Competition — Abuse of dominant position — Slovakian market for broadband telecommunications services — Access by third-party undertakings to the ‘local loop’ of the incumbent operator on that market — Decision finding an infringement of Article 102 TFEU and Article 54 of the EEA Agreement — Single and continuous infringement — Definition of ‘abuse’ — Refusal to grant access — Margin squeeze — Calculation of margin squeeze — Equally efficient competitor test — Rights of the defence — Imputation to the parent company of the infringement committed by its subsidiary — Decisive influence of the parent company over the subsidiary’s commercial policy — Actual exercise — Burden of proof — Calculation of the amount of the fine — 2006 Guidelines on the method of setting fines — Separate fine imposed only on the parent company in respect of repeated infringement and application of a multiplier for deterrence)In Case T‑827/14, Deutsche Telekom AG, established in Bonn (Germany), represented by K. Apel and D. Schroeder, lawyers,applicant,v European Commission, represented by M. Kellerbauer, L. Malferrari, C. Vollrath and L. Wildpanner, acting as Agents,defendant,supported by Slovanet, a.s., established in Bratislava (Slovakia), represented by P. Tisaj, lawyer,intervener,APPLICATION under Article 263 TFEU for, primarily, annulment, in whole or in part, in so far as it concerns the applicant, of Commission Decision C(2014) 7465 final of 15 October 2014 relating to proceedings under Article 102 TFEU and Article 54 of the EEA Agreement (Case AT.39523 — Slovak Telekom), as rectified by Commission Decision C(2014) 10119 final of 16 December 2014, and also by Commission Decision C(2015) 2484 final of 17 April 2015, and, in the alternative, annulment or reduction of the amount of the fines imposed on the applicant by that decision,THE GENERAL COURT (Ninth Chamber, Extended Composition),composed of M. van der Woude, acting as President, S. Gervasoni, L. Madise, R. da Silva Passos (Rapporteur) and K. Kowalik-Bańczyk, Judges,Registrar: N. Schall, Administrator,having regard to the written part of the procedure and further to the hearing on 19 April 2018,gives the following Judgment ( 1 ) I. Background to the dispute 1The applicant, Deutsche Telekom AG, is the incumbent telecommunications operator in Germany and the parent company of the Deutsche Telekom group. From 4 August 2000 and throughout the relevant period in the present case, the applicant owned 51% of the capital of Slovak Telekom, a.s., which is the incumbent telecommunications operator in Slovakia. The other part of the capital of Slovak Telekom was owned, respectively, by the Slovak Ministry of the Economy, which owned 34%, and by the National Property Fund of the Slovak Republic, which owned 15% (together ‘the Slovakian State’).2On 15 October 2014, the European Commission adopted Decision C(2014) 7465 final relating to proceedings under Article 102 TFEU and Article 54 of the EEA Agreement (Case AT.39523 — Slovak Telekom), rectified by Commission Decision C(2014) 10119 final of 16 December 2014, and also by Commission Decision C(2015) 2484 final of 17 April 2015, addressed to the applicant and also to Slovak Telekom (‘the contested decision’). Slovak Telekom brought a separate action on 26 December 2014, whereby it also seeks annulment of the contested decision (Case T‑851/14). A. Technological, factual and regulatory background to the contested decision 3Slovak Telekom, the indirect successor to the public posts and telecommunications undertaking that ceased to exist in 1992, is the largest telecommunications operator and broadband provider in Slovakia. The legal monopoly which it enjoyed on the Slovak telecommunications market came to an end in 2000. Slovak Telekom offers a full range of data services and voice services and owns and operates fixed copper and fibre optic networks and a mobile telecommunications network. The copper network and the mobile network cover almost the entire territory of Slovakia.4The contested decision concerns anticompetitive practices on the Slovakian market for broadband internet services. It relates, in essence, to the conditions laid down by Slovak Telekom for unbundled access by other operators to the copper local loop in Slovakia between 2005 and 2010.5The local loop means the physical twisted metallic pair circuit (also called ‘the line’) that connects the network termination point at the subscriber’s premises to the main distribution frame or any other equivalent facility in the fixed public telephone network.6Unbundled access to the local loop allows new entrants — usually called ‘alternative operators’, as opposed to the incumbent telecommunications network operators — to use the existing telecommunications infrastructure belonging to those incumbent operators in order to offer various services to end users, in competition with the incumbent operators. Among the various telecommunications services that may be provided to end users via the local loop is high-speed data transmission for fixed access to the internet and for multimedia applications on the basis of digital subscriber line or DSL technology.7Local loop unbundling was organised at EU level, in particular, by Regulation (EC) No 2887/2000 of the European Parliament and of the Council of 18 December 2000 on unbundled access to the local loop (OJ 2000 L 336, p. 4) and by Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (OJ 2002 L 108, p. 33). Under Regulation No 2887/2000, operators ‘having significant market power’ were required to grant unbundled local loop, or ULL, access and to publish a reference offer on unbundling. Those provisions were implemented in Slovakia by Zákon z 3. decembra 2003 č. 610/2003 Z.z. o elektronických komunikáciách, v znení neskorších predpisov (Law No 610/2003 of 3 December 2003 on electronic communications), as amended, which, with certain exceptions, entered into force on 1 January 2004.8In essence, that regulatory framework required the operator identified by the national regulatory authority as the operator with significant market power, which is generally the incumbent operator, to grant alternative operators unbundled access to its local loop and to related services under transparent, fair and non-discriminatory conditions, and to maintain an updated reference offer for such unbundled access. The national regulatory authority was required to ensure that charging for unbundled access to the local loop, set on the basis of cost-orientation, fostered fair and sustainable competition. To that end, the national regulatory authority was entitled inter alia to require changes to be made to the reference offer.9Following a market analysis, on 8 March 2005 the Slovakian national regulatory authority for telecommunications (‘TUSR’) adopted a first-instance decision — Decision No 205/14/2005 — designating Slovak Telekom as an operator with significant power on the wholesale market for unbundled access to the local loop within the meaning of Regulation No 2887/2000. Consequently, TUSR imposed a number of obligations on Slovak Telekom, including requiring it to submit a reference offer within 60 days. That decision, which Slovak Telekom challenged, was confirmed by the Chairman of TUSR on 14 June 2005. Pursuant to that confirmatory decision, Slovak Telekom was required to grant all reasonable and justified requests for unbundling of its local loop in order to enable alternative operators to use that loop with a view, on that basis, to offering their own services on the ‘retail mass market’ for broadband services at a fixed location in Slovakia. The decision of 14 June 2005 also ordered Slovak Telekom to publish all intended changes to the reference unbundling offer at least 45 days in advance and to submit them to TUSR.10Slovak Telekom published its reference unbundling offer on 12 August 2005 (‘the reference offer’). That offer, which was amended on nine occasions between that date and the end of 2010, sets out the contractual and technical conditions for access to Slovak Telekom’s local loop. On the wholesale market, Slovak Telekom offers access to unbundled local loops in or next to a main distribution frame on which the alternative operator seeking access has rolled out its own backbone network.11According to the contested decision, Slovak Telekom’s local loop network, which could be used to supply broadband services after the lines concerned have been unbundled from that operator, covered 75.7% of all Slovakian households between 2005 and 2010. That coverage extended to all local loops in Slovak Telekom’s metallic access network that could be used to transmit a broadband signal. However, during that same period, only very few of Slovak Telekom’s local loops were unbundled, as from 18 December 2009, and used only by a single alternative operator to provide retail broadband services to undertakings. B. Procedure before the Commission 12The Commission opened an investigation on its own initiative into, inter alia, the conditions for unbundled access to Slovak Telekom’s local loop. Following requests for information sent to alternative operators on 13 June 2008 and an unannounced inspection at Slovak Telekom’s premises which took place between 13 and 15 January 2009, the Commission decided, on 8 April 2009, to initiate proceedings against Slovak Telekom, within the meaning of Article 2 of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101] and [102 TFEU] (OJ 2004 L 123, p. 18).13Further steps were taken in the investigation, consisting of additional requests for information sent to alternative operators and TUSR, as well as an announced inspection at Slovak Telekom’s premises on 13 and 14 July 2009.14In several discussion documents sent to the Commission between 11 August 2009 and 31 August 2010, Slovak Telekom argued that there were no grounds for finding that it had infringed Article 102 TFEU in the present case.15Within the framework of the investigation, Slovak Telekom objected to the provision of information dating from the period prior to 1 May 2004, the date of accession of the Slovak Republic to the European Union. It brought an action for annulment, first, of Commission Decision C(2009) 6840 of 3 September 2009 relating to a proceeding pursuant to Articles 18(3) and 24(1) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1) and, second, of Commission Decision C(2010) 902 of 8 February 2010 relating to a proceeding pursuant to Articles 18(3) and 24(1) of Regulation No 1/2003. By judgment of 22 March 2012, Slovak Telekom v Commission (T‑458/09 and T‑171/10, EU:T:2012:145), this Court dismissed the actions brought against those decisions.16On 13 December 2010, following requests for information addressed to the applicant, the Commission decided to initiate proceedings against it within the meaning of Article 2 of Regulation No 773/2004.17On 7 May 2012, the Commission sent a statement of objections to Slovak Telekom. That statement of objections was sent to the applicant on the following day. In that statement of objections, the Commission concluded, on a preliminary basis, that Slovak Telekom might have infringed Article 102 TFEU on account of a practice resulting in margin squeeze as regards unbundled access to local loops in its network as well as national and regional wholesale broadband access to its competitors, and might have refused alternative operators access to some wholesale products. It also set out the preliminary view that the applicant might be liable for the infringement in its capacity as parent company of Slovak Telekom during the infringement period.18After obtaining access to the investigation file, Slovak Telekom and the applicant each replied to the statement of objections on 5 September 2012. A hearing was then held on 6 and 7 November 2012.19On 21 June 2013, Slovak Telekom sent the Commission a proposal for commitments intended to address its objections from the standpoint of competition law and asked the Commission to adopt a commitments decision within the meaning of Article 9 of Regulation No 1/2003 instead of a prohibition decision. The Commission nonetheless considered those commitments to be insufficient and therefore decided to continue the proceedings.20On 6 December 2013 and 10 January 2014 respectively, the Commission sent Slovak Telekom and the applicant a letter of facts intended to afford them the opportunity to comment on the additional evidence collected after the statement of objections had been issued. The Commission stated that that evidence, to which Slovak Telekom and the applicant were given access, could be used in a possible final decision.21Slovak Telekom and the applicant replied to the letter of facts on 21 February and 6 March 2014 respectively.22At meetings held with Slovak Telekom on 16 September 2014 and with the applicant on 29 September 2014, the Commission provided information on the decision which it planned to adopt pursuant to Article 7 of Regulation No 1/2003. C. Contested decision 23In the contested decision, the Commission finds that the undertaking comprising Slovak Telekom and the applicant committed a single and continuous infringement of Article 102 TFEU and Article 54 of the EEA Agreement concerning broadband services in Slovakia between 12 August 2005 and 31 December 2010 (‘the period under consideration’). 1. Definition of the relevant markets and Slovak Telekom’s dominant position on those markets 24In the contested decision, the Commission identifies two relevant product markets, namely:–the retail mass market for broadband services at a fixed location;the wholesale market for access to unbundled local loops.25According to the contested decision, the relevant geographical market is the entire territory of Slovakia.26The Commission states that, during the period under consideration, Slovak Telekom held a monopoly position on the wholesale market for unbundled access to local loops and there were no direct constraints in the form of actual or potential competition or countervailing buying power limiting its market power. Slovak Telekom therefore held a dominant position on that market during the period under consideration. The Commission also finds that Slovak Telekom held a dominant position during that period on the retail mass market for broadband services at a fixed location. 2. Slovak Telekom’s conduct (a) Refusal to supply unbundled access to Slovak Telekom’s local loops 27In the first part of its analysis, entitled ‘Refusal to supply’, the Commission observes that, although several alternative operators had expressed great interest in being granted access to Slovak Telekom’s local loops in order to compete with it on the retail market for broadband services, Slovak Telekom set unfair terms and conditions in its reference offer rendering such access unacceptable. Slovak Telekom thereby delayed, complicated or prevented entry on the retail broadband market.28In that regard, the Commission states that, first, unbundled access to the local loop by an alternative operator is based on the premiss that that operator must first obtain sufficient and adequate information concerning the incumbent operator’s network. That information must enable the alternative operator concerned to assess its business opportunities and to prepare appropriate business plans for its future retail services based on unbundled access to the local loop. In the present case, the reference offer did not satisfy that information requirement with respect to alternative operators.29Thus, in spite of the requirements laid down in the relevant regulatory framework (see paragraphs 7 and 8 above), the reference offer does not provide any basic information regarding the locations of physical access sites and the availability of local loops in specific parts of the network. Alternative operators had access to such information only upon request, in exchange for payment of a fee, within 5 days of the entry into force of a confidentiality agreement with Slovak Telekom and solely after the provision of a bank guarantee. The Commission considers, in essence, that those requirements unreasonably delayed and complicated disclosure of the relevant information to alternative operators and thus discouraged those operators from accessing Slovak Telekom’s local loops.30Even in the case of access upon request, the Commission finds that the information provided by Slovak Telekom was insufficient. In particular, Slovak Telekom did not provide any information on the availability of its local loops, even though such information was crucial to enable alternative operators to prepare their business models in time and to identify the business potential of unbundling. The Commission takes the view that Slovak Telekom should have disclosed not only the list of main distribution frames and similar facilities, but also a description of their geographical coverage; information on the ranges of telephone numbers served by those exchanges; information on the actual use of cables (as a percentage) for DSL technologies; information on the ratio of pulse code modulation (PCM) equipment deployment regarding the cables connected to the different main distribution frames; the names or functions of the distribution frames and information on how they are used in that company’s technical and methodological regulations; and the maximum lengths of homogeneous local loops. Slovak Telekom was, moreover, well aware of the problems faced by alternative operators as a result of those terms of access to information and the information’s limited scope. The Commission also points out that, although Slovak Telekom did not publish a template for the unbundling requests to be submitted by alternative operators until May 2009, its reference unbundling offer made provision at the very outset for the imposition of financial penalties if a request for access were deemed incomplete.31Second, according to the contested decision, Slovak Telekom unjustifiably reduced the scope of its obligation relating to unbundled access to its local loops.32Thus, in the first place, Slovak Telekom improperly excluded from that obligation ‘passive’ lines, namely lines which existed physically but were not in use. By doing so, Slovak Telekom reserved for itself a significant number of potential customers who were not yet purchasing its broadband services but to whom its network was available, even though the market was growing and the relevant regulatory framework did not restrict the unbundling obligation to active lines only. The restriction applied by Slovak Telekom was not, in the Commission’s view, justified by any objective technical reasons.33In the second place, Slovak Telekom unjustifiably excluded from its unbundling obligation the services which it classed as ‘conflicting services’, namely services that it was likely to offer and which might be in conflict with access to the local loop by an alternative operator. In addition to the fact that the actual concept of conflicting services is vague, the list of such services — drawn up unilaterally by Slovak Telekom — is open and, in consequence, creates uncertainty for alternative operators. That limitation deprived alternative operators of a large number of potential customers, customers which were reserved for Slovak Telekom and therefore withdrawn from the retail market.34In the third place, the Commission classifies as unjustified the rule imposed by Slovak Telekom in the reference offer, whereby only 25% of local loops contained in a multi-pair cable could be used for the provision of broadband services, in order to avoid cross-talk and interferences. That rule is not justified because it is of a general and abstract nature and thus does not take account of the characteristics of the cables and the specific combination of transmission techniques. The Commission points out, in that regard, that the practice followed in other Member States demonstrates that there are alternatives to such upstream abstract limitations on access, for instance the principle of 100% cable fill-in together with the a posteriori resolution of any specific problems stemming from spectrum interferences. Finally, Slovak Telekom applied to itself a maximum fill-in rule of 63%, which is less strict than the rule it applied to alternative operators.35Third, and last, Slovak Telekom established a number of unfair terms and conditions in the reference offer concerning unbundled access to its local loops.36In that regard, in the first place, according to the contested decision, Slovak Telekom included unfair terms and conditions in the reference offer relating to collocation, defined in that offer as ‘the provision of the physical space and the technical equipment necessary for the appropriate placement of the telecommunication equipment of the Authorised Provider with the purpose of provision of services to the end users of the Authorised Provider via access to the local loop’. The barrier thus erected for alternative operators was the result of, in particular, the following factors: (i) the conditions required a preliminary inquiry into the possibilities of collocation which was not objectively necessary; (ii) alternative operators were only able to challenge the determination of the form of collocation decided by Slovak Telekom by paying an additional fee; (iii) the consequence of the expiry of the reservation period after delivery to the alternative operator of the notice regarding the outcome of the preliminary or detailed inquiry, without any collocation agreement being concluded, was that the preliminary or detailed inquiry had to be repeated in full; (iv) Slovak Telekom was not bound by any deadlines in the event of additional detailed inquiries triggered by negotiations and was entitled to withdraw — without stating reasons and without any legal consequences — a proposed collocation agreement during the term for acceptance of the proposal by the alternative operators within the established deadlines; (v) Slovak Telekom was not bound by any precise time limit for implementing collocation; (vi) Slovak Telekom unilaterally imposed unfair and non-transparent fees for collocation.37In the second place, the Commission finds that, under the reference offer, alternative operators were required to submit forecasts of the requests for qualification of the local loop 12 months in advance for each collocation space, on a month-by-month basis, before being able to submit a request for qualification for access to the relevant local loop. The Commission considers that such a requirement obliges alternative operators to submit forecasts at a time when they are not in a position to estimate their needs in terms of unbundled access. It also criticises the fact that failure to comply with the forecasting terms triggered the payment of penalties and complains about the mandatory nature of the forecasting obligation and the lack of any deadline for Slovak Telekom to respond to a request for qualification in the event that such a request did not comply with the forecasted volume.38In the third place, the Commission considers that the mandatory qualification procedure, which was designed to enable alternative operators to determine whether a specific local loop was suitable for DSL technology or any other broadband technology they might intend to use before placing a firm unbundling order, was such that those operators were deterred from requesting unbundled access to Slovak Telekom’s local loops. Thus, while conceding that it is necessary to verify the suitability of local loops for unbundling or the basic preconditions for unbundling a specific line, the Commission states that the splitting of that qualification process from the very request for access to the local loop unnecessarily delayed unbundling and generated additional costs for alternative operators. Furthermore, a number of aspects examined in the context of the qualification process are superfluous. The Commission considers to be unjustified the validity period limited to 10 days applying to the qualification of a local loop, after which a request for access could no longer be made.39In the fourth place, according to the contested decision, the reference offer included disadvantageous terms as regards repairs, service and maintenance, due to (i) the lack of an appropriate definition of ‘planned works’ and ‘unplanned works’; (ii) the unclear distinction between ‘unplanned works’ and straightforward ‘defaults’, liable to give rise to unjustified conduct on the part of Slovak Telekom; (iii) the very short deadlines for informing alternative operators of such works and for transmitting that information to their customers; and, finally, (iv) the shifting of responsibility to the alternative operator for service interruptions caused by repairs where that operator has been deemed to be uncooperative.40In the fifth place, the Commission regards as unfair several terms and conditions applying to the bank guarantee that must be provided by all alternative operators wishing to conclude a collocation agreement with Slovak Telekom and ultimately to secure access to its local loops. Therefore, first of all, Slovak Telekom enjoys an overly wide discretion in deciding whether to accept or refuse a bank guarantee and is not subject to any deadline in that regard. Next, the amount of the guarantee, set at EUR 66 387.84, is disproportionate in the light of the risks and costs borne by Slovak Telekom. That is all the more so since the reference offer allowed Slovak Telekom to multiply that amount by up to 12 where it called on the guarantee. Furthermore, Slovak Telekom was able to call on the bank guarantee to cover not only the failure to pay for actual services it provided, but also to cover any claims for damages that it could submit. Moreover, Slovak Telekom was entitled to trigger the bank guarantee without having to show that it had first asked the debtor to pay and without the debtor having the option of raising a counterclaim. Lastly, the Commission notes that alternative operators do not benefit from any similar guarantee even though they may incur losses as a result of Slovak Telekom’s conduct in respect of unbundled access to local loops.41The Commission concludes that those aspects of Slovak Telekom’s conduct, taken together, amounted to a refusal on its part to provide unbundled access to its local loops. (b) Margin squeeze of alternative operators in the provision of unbundled access to Slovak Telekom’s local loops 42In the second part of its analysis of Slovak Telekom’s conduct, the Commission makes a finding of margin squeeze as a result of the behaviour of that operator in connection with unbundled access to its local loops, which constitutes an independent form of abuse of a dominant position. Accordingly, the spread between the prices charged by Slovak Telekom for the grant of such access to alternative operators and the prices charged to its own customers was either negative or insufficient for an operator as efficient as Slovak Telekom to cover the specific costs which it had to incur to supply its own products or services on the downstream market, namely the retail market.43Where the service portfolio under consideration includes only broadband products, the Commission notes that an equally efficient competitor would have been able, by means of unbundled access to Slovak Telekom’s local loops, to replicate the entirety of Slovak Telekom’s retail DSL offering as it evolved over time. The ‘period-by-period’ margin analysis (namely the calculation of the available margins for each year of the period between 2005 and 2010) demonstrates that a competitor as efficient as Slovak Telekom faced negative margins and would not therefore have been able to replicate profitably the retail broadband portfolio offered by Slovak Telekom.44Where the portfolio examined includes voice telephony services in addition to broadband services by means of full access to the local loop, the Commission also concludes that a competitor as efficient as Slovak Telekom would not have been able, due to the prices charged by Slovak Telekom on the upstream market for unbundled access, to operate profitably on the relevant retail market during the period between 2005 and 2010. An equally efficient competitor would not therefore have been able to replicate profitably, over that same period, Slovak Telekom’s portfolio. The addition to that reference portfolio of multi-play services, available as from 2007, would not alter that finding.45Since neither Slovak Telekom nor the applicant put forward during the administrative procedure any objective justification for their exclusionary conduct, the Commission concludes that Slovak Telekom’s conduct during the period under consideration constitutes an abusive margin squeeze. 3. Analysis of the anticompetitive effects of Slovak Telekom’s conduct 46The Commission considers that those two types of conduct on the part of Slovak Telekom, namely the refusal to provide unbundled access to the local loop and the margin squeeze of the alternative operators, were likely to prevent alternative operators from relying on unbundled access in order to enter the Slovakian retail mass market for broadband services at a fixed location. According to the contested decision, its conduct made competition less effective on that market because there was no genuine profitable alternative for competing operators to wholesale access to DSL broadband based on the unbundling of local loops. The impact of Slovak Telekom’s conduct on competition was all the more significant because the retail market for broadband services showed strong potential for growth during the period under consideration.47The Commission also states, in essence, that, according to the ‘investment ladder’ concept, that barrier to access to the unbundling of the local loop deprived alternative operators of a source of income which would have allowed them to make further investments in the network, particularly by developing their own access network to connect their customers directly.48The Commission concludes that Slovak Telekom’s anticompetitive conduct on the mass market for broadband services at a fixed location in Slovakia was likely to have negative effects on competition and, in the light of its geographical reach across the entire territory of the Slovak Republic, was able to affect trade between Member States. 4. Addressees of the contested decision and fines 49According to the contested decision, not only was the applicant in a position to exercise decisive influence over Slovak Telekom’s commercial policy during the entire period under consideration, but it actually exercised such influence. Since Slovak Telekom and the applicant form part of the same undertaking, both are held liable for the single and continuous infringement of Article 102 TFEU forming the subject matter of the contested decision.50As regards the penalty for that infringement, the Commission states that it set the amount of the fines by reference to the principles laid down in its Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (OJ 2006 C 210, p. 2; ‘the 2006 Guidelines’).51First of all, the Commission calculates the basic amount of the fine by taking 10% of Slovak Telekom’s turnover on the market for unbundled access to the local loop and for fixed retail broadband services in the last full financial year of its participation in the infringement, in the case at hand 2010, and by multiplying the resulting figure by 5.33 to take account of the duration of the infringement (5 years and 4 months). The basic amount of the fine arrived at following that calculation comes to EUR 38838000. This is the first fine imposed for the infringement in question and for which, according to point (a) of the first paragraph of Article 2 of the contested decision, Slovak Telekom and the applicant are held jointly and severally liable.52Next, the Commission applies a twofold adjustment to the basic amount. In the first place, it finds that when the infringement in question occurred, the applicant had already been held liable for an infringement of Article 102 TFEU, on account of a margin squeeze in the telecommunications sector, in Decision 2003/707/EC of 21 May 2003 relating to a proceeding under Article 82 [EC] (Cases COMP/37.451, 37.578, 37.579 — Deutsche Telekom AG) (OJ 2003 L 263, p. 9, ‘the Deutsche Telekom Decision’), and that, when the decision was adopted, the applicant already held 51% of Slovak Telekom’s shares and was in a position to exercise decisive influence over it. Consequently, the Commission finds that, for the applicant, the basic amount of the fine should be increased by 50% on account of repeated infringement. In the second place, the Commission states that the applicant’s worldwide turnover for 2013 was EUR 60123 billion and that, in order to give the fine sufficient deterrent effect, a coefficient multiplier of 1.2 should be applied to the basic amount. The product of that twofold adjustment of the basic amount, namely EUR 31070000, gives rise, under point (b) of the first paragraph of Article 2 of the contested decision, to a separate fine imposed on the applicant alone. 5. Operative part of the contested decision 53Articles 1 and 2 of the contested decision read as follows: ‘Article 1 1. The undertaking consisting of Deutsche Telekom AG and Slovak Telekom a.s. has committed a single and continuous infringement of Article 102 of the Treaty and Article 54 of the EEA Agreement.2. The infringement lasted from 12 August 2005 until 31 December 2010 and consisted of the following practices:(a)withholding from alternative operators network information necessary for the unbundling of local loops;(b)reducing the scope of its obligations regarding unbundled local loops;(c)setting unfair terms and conditions in its Reference Unbundling Offer regarding collocation, qualification, forecasting, repairs and bank guarantees;(d)applying unfair tariffs which do not allow an equally efficient competitor relying on wholesale access to the unbundled local loops of Slovak Telekom a.s. to replicate the retail broadband services offered by Slovak Telekom a.s. without incurring a loss. Article 2 For the infringement referred to in Article 1, the following fines are imposed:a fine of EUR 38838000 on Deutsche Telekom AG and Slovak Telekom a.s., jointly and severally;a fine of EUR 31070000 on Deutsche Telekom AG.…’ II. Procedure and forms of order sought …70The applicant claims that the Court should:annul the contested decision in whole or in part, in that it concerns the applicant, and, in the alternative, annul or reduce the fines imposed on the applicant;order the Commission to pay the costs.71The Commission and the intervener, Slovanet, contend that the Court should:dismiss the action;order the applicant to pay the costs. III. Law 72The applicant puts forward five pleas in law in support of both its principal claim, whereby it seeks annulment of the contested decision in whole or in part, and its alternative claim, whereby it seeks annulment of the fines imposed on it or a reduction of the amount of those fines. The first plea alleges errors of fact and of law in the application of Article 102 TFEU as regards Slovak Telekom’s abusive conduct and also a breach of the rights of the defence. The second plea alleges errors of law and of fact as regards the duration of Slovak Telekom’s abusive conduct. The third plea alleges errors of law and of fact in the imputation of Slovak Telekom’s abusive conduct to the applicant on the ground that those companies are part of the same undertaking. The fourth plea alleges misinterpretation of the concept of ‘undertaking’ within the meaning of EU law and breach of the principle that the penalty must be specific to the offender and the offence, in that the contested decision also imposes a separate fine on the applicant, and failure to state reasons. Last, the fifth plea alleges errors in calculating the amount of the fine imposed jointly and severally on Slovak Telekom and the applicant. A. The principal claims put forward, seeking annulment of the contested decision 73It is appropriate to examine in turn the five pleas put forward by the applicant and referred to in paragraph 72 above. 1. First plea: errors of law and of fact in the application of Article 102 TFEU as regards Slovak Telekom’s abusive conduct and breach of the rights of the defence 74The first plea consists of three parts, alleging, first, infringement of Article 102 TFEU, since the Commission found that there had been an infringement within the meaning of that provision without considering whether the telecommunications infrastructures in question were indispensable; second, breach of the applicant’s right to be heard as regards the calculation of the margin squeeze; and, third, errors in the calculation of the long run average incremental costs (‘the LRAIC’).75Furthermore, the applicant states that it supports, in the context of its first plea, the argument put forward by Slovak Telekom in the action which it brought against the contested decision on 26 December 2014 (Case T‑851/14). The applicant also claims, referring in particular to the judgment of 22 January 2013, Commission v Tomkins (C‑286/11 P, EU:C:2013:29), that, if a plea put forward in that action should be upheld, it should also benefit from such an outcome in the present case. (b) First part: infringement of Article 102 TFEU on the ground that the Commission found that there had been an infringement within the meaning of that provision without considering whether the telecommunications infrastructures at issue were indispensable 81By the first part of its first plea, the applicant maintains that the Commission incorrectly failed, in the contested decision, to examine whether access to Slovak Telekom’s copper DSL network was indispensable in order to operate on the retail market for broadband services in Slovakia. In doing so, the Commission failed to have regard to the principle established in the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), that a refusal to supply or to grant access constitutes abuse of a dominant position only where it is capable of eliminating all competition on the secondary market and the upstream inputs at issue are indispensable to the exercise of the downstream activity. The application of that principle in the present case is not called into question by the fact that the present case concerns an implied refusal of access and not, as in the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), a complete refusal to supply. There is no valid reason why the existence of abuse owing to an implied refusal of access should be subject to less strict requirements than the existence of abuse owing to a complete refusal of access. The distinction which the Commission draws in that sense is based on a misreading of paragraphs 55 and 58 of the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83) and leads, moreover, to the illogical result that proof of the most serious infringement (namely a complete refusal of access) would be subject to stricter conditions than those applicable to the less serious infringement (namely the implied refusal of access). The applicant submits, on the latter point, that at least one undertaking obtained access to Slovak Telekom’s local loops, which would have been precluded had there been a complete refusal of access.82The applicant also claims that that requirement of proof would not be reduced by the fact that Slovak Telekom was subject to a regulatory obligation to grant competing suppliers unbundled access to its local loop, as that obligation pursues other objectives and is subject to other conditions than the a posteriori review of abuse for the purposes of Article 102 TFEU. Such an obligation, laid down in 2005 by TUSR, is not of such a kind as to replace the specific examination of the indispensable nature of access to Slovak Telekom’s local loops at a later time. However, the Commission failed to carry out such a specific examination in the present case, even though the telecommunications markets are constantly evolving.83Likewise, the applicant disputes the Commission’s viewpoint that, in essence, the principle arising from the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), would not apply in the present case because the telecommunications network at issue was developed in monopoly conditions by the Slovakian Government. It submits that the Commission does not show how that circumstance enabled it to find that there was a dominant position without ascertaining that access to Slovak Telekom’s copper DSL network was indispensable. As the existence of abuse must always be assessed independently of the conditions in which a dominant position arises, there is no reason why former State monopolies should be treated differently from other undertakings in the context of the application of Article 102 TFEU. The applicant further submits that Slovak Telekom’s copper-based DSL network originally had a very low rate of coverage and was of poor quality and that that led Slovak Telekom, as is apparent from recital 891 of the contested decision, to invest in broadband assets consistently between 2003 and 2010, or after it had lost its monopoly.84In any event, the fact that several competing suppliers have succeeded in entering the broadband retail market using their own infrastructure shows that unbundled access to Slovak Telekom’s local loop was not indispensable to the development of competing offers.85The Commission disputes those assertions.86In that regard, according to established case-law, a dominant undertaking has a special responsibility not to allow its behaviour to impair genuine, undistorted competition on the internal market (see judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraph 135 and the case-law cited), and the fact that such a position has its origins in a former legal monopoly must, in that regard, be taken into account (judgment of 27 March 2012, Post Danmark, C‑209/10, EU:C:2012:172, paragraph 23).87That is why Article 102 TFEU prohibits, in particular, a dominant undertaking from adopting pricing practices that have an exclusionary effect on competitors considered to be as efficient as it is itself and strengthening its dominant position by using methods other than those that are part of competition on the merits. From that point of view, not all competition on price can be regarded as legitimate (see judgment of 6 September 2017, Intel v Commission, C‑413/14 P, EU:C:2017:632, paragraph 136 and the case-law cited).88It has been held, in that regard, that abuse of a dominant position prohibited by Article 102 TFEU is an objective concept relating to the conduct of a dominant undertaking which, on a market where the degree of competition is already weakened precisely because of the presence of the undertaking concerned, through recourse to methods different from those governing normal competition in products or services on the basis of the transactions of commercial operators, has the effect of hindering the maintenance of the degree of competition still existing on the market or the growth of that competition (see judgments of 19 April 2012, Tomra Systems and Others v Commission, C‑549/10 P, EU:C:2012:221, paragraph 17 and the case-law cited, and of 9 September 2009, Clearstream v Commission, T‑301/04, EU:T:2009:317, paragraph 140 and the case-law cited).89Article 102 TFEU covers not only those practices that directly cause harm to consumers but also practices that cause consumers harm by interfering with the free play of competition (see, to that effect, judgments of 27 March 2012, Post Danmark, C‑209/10, EU:C:2012:172, paragraph 20 and the case-law cited, and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 171).90The effect on competition referred to in paragraph 88 above does not necessarily relate to the actual effect of the abusive conduct complained of. For the purposes of establishing an infringement of Article 102 TFEU, it is necessary to show that the abusive conduct of the undertaking in a dominant position tends to restrict competition or, in other words, that the conduct is capable of having that effect (judgment of 19 April 2012, Tomra Systems and Others v Commission, C‑549/10 P, EU:C:2012:221, paragraph 68; see, also, judgments of 9 September 2009, Clearstream v Commission, T‑301/04, EU:T:2009:317, paragraph 144 and the case-law cited, and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 268 and the case-law cited).91Moreover, as regards the abusive nature of a practice resulting in a margin squeeze, it should be noted that subparagraph (a) of the second paragraph of Article 102 TFEU expressly prohibits a dominant undertaking from directly or indirectly imposing unfair prices (judgments of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 25, and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 173). Since the list of abusive practices contained in Article 102 TFEU is nevertheless not exhaustive, the list of abusive practices contained in that provision does not exhaust the methods of abusing a dominant position prohibited by EU law (judgments of 21 February 1973, Europemballage and Continental Can v Commission, 6/72, EU:C:1973:22, paragraph 26; of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 26; and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 174).92In the present case, it should be pointed out that the argument presented by the applicant in the first part of this plea refers only to the legal test applied by the Commission, in the seventh part of the contested decision (recitals 355 to 821), in order to classify a range of conduct of the applicant during the period under consideration as ‘refusal to supply’. By contrast, the applicant does not dispute the existence itself of the conduct noted by the Commission in that part of the contested decision. As is apparent from recitals 2 and 1507 of the contested decision, that conduct, which contributed to the identification by the Commission of a single and continuous infringement of Article 102 TFEU (recital 1511 of the contested decision), consisted, first, in concealing from alternative operators information relating to Slovak Telekom’s network, which is necessary for the unbundling of that operator’s local loop, secondly, in a reduction by Slovak Telekom of its obligations relating to unbundling under the applicable regulatory framework and, thirdly, in the establishment by that operator of a number of unfair terms and conditions in its reference offer relating to unbundling.93Moreover, as the applicant confirmed during the hearing, the first part of the first plea does not call into question the analysis of Slovak Telekom’s conduct consisting in a margin squeeze carried out by the Commission in the eighth part of the contested decision (recitals 822 to 1045 of the contested decision). In its action, the applicant does not dispute that that type of conduct constitutes an independent form of abuse distinct from that of refusal to provide access and the existence thereof is therefore not subject to the criteria laid down in the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569) (see, to that effect, judgment of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 75 and the case-law cited).94Thus, in essence, the applicant takes issue with the Commission for having classified the conduct referred to in paragraph 92 above as ‘refusal to supply’ access to Slovak Telekom’s local loop without having verified the ‘indispensable’ nature of such access, for the purposes of the third condition set out in paragraph 41 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569).95In that judgment, the Court of Justice indeed considered that, in order for the refusal by a dominant undertaking to grant access to a service to constitute an abuse within the meaning of Article 102 TFEU, that refusal must be likely to eliminate all competition on the market on the part of the person requesting the service, such refusal must not be capable of being objectively justified, and the service must in itself be indispensable to carrying on that person’s business (judgment of 26 November 1998, Bronner, C‑7/97, EU:C:1998:569, paragraph 41; see, also, judgment of 9 September 2009, Clearstream v Commission, T‑301/04, EU:T:2009:317, paragraph 147 and the case-law cited).96Moreover, it is clear from paragraphs 43 and 44 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), that, in order to determine whether a product or service is indispensable for enabling an undertaking to carry on business in a particular market, it must be determined whether there are products or services which constitute alternative solutions, even if they are less advantageous, and whether there are technical, legal or economic obstacles capable of making it impossible or at least unreasonably difficult for any undertaking seeking to operate in the market to create, possibly in cooperation with other operators, alternative products or services. According to paragraph 46 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), in order to accept the existence of economic obstacles, it must be established, at the very least, that the creation of those products or services is not economically viable for production on a scale comparable to that of the undertaking which controls the existing product or service (judgment of 29 April 2004, IMS Health, C‑418/01, EU:C:2004:257, paragraph 28).97However, in the present case, since the legislation relating to the telecommunications sector defines the legal framework applicable to it and, in so doing, contributes to the determination of the competitive conditions under which a telecommunication undertaking carries on its business in the relevant markets, that legislation constitutes a relevant factor in the application of Article 102 TFEU to the conduct of that undertaking, in particular for assessing the abusive nature of such conduct (judgment of 14 October 2010, Deutsche Telekom v Commission, C‑280/08 P, EU:C:2010:603, paragraph 224).98As the Commission correctly points out, the conditions referred to in paragraph 95 above were laid down and applied in the context of cases dealing with the question of whether Article 102 TFEU could be such as to require the undertaking in a dominant position to supply to other undertakings access to a product or service, in the absence of any regulatory obligation to that end.99Such a context differs from that of the present case, in which TUSR, by a decision of 8 March 2005 confirmed by the director of that authority on 14 June 2005, required Slovak Telekom to grant all reasonable and justified requests for unbundling of its local loop, in order to enable alternative operators, on that basis, to offer their own services on the retail mass market for broadband services at a fixed location in Slovakia (paragraph 9 above). That requirement resulted from the public authorities’ intention to encourage Slovak Telekom and its competitors to invest and innovate, whilst ensuring that competition in the market is maintained (recitals 218, 373, 388, 1053 and 1129 of the contested decision).100As is stated in recitals 37 to 46 of the contested decision, TUSR’s decision, taken in accordance with Law No 610/2003, implemented in Slovakia the requirement of unbundled access to the local loop of operators with significant market power on the market for the provision of fixed public telephone networks, provided for in Article 3 of Regulation No 2887/2000. The EU legislature justified that requirement, in recital 6 of that regulation, by the fact that ‘it would not be economically viable for new entrants to duplicate the incumbent’s metallic local access infrastructure in its entirety within a reasonable time[, since a]lternative infrastructures … do not generally offer the same functionality or ubiquity’.101Therefore, given that the relevant regulatory framework clearly acknowledged the need for access to Slovak Telekom’s local loop, in order to allow the emergence and development of effective competition in the Slovak market for high-speed internet services, the demonstration, by the Commission, that such access was indeed indispensable for the purposes of the last condition set out in paragraph 41 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), was not required.102That conclusion is not called into question by the applicant’s argument that the existence of a regulatory obligation to provide access to Slovak Telekom’s local loop does not mean that such access should also have been granted under Article 102 TFEU, since such an ex ante regulatory obligation pursues other objectives and is subject to conditions other than the ex post control of the conduct of a dominant undertaking, pursuant to that article.103In order to reject that argument, it is sufficient to state that the elements set out in paragraphs 97 to 101 above are not based on the premiss that Slovak Telekom’s obligation to grant unbundled access to its local group is the consequence of Article 102 TFEU, but merely emphasise, in accordance with the case-law cited in paragraph 97 above, that the existence of such a regulatory obligation constitutes a relevant element of the economic and legal context in which the question whether Slovak Telekom’s practices examined in the seventh part of the contested decision might be classified as abusive practices within the meaning of that provision must be appraised.104Furthermore, the reference which the applicant makes to paragraph 113 of the judgment of 10 April 2008, Deutsche Telekom v Commission (T‑271/03, EU:T:2008:101), in order to support the argument referred to in paragraph 102 above is irrelevant. The General Court did indeed observe, in that paragraph, that the national regulatory authorities operated under national law, which may have objectives which differ from those of EU competition policy. That point was intended to support the Court’s rejection of the applicant’s argument put forward in that case that, in essence, the ex ante control of its tariffs by the German regulatory authority for telecommunications and post precluded Article 102 TFEU from being applied to any margin squeeze resulting from its tariffs for unbundled access to its own local loop. That point therefore had no bearing on the question whether the existence of a regulatory obligation to provide access to the local loop of the dominant operator is relevant for the purposes of assessing the conformity of its conditions of access with Article 102 TFEU.105It follows from the foregoing that the Commission cannot be criticised for having failed to establish the indispensable nature of access to the network at issue.106Nor, it should be added, could such a complaint be made against the Commission if it had to be considered that the implied refusal of access at issue was covered by the considerations in the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83). In that judgment, the Court of Justice held that it cannot be inferred from paragraphs 48 and 49 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), that the conditions to be met in order to establish that a refusal to supply is abusive, which was the object of the first question for a preliminary ruling examined in that case, must necessarily also apply when assessing the abusive nature of conduct which consists in supplying services or selling goods on conditions which are disadvantageous or in which the purchaser might not be interested (judgment of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 55). In that regard, the Court of Justice held that such conduct may, in itself, constitute an independent form of abuse distinct from that of refusal to supply (judgment of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 56).107The Court of Justice, moreover, stated that if the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), were to be interpreted otherwise, that would amount to a requirement that before any conduct of a dominant undertaking in relation to its terms of trade could be regarded as abusive the conditions to be met to establish that there was a refusal to supply would in every case have to be satisfied, and that would unduly reduce the effectiveness of Article 102 TFEU (judgment of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 58).108The applicant correctly notes, concerning that point, that the practice at issue in the main proceedings examined by the Court of Justice in the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83), merely consisted, as is apparent from paragraph 8 of that judgment, in a possible margin squeeze by the historical Swedish fixed telephone network operator in order to discourage requests by alternative operators for access to its local loop. It cannot be deduced therefrom that the interpretation given by the Court of Justice in that judgment of the scope of the conditions set out in paragraph 41 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569), is limited to that sole form of abusive conduct and does not cover practices which are not strictly related to pricing such as those examined in the present case by the Commission in the seventh part of the contested decision (see paragraphs 27 to 41 above).109It should, first of all, be noted that, in paragraphs 55 to 58 of the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83), the Court of Justice did not refer to the particular form of abuse constituted by the margin squeeze of competitor operators in a downstream market, but rather to the supply of ‘services or selling goods on conditions which are disadvantageous or in which the purchaser might not be interested’ and to ‘terms of trade’ fixed by the dominant undertaking. Such wording suggests that the exclusionary practices to which reference was therefore made concerned not solely a margin squeeze, but also other business practices capable of producing unlawful exclusionary effects for current or potential competitors, like those classified by the Commission as an implicit refusal to supply access to Slovak Telekom’s local loop (see, to that effect, recital 366 of the contested decision).110That reading of the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83), is supported by the reference made by the Court of Justice, in that part of its analysis, to paragraphs 48 and 49 of the judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569). Those paragraphs dealt with the second question for a preliminary ruling referred to the Court of Justice in that case and did not concern the refusal by the dominant undertaking at issue in the dispute in the main proceedings to give access to its home-delivery scheme to the publisher of a rival newspaper, examined in the context of the first question, but the possible classification as abuse of a dominant position of a practice which consisted for that undertaking in making such access subject to the condition that the publisher at issue entrust to it the carrying out of other services, such as sales in kiosks or printing.111In that regard, the applicant’s argument that, in essence, the application in the present case of the reasoning followed in paragraphs 55 to 58 of the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83), would have the illogical consequence that an implied refusal to supply would be easier to prove than a simple refusal to supply, even though the latter type of conduct constitutes a more serious form of abuse of a dominant position, cannot be upheld. It is sufficient to state that that argument is based on a false premiss, namely that the gravity of an infringement of Article 102 TFEU consisting in a refusal by a dominant undertaking to supply goods or services to other undertakings would depend solely on the form of that refusal. The gravity of such an infringement may depend on numerous factors that are independent of the explicit or implied nature of the refusal, such as the geographic scope of the infringement, its intentional nature or its effects on the market. The 2006 Guidelines confirm that analysis when they state, in point 20, that the assessment of the gravity of an infringement of Article 101 or 102 TFEU is made on a case-by-case basis for all types of infringement, taking account of all the relevant circumstances of the case.112Last, it must be borne in mind that, in paragraph 69 of the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83), the Court of Justice observed that the indispensable nature of the wholesale product could be relevant in order to assess the effects of a margin squeeze. However, in the present case, it must be pointed out that the applicant invoked the Commission’s obligation to show the indispensable nature of the unbundled access to Slovak Telekom’s local loop only in support of its claim that the Commission failed to apply the legally appropriate criteria during its assessment of the practices examined in the seventh part of the contested decision (see, by analogy, judgment of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 182), and not in order to call into question the Commission’s assessment of the anticompetitive effects of those practices, carried out in the ninth part of that decision (recitals 1046 to 1109 of the contested decision).113As for the reference which the applicant makes to point 79 of the Communication on Guidance on the Commission’s enforcement priorities in applying Article [102 TFEU] to abusive exclusionary conduct by dominant undertakings (OJ 2009 C 45, p. 7), it is irrelevant in the present case.114First, as the Commission correctly observes, the distinction made in that point between a simple refusal and a ‘constructive refusal’ to supply is not accompanied by any detail as to the relevant legal criteria for the purpose of arriving, in each of those situations, at a finding of infringement of Article 102 TFEU. Second, and in any event, that communication states that its sole purpose is to set out the enforcement priorities that will guide the Commission in applying Article 102 TFEU to exclusionary conduct by dominant undertakings, and not to constitute a statement of the law (see points 2 and 3 of the communication).115Having regard to the foregoing, it must be concluded that the classification of the conduct of Slovak Telekom examined in the seventh part of the contested decision as abusive practices within the meaning of Article 102 TFEU did not assume that the Commission was required to establish that access to Slovak Telekom’s local loop was indispensable for the exercise of the activity of the operators competing on the retail market for fixed broadband services in Slovakia, within the meaning of the case-law cited in paragraph 96 above.116It follows from all of the foregoing that the first part of the first plea must be rejected as unfounded. (c) Second part: breach of the applicant’s right to be heard concerning the calculation of the margin squeeze 117By the second part of its first plea, the applicant maintains that the Commission breached its right to be heard at the administrative procedure stage, in two respects.118First, it claims that the Commission informed it of a body of new evidence at an information meeting held on 29 September 2014. A document entitled ‘Margin squeeze calculation (preliminary results)’, communicated to the applicant on that occasion, revealed that Slovak Telekom’s margin in 2005 was positive on the basis of a calculation of the margins period by period (year by year). That document also contained figures to which the applicant had not had access before the information meeting. Last, the Commission stated at that meeting that it intended to apply a multi-period (multi-year) approach when calculating the margins between 12 August 2005 and 31 December 2010 and, moreover, that it thus found a negative margin for 2005 as well. That statement came as a surprise to both the applicant and Slovak Telekom, neither of which had thus far suggested such a method.119Following a request by the applicant, the Commission informed it, on 1 October 2014, that it could provide it with its comments on that evidence by 3 October 2014 at the latest. Since that date was a national holiday in Germany, the applicant had less than two working days to submit its comments. As some of the figures used in the revised calculation of the margin squeeze had been supplied by Slovak Telekom in its reply to the account of the facts and the applicant had not had access to that document, the Commission, by letter of 7 October 2014, authorised the applicant to consult that reply and to submit its comments on it by no later than the evening of 9 October.120In the applicant’s submission, those very tight deadlines deprived it, in practice, of any genuine possibility of revealing its views on the new evidence brought to its knowledge on 29 September 2014, even though that evidence was taken into account in the contested decision. The applicant submits that the figures presented by the Commission for the first time on that date were not only new, owing in particular to the use of the LRAIC, but also complex. It was not in a position to submit those new figures to economists, which would certainly have allowed it to influence the Commission’s assessment of the duration of the margin squeeze forming the subject matter of the investigation.121Second, the applicant takes issue with the Commission for having corrected and adjusted, in the contested decision, the figures supplied by Slovak Telekom in order to calculate the LRAIC, without having first informed the applicant of its objections in that respect and, consequently, having thus deprived it of any possibility of expressing its views.122The Commission disputes those arguments.123It should be recalled that observance of the rights of the defence in the conduct of administrative procedures relating to competition policy constitutes a general principle of EU law whose observance the Courts of the European Union ensure (see judgment of 18 June 2013, ICF v Commission, T‑406/08, EU:T:2013:322, paragraph 115 and the case-law cited).124That principle requires that the undertaking concerned must have been afforded the opportunity, during the administrative procedure, to make known its views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim that there has been an infringement of the rules on competition. To that end, Article 27(1) of Regulation No 1/2003 provides that the parties are to be sent a statement of objections. That statement must set out clearly all the essential elements on which the Commission is relying at that stage of the procedure (judgment of 5 December 2013, SNIA v Commission, C‑448/11 P, not published, EU:C:2013:801, paragraphs 41 and 42).125That requirement is satisfied where the final decision does not allege that the persons concerned have committed infringements other than those referred to in the statement of objections and only takes into consideration facts on which the persons concerned have had the opportunity of stating their views in the course of the procedure (see, to that effect, judgments of 24 May 2012, MasterCard and Others v Commission, T‑111/08, EU:T:2012:260, paragraph 266, and of 18 June 2013, ICF v Commission, T‑406/08, EU:T:2013:322, paragraph 117).126However, the essential facts on which the Commission is relying in the statement of objections may be set out summarily and the decision is not necessarily required to be a replica of the statement of objections, because that statement is a preparatory document containing assessments of fact and of law which are purely provisional in nature (see, to that effect, judgments of 17 November 1987, British American Tobacco and Reynolds Industries v Commission, 142/84 and 156/84, EU:C:1987:490, paragraph 70; of 5 December 2013, SNIA v Commission, C‑448/11 P, not published, EU:C:2013:801, paragraph 42 and the case-law cited; and of 24 May 2012, MasterCard and Others v Commission, T‑111/08, EU:T:2012:260, paragraph 267). Thus, it is permissible for the Commission to supplement the statement of objections in the light of the parties’ replies, whose arguments show that they have actually been able to exercise their rights of defence. The Commission may also, in the light of the administrative procedure, revise or supplement its arguments of fact or law in support of its objections (judgment of 9 September 2011, Alliance One International v Commission, T‑25/06, EU:T:2011:442, paragraph 181). Consequently, until a final decision has been adopted, the Commission may, in view, in particular, of the written or oral observations of the parties, abandon some or even all of the objections initially made against them and thus alter its position in their favour or decide to add new complaints, provided that it affords the undertakings concerned the opportunity of making known their views in that respect (see judgment of 30 September 2003, Atlantic Container Line and Others v Commission, T‑191/98 and T‑212/98 to T‑214/98, EU:T:2003:245, paragraph 115 and the case-law cited).127It results from the provisional nature of the legal classification of the facts made in the statement of objections that the Commission’s final decision cannot be annulled on the sole ground that the definitive conclusions drawn from those facts do not correspond precisely with that provisional classification (judgment of 5 December 2013, SNIA v Commission, C‑448/11 P, not published, EU:C:2013:801, paragraph 43). The taking into account of an argument put forward by a party during the administrative procedure, without it having been given the opportunity to express an opinion in that respect before the adoption of the final decision, cannot as such constitute a breach of its rights of defence, where taking account of that argument does not alter the nature of the complaints against it (see, to that effect, order of 10 July 2001, Irish Sugar v Commission, C‑497/99 P, EU:C:2001:393, paragraph 24; judgments of 28 February 2002, Compagnie générale maritime and Others v Commission, T‑86/95, EU:T:2002:50, paragraph 447; and of 9 September 2011, Alliance One International v Commission, T‑25/06, EU:T:2011:442, paragraph 182).128The Commission is required to hear the addressees of a statement of objections and, where necessary, to take account of their observations made in response to the objections by amending its analysis specifically in order to respect their rights of defence. The Commission must therefore be permitted to clarify that classification in its final decision, taking into account the factors emerging from the administrative procedure, in order either to abandon such objections as have been shown to be unfounded or to amend and supplement its arguments, both in fact and in law, in support of the objections which it raises, provided however that it relies only on facts on which those concerned have had an opportunity to make known their views and provided that, in the course of the administrative procedure, it has made available the evidence necessary for their defence (see judgments of 3 September 2009, Prym and Prym Consumer v Commission, C‑534/07 P, EU:C:2009:505, paragraph 40 and the case-law cited, and of 5 December 2013, SNIA v Commission, C‑448/11 P, not published, EU:C:2013:801, paragraph 44 and the case-law cited).129Last, it should be recalled that, according to established case-law, there is a breach of the rights of the defence where it is possible that, as a result of an error committed by the Commission, the outcome of the administrative procedure conducted by the latter might have been different. An applicant undertaking establishes that there has been such a breach where it adequately demonstrates, not that the Commission’s decision would have been different in content, but rather that it would have been better able to ensure its defence had there been no error, for example because it would have been able to use for its defence documents to which it was denied access during the administrative procedure (see judgments of 2 October 2003, Thyssen Stahl v Commission, C‑194/99 P,EU:C:2003:527, paragraph 31 and the case-law cited, and of 24 May 2012, MasterCard and Others v Commission, T‑111/08, EU:T:2012:260, paragraph 269 and the case-law cited; judgment of 9 September 2015, Philips v Commission, T‑92/13, not published, EU:T:2015:605, paragraph 93).130It is in the light of those principles that the Court must first of all examine the applicant’s first complaint, that its right to be heard was infringed since it was not in a position to put forward its views, during the administrative procedure, on new material brought to its knowledge at the information meeting held by the Commission on 29 September 2014 and taken into account in the contested decision. That material consists, first, in new figures relating to the calculations of Slovak Telekom’s margin squeeze; second, in the fact that the margin for 2005 was positive on the basis of a calculation of the margins period by period (year by year); and, third, in the intention which the Commission showed at that meeting of applying to the surplus a multi-period (multi-year) method of calculating the margins that allowed it to conclude that there was also a negative margin for 2005.131As regards the first two items, it should indeed be observed that, according to recital 1010 of the contested decision, the margins identified for 2005 were positive as regards the three service portfolios analysed. That contrasts with the calculation of the margin squeeze for access to Slovak Telekom’s local loop that appeared in the statement of objections, which revealed that the margin calculated for that year was negative (see Table 88 and recital 1203 of the statement of objections). Furthermore, it is common ground that, in the contested decision, the Commission did not reproduce all the figures used in order to calculate the margin squeeze in the statement of objections and that that modification resulted in different margins being identified in the contested decision from those provisionally calculated in the statement of objections.132However, as the Commission correctly observes in its written pleadings, without being contradicted by the applicant, those changes concerning the calculations of the margins were the result of the figures and calculations supplied by Slovak Telekom itself in reply to the statement of objections being taken into consideration. The fact that those figures and calculations were taken into consideration is apparent, in particular, from recitals 910, 945, 963 and 984 of the contested decision. It is also apparent from recitals 946 (footnote 1405) and 1000 of the contested decision that the Commission took into account, when adopting that decision, the updated calculations of the margin squeeze supplied by Slovak Telekom in its response to the letter of facts (see paragraph 21 above).133In doing so, as regards its assessment of the margin squeeze, the Commission did not modify, in the contested decision, the nature of the complaints against Slovak Telekom and, by extension, against the applicant in its capacity as parent company, by holding them liable for facts on which they were not given the opportunity to express their views during the administrative procedure. It merely took account of the objections put forward by Slovak Telekom during that procedure in order to adjust and supplement its analysis of margin squeeze in the statement of objections. As it did so with the specific intention of satisfying the requirements set out in paragraph 128 above, the parties’ right to be heard during the administrative procedure did not require that they be given a fresh opportunity to make known their views on the revised calculations of the margin squeeze before the contested decision was adopted.134As regards the third item referred to in paragraph 130 above, relating to the multi-period (multi-year) method of calculating the margin squeeze, it should be emphasised that, in paragraph 1281 of its reply to the statement of objections, reproduced in the Commission’s defence, Slovak Telekom objected to the exclusive use of the period-by-period (year-by-year) method, which had been proposed by the Commission in the statement of objections.135Slovak Telekom claimed, in essence, that, in the telecommunications sector, operators studied their capacity to obtain a reasonable return over a period longer than a year. It thus suggested, in particular, that the examination of a margin squeeze should be supplemented by a multi-period analysis, in which the total margin would be evaluated over several years. It follows from recital 587 of the applicant’s reply to the statement of objections, moreover, that the applicant supported that objection.136As is apparent from recital 859 of the contested decision, the Commission used a multi-period (multi-year) approach in order to take account of that objection and in order to establish whether that approach altered its finding that the tariffs charged by Slovak Telekom to the alternative operators for unbundled access to its local loop had entailed margin squeeze between 2005 and 2010.137In the context of that additional examination, the result of which is set out in recitals 1013 and 1014 of the contested decision, the Commission identified a total negative margin for each portfolio of services, first, for the period between 2005 and 2010 (Table 39 in recital 1013 of the contested decision) and, second, for the period between 2005 and 2008 (Table 40 in recital 1014 of the contested decision). The Commission inferred, in recital 1015 of the contested decision, that the multi-year (multi-period) analysis did not alter its conclusion as to the existence of margin squeeze resulting from a period-by-period (year-by-year) analysis.138It follows from the foregoing that, in the context of the establishment of a margin squeeze in the contested decision, the multi-period (multi-year) analysis was carried out following the objection, by Slovak Telekom in its reply to the statement of objections, and which was supported by the applicant, concerning the period-by-period (year-by-year) calculation method. Furthermore, the multi-period (multi-year) analysis of the margins for unbundled access to Slovak Telekom’s local loop was meant to be added to the period-by-period (year-by-year) analysis set out in recitals 1175 to 1222 of that decision, without replacing that analysis. Moreover, the additional multi-period (multi-year) analysis led the Commission to support its finding that there was a margin squeeze on the Slovakian market for broadband services between 12 August 2005 and 31 December 2010.139Therefore, as the Commission maintains in essence, the multi-period (multi-year) analysis did not result in the applicant and Slovak Telekom being held liable for facts on which they did not have the opportunity to explain their views during the administrative procedure, owing to the modification of the nature of the objections against them, but resulted only in an additional analysis of the margin squeeze resulting from the tariffs charged by Slovak Telekom for unbundled access to its local loop being carried out, in the light of an objection raised by Slovak Telekom in answer to the statement of objections.140In those circumstances, in accordance with the case-law cited in paragraphs 127 and 128 above, the applicant’s right to be heard did not require that the Commission, before adopting the contested decision, should give it the opportunity to present fresh observations on the multi-period analysis of margin squeeze for unbundled access to Slovak Telekom’s local loop. It should be emphasised that a different solution would be incompatible with the case-law referred to in paragraph 127 above, since it would amount to preventing the contested decision from containing elements on which the parties were not given the specific opportunity to comment during the administrative procedure, even when those elements do not alter the nature of the objections made against them.141That conclusion is not called into question by the applicant’s argument that, in essence, the method of calculating margin squeeze applied by the Commission in the context of that additional examination would not correspond to the method proposed by Slovak Telekom in its reply to the statement of objections and alleged to be based on the Commission’s practice in taking decisions, whereas in the present case it used the multi-period (multi-year) analysis with the aim of increasing the duration of the infringement.142First, that argument is based on a misreading of the contested decision in so far as, following the period-by-period (year-by-year) analysis, the Commission had already reached the conclusion that a competitor as efficient as Slovak Telekom could not have replicated profitably between 12 August 2005 and 31 December 2010 Slovak Telekom’s retail portfolio comprising broadband services (recital 1012 of the contested decision). It is apparent, in particular, from recital 998 of the contested decision that, according to the Commission, the fact that there was a positive margin between August and December 2005 did not preclude that period being included in the infringement in the form of margin squeeze, since operators consider their ability to earn a reasonable return over a longer period. In other words, the Commission established the duration of the practice leading to the margin squeeze on the basis of the period-by-period (year-by-year) approach and the multi-period (multi-year) approach was used solely as an additional measure.143Second, and in any event, it follows from the case-law cited in paragraph 128 above that respect for the applicant’s right to be heard required only that the Commission should take account, when adopting the contested decision, of the criticism concerning the method of calculating the margins presented by Slovak Telekom in reply to the statement of objections and shared by the applicant (see paragraph 135 above). On the other hand, that right did not in any way mean that the Commission must necessarily arrive at the result to which the applicant aspired by supporting the criticism submitted by Slovak Telekom, namely the finding that there was no margin squeeze between 12 August 2005 and 31 December 2010.144In the interest of completeness, that is to say on the assumption that the Commission was required to offer the applicant a specific opportunity to be heard about the matters referred to in paragraph 130 above before adopting the contested decision, it should be stated that such a requirement would have been met. Admittedly, the time limits which the Commission allowed the applicant to submit its comments on those elements were particularly short. However, it cannot be inferred that they deprived the applicant of any opportunity to be properly heard in that respect, having regard, first, to the very advanced stage of the administrative procedure at which the meeting of 29 September 2014 took place, that is to say, more than 2 years and 4 months after the statement of objections was issued, and, second, to the high degree of knowledge of the file which the applicant may reasonably be considered to have acquired at that time.145It follows that the first complaint in the second part of the present plea must be rejected.146The second complaint, whereby the applicant maintains that the Commission breached its right to be heard by not allowing it to put forward its point of view during the administrative procedure concerning the corrections and adjustments made in the contested decision of the data supplied by Slovak Telekom for the calculation of the LRAIC, must also be rejected.147In that regard, it is indeed the case that, in the contested decision, the Commission did not accept in full the new data concerning the calculation of the LRAIC supplied by Slovak Telekom following the issue of the statement of objections. That finding may be inferred, in particular, from recitals 910, 945 and 963 of the contested decision. However, by analogy with the reasoning followed in paragraph 143 above, the Commission cannot be required to hear the parties again when it envisages that it will not uphold in its final decision all of the objections put forward by them in response to the statement of objections, except where it is induced to modify the nature of the objections upheld against them.148As the circumstance referred to in the preceding paragraph did not have the effect of modifying the principal elements of fact and of law on which the accusations upheld against the applicant during the administrative procedure were based, the second part of the first plea must be rejected in its entirety as unfounded. (d) Third part: errors in the calculation of the long run average incremental costs (LRAIC) 149In the third part, the applicant takes issue with the Commission for not having correctly calculated Slovak Telekom’s LRAIC, that is to say, the costs which Slovak Telekom would not have had to bear if it had not offered the corresponding services. The consultancy report produced by Slovak Telekom as an annex to its reply to the statement of objections (‘the consultancy report’) proposed that Slovak Telekom’s assets be adjusted to the level of an efficient operator that would design a network in an optimal manner in order to respond to current and future demand (‘the optimisation adjustments’). However, the Commission did not eventually make such adjustments. More specifically, the Commission did not agree that the current assets should be replaced by their modern equivalents (modern asset equivalent). Nor did it take into account the reduction of the assets on the basis of currently used capacity. That approach calls for criticism on the grounds that the Commission also accepted a re-evaluation of Slovak Telekom’s assets in the contested decision, that the adjustment proposed in the consultancy report was indeed based on Slovak Telekom’s historical costs and not on the costs of a hypothetical competitor and that those costs had to be assessed by reference to an efficient competitor. In addition, the applicant claims that the calculation of the LRAIC in the consultancy report took account of sufficient reserve capacity for Slovak Telekom and, contrary to the Commission’s assertion, did not take a fully efficient competitor as a reference. In the applicant’s submission, if that calculation error had not occurred, the Commission would necessarily have concluded that the margins were higher, indeed positive for certain years, owing to a downward re-evaluation of the LRAIC.150The Commission disputes that argument.151As regards the arguments put forward by the applicant, it should first of all be observed that Slovak Telekom proposed in its reply to the statement of objections, relying on the consultancy report, a method based on current cost accounting, by means of the estimate of upstream costs for 2005 to 2010 on the basis of data from 2011 (recital 881 of the contested decision). In particular, Slovak Telekom maintained, in that reply, that it was necessary, when calculating the LRAIC, to re-evaluate the assets and to take account of the inefficiencies of its network for the broadband offer. As regards, in particular, the taking into account of those inefficiencies, Slovak Telekom proposed that optimisation adjustments should be made, namely, first, the replacement of current assets by their modern, more efficient and less costly equivalents (modern asset equivalent); second, the maintenance as far as possible of technological coherence; and, third, the reduction of assets on the basis of currently used capacity by contrast to installed capacity.152In its own calculations of the LRAIC, the applicant thus adjusted the capital cost of the assets and their written-down values in the years 2005 to 2010, as well as the operating costs of those assets, by relying on the weighted average adjustment factor calculated by the author of the consultancy report for 2011 (recital 897 of the contested decision). The applicant claims that the suggested optimisation adjustments reflected the spare capacity identified in the elements of that network, namely assets removed from that network because they were not in productive use, but which had not yet been sold by that operator (recital 898 of the contested decision).153The Commission nevertheless refused to make those optimisation adjustments in the contested decision.154In the first place, as regards the replacement of existing assets with their more modern equivalents, the Commission stated, in recital 900 of the contested decision, that such a replacement could not be accepted since it amounts to adjusting the costs without properly adjusting the depreciations. The Commission referred to that point in recitals 889 to 893 of the contested decision, in which it expressed doubts about the adjustment, as it was proposed by the applicant, of the costs of assets for the period between 2005 and 2010 suggested by Slovak Telekom. Moreover, the Commission considered, in recital 901 of the contested decision, that such a replacement of existing assets was not compatible with the equally efficient competitor criterion. The case-law confirmed that the abusive nature of the pricing practices of a dominant operator is in principle determined in relation to its own position. In the present case, the adjustment of the LRAIC suggested by the applicant is based on a collection of hypothetical assets and not on the same assets as those held by that operator.155In the second place, as regards the taking into account of the excess capacity of the networks on the basis of ‘actually’ used capacity, the Commission concluded, in recital 902 of the contested decision, that, since investments are based on a forecast of demand, it was inevitable that, in the context of an ex post examination, a certain capacity remains sometimes unused.156None of the complaints put forward by the applicant against that part of the contested decision can be upheld.157First, the applicant is wrong to claim that there is a contradiction between, on the one hand, the rejection of the optimisation adjustments of the LRAIC and, on the other hand, the acceptance, in recital 894 of the contested decision, of the asset re-evaluation which it proposed. The applicant also cannot claim in the reply that the Commission should have accepted the optimisation adjustments proposed by it on the ground that, as for the asset re-evaluation, the Commission did not have reliable historical costs concerning the optimisation adjustments.158The re-evaluation of the assets was based on the assets held by Slovak Telekom in 2011. With respect to that re-evaluation and as is apparent from recitals 885 to 894 of the contested decision, the Commission noted that it did not have at its disposal data better reflecting Slovak Telekom’s incremental broadband asset costs for the period between 2005 and 2010. As a result, in the analysis of the margin squeeze in the contested decision, the Commission included Slovak Telekom’s current assets proposed by the latter. However, the Commission pointed out that that re-evaluation was capable of leading to an underestimation of downstream asset costs.159By comparison, as is apparent from recital 895 of the contested decision, the optimisation adjustments proposed by Slovak Telekom consisted in adjusting the assets to the approximate level of an efficient operator that would build an optimal network adapted to satisfy future demand based on ‘today’s’ information and demand predictions. Those adjustments were based on a forecast and on an optimal network model, and not on an estimate reflecting the incremental costs of Slovak Telekom’s existing assets.160It follows that the optimisation adjustments, in general, and the replacement of existing assets by their more modern equivalents, in particular, had a different objective from the re-evaluation of assets proposed by Slovak Telekom. Furthermore, the taking into consideration, by the Commission, of the re-evaluation of current assets proposed by Slovak Telekom, due to the absence of other more reliable data on the LRAIC of that operator, did not suggest that the Commission necessarily accepted the optimisation adjustments of the LRAIC. The Commission was thus justified in treating differently, on the one hand, the replacement of existing assets by their more modern equivalents and, on the other hand, the re-evaluation of assets proposed by Slovak Telekom.161Second, the applicant cannot be followed when it disputes the conclusion, in recital 901 of the contested decision, that the optimisation adjustments would lead to a calculation of the LRAIC on the basis of the assets of a hypothetical competitor and not on the assets of the incumbent operator in question, Slovak Telekom.162In that regard, it should be noted that, according to settled case-law, the assessment of the lawfulness of the pricing policy applied by a dominant undertaking, in the light of Article 102 TFEU, requires that reference be made, in principle, to pricing criteria based on the costs incurred by the dominant undertaking and on its strategy (see judgments of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 41 and the case-law cited, and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 190; see also, to that effect, judgment of 10 April 2008, Deutsche Telekom v Commission, T‑271/03, EU:T:2008:101, paragraph 188 and the case-law cited).163In particular, as regards a pricing practice resulting in a margin squeeze, the use of such analytical criteria can establish whether, in accordance with the equally efficient competitor test referred to in paragraph 87 above, that undertaking would have been sufficiently efficient to offer its retail services to end users otherwise than at a loss if it had first been obliged to pay its own wholesale prices for the intermediary services (judgments of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 42, and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 191; see, to that effect, judgment of 14 October 2010, Deutsche Telekom v Commission, C‑280/08 P, EU:C:2010:603, paragraph 201).164The validity of such an approach is reinforced by the fact that it also conforms to the general principle of legal certainty, since taking into account the costs and prices of the dominant undertaking enables that undertaking, in the light of its special responsibility under Article 102 TFEU, to assess the lawfulness of its own conduct. While a dominant undertaking knows its own costs and prices, it does not as a general rule know those of its competitors (judgments of 14 October 2010, Deutsche Telekom v Commission, C‑280/08 P, EU:C:2010:603, paragraph 202; of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 44; and of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 192).165The Court of Justice admittedly stated, in paragraphs 45 and 46 of the judgment of 17 February 2011, TeliaSonera Sverige (C‑52/09, EU:C:2011:83), that it could not be ruled out that the costs and prices of competitors may be relevant to the examination of the practice resulting in the margin squeeze. It is apparent however from that judgment that it is only where it is not possible, in the light of the particular circumstances, to refer to the prices and costs of the dominant undertaking that the prices and costs of competitors on the same market should be examined, which the applicant has not claimed in the present case (see, by analogy, judgment of 29 March 2012, Telefónica and Telefónica de España v Commission, T‑336/07, EU:T:2012:172, paragraph 193).166In the present case, first, the replacement of existing assets by their more modern equivalents sought to adjust the costs of assets by retaining the value of ‘current’ assets, without however properly adjusting the depreciations (recital 900 of the contested decision). That replacement led to a calculation of the margin squeeze on the basis of hypothetical assets, namely assets which do not correspond with those held by Slovak Telekom. The costs relating to Slovak Telekom’s assets were thus underestimated (recitals 893 and 900 of the contested decision). Moreover, taking into consideration the excess capacity of the networks on the basis of the ‘currently’ used capacity would result in excluding Slovak Telekom’s assets which are not in productive use (see paragraph 152 above).167Therefore, in the light of the principles noted in paragraphs 162 to 165 above, the Commission was able to conclude without committing an error that the optimisation adjustments of the LRAIC proposed by Slovak Telekom would have resulted, during the calculation of the margin squeeze, in the costs incurred by that operator itself between 12 August 2005 and 31 December 2010 being disregarded.168Last, the applicant cannot be followed when it claims that, in the contested decision, the Commission infringed the principle that the examination of a margin squeeze must be based on an effective competitor, when it concluded in essence that it was inevitable that there sometimes remains unused capacity (recital 902 of the contested decision). It follows from the principles referred to in paragraphs 162 and 163 above that the examination of a pricing practice resulting in a margin squeeze consists, in essence, in assessing whether a competitor as efficient as the dominant operator is capable of offering the services concerned to final customers otherwise than at a loss. Such an examination is therefore not carried out by reference to a perfectly efficient operator in the light of market conditions at the time of such a practice. If the Commission had accepted the optimisation adjustments linked to excess capacity, the calculations of Slovak Telekom’s LRAIC would have reflected the costs associated with an optimal network corresponding to demand and not affected by the inefficiencies of that operator’s network, namely the costs of a competitor more efficient than Slovak Telekom. Therefore, in the present case, although it is not disputed that part of Slovak Telekom’s relevant assets remained unused between 12 August 2005 and 31 December 2010, the Commission was able without committing an error to include that part of the assets, in other words the excess capacity, in the calculation of the LRAIC.169It follows from the foregoing that the third part of the first plea must be rejected as unfounded, as must that plea in its entirety. 2. Second plea: errors of law and of fact with respect to the duration of Slovak Telekom’s abusive conduct 170By its second plea, the applicant, embracing the argument put forward on this point by Slovak Telekom in Case T‑851/14, maintains that the contested decision is vitiated by a manifest error of assessment and infringes the principles of equal treatment and legal certainty in so far as it makes a finding of infringement as from 12 August 2005. The applicant relies in that regard on three complaints. By its first complaint, the applicant claims, in essence, that the Commission was wrong to consider that the implied refusal of access to the local loop began on 12 August 2005, that is to say, on the date on which Slovak Telekom published its reference offer. By its second and third complaints, the applicant maintains in essence that the Commission was wrong to make a finding of margin squeeze in 2005. (a) Preliminary observations 172Second, on the substance, it should first of all be borne in mind that, as stated in paragraph 90 above, from the aspect of proving an abuse of a dominant position within the meaning of Article 102 TFEU, it is sufficient to show that the abusive conduct of the undertaking in a dominant position tends to restrict competition or that the conduct is capable of having such an effect. Thus, although the practice of an undertaking in a dominant position cannot be characterised as abusive in the absence of any anticompetitive effect on the market, such an effect does not necessarily have to be concrete, and it is sufficient to demonstrate that there is a potential anticompetitive effect (see judgment of 6 December 2012, AstraZeneca v Commission, C‑457/10 P, EU:C:2012:770, paragraph 112 and the case-law cited).173In addition, as is apparent from the case-law cited in paragraph 89 above, practices that interfere with the free play of competition, for example by preventing or delaying the entry of competitors to the market, are covered by the prohibition set out in Article 102 TFEU even where they do not cause immediate harm to consumers.174In the present case, the infringement of Article 102 TFEU identified by the Commission consisted, according to recital 1497 of the contested decision, in diverse practices of Slovak Telekom constituting a refusal to provide unbundled access to its local loop and a margin squeeze of alternative operators in the context of that access. The practices entailing a refusal to supply consisted, first, in withholding from alternative operators information relating to Slovak Telekom’s network that was necessary for the unbundling of local loops; second, in the reduction by Slovak Telekom of its obligations regarding unbundling resulting from the applicable regulatory framework; and, third, in the fixing by Slovak Telekom of several unfair clauses and conditions in its reference offer in relation to unbundling (see paragraph 92 above).175The Commission also found, in recitals 1507 to 1511 of the contested decision, that those diverse practices formed part of the same strategy of exclusion employed by Slovak Telekom, designed to restrict and distort competition on the retail market for fixed broadband services in Slovakia and to protect Slovak Telekom’s revenues and market position. It concluded that those practices, for which the applicant also had to be held liable in its capacity as Slovak Telekom’s parent company, formed part of an overall plan to restrict competition and thus constituted a single and continuous infringement (recital 1511 of the contested decision).176In the present case, and as it confirmed at the hearing, the applicant does not call that classification as a single and continuous infringement into question in its action. On the other hand, by its second plea, it disputes the finding set out in recital 1184 of the contested decision that that single and continuous infringement commenced on 12 August 2005, the date on which Slovak Telekom published its reference offer for unbundled access to its local loop.177The Commission rejected, on that point, the arguments put forward by Slovak Telekom during the administrative procedure that, in particular, the infringement for which it is held liable could not have begun at the time of publication of its reference offer, since that offer constituted only a framework contract describing the conditions of access to the local loop and therefore assumed that there would be negotiations with the alternative operators interested in such access, and the refusal to supply could be identified only if such negotiations failed. The Commission emphasised on that point, in recital 1520 of the contested decision, that it had shown that several modalities and conditions set out in the reference offer in order for an alternative operator to obtain unbundled access to Slovak Telekom’s local loop were unfair. It considered that the reference offer, which was intended to implement the regulatory unbundling obligation, was required to contain fair modalities and conditions from the outset.178In addition, the Commission rejected, in recital 1521 of the contested decision, the applicant’s argument that the practice consisting in margin squeeze by Slovak Telekom could not have begun before 1 January 2006, since it had not been possible to identify any negative margin in 2005. First, it referred to its analysis, in recital 998 of the contested decision, according to which that fact did not disprove the existence of margin squeeze between 12 August and 31 December 2005, since, in essence, no alternative operator decided to enter the market in question following a prospective analysis of returns relating to such a short period. Second, the Commission emphasised that that fact could not have an impact on the duration of the infringement, since it also consists in other practices with which it forms a single and continuous infringement.179It is against those preliminary observations that it is appropriate to examine the applicant’s first complaint, alleging that the Commission was wrong to consider that the implicit refusal of access to the local loop began on 12 August 2005 and, furthermore, the second and third complaints, alleging, in essence, that the Commission erred in concluding that there was a margin squeeze in 2005. (b) The setting of 12 August 2005 as the beginning of the implied refusal of access to Slovak Telekom’s local loop 180By its first complaint, the applicant claims that the reference offer was limited to fixing a framework, which could not in itself entail any margin squeeze, but had to be supplemented by individual negotiations with prospective candidates for unbundled access to the local loop. In practice, those negotiations led to more favourable conditions for those candidates. Likewise, a refusal to supply can be identified only where such negotiations fail. The applicant submits that the contested decision is not consistent on that point with the Commission’s practice in previous decisions, citing in that regard Decisions C(2004) 1958 final of 2 June 2004 (Case COMP/38.096 — Clearstream, ‘the Clearstream Decision’) and C(2011) 4378 final of 22 June 2011 (Case COMP/39.525 — Polish telecommunications, ‘the Polish Telecommunications Decision’). The limited demand for unbundled access to Slovak Telekom’s local loop may be explained, in particular, by the fact that certain alternative operators considered that it was more advantageous to enter the market by using broadband access or by developing their own local infrastructures.181The Commission, supported by the intervener, disputes that argument.182In that regard, it is common ground that the Chairman of TUSR, by his decision of 14 June 2005, required that Slovak Telekom provide unbundled access to its local loop on fair and reasonable conditions and that it was in order to satisfy that obligation that Slovak Telekom published a reference unbundling offer on 12 August 2005 (see paragraphs 9 and 10 above).183Furthermore, the applicant does not dispute the description of the content of the reference offer set out in section 7.6 of the contested decision (‘[Slovak Telekom’s] unfair terms and conditions’), following which the Commission concluded, in recital 820 of that decision, that the terms and conditions of that offer had been set in such a way as to render unbundled access to the local loop unacceptable for alternative operators.184It is apparent from that part of the contested decision that the abusive practices classified by the Commission in that part as ‘refusal to supply’ result, essentially, from the reference offer itself.185Thus, as regards, first, the withholding from alternative operators of information relating to Slovak Telekom’s network, which was necessary for the unbundling of the local loop, it is apparent, first of all, from recital 439 of the contested decision that the Commission considered that the reference offer did not contain the basic information concerning the locations of the physical access points and the availability of the local loops in very specific parts of the access network. Furthermore, in recitals 443 to 528 of the contested decision, the Commission did admittedly examine the network information supplied by Slovak Telekom at the request of an alternative operator with a view to unbundling. However, it is also apparent from that part of the contested decision that the modalities of access to such information which the Commission considered to be unfair and therefore to constitute a disincentive for alternative operators resulted from the reference offer itself. The Commission criticised, in particular, in the first place, the fact that the reference offer had not determined the exact scope of the network information that Slovak Telekom would make available to alternative operators, by specifying the categories of information concerned (recital 507 of the contested decision); in the second place, that the reference offer did not provide access to information from non-public information systems until after the framework agreement on access to the local loop had been concluded (recital 510 of the contested decision); and, in the third place, that that offer made such access to information on Slovak Telekom’s network conditional on payment of high fees by the alternative operator (recitals 519 and 527 of the contested decision).186As regards, second, Slovak Telekom’s reduction of the scope of its regulatory obligation concerning unbundled access to the local loop, first of all, it follows from recitals 535 and 536 of the contested decision that the limitation of that obligation to only active lines (see paragraph 32 above), for which the Commission held Slovak Telekom liable, resulted from paragraph 5.2 of the introductory part of its reference offer. Next, it follows, in particular, from recitals 570, 572, 577, 578 and 584 of the contested decision that it was in the light of the stipulations contained in Annex 3 to the reference offer that the Commission inferred that Slovak Telekom had wrongly excluded the conflicting services from its obligation relating to unbundled access to the local loop (see paragraph 33 above). Last, it follows from recital 606 of the contested decision that the rule limiting the use of cable to 25%, imposed by Slovak Telekom for unbundled access to the local loop and considered by the Commission to be unjustified (see paragraph 34 above), followed from Annex 8 to the reference offer.187As regards, third, Slovak Telekom’s fixing of unfair unbundling conditions regarding collocation, forecasting, repairs, service and maintenance and the provision of a bank guarantee, these all resulted, as shown in section 7.6.4 of the contested decision, from the reference offer published by Slovak Telekom on 12 August 2005. Also, the terms considered unfair by the Commission were contained in Annexes 4, 5, 14 and 15 to that offer as regards collocation (recitals 653, 655 and 683 of the contested decision), in Annexes 12 and 14 as regards the obligation for alternative operators to submit forecasts (recitals 719 and 726 to 728 of the contested decision), Annex 5 as regards the qualification of the local loops (recitals 740, 743, 767, 768 and 774 of the contested decision), Annex 11 as regards the terms and conditions relating to repairs, service and maintenance (recitals 780, 781, 787, 790 and 796 of the contested decision) and Annexes 5 and 17 as regards the bank guarantee required of a candidate alternative operator for unbundled access (recitals 800, 802 to 807, 815 and 816 of the contested decision).188It follows that, even on the assumption that certain of those modalities of access were capable of being made more flexible in the context of bilateral negotiations between Slovak Telekom and candidate operators for access, which the applicant merely asserts without providing supporting evidence, the Commission was correct to conclude that the reference offer published on 12 August 2005 had been able to deter from that date the submissions for requests for access by alternative operators, owing to the unfair terms and conditions which they contained.189In those circumstances, the Commission was not wrong to consider that, owing to the modalities on access set out in its reference offer published on 12 August 2005, Slovak Telekom had made it more difficult or impossible for alternative operators to enter the retail mass-market for broadband services at a fixed location in Slovakia, in spite of its obligation to do so under the TUSR Decision, and that that conduct was therefore capable of having such negative effects on competition from that date (see, in particular, recitals 1048, 1050, 1109, 1184 and 1520 of the contested decision).190That conclusion is not contradicted by the applicant’s assertion in the reply that the limited demand of alternative operators to obtain unbundled access to Slovak Telekom’s local loop was explained by the fact that wholesale broadband access (WBA) or bitstream, offered through products called ‘ISP Gate/ADSL Partner’, represented for those operators an interesting alternative for entering the retail market, having regard to the significantly lower investments which it required, and, moreover, by the preference shown by certain alternative operators for entering the market by means of their own local infrastructures. It is sufficient to state that that assertion, whereby the applicant seeks generally to dispute the anticompetitive effects of the practices at issue, is wholly unsubstantiated and is therefore not capable of calling into question the Commission’s analysis of those effects in recitals 1049 to 1183 of the contested decision.191Nor can the applicant be followed when it disputes the starting date of the infringement taken by the Commission in the present case by reference to the approach taken in the Clearstream Decision and in the Polish Telecommunications Decision. Without there even being any need to establish whether such decisions are capable of coming within the relevant legal framework for assessing the legality of the contested decision, which the Commission disputes, it is sufficient to state that they were adopted in a different context from that of the present case and that they are therefore not capable of establishing that the Commission departed in the contested decision from its previous practice in adopting decisions.192Thus, in the case of the Clearstream Decision, it is sufficient to point out that that decision, unlike the contested decision in the present case, was adopted in a context characterised by the absence of any regulatory obligation for the undertaking owning the infrastructure in question to grant other undertakings access to that infrastructure and also by the absence of any obligation placed on that undertaking to publish a reference offer setting out the modalities and conditions of such access.193As regards the Polish Telecommunications Decision, the Commission found in that decision that the incumbent operator in question had abused its dominant position on the Polish wholesale market for broadband access and unbundled access to the local loop, by refusing access to its network and refusing to provide wholesale products relating to those markets in order to protect its position on the retail market. In addition, the context of the Polish Telecommunications case was characterised by a regulatory obligation to provide access analogous to the obligation borne by Slovak Telekom in the present case and also by the requirement for the Polish telecommunications operator in question to publish a reference offer for unbundled access to its local loop. However, it is apparent from a detailed analysis of the Polish Telecommunications Decision that the approach followed in that decision is not in any way inconsistent with the approach taken in the contested decision. In the Polish Telecommunications Decision, the Commission observed that the anticompetitive strategy of the dominant operator had essentially materialised only during the negotiations with alternative candidate operators seeking unbundled access to the local loop and access to the dominant operator’s wholesale broadband services. Thus, the unreasonable conditions of access resulted from the draft access contracts drawn up by the dominant operator in question in the course of the negotiations with alternative operators. Furthermore, the delay in the process of negotiating the access agreements had by definition not been capable of being identified at the time of publication of the dominant operator’s first reference offer. In addition, the limitation of access to its network by the dominant operator was developed at a stage subsequent to the conclusion of the wholesale access agreements with the alternative operators. Furthermore, effective access to subscriber lines was limited after the alternative operator concerned had obtained access to a collocation space or had been authorised to install a correspondence cable. Last, the problems of access to reliable and accurate general information indispensable for alternative operators to take decisions on access had become apparent at each stage of the process of access to the dominant operator’s network. The conduct of the dominant operator in the Polish Telecommunications case was therefore different from the practices characterised by the Commission as ‘refusal to supply’ in the contested decision, which, as is apparent from the analysis set out in paragraphs 184 to 189 above, essentially resulted from the reference offer for unbundled access to Slovak Telekom’s local loop itself. Those differences mean that, unlike in the Polish Telecommunications Decision, in which the starting point of the infringement of Article 102 TFEU was set at the date on which the first access negotiations between the dominant operator in question and an alternative operator had begun, several months after the publication of the first reference offer (recital 909 and footnote 1259 of the contested decision), the Commission was justified in taking 12 August 2005, the date of publication of the reference offer, as the starting date of the implied refusal of access to the local loop in the present case.194The first complaint, alleging that the Commission erred when it considered that the implied refusal of access to the local loop had begun on 12 August 2005, must therefore be rejected as unfounded.195It should be added that the applicant does not dispute the classification as a single and continuous infringement which the Commission applied to all the practices referred to in Article 1(2) of the contested decision, namely (a) withholding from alternative operators network information necessary for the unbundling of local loops; (b) reducing the scope of its obligations regarding unbundled local loops; (c) setting unfair terms and conditions in its Reference Unbundling Offer regarding collocation, qualification, forecasting, repairs and bank guarantees; (d) applying unfair tariffs which do not allow an equally efficient competitor relying on wholesale access to the unbundled local loops of Slovak Telekom to replicate the retail broadband services offered by Slovak Telekom without incurring a loss.196In those circumstances, and in so far as the applicant’s first complaint, alleging that the Commission erred when it considered that the implied refusal of access to the local loop had begun on 12 August 2005, was rejected (see paragraph 194 above), the Commission was correct to find that the single and continuous infringement forming the subject matter of the contested decision had commenced on 12 August 2005.197However, that conclusion does not prevent the Court from examining the second and third complaints put forward by the applicant and from appraising whether Article 1(2)(d) of the contested decision might be annulled in part in that it finds that, during the period between 12 August and 31 December 2005, the applicant applied unfair tariffs which did not allow an equally efficient competitor relying on wholesale access to Slovak Telekom’s unbundled local loops to replicate the retail broadband services offered by Slovak Telekom without incurring a loss (see, by analogy, judgment of 1 July 2010, AstraZeneca v Commission, T‑321/05, EU:T:2010:266, paragraphs 864 and 865 and paragraph 1 of the operative part). (c) The existence of margin squeeze during 2005 198By its second and third complaints, the applicant maintains, in essence, that the Commission was wrong to find that margin squeeze had existed during 2005.199By its second complaint, the applicant maintains that Slovak Telekom’s margin during 2005 was positive, irrespective of the scenario envisaged. As such a positive margin necessarily means that competitors as efficient as Slovak Telekom would not suffer any loss if they entered the market, the Commission was wrong to conclude that there was margin squeeze during that year. It is untrue, moreover, that a decision by a competitor to enter the market in 2005 was not conceivable for a period as short as 4½ months. At that time, the figures for future years were by definition not yet known and could therefore have no influence whatsoever on such an investment decision.200By its third complaint, the applicant maintains that the multi-period (multi-year) method of calculating margins, which until then had been applied only additionally and in favour of the undertaking concerned, would have enabled the Commission to identify artificially margin squeeze during years preceding those during which such margin squeeze could actually be established. However, that method cannot be used in order to extend margin squeeze in the past. Since neither Slovak Telekom nor the applicant could foresee the development of tariffs after 2005, the finding that they committed an infringement during that period is contrary to Article 23 of Regulation No 1/2003. The fact that the Commission itself took several years before it was in a position to present a calculation of margin squeeze shows that neither the applicant nor Slovak Telekom could be aware that Slovak Telekom was committing an abuse in the form of such a margin squeeze at the material time.201The Commission responds, as regards the second complaint, that the slight positive margin that may have existed in 2005 is without prejudice to the finding that there was margin squeeze from 12 August of that year. That margin squeeze prevented competitors who entered the market from amortising their investments linked with that entry. In addition, contrary to the applicant’s assertion, no operator would envisage entering a market without a reasonable prospect of returns over several years.202Furthermore, the Commission responds to the third complaint by stating that it did not fix the starting point of the infringement at 12 August 2005 in an arbitrary manner, but did so because that was the date of publication of the reference order and it took account of the period from which Slovak Telekom was required to unbundle access to its local loops. As for the argument alleging infringement of Article 23 of Regulation No 1/2003, the Commission observes that it is sufficient that an undertaking was aware of the elements of fact relating to the abuse of a dominant position which it is alleged to have committed to establish its liability under Article 102 TFEU. In the present case, Slovak Telekom was aware that an equally efficient competitor had, in 2005, no chance of achieving a sufficiently positive margin by entering the market. Contrary to the applicant’s assertion, the costs of access to the wholesale market were not essentially at issue. Nor does the applicant explain why the multi-period (multi-year) method can be used only when it is advantageous for the dominant undertaking in question.203Last, the Commission maintains that, since it demonstrated the existence of two forms of abuse throughout the infringement period, any finding that there was no margin squeeze in 2005 would not in any event mean that 12 August 2005 could not be taken as the starting date of the infringement. It follows that such a finding would be of no advantage to the applicant.204In that regard, it should be borne in mind that the Commission concluded, relying on the ‘period-by-period’ (year-by-year) approach, that Slovak Telekom had engaged in margin squeeze practices from 12 August 2005. It is apparent from recital 997 of the contested decision that, on the basis of an analysis relating to every year during the period under consideration, an equally efficient competitor using wholesale access to Slovak Telekom’s local loop was faced with negative margins and could not replicate profitably the applicant’s retail broadband portfolio. In recital 998 of the contested decision, the Commission pointed out that the fact that there was a positive margin for 4 months in 2005 did not disprove that conclusion, given that an entry over 4 months could not be considered as entry on a lasting basis. According to the Commission, operators consider their ability to earn a reasonable return over a longer period, which extends over several years (recital 998 of the contested decision). On that basis, the Commission concluded, in recital 1012 of that decision, that, in the period between 12 August 2005 and 31 December 2010, a competitor as efficient as Slovak Telekom could not have replicated profitably that operator’s retail portfolio.205However, as was noted in paragraph 162 above, in order to assess the lawfulness of the pricing policy applied by a dominant undertaking, it is necessary, in principle, to refer to pricing criteria based on the costs incurred by the dominant undertaking itself and on its strategy.206In particular, as regards a pricing practice resulting in a margin squeeze, the use of such analytical criteria can establish whether that undertaking would have been sufficiently efficient to offer its retail services to end users otherwise than at a loss if it had first been obliged to pay its own wholesale prices for the intermediary services (see paragraph 163 above and the case-law cited).207The validity of such an approach is all the more justified by the fact that it also conforms to the general principle of legal certainty, since taking into account the costs and prices of the dominant undertaking enables that undertaking, in the light of its special responsibility under Article 102 TFEU, to assess the lawfulness of its own conduct. While a dominant undertaking knows what its own costs and charges are, it does not, as a general rule, know what its competitors’ costs and charges are. Furthermore, an exclusionary abuse also affects potential competitors of the dominant undertaking, which might be deterred from entering the market by the prospect of a lack of profitability (see paragraph 164 above and the case-law cited).208It follows that, in order to establish the constituent elements of the practice of a margin squeeze, the Commission, in recital 828 of the contested decision, correctly had recourse to the equally efficient competitor criterion, by demonstrating that the dominant undertaking’s downstream operations could not trade profitably on the basis of the wholesale price applied in respect of its downstream competitors and on the retail price applied by the downstream arm of that undertaking.209As is apparent from Tables 32 to 35 of the contested decision, the analysis carried out by the Commission resulted, in all the scenarios envisaged and as the latter itself acknowledged in recital 998 of that decision, in a positive margin for the period between 12 August and 31 December 2005.210In such circumstances, the Court of Justice has already held that, to the extent that a dominant undertaking sets its prices at a level covering the great bulk of the costs attributable to the supply of the goods or services in question, it is, as a general rule, possible for a competitor as efficient as that undertaking to compete with those prices without suffering losses that are unsustainable in the long term (judgment of 27 March 2012, Post Danmark, C‑209/10, EU:C:2012:172, paragraph 38).211It follows that, during the period between 12 August and 31 December 2005, a competitor as efficient as Slovak Telekom had, in principle, the possibility to compete with the latter on the retail market for broadband services in so far as unbundled access to the local loop was granted to it, and without suffering losses that were unsustainable in the long term.212The Court of Justice has indeed held that, if a margin is positive, it is not ruled out that the Commission can, in the context of the examination of the exclusionary effect of a pricing practice, demonstrate that the application of that practice was, by reason, for example, of reduced profitability, likely to have the consequence that it would be at least more difficult for the operators concerned to trade on the market concerned (see, to that effect, judgment of 17 February 2011, TeliaSonera Sverige, C‑52/09, EU:C:2011:83, paragraph 74). That case-law can be read in conjunction with Article 2 of Regulation No 1/2003, according to which, in any proceedings for the application of Article 102 TFEU, the burden of proving an infringement of that article rests on the party or the authority alleging the infringement, namely, in the present case, the Commission.213However, in the present case, it must be noted that the Commission did not demonstrate in the contested decision that Slovak Telekom’s pricing practice, during the period between 12 August and 31 December 2005, resulted in such exclusionary effects. However, such a demonstration was required particularly given the presence of positive margins.214The mere claim, in recital 998 of the contested decision, that the operators consider their ability to earn a reasonable return over a longer period, lasting several years, cannot constitute such proof. Such a fact, assuming it is established, is based on a prospective examination of profitability, which is necessarily hypothetical. Furthermore, in the present case, those positive margins appeared at the very beginning of the period under consideration, at a time when no negative margin could yet have been found. In those circumstances, it must be concluded that the reason set out in recital 998 of the contested decision does not satisfy the requirement arising from the principle of legal certainty noted in paragraph 164 above, according to which a dominant undertaking must be in a position to assess the conformity of its conduct with Article 102 TFEU.215For that same reason, the finding of the negative margins, by means of the application of the multi-period (multi-year) approach, cannot undermine that assessment, since, in the present case, that approach resulted in such a finding only by means of a weighting of the positive margins for 2005 with the negative margins found respectively for the years 2006 to 2010 (recital 1013 of the contested decision) and 2006 to 2008 (recital 1014 of the contested decision).216Moreover, in recital 1026 of the contested decision, on the basis of the documents established by Slovak Telekom’s regulatory department in April 2005 and relating to a strategy of submission of the reference offer concerning unbundled access to the local loop and ULL prices, the Commission considered that Slovak Telekom knew, from 12 August 2005, that the prices for wholesale access at local loop level were squeezing the margins of alternative operators.217Nevertheless, it should be noted that, in the light of positive margins between 12 August and 31 December 2005, the Commission was subject to a specific obligation with regard to the proof of exclusionary effects of the practice of a margin squeeze alleged against Slovak Telekom during that period (see the case-law referred to in paragraph 212 above).218Therefore, the Commission’s allegation and the documents invoked in support thereof are not sufficient to demonstrate the exclusionary effect of the practice of a margin squeeze alleged against Slovak Telekom and, for example, a reduction of profitability, likely to make it at least more difficult for the operators concerned to exercise their activities on the market at issue.219Moreover, sections 9 and 10 of the contested decision, which deal with the anticompetitive effects of Slovak Telekom’s conduct, do not contain any examination of the effects of the practice of a margin squeeze alleged during the period between 12 August and 31 December 2005.220Therefore, in the light of settled case-law according to which any doubt in the mind of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed (judgments of 8 July 2004, JFE Engineering and Others v Commission, T‑67/00, T‑68/00, T‑71/00 and T‑78/00, EU:T:2004:221, paragraph 177, and of 12 July 2011, Hitachi and Others v Commission, T‑112/07, EU:T:2011:342, paragraph 58), it must be concluded that the Commission has not provided proof that the practice leading to a margin squeeze by Slovak Telekom had begun before 1 January 2006. Since the contested decision is, consequently, vitiated by an error of assessment on that point, it is not necessary to examine whether that approach also infringed Article 23 of Regulation No 1/2003, as the applicant claims.221In the light of the foregoing, the applicant’s second plea must be upheld in part and Article 1(2)(d) of the contested decision must be annulled in so far as it declares that, over the course of the period between 12 August and 31 December 2005, the applicant applied unfair tariffs which did not allow an equally efficient competitor relying on wholesale access to Slovak Telekom’s unbundled local loops to replicate the retail broadband services offered by Slovak Telekom without incurring a loss. 4. Fourth plea: misinterpretation of the concept of ‘undertaking’ within the meaning of EU law and breach of the principle that the penalty must be specific to the offender and the offence, and failure to state reasons 474By its fourth plea, the applicant maintains, in the first part, that the contested decision misinterprets the concept of ‘undertaking’ and infringes the principle that the penalty must be specific to the offender and the offence, in that it imposed on the applicant, for a repeated infringement and for deterrent purposes, a fine of EUR 31070000, separate from the fine imposed jointly and severally on Slovak Telekom and the applicant, and, in the second part, that the contested decision is vitiated on that point by a failure to state reasons.475It is appropriate to examine, first, the alleged failure to state reasons and, second, the alleged misinterpretation of the concept of ‘undertaking’ and breach of the principle that the penalty must be specific to the offender and the offence. (a) The alleged failure to state reasons 476By the second part of the fourth plea, the applicant takes issue with the Commission for not having provided in the contested decision any reason why the applicant should bear on its own the increased amounts imposed for a repeated infringement and for a deterrent effect, and for thus having failed to fulfil its obligation to state reasons. It submits that the Commission merely established the aggravating grounds that justified an adjustment of the basic amount of the fine and then announced that the increases in the fine should be borne by the applicant alone. The contested decision does not enable the applicant to understand the reason justifying such an approach, a fortiori because its liability in the present case arises solely from the fact that an infringement committed by its subsidiary Slovak Telekom was imputed to it. As for recitals 1533 and 1535 of the contested decision, cited by the Commission in the context of these proceedings, they do indeed show that the applicant’s turnover is higher than Slovak Telekom’s. However, those passages of the contested decision do not reveal why Slovak Telekom should escape the fine specifically imposed on the applicant.477478According to settled case-law, the purpose of the obligation to state reasons on which an individual decision is based is to enable the Courts of the European Union to review the legality of that decision and to provide the person concerned with sufficient information to know whether the decision is well founded or whether it may be vitiated by an error enabling its validity to be challenged (see, to that effect, judgments of 9 November 1983, Nederlandsche Banden-Industrie-Michelin v Commission, 322/81, EU:C:1983:313, paragraph 14, and of 29 February 2016, Schenker v Commission, T‑265/12, EU:T:2016:111, paragraph 230).479In the present case, as regards the part of the fine imposed solely on the applicant and reflecting the increase for repeated infringement of the amount of the fine imposed jointly and severally on the applicant and Slovak Telekom, it follows unambiguously from recitals 1525 to 1531 of the contested decision that that increase was justified by the fact that the applicant, whose liability for the infringement in question was established, had already been penalised for a similar infringement in the Deutsche Telekom decision. Although that passage of the contested decision does not explain why the applicant alone had to be required to bear the consequences of that repeated infringement, and not Slovak Telekom, it follows implicitly from that decision that that result was due to the fact that only the applicant had been held liable for the infringement at issue in the Deutsche Telekom decision and on that basis had been the addressee of that decision.480As regards the part of the fine imposed solely on the applicant and reflecting the application of a multiplier of 1.2 for deterrent purposes, the Commission stated in recital 1533 of the contested decision, first, that the applicant’s worldwide turnover in 2013 was EUR 60132 million; second, that the value of sales of the products relevant for the infringement at issue represented less than 0.067% of that turnover; and, third, that the applicant was liable for the infringement committed by Slovak Telekom. The Commission inferred, in recitals 1534 and 1535 of the contested decision, that the applicant had, on the basis of point 30 of the 2006 Guidelines, to be fined a greater amount than the basic fine increased by 50% for repeated infringement, in order to ensure that the fine would have a sufficiently deterrent effect. Although that passage of the contested decision does not explain why the application of the multiplier of 1.2 was not also to be borne by Slovak Telekom, it follows implicitly from the reasoning followed by the Commission that the reason for that approach was that that subsidiary’s turnover was much lower than the applicant’s at the time when the contested decision was adopted, and that the fine of EUR 38838000 thus had a sufficiently deterrent effect for that subsidiary.481It follows that, even though the reasoning on which the contested decision is based appears to be cursory so far as the fine imposed individually on the applicant is concerned, it provided the applicant with sufficient information to ascertain whether the contested decision was well founded on that point and thus enabled the applicant to challenge its validity. Likewise, that reasoning allowed the Court to review the legality of the contested decision as regards the fine imposed individually on the applicant.482The second part of the fourth plea, alleging failure to state reasons, must therefore be rejected. (b) Misinterpretation of the concept of ‘undertaking’ within the meaning of EU law and breach of the principle that the penalty must be specific to the offender and the offence 483By the first part of its fourth plea, the applicant observes that the specific fine imposed on it in the contested decision is the consequence of two circumstances which the Commission took into account in the contested decision, namely, first, the size of the undertaking of which it forms part, which according to the Commission justified the application of a multiplier of 1.2 to the fine, and, second, the fact that it had already been held liable for a similar infringement in the Deutsche Telekom Decision, which justified an increase of the basic amount of the fine of 50%. However, the applicant emphasises that, in the contested decision, the Commission holds it liable not because of its direct participation in the facts constituting the infringement, but because of its links with Slovak Telekom. In addition, according to the contested decision, the applicant and Slovak Telekom were part of the same undertaking not only throughout the infringement period but also on the date on which it adopted the Deutsche Telekom Decision, as the applicant’s majority shareholding in Slovak Telekom’s capital dates from 4 August 2000 and the structure of that shareholding has since remained unaltered.484Having regard to those circumstances, the applicant maintains that the Commission misinterpreted the concept of ‘undertaking’ in EU law and infringed the principle that the penalty must be specific to the offender and the offence when it imposed a separate fine on the applicant. That principle requires, in accordance with Article 23(3) of Regulation No 1/2003, that the amount of the fine be determined by reference to the gravity of the infringement in respect of which the undertaking concerned is held individually liable and the duration of that infringement. Thus, it follows from the case-law of the Court of Justice that the Commission may impose different fines only on different undertakings and not on different companies when they form part of the same undertaking. The principle that the penalty must be specific to the offender and the offence does not apply to the internal relationship between different legal persons of which an undertaking is composed. As the Commission’s previous practice in adopting decisions confirms, a separate fine is justified only where, from a legal point of view, the composition of the undertaking concerned has evolved during the relevant period and where different undertakings may therefore be identified. Since that was not the position in the present case, the Commission could not impose a higher fine on the applicant than that imposed on Slovak Telekom without disregarding the principle that the penalty must be specific to the offender and the offence. Furthermore, subject to changes in the structure of the undertaking liable for the infringement, the upper limit of 10% laid down in Article 23(2) of Regulation No 1/2003 must be calculated on the basis of the overall turnover of the undertaking concerned. As regards repeated infringement, the applicant maintains that, since it was the applicant itself that committed the infringement penalised in the Deutsche Telekom Decision, it is not appropriate to determine whether Slovak Telekom was already part of the undertaking liable for that infringement at the time when it was committed. The only relevant consideration at that stage lies in the fact that the latter undertaking committed that infringement and that the company in the group that is to be penalised now is currently part of the same undertaking.485The applicant further adds, as regards the risk of repeated infringement, that it might in any event be considered in the present case that Slovak Telekom not only already formed part of the undertaking responsible for the infringement penalised in the Deutsche Telekom Decision, but had been aware of that infringement, given the wide publicity attending the decision penalising the infringement. As regards the deterrent effect, the applicant emphasises in essence that, if the Commission’s reasoning is followed, it and Slovak Telekom are part of the same undertaking and it is therefore incorrect to rely on their different sizes for the purposes of calculating the amount of the fine.486Last, the applicant maintains, in the alternative, that the Commission does not have a discretion to decide freely, without an objective reason, to impose a fine on one company in a group and not on another company in the same group. In the present case, it is inappropriate to favour the company that carried out the acts constituting the infringement and to afford less favourable treatment to its parent company, whose liability is purely derivative.487The Commission disputes those arguments. It contends that the mere fact that the applicant owned 51% of Slovak Telekom’s share capital at the time when the infringement penalised in the Deutsche Telekom Decision was committed does not mean that Slovak Telekom belonged to the undertaking that committed that infringement. The applicant’s argument is based, on that point, on a false premiss, since the undertaking responsible for the abuse of a dominant position at issue in the Deutsche Telekom Decision was composed solely of Deutsche Telekom and not the applicant and Slovak Telekom. Contrary to the applicant’s contention, when the Commission penalises an infringement of competition law, it has a broad discretion to take account of the separate situations of the companies within a group. The Court of Justice has never suggested that such a discretion is limited to situations in which the composition of the undertaking concerned has changed.488That conclusion is not incompatible with the principle that the penalty must be specific to the offender and the offence, which implies only that the amount of the fine must be determined by reference to the gravity of the infringement for which the undertaking concerned is held to be individually liable. It follows that the penalty applied to the legal persons that make up the undertaking that committed the infringement cannot exceed what is justified having regard to the infringement. On the other hand, it does not follow from the principle that the penalty must be specific to the offender and the offence that the Commission is required to impose the same fine on all the legal persons that make up the undertaking in question.489In the present case, the Commission used its broad discretion when it considered that Slovak Telekom, which is a relatively small company, was not to be held liable for payment of all the fines imposed. Conversely, an increase for deterrent purposes was justified in the applicant’s case, since it is a very large company and since a smaller fine would not have had a deterrent effect on it. The Commission emphasises in that regard that, since the case-law accepts that it is free not to penalise a parent company even though it belongs to an undertaking that has infringed EU competition law, it should a fortiori be in a position, for objective reasons, to impose on a company belonging to an undertaking that is liable for an infringement only part of the overall fine imposed. The applicant, moreover, has put forward no argument capable of establishing that it was unlawful for the Commission to apply to it the aggravating circumstance of repeated infringement as well as the increase for deterrent purposes.490The Commission further emphasises that a presumption that the applicant exercised decisive influence over Slovak Telekom’s conduct on the market did not apply either when it committed the infringement that gave rise to the Deutsche Telekom Decision or during the period when it committed the infringement penalised in the contested decision. In the absence of actual proof that Slovak Telekom and the applicant were already part of the same undertaking at the time when the infringement at issue in the Deutsche Telekom Decision was committed, the Commission could not increase the fine imposed on Slovak Telekom on the ground of repeated infringement. On the other hand, since the applicant was the addressee of the Deutsche Telekom Decision, the Commission considers that it had to be in a position to apply an increase for repeated infringement to the applicant, without a more thorough investigation being necessary in order to determine whether it and Slovak Telekom already formed the same undertaking at the time of the infringement penalised in that decision. As for the increase in the fine for deterrent purposes, the Commission indeed accepts that it could also have applied that increase to Slovak Telekom, since it formed part of the undertaking liable for the infringement of competition law penalised in the present case. The Commission maintains, however, that it was on the basis of its broad discretion that it was able to consider it more appropriate not to take such an approach. (1) A reminder of the principles 491It should first of all be borne in mind that the authors of the Treaties chose to use the concept of ‘undertaking’ to designate the perpetrator of an infringement of competition law, who is liable to be punished pursuant to Article 101 or 102 TFEU (see judgment of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 46 and the case-law cited).492EU competition law thus refers to the activities of undertakings and the concept of an ‘undertaking’ covers any entity engaged in an economic activity, irrespective of its legal status and the way in which it is financed (see judgment of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 47 and the case-law cited). In that context, the term ‘undertaking’ must be understood as designating an economic unit even if in law that economic unit consists of several persons, natural or legal (see judgments of 1 July 2010, Knauf Gips v Commission, C‑407/08 P, EU:C:2010:389, paragraph 64 and the case-law cited, and of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 48 and the case-law cited).493It follows that, when such an economic entity infringes the competition rules, it is for that entity, according to the principle of personal responsibility, to answer for that infringement (see judgments of 20 January 2011, General Química and Others v Commission, C‑90/09 P, EU:C:2011:21, paragraphs 35 and 36 and the case-law cited, and of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 49 and the case-law cited).494Furthermore, for the purposes of applying and enforcing decisions adopted by the Commission pursuant to Articles 101 and 102 TFEU, it is necessary to identify an entity possessing legal personality to be the addressee of the decision finding and penalising an infringement of one of those provisions (see, to that effect, judgment of 27 March 2014, Saint-Gobain Glass France and Others v Commission, T‑56/09 and T‑73/09, EU:T:2014:160, paragraph 312 and the case-law cited). An infringement of EU competition law must thus be imputed unequivocally to a legal person on whom fines may be imposed and to whom the statement of objections will be addressed (see, to that effect, judgments of 5 March 2015, Commission and Others v Versalis and Others, C‑93/13 P and C‑123/13 P, EU:C:2015:150, paragraph 89 and the case-law cited; of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 50; and of 27 March 2014, Saint-Gobain Glass France and Others v Commission, T‑56/09 and T‑73/09, EU:T:2014:160, paragraph 312 and the case-law cited).495In that regard, neither Article 23(2)(a) of Regulation No 1/2003 nor the case-law determines which legal or natural person the Commission is obliged to hold responsible for the infringement or to punish by the imposition of a fine (see judgment of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 51 and the case-law cited).496On the other hand, the unlawful conduct of a subsidiary may be imputed to its parent company in particular where, although it has separate legal personality, that subsidiary does not decide independently on its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities (see judgments of 10 September 2009, Akzo Nobel and Others v Commission, C‑97/08 P, EU:C:2009:536, paragraphs 58 and 72 and the case-law cited, and of 18 January 2017, Toshiba v Commission, C‑623/15 P, not published, EU:C:2017:21, paragraph 45 and the case-law cited).497In such a case, according to the settled case-law of the Court of Justice, the parent company to which the unlawful conduct of its subsidiary is attributed is held individually liable for an infringement of the EU competition rules which it itself is deemed to have infringed, because of the decisive influence which it exercised over the subsidiary and by which it was able to determine the subsidiary’s conduct on the market (see judgment of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 56 and the case-law cited).498Thus, where the parent company’s liability is purely derivative, that is to say, when it is incurred solely because of one of its subsidiary’s direct participation in the infringement, that liability arises from the subsidiary’s unlawful conduct, which is attributed to the parent company in view of the economic unit formed by those companies. Consequently, the parent company’s liability necessarily depends on the facts constituting the infringement committed by its subsidiary and to which its liability is inextricably linked (judgment of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 61).499It is for that reason that the Court of Justice has made clear that, in a situation in which the parent company’s liability is purely derived from that of its subsidiary and in which no factor individually reflects the conduct for which the parent company is held liable, the parent company’s liability cannot exceed that of its subsidiary (see judgments of 17 September 2015, Total v Commission, C‑597/13 P, EU:C:2015:613, paragraph 38 and the case-law cited, and of 19 January 2017, Commission v Total and Elf Aquitaine, C‑351/15 P, EU:C:2017:27, paragraph 44 and the case-law cited; see also, to that effect, judgment of 27 April 2017, Akzo Nobel and Others v Commission, C‑516/15 P, EU:C:2017:314, paragraph 62).500It is in the light of those principles that the Court must examine, in the first place, the part of the fine imposed solely on the applicant in respect of repeated infringement and, in the second place, the part of the fine imposed solely on the applicant for deterrence. (2) The part of the fine imposed on the applicant alone in respect of repeated infringement 501By the argument which it puts forward in support of the first part of the fourth plea, the applicant claims that, in so far as its purely derivative liability for the infringement at issue in the present case should be confirmed, the Commission was not entitled to impute to it alone, without imputing to Slovak Telekom, the consequences of the repeated infringement resulting from the similar infringement previously penalised in the Deutsche Telekom Decision.502However, that argument cannot be accepted.503Admittedly, as the applicant submits, the Court of Justice has held that the EU law principle of personal liability for an infringement and the principle that the penalty must be specific to the offender and the offence, which must be complied with when the Commission exercises its power to impose penalties for infringements of competition law, relate only to the undertaking per se, not the natural or legal persons forming part of the undertaking (judgment of 10 April 2014, Commission and Others v Siemens Österreich and Others, C‑231/11 P to C‑233/11 P, EU:C:2014:256, paragraph 56).504The fact nonetheless remains that the principle that the penalty must be specific to the offender and the offence must be reconciled with the principle, resulting from the case-law cited in paragraph 499 above, that certain factors that individually characterise the parent company’s own conduct may justify the imposition on the parent company of a heavier penalty than that resulting from the imputation to it of the infringement committed by its subsidiary.505In that regard, this Court has already held that, although the unity of the conduct of an undertaking on the market justifies that, in the case of an infringement of the competition rules, the different companies that formed part of the undertaking throughout the infringement period being, in principle, all held jointly and severally liable for payment of the same amount of the fine, an exception must be made where there are aggravating or mitigating circumstances and, more generally, circumstances that justify a variation in the amount of the fine which apply only in respect of some of those companies and not others. The Court thus inferred that an entity in respect of which the aggravating circumstance of repeated infringement has not been found cannot be held jointly and severally liable, with an entity in respect of which that circumstance has been found, for the part of the fine corresponding to the increase for repeated infringement (see, to that effect, judgment of 23 January 2014, Evonik Degussa and AlzChem v Commission, T‑391/09, not published, EU:T:2014:22, paragraph 271).506It follows that the aggravating circumstance of repeated infringement may constitute a factor that individually characterises the conduct of a parent company and justifies the extent of its liability exceeding that of its subsidiary from which that liability is wholly derived (see, to that effect, judgment of 29 February 2016, UTi Worldwide and Others v Commission, T‑264/12, not published, EU:T:2016:112, paragraph 332).507In the present case, first, the applicant does not deny that it was the only addressee of the Deutsche Telekom Decision and that Slovak Telekom was not held liable for the infringement penalised in that decision.508Thus, the applicant’s liability established in the Deutsche Telekom Decision, which in the meantime has become final, is a factor that individually characterises the conduct in respect of which the applicant was held liable in the present case.509Second, it is true that Slovak Telekom was already part of the Deutsche Telekom group during a significant part of the infringement penalised in the Deutsche Telekom Decision and also at the time of adoption of that decision, which was not addressed to it.510However, it follows from the case-law that the liability of a company which was not an addressee of a decision finding a first infringement of EU competition law, but which is an addressee of a decision imposing a fine on it in respect of its participation in a new similar infringement, can be increased on the ground of repeated infringement only in so far as the Commission provides, in the latter decision, a statement of reasons that enables that company to understand in what capacity and to what extent it was involved in the first infringement (see, to that effect, judgments of 8 May 2013, Eni v Commission, C‑508/11 P, EU:C:2013:289, paragraph 129, and of 5 March 2015, Commission and Others v Versalis and Others, C‑93/13 P and C‑123/13 P, EU:C:2015:150, paragraph 98 and the case-law cited).511In the present case, there is nothing to suggest that Slovak Telekom was involved, in any capacity whatsoever, in the infringement penalised by the Commission in the Deutsche Telekom Decision and that that infringement could also be imputed to it.512In those circumstances, if the applicant’s argument that the Commission ought to have applied the aggravating circumstance of repeated infringement to Slovak Telekom were upheld, that would amount to holding that subsidiary liable for the earlier conduct of the applicant, its parent company. However, the Court of Justice has held that it was not possible to impute to a company all of the acts of a group if that company was not identified as the legal person at the head of that group with responsibility for coordinating the group’s activities. (judgment of 2 October 2003, Aristrain v Commission, C‑196/99 P, EU:C:2003:529, paragraph 98).513In the present case, it is common ground that Slovak Telekom was not at the head of the undertaking that committed the infringement penalised by the Deutsche Telekom Decision, as that infringement was committed directly by the applicant alone. It follows that only the applicant took part in both the infringement penalised in the Deutsche Telekom Decision and the infringement penalised in the contested decision in the present case, which individually characterises its conduct.514In the light of the foregoing, it must be concluded that the Commission did not err when, in the contested decision, it increased the fine on the ground of repeated infringement with regard to the applicant alone. (3) The part of the fine imposed on the applicant alone for deterrence 515It should be borne in mind that the concept of ‘deterrence’ is one of the factors to be taken into account in calculating the amount of the fine. It is settled case-law that the fines imposed for infringements of Articles 101 and 102 TFEU, as laid down in Article 23(2) of Regulation No 1/2003, are designed to penalise the unlawful acts of the undertakings concerned and to deter both the undertakings in question and other economic operators from infringing, in future, the rules of EU competition law. The link between, first, undertakings’ size and global resources and, second, the need to ensure that a fine has deterrent effect cannot be denied. Thus, when the Commission calculates the amount of a fine it may take into consideration, inter alia, the size and the economic power of the undertaking concerned (see judgments of 17 June 2010, Lafarge v Commission, C‑413/08 P, EU:C:2010:346, paragraph 102 and the case-law cited, and of 5 June 2012, Imperial Chemical Industries v Commission, T‑214/06, EU:T:2012:275, paragraph 142 and the case-law cited).516The fact that the size and global resources of the undertaking in question are taken into consideration in order to ensure that the fine has sufficient deterrent effect is justified by the impact it should have on that undertaking, since the penalty must not be negligible in the light, particularly, of its financial capacity (see, to that effect, judgments of 5 June 2012, Imperial Chemical Industries v Commission, T‑214/06, EU:T:2012:275, paragraph 143 and the case-law cited, and of 6 February 2014, ElfAquitaine v Commission, T‑40/10, not published, EU:T:2014:61, paragraph 312 and the case-law cited). Thus, it has been held inter alia that the objective of deterrence which the Commission is entitled to pursue when setting the amount of a fine can be properly achieved only if regard is had to the situation of the undertaking at the time when the fine is imposed (see judgment of 5 June 2012, Imperial Chemical Industries v Commission, T‑214/06, EU:T:2012:275, paragraph 143 and the case-law cited; see, to that effect, judgment of 9 December 2014, Lucchini v Commission, T‑91/10, EU:T:2014:1033, paragraph 314 and the case-law cited).517Moreover, in so far as an undertaking with a very high turnover is more readily able to raise the necessary funds to pay its fine, the Commission is entitled, as stated in point 30 of the 2006 Guidelines, to increase the fine on that basis in order to ensure that it has a sufficiently deterrent effect (see, to that effect, judgments of 17 May 2011, Elf Aquitaine v Commission, T‑299/08, EU:T:2011:217, paragraph 253; of 6 March 2012, UPM-Kymmene v Commission, T‑53/06, not published, EU:T:2012:101, paragraph 76 and the case-law cited; and of 6 February 2014, Elf Aquitaine v Commission, T‑40/10, not published, EU:T:2014:61, paragraph 352).518It has also been held that the total turnover of the undertaking concerned is the figure that gives an indication of the size of the undertaking and of its economic power, which must be known in order to assess whether a fine will deter it (see, to that effect, judgment of 9 July 2003, Cheil Jedang v Commission, T‑220/00, EU:T:2003:193, paragraph 96 and the case-law cited; see also, to that effect, judgment of 22 May 2008, Evonik Degussa v Commission, C‑266/06 P, not published, EU:C:2008:295, paragraph 120).519In the circumstances of the present case, first of all, it should be emphasised that, as the Commission correctly found, the applicant and Slovak Telekom formed the same economic unit during the period in question and that the applicant’s liability for the infringement forming the subject matter of the contested decision is purely derivative from that of its subsidiary.520Next, it should be borne in mind that the case-law does indeed accept that a parent company may receive a fine greater than that imposed on its subsidiary, even though the former’s liability is purely derived from the latter’s. However, that may be so only where there is a factor that individually characterises the conduct of the parent company (see the case-law cited in paragraph 499 above). Where, as in the present case, the Commission, in order to assess the gravity of the infringement committed by the undertaking and to calculate the fine to be imposed on it, relies on the subsidiary’s turnover, the turnover of the parent company, even if it is considerably higher than the subsidiary’s, is not a factor of such a kind as to characterise the individual conduct of the parent company in committing the infringement attributed to the undertaking, as the parent company’s liability in that regard is purely derivative from the liability of its subsidiary. Furthermore, the mere finding of a turnover is an element of fact that cannot individualise the parent company’s conduct. The Commission was therefore not entitled, in order to justify the application of the specific weighting for deterrence to the applicant, to take its turnover into consideration.521Last, the Commission cannot be followed when it relies on the discretion which it has when setting the amount of fines penalising infringements of Article 101 and 102 TFEU. It is the case that, according to the case-law, Article 23(2) of Regulation No 1/2003 leaves the Commission a discretion in that regard. However, that provision limits the exercise of that discretion by establishing objective criteria to which the Commission must adhere (see, to that effect, judgment of 12 November 2014, Guardian Industries and Guardian Europe v Commission, C‑580/12 P, EU:C:2014:2363, paragraph 55). Such objective factors do indeed include the concept of ‘undertaking’ to which that provisions refers and which, as observed in paragraph 492 above, must be understood as designating an economic unit even if in law that economic unit is made up of several natural or legal persons.522In the present case, the Commission has established that the applicant exercised decisive influence over Slovak Telekom during the period under consideration and for that reason imputed liability for the infringement forming the subject matter of the contested decision to the economic unit consisting of those two companies. It must therefore be considered that the Commission’s approach, consisting in imposing on the applicant the consequences of the application of a multiplier of 1.2, has no objective justification.523It follows from the foregoing that the Commission misinterpreted the concept of ‘undertaking’ in EU law when, in the contested decision, it imposed on the applicant a multiplier of 1.2 for deterrent purposes.524The fourth plea must therefore be upheld to that extent alone and point (b) of the first paragraph of Article 2 of the contested decision must be annulled on the ground that it imposes on the applicant the multiplier of 1.2 for deterrent purposes. 5. Fifth plea: errors in the calculation of the amount of the fine imposed jointly and severally on Slovak Telekom and the applicant 525By its fifth plea, the applicant maintains that the Commission made a number of errors when calculating the amount of the fine imposed jointly and severally on it and Slovak Telekom. This plea, in which the applicant declares that it supports the arguments set out by Slovak Telekom in its own action, is divided into two parts, which should be examined in turn. (a) First part: manifest error of assessment and breach of the principle of equal treatment on the ground that the amount of the fine was calculated by reference to Slovak Telekom’s turnover in 2010 526The applicant maintains, in the first part, that, in calculating the basic amount of the fine by reference to Slovak Telekom’s turnover in 2010 on the market for unbundled access to the local loop and on the retail market for broadband services at a fixed location, the Commission not only made a manifest error of assessment but also infringed the principle of equal treatment. Although the contested decision is consistent in that regard with point 13 of the 2006 guidelines, it follows from the Commission’s previous practice in taking decisions that that rule must not be applied when the turnover during the last full year of participation in the infringement is significantly different from the annual average of relevant sales during the first years of such participation. In the present case, Slovak Telekom’s relevant turnover rose by 133% between 2005 and 2010. As such an increase is significant, the turnover achieved in 2010 is not on its own sufficiently representative.527In those circumstances, in the applicant’s submission, it was for the Commission to calculate the basic amount of the fine by reference to the average annual turnover achieved throughout the infringement period, namely between 2005 and 2010. By departing from its previous practice in taking decisions on the ground that the abovementioned increase in turnover was not exponential, the Commission infringed the principle of equal treatment. Last, the Commission’s assertion that that increase in turnover may be explained by Slovak Telekom’s alleged abusive conduct on the market is the result of mere speculation. That increase is attributable to the rapid growth of broadband markets throughout the infringement period and not to an increase in Slovak Telekom’s market shares over that period.528The Commission, supported by the intervener, disputes those arguments.530As regards the substance, it is necessary, first of all, as regards the first part of the plea, to note that Article 23(3) of Regulation No 1/2003 provides that, in fixing the amount of the fine, regard must be had both to the gravity and to the duration of the infringement.531Moreover, it should be noted that, according to point 13 of the 2006 Guidelines, ‘in determining the basic amount of the fine to be imposed, the Commission will take the value of the undertaking’s sales of goods or services to which the infringement directly or indirectly relates in the relevant geographic area within the EEA’ and that, for that purpose, it ‘will normally take the sales made by the undertaking during the last full business year of its participation in the infringement’.532It is apparent, moreover, from the case-law that the proportion of the turnover accounted for by the goods or services in respect of which the infringement was committed gives a proper indication of the scale of the infringement on the relevant market, since the turnover in those goods or services constitutes an objective criterion giving a proper measure of the harm which that practice does to normal competition (see, to that effect, judgment of 28 June 2016, Portugal Telecom v Commission, T‑208/13, EU:T:2016:368, paragraph 236 and the case-law cited).533Point 13 of the 2006 Guidelines thus aims, as regards an infringement of Article 102 TFEU, to adopt as the starting point for the calculation of the amount of the fine imposed on the undertaking at issue an amount which reflects the economic significance of the infringement (see, to that effect, judgments of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 76; of 12 November 2014, Guardian Industries and GuardianEurope v Commission, C‑580/12 P, EU:C:2014:2363, paragraph 57; and of 23 April 2015, LG Display and LG Display Taiwan v Commission, C‑227/14 P, EU:C:2015:258, paragraph 53).534However, it should also be noted that the self-limitation of the Commission’s discretion arising from the adoption of the 2006 Guidelines is not incompatible with that institution maintaining a substantial margin of discretion. Those guidelines display flexibility in a number of ways, enabling the Commission to exercise its discretion in accordance with the provisions of Regulation No 1/2003, as interpreted by the EU Courts (see, to that effect, judgment of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraph 96 and the case-law cited), and with other rules and principles of Union law. In particular, point 13 of the 2006 Guidelines itself states that the Commission must ‘normally’ use the sales made by the undertaking during the last full business year of its participation in the infringement for the calculation of the amount of the basic fine (see, to that effect, judgment of 9 September 2015, SamsungSDI and Others v Commission, T‑84/13, not published, EU:T:2015:611, paragraph 214).535In the present case, it is apparent from recitals 1490 to 1495 of the contested decision that, in order to determine the basic amount of the fine imposed jointly and severally on the applicant and on Slovak Telekom, the Commission took account of the sales made by Slovak Telekom during the last full business year of its participation in the infringement, namely the turnover achieved by that operator on the market for access to unbundled local loops for fixed retail broadband in 2010. The Commission thus applied point 13 of the 2006 Guidelines.536The applicant cannot be followed when it claims that the Commission made a manifest error of assessment by not deviating from that rule in the present case, despite the sharp increase in Slovak Telekom’s turnover during the period under consideration.537On the one hand, although the applicant claims that, between 2005 and 2010, Slovak Telekom’s relevant turnover increased by 133%, from EUR 31184949 to EUR 72868176, it does not however put forward any evidence to establish that the latter turnover, achieved during the last full business year of the infringement, did not constitute, at the time when the Commission adopted the contested decision, an indication of its true size, its economic power on the market and the extent of the infringement in question.538On the other hand, the applicant cannot be followed when it takes issue with the Commission for having infringed the principle of equal treatment in the present case, in that it departed from its previous practice in taking decisions on the ground that the abovementioned increase in turnover was not exponential.539In that regard, it is indeed true that respect for the principle of equal treatment, which precludes comparable situations being treated differently and different situations being treated in the same way, unless such treatment is objectively justified, is binding on the Commission when it imposes a fine on an undertaking for infringement of the rules on competition, as on every institution in all of its activities (judgments of 29 June 2012, E.ON Ruhrgas and E.ON v Commission, T‑360/09, EU:T:2012:332, paragraph 261, and of 9 September 2015, Philips v Commission, T‑92/13, not published, EU:T:2015:605, paragraph 204).540Nonetheless, it is clear from settled case-law that the Commission’s practice in previous decisions does not itself serve as a legal framework for the fines imposed in competition matters and that decisions in other cases can give only an indication for the purpose of determining whether there might be discrimination since the facts of those cases, such as markets, products, the undertakings and periods concerned, are not likely to be the same (see judgment of 24 September 2009, Erste Group Bank and Others v Commission, C‑125/07 P, C‑133/07 P and C‑137/07 P, EU:C:2009:576, paragraph 233 and the case-law cited; judgments of 16 June 2011, Heineken Nederland and Heineken v Commission, T‑240/07, EU:T:2011:284, paragraph 347; and of 27 February 2014, InnoLux v Commission, T‑91/11, EU:T:2014:92, paragraph 144).541Thus, previous decisions by the Commission imposing fines can be relevant from the point of view of observance of the principle of equal treatment only where it is demonstrated that the facts of the cases in those other decisions, such as markets, products, the countries, the undertakings and periods concerned, are comparable to those of the present case (see judgments of 13 September 2010, Trioplast Industrier v Commission, T‑40/06, EU:T:2010:388, paragraph 145 and the case-law cited; of 29 June 2012, E.ON Ruhrgas and E.ON v Commission, T‑360/09, EU:T:2012:332, paragraph 262 and the case-law cited; and of 9 September 2015, Philips v Commission, T‑92/13, not published, EU:T:2015:605, paragraph 205 and the case-law cited).542However, in the present case, the applicant puts forward no evidence to establish that the facts of the cases relating to the previous decisions to which it refers, namely the Polish Telecommunications Decision, Decision C(2010) 8761 final of 8 December 2010 (Case COMP/39.309 — LCD — Liquid Crystal Display) and Decision C(2009) 5355 final of 8 July 2009 (Case COMP/39.401 — E.ON/GDF), are comparable with those of the present case. The applicant merely cites those three decisions, observing that the undertakings concerned had shown a steep increase in their turnover throughout the infringement period and that the Commission had in each case used those undertakings’ average annual turnovers in order to calculate the basic amount of the fine.543In any event, it should be stated that the increases in turnover established over the infringement periods in question in those three decisions were significantly higher than in the present case. Thus, the Commission stated in its written pleadings that the net increase in turnover stated in recital 896 of the Polish Telecommunications decision came, over the infringement period, to more than 3000%. Furthermore, in answer to a written question put by the Court, the Commission stated at the hearing that, over the whole period of the infringements in question, the relevant increases came to 521.58% on one market and to 422.65% on a second market in the case of the infringement penalised in Decision C(2010) 8761 final and to 261% in the case of the infringement penalised in Decision C(2009) 5355 final.544It follows from the foregoing that, by taking into account in the present case the turnover achieved by Slovak Telekom during the year ending 31 December 2010, namely the last full business year of participation in the infringement, and by thus complying with its own rule set out in point 13 of the 2006 Guidelines, the Commission did not exceed the limits of its discretion concerning the determination of the amount of fines.545The first part of the fifth plea must therefore be rejected as unfounded. (b) Second part: an error of calculation resulting from the inclusion of 2005 in the infringement period 546In the second part, the applicant claims that, since 2005 was incorrectly included in the infringement period, it is wrong that that year was taken into account for the purpose of calculating the basic amount of the fine imposed jointly and severally on it and Slovak Telekom.547The Commission contends that this argument must be rejected, since in its view the inclusion of 2005 in the infringement period was correct.548It follows from the reasoning set out in paragraphs 172 to 196 above, in answer to the second plea, that the Commission did not err when it concluded that the reference offer published by Slovak Telekom on 12 August 2005 might have deterred from that date the submission of requests for unbundled access to Slovak Telekom’s local loop by alternative operators owing to the unfair terms and conditions which it contained and that, accordingly, the Commission had been correct to conclude that the single and continuous infringement forming the subject matter of the contested decision had begun on that date.549On the other hand, and still in answer to the second plea, the Court considered that Article 1(2)(d) of the contested decision must be annulled in so far as that provision found that, during the period between 12 August and 31 December 2005, the applicant applied unfair tariffs which did not allow an equally efficient competitor relying on wholesale access to Slovak Telekom’s unbundled local loops to replicate the retail broadband services offered by Slovak Telekom without incurring a loss (see paragraph 221 above).550It follows from all of the foregoing that Article 1(2)(d) of the contested decision must be annulled in so far as it declares that, during the period between 12 August and 31 December 2005, the applicant applied unfair tariffs which did not allow an equally efficient competitor relying on wholesale access to Slovak Telekom’s unbundled local loops to replicate the retail broadband services offered by Slovak Telekom without incurring a loss. As a result, and for the reasons adopted in paragraphs 515 to 524 above, Article 2 of that decision must also be annulled in so far as it concerns the applicant. The remainder of the claim for annulment of the contested decision must be rejected. B. The claims, put forward in the alternative, for cancellation or reduction of the amount of the fines imposed on the applicant 551The applicant also requests the Court, in the alternative, to cancel or reduce the amount of the fines which were imposed on it by the contested decision.552It should be noted, in that regard, that, according to settled case-law, the review of legality provided for in Article 263 TFEU entails the Courts of the European Union conducting a review, in respect of both the law and the facts, of the contested decision in the light of the arguments relied on by an applicant, which means that they have the power to assess the evidence, annul the decision and to alter the amount of the fines (see, to that effect, judgments of 3 September 2009, Prym and Prym Consumer v Commission, C‑534/07 P, EU:C:2009:505, paragraph 86 and the case-law cited; of 26 January 2017,Duravit and Others v Commission, C‑609/13 P, EU:C:2017:46, paragraph 30 and the case-law cited; and of 27 March 2014, Saint-Gobain Glass France and Others v Commission, T‑56/09 and T‑73/09, EU:T:2014:160, paragraph 461 and the case-law cited).553The review of legality is supplemented by the unlimited jurisdiction which the Courts of the European Union are afforded by Article 31 of Regulation No 1/2003, in accordance with Article 261 TFEU. That jurisdiction empowers the Courts, in addition to carrying out a mere review of the lawfulness of the penalty, to substitute their own appraisal for the Commission’s and, consequently, to cancel, reduce or increase the fine or penalty payment imposed (judgments of 8 December 2011, Chalkor v Commission, C‑386/10 P, EU:C:2011:815, paragraph 63, and of 8 December 2011, KME Germany and Others v Commission, C‑389/10 P, EU:C:2011:816, paragraph 130; see, also, judgment of 26 January 2017, Duravit and Others v Commission, C‑609/13 P, EU:C:2017:46, paragraph 31 and the case-law cited).554It should be noted that the exercise of unlimited jurisdiction does not amount to a review of the Court’s own motion, and that proceedings before the Courts of the European Union are inter partes. Therefore, with the exception of pleas involving matters of public policy which the Courts are required to raise of their own motion, it is for the applicant, in principle, to raise pleas in law against the contested decision and to adduce evidence in support of those pleas (see, to that effect, judgment of 10 July 2014, Telefónica and Telefónica de España v Commission, C‑295/12 P, EU:C:2014:2062, paragraph 213 and the case-law cited).555It is in the light of those principles that it is necessary to determine whether the amount of the fines imposed by the Commission in the contested decision must be modified.556In the first place, it should be observed that the arguments presented by the applicant in support of its alternative claims, whereby it seeks cancellation of the fines imposed on it or a reduction in the amount of those fines, cannot be distinguished from the arguments put forward in support of its claims for annulment. In those circumstances, the complaints put forward in support of that alternative claim which have already been rejected in so far as they sought to maintain the claims for annulment must be rejected.557In the second place, as is apparent from paragraphs 204 to 221 above, the Commission has not provided evidence that the practice leading to a margin squeeze engaged in by Slovak Telekom could have started before 1 January 2006 and, consequently, Article 1(2)(d) of the contested decision must be annulled to the extent that it concerns the applicant and that it includes a margin squeeze which was applied between 12 August and 31 December 2005 in the single and continuous infringement.558As regards the impact of that error on the basic amount of the fine for which the applicant is jointly and severally liable, the Court considers, in the exercise of its unlimited jurisdiction, that it is necessary to reduce the proportion of the applicant’s relevant sales applied by the Commission and to establish that proportion at 9.8% instead of 10%. Since Slovak Telekom achieved over the course of the last full year of the infringement a relevant turnover of EUR 72868176, the amount which must be used to calculate the basic amount of the fine for which the applicant is jointly and severally liable is EUR 7141 081.20. The basic amount of that fine corresponds to the multiplication of that amount by a coefficient of 5.33, reflecting the duration of the infringement, and must therefore be set at EUR 38061963.559In the third place, it is appropriate to draw the necessary conclusions from the finding, in paragraph 523 above, that the Commission misconstrued the concept of ‘undertaking’ under EU law when, in the contested decision, it imposed on the applicant alone the weighting of 1.2 for dissuasive purposes, in order to take account of the size and economic weight of the undertaking held liable for the infringement in question. That error means that the amount of the separate fine imposed on the applicant in order to ensure that it would bear the consequences of the repeated offending identified by the Commission in the contested decision must be re-calculated. That fine, which represents 50% of the basic amount of the fine for which the applicant is held jointly and severally liable before the application of the weighting of 1.2, must thus be set at EUR 19030981.560In the fourth place, in the case that gave rise to the judgment of today’s date, Slovak Telekom v Commission (T‑851/14), the Court found that the Commission had erred in finding that, during the period between 12 August and 31 December 2005, Slovak Telekom had implemented a practice resulting in margin squeeze. In consequence, the Court annulled in part Article 1(2) of the contested decision and also Article 2 of that decision, in so far as they related to Slovak Telekom, and reduced the amount of the fine for which Slovak Telekom was held liable under point (a) of the first paragraph of Article 2 of that decision.561In the present case, the Court drew the same conclusions from the error referred to in paragraph 560 above (see paragraphs 557 and 558 above). Thus, the applicant cannot ask the Court to draw, in the present case, the necessary conclusions from the judgment of today’s date, Slovak Telekom v Commission (T‑851/14). The request which the applicant bases on the judgment of 22 January 2013, Commission v Tomkins (C‑286/11 P, EU:C:2013:29), must therefore be rejected.562Consequently, the amount of the fine imposed jointly and severally on Deutsche Telekom is set at EUR 38061963 and the amount of the fine for which Deutsche Telekom alone is held liable is set at EUR 19030981. The claim for cancellation of the fine or a reduction of the amount of the fine is rejected as to the remainder. IV. Costs 563Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Furthermore, under Article 134(3) of the Rules of Procedure, the parties are to bear their own costs where each party succeeds on some and fails on other heads. However, if it appears justified in the circumstances of the case, the Court may order that one party, in addition to bearing its own costs, pay a proportion of the costs of the other party.564In the present case, the Commission and the intervener have been partially unsuccessful. Nevertheless, the applicant has not applied for the intervener to be ordered to pay the costs, but only for the Commission to be so ordered.565In those circumstances, the applicant must be ordered to bear four fifths of its own costs, as well as four fifths of the costs of the Commission and the intervener, in accordance with the form of order sought by them. The Commission is to bear one fifth of its own costs and of those of the applicant. The intervener is to bear one fifth of its own costs.On those grounds,THE GENERAL COURT (Ninth Chamber, Extended Composition)hereby: 1. Annuls Article 1(2)(d) of Commission Decision C(2014) 7465 final of 15 October 2014 relating to proceedings under Article 102 TFEU and Article 54 of the EEA Agreement (Case AT.39523 — Slovak Telekom) in so far as it declares that, over the course of the period between 12 August and 31 December 2005, Deutsche Telekom AG imposed unfair tariffs that did not allow an equally efficient operator relying on wholesale access to Slovak Telekom’s unbundled local loops to replicate the retail broadband services offered by Slovak Telekom without incurring a loss; 2. Annuls Article 2 of Decision C(2014) 7465 final in so far as it sets the amount of the fine imposed jointly and severally on Deutsche Telekom at EUR 38838000 and the amount of the fine imposed on Deutsche Telekom alone at EUR 31070000; 3. Sets the amount of the fine imposed jointly and severally on Deutsche Telekom at EUR 38061963 euros and the amount of the fine imposed on Deutsche Telekom alone at EUR 19030981 euros; 4. Dismisses the action as to the remainder; 5. Orders Deutsche Telekom to bear four fifths of its own costs and to pay four fifths of the costs of the European Commission and four fifths of the costs of Slovanet, a.s.; 6. Orders the Commission to bear one fifth of its own costs and to pay one fifth of the costs incurred by Deutsche Telekom; 7. Orders Slovanet to bear one fifth of its own costs. Van der WoudeGervasoniMadiseda Silva PassosKowalik-BańczykDelivered in open court in Luxembourg on 13 December 2018.[Signatures]( *1 ) Language of the case: German.( 1 ) Only the paragraphs of the present judgment which the Court considers it appropriate to publish are reproduced here. | ff59c-25b18ad-4d7a | EN |
The General Court annuls in part the European Commission’s decision finding the existence of restrictive agreements and an abuse of a dominant position on the market for perindopril, a medicine used to treat hypertension and heart failure | 12 December 2018 ( *1 )(Competition — Agreements, decisions and concerted practices — Market for perindopril, a medicinal product intended for the treatment of cardiovascular diseases, in its originator and generic versions — Decision finding an infringement of Articles 101 and 102 TFEU — Agreements intended to delay, or even prevent, entry into the market of generic versions of perindopril — Participation of a subsidiary in the infringement committed by its parent company — Imputation of the infringement — Joint and several liability — Ceiling for the fine)In Case T‑677/14, Biogaran, established in Colombes (France), represented by T. Reymond, O. de Juvigny and J. Jourdan, lawyers,applicant,v European Commission, represented initially by F. Castilla Contreras, T. Vecchi and B. Mongin, and subsequently by F. Castilla Contreras, B. Mongin and C. Vollrath, acting as Agents,defendant,APPLICATION under Article 263 TFEU for annulment of Commission Decision C(2014) 4955 final of 9 July 2014 relating to a proceeding under Article 101 and Article 102 TFEU (Case AT.39612 — Perindopril (Servier)) in so far as it concerns the applicant and, in the alternative, for reduction of the fine imposed on the applicant by that decision,THE GENERAL COURT (Ninth Chamber),composed of S. Gervasoni (Rapporteur), President, L. Madise and R. da Silva Passos, Judges,Registrar: G. Predonzani, Administrator,having regard to the written part of the procedure and further to the hearing on 5 October 2017,gives the following Judgment I. Background to the dispute A. Perindopril 1The Servier group, composed, of Servier SAS, and several subsidiaries (individually or jointly, ‘Servier’), developed perindopril, a medicinal product used in cardiovascular medicine, primarily intended for the treatment of hypertension and heart failure, by inhibiting the angiotensin converting enzyme (‘ACE’).2The active pharmaceutical ingredient (‘API’) of perindopril, that is to say, the biologically active chemical substance which produces the desired therapeutic effects, takes the form of a salt. The salt used initially was erbumine (or tert-butylamine), which is in its crystalline form on account of the synthesis process applied by Servier. 1. Compound patent 3The perindopril compound patent (patent EP0049658, ‘the 658 patent’) was filed with the European Patent Office (EPO) on 29 September 1981. The 658 patent was due to expire on 29 September 2001, but protection was prolonged in a number of EU Member States, including the United Kingdom, until 22 June 2003, in accordance with Council Regulation (EEC) No 1768/92 of 18 June 1992 concerning the creation of a supplementary protection certificate for medicinal products (OJ 1992 L 182, p. 1). In France, protection under the 658 patent was prolonged until 22 March 2005 and, in Italy, until 13 February 2009. 2. Secondary patents 4In 1988, Servier also filed a number of patents before the EPO relating to processes for the manufacture of the perindopril compound with an expiry date of 16 September 2008: patents EP0308339, EP0308340, EP0308341 and EP0309324 (respectively, ‘the 339 patent’, ‘the 340 patent’, ‘the 341 patent’ and ‘the 324 patent’).5Servier filed new patents relating to erbumine and its manufacturing processes with the EPO in 2001, including patent EP1294689 (known as ‘the beta patent’ — ‘the 689 patent’), patent EP1296948 (known as ‘the gamma patent’ — ‘the 948 patent’), and patent EP1296947 (known as ‘the alpha patent’ — ‘the 947 patent’). The 947 patent application relating to the alpha crystalline form of erbumine and the process for its preparation was filed on 6 July 2001 and granted by the EPO on 4 February 2004. 3. Second generation perindopril 6From 2002, Servier began developing a second generation perindopril product, manufactured using another salt, arginine, instead of erbumine. Perindopril arginine showed improvements in terms of shelf life, which increased from two to three years; stability, enabling the use of a single type of packaging for all climatic zones; and storage, since it required no particular storage conditions.7Servier applied for a European patent for perindopril arginine (patent EP1354873B, ‘the 873 patent’) on 17 February 2003. The 873 patent was granted to Servier on 17 July 2004 with an expiry date of 17 February 2023. The introduction of perindopril arginine in the European Union markets started in 2006. B. The applicant 8Biogaran (‘the applicant’ or ‘Biogaran’), a generic company whose distribution activity is almost exclusively limited to France, was founded in 1996 and is a wholly owned subsidiary of Laboratoires Servier SAS, itself a subsidiary of Servier SAS. C. Niche’s activities in relation to perindopril 9The generic company Niche Generics Ltd (‘Niche’) assumed all of the obligations and responsibilities of Bioglan Generics Ltd under the development and licensing agreement which it had concluded on 26 March 2001 with Medicorp Technologies India Ltd (‘Medicorp’), of which Matrix Laboratories Ltd (‘Matrix’) was the successor company, with a view to marketing a generic version of perindopril (‘the Niche/Matrix agreement’). Under that agreement, the two companies were to market generic perindopril in the European Union, with Matrix responsible primarily for developing and supplying the perindopril API, while Niche was responsible primarily for taking the necessary steps to obtain marketing authorisations and for the business strategy.10In April 2003, Matrix provided a pilot batch of perindopril API and the corresponding drug master file in order for Niche to prepare the marketing authorisation applications.11Unichem Laboratories Ltd (‘Unichem’), the parent company of Niche, was responsible for the production of perindopril in final dosage form under an agreement for the development and manufacture of perindopril tablets concluded on 27 March 2003 with Medicorp (subsequently Matrix), which was responsible for developing the perindopril API and providing it to Unichem. D. Disputes relating to perindopril 1. Disputes before the EPO 12Ten generic companies, including Niche, filed opposition proceedings against the 947 patent before the EPO in 2004, seeking the revocation in full of that patent on grounds of lack of novelty, lack of inventive step and insufficient disclosure of the invention. However, Niche withdrew from the opposition procedure on 9 February 2005.13On 27 July 2006, the Opposition Division of the EPO confirmed the validity of the 947 patent after Servier made some minor amendments to its original claims (‘the EPO decision of 27 July 2006’). Seven companies brought an appeal against that decision. By decision of 6 May 2009, the EPO’s Technical Board of Appeal annulled the EPO decision of 27 July 2006 and revoked the 947 patent. Servier’s request for a revision of that decision was rejected on 19 March 2010.14On 11 August 2004, Niche also filed an opposition against the 948 patent before the EPO, but withdrew from the procedure on 14 February 2005. 2. Disputes before the national courts 15The validity of the 947 patent has, moreover, been challenged by generic companies before the courts of certain Member States, notably in the Netherlands and the United Kingdom.16In the United Kingdom, on 25 June 2004, Servier brought an action for infringement before the High Court of Justice (England & Wales), Chancery Division (Patents Court), against Niche, in relation to the 339, 340 and 341 patents, after Niche applied for marketing authorisations in the United Kingdom for a generic version of perindopril, developed in partnership with Matrix under the Niche/Matrix agreement. On 9 July 2004 Niche served on Servier a counterclaim for a declaration of invalidity of the 947 patent.17The hearing before the High Court of Justice (England & Wales), Chancery Division (Patents Court), concerning the merits of the alleged infringement, was finally scheduled for 7 and 8 February 2005, but lasted for only half a day because a settlement agreement was concluded between Servier and Niche on 8 February 2005, which put an end to the litigation between those two parties.18Matrix was kept informed by Niche on the progress of that litigation procedure and was also associated with that procedure as it gave evidence before the High Court of Justice (England & Wales), Chancery Division (Patents Court), on behalf of Niche. Moreover, on 7 February 2005, Servier sent a formal warning letter to Matrix, accusing it of infringing the 339, 340 and 341 patents and threatening to bring an action for infringement.19In the autumn of 2004, Servier began to consider acquiring Niche. To that end, Servier carried out a due diligence, of which the first phase was completed on 10 January 2005, the date on which Servier submitted a preliminary non-binding offer to acquire Niche’s capital for an amount between 15 and 45 million pounds sterling (GBP). Following the second phase of the due diligence, which took place on 21 January 2005, Servier informed Niche verbally on 31 January 2005 that it did not wish to proceed with the acquisition. E. The settlements 1. The agreements concluded between Niche, Unichem, Matrix and Servier 20Servier entered into a series of patent settlement agreements with a number of generic companies with which it was involved in patent disputes.21On 8 February 2005, Servier concluded a settlement agreement with Niche and Unichem (‘the settlement agreement’ or ‘the settlement agreement between Servier and Niche’). The territorial scope of the agreement covered all the countries in which the 339, 340, 341 and 947 patents existed (Clause 3 of the agreement).22Under the settlement agreement, Niche and Unichem were to refrain from making, having made, keeping, importing, supplying, offering to supply or disposing of generic perindopril made using the process developed by Niche, which Servier regarded as infringing the 339, 340 and 341 patents, as validated in the United Kingdom, using a substantially similar process or using any other process that would infringe the 339, 340 and 341 patents (‘the process at issue’) until the local expiry date of those patents (Clause 3 of the agreement) (‘the non-marketing clause’). However, they would be free, under the agreement, to market perindopril made using the process at issue without infringing the patents after the expiry of those patents (Clauses 4 and 6 of the agreement). Moreover, Niche was required to cancel, terminate or suspend until the expiry date of the patents all of its existing contracts relating, on the one hand, to perindopril made using the process at issue and, on the other, to marketing authorisation applications for that perindopril (Clause 11 of the agreement). Furthermore, Niche and Unichem undertook not to make any applications for marketing authorisations for perindopril made using the process at issue and not to assist any third parties to obtain such a marketing authorisation (Clause 10 of the agreement). Lastly, they were to abstain from any invalidity and non-infringement actions against the 339, 340, 341, 947, 689 and 948 patents until their expiry, except as a defence to a patent infringement action (Clause 8 of the agreement) (‘the non-challenge clause’). Niche also agreed to withdraw its oppositions to the 947 and 948 patents before the EPO (Clause 7 of the agreement).23In return, Servier undertook, first, not to bring any infringement actions against Niche, Niche customers or Unichem based on the 339, 340, 341 and 947 patents in respect of any act of alleged infringement occurring before the conclusion of the agreement (Clause 5 of the agreement) (‘the non-assertion clause’), and, secondly, to pay Niche and Unichem the sum of GBP 11.8 million in two instalments (Clause 13 of the agreement). That sum was to be paid in consideration for the commitments made by Niche and Unichem and for the ‘substantial costs and potential liabilities that may be incurred by Niche and Unichem as a consequence of ceasing their programme to develop perindopril made using the process [at issue]’.24On 8 February 2005, Servier also concluded a settlement agreement with Matrix (‘the Matrix agreement’) covering all the countries in which the 339, 340, 341 and 947 patents existed, with the exception of one non-Member State of the European Economic Area (EEA) (Section 1(1)(xiii) of the agreement).25Under the Matrix agreement, Matrix committed to refrain from making, having made, keeping, importing, supplying, offering to supply or disposing of perindopril made using the process at issue until the local expiry date of those patents (Clauses 1 and 2 of the agreement). However, the agreement stipulated that Matrix would be free to deal in perindopril made using the process at issue without infringing the patents after the expiry of those patents (Clause 4 of the agreement). Moreover, Matrix was required to cancel, terminate or suspend until the expiry date of the patents all of its existing contracts relating to perindopril made using the process at issue and to marketing authorisation applications for that perindopril by 30 June 2005 at the latest (Clauses 7 and 8 of the agreement). Furthermore, it committed not to apply for marketing authorisations for perindopril made using the process at issue and not to assist any third parties to obtain such a marketing authorisation (Clause 6 of the agreement). Finally, Matrix was to abstain from any invalidity and non-infringement actions against the 339, 340, 341, 947, 689 and 948 patents until their expiry, except as a defence to a patent infringement action (Clause 5 of the agreement).26In return, Servier committed, first, not to bring any infringement actions against Matrix based on the 339, 340, 341 and 947 patents in respect of any act of alleged infringement occurring before the conclusion of the Matrix agreement (Clause 3 of the agreement) and, secondly, to pay Matrix the sum of GBP 11.8 million in two instalments (Clause 9 of the agreement). That sum was consideration for the commitments made by Matrix and for the ‘substantial costs and potential liabilities that may be incurred by Matrix as a consequence of ceasing its programme to develop and manufacture perindopril made using the process [at issue]’. 2. The agreement concluded between Niche and Biogaran 27On 8 February 2005 (the day of the conclusion of the settlement agreement between Servier and Niche), a licensing and supply agreement was concluded between Niche and Biogaran concerning the transfer from Niche to Biogaran of three product dossiers (that is to say ‘any and all information and/or data in possession of Niche related to the products and necessary for the obtention of marketing authorisations’) and of an existing marketing authorisation in return for a payment by Biogaran to Niche of GBP 2.5 million (‘the Biogaran agreement’).28Under the Biogaran agreement, Niche undertook to transfer to Biogaran the product dossier relating to product A for exclusive use by Biogaran in order to obtain marketing authorisations in France, the United Kingdom and a non-EEA country and for non-exclusive use for the rest of the world. As regards the two other product dossiers, relating to product B and product C, the transfer of the dossiers was made on a non-exclusive basis worldwide. As regards product B in particular, Niche agreed to transfer its marketing authorisation for France to Biogaran. The Biogaran agreement provided that, once Biogaran had obtained its marketing authorisations, it would order the products concerned from Niche (Clause 2.2 of the agreement). Pursuant to Clause 2.5 of the agreement, Niche undertook to provide Biogaran with all the information and all the data owned or controlled by it and constituting the product dossier necessary to obtain the corresponding marketing authorisations. Moreover, Biogaran was required to make all reasonable efforts to ensure that orders for the product or products were placed at the appropriate time, to allow Niche to maintain a consistent production rate for the full duration of that agreement (Clause 4.1 of the agreement). However, the Biogaran agreement stipulated that that agreement would be automatically terminated if the marketing authorisations were not obtained within 18 months (Clause 14.4 of the agreement). Similarly, the agreement provided that neither party would be entitled to compensation in the event of termination in accordance with Clauses 14.2 and 14.4 of the agreement.29In consideration for the product dossiers, Clause 2.3 of the Biogaran agreement provided for the payment by Biogaran of GBP 2.5 million and set out payment terms that obliged Biogaran to pay Niche GBP 1.5 million on 14 February 2005 at the latest and GBP 1 million on 5 October 2005 at the latest, the same dates as agreed under the settlement agreement between Servier and Niche for the payment of GBP 11.8 million. F. The sector inquiry 30On 15 January 2008, the Commission of the European Communities decided to open an inquiry into the pharmaceutical sector pursuant to Article 17 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1) in order to identify the factors contributing to the decline in innovation in that sector, measured by the number of new medicines reaching the market, and the reasons for the delayed entry into the market of certain generic medicines.31The Commission published a preliminary report on the results of its inquiry on 28 November 2008, followed by a public consultation. On 8 July 2009, it adopted a communication giving a summary of its pharmaceutical sector inquiry report. The Commission stated, inter alia, in that communication, that the monitoring of patent settlements concluded between originator companies and generic companies should continue in order better to understand the use of that type of agreement and to identify those agreements that delay generic market entry to the detriment of EU consumers and may constitute an infringement of competition rules. The Commission subsequently published six annual reports on the monitoring of patent settlement agreements. G. The administrative procedure and the contested decision 32On 24 November 2008, the Commission made unannounced inspections of the premises of the companies concerned. The Commission sent requests for information to several companies in January 2009.33On 2 July 2009, the Commission decided to open proceedings against Servier and the applicant as well as other generic companies.34In August 2009 and then between December 2009 and May 2012, the Commission sent several requests for information both to Servier and to Niche. Following two refusals by Servier to communicate information relating to the Biogaran agreement, the Commission adopted a decision based on Article 18(3) of Regulation No 1/2003, requesting that certain information be communicated to it. The response to that request was provided on 7 November 2011.35On 27 July 2012, the Commission issued a Statement of Objections to several companies including the applicant, which submitted its reply on 14 January 2013.36The hearing of the companies concerned, including the applicant, was held from 15 to 18 April 2013.37On 18 December 2013, the Commission granted access to evidence gathered or more widely disclosed after the Statement of Objections and sent a Letter of Facts to which the applicant replied on 21 January 2014.38The hearing officer issued his final report on 7 July 2014.39On 9 July 2014, the Commission adopted Decision C(2014) 4955 final relating to a proceeding under Article 101 and Article 102 TFEU (Case AT.39612 — Perindopril (Servier)) (‘the contested decision’).40Article 1 of the contested decision finds that Unichem, including its subsidiary Niche, and Servier, including its subsidiary Biogaran, infringed Article 101 TFEU by participating in a reverse payment patent dispute settlement agreement covering all Member States, except Croatia and Italy, for the period starting 8 February 2005, except as regards Latvia (period starting 1 July 2005), Bulgaria and Romania (period starting 1 January 2007) and Malta (period starting 1 March 2007), and ending on 15 September 2008, except as regards the Netherlands (period ending 1 March 2007) and the United Kingdom (period ending 6 July 2007).41The Commission considered that the Biogaran agreement had constituted an additional inducement intended to persuade Niche not to enter the market and revealed Biogaran’s direct involvement in the infringement committed by Servier, its parent company.42In recitals 1349 to 1354 of the contested decision, the Commission found that, in addition to the net value transfer, Servier had provided an additional inducement to Niche through the Biogaran agreement. The Commission pointed out that, on 8 February 2005, that is to say on the same day that the settlement agreement between Servier and Niche was concluded, Niche had also concluded the Biogaran agreement and that, under that agreement, Biogaran had paid Niche GBP 2.5 million in consideration for the transfer of the product dossiers and of a marketing authorisation for pharmaceutical products unrelated to perindopril.43According to Article 7(1)(b) of the contested decision, a fine of EUR 131532600 is imposed on Servier and Biogaran jointly and severally. Biogaran is also required, under Article 8 of that decision, to refrain both from repeating the infringement found and penalised therein and from any act or conduct having the same or similar object or effect. II. Procedure and forms of order sought by the parties 44By application lodged at the Registry of the General Court on 19 September 2014, the applicant brought the present action.45The applicant claims that the Court should:–annul Articles 1, 7 and 8 of the contested decision, in so far as they concern the applicant;in the alternative, make use of its unlimited jurisdiction in order to reduce very substantially the fine imposed on the applicant;grant the applicant the benefit of any annulment, in whole or in part, of the contested decision in the action brought by Servier and draw all appropriate conclusions therefrom in the exercise of the Court’s unlimited jurisdiction;order the Commission to pay the costs.46The Commission contends that the Court should:dismiss the action;order the applicant to pay the costs. III. Admissibility A. The third head of claim, by which the applicant seeks to be granted the benefit of any annulment of the contested decision in the action brought by Servier 47As a preliminary point, it must be recalled that, pursuant to Article 21 of the Statute of the Court of Justice of the European Union and Article 44(1)(c) of the Rules of Procedure of the General Court of 2 May 1991, each application is required to state the subject matter of the proceedings and a summary of the pleas in law on which the application is based.48According to settled case-law, that information must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the action. The same considerations must apply to all claims, which must be accompanied by pleas and arguments enabling both the defendant and the Court to assess their validity (see judgment of 7 July 1994, Dunlop Slazenger v Commission, T‑43/92, EU:T:1994:79, paragraph 183 and the case-law cited). It is necessary, in order for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the text of the application itself. Whilst the body of the application may be supported and supplemented on specific points by references to extracts from documents annexed thereto, a general reference to other documents, even those annexed to the application, cannot make up for the absence of the essential arguments in law which, in accordance with the abovementioned provisions, must appear in the application. Furthermore, it is not for the Court to seek and identify in the annexes the pleas and arguments on which it may consider the action to be based, since the annexes have a purely evidential and instrumental function (see judgment of 17 September 2007, Microsoft v Commission, T‑201/04, EU:T:2007:289, paragraph 94 and the case-law cited). A fortiori, a general reference in the application to the pleas and arguments relied on in support of another action, even one brought in a related case, does not meet the requirement referred to above (judgment of 24 March 2011, Legris Industries v Commission, T‑376/06, not published, EU:T:2011:107, paragraph 32).49In the present case, the general reference in the application, without any further detail or explanation, to the pleas and arguments relied on in support of the action brought in the case giving rise to the judgment delivered today, Servier and Others v Commission (T‑691/14), does not meet the requirement referred to above.50Moreover, even if, by the third head of claim in the application, the applicant was seeking to rely on the case-law according to which the Courts of the European Union must grant a company the benefit of any annulment in favour of another company in a situation where they comprise the same economic entity (judgment of 22 January 2013, Commission v Tomkins, C‑286/11 P, EU:C:2013:29, paragraphs 43 and 44), as the applicant argued in the reply, that claim cannot succeed. By its judgment delivered today, Servier and Others v Commission (Case T‑691/14), the General Court dismissed the action in so far as it concerned the settlement agreement between Servier and Niche. The applicant therefore cannot rely for its benefit on any annulment of the contested decision in the action brought by Servier.51It follows from the foregoing that the applicant’s third head of claim, seeking to adopt the form of order sought by Servier and its pleadings, must be rejected. B. The admissibility of certain annexes to the defence and of some evidence adduced in that pleading 1. Arguments of the parties 52As a preliminary point, the applicant maintains in the reply that the Commission produced in the defence new documents and arguments in support of the arguments put forward in the contested decision. The defence (which contains 40 pages) is claimed to be based in part on new factual matters, primarily intended to support the contested decision, which devotes only 6 out of a total of 919 pages to condemning Biogaran. Relying on the case-law, the applicant claims that the use of new evidence at the stage of the judicial proceedings infringes the rights of the defence.53The applicant requested that certain annexes to the defence be declared inadmissible, on the ground that 23 of them were in English and had not been translated into the language of the case, namely French.54The Commission disputes that it put forward new evidence in support of the lawfulness of the contested decision and failed to fulfil its obligation to state reasons. The existence of the link between the Biogaran agreement and the settlement agreement is explained in detail in the contested decision in recitals 561 to 569 and 1351 to 1354 thereof.55According to the Commission, the three facts which confirm the existence of a link between the Biogaran agreement and the settlement cannot be described as ‘new’, since they are set out in the contested decision or may be inferred from the findings of that decision itself. First of all, the pre-eminent role of Mr M. in Niche’s negotiations with Servier is referred to in recitals 532 and 538 of the contested decision. Next, the discussions concerning Niche’s wish to obtain an amount higher than that allocated to Matrix are mentioned in recital 577 of the contested decision. Finally, Biogaran’s role in the relationship between Servier and the generic company Lupin Ltd is also referred to in recital 979 of the contested decision. 2. Findings of the Court 56The applicant maintains that the Commission, in breach of the principle of respect for the rights of the defence, puts forward in the defence new documents and arguments in support of the arguments advanced in the contested decision in order to remedy an inadequate statement of reasons.57It must be borne in mind in that regard that, in an action for annulment, the Commission cannot, in support of the contested decision, produce new inculpatory evidence not contained in the decision. However, the Court of Justice and the General Court have recognised that the author of a contested decision is entitled to provide explanations at the stage of the judicial proceedings in order to supplement a statement of reasons which is already adequate in itself, since those explanations may serve a useful purpose in relation to review by the Courts of the European Union of the adequacy of the grounds of the decision, since they enable the institution to explain the reasons underlying its decision (see, to that effect, judgments of 16 November 2000, Finnboard v Commission, C‑298/98 P, EU:C:2000:634, paragraph 46; of 13 July 2011, ThyssenKrupp Liften Ascenseurs v Commission, T‑144/07, T‑147/07 to T‑150/07 and T‑154/07, EU:T:2011:364, paragraphs 146 to 149, and of 27 September 2012, Ballast Nedam v Commission, T‑361/06, EU:T:2012:491, paragraph 49).58In the present case, the Commission has not infringed either its obligation to state reasons or the applicant’s rights of defence by providing explanations in the defence. Indeed, the factual matters put forward in the defence and described by the applicant as ‘new’ merely support the Commission’s argument that there is a link between the Biogaran agreement and the settlement and are apparent from the contested decision.59First of all, as regards the question whether the Commission could provide additional evidence relating to the participation of certain employees of Biogaran and Servier in the negotiations for the Biogaran agreement and the settlement, it should be noted that the email of 4 February 2005 mentioned several times in the contested decision (recitals 566 and 1351) and reproduced in Annex B. 10 to the defence) shows, first, that Mr M. had played a role for Niche in the negotiation of the two agreements (see also recital 538 of the contested decision) and, secondly, that Ms L., the legal director of the Servier group, a recipient of a copy of that email, was involved in the discussions. That email shows that the person who negotiated the Biogaran agreement on behalf of the applicant was also the signatory of the letter of formal notice sent by Servier to Matrix on 7 February 2005, one day before the conclusion of the settlement.60Next, as regards the negotiations between Matrix and Niche and Niche’s wish to obtain a higher amount than that of Matrix, the Commission rightly argues that those elements are apparent from recital 577 of the contested decision.61Finally, as regards the alleged role played by a director of Biogaran in the conclusion of the settlement between Servier and the generic company Lupin, the Commission is entitled to respond in the defence to the applicant’s arguments, when the applicant seeks to establish that the Commission’s arguments are vitiated by an error of law, namely that the contested decision sought to impute to Biogaran liability for Servier’s acts (see, to that effect, judgments of 13 July 2011, ThyssenKrupp Liften Ascenseurs v Commission, T‑144/07, T‑147/07 to T‑150/07 and T‑154/07, EU:T:2011:364, paragraphs 146 to 149, and of 27 September 2012, Ballast Nedam v Commission, T‑361/06, EU:T:2012:491, paragraphs 49 and 50). The Commission refers to the role of Mr B., the founding chairman of Biogaran, in the agreement between Servier and Lupin, in order to illustrate that Biogaran could be held liable for its direct participation in the infringement and not for the acts alleged against its parent company.62As regards the admissibility of certain annexes to the defence, the applicant argues that the documents in question are drafted in English and are not accompanied by translations into the language of the case, namely French.63Under the first and second subparagraphs of Article 35(3) of the Rules of Procedure of 2 May 1991, in force at the time when the defence was lodged, the language of the case is to be used in the written and oral pleadings of the parties and in supporting documents, and any supporting documents expressed in another language must be accompanied by a translation into the language of the case. The second subparagraph of Article 7(5) of the Instructions to the Registrar of the General Court of 5 July 2007 provides that where documents annexed to a pleading or procedural document are not accompanied by a translation into the language of the case, the Registrar is to require the party concerned to make good the irregularity if such a translation appears necessary for the purposes of the efficient conduct of the proceedings. It follows from points 64 and 68 of the Practice Directions to the parties before the General Court of 24 January 2012 (OJ 2012 L 68, p. 23) that, if the defence does not comply with the procedural rules relating to the translation into the language of the case of any documents drafted in a language other than the language of the case, a reasonable period is to be prescribed for the purposes of putting it in order.64In the light of those provisions, it must be held that, in the absence of a request from a party to that effect, it is only if the translation into the language of the case appears necessary for the purposes of the efficient conduct of the proceedings that it is for the Registrar to have it carried out (see, to that effect, judgment of 15 June 2010, Mediaset v Commission, T‑177/07, EU:T:2010:233, paragraph 37).65In the present case, it should be pointed out that the applicant did not expressly request that the Court ask the Commission to translate into French, the language of the present case, the annexes to the defence drafted in English. The applicant only challenged the admissibility of those annexes on the ground that they were not drafted in the language of the case. However, within a reasonable period after lodging the defence, the Commission notified the Registry of the Court, by letter of 28 September 2015, of the translation into French of those annexes. Moreover, the applicant was able to comment on those documents at the hearing. Therefore, in any event, without it being necessary to determine whether that translation was necessary for the purposes of the efficient conduct of the proceedings, the objection of inadmissibility raised by the applicant against the annexes in question must be rejected.66Accordingly, the pleas of inadmissibility raised by the applicant must be rejected. IV. Substance 67The applicant raises three pleas in support of its claims. It submits, first, that the contested decision fails to establish that it participated in any infringement of the competition rules. Secondly, it challenges the Commission’s factual assessment of the existence of an additional inducive benefit resulting from the Biogaran agreement. Thirdly, it submits that the Commission erred in law by imposing a fine on it. The second plea must be examined first, then the first plea and finally the third plea. A. The plea alleging distortion of the facts in that the contested decision wrongly finds that the Biogaran agreement served as an additional inducement for Niche to conclude the settlement with Servier 68By this plea, the applicant disputes the Commission’s assessment of the facts in question, which led the Commission to find that there was a restriction of competition. (a) The error of assessment in the analysis of the link between the Biogaran agreement and the settlement agreement (1) The chronology of the negotiations for the agreements 69The applicant submits that the history of the negotiations of the two agreements differs, even though the Biogaran agreement and the settlement agreement between Servier and Niche were signed on the same day. Indeed, several contemporaneous documents show that Biogaran started to negotiate the Biogaran agreement in 2002, nearly two years prior to the start of the discussions relating to the settlement. The applicant thus disputes the claim that the two agreements were negotiated during the same period, as stated in recital 1351 of the contested decision.70The fact that the applicant started to negotiate the Biogaran agreement even before the beginning of the dispute between Servier and Niche demonstrates that Biogaran had its own, autonomous and separate interest in signing that agreement, irrespective of the settlement.71The applicant argues that the conclusion of the two agreements on the same day reveals not the existence of a link, but simply the fact that the dispute between Servier and Niche had the collateral effect of blocking the pre-existing negotiations between Niche and Biogaran, which resumed in February 2005, a few days before the signing of the settlement agreement.72The Commission maintains that it has established in the contested decision that the chronology of the negotiations confirmed the existence of a link between the settlement agreement and the Biogaran agreement.73In the first place, Niche confirmed, in a statement of 15 June 2011, that the settlement agreement and the Biogaran agreement had been negotiated at the same time. In the second place, the earlier negotiations between Niche and Biogaran related only to product A and were extended to other compounds only in February 2005. The scope of the agreement was therefore extended at the last moment, which is confirmed by an email of 4 February 2005 sent by Biogaran’s lawyer to Niche. In the third place, contacts between Biogaran and Niche were still in progress in August 2004, over a month after the start of the litigation in the United Kingdom. Even though those contacts were unsuccessful, negotiations between Biogaran and Niche resumed only during the negotiations for the settlement, although the litigation between Servier and Niche was still ongoing. The negotiations concerning product A therefore do not seem to have been paralysed on account of the litigation which had commenced in June 2004. (2) The legal link between the settlement agreement and the Biogaran agreement 74According to the applicant, contrary to what the Commission states in recital 1190 of the contested decision, the agreement signed by Biogaran was not ‘dependent’ on Niche’s acceptance of the terms of the settlement agreement. Under neither of those two agreements was the signing or performance of either agreement linked to or dependent on the signing or performance of the other.75Moreover, the applicant emphasises that the two agreements are governed by different laws and do not fall within the jurisdictions of the same courts. Similarly, the two agreements are not binding on the same legal persons within the Servier group and were not signed in the same place, since the Biogaran agreement was signed in Paris (France) while the settlement agreement was signed between Niche and Servier in London (United Kingdom).76Furthermore, the applicant states that the payment dates provided for by the two agreements were only identical in part, since Biogaran’s payments relating to the supply permitted under the licence were later.77The applicant adds that the Commission’s argument relating to the existence of a link between the two agreements is largely based on the statements made by Niche, even though the ambiguity of those statements should have led the Commission to use them with caution. The Commission simply rejected the statements which were contrary to its arguments, on the sole ground that they were subsequent to the Statement of Objections and therefore allegedly less conclusive than the statements made earlier in the context of the administrative procedure.78The Commission contends that the two agreements, negotiated simultaneously, were concluded on the same day and provided for payments to be made in instalments on exactly the same dates in relation to the transfer of the product dossiers, which transfer was the rationale for the payment of GBP 2.5 million. The Commission argues that Niche expressly confirmed on several occasions during the administrative procedure, in particular in response to the Statement of Objections, that the Biogaran agreement had been proposed to Niche by Servier in order to provide Niche with the total overall consideration agreed for entering into the global settlement agreement. The Commission refers to a draft settlement between Servier and Niche in which the handwritten word ‘ramipril’ appears in front of a reference to ‘2.5 million’. According to the Commission, those elements show that the price paid by Servier in consideration for Niche’s commitments includes the payment of GBP 2.5 million provided for in the context of the ramipril dossier, that is to say the Biogaran agreement.79The Commission acknowledges that Niche added, in its response to the Statement of Objections, that the Biogaran agreement was a genuine commercial agreement with real consideration. Nevertheless, in the same document, Niche maintained that occasionally, although it was not normal commercial practice, agreements could be signed for several products at the same time. Moreover, the Commission points out that Niche’s statements made at a time when Niche was aware of the complaints made against it do not have the same probative value as statements made earlier, in tempore non suspecto.80The Commission also argues that the email dated 4 February 2005 sent by Biogaran’s lawyer to Niche concerning the amount at stake corroborates the existence of a link between the two agreements. The parties agreed on an amount to be paid by Biogaran to Niche and subsequently discussed the content of the Biogaran agreement. The primary objective of the agreement was therefore to provide Niche with an additional inducement and not to conclude a commercial agreement, as Biogaran suggests in paragraph 75 of the application. That agreement demonstrates neither Biogaran’s interest in those products nor any incentive to market products which were included within the scope of the agreement only at the end of the negotiations.81Moreover, the Commission takes the view that, although the Biogaran and settlement agreements did not have the same signatories, the negotiators involved in the negotiations were, in part, the same. Similarly, the draft Biogaran agreement was circulated within the Servier group and the group’s legal director, Ms L., was a recipient of a copy of the email of 4 February 2005 sent by Biogaran to Niche, although that email related to a contract to be concluded by Biogaran, and also received a copy of the agreement concluded between Niche and Biogaran of 20 July 2004 concerning the capsules of product A. (3) The intention to induce Niche 82The applicant claims that the Commission failed to establish in the contested decision that Biogaran intended to induce Niche to sign the settlement. Similarly, nor does the Commission explain the reasons which allegedly led Servier to make that additional payment of GBP 2.5 million through Biogaran, while Servier itself undertook to pay directly to Niche the amount of GBP 11.8 million.83The Commission argues that when they concluded their respective settlements with Servier, Niche and Matrix discussed the distribution of the amounts between them. An internal Matrix document of September 2005 shows that the amounts forming the subject matter of the settlements were negotiated and divided equally between Niche and Matrix, although Matrix wished to receive more than Niche (recital 577 of the contested decision). The conclusion of a separate agreement between Biogaran and Niche clearly made it possible to increase the contribution paid by the Servier group to Niche while excluding Matrix. Moreover, Niche confirmed that the payment formed part of the ‘total overall compensation’ of GBP 15.7 million negotiated between Servier and Niche.84The Commission adds that it did not need to show that Biogaran intended to induce Niche to sign the settlement. The intention of the parties does not constitute a necessary element for determining the restrictive nature of the agreement. Moreover, the Commission considers that it has established the indissociable nature of the two agreements concluded, respectively, by Biogaran and its parent company, Servier, with Niche. Since Biogaran and Servier constitute a single economic entity, it was not necessary to show that, within that entity, each of its parts intended to induce Niche to sign the settlement agreement.85The Commission argues that the terms of the Biogaran agreement, according to which the parties could not claim reimbursement of the amounts paid in the event of a failure to obtain marketing authorisations, were not intended to encourage Biogaran to apply for marketing authorisations.86First of all, Biogaran’s contractual obligations did not include the obligation to apply for marketing authorisations on the basis of the dossiers transferred (Clauses 2.2 and 3 of the Biogaran agreement).87Next, if Biogaran had not obtained a marketing authorisation within 18 months and, pursuant to Clauses 14.2 and 14.4 of the Biogaran agreement, the agreement had been automatically terminated, the payment already paid to Niche was not refundable.88Moreover, Biogaran was not subject to any exclusivity as regards the product dossiers and could therefore easily avoid being bound to Niche, by not applying for a marketing authorisation on the basis of the dossiers, since Biogaran was under no obligation to do so. That is indeed what happened, as Biogaran concluded another agreement with company A. for the acquisition of several dossiers, also relating to product A in various dosages. The Commission notes that the agreement concluded with company A., unlike the Biogaran agreement, provided that company A. would reimburse the payments transferred by Biogaran in the event of a failure to obtain marketing authorisation. Such a difference between the terms of those two agreements suggests that Niche had no guarantee that Biogaran was going to apply for marketing authorisations and obtain supplies from Niche following the Biogaran agreement. In so far as the payment should, in any event, have been paid to Niche before it was possible to ascertain whether Biogaran was going to obtain the marketing authorisations, Niche had no guarantee that Biogaran was going to apply for the marketing authorisations and obtain supplies from Niche.89Finally, the Commission argues that Biogaran’s explanations concerning the payment of the amount of GBP 2.5 million are implausible. Biogaran was unable to justify, first, why it had paid that amount — whether as an incentive for it to apply for marketing authorisations, as a means of securing a second source of supply for product A or as a means of obtaining ‘security’ dossiers selected at random (except for product A) — and, secondly, why it had taken the risk of losing that payment. The Commission likewise questions the unusual structure of the Biogaran agreement and in particular the non-refundable nature of the payment. Indeed, the Biogaran agreement differs from the agreement concluded with company A., which stipulated that in the event of a failure to obtain marketing authorisations, company A. would reimburse the payment received. (b) The taking into account of the applicant’s commercial interest in concluding the Biogaran agreement 90The applicant argues that the Biogaran agreement was justified by Biogaran’s commercially legitimate and pro-competitive intention of securing several sources of supply in order to launch and develop products on the generic market, and in particular product A, by turning to Niche, a long-standing partner which had the requisite dossiers and supply capabilities. The fact that the GBP 2.5 million payment constituted reasonable consideration for the rights acquired under the Biogaran agreement is confirmed by the fact that that sum was not taken into account by the Commission in the contested decision in the calculation of the amount of the fine imposed on Niche.91The Commission rejects the applicant’s argument that it was securing sources of supply, which the Commission describes as ‘implausible’, on the ground that Biogaran took no steps to obtain the marketing authorisations. (1) Product A 92The applicant states that, in view of the commercial success of product A, obtaining the rights necessary for the launch of the generic version of that medicinal product represented a major challenge for Biogaran. Thus, in order to secure its supply, Biogaran wished to obtain two dossiers from different market operators, by concluding two agreements, the first with company A. in December 2004 and the second with Niche in February 2005. The applicant emphasises that acquiring several sources of supply is a common practice for generic companies due to the technical and regulatory difficulties encountered during the development of a generic.93The applicant submits that, in the present case, securing two sources of supply proved to be relevant for two reasons. First, Niche’s product A 10 mg dossier proved to be very weak from an analytical perspective, which could have delayed the assessment by the competent authorities (Annex A. 17 to the application). Secondly, the measures of inquiry taken by the Agence française de sécurité sanitaire des produits de santé (AFSSAPS) (Agency for the Safety of Health Products, France) in July 2005 in connection with several of company A.’s dossiers cast doubt on their validity (Annex A. 18 to the application).94Moreover, the securing of a second source of supply for product A from Niche offered several advantages by comparison with the agreement concluded with company A. First, the Biogaran agreement allowed Biogaran to obtain dossiers for product A in tablet form and product A 10 mg, which were not covered by the agreement with company A.; secondly, the agreement with Niche offered the prospect of opportunities in the United Kingdom and in a non-EEA country at a time when Biogaran was seeking to pursue its activities abroad.95However, the applicant preferred the dossiers of company A., because they allowed a faster entry into the market, since company A. had filed its marketing authorisation dossiers before Niche.96The applicant argues that the financial stakes justified its supply strategy. Since its launch in France, that generic product has generated a turnover of more than EUR 79 million (EUR 83 million, according to the update referred to in the reply). In the light of those factors, the applicant argues that it had to secure its supply of product A, in order to justify the payment to Niche of GBP 2.5 million and so as not to be limited solely to the turnover generated by the sales of product B.97Finally, the applicant adds that the payment of that amount to Niche was all the more justified because Niche had granted it exclusive rights to the product dossiers in France, the United Kingdom and a non-EEA country, which was not the case with other non-exclusive agreements concluded by Biogaran. In that context, the comparison made by the contested decision with those other agreements is therefore ineffective.98The Commission takes the view that the audit produced by Biogaran after the conclusion of the Biogaran agreement, revealing the alleged weaknesses of the Niche dossier, works to the detriment of the applicant’s case. That argument shows that Biogaran did not have any information about the performance of Niche’s product A before entering into that agreement and took the risk of paying GBP 2.5 million, even though the product A dossier was potentially worthless. Although that audit concerning the quality of the Niche dossiers might justify the securing of a second source of supply from company A., it cannot explain why the applicant wanted to pay a higher price than that for the dossier of company A. Biogaran paid company A. EUR 330000 in total under the two agreements relating to product A, an amount well below the amount paid to Niche.99The Commission points out that the opportunity for Niche to supply tablets and the 10 mg dosage could not justify the agreement at issue. Two months after the agreement, although Biogaran had the possibility of filing the Niche dossier with the competent authorities, it concluded a second agreement with company A. for product A in tablet form.100Moreover, the Commission disputes the applicant’s argument that Biogaran was encouraged to conclude the Biogaran agreement because of an investigation initiated by AFSSAPS in July 2005 concerning company A. That event could not have influenced Biogaran because it occurred after the Biogaran agreement.101Furthermore, Biogaran has not adduced any evidence of the usefulness of the Biogaran agreement in the context of its planned expansion abroad.102The Commission points out that, although Biogaran has generated a turnover of more than EUR 79 million since 2007, the income deriving from Niche’s product A is equivalent to 0 (recital 567 of the contested decision). In that context, the Commission disputes the claim that Biogaran had to acquire a second source of supply from Niche.103Finally, the Commission disputes the argument that the exclusivity granted by the Biogaran agreement makes the comparison with other agreements ineffective. The comparison shows that none of the other agreements provided for a non-refundable payment. According to the Commission, the payment was already lost and Biogaran made no effort to make a return on it. Similarly, exclusivity has no value if development of the product was not sufficiently advanced or if there were other regulatory barriers. (2) Product B 104The applicant claims that the Biogaran agreement enabled it to market product B 10 mg and to achieve a turnover of EUR 150000 (EUR 211000 according to the update in the reply). The marketing of that product was entrusted to Almus, one of the main wholesale distributors in France.105The Commission argues that the agreement previously concluded between Biogaran and Bioglan (now Niche) concerning product B provided that the payment by Biogaran was refundable in the event of a failure to obtain the marketing authorisations, which was not the case with the Biogaran agreement. Moreover, Niche provided no guarantee, by that agreement, to transfer the marketing authorisation it had obtained in France in 2001, since that transfer required a renewal of the marketing authorisation and Niche had not applied for its renewal to the competent authorities.106As regards the marketing contract awarded to Almus and its loyalty, the Commission argues that product B did not lead to the conclusion of that contract, in that product B was only one of the approximately 23 compounds covered by that contract. (3) Product C 107The applicant claims that it has been able to market product C since 2000 as a result of a number of agreements concluded with Disphar. However, it decided to secure other sources of supply because of the uncertainty concerning the renewal of the supply agreement with Disphar and its desire to expand its activities abroad. Biogaran did not ultimately make use of the product dossiers granted by Niche, because of the renewal of the agreement concluded with Disphar.108Accordingly, the fact that, for two of the three products, Biogaran did not obtain a marketing authorisation on the basis of the dossiers transferred by Niche cannot suggest the existence of a link between the Biogaran agreement and the settlement. This simply reveals Biogaran’s desire to secure several sources of supply in accordance with the practice in the sector concerned.109The Commission takes the view that it is not credible that Biogaran paid such a large amount solely for the opportunity to possess a product dossier which it never used. Biogaran did not even insist that Niche ensure that the transfer of the dossier take place before the agreement at issue was automatically terminated owing to the failure to obtain marketing authorisations. (a) Preliminary remarks 110As a preliminary point, it should be pointed out that the Biogaran agreement was regarded by the Commission in the contested decision as an inducement from Servier to Niche, in addition to that resulting from the settlement agreement between Servier and Niche, in order to convince Niche to give up its efforts to enter the perindopril market. The Biogaran agreement is, according to the Commission, a component of the infringement represented by that settlement agreement, which constitutes a restriction of competition by object. The Biogaran agreement can therefore be unlawful in nature only if the settlement agreement between Servier and Niche is of the same nature. In those circumstances, it is necessary to set out, for the purposes of the examination of the present action, the legal context of the settlement agreement with which the Biogaran agreement was linked.111It should be noted in that regard that a patent dispute settlement agreement may have no negative impact on competition. That is the case, for example, if the parties agree that the patent in question is not valid and therefore provide for the immediate market entry of the generic company.112In the present case, the agreement concluded between Servier and Niche does not fall into that category because it contains non-challenge clauses in respect of patents and non-marketing clauses in respect of products, which are, by themselves, restrictive of competition. The non-challenge clause undermines the public interest in eliminating any obstacle to economic activity which may arise where a patent was granted in error (see, to that effect, judgment of 25 February 1986, Windsurfing International v Commission, 193/83, EU:C:1986:75, paragraph 92) and the non-marketing clause entails the exclusion from the market of one of the patent holder’s competitors.113Nevertheless, the insertion of such clauses may be legitimate, but only in so far as it is based on the parties’ recognition of the validity of the patent in question (and, consequently, of the infringing nature of the generic products concerned).114The presence of non-marketing and non-challenge clauses whose scope is limited to that of the patent in question is, however, problematic when it is apparent that the generic company’s agreement to those clauses is not based on its recognition of the validity of the patent. As the Commission rightly points out, ‘even if the limitations in the agreement on the generic undertaking’s commercial autonomy do not go beyond the material scope of the patent, they constitute a breach of Article 101 [TFEU] when those limitations cannot be justified and do not result from the parties’ assessment of the merits of the exclusive right itself’ (recital 1137 of the contested decision).115In that respect, it should be noted that the existence of a ‘reverse payment’, that is to say a payment from the originator company to the generic company, is doubly suspect in the context of a settlement agreement. In the first place, it must be borne in mind that a patent is intended to reward the creative effort of the inventor by allowing him to make a fair profit from his investment and that a valid patent must, in principle, allow a transfer of value to its holder — for example, through a licence agreement — and not vice versa. In the second place, the existence of a reverse payment gives rises to doubts as to whether the settlement is actually based on the recognition, by the parties to the agreement, of the validity of the patent in question.116However, the mere presence of a reverse payment does not mean that there is a restriction by object. It is possible that some reverse payments, where they are inherent in the settlement of the dispute in question, may be justified. However, where an unjustified reverse payment occurs in the conclusion of the settlement, the generic company must then be regarded as having been induced by that payment to agree to the non-marketing and non-challenge clauses and it must be concluded that there is a restriction by object. In that case, the restrictions of competition introduced by the non-marketing and non-challenge clauses no longer relate to the patent and to the settlement, but rather can be explained by the conferral of a benefit inducing the generic company to abandon its competitive efforts.117It must be pointed out that, although neither the Commission nor the Courts of the European Union are competent to rule on the validity of the patent, it is nevertheless the case that those institutions may, in the context of their respective powers and without ruling on the intrinsic validity of the patent, find that it has been used abnormally, in a manner which has no relation to its specific subject matter (see, to that effect, judgments of 29 February 1968, Parke, Davis and Co., 24/67, EU:C:1968:11, pp. 71 and 72, and of 31 October 1974, Centrafarm and de Peijper, 15/74, EU:C:1974:114, paragraphs 7 and 8; see also, by analogy, judgments of 6 April 1995, RTE and ITP v Commission, C‑241/91 P and C‑242/91 P, EU:C:1995:98, paragraph 50, and of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, paragraphs 104 to 106).118Inducing a competitor to accept non-marketing and non-challenge clauses, in the sense described in paragraph 116 above, or its corollary, accepting such clauses because of an inducement, constitutes an abnormal use of the patent.119As the Commission rightly stated in recital 1137 of the contested decision, ‘patent law does not provide for a right to pay actual or potential competitors to stay out of the market or to refrain from challenging a patent prior to entering the market’. Likewise, according to the Commission, ‘patent holders are not entitled to pay generic companies to keep them off the market and reduce the risks of competition, whether in the context of a patent settlement agreement or otherwise’ (recital 1141 of the contested decision). Lastly, the Commission correctly added that ‘paying or otherwise inducing potential competitors to stay out of the market [was] not part of any patent right, nor [was] it one of the means provided for under patent law to enforce the patent’ (recital 1194 of the contested decision).120Where an inducement has been found, the parties may no longer rely on their recognition, in the context of the settlement, of the validity of the patent. The fact that the validity of the patent is confirmed by a judicial or administrative body is, in that regard, irrelevant.121It is then the inducement, and not the recognition of the validity of the patent by the parties to the settlement, which must be regarded as the real cause of the restrictions of competition introduced by the non-marketing and non-challenge clauses (see paragraph 112 above), which — since they are in that case entirely illegitimate — therefore reveal a sufficient degree of harm to the proper functioning of normal competition that a restriction by object may be found.122Where they involve an inducement, the agreements in question must therefore be regarded as market exclusion agreements, in which the ‘stayers’ are to compensate the ‘goers’. Such agreements actually constitute a buying-off of competition and must therefore be classified as restrictions of competition by object, as follows from the judgment of 20 November 2008, Beef Industry Development Society and Barry Brothers (C‑209/07, EU:C:2008:643, paragraphs 8 and 31 to 34), and the Opinion of Advocate General Trstenjak in Beef Industry Development Society and Barry Brothers (C‑209/07, EU:C:2008:467, point 75), referred to inter alia in recitals 1139 and 1140 of the contested decision. Moreover, the exclusion of competitors from the market constitutes an extreme form of market sharing and of limitation of production (judgment of 8 September 2016, Lundbeck v Commission, T‑472/13, under appeal, EU:T:2016:449, paragraph 435), which, in a context such as that of the agreements in question, reveals a degree of harm which is all the greater since the companies excluded are generic companies, the market entry of which is, as a rule, favourable to competition and which also contributes to the public interest in lowering the cost of healthcare. Lastly, that market exclusion is augmented, in the agreements at issue, by the fact that it is not possible for the generic company to challenge the patent in question.123It follows from all the foregoing that, in the context of patent dispute settlement agreements, a finding of a restriction of competition by object presupposes that the settlement agreement contains both an inducement in the form of a benefit for the generic company and a corresponding limitation of the generic company’s efforts to compete with the originator company. Where those two conditions are met, a finding of restriction of competition by object must be made in view of the harmfulness of that agreement to the proper functioning of normal competition.124By the judgments delivered today, Servier and Others v Commission (T‑691/14) and Niche Generics v Commission (T‑701/14), the Court held that those two conditions were met, in particular that the Commission correctly considered that the sum of GBP 11.8 million paid to Niche by Servier under the settlement agreement concluded between those two companies was an inducement intended to exclude Niche from the market and that that agreement constituted a restriction of competition by object.125Accordingly, the plea raised at the hearing by Biogaran, in response to the written question from the Court relating to the settlement agreement, alleging that that agreement did not constitute an infringement of Article 101 TFEU, must be dismissed, without it being necessary to rule on its admissibility. (b) The existence of an inducement in the form of a benefit represented by the Biogaran agreement 126Biogaran argues that the Biogaran agreement is not a further incentive for Niche to conclude the settlement agreement, but an autonomous commercial agreement concluded at arm’s length.127In that regard, it follows from Article 2 of Regulation No 1/2003 and from settled case-law that, in the field of competition law, where there is a dispute as to the existence of an infringement, it is incumbent on the Commission to prove the infringements found by it and to adduce evidence capable of demonstrating to the requisite legal standard the existence of the circumstances constituting an infringement (judgments of 17 December 1998, Baustahlgewebe v Commission, C‑185/95 P, EU:C:1998:608, paragraph 58, and of 8 July 1999, Commission v Anic Partecipazioni, C‑49/92 P, EU:C:1999:356, paragraph 86; see, also, judgment of 12 April 2013, CISAC v Commission, T‑442/08, EU:T:2013:188, paragraph 91 and the case-law cited).128In that context, any doubt on the part of the Court must operate to the advantage of the undertaking to which the decision finding an infringement was addressed. The Court cannot therefore conclude that the Commission has established the infringement in question to the requisite legal standard if it still entertains any doubts on that point, in particular in proceedings for annulment of a decision imposing a fine (see judgment of 12 April 2013, CISAC v Commission, T‑442/08, EU:T:2013:188, paragraph 92 and the case-law cited).129It is necessary to take into account the principle of the presumption of innocence resulting in particular from Article 48 of the Charter of Fundamental Rights of the European Union. Given the nature of the infringements in question and the nature and degree of severity of the penalties which may ensue, the presumption of innocence applies, inter alia, to the procedures relating to infringements of the competition rules applicable to undertakings that may result in the imposition of fines or periodic penalty payments (see judgment of 12 April 2013, CISAC v Commission, T‑442/08, EU:T:2013:188, paragraph 93 and the case-law cited).130In addition, account must be taken of the non-negligible stigma attached to a finding of involvement in an infringement of the competition rules for a natural or legal person (see judgment of 12 April 2013, CISAC v Commission, T‑442/08, EU:T:2013:188, paragraph 95 and the case-law cited).131Thus, the Commission must show precise and consistent evidence in order to establish the existence of the infringement and to support the firm conviction that the alleged infringement constitutes a restriction of competition within the meaning of Article 101(1) TFEU (see judgment of 12 April 2013, CISAC v Commission, T‑442/08, EU:T:2013:188, paragraph 96 and the case-law cited).132It is not necessary for every item of evidence produced by the Commission to satisfy those criteria in relation to every aspect of the infringement. It is sufficient if the set of indicia relied on by the Commission, viewed as a whole, meets that requirement (see judgment of 12 April 2013, CISAC v Commission, T‑442/08, EU:T:2013:188, paragraph 97 and the case-law cited).133The existence of an anticompetitive practice or agreement must sometimes even be inferred from a number of coincidences and indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules (judgment of 7 January 2004, Aalborg Portland and Others v Commission, C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P, EU:C:2004:6, paragraph 57).134For example, although parallel behaviour may not by itself be identified with a concerted practice, it may however amount to strong evidence of such a practice if it leads to conditions of competition which do not correspond to the normal conditions of the market (judgment of 14 July 1972, Farbenfabriken Bayer v Commission, 51/69, EU:C:1972:72, paragraph 25).135Likewise, the presence of a ‘side deal’ — the expression used by the Commission in recital 1190 of the contested decision — may constitute, as regards the settlement of a patent dispute, a strong indication of the existence of an inducement and, consequently, of a restriction of competition by object.136In this connection, it should be noted that the Biogaran agreement was regarded by the Commission as a ‘side deal’, the expression used by the Commission in recital 1190 of the contested decision. In recitals 1349 and 1351 of that decision, the Commission considered that, through the Biogaran agreement, which was in the Commission’s view linked to the settlement agreement, Servier provided Niche with an additional inducement for Niche to conclude the settlement and that the existence of such an inducement followed from certain elements indicating that the Biogaran agreement was not an arm’s length deal.137It should be explained that a side deal is a normal commercial agreement ‘linked’ to a dispute settlement agreement which contains clauses which are by themselves restrictive. Such a link exists, in particular, where the two agreements are concluded on the same day, where they are legally linked, the binding nature of one of the agreements being conditional upon the conclusion of the other agreement, or where, in the light of the context in which they are concluded, the Commission is able to establish that they are indissociable. It may be added that, the shorter the time between the conclusion of each agreement, the easier it will be for the Commission to establish that indissociable nature. The fact that the settlement agreement and the side deal are concluded on the same day or that there is a contractual link between them is an indication that those agreements form part of a single contractual framework. If those agreements were not concluded on the same day (and if there were no contractual link between them), one of the parties to the negotiation would grant the other party everything it wants without any certainty of ultimately obtaining the expected quid pro quo. That temporal or legal link between the two agreements is also an indication that they were negotiated together.138The side deal is a normal commercial agreement that could exist independently without the settlement of a dispute being at issue. Likewise, the conclusion of a settlement agreement does not require the concurrent conclusion of a commercial agreement. Thus, the two agreements do not need to be linked. Moreover, that linkage cannot be justified by the settlement of a dispute, because the purpose of the side deal is not to reach such a settlement but rather to carry out a commercial transaction.139In addition, a side deal involves value transfers, of a financial or non-financial nature, between the parties. It may involve, in particular, the transfer of value from the patent holder or from the subsidiary with which it constitutes a single economic entity to the generic company. There is therefore a risk that the linking of a commercial agreement with a settlement agreement containing non-marketing and non-challenge clauses, which are, by themselves, restrictive of competition, is actually intended — under the guise of a commercial transaction, taking the form, as the case may be, of a complex contractual arrangement — to induce the generic company to accept those clauses, through a value transfer provided for in the side deal.140Consequently, the fact that a commercial agreement, which does not normally have the settlement of a dispute as its subject matter, and which serves as a vehicle for a transfer of value from the originator company, or from the subsidiary with which that company constitutes a single economic entity, to the generic company, is, in the circumstances set out in paragraph 137 above, linked with a dispute settlement agreement containing competition-restricting clauses is a strong indication of the existence of a reverse payment.141However, the strong indication referred to in the preceding paragraph is not sufficient and the Commission must therefore support it with other consistent evidence justifying the conclusion that there is a reverse payment. Such a payment, in the specific context of side deals, corresponds to the part of the payment made by the originator company which exceeds the ‘normal’ value of the asset traded (or, as the case may be, to the part of the ‘normal’ value of the asset traded which exceeds the payment made by the generic company).142In the present dispute, in finding that the Biogaran agreement had served as an additional inducement for Niche, the Commission stated, in recital 1351 of the contested decision, on the basis of a number of indications, that that agreement ‘was not an arm’s length deal’ and that it ‘was not normal commercial practice’.143In that regard, it should be noted that the concept of ‘normal competitive conditions’, which is similar to that of ‘arm’s length commercial conditions’, even though it is not used in relation to agreements, decisions and concerted practices, is not alien to competition law, since it is used in the particular field of State aid in order to determine whether a State has acted like a private investor (judgment of 2 September 2010, Commission v Scott, C‑290/07 P, EU:C:2010:480, paragraph 68), that is to say, whether the advantage granted to the undertakings in question constitutes the normal remuneration for a quid pro quo obtained by the State. That concept may therefore constitute, by analogy, a relevant reference parameter when determining whether two companies that concluded a commercial transaction did so on the basis of economic considerations limited to the economic value of the asset traded, for example to its prospects of profitability, and, thus, at arm’s length.144Where there are indicia or evidence put forward by the Commission in order to support a finding that the side deal was not concluded at arm’s length, the parties to the agreements may present their version of the facts, supporting their claims with the evidence that they are able to provide and which permits the conclusion that the commercial agreement, although linked to the settlement agreement, is justified by reasons other than the exclusion of a competitor by means of a reverse payment. The parties to the agreements may thus argue that the side deal was concluded at arm’s length by adducing relevant evidence concerning, for example, the industrial and commercial practices in the sector or the particular circumstances of the case.145In the light of all the evidence available to it and, as the case may be, the lack of an explanation or the lack of a plausible explanation from the parties to the agreements, the Commission may be justified in finding, following an overall assessment, that the side deal was not concluded at arm’s length, that is to say that the payment made by the originator company exceeds the value of the asset traded (or that the value of the asset transferred to the generic company exceeds the payment made by the latter). The Commission may thus conclude that there is a reverse payment.146A reverse payment, if it is not intended to compensate for costs inherent in the settlement, therefore constitutes an inducive benefit (see paragraph 116 above). That is the case where the purpose of a side deal is not to settle a dispute but rather to carry out a commercial transaction (see paragraph 138 above).147However, the parties to the agreement may still argue that the benefit in question is insignificant, if the amount of that benefit is insufficient to be regarded as a significant inducement to accept the competition-restricting clauses set out in the settlement agreement.148It is now appropriate to apply to the particular circumstances of the present case the principles set out in the foregoing paragraphs.149In the present case, it is common ground that Biogaran paid GBP 2.5 million to Niche. That payment stemmed from the Biogaran agreement, under which Niche undertook to transfer to Biogaran product dossiers and a marketing authorisation for products unrelated to perindopril.150Although the Biogaran agreement and the settlement agreement between Servier and Niche are formally separate legal acts, governed by different laws and not falling within the jurisdictions of the same courts, there are several elements which establish the existence of a link between those two agreements.151The Commission rightly pointed out, in recital 1351 of the contested decision, that the chronology of the agreements was one of the elements supporting a finding of the existence of such a link between them. Indeed, those agreements were concluded on the same day. Moreover, the payment dates stipulated by the two agreements were the same, that is to say no later than 14 February 2005 and 5 October 2005, and only the payments relating to the supply of medicinal products provided for by the Biogaran agreement were later.152The Commission also correctly pointed out that the Biogaran agreement was negotiated at the same time as the settlement agreement, based in particular on Niche’s statement of 15 June 2011. Although Niche qualified that statement subsequently, at the end of the administrative procedure, by producing several documents describing discussions concerning the licence almost two years before the start of the discussions concerning the settlement, that position of Niche, at a time when that company was aware of the complaints against it, does not have the same probative value as its previous statements.153Next, while the Commission does not deny that Biogaran and Niche were indeed in contact concerning product A even before the dispute between Servier and Niche began, there is no evidence in the file to support the claim made by the applicant that that dispute had the effect of paralysing the negotiations between Niche and Biogaran. In that regard, an email of 4 February 2005 shows that the negotiations for the conclusion of the Biogaran agreement were very advanced at that date, while the litigation between Niche and Servier was still ongoing and was only settled on 8 February 2005. The simultaneity of the negotiations is a strong indication of the existence of a link between the two agreements.154Moreover, while the two agreements do not have the same signatories and were signed respectively in Paris, as regards the Biogaran agreement, and in London, as regards the settlement agreement between Servier and Niche, they had, in part, the same negotiators. On the one hand, Mr M., one of the directors of Niche, participated in the negotiations for both agreements. On the other hand, it is clear from the email of 4 February 2005, sent by Biogaran’s lawyer to the director of Niche, that the person who negotiated the agreement with Niche on behalf of Biogaran was also the signatory of the letter of formal notice sent by Servier to Matrix on 7 February 2005, the day before the conclusion of the settlement between Servier and Matrix. As the Commission points out, it is likely that that person was aware of the settlement with Niche, in view of the linkage between the settlement agreement between Servier and Niche and the Matrix agreement. A copy of that same email was sent to the legal director of the Servier group, although it related to a contract concerning Biogaran.155Finally, the Commission rightly maintains that the fact that the payments from Biogaran relating to the supply of medicinal products — and not to the transfer of product dossiers, which transfer was the rationale for the Biogaran agreement — were later confirms the existence of a link between the agreements. It is the transfer of dossiers that constitutes the very essence of the licensing agreement, and not the supply of products by Niche. Thus, the simultaneous nature of the payments of GBP 2.5 million, in consideration for the product dossiers, and of GBP 11.8 million, provided for in the settlement, confirms the existence of a link between the two agreements.156It follows from the foregoing considerations (see paragraphs 150 to 155 above) that the Biogaran agreement constituted a side deal linked to the settlement agreement. The fact that that agreement, which served as a vehicle for a transfer of value to Niche, is associated with the agreement for the settlement of the dispute between Servier and Niche, even though that side deal is presented as a normal commercial agreement which does not have the settlement of a dispute as its subject matter, is a strong indication that the transfer of value in question is not merely the quid pro quo for the asset transferred under the side deal, but also involves a reverse payment (within the meaning of that expression in relation to side deals).157Moreover, the Commission found a number of consistent indications confirming the finding of the existence of a reverse payment.158First, the Commission, for the purpose of arguing that the consideration obtained by Biogaran could not be valued at GBP 2.5 million, correctly pointed out that that amount was much higher than the amount paid by Biogaran to another generic company, company A., in order to acquire several dossiers relating to product A in tablet form in various dosages. Biogaran paid company A. a total of EUR 330000 under the two agreements relating to product A, an amount well below the amount of GBP 2.5 million, even though the latter amount also covered product B and product C.159Next, the Commission stated, again correctly, that the absence of a clause in the Biogaran agreement, unlike in the agreement with company A., allowing Biogaran to claim reimbursement of the amounts paid to Niche in the event of a failure to obtain marketing authorisations was a sign that the agreement was not aimed at encouraging Biogaran to apply for those marketing authorisations and was not in the nature of a normal commercial agreement.160Finally, it was reasonable of the Commission to point out that Niche had repeatedly stated during the administrative procedure that the Biogaran agreement had been proposed to Niche by Servier in order to provide Niche with the total overall consideration agreed for entering into the global settlement agreement with Servier. It is also apparent from a draft settlement agreement between Servier and Niche, annexed to the defence and containing the list of payments to be made, that a payment of GBP 2.5 million for the benefit of Niche was envisaged in relation to ramipril, one of the products covered by the Biogaran agreement. As the Commission rightly argues, it is also apparent from the email of 4 February 2005, already mentioned (see, in particular, paragraph 154 above), that the parties to the Biogaran agreement had agreed to the payment of GBP 2.5 million even before Biogaran’s consideration for such a sum had been negotiated and agreed by the contracting parties. Niche itself also pointed out in the course of the administrative procedure, before retracting that statement, that the Biogaran agreement was not a normal commercial practice and that the magnitude of the payment formed part of the settlement (recital 562 of the contested decision).161However, the applicant has not adduced any specific evidence to show that the acquisition of Niche’s product dossiers for GBP 2.5 million could reasonably be regarded as a profitable investment (see, to continue the analogy with the concept of a ‘private investor in a market economy’ begun in paragraph 143 above, paragraph 84 of the judgment of 12 December 2000, Alitalia v Commission, C‑296/97, EU:T:2000:289, in which it is stated that the conduct of a private investor in a market economy is guided by prospects of profitability) or, at the very least, as being such as to generate, for the acquirer of those product dossiers, income capable of compensating for the high cost of acquiring them.162Moreover, there is nothing in the file to explain how Niche’s dossiers could yield for their acquirer profits which could offset such an acquisition cost. In that regard, it should be pointed out that Biogaran’s total turnover as a result of the agreement amounted only to between EUR 100000 and EUR 200000.163It may be noted, furthermore, that there is no evidence in the file to show that, before concluding the Biogaran agreement, the applicant had required Niche to provide it with all the data necessary to ensure that the price quoted for the product dossiers in question was not overstated in view of their foreseeable profitability.164It follows from the foregoing, in the light of all of the evidence discussed before the Court, that the Commission established to the requisite legal standard the existence of a reverse payment which was not inherent in the settlement of the dispute at issue (see paragraph 146 above). The Commission therefore reasonably concluded that the payment of GBP 2.5 million to Niche under the Biogaran agreement constituted an additional inducive benefit and not a transaction carried out at arm’s length.165Lastly, it must be noted, in view of the considerations set out in the preceding paragraphs, that it has not been established that the benefit in question is insignificant, that is to say, of an amount insufficient to be regarded as a significant inducement to accept the anticompetitive clauses contained in the settlement agreement (see paragraph 147 above).166That conclusion cannot be called into question by the applicant’s other arguments.167First, in the response to the Letter of Facts, Biogaran claimed that ‘the absence of reimbursement of the amounts [which it had] paid … in the event of a failure to obtain marketing authorisations was intentional on the part of Niche and was aimed at ensuring [that Biogaran do] what was required to obtain such marketing authorisations so as to generate a profitable turnover for Niche’.168However, that argument, reproduced by Biogaran in its application, cannot be accepted. The structure of that agreement provides no guarantee that Biogaran would apply for marketing authorisations and obtain supplies from Niche, since the payment was to be paid to Niche before it knew whether Biogaran was going to obtain the marketing authorisations. The Commission rightly points out that Biogaran’s contractual obligations did not include the obligation to apply for marketing authorisations on the basis of the transferred dossiers (Clauses 2.2 and 3 of the Biogaran agreement). Moreover, even if Biogaran did not obtain the marketing authorisations within 18 months from the date of the entry into force of the agreement, the agreement had to be automatically terminated and neither party had the right to compensation. Furthermore, Biogaran was not subject to any exclusivity, since it could apply for marketing authorisations on the basis of dossiers other than those transferred by Niche.169Although Biogaran referred, in its response to the Letter of Facts, to other agreements signed by it, which did not contain a reimbursement clause, those agreements contained payments in several instalments and the payments were considerably lower than the single payment of GBP 2.5 million at issue in the present case.170Secondly, the applicant claims that the Biogaran agreement was intended to ensure that it had a second source of supply for product A.171That argument cannot be accepted.172The applicant had already signed an agreement with company A. for the supply of product A in December 2004, before the agreement at issue. Similarly, following an audit in March 2005 of Niche’s product dossier relating to product A in the form of 10 mg tablets, a form and dosage which were not covered by the agreement with company A., Biogaran noted that the dossier was very weak from an analytical perspective. Thus, the Commission rightly argues that, in view of those elements, it is surprising that Biogaran agreed to pay a considerably higher amount for that dossier than for the dossier of company A. Although Biogaran states that product A has generated for it a turnover of more than EUR 79 million since 2007, it is apparent from recital 569 of the contested decision, which Biogaran does not dispute, that Biogaran’s overall turnover from the Biogaran agreement remained below EUR 200000.173Thirdly, as regards the product B dossier, Biogaran does not dispute that in 2001 Biogaran itself concluded with Bioglan (now Niche) a commercial agreement concerning the compound for product B 5 mg and 10 mg which, unlike the Biogaran agreement, provided for a refundable payment in the event of a failure to obtain marketing authorisations. It should be noted that the fact that the Biogaran agreement did not provide such a refund guarantee, as provided for in the previous agreement between Bioglan and Biogaran, confirms that the transfer of the product B dossier was not a transaction carried out at arm’s length.174Fourthly, as regards the product C dossier, Biogaran acknowledges that Niche’s product dossier was not used and that Biogaran continued its business relationship with Disphar. Similarly, although the Biogaran agreement had already been terminated because of the failure to obtain marketing authorisations, that dossier was transferred only in January 2007, that is to say after Niche had already received the whole payment, which was non-refundable. The Commission rightly argues that it is not credible that Biogaran paid such a large amount when it had for several years had a supply contract with Disphar and that the mere fact that the renewal of the Disphar agreement was uncertain did not justify such a transaction.175Moreover, even assuming that Biogaran also pursued legitimate objectives by acquiring Niche’s product dossiers, it must be borne in mind that the mere fact that an agreement also pursues legitimate objectives is not sufficient to preclude a finding of restriction of competition by object (see, to that effect, judgments of 8 November 1983, IAZ International Belgium and Others v Commission, 96/82 to 102/82, 104/82, 105/82, 108/82 and 110/82, EU:C:1983:310, paragraph 25; of 6 April 2006, General Motors v Commission, C‑551/03 P, EU:C:2006:229, paragraph 64; and of 20 November 2008, Beef Industry Development Society and Barry Brothers, C‑209/07, EU:C:2008:643, paragraph 21).176Finally, the applicant submits that the Commission has not established the existence of anticompetitive intentions on the part of Biogaran.177In that regard, it is apparent from recital 577 of the contested decision, which is not seriously challenged by Biogaran, that the payments provided for by the settlement agreements concluded by Servier with Niche and Matrix were negotiated and divided equally between Niche and Matrix, although Matrix wished to receive more than Niche. The Commission rightly argues that the Biogaran agreement made it possible, under the guise of a seemingly ordinary transaction, to increase the contribution paid by the Servier group to Niche while excluding Matrix. Niche also confirmed that the amount of GBP 2.5 million formed part of the GBP 15.7 million ‘total overall compensation’ negotiated between Niche and Servier (recital 560 of the contested decision). Although the Commission does not put forward additional evidence on the reasons prompting Servier to use Biogaran to induce Niche, the evidence gathered by the Commission constitutes a conclusive set of indicia of the existence of an inseparable link between the payment of GBP 2.5 million and the main payment made by Servier to Niche under the settlement agreement.178In any event, it must be pointed out that the parties’ intention is not a necessary factor in determining whether a type of coordination between undertakings is restrictive (judgment of 19 March 2015, Dole Food and Dole Fresh Fruit Europe v Commission, C‑286/13 P, EU:C:2015:184, paragraph 118).179It follows from the foregoing that the Commission correctly concluded that the payment of GBP 2.5 million to Niche under the Biogaran agreement constituted an additional inducive benefit.180It should be added that the additional inducement is sufficiently decisive in that it had a determining influence on Niche’s decision not to enter the perindopril market. The Commission noted, in recital 577 of the contested decision, without this being seriously challenged, that the amounts which were the subject matter of the settlements concluded by Servier with Niche and Matrix, respectively, were originally divided equally, but that the payment from Biogaran to Niche ultimately made it possible to increase the contribution paid by the Servier group to Niche without Matrix being aware of this. Moreover, Niche itself confirmed that the additional payment formed part of the ‘total overall compensation’ which it had negotiated with Servier. In the light of that evidence, it must be concluded that, without the Biogaran agreement, Niche would probably not have entered into the settlement agreement. Therefore, it is the combined actions of Servier and its subsidiary which allowed a restriction of competition to occur.181That finding alone supports the conclusion that there was a restriction of competition by object in which Biogaran directly participated. The fact that Biogaran was not a competitor of Niche at the material time, even if it were established, has no bearing on that conclusion. As the Court of Justice has held, a company may participate in a cartel without necessarily operating on the market affected by the restriction of competition (see, to that effect, judgment of 22 October 2015, AC-Treuhand v Commission, C‑194/14 P, EU:C:2015:717, paragraph 34).182The applicant’s argument that the Biogaran agreement does not contain an anticompetitive clause cannot be relied upon in the light of the foregoing evidence. That fact does not have the effect of depriving the agreement of its true nature as a restriction, inasmuch as the purpose of that agreement is to act as a supplement to the settlement containing such clauses.183Lastly, the fact that the Commission did not take into account the payment of GBP 2.5 million in the calculation of the amount of the fine imposed on Niche is not such as to establish that the Biogaran agreement did not constitute an additional transfer of value aimed at inducing Niche to conclude the settlement. The Commission, in response to a question from the Court, explained that it was not necessary to take into account that amount in order to ensure the deterrent effect of the fine imposed on Niche, particularly in view of Niche’s modest size and situation. Even assuming that the failure to take that amount into account in calculating the amount of Niche’s fine is merely the result of an oversight on the part of the Commission, that omission remains, in any event, immaterial to the finding, reasonably made in that decision, that the Biogaran agreement supports the restriction of competition resulting from the settlement agreement.184It follows from all the foregoing that the present plea must be rejected. B. The plea alleging errors of law in that the contested decision fails to establish that Biogaran participated in any infringement of the competition rules (a) The unlawful nature of the Biogaran agreement 185The applicant argues that the Biogaran agreement itself does not, by the Commission’s own admission, constitute an infringement. The terms of that agreement were not the subject of any criticism in the contested decision, which, moreover, only devotes six pages to that agreement. Accordingly, Biogaran was penalised for an agreement which does not involve any restriction of competition, with the result that the mere fact that Biogaran was a signatory to that agreement could not be penalised on the basis of Article 101 TFEU. Biogaran’s liability is strictly linked to the allegedly unlawful nature of the settlement, of which it was not a signatory, even though the contested decision acknowledges, in recital 1351, that ‘the settlement agreement and the Biogaran agreement are separate legal acts’.186Relying on the Opinion of Advocate General Wahl in AC-Treuhand v Commission (C‑194/14 P, EU:C:2015:350), the applicant claims that, in order to be a party to a cartel the object or effect of which is to restrict competition, the undertaking in question must represent a competitive pressure for the other cartel members, which is not the case here, since Biogaran was not a competitor of Niche at the material time.187The Commission takes the view that the Biogaran agreement cannot be examined independently of the settlement from which it is inseparable. The Commission has already shown, in recitals 1351 and 3011 of the contested decision, that that agreement served to support the transfer to Niche of an additional amount of GBP 2.5 million in consideration for the commitments made by Niche in the settlement between Servier and Niche.188That payment contained in the Biogaran agreement constitutes direct participation by Biogaran in the cartel, even though the terms of that agreement are not at issue. The Commission adds that that amount constitutes an additional inducement offered to Niche in order to convince it to adhere to the settlement. The fact that that amount was paid in the context of a licensing agreement does not deprive it of its nature as a supplement to the payment of GBP 11.8 million made in the context of the settlement. Similarly, the fact that the Biogaran agreement relates to compounds distinct from those forming the subject matter of the settlement and that it may have had some operational utility, which was never established, does not deprive the payment of its nature as a direct inducement. (b) Imputing to the subsidiary liability for the parent company’s acts 189The applicant submits that the contested decision imputes to the applicant liability for an alleged infringement connected with the conclusion by its parent company of an agreement to which the applicant is not a party and of whose contents it was unaware. Such an approach is contrary to the principle of personal responsibility, which, according to the case-law, should be interpreted strictly. Given its separate legal personality, the applicant argues that it could not be held liable for the infringement allegedly committed by Servier, unless it is established that the applicant was a co-perpetrator or beneficiary of the alleged cartel.190The applicant notes that it stated, in its responses to the Statement of Objections, that it acted autonomously on the market by means of directors, premises, brands, activities and assets distinct from those of Servier, which operates as an originator company whereas Biogaran is, by contrast, a generic company. The applicant points out that, since it is neither the parent company nor the shareholder of Niche or Servier, it consequently had no right or means of control over the commercial policy or strategy of the parties to the settlement agreement allegedly contrary to Article 101 TFEU.191In that regard, the applicant complains that the Commission established, in breach of the principle of legality, a presumption of liability of the subsidiary for the acts of the parent company, thus infringing the principle that penalties should be applied solely to the offender as guaranteed by the Article 6(2) of the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, and by Article 48 of the Charter of Fundamental Rights.192The Commission contends that it did not, in the contested decision, seek to impute to the subsidiary liability for the acts of the parent company. The Commission argues that Biogaran is held liable for its direct participation in the infringement committed by Servier. It is the combined action of Servier (the signing of the settlement) and its subsidiary (the signing of the licensing agreement) which made it possible to block the entry into the market of Niche’s generic products, for the benefit of the Servier group as a whole.193The Commission points out that it did not argue that Biogaran was liable on the basis of the absence of control or supervision. It held Biogaran liable on the basis of its direct participation in the infringement and took into account its membership of the Servier group in order to hold its parent company jointly and severally liable.194The Commission argues that the conduct of a subsidiary may be imputed to the parent company in particular where, although having a separate legal personality, that subsidiary does not decide independently upon its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company. The Commission adds that, in the case where a parent company has a 100% shareholding in a subsidiary which has infringed competition law, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary. According to the Commission, in such a context, the parent company and the subsidiary must be held jointly and severally liable for the payment of a fine for that infringement.195The Commission adds that, although the settlement agreement between Servier and Niche and the Biogaran agreement are separate acts, they are nevertheless indissociable in that both have the purpose of making, on the same day, a substantial payment to Niche in consideration for commitments not to enter the perindopril market (recitals 1351 and 3011 of the contested decision). The two entities pursued the same objective, their conduct was concerted and they behaved as a single economic entity, not only on the market but also for the purpose of the infringement.196The Commission is of the view that the context of the Biogaran agreement made it possible to establish that Biogaran could not be unaware that the payment formed part of the settlement, the objective of which was the exclusion of Niche from the perindopril market. The Biogaran agreement is an element of the common plan of the single economic entity and the fact that the Biogaran agreement does not reproduce the non-marketing and non-challenge clauses of the settlement does not deprive the Biogaran agreement of its true nature, that is to say as an additional inducement intended to exclude Niche from the perindopril market. (c) Biogaran’s knowledge of Servier’s unlawful conduct 197The applicant states that, at the material time, it was not aware of the content of the settlement and could not therefore foresee the anticompetitive nature of that transaction.198On the basis of the case-law, the applicant argues that ‘in order to hold a company liable for a single and continuous infringement, awareness (proved or presumed) of the offending conduct of the other participants in the cartel is required’. The Commission is claimed to have wrongly disregarded the standard of proof laid down by the case-law, in that it stated in the contested decision that it was ‘not necessary to prove Biogaran’s awareness of the anticompetitive nature of the settlement agreement’.199Moreover, the applicant takes the view that, according to the case-law, the existence of an objective link between the infringement and the agreement is not sufficient to enable the Commission to impute the infringement to Biogaran. The Commission must establish that the undertaking was aware of the existence of the infringement or could reasonably foresee it. The Commission distorted the facts and disregarded the case-law referred to above by considering that ‘Biogaran was in a position to understand that the Biogaran agreement was related to the … settlement agreement’.200The applicant adds that, even if the Commission were able to show that the agreements were linked and that Biogaran could not be unaware of that link, this does not mean that the applicant was aware of or could reasonably foresee the content of the settlement. In that regard, the contested decision did not demonstrate that Biogaran was aware both of the allegedly anticompetitive objective of the settlement and of the essential features of that settlement, an awareness which cannot be presumed.201The applicant emphasises that it could not have been aware of the allegedly unlawful nature of the settlement, in that there was at the material time (2005) no precedent in accordance with which such a settlement agreement was unlawful. Relying on an opinion of Sir Francis Jacobs, the applicant argues that, at the material time, it was impossible for anyone to conceive of the analytical approach presented by the Commission in the Statement of Objections.202Finally, the applicant raises the inadmissibility of certain arguments relied on by the Commission, at the stage of the defence, in support of the claim that Biogaran could not be unaware of Servier’s ‘actual conduct’.203The Commission argues that Biogaran could reasonably foresee the actual conduct planned by the other participants in the collusive practice and that it was prepared to take the risk. The Commission considers that awareness or knowledge which a party to the cartel has of its own participation in an infringement of Article 101 TFEU cannot be interpreted in the same way when its partner in a foreclosure operation is its parent company. In such a case, the subsidiary is unable to act in a context other than that determined by its parent company, that is to say, in the present case, the implementation of a far-reaching anti-generic strategy. In that context, Biogaran could reasonably have foreseen that a payment to a producer of generic products in the process of entering the market could have no other objective than the foreclosure of that producer from the market. There is then no plausible explanation for the payment other than the intention to offer Niche an additional inducement to conclude the settlement agreement.204The Commission also claims that awareness of the unlawful nature of the operation is all the more certain since Servier’s lawyers were involved in the preparation of the Biogaran agreement or were recipients of it. Moreover, the allegations of denigration made by Sandoz AG against Biogaran in 2008 also attest to Biogaran’s involvement in Servier’s anticompetitive strategy. Similarly, the fact that Biogaran played an intermediary role in 2006 in establishing an allegedly anticompetitive settlement between Servier and Lupin supports the Commission’s claim that Biogaran was aware of Servier’s actual conduct.205Finally, the Commission relies on the negotiations between Niche and Matrix relating to the amounts paid to them by Servier in consideration for the settlement, in support of its argument that Biogaran could not be unaware of the aim pursued simultaneously by the settlement and the Biogaran agreement. Indeed, Niche confirmed that the payment was part of the GBP 15.7 million ‘total overall compensation’ negotiated between Niche and Servier.206It is necessary to note the decisive grounds relied on by the Commission in the contested decision in order to reach the conclusion, first, that the Biogaran agreement was an additional inducement for Niche to conclude the settlement agreement, which could be classified as a restriction of competition by object (recitals 1369 and 3011 of the contested decision), and, secondly, that Biogaran could be held jointly and severally liable with Servier for the entire period of that infringement (recitals 3006, 3012 and 3145 of the contested decision).207The Commission considered that the amount paid by Biogaran to Niche in consideration for the purchase of the product dossiers constituted an additional inducement for Niche, contributing to Niche’s exclusion from the perindopril market. According to the Commission, Niche’s commitment not to enter the perindopril market was made possible by an inducement taking the form, on the one hand, of a payment by Servier in the context of the settlement with Niche and, on the other hand, of a further payment made directly by Biogaran, a subsidiary of Servier, in the context of the Biogaran agreement.208The applicant disputes those assessments. It argues that the Commission disregarded the principle of personal responsibility by imputing to it liability for an agreement concluded by its parent company. It maintains that the Biogaran agreement does not constitute an infringement of Article 101 TFEU and that it was unaware both of the conduct of its parent company and of the unlawful nature of the settlement concluded between its parent company and Niche.209As a preliminary point, it must be pointed out that, contrary to what the applicant claims, the Commission did not, in the contested decision, impute to Biogaran the acts alleged against its parent company. In recital 1349 of the contested decision, the Commission considered that Servier had provided to Niche an additional inducement through the Biogaran agreement. In recital 3011 of that decision, the Commission stated that, although it was not necessary to prove Biogaran’s knowledge of the anticompetitive nature of the settlement agreement, there were several elements showing that Biogaran was in a position to understand that the Biogaran agreement was related to the settlement and that, by that agreement, Biogaran had directly participated in the infringement. As the Commission observes in the defence, it in no way sought to impute to Biogaran the acts alleged against its parent company.210The Commission stated, in recital 3007 of the contested decision, that Servier wholly owned its subsidiary at the time of the signature of the agreement and therefore formed a single undertaking with its subsidiary. Similarly, the Commission found Biogaran jointly and severally liable, in that the Biogaran agreement and the settlement agreement had been ‘concluded between the same undertakings’, namely the Servier group, on the one hand, and Niche and Unichem, on the other hand (recital 1351 and footnote 1898 of the contested decision).211In that regard, the Court notes that the Courts of the European Union have not, to date, ruled on the question of the conditions under which the Commission may hold a subsidiary jointly and severally liable where, as in the present case, that subsidiary participated directly in the unlawful conduct of its parent company.212It follows from settled case-law that the concept of an undertaking covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed. In that regard, the Court of Justice has stated, on the one hand, that, in the same context, the term ‘undertaking’ must be understood as designating an economic unit even if in law that economic unit consists of several natural or legal persons and, on the other hand, that when such an economic entity infringes the competition rules, it falls, according to the principle of personal responsibility, to that entity to answer for that infringement (see judgment of 20 January 2011, General Química and Others v Commission, C‑90/09 P, EU:C:2011:21, paragraphs 34 to 36 and the case-law cited).213In the specific case where a parent company has a 100% shareholding in a subsidiary which has infringed competition law, there is a rebuttable presumption that the parent company does in fact exercise a decisive influence over the conduct of its subsidiary (judgment of 10 September 2009, Akzo Nobel and Others v Commission, C‑97/08 P, EU:C:2009:536, paragraph 60). Thus, it is sufficient for the Commission to prove that the subsidiary is wholly owned by the parent company in order to presume that the parent company exercises decisive influence over the subsidiary’s commercial policy (judgment of 29 March 2011, ArcelorMittal Luxembourg v Commission and Commission v ArcelorMittal Luxembourg and Others, C‑201/09 P and C‑216/09 P, EU:C:2011:190, paragraph 98).214This is the case here. Biogaran was a wholly owned subsidiary of Servier at the time of the conclusion of the Biogaran agreement and the presumption arising from that finding has not been rebutted (see, to that effect, judgment of 10 September 2009, Akzo Nobel and Others v Commission, C‑97/08 P, EU:C:2009:536, paragraphs 60 to 65). It should be pointed out that Biogaran has not demonstrated that it decided its commercial policy independently of Servier. The evidence discussed above concerning the existence of an inseparable link between the two agreements confirms Servier’s decisive influence over Biogaran’s conduct and the actual use of that power. In order to illustrate Biogaran’s independence of Servier, the applicant argues that Biogaran’s directors have never held positions at Servier. However, that evidence cannot rebut the presumption that Servier actually exercises a decisive influence over Biogaran (see, to that effect, judgment of 16 September 2013, Roca v Commission, T‑412/10, EU:T:2013:444, paragraph 76). As regards the other circumstances alleged by the applicant, showing that it was operating independently on the market — by means of premises, brands and assets distinct from those of Servier — and also as a generic company, they illustrate only that Biogaran is a legal person separate from Servier but cannot rebut the presumption that Servier exercises a decisive influence over Biogaran.215Biogaran was therefore, at the time of the conclusion of the Biogaran agreement and of the settlement agreement between Servier and Niche, the subsidiary of Servier and constituted with its parent company one and the same undertaking for the purposes of competition law.216The Commission was therefore entitled, in application of the concept of ‘undertaking’, to consider that Servier and Biogaran were jointly and severally liable for the conduct which was alleged against them, since the acts committed by each were accordingly deemed to have been committed by one and the same undertaking (see, to that effect, judgments of 20 March 2002, HFB and Others v Commission, T‑9/99, EU:T:2002:70, paragraphs 524 and 525, and of 12 December 2007, Akzo Nobel and Others v Commission, T‑112/05, EU:T:2007:381, paragraph 62; see also, to that effect and by analogy, judgments of 6 March 1974, Istituto Chemioterapico Italiano and Commercial Solvents v Commission, 6/73 and 7/73, EU:C:1974:18, paragraph 41, and of 16 November 2000, Metsä-Serla and Others v Commission, C‑294/98 P, EU:C:2000:632, paragraphs 26 to 28).217The fact that, in the present dispute, the infringement of Article 101 TFEU found by the Commission results, in part, from the conduct of the parent company and, in part, from the conduct of the subsidiary, whereas in the situations of joint and several liability between a parent company and its subsidiary most often brought before the Courts of the European Union the infringement results solely from the conduct of the subsidiary, is not such as to call into question that conclusion.218If it is possible to impute to a parent company liability for an infringement committed by its subsidiary and, consequently, to make both companies jointly and severally liable for the infringement committed by the undertaking which they comprise, without infringing the principle of personal responsibility, the same applies a fortiori where the infringement committed by the economic entity comprising a parent company and its subsidiary results from the combined conduct of both those companies.219As the Commission rightly points out, the contested decision could have been addressed to Servier based on its joint liability for the infringement committed by Biogaran, even if there were no evidence that Servier had had any involvement in the infringement. A fortiori, the contested decision could have been addressed to Servier as the parent company and to its subsidiary, based on their joint and several liability, since each company played a direct part in the infringement.220The Commission therefore correctly considered that the Biogaran agreement and the settlement agreement between Servier and Niche were concluded between the same undertakings, namely the Servier group, on the one hand, and Niche, on the other hand, and that the infringement of Article 101 TFEU was to be imputed to the Servier group, thereby justifying the finding that Servier as the parent company and its subsidiary Biogaran were jointly and severally liable, the respective conduct of each having contributed to the infringement. That conclusion is all the more necessary since the conduct of the two companies is closely related because of the inseparable links, established by the Commission, between the Biogaran agreement and the settlement agreement between Servier and Niche.221Biogaran cannot claim that it should not be found jointly and severally liable for the infringement on the ground that it was unaware of the conduct of its parent company.222In the first place, that complaint is based on the erroneous assumption that Biogaran was held liable for an infringement which its parent company committed. However, as has just been stated, that assumption has no basis in fact or in law.223In the second place, it should be recalled that the decisive influence which a parent company exercises over its wholly owned subsidiary supports the presumption that the acts of the subsidiary are carried out in the name and on behalf of the parent company and, consequently, of the undertaking which they comprise. Since the Court has held, as is apparent from the response to the preceding plea, that Biogaran had not pursued a genuine commercial interest in concluding the Biogaran agreement and had not implemented an autonomous strategy, outside the control of its parent company, the Commission was entitled to find that the Biogaran agreement, as an additional inducement for Niche to accept the settlement, was one of the components of the infringement in which Biogaran had directly participated, without it being necessary to show that Biogaran was aware of Servier’s conduct or overall plan or of the characteristics of the infringement.224Moreover, the applicant is wrong to rely on the judgment of 2 October 2003, Aristrain v Commission (C‑196/99 P, EU:C:2003:529, paragraph 99). That case concerned not a relationship between a parent company and its wholly owned subsidiary, but a holding by the same person or family in the share capital of two separate commercial companies, a circumstance which was considered insufficient by the Courts of the European Union, as such, to establish the existence, between those two companies, of an economic unit, with the result that, under EU competition law, the conduct of each may be imputed to that economic unit. Similarly, the references to the judgments of 8 July 2008, AC-Treuhand v Commission (T‑99/04, EU:T:2008:256), of 30 November 2011, Quinn Barlo and Others v Commission (T‑208/06, EU:T:2011:701), and of 10 October 2014, Soliver v Commission (T‑68/09, EU:T:2014:867), are not relevant, since they are unrelated to the context of the parent-subsidiary relationship and of an economic unit.225In the third place, if, as the applicant claims, the Commission had to prove that the subsidiary was aware of the parent company’s conduct in order to impute the infringement to the group, this would have an effect on the concept of economic unit. It would be necessary to establish, for each component of the infringement resulting from the conduct of one or other of those two companies, that the subsidiary was aware of the objectives pursued by the parent company, whereas the very concept of undertaking within the meaning of EU competition law presupposes, through the presumption that the parent company exercises a decisive influence over the wholly owned subsidiary, that the subsidiary acts within the framework of the objectives pursued by the parent company, under the parent company’s direction and control. As the Court of Justice has held, the condition for the attribution of various anticompetitive acts constituting the cartel as a whole to all the parts of the undertaking is satisfied where each part of that undertaking has contributed to its implementation, even in a subsidiary, accessory or passive role (see, to that effect, judgments of 26 January 2017, Duravit and Others v Commission, C‑609/13 P, EU:C:2017:46, paragraphs 117 to 126, and of 8 July 2008, AC-Treuhand v Commission, T‑99/04, EU:T:2008:256, paragraph 133).226If the applicant’s argument were accepted, the finding of infringements of competition law in groups of companies would be made more difficult, whereas the presumption of control by the parent company of its wholly owned subsidiary seeks to prevent unlawful conduct from being attributed only to the subsidiaries which are directly responsible for it and from thereby going unpunished at the level of the group. It would be sufficient for a parent company to apportion the unlawful conduct between itself and its subsidiary and to argue that the subsidiary was unaware of the parent company’s conduct in order for the part of the infringement resulting from the subsidiary’s direct participation in the infringement to be imputed only to the subsidiary. This would render action to combat anticompetitive practices less effective, which cannot be justified by observance of the principle of personal responsibility for infringements.227It follows from the foregoing that the applicant’s line of argument that the Commission, in breach of the principle of personal responsibility, wrongly imputed to the applicant liability for the unlawful conduct of its parent company therefore has no basis in either fact or law. Not only did the Commission not impute to Biogaran the infringement alleged against its parent company, since the infringement was imputed only to the Servier group, but the Commission also rightly considered that it was not necessary to establish that Biogaran was aware of the conduct of its parent company.228Contrary to what the applicant argued at the hearing in support of the plea which it raised on that occasion, alleging an inadequate statement of reasons and a contradiction in the reasoning vitiating the contested decision, that decision is free from such defects. It is clear from that decision, in particular recitals 1349, 3007 and 3011 thereof, that the Commission considered that the entity responsible for the infringement was the undertaking, within the meaning of Article 101 TFEU, comprising Servier and its wholly owned subsidiary Biogaran and that it was not necessary to prove Biogaran’s knowledge of the anticompetitive nature of the settlement agreement in order to impute liability for the infringement to the ‘undertaking’. Although it is true, as Biogaran noted at the hearing, that the Commission, in its pleadings, stated that it was possible to presume that Biogaran was aware of Servier’s conduct and that such an analysis is debatable in that a subsidiary cannot be presumed, in principle, to be aware of the conduct of its parent company, no such ground is included in the contested decision, which merely concludes that Biogaran, a wholly owned subsidiary of Servier, is presumed to act under the influence and control of Servier and finds that there is evidence to indicate Biogaran’s direct involvement in an infringement committed by the single economic entity concerned.229For the sake of completeness, even if the Commission were required to establish that Biogaran was aware of Servier’s conduct and of the unlawful nature of the settlement agreement between Servier and Niche, it is apparent from the documents before the Court that such evidence was adduced to the requisite legal standard by the Commission.230It should first be recalled that the undertaking may have participated directly in only some of the forms of anticompetitive conduct comprising the single and continuous infringement, but have been aware of all the other unlawful conduct planned or put into effect by the other participants in the cartel in pursuit of the same objectives, or could reasonably have foreseen that conduct and have been prepared to take the risk. In such cases, the Commission is also entitled to attribute liability to that undertaking in relation to all the forms of anticompetitive conduct comprising such an infringement and, accordingly, in relation to the infringement as a whole (see judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 158 and the case-law cited; judgment of 26 January 2017, Duravit and Others v Commission, C‑609/13 P, EU:C:2017:46, paragraph 119).231On the other hand, if an undertaking has directly taken part in one or more of the forms of anticompetitive conduct comprising a single and continuous infringement, but it has not been shown that that undertaking intended, through its own conduct, to contribute to all the common objectives pursued by the other participants in the cartel and that it was aware of all the other offending conduct planned or put into effect by those other participants in pursuit of the same objectives, or that it could reasonably have foreseen all that conduct and was prepared to take the risk, the Commission is entitled to attribute to that undertaking liability only for the conduct in which it had participated directly and for the conduct planned or put into effect by the other participants, in pursuit of the same objectives as those pursued by the undertaking itself, where it has been shown that the undertaking was aware of that conduct or was able reasonably to foresee it and prepared to take the risk (see judgment of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 159 and the case-law cited; judgment of 26 January 2017, Duravit and Others v Commission, C‑609/13 P, EU:C:2017:46, paragraph 120).232In the present case, the Commission established that Biogaran was aware that the Biogaran agreement was intended to contribute to achieving the objective of excluding Niche from the market. By the evidence which it gathered, referred to in recital 1351 of the contested decision, relating to the inducive nature of the Biogaran agreement, and which could not reasonably be called into question by Biogaran in the context of the plea alleging distortion of the facts, the Commission — stating also that Biogaran, a wholly owned subsidiary of Servier, could not act autonomously — demonstrated that the Biogaran agreement could be assessed only as an additional inducement to Niche: Biogaran could not be unaware of the nature of that inducement.233As is apparent from the examination of the plea alleging the distortion of the facts, Biogaran has put forward no plausible explanation justifying the conclusion of that agreement in conjunction with the settlement agreement between Servier and Niche. Nor can it reasonably argue that it was unaware of the unlawful nature of those agreements. Indeed, it was obvious to the negotiators of those agreements that the objective of excluding Niche from the market, achieved in exchange for substantial payments, was restrictive in nature.234It follows from all the foregoing that the present plea must be rejected, without it being necessary to take into consideration the arguments put forward by the Commission in its defence, relating to facts subsequent to the signature of the Biogaran agreement. C. The plea alleging that the Commission erred in law by imposing a fine on Biogaran (a) The unprecedented, unpredictable and complex nature of the case 235On the basis of the principle that offences and penalties must have a proper legal basis, as laid down in Article 7 of the Convention for the Protection of Human Rights and Fundamental Freedoms and in Article 49 of the Charter of Fundamental Rights, the applicant argues that the Commission may impose penalties only in relation to practices defined as being in the nature of an infringement at the material time. Similarly, it adds that, in accordance with the Commission’s decision-making practice, a fine cannot be imposed where the infringements found are relatively new in nature and where, at the material time, there was no precedent clearly establishing the unlawful nature of the type of conduct in question or where a new approach has been adopted in terms of the principles established.236Furthermore, the applicant takes the view that the Commission could not impose a fine for practices whose classification was unclear at the material time. The contested decision is based on an unprecedented and unforeseeable criticism of the settlement agreement between Servier and Niche. The applicant argues that there existed, at the material time, no precedent and, consequently, that Biogaran could not have suspected that such a settlement agreement would be classified as unlawful.237The Commission points out that the wording of the infringements provided for in Article 101 TFEU literally suggests that the practices in question, namely the exclusion of a competitor from a market in exchange for a transfer of value, are anticompetitive. The Commission refers to the relevant sections of the contested decision in order to assert that it was common ground at the time of the agreements that practices aiming at excluding competitors from the market were likely to be considered anticompetitive (recital 3092 of the contested decision).238The Commission maintains that the discussions within Servier at the material time concerning the compatibility of the settlement with competition law clearly show an awareness of the potentially anticompetitive nature of the agreements.239Finally, the fact that the legal advisors of the parties to the agreements did not identify any risk of infringement cannot have the effect of exempting the undertaking from a fine, since that undertaking could not be unaware of the anticompetitive nature of that conduct. (b) The disproportionate nature of the fine 240The applicant claims, in any event, that the amount of the fine is manifestly disproportionate in the light of the minor role played by Biogaran in bringing about the alleged infringement. On the basis of the case-law, the applicant emphasises that the fact that an undertaking did not participate in all the constituent elements of a cartel or that it played a minor role in the aspects in which it was involved must be taken into account when assessing the gravity of the infringement and, where appropriate, in determining the amount of the fine.241By imposing a penalty without taking into account Biogaran’s limited contribution to the alleged infringement, the Commission manifestly infringed the principles of proportionality and equal treatment. Indeed, the severity of the fine infringes the principle of equal treatment, which requires that comparable situations are not treated differently and that different situations are not treated in the same way, unless such treatment is objectively justified.242Thus, by imposing on Biogaran jointly and severally the whole of the fine imposed on its parent company, even though the objective circumstances characterising the participation of the two companies were not comparable, the Commission infringed the principle of equal treatment. While Servier is being penalised for anticompetitive conduct, the Commission is penalising Biogaran for an act which is not in itself restrictive of competition. Moreover, even assuming that the Biogaran agreement forms part of the allegedly anticompetitive settlement agreement, the transfer of value to Niche complained of by the Commission amounts to a total of GBP 13.8 million, of which Biogaran contributed only GBP 2.5 million.243Furthermore, the applicant states that the amount of the fine imposed on it for having indirectly participated in an allegedly anticompetitive agreement is so disproportionate that it greatly exceeds the total cumulative amount of the pecuniary penalties imposed on the other five generic companies (that is to say EUR 96.6 million), although they participated directly in the settlement agreements at issue.244Finally, the decision is vitiated by an error of law in that it uses for Biogaran the value of the sales of its parent company (EUR 476 million), although Biogaran did not itself have any sales. The applicant thus argues that, in accordance with the principle of equal treatment, the Commission should have applied to Biogaran the same reasoning as for the other generic companies. If the Commission had taken into account the value transferred under the agreement signed by Biogaran, that is to say GBP 2.5 million, the amount of the fine imposed on Biogaran would have been divided by more than 150.245The Commission responds that Biogaran did not act as an entity independent of and distinct from the Servier group. Biogaran acted as an integral part of the Servier group and it is therefore Servier as a whole which is held liable for the infringement. The Commission adds that Biogaran played a causal role as important as that of its parent company.246Finally, the Commission takes the view that the comparison between the fines of the generic companies and that of Biogaran is not relevant, since Biogaran acted as part of the same undertaking as Servier in this case. It acted as the producer of the originator product seeking to preserve its monopoly, a position distinct from that of the generic companies which agreed not to enter the market in return for a significant payment. (c) The 10% upper limit of the fine 247The applicant argues that the Commission infringed Article 23(2) of Regulation No 1/2003 by ordering Biogaran jointly and severally to pay a fine of EUR 131.5 million, that is to say almost 18% of its total turnover, for having allegedly ‘induced’ Niche to conclude the settlement agreement.248Relying on the case-law, the Commission argues that the ceiling of the amount of the fine must be calculated on the basis of the turnover of all the companies constituting the single economic entity acting as an undertaking for the purposes of Article 101 TFEU. The Commission did not therefore err in taking into account the turnover of the Servier group.249Finally, the Commission maintains that it is not possible to apply the method of calculating the generic companies’ fines to Biogaran’s fine. Biogaran acted in support of the patent holder and helped to pay a generic producer to induce it not to enter the market of Biogaran’s parent company, which is not comparable to the role played by the generic producers.250According to the case-law, the principle that offences and penalties must have a proper legal basis implies that legislation must define clearly offences and the penalties which they attract. That requirement is satisfied where the individual concerned is in a position to ascertain from the wording of the relevant provision and, if need be, with the assistance of the courts’ interpretation of it, what acts and omissions will make him criminally liable (see judgment of 22 October 2015, AC-Treuhand v Commission, C‑194/14 P, EU:C:2015:717, paragraph 40 and the case-law cited).251The principle that offences and penalties must have a proper legal basis cannot be interpreted as precluding the gradual, case-by-case clarification of the rules on criminal liability by judicial interpretation, provided that the result was reasonably foreseeable at the time the offence was committed, especially in the light of the interpretation put on the provision in the case-law at the material time (see judgment of 22 October 2015, AC-Treuhand v Commission, C‑194/14 P, EU:C:2015:717, paragraph 41 and the case-law cited).252The scope of the notion of foreseeability depends to a considerable degree on the content of the text in issue, the field it covers and the number and status of those to whom it is addressed. A law may still satisfy the requirement of foreseeability even if the person concerned has to take appropriate legal advice to assess, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. This is particularly true in relation to persons carrying on a professional activity, who are used to having to proceed with a high degree of caution when pursuing their occupation. Such persons can therefore be expected to take special care in evaluating the risk that such an activity entails (see judgment of 22 October 2015, AC-Treuhand v Commission, C‑194/14 P, EU:C:2015:717, paragraph 42 and the case-law cited).253It should be added that the need for professional advice appears all the more evident where, as was the case here, it is necessary to prepare and draft a licensing agreement in the context of the settlement of a dispute.254In that context, even though, at the time of the infringement found in the contested decision, the Courts of the European Union had not yet had the opportunity to rule specifically on settlement and licensing agreements of the type adopted by Servier, Niche and Biogaran, Biogaran should have expected, if necessary after taking appropriate legal advice, that the undertaking’s conduct to which it contributed by means of the Biogaran agreement would be declared incompatible with the EU competition rules, especially in the light of the broad scope of the terms ‘agreement’ and ‘concerted practice’ established by the case-law of the Court of Justice (see, to that effect, judgment of 22 October 2015, AC-Treuhand v Commission, C‑194/14 P, EU:C:2015:717, paragraph 43).255In particular, Biogaran could assume that the fact that its parent company required Niche to accept non-marketing and non-challenge clauses, by themselves restrictive of competition, rendered the inclusion of such clauses in a patent settlement agreement entirely illegitimate. Indeed, the inclusion of such clauses was not based on recognition by the parties to the agreements of the validity of the patent and thus indicated a misuse of the patent, unrelated to its specific purpose (judgment delivered today, Servier and Others v Commission, T‑691/14). Moreover, the applicant could also assume that providing an additional inducement to Niche by means of the Biogaran agreement was such as to reinforce the restrictive effects of the agreement concluded by its parent company. The applicant could therefore reasonably have foreseen that its conduct was caught by the prohibition laid down in Article 101(1) TFEU (see, to that effect, judgments of 22 October 2015, AC-Treuhand v Commission, C‑194/14 P, EU:C:2015:717, paragraph 46, and of 8 September 2016, Lundbeck v Commission, T‑472/13, under appeal, EU:T:2016:449, paragraph 764).256In addition, it should be noted that, well before the date of conclusion of the two agreements, there was case-law on the application of competition law in fields characterised by the presence of intellectual property rights (see, to that effect, judgment of 8 September 2016, Xellia Pharmaceuticals and Alpharma v Commission, T‑471/13, not published, under appeal, EU:T:2016:460, paragraphs 314 and 315).257Thus, the Court of Justice held, as early as 1974, that although the existence of rights recognised under the industrial property legislation of a Member State is not affected by Article 101 TFEU, the conditions under which those rights may be exercised may nevertheless fall within the prohibitions contained in that article and that this may be the case whenever the exercise of such a right appears to be the object, the means or the consequence of an agreement (judgment of 31 October 1974, Centrafarm and de Peijper, 15/74, EU:C:1974:114, paragraphs 39 and 40).258Next, since the judgment of 27 September 1988, Bayer and Maschinenfabrik Hennecke (65/86, EU:C:1988:448), it is clear that patent dispute settlements may be categorised as agreements within the meaning of Article 101 TFEU.259Moreover, it must be pointed out that, by the agreements at issue, Niche, Servier and Biogaran actually decided to conclude market exclusion agreements (judgment delivered today, Servier and Others v Commission, T‑691/14). Although it was only in a judgment delivered after the conclusion of the agreements at issue that the Court of Justice held that market exclusion agreements, in which the stayers are to compensate the goers, constitute a restriction of competition by object, it nonetheless made clear that that type of agreement conflicts patently with the concept inherent in the provisions of the Treaty relating to competition, according to which each economic operator must determine independently the policy which it intends to adopt on the market (judgment of 20 November 2008, Beef Industry Development Society and Barry Brothers, C‑209/07, EU:C:2008:643, paragraphs 8 and 32 to 34). In concluding an agreement such as the Biogaran agreement, the applicant could not, therefore, have been unaware of the anticompetitive nature of its conduct.260Indeed, although, because the agreement between Niche and Servier was concluded in the form of a patent settlement and the Biogaran agreement was presented as a licensing and supply agreement, the unlawful nature of those agreements might not have been evident to an outside observer such as the Commission, the same could not be said for the parties to the agreement.261In the light of all the foregoing considerations, it must be concluded that Biogaran, even though it was not active on the perindopril market affected by the restriction of competition, could reasonably foresee that the prohibition laid down in Article 101 TFEU was applicable to it.262That conclusion is not called in question by the other arguments submitted by the applicant.263In the first place, although the applicant refers to the existence of a legal opinion which it had requested from Sir Francis Jacobs, it does not adduce sufficient evidence for it to be possible to conclude that there was real uncertainty as to the unlawful nature of the Biogaran agreement and of the settlement agreement between Servier and Niche in the light of the EU rules on competition law. Although Sir Francis Jacobs’ opinion acknowledges that the Commission’s analysis is novel in nature and that an ‘analytical approach’ of that kind had never been applied by the Courts of the European Union, it takes the view that the Commission’s legal approach is well founded in principle.264Moreover, that legal opinion does not dispute that Article 101 TFEU literally suggests that the practices in question, namely the exclusion of a competitor, are not compatible with competition law. The Commission also rightly pointed out, in recital 597 of the contested decision, that the issue of the compatibility of the agreements at issue with competition law had given rise to uncertainty on the part of Servier.265In the second place, the argument alleging that the Commission has a practice of not imposing fines or imposing merely symbolic fines when it examines complex issues of law which have never been settled by the Courts of the European Union cannot be accepted. In spite of the novelty of some of the questions raised in the present dispute, Biogaran could not have been unaware in this case of the anticompetitive nature of Servier’s strategic plan (paragraphs 229 to 234 above) or of the fact that, since it is wholly owned by Servier, its conduct as a subsidiary was likely to be attributed to the undertaking comprising Servier and its subsidiary. Similarly, the Commission rightly states, in paragraph 80 of the rejoinder, that the length of the decision and the duration of the administrative procedure certainly reflect the complexity of the facts, but do not amount to proof of the unforeseeable nature of the infringement.266In any event, according to the case-law, the Commission has a margin of discretion when setting the amount of fines, in order that it may channel the conduct of undertakings towards compliance with the competition rules. The fact that in the past the Commission has applied fines of a particular level for certain types of infringements, on those occasions symbolic fines for infringements of an unprecedented nature, does not mean that it is precluded from increasing that level within the limits indicated in Regulation No 1/2003, if that is necessary to ensure the implementation of EU competition policy. The proper application of the European Union competition rules in fact requires that the Commission may at any time adjust the level of fines to the needs of that policy (judgment of 8 September 2016, Lundbeck v Commission, T‑472/13, under appeal, EU:T:2016:449, paragraph 773).267In the third place, the applicant cannot rely on the fact that its legal advisor provided an incorrect legal classification of its conduct forming the basis for the finding of the infringement. The error made by the advisor of the undertaking concerned cannot have the effect of exempting it from imposition of a fine in so far as it could not be unaware of the anticompetitive nature of that conduct (see, to that effect, judgment of 18 June 2013, Schenker & Co. and Others, C‑681/11, EU:C:2013:404, paragraph 37).268In the fourth place, contrary to what the applicant maintains, the clauses of the Biogaran agreement could be perceived by the signatories of that agreement only as an additional restriction of competition. Even though the applicant claims that the clauses of the agreement ‘are not at issue’, the applicant was in a position to understand that the agreement, in view of the fact that it contained atypical terms by comparison with other licensing agreements and provided no real consideration for the payment, had no objective other than to induce a potential competitor of Servier not to enter the perindopril market and, consequently, constituted an infringement of competition law.269It follows from all the foregoing that the present complaint must be rejected.270It should be noted that Biogaran’s criticisms of the amount of the fine imposed on it jointly and severally with its parent company, which it regards as disproportionate, are based on the assumptions, first, that the infringement committed by its parent company was imputed to Biogaran and, secondly, that it was on that basis penalised as a legal person separate from Servier, although its conduct was less serious than that of its parent company and its participation in the infringement was much more limited than that of its parent company.271Those assumptions are, as has been stated in response to the first plea, erroneous.272As the Commission rightly argues, Biogaran acted not as an entity independent of and distinct from the Servier group but as an integral part of that group, under the control of its parent company. Although the Commission found that Biogaran was directly involved in the infringement and noted the decisive nature of the Biogaran agreement in giving rise to the restrictive effects of the settlement agreement between Servier and Niche, it nonetheless did not hold Biogaran liable for the infringement as an autonomous legal person, distinct from the Servier group. The fine at issue is in fact imposed on the undertaking, within the meaning of Article 101 TFEU, comprising the subsidiary and its parent company, which are jointly and severally liable for the infringement and for the payment of the corresponding fine, and that fine is not intended to penalise the anticompetitive conduct attributable to each of those two companies as separate legal persons.273Joint and several liability of the subsidiary and parent company for payment of a fine — the basis of the operative part of the contested decision, Article 7(1)(b) of which covers Servier and Biogaran, jointly and severally liable for the payment of EUR 131532600 — cannot be interpreted as meaning that liability for an infringement committed by Biogaran’s parent company has been imputed to Biogaran.274Indeed, it must be borne in mind that joint and several liability for payment of a fine is merely the manifestation of an ipso jure legal effect of the concept of an ‘undertaking’, the designation of the entity which may be penalised by the Commission on account of an infringement of EU competition rules (judgments of 10 April 2014, Commission and Others v Siemens Österreich and Others, C‑231/11 P to C‑233/11 P, EU:C:2014:256, paragraph 57, and of 10 April 2014, Areva and Others v Commission, C‑247/11 P and C‑253/11 P, EU:C:2014:257, paragraphs 122 to 124). Companies may therefore be held jointly and severally liable for the payment of a fine in so far as they may be held personally responsible for participation in the infringement committed by the single undertaking which they constitute (judgment of 10 April 2014, Commission and Others v Siemens Österreich and Others, C‑231/11 P to C‑233/11 P, EU:C:2014:256, paragraph 49).275Moreover, it is irrelevant whether or not the personal liabilities incurred by companies by reason of their participation in the commission of the infringement are the same, since, during the period of the infringement, they constituted a single undertaking (judgment of 3 March 2011, Areva and Others v Commission, T‑117/07 and T‑121/07, EU:T:2011:69, paragraph 206). Furthermore, the Commission’s power to impose penalties cannot extend to the determination of the shares to be paid by each of those held jointly and severally liable from the perspective of their internal relationship (judgments of 10 April 2014, Commission and Others v Siemens Österreich and Others, C‑231/11 P to C‑233/11 P, EU:C:2014:256, paragraph 58, and of 10 April 2014, Areva and Others v Commission, C‑247/11 P and C‑253/11 P, EU:C:2014:257, paragraph 151). In addition, Biogaran stated at the hearing, in response to a question from the Court, that its parent company had paid the full amount of the fine referred to in Article 7(1)(b) of the contested decision.276In imposing the fine on the single economic entity constituted by the parent company and its wholly owned subsidiary and in taking into account the value of the sales made by the Servier group, the Commission thus acted in accordance with the settled case-law of the Courts of the European Union and did not err in law (see, to that effect, judgments of 19 March 2015, Dole Food and Dole Fresh Fruit Europe v Commission, C‑286/13 P, EU:C:2015:184, paragraphs 145 to 148 and the case-law cited, and of 23 January 2014, Evonik Degussa and AlzChem v Commission, T‑391/09, not published, EU:T:2014:22, paragraphs 129 to 135).277For the same reasons, the applicant cannot claim that the fine was imposed on it in breach of the principle of equal treatment.278Since neither Biogaran nor Servier is penalised for its conduct as a separate legal person, the comparison made between Servier’s situation and that of Biogaran is irrelevant.279Likewise, since Biogaran was held jointly and severally liable for payment of the fine only as an integral part of the single economic entity which it forms with Servier, its situation cannot be compared to the situation of the generic companies to which the contested decision was addressed. While the fine imposed on the Servier group is based on the value of the sales of that group, the fines imposed on those companies could not be calculated on the basis of that parameter, since those companies were not on the market at the time of the practices alleged against them (judgment delivered today, Servier and Others v Commission, T‑691/14).280Nor is it possible to uphold the complaint, raised by Biogaran at the hearing, that Niche was not penalised on the basis of the Biogaran agreement, since the Commission failed to take into account the payment of GBP 2.5 million in the calculation of Niche’s fine. That complaint was raised, in connection with the principle of equal treatment, only at the hearing and is therefore inadmissible, in the absence of justification for its presentation at that stage of the proceedings. Moreover, as has just been stated, Biogaran, a subsidiary of Servier, was not in a situation comparable to that of the generic companies which, like Niche, had concluded an agreement with Servier. Lastly, the fact, if it were established, that Niche was not penalised by the Commission cannot exempt Biogaran from its liability for the infringement committed by the undertaking of which it is a part.281282The applicant claims that the Commission infringed Article 23(2) of Regulation No 1/2003 by imposing on it a fine which amounts to more than 10% of its annual turnover and which uses the value of the sales of its parent company, Servier (that is EUR 476 million), even though Biogaran itself did not have any sales.283In that regard, it should be recalled that the ceiling provided for in Article 23(2) of Regulation No 1/2003 must be calculated on the basis of the total turnover of all the companies constituting the single economic entity acting as an undertaking for the purposes of Article 101 TFEU (see judgments of 8 May 2013, Eni v Commission, C‑508/11 P, EU:C:2013:289, paragraph 109 and the case-law cited, and of 11 July 2013, Team Relocations and Others v Commission, C‑444/11 P, not published, EU:C:2013:464, paragraphs 172 and 173 and the case-law cited; see also, to that effect, judgment of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraph 56).284The proportionality of a penalty must in particular be assessed in the light of the deterrent effect sought by its imposition and it is necessary to use that total amount, for the purposes of that assessment, in order to take into account the economic power of the undertaking concerned (see, to that effect, judgment of 20 January 2016, Toshiba Corporation v Commission, C‑373/14 P, EU:C:2016:26, paragraphs 83 and 84).285In the present case, it is apparent from the considerations set out above that the undertaking concerned comprised the applicant and its parent company, Servier, both of which together constitute one and the same economic entity (see paragraphs 206 to 234 above). Consequently, in accordance with the principles set out in paragraph 283 above, the Commission relied on the total turnover of the parent company of the Servier group over the period from 1 October 2012 to 30 September 2013 for the purposes of the application of the abovementioned limit of 10% of turnover (recital 3144 of the contested decision).286As that turnover amounts to a little over EUR 4 billion, the Court considers that the fine of EUR 131532600 imposed on the applicant, jointly and severally with its parent company, clearly did not exceed that limit.287Accordingly, the present complaint, as well as the present plea in its entirety, must be rejected.288In the light of all the foregoing considerations, the action must be dismissed in its entirety and, in view of all the facts of the case, the claims that the Court, in the exercise of its unlimited jurisdiction, should cancel the fine or reduce its amount must also be rejected. Costs 289Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission.On those grounds,THE COURT (Ninth Chamber)hereby: 1. Dismisses the action; 2. Orders Biogaran to bear the costs. GervasoniMadiseda Silva PassosDelivered in open court in Luxembourg on 12 December 2018.[Signatures]Table of contentsI. Background to the disputeA. Perindopril1. Compound patent2. Secondary patents3. Second generation perindoprilB. The applicantC. Niche’s activities in relation to perindoprilD. Disputes relating to perindopril1. Disputes before the EPO2. Disputes before the national courtsE. The settlements1. The agreements concluded between Niche, Unichem, Matrix and Servier2. The agreement concluded between Niche and BiogaranF. The sector inquiryG. The administrative procedure and the contested decisionII. Procedure and forms of order sought by the partiesIII. AdmissibilityA. The third head of claim, by which the applicant seeks to be granted the benefit of any annulment of the contested decision in the action brought by ServierB. The admissibility of certain annexes to the defence and of some evidence adduced in that pleading1. Arguments of the parties2. Findings of the CourtIV. SubstanceA. The plea alleging distortion of the facts in that the contested decision wrongly finds that the Biogaran agreement served as an additional inducement for Niche to conclude the settlement with Servier(a) The error of assessment in the analysis of the link between the Biogaran agreement and the settlement agreement(1) The chronology of the negotiations for the agreements(2) The legal link between the settlement agreement and the Biogaran agreement(3) The intention to induce Niche(b) The taking into account of the applicant’s commercial interest in concluding the Biogaran agreement(1) Product A(2) Product B(3) Product C(a) Preliminary remarks(b) The existence of an inducement in the form of a benefit represented by the Biogaran agreementB. The plea alleging errors of law in that the contested decision fails to establish that Biogaran participated in any infringement of the competition rules(a) The unlawful nature of the Biogaran agreement(b) Imputing to the subsidiary liability for the parent company’s acts(c) Biogaran’s knowledge of Servier’s unlawful conductC. The plea alleging that the Commission erred in law by imposing a fine on Biogaran(a) The unprecedented, unpredictable and complex nature of the case(b) The disproportionate nature of the fine(c) The 10% upper limit of the fineCosts( *1 ) Language of the case: French. | b7814-18b649b-4902 | EN |
Advocate General Szpunar proposes that the Court should rule that sampling constitutes an infringement of the rights of the producer of a phonogram when it is done without his authorisation | 29 July 2019 ( *1 )(Reference for a preliminary ruling — Copyright and related rights — Directive 2001/29/EC — Information Society — Harmonisation of certain aspects of copyright and related rights — Sampling — Article 2(c) — Phonogram producer — Reproduction right — Reproduction ‘in part’ — Article 5(2) and (3) — Exceptions and limitations — Scope — Article 5(3)(d) — Quotations — Directive 2006/115/EC — Article 9(1)(b) — Distribution right — Fundamental rights — Charter of Fundamental Rights of the European Union — Article 13 — Freedom of the arts)In Case C‑476/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesgerichtshof (Federal Court of Justice, Germany), by decision of 1 June 2017, received at the Court on 4 August 2017, in the proceedings Pelham GmbH, Moses Pelham, Martin Haas v Ralf Hütter, Florian Schneider‑Esleben, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Arabadjiev, M. Vilaras, T. von Danwitz, C. Toader, F. Biltgen and C. Lycourgos, Presidents of Chambers, E. Juhász, M. Ilešič (Rapporteur), L. Bay Larsen and S. Rodin, Judges,Advocate General: M. Szpunar,Registrar: R. Şereş, Administrator,having regard to the written procedure and further to the hearing on 3 July 2018,after considering the observations submitted on behalf of:–Pelham GmbH, Mr Pelham and Mr Haas, by A. Walter, Rechtsanwalt,Mr Hütter and Mr Schneider‑Esleben, by U. Hundt‑Neumann and H. Lindhorst, Rechtsanwälte,the German Government, by T. Henze, M. Hellmann and J. Techert, acting as Agents,the French Government, by D. Colas, D. Segoin and E. Armoët, acting as Agents,the United Kingdom Government, by Z. Lavery and D. Robertson, acting as Agents, and by N. Saunders, Barrister,the European Commission, by T. Scharf and J. Samnadda, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 12 December 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 2(c) and Article 5(3)(d) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10), and of Article 9(1)(b) and of the first paragraph of Article 10(2) of Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (OJ 2006 L 376, p. 28).2The request has been made in proceedings between Pelham GmbH, Mr M. Pelham and Mr M. Haas (‘Pelham’), on the one hand, and Mr R. Hütter and Mr F. Schneider‑Esleben (‘Hütter and another’), on the other, concerning the use, in the recording of the song ‘Nur mir’, composed by Mr Pelham and Mr Haas and produced by Pelham GmbH, of an approximately 2-second rhythm sequence from a phonogram of the group Kraftwerk, of which Hütter and another are members. Legal context International law 3Article 1 of the Convention for the Protection of Producers of Phonograms Against Unauthorised Duplication of Their Phonograms, signed in Geneva on 29 October 1971 (‘the Geneva Convention’), reads as follows:‘For the purposes of this Convention:(a)“phonogram” means any exclusively aural fixation of sounds of a performance or of other sounds;(b)“producer of phonograms” means the person who, or the legal entity which, first fixes the sounds of a performance or other sounds;(c)“duplicate” means an article which contains sounds taken directly or indirectly from a phonogram and which embodies all or a substantial part of the sounds fixed in that phonogram;(d)“distribution to the public” means any act by which duplicates of a phonogram are offered, directly or indirectly, to the general public or any section thereof.’4Article 2 of the Geneva Convention provides:‘Each Contracting State shall protect producers of phonograms who are nationals of other Contracting States against the making of duplicates without the consent of the producer and against the importation of such duplicates, provided that any such making or importation is for the purpose of distribution to the public, and against the distribution of such duplicates to the public.’ European Union law Directive 2001/29 5Recitals 3, 4, 6, 7, 9, 10, 31 and 32 of Directive 2001/29 state:‘(3)The proposed harmonisation will help to implement the four freedoms of the internal market and relates to compliance with the fundamental principles of law and especially of property, including intellectual property, and freedom of expression and the public interest.(4)A harmonised legal framework on copyright and related rights, through increased legal certainty and while providing for a high level of protection of intellectual property, will foster substantial investment in creativity and innovation, including network infrastructure, and lead in turn to growth and increased competitiveness of European industry, both in the area of content provision and information technology and more generally across a wide range of industrial and cultural sectors. This will safeguard employment and encourage new job creation.…(6)Without harmonisation at [EU] level, legislative activities at national level which have already been initiated in a number of Member States in order to respond to the technological challenges might result in significant differences in protection and thereby in restrictions on the free movement of services and products incorporating, or based on, intellectual property, leading to a refragmentation of the internal market and legislative inconsistency. The impact of such legislative differences and uncertainties will become more significant with the further development of the information society, which has already greatly increased transborder exploitation of intellectual property. This development will and should further increase. Significant legal differences and uncertainties in protection may hinder economies of scale for new products and services containing copyright and related rights.(7)The [EU] legal framework for the protection of copyright and related rights must, therefore, also be adapted and supplemented as far as is necessary for the smooth functioning of the internal market. To that end, those national provisions on copyright and related rights which vary considerably from one Member State to another or which cause legal uncertainties hindering the smooth functioning of the internal market and the proper development of the information society in Europe should be adjusted, and inconsistent national responses to the technological developments should be avoided, whilst differences not adversely affecting the functioning of the internal market need not be removed or prevented.(9)Any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation. Their protection helps to ensure the maintenance and development of creativity in the interests of authors, performers, producers, consumers, culture, industry and the public at large. …(10)If authors or performers are to continue their creative and artistic work, they have to receive an appropriate reward for the use of their work, as must producers in order to be able to finance this work. The investment required to produce products such as phonograms, films or multimedia products, and services such as “on-demand” services, is considerable. Adequate legal protection of intellectual property rights is necessary in order to guarantee the availability of such a reward and provide the opportunity for satisfactory returns on this investment.(31)A fair balance of rights and interests between the different categories of rightholders, as well as between the different categories of rightholders and users of protected subject-matter must be safeguarded. The existing exceptions and limitations to the rights as set out by the Member States have to be reassessed in the light of the new electronic environment. … In order to ensure the proper functioning of the internal market, such exceptions and limitations should be defined more harmoniously. The degree of their harmonisation should be based on their impact on the smooth functioning of the internal market.(32)This Directive provides for an exhaustive enumeration of exceptions and limitations to the reproduction right and the right of communication to the public. Some exceptions or limitations only apply to the reproduction right, where appropriate. This list takes due account of the different legal traditions in Member States, while, at the same time, aiming to ensure a functioning internal market. Member States should arrive at a coherent application of these exceptions and limitations, which will be assessed when reviewing implementing legislation in the future.’6Under the heading ‘Reproduction right’, Article 2 of Directive 2001/29 provides:‘Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:for phonogram producers, of their phonograms;…’7Article 5 of Directive 2001/29 sets out the exceptions and limitations to the rights referred to in Articles 2 to 4 thereof. Article 5(3) and (5) provides:‘3. Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the following cases:quotations for purposes such as criticism or review, provided that they relate to a work or other subject-matter which has already been lawfully made available to the public, that, unless this turns out to be impossible, the source, including the author's name, is indicated, and that their use is in accordance with fair practice, and to the extent required by the specific purpose;5. The exceptions and limitations provided for in paragraphs 1, 2, 3 and 4 shall only be applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder.’ Directive 2006/115 8Recitals 2, 5 and 7 of Directive 2006/115 state:‘(2)Rental and lending of copyright works and the subject matter of related rights protection is playing an increasingly important role in particular for authors, performers and producers of phonograms and films. Piracy is becoming an increasing threat.(5)The creative and artistic work of authors and performers necessitates an adequate income as a basis for further creative and artistic work, and the investments required particularly for the production of phonograms and films are especially high and risky. The possibility of securing that income and recouping that investment can be effectively guaranteed only through adequate legal protection of the rightholders concerned.The legislation of the Member States should be approximated in such a way as not to conflict with the international conventions on which the copyright and related rights laws of many Member States are based.’9Under the heading ‘Object of harmonisation’, Article 1(1) of that directive provides:‘In accordance with the provisions of this Chapter, Member States shall provide, subject to Article 6, a right to authorise or prohibit the rental and lending of originals and copies of copyright works, and other subject matter as set out in Article 3(1).’10Under the heading ‘Distribution right’, Article 9(1) of the directive provides:‘Member States shall provide the exclusive right to make available to the public, by sale or otherwise, the objects indicated in points (a) to (d), including copies thereof, hereinafter “the distribution right”:for phonogram producers, in respect of their phonograms;11The first paragraph of Article 10(2) of Directive 2006/115 reads as follows:‘… any Member State may provide for the same kinds of limitations with regard to the protection of performers, producers of phonograms, broadcasting organisations and of producers of the first fixations of films, as it provides for in connection with the protection of copyright in literary and artistic works.’ German law 12Paragraph 24 of the Gesetz über Urheberrecht und verwandte Schutzrechte — Urheberrechtsgesetz (Law on copyright and related rights) of 9 September 1965 (BGBl. 1965 I, p. 1273; ‘the UrhG’) provides:‘1. An independent work created in the free use of the work of another person may be published and exploited without the consent of the author of the work used.2. Subparagraph 1 shall not apply to the use of a musical work in which a melody is recognisably taken from the work and used as the basis for a new work.’13Paragraph 85(1) of the UrhG, which transposes Article 2(c) of Directive 2001/29 and Article 9 of Directive 2006/115, provides, in its first sentence, first and second cases, that the producer of a phonogram has the exclusive right to reproduce and distribute the phonogram. The case in the main proceedings and the questions referred for a preliminary ruling 14Hütter and another are members of the group Kraftwerk. In 1977, that group published a phonogram featuring the song ‘Metall auf Metall’.15Mr Pelham and Mr Haas composed the song ‘Nur mir’, which was released on phonograms recorded by Pelham GmbH in 1997.16Hütter and another submit that Pelham electronically copied (‘sampled’) approximately 2 seconds of a rhythm sequence from the song ‘Metall auf Metall’ and used that sample in a continuous loop in the song ‘Nur mir’, although it would have been possible for them to play the adopted rhythm sequence themselves.17As the phonogram producers, Hütter and another’s principal claim is that Pelham infringed their copyright-related right. In the alternative, they claim that their intellectual property right as performers and Mr Hütter’s copyright in the musical work were infringed. In the further alternative, they claim that Pelham infringed competition law.18Hütter and another brought an action before the Landgericht Hamburg (Regional Court, Hamburg, Germany) seeking a prohibitory injunction, damages, the provision of information and the surrender of the phonograms for the purposes of their destruction.19That court upheld the action, and Pelham’s appeal before the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg, Germany) was dismissed. Following an appeal on a point of law (Revision) brought by Pelham before the Bundesgerichtshof (Federal Court of Justice, Germany), the judgment of the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg) was overturned and the case was referred back to that court for re-examination. That court dismissed Pelham’s appeal a second time. In a judgment of 13 December 2012, the Bundesgerichtshof (Federal Court of Justice) once again dismissed Pelham’s appeal on a point of law. That judgment was overturned by the Bundesverfassungsgericht (Federal Constitutional Court, Germany), which referred the case back to the referring court.20The referring court notes that the outcome of the Revision proceedings turns on the interpretation of Article 2(c) and Article 5(3)(d) of Directive 2001/29 and of Article 9(1)(b) and Article 10(2) of Directive 2006/115.21According to the referring court, it must, in the first place, be determined whether, by using Hütter and another’s sound recording in the production of its own phonogram, Pelham encroached on the exclusive right of Hütter and another to reproduce and distribute the phonogram featuring the song ‘Metall auf Metall’, as laid down in Paragraph 85(1) of the UrhG, which transposes Article 2(c) of Directive 2001/29 and Article 9 of Directive 2006/115. In particular, it must be determined whether such an infringement can be found where, as in the present case, 2 seconds of a rhythm sequence are taken from a phonogram then transferred to another phonogram, and whether that amounts to a copy of another phonogram within the meaning of Article 9(1)(b) of Directive 2006/115.22In the second place, if it is found that there has been an infringement of the phonogram producer’s right, the question arises of whether Pelham may rely on the ‘right to free use’, laid down in Paragraph 24(1) of the UrhG, which is applicable by analogy to the phonogram producer’s right, according to which an independent work created in the free use of the work of another person may be published or exploited without the consent of the author of the work used. The referring court notes, in that context, that that provision has no express equivalent in EU law and therefore asks whether that right is consistent with EU law in the light of the fact that that provision limits the scope of protection of the phonogram producer’s exclusive right to reproduce and distribute his or her phonogram.23In the third place, the national law exceptions and limitations to the reproduction right referred to in Article 2(c) of Directive 2001/29 and to the distribution right referred to in Article 9(1)(b) of Directive 2006/115 are based on Article 5(3) of Directive 2001/29 and the first paragraph of Article 10(2) of Directive 2006/115. However, the referring court harbours doubts as to the interpretation of those provisions in circumstances such as those at issue in the main proceedings.24In the fourth place, the referring court notes that EU law must be interpreted and applied in the light of the fundamental rights enshrined in the Charter of Fundamental Rights of the European Union (‘the Charter’). In that context, it asks whether the Member States have any discretion for the purposes of the transposition into national law of Article 2(c) and Article 5(2) and (3) of Directive 2001/29 and of Article 9(1)(b) and the first paragraph of Article 10(2) of Directive 2006/115. The referring court notes that, according to case-law of the Bundesverfassungsgericht (Federal Constitutional Court), national legislation which transposes an EU directive must be measured, as a rule, not against the fundamental rights guaranteed by the Grundgesetz für die Bundesrepublik Deutschland (Basic Law for the Federal Republic of Germany) of 23 May 1949 (BGBl. 1949 I, p. 1), but solely against the fundamental rights guaranteed by EU law, where that directive does not allow the Member States any discretion in its transposition. That court also harbours doubts as to the interpretation of those fundamental rights in circumstances such as those at issue in the main proceedings.25In those circumstances, the Bundesgerichtshof (Federal Court of Justice) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Is there an infringement of the phonogram producer’s exclusive right under Article 2(c) of Directive 2001/29 to reproduce its phonogram if very short audio snatches are taken from its phonogram and transferred to another phonogram?(2)Is a phonogram which contains very short audio snatches transferred from another phonogram a copy of the other phonogram within the meaning of Article 9(1)(b) of Directive 2006/115?(3)Can the Member States enact a provision which — in the manner of Paragraph 24(1) of [the UrhG] — inherently limits the scope of protection of the phonogram producer’s exclusive right to reproduce (Article 2(c) of Directive 2001/29) and to distribute (Article 9(1)(b) of Directive 2006/115) its phonogram in such a way that an independent work created in free use of its phonogram may be exploited without the phonogram producer’s consent?Can it be said that a work or other subject matter is being used for quotation purposes within the meaning of Article 5(3)(d) of Directive 2001/29 if it is not evident that another person’s work or another person’s subject matter is being used?Do the provisions of EU law on the reproduction right and the distribution right of the phonogram producer (Article 2(c) of Directive 2001/29 and Article 9(1)(b) of Directive 2006/115) and the exceptions or limitations to those rights (Article 5(2) and (3) of Directive 2001/29 and the first paragraph of Article 10(2) of Directive 2006/115) allow any latitude in terms of implementation in national law?In what way are the fundamental rights set out in [the Charter] to be taken into account when ascertaining the scope of protection of the exclusive right of the phonogram producer to reproduce (Article 2(c) of Directive 2001/29) and to distribute (Article 9(1)(b) of Directive 2006/115) its phonogram and the scope of the exceptions or limitations to those rights (Article 5(2) and (3) of Directive 2001/29 and the first paragraph of Article 10(2) of Directive 2006/115)?’ Consideration of the questions referred The first and sixth questions 26By its first and sixth questions, which it is appropriate to consider together, the referring court asks, in essence, whether Article 2(c) of Directive 2001/29 must, in the light of the Charter, be interpreted as meaning that the exclusive right granted to a phonogram producer to reproduce and distribute his or her phonogram allows him to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram.27Under Article 2(c) of Directive 2001/29, Member States are to provide for the exclusive right of phonogram producers ‘to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part’ of their phonograms.28Directive 2001/29 does not define the concept of ‘reproduction … in whole or in part’ of a phonogram for the purposes of that provision. The meaning and scope of those words must, as the Court has consistently held, be determined by considering their usual meaning in everyday language, while also taking into account the context in which they occur and the purposes of the rules of which they are part (judgment of 3 September 2014, Deckmyn and Vrijheidsfonds, C‑201/13, EU:C:2014:2132, paragraph 19 and the case-law cited).29It is clear from the wording of Article 2(c) of Directive 2001/29 stated in paragraph 27 above, that the reproduction by a user of a sound sample, even if very short, of a phonogram must, in principle, be regarded as a reproduction ‘in part’ of that phonogram within the meaning of the provision, and that such a reproduction therefore falls within the exclusive right granted to the producer of such a phonogram under that provision.30That literal interpretation of Article 2(c) of Directive 2001/29 is consistent, first, with the general objective of that directive which is, as follows from recitals 4, 9 and 10, to establish a high level of protection of copyright and related rights, and, second, the specific objective of the exclusive right of the phonogram producer, referred to in recital 10, which is to protect a phonogram producer’s investment. As stated in that recital, the investment required to produce products such as phonograms, is considerable to such an extent that it is necessary in order to guarantee phonogram producers the opportunity of satisfactory returns.31However, where a user, in exercising the freedom of the arts, takes a sound sample from a phonogram in order to use it, in a modified form unrecognisable to the ear, in a new work, it must be held that such use does not constitute ‘reproduction’ within the meaning of Article 2(c) of Directive 2001/29.32It must be borne in mind, in that regard, that it follows from recitals 3 and 31 of Directive 2001/29 that the harmonisation effected by that directive aims to safeguard, in particular in the electronic environment, a fair balance between, on the one hand, the interest of the holders of copyright and related rights in the protection of their intellectual property rights now guaranteed by Article 17(2) of the Charter and, on the other hand, the protection of the interests and fundamental rights of users of protected subject matter as well as of the public interest (see, to that effect, judgment of 7 August 2018, Renckhoff, C‑161/17, EU:C:2018:634, paragraph 41).33The Court has thus previously held that there is nothing whatsoever in the wording of Article 17(2) of the Charter or in the Court’s case-law to suggest that the intellectual property rights enshrined in that article are inviolable and must for that reason be protected as absolute rights (judgments of 24 November 2011, Scarlet Extended, C‑70/10, EU:C:2011:771, paragraph 43; of 16 February 2012, SABAM, C‑360/10, EU:C:2012:85, paragraph 41; and of 27 March 2014, UPC Telekabel Wien, C‑314/12, EU:C:2014:192, paragraph 61).34A balance must be struck between that right and other fundamental rights, including freedom of the arts, enshrined in Article 13 of the Charter, which, in so far as it falls within the scope of freedom of expression, enshrined in Article 11 of the Charter and in Article 10(1) of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950, affords the opportunity to take part in the public exchange of cultural, political and social information and ideas of all kinds (see, to that effect, ECtHR, 24 May 1988, Müller and Others v. Switzerland, CE:ECHR:1988:0524JUD001073784, § 27, and ECtHR, 8 July 1999, Karataş v. Turkey, CE:ECHR:1999:0708JUD002316894, § 49).35In that context, it should be noted that the technique of ‘sampling’, which consists in a user taking a sample from a phonogram, most often by means of electronic equipment, and using the sample for the purposes of creating a new work, constitutes a form of artistic expression which is covered by freedom of the arts, as protected in Article 13 of the Charter.36In exercising that freedom, the user of a sound sample, when creating a new work, may decide to modify the sample taken from a phonogram to such a degree that that sample is unrecognisable to the ear in that new work.37Thus, to regard a sample taken from a phonogram and used in a new work in a modified form unrecognisable to the ear for the purposes of a distinct artistic creation, as constituting ‘reproduction’ of that phonogram within the meaning of Article 2(c) of Directive 2001/29 would not only run counter to the usual meaning of that word in everyday language, within the meaning of the case-law set out in paragraph 28 above, but would also fail to meet the requirement of a fair balance set out in paragraph 32 above.38In particular, such an interpretation would allow the phonogram producer to prevent another person from taking a sound sample, even if very short, from his or her phonogram for the purposes of artistic creation in such a case, despite the fact that such sampling would not interfere with the opportunity which the producer has of realising satisfactory returns on his or her investment.39In the light of the foregoing considerations, the answer to the first and sixth questions is that Article 2(c) of Directive 2001/29 must, in the light of the Charter, be interpreted as meaning that the phonogram producer’s exclusive right under that provision to reproduce and distribute his or her phonogram allows him or her to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognisable to the ear. The second question 40By its second question, the referring court asks, in essence, whether Article 9(1)(b) of Directive 2006/115 must be interpreted as meaning that a phonogram which contains sound samples transferred from another phonogram constitutes a ‘copy’, within the meaning of that provision, of that phonogram.41Under Article 9(1)(b) of Directive 2006/115, Member States are to provide phonogram producers with the exclusive right to make available to the public, by sale or otherwise, their phonograms, including copies thereof.42Neither Article 9 of Directive 2006/115 nor any other provision of that directive defines the concept of ‘copy’ within the meaning of that article.43That concept must therefore be interpreted by taking into account the legislative context of the provision in question and the purposes of the relevant legislation.44It must be borne in mind that the phonogram producer’s exclusive distribution right provided for in Article 9(1)(b) of Directive 2006/115 is intended to afford a producer, through adequate legal protection of intellectual property rightholders, with the possibility of recouping investments made by him or her in order to produce phonograms, since those investments can prove to be especially high and risky, as stated in recitals 2 and 5 of Directive 2006/115.45In that regard, it is clear from recital 2 of Directive 2006/115 that the protection conferred on a phonogram producer under that directive aims, in particular, to fight piracy, that is, as the Advocate General stated in point 45 of his Opinion, the production and distribution to the public of counterfeit copies of phonograms. The distribution of such copies poses a particularly serious threat to the interests of such phonogram producers in that it is capable of significantly decreasing the revenue that they receive by making phonograms available.46As the Advocate General stated in point 46 of his Opinion, only an article which reproduces all or a substantial part of the sounds fixed in a phonogram is, by its nature, intended to replace lawful copies of that phonogram and, therefore, capable of constituting a copy of that phonogram within the meaning of Article 9(1) of Directive 2006/115.47That is not, by contrast, the case of an article which, without reproducing all or a substantial part of the sounds fixed in a phonogram, merely embodies sound samples, where relevant in a modified form, transferred from that phonogram for the purposes of creating a new and distinct work from that phonogram.48That interpretation of Article 9(1)(b) of Directive 2006/115 in the light of its purposes is supported by the legislative context of which that provision is part.49In that regard, as stated in recital 7 of Directive 2006/115, that directive aims to approximate the legislation of the Member States in such a way as not to conflict with the international conventions on which the copyright and related rights laws of many Member States are based.50The Geneva Convention is one of those conventions, which, according to its preamble, has, inter alia, the aim of addressing the widespread and increasing unauthorised duplication of phonograms and the damage that this is occasioning to the interests of producers.51Article 2 of that convention contains an analogous provision to Article 9(1)(b) of Directive 2006/115 which specifically provides that the producers of phonograms are to be protected against the making and distribution to the public of ‘duplicates’ of their phonograms without their consent.52According to Article 1(c) of the Geneva Convention, a ‘duplicate’ means an article which contains sounds taken directly or indirectly from a phonogram and which embodies ‘all or a substantial part’ of the sounds fixed in that phonogram.53It is true that the provisions of the Geneva Convention do not form part of the EU legal order, in that, first, the European Union is not a contracting party to that convention and, second, the European Union cannot be regarded as having taken the place of its Member States as regards its application, if only because not all of those States are parties to that convention (see, by analogy, judgment of 15 March 2012, SCF, C‑135/10, EU:C:2012:140, paragraph 41). The fact remains, however, that it is one of the international conventions referred to in paragraph 49 above and therefore the provisions of Directive 2006/115 must be interpreted, so far as possible, in the light of that convention (see, to that effect, judgments of 7 December 2006, SGAE, C‑306/05, EU:C:2006:764, paragraph 35; of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, paragraph 189; and of 19 December 2018, Syed, C‑572/17, EU:C:2018:1033, paragraph 20).54It follows that it should be considered, as did the Advocate General in points 46 and 47 of his Opinion, that the concept of ‘copy’ within the meaning of Article 9(1)(b) of Directive 2006/115 must be interpreted consistently with the same concept as it is used in Article 1(c) and Article 2 of the Geneva Convention.55In the light of the foregoing considerations, the answer to the second question is that Article 9(1)(b) of Directive 2006/115 must be interpreted as meaning that a phonogram which contains sound samples transferred from another phonogram does not constitute a ‘copy’, within the meaning of that provision, of that phonogram, since it does not reproduce all or a substantial part of that phonogram. The third question 56The referring court notes that, according to Paragraph 24(1) of the UrhG, applicable by analogy to a phonogram producer’s right, an independent work created using the work of another person may be used and exploited without the consent of the author of the work used. It states that such a ‘right to free use’ does not constitute a derogation from copyright as such but rather sets out an inherent limitation to its scope of protection, based on the idea that it is not possible to conceive of a cultural creation without that creation building upon the previous work of other authors.57In those circumstances, since it is clear from the answer to the second question that a reproduction such as that at issue in the main proceedings does not fall within the scope of Article 9(1)(b) of Directive 2006/115, it must be held that, by its third question, the referring court asks, in essence, whether a Member State may, in its national law, lay down an exception or limitation, other than those provided for in Article 5 of Directive 2001/29, to the phonogram producer’s right provided for in Article 2(c) of Directive 2001/29.58As is clear both from the Explanatory Memorandum to the Proposal for a European Parliament and Council Directive on the harmonisation of certain aspects of copyright and related rights in the Information Society of 10 December 1997 (COM(97) 628 final) and from recital 32 of Directive 2001/29, the list of exceptions and limitations contained in Article 5 of that directive is exhaustive, as the Court has also pointed out on several occasions (judgments of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 34, and of 7 August 2018, Renckhoff, C‑161/17, EU:C:2018:634, paragraph 16).59In that regard, it has been recalled, in paragraph 32 above, that the harmonisation effected by Directive 2001/29 aims to safeguard, in particular in the electronic environment, a fair balance between, on the one hand, the interest of the holders of copyright and related rights in the protection of their intellectual property rights and, on the other hand, the protection of the interests and fundamental rights of users of protected subject matter as well as of the public interest.60The mechanisms allowing those different rights and interests to be balanced are contained in Directive 2001/29 itself, in that it provides inter alia, first, in Articles 2 to 4 thereof, rightholders with exclusive rights and, second, in Article 5 thereof, for exceptions and limitations to those rights which may, or even must, be transposed by the Member States, since those mechanisms must nevertheless find concrete expression in the national measures transposing that directive and in their application by national authorities (see, to that effect, judgment of 29 January 2008, Promusicae, C‑275/06, EU:C:2008:54, paragraph 66 and the case-law cited).61The Court has repeatedly held that the fundamental rights now enshrined in the Charter, the observance of which the Court ensures, draw inspiration from the constitutional traditions common to the Member States and from the guidelines supplied by international instruments for the protection of human rights on which the Member States have collaborated or to which they are signatories (see, to that effect, judgment of 27 June 2006, Parliament v Council, C‑540/03, EU:C:2006:429, paragraph 35 and the case-law cited).62Article 5(5) of Directive 2001/29 also contributes to the fair balance mentioned in paragraph 32 above, in that it requires that the exceptions and limitations provided for in Article 5(1) to (4) of the directive be applied only in certain special cases which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rightholder.63In that context, to allow, notwithstanding the express intention of the EU legislature, set out in paragraph 58 above, each Member State to derogate from an author’s exclusive rights, referred to in Articles 2 to 4 of Directive 2001/29, beyond the exceptions and limitations exhaustively set out in Article 5 of that directive, would endanger the effectiveness of the harmonisation of copyright and related rights effected by that directive, as well as the objective of legal certainty pursued by it (judgment of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraphs 34 and 35). It is expressly clear from recital 31 of that directive that the differences that existed in the exceptions and limitations to certain restricted acts had direct negative effects on the functioning of the internal market of copyright and related rights, since the list of the exceptions and limitations set out in Article 5 of Directive 2001/29 is aimed at ensuring such proper functioning of the internal market.64In addition, as is clear from recital 32 of that directive, the Member States are required to apply those exceptions and limitations consistently. The requirement of consistency in the implementation of those exceptions and limitations could not be ensured if the Member States were free to provide for such exceptions and limitations beyond those expressly set out in Directive 2001/29 (see, to that effect, judgment of 12 November 2015, Hewlett-Packard Belgium, C‑572/13, EU:C:2015:750, paragraphs 38 and 39), since the Court has moreover previously held that no provision of Directive 2001/29 envisages the possibility for the scope of such exceptions or limitations to be extended by the Member States (see, to that effect, judgment of 10 April 2014, ACI Adam and Others, C‑435/12, EU:C:2014:254, paragraph 27).65In the light of the foregoing considerations, the answer to the third question is that a Member State cannot, in its national law, lay down an exception or limitation other than those provided for in Article 5 of Directive 2001/29 to the phonogram producer’s right provided for in Article 2(c) of that directive. The fourth question 66By its fourth question, which concerns a situation in which it is found that there has been an infringement of the phonogram producer’s exclusive right provided for in Article 2(c) of Directive 2001/29, the referring court asks, in essence, whether Article 5(3)(d) of that directive must be interpreted as meaning that the concept of ‘quotations’, referred to in that provision, extends to a situation in which it is not possible to identify the work concerned by the quotation in question.67Under Article 5(3)(d) of Directive 2001/29, Member States may provide for exceptions or limitations to the exclusive rights of reproduction and of communication to the public referred to in Articles 2 and 3 of that directive in the case of quotations for purposes such as criticism or review, provided that they relate to a work or other subject matter which has already been lawfully made available to the public, that, unless this turns out to be impossible, the source, including the author’s name, is indicated, and that their use is in accordance with fair practice, and to the extent required by the specific purpose.68First of all, it must be considered, as did the Advocate General in points 62 and 63 of his Opinion, that, in the light of the wording in Article 5(3)(d) of Directive 2001/29 which refers to ‘a work or other subject-matter’, the exception or limitation provided for in that article may apply to the use of a protected musical work, provided that the conditions provided for in that article are satisfied.69In particular, for Article 5(3)(d) of Directive 2001/29 to apply, as has been stated in paragraph 67 above, the use in question must be made ‘in accordance with fair practice, and to the extent required by the specific purpose’, so that the use at issue for the purposes of quotation must not be extended beyond the confines of what it necessary to achieve the informatory purpose of that particular quotation.70Since Directive 2001/29 gives no definition of the term ‘quotation’, the meaning and scope of that term must, according to the Court’s settled case-law set out in paragraph 28 above, be determined by considering its usual meaning in everyday language, while also taking into account the legislative context in which it occurs and the purposes of the rules of which it is part.71As regards the usual meaning of the word ‘quotation’ in everyday language, it should be noted that the essential characteristics of a quotation are the use, by a user other than the copyright holder, of a work or, more generally, of an extract from a work for the purposes of illustrating an assertion, of defending an opinion or of allowing an intellectual comparison between that work and the assertions of that user, since the user of a protected work wishing to rely on the quotation exception must therefore have the intention of entering into ‘dialogue’ with that work, as the Advocate General stated in point 64 of his Opinion.72In particular, where the creator of a new musical work uses a sound sample taken from a phonogram which is recognisable to the ear in that new work, the use of that sample may, depending on the facts of the case, amount to a ‘quotation’, on the basis of Article 5(3)(d) of Directive 2001/29 read in the light of Article 13 of the Charter, provided that that use has the intention of entering into dialogue with the work from which the sample was taken, within the meaning referred to in paragraph 71 above, and that the conditions set out in Article 5(3)(d) are satisfied.73However, as the Advocate General stated in point 65 of his Opinion, there can be no such dialogue where it is not possible to identify the work concerned by the quotation at issue.74In the light of the foregoing considerations, the answer to the fourth question is that Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that the concept of ‘quotations’, referred to in that provision, does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question. The fifth question 75As a preliminary matter, it should be noted, as is clear from paragraph 24 above, that the fifth question relates, in particular, to the application by the referring court, for the purposes of disposing of the case in the main proceedings, of Article 2(c) and Article 5(3)(d) of Directive 2001/29, and of Article 9(1)(b) and the first paragraph of Article 10(2) of Directive 2006/115.76In that context, the referring court asks whether those provisions of EU law allow the Member States discretion in their transposition, since, according to the case-law of the Bundesverfassungsgericht (Federal Constitutional Court), national legislation which transposes an EU directive must be measured, as a rule, not against the fundamental rights guaranteed by the Basic Law for the Federal Republic of Germany, but solely against the fundamental rights guaranteed by EU law, where that directive does not allow the Member States any discretion in its transposition.77As regards the answer to the second and fourth questions, it must be held that, by its fifth question, the referring court asks, in essence, whether Article 2(c) of Directive 2001/29 must be interpreted as constituting measures of full harmonisation.78In that regard, it should be stated that, by virtue of the principle of primacy of EU law, which is an essential feature of the EU legal order, rules of national law, even of a constitutional order, cannot be allowed to undermine the effectiveness of EU law in the territory of that State (judgment of 26 February 2013, Melloni, C‑399/11, EU:C:2013:107, paragraph 59).79It should be noted in that connection that, since the transposition of a directive by the Member States is covered, in any event, by the situation, referred to in Article 51 of the Charter, in which the Member States are implementing Union law, the level of protection of fundamental rights provided for in the Charter must be achieved in such a transposition, irrespective of the Member States’ discretion in transposing the directive.80That said, where, in a situation in which action of the Member States is not entirely determined by EU law, a national provision or measure implements EU law for the purposes of Article 51(1) of the Charter, national authorities and courts remain free to apply national standards of protection of fundamental rights, provided that the level of protection provided for by the Charter, as interpreted by the Court, and the primacy, unity and effectiveness of EU law are not thereby compromised (judgments of 26 February 2013, Melloni, C‑399/11, EU:C:2013:107, paragraph 60, and of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 29).81Thus, it is consistent with EU law for national courts and authorities to make that application subject to the condition, emphasised by the referring court, that the provisions of a directive ‘allow [some] discretion in terms of implementation in national law’, provided that that condition is understood as referring to the degree of the harmonisation effected in those provisions, since such an application is conceivable only in so far as those provisions do not effect full harmonisation.82In the present case, the objective of Directive 2001/29 is to harmonise only certain aspects of the law on copyright and related rights, of which a number of provisions also disclose the intention of the EU legislature to grant a degree of discretion to the Member States in the implementation of the directive (see, to that effect, judgment of 5 March 2015, Copydan Båndkopi, C‑463/12, EU:C:2015:144, paragraph 57).83As regards the exclusive right of holders, referred to in Article 2(c) of Directive 2001/29, it has been stated, in paragraph 27 above, that, according to that provision, Member States are to provide for the exclusive right of phonogram producers ‘to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part’ of their phonograms.84That provision therefore defines a phonogram producer’s exclusive right of reproduction in the European Union in unequivocal terms. Furthermore, that provision is not qualified by any condition, nor is it subject, in its implementation or effects, to any measure being taken in any particular form.85It follows that Article 2(c) of Directive 2001/29 constitutes a measure of full harmonisation of the corresponding substantive law (see, by analogy, as regards the exclusive right of an EU trade mark proprietor, judgments of 20 November 2001, Zino Davidoff and Levi Strauss, C‑414/99 to C‑416/99, EU:C:2001:617, paragraph 39, and of 12 November 2002, Arsenal Football Club, C‑206/01, EU:C:2002:651, paragraph 43).86In the light of the foregoing considerations, the answer to the fifth question is that Article 2(c) of Directive 2001/29 must be interpreted as constituting a measure of full harmonisation of the corresponding substantive law. Costs 87Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Article 2(c) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must, in the light of the Charter of Fundamental Rights of the European Union, be interpreted as meaning that the phonogram producer’s exclusive right under that provision to reproduce and distribute his or her phonogram allows him to prevent another person from taking a sound sample, even if very short, of his or her phonogram for the purposes of including that sample in another phonogram, unless that sample is included in the phonogram in a modified form unrecognisable to the ear. 2. Article 9(1)(b) of Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property must be interpreted as meaning that a phonogram which contains sound samples transferred from another phonogram does not constitute a ‘copy’, within the meaning of that provision, of that phonogram, since it does not reproduce all or a substantial part of that phonogram. 3. A Member State cannot, in its national law, lay down an exception or limitation, other than those provided for in Article 5 of Directive 2001/29, to the phonogram producer’s right provided for in Article 2(c) of that directive. 4. Article 5(3)(d) of Directive 2001/29 must be interpreted as meaning that the concept of ‘quotations’, referred to in that provision, does not extend to a situation in which it is not possible to identify the work concerned by the quotation in question. 5. Article 2(c) of Directive 2001/29 must be interpreted as constituting a measure of full harmonisation of the corresponding substantive law. [Signatures]( *1 ) Language of the case: German. | a518f-64c3cef-4d07 | EN |
The ECB’s PSPP programme for the purchase of government bonds on secondary markets does not infringe EU law | 11 December 2018 ( *1 )(Reference for a preliminary ruling — Economic and monetary policy — Decision (EU) 2015/774 of the European Central Bank — Validity — Secondary markets public sector asset purchase programme — Articles 119 and 127 TFEU — Powers of the ECB and the European System of Central Banks — Maintenance of price stability — Proportionality — Article 123 TFEU — Prohibition of monetary financing of Member States in the euro area)In Case C‑493/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesverfassungsgericht (Federal Constitutional Court, Germany), made by decision of 18 July 2017, received at the Court on 17 August 2017, in the proceedings brought by Heinrich Weiss and Others, Bernd Lucke and Others, Peter Gauweiler, Johann Heinrich von Stein and Others, Interested parties: Bundesregierung, Bundestag, Deutsche Bundesbank, THE COURT (Grand Chamber),Composed of K. Lenaerts, President, A. Prechal, M. Vilaras, E. Regan, T. von Danwitz, C. Toader and C. Lycourgos, Presidents of Chamber, A. Rosas, E. Juhász, M. Ilešič, L. Bay Larsen (Rapporteur), M. Safjan, D. Šváby, C.G. Fernlund and C. Vajda, Judges,Advocate General: M. Wathelet,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 10 July 2018,after considering the observations submitted on behalf of:–Mr Weiss and Others, by C. Degenhart,Mr Lucke and Others, by H.-D. Horn and G. Beck, Barrister,Mr Gauweiler, by D. Murswiek,Mr von Stein and Others, by M.C. Kerber, Rechtsanwalt,the Deutsche Bundesbank, by A. Guericke, acting as Agent, and by U. Soltész, C. von Köckritz and B. Herz, Rechtsanwälte,the German Government, by T. Henze, J. Möller and U. Häde, acting as Agents,the Greek Government, by K. Boskovits, S. Charitaki and A. Magrippi, acting as Agents,the French Government, by D. Colas, D. Segoin and E. de Moustier, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and by F. De Luca and P. Gentili, avvocati dello Stato,the Portuguese Government, by L. Inez Fernandes, M. Figueiredo, T. Larsen and P. Machado, acting as Agents,the Finnish Government, by S. Hartikainen, acting as Agent,the European Commission, by L. Flynn, J.-P. Keppenne, C. Ladenburger and B. Martenczuk, acting as Agents,the European Central Bank (ECB), by C. Zilioli, K. Kaiser and C. Kroppenstedt, acting as Agents, and by H.-G. Kamann, Rechtsanwalt,after hearing the Opinion of the Advocate General at the sitting on 4 October 2018,gives the following Judgment 1This request for a preliminary ruling concerns the validity of Decision (EU) 2015/774 of the European Central Bank of 4 March 2015 on a secondary markets public sector asset purchase programme (OJ 2015 L 121, p. 20), as amended by Decision (EU) 2017/100 of the European Central Bank of 11 January 2017 (OJ 2017 L 16, p. 51) (‘Decision 2015/774’), and the interpretation of Article 4(2) TEU and Articles 123 and 125 TFEU.2The request has been made in the context of four constitutional actions brought by Mr Heinrich Weiss and others, Mr Bernd Lucke and others, Mr Peter Gauweiler and Mr Johann Heinrich von Stein and others, concerning the applicability, in Germany, of various decisions of the European Central Bank (ECB), the participation of the Deutsche Bundesbank (German Central Bank) in the implementation of those decisions or its alleged failure to act with regard to those decisions, and the alleged failure of the Bundesregierung (Federal Government, Germany) and the Deutscher Bundestag (Lower House of the German Federal Parliament), to act in respect of that participation and those decisions. Legal context Decision 2015/774 3Recitals 2 to 4 and 7 of Decision 2015/774 are worded as follows:‘(2)On 4 September 2014, the Governing Council decided to initiate a third covered bond purchase programme (hereinafter the “CBPP3”) and an asset-backed securities purchase programme (ABSPP). Alongside the targeted longer-term refinancing operations introduced in September 2014, these asset purchase programmes are aimed at further enhancing the transmission of monetary policy, facilitating credit provision to the euro area economy, easing borrowing conditions of households and firms and contributing to returning inflation rates to levels closer to 2%, consistent with the primary objective of the ECB to maintain price stability.(3)On 22 January 2015, the Governing Council decided that asset purchases should be expanded to include a secondary markets public sector asset purchase programme (hereinafter the “PSPP”). Under the PSPP the [national central banks], in proportions reflecting their respective shares in the ECB’s capital key, and the ECB may purchase outright eligible marketable debt securities from eligible counterparties on the secondary markets. This decision was taken as part of the single monetary policy in view of a number of factors that have materially increased the downside risk to the medium-term outlook on price developments, thus jeopardising the achievement of the ECB’s primary objective of maintaining price stability. These factors include lower than expected monetary stimulus from adopted monetary policy measures, a downward drift in most indicators of actual and expected euro area inflation — both headline measures and measures excluding the impact of volatile components, such as energy and food — towards historical lows, and the increased potential of second-round effects on wage and price-setting stemming from a significant decline in oil prices.(4)The PSPP is a proportionate measure for mitigating the risks to the outlook on price developments, as it will further ease monetary and financial conditions, including those relevant to the borrowing conditions of euro area non-financial corporations and households, thereby supporting aggregate consumption and investment spending in the euro area and ultimately contributing to a return of inflation rates to levels below but close to 2% over the medium term. In an environment where key ECB interest rates are at their lower bound, and purchase programmes focusing on private sector assets are judged to have provided measurable, but insufficient, scope to address the prevailing downside risks to price stability, it is necessary to add to the Eurosystem’s monetary policy measures the PSPP as an instrument that features a high transmission potential to the real economy. Thanks to its portfolio re-balancing effect, the sizable purchase volume of the PSPP will contribute to achieving the underlying monetary policy objective of inducing financial intermediaries to increase their provision of liquidity to the interbank market and credit to the euro area economy.…(7)In terms of the size of the PSPP, the ABSPP and the CBPP3, the liquidity provided to the market by the combined monthly purchases will amount to EUR 60 billion. Purchases are intended to be carried out until the end of September 2016 and will, in any case, be conducted until the Governing Council sees a sustained adjustment in the path of inflation which is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.’4Article 1 of Decision 2015/774 provides:‘The Eurosystem hereby establishes the PSPP under which the Eurosystem central banks shall purchase eligible marketable debt securities, as defined in Article 3, on the secondary markets, from eligible counterparties, as defined in Article 7, under specific conditions.’5Article 3 of that decision provides:‘1. Subject to the requirements laid down in Article 3, euro-denominated marketable debt securities issued by central, regional or local governments of a Member State whose currency is the euro, recognised agencies located in the euro area, international organisations located in the euro area and multilateral development banks located in the euro area shall be eligible for purchases by the Eurosystem central banks under the PSPP. In exceptional circumstances, where the envisaged purchase amount cannot be attained, the Governing Council may decide to purchase marketable debt securities issued by other entities located in the euro area …2. In order to be eligible for purchases under the PSPP, marketable debt securities shall comply with the eligibility criteria for marketable assets for Eurosystem credit operations pursuant to Part Four of Guideline (EU) 2015/510 of the European Central Bank [of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (ECB/2014/60) (OJ 2015 L 91, p. 3)], subject to the following requirements:(a)the issuer or guarantor of the marketable debt securities shall have a credit quality assessment of at least Credit Quality Step 3 in the Eurosystem’s harmonised rating scale …(d)if the credit assessment … for the issuer, guarantor or issue does not comply with at least Credit Quality Step 3 in the Eurosystem’s harmonised rating scale, marketable debt securities shall be eligible only if they are issued or fully guaranteed by the central governments of euro area Member States under a financial assistance programme and in respect of which the application of the Eurosystem’s credit quality threshold is suspended by the Governing Council …(e)in the event of a review of an ongoing financial assistance programme, eligibility for PSPP purchases shall be suspended and shall resume only in the event of a positive outcome of the review.3. In order to be eligible for purchase under the PSPP, debt securities, within the meaning of paragraphs 1 to 2, shall have a minimum remaining maturity of 1 year and a maximum remaining maturity of 30 years at the time of their purchase by the relevant Eurosystem central bank. In order to facilitate smooth implementation, marketable debt instruments with a remaining maturity of 30 years and 364 days shall be eligible under the PSPP. National central banks shall also carry out substitute purchases of marketable debt securities issued by international organisations and multilateral development banks if the envisaged amounts to be purchased in marketable debt securities issued by central, regional or local governments and recognised agencies cannot be attained.5. Purchases of nominal marketable debt instruments at a negative yield to maturity (or yield to worst) equal to or above the deposit facility rate are permitted. Purchases of nominal marketable debt instruments at a negative yield to maturity (or yield to worst) below the deposit facility rate are permitted to the extent necessary.’6Article 4(1) of Decision 2015/774 provides:‘To permit the formation of a market price for eligible securities, no purchases shall be permitted in a newly issued or tapped security and the marketable debt instruments with a remaining maturity that are close in time, before and after, to the maturity of the marketable debt instruments to be issued, over a period to be determined by the Governing Council (“blackout period”). ...’7Article 5(1) and (2) of Decision 2015/774 is worded as follows:‘1. Subject to Article 3, an issue share limit per international securities identification number (ISIN) shall apply under the PSPP to marketable debt securities fulfilling the criteria laid down in Article 3, after consolidating holdings in all of the portfolios of the Eurosystem central banks. The issue share limit shall be as follows:50% per ISIN for eligible marketable debt securities issued by eligible international organisations and multilateral development banks;(b)33% per ISIN for other eligible marketable debt securities; …2. All marketable debt securities eligible for purchase under the PSPP and which have the remaining maturities specified in Article 3 shall be subject to an aggregate limit, after consolidating holdings in all of the portfolios of the Eurosystem central banks, of:50% of the outstanding securities of an issuer which is an eligible international organisation or a multilateral development bank; or33% of the outstanding securities of an issuer other than an eligible international organisation or a multilateral development bank.’8Article 6 of that decision provides:‘1. Of the book value of purchases of marketable debt securities eligible under the PSPP, 10% shall be purchased in securities issued by eligible international organisations and multilateral development banks, and 90% of that book value shall be purchased in securities issued by eligible central, regional or local governments and recognised agencies … This allocation is subject to revision by the Governing Council. Purchases of debt securities issued by eligible international organisations, multilateral development banks and regional and local governments shall be made by NCBs only.2. The NCBs’ share of the book value of purchases of marketable debt securities eligible under the PSPP shall be 90%, and the remaining 10% shall be purchased by the ECB. The distribution of purchases across jurisdictions shall be in accordance with the key for subscription of the ECB’s capital as referred to in Article 29 of the Statute of the [European System of Central Banks].3. Eurosystem central banks shall apply a specialisation scheme for the allocation of marketable debt securities to be purchased under the PSPP. The Governing Council shall allow for ad hoc deviations from the specialisation scheme should objective considerations obstruct the achievement of the said scheme or otherwise render deviations advisable in the interests of attaining the overall monetary policy objectives of the PSPP. In particular, each NCB shall purchase eligible securities of issuers of its own jurisdiction. Securities issued by eligible international organisations and multilateral development banks may be purchased by all NCBs. The ECB shall purchase securities issued by central governments and recognised agencies of all jurisdictions.’9Article 8 of the decision provides:‘1. The Eurosystem shall publish on a weekly basis the aggregate book value of the securities held under the PSPP in the commentary of its consolidated weekly financial statement.2. The Eurosystem shall publish on a monthly basis the weighted average residual maturity by issuer residence, separating international organisations and multilateral development banks from other issuers, of its PSPP holdings.3. The book value of securities held under the PSPP shall be published on the ECB’s website under the open market operations section on a weekly basis.’ Decision 2015/2464 10Recitals 2 to 5 of Decision (EU) 2015/2464 of the European Central Bank of 16 December 2015 amending Decision 2015/774 (OJ 2015 L 344, p. 1) state:On 3 December 2015, the Governing Council decided, in line with its mandate to ensure price stability, to revise certain of the PSPP’s design features, to secure a sustained adjustment in the path of inflation towards levels that are below, but close to 2%, over the medium term. The revisions are in line with the Governing Council’s monetary policy mandate and duly reflect risk management considerations.Accordingly, in order to achieve the PSPP’s objectives, the Governing Council decided to extend the intended horizon of purchases under the PSPP until the end of March 2017, or beyond, if necessary, and in any event until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term. The Governing Council decided to extend the intended horizon of the purchases under the CBPP3 and the ABSPP accordingly.The Governing Council also decided that, in order to enhance the flexibility of the PSPP and thereby support the continued smooth implementation of purchases at least until its intentional end date, euro-denominated marketable debt instruments issued by regional and local governments located in the euro area will be eligible for regular purchases under the PSPP by the national central banks of the jurisdiction in which the issuing entity is located.(5)The Governing Council also decided to reinvest the principal payments of the securities purchased under the APP [(expanded asset purchase programme)] as the underlying securities mature, for as long as necessary, thus contributing to favourable liquidity conditions and to an appropriate monetary policy stance.’ Decision 2016/702 11Recitals 2, 3 and 5 of Decision (EU) 2016/702 of the European Central Bank of 18 April 2016 amending Decision 2015/774 (OJ 2016 L 121, p. 24) state:In line with the Governing Council’s mandate to ensure price stability, certain features of the PSPP should be modified in order to ensure a sustained adjustment in the path of inflation towards levels that are below, but close to 2%, over the medium term. The changes are in line with the Governing Council’s monetary policy mandate and duly reflect risk management considerations.More specifically, in order to achieve the PSPP’s objectives, the liquidity provided to the market through the combined monthly purchases under the APP should be increased to EUR 80 billion.Starting in April 2016, the allocation between purchases of eligible marketable debt securities issued by international organisations and multilateral development banks and purchases of other eligible marketable debt securities under the PSPP should be modified in order to achieve the PSPP’s objectives and ensure its smooth implementation for the duration of the PSPP and at its increased purchase volume.’ Decision 2017/100 12Recitals 3 to 6 of Decision 2017/100 are worded as follows:‘(3)On 8 December 2016, the Governing Council decided, in line with its mandate to ensure price stability, that certain parameters of the APP should be adjusted in order to achieve the APP’s objectives. The adjustments are in line with the Governing Council’s monetary policy mandate, fully comply with the obligations of the Eurosystem central banks under the Treaties and duly reflect risk management considerations.More specifically, the intended horizon of purchases under the APP should be extended until the end of December 2017, or beyond, if necessary, and in any event until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.The liquidity provided to the market through the combined monthly purchases under the APP should continue to amount to EUR 80 billion until the end of March 2017. From April 2017, the combined monthly purchases under the APP should proceed at a pace of EUR 60 billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. If, in the meantime, the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council intends to increase the programme in terms of size and/or duration.(6)To ensure the continued smooth implementation of purchases under the APP over the intended horizon, the maturity range of the PSPP should be broadened by decreasing the minimum remaining maturity for eligible securities from two years to one year. Moreover, purchases of securities under the APP with a yield to maturity below the interest rate on the ECB’s deposit facility should be permitted to the extent necessary.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 13Several groups of individuals have brought various constitutional actions before the Bundesverfassungsgericht (Federal Constitutional Court, Germany) concerning various decisions of the ECB, the participation of the German Central Bank in the implementation of those decisions or its alleged failure to act with regard to those decisions and the alleged failure of the Federal Government and the Federal Parliament to act in respect of that participation and those decisions.14In support of those actions, the applicants in the main proceedings maintain, in essence, that the decisions of the ECB in question together amount to an ultra vires act, inasmuch as (i) they fail to observe the division of competences between the European Union and the Member States provided for in Article 119 TFEU, since they do not fall within the scope of the ECB’s mandate, as defined in Article 127(1) and (2) TFEU and Articles 17 to 24 of Protocol No 4 on the Statute of the European System of Central Banks and of the European Central Bank (‘the Protocol on the ESCB and the ECB’), and (ii) they infringe Article 123 TFEU. They also argue that those decisions infringe the principle of democracy laid down by the Grundgesetz (German Basic Law) and thereby undermine German constitutional identity.15The Bundesverfassungsgericht (Federal Constitutional Court) states that if Decision 2015/774 exceeds the mandate of the ECB or infringes Article 123 TFEU, it must uphold these various actions. The same applies if the rules on the sharing of losses stemming from that decision affect the budgetary powers of the Federal Parliament.16In those circumstances, the Bundesverfassungsgericht (Federal Constitutional Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Does Decision … 2015/774 … as amended by … Decision … 2016/702 … or the method of its implementation, infringe Article 123(1) TFEU?Does it infringe Article 123(1) TFEU in particular if in the course of the public sector asset purchase programme (PSPP),details of the purchases are communicated in a way that creates de facto certainty on the markets that the Eurosystem will purchase part of the bonds to be issued by the Member States?even after the event no details are given about compliance with minimum periods between the issue of a debt instrument on the primary market and its purchase on the secondary market, with the result that a review by the courts is not possible in that regard?(c)all bonds purchased are not resold but held until maturity and thus withdrawn from the market?the Eurosystem purchases marketable debt instruments with a negative yield at maturity?(2)Does the Decision referred to in [the first question] then infringe Article 123 TFEU in any event if, in view of changes in conditions on the financial markets, in particular as a result of a shortage of bonds available for purchase, its continued implementation requires a continual loosening of the originally agreed purchase rules and [if] the restrictions laid down in the case-law of the Court of Justice for a bond purchase programme, such as the PSPP, lose their effect?Does the current version of Decision … 2015/774 … infringe Article 119 and Article 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the [ESCB and the ECB] because it exceeds the monetary policy mandate of the ECB laid down in those provisions and for that reason encroaches upon the competence of the Member States?Is the mandate of the ECB exceeded in particular as a result of the fact that:on the basis of the volume of the PSPP, which amounted to EUR 1 534.8 billion on 12 May 2017, the Decision referred to in [the first question] materially influences the refinancing terms of the Member States?in view of the improvement in the refinancing terms of the Member States referred to in (a) above and their effect on the commercial banks, the Decision referred to in [the first question] has not only indirect economic policy consequences but its objectively ascertainable effects suggest that an economic policy aim of the programme is at least of equal priority as the monetary policy aim?on account of its powerful economic policy effects, the Decision referred to in [the first question] infringes the principle of proportionality?in the absence of a specific statement of reasons during the period of more than two years of implementation, it is not possible to examine whether the Decision referred to in [the first question] is still necessary and proportionate?Does the Decision referred to in [the first question] infringe Article 119 and Article 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the [ESCB and the ECB] in any event because its volume and implementation period of more than two years and the resulting economic policy effects give grounds for a different view of the need for and proportionality of the PSPP and consequently, from a certain point in time, it exceeds the monetary policy mandate of the [ECB]?Does the unlimited sharing of risks between the national central banks of the Eurosystem that may be provided for under the Decision referred to in [the first question], in the event of the non-repayment of bonds of the central governments and of equivalent issuers, infringe Article 123 and Article 125 TFEU and Article 4(2) TEU, if as a result it may be necessary for national central banks to be recapitalised using budget funds?’ Consideration of the questions referred Admissibility of the request for a preliminary ruling 17The Italian Government submits that the present request for a preliminary ruling must be declared inadmissible in its entirety by the Court.18That government argues in that regard, first, that the referring court is in reality asking the Court of Justice to provide an opinion, since the referring court does not accept that the answer that might be given to this request for a preliminary ruling is binding but rather considers that it is itself ultimately responsible for deciding upon the validity of Decision 2015/774 in the light of the conditions and limits laid down by the German Basic Law.19However, those arguments do not give grounds for finding the request for a preliminary ruling to be inadmissible given that (i) this request directly concerns the interpretation of EU law and the validity of EU acts and (ii) a judgment in which the Court gives a preliminary ruling is binding on the national court, as regards the interpretation of that law or the validity of such acts, for the purposes of the decision to be given in the main proceedings (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 14 and 16).20The Italian Government goes on to argue that the national proceedings which have given rise to the present request are not compatible with the system for reviewing the validity of EU acts established by Articles 263 and 267 TFEU. In its view, those proceedings circumvent that system in the sense that they open the way to a direct action against the validity of an EU act before the national courts, when in fact those courts can properly ask the Court of Justice for a preliminary ruling concerning the validity of an EU act only when the origin of the request is to be found in national measures implementing the EU act.21In that regard, the Court has consistently held, however, that a request for a preliminary ruling concerning the validity of an EU act is admissible when the referring court is called upon, as is the case in the main proceedings, to hear a genuine dispute in which the question of the validity of an EU act is raised indirectly (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 29 and the case-law cited).22Lastly, the Italian Government argues that the questions raised are based on complaints that challenge the choices made by the ECB in the exercise of its discretion and in the implementation of Decision 2015/774. It submits that the Court’s review cannot concern the implementation of such a decision and is limited, in the sphere of monetary policy, to procedural aspects.23It should first be observed in that regard that, in accordance with the principle of conferred powers set out in Article 5(2) TEU, the European System of Central Banks (ESCB) must act within the limits of the powers conferred upon it by primary law and it cannot therefore validly adopt and implement a programme which falls outside the area assigned to monetary policy by primary law. In order to ensure that the principle of conferral is complied with, the acts of the ESCB are, under the conditions laid down by the Treaties, subject to review by the Court (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 41).24Next, it is true that the ESCB must be allowed a broad discretion since, when it prepares and implements an open market operations programme, it is required to make choices of a technical nature and to undertake complex forecasts and assessments. The fact remains, however, that the Court is required to ascertain, in its review of the proportionality of the measures entailed by such a programme in relation to monetary policy objectives, whether the ESCB made a manifest error of assessment in that regard (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 68, 74, 81 and 91).25Finally, the foregoing considerations concern the scope of the examination of the validity of Decision 2015/774 which the Court must undertake. They are not, however, capable of calling into question the Court’s obligation to undertake that examination when a question is referred to it for a preliminary ruling on validity and, accordingly, they cannot give grounds for finding the present request for a preliminary ruling to be inadmissible.26Consequently, it is not appropriate to declare the request for a preliminary ruling to be inadmissible as a whole. The first to fourth questions 27By its first to fourth questions, which it is appropriate to consider together, the referring court is, in essence, asking the Court of Justice to assess the validity of Decision 2015/774 in the light of Article 119, Article 123(1), Article 127(1) and (2) and the second paragraph of Article 296 TFEU and of Articles 17 to 24 of the Protocol on the ESCB and the ECB.28As a preliminary point, the Court notes that, in view of the grounds of the order for reference and as the Advocate General has stated in points 31 and 32 of his Opinion, account must be taken, in answering those questions, not only of the ECB decisions mentioned by the referring court but also of Decisions 2015/2464 and 2017/100. Compliance with the obligation to state reasons laid down in the second paragraph of Article 296 TFEU 29The referring court is uncertain whether the ECB has complied with the obligation to state reasons arising under the second paragraph of Article 296 TFEU, first, because of the alleged absence of any specific statement of reasons for the ECB decisions relating to the PSPP, in particular so far as the necessity, extent and duration of the economic policy effects of that programme were concerned, and, secondly, because details of the ‘blackout period’, as referred to in Article 4(1) of Decision 2015/774, were not subsequently published.30In that regard, in so far as concerns the alleged absence of a specific statement of reasons for the ECB decisions relating to the PSPP, it should be recalled that, in situations such as that at issue in the present case, in which an EU institution enjoys broad discretion, a review of compliance with certain procedural safeguards –– including the obligation for the ESCB to examine carefully and impartially all the relevant elements of the situation in question and to give an adequate statement of the reasons for its decisions –– is of fundamental importance (see, to that effect, judgments of 21 November 1991, Technische Universität München, C‑269/90, EU:C:1991:438, paragraph 14, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 68 and 69).31According to settled case-law of the Court, although the statement of reasons for an EU measure, which is required by the second paragraph of Article 296 TFEU, must show clearly and unequivocally the reasoning of the author of the measure in question, so as to enable the persons concerned to ascertain the reasons for the measure and to enable the Court to exercise its power of review, it is not required to go into every relevant point of fact and law (judgments of 19 November 2013, Commission v Council, C‑63/12, EU:C:2013:752, paragraph 98, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 70).32In particular, in the case of a measure intended to have general application, which makes clear the essential objective pursued by the institutions, a specific statement of reasons for each of the technical choices made by the institutions cannot be required (see, to that effect, judgments of 10 January 2006, IATA and ELFAA, C‑344/04, EU:C:2006:10, paragraph 67; of 12 December 2006, Germany v Parliament and Council, C‑380/03, EU:C:2006:772, paragraph 108; and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 76).33The question whether the duty to state reasons has been satisfied must, moreover, be assessed by reference not only to the wording of the measure but also to its context and to the whole body of legal rules governing the matter in question (judgments of 19 November 2013, Commission v Council, C‑63/12, EU:C:2013:752, paragraph 99, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 70).34In the present case, recitals 3 and 4 of Decision 2015/774 outline the objective of the PSPP, the economic context justifying the establishment of that programme as well as the mechanisms for bringing about the intended effects of the programme.35While the statements of reasons for Decisions 2015/2464, 2016/702 and 2017/100 do not reproduce those reasons relating to the PSPP, they do include explanations concerning the considerations underpinning the amendments which those decisions made to the rules governing the PSPP.36Furthermore, various documents published by the ECB at the time when each of those decisions was adopted supplement the reasoning given in the decisions by setting out, in detail, the economic analyses underpinning the decisions, the various options considered by the Governing Council and the reasons justifying the choices made, in the light, in particular, of the observed and anticipated effects of the PSPP.37Thus, as the Advocate General has observed at points 133 to 138 and 144 to 148 of his Opinion, the successive decisions of the ECB relating to the PSPP have consistently been clarified by the publication of press releases, introductory statements of the President of the ECB at press conferences, accompanied by answers to the questions raised by the press, and by the accounts of the ECB Governing Council’s monetary policy meetings, which outline the discussions within that body.38In that regard, attention should be drawn in particular to the fact that those accounts include, inter alia, explanations of the upward then downward trends in the monthly volume of purchases of bonds and of the reinvestment of the sums received on maturity of the bonds. They show, in that context, that the potential side effects of the PSPP, including its possible impact on the budgetary decisions of the Member States concerned, were taken into account.39The President of the ECB explained at successive press conferences that it was the exceptionally low level of inflation rates, by comparison with the objective of maintaining price stability by returning annual inflation rates to levels closer to 2%, that justified establishing the PSPP and making regular adjustments to that programme. Indeed, prior to the adoption of Decisions 2015/774, 2015/2464, 2016/702 and 2017/100, the annual rate of inflation was, respectively –0.2%, 0.1%, 0.3% and 0.6%. It was only at his press conference on 7 September 2017 that the President of the ECB announced that the annual rate of inflation had reached 1.5%, thus approaching the target.40In addition to the various documents mentioned in paragraph 37 of this judgment, which were made available both at the time when the PSPP was set up and whenever that programme was reviewed and amended, mention can also be made of the publication, in the ECB’s Economic Bulletin, of general analyses of the monetary situation in the euro area and of a number of specific studies dealing with the effects of the APP and the PSPP.41It follows from all those factors that the ESCB explained how persistently low levels of inflation and the exhaustion of the instruments normally used for the conduct of its monetary policy led it to consider that the adoption and implementation, with effect from 2015, of an asset purchase programme with the features of the PSPP was necessary, both in principle and in its various practical aspects.42Having regard to the principles referred to in paragraphs 31 to 33 of this judgment, those factors establish that the ECB duly stated the reasons for Decision 2015/774.43As regards the absence of any subsequent publication of details relating to the black-out period, the Court observes that, since the purpose of such publication would be to show the precise content of the measures adopted by the ESCB rather than the reasons justifying those measures, it cannot be required by virtue of the obligation to state reasons.44In view of the foregoing, it must be found that Decision 2015/774 is not vitiated by any defect in the statement of reasons such as to render it invalid. Article 119 and Article 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the ESCB and the ECB 45The referring court asks whether Decision 2015/774 falls within the ambit of the powers of the ESCB, as defined by primary law, in view, inter alia, of the scale of the effects of the decision, which follow from the volume of bonds that may be acquired under the PSPP and from the duration of that programme.– The powers of the ESCB 46It should be noted that under Article 119(2) TFEU, the activities of the Member States and the Union are to include a single currency, the euro, as well as the definition and conduct of a single monetary policy and exchange-rate policy (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 48, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 34).47As regards more particularly monetary policy, Article 3(1)(c) TFEU states that the Union is to have exclusive competence in that area for the Member States whose currency is the euro (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 50, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 35).48Under Article 282(1) TFEU, the ECB and the central banks of the Member States whose currency is the euro, which constitute the Eurosystem, are to conduct the monetary policy of the Union. According to Article 282(4) TFEU, the ECB is to adopt such measures as are necessary to carry out its tasks in accordance with Articles 127 to 133 and Article 138 TFEU, as well as with the conditions laid down in the Statute of the ESCB and of the ECB (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 49, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 36).49Within that framework, it is for the ESCB, pursuant to Article 127(2), Article 130 and Article 282(3) TFEU, to define and implement that policy, acting independently and in compliance with the principle of conferral of powers, while it is for the Court, in the exercise of its power of review, to safeguard, under the conditions laid down by the Treaties, the principle of conferral (see, to that effect, judgments of 10 July 2003, Commission v ECB, C‑11/00, EU:C:2003:395, paragraph 134, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 37, 40 and 41).50It must be pointed out in this regard that the FEU Treaty contains no precise definition of monetary policy but defines both the objectives of monetary policy and the instruments which are available to the ESCB for the purpose of implementing that policy (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 53, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 42).51Thus, under Article 127(1) and Article 282(2) TFEU, the primary objective of the Union’s monetary policy is to maintain price stability. The same provisions further stipulate that, without prejudice to that objective, the ESCB is to support the general economic policies in the Union, with a view to contributing to the achievement of its objectives, as laid down in Article 3 TEU (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 54, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 43).52As to the means assigned to the ESCB by primary law for the purpose of achieving those objectives, Chapter IV of the Protocol on the ESCB and the ECB, which describes the monetary functions and operations assured by the ESCB, sets out the instruments to which the ESCB may have recourse within the framework of monetary policy (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 45).– Delimitation of the Union’s monetary policy 53The Court has held that in order to determine whether a measure falls within the area of monetary policy it is appropriate to refer principally to the objectives of that measure. The instruments which the measure employs in order to attain those objectives are also relevant (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraphs 53 and 55, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 46).54In the first place, so far as the objectives of Decision 2015/774 are concerned, it is apparent from recital 4 of that decision that the purpose of the latter is to contribute to a return of inflation rates to levels below, but close to, 2% over the medium term.55In that regard, it is important to point out that the authors of the Treaties chose to define the primary objective of the Union’s monetary policy –– namely the maintenance of price stability –– in a general and abstract manner, but did not spell out precisely how that objective was to be given concrete expression in quantitative terms.56It does not appear that the specification of the objective of maintaining price stability as the maintenance of inflation rates at levels below, but close to, 2% over the medium term, which the ESCB chose to adopt in 2003, is vitiated by a manifest error of assessment and goes beyond the framework established by the FEU Treaty. As the ECB has explained, such a choice can properly be based, inter alia, on the fact that instruments for measuring inflation are not precise, on the appreciable differences in inflation within the euro area and on the need to preserve a safety margin to guard against the possible emergence of a risk of deflation.57It follows that, as the ECB submits and as the referring court has indeed noted, the specific objective set out in recital 4 of Decision 2015/774 can be attached to the primary objective of the Union’s monetary policy, as set out in Article 127(1) and Article 282(2) TFEU.58That conclusion is not called into question by the fact, to which the referring court draws attention, that the PSPP allegedly has considerable effects on the balance sheets of commercial banks as well as on the refinancing terms of the Member States of the euro area.59In the present case, it is undisputed that, by virtue of its underlying principle and its procedures, the PSPP is capable of having an impact both on the balance sheets of commercial banks and on the financing of the Member States covered by that programme and that such effects might possibly be sought through economic policy measures.60It must be emphasised in that regard that Article 127(1) TFEU provides, inter alia, that (i) without prejudice to its primary objective of maintaining price stability, the ESCB is to support the general economic policies in the Union and that (ii) the ESCB must act in accordance with the principles laid down in Article 119 TFEU. Accordingly, within the institutional balance established by the provisions of Title VIII of the FEU Treaty, which includes the independence of the ESCB guaranteed by Article 130 and Article 282(3) TFEU, the authors of the Treaties did not intend to make an absolute separation between economic and monetary policies.61In that connection, it should be recalled that a monetary policy measure cannot be treated as equivalent to an economic policy measure for the sole reason that it may have indirect effects that can also be sought in the context of economic policy (see, to that effect, judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 56, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 52).62The Court cannot concur with the referring court’s view that any effects of an open market operations programme that were knowingly accepted and definitely foreseeable by the ESCB when the programme was set up should not be regarded as ‘indirect effects’ of the programme.63First, both in the judgment of 27 November 2012, Pringle (C‑370/12, EU:C:2012:756) and in the judgment of 16 June 2015, Gauweiler and Others (C‑62/14, EU:C:2015:400), the Court regarded as indirect effects, having no consequences for the purposes of classification of the measures at issue in the cases that gave rise to those judgments, effects which, even at the time of adoption of the measures, were foreseeable consequences of those measures, which must therefore have been knowingly accepted at that time.64Secondly, the conduct of monetary policy will always entail an impact on interest rates and bank refinancing conditions, which necessarily has consequences for the financing conditions of the public deficit of the Member States (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 110).65More specifically, as the ECB explained before the Court, the transmission of the ESCB’s monetary policy measures to price trends takes place via, inter alia, facilitation of the supply of credit to the economy and modification of the behaviour of businesses and individuals with regard to investment, consumption and saving.66Consequently, in order to exert an influence on inflation rates, the ESCB necessarily has to adopt measures that have certain effects on the real economy, which might also be sought –– to different ends –– in the context of economic policy. In particular, when the maintenance of price stability requires the ESCB to seek to raise inflation, the measures that it must adopt to ease monetary and financial conditions in the euro area for that purpose may entail an impact on the interest rates of government bonds because, inter alia, those interest rates play a decisive role in the setting of the interest rates applicable to the various economic actors (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 78 and 108).67That being so, if the ESCB were precluded altogether from adopting such measures when their effects are foreseeable and knowingly accepted, that would, in practice, prevent it from using the means made available to it by the Treaties for the purpose of achieving monetary policy objectives and might –– in particular in the context of an economic crisis entailing a risk of deflation –– represent an insurmountable obstacle to its accomplishing the task assigned to it by primary law.68In the second place, as regards the means used in Decision 2015/774 to achieve the objective of maintaining price stability, it is common ground that the PSPP is based on the purchase of government bonds on secondary markets.69It is clear from Article 18.1 of the Protocol on the ESCB and the ECB, which forms part of Chapter IV of that protocol, that in order to achieve the objectives of the ESCB and to carry out its tasks, as provided for in primary law, the ECB and the central banks of the Member States may, in principle, operate in the financial markets by buying and selling outright marketable instruments denominated in euros. It follows that the operations provided for by Decision 2015/774 use one of the monetary policy instruments for which primary law provides (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 54).70In view of the foregoing, it follows that, taking account of its objective and of the means provided for achieving that objective, a decision such as Decision 2015/774 falls within the sphere of monetary policy.– Proportionality in relation to the objectives of monetary policy 71It follows from Article 119(2) TFEU and Article 127(1) TFEU, read in conjunction with Article 5(4) TEU, that a bond-buying programme forming part of monetary policy may be validly adopted and implemented only in so far as the measures that it entails are proportionate to the objectives of that policy (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 66).72According to settled case-law of the Court, the principle of proportionality requires that acts of the EU institutions should be suitable for attaining the legitimate objectives pursued by the legislation at issue and should not go beyond what is necessary to achieve those objectives (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 67 and the case-law cited).73As regards judicial review of compliance with those conditions, since the ESCB is required, when it prepares and implements an open market operations programme of the kind provided for in Decision 2015/774, to make choices of a technical nature and to undertake complex forecasts and assessments, it must be allowed, in that context, a broad discretion (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 68 and the case-law cited).74As regards, first, the suitability of the PSPP for attaining the ESCB’s objectives, it follows from recital 3 of Decision 2015/774, from the documents published by the ECB at the time of adoption of that decision and from the observations submitted to the Court that Decision 2015/774 was adopted in the light of a number of factors that materially increased the risk of a decline in prices over the medium term, in the context of an economic crisis entailing a risk of deflation.75It can be seen from the documents before the Court that, in spite of the monetary policy measures adopted, annual rates of inflation in the euro area were at that time far below the 2% target fixed by the ESCB, as they were no higher than ‑0.2% in December 2014, and that the forecasts available at that time as to how inflation rates would move anticipated that such rates would remain very low or negative over the following months. Although monetary and financial conditions in the euro area subsequently improved gradually, it is the case that, at the date of adoption of Decision 2015/774, actual annual inflation rates continued to be appreciably below 2%, the rate being 0.6% in November 2016.76Against that background, recital 4 of Decision 2015/774 states that, for the purpose of achieving the objective of inflation rates at levels below, but close to, 2%, the PSPP is intended to ease monetary and financial conditions, including those of non-financial corporations and households, thereby supporting aggregate consumption and investment spending in the euro area and ultimately contributing to a return of inflation rates to the levels sought over the medium term.77The ECB has referred in this regard to the practices of other central banks and to various studies, which show that large-scale purchases of government bonds can contribute to achieving that objective by means of facilitating access to financing that is conducive to boosting economic activity by giving a clear signal of the ESCB’s commitment to achieving the inflation target set, by promoting a reduction in real interest rates and, at the same time, by encouraging commercial banks to provide more credit in order to rebalance their portfolios.78Accordingly, in view of the information before the Court, it does not appear that the ESCB’s economic analysis –– according to which the PSPP was appropriate, in the monetary and financial conditions of the euro area, for contributing to achieving the objective of maintaining price stability –– is vitiated by a manifest error of assessment.79It must therefore be determined, in the second place, whether the PSPP does not go manifestly beyond what is necessary to achieve that objective.80In that regard, the PSPP programme was adopted in a context which the ECB described as characterised, on the one hand, by persistently low inflation that risked triggering a cycle of deflation and, on the other, by an inability to counter that risk by means of the other instruments available to the ESCB for increasing inflation rates. Concerning the latter point, it is to be noted, inter alia, that key interest rates were at levels close to the bottom of their conceivable range and that the ESCB had, for several months, already been implementing a programme of large-scale purchases of private sector assets.81In those circumstances, in view of the foreseeable effects of the PSPP and given that it does not appear that the ESCB’s objective could have been achieved by any other type of monetary policy measure entailing more limited action on the part of the ESCB, it must be held that, in its underlying principle, the PSPP does not manifestly go beyond what is necessary to achieve that objective.82As regards the procedures for implementing the PSPP, the way that programme is set up also helps to guarantee that its effects are limited to what is necessary to achieve the objective concerned, in particular because, since the PSPP is not selective, the ESCB’s action will have an impact on financial conditions across the whole of the euro area and will not meet the specific financing needs of certain Member States of that area.83Likewise, the decision, reflected in Article 3 of Decision 2015/774, to make the purchase of bonds under the PSPP subject to stringent eligibility criteria has the effect of limiting that programme’s impact on the balance sheets of commercial banks, by ensuring that the programme is not implemented in such a way as to allow those banks to resell securities with a high level of risk to the ESCB.84In addition, the PSPP has, from the start, been intended to apply only during the period necessary for attaining the objective sought and is therefore temporary in nature.85It thus follows from recital 7 of Decision 2015/774 that it was initially anticipated that the PSPP’s period of application would run until the end of September 2016. That period was subsequently extended until the end of March 2017 and then until the end of December 2017, as is stated in recital 3 of Decision 2015/2464 and recital 4 of Decision 2017/100 respectively. To that end, the decisions taken in that regard were incorporated into Article 2(2) of the Guideline on a secondary markets public sector asset purchase programme (ECB/2015/NP3) (‘the Guideline’), which is binding on the central banks of the Member States in accordance with Article 12(1) of the Protocol on the ESCB and the ECB.86It does not appear that that initial period or the successive extensions thereof manifestly go beyond what was necessary to achieve the objective sought, since they always covered relatively short periods and were decided upon in view of the fact that the observed changes in inflation rates were not sufficient to achieve the objective sought by Decision 2015/774.87As to the volume of bonds that can be purchased under the PSPP, it must first be emphasised that a set of rules has been adopted to limit that volume in advance.88Thus, that volume was, from the outset, circumscribed by setting a monthly asset purchase amount under the APP. That amount, which was regularly revised in order to restrict it to what was necessary in order to achieve the stated objective, is found in recital 7 of Decision 2015/774, recital 3 of Decision 2016/702 and recital 5 of Decision 2017/100 and was incorporated in Article 2(2) of the Guideline. It also follows from the last-mentioned provision that priority is given to bonds issued by private operators for the purpose of reaching the monthly asset purchase volume under the APP as a whole.89In addition, the extent of the ESCB’s possible intervention on secondary markets, within the framework of the PSPP, is also restricted by the rules in Article 5 of Decision 2015/774, which lay down strict purchase limits per issue and per issuer.90Next, although it is true that, despite those various limits, the total volume of securities that may be acquired under the PSPP remains substantial, the ECB has made the valid point that the efficacy of such a programme through the mechanisms described in paragraph 77 of this judgment depends on a large volume of government bonds being purchased and held. That means not only that the volume of purchases must be sufficient, but also that it may prove necessary — in order to achieve the objective pursued by Decision 2015/774 –– to hold the bonds purchased on a lasting basis and to reinvest the sums realised when those bonds are repaid on maturity.91In that regard, the fact that that reasoned analysis is disputed does not, in itself, suffice to establish a manifest error of assessment on the part of the ESCB, since, given that questions of monetary policy are usually of a controversial nature and in view of the ESCB’s broad discretion, nothing more can be required of the ESCB apart from that it use its economic expertise and the necessary technical means at its disposal to carry out that analysis with all care and accuracy (see, to that effect, judgment of 16 June 2005, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 75).92Finally, having regard to the information in the documents before the Court and to the broad discretion enjoyed by the ESCB, it is not apparent that a government-bonds purchase programme of either more limited volume or shorter duration would have been able to bring about –– as effectively and rapidly as the PSPP –– changes in inflation comparable to those sought by the ESCB, for the purpose of achieving the primary objective of monetary policy laid down by the authors of the Treaties.93In the third place, as the Advocate General has stated in point 148 of his Opinion, the ESCB weighed up the various interests involved so as effectively to prevent disadvantages which are manifestly disproportionate to the PSPP’s objective from arising on implementation of the programme.94In particular, as the Court has already had occasion to note, in paragraph 125 of the judgment of 16 June 2015, Gauweiler and Others (C‑62/14, EU:C:2015:400), the open market operations authorised by the authors of the Treaties inevitably entail a risk of losses. However, the ESCB has adopted various measures designed to circumscribe that risk and to take it into account.95Thus, the rules mentioned in paragraphs 83 and 89 of this judgment also reduce that risk, by limiting the ESCB’s exposure in the event of a default of the issuer of some of the bonds purchased and by ensuring that bonds with a significant default risk cannot be purchased under the PSPP. It follows, moreover, from Article 4(3) of the Guideline that the ECB monitors the central banks of the Member States on an ongoing basis to ensure that they are complying with those rules.96In addition, in order to prevent the position of a central bank of one Member State from being weakened in the event of an issuer in another Member State failing to make a repayment, Article 6(3) of Decision 2015/774 provides that each national central bank is to purchase eligible securities of issuers of its own jurisdiction.97If, despite those preventive measures, the purchase of securities under the PSPP were to result in, possibly significant, losses, the information provided to the Court indicates that the rules on loss allocation, which were established right at the start of the programme and have subsequently been maintained, provide that, in the case of any losses of a national central bank that are related to the programme, the only losses to be shared are those generated by securities issued by eligible international organisations; under Article 6(1) of Decision 2015/774, such securities represent 10% of the total value of the PSPP. By contrast, the ESCB has not adopted any rule allowing for the sharing of losses of a central bank of a Member State that derive from securities issued by issuers of that Member State. Nor has the adoption of such a rule been announced by the ESCB.98It follows from the foregoing that the ESCB duly took into consideration the risks to which the substantial volume of asset purchases under the PSPP might possibly expose the central banks of the Member States and that, having considered the interests involved, it took the view that it was not appropriate to establish a general rule on loss sharing.99As regards possible PSPP-related losses of the ECB, especially in the event of its purchasing, within the limit of the 10% share allocated to it by Article 6(2) of Decision 2015/774, exclusively or predominantly securities issued by national authorities, it must be observed that the ESCB has not adopted –– beyond the safeguards against such a risk that are afforded both by the high eligibility criteria set out in Article 3 of that decision and by the purchase limits per issue and per issuer under Article 5 of the decision –– any rule derogating from the general scheme for the allocation of losses of the ECB under Article 32(5) of the Protocol on the ESCB and the ECB in conjunction with Article 33 thereof. It follows, in essence, that such losses may be offset against the ECB’s general reserve fund and, if necessary, following a decision by the Governing Council, against the monetary income of the relevant financial year in proportion and up to the amounts allocated to the national central banks in accordance with the rule that allocation is in proportion to their respective paid-up shares in the capital of the ECB.100It follows from those considerations that Decision 2015/774 does not infringe the principle of proportionality. Article 123(1) TFEU 101The referring court is uncertain whether Decision 2015/774 is compatible with Article 123(1) TFEU.102According to the wording of Article 123(1) TFEU, that provision prohibits the ECB and the central banks of the Member States from granting overdraft facilities or any other type of credit facility to public authorities and bodies of the Union and of Member States and from purchasing directly from them their debt instruments.103It follows that that provision prohibits all financial assistance from the ESCB to a Member State, but does not preclude, generally, the possibility of the ESCB purchasing from the creditors of such a State, bonds previously issued by that State (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 132, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 95).104As regards Decision 2015/774, it should be observed that under the PSPP the ESCB is not entitled to purchase bonds directly from public authorities and bodies of the Member States, but only to do so indirectly, on the secondary markets. The intervention by the ESCB provided for by that programme thus cannot be equated with a measure granting financial assistance to a Member State.105However, the Court has held that Article 123(1) TFEU imposes two further limits on the ESCB when it adopts a programme for purchasing bonds issued by the public authorities and bodies of the Union and the Member States.106First, the ESCB cannot validly purchase bonds on the secondary markets under conditions which would, in practice, mean that its intervention has an effect equivalent to that of a direct purchase of bonds from the public authorities and bodies of the Member States (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 97).107Secondly, the ESCB must build sufficient safeguards into its intervention to ensure that the latter does not fall foul of the prohibition of monetary financing in Article 123 TFEU, by satisfying itself that the programme is not such as to reduce the impetus which that provision is intended to give the Member States to follow a sound budgetary policy (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 100 to 102 and 109).108The safeguards which the ESCB must provide so that those two restrictions are observed will depend both on the particular features of the programme under consideration and on the economic context in which that programme is adopted and implemented. Whether those safeguards are sufficient must then be determined by the Court in the event of the programme being challenged.– The alleged equivalence of intervention under the PSPP and the purchase of bonds on the primary markets 109The referring court considers that the PSPP procedures may create, for private operators, de facto certainty that the bonds that they may acquire from the Member States will subsequently be purchased by the ESCB on the secondary markets.110In that regard, it should be observed that the ESCB’s intervention would be incompatible with Article 123(1) TFEU if the potential purchasers of government bonds on the primary markets knew for certain that the ESCB was going to purchase those bonds within a certain period and under conditions allowing those market operators to act, de facto, as intermediaries for the ESCB for the direct purchase of those bonds from public authorities and bodies of the Member State concerned (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 104).111In the present case, it is true that the foreseeability of the ESCB’s intervention under the PSPP is –– deliberately –– increased by publishing in advance a set of features of that programme, which, as the Commission and the ECB have emphasised, is intended to contribute to the effectiveness and proportionality of the programme, by limiting the volume of bonds that actually have to be purchased to achieve the objective sought.112In particular, the announcement, both in decisions of the ESCB and in communications intended for the public, of the monthly volume of asset purchases envisaged under the APP, the expected duration of that programme, the rules for allocating those volumes between the various central banks of the Member States, or the eligibility criteria governing the purchase of a security, is such as to enable private operators to foresee, to some extent, significant aspects of the ESCB’s future actions on the secondary markets.113However, the ESCB has put in place various safeguards with a view to ensuring that a private operator is not able to act as if it were an intermediary of the ESCB.114Thus, observance of the blackout period provided for in Article 4(1) of Decision 2015/774, which is monitored by the ECB pursuant to Article 9 of the Guideline, ensures that bonds issued by a Member State cannot be purchased by the ESCB immediately after they are issued.115Although Article 4(1) of Decision 2015/774 does not specify the precise duration of the blackout period, which is fixed in Article 15 of the Guideline, the ECB has stated, in its written observations, that the length of the period is measured in days rather than weeks. Such a duration does not, however, give operators who are potential purchasers of government bonds on the primary markets the certainty that the ESCB is going to purchase those bonds very shortly thereafter.116Indeed, the absence of any publication, either in advance or after the event, of information concerning the duration of the blackout period, and the fact that the period in question is only a minimum period, on expiry of which the purchase of a security is permitted, avoid a situation in which a private operator is able to act, de facto, as an intermediary of the ESCB, since those factors limit the foreseeability, in terms of timing, of the ESCB’s interventions on the secondary markets. The fact that a purchase may thus take place several months or several years after a bond has been issued increases the uncertainty of private operators all the more, given that the ESCB has the option of reducing the monthly volume of bond purchases under the APP and has, moreover, already made use of that option on a number of occasions.117In addition, the ESCB has introduced a number of safeguards specifically to prevent private operators from predicting with certainty whether particular bonds will in fact be purchased on the secondary markets under the PSPP.118First, although the ESCB discloses the total volume of projected purchases under the APP, it does not disclose the volume of bonds issued by public authorities and bodies of a Member State which will in the normal course of events be purchased in a given month under the PSPP. In addition, the ESCB has laid down rules intended to ensure that that volume cannot be precisely determined in advance.119In that regard, first, the rules laid down in Article 2(2) of the Guideline provide that the volume set out therein applies for the whole of the APP and that PSPP purchases may be made only up to the residual amount. It follows that the volume of those purchases having to be made can vary from month to month depending on how many bonds issued by private operators are available on the secondary markets. That provision also enables the Governing Council to depart, by way of exception, from the monthly forecast volume, when specific market conditions so demand.120Secondly, although Article 6(2) of Decision 2015/774 provides that purchases are to be distributed among the central banks of the Member States in accordance with the key for subscription of the ECB’s capital, it cannot be deduced with certainty therefrom that the amount thus allocated to a central bank of a Member State will be used, to the extent provided for in Article 6(1) of that decision, for the purchase of bonds originating from public authorities and bodies of that Member State. Indeed, the allocation of securities purchased under the PSPP, as provided for in Article 6(1) of Decision 2015/774, is, under the second sentence of that provision, to be subject to revision by the Governing Council. Decision 2015/774 also includes various mechanisms that inject a degree of flexibility into purchases under the PSPP, in particular by permitting, in Article 3(3) and (4), substitute purchases to be carried out and, in Article 6(3), the Governing Council to allow ad hoc deviations from the specialisation scheme for the allocation of securities purchased under the PSPP. Article 2(3) of the Guideline enables the Eurosystem central banks to depart from the monthly purchase guidance in order to react appropriately to market conditions.121Next, it is apparent from Article 3(1), (3) and (5) of Decision 2015/774 that the ESCB has authorised the purchase of diversified securities under the PSPP, thereby reducing the possibilities for determining in advance the nature of the purchases that will be made for the purpose of achieving the programme’s monthly purchase targets.122Thus, it is possible in that context for not only bonds issued by central governments but also those issued by regional or local governments to be purchased. Similarly, those bonds can have a maturity of between 1 year and 30 years and 364 days and their yield may, where necessary, be negative, or even below the deposit facility rate.123It must also be noted that Decisions 2015/2464 and 2017/100 rightly amended, on these points, the scheme initially set up in order to extend the scope of asset purchases. Those decisions thus further limited, in the light of the changes in market conditions, the foreseeability of the ESCB’s purchases of Member State bonds.124Lastly, under Article 5(1) and (2) of Decision 2015/774, the Eurosystem central banks cannot purchase more than 33% of a particular issue of bonds of a central government of a Member State or more than 33% of the outstanding securities of one of those governments.125It follows from those purchase limits, compliance with which is monitored on a daily basis by the ECB in accordance with Article 4(3) of the Guideline, that the ESCB is not permitted to buy either all the bonds issued by such an issuer or the entirety of a given issue of those bonds. As has been pointed out by the governments that have taken part in the present proceedings and by the ECB, it follows that, when bonds are purchased from a central government of a Member State, a private operator necessarily runs the risk of not being able to resell them to the ESCB on the secondary markets, as a purchase of all the bonds issued is in all cases precluded.126The uncertainty that those purchase limits create in that regard is heightened by the restrictions which Article 8 of Decision 2015/774 places on the publication of information concerning the bonds held by the ESCB. As a result of those restrictions, only aggregate information is published, to the exclusion of any indication as to the proportion of bonds actually held by the ESCB following a given issue.127It follows from all the foregoing that, assuming that, as mentioned by the referring court, the ESCB is faced with a severe shortage of bonds issued by certain Member States –– which has been strongly disputed by the ECB ––, the safeguards built into the PSPP ensure that a private operator cannot be certain, when it purchases bonds issued by a Member State, that those bonds will actually be bought by the ESCB in the foreseeable future.128Accordingly, it must be found, as the Advocate General has stated in point 79 of his Opinion, that the fact that the PSPP procedures make it possible to foresee, at the macroeconomic level, that there will be a purchase of a significant volume of bonds issued by public authorities and bodies of the Member States does not afford a given private operator such certainty that he can act, de facto, as an intermediary of the ESCB for the direct purchase of bonds from a Member State.– Allegedly reduced impetus to conduct a sound budgetary policy 129The referring court asks whether Decision 2015/774 is compatible with Article 123(1) TFEU inasmuch as the certainty that that decision might create with regard to the ESCB’s intervention may distort market conditions by reducing the impetus for Member States to pursue a sound budgetary policy.130It should be borne in mind that the fact that implementation of an open market operations programme to some extent facilitates financing for the Member States concerned is not decisive, since the conduct of monetary policy will always entail an impact on interest rates and bank refinancing conditions, which necessarily has consequences for the financing conditions of the public deficit of the Member States (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 108 and 110).131Accordingly, although such a programme may make it foreseeable that, in the months ahead, a not inconsiderable proportion of the bonds issued by a Member State is likely to be purchased by the ESCB, which can facilitate that Member State’s financing, that does not in itself mean that the programme is incompatible with Article 123(1) TFEU.132However, in order to avoid a situation in which the Member States’ impetus to pursue a sound budgetary policy is reduced, the adoption and implementation of such a programme may not create certainty regarding a future purchase of Member State bonds, in consequence of which Member States might adopt a budgetary policy that fails to take account of the fact that they will be compelled, in the event of a deficit, to seek financing on the markets, or in consequence of which they would be protected against the consequences which a change in their macroeconomic or budgetary situation may have in that regard (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 113 and 114).133In that context, it must be stated, in the first place, that, according to recital 7 of Decision 2015/774, the PSPP is intended to be implemented only until the Governing Council sees a sustained adjustment in the path of inflation which is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term. Although the actual period of anticipated application of the PSPP has nonetheless been extended on a number of occasions, that principle has never been called into question when it was decided to adopt those extensions, as is confirmed by recital 3 of Decision 2015/2464 and recital 5 of Decision 2017/100.134It follows that the ESCB has, in its successive decisions, provided for the purchase of government bonds only in so far as necessary for the maintenance of price stability, that it has regularly revised the PSPP volume and that it has consistently preserved the temporary nature of that programme.135The programme’s temporary nature is also reinforced by the fact that, under Article 12(2) of the Guideline, the ESCB has retained the option of selling purchased bonds at any time, which enables it to adapt its programme according to the attitudes of the Member States concerned and means that the operators involved cannot be certain that the ESCB will not make use of that option (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 117 and 118).136Accordingly, Decision 2015/774 does not enable the Member States to determine their budgetary policy without taking account of the fact that, in the medium term, continuity in the implementation of the PSPP is in no way guaranteed and that they will thus be compelled, in the event of a deficit, to seek financing on the markets without being able to take advantage of the easing of financing conditions that implementation of the PSPP may entail (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 112 and 114).137In the second place, it is important to note that Decision 2015/774 and the Guideline contain a series of safeguards designed to limit the effects of the PSPP on the impetus to pursue a sound budgetary policy.138First, the scale of the PSPP’s impact on the financing conditions of the Member States of the euro area is limited by the measures restricting the volume of Member State bonds eligible to be purchased under the PSPP (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 116).139In that regard, it can be seen from the considerations in paragraph 88 of this judgment that the total volume of those bonds is limited, de jure, both by the setting of a monthly purchase amount under the APP and by the subsidiary nature of the PSPP within the APP, as described in Article 2(2) of the Guideline.140In addition, as the ECB has argued, the distribution, in accordance with Article 6(2) of Decision 2015/774, of those purchases between national central banks in accordance with the key for subscription of the ECB’s capital, as referred to in Article 29 of the Protocol on the ESCB and the ECB, rather than in accordance with other criteria such as, for example, the level of the respective debts of each Member State, in conjunction with the rule set out in Article 6(3) of that decision that each national central bank is to purchase securities of public issuers of its own Member State, means that the considerable increase in a Member State’s deficit resulting from the possible abandonment of a sound budgetary policy would reduce the proportion of that Member State’s bonds purchased by the ESCB. Implementation of the PSPP does not therefore enable a Member State to avoid the consequences, so far as financing is concerned, of any deterioration in its budgetary position.141Moreover, as a result of the purchase limits per issue and per issuer set out in Article 5(1) and (2) of that decision, in every case only a minority of the bonds issued by a Member State can be purchased by the ESCB under the PSPP, which means that that Member State has to rely chiefly on the markets to finance its budget deficit.142Next, Article 3(2) of Decision 2015/774 lays down stringent eligibility criteria based on a credit quality assessment, from which it is possible to depart only if the Member State concerned is subject to a financial assistance programme. Article 13(1) of the Guideline provides in addition that, in the event of a downgrade of the rating of a Member State’s bonds or of a negative review of a financial assistance programme, the Governing Council will have to decide whether to sell the bonds of the Member State concerned that have already been purchased.143It follows, as the Advocate General has stated in point 87 of his Opinion, that a Member State cannot rely on the financing possibilities to which the implementation of the PSPP may give rise in order to abandon a sound budgetary policy, without ultimately running the risk (i) of the bonds that it issues being excluded from the PSPP because they have been downgraded or (ii) of the ESCB selling the bonds of that Member State which it had previously purchased.144Accordingly, Decision 2015/774 does not reduce the impetus of the Member States concerned to conduct a sound budgetary policy.– Holding bonds until maturity and purchasing bonds at a negative yield to maturity 145The referring court expresses its doubts as to the compatibility of Decision 2015/774 with Article 123(1) TFEU with regard to (i) the possibility of the ESCB holding bonds purchased until maturity and (ii) the purchase of bonds at a negative yield.146As regards, in the first place, the possibility of the ESCB holding bonds purchased under the PSPP until maturity, it must be recalled that such a practice is in no way precluded by Article 18.1 of the Protocol on the ESCB and the ECB and that it does not imply that the ESCB waives its right to payment of the debt, by the issuing Member State, once the bond matures (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 118).147The ESCB is thus entitled to evaluate, on the basis of the objectives and characteristics of an open market operations programme, whether it is appropriate to envisage holding the bonds purchased under that programme; selling the bonds is not to be regarded as the rule and holding them as the exception to that rule.148In the present case, although Decision 2015/774 does not provide any further details concerning the possible sale of bonds purchased under the PSPP, it is clear from Article 12(2) of the Guideline that the ESCB retains the option of selling such bonds at any time and without any specific conditions.149Furthermore, the absence of any obligation to sell the bonds purchased is not sufficient to establish an infringement of Article 123(1) TFEU.150First, the mere fact that the ESCB has the option of selling, should it so wish, all or part of the purchased bonds helps to maintain the impetus to conduct a sound budgetary policy, since –– as has been stated in paragraph 135 of this judgment –– that option allows the ESCB to adapt its programme according to the attitudes of the Member States concerned.151Secondly, should the ESCB continue to hold those bonds, that does not, in itself, mean that that impetus of the Member States concerned is diminished, particularly because, as the ECB has pointed out, such retention of the bonds is not accompanied by any obligation for the ESCB to purchase the new bonds which a Member State that ceased to follow a sound budgetary policy would inevitably have to issue.152Although such holding of bonds is nonetheless liable to have some influence on the functioning of the primary and secondary sovereign debt markets, that effect is inherent in purchases on the secondary markets which are authorised by primary law. That effect is, moreover, essential if those purchases are to be used effectively in the framework of monetary policy (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 108) and are thereby to contribute to the objective of maintaining price stability, mentioned in paragraph 51 of this judgment.153As regards, in the second place, the purchase of government bonds at a negative yield to maturity, the first point to make is that Article 18.1 of the Protocol on the ESCB and the ECB authorises open market operations and does not provide that such operations must concern bonds with a minimum yield.154Secondly, Article 123(1) TFEU is not to be interpreted as preventing the ESCB from purchasing such bonds within the framework of the PSPP.155Although the issue of bonds at a negative yield to maturity is advantageous in financial terms for the Member States concerned, those bonds can be purchased, under the PSPP, only on the secondary markets and they do not therefore give rise to the grant of overdraft facilities or any other type of credit facility in favour of public authorities and bodies of the Member States, or to the direct purchase from them of their debt instruments.156As to the question whether the purchase by the ESCB of government bonds at a negative yield to maturity has an effect equivalent to that of a direct purchase of bonds from the public authorities and bodies of the Member States, it should be pointed out that, in the economic context in which Decision 2015/774 was adopted, authorising the purchase of bonds at a negative yield to maturity does not make it easier for private operators to identify the bonds that the ESCB will buy. It is more likely to reduce the certainty of operators on that point by broadening the range of bonds eligible for purchase under the PSPP. The easing of the yield criteria which Decision 2017/100 effects is, moreover, likely further to reinforce the safeguards adopted by the ESCB in that regard.157In addition, as the ECB has stated, since bonds with a negative yield can be issued only by Member States whose financial situation is assessed positively by operators in the sovereign debt markets, the purchase of such bonds cannot be considered to reduce the impetus of the Member States to follow a sound budgetary policy.158In view of all the foregoing, the answer to the first to fourth questions is that consideration of those questions has disclosed no factor of such a kind as to affect the validity of Decision 2015/774. The fifth question 159By its fifth question, the referring court asks, in essence, whether it is compatible with Article 4(2) TEU and Articles 123 and 125 TFEU for a decision of the ECB to provide for the entirety of the losses that might be sustained by one of the central banks following a potential default by a Member State to be shared between the central banks of the Member States, in a context in which the scale of those losses would make it necessary to recapitalise that central bank.160The Italian Government maintains that this question is inadmissible as it is clearly hypothetical.161Without formally submitting that the fifth question is inadmissible, the Greek, French, Portuguese and Finnish Governments, as well as the Commission and the ECB, observe that it is hypothetical in nature or, at least, that it is concerned with uncertain changes in EU law. The Portuguese Government and the Commission also emphasise that it would be inappropriate for the Court to rule on such changes when they amount to no more than a mere possibility.162In that regard, it should be noted that primary law includes no rules providing for the losses sustained by one of the central banks of the Member States in the course of open market operations to be shared between those central banks.163Moreover, it is undisputed that the ECB decided not to adopt a decision entailing sharing of the entirety of losses made by the central banks of the Member States during implementation of the PSPP. As the referring court points out, the ECB has, up until now, provided, so far as such losses are concerned, only for the sharing of losses generated by securities issued by international issuers.164It follows, first, that the potential volume of those losses is circumscribed by the rule, set out in Article 6(1) of Decision 2015/774, limiting the proportion of those securities to 10% of the book value of purchases under the PSPP and, secondly, that the losses that may be shared, should the case arise, between the central banks of the Member States cannot be the direct consequence of the default of a Member State, to which the referring court alludes.165In that regard, the Court has consistently held that, although questions concerning EU law enjoy a presumption of relevance, it must refuse to give a ruling on a question referred by a national court where it is quite obvious that the interpretation, or the determination of validity, of a rule of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to that effect, judgment of 10 July 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 31 and the case-law cited).166Accordingly, the Court cannot, if it is not to exceed its powers, reply to the fifth question by delivering an advisory opinion on a problem which is, at this stage, hypothetical (see, to that effect, judgments of 10 November 2016, Private Equity Insurance Group, C‑156/15, EU:C:2016:851, paragraph 56, and of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 194).167Consequently, the fifth question must be found to be inadmissible. Costs 168Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Consideration of the first to fourth questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of Decision (EU) 2015/774 of the European Central Bank of 4 March 2015 on a secondary markets public sector asset purchase programme, as amended by Decision (EU) 2017/100 of the European Central Bank of 11 January 2017. 2. The fifth question is inadmissible. [Signatures]( *1 ) Language of the case: German. | 60d40-6cbcad8-432b | EN |
The United Kingdom is free to revoke unilaterally the notification of its intention to withdraw from the EU | 10 December 2018 ( *1 )(Reference for a preliminary ruling — Article 50 TEU — Notification by a Member State of its intention to withdraw from the European Union — Consequences of the notification — Right of unilateral revocation of the notification — Conditions)In Case C‑621/18,REQUEST for a preliminary ruling under Article 267 TFEU from the Court of Session, Inner House, First Division (Scotland, United Kingdom), made by decision of 3 October 2018, received at the Court on the same day, in the proceedings Andy Wightman, Ross Greer, Alyn Smith, David Martin, Catherine Stihler, Jolyon Maugham, Joanna Cherry v Secretary of State for Exiting the European Union, interveners: Chris Leslie, Tom Brake, THE COURT (Full Court),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, J.-C. Bonichot, A. Arabadjiev, A. Prechal, M. Vilaras, E. Regan, T. von Danwitz, C. Toader, F. Biltgen, K. Jürimäe and C. Lycourgos, Presidents of Chambers, A. Rosas, E. Juhász, M. Ilešič, J. Malenovský, L. Bay Larsen, M. Safjan, D. Šváby, C.G. Fernlund (Rapporteur), C. Vajda, S. Rodin, P.G. Xuereb, N. Piçarra, and L.S. Rossi, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 27 November 2018,after considering the observations submitted on behalf of:–Andy Wightman, Ross Greer, Alyn Smith, David Martin, Catherine Stihler, Jolyon Maugham and Joanna Cherry, by A. O’Neill QC, M. Lester QC, D. Welsh, Advocate, P. Eeckhout, Professor of Law, and E. Motion, Solicitor,Chris Leslie and Tom Brake, by M. Ross QC, G. Facenna QC, A. Howard, Barrister, S. Donnelly, Advocate, J. Jack and J. Halford, Solicitors,the United Kingdom Government, by S. Brandon and C. Brodie, acting as Agents, and by the Rt Hon Lord Keen of Elie QC, and T. de la Mare QC,the Council of the European Union, by H. Legal, J.-B. Laignelot and J. Ciantar, acting as Agents,the European Commission, by L. Romero Requena, F. Erlbacher and K. Banks, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 4 December 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 50 TEU.2The request has been made in proceedings between Andy Wightman MSP, Ross Greer MSP, Alyn Smith MEP, David Martin MEP, Catherine Stihler MEP, Jolyon Maugham, and Joanna Cherry MP, on the one hand, and the Secretary of State for Exiting the European Union (United Kingdom), on the other, concerning the possibility of unilaterally revoking the notification of the intention of the United Kingdom of Great Britain and Northern Ireland to withdraw from the European Union. Legal context International law 3The Vienna Convention on the Law of Treaties, of 23 May 1969 (United Nations Treaty Series, Vol. 1155, p. 331), provides, in Articles 65, 67 and 68 thereof:‘Article 65. Procedure to be followed with respect to invalidity, termination, withdrawal from or suspension of the operation of a treaty1. A party which, under the provisions of the present Convention, invokes either a defect in its consent to be bound by a treaty or a ground for impeaching the validity of a treaty, terminating it, withdrawing from it or suspending its operation, must notify the other parties of its claim. The notification shall indicate the measure proposed to be taken with respect to the treaty and the reasons therefor.2. If, after the expiry of a period which, except in cases of special urgency, shall not be less than three months after the receipt of the notification, no party has raised any objection, the party making the notification may carry out in the manner provided in Article 67 the measure which it has proposed.3. If, however, objection has been raised by any other party, the parties shall seek a solution through the means indicated in Article 33 of the Charter of the United Nations....Article 67. Instruments for declaring invalid, terminating, withdrawing from or suspending the operation of a treaty1. The notification provided for under Article 65, paragraph 1 must be made in writing.2. Any act declaring invalid, terminating, withdrawing from or suspending the operation of a treaty pursuant to the provisions of the treaty or of paragraphs 2 or 3 of Article 65 shall be carried out through an instrument communicated to the other parties. If the instrument is not signed by the Head of State, Head of Government or Minister for Foreign Affairs, the representative of the State communicating it may be called upon to produce full powers.Article 68. Revocation of notifications and instruments provided for in Articles 65 and 67A notification or instrument provided for in Article 65 or 67 may be revoked at any time before it takes effect.’ European Union law 4According to the second subparagraph of Article 1 TEU, that treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen.5Article 2 TEU provides:‘The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.’6Under Article 50 TEU:‘1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) [TFEU]. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.A qualified majority shall be defined in accordance with Article 238(3)(b) [TFEU].5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.’ United Kingdom law 7The European Union (Notification of Withdrawal) Act 2017 provides:‘…Power to notify withdrawal from the [European Union](1)The Prime Minister may notify, under Article 50(2) [TEU], the United Kingdom’s intention to withdraw from the [European Union].(2)This section has effect despite any provision made by or under the European Communities Act 1972 or any other enactment.’8Section 13 of the European Union (Withdrawal) Act 2018, enacted on 26 June 2018, provides:‘(1)The withdrawal agreement may be ratified only if—(a)a Minister of the Crown has laid before each House of Parliament—(i)a statement that political agreement has been reached,(ii)a copy of the negotiated withdrawal agreement, and(iii)a copy of the framework for the future relationship,(b)the negotiated withdrawal agreement and the framework for the future relationship have been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown,(c)a motion for the House of Lords to take note of the negotiated withdrawal agreement and the framework for the future relationship has been tabled in the House of Lords by a Minister of the Crown and—the House of Lords has debated the motion, orthe House of Lords has not concluded a debate on the motion before the end of the period of five Lords sitting days beginning with the first Lords sitting day after the day on which the House of Commons passes the resolution mentioned in paragraph (b), and(d)an Act of Parliament has been passed which contains provision for the implementation of the withdrawal agreement.So far as practicable, a Minister of the Crown must make arrangements for the motion mentioned in subsection (1)(b) to be debated and voted on by the House of Commons before the European Parliament decides whether it consents to the withdrawal agreement being concluded on behalf of the [European Union] in accordance with Article 50(2) [TEU].…’ The dispute in the main proceedings and the question referred for a preliminary ruling 9On 23 June 2016, a referendum of the United Kingdom electorate produced a majority in favour of that Member State’s leaving the European Union. On 29 March 2017, having been authorised to do so by the European Union (Notification of Withdrawal) Act 2017, the Prime Minister (United Kingdom) notified the European Council of the United Kingdom’s intention to withdraw from the European Union under Article 50 TEU.10On 19 December 2017, a petition for judicial review was lodged in the Court of Session (Scotland, United Kingdom), in which the petitioners in the main proceedings — including one member of the Parliament of the United Kingdom of Great Britain and Northern Ireland, two members of the Scottish Parliament, and three members of the European Parliament — seek a declarator specifying whether, when and how that notification can unilaterally be revoked. Those petitioners, in support of whom two other Members of the United Kingdom Parliament intervened, wish to know whether the notification referred to in Article 50 TEU can unilaterally be revoked before the expiry of the two-year period laid down in that article, with the effect that, if the notification made by the United Kingdom were revoked, that Member State would remain in the European Union. They asked the Court of Session (Scotland) to refer a question on that issue to the Court of Justice for a preliminary ruling. In response, the Secretary of State for Exiting the European Union argued that the question was hypothetical and academic, in view of the United Kingdom Government’s stated position that the notification would not be revoked.11By decision of 8 June 2018, the Lord Ordinary (first instance judge of the Court of Session) declined to make a reference to the Court of Justice and refused the petition for judicial review on the grounds, first, that the issue was hypothetical in view of the United Kingdom Government’s position and because the facts upon which the Court would be asked to give an answer could not be ascertained and, secondly, that the matter encroached upon parliamentary sovereignty and was outwith the national court’s jurisdiction.12The petitioners in the main proceedings brought an appeal against that decision before the referring court.13The referring court points out that, under section 13 of the European Union (Withdrawal) Act 2018, the approval of the United Kingdom Parliament must be obtained on the outcome of negotiations between the United Kingdom and the European Union under Article 50 TEU. In particular, the withdrawal agreement can be ratified only if it, and the framework for the future relationship between the United Kingdom and European Union, have been approved by a resolution of the House of Commons and been debated in the House of Lords. If no such approval is forthcoming, the United Kingdom Government must state how it proposes to proceed. If the Prime Minister states, prior to 21 January 2019, that no agreement in principle can be reached, that government must, once again, state how it proposes to proceed and must bring that proposal before both Houses of the United Kingdom Parliament.14The referring court states that if any agreement between the United Kingdom and the European Union is not approved, and nothing further occurs, the treaties will cease to apply to the United Kingdom on 29 March 2019 and that Member State will automatically leave the European Union on that date.15By order of 21 September 2018, the referring court allowed the appeal against the decision of the Lord Ordinary and granted the request of the petitioners in the main proceedings that a reference for a preliminary ruling be made under Article 267 TFEU. The referring court considers that it is neither academic nor premature to ask the Court of Justice whether it is legally possible, for a Member State, to revoke unilaterally the notification made under Article 50(2) TEU and to remain in the European Union. It considers that the matter is uncertain and that the answer given by the Court of Justice will have the effect of clarifying the options open to the Members of the House of Commons when they cast their votes on any agreement between the United Kingdom and the European Union. In particular, that answer would allow them to ascertain whether there are not two options, but three, namely withdrawal from the European Union without an agreement, withdrawal from the European Union with the agreement that has been laid before them, or revocation of the notification of the intention to withdraw and the United Kingdom’s remaining in the European Union.16In those circumstances the Court of Session, Inner House, First Division (Scotland), decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Where, in accordance with Article 50 [TEU], a Member State has notified the European Council of its intention to withdraw from the European Union, does EU law permit that notice to be revoked unilaterally by the notifying Member State; and, if so, subject to what conditions and with what effect relative to the Member State remaining within the European Union?’17The United Kingdom Government made an application to the referring court for permission to appeal the order of 21 September 2018, referred to in paragraph 15 of the present judgment, and the order of 3 October 2018 by which the referring court submitted this reference for a preliminary ruling. That application was refused by decision of 8 November 2018, and the United Kingdom Government then applied to the Supreme Court of the United Kingdom for permission to appeal against those two orders. That permission was refused by order of the Supreme Court of the United Kingdom of 20 November 2018. Procedure before the Court of Justice 18The referring court requested that the reference for a preliminary ruling be determined pursuant to the expedited procedure provided for in Article 105 of the Rules of Procedure of the Court.19By order of 19 October 2018, Wightman and Others (C‑621/18, EU:C:2018:851), the President of the Court granted that request. Consideration of the question referred Admissibility 20The United Kingdom Government argues that the question referred is inadmissible because it is hypothetical. In particular, the United Kingdom Government submits that no draft act of revocation of the notification of the United Kingdom’s intention to withdraw from the European Union has been adopted or even contemplated, that there is no dispute in the main proceedings and that the question referred is actually intended to obtain an advisory opinion on a constitutional issue, namely the correct interpretation of Article 50 TEU and of acts adopted pursuant to that article.21According to the United Kingdom Government, there is no concrete dispute, since the question referred addresses events that have not occurred and may not occur. The United Kingdom Government submits that it has consistently reiterated its intention to honour the result of the referendum by giving notice under Article 50 TEU and thereby withdrawing from the European Union, whether on the basis of an agreement or without any agreement.22The question, according to the United Kingdom Government, actually concerns the legal implications of a situation that does not currently exist. It is based on the assumption, first, that there will be an attempt by the United Kingdom, whether at the instigation of its Parliament or otherwise, to revoke the notification and, secondly, that the European Commission or the other 27 Member States will oppose that revocation. Only in the event of such opposition would a dispute arise.23According to the United Kingdom Government, the lodging of the petition in the main proceedings accompanied by a request that a question be referred for a preliminary ruling in order to obtain an advisory opinion from the Court circumvents the rules of the TFEU on remedies, standing and time limits. That government submits that the advisory opinion procedure is subject to the rules set out in Article 218(11) TFEU and is available only where a question arises as to the compatibility of a proposed international agreement with the Treaties.24The only possible remedies would be direct actions, if the United Kingdom were to revoke its notification and trigger a dispute with the other Member States and the EU institutions.25The Commission also argues that the ruling that the referring court will deliver after receiving the Court’s answer to the question referred will not produce any binding effects on the parties to the main proceedings and that that question is therefore hypothetical. It acknowledged however, at the hearing, that there is a dispute in the main proceedings.26In that regard, it should be borne in mind that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of a rule of EU law, the Court is in principle bound to give a ruling (judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 24, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 31).27It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 25, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 32).28It should also be borne in mind that, in accordance with settled case-law, the justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 194 and the case-law cited; see, also, to that effect, judgments of 16 December 1981, Foglia, 244/80, EU:C:1981:302, paragraph 18, and of 12 June 2008, Gourmet Classic, C‑458/06, EU:C:2008:338, paragraph 26).29In the present case, it must be noted that an appeal has been brought before the referring court against a decision of the first instance court delivered in the context of an action seeking a declarator specifying whether the notification of the United Kingdom’s intention to withdraw from the European Union, given under Article 50 TEU, may be unilaterally revoked before the expiry of the two-year period laid down in that article, with the effect that, if the notification made by the United Kingdom were revoked, that Member State would remain in the European Union. The referring court states, in that respect, that it is required to rule on that question of law, which represents a genuine and live issue, of considerable practical importance, and which has given rise to a dispute. That court emphasises that one of the petitioners and the two interveners, who are Members of the United Kingdom Parliament, must vote on the withdrawal of the United Kingdom from the European Union and, in particular, in accordance with section 13 of the European Union (Withdrawal) Act 2018, on the ratification of the agreement negotiated between the United Kingdom Government and the European Union pursuant to Article 50 TEU. The referring court states that those Members of the United Kingdom Parliament have an interest in the answer to that question of law, since that answer will clarify the options open to them in exercising their parliamentary mandates.30It is not for the Court to call into question the referring court’s assessment of the admissibility of the action in the main proceedings, which falls, in the context of the preliminary ruling proceedings, within the jurisdiction of the national court; nor is it for the Court to determine whether the order for reference was made in accordance with the rules of national law governing the organisation of the courts and legal proceedings (see, to that effect, judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 26, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 34). In the present case, the referring court rejected the pleas of inadmissibility raised before it by the United Kingdom Government concerning the hypothetical or academic nature of the action in the main proceedings. It follows that, in so far as the arguments of the United Kingdom Government and of the Commission are intended to call into question the admissibility of that action, they are irrelevant for the purposes of determining whether the request for a preliminary ruling is admissible (see, to that effect, judgment of 13 March 2007, Unibet, C‑432/05, EU:C:2007:163, paragraph 33).31In addition, the fact that the action in the main proceedings seeks a declaratory remedy does not prevent the Court from ruling on a question referred for a preliminary ruling, provided that the action is permitted under national law and that the question meets an objective need for the purpose of settling the dispute properly brought before the referring court (see, to that effect, judgments of 15 December 1995, Bosman, C‑415/93, EU:C:1995:463, paragraph 65, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400 paragraph 28).32Accordingly, there is indeed a dispute before the referring court, even though the respondent in the main proceedings chose not to address the substance of the issue raised by the petitioners in the main proceedings, maintaining only that the petitioners’ action was inadmissible (see, to that effect, judgment of 8 July 2010, Afton Chemical, C‑343/09, EU:C:2010:419, paragraphs 11 and 15).33There is no doubt as to the relevance of the question referred, since it concerns the interpretation of a provision of EU law — primary law, in this case — and that question is precisely the point at issue in the dispute in the main proceedings.34Accordingly, it is in no way obvious that the question referred, regarding the interpretation of Article 50 TEU, bears no relation to the actual facts of the main action or its purpose, or concerns a hypothetical problem.35As regards the argument, mentioned in paragraph 23 of the present judgment, that the referring court seeks to obtain an advisory opinion from the Court, circumventing the procedure set out in Article 218(11) TFEU, it should be noted that the referring court does not ask the Court for an opinion on the compatibility of an agreement envisaged by the European Union with the Treaties, but rather asks the Court to interpret a provision of EU law in order to enable it to give judgment in the main proceedings.36It follows that the question referred is admissible. Substance 37The petitioners and the interveners in the main proceedings, while acknowledging that Article 50 TEU does not contain any express rule on the revocation of a notification of the intention to withdraw from the European Union, submit that a right of revocation exists and is unilateral in nature. However, that right may only be exercised in accordance with the constitutional requirements of the Member State concerned, by analogy with the right of withdrawal itself, laid down in Article 50(1) TEU. According to those parties to the main proceedings, the withdrawal procedure therefore continues for as long as the Member State concerned intends to withdraw from the European Union, but comes to an end if, before the end of the period laid down in Article 50(3) TEU, that Member State changes its mind and decides not to withdraw from the European Union.38The Council and the Commission, while agreeing that a Member State is entitled to revoke the notification of its intention to withdraw before the Treaties have ceased to apply to that Member State, dispute the unilateral nature of that right.39According to those institutions, the recognition of a right of unilateral revocation would allow a Member State that has notified its intention to withdraw to circumvent the rules set out in Article 50(2) and (3) TEU, which are intended to ensure an orderly withdrawal from the European Union, and would open the way for abuse by the Member State concerned to the detriment of the European Union and its institutions.40The Council and the Commission argue that the Member State concerned could thus use its right of revocation shortly before the end of the period laid down in Article 50(3) TEU and notify a new intention to withdraw immediately after that period expired, thereby triggering a new two-year negotiation period. By doing so, the Member State would enjoy, de facto, a right to negotiate its withdrawal without any time limit, rendering the period laid down in Article 50(3) TEU ineffective.41In addition, according to those institutions, a Member State could at any time use its right of revocation as leverage in negotiations. If the terms of the withdrawal agreement did not suit that Member State, it could threaten to revoke its notification and thus put pressure on the EU institutions in order to alter the terms of the agreement to its own advantage.42In order to guard against such risks, the Council and the Commission propose that Article 50 TEU should be interpreted as allowing revocation, but only with the unanimous consent of the European Council.43The United Kingdom Government has not taken a position on the right, for a Member State that has notified its intention to withdraw from the European Union under Article 50 TEU, to revoke that notification.44In that respect, it must be borne in mind that the founding Treaties, which constitute the basic constitutional charter of the European Union (judgment of 23 April 1986, Les Verts v Parliament, 294/83, EU:C:1986:166, paragraph 23), established, unlike ordinary international treaties, a new legal order, possessing its own institutions, for the benefit of which the Member States thereof have limited their sovereign rights, in ever wider fields, and the subjects of which comprise not only those States but also their nationals (Opinion 2/13 (Accession of the European Union to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraph 157 and the case-law cited).45According to settled case-law of the Court, that autonomy of EU law with respect both to the law of the Member States and to international law is justified by the essential characteristics of the European Union and its law, relating in particular to the constitutional structure of the European Union and the very nature of that law. EU law is characterised by the fact that it stems from an independent source of law, namely the Treaties, by its primacy over the laws of the Member States, and by the direct effect of a whole series of provisions which are applicable to their nationals and to the Member States themselves. Those characteristics have given rise to a structured network of principles, rules and mutually interdependent legal relations binding the European Union and its Member States reciprocally as well as binding its Member States to each other (judgment of 6 March 2018, Achmea, C‑284/16, EU:C:2018:158, paragraph 33 and the case-law cited).46The question referred must therefore be examined in the light of the Treaties taken as a whole.47In that respect, it should be borne in mind that, according to settled case-law of the Court, the interpretation of a provision of EU law requires that account be taken not only of its wording and the objectives it pursues, but also of its context and the provisions of EU law as a whole. The origins of a provision of EU law may also provide information relevant to its interpretation (see, to that effect, judgment of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 135; judgments of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament andCouncil, C‑583/11 P, EU:C:2013:625, paragraph 50 and the case-law cited, and of 17 March 2016, Parliament v Commission, C‑286/14, EU:C:2016:183, paragraph 43).48As regards the wording of Article 50 TEU, it should be noted that that article does not explicitly address the subject of revocation. It neither expressly prohibits nor expressly authorises revocation.49That being said, as the Advocate General pointed out in points 99 to 102 of his Opinion, it follows from the wording of Article 50(2) TEU that a Member State which decides to withdraw is to notify the European Council of its ‘intention’. An intention is, by its nature, neither definitive nor irrevocable.50In addition, Article 50(1) TEU provides that any Member State may decide to withdraw from the European Union in accordance with its own constitutional requirements. It follows that the Member State is not required to take its decision in concert with the other Member States or with the EU institutions. The decision to withdraw is for that Member State alone to take, in accordance with its constitutional requirements, and therefore depends solely on its sovereign choice.51Article 50(2) and (3) TEU then set out the procedure to be followed if a Member State decides to withdraw. As the Court held in the judgment of 19 September 2018, RO (C‑327/18 PPU, EU:C:2018:733, paragraph 46), that procedure consists of, first, notification to the European Council of the intention to withdraw, secondly, negotiation and conclusion of an agreement setting out the arrangements for withdrawal, taking into account the future relationship between the State concerned and the European Union and, thirdly, the actual withdrawal from the Union on the date of entry into force of that agreement or, failing that, two years after the notification given to the European Council, unless the latter, in agreement with the Member State concerned, unanimously decides to extend that period.52Article 50(2) TEU refers to Article 218(3) TFEU, according to which the Commission is to submit recommendations to the Council, which is to adopt a decision authorising the opening of negotiations and nominating the European Union negotiator or the head of the European Union’s negotiating team.53Article 50(2) TEU thus defines the role of the various institutions in the procedure to be followed in order to negotiate and conclude the withdrawal agreement, the conclusion of which requires a decision of the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.54In addition, Article 50(3) TEU determines when the withdrawal of the Member State concerned from the European Union will take effect, in providing that the Treaties are to cease to apply to that Member State from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification by that Member State of its intention to withdraw. That maximum period of two years applies unless the European Council decides, unanimously and in agreement with the Member State concerned, to extend it.55After its withdrawal from the European Union, the Member State concerned may ask to rejoin, under the procedure set out in Article 49 TEU.56It follows that Article 50 TEU pursues two objectives, namely, first, enshrining the sovereign right of a Member State to withdraw from the European Union and, secondly, establishing a procedure to enable such a withdrawal to take place in an orderly fashion.57As the Advocate General stated in points 94 and 95 of his Opinion, the sovereign nature of the right of withdrawal enshrined in Article 50(1) TEU supports the conclusion that the Member State concerned has a right to revoke the notification of its intention to withdraw from the European Union, for as long as a withdrawal agreement concluded between the European Union and that Member State has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that provision, has not expired.58In the absence of an express provision governing revocation of the notification of the intention to withdraw, that revocation is subject to the rules laid down in Article 50(1) TEU for the withdrawal itself, with the result that it may be decided upon unilaterally, in accordance with the constitutional requirements of the Member State concerned.59The revocation by a Member State of the notification of its intention to withdraw, before the occurrence of one of the events referred to in paragraph 57 of the present judgment, reflects a sovereign decision by that State to retain its status as a Member State of the European Union, a status which is not suspended or altered by that notification (see, to that effect, judgment of 19 September 2018, RO, C‑327/18 PPU, EU:C:2018:733, paragraph 45), subject only to the provisions of Article 50(4) TEU.60That revocation is fundamentally different in that respect from any request by which the Member State concerned might ask the European Council to extend the two-year period referred to in Article 50(3) TEU; the analogy that the Commission and the Council seek to make between that revocation and such an extension request cannot therefore be accepted.61As regards the context of Article 50 TEU, reference must be made to the 13th recital in the preamble to the TEU, the first recital in the preamble to the TFEU and Article 1 TEU, which indicate that those treaties have as their purpose the creation of an ever closer union among the peoples of Europe, and to the second recital in the preamble to the TFEU, from which it follows that the European Union aims to eliminate the barriers which divide Europe.62It is also appropriate to underline the importance of the values of liberty and democracy, referred to in the second and fourth recitals of the preamble to the TEU, which are among the common values referred to in Article 2 of that Treaty and in the preamble to the Charter of Fundamental Rights of the European Union, and which thus form part of the very foundations of the European Union legal order (see, to that effect, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 303 and 304).63As is apparent from Article 49 TEU, which provides the possibility for any European State to apply to become a member of the European Union and to which Article 50 TEU, on the right of withdrawal, is the counterpart, the European Union is composed of States which have freely and voluntarily committed themselves to those values, and EU law is thus based on the fundamental premiss that each Member State shares with all the other Member States, and recognises that those Member States share with it, those same values (see, to that effect, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 35).64It must also be noted that, since citizenship of the Union is intended to be the fundamental status of nationals of the Member States (see, to that effect, judgments of 20 September 2001, Grzelczyk, C‑184/99, EU:C:2001:458, paragraph 31; of 19 October 2004, Zhu and Chen, C‑200/02, EU:C:2004:639, paragraph 25; and of 2 March 2010, Rottmann, C‑135/08, EU:C:2010:104, paragraph 43), any withdrawal of a Member State from the European Union is liable to have a considerable impact on the rights of all Union citizens, including, inter alia, their right to free movement, as regards both nationals of the Member State concerned and nationals of other Member States.65In those circumstances, given that a State cannot be forced to accede to the European Union against its will, neither can it be forced to withdraw from the European Union against its will.66However, if the notification of the intention to withdraw were to lead inevitably to the withdrawal of the Member State concerned from the European Union at the end of the period laid down in Article 50(3) TEU, that Member State could be forced to leave the European Union despite its wish — as expressed through its democratic process in accordance with its constitutional requirements — to reverse its decision to withdraw and, accordingly, to remain a Member of the European Union.67Such a result would be inconsistent with the aims and values referred to in paragraphs 61 and 62 of the present judgment. In particular, it would be inconsistent with the Treaties’ purpose of creating an ever closer union among the peoples of Europe to force the withdrawal of a Member State which, having notified its intention to withdraw from the European Union in accordance with its constitutional requirements and following a democratic process, decides to revoke the notification of that intention through a democratic process.68The origins of Article 50 TEU also support an interpretation of that provision as meaning that a Member State is entitled to revoke unilaterally the notification of its intention to withdraw from the European Union. That article largely adopts the wording of a withdrawal clause first set out in the draft Treaty establishing a Constitution for Europe. Although, during the drafting of that clause, amendments had been proposed to allow the expulsion of a Member State, to avoid the risk of abuse during the withdrawal procedure or to make the withdrawal decision more difficult, those amendments were all rejected on the ground, expressly set out in the comments on the draft, that the voluntary and unilateral nature of the withdrawal decision should be ensured.69It follows from the foregoing that the notification by a Member State of its intention to withdraw does not lead inevitably to the withdrawal of that Member State from the European Union. On the contrary, a Member State that has reversed its decision to withdraw from the European Union is entitled to revoke that notification for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that provision, has not expired.70That conclusion is corroborated by the provisions of the Vienna Convention on the Law of Treaties, which was taken into account in the preparatory work for the Treaty establishing a Constitution for Europe.71In the event that a treaty authorises withdrawal under its provisions, Article 68 of that convention specifies inter alia, in clear and unconditional terms, that a notification of withdrawal, as provided for in Article 65 or 67 thereof, may be revoked at any time before it takes effect.72As regards the proposal of the Council and the Commission that the right of the Member State concerned to revoke the notification of its intention to withdraw should be subject to the unanimous approval of the European Council, that requirement would transform a unilateral sovereign right into a conditional right subject to an approval procedure. Such an approval procedure would be incompatible with the principle, referred to in paragraphs 65, 67 and 69 of the present judgment, that a Member State cannot be forced to leave the European Union against its will.73It follows, in the first place, that, for as long as a withdrawal agreement concluded between the European Union and that Member State has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that provision, has not expired, that Member State — which enjoys, subject to Article 50(4) TEU, all of the rights and remains bound by all of the obligations laid down in the Treaties — retains the ability to revoke unilaterally the notification of its intention to withdraw from the European Union, in accordance with its constitutional requirements.74In the second place, the revocation of the notification of the intention to withdraw must, first, be submitted in writing to the European Council and, secondly, be unequivocal and unconditional, that is to say that the purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end.75In view of all the foregoing, the answer to the question referred is that Article 50 TEU must be interpreted as meaning that, where a Member State has notified the European Council, in accordance with that article, of its intention to withdraw from the European Union, that article allows that Member State — for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired — to revoke that notification unilaterally, in an unequivocal and unconditional manner, by a notice addressed to the European Council in writing, after the Member State concerned has taken the revocation decision in accordance with its constitutional requirements. The purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end. Costs 76Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Full Court) hereby rules: Article 50 TEU must be interpreted as meaning that, where a Member State has notified the European Council, in accordance with that article, of its intention to withdraw from the European Union, that article allows that Member State — for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired — to revoke that notification unilaterally, in an unequivocal and unconditional manner, by a notice addressed to the European Council in writing, after the Member State concerned has taken the revocation decision in accordance with its constitutional requirements. The purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end. LenaertsSilva de LapuertaBonichotArabadjievPrechalVilarasReganvon DanwitzToaderBiltgenJürimäeLycourgosRosasJuhászIlešičMalenovskýBay LarsenSafjanŠvábyFernlundVajdaRodinXuerebPiçarraRossiDelivered in open court in Luxembourg on 10 December 2018.A. Calot EscobarRegistrarK. LenaertsPresident( *1 ) Language of the case: English. | 6823c-f23b709-496a | EN |
Member States may not impose a charge on the export of electricity generated in their own territory | 6 December 2018 ( *1 )(Reference for a preliminary ruling — Free movement of goods — Customs duties — Charges having equivalent effect — Levy on the transmission of electricity generated within the national territory and intended for export — Compatibility of such legislation with the principle of free movement of goods)In Case C‑305/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Okresný súd Bratislava II (District Court, Bratislava II, Slovakia), made by decision of 28 February 2017, received at the Court on 26 May 2017, in the proceedings FENS spol. s r.o. v Slovak Republic — Úrad pre reguláciu sieťových odvetví THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Seventh Chamber, acting as President of the Fourth Chamber, K. Jürimäe, C. Lycourgos, E. Juhász (Rapporteur) and C. Vajda, Judges,Advocate General: E. Sharpston,Registrar: M. Aleksejev, Administrator,having regard to the written procedure and further to the hearing on 19 April 2018,after considering the observations submitted on behalf of:–FENS spol. s r. o., by A. Čižmáriková, advokátka,the Slovak Government, by B. Ricziová, acting as Agent,the Netherlands Government, by M. Bulterman and J. Langer, acting as Agents,the European Commission, by M. Wasmeier and A. Tokár, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 5 July 2018,gives the following Judgment 1The present request for a preliminary ruling concerns the interpretation of Articles 28 and 30 TFEU.2The request has been made in the context of proceedings between FENS spol. s r.o., a limited liability company established in Slovakia, and the Slovenská republika (Slovak Republic), represented by the Úrad pre reguláciu sieťových odvetví (the Energy Regulation Authority; ‘the ÚRSO’), concerning a levy on the supply of electricity transmission services in respect of which the ÚRSO had sought payment from FENS’ predecessor. Legal context EU law 3Article 28(1) TFEU provides:‘The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries.’4Under Article 30 TFEU:‘Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.’5Directive 2003/54/EC of the European Parliament and of the Council of 26 June 2003 concerning common rules for the internal market in electricity and repealing Directive 96/92/EC (OJ 2003 L 176, p. 37), features an Article 11, entitled ‘Dispatching and balancing’, paragraph 7 of which provides as follows:‘Rules adopted by transmission system operators for balancing the electricity system shall be objective, transparent and non-discriminatory, including rules for the charging of system users of their networks for energy imbalance. Terms and conditions, including rules and tariffs, for the provision of such services by transmission system operators shall be established pursuant to a methodology compatible with Article 23(2) in a non-discriminatory and cost-reflective way and shall be published.’6Directive 2005/89/EC of the European Parliament and of the Council of 18 January 2006 concerning measures to safeguard security of electricity supply and infrastructure investment (OJ 2006 L 33, p. 22) provides in Article 1, entitled ‘Scope’:‘1. This Directive establishes measures aimed at safeguarding security of electricity supply so as to ensure the proper functioning of the internal market for electricity and to ensure:(a)an adequate level of generation capacity;(b)an adequate balance between supply and demand;and(c)an appropriate level of interconnection between Member States for the development of the internal market.2. It establishes a framework within which Member States are to define transparent, stable and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive internal market for electricity.’7Article 5 of Directive 2005/89, entitled ‘Maintaining balance between supply and demand’, provides:‘1. Member States shall take appropriate measures to maintain a balance between the demand for electricity and the availability of generation capacity.In particular, Member States shall:without prejudice to the particular requirements of small isolated systems, encourage the establishment of a wholesale market framework that provides suitable price signals for generation and consumption;require transmission system operators to ensure that an appropriate level of generation reserve capacity is available for balancing purposes and/or to adopt equivalent market-based measures.2. Without prejudice to Articles 87 and 88 of the Treaty, Member States may also take additional measures, including but not limited to the following:provisions facilitating new generation capacity and the entry of new generation companies to the market;removal of barriers that prevent the use of interruptible contracts;removal of barriers that prevent the conclusion of contracts of varying lengths for both producers and customers;(d)encouragement of the adoption of real-time demand management technologies such as advanced metering systems;(e)encouragement of energy conservation measures;(f)tendering procedures or any procedure equivalent in terms of transparency and non-discrimination in accordance with Article 7(1) of Directive 2003/54/EC.3. Member States shall publish the measures to be taken pursuant to this Article and shall ensure the widest possible dissemination thereof.’ Slovak law 8The Nariadenie vlády Slovenskej republiky č. 317/2007 Z. z., ktorým sa ustanovujú pravidlá pre fungovanie trhu s elektrinou (Regulation No 317/2007 of the Government of the Slovak Republic laying down rules for the functioning of the market in electricity), as in force at the material time (‘Government Regulation No 317/2007) provides as follows in Article 12, entitled ‘Terms regarding the supply of network services’:‘1. Network services are supplied by the transmission network operator according to technical conditions and the instructions of the electricity distribution centre, in return for auxiliary services purchased.2. Where the final consumer of electricity is connected to the transmission network, he shall pay the charge for the network services and the charge for the operation of the system to the transmission service operator, on the basis of a contract for transmission and access to the transmission network.3. Where the final consumer of electricity is not connected to the transmission network, he shall pay the charge for the network services and the charge for the operation of the system by the intermediary of the distribution network operator to which his consumption site is connected, on the basis of a contract for distribution and access to the distribution network.…9. The payment for network services in the case where the electricity is exported shall be made by the exporter of the electricity, unless he can prove that the exported electricity was imported into the specified territory.10. The payment for operating the system does not include electricity for the purposes of export.’9Under Article 2(a)(2) of zákon č. 251/2012 Z. z. o energetike a o zmene a doplnení niektorých zákonov (Law No 251/2012 on energy, amending and supplementing certain laws), the territory defined is the territory of the Slovak Republic in which the transmission system or distribution system manager is required to guarantee the transmission or distribution of electricity, or the territory in which the transmission system or distribution system manager is required to guarantee the transmission or distribution of gas. The dispute in the main proceedings and the questions referred for a preliminary ruling 10FENS is the successor in title to Korlea Invest a.s. (‘Korlea’), a company declared insolvent during the legal proceedings in the context of which the present request for a preliminary ruling was introduced.11Korlea was authorised to operate as a supplier in the Slovak electricity sector. Its activities included buying, selling and exporting electricity. In that context Korlea concluded a framework contract for buying and selling electricity with Slovenské elektrárne a.s., a Slovak company involved in the electricity-generating sector, taking effect from 15 August 2006, as well as several individual supply contracts. On 16 January 2008, Korlea concluded an electricity-transmission agreement with Slovenská elektrizačná prenosová sústava a.s. (‘SEPS’), a Slovak company managing the national electricity transmission network, under which the latter company undertook to provide, on behalf of Korlea, the transmission of electricity via interconnection lines and to manage and provide transmission services. The transmission agreement provided that, for the supply of network services for the export of electricity, Korlea was required to pay a fee, calculated in accordance with Article 12(9) of Government Regulation No 317/2007, unless it could demonstrate that the electricity exported had first been imported into Slovakia.12Korlea paid SEPS a sum of EUR 6 815 853.415 in respect of that fee for the period from 1 January to 31 December 2008. That sum was calculated in accordance with an ÚRSO decision of 4 December 2007.13By letter of 13 October 2008, Korlea requested that SEPS cease invoicing the aforementioned charge and refund the monies already paid in that respect. By letter of 30 October 2008, SEPS refused that request.14In 2010 Korlea brought proceedings before the Okresný súd Bratislava II (District Court, Bratislava II, Slovakia) for damages directed against the ÚRSO, arguing, in particular, that the fee in question constituted a charge equivalent in effect to a customs duty. The ÚRSO contended that that fee was not such as to affect trade between Member States, but that its objective was to guarantee security of supply, reliability and stability of the Slovak energy network, particularly during the period prior to 2009, during which stability of the network was at risk because of the cessation of operation of two units at the Jaslovské Bohunice nuclear power plant (Slovakia). The ÚRSO also indicated that when the Slovak energy sector was once again stable — namely, as from 1 April 2009 — it had no longer applied the aforementioned fee.15By judgment of 4 February 2011, that court dismissed the action. Korlea appealed that decision to the Krajský súd Bratislava (Bratislava Regional Court, Slovakia), which, by order of 15 August 2012, set aside that judgment and referred the case back to the court of first instance.16In those circumstances, the Okresný súd Bratislava II (Bratislava II District Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Must Article 30 TFEU be interpreted as precluding a national rule such as Article 12(9) of [Government Regulation No 317/2007] which introduces a specific pecuniary charge for the export of electricity from Slovak territory, regardless of whether that electricity is exported from Slovak territory to the Member States of the European Union or to third countries, in circumstances in which the electricity exporter fails to demonstrate that the electricity exported has been imported into Slovak territory, that is to say, a pecuniary charge levied solely on electricity generated in Slovakia and exported from it?(2)Must a pecuniary charge, such as the charge introduced by Article 12(9) of [Government Regulation No 317/2007], namely: a charge applied solely to electricity generated in Slovakia and at the same time exported from Slovak territory, regardless of whether it is exported to third countries or to the Member States of the European Union, be classified as a charge having equivalent effect to a customs duty within the meaning of Article 28(1) TFEU?(3)Is a rule of national law such as Article 12(9) of [Government Regulation No 317/2007] compatible with the principle of free movement of goods laid down by Article 28 TFEU?’ Consideration of the questions referred for a preliminary ruling 17By its questions, which it is appropriate to consider jointly, the referring court asks, in essence, whether Articles 28 and 30 TFEU must be interpreted as precluding legislation of a Member State which provides for a pecuniary charge, such as that at issue in the main proceedings, which is imposed on electricity exported to another Member State or to a third country only in the case where that electricity is generated within the national territory.18Article 12(9) of Government Regulation No 317/2007 provides for payment for network services in the case where the electricity is exported at the expense of the electricity exporter, unless it can show that the electricity exported was imported into Slovak territory. It is also apparent from the case file submitted to the Court that the pecuniary charge which constitutes such a payment was imposed only temporarily and that it has no longer been applied since 1 April 2009. The applicability of Articles 28 and 30 TFEU 19The Netherlands and Slovak Governments submit that the circumstances in the main proceedings are governed by secondary legislation. The former refers to certain provisions of Directive 2003/54 and the latter to certain provisions of Directive 2005/89.20According to the Netherlands Government, the pecuniary charge at issue comes within the scope of Article 11(7) of Directive 2003/54, which permits system operators to impose charges on users of electricity transmission in the event of energy imbalance. The compatibility of such a charge with EU law must therefore be examined under that directive and not under primary law.21The Slovak Government contends, for its part, that Article 5 of Directive 2005/89 expressly provides that Member States must take appropriate measures in order to maintain balance between the available generation capacity and electricity demand. In its view, the temporary introduction of the pecuniary charge at issue in the main proceedings, payable by domestic electricity exporters, specifically meets the objectives referred to in that article.22In that regard, it should be noted that the Court has consistently held that, where a matter has been the subject of exhaustive harmonisation at EU level, any national measure relating thereto must be assessed in the light of the provisions of that harmonising measure and not in the light of primary law (see, inter alia, judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 57 and the case-law cited).23In the present case, it must therefore be determined whether Article 11(7) of Directive 2003/54 and/or Article 5 of Directive 2005/89 have brought about exhaustive harmonisation capable of precluding examination of the compatibility of legislation such as that at issue in the main proceedings with Articles 28 and 30 TFEU.24In that regard, it is noteworthy that Directive 2003/54, applicable at the date of the material facts, constituted one of the steps in the gradual completion of the internal electricity market throughout the European Union. Though it contributed to the creation of such an internal market, it in no way achieved the realisation of an internal market in electricity. The fact that Directive 2003/54 was repealed by Directive 2009/72/EC of the European Parliament and of the Council of 13 July 2009 concerning common rules for the internal market in electricity (OJ 2009 L 211, p. 55) supports that conclusion.25With regard, in particular, to Article 11(7) of Directive 2003/54, it follows from the very terms used in that provision that the rules for charging system users of electricity networks in the event of energy imbalance must be objective, transparent and non-discriminatory. This provision thus merely defines the framework within which the transmission system operators set their charges, the imposition of which is therefore not exhaustively harmonised. Thus, Articles 28 and 30 TFEU must be taken into account in order to assess the compatibility with EU law of national measures such as those at issue in the main proceedings.26Directive 2005/89 seeks, as follows from its Article 1(2), to establish a framework within which Member States are to define transparent, stable and non-discriminatory policies on security of electricity supply compatible with the requirements of a competitive internal market for electricity. Article 5 of that directive, invoked by the Slovak Government, refers to the adoption of ‘appropriate measures’ by the Member States. It is evident from these provisions that Member States retain a significant margin of latitude in this context and that the harmonisation achieved by that directive is not exhaustive in nature.27It follows that Article 11(7) of Directive 2003/54 and Article 5 of Directive 2005/89 did not exhaustively harmonise the fields which they govern.28In the light of the foregoing considerations, it is appropriate to proceed to the interpretation of Articles 28 and 30 TFEU. Whether there is a charge equivalent in effect to a customs duty 29According to settled case-law of the Court, any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect to a customs duty. By contrast, pecuniary charges resulting from a general system of internal taxation applied systematically, in accordance with the same objective criteria, to categories of products irrespective of their origin or destination fall within Article 110 TFEU, which prohibits discriminatory internal taxation (judgment of 14 June 2018, Lubrizol France, C‑39/17, EU:C:2018:438, paragraph 24 and the case-law cited).30In that respect, it must be borne in mind that the FEU Treaty provisions relating to charges having equivalent effect and those relating to discriminatory internal taxation cannot be applied together, with the result that a measure covered by Article 110 TFEU cannot, within the system of that Treaty, be classified as a ‘charge having equivalent effect’ (see, to that effect, judgment of 2 October 2014, Orgacom, C‑254/13, EU:C:2014:2251, paragraph 20 and the case-law cited) and that Article 110 TFEU relates not only to imported goods but also to exported goods (see, to that effect, judgment of 22 May 2003, Freskot, C‑355/00, EU:C:2003:298, paragraph 45 and the case-law cited).31A pecuniary charge also escapes classification as a ‘charge having equivalent effect’ if it is levied, in certain circumstances, by reason of inspections carried out in order to comply with obligations imposed by EU law, or if it represents payment for a service actually provided to an operator which he is required to pay in an amount proportionate to that service (judgment of 14 June 2018, Lubrizol France, C‑39/17, EU:C:2018:438, paragraph 26 and the case-law cited).32It is necessary, therefore, to determine whether the pecuniary charge at issue in the main proceedings meets the definition of a charge having equivalent effect to a customs duty, as follows from the factors set out in paragraphs 29 to 31 of the present judgment.33In that regard, it should be observed, first, that the charge at issue in the main proceedings constitutes a pecuniary charge unilaterally imposed by a Member State. As the purpose for which such a charge is imposed is irrelevant, it does not matter that it relates to charges for certain electricity network transmission services (see, to that effect, judgment of 21 September 2000, Michaïlidis, C‑441/98 and C‑442/98, EU:C:2000:479, paragraph 14 and the case-law cited).34Second, it must be observed that electricity constitutes a product within the meaning of EU law and that a tax imposed, not on a product as such, but on an activity necessary for doing business with that product, such as, as in the case in the main proceedings, network services, may come within the scope of provisions on the free movement of goods. Thus, where a tax is calculated on the basis of the number of kWh transmitted and not on the basis of the distance for which the electricity is transmitted or according to any other criterion directly connected with transmission, it must be treated as having been imposed on the product itself (see, to that effect, judgment of 17 July 2008, Essent Netwerk Noord and Others, C‑206/06, EU:C:2008:413, paragraphs 43 and 44 and the case-law cited).35In the case in the main proceedings, as the charge in question was calculated on the basis of the number of kWh transmitted, it must be regarded as having been levied on goods.36It is necessary to determine, thirdly, whether that charge is levied on those goods by reason of the fact that they cross a border or whether, on the contrary, it results from a general system of internal taxation applied systematically, in accordance with the same objective criteria, to categories of goods irrespective of their origin or intended purpose.37In that regard, the Court has already held that the essential feature of a charge having equivalent effect to a customs duty which distinguishes it from a general internal tax is that the former is borne solely by a product which crosses a frontier, as such, whereas the latter is borne by imported, exported and domestic products (judgment of 2 October 2014, Orgacom, C‑254/13, EU:C:2014:2251, paragraph 28).38In the present case, it is apparent from the formulation of the questions posed that the charge in the main proceedings is levied solely on electricity generated in Slovakia and subsequently exported. It follows that it is imposed by reason of the fact that the electricity crosses a border.39The Slovak Government argues, however, that Government Regulation No 317/2007 provides for an identical charge to be levied on electricity consumed in Slovakia, regardless of the origin of the electricity. For that reason, the electricity generated in Slovakia and subsequently exported is, it argues, treated in the same way as electricity generated in Slovakia and consumed in that country.40Nevertheless, even if the two categories of electricity were subject to the same system, it must also be noted that, in order to relate to a general system of ‘internal taxation’, within the meaning of Article 110 TFEU, the tax charge in question must impose the same duty on both domestic goods and identical exported goods at the same marketing stage and the chargeable event triggering the duty must also be identical (judgment of 2 October 2014, Orgacom, C‑254/13, EU:C:2014:2251, paragraph 29 and the case-law cited).41While, according to the Slovak Government’s contentions, it is, in particular, the end customer who pays the pecuniary charge in question for electricity consumed in Slovakia, it is common ground that, in the case of exported electricity, it is the exporter of the electricity who pays that charge. Thus, the charge in question in the main proceedings is levied on electricity generated in Slovakia on account of its being consumed in that country, or, where the latter is exported for the purpose of subsequently being consumed in another country, on account of its being exported. In those circumstances, it must be noted that this pecuniary charge is not levied at the same commercial stage on electricity exported and electricity consumed within that Member State.42It should be noted, fourthly, that it is not clear from the documents submitted to the Court whether the pecuniary charge at issue in the main proceedings is levied by reason of inspections carried out in order to comply with obligations imposed by EU law or whether it constitutes consideration for a service actually provided to an operator, in an amount proportionate to that service.43In this respect, it should be pointed out that, while the Court has accepted that a charge that represents payment for a service actually provided to an economic operator required to pay it, in an amount that is proportionate to that service, does not constitute a charge having equivalent effect to a customs duty (judgment of 9 September 2004, Carbonati Apuani, C‑72/03, EU:C:2004:506, paragraph 31), the fact remains that, as the Advocate General noted in point 66 of her Opinion, in order for the charge to fall outwith the scope of Article 28 TFEU, the service provided must confer a specific benefit on the individual exporter, a benefit to the public interest being too general in nature and difficult to assess to be regarded as the consideration for a benefit actually conferred (see, to that effect, judgments of 1 July 1969, Commission v Italy, 24/68, EU:C:1969:29, paragraph 16, and of 27 September 1988, Commission v Germany, 18/87, EU:C:1988:453, paragraph 7).44However, the Slovak Government, while stating in its written observations that that pecuniary charge had been levied for a network service which was actually provided to exporters, has failed to substantiate this part of its case by additional elements capable of establishing that the charge at issue represented such a specific benefit.45It is also not clear from the other material in the file whether a pecuniary charge imposed in order to maintain balance between the available generation capacity and electricity demand is capable of constituting consideration for a service conferring a specific benefit.46In those circumstances, a pecuniary charge such as that in issue in the main proceedings, levied on electricity exported both to another Member State other than the Slovak Republic and to third countries, constitutes a charge having equivalent effect within the meaning of Article 28 TFEU.47This finding holds good both for electricity exported to another Member State and for electricity exported to a third country.48To the extent that such a pecuniary charge is levied on exports to other Member States, it comes within the scope of Articles 28 and 30 TFEU and, to the extent that it is levied on exports to third countries, it comes within the scope of Article 28 TFEU.49With more particular regard to exports to third countries, it should be noted that under Article 3(1)(a) and (e) TFEU the European Union has exclusive competence in the areas of the customs union and the common commercial policy and that, in accordance with Article 207(1) TFEU, the common commercial policy is based on uniform principles, particularly with regard to changes in tariff rates, as well as the conclusion of tariff and trade agreements relating to trade in goods and services.50The uniformity of the common commercial policy would be seriously undermined if Member States were authorised unilaterally to impose charges having equivalent effect to customs duties on exports to third countries.51It follows that, as the European Commission has noted, Member States do not have any power allowing them unilaterally to introduce charges having an effect equivalent to customs duties on exports to third countries (see, by analogy, judgment of 26 October 1995, SIESSE, C‑36/94, EU:C:1995:351, paragraph 17). Possible justification for this charge on exports 52The Netherlands Government submits that the objective of safeguarding security of supply constitutes, as the Court has already recognised in its judgment of 22 October 2013, Essentand Others (C‑105/12 to C‑107/12, EU:C:2013:677, paragraph 59 and the case-law cited), an overriding reason in the public interest.53In this regard, it is settled case-law that the prohibition in Article 28 TFEU is of a general and absolute nature (see, to that effect, judgment of 21 September 2000, Michaïlidis, C‑441/98 and C‑442/98, EU:C:2000:479, paragraph 14 and the case-law cited). The FEU Treaty does not provide for any derogations and the Court has held that it follows from the clarity, imperative nature and unrestricted scope of the provisions of relevant primary law that the prohibition of customs duties constitutes an essential rule and that any exception must therefore be clearly provided for. The Court has also stated that the concept of a ‘charge having equivalent effect to a customs duty’ is the necessary complement to the prohibition of customs duties (see, to that effect, judgment of 14 December 1962, Commission v Luxembourg and Belgium, 2/62 and 3/62, EU:C:1962:45, at page 432).54The Court has also taken the view that the derogations from Articles 34 and 35 TFEU provided for in Article 36 TFEU cannot be applied by analogy in the context of customs duties and charges having equivalent effect (see, to that effect, judgment of 10 December 1968, Commission v Italy, 7/68, EU:C:1968:51, at page 430).55Those considerations hold good both for the prohibition of charges having equivalent effect to a customs duty on exports to other Member States and for the prohibition of such charges on exports to third counties.56It follows that, as the pecuniary charge in question must be regarded as being a charge having equivalent effect to customs duties, it cannot have any justification.57It follows from the foregoing that Articles 28 and 30 TFEU must be interpreted as precluding legislation of a Member State under which a pecuniary charge, such as that at issue in the main proceedings, is imposed on electricity exported to another Member State or to a third country solely in cases where the electricity was generated within the national territory. Costs 58Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fourth Chamber) hereby rules: Articles 28 and 30 TFEU must be interpreted as precluding legislation of a Member State under which a pecuniary charge, such as that at issue in the main proceedings, is imposed on electricity exported to another Member State or to a third country solely in cases where the electricity was generated within the national territory. [Signatures]( *1 ) Language of the case: Slovak. | 7d512-2ef5415-48c2 | EN |
Academic qualifications obtained as a result of taking partially overlapping courses must be automatically recognised in all Member States if the minimum training conditions, laid down by EU law, are complied with | 6 December 2018 ( *1 )(Reference for a preliminary ruling — Recognition of professional qualifications — Directive 2005/36/EC — Recognition of the evidence of formal qualifications obtained following periods of partially overlapping training — Host Member State’s powers of investigation)In Case C–675/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Consiglio di Stato (Council of State, Italy), made by decision of 12 October 2017, received at the Court on 30 November 2017, in the proceedings Ministero della Salute v Hannes Preindl, THE COURT (Third Chamber),composed of M. Vilaras, President of the Fourth Chamber, acting as President of the Third Chamber, J. Malenovský, L. Bay Larsen (Rapporteur), M. Safjan and D. Šváby, Judges,Advocate General: M. Bobek,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of–Mr Preindl, by M. Schullian and C. Senoner, avvocati,the Italian Government, by G. Palmieri, acting as Agent, and by M. Russo, avvocato dello Stato,the Spanish Government, initially by A. Gavela Llopis, and subsequently by L. Aguilera Ruiz, acting as Agents,the Austrian Government, by G. Hesse, acting as Agent,the European Commission, by H. Støvlbæk and L. Malferrari, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 21, 22 and 24 of Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22).2The request has been made in the context of proceedings where the opposing parties are the Ministero della Salute (Ministry of Health, Italy) (‘the Ministry’) andt Mr Hannes Preindl concerning a refusal, by that Ministry, to recognise evidence of formal qualification as a doctor issued by the competent Austrian authority. Legal context European Union law 3Recitals 1 and 19 of Directive 2005/36 are worded as follows:‘(1)Pursuant to Article 3(1)(c)[EC], the abolition, as between Member States, of obstacles to the free movement of persons and services is one of the objectives of the European Union. For nationals of the Member States, this includes, in particular, the right to pursue a profession, in a self-employed or employed capacity, in a Member State other than the one in which they have obtained their professional qualifications. In addition, Article 47(1)(EC) lays down that directives shall be issued for the mutual recognition of diplomas, certificates and other evidence of formal qualifications.…(19)Freedom of movement and the mutual recognition of the evidence of formal qualifications of doctors, nurses responsible for general care, dental practitioners, veterinary surgeons, midwives, pharmacists and architects should be based on the fundamental principle of automatic recognition of the evidence of formal qualifications on the basis of coordinated minimum conditions for training. In addition, access in the Member States to the professions of doctor, nurse responsible for general care, dental practitioner, veterinary surgeon, midwife and pharmacist should be made conditional upon the possession of a given qualification ensuring that the person concerned has undergone training which meets the minimum conditions laid down. This system should be supplemented by a number of acquired rights from which qualified professionals benefit under certain conditions.’4Article 1 of that directive, headed ‘Purpose’, provides:‘This Directive establishes rules according to which a Member State which makes access to or pursuit of a regulated profession in its territory contingent upon possession of specific professional qualifications (referred to hereinafter as the host Member State) shall recognise professional qualifications obtained in one or more other Member States (referred to hereinafter as the home Member State) and which allow the holder of the said qualifications to pursue the same profession there, for access to and pursuit of that profession.’5Article 21(1) of that directive, headed ‘Principles of automatic recognition’, provides:‘Each Member State shall recognise evidence of formal qualifications as doctor giving access to the professional activities of doctor with basic training and specialised doctor, as nurse responsible for general care, as dental practitioner, as specialised dental practitioner, as veterinary surgeon, as pharmacist and as architect, listed in Annex V, points 5.1.1, 5.1.2, 5.2.2, 5.3.2, 5.3.3, 5.4.2, 5.6.2 and 5.7.1 respectively, which satisfy the minimum training conditions referred to in Articles 24, 25, 31, 34, 35, 38, 44 and 46 respectively, and shall, for the purposes of access to and pursuit of the professional activities, give such evidence the same effect on its territory as the evidence of formal qualifications which it itself issues.Such evidence of formal qualifications must be issued by the competent bodies in the Member States and accompanied, where appropriate, by the certificates listed in Annex V, points 5.1.1, 5.1.2, 5.2.2, 5.3.2, 5.3.3, 5.4.2, 5.6.2 and 5.7.1 respectively.…’6Article 22(a) of that directive, that article being headed ‘Common provisions on training’, is worded as follows:‘With regard to the training referred to in Articles 24, 25, 28, 31, 34, 35, 38, 40, 44 and 46:(a)Member States may authorise part-time training under conditions laid down by the competent authorities; those authorities shall ensure that the overall duration, level and quality of such training is not lower than that of continuous full-time training’.7Article 24(2) and (3) of Directive 2005/36, headed ‘Basic medical training’, provides:‘2. Basic medical training shall comprise a total of at least six years of study or 5500 hours of theoretical and practical training provided by, or under the supervision of, a university.3. Basic medical training shall provide an assurance that the person in question has acquired the following knowledge and skills:adequate knowledge of the sciences on which medicine is based and a good understanding of the scientific methods including the principles of measuring biological functions, the evaluation of scientifically established facts and the analysis of data;(b)sufficient understanding of the structure, functions and behaviour of healthy and sick persons, as well as relations between the state of health and physical and social surroundings of the human being;(c)adequate knowledge of clinical disciplines and practices, providing him with a coherent picture of mental and physical diseases, of medicine from the points of view of prophylaxis, diagnosis and therapy and of human reproduction;(d)suitable clinical experience in hospitals under appropriate supervision.’8Article 34(2) and (3) of that directive, that article being headed ‘Basic dental training’, provides:‘2. Basic dental training shall comprise a total of at least five years of full-time theoretical and practical study, comprising at least the programme described in Annex V, point 5.3.1 and given in a university, in a higher institute providing training recognised as being of an equivalent level or under the supervision of a university.3. Basic dental training shall provide an assurance that the person in question has acquired the following knowledge and skills:adequate knowledge of the sciences on which dentistry is based and a good understanding of scientific methods, including the principles of measuring biological functions, the evaluation of scientifically established facts and the analysis of data;adequate knowledge of the constitution, physiology and behaviour of healthy and sick persons as well as the influence of the natural and social environment on the state of health of the human being, in so far as these factors affect dentistry;adequate knowledge of the structure and function of the teeth, mouth, jaws and associated tissues, both healthy and diseased, and their relationship to the general state of health and to the physical and social well-being of the patient;adequate knowledge of clinical disciplines and methods, providing the dentist with a coherent picture of anomalies, lesions and diseases of the teeth, mouth, jaws and associated tissues and of preventive, diagnostic and therapeutic dentistry;(e)suitable clinical experience under appropriate supervision.9Article 50(2) of that directive, that article being headed ‘Documentation and formalities’, is worded as follows:‘In the event of justified doubts, the host Member State may require from the competent authorities of a Member State confirmation of the authenticity of the attestations and evidence of formal qualifications awarded in that other Member State, as well as, where applicable, confirmation of the fact that the beneficiary fulfils, for the professions referred to in Chapter III of this Title, the minimum training conditions set out respectively in Articles 24, 25, 28, 31, 34, 35, 38, 40, 44 and 46.’ Italian law 10Article 142(2) of Regio Decreto No 1592 — approvazione del testo unico delle leggi sull’istruzione superiore (Royal Decree relating to approval of the consolidating Act of laws on higher education) of 31 August 1933 (Ordinary Supplement to GURI No 283 of 7 December 1933), in force at the material time in the main proceedings, provides that ‘without prejudice to the provisions of Article 39(c), enrolment at more than one university and institute of higher education, faculty or school in the same university or institute and for more than one academic degree or diploma course in the same faculty or school at the same time shall be prohibited’. The dispute in the main proceedings and the questions referred for a preliminary ruling 11On 26 March 2013 Mr Priendl, an Italian citizen, submitted a request to the Ministry for recognition of his qualification as ‘Doktor der Zahnheilkunde’, awarded on 8 January 2013 by the Medical University of Innsbruck (Austria), in order to practise as a dentist in Italy.12By executive decree of 20 May 2013, the Ministry recognised this qualification as a qualification to practise dentistry having regard to the document issued by the competent Austrian authority, namely the Austrian Dental Association, which certified that the qualification meets the minimum requirements laid down in Article 34 of Directive 2005/36.13On 16 October 2014 Mr Preindl submitted a request to the Ministry for recognition of his qualification as ‘Doktor der Gesamten Heilkunde’, awarded on 20 August 2014 by the Medical University of Innsbruck, in order to also practise as a ‘surgeon’ in Italy. Accompanying this request was, inter alia, a certificate by the competent Austrian authority, namely the Austrian Medical Association, stating that the qualification satisfies the criteria laid down in Article 24 of Directive 2005/36 and that it corresponds to the qualification in Austria for the conferment of the academic degree of doctor of medicine, referred to in point 5.1.1 of Annex V to Directive 2005/36.14Dealing with this second recognition request, the Ministry found that the Austrian degrees in dentistry and medicine had been awarded to Mr Preindl on 8 January 2013 and 20 August 2014, respectively, and that the latter qualification had been awarded at the end of a medical degree course the duration of which was 15 months, which is much shorter than the minimum period of six years required for the qualification as a doctor under Article 24 of Directive 2005/36.15The Ministry therefore contacted the Austrian Medical Association in order to ascertain how the degree in medicine obtained by Mr Preindl could meet all the requirements laid down in Article 24 of Directive 2005/36.16The Austrian Medical Association confirmed, on 19 March 2015, that that qualification met those requirements and that Mr Preindl began his studies in dentistry on 7 September 2004 and completed them on 8 January 2013, and began his studies in medicine on 21 March 2006 and completed them on 20 August 2014.17In the light of that information, the Ministry refused to recognise Mr Preindl’s qualification as permitting him to practise as a ‘surgeon’ in Italy, on the ground that Directive 2005/36 does not provide that a person can take two training courses at the same time.18Mr Preindl brought an action before the Tribunale amministrativo regionale del Lazio (Latium Regional Administrative Court, Italy), claiming that the Ministry’s refusal was in direct conflict with the principle of automatic recognition of qualifications as a doctor laid down in Article 21 of Directive 2005/36. He added that the certification issued by the Austrian Medical Association expressly recognised that the course that he had followed met the minimum training conditions referred to in Article 21(1) and specified in Article 24 of the Directive.19The Tribunale amministrativo regionale del Lazio (Latium Regional Administrative Court) upheld the action. The Ministry brought an appeal against that judgment before the Consiglio di Stato (Council of State, Italy). According to the Ministry, Directive 2005/36 lists the mandatory training requirements that must be guaranteed by Member States for the purpose of awarding a basic medical qualification. In that regard, Article 24 of that directive provides, in particular, that basic medical training is to comprise a total of at least six years of study or 5500 hours of theoretical and practical training provided by, or under the supervision of, a university. In the present case, numerous examinations taken by Mr Preindl were simultaneously taken into account both for the purpose of awarding the degree in dentistry and for the purpose of awarding the degree in medicine. Such a procedure constitutes a modus operandi provided for by Austrian national legislation, but is, according to the Ministry, clearly incompatible with the provisions of Directive 2005/36, leading, moreover, to unequal treatment that constitutes significant discrimination between Austrian nationals and nationals of other EU Member States — including the Republic of Italy — where enrolment on two training courses at the same time is expressly prohibited.20The referring court considers that it may be inferred that training is part-time from the fact that it is possible to pursue two or more university courses simultaneously and asks whether, despite recognition of professional qualifications, under Article 21 and Article 24 of Directive 2005/36, being automatic, such training meets the minimum requirements set out in Article 24 of and Annex V to that directive. If it does, that court also asks whether a Member State, from which recognition is sought, is entitled to verify whether part-time training in the home Member State actually corresponds to the minimum training required by those provisions.21In those circumstances, the Consiglio di Stato (Council of State) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:Do Articles 21, 22 and 24 of Directive [2005/36] oblige a Member State in which full-time training is required, and there is a corresponding prohibition on enrolling in two degree courses at the same time, automatically to recognise qualifications that are obtained in the home Member State simultaneously or during periods that in part overlap?(2)If so, can Article 22(a) and Article 21 of Directive [2005/36] be interpreted as meaning that the authorities in the Member State in which recognition is sought may nevertheless verify whether the condition that the overall duration, level and quality of such training should not be lower than those of continuous full-time training is satisfied?’ Consideration of the questions referred Preliminary observations 22As mentioned in paragraph 20 of the present judgment, the referring court considers that it can be reasonably inferred from the fact that the applicant took more than one university course at the same time that the university education was pursued part-time.23By contrast, the European Commission, as well as the Spanish and Austrian governments maintain that pursuing two academic courses at the same time does not necessarily mean that those courses are not the equivalent of full-time education.24In that regard, it must be recalled that, in the procedure of cooperation established by Article 267 TFEU, it is not for the Court of Justice but for the national court to ascertain the facts which have given rise to the dispute and to establish the consequences which they have for the judgment which it is required to deliver. Moreover, the Court of Justice must take account, under the division of jurisdiction between the EU Courts and the national courts, of the factual and legislative context, as described in the order for reference, in which the questions put to it are set (see, to that effect, judgment of 7 June 2018, Scotch Whisky Association, C‑44/17, EU:C:2018:415, paragraph 24 and the case-law cited).25Consequently, although the argument set out by the Commission and by the Spanish and Austrian governments does not a priori appear to be wholly implausible, the questions referred for a preliminary ruling will be examined having regard to the facts as found by the referring court. The first question 26By its first question, the referring court seeks, in essence, to ascertain whether Articles 21, 22 and 24 of Directive 2005/36 must be interpreted as obliging a Member State, whose legislation creates a requirement to pursue full-time training and a prohibition on being enrolled on two courses at the same time, automatically to recognise the evidence of formal qualifications issued by another Member State which were obtained as a result of partially overlapping training.27In that regard, it must be recalled that, as is apparent from recital 19 of Directive 2005/36, that directive provides, as regards in particular the profession of doctor or dentist, for a system of automatic recognition of the evidence of formal qualifications based on coordinated minimum conditions for training (see, to that effect, judgment of 30 April 2014, Ordre des architectes, C‑365/13, EU:C:2014:280, paragraph 20).28Thus, Article 21(1) of Directive 2005/36, concerning the principle of automatic recognition, provides that each Member State is to recognise evidence of formal qualifications as a doctor, giving access to the professional activities of a doctor with basic training, and as a dental practitioner, referred to in points 5.1.1 and 5.3.2 respectively of Annex V to that directive, which satisfy the minimum training conditions referred to in Articles 24 and 34 of that directive, and is, for the purposes of access to and pursuit of the professional activities, to give such evidence the same effect on its territory as the evidence of formal qualifications which it itself issues.29In addition, Article 22(a) of Directive 2005/36 provides that, as regards some types of training, such as basic medical training and dental practitioner training covered by Articles 24 and 34 of that directive, Member States may authorise part-time training under conditions laid down by the competent authorities of those Member States, as long as the overall duration, level and quality of such training are not lower than those of continuous full-time training.30Finally, it should be noted that no provision in that directive precludes Member States from authorising simultaneous enrolment in more than one training course.31Therefore, recognition of evidence of formal qualifications, including a degree in medicine with basic training and a degree in dentistry, is automatic and unconditional, in that it obliges Member States to accept the equivalence of evidence of formal qualifications covered by Directive 2005/36 and cannot require the persons concerned to comply with requirements other than those laid down by that directive. That recognition is based on the Member States’ mutual trust in the adequacy of the evidence of formal qualifications issued by other Member States, such trust being based on a training system the standards of which were determined by mutual agreement (see, by analogy, judgment of 19 June 2003, Tennah-Durez, C‑110/01, EU:C:2003:357, paragraph 30).32Consequently, the answer to the first question is that Articles 21, 22 and 24 of Directive 2005/36 must be interpreted as obliging a Member State, whose legislation creates a requirement to pursue full-time training and a prohibition on being enrolled on two courses at the same time, automatically to recognise the evidence of formal qualifications issued by another Member State on the completion of partially concurrent training. The second question 33By its second question, the referring court asks, in essence, whether Article 21 and Article 22(a) of Directive 2005/36 must be interpreted as meaning that the host Member State may verify compliance with the condition that the overall duration, level and quality of part-time training are not lower than those of continuous full-time training.34As has already been noted in paragraphs 28 and 29 of the present judgment, Articles 21 and 22 of Directive 2005/36 provide for the mutual recognition of qualifications as a doctor and a dental practitioner, and authorise Member States to provide, in accordance with certain requirements, part-time medical and dental practitioner training. The responsibility for ensuring that the training requirements, both qualitative and quantitative, laid down by Directive 2005/36 are fully complied with falls wholly on the competent authority of the Member State awarding the evidence of a formal qualification (see, by analogy, judgment of 19 June 2003, Tennah-Durez, C‑110/01, EU:C:2003:357, paragraph 56).35That authority must, when exercising its powers, take into consideration the fact that the evidence of formal qualifications will enable those so qualified to move and practise in all the Member States of the European Union, as a result of that evidence being recognised automatically and unconditionally (see, to that effect, judgment of 19 June 2003, Tennah-Durez, C‑110/01, EU:C:2003:357, paragraph 56), that recognition being based, as already noted in paragraph 31 of the present judgment, on the Member States’ mutual trust in the adequacy of the evidence of formal qualifications issued by other Member States.36In that regard, it can be observed that a system for the automatic and unconditional recognition of evidence of formal qualifications, such as that provided for in Article 21 of Directive 2005/36, would be seriously jeopardised if it were open to Member States at their discretion to question the merits of a decision taken by the competent authority of another Member State to issue such evidence (see, by analogy, judgment of 19 June 2003, Tennah-Durez, C‑110/01, EU:C:2003:357, paragraph 75).37The automatic and unconditional recognition of evidence of formal qualifications remains the same where the home Member State issues such evidence following basic medical training or dental practitioner training that is provided in accordance with Article 22(a) of Directive 2005/36. In that context also, it is for the competent authorities of the home Member State, and not for those of the host Member State, to ensure that the overall duration, level, and quality of the part-time training are not lower than those of continuous full-time training, and, more generally, that all the requirements laid down by Directive 2005/36 are fully complied with.38For the sake of completeness, it must be pointed out that Article 50(2) of Directive 2005/36 allows a host Member State, where there is justified doubt, to require confirmation from the competent authorities of a Member State of the authenticity of the attestations and evidence of formal qualifications awarded in that other Member State, as well as, where applicable, confirmation of the fact that the beneficiary fulfils, for the professions referred to in that directive, the minimum training conditions required by it.39Such means allow, moreover, the host Member State to satisfy itself that the attestations and evidence of formal qualifications submitted to it are entitled to automatic and unconditional recognition (see, by analogy, judgment of 19 June 2003, Tennah-Durez, C‑110/01, EU:C:2003:357, paragraph 76).40Accordingly, where a course satisfies the training requirements established by Directive 2005/36, which it is for the authority of the Member State which issues the evidence of formal qualifications to verify, the authorities of the host Member State may not refuse recognition of that evidence of formal qualifications. The fact that the individual concerned has pursued part-time training, under Article 22(a) of that directive, or more than one course simultaneously or during periods which partially overlap, is irrelevant in that regard, provided that the training requirements laid down by that directive are met.41In the light of the foregoing, the answer to the second question is that Article 21 and Article 22(a) of Directive 2005/36 must be interpreted as precluding the host Member State from verifying compliance with the condition that the overall duration, level and quality of part-time training are not lower than those of continuous full-time training. Costs 42Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Third Chamber) hereby rules: 1. Articles 21, 22 and 24 of Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications must be interpreted as obliging a Member State, whose legislation creates a requirement to pursue full-time training and a prohibition on being enrolled on two courses at the same time, automatically to recognise the evidence of formal qualifications issued by another Member State on the completion of partially concurrent training. 2. Article 21 and Article 22(a) of Directive 2005/36 must be interpreted as precluding the host Member State from verifying compliance with the condition that the overall duration, level and quality of part-time training are not lower than those of continuous full-time training. [Signatures]( *1 ) Language of the case: Italian. | e7d96-c4d4860-466b | EN |
Advocate General Campos Sánchez-Bordona proposes that the Court of Justice should declare that Article 50 TEU allows the unilateral revocation of the notification of the intention to withdraw from the EU | 10 December 2018 ( *1 )(Reference for a preliminary ruling — Article 50 TEU — Notification by a Member State of its intention to withdraw from the European Union — Consequences of the notification — Right of unilateral revocation of the notification — Conditions)In Case C‑621/18,REQUEST for a preliminary ruling under Article 267 TFEU from the Court of Session, Inner House, First Division (Scotland, United Kingdom), made by decision of 3 October 2018, received at the Court on the same day, in the proceedings Andy Wightman, Ross Greer, Alyn Smith, David Martin, Catherine Stihler, Jolyon Maugham, Joanna Cherry v Secretary of State for Exiting the European Union, interveners: Chris Leslie, Tom Brake, THE COURT (Full Court),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, J.-C. Bonichot, A. Arabadjiev, A. Prechal, M. Vilaras, E. Regan, T. von Danwitz, C. Toader, F. Biltgen, K. Jürimäe and C. Lycourgos, Presidents of Chambers, A. Rosas, E. Juhász, M. Ilešič, J. Malenovský, L. Bay Larsen, M. Safjan, D. Šváby, C.G. Fernlund (Rapporteur), C. Vajda, S. Rodin, P.G. Xuereb, N. Piçarra, and L.S. Rossi, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 27 November 2018,after considering the observations submitted on behalf of:–Andy Wightman, Ross Greer, Alyn Smith, David Martin, Catherine Stihler, Jolyon Maugham and Joanna Cherry, by A. O’Neill QC, M. Lester QC, D. Welsh, Advocate, P. Eeckhout, Professor of Law, and E. Motion, Solicitor,Chris Leslie and Tom Brake, by M. Ross QC, G. Facenna QC, A. Howard, Barrister, S. Donnelly, Advocate, J. Jack and J. Halford, Solicitors,the United Kingdom Government, by S. Brandon and C. Brodie, acting as Agents, and by the Rt Hon Lord Keen of Elie QC, and T. de la Mare QC,the Council of the European Union, by H. Legal, J.-B. Laignelot and J. Ciantar, acting as Agents,the European Commission, by L. Romero Requena, F. Erlbacher and K. Banks, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 4 December 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 50 TEU.2The request has been made in proceedings between Andy Wightman MSP, Ross Greer MSP, Alyn Smith MEP, David Martin MEP, Catherine Stihler MEP, Jolyon Maugham, and Joanna Cherry MP, on the one hand, and the Secretary of State for Exiting the European Union (United Kingdom), on the other, concerning the possibility of unilaterally revoking the notification of the intention of the United Kingdom of Great Britain and Northern Ireland to withdraw from the European Union. Legal context International law 3The Vienna Convention on the Law of Treaties, of 23 May 1969 (United Nations Treaty Series, Vol. 1155, p. 331), provides, in Articles 65, 67 and 68 thereof:‘Article 65. Procedure to be followed with respect to invalidity, termination, withdrawal from or suspension of the operation of a treaty1. A party which, under the provisions of the present Convention, invokes either a defect in its consent to be bound by a treaty or a ground for impeaching the validity of a treaty, terminating it, withdrawing from it or suspending its operation, must notify the other parties of its claim. The notification shall indicate the measure proposed to be taken with respect to the treaty and the reasons therefor.2. If, after the expiry of a period which, except in cases of special urgency, shall not be less than three months after the receipt of the notification, no party has raised any objection, the party making the notification may carry out in the manner provided in Article 67 the measure which it has proposed.3. If, however, objection has been raised by any other party, the parties shall seek a solution through the means indicated in Article 33 of the Charter of the United Nations....Article 67. Instruments for declaring invalid, terminating, withdrawing from or suspending the operation of a treaty1. The notification provided for under Article 65, paragraph 1 must be made in writing.2. Any act declaring invalid, terminating, withdrawing from or suspending the operation of a treaty pursuant to the provisions of the treaty or of paragraphs 2 or 3 of Article 65 shall be carried out through an instrument communicated to the other parties. If the instrument is not signed by the Head of State, Head of Government or Minister for Foreign Affairs, the representative of the State communicating it may be called upon to produce full powers.Article 68. Revocation of notifications and instruments provided for in Articles 65 and 67A notification or instrument provided for in Article 65 or 67 may be revoked at any time before it takes effect.’ European Union law 4According to the second subparagraph of Article 1 TEU, that treaty marks a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen.5Article 2 TEU provides:‘The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.’6Under Article 50 TEU:‘1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) [TFEU]. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.4. For the purposes of paragraphs 2 and 3, the member of the European Council or of the Council representing the withdrawing Member State shall not participate in the discussions of the European Council or Council or in decisions concerning it.A qualified majority shall be defined in accordance with Article 238(3)(b) [TFEU].5. If a State which has withdrawn from the Union asks to rejoin, its request shall be subject to the procedure referred to in Article 49.’ United Kingdom law 7The European Union (Notification of Withdrawal) Act 2017 provides:‘…Power to notify withdrawal from the [European Union](1)The Prime Minister may notify, under Article 50(2) [TEU], the United Kingdom’s intention to withdraw from the [European Union].(2)This section has effect despite any provision made by or under the European Communities Act 1972 or any other enactment.’8Section 13 of the European Union (Withdrawal) Act 2018, enacted on 26 June 2018, provides:‘(1)The withdrawal agreement may be ratified only if—(a)a Minister of the Crown has laid before each House of Parliament—(i)a statement that political agreement has been reached,(ii)a copy of the negotiated withdrawal agreement, and(iii)a copy of the framework for the future relationship,(b)the negotiated withdrawal agreement and the framework for the future relationship have been approved by a resolution of the House of Commons on a motion moved by a Minister of the Crown,(c)a motion for the House of Lords to take note of the negotiated withdrawal agreement and the framework for the future relationship has been tabled in the House of Lords by a Minister of the Crown and—the House of Lords has debated the motion, orthe House of Lords has not concluded a debate on the motion before the end of the period of five Lords sitting days beginning with the first Lords sitting day after the day on which the House of Commons passes the resolution mentioned in paragraph (b), and(d)an Act of Parliament has been passed which contains provision for the implementation of the withdrawal agreement.So far as practicable, a Minister of the Crown must make arrangements for the motion mentioned in subsection (1)(b) to be debated and voted on by the House of Commons before the European Parliament decides whether it consents to the withdrawal agreement being concluded on behalf of the [European Union] in accordance with Article 50(2) [TEU].…’ The dispute in the main proceedings and the question referred for a preliminary ruling 9On 23 June 2016, a referendum of the United Kingdom electorate produced a majority in favour of that Member State’s leaving the European Union. On 29 March 2017, having been authorised to do so by the European Union (Notification of Withdrawal) Act 2017, the Prime Minister (United Kingdom) notified the European Council of the United Kingdom’s intention to withdraw from the European Union under Article 50 TEU.10On 19 December 2017, a petition for judicial review was lodged in the Court of Session (Scotland, United Kingdom), in which the petitioners in the main proceedings — including one member of the Parliament of the United Kingdom of Great Britain and Northern Ireland, two members of the Scottish Parliament, and three members of the European Parliament — seek a declarator specifying whether, when and how that notification can unilaterally be revoked. Those petitioners, in support of whom two other Members of the United Kingdom Parliament intervened, wish to know whether the notification referred to in Article 50 TEU can unilaterally be revoked before the expiry of the two-year period laid down in that article, with the effect that, if the notification made by the United Kingdom were revoked, that Member State would remain in the European Union. They asked the Court of Session (Scotland) to refer a question on that issue to the Court of Justice for a preliminary ruling. In response, the Secretary of State for Exiting the European Union argued that the question was hypothetical and academic, in view of the United Kingdom Government’s stated position that the notification would not be revoked.11By decision of 8 June 2018, the Lord Ordinary (first instance judge of the Court of Session) declined to make a reference to the Court of Justice and refused the petition for judicial review on the grounds, first, that the issue was hypothetical in view of the United Kingdom Government’s position and because the facts upon which the Court would be asked to give an answer could not be ascertained and, secondly, that the matter encroached upon parliamentary sovereignty and was outwith the national court’s jurisdiction.12The petitioners in the main proceedings brought an appeal against that decision before the referring court.13The referring court points out that, under section 13 of the European Union (Withdrawal) Act 2018, the approval of the United Kingdom Parliament must be obtained on the outcome of negotiations between the United Kingdom and the European Union under Article 50 TEU. In particular, the withdrawal agreement can be ratified only if it, and the framework for the future relationship between the United Kingdom and European Union, have been approved by a resolution of the House of Commons and been debated in the House of Lords. If no such approval is forthcoming, the United Kingdom Government must state how it proposes to proceed. If the Prime Minister states, prior to 21 January 2019, that no agreement in principle can be reached, that government must, once again, state how it proposes to proceed and must bring that proposal before both Houses of the United Kingdom Parliament.14The referring court states that if any agreement between the United Kingdom and the European Union is not approved, and nothing further occurs, the treaties will cease to apply to the United Kingdom on 29 March 2019 and that Member State will automatically leave the European Union on that date.15By order of 21 September 2018, the referring court allowed the appeal against the decision of the Lord Ordinary and granted the request of the petitioners in the main proceedings that a reference for a preliminary ruling be made under Article 267 TFEU. The referring court considers that it is neither academic nor premature to ask the Court of Justice whether it is legally possible, for a Member State, to revoke unilaterally the notification made under Article 50(2) TEU and to remain in the European Union. It considers that the matter is uncertain and that the answer given by the Court of Justice will have the effect of clarifying the options open to the Members of the House of Commons when they cast their votes on any agreement between the United Kingdom and the European Union. In particular, that answer would allow them to ascertain whether there are not two options, but three, namely withdrawal from the European Union without an agreement, withdrawal from the European Union with the agreement that has been laid before them, or revocation of the notification of the intention to withdraw and the United Kingdom’s remaining in the European Union.16In those circumstances the Court of Session, Inner House, First Division (Scotland), decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Where, in accordance with Article 50 [TEU], a Member State has notified the European Council of its intention to withdraw from the European Union, does EU law permit that notice to be revoked unilaterally by the notifying Member State; and, if so, subject to what conditions and with what effect relative to the Member State remaining within the European Union?’17The United Kingdom Government made an application to the referring court for permission to appeal the order of 21 September 2018, referred to in paragraph 15 of the present judgment, and the order of 3 October 2018 by which the referring court submitted this reference for a preliminary ruling. That application was refused by decision of 8 November 2018, and the United Kingdom Government then applied to the Supreme Court of the United Kingdom for permission to appeal against those two orders. That permission was refused by order of the Supreme Court of the United Kingdom of 20 November 2018. Procedure before the Court of Justice 18The referring court requested that the reference for a preliminary ruling be determined pursuant to the expedited procedure provided for in Article 105 of the Rules of Procedure of the Court.19By order of 19 October 2018, Wightman and Others (C‑621/18, EU:C:2018:851), the President of the Court granted that request. Consideration of the question referred Admissibility 20The United Kingdom Government argues that the question referred is inadmissible because it is hypothetical. In particular, the United Kingdom Government submits that no draft act of revocation of the notification of the United Kingdom’s intention to withdraw from the European Union has been adopted or even contemplated, that there is no dispute in the main proceedings and that the question referred is actually intended to obtain an advisory opinion on a constitutional issue, namely the correct interpretation of Article 50 TEU and of acts adopted pursuant to that article.21According to the United Kingdom Government, there is no concrete dispute, since the question referred addresses events that have not occurred and may not occur. The United Kingdom Government submits that it has consistently reiterated its intention to honour the result of the referendum by giving notice under Article 50 TEU and thereby withdrawing from the European Union, whether on the basis of an agreement or without any agreement.22The question, according to the United Kingdom Government, actually concerns the legal implications of a situation that does not currently exist. It is based on the assumption, first, that there will be an attempt by the United Kingdom, whether at the instigation of its Parliament or otherwise, to revoke the notification and, secondly, that the European Commission or the other 27 Member States will oppose that revocation. Only in the event of such opposition would a dispute arise.23According to the United Kingdom Government, the lodging of the petition in the main proceedings accompanied by a request that a question be referred for a preliminary ruling in order to obtain an advisory opinion from the Court circumvents the rules of the TFEU on remedies, standing and time limits. That government submits that the advisory opinion procedure is subject to the rules set out in Article 218(11) TFEU and is available only where a question arises as to the compatibility of a proposed international agreement with the Treaties.24The only possible remedies would be direct actions, if the United Kingdom were to revoke its notification and trigger a dispute with the other Member States and the EU institutions.25The Commission also argues that the ruling that the referring court will deliver after receiving the Court’s answer to the question referred will not produce any binding effects on the parties to the main proceedings and that that question is therefore hypothetical. It acknowledged however, at the hearing, that there is a dispute in the main proceedings.26In that regard, it should be borne in mind that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of a rule of EU law, the Court is in principle bound to give a ruling (judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 24, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 31).27It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 25, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 32).28It should also be borne in mind that, in accordance with settled case-law, the justification for a reference for a preliminary ruling is not that it enables advisory opinions on general or hypothetical questions to be delivered but rather that it is necessary for the effective resolution of a dispute (judgment of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 194 and the case-law cited; see, also, to that effect, judgments of 16 December 1981, Foglia, 244/80, EU:C:1981:302, paragraph 18, and of 12 June 2008, Gourmet Classic, C‑458/06, EU:C:2008:338, paragraph 26).29In the present case, it must be noted that an appeal has been brought before the referring court against a decision of the first instance court delivered in the context of an action seeking a declarator specifying whether the notification of the United Kingdom’s intention to withdraw from the European Union, given under Article 50 TEU, may be unilaterally revoked before the expiry of the two-year period laid down in that article, with the effect that, if the notification made by the United Kingdom were revoked, that Member State would remain in the European Union. The referring court states, in that respect, that it is required to rule on that question of law, which represents a genuine and live issue, of considerable practical importance, and which has given rise to a dispute. That court emphasises that one of the petitioners and the two interveners, who are Members of the United Kingdom Parliament, must vote on the withdrawal of the United Kingdom from the European Union and, in particular, in accordance with section 13 of the European Union (Withdrawal) Act 2018, on the ratification of the agreement negotiated between the United Kingdom Government and the European Union pursuant to Article 50 TEU. The referring court states that those Members of the United Kingdom Parliament have an interest in the answer to that question of law, since that answer will clarify the options open to them in exercising their parliamentary mandates.30It is not for the Court to call into question the referring court’s assessment of the admissibility of the action in the main proceedings, which falls, in the context of the preliminary ruling proceedings, within the jurisdiction of the national court; nor is it for the Court to determine whether the order for reference was made in accordance with the rules of national law governing the organisation of the courts and legal proceedings (see, to that effect, judgments of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 26, and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 34). In the present case, the referring court rejected the pleas of inadmissibility raised before it by the United Kingdom Government concerning the hypothetical or academic nature of the action in the main proceedings. It follows that, in so far as the arguments of the United Kingdom Government and of the Commission are intended to call into question the admissibility of that action, they are irrelevant for the purposes of determining whether the request for a preliminary ruling is admissible (see, to that effect, judgment of 13 March 2007, Unibet, C‑432/05, EU:C:2007:163, paragraph 33).31In addition, the fact that the action in the main proceedings seeks a declaratory remedy does not prevent the Court from ruling on a question referred for a preliminary ruling, provided that the action is permitted under national law and that the question meets an objective need for the purpose of settling the dispute properly brought before the referring court (see, to that effect, judgments of 15 December 1995, Bosman, C‑415/93, EU:C:1995:463, paragraph 65, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400 paragraph 28).32Accordingly, there is indeed a dispute before the referring court, even though the respondent in the main proceedings chose not to address the substance of the issue raised by the petitioners in the main proceedings, maintaining only that the petitioners’ action was inadmissible (see, to that effect, judgment of 8 July 2010, Afton Chemical, C‑343/09, EU:C:2010:419, paragraphs 11 and 15).33There is no doubt as to the relevance of the question referred, since it concerns the interpretation of a provision of EU law — primary law, in this case — and that question is precisely the point at issue in the dispute in the main proceedings.34Accordingly, it is in no way obvious that the question referred, regarding the interpretation of Article 50 TEU, bears no relation to the actual facts of the main action or its purpose, or concerns a hypothetical problem.35As regards the argument, mentioned in paragraph 23 of the present judgment, that the referring court seeks to obtain an advisory opinion from the Court, circumventing the procedure set out in Article 218(11) TFEU, it should be noted that the referring court does not ask the Court for an opinion on the compatibility of an agreement envisaged by the European Union with the Treaties, but rather asks the Court to interpret a provision of EU law in order to enable it to give judgment in the main proceedings.36It follows that the question referred is admissible. Substance 37The petitioners and the interveners in the main proceedings, while acknowledging that Article 50 TEU does not contain any express rule on the revocation of a notification of the intention to withdraw from the European Union, submit that a right of revocation exists and is unilateral in nature. However, that right may only be exercised in accordance with the constitutional requirements of the Member State concerned, by analogy with the right of withdrawal itself, laid down in Article 50(1) TEU. According to those parties to the main proceedings, the withdrawal procedure therefore continues for as long as the Member State concerned intends to withdraw from the European Union, but comes to an end if, before the end of the period laid down in Article 50(3) TEU, that Member State changes its mind and decides not to withdraw from the European Union.38The Council and the Commission, while agreeing that a Member State is entitled to revoke the notification of its intention to withdraw before the Treaties have ceased to apply to that Member State, dispute the unilateral nature of that right.39According to those institutions, the recognition of a right of unilateral revocation would allow a Member State that has notified its intention to withdraw to circumvent the rules set out in Article 50(2) and (3) TEU, which are intended to ensure an orderly withdrawal from the European Union, and would open the way for abuse by the Member State concerned to the detriment of the European Union and its institutions.40The Council and the Commission argue that the Member State concerned could thus use its right of revocation shortly before the end of the period laid down in Article 50(3) TEU and notify a new intention to withdraw immediately after that period expired, thereby triggering a new two-year negotiation period. By doing so, the Member State would enjoy, de facto, a right to negotiate its withdrawal without any time limit, rendering the period laid down in Article 50(3) TEU ineffective.41In addition, according to those institutions, a Member State could at any time use its right of revocation as leverage in negotiations. If the terms of the withdrawal agreement did not suit that Member State, it could threaten to revoke its notification and thus put pressure on the EU institutions in order to alter the terms of the agreement to its own advantage.42In order to guard against such risks, the Council and the Commission propose that Article 50 TEU should be interpreted as allowing revocation, but only with the unanimous consent of the European Council.43The United Kingdom Government has not taken a position on the right, for a Member State that has notified its intention to withdraw from the European Union under Article 50 TEU, to revoke that notification.44In that respect, it must be borne in mind that the founding Treaties, which constitute the basic constitutional charter of the European Union (judgment of 23 April 1986, Les Verts v Parliament, 294/83, EU:C:1986:166, paragraph 23), established, unlike ordinary international treaties, a new legal order, possessing its own institutions, for the benefit of which the Member States thereof have limited their sovereign rights, in ever wider fields, and the subjects of which comprise not only those States but also their nationals (Opinion 2/13 (Accession of the European Union to the ECHR) of 18 December 2014, EU:C:2014:2454, paragraph 157 and the case-law cited).45According to settled case-law of the Court, that autonomy of EU law with respect both to the law of the Member States and to international law is justified by the essential characteristics of the European Union and its law, relating in particular to the constitutional structure of the European Union and the very nature of that law. EU law is characterised by the fact that it stems from an independent source of law, namely the Treaties, by its primacy over the laws of the Member States, and by the direct effect of a whole series of provisions which are applicable to their nationals and to the Member States themselves. Those characteristics have given rise to a structured network of principles, rules and mutually interdependent legal relations binding the European Union and its Member States reciprocally as well as binding its Member States to each other (judgment of 6 March 2018, Achmea, C‑284/16, EU:C:2018:158, paragraph 33 and the case-law cited).46The question referred must therefore be examined in the light of the Treaties taken as a whole.47In that respect, it should be borne in mind that, according to settled case-law of the Court, the interpretation of a provision of EU law requires that account be taken not only of its wording and the objectives it pursues, but also of its context and the provisions of EU law as a whole. The origins of a provision of EU law may also provide information relevant to its interpretation (see, to that effect, judgment of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 135; judgments of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament andCouncil, C‑583/11 P, EU:C:2013:625, paragraph 50 and the case-law cited, and of 17 March 2016, Parliament v Commission, C‑286/14, EU:C:2016:183, paragraph 43).48As regards the wording of Article 50 TEU, it should be noted that that article does not explicitly address the subject of revocation. It neither expressly prohibits nor expressly authorises revocation.49That being said, as the Advocate General pointed out in points 99 to 102 of his Opinion, it follows from the wording of Article 50(2) TEU that a Member State which decides to withdraw is to notify the European Council of its ‘intention’. An intention is, by its nature, neither definitive nor irrevocable.50In addition, Article 50(1) TEU provides that any Member State may decide to withdraw from the European Union in accordance with its own constitutional requirements. It follows that the Member State is not required to take its decision in concert with the other Member States or with the EU institutions. The decision to withdraw is for that Member State alone to take, in accordance with its constitutional requirements, and therefore depends solely on its sovereign choice.51Article 50(2) and (3) TEU then set out the procedure to be followed if a Member State decides to withdraw. As the Court held in the judgment of 19 September 2018, RO (C‑327/18 PPU, EU:C:2018:733, paragraph 46), that procedure consists of, first, notification to the European Council of the intention to withdraw, secondly, negotiation and conclusion of an agreement setting out the arrangements for withdrawal, taking into account the future relationship between the State concerned and the European Union and, thirdly, the actual withdrawal from the Union on the date of entry into force of that agreement or, failing that, two years after the notification given to the European Council, unless the latter, in agreement with the Member State concerned, unanimously decides to extend that period.52Article 50(2) TEU refers to Article 218(3) TFEU, according to which the Commission is to submit recommendations to the Council, which is to adopt a decision authorising the opening of negotiations and nominating the European Union negotiator or the head of the European Union’s negotiating team.53Article 50(2) TEU thus defines the role of the various institutions in the procedure to be followed in order to negotiate and conclude the withdrawal agreement, the conclusion of which requires a decision of the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.54In addition, Article 50(3) TEU determines when the withdrawal of the Member State concerned from the European Union will take effect, in providing that the Treaties are to cease to apply to that Member State from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification by that Member State of its intention to withdraw. That maximum period of two years applies unless the European Council decides, unanimously and in agreement with the Member State concerned, to extend it.55After its withdrawal from the European Union, the Member State concerned may ask to rejoin, under the procedure set out in Article 49 TEU.56It follows that Article 50 TEU pursues two objectives, namely, first, enshrining the sovereign right of a Member State to withdraw from the European Union and, secondly, establishing a procedure to enable such a withdrawal to take place in an orderly fashion.57As the Advocate General stated in points 94 and 95 of his Opinion, the sovereign nature of the right of withdrawal enshrined in Article 50(1) TEU supports the conclusion that the Member State concerned has a right to revoke the notification of its intention to withdraw from the European Union, for as long as a withdrawal agreement concluded between the European Union and that Member State has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that provision, has not expired.58In the absence of an express provision governing revocation of the notification of the intention to withdraw, that revocation is subject to the rules laid down in Article 50(1) TEU for the withdrawal itself, with the result that it may be decided upon unilaterally, in accordance with the constitutional requirements of the Member State concerned.59The revocation by a Member State of the notification of its intention to withdraw, before the occurrence of one of the events referred to in paragraph 57 of the present judgment, reflects a sovereign decision by that State to retain its status as a Member State of the European Union, a status which is not suspended or altered by that notification (see, to that effect, judgment of 19 September 2018, RO, C‑327/18 PPU, EU:C:2018:733, paragraph 45), subject only to the provisions of Article 50(4) TEU.60That revocation is fundamentally different in that respect from any request by which the Member State concerned might ask the European Council to extend the two-year period referred to in Article 50(3) TEU; the analogy that the Commission and the Council seek to make between that revocation and such an extension request cannot therefore be accepted.61As regards the context of Article 50 TEU, reference must be made to the 13th recital in the preamble to the TEU, the first recital in the preamble to the TFEU and Article 1 TEU, which indicate that those treaties have as their purpose the creation of an ever closer union among the peoples of Europe, and to the second recital in the preamble to the TFEU, from which it follows that the European Union aims to eliminate the barriers which divide Europe.62It is also appropriate to underline the importance of the values of liberty and democracy, referred to in the second and fourth recitals of the preamble to the TEU, which are among the common values referred to in Article 2 of that Treaty and in the preamble to the Charter of Fundamental Rights of the European Union, and which thus form part of the very foundations of the European Union legal order (see, to that effect, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraphs 303 and 304).63As is apparent from Article 49 TEU, which provides the possibility for any European State to apply to become a member of the European Union and to which Article 50 TEU, on the right of withdrawal, is the counterpart, the European Union is composed of States which have freely and voluntarily committed themselves to those values, and EU law is thus based on the fundamental premiss that each Member State shares with all the other Member States, and recognises that those Member States share with it, those same values (see, to that effect, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the system of justice), C‑216/18 PPU, EU:C:2018:586, paragraph 35).64It must also be noted that, since citizenship of the Union is intended to be the fundamental status of nationals of the Member States (see, to that effect, judgments of 20 September 2001, Grzelczyk, C‑184/99, EU:C:2001:458, paragraph 31; of 19 October 2004, Zhu and Chen, C‑200/02, EU:C:2004:639, paragraph 25; and of 2 March 2010, Rottmann, C‑135/08, EU:C:2010:104, paragraph 43), any withdrawal of a Member State from the European Union is liable to have a considerable impact on the rights of all Union citizens, including, inter alia, their right to free movement, as regards both nationals of the Member State concerned and nationals of other Member States.65In those circumstances, given that a State cannot be forced to accede to the European Union against its will, neither can it be forced to withdraw from the European Union against its will.66However, if the notification of the intention to withdraw were to lead inevitably to the withdrawal of the Member State concerned from the European Union at the end of the period laid down in Article 50(3) TEU, that Member State could be forced to leave the European Union despite its wish — as expressed through its democratic process in accordance with its constitutional requirements — to reverse its decision to withdraw and, accordingly, to remain a Member of the European Union.67Such a result would be inconsistent with the aims and values referred to in paragraphs 61 and 62 of the present judgment. In particular, it would be inconsistent with the Treaties’ purpose of creating an ever closer union among the peoples of Europe to force the withdrawal of a Member State which, having notified its intention to withdraw from the European Union in accordance with its constitutional requirements and following a democratic process, decides to revoke the notification of that intention through a democratic process.68The origins of Article 50 TEU also support an interpretation of that provision as meaning that a Member State is entitled to revoke unilaterally the notification of its intention to withdraw from the European Union. That article largely adopts the wording of a withdrawal clause first set out in the draft Treaty establishing a Constitution for Europe. Although, during the drafting of that clause, amendments had been proposed to allow the expulsion of a Member State, to avoid the risk of abuse during the withdrawal procedure or to make the withdrawal decision more difficult, those amendments were all rejected on the ground, expressly set out in the comments on the draft, that the voluntary and unilateral nature of the withdrawal decision should be ensured.69It follows from the foregoing that the notification by a Member State of its intention to withdraw does not lead inevitably to the withdrawal of that Member State from the European Union. On the contrary, a Member State that has reversed its decision to withdraw from the European Union is entitled to revoke that notification for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that provision, has not expired.70That conclusion is corroborated by the provisions of the Vienna Convention on the Law of Treaties, which was taken into account in the preparatory work for the Treaty establishing a Constitution for Europe.71In the event that a treaty authorises withdrawal under its provisions, Article 68 of that convention specifies inter alia, in clear and unconditional terms, that a notification of withdrawal, as provided for in Article 65 or 67 thereof, may be revoked at any time before it takes effect.72As regards the proposal of the Council and the Commission that the right of the Member State concerned to revoke the notification of its intention to withdraw should be subject to the unanimous approval of the European Council, that requirement would transform a unilateral sovereign right into a conditional right subject to an approval procedure. Such an approval procedure would be incompatible with the principle, referred to in paragraphs 65, 67 and 69 of the present judgment, that a Member State cannot be forced to leave the European Union against its will.73It follows, in the first place, that, for as long as a withdrawal agreement concluded between the European Union and that Member State has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that provision, has not expired, that Member State — which enjoys, subject to Article 50(4) TEU, all of the rights and remains bound by all of the obligations laid down in the Treaties — retains the ability to revoke unilaterally the notification of its intention to withdraw from the European Union, in accordance with its constitutional requirements.74In the second place, the revocation of the notification of the intention to withdraw must, first, be submitted in writing to the European Council and, secondly, be unequivocal and unconditional, that is to say that the purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end.75In view of all the foregoing, the answer to the question referred is that Article 50 TEU must be interpreted as meaning that, where a Member State has notified the European Council, in accordance with that article, of its intention to withdraw from the European Union, that article allows that Member State — for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired — to revoke that notification unilaterally, in an unequivocal and unconditional manner, by a notice addressed to the European Council in writing, after the Member State concerned has taken the revocation decision in accordance with its constitutional requirements. The purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end. Costs 76Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Full Court) hereby rules: Article 50 TEU must be interpreted as meaning that, where a Member State has notified the European Council, in accordance with that article, of its intention to withdraw from the European Union, that article allows that Member State — for as long as a withdrawal agreement concluded between that Member State and the European Union has not entered into force or, if no such agreement has been concluded, for as long as the two-year period laid down in Article 50(3) TEU, possibly extended in accordance with that paragraph, has not expired — to revoke that notification unilaterally, in an unequivocal and unconditional manner, by a notice addressed to the European Council in writing, after the Member State concerned has taken the revocation decision in accordance with its constitutional requirements. The purpose of that revocation is to confirm the EU membership of the Member State concerned under terms that are unchanged as regards its status as a Member State, and that revocation brings the withdrawal procedure to an end. LenaertsSilva de LapuertaBonichotArabadjievPrechalVilarasReganvon DanwitzToaderBiltgenJürimäeLycourgosRosasJuhászIlešičMalenovskýBay LarsenSafjanŠvábyFernlundVajdaRodinXuerebPiçarraRossiDelivered in open court in Luxembourg on 10 December 2018.A. Calot EscobarRegistrarK. LenaertsPresident( *1 ) Language of the case: English. | efeff-27612b3-48e9 | EN |
Advocate General Kokott sees grounds for taking the view that the Belgian Law on the extension of the lifetime of the Doel 1 and 2 nuclear power stations was adopted without the necessary prior environmental impact assessments | 29 July 2019 ( *1 )(Reference for a preliminary ruling — Environment — Espoo Convention — Aarhus Convention — Conservation of natural habitats and of wild fauna and flora — Directive 92/43/EEC — Article 6(3) — Definition of ‘project’ — Assessment of the effects on the site concerned — Article 6(4) — Meaning of ‘imperative reasons of overriding public interest’ — Conservation of wild birds — Directive 2009/147/EC — Assessment of the effects of certain public and private projects on the environment — Directive 2011/92/EU — Article 1(2)(a) — Definition of ‘project’ — Article 2(1) — Article 4(1) — Environmental impact assessment — Article 2(4) — Exemption from assessment — Phasing out of nuclear energy — National legislation providing, first, for restarting industrial production of electricity for a period of almost 10 years at a nuclear power station that had previously been shut down, with the effect of deferring by 10 years the date initially set by the national legislature for deactivating and ceasing production at that power station, and second, for deferral, also by 10 years, of the date initially set by the legislature for deactivating and ceasing industrial production of electricity at an active power station — No environmental impact assessment)In Case C‑411/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour constitutionnelle (Constitutional Court, Belgium), made by decision of 22 June 2017, received at the Court on 7 July 2017, in the proceedings Inter-Environnement Wallonnie ASBL, Bond Beter Leefmilieu Vlaanderen ASBL v Council of Ministers, intervener: Electrabel SA, THE COURT (Grand Chamber),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice‑President, J.‑C. Bonichot (Rapporteur), A. Prechal, M. Vilaras, E. Regan, T. von Danwitz, C. Toader and C. Lycourgos, Presidents of Chambers, A. Rosas, M. Ilešič, J. Malenovský, M. Safjan, D. Šváby and C.G. Fernlund, Judges,Advocate General: J. Kokott,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 10 September 2018,after considering the observations submitted on behalf of:–Inter-Environnement Wallonie ASBL and Bond Beter Leefmilieu Vlaanderen ASBL, by J. Sambon, avocat,Electrabel SA, by T. Vandenput and M. Pittie, avocats, and by D. Arts and F. Tulkens, advocaten,the Belgian Government, by M. Jacobs, C. Pochet and J. Van Holm, acting as Agents, and by G. Block and K. Wauters, avocats, and F. Henry,the Czech Government, by M. Smolek, J. Vláčil, J. Pavliš and L. Dvořáková, acting as Agents,the German Government, originally represented by T. Henze and D. Klebs, and later by D. Klebs, acting as Agents,the Austrian Government, originally represented by C. Pesendorfer, and later by M. Oswald and G. Hesse, acting as Agents,the Portuguese Government, by L. Inez Fernandes, M. Figueiredo, J. Reis Silva and L. Medeiros, acting as Agents,the Finnish Government, by J. Heliskoski, acting as Agent,the United Kingdom Government, by S. Brandon, J. Kraehling, G. Brown and R. Fadoju, acting as Agents, and by D. Blundell, Barrister,the European Commission, by G. Gattinara, C. Zadra, M. Noll‑Ehlers, R. Tricot and M. Patakia, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 29 November 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of the Convention on Environmental Impact Assessment in a Transboundary Context, concluded at Espoo (Finland) on 25 February 1991 and approved on behalf of the European Community by Council Decision of 27 June 1997 (‘the Espoo Convention’); of the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters, concluded at Aarhus (Denmark) on 25 June 1998 and approved on behalf of the Community by Council Decision 2005/370/EC of 17 February 2005 (OJ 2005 L 124, p. 1) (‘the Aarhus Convention’); of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ 1992 L 206, p. 7), as amended by Council Directive 2013/17/EU of 13 May 2013 (OJ 2013 L 158, p. 193) (‘the Habitats Directive’); of Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ 2010 L 20, p. 7), as amended by Directive 2013/17 (‘the Birds Directive’), and of Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ 2012 L 26, p. 1; ‘the EIA Directive’).2The request has been made in proceedings between Inter Environnement Wallonie ASBL and Bond Beter Leefmilieu Vlaanderen ASBL, on the one hand, and the Conseil des ministres (Council of Ministers, Belgium), on the other, in relation to legislation whereby the Kingdom of Belgium, first, provided for the restarting of industrial production of electricity, for a period of almost 10 years, at a nuclear power station that had previously been shut down, and second, for deferral by 10 years of the date initially set for deactivating and ceasing industrial production of electricity at an active nuclear power station. I. Legal context A. International law 1. The Espoo Convention 3Article 1 of the Espoo Convention, headed ‘Definitions’, provides:‘…(v)“Proposed activity” means any activity or any major change to an activity subject to a decision of a competent authority in accordance with an applicable national procedure;…(ix)“Competent authority” means the national authority or authorities designated by a Party as responsible for performing the tasks covered by this Convention and/or the authority or authorities entrusted by a Party with decision-making powers regarding a proposed activity;…’4Article 2 of the Espoo Convention states:‘1. The Parties shall, either individually or jointly, take all appropriate and effective measures to prevent, reduce and control significant adverse transboundary environmental impact from proposed activities.2. Each Party shall take the necessary legal, administrative or other measures to implement the provisions of this Convention, including, with respect to proposed activities listed in Appendix I that are likely to cause significant adverse transboundary impact, the establishment of an environmental impact assessment procedure that permits public participation and preparation of the environmental impact assessment documentation described in Appendix II.3. The Party of origin shall ensure that in accordance with the provisions of this Convention an environmental impact assessment is undertaken prior to a decision to authorise or undertake a proposed activity listed in Appendix I that is likely to cause a significant adverse transboundary impact.6. The Party of origin shall provide, in accordance with the provisions of this Convention, an opportunity to the public in the areas likely to be affected to participate in relevant environmental impact assessment procedures regarding proposed activities and shall ensure that the opportunity provided to the public of the affected Party is equivalent to that provided to the public of the Party of origin.7. Environmental impact assessments as required by this Convention shall, as a minimum requirement, be undertaken at the project level of the proposed activity. To the extent appropriate, the Parties shall endeavour to apply the principles of environmental impact assessment to policies, plans and programmes.5Article 3(8) of the Espoo Convention provides that ‘the concerned Parties shall ensure that the public of the affected Party, in the areas likely to be affected, be informed of, and be provided with possibilities for making comments or objections on, the proposed activity and for the transmittal of these comments or objections to the competent authority of the Party of origin, either directly to this authority, or, where appropriate, through the Party of origin’.6Article 5 of the Espoo Convention states:‘The Party of origin shall, after completion of the environmental impact assessment documentation, without undue delay enter into consultations with the affected Party concerning, inter alia, the potential transboundary impact of the proposed activity and measures to reduce or eliminate its impact. Consultations may relate to:(a)Possible alternatives to the proposed activity, including the no‑action alternative and possible measures to mitigate significant adverse transboundary impact and to monitor the effects of such measures at the expense of the Party of origin;(b)Other forms of possible mutual assistance in reducing any significant adverse transboundary impact of the proposed activity; and(c)Any other appropriate matters relating to the proposed activity.The Parties shall agree, at the commencement of such consultations, on a reasonable time frame for the duration of the consultation period. Any such consultations may be conducted through an appropriate joint body, where one exists.’7Article 6(1) of the Espoo Convention states:‘The Parties shall ensure that, in the final decision on the proposed activity, due account is taken of the outcome of the environmental impact assessment, including the environmental impact assessment documentation, as well as the comments thereon received pursuant to Article 3, paragraph 8 and Article 4, paragraph 2, and the outcome of the consultations as referred to in Article 5.’8Appendix I to the Espoo Convention, headed ‘List of activities’, refers, in point 2, to, inter alia, ‘nuclear power stations and other nuclear reactors’.9The ‘Background Note on the application of [the Espoo Convention] to nuclear energy-related activities’ (ECE/MP.EIA/2011/5), issued on 2 April 2011 by the United Nations Economic Commission for Europe, mentions, among the major changes that are subject to the requirements of the Espoo Convention, ‘a substantial increase in the production or storage of radioactive waste from a facility (not only NPP [nuclear power plants]), for example by 25 per cent’, and ‘an extension of the lifetime of a facility’.10In the same note, a summary of its content includes the following:‘This note attempts to reflect the diverse and sometimes conflicting views expressed on the application of the [Espoo] Convention to nuclear energy-related activities, particularly nuclear power plants. It is not a guidance note, but rather is intended to encourage debate on key issues during the panel discussion on nuclear energy-related projects to be held during the fifth session of the Meeting of the Parties to the [Espoo Convention].The note does not necessarily reflect the views of the United Nations Economic Commission for Europe or of the secretariat.’11The terms of reference for the drawing up of the ‘Good Practice Recommendations on the application of [the Espoo Convention] to nuclear energy-related activities’, approved by the Meeting of the Parties to the Espoo Convention, 7th Session (Minsk (Belarus), 13 to 16 June 2017) state that the object of that document is to ‘describe existing good practice on environmental impact assessment [of] nuclear energy-related activities’.12The same terms of reference state that screening will have to determine whether nuclear activities, as well as major changes to them, fall under the scope of the Espoo Convention. It is also stated that that screening ‘includes considerations relating to the extension, renewal and updating of the licence (for example, extension of the operating life), such as a substantial increase in levels of production or in the production/transport/storage of radioactive waste from a facility (not only an NPP) and decommissioning’. 2. The Aarhus Convention 13Under Article 2(2) of the Aarhus Convention, the definition of ‘public authority’ in that Convention ‘does not include bodies or institutions acting in a … legislative capacity’.14Article 6(1) and (4) of the Aarhus Convention, that article being headed ‘Public participation in decisions on specific activities’, provides:‘1. Each Party:Shall apply the provisions of this article with respect to decisions on whether to permit proposed activities listed in Annex I;Shall, in accordance with its national law, also apply the provisions of this article to decisions on proposed activities not listed in Annex I which may have a significant effect on the environment. To this end, Parties shall determine whether such a proposed activity is subject to these provisions;4. Each Party shall provide for early public participation, when all options are open and effective public participation can take place.’15Annex I to the Aarhus Convention, headed ‘List of activities referred to in Article 6, paragraph 1 (a)’, mentions, in the fifth indent of point 1, ‘nuclear power stations and other nuclear reactors, including the dismantling or decommissioning of such power stations or reactors’.16Point 22 of that annex reads as follows:‘Any change to or extension of activities, where such a change or extension in itself meets the criteria/thresholds set out in this annex, shall be subject to Article 6, paragraph 1 (a) of this Convention. Any other change or extension of activities shall be subject to Article 6, paragraph 1 (b) of this Convention.’17The ‘Maastricht Recommendations on Promoting Effective Public Participation in Decision-making in Environmental Matters’ were approved by the Meeting of the Parties to the Aarhus Convention at the fifth session (Maastricht (Netherlands), 30 June to 1 July 2014). In the part of those recommendations entitled ‘Summary’, it is stated that those recommendations, though ‘neither binding nor exhaustive’, nonetheless provide ‘helpful guidance on implementing Articles 6, 7 and 8 of [the Aarhus Convention]’. B. EU law 1. The Habitats Directive 18Article 2(2) of the Habitats Directive states:‘Measures taken pursuant to this Directive shall be designed to maintain or restore, at favourable conservation status, natural habitats and species of wild fauna and flora of Community interest.’19Article 3(1) of that directive provides:‘A coherent European ecological network of special areas of conservation shall be set up under the title Natura 2000. This network, composed of sites hosting the natural habitat types listed in Annex I and habitats of the species listed in Annex II, shall enable the natural habitat types and the species’ habitats concerned to be maintained or, where appropriate, restored at a favourable conservation status in their natural range.The Natura 2000 network shall include the special protection areas classified by the Member States pursuant to [Council] Directive 79/409/EEC [of 2 April 1979 on the conservation of wild birds (OJ 1979 L 103, p. 1)].’20Article 6 of the Habitats Directive states:‘1. For special areas of conservation, Member States shall establish the necessary conservation measures involving, if need be, appropriate management plans specifically designed for the sites or integrated into other development plans, and appropriate statutory, administrative or contractual measures which correspond to the ecological requirements of the natural habitat types in Annex I and the species in Annex II present on the sites.2. Member States shall take appropriate steps to avoid, in the special areas of conservation, the deterioration of natural habitats and the habitats of species as well as disturbance of the species for which the areas have been designated, in so far as such disturbance could be significant in relation to the objectives of this Directive.3. Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site’s conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.4. If, in spite of a negative assessment of the implications for the site and in the absence of alternative solutions, a plan or project must nevertheless be carried out for imperative reasons of overriding public interest, including those of a social or economic nature, the Member State shall take all compensatory measures necessary to ensure that the overall coherence of Natura 2000 is protected. It shall inform the Commission of the compensatory measures adopted.Where the site concerned hosts a priority natural habitat type and/or a priority species, the only considerations which may be raised are those relating to human health or public safety, to beneficial consequences of primary importance for the environment or, further to an opinion from the Commission, to other imperative reasons of overriding public interest.’21Article 7 of the Habitats Directive provides:‘Obligations arising under Article 6(2), (3) and (4) of this Directive shall replace any obligations arising under the first sentence of Article 4(4) of Directive [79/409] in respect of areas classified pursuant to Article 4(1) or similarly recognised under Article 4(2) thereof, as from the date of implementation of this Directive or the date of classification or recognition by a Member State under Directive [79/409], where the latter date is later.’ 2. The Birds Directive 22Article 2 of the Birds Directive states:‘Member States shall take the requisite measures to maintain the population of the species referred to in Article 1 at a level which corresponds in particular to ecological, scientific and cultural requirements, while taking account of economic and recreational requirements, or to adapt the population of these species to that level.’23Article 3 of that directive provides:‘1. In the light of the requirements referred to in Article 2, Member States shall take the requisite measures to preserve, maintain or re‑establish a sufficient diversity and area of habitats for all the species of birds referred to in Article 1.2. The preservation, maintenance and re-establishment of biotopes and habitats shall include primarily the following measures:creation of protected areas;upkeep and management in accordance with the ecological needs of habitats inside and outside the protected zones;re-establishment of destroyed biotopes;(d)creation of biotopes.’24Article 4 of the Birds Directive states:‘1. The species mentioned in Annex I shall be the subject of special conservation measures concerning their habitat in order to ensure their survival and reproduction in their area of distribution.2. Member States shall take similar measures for regularly occurring migratory species not listed in Annex I, bearing in mind their need for protection in the geographical sea and land area where this Directive applies, as regards their breeding, moulting and wintering areas and staging posts along their migration routes. …4. In respect of the protection areas referred to in paragraphs 1 and 2, Member States shall take appropriate steps to avoid pollution or deterioration of habitats or any disturbances affecting the birds, in so far as these would be significant having regard to the objectives of this Article. Outside these protection areas, Member States shall also strive to avoid pollution or deterioration of habitats.’25As is stated in the first paragraph of its Article 18, the Birds Directive repealed Directive 79/409. The second paragraph of Article 18 adds that references to the latter directive are to be construed as references to the Birds Directive and are to be read in accordance with the correlation table in Annex VII to that directive. 3. The EIA Directive 26Recitals 1, 15 and 18 to 20 of the EIA Directive state:‘(1)Council Directive 85/337/EEC of 27 June 1985 on the assessment of the effects of certain public and private projects on the environment [(OJ 1985 L 175, p. 40)] has been substantially amended several times. In the interests of clarity and rationality the said Directive should be codified.(15)It is desirable to lay down strengthened provisions concerning environmental impact assessment in a transboundary context to take account of developments at international level. The European Community signed [the Espoo Convention] on 25 February 1991 and ratified it on 24 June 1997.(18)The European Community signed [the Aarhus Convention] on 25 June 1998 and ratified it on 17 February 2005.(19)Among the objectives of the Aarhus Convention is the desire to guarantee rights of public participation in decision-making in environmental matters in order to contribute to the protection of the right to live in an environment which is adequate for personal health and well-being.(20)Article 6 of the Aarhus Convention provides for public participation in decisions on the specific activities listed in Annex I thereto and on activities not so listed which may have a significant effect on the environment.’27Article 1(2) and (4) of the EIA Directive provides:‘2. For the purposes of this Directive, the following definitions shall apply:“project” means:the execution of construction works or of other installations or schemes,other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources;“developer” means the applicant for authorisation for a private project or the public authority which initiates a project;“development consent” means the decision of the competent authority or authorities which entitles the developer to proceed with the project;4. This Directive shall not apply to projects the details of which are adopted by a specific act of national legislation, since the objectives of this Directive, including that of supplying information, are achieved through the legislative process.’28Article 2(1) and (4) of the EIA Directive provides:‘1. Member States shall adopt all measures necessary to ensure that, before consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects. These projects are defined in Article 4.4. Without prejudice to Article 7, Member States may, in exceptional cases, exempt a specific project in whole or in part from the provisions laid down in this Directive.In that event, the Member States shall:consider whether another form of assessment would be appropriate;make available to the public concerned the information obtained under other forms of assessment referred to in point (a), the information relating to the decision granting exemption and the reasons for granting it;inform the Commission, prior to granting consent, of the reasons justifying the exemption granted, and provide it with the information made available, where applicable, to their own nationals.The Commission shall immediately forward the documents received to the other Member States.The Commission shall report annually to the European Parliament and to the Council on the application of this paragraph.’29Article 4(1) and (2) of the EIA Directive provides:‘1. Subject to Article 2(4), projects listed in Annex I shall be made subject to an assessment in accordance with Articles 5 to 10.2. Subject to Article 2(4), for projects listed in Annex II, Member States shall determine whether the project shall be made subject to an assessment in accordance with Articles 5 to 10. Member States shall make that determination through:a case-by-case examination;orthresholds or criteria set by the Member State.Member States may decide to apply both procedures referred to in points (a) and (b).’30Article 5(3) of the EIA Directive provides that the information to be provided by a developer, for projects which, under Article 4 of that directive, must be subject to an environmental impact assessment, is to at least include: a description of the project comprising information on the site, design and size of the project; a description of the measures envisaged in order to avoid, reduce and, if possible, remedy significant adverse effects; the data required to identify and assess the main effects which the project is likely to have on the environment; an outline of the main alternatives studied by the developer and an indication of the main reasons for his choice, taking into account the environmental effects; a non-technical summary of the above information.31The first subparagraph of Article 7(1) of the EIA Directive states:‘Where a Member State is aware that a project is likely to have significant effects on the environment in another Member State or where a Member State likely to be significantly affected so requests, the Member State in whose territory the project is intended to be carried out shall send to the affected Member State as soon as possible and no later than when informing its own public, inter alia:a description of the project, together with any available information on its possible transboundary impact;information on the nature of the decision which may be taken.’32Annex I to that directive, headed ‘Projects referred to in Article 4(1)’, mentions, in point 2(b), ‘Nuclear power stations and other nuclear reactors including the dismantling or decommissioning of such power stations or reactors’.33The same Annex I refers, in point 24, to ‘any change to or extension of projects listed in this Annex where such a change or extension in itself meets the thresholds, if any, set out in this Annex’.34Annex II to the EIA Directive mentions, in point 13(a), ‘any change or extension of projects listed in Annex I or this Annex, already authorised, executed or in the process of being executed, which may have significant adverse effects on the environment (change or extension not included in Annex I)’. C. Belgian law 1. The Law of 31 January 2003 35The loi du 31 janvier 2003 sur la sortie progressive de l’énergie nucléaire à des fins de production industrielle d’électricité (Law of 31 January 2003 on the phasing out of nuclear energy for the purposes of industrial production of electricity (Moniteur belge of 28 February 2003, p. 9879; ‘the Law of 31 January 2003’), laid down a timetable for phasing out industrial production of electricity by the fission of nuclear fuels in nuclear power stations.36Article 2 of that law provides:‘For the purposes of this Law, the following definitions shall apply:1° “date of entry into service for industrial purposes”: date on which the formal agreement between the electricity producer, the builders and the engineering consultancy firm finalises the project phase and initiates the production phase, as follows for the existing power stations:Doel 1: 15 February 1975Doel 2: 1 December 1975Doel 3: 1 October 1982Doel 4: 1 July 1985Tihange 1: 1 October 1975Tihange 2: 1 February 1983Tihange 3: 1 September 198537Article 4 of that law, in the initial version, provided:‘§ 1. Nuclear power stations used for the industrial production of electricity by the fission of nuclear fuels shall be deactivated 40 years after the date on which they were brought into service for industrial purposes and may no longer produce electricity thereafter.‘§ 2. All specific operating consents and consents for the industrial production of electricity by the fission of nuclear fuels issued for an unlimited period by the King … shall expire 40 years after the date on which the production facility concerned was brought into service for industrial purposes.’38According to Article 9 of that law:‘If the security of the electricity supply is threatened, the King may take the necessary measures by Royal Order, deliberated upon by the Conseil des Ministres (Council of Ministers) following an opinion from the Commission de Régulation de l’Électricité et du Gaz (Commission for the Regulation of Gas and Electricity, Belgium), without prejudice to Articles 3 to 7 of this Law, except in the event of force majeure. That opinion shall focus, in particular, on the effect of production price movements on security of supply.’ 2. The Law of 28 June 2015 39The loi du 28 juin 2015 modifiant la loi du 31 janvier 2003 sur la sortie progressive de l’énergie nucléaire à des fins de production industrielle d’électricité afin de garantir la sécurité d’approvisionnement sur le plan énergétique (Law of 28 June 2015 amending the Law of 31 January 2003 on the phasing out of nuclear energy for the purposes of the industrial production of electricity in order to ensure security of the energy supply (Moniteur belge of 6 July 2015, p. 44423; ‘the Law of 28 June 2015’), entered into force on 6 July 2015.40The explanatory memorandum to the Law of 28 June 2015 stresses, in particular, that a number of scientific studies have highlighted the potentially problematic situation in relation to security of supply, and that, given the major uncertainties surrounding restarting the Doel 3 and Tihange 2 stations, and the planned closure of thermal power stations in 2015, combined with the fact that foreign capacity cannot in the short term be integrated into the Belgian grid, the Belgian Government decided, on 18 December 2014, to continue to operate the Doel 1 and Doel 2 power stations for a further 10 years, with the proviso that the operating life of those reactors may not be extended beyond the year 2025. The memorandum specifies that the extension will be implemented in accordance with the requirements in respect of 10-year safety reviews, which cover, inter alia, the measures set out in Electrabel SA’s long-term plan for the operation of the power stations known as the ‘Long Term Operation Plan’ (‘LTO plan’), which details the measures to be taken as a result of prolonging industrial electricity production at those two power stations, the adjustments to be made to the action plan on stress tests and the approvals needed from the Agence fédérale de contrôle nucléaire (Federal Nuclear Control Agency, AFCN).41Article 4(1) of the Law of 31 January 2003, as amended by the Law of 28 June 2015, states:‘The Doel 1 nuclear power station may resume electricity production upon entry into force of the [Law of 28 June 2015]. It shall be deactivated and may no longer produce electricity as from 15 February 2025. The other nuclear power stations used for the industrial production of electricity by the fission of nuclear fuels shall be deactivated on the following dates and may no longer produce electricity from those dates onward:Doel 2: 1 December 2025.’42Further, the Law of 28 June 2015 inserted a third paragraph into Article 4 of the Law of 31 January 2003, in the following terms:‘By order deliberated in the Council of Ministers, the King shall bring forward the date referred to in § 1 in respect of the Doel 1 and Doel 2 nuclear power stations to 31 March 2016, if the agreement referred to in Article 4/2, § 3, has not been concluded by 30 November 2015, at the latest.’43Finally, the Law of 28 June 2015 inserted an Article 4/2, into the Law of 31 January 2003, worded as follows:‘§ 1. The owner of the Doel 1 and Doel 2 nuclear power stations shall pay an annual fee to the Federal State, until 15 February 2025 for Doel 1 and 1 December 2025 for Doel 2, in return for the extension of the period authorised for the industrial production of electricity by the fission of nuclear fuels.§ 3. The Federal State shall conclude an agreement with the owner of the Doel 1 and Doel 2 nuclear power stations, for the purpose of, in particular:1°specifying the arrangements for calculating the fee referred to in paragraph l;2°paying compensation to each party in respect of any breach of their contractual obligations.’ II. The dispute in the main proceedings and the questions referred for a preliminary ruling 44There are seven nuclear reactors in the Kingdom of Belgium: four in the territory of the Flemish Region at Doel (Doel 1, Doel 2, Doel 3 and Doel 4), and three in the territory of the Walloon Region at Tihange (Tihange 1, Tihange 2 and Tihange 3). For the purposes of the present judgment, each reactor will be treated as a separate nuclear power station.45The Doel 1 and Doel 2 power stations have been in service since 15 February 1975 and 1 December 1975, respectively. A single consent was issued in respect of both stations by Royal Order in 1974, for an indeterminate period.46The Law of 31 January 2003, in the initial version, first of all, prohibited the construction and commissioning of any new nuclear power stations in Belgium and, secondly, established a timetable for the phasing out of nuclear energy, whereby industrial electricity production by all active power stations would end on specified dates. For that purpose, the law provided that specific operating consents and consents for the industrial production of electricity would expire 40 years after the power station concerned was brought into service, but allowed the King to adjust the timetable if security of supply to the country were threatened.47However, the Law of 18 December 2013, amending the Law of 31 January 2003, postponed by 10 years the date on which industrial production of electricity by the Tihange 1 power station, brought into service on 1 October 1975, would end. That Law provided that only the consent for industrial production of electricity would expire on the deactivation date provided for in the timetable for the phasing out of nuclear energy and that the operating consent would remain valid until such time as it were ‘adjusted’. The law also removed the possibility of the King altering the timetable for phasing out nuclear energy laid down in the Law of 31 January 2003.48On 18 December 2014 the Belgian Government decided that the period of electricity production at the Doel 1 and Doel 2 power stations would also be extended by 10 years.49On 13 February 2015 Electrabel, the owner-operator of those two power stations, notified the AFCN that the Doel 1 power station would be deactivated and that industrial electricity production at that station would cease on 15 February 2015 at midnight, in accordance with the timetable established by the Law of 31 January 2003. It was specified that the notification would be ‘null and void’, if and when legislation providing for a 10-year extension in respect of that power station were to enter into force and provided that the conditions relating thereto were accepted by Electrabel.50The Law of 28 June 2015 introduced further changes to the timetable laid down by the national legislature for phasing out nuclear energy, deferring the end of industrial electricity production at the Doel 1 and Doel 2 power stations by 10 years. That law also provided that the Doel 1 power station could resume electricity production.51Under that law, those two power stations must be deactivated and cease industrial electricity production on 15 February 2025, for the Doel 1 power station, and 1 December 2025, for the Doel 2 power station.52The order for reference indicates that members of parliament held a number of hearings in the course of the proceedings for the adoption of that law, and those heard from included the head of the national body on radioactive waste and enriched fissionable materials, who indicated that a 10-year extension of electricity production by those two power stations was likely to produce 350 m3 of operational waste.53In September 2015 the AFCN confirmed the decision it had adopted in August 2015 not to carry out an environmental impact assessment in respect of the changes envisaged by the operator under the LTO plan.54An action was brought against that decision before the Conseil d’État (Council of State, Belgium).55A Royal Order of 27 September 2015 laid down the conditions for the operation of the Doel 1 and Doel 2 power stations, specifying that Electrabel should implement the LTO plan by the end of 2019 at the latest. An action against that decision was also brought before the Conseil d’État (Council of State).56On 30 November 2015 Electrabel and the Belgian State signed an agreement for a ‘rejuvenation’ investment plan of approximately EUR 700 million to extend the period of operation of the Doel 1 and Doel 2 power stations up until the date provided for in the Law of 28 June 2015 (‘the Agreement of 30 November 2015’).57The Belgian environmental protection associations Inter-Environnement Wallonie and Bond Beter Leefmilieu Vlaanderen brought proceedings before the Cour constitutionnelle (Constitutional Court, Belgium) seeking annulment of the Law of 28 June 2015. They argue, in essence, that the adoption of that legislation was in breach of the requirements to carry out a prior assessment, under the Espoo Convention and the Aarhus Convention, as well as the EIA Directive, the Habitats Directive and the Birds Directive.58In those circumstances, the Cour constitutionnelle (Constitutional Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:Must Article 2(1) to (3), (6) and (7), Article 3(8), Article 5 and Article 6(1) of the Espoo Convention, and point 2 of Appendix 1 to [the Epsoo Convention], be interpreted in accordance with the explanations provided in the background note on the application of the [Espoo Convention] to nuclear-energy related activities and the good practice recommendations on the application of the [Espoo Convention] to nuclear-energy related activities?(2)May Article 1(ix) of the [Espoo Convention], which defines the “competent authority”, be interpreted as excluding from the scope of that [Convention] legislative acts such as the [Law of 28 June 2015], having regard in particular to the various assessments and hearings carried out in connection with the adoption of that law?(3)Must Articles 2 to 6 of the [Espoo Convention] be interpreted as applying prior to the adoption of a legislative act such as the [Law of 28 June 2015], Article 2 of which postpones the date of deactivation and of the end of the industrial production of electricity of the Doel 1 and Doel 2 nuclear power stations?Does the answer to the question in point (a) differ depending on whether it relates to the Doel 1 or the Doel 2 power station, having regard to the need, in the case of the former power station, to adopt administrative acts implementing the abovementioned Law of 28 June 2015?May the security of the country’s electricity supply constitute an overriding reason of public interest permitting a derogation from the application of Articles 2 to 6 of the [Espoo Convention] and/or suspension of the application of those provisions?(4)Must Article 2(2) of the [Aarhus Convention] be interpreted as excluding from the scope of that [Convention] legislative acts such as the [Law of 28 June 2015], irrespective of whether the various assessments and hearings carried out in connection with the adoption of that law are taken into account?(5)Having regard in particular to the Maastricht Recommendations on Promoting Effective Public Participation in Decision-making in Environmental Matters with respect to multi-stage decision-making, must Articles 2 and 6 of the [Aarhus Convention], in conjunction with Annex I.1 to that [Convention], be interpreted as applying prior to the adoption of a legislative act such as the [Law of 28 June 2015], Article 2 of which postpones the date of deactivation and of the end of the industrial production of electricity of the Doel 1 and Doel 2 nuclear power stations?May the security of the country’s electricity supply constitute an overriding ground of public interest permitting derogation from the application of Articles 2 and 6 of the [Aarhus Convention] and/or suspension of the application of those provisions?(6)Must Article 1(2) of the [EIA] Directive, in conjunction with point 13(a) of Annex II to that directive, read, where appropriate, in the light of the Espoo and Aarhus [Conventions], be interpreted as applying to the postponement of the date of deactivation and of the end of the industrial production of electricity of a nuclear power station, entailing, as in this instance, significant investment and security upgrades for the Doel 1 and 2 nuclear power stations?If the answer to the question in point (a) is in the affirmative, must Articles 2 to 8 and 11 of the [EIA] Directive and Annexes I, II and III to that directive be interpreted as applying prior to the adoption of a legislative act such as the [Law of 28 June 2015], Article 2 of which postpones the date of deactivation and the end of the industrial production of electricity of the Doel 1 and Doel 2 nuclear power stations?Does the answer to the questions in points (a) and (b) differ depending on whether it relates to the Doel 1 or the Doel 2 power station, having regard to the need, in the case of the former power station, to adopt administrative acts implementing the abovementioned Law of 28 June 2015?If the answer to the question set out in point (a) is in the affirmative, must Article 2(4) of the [EIA] Directive be interpreted as permitting an exemption for the postponement of the deactivation of a nuclear power station from the application of Articles 2 to 8 and 11 of the [EIA] Directive for overriding reasons in the public interest linked with the security of the country’s electricity supply?(7)Must the concept of “specific act of legislation” within the meaning of Article 1(4) of the [EIA] Directive be interpreted as excluding from the scope of that directive a legislative act such as the [Law of 28 June 2015], having regard to the various assessments and hearings carried out in connection with the adoption of that law, which might attain the objectives of that directive?(8)Must Article 6 of the [Habitats] Directive, in conjunction with Articles 3 and 4 of the [Birds] Directive, read, where appropriate, in the light of the [EIA] Directive and the Espoo and Aarhus [Conventions], be interpreted as applying to the postponement of the date of deactivation and of the end of the industrial production of electricity of a nuclear power station, entailing, as in this instance, significant investments and security upgrades for the Doel 1 and Doel 2 nuclear power stations?If the answer to the question in point (a) is in the affirmative, must Article 6(3) of the [Habitats] Directive be interpreted as applying prior to the adoption of a legislative act such as the [Law of 28 June 2015], Article 2 of which postpones the date of deactivation and of the end of the industrial production of electricity of the Doel 1 and Doel 2 nuclear power stations?If the answer to the question in point (a) is in the affirmative, must Article 6(4) of the [Habitats] Directive be interpreted as allowing grounds linked with the security of the country’s electricity supply to be considered an imperative reason of overriding public interest, having regard in particular to the various assessments and hearings carried out in the context of the adoption of the abovementioned Law of 28 June 2015, which might be capable of attaining the objectives of that directive?(9)If, on the basis of the answers to the preceding questions, the national court should conclude that the Law [of 28 June 2015] fails to fulfil one of the obligations arising under the abovementioned Conventions or directives, and the security of the country’s electricity supply cannot constitute an imperative reason of overriding public interest permitting a derogation from those obligations, might the national court maintain the effects of the Law of 28 June 2015 in order to avoid legal uncertainty and to allow the environmental impact assessment and public participation obligations arising under those Conventions or directives to be fulfilled?’ III. Consideration of the questions referred A. Questions 6 and 7, on the EIA Directive 1. Question 6(a) to (c) 59By Question 6(a) to (c), which should be examined first, the referring court asks, in essence, whether the first indent of Article 1(2)(a) and Article 2(1) of the EIA Directive must be interpreted as meaning that restarting industrial production of electricity for a period of almost 10 years at a nuclear power station that had previously been shut down, with the effect of deferring by 10 years the date initially set by the national legislature for deactivating and ceasing production at that power station, and deferral, also by 10 years, of the date initially set by the legislature for deactivating and ceasing industrial production of electricity at an active power station, where those measures entail work to upgrade the power stations in question, constitute a project, within the meaning of that directive and if so, whether an environmental impact assessment must be carried out in respect of that work and those measures prior to the adoption of those measures by the national legislature. The referring court is also uncertain whether it is relevant that in order to implement the measures contested before that court, subsequent measures must be adopted in respect of one of the two power stations in question, such as the issue of a new specific consent for the production of electricity for industrial purposes.60Given that, as stated in recital 1 of the EIA Directive, that directive codifies Directive 85/337, the Court’s interpretation of the provisions of the latter directive also applies to identical provisions of the EIA Directive. (a) The definition of a ‘project’ for the purposes of the EIA Directive 61The term ‘project’ in Article 1(2)(a) of the EIA Directive refers, in the first indent, to the execution of construction works or of other installations or schemes and in the second indent, to other interventions in the natural surroundings and landscape including those involving the extraction of mineral resources.62It follows from the case-law of the Court that the definition of the term ‘project’, specifically in the context of the wording of the first indent of Article 1(2)(a) of the EIA Directive, refers to work or interventions involving alterations to the physical aspect of the site (see, to that effect, judgment of 19 April 2012, Pro-Braine and Others, C‑121/11, EU:C:2012:225, paragraph 31 and the case-law cited).63The referring court’s question is whether that description applies to the measures at issue in the main proceedings, given that their implementation requires and would therefore inevitably be accompanied by substantial investment and major upgrading work to the two power stations concerned.64The evidence available to the Court indicates that the measures at issue in the main proceedings entail major work on the Doel 1 and Doel 2 power stations to upgrade them and ensure that current safety standards are met, as demonstrated by the EUR 700 million investment budget earmarked for those power stations.65According to the order for reference, the Agreement of 30 November 2015 makes provision for a ‘rejuvenation’ investment plan, which describes that work as what is needed in order to extend the operational life of both power stations and includes, in particular, investment approved by the AFCN under the LTO plan for the replacement of facilities due to ageing and the upgrading of other facilities, along with changes to be introduced under the Fourth Periodical Safety Review and stress tests carried out in the wake of the accident in Fukushima (Japan).66In particular, the documents provided to the Court indicate that work will focus, in particular, on upgrading the containment structures of the Doel 1 and Doel 2 power stations, renewal of the spent fuel pools, building a new pumping station and adaptation of the base to offer better protection to the power stations against flooding. That work would not be limited to improvements to existing structures, but would also involve the construction of three buildings, two to host ventilation systems and a third as a fire protection structure. Work of that nature is such as to alter the physical aspect of the sites in question, within the meaning of the Court’s case-law.67Further, although no reference is made to that work in the Law of 28 June 2015, and it features instead in the Agreement of 30 November 2015, it is nonetheless closely linked to the measures adopted by the Belgian legislature.68Given the extent of the prolongation of industrial production of electricity provided for by those measures, those measures could not have been adopted unless the Belgian legislature had first been made aware of the nature and the technical and financial feasibility of the upgrading work required and the investment needed to implement it. Indeed, the explanatory memorandum and the travaux préparatoires of the Law of 28 June 2015 make specific reference to that upgrading work and that investment.69It must also be pointed out that the tangible link between the measures contested before the referring court and the investment referred to in the preceding paragraph is borne out by the fact that the Law of 28 June 2015 inserted a paragraph 3 into Article 4 of the Law of 31 January 2003, which provides that, in the absence of agreement between the owner of the Doel 1 and Doel 2 power stations and the Belgian State by 30 November 2015 at the latest, the King would bring forward the date of deactivation for those power stations to 31 March 2016.70The documents provided to the Court also show that the operator of both power stations took on a legal obligation to complete all work by the end of 2019.71In the light of those various factors, measures such as those at issue in the main proceedings cannot be artificially dissociated from the work to which they are inextricably linked when assessing, in the present instance, whether they constitute a project within the meaning of the first indent of Article 1(2)(a) of the EIA Directive. It must therefore be held that such measures and the upgrading work inextricably linked thereto together constitute a single project within the meaning of that provision, subject to findings of fact that are for the referring court to make.72The fact that the implementation of those measures requires the adoption of subsequent acts in respect of one of the power stations concerned, such as issue of a new specific consent for the production of electricity for industrial purposes, does not change that analysis. (b) The need for an environmental impact assessment 73It must, first, be recalled that, before consent is granted in respect of any project within the meaning of Article 1(2)(a) of the EIA Directive, an environmental impact assessment must be conducted on that project pursuant to Article 2(1) of that directive, if it is likely to have significant effects on the environment, by virtue of its nature, size or location.74Furthermore, the requirement imposed by Article 2(1) of the EIA Directive is not that all projects likely to have a significant effect on the environment be made subject to the assessment procedure provided for in that directive, but only those mentioned in Article 4 of that directive, which refers to the projects listed in Annexes I and II thereto (see, to that effect, judgment of 17 March 2011, Brussels Hoofdstedelijk Gewest and Others, C‑275/09, EU:C:2011:154, paragraph 25).75Finally, Article 2(1) and Article 4(1) of the EIA Directive, read together, indicate that projects covered by Annex I to that directive, present an inherent risk of significant effects on the environment and therefore an environmental impact assessment is indispensable in those cases (see, to that effect, on the obligation to conduct an impact assessment, judgments of 24 November 2011, Commission v Spain, C‑404/09, EU:C:2011:768, paragraph 74, and of 11 February 2015, Marktgemeinde Straßwalchen and Others, C‑531/13, EU:C:2015:79, paragraph 20). (1) The application of Annexes I and II to the EIA Directive 76Point 2(b) of Annex I to the EIA Directive lists nuclear power stations and other nuclear reactors, including their dismantling and decommissioning, among the projects which under Article 4(1) of that directive are subject to an assessment in accordance with Articles 5 to 10 of that directive.77Consequently, it must be examined whether measures such as those at issue in the main proceedings, along with the work to which those measures are inextricably linked, may fall within the scope of point 24 of Annex I to the EIA Directive, which refers to ‘any change to or extension of projects listed in this Annex where such a change or extension in itself meets the thresholds, if any, set out in this Annex’, or of point 13(a) of Annex II to that directive, which refers to ‘any change or extension of projects listed in Annex I or this Annex, already authorised, executed or in the process of being executed, which may have significant adverse effects on the environment (change or extension not included in Annex I)’.78As regards point 24 of Annex I to the EIA Directive, it is evident from the wording and general scheme of that provision that it applies to any change or extension to a project, which by virtue of, inter alia, its nature or scale, presents risks that are similar, in terms of their effects on the environment, to those posed by the project itself.79The measures at issue in the main proceedings, which have the effect of extending, by a significant period of 10 years, the duration of consents to produce electricity for industrial purposes with respect to both power stations in question, which had up until then been limited to 40 years by the Law of 31 January 2003, combined with major renovation works necessary due to the ageing of those power stations and the obligation to bring them into line with safety standards, must be found to be of a scale that is comparable, in terms of the risk of environmental effects, to that when those power stations were first put into service.80The Court therefore finds that those measures and that work fall within the scope of point 24 of Annex I to the EIA Directive. Such a project carries an inherent risk of significant effects on the environment, within the meaning of Article 2(1) of that directive, and must therefore be subject to an assessment of its environmental impact under Article 4(1) of that directive.81Furthermore, given that the Doel 1 and Doel 2 power stations are located close to the border of the Kingdom of Belgium and the Kingdom of the Netherlands, it is indisputable that the project could also have significant effects on the environment in the latter Member State, within the meaning of Article 7(1) of that directive. (2) The stage at which the environmental impact assessment must be conducted 82Article 2(1) of the EIA Directive states that the environmental impact assessment required by that directive must be conducted ‘before consent is given’ in respect of projects covered by that directive.83As the Court has previously pointed out, the requirement that such an assessment should precede consent is justified by the fact that it is necessary, in the decision-making process, for the competent authority to take effects on the environment into account at the earliest possible stage in all the technical planning and decision-making processes, the objective being to prevent the creation of pollution or nuisances at source rather than to counteract their effects subsequently (judgment of 31 May 2018, Commission v Poland, C‑526/16, not published, EU:C:2018:356, paragraph 75 and the case-law cited).84It must also be stated that Article 1(2)(c) of the EIA Directive defines the term ‘development consent’ as the decision of the competent authority or authorities which entitles the developer to proceed with the project, a matter which should be determined, in principle, by the referring court, in the light of applicable national legislation.85Furthermore, where national law provides that the consent procedure is to be carried out in several stages, the environmental impact assessment in respect of a project must, in principle, be carried out as soon as it is possible to identify and assess all potential effects of the project on the environment (judgments of 7 January 2004, Wells, C‑201/02, EU:C:2004:12, paragraph 52, and of 28 February 2008, Abraham and Others, C‑2/07, EU:C:2008:133, paragraph 26).86Where one of those stages is a principal decision and another an implementing decision which cannot extend beyond the parameters set by the principal decision, the effects which the project may have on the environment must be identified and assessed at the time of the procedure relating to the principal decision. It is only if those effects are not identifiable until the time of the procedure relating to the implementing decision that the assessment should be carried out in the course of the latter procedure (judgments of 7 January 2004, Wells, C‑201/02, EU:C:2004:12, paragraph 52, and of 28 February 2008, Abraham and Others, C‑2/07, EU:C:2008:133, paragraph 26).87In the present case, although it is for the referring court to determine, in the light of the applicable national legislation, whether the Law of 28 June 2015 constitutes development consent for the purposes of Article 1(2)(c) of the EIA Directive, it must be found that that legislation provides, in a precise and unconditional manner, first for the restarting of industrial production of electricity, for a period of almost 10 years, at a nuclear power station that had previously been shut down, with the effect of deferring by 10 years the date initially set by the national legislature for deactivating and ceasing industrial production of electricity at that power station and, second, for deferral, also by a period of 10 years, of the date initially set by the national legislature at which industrial production of electricity at an active power station would cease.88Consequently, although further measures are required to implement those acts, in the context of a complex and regulated process designed, inter alia, to ensure compliance with safety and security standards applicable to industrial production of nuclear electricity, and those measures are subject, in particular, to prior approval by the AFCN, as is apparent from the explanatory memorandum to the Law of 28 June 2015, the fact remains that those measures, once adopted by the national legislature, define essential characteristics of the project and, a priori, should no longer be a matter for debate or reconsideration.89As regards the need for the issuing of a new specific consent for the production of electricity for industrial purposes in respect of one of the two power stations concerned in order to proceed with the project, that fact cannot justify postponing the environmental impact assessment until after the adoption of that legislation. Furthermore, the order for reference indicates that the amount of additional radioactive waste (350 m3) likely to be generated as a result of the measures at issue in the main proceedings had been brought to the attention of the Belgian Parliament prior to its adoption.90Moreover, as stated in paragraphs 63 to 71 of the present judgment, the measures at issue in the main proceedings, together with the upgrading work inextricably linked thereto, constitute a project within the meaning of the first indent of Article 1(2)(a) of the EIA Directive.91Against that background, it would appear, prima facie, that the Law of 28 June 2015 constitutes development consent, within the meaning of Article 1(2)(c) of that directive, or at the very least, a first step in the process of obtaining consent for the project, as regards its essential characteristics.92As regards whether the environmental impact assessment should extend to work inextricably linked to the measures at issue in the main proceedings, that would be the case if both the work and its potential effects on the environment were sufficiently identifiable at that stage of the consent procedure, a finding that it is for the referring court to make. On that point, it is apparent from the order for reference, as previously noted in paragraph 68 of the present judgment, that both the nature and cost of the work entailed by the measures contained in the Law of 28 June 2015 were also known to the Belgian Parliament prior to the adoption of that law.93Furthermore, if the project at issue in the main proceedings is likely to have significant effects on the environment in another Member State, it must also be subject to a procedure for transboundary assessment under Article 7 of the EIA Directive.94In the light of all the foregoing, the answer to Question 6(a) to (c) is that the first indent of Article 1(2)(a), Article 2(1) and Article 4(1) of the EIA Directive must be interpreted as meaning that the restarting of industrial production of electricity for a period of almost 10 years at a nuclear power station that had previously been shut down, with the effect of deferring by 10 years the deadline initially set by the national legislature for deactivating and ceasing production at that power station, and deferral, also by 10 years, of the date initially set by the legislature for deactivating and ceasing industrial production of electricity at an active power station, measures which entail work to upgrade the power stations in question such as to alter the physical aspect of the sites, constitute a ‘project’, within the meaning of that directive, and subject to the findings that are for the referring court to make, an environmental impact assessment must, in principle, be carried out with respect to that project prior to the adoption of those measures. The fact that the implementation of those measures involves subsequent acts, such as the issue, for one of the power stations in question, of a new specific consent for the production of electricity for industrial purposes, is not decisive in that respect. Work that is inextricably linked to those measures must also be made subject to such an assessment before the adoption of those measures if its nature and potential impact on the environment are sufficiently identifiable at that stage, a finding which it is for the referring court to make. 2. Question 6(d) 95By Question 6(d), the referring court asks, in essence, whether Article 2(4) of the EIA Directive must be interpreted as permitting an exemption, in respect of a project such as that at issue in the main proceedings, from the requirement to conduct an environmental impact assessment on grounds linked with the security of the electricity supply in the Member State in question.96In accordance with the first subparagraph of Article 2(4) of the EIA Directive, Member States may, in exceptional cases, exempt a specific project in whole or in part from the provisions of that directive, without prejudice, however, to Article 7 of that directive on the obligations incumbent on Member States in whose territory a project that is likely to have significant effects on the environment in another Member State is intended to be carried out.97Although it is conceivable that the need to ensure the security of the electricity supply to a Member State could amount to an exceptional case, within the meaning of the first subparagraph of Article 2(4) of the EIA Directive, which would justify exempting a project from environmental impact assessment, it should be noted that points (a) to (c) of the second subparagraph of Article 2(4) of that directive impose specific obligations upon Member States wishing to rely on that exemption.98In such a case, the Member States concerned are required to consider whether another form of assessment would be appropriate, make available to the public concerned the information thereby obtained, and inform the Commission, prior to granting consent, of the reasons justifying the exemption granted, and provide it with the information, if any, made available to their own nationals.99As noted by the Advocate General in point 150 of her Opinion, these obligations are not mere formal requirements, but conditions designed to ensure that the objectives of the EIA Directive are met, as far as possible.100In the present case, although it is a matter for the referring court to determine whether the Kingdom of Belgium has met those obligations, it may be noted at this stage that the Commission has stated in its written observations that it has not been informed by that Member State that such an exemption had been granted.101Moreover, the exemption of a project under Article 2(4) of the EIA Directive from the requirement to conduct an environmental impact assessment is only permissible if the Member State concerned can show that the alleged risk to security of the electricity supply is reasonably probable and that that project is sufficiently urgent to justify not carrying out such an assessment. Furthermore, as stated in paragraph 96 of the present judgment, the exemption is applicable without prejudice to Article 7 of that directive, on the assessment of projects with transboundary effects.102In the light of the foregoing, the answer to Question 6(d) is that Article 2(4) of the EIA Directive must be interpreted as meaning that a Member State may exempt a project such as that at issue in the main proceedings from the requirement to conduct an environmental impact assessment in order to ensure the security of its electricity supply only where that Member State can demonstrate that the risk to the security of that supply is reasonably probable and that the project in question is sufficiently urgent to justify not carrying out the assessment, subject to compliance with the obligations in points (a) to (c) of the second subparagraph of Article 2(4) of that directive. However, that possibility of granting an exemption is without prejudice to the obligations incumbent on the Member State concerned under Article 7 of that directive. 3. Question 7 103By Question 7, the referring court seeks, in essence, to ascertain whether Article 1(4) of the EIA Directive must be interpreted as meaning that national legislation such as that at issue in the main proceedings constitutes a specific act of national legislation, within the meaning of that provision, which is excluded, by virtue of that provision, from the scope of that directive.104In that regard, Article 1(4) of the EIA Directive, which reproduced the content of Article 1(5) of Directive 85/337, requires two conditions to be met if a project is to be excluded from the scope of the EIA Directive.105The first condition is that the project must be adopted by a specific act of legislation that has the same characteristics as a development consent. In particular, that act must grant the developer the right to proceed with the project (see, to that effect, judgment of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 32 and the case-law cited).106In addition, the project must be adopted in detail, that is to say, in a sufficiently precise and definitive manner, so that the legislative act adopting the project must include, like a development consent, following their consideration by the legislature, all the elements of the project relevant to the environmental impact assessment. The legislative act must demonstrate that the objectives of the EIA Directive have been achieved as regards the project in question (see, to that effect, judgment of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 33 and the case-law cited).107It follows that the details of a project cannot be considered to have been adopted by a legislative act, for the purposes of Article 1(4) of the EIA Directive, if that act does not include the elements necessary to assess the environmental impact of the project or if the adoption of other measures is needed in order for the developer to be entitled to proceed with the project (see, to that effect, judgment of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 34 and the case-law cited).108The second condition laid down in Article 1(4) of the EIA Directive is that the objectives of that directive, including that of making available information, are achieved through the legislative process. It follows from Article 2(1) of that directive that the essential objective of the directive is to ensure that projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are subject to an assessment with regard to their environmental effects before consent is given (see, to that effect, judgment of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 35 and the case-law cited).109Consequently, the legislature must have sufficient information at its disposal at the time when the project concerned is adopted. In that regard, it follows from Article 5(3) of the EIA Directive that the minimum information to be supplied by the developer is to include a description of the project comprising information on the site, design and size of the project, a description of the measures envisaged in order to avoid, reduce and, if possible, remedy significant adverse effects, the data required to identify and assess the main effects which the project is likely to have on the environment, an outline of the main alternatives studied by the developer and an indication of the main reasons for his choice, taking into account the environmental effects, and a non‑technical summary of the above information (see, to that effect, judgments of 18 October 2011, Boxus and Others, C‑128/09 to C‑131/09, C‑134/09 and C‑135/09, EU:C:2011:667, paragraph 43, and of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 37).110In the present case, it is for the referring court to determine whether those conditions have been satisfied, taking account both of the content of the legislative act adopted and of the entire legislative process which led to its adoption, in particular the preparatory documents and parliamentary debates (see, to that effect, judgments of 18 October 2011, Boxus and Others, C‑128/09 to C‑131/09, C‑134/09 and C‑135/09, EU:C:2011:667, paragraph 47, and of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 41).111However, having regard to the information brought to the attention of the Court, that does not appear to be the case.112While the referring court mentions that studies and hearings were conducted prior to the adoption of the Law of 28 June 2015, the documents before the Court do not indicate that the national legislature had the information referred to in paragraph 109 of the present judgment on the measures at issue in the main proceedings or the work inextricably linked thereto, which have, together, been held to comprise a single project, in the answer to Question 6(a) to (c).113Furthermore, as is apparent from, in particular, paragraph 91 of the present judgment, a law such as that of 28 June 2015 could merely be the first step in the process of granting development consent in respect of the project at issue in the main proceedings, as regards the work that project entails, with the result that it also fails to satisfy one of the prerequisites of the project concerned being excluded from the scope of the EIA Directive under Article 1(4) thereof, namely that it was adopted in detail, by a specific legislative act.114In the light of the foregoing, the answer to Question 7 is that Article 1(4) of the EIA Directive must be interpreted as meaning that national legislation such as that at issue in the main proceedings is not a specific act of national legislation, within the meaning of that provision, that is excluded, by virtue of that provision, from the scope of that directive. B. Question 8, on the Habitats Directive 1. Question 8(a) to (c) 115By Question 8(a) to (c), the referring court asks, in essence, whether Article 6(3) of the Habitats Directive, read together with Articles 3 and 4 of the Birds Directive and, where relevant, in the light of the EIA Directive, must be interpreted as meaning that the measures at issue in the main proceedings constitute, given the upgrading work and work to ensure compliance with safety standards, a plan or project subject to assessment, under Article 6(3), and, if so, whether that assessment should be conducted before they are adopted by the legislature. The referring court also asks whether a distinction should be drawn dependent on whether the measures relate to one or other of the two power stations at issue in the main proceedings, having regard to the need to adopt subsequent administrative acts in respect of one power station, such as issue of a new specific consent for the production of electricity for industrial purposes. (a) Preliminary observations 116Article 6 of the Habitats Directive imposes upon the Member States a set of specific obligations and procedures designed, as is clear from Article 2(2) of that directive, to maintain, or as the case may be, restore, at favourable conservation status, natural habitats and species of wild fauna and flora of Community interest, in order to attain the more general aim pursued by that directive, which is to ensure a high level of environmental protection for the sites protected pursuant to it (see, to that effect, judgment of 17 April 2018, Commission v Poland(Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 106 and the case-law cited).117Article 6(3) of the Habitats Directive establishes an assessment procedure intended to ensure, by means of a prior examination, that a plan or project not directly connected with or necessary to the management of the site concerned but likely to have a significant effect on it is authorised only to the extent that it will not adversely affect the integrity of that site (judgments of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 108 and the case-law cited, and of 25 July 2018, Grace and Sweetman, C‑164/17, EU:C:2018:593, paragraph 38).118Article 6(3) distinguishes two stages in the prescribed assessment procedure.119The first, the subject of that provision’s first sentence, requires Member States to carry out an appropriate assessment of the implications for a protected site of a plan or project when there is a likelihood that the plan or project will have a significant effect on the site. The second, the subject of the second sentence, which arises following the appropriate assessment, allows such a plan or project to be authorised only if it will not adversely affect the integrity of the site concerned, subject to the provisions of Article 6(4) of the directive (judgment of 25 July 2018, Grace and Sweetman, C‑164/17, EU:C:2018:593, paragraph 32).120Furthermore, an appropriate assessment of the implications of a plan or project implies that, before the plan or project is approved, all the aspects of the plan or project which can, either individually or in combination with other plans or projects, affect the conservation objectives of that site must be identified, in the light of the best scientific knowledge in the field. The competent national authorities are to authorise an activity only if they have made certain that it will not adversely affect the integrity of that site. That is so where there is no reasonable scientific doubt as to the absence of such effects (judgment of 7 November 2018, Holohan and Others, C‑461/17, EU:C:2018:883, paragraph 33 and the case-law cited).121Furthermore, with regard to areas classified as special protection areas, the obligations arising from Article 6(3) of the Habitats Directive replace, in accordance with Article 7 of that directive, any obligations arising under the first sentence of Article 4(4) of the Birds Directive, as from the date of classification under the Birds Directive, where that date is later than the date of implementation of the Habitats Directive (judgments of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 109 and the case-law cited, and of 25 July 2018, Grace and Sweetman, C‑164/17, EU:C:2018:593, paragraph 27). (b) The definition of a ‘project’, for the purposes of the Habitats Directive 122As the Habitats Directive does not define the term ‘project’, for the purposes of Article 6(3), account should be taken of the definition of ‘project’ in Article 1(2)(a) of the EIA Directive (see, to that effect, judgments of 7 September 2004, Waddenvereniging and Vogelbeschermingsvereniging, C‑127/02, EU:C:2004:482, paragraphs 23, 24 and 26; of 14 January 2010, Stadt Papenburg, C‑226/08, EU:C:2010:10, paragraph 38; of 17 July 2014, Commission v GreeceC‑600/12, not published, EU:C:2014:2086, paragraph 75; and of 7 November 2018, Coöperatie Mobilisation for the Environment and Others, C‑293/17 and C‑294/17, EU:C:2018:882, paragraph 60).123The Court has previously held that if an activity is covered by the EIA Directive, it must, a fortiori, be covered by the Habitats Directive (judgment of 7 November 2018, Coöperatie Mobilisation for the Environment and Others, C‑293/17 and C‑294/17, EU:C:2018:882, paragraph 65).124It follows that if an activity is regarded as a ‘project’ within the meaning of the EIA Directive, it may constitute a ‘project’ within the meaning of the Habitats Directive (judgment of 7 November 2018, Coöperatie Mobilisation for the Environment and Others, C‑293/17 and C‑294/17, EU:C:2018:882, paragraph 66).125Given the answer to Question 6(a) to (c), it must be held that measures such as those at issue in the main proceedings, together with the work inextricably linked thereto, constitute a project, for the purposes of the Habitats Directive.126Further, it is not disputed that the project at issue in the main proceedings is neither linked to nor necessary for the management of a protected site.127Last, the fact that a recurrent activity has been authorised under national law before the entry into force of the Habitats Directive does not constitute, in itself, an obstacle to such an activity being regarded, at the time of each subsequent intervention, as a distinct project for the purposes of that directive, at the risk of permanently excluding that activity from any prior assessment of its implications for that site (see, to that effect, judgments of 14 January 2010, Stadt Papenburg, C‑226/08, EU:C:2010:10, paragraph 41, and of 7 November 2018, Coöperatie Mobilisation for the Environment and Others, C‑293/17 and C‑294/17, EU:C:2018:882, paragraph 77).128To that end, it must be determined whether, having regard in particular to the regularity or nature of some activities or the conditions under which they are carried out, they must be regarded as constituting a single operation, and can be considered to be one and the same project for the purposes of Article 6(3) of the Habitats Directive (see, to that effect, judgments of 14 January 2010, Stadt Papenburg, C‑226/08, EU:C:2010:10, paragraph 47, and of 7 November 2018, Coöperatie Mobilisation for the Environment and Others, C‑293/17 and C‑294/17, EU:C:2018:882, paragraph 78).129That would not be the case where there is no continuity in the activity, inter alia when the location and conditions in which it is carried out are not the same (judgment of 7 November 2018, Coöperatie Mobilisation for the Environment and Others, C‑293/17 and C‑294/17, EU:C:2018:882, paragraph 83).130In the present case, while industrial electricity production by the Doel 1 and Doel 2 power stations was authorised before the entry into force of the Habitats Directive for an unlimited period, the Law of 31 January 2003 limited that period of activity to 40 years, up until 15 February 2015 for the Doel 1 power station and 1 December 2015 for the Doel 2 power station. As noted by the referring court, that legislative choice was modified by the measures at issue in the main proceedings, with the result, in particular, that one of those two power stations had to be restarted.131It is also undisputed that upon implementation of those measures, industrial production at those two power stations will not be carried out under operational conditions identical to those initially authorised, if only due to scientific developments and new safety standards, the latter of which justify, as stated in paragraphs 64 to 66 of the present judgment, proceeding with major upgrading work. Furthermore, the order for reference indicates that a production consent was granted to the operator of those power stations after the Habitats Directive had entered into force, following an increase in their capacity.132It follows that the measures at issue in the main proceedings, together with the work inextricably linked thereto, constitute a distinct project, subject to the rules of assessment provided for in Article 6(3) of the Habitats Directive.133The fact that the national authority that is competent to approve the plan or project in question is the legislature has no bearing in this matter. In contrast to the provisions of the EIA Directive, no derogation is possible from the assessment under Article 6(3) of the Habitats Directive on the grounds that the competent authority to grant consent to the project in question is the legislature (see, to that effect, judgment of 16 February 2012, Solvay and Others, C‑182/10, EU:C:2012:82, paragraph 69). (c) The risk of a protected site being significantly affected 134It follows from the Court’s case-law that the requirement of an appropriate assessment of the implications of a plan or project under Article 6(3) of the Habitats Directive is conditional on there being a likelihood or a risk that the plan or project will have a significant effect on the site concerned. Having regard to the precautionary principle, in particular, such a risk is deemed to be present where it cannot be ruled out, having regard to the best scientific knowledge in the field, that the plan or project might affect the conservation objectives for the site. The assessment of that risk must be made in the light, in particular, of the characteristics and specific environmental conditions of the site concerned by such a plan or project (see, to that effect, judgment of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraphs 111 and 112 and the case-law cited).135In the present case, as apparent from extracts of parliamentary proceedings on the Law of 28 June 2015, reproduced in the order for reference, and as noted by the Advocate General in points 24 to 26 of her Opinion, the power stations that are the subject of the measures at issue in the main proceedings are located on the banks of the Scheldt, close to protected areas under the Habitats Directive and the Birds Directive, designated as such specifically for protected species of fish and cyclostomata in that river.136In that regard, the fact that a project is located outside a Natura 2000 area is not sufficient to exempt it from the requirements under Article 6(3) of the Habitats Directive (see, to that effect, judgments of 10 January 2006, Commission v Germany, C‑98/03, EU:C:2006:3, paragraphs 44 and 51, and of 26 April 2017, Commission v Germany, C‑142/16, EU:C:2017:301, paragraph 29).137In the present case, it is abundantly clear, given the scale of the work involved and the length of the extension granted for industrial production of electricity at the two power stations, that the project at issue in the main proceedings is likely to undermine the conservation objectives for nearby protected sites, if only because of how those power stations operate, in particular, by collecting large volumes of water from the nearby river for use in the cooling system, which are then discharged into that river, but also the risk of a serious accident (see, by analogy, judgments of 10 January 2006, Commission v Germany, C‑98/03, EU:C:2006:3, paragraph 44, and of 26 April 2017, Commission v Germany, C‑142/16, EU:C:2017:301, paragraph 30), there being no need to distinguish the two power stations.138Accordingly, a project such as that at issue in the main proceedings is likely to have a significant effect on protected sites within the meaning of Article 6(3) of the Habitats Directive.139It follows from the foregoing that Article 6(3) of the Habitats Directive must be interpreted as meaning that measures such as those at issue in the main proceedings, together with the work inextricably linked thereto, constitute a project in respect of which an appropriate assessment of its effects on the site concerned must be conducted under that directive, there being no need to distinguish whether those measures relate to one or other of the two power stations in question. (d) When the assessment should take place 140The second sentence of Article 6(3) of the Habitats Directive specifies that following an appropriate assessment, the competent national authorities are to ‘agree’ to the project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public.141It follows that the assessment must be conducted before agreement is given.142Furthermore, while the Habitats Directive does not define the conditions governing how the authorities ‘agree’ to a given project under Article 6(3) of that directive, the definition of ‘development consent’ in Article 1(2)(c) of the EIA Directive is relevant in defining that term.143Accordingly, by analogy with the Court’s findings on the EIA Directive, if national law provides for a number of steps in the consent procedure, the assessment under Article 6(3) of the Habitats Directive, should, in principle, be carried out as soon as the effects which the project in question is likely to have on a protected site are sufficiently identifiable.144Consequently, for reasons similar to those set out in paragraphs 87 to 91 of the present judgment, national legislation such as the Law of 28 June 2015 has the characteristics of an agreement given by the authorities in respect of the project concerned, for the purposes of Article 6(3) of the Habitats Directive, and the fact that subsequent acts must be adopted in order to proceed with that project, specifically a new specific consent for production of electricity for industrial purposes at one of the two power stations in question, does not justify the failure to conduct an appropriate assessment of those effects before the adoption of that legislation. Moreover, as regards the work that is inextricably linked to the measures at issue in the main proceedings, if its nature and potential effects on the protected sites are sufficiently identifiable, a finding which it is for the national court to make, an assessment must be conducted of that work at that stage of the consent procedure.145In the light of the foregoing, the answer to Question 8(a) to (c) is that Article 6(3) of the Habitats Directive must be interpreted as meaning that measures such as those at issue in the main proceedings, together with the work of upgrading and of ensuring compliance with current safety standards, constitute a project in respect of which an appropriate assessment of its effects on the protected sites concerned should be conducted. Such an assessment should be conducted in respect of those measures before they are adopted by the legislature. The fact that the implementation of those measures involves subsequent acts, such as the issue, for one of the power stations in question, of a new specific consent for the production of electricity for industrial purposes, is not decisive in that respect. Work that is inextricably linked to those measures must also be subject to such an assessment before the adoption of those measures if its nature and potential impact on the protected sites are sufficiently identifiable at that stage, a finding which it is for the referring court to make. 2. Question 8(d) 146By Question 8(d), the referring court asks, in essence, whether Article 6(4) of the Habitats Directive must be interpreted as meaning that the objective of ensuring the security of a Member State’s electricity supply constitutes an imperative reason of overriding public interest, within the meaning of that provision.147As a provision derogating from the criterion for authorisation laid down in the second sentence of Article 6(3) of the Habitats Directive, Article 6(4) thereof must be interpreted strictly and can be applied only after the implications of a plan or project have been analysed in accordance with Article 6(3) (judgment of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 189 and the case-law cited).148Under the first subparagraph of Article 6(4) of the Habitats Directive, if, in spite of the findings of an assessment carried out in accordance with the first sentence of Article 6(3) of that directive being negative, and in the absence of alternative solutions, a plan or project must nevertheless be carried out for imperative reasons of overriding public interest, including those of a social or economic nature, the Member State is to take all compensatory measures necessary to ensure that the overall coherence of Natura 2000 is protected (see, to that effect, judgments of 20 September 2007, Commission v Italy, C‑304/05, EU:C:2007:532, paragraph 81, and of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 190).149Moreover, where the site concerned hosts a priority natural habitat type or a priority species, the second subparagraph of Article 6(4) of the Habitats Directive provides that the only considerations which may be raised are those relating to human health or public safety, or beneficial consequences of primary importance for the environment or, further to an opinion from the Commission, to other imperative reasons of overriding public interest.150Knowledge of the effects of a plan or project, in the light of the conservation objectives relating to the site at issue, is thus a necessary prerequisite for the application of Article 6(4) of the Habitats Directive, since, in the absence thereof, no condition for application of that derogating provision can be assessed. The assessment of any imperative reasons of overriding public interest and that of the existence of less harmful alternatives require a weighing up against the damage caused to the site by the plan or project under consideration. In addition, in order to determine the nature of any compensatory measures, the damage to the site concerned must be precisely identified (judgments of 20 September 2007, Commission v Italy, C‑304/05, EU:C:2007:532, paragraph 83, and of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 191 and the case-law cited).151In the present case, it is apparent from the order for reference that Question 8(d) is based on the premiss that the studies and hearings conducted in the course of the procedure for the adoption of the measures at issue in the main proceedings made it possible to conduct an assessment that meets the requirements laid down in Article 6(3) of the Habitats Directive.152However, aside from the fact that it is not apparent from the documents before the Court that those studies and hearings made it possible to conduct an environmental impact assessment under the EIA Directive, the referring court would have to assess, in any event, whether such an assessment may be deemed to satisfy also the requirements of the Habitats Directive (see, by analogy, judgments of 22 September 2011, Valčiukienė and Others, C‑295/10, EU:C:2011:608, paragraph 62, and of 10 September 2015, Dimos Kropias Attikis, C‑473/14, EU:C:2015:582, paragraph 58).153Whatever the situation, it is necessary in particular, as noted in paragraph 120 of the present judgment, that all the aspects of the plan or project which can, either by themselves or in combination with other plans or projects, affect the conservation objectives of the protected sites concerned should be identified, in the light of the best scientific knowledge in the field (see, to that effect, judgments of 17 April 2018, Commission v Poland (Białowieża Forest), C‑441/17, EU:C:2018:255, paragraph 113 and the case-law cited, and of 25 July 2018, Grace and Sweetman, C‑164/17, EU:C:2018:593, paragraph 40).154The referring court should also verify, if necessary, whether negative findings emerged from the studies and hearings conducted in the context of the procedure for the adoption of the measures at issue in the main proceedings, because, if not, Article 6(4) of the Habitats Directive would not be applicable.155As regards the question whether the objective of ensuring the security of a Member State’s electricity supply constitutes an imperative reason of overriding public interest within the meaning of the first subparagraph of Article 6(4) of the Habitats Directive, it should be noted that an interest capable of justifying proceeding with a plan or project must be both ‘public’ and ‘overriding’, which means that it must be of such an importance that it can be weighed against that directive’s objective of the conservation of natural habitats and wild fauna, including birds, and flora (judgment of 11 September 2012, Nomarchiaki Aftodioikisi Aitoloakarnanias and Others, C‑43/10, EU:C:2012:560, paragraph 121).156In that regard, it may be noted that Article 194(1)(b) TFEU identifies security of energy supply in the European Union as one of the fundamental objectives of EU policy in the field of energy (judgment of 7 September 2016, ANODE, C‑121/15, EU:C:2016:637, paragraph 48).157Furthermore, and in any event, the objective of ensuring the security of electricity supply in a Member State at all times fulfils the conditions specified in paragraph 155 of the present judgment.158However, if a protected site likely to be affected by a project hosts a priority natural habitat type or species, within the meaning of the Habitats Directive, in circumstances such as those in the main proceedings, the only ground capable of constituting a public security ground for the purposes of the second subparagraph of Article 6(4) of that directive that would justify proceeding with the project is the need to nullify a genuine and serious threat of rupture of that Member State’s electricity supply.159It follows that the answer to Question 8(d) is that the first subparagraph of Article 6(4) of the Habitats Directive must be interpreted as meaning that the objective of ensuring security of the electricity supply in a Member State at all times constitutes an imperative reason of overriding public interest, within the meaning of that provision. The second subparagraph of Article 6(4) of that directive must be interpreted as meaning that if a protected site likely to be affected by a project hosts a priority natural habitat type or priority species, a finding which it is for the referring court to make, only a need to nullify a genuine and serious threat of rupture of that Member State’s electricity supply constitutes, in circumstances such as those in the main proceedings, a public security ground, within the meaning of that provision. C. Questions 1 to 3, on the Espoo Convention 160By Questions 1 to 3, the referring court asks, in essence, whether the Espoo Convention must be interpreted as meaning that the environmental impact assessment provided for by that Convention must be conducted in respect of measures such as those at issue in the main proceedings.161However, as noted in paragraph 93 of the present judgment, measures such as those at issue in the main proceedings form part of a project that is likely to have significant effects on the environment in another Member State, and that project must undergo an assessment procedure of its transboundary effects in accordance with Article 7 of the EIA Directive, which takes account of the requirements of the Espoo Convention, as indicated by recital 15 of the EIA Directive.162As a result, there is no need to answer Questions 1 to 3, in relation to the Espoo Convention. D. Questions 4 and 5, on the Aarhus Convention 163By its Questions 4 and 5, the referring court asks, in essence, whether Article 6 of the Aarhus Convention must be interpreted as meaning that the public participation requirements under that Convention apply to measures such as those at issue in the main proceedings.164It is apparent from the order for reference that the Cour constitutionnelle (Constitutional Court) raises those questions on account of its doubts as to whether the EIA Directive applies to those measures, yet, as is apparent from recitals 18 to 20 of that directive, the EIA Directive is intended to take account of the provisions of the Aarhus Convention.165It follows, however, from the answers to Questions 6 and 7 that measures such as those at issue in the main proceedings, together with the work inextricably linked thereto, constitute a project in respect of which, prior to its adoption, an environmental impact assessment must be conducted under the EIA Directive.166Consequently, there is no need to answer Questions 4 and 5. E. Question 9, on maintaining the effects of the law in question in the main proceedings 167By Question 9, the referring court asks, in essence, whether EU law allows a national court to maintain the effects of measures such as those at issue in the main proceedings for the time necessary to remedy any infringement of the EIA Directive and the Habitats Directive.168In that regard, while Article 2(1) of the EIA Directive imposes an obligation to conduct a prior assessment of projects covered by that provision, the Habitats Directive also provides, in respect of projects subject to assessment under Article 6(3) of that directive, that Member States may agree to a project only after they have ascertained that it will not adversely affect the integrity of the site concerned.169However, neither the EIA Directive nor the Habitats Directive specify what action should be taken in the event of infringement of the obligations laid down by those directives.170Nonetheless, under the principle of sincere cooperation laid down in Article 4(3) TEU, Member States are required to nullify the unlawful consequences of that infringement of EU law. The competent national authorities are therefore under an obligation to take all measures necessary, within the sphere of their competence, to remedy the failure to carry out an environmental impact assessment, for example by revoking or suspending consent already granted in order to carry out such an assessment (see, to that effect, judgment of 26 July 2017, Comune di Corridonia and Others, C‑196/16 and C‑197/16, EU:C:2017:589, paragraph 35 and the case-law cited).171That obligation is also incumbent on national courts before which an action against a national measure including such a consent has been brought. The detailed procedural rules applicable to such actions are a matter for the domestic legal order of each Member State, under the principle of procedural autonomy of the Member States, provided that they are not less favourable than those governing similar domestic situations (the principle of equivalence) and that they do not render impossible in practice or excessively difficult the exercise of rights conferred by the European Union legal order (the principle of effectiveness) (see, to that effect, judgment of 28 February 2012, Inter-Environnement Wallonie and Terre wallonne, C‑41/11, EU:C:2012:103, paragraph 45 and the case-law cited).172Consequently, courts before which actions are brought in that regard must adopt, on the basis of their national law, measures to suspend or annul the project adopted in breach of the obligation to carry out an environmental assessment (see, to that effect, judgment of 28 February 2012, Inter-Environnement Wallonie and Terre Wallonne, C‑41/11, EU:C:2012:103, paragraph 46 and the case-law cited).173It is true that the Court has also held that EU law does not preclude national rules which, in certain cases, permit the regularisation of operations or measures which are unlawful in the light of EU law (judgment of 26 July 2017, Comune di Corridonia and Others, C‑196/16 and C‑197/16, EU:C:2017:589, paragraph 37 and the case-law cited).174However, such a possible regularisation would have to be subject to the condition that it does not offer the parties concerned the opportunity to circumvent the rules of EU law or to refrain from applying them, and should remain the exception (judgment of 26 July 2017, Comune di Corridonia and Others, C‑196/16 and C‑197/16, EU:C:2017:589, paragraph 38 and the case-law cited).175Consequently, in the event of failure to carry out an assessment of the environmental impact of a project required under the EIA Directive, although Member States are required to nullify the unlawful consequences of that failure, EU law does not preclude regularisation through the conducting of such an assessment while the project is under way or even after it has been completed, on the twofold condition, first, that national rules allowing for that regularisation do not provide the parties concerned with an opportunity to circumvent the rules of EU law or to refrain from applying them, and second, that an assessment carried out for regularisation purposes is not conducted solely in respect of the project’s future environmental impact, but must also take into account its environmental impact since the time of completion of that project (see, to that effect, judgments of 26 July 2017, Comune di Corridoniaand Others, C‑196/16 and C‑197/16, EU:C:2017:589, paragraph 43, and of 28 February 2018, Comune di Castelbellino, C‑117/17, EU:C:2018:129, paragraph 30).176By analogy, it must be held that EU law does not preclude such regularisation, subject to the same conditions, in the event of failure to conduct a prior impact assessment of the effects of the project concerned on a protected site, as required by Article 6(3) of the Habitats Directive.177It must be added that only the Court of Justice may, in exceptional cases, for overriding considerations of legal certainty, allow temporary suspension of the ousting effect of a rule of EU law with respect to national law that is contrary thereto. If national courts had the power to give provisions of national law primacy in relation to EU law contravened by those provisions, even temporarily, the uniform application of EU law would be undermined (see, to that effect, judgments of 8 September 2010, Winner Wetten, C‑409/06, EU:C:2010:503, paragraphs 66 and 67, and of 28 July 2016, Association France Nature Environnement, C‑379/15, EU:C:2016:603, paragraph 33).178However, the Court has also held, in paragraph 58 of its judgment of 28 February 2012, Inter-Environnement Wallonie and Terre wallonne (C‑41/11, EU:C:2012:103), that a national court may, given the existence of an overriding consideration relating to the protection of the environment, as applied in the case giving rise to that judgment, and provided that the conditions specified in that judgment are met, exceptionally be authorised to make use of a provision of its national law empowering it to maintain certain effects of an annulled national measure. It is thus apparent from that judgment that the Court intended to afford, on a case‑by‑case basis and by way of exception, a national court the power to adjust the effects of annulment of a national provision held to be incompatible with EU law, with due regard to the conditions laid down by the Court’s case-law (see, to that effect, judgment of 28 July 2016, Association France Nature Environnement, C‑379/15, EU:C:2016:603, paragraph 34).179In this instance, in accordance with the case-law cited in paragraph 177 of the present judgment, it is for the Court of Justice alone to determine the circumstances in which it may be justifiable, by way of exception, to maintain the effects of measures such as those at issue in the main proceedings on account of overriding considerations relating to the security of the electricity supply of the Member State concerned. In that regard, such considerations could justify maintaining the effects of national measures adopted in breach of the obligations under the EIA Directive and the Habitats Directive only if, in the event that the effects of those measure were annulled or suspended, there was a genuine and serious threat of disruption to the electricity supply of the Member State concerned, which could not be remedied by any other means or alternatives, particularly in the context of the internal market.180It is for the referring court to assess whether, given the other means and alternatives available to the Member State concerned for the purpose of ensuring electricity supply within its territory, the need to respond to such a threat justifies maintaining, exceptionally, the effects of the measures contested before that court.181In any event, the effects may only be maintained for as long as is strictly necessary to remedy the breach.182In the light of the foregoing, the answer to Question 9 is that EU law must be interpreted as meaning that if domestic law allows it, a national court may, by way of exception, maintain the effects of measures, such as those at issue in the main proceedings, adopted in breach of the obligations laid down by the EIA Directive and the Habitats Directive, where such maintenance is justified by overriding considerations relating to the need to nullify a genuine and serious threat of rupture of the electricity supply in the Member State concerned, which cannot be remedied by any other means or alternatives, particularly in the context of the internal market. The effects may only be maintained for as long as is strictly necessary to remedy the breach. IV. Costs 183Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. The first indent of Article 1(2)(a), Article 2(1) and Article 4(1) of Directive 2011/92/EU of the European Parliament and the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment must be interpreted as meaning that the restarting of industrial production of electricity for a period of almost 10 years at a nuclear power station that had previously been shut down, with the effect of deferring by 10 years the deadline initially set by the national legislature for deactivating and ceasing production at that power station, and deferral, also by 10 years, of the date initially set by the legislature for deactivating and ceasing industrial production of electricity at an active power station, measures which entail work to upgrade the power stations in question such as to alter the physical aspect of the sites, constitute a ‘project’, within the meaning of that directive, and subject to the findings that are for the referring court to make, an environmental impact assessment must, in principle, be carried out with respect to that project prior to the adoption of those measures. The fact that the implementation of those measures involves subsequent acts, such as the issue, for one of the power stations in question, of a new specific consent for the production of electricity for industrial purposes, is not decisive in that respect. Work that is inextricably linked to those measures must also be made subject to such an assessment before the adoption of those measures if its nature and potential impact on the environment are sufficiently identifiable at that stage, a finding which it is for the referring court to make. 2. Article 2(4) of Directive 2011/92 must be interpreted as meaning that a Member State may exempt a project such as that at issue in the main proceedings from the requirement to conduct an environmental impact assessment in order to ensure the security of its electricity supply only where that Member State can demonstrate that the risk to the security of that supply is reasonably probable and that the project in question is sufficiently urgent to justify not carrying out the assessment, subject to compliance with the obligations in points (a) to (c) of the second subparagraph of Article 2(4) of that directive. However, that possibility of granting an exemption is without prejudice to the obligations incumbent on the Member State concerned under Article 7 of that directive. 3. Article 1(4) of Directive 2011/92 must be interpreted as meaning that national legislation such as that at issue in the main proceedings is not a specific act of national legislation, within the meaning of that provision, that is excluded, by virtue of that provision, from the scope of that directive. 4. Article 6(3) of Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora must be interpreted as meaning that measures such as those at issue in the main proceedings, together with the work of upgrading and of ensuring compliance with current safety standards, constitute a project in respect of which an appropriate assessment of its effects on the protected sites concerned should be conducted. Such an assessment should be conducted in respect of those measures before they are adopted by the legislature. The fact that the implementation of those measures involves subsequent acts, such as the issue, for one of the power stations in question, of a new specific consent for the production of electricity for industrial purposes, is not decisive in that respect. Work that is inextricably linked to those measures must also be subject to such an assessment before the adoption of those measures if its nature and potential impact on the protected sites are sufficiently identifiable at that stage, a finding which it is for the referring court to make. 5. The first subparagraph of Article 6(4) of Directive 92/43 must be interpreted as meaning that the objective of ensuring security of the electricity supply in a Member State at all times constitutes an imperative reason of overriding public interest, within the meaning of that provision. The second subparagraph of Article 6(4) of that directive must be interpreted as meaning that if a protected site likely to be affected by a project hosts a priority natural habitat type or priority species, a finding which it is for the referring court to make, only a need to nullify a genuine and serious threat of rupture of that Member State’s electricity supply constitutes, in circumstances such as those in the main proceedings, a public security ground, within the meaning of that provision. 6. EU law must be interpreted as meaning that if domestic law allows it, a national court may, by way of exception, maintain the effects of measures, such as those at issue in the main proceedings, adopted in breach of the obligations laid down by Directive 2011/92 and Directive 92/43, where such maintenance is justified by overriding considerations relating to the need to nullify a genuine and serious threat of rupture of the electricity supply in the Member State concerned, which cannot be remedied by any other means or alternatives, particularly in the context of the internal market. The effects may only be maintained for as long as is strictly necessary to remedy the breach. LenaertsSilva de LapuertaBonichotPrechalVilarasReganvon DanwitzToaderLycourgosRosasIlešičMalenovskýSafjanŠvábyFernlundDelivered in open court in Luxembourg on 29 July 2019.[Signatures]( *1 ) Language of the case: French. | 0ce32-06fa3db-4cab | EN |
Brexit: the application for annulment of the decision authorising the opening of Brexit negotiations, brought by thirteen British citizens who live in EU Member States other than the UK, is inadmissible | 26 November 2018 ( *1 )(Action for annulment — Institutional law — Withdrawal of the United Kingdom from the EU — Agreement setting out the arrangements for withdrawal — Article 50 TEU — Council Decision authorising the opening of negotiations with the United Kingdom with a view to conclusion of that agreement — UK citizens residing in another EU Member State — Preparatory act — Act not open to challenge — Lack of direct concern — Inadmissibility)In Case T‑458/17, Harry Shindler, residing in Porto d’Ascoli (Italy), and the other applicants whose names are listed in the annex, ( 1 ) represented by J. Fouchet, lawyer,applicants,v Council of the European Union, represented by M. Bauer and R. Meyer, acting as Agents,defendant,APPLICATION under Article 263 TFEU for annulment of Council Decision (EU, Euratom) of 22 May 2017 authorising the opening of negotiations with the United Kingdom of Great Britain and Northern Ireland for an agreement setting out the arrangements for that Member State’s withdrawal from the European Union (document XT 21016/17), including the annex to that decision establishing directives for the negotiation of that agreement (document XT 21016/17 ADD 1 REV 2),THE GENERAL COURT (Ninth Chamber, Extended Composition)composed of S. Gervasoni (Rapporteur), President, L. Madise, R. da Silva Passos, K. Kowalik-Bańczyk and C. Mac Eochaidh, Judges,Registrar: M. Marescaux, Administrator,having regard to the written part of the procedure and further to the hearing on 5 July 2018,gives the following Judgment Background to the dispute 1On 23 June 2016 the citizens of the United Kingdom of Great Britain and Northern Ireland voted in a referendum in favour of the withdrawal of their country from the European Union.2On 13 March 2017 the United Kingdom Parliament adopted the European Union (Notification of Withdrawal) Act 2017, authorising the Prime Minister to notify the United Kingdom’s intention to withdraw from the European Union in accordance with Article 50(2) TEU.3On 29 March 2017 the Prime Minister of the United Kingdom notified the European Council of the intention of that Member State to withdraw from the European Union and from the European Atomic Energy Community (Euratom) (‘the notification of intention to withdraw’).4By a declaration made the same day, the European Council stated that it had received the notification of intention to withdraw.5On 29 April 2017 the European Council adopted guidelines setting out the framework for the negotiations provided for by Article 50 TEU and establishing the positions and general principles that the EU would defend throughout the negotiations.6On 22 May 2017 the Council of the European Union adopted, on the basis of the provisions of Article 50 TEU, read in conjunction with Article 218(3) TFEU, and on the recommendation of the European Commission of 3 May 2017, the decision authorising the European Commission to open negotiations with the United Kingdom for an agreement setting out the arrangements for its withdrawal from the EU and Euratom (‘the agreement setting out the arrangements for withdrawal’ or ‘the withdrawal agreement’; and ‘the contested decision’).7The contested decision nominates the Commission as Union negotiator (Article 1) and stipulates that the negotiations will be conducted in the light of the guidelines adopted by the European Council and in line with the negotiating directives set out in the annex to that decision (Article 2).8The annex to the contested decision (document XT 21016/17 ADD 1 REV 2) contains the negotiating directives for the first phase of the negotiations as regards, inter alia, citizens’ rights, a single financial settlement, the situation of goods placed on the market and outcome of procedures based on Union law, other administrative issues relating to the functioning of the Union and the governance of the agreement setting out the arrangements for withdrawal. Procedure and forms of order sought 9By application lodged on 21 July 2017, the applicants, Harry Shindler and the other applicants whose names are listed in the annex to this judgment, brought the present action.10By separate document lodged at the Court Registry on 16 October 2017, the Council raised a plea of inadmissibility under Article 130(1) of the Rules of Procedure of the General Court.11By document lodged at the Court Registry on 20 October 2017, the Commission sought leave to intervene in the present case in support of the form of order sought by the Council, in accordance with Article 143 of the Rules of Procedure.12On 30 November 2017 the applicants lodged their observations on the plea of inadmissibility at the Court Registry.13Acting on a proposal from the Ninth Chamber, the Court decided, pursuant to Article 28 of the Rules of Procedure, to assign the case to a Chamber sitting in extended composition.14Acting on a proposal from the Judge-Rapporteur, the Court (Ninth Chamber, Extended Composition) decided, in accordance with Article 130(6) of the Rules of Procedure, to open the oral phase of the procedure, limited to the admissibility of the action.15At the hearing held on 5 July 2018, the parties presented their oral arguments and answered the oral questions asked by the Court.16The applicants claim that the Court should:–annul the contested decision, including the negotiating directives annexed to it;order the Council to pay the costs, including legal fees of EUR 5000.17The Council contends that the Court should:dismiss the action as being manifestly inadmissible;order the applicants to pay the costs.18By document lodged at the Court Registry on 5 September 2018, the applicants produced further evidence, pursuant to Article 85 of the Rules of Procedure, on which the Council was given the opportunity to comment. Law 19The Council claims that the action based on Article 263 TFEU is manifestly inadmissible since the contested decision is not open to challenge by natural or legal persons and the applicants have no interest or standing to bring proceedings against the contested decision.20The applicants dispute the Council’s argument and take the view that the action is admissible. Admissibility of the action 21The Court considers it appropriate to rule on whether the contested decision is open to challenge and on the standing of the applicants, within the meaning of the fourth paragraph of Article 263 TFEU, and to assess, in that regard, whether the contested decision is of direct concern to the applicants. More precisely, it is appropriate to consider whether the contested decision directly affects the applicants’ legal situation.22The Council claims that the contested decision cannot be the subject of an action for annulment since it is, as regards the applicants, a measure of a preliminary or preparatory nature, intended to pave the way for the agreement setting out the arrangements for withdrawal pursuant to Article 50 TEU. Authorising the Commission to open negotiations on behalf of the Union and to conduct those negotiations in the light of the guidelines adopted by the European Council and in line with the negotiating directives annexed to the decision does not affect the applicants’ legal situation, which remains the same before and after the adoption of the contested decision.23Furthermore, the Council claims that the applicants do not have standing to bring proceedings pursuant to the fourth paragraph of Article 263 TFEU since, inter alia, the contested decision is not of direct concern to them. In particular, the contested decision does not affect the applicants’ legal situation. First, it is not the contested decision which triggered the procedure laid down in Article 50 TEU but the notification of intention to withdraw. If the Council had not adopted the contested decision the procedure laid down in Article 50 TEU would have followed its course and, two years after the notification of intention to withdraw, the United Kingdom would have left the Union without an agreement setting out the arrangements for withdrawal. Second, the contested decision also did not ‘ratify’ the notification of intention to withdraw and merely acts upon that national decision without having any effect on the right of the applicants. Irrespective of the adoption of the contested decision, the United Kingdom continues to be a member of the Union until the date of its withdrawal and the applicants continue to benefit from the rights they derive from the Treaties in that regard. It is only at the end of the procedure laid down in Article 50 TEU that the rights of the applicants are liable to be affected, to an extent which is not, however, possible to predict.24The applicants maintain that the contested decision may be the subject of an action for annulment. They also argue that their standing to bring proceedings stems from the fact that they are expatriate UK citizens and citizens of the EU, that they reside in another Member State and that they were denied, because of the so‑called ’15 years rule’, the right to vote in the referendum of 23 June 2016 and in the general elections of 7 May 2015 which led to the appointment of the Members of Parliament who ‘confirmed’ the referendum by adopting the European Union (Notification of Withdrawal) Act 2017.25First, the applicants claim that the contested decision has a direct impact on the rights they derive from the Treaties, inter alia as regards their status as EU citizens and their right to vote in European and municipal elections, their right to respect for their private and family life, their freedom to move, reside and work, their right to own property and their right to social security benefits.26Second, the applicants argue that the contested decision is not merely an interim measure before the United Kingdom’s withdrawal from the EU, since it comprises, in addition to an express act opening negotiations, an implicit act by which the Council accepted the notification of intention to withdraw. The contested decision acknowledged the irreversible ‘exit’ of the United Kingdom from the EU on 29 March 2019.27Third, the applicants state that the contested decision, particularly its negotiating directives producing legal effects, does not include an objective to ensure that UK citizens who obtained the status of EU citizen before 29 March 2019 maintain that status. Whether an agreement is reached or not, there is no doubt as to the loss in the short or medium term of rights and freedoms conferred on UK citizens by EU law, in particular EU citizenship.28Fourth, the applicants claim that the Council should have refused or stayed the opening of negotiations. They argue that the withdrawal procedure is void in the absence of definite constitutional authorisation based on the votes of all UK citizens, who are also EU citizens. They state that the Council and the United Kingdom should have sought judicial review of the constitutionality of the notification of the intention to withdraw pursuant to the principle of sincere cooperation provided for in Article 4(3) TEU, and that the Council should have requested the opinion of the Court as to the compatibility with the Treaties of depriving expatriate UK citizens of the right to vote and of their indirect representation by MPs, pursuant to Article 218(11) TFEU. They add that to dismiss the present action for inadmissibility would infringe the principle of democracy.29Fifth, the applicants claim that the present action is the sole effective form of legal remedy before the EU Courts before the inescapable loss of their status as EU citizens on 29 March 2019 as a consequence of the contested decision.30In that regard, it follows from settled case-law that an action for annulment must be available in the case of all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects that are binding on, and capable of affecting the interests of, the applicant by bringing about a distinct change in his legal position (judgments of 11 November 1981, IBM v Commission, 60/81, EU:C:1981:264, paragraph 9, and of 26 January 2010, Internationaler Hilfsfonds v Commission, C‑362/08 P, EU:C:2010:40, paragraph 51).31Furthermore, where, as in the present case, an action for annulment is brought by non-privileged applicants against a measure that has not been addressed to them, the requirement that the binding legal effects of the measure being challenged must be capable of affecting the interests of the applicant, by bringing about a distinct change in his legal position, overlaps with the conditions laid down in the fourth paragraph of Article 263 TFEU (judgment of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 38).32It is clear from the fourth paragraph of Article 263 TFEU that the standing of a natural or legal person to institute proceedings against an act that is not addressed to him requires, at the very least, that that act, whether or not a regulatory act, is of direct concern to him. The condition that a natural or legal person is directly concerned by the act which is the subject matter of the proceedings requires that the contested measure directly affects the legal situation of the applicant (see, to that effect, judgments of 5 May 1998, Dreyfus v Commission, C‑386/96 P, EU:C:1998:193, paragraph 43 and the case-law cited, and of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 66).33Thus, both the requirement that the binding legal effects of the contested measure be capable of affecting the interests of the applicant by bringing about a distinct change in his legal position and the condition that a natural or legal person must be directly concerned by the act forming the subject matter of the proceedings, as laid down in the fourth paragraph of Article 263 TFEU, require that the contested decision in this action directly affects the legal situation of the applicants.34However, in the present case, the contested decision does not directly produce such effects.35The contested decision was taken by the Council on the basis of the third sentence of Article 50(2) TEU, in combination with Article 218(3) TFEU.36Article 50(1) to (3) TEU states:‘1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.’37Article 218(3) TFEU, to which Article 50(2) TEU refers, is worded as follows:‘The Commission … shall submit recommendations to the Council, which shall adopt a decision authorising the opening of negotiations and, depending on the subject of the agreement envisaged, nominating the Union negotiator or the head of the Union’s negotiating team.’38The contested decision is, in accordance with Article 288 TFEU, binding in its entirety. The decision authorises the Commission to open negotiations on behalf of the EU for an agreement with the United Kingdom setting out the arrangements for that Member State’s withdrawal from the European Union and from Euratom and nominates the Commission as the Union negotiator (Article 1 of the contested decision). The contested decision stipulates that the negotiations will be conducted in the light of the guidelines adopted by the European Council and in line with the negotiating directives set out in the annex to that decision (Article 2 of the contested decision).39The Court has held that a decision adopted on the basis of Article 218(3) and (4) TFEU produced legal effects as regards relations between the European Union and its Member States and between the EU institutions (see, to that effect, judgments of 4 September 2014, Commission v Council, C‑114/12, EU:C:2014:2151, paragraph 40, and of 16 July 2015, Commission v Council, C‑425/13, EU:C:2015:483, paragraph 28).40It should be noted that the contested decision has legal effects as regards relations between the European Union and its Member States and between the EU institutions, particularly as regards the Commission. The Commission is, as a result of that decision, authorised to open negotiations for an agreement with the United Kingdom in the light of the guidelines adopted by the European Council and in line with the negotiating directives adopted by the Council.41By contrast, the contested decision does not directly affect the legal situation of the applicants.42To begin with, the contested decision, by which the Council authorised the Commission to open negotiations with the United Kingdom in accordance with Article 50(2) TEU, must not be confused with the United Kingdom’s decision to withdraw from the EU under Article 50(1) TEU.43The contested decision must also be distinguished from the act of 29 March 2017 by which the Prime Minister of the United Kingdom notified the European Council of that country’s intention to withdraw from the EU and Euratom. It is the notification of intention to withdraw and not the contested decision which initiated the withdrawal procedure provided for in Article 50(2) and (3) TEU and set running the two-year time limit, provided for in Article 50(3) TEU, at the end of which, in the absence of a withdrawal agreement, the Treaties will cease to apply to the State concerned, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.44Furthermore, the contested decision does not alter the legal situation of UK citizens resident in one of the European Union’s other 27 Member States (‘the EU 27’), whether that be their situation at the date of the contested decision or their situation from the date of the United Kingdom’s withdrawal from the EU. In particular, the applicants are wrong to claim that they are directly affected, inter alia as regards their status as EU citizens and their right to vote in European and municipal elections, their right to respect for their private and family life, their freedom to move, reside and work, their right to own property and their right to social security benefits.45The contested decision does not affect the rights of the applicants who, as the Council points out, have the same rights after the contested decision as before. As regards the rights of UK citizens in the EU 27 from the date of withdrawal, the contested decision merely constitutes a preparatory act for any final agreement, which would be subject to a subsequent decision of the Council, acting by qualified majority, after obtaining the consent of the European Parliament (see, by analogy, regarding a Council decision authorising the Commission to open negotiations with a view to concluding an international agreement, judgment of 10 May 2017, Efler and Others v Commission, T‑754/14, EU:T:2017:323, paragraph 34).46Annulment of the contested decision would thus have no impact on the legal situation of UK citizens, including those who, like the applicants, live in another EU Member State and did not have the right to vote in the referendum of 23 June 2016 and the UK general elections. It would lead neither to annulment of the notification of intention to withdraw nor to suspension of the two-year time limit provided for by Article 50(3) TEU. The applicants’ rights would remain unchanged.47Although it is true that the applicants’ legal situation, particularly as regards their status as EU citizens, is likely to be affected when the United Kingdom withdraws from the EU, whether or not an agreement is concluded, such potential effect on their rights — the nature and extent of which cannot, however, be known at this time — does not result from the contested decision, as the Council correctly states.48In those circumstances, the contested decision does not directly affect the legal situation of the applicants, and consequently they may not bring an action for annulment and, in addition, do not have standing to bring proceedings under the fourth paragraph of Article 263 TFEU.49None of the other arguments put forward by the applicants is sufficient to call that finding into question.50In the first place, the applicants argue that the contested decision is not merely an interim measure before the United Kingdom’s withdrawal from the EU, since it comprises, in addition to an express act opening negotiations, an implicit act by which the Council accepted the notification of intention to withdraw. According to the applicants, the contested decision acknowledged the irreversible ‘exit’ of the United Kingdom from the EU on 29 March 2019.51That argument cannot be upheld.52It is true that the contested decision is not merely an interim act or a preparatory act before the withdrawal of the United Kingdom from the Union, insofar as it applies to relations between the European Union and its Member States and between the EU institutions. For the Member States and for those institutions, the contested decision produces legal effects as described in paragraph 40 above. However, that is not the case with regard to the applicants, in respect of whom the decision must be considered to be a preparatory act which, as was stated in paragraphs 41 to 48 above, does not have direct legal effects.53Furthermore, the applicants are wrong to claim that the contested decision comprises an implicit acceptance of the notification of intention to withdraw and that it acknowledged the ‘exit’ of the United Kingdom from the EU.54As was stated in paragraphs 42 and 43 above, the contested decision must not be confused with the United Kingdom’s decision to withdraw from the EU under Article 50(1) TEU, or with the notification of intention to withdraw.55In addition, the Council did not, by the contested decision, implicitly accept the notification of intention to withdraw.56It is clear from the wording of Article 50 TEU that the possibility for a Member State to withdraw from the Union is based on a unilateral decision by that Member State pursuant to its own constitutional requirements. Article 50(1) TEU thus provides that a Member State may ‘decide’ to withdraw from the EU. Article 50(2) TEU also states that the Member State ‘decides’ to withdraw from the EU and is to notify the European Council of its intention to withdraw from the Union, not to make a request to withdraw.57Article 50(3) TEU confirms that the possibility for a Member State to withdraw from the EU is not subject to authorisation from the EU institutions. According to Article 50(3) TEU, without a withdrawal agreement the Treaties would cease to apply to the State in question two years after notification by that State of its intention to withdraw from the Union, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.58In that regard, although Article 50(1) TEU provides that the decision by which a Member State decides to withdraw from the Union is taken in accordance with its own constitutional requirements, that does not mean that the withdrawal decision gives rise to a decision of acceptance from the EU institutions, by which they confirm that the State in question has respected those requirements. Such a decision of acceptance by the Council or by any other EU institution is not needed and is not provided for by Article 50 TEU.59In accordance with Article 50 TEU, the contested decision does not contain any decision ratifying or accepting the notification of intention to withdraw. Moreover, the institution to which the notification of intention to withdraw was addressed was not the Council but the European Council, which, by declaration of 29 March 2017, stated that it had received that notification. Similarly, the Council did not decide, by the contested decision, that the United Kingdom ‘would leave’ the EU on 29 March 2019. Although recital 4 of the contested decision states that the Treaties will cease to apply to the United Kingdom from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification, unless the European Council, in agreement with the United Kingdom, unanimously decides to extend this period, that recital, which merely repeats the wording of Article 50(3) TEU, does not mean that the Council decided that the withdrawal of the United Kingdom would take place on 29 March 2019.60Therefore, the applicants are not justified in claiming that the contested decision constitutes an implicit act by which the Council accepted the notification of intention to withdraw or that the contested decision acknowledged the ‘exit’ of the United Kingdom from the EU on 29 March 2019.61In the second place, the applicants claim that the contested decision, particularly the negotiating directives which are annexed to it and which produce legal effects, does not include an objective to ensure that UK citizens who obtained the status of EU citizen before 29 March 2019 maintain that status. They claim that there is no doubt as to the loss in the short or medium term of rights and freedoms conferred on UK citizens by EU law. If a final agreement is reached by the Council, the current negotiations would merely determine the extent of the loss of expatriate UK citizens’ rights deriving from EU law. In the absence of an agreement, the Council would not have provided, in the contested decision and its negotiating directives, for protection of UK citizens’ established rights. Therefore, that decision does not protect UK citizens’ status as citizens of the EU and provides no certainty as to the rights of UK citizens for the period after the date of withdrawal.62However, the contested decision, in particular insofar as it includes directives for the negotiation of the withdrawal agreement, does not constitute an act laying down the rights of UK residents living in the EU 27 in the event that an agreement is reached. The negotiating directives merely stipulate, using, at least in the English and French language versions, the conditional tense rather than mandatory terms, the objectives of the EU in the context of negotiations with the United Kingdom. Paragraph 11 of the negotiating directives mentions in particular that safeguarding the status and rights of the EU 27 citizens and their families in the United Kingdom and of the citizens of the United Kingdom and their families in the EU 27 is the first priority of the negotiations. Section III.1 of the negotiating directives, dedicated to citizens’ rights, provides that the agreement ‘should’ safeguard the status and rights derived from Union law at the withdrawal date, including those the enjoyment of which will intervene at a later date as well as rights which are in the process of being obtained (Article 20). Section III.1 also provides that the agreement ‘should’ cover at least the definition of the persons to be covered and that the personal scope ‘should’ be the same as that of Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC (OJ 2004 L 158, p. 77) and include persons covered by Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1) (Article 21).63Accordingly, the negotiating directives cannot produce legal effects as regards UK citizens in an EU 27 Member State. First, they do not necessarily stipulate the final positions of the EU in the context of the negotiations, since, as Article 4 of those directives expressly states, they can be amended or supplemented, where necessary, throughout the course of the negotiations, in particular to reflect the European Council guidelines as they evolve. Second, the negotiations may not necessarily result in the conclusion of an agreement. Third, if the negotiations result in the conclusion of an agreement, the rights of UK citizens in the EU 27 that may be determined by that agreement will not, by definition, be determined unilaterally by the EU but will also depend on the positions of the United Kingdom. Fourth, the provisions on the protection of the status and rights of UK citizens in the EU 27 from the date of withdrawal, as provided for by a possible future agreement, are not the sole competence of the Council, since the decision to conclude the withdrawal agreement is to be taken by the Council, acting by qualified majority, after obtaining the consent of the Parliament. For all these reasons, the negotiating directives are addressed only to the Commission and cannot have the effect of determining the rights of UK citizens living in the EU 27 as from the date of withdrawal.64Furthermore, the fact, noted by the applicants, that the negotiating directives do not include an objective to ensure that UK citizens who obtained the status of EU citizen before 29 March 2019 maintain that status, in particular the right to vote in European and municipal elections, does not directly affect their legal situation. As has been stated, the contested decision, including the negotiating directives, is merely a preparatory act which cannot prejudge the content of any final agreement, particularly as regards the personal scope of any provisions on the protection of the status and rights of UK citizens in the EU 27.65In addition, the contested decision, which concerns the negotiations between the EU and the United Kingdom for an agreement setting out the arrangements for withdrawal, is not intended to establish the rights of UK citizens living in the EU 27 as from the date of withdrawal in the event that no agreement is reached. As a result, the applicants cannot validly argue that the Council did not provide, in the contested decision and the negotiating directives, for the protection of the established rights of UK citizens in the absence of agreement and that, as a result, the contested decision provides no certainty as to the rights of expatriate UK citizens as from the date of withdrawal.66The applicants’ argument concerning the objectives of the contested decision and the negotiating directives must therefore be rejected.67In the third place, the applicants claim that the Council should have refused or stayed the opening of negotiations. They assert that the withdrawal procedure is void in the absence of definite constitutional authorisation based on the votes of all UK citizens, who are also EU citizens, and that probably nothing has occurred to require the adoption of the contested decision. The applicants state that they were denied the right to vote in the referendum of 23 June 2016 and for the election of parliamentarians who adopted the European Union (Notification of Withdrawal) Act 2017, because of the ‘15 years rule’ which deprives UK citizens who have been living outside the UK for more than 15 years of the right to vote. In addition, the European Union (Notification of Withdrawal) Act 2017 does not state that the United Kingdom is to withdraw from the EU but merely authorises the Prime Minister to notify the European Union of the United Kingdom’s decision to withdraw. The applicants state that legal proceedings are currently underway before a UK court, that the Council and the United Kingdom should have sought judicial review of the constitutionality of the notification of the intention to withdraw pursuant to the principle of sincere cooperation provided for in Article 4(3) TEU, and that the Council also should have requested the opinion of the Court as to the compatibility with the Treaties of depriving expatriate UK citizens of the right to vote and their indirect representation by MPs, pursuant to Article 218(11) TFEU. They add that to dismiss the present action for inadmissibility would infringe the principle of democracy, in so far as removing EU citizenship in March 2019 will occur in circumstances that are illegal, where EU citizens have been deprived of the right to vote.68By those arguments the applicants raise substantive pleas which seek, in actual fact, to contest the lawfulness of the contested decision. In fact, they challenge the latter in so far as it did not refuse or stay the opening of negotiations in the light of the conditions under which the referendum of 23 June 2016 and the UK general elections took place and in the light of the content of the European Union (Notification of Withdrawal) Act 2017. They also challenge the contested decision in so far as it was not preceded by court proceedings to verify, in particular, the constitutionality of the notification of intention to withdraw and the compatibility with the Treaties of expatriate UK citizens’ lack of a right to vote.69However, those substantive pleas have no impact on the admissibility of the action, since they do not call into question the fact that the contested decision does not directly affect the legal situation of the applicants. Even if the Council should have refused to open the negotiations or should have verified that the decision by which the United Kingdom decided to leave the European Union had been taken in accordance with its own constitutional requirements, the fact remains that the contested decision, which merely authorises the opening of the negotiations with the United Kingdom and sets the directives for conducting those negotiations, does not change the legal situation of the applicants. In particular, if the Council was wrong not to make use of the possibility, provided for in Article 218(11) TFEU, of obtaining the opinion of the Court as to the compatibility of the envisaged agreement with the Treaties, or infringed the principle of sincere cooperation, that fact cannot have the effect of setting aside the conditions governing admissibility expressly provided for in Article 263 TFEU (see, to that effect, concerning the principle of sincere cooperation, judgment of 20 February 2018, Belgium v Commission, C‑16/16 P, EU:C:2018:79, paragraph 40), the request for an opinion being, in any case, for the Council optional and not obligatory.70Regarding the allegations of infringement of the principle of democracy, which is set out, inter alia, in the preamble to the EU Treaty, in Article 2 TEU and in the preamble to the Charter of Fundamental Rights of the European Union, it cannot validly be argued that the action should be found to be admissible on the basis that the contested decision was made in breach of the principle of democracy. Such reasoning would be tantamount to inferring the admissibility of an action for annulment under Article 263 TFEU from the possible unlawfulness of the contested decision. It follows from the case-law that the seriousness of the alleged infringement by the institution concerned or the extent of its adverse impact on the observance of fundamental rights cannot justify an exception to the absolute bars to proceedings laid down by the FEU Treaty (see, to that effect, order of 10 May 2001, FNAB and Others v Council, C‑345/00 P, EU:C:2001:270, paragraph 40). That argument is, therefore, ineffective, since the contested decision does not, of itself, restrict the applicants’ rights.71The applicants’ argument that the Council should have refused or stayed the opening of the negotiations, in the light of the lack of definite constitutional authorisation based on the votes of all UK citizens, must therefore be rejected.72In the fourth and last place, the applicants claim that the present action is the sole effective form of legal remedy before the EU Courts before the inescapable loss of their status as EU citizens on 29 March 2019 as a consequence of the contested decision. Neither an emergency procedure nor, a fortiori, an action for damages could prevent the immediate loss of EU citizenship on that date. The present action should be upheld in accordance with the principle of a Union based on the rule of law and with Article 47 of the Charter of Fundamental Rights.73However, it has to be stated that the Council did not, by the contested decision, decide that the United Kingdom would exit the EU on 29 March 2019, as was noted in paragraph 59 above. Any loss of UK citizens’ status as EU citizens on 29 March 2019 would therefore not be a result of the contested decision, which as regards the applicants constitutes merely a preparatory act.74Furthermore, judicial review of compliance with the European Union legal order is ensured, as can be seen from Article 19(1) TEU, not only by the Court of Justice but also by the courts and tribunals of the Member States (see judgment of 28 April 2015, T & L Sugars and Sidul Açúcares v Commission, C‑456/13 P, EU:C:2015:284, paragraph 45 and the case-law cited). In the present case, as the Council stated, one of the principal complaints invoked by the applicants is that they did not have the right to vote in the referendum of 23 June 2016 or during the election of the parliamentarians who adopted the European Union (Notification of Withdrawal) Act 2017. Those UK citizen voting procedures and, indeed, the notification of intention to withdraw, were open to challenge before the UK courts, which may, where appropriate, refer questions to the Court for a preliminary ruling on the interpretation of the Treaties, pursuant to Article 267 TFEU. In that regard, it must be noted that a number of cases on the legality of the procedures and acts of the UK authorities implementing the withdrawal procedure provided for by Article 50 TEU have been brought before the UK courts. By a judgment of 28 April 2016, the High Court of Justice (England and Wales), Queen’s Bench Division (Administrative Court) ruled on the application by which Mr H. Shindler and other applicants challenged the legality of the referendum of 23 June 2016, claiming that UK citizens resident in another EU Member State for more than 15 years were deprived of their right to vote by the so-called ‘15 years rule’, in breach of EU law. As was noted at the hearing, the same court, by a judgment of 12 June 2018, also dismissed an application by which Ms E. Webster and other applicants called into question the United Kingdom’s conduct of the negotiations for a withdrawal agreement, in the light of the alleged lack of a decision to withdraw taken in accordance with the United Kingdom’s constitutional requirements.75Last, the applicants claim, in support of their argument that the present action is the only way to ensure their right to effective judicial protection, that after 29 March 2019, in the event of dispute over the possible withdrawal agreement, the United Kingdom would be a third country outside the EU and could consider itself not to be bound by a decision of the EU Courts. After that date, a decision of the EU Courts on any withdrawal agreement would not be enforceable.76However, the inadmissibility of the present action is not derived from the possibility for the applicants of bringing a case before the EU Courts against the decision on the conclusion of a possible withdrawal agreement, but follows from the finding that the condition that the contested decision must directly affect the legal situation of the applicants is not satisfied in the present case. Although that condition of admissibility must be interpreted in the light of the fundamental right to effective judicial protection, as enshrined in Article 47 of the Charter of Fundamental Rights, it cannot be set aside without going beyond the jurisdiction conferred by the FEU Treaty on the EU Courts (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraphs 97 and 98). Moreover, nor is consideration of the admissibility of the present action, which is governed by the rules of the FEU Treaty, dependent on whether the United Kingdom considers itself bound by a decision of the EU Courts in the event of a dispute concerning the possible withdrawal agreement.77The argument concerning effective judicial protection must therefore be rejected.78It follows from all the foregoing that the contested decision, which does not produce binding legal effects capable of affecting the interests of the applicants by bringing about a distinct change in their legal position, cannot be the subject of an action for annulment. In addition, the applicants, who are not directly concerned by the contested decision, do not have standing to bring proceedings pursuant to the fourth paragraph of Article 263 TFEU. Consequently, the action must be dismissed in its entirety as being unfounded. Application for leave to intervene 79In accordance with Article 142(2) of the Rules of Procedure, an intervention is ancillary to the main proceedings and becomes devoid of purpose, inter alia, when the application is declared inadmissible.80In those circumstances, there is no longer any need to adjudicate on the Commission’s application to intervene in support of the Council. Costs 81Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.82As the applicants have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Council, in accordance with the form of order sought by the Council.83Pursuant to Article 144(10) of the Rules of Procedure, since the proceedings in the main case have concluded before the application to intervene has been decided, the Commission must bear its own costs relating to the application to intervene.On those grounds,hereby: 1. Dismisses the action as being inadmissible; 2. Declares that there is no longer any need to rule on the European Commission’s application for leave to intervene; 3. Orders Mr Harry Shindler and the other applicants, whose names are listed in the annex, to bear their own costs and pay those incurred by the Council of the European Union; 4. Orders the Commission to bear its own costs relating to the application to intervene. GervasoniMadiseda Silva PassosKowalik-BańczykMac EochaidhDelivered in open court in Luxembourg on 26 November 2018.[Signatures]( *1 ) Language of the case: French.( 1 ) The list of the other applicants is annexed only to the version sent to the parties. | b97b4-db06d56-474b | EN |
Decisions adopted in the context of the international treaties relating to the preservation and conservation of living resources in Antarctica must be adopted jointly by the EU and the Member States who are parties to those treaties | 20 November 2018 ( *1 )(Actions for annulment — Decision of the Permanent Representatives Committee (Coreper) — Decision approving the submission of a reflection paper to an international body — Admissibility — Challengeable act — Exclusive, shared or complementary competence of the European Union — Action of the European Union alone in an international body or participation of the Member States alongside it — Conservation of marine biological resources — Fisheries — Protection of the environment — Research — Marine protected areas (MPAs) — Antarctic Treaty — Convention on the Conservation of Antarctic Marine Living Resources — Weddell Sea and Ross Sea)In Joined Cases C‑626/15 and C‑659/16,ACTIONS for annulment under Article 263 TFEU, brought on 23 November 2015 (C‑626/15) and 20 December 2016 (C‑659/16), respectively, European Commission, represented by A. Bouquet, E. Paasivirta and C. Hermes, acting as Agents, with an address for service in Luxembourg,applicant,v Council of the European Union, represented by A. Westerhof Löfflerová, R. Liudvinaviciute-Cordeiro and M. Simm, acting as Agents,defendant,supported by: Federal Republic of Germany, represented by T. Henze, J. Möller, K. Stranz and S. Eisenberg, acting as Agents, Hellenic Republic, represented by G. Karipsiadis and K. Boskovits, acting as Agents, Kingdom of Spain, represented by M.A. Sampol Pucurull, acting as Agent, French Republic, represented by F. Fize, D. Colas, G. de Bergues and B. Fodda, acting as Agents, Kingdom of the Netherlands, represented by M. Gijzen, M. Bulterman and M. Noort, acting as Agents, Portuguese Republic, represented by L. Inez Fernandes, M. Figueiredo and M.L. Duarte, acting as Agents, Republic of Finland, represented by J. Heliskoski, acting as Agent, Kingdom of Sweden, represented by A. Falk, C. Meyer-Seitz, U. Persson, N. Otte Widgren, L. Zettergren and L. Swedenborg, acting as Agents, United Kingdom of Great Britain and Northern Ireland, represented by C. Brodie, acting as Agent, and J. Holmes QC,interveners (C‑626/15), Kingdom of Belgium, represented by J. Van Holm, C. Pochet and L. Van den Broeck, acting as Agents, Federal Republic of Germany, represented by T. Henze, J. Möller and S. Eisenberg, acting as Agents, French Republic, represented by D. Colas and B. Fodda, acting as Agents, Grand Duchy of Luxembourg, represented by D. Holderer, acting as Agent, Kingdom of the Netherlands, represented by B. Koopman, M. Bulterman and M. Noort, acting as Agents, Portuguese Republic, represented by L. Inez Fernandes, M. Figueiredo and L. Medeiros, acting as Agents, Kingdom of Sweden, represented by A. Falk, C. Meyer-Seitz, H. Shev and L. Zettergren, acting as Agents, United Kingdom of Great Britain and Northern Ireland, represented by C. Brodie and G. Brown, acting as Agents, J. Holmes QC and J. Gregory, Barrister,interveners (C‑659/16),THE COURT (Grand Chamber),composed of K. Lenaerts, President, J.-C. Bonichot, A. Arabadjiev, M. Vilaras, T. von Danwitz, F. Biltgen and K. Jürimäe, Presidents of Chambers, E. Juhász, M. Ilešič, J. Malenovský (Rapporteur), E. Levits, L. Bay Larsen and S. Rodin, Judges,Advocate General: J. Kokott,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 13 March 2018,after hearing the Opinion of the Advocate General at the sitting on 31 May 2018,gives the following Judgment 1By its applications, the European Commission asks the Court (i) to annul the decision of the Council of the European Union, as contained in the conclusion of the Chairman of the Permanent Representatives Committee of 11 September 2015 (‘the 2015 decision’), in so far as the conclusion approves the submission, on behalf of the European Union and its Member States, to the Commission for the Conservation of Antarctic Marine Living Resources (‘the CCAMLR’) of a reflection paper relating to a future proposal to create a marine protected area in the Weddell Sea (‘the reflection paper’) (Case C‑626/15) and (ii) to annul the Council decision of 10 October 2016 (‘the 2016 decision’) in so far as it approves the submission, on behalf of the European Union and its Member States, to the CCAMLR, at the 35th annual meeting of that body, of three proposals for the creation of marine protected areas and a proposal for the creation of special areas for scientific study of the marine area concerned, of climate change and of the retreat of ice shelves (Case C‑659/16). Legal context Public international law Antarctic Treaty 2The Antarctic Treaty, signed in Washington on 1 December 1959, entered into force on 23 June 1961. Article VI of that treaty states:‘The provisions of the present Treaty shall apply to the area south of 60o South Latitude, including all ice shelves, …’3Article IX of the treaty provides:‘1. Representatives of the Contracting Parties … shall meet at the City of Canberra [Australia] within two months after the date of entry into force of the Treaty, and thereafter at suitable intervals and places, for the purpose of exchanging information, consulting together on matters of common interest pertaining to Antarctica, and formulating and considering, and recommending to their Governments, measures in furtherance of the principles and objectives of the Treaty, including measures regarding:…(f)preservation and conservation of living resources in Antarctica.2. Each Contracting Party which has become a party to the present Treaty by accession under Article XIII shall be entitled to appoint representatives to participate in the meetings referred to in paragraph 1 of the present Article, during such time as that Contracting Party demonstrates its interest in Antarctica by conducting substantial scientific research activity there, such as the establishment of a scientific station or the despatch of a scientific expedition.’4Currently, 20 Member States are Contracting Parties to the Antarctic Treaty. Three Member States were signatories to the treaty on 1 December 1959 and have, on that basis, the status of ‘ratifying’ consultative parties (the Kingdom of Belgium, the French Republic and the United Kingdom of Great Britain and Northern Ireland). Nine others acceded to the Antarctic Treaty subsequently and have the status of ‘acceding’ consultative parties (the Republic of Bulgaria, the Czech Republic, the Federal Republic of Germany, the Kingdom of Spain, the Italian Republic, the Kingdom of the Netherlands, the Republic of Poland, the Republic of Finland and the Kingdom of Sweden). Finally, eight Member States have the status of non-consultative parties (the Kingdom of Denmark, the Republic of Estonia, the Hellenic Republic, Hungary, the Republic of Austria, the Portuguese Republic, Romania and the Slovak Republic). Only the consultative parties may participate in the decision-making at the meetings of the Contracting Parties. Convention on the Conservation of Antarctic Marine Living Resources 5The Convention on the Conservation of Antarctic Marine Living Resources was signed in Canberra on 20 May 1980 and entered into force on 7 April 1982 (‘the Canberra Convention’). The preamble to the Canberra Convention states that the Contracting Parties:‘[recognise] the importance of safeguarding the environment and protecting the integrity of the ecosystem of the seas surrounding Antarctica;[note] the concentration of marine living resources found in Antarctic waters and the increased interest in the possibilities offered by the utilisation of these resources as a source of protein;[are] conscious of the urgency of ensuring the conservation of Antarctic marine living resources;[consider] that it is essential to increase knowledge of the Antarctic marine ecosystem and its components so as to be able to base decisions on harvesting on sound scientific information;[believe] that the conservation of Antarctic marine living resources calls for international co-operation … with the active involvement of all States engaged in research or harvesting activities in Antarctic waters;[recognise] the prime responsibilities of the Antarctic Treaty Consultative Parties for the protection and preservation of the Antarctic environment and, in particular, their responsibilities under Article IX, paragraph 1(f) of the Antarctic Treaty in respect of the preservation and conservation of living resources in Antarctica;[recall] the action already taken by the Antarctic Treaty Consultative Parties including in particular the Agreed Measures for the Conservation of Antarctic Fauna and Flora, as well as the provisions of the Convention for the Conservation of Antarctic Seals;[bear] in mind the concern regarding the conservation of Antarctic marine living resources expressed by the Consultative Parties at the Ninth Consultative Meeting of the Antarctic Treaty and the importance of the provisions of Recommendation IX-2 which led to the establishment of the present Convention;[recognise], in the light of the foregoing, that it is desirable to establish suitable machinery for recommending, promoting, deciding upon and coordinating the measures and scientific studies needed to ensure the conservation of Antarctic marine living organisms’.6Article I(1) to (3) of the Canberra Convention provides:‘1. This Convention applies to the Antarctic marine living resources of the area south of 60o South latitude and to the Antarctic marine living resources of the area between that latitude and the Antarctic Convergence which form part of the Antarctic marine ecosystem.2. “Antarctic marine living resources” means the populations of fin fish, molluscs, crustaceans and all other species of living organisms, including birds, found south of the Antarctic Convergence.3. “The Antarctic marine ecosystem” means the complex of relationships of Antarctic marine living resources with each other and with their physical environment.’7Article II of the Canberra Convention states:‘1. The objective of this Convention is the conservation of Antarctic marine living resources.2. For the purposes of this Convention, the term “conservation” includes rational use.3. Any harvesting and associated activities in the area to which this Convention applies shall be conducted in accordance with the provisions of this Convention and with the following principles of conservation:(a)prevention of decrease in the size of any harvested population to levels below those which ensure its stable recruitment. For this purpose its size should not be allowed to fall below a level close to that which ensures the greatest net annual increment;(b)maintenance of the ecological relationships between harvested, dependent and related populations of Antarctic marine living resources and the restoration of depleted populations to the levels defined in subparagraph (a) above; and(c)prevention of changes or minimisation of the risk of changes in the marine ecosystem which are not potentially reversible over two or three decades, taking into account the state of available knowledge of the direct and indirect impact of harvesting, the effect of the introduction of alien species, the effects of associated activities on the marine ecosystem and of the effects of environmental changes, with the aim of making possible the sustained conservation of Antarctic marine living resources.’8Article V of the Canberra Convention provides:‘1. The Contracting Parties which are not Parties to the Antarctic Treaty acknowledge the special obligations and responsibilities of the Antarctic Treaty Consultative Parties for the protection and preservation of the environment of the Antarctic Treaty area.2. The Contracting Parties which are not Parties to the Antarctic Treaty agree that, in their activities in the Antarctic Treaty area, they will observe as and when appropriate the Agreed Measures for the Conservation of Antarctic Fauna and Flora and such other measures as have been recommended by the Antarctic Treaty Consultative Parties in fulfilment of their responsibility for the protection of the Antarctic environment from all forms of harmful human interference.3. For the purposes of this Convention, “Antarctic Treaty Consultative Parties” means the Contracting Parties to the Antarctic Treaty whose representatives participate in meetings under Article IX of the Antarctic Treaty.’9Article VII of the Canberra Convention states:‘1. The Contracting Parties hereby establish and agree to maintain the [CCAMLR].2. Membership in the [CCAMLR] shall be as follows:each regional economic integration organisation which has acceded to this Convention pursuant to Article XXIX shall be entitled to be a Member of the [CCAMLR] during such time as its States members are so entitled;…’10Article IX(1) and (2) of the Canberra Convention is worded as follows:‘1. The function of the [CCAMLR] shall be to give effect to the objective and principles set out in Article II of this Convention. To this end, it shall:facilitate research into and comprehensive studies of Antarctic marine living resources and of the Antarctic marine ecosystem;compile data on the status of and changes in population of Antarctic marine living resources and on factors affecting the distribution, abundance and productivity of harvested species and dependent or related species or populations;ensure the acquisition of catch and effort statistics on harvested populations;formulate, adopt and revise conservation measures on the basis of the best scientific evidence available, subject to the provisions of paragraph 5 of this Article;2. The conservation measures referred to in paragraph 1(f) above include the following:the designation of the quantity of any species which may be harvested in the area to which this Convention applies;(d)the designation of protected species;(e)the designation of the size, age and, as appropriate, sex of species which may be harvested;the designation of open and closed seasons for harvesting;(g)the designation of the opening and closing of areas, regions or sub-regions for purposes of scientific study or conservation, including special areas for protection and scientific study;(h)regulation of the effort employed and methods of harvesting, including fishing gear, with a view inter alia to avoiding undue concentration of harvesting in any region or sub-region;(i)the taking of such other conservation measures as the [CCAMLR] considers necessary for the fulfilment of the objective of this Convention, including measures concerning the effects of harvesting and associated activities on components of the marine ecosystem other than the harvested populations.’11Article XXIX(2) of the Canberra Convention states:‘This Convention shall be open for accession by regional economic integration organisations constituted by sovereign States which include among their members one or more States Members of the [CCAMLR] and to which the States members of the organisation have transferred, in whole or in part, competences with regard to the matters covered by this Convention. The accession of such regional economic integration organisations shall be the subject of consultations among Members of the [CCAMLR].’12The European Union approved the Canberra Convention by Council Decision 81/691/EEC of 4 September 1981 (OJ 1981 L 252, p. 26) and it became a party thereto on 21 April 1982.13To date, twelve Member States have become parties to the Canberra Convention, six (the Kingdom of Belgium, the Republic of Bulgaria, the Federal Republic of Germany, the French Republic, the Republic of Poland and the United Kingdom) before the European Union acceded to the convention and six (the Kingdom of Spain, the Hellenic Republic, the Italian Republic, the Kingdom of the Netherlands, the Republic of Finland and the Kingdom of Sweden) after its accession. General framework for the establishment of marine protected areas 14At its session held from 24 October to 4 November 2011, the CCAMLR adopted the conservation measure entitled ‘General framework for the establishment of CCAMLR Marine Protected Areas’, recitals 1 and 6 of which state:‘The [CCAMLR],Recalling its endorsement of the work program of the Scientific Committee to develop a representative system of Antarctic Marine Protected Areas (MPAs) with the aim of conserving marine biodiversity in the Convention Area, and in accordance with the decision at the World Summit on Sustainable Development (WSSD) in 2002 to achieve a representative network of MPAs by 2012,Recognising that CCAMLR MPAs aim to contribute to sustaining ecosystem structure and function, including in areas outside the MPAs, maintain the ability to adapt in the face of climate change, and reduce the potential for invasion by alien species, as a result of human activity’.15Paragraph 2 of the General framework for the establishment of CCAMLR Marine Protected Areas provides:‘CCAMLR MPAs shall be established on the basis of the best available scientific evidence, and shall contribute, taking full consideration of Article II of the [Canberra Convention] where conservation includes rational use, to the achievement of the following objectives:the protection of representative examples of marine ecosystems, biodiversity and habitats at an appropriate scale to maintain their viability and integrity in the long term;(ii)the protection of key ecosystem processes, habitats and species, including populations and life-history stages;(iii)the establishment of scientific reference areas for monitoring natural variability and long-term change or for monitoring the effects of harvesting and other human activities on Antarctic marine living resources and on the ecosystems of which they form part;(iv)the protection of areas vulnerable to impact by human activities, including unique, rare or highly biodiverse habitats and features;(v)the protection of features critical to the function of local ecosystems;(vi)the protection of areas to maintain resilience or the ability to adapt to the effects of climate change.’ EU law The multiannual position 16The Council adopted Decision 13908/1/09 REV 1 of 19 October 2009 on the position to be adopted, on behalf of the European Union in the CCAMLR for the period 2009-14. That decision was replaced, for the period 2014-19, by Decision 10840/14 of 11 June 2014 (‘the multiannual position’).17It is apparent from Article 1 of the multiannual position that the rules which it lays down apply ‘when [the CCAMLR] is called upon to adopt decisions having legal effects in relation to matters pertaining to the Common Fisheries Policy’.18Article 2 of the multiannual position provides that the specification of the EU position to be taken in the annual meeting of the CCAMLR is to be conducted in accordance with Annex II thereto. That annex establishes a simplified procedure under which:‘… the European Commission shall transmit to the Council or to its preparatory bodies in sufficient time before each annual Meeting of the CCAMLR a written document setting out the particulars of the proposed specification of the Union position for discussion and endorsement of the details of the position to be expressed on the Union’s behalf.If, in the course of further meetings, including on the spot, it is impossible to reach an agreement in order for the Union position to take account of new elements, the matter shall be referred to the Council or its preparatory bodies.’ Regulations (EC) No 600/2004 and (EC) No 601/2004 19Recitals 4 and 5 of Council Regulation (EC) No 600/2004 of 22 March 2004 laying down certain technical measures applicable to fishing activities in the area covered by the Convention on the conservation of Antarctic marine living resources (OJ 2004 L 97, p. 1) state:‘(4)Some of the technical measures adopted by the CCAMLR have been transposed by Council Regulation (EEC) No 3943/90 of 19 December 1990 on the application of the system of observation and inspection established under Article XXIV of the [Canberra Convention (OJ 1990 L 379, p. 45)], and by Council Regulation (EC) No 66/98 of 18 December 1997 laying down certain conservation and control measures applicable to fishing activities in the Antarctic [(OJ 1998 L 6, p. 41)].(5)The adoption by the CCAMLR of new conservation measures and the updating of those already in force since the above Regulations were adopted means that the latter should be amended later.’20Article 1(1) of Regulation No 600/2004 provides:‘This Regulation lays down technical measures concerning the activities of [EU] fishing vessels which take and keep on board marine organisms taken from marine living resources in the area covered by the [Canberra Convention].’21Recital 6 of Council Regulation (EC) No 601/2004 of 22 March 2004 laying down certain control measures applicable to fishing activities in the area covered by the Convention on the conservation of Antarctic marine living resources and repealing Regulations (EEC) No 3943/90, (EC) No 66/98 and (EC) No 1721/1999 (OJ 2004 L 97, p. 16) states:‘With a view to implementing the new conservation measures adopted by the CCAMLR, [Regulation (EEC) No 3943/90, Regulation (EC) No 66/98 and Council Regulation (EC) No 1721/1999 of 29 July 1999 laying down certain control measures in respect of vessels flying the flag of non-Contracting Parties to the [Canberra Convention] (OJ 1999 L 203, p. 14)] should be repealed and replaced by a single Regulation bringing together the special provisions for the control of fishing activities arising from the [European Union’s] obligations as a Contracting Party to the Convention.’22Article 1(1) of Regulation No 601/2004 provides:‘This Regulation lays down general rules and conditions for the application by the [European Union] of:control measures applicable to fishing vessels flying the flag of a Contracting Party to the [Canberra Convention] operating in the Convention area in waters located beyond the limits of national jurisdictions;a system to promote compliance by vessels flying the flag of a non-Contracting Party to the [Canberra] Convention with conservation measures laid down by the [CCAMLR].’ Regulation (EU) No 1380/2013 23Recital 13 of Regulation (EU) No 1380/2013 of the European Parliament and of the Council of 11 December 2013 on the Common Fisheries Policy, amending Council Regulations (EC) No 1954/2003 and (EC) No 1224/2009 and repealing Council Regulations (EC) No 2371/2002 and (EC) No 639/2004 and Council Decision 2004/585/EC (OJ 2013 L 354, p. 22), states:‘An ecosystem-based approach to fisheries management needs to be implemented, environmental impacts of fishing activities should be limited and unwanted catches should be avoided and reduced as far as possible.’24Article 2(1) to (3) of Regulation No 1380/2013 provides:‘1. The [common fisheries policy (CFP)] shall ensure that fishing and aquaculture activities are environmentally sustainable in the long-term and are managed in a way that is consistent with the objectives of achieving economic, social and employment benefits, and of contributing to the availability of food supplies.2. The CFP shall apply the precautionary approach to fisheries management, and shall aim to ensure that exploitation of living marine biological resources restores and maintains populations of harvested species above levels which can produce the maximum sustainable yield.3. The CFP shall implement the ecosystem-based approach to fisheries management so as to ensure that negative impacts of fishing activities on the marine ecosystem are minimised, and shall endeavour to ensure that aquaculture and fisheries activities avoid the degradation of the marine environment.’25Article 4(1) of Regulation No 1380/2013 states:‘For the purpose of this Regulation the following definitions shall apply:(9)“ecosystem-based approach to fisheries management” means an integrated approach to managing fisheries within ecologically meaningful boundaries which seeks to manage the use of natural resources, taking account of fishing and other human activities, while preserving both the biological wealth and the biological processes necessary to safeguard the composition, structure and functioning of the habitats of the ecosystem affected, by taking into account the knowledge and uncertainties regarding biotic, abiotic and human components of ecosystems’. Background to the cases 26The CCAMLR has set itself the objective of creating a network of MPAs in the Antarctic, an objective which is expressly supported by the European Union.27Against that background, in preparation for the European Union’s participation in future annual meetings of the CCAMLR, the Council established in 2014, on the basis of Article 218(9) TFEU, the multiannual position, which lays down, inter alia, a simplified procedure for Council decision-making regarding the position to be adopted by the European Union in the CCAMLR on matters pertaining to the CFP. Under that procedure, before each annual meeting of the CCAMLR the Commission submits the relevant documents to the preparatory bodies of the Council. In practice, the Commission sends those documents either to the Council Working Party on Fisheries or to the Permanent Representatives Committee (Coreper). Case C‑626/15 28On 31 August 2015 the Commission, acting on the basis of the simplified procedure established by the Council, submitted to the Council Working Party on Fisheries an informal document (‘non-paper’) to which the draft of the reflection paper was annexed. On pages 4 and 5 of that reflection paper, reference is made, inter alia, to the need to protect the ecosystem in the Weddell Sea and, in particular, the animals which form part of it, such as marine mammals, penguins and seabirds.29The Commission proposed that the reflection paper be submitted to the Scientific Committee of the CCAMLR on behalf of the European Union alone as, in its view, that paper fell within the area of the CFP.30At its meeting of 3 September 2015, the Council Working Party approved the content of the reflection paper, but took the view that the paper fell within the area of environmental policy rather than that of the CFP and that it therefore had to be submitted on behalf of the European Union and its Member States. In the light of that difference of views, it was decided to refer the matter to Coreper.31Coreper examined the matter at its meeting of 11 September 2015. After an exchange of views, the Chairman of Coreper declared that Coreper had approved the submission of the reflection paper and had decided that it was to be submitted to the CCAMLR at its 34th annual meeting on behalf of the European Union and its Member States.32In a declaration entered in the minutes of the meeting of 11 September 2015, the Commission expressed its disagreement on this last point. It stated that it was willing to submit the reflection paper to the CCAMLR on behalf of the European Union and its Member States, as Coreper had decided, but that it reserved the right to bring legal proceedings.33By application of 23 November 2015, the Commission brought an action for annulment of the 2015 decision in so far as it approves the submission of the reflection paper to the CCAMLR on behalf of the European Union and its Member States. Case C‑659/16 34On 30 August 2016, the Commission, again acting on the basis of the simplified procedure, submitted an informal document (‘non-paper’) to the Council Working Party on Fisheries. On 6 September 2016, that document was supplemented by three draft proposals concerning the creation or support for the creation of MPAs in the Antarctic, namely the MPA in the Weddell Sea, an MPA in the Ross Sea and an MPA in the East Antarctic, and by a proposal for the creation of a group of special areas for scientific study of the marine area concerned, of climate change and of the retreat of ice shelves (‘the envisaged measures’).35The Commission proposed that the envisaged measures be submitted to the CCAMLR on behalf of the European Union alone, as in its view they fell within the CFP. In order to comply with the deadline for the submission of proposals to the annual meeting of the CCAMLR, the Commission sent those measures at the same time to the CCAMLR Secretariat, on behalf of the European Union.36At its meetings on 15 September and 22 September 2016, the Council Working Party on Fisheries examined the content of the envisaged measures. It took the view that they fell within the area of environmental policy, and not that of the CFP, so that, first, they had to be submitted to the CCAMLR on behalf of the European Union and its Member States and, second, they could not be approved under the simplified procedure established by the Council as that procedure was limited solely to matters relating to the CFP. The matter was then referred to Coreper, and subsequently to the Council.37On 10 October 2016 in Luxembourg, at its 3487th meeting, the Council approved the submission of the envisaged measures to the CCAMLR on behalf of the European Union and its Member States. It also decided that those measures established the position to be adopted by the European Union at the 35th annual meeting of the CCAMLR.38In a declaration entered in the minutes of the meeting, the Commission insisted that the envisaged measures fell within the area, referred to in Article 3(1)(d) TFEU, of exclusive EU competence regarding the conservation of marine biological resources, and that there was therefore no justification for submitting them on behalf of the European Union and its Member States.39In 2016, at its 35th annual meeting, the CCAMLR decided to give effect to two of the measures submitted and supported by the European Union, namely the establishment of an MPA in the Ross Sea and the creation of a number of special areas for scientific study of the marine area concerned, of climate change and of the retreat of ice shelves. In addition, the CCAMLR decided to continue discussions on the European Union’s other two proposals.40By application of 20 December 2016, the Commission brought an action for annulment of the 2016 decision in so far as it approves the submission of the envisaged measures to the CCAMLR, at the 35th annual meeting of that body, on behalf of the European Union and its Member States. Procedure before the Court and forms of order sought 41In Case C‑626/15, the Commission claims that the Court should:–annul the 2015 decision in so far as it approves the submission of the reflection paper to the CCAMLR on behalf of the European Union and its Member States;order the Council to pay the costs.42The Council contends that the Court should:dismiss the action as inadmissible and, in any event, as unfounded;order the Commission to pay the costs.43By decisions of 7 April, 14 April, 29 April, 2 May and 3 May 2016, the President of the Court respectively granted (i) the Federal Republic of Germany, (ii) the Kingdom of Spain and the Kingdom of the Netherlands, (iii) the French Republic and the Republic of Finland, (iv) the Portuguese Republic and (v) the Hellenic Republic, the Kingdom of Sweden and the United Kingdom leave to intervene in support of the Council in this case.44In its rejoinder, the Council requested, on the basis of Article 60(1) of the Rules of Procedure of the Court of Justice, that the case be decided by the Grand Chamber.45By decision of the President of the Court of 10 February 2017, proceedings in Case C‑626/15 were stayed until the close of the written part of the procedure in Case C‑659/16.46In Case C‑659/16, the Commission claims that the Court should:annul the 2016 decision in so far as it approves the submission of the envisaged measures to the CCAMLR, at the 35th annual meeting of that body, on behalf of the European Union and its Member States;47dismiss the action as unfounded;48By decision of 25 April 2017, the President of the Court granted the Kingdom of Belgium, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom leave to intervene in support of the Council in this case.49By decision of the President of the Court of 10 February 2017, Cases C‑626/15 and C‑659/16 were joined for the purposes of the oral procedure and of the judgment.50After the close of the written procedure on 16 September 2016, the Council requested permission on 16 November 2016, in reliance upon Article 128(2) of the Rules of Procedure, to produce three new items of evidence in Case C‑626/15, namely a note regarding establishment of the position of the European Union for the 35th annual meeting of the CCAMLR so far as concerns the envisaged measures, the text of the position thus adopted and a declaration of the Commission relating thereto.51By decision of the President of the Court of 10 January 2017, after the Advocate General had been heard, the three new items of evidence produced after the close of the written part of the procedure were admitted in Case C‑626/15. The request that the oral procedure be reopened 52By letter received at the Court Registry on 27 June 2018, the Council requested that the oral procedure be reopened. In support of its request, it submitted, in essence, that the argument set out by the Advocate General in her Opinion concerning the alleged full exercise of the environmental competence of the European Union when the 2015 and 2016 decisions were adopted had not been raised by the Commission in its pleadings or at the hearing and, moreover, had not been debated between the parties at the hearing.53In that regard, it should be noted that, under Article 83 of the Rules of Procedure, the Court may at any time, after hearing the Advocate General, order the reopening of the oral part of the procedure, inter alia where the case must be decided on the basis of an argument which has not been debated between the parties or the interested persons referred to in Article 23 of the Statute the Court of Justice of the European Union (see, to that effect, judgment of 26 September 2018, Belastingdienst/Toeslagen (Suspensory effect of the appeal), C-175/17, EU:C:2018:776, paragraph 20).54In the present instance, the Court holds, after hearing the Advocate General, that there is no need to decide the case on the basis of an argument which has not been debated before the Court.55Consequently, the Council’s request that the oral procedure be reopened must be rejected. The actions Admissibility of the action in Case C‑626/15 Arguments of the parties 56The Council, supported by the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom, contests the admissibility of the action in Case C‑626/15, on the ground that the 2015 decision is not a challengeable act.57It submits, first, that the 2015 decision was adopted not by an institution but by Coreper, which is not endowed with a decision-making power of its own. Second, that decision is not such as to ‘produce legal effects’, within the meaning of Article 263 TFEU, since it approves a mere reflection paper designed to gather views on the establishment of an MPA in the Weddell Sea. The 2015 decision cannot be classified as approval of a position of the European Union, for the purposes of Article 218(9) TFEU, as such classification requires the international body at issue to be about to adopt an act producing legal effects. Here, however, the precise content of the proposal to establish an MPA in the Weddell Sea was not yet known when the 2015 decision was adopted and it was not certain that such a proposal would be formulated.58The Commission contends that the action brought in Case C‑626/15 is admissible. The 2015 decision is attributable to the Council, which is an institution. Moreover, it is intended to produce legal effects since it obliges the Commission to lodge the reflection paper on behalf of the European Union and its Member States, and not on behalf of the European Union alone. Furthermore, it amounts to adoption of a position for the purposes of Article 218(9) TFEU. Findings of the Court 59In accordance with settled case-law, any decision adopted by an institution, office, body or agency of the European Union, irrespective of its nature or form, which is intended to have legal effects constitutes a challengeable act for the purposes of Article 263 TFEU (see, inter alia, judgment of 28 April 2015, Commission v Council, C‑28/12, EU:C:2015:282, paragraph 14).60First of all, as set out in Article 240(1) TFEU, Coreper consists of the permanent representatives of the governments of the Member States of the European Union and is responsible for preparing the work of the Council and for carrying out the tasks assigned to it by the latter. Thus, the framers of the Treaties intended to make Coreper an auxiliary body of the Council, for which it carries out preparation and implementation work (see, to that effect, judgment of 19 March 1996, Commission v Council, C‑25/94, EU:C:1996:114, paragraphs 25 and 26).61Whilst the function of preparing the work of the Council and of carrying out the tasks assigned by it does not give Coreper the power to take decisions, a power which belongs, under the Treaties, to the Council (see, to that effect, judgment of 19 March 1996, Commission v Council, C‑25/94, EU:C:1996:114, paragraph 27), the fact remains that, as the European Union is a union based on the rule of law, a measure adopted by Coreper must be amenable to judicial review where it is intended, as such, to produce legal effects and therefore falls outside the framework of that preparation and implementation function.62Next, so far as concerns determination of the effects which the 2015 decision is intended to produce, in accordance with settled case-law it is necessary to look to its substance, which must be assessed on the basis of objective criteria such as the context in which that measure was adopted, its content and its author’s intention, provided that the latter can be determined objectively (see, to that effect, judgment of 17 July 2008, Athinaïki Techniki v Commission, C‑521/06 P, EU:C:2008:422, paragraph 42).63So far as concerns, first, the context of the 2015 decision, it was adopted with a view to persuading the CCAMLR to establish an MPA in the Weddell Sea.64Second, as to that decision’s content, in deciding that the reflection paper was to be submitted on behalf of the European Union and its Member States, Coreper obliged the Commission not to depart from that position in the exercise of its power to represent the European Union externally when participating at the 34th annual meeting of the CCAMLR.65Third, as regards the intention of the measure’s author, it is apparent from the minutes of the Coreper meeting of 11 September 2015, which constitute material enabling that intention to be determined objectively, that the 2015 decision had the objective of establishing definitively the Council’s and, accordingly, the European Union’s position so far as concerns submission of the reflection paper to the CCAMLR on behalf of the European Union and its Member States, and not on behalf of the European Union alone.66In the light of the foregoing, the 2015 decision was thus indeed intended to produce legal effects and is therefore a challengeable act.67Accordingly, the plea of inadmissibility raised by the Council in Case C‑626/15 must be rejected. Substance 68The Commission puts forward the same two pleas in law in support of each of its actions. The first, and principal, plea is to the effect that the 2015 and 2016 decisions (‘the contested decisions’) were adopted in breach of the exclusive competence which Article 3(1)(d) TFEU confers upon the European Union in the area of the conservation of marine biological resources. The second plea, put forward in the alternative, is to the effect that those decisions were adopted in breach of the exclusive competence which the European Union has for that same purpose by virtue of Article 3(2) TFEU. The first plea: breach of Article 3(1)(d) TFEU – Arguments of the parties 69The Commission contends that the reflection paper and the envisaged measures should have been submitted to the CCAMLR on behalf of the European Union alone, and not on behalf of the European Union and its Member States, because they fall entirely or, in any event, mainly within the exclusive competence which the European Union possesses, by virtue of Article 3(1)(d) TFEU, in the area of the conservation of marine biological resources.70In support of its plea, the Commission submits, first, that that competence concerns not only conservation measures adopted in order to safeguard fishing opportunities, but all measures to conserve marine biological resources. The reference to the CFP in Article 3(1)(d) TFEU must be understood as intended to make it clear that the conservation of marine biological resources constitutes a specific competence within the more general competence of the European Union regarding fisheries, and not as limiting the exclusive competence arising from that provision solely to measures for the conservation of marine biological resources that are adopted in the context of fisheries policy.71Second, although the creation of an MPA is in part a response to environmental concerns, that fact is not sufficient for the view to be taken that a measure of that kind falls within environmental policy. Since Article 11 TFEU provides that environmental protection requirements must be integrated into the definition and implementation of the European Union’s policies and activities, the mere fact that a measure pursues an objective or includes a component connected with protection of the environment does not necessarily mean that that measure falls within the competence which the European Union and the Member States share in environmental matters. That measure’s centre of gravity would also have to lie on the side of environmental policy. In the present instance, the centre of gravity of the reflection paper and of the envisaged measures, and, accordingly, that of the contested decisions, tilt towards the exclusive competence which the European Union possesses in respect of conservation of marine biological resources.72In any event, even if that exclusive competence is limited solely to protection measures falling within the CFP, that is to say, to measures intended to safeguard fishing opportunities, the reflection paper and the envisaged measures nevertheless fall within such a competence since, as Regulation No 1380/2013 states, the CFP is founded on an ecosystem-based approach.73The Council and all the intervening Member States contend that the first plea is unfounded. The words ‘under the [CFP]’, used in Article 3(1)(d) TFEU, are intended to limit the exclusive competence, possessed by the European Union in the context of the CFP, solely to conservation measures adopted in order to safeguard species concerned by fisheries. Whilst it is true that the reflection paper and the envisaged measures were concerned with the adoption of conservation measures, those measures fall, however, not within the area of fisheries, but within that of protection of the environment, which, itself, falls within a competence that the European Union shares with the Member States.74In the alternative, some of the intervening Member States submit that the reflection paper and the envisaged measures fall within the competence which, in accordance with Article 4(3) TFEU, the European Union and the Member States may exercise in parallel in respect of research and that, on that basis, they had to be submitted to the CCAMLR on behalf of the European Union and its Member States.– Findings of the Court 75First of all, although the contested decisions merely state that the reflection paper and the envisaged measures must be submitted to the CCAMLR on behalf of the European Union and its Member States, the fact remains that, inasmuch as they approve the content of that paper and of those measures without amendment, the competence to adopt the contested decisions is determined by the nature and the content of the paper and measures and by their aim and context.76 Indeed, it should be recalled that, according to settled case-law, in order to identify the competence to which decisions are to be linked, it is necessary to specify their appropriate legal basis by having regard to objective factors that include the context, content and aims pursued by the decisions at issue (judgment of 18 December 2014, United Kingdom v Council, C‑81/13, EU:C:2014:2449, paragraph 35).77In addition, according to settled case-law, if examination of an EU measure reveals that it pursues several purposes or that it comprises several components and if one of these is identifiable as the main or predominant purpose or component, whereas the others are merely incidental, the measure must then be founded on a single legal basis, namely that corresponding to the main purpose or component (see, to that effect, judgments of 24 June 2014, Parliament v Council, C‑658/11, EU:C:2014:2025, paragraph 43 and the case-law cited, and of4 September 2018, Commission v Council (Agreement with Kazakhstan), C‑244/17, EU:C:2018:662, paragraph 37 and the case-law cited).78It is only exceptionally that an EU measure must be founded simultaneously on several legal bases, that is to say, when it simultaneously pursues a number of objectives or has several components that are inseparably linked, without one being incidental to the other (see, to that effect, judgment of11 September 2003, Commission v Council, C‑211/01, EU:C:2003:452, paragraph 40).79 In the present instance, all the parties agree that the reflection paper and the envisaged measures are capable of falling within a number of areas of EU competence. On the other hand, they disagree as to the legal basis upon which the contested decisions had to adopted. Consequently, the case-law recalled in paragraphs 76 to 78 of the present judgment must be applied to the reflection paper and the envisaged measures.80In that regard, the Commission contends that the main purpose and component of the reflection paper and the envisaged measures fall within the exclusive competence which the European Union possesses in respect of conservation of marine biological resources under the CFP, in accordance with Article 3(1)(d) TFEU. In its submission, that provision applies to the adoption of any document or to any measure directed at conserving marine resources, whatever the objective pursued.81Accordingly, in order to determine whether the plea is well founded, it is necessary, first, to specify the scope of the exclusive competence of the European Union in respect of conservation of marine biological resources under Article 3(1)(d) TFEU and then, second, to determine whether, as the Commission contends, the exclusive or main purpose and component of the reflection paper and the envisaged measures fall within that area of competence.82So far as concerns, in the first place, the extent of the exclusive competence that the European Union possesses under Article 3(1)(d) TFEU, it should be noted that that provision states that the abovementioned competence relates to the conservation of marine biological resources ‘under the [CFP]’.83On the basis of the ordinary meaning of those words it must be held that only conservation of marine biological resources which is undertaken under the CFP, and which is therefore inseparable from the CFP, is referred to in Article 3(1)(d) TFEU.84It is therefore only in so far as the conservation of marine biological resources is pursued under the CFP that it falls within the exclusive competence of the European Union and is, consequently, as Article 4(2)(d) TFEU expressly states, excluded from the competence that the European Union and its Member States share in the area of agriculture and fisheries.85That conclusion is supported by the origins of Article 3(1)(d) TFEU.86Initially, the Treaties prescribed, among the competences of the European Union, the establishment of a common agricultural policy including fisheries, without separate mention of the conservation of marine resources. Under that competence, the European Union adopted, on 20 October 1970, Regulation (EEC) No 2141/70 of the Council laying down a common structural policy for the fishing industry (OJ, English Special Edition 1970 (III), p. 703), Article 5 of which specifically empowered the Council to adopt measures for the conservation of fishery resources. That power was then reproduced in the Act concerning the conditions of accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland (OJ, English Special Edition, 27 March 1972, p. 14), an act in respect of which the Court has held that, at the end of the transitional period laid down by it, the Member States cease to have competence in respect of that area (see, to that effect, judgments of 14 July 1976, Kramer and Others, 3/76, 4/76 and 6/76, EU:C:1976:114, paragraph 40, and of 5 May 1981, Commission v United Kingdom, 804/79, EU:C:1981:93, paragraphs 17 and 27).87As regards, in the second place, determination of the exclusive or main purpose or component of the reflection paper and the envisaged measures, as has been recalled in paragraph 76 of the present judgment they must be determined on the basis of objective factors amenable to judicial review, namely the context, content and aims pursued by the decisions at issue.88So far as concerns, first, the context, given that the reflection paper and the envisaged measures were intended to be submitted to the CCAMLR, it is necessary to examine the tasks assigned by the Canberra Convention to that international body and the rights and obligations of the States represented within it.89In that regard, it is, admittedly, apparent from Article IX of the Canberra Convention, read in conjunction with Article II thereof, that a certain number of tasks assigned to the CCAMLR relate to the conservation of Antarctic marine living resources that are fished.90However, first of all, the introductory paragraph of the preamble to the Canberra Convention explains that that convention was adopted in view of the importance of safeguarding the environment and protecting the integrity of the ecosystem of the seas surrounding Antarctica.91 Next, the scope of the Canberra Convention is not limited merely to fishery-related resources but extends, under Article I(1) and (2), to all species of living organisms that form part of the Antarctic marine ecosystem, including birds.92Furthermore, Article V(2) of the Canberra Convention states that the parties to that convention which are not parties to the Antarctic Treaty must undertake to observe the measures agreed under that treaty for the conservation of Antarctic fauna and flora and such other measures as have been recommended by the Antarctic Treaty consultative parties in fulfilment of their responsibility for the protection of the Antarctic environment from all forms of harmful human interference, which goes well beyond the obligations normally entered into in the context of a fisheries management agreement.93 Finally, the General framework for the establishment of CCAMLR Marine Protected Areas does not assign fishing activities or the conservation of fishery resources as the main purpose of those areas. On the other hand, it is apparent from recitals 1 and 6 of that framework that the MPAs which the CCAMLR may create have as objectives the maintenance of ‘marine biodiversity’, of ‘ecosystem structure and function’ and of the ecosystem’s ‘ability to adapt in the face of climate change’, and the reduction of ‘the potential for invasion by alien species, as a result of human activity’. Also, paragraph 2 of the framework, which is intended to define those objectives, states that MPAs must contribute to the achievement of ‘the protection of representative examples of marine ecosystems, biodiversity and habitats at an appropriate scale to maintain their viability and integrity in the long term’, to the ‘protection of key ecosystem processes, habitats and species’, to ‘the protection of areas vulnerable to impact by human activities’, and to ‘the protection of features critical to the function of local ecosystems’.94It follows that not only is the CCAMLR empowered to adopt various measures falling within environmental protection, but also that such protection constitutes the main purpose and the main component of those measures.95So far as concerns, second, the content of the reflection paper and the envisaged measures, it is true, as the Advocate General has observed in point 94 of her Opinion, that particular attention is paid in them to regulation of the activity of fishing vessels. However, as is apparent from paragraphs 5.3 and 5.4 of the proposal to create an MPA in the Weddell Sea, paragraphs 3 and 7 of the proposal to create an MPA in the Ross Sea and the introductory paragraph and paragraph 10 of the proposal for the creation of special areas for scientific study of the marine area concerned, of climate change and of the retreat of ice shelves, that regulation is intended to lay down a partial, but significant, prohibition on fishing, which would be authorised only by way of exception, in order to preserve the ecosystems concerned or, in the case of that last measure, in order to enable study of the impact of climate change on the marine ecosystem that the measure covers. It follows that the very limited fishing opportunities provided for by the aforesaid measures and reflection paper in the areas concerned are justified exclusively by environmental considerations.96Also, certain provisions of the reflection paper and the envisaged measures, such as paragraph 5.5 of the proposal to create an MPA in the Weddell Sea, paragraph 10 of the proposal to create an MPA in the Ross Sea and paragraph 14 of the proposal for the creation of special areas for scientific study of the marine area concerned, of climate change and of the retreat of ice shelves, also prohibit the dumping or discharge of waste and therefore do not concern the regulation of the activities of fishing vessels as such.97Consequently, whilst it is true that the reflection paper and the envisaged measures are concerned in part with regulation of the activities of fishing vessels and therefore, in terms of content, go beyond environmental protection alone, the latter nevertheless constitutes their main component.98As regards, third, the objectives pursued by the reflection paper and the envisaged measures, it is apparent both from their preambles and from their provisions that that paper and those measures are directed at conserving, studying and protecting the ecosystems, biodiversity and habitats in the Antarctic, and at combating the harmful effects of climate change on that region, which is of the utmost importance for the world’s climate. Thus, the animal species which those measures are intended to protect are not limited to those that are fished commercially but include, inter alia, as mentioned on pages 4 and 5 of the reflection paper, in paragraph 3(1)(b) of the proposal to create an MPA in the Weddell Sea and in paragraph 3(i) of the proposal to create an MPA in the Ross Sea, certain birds and marine mammals.99Therefore, the objectives pursued by the reflection paper and the envisaged measures, which contribute to achievement of a number of the objectives, laid down in Article 191(1) TFEU, of EU environmental policy, bear out the conclusions drawn in paragraphs 94 and 97 of the present judgment.100It follows from the foregoing that, contrary to the Commission’s submissions, fisheries constitute only an incidental purpose of the reflection paper and the envisaged measures. As protection of the environment is the main purpose and component of that paper and those measures, it must be held that the contested decisions do not fall within the exclusive competence of the European Union laid down in Article 3(1)(d) TFEU, but within the competence under Article 4(2)(e) TFEU regarding protection of the environment that it shares, in principle, with the Member States.101That conclusion cannot be called into question by the fact that, under Article 11 TFEU, environmental protection requirements must be integrated into the definition and implementation of the European Union’s policies and activities, including the CFP. Whilst the European Union must comply with that provision when it exercises one of its competences, the fact remains that environmental policy is expressly referred to in the Treaties as constituting an autonomous area of competence and that, consequently, when the main purpose and component of a measure relate to that area of competence, the measure must also be regarded as falling within that area of competence (see, to that effect, Opinion 2/00 (Cartagena Protocol on Biosafety) of 6 December 2001, EU:C:2001:664, paragraphs 34 and 42 to 44).102Likewise, whilst it is admittedly open to the European Union to integrate into the CFP matters designed to implement that policy within the framework of an ecosystem-based approach intended to minimise the negative impacts of fishing activities on the marine ecosystem and to avoid the degradation of the marine environment on account of those activities, as is illustrated by recital 13 of Regulation No 1380/2013 and Articles 2(3) and 4 of that regulation, such an approach pursues a much more limited objective than the objectives pursued by the reflection paper and the envisaged measures, set out in paragraph 98 of the present judgment, and cannot therefore justify those measures being integrated into the CFP.103In the light of the foregoing, the first plea must be dismissed in its entirety as unfounded. The second plea, put forward in the alternative: breach of Article 3(2) TFEU 104In the alternative, the Commission contends that, if submission of the reflection paper and the envisaged measures to the CCAMLR were not to fall within the competence of the European Union referred to in Article 3(1)(d) TFEU, the European Union should nevertheless have put forward that paper and those measures on its behalf alone, by virtue of Article 3(2) TFEU.105The Commission points out that, under Article 3(2) TFEU, the European Union has exclusive competence for the conclusion of an international agreement where that agreement may affect common rules or alter their scope. That competence concerns not only the conclusion of international agreements but also, as in the present instance, the adoption of implementing measures by the bodies established under such agreements. Accordingly, assuming that participation in the vote that is to lead to the adoption of the envisaged measures within the CCAMLR falls within a shared competence, that competence has become exclusive for two reasons. First, those measures conflict with the multiannual position, according to which positions within that international body must be adopted by the European Union acting alone. Second, establishment of the MPAs and special research areas proposed may affect a number of rules contained in Regulations No 600/2004 and No 601/2004.106Furthermore, the Commission submits that the Council has wrongly taken the view that shared competence necessarily results in external action of the European Union and its Member States being joint action. In actual fact, according to the Commission, the Council refuses to respect the fact that, in a supposed area of shared competence, the European Union may indeed act alone and may do so by applying the decision-making procedure laid down by the Treaties.107In its defence, the Council, supported by all the intervening Member States, submits, first, that the envisaged measures, if they were to be adopted, are not liable to affect the scope of the multiannual position, because, as is apparent from Article 1 thereof and point 2 of Annex I thereto, the sphere of application of the multiannual position was limited on purpose by the Council to matters pertaining to the CFP. The envisaged measures do not fall within that policy.108The Commission’s argument concerning the two regulations referred to does not meet the evidential requirements resulting from the Court’s case-law. As the Court held in the judgment of 4 September 2014, Commission v Council (C‑114/12, EU:C:2014:2151, paragraph 75), it is for the party which pleads that the external competence of the European Union is exclusive to prove this. However, the Commission has not put forward any evidence or arguments to establish that the external competence of the European Union invoked by it on the basis of Article 3(2) TFEU is exclusive. In any event, the envisaged measures do not contain any provision that may affect the application of Regulations No 600/2004 and 601/2004, because those regulations concern fishing activities and not, as in the present instance, activities for the conservation of biological resources.109Finally, as regards the argument that the Council has confused shared competence and the joint nature of the action, although this argument was set out by the Commission in its applications the Council chose not to respond to it.110So far as concerns the argument relating to the application of Article 3(2) TFEU, it should be recalled, first of all, that under that provision the European Union has exclusive competence for the conclusion of an international agreement when its conclusion may affect common rules or alter their scope.111Thus, in reserving exclusive competence for the European Union to adopt an agreement in the circumstances specified in Article 3(2) TFEU, the EU legislature seeks by that provision to prevent the Member States from being able, unilaterally or collectively, to undertake obligations with third States which may affect common rules or alter their scope (see, to that effect, Opinion 2/15 (EU-Singapore Free Trade Agreement) of 16 May 2017, EU:C:2017:376, paragraph 170).112In the light of that objective, Article 3(2) TFEU must therefore be interpreted, in order to preserve its practical effect, as meaning that, although its wording refers solely to the conclusion of an international agreement, it also applies, at an earlier stage, when such an agreement is being negotiated and, at a later stage, when a body established by the agreement is called upon to adopt measures implementing it.113Next, it is apparent from settled case-law that there is a risk that common EU rules may be adversely affected by international commitments undertaken by the Member States, or that the scope of the rules may be altered, such as to justify an exclusive external competence of the European Union where those commitments fall within the scope of those rules. However, a finding that there is such a risk does not presuppose that the area covered by the international commitments and that covered by the EU rules coincide fully. In particular, the scope of EU rules may be affected or altered by international commitments where the latter fall within an area which is already covered to a large extent by such rules (Opinion 1/13 (Accession of third States to the Hague Convention) of 14 October 2014, EU:C:2014:2303, paragraphs 71 to 73).114Furthermore, such a risk of common EU rules being affected may be found to exist where the international commitments at issue, without necessarily conflicting with those rules, may have an effect on their meaning, scope and effectiveness (see, to that effect, judgment of 4 September 2014, Commission v Council, C‑114/12, EU:C:2014:2151, paragraph 102, and Opinion 1/13 (Accession of third States to the Hague Convention) of 14 October 2014, EU:C:2014:2303, paragraph 85).115It is for the party concerned to put forward evidence or arguments to establish that the exclusive nature of the external competence of the European Union on which it seeks to rely has been disregarded (see, to that effect, judgment of 4 September 2014, Commission v Council, C‑114/12, EU:C:2014:2151, paragraph 75).116In the present instance, the Commission has not put forward such evidence or arguments.117In the first place, in order to establish that the international commitments at issue fall within an area already covered by EU rules, the Commission merely refers to the content of the multiannual position and of Regulations No 600/2004 and No 601/2004, without analysing whether their sphere of application covers ‘to a large extent’ those of the international commitments.118In that regard, it follows from the analysis set out in paragraphs 89 to 92 of the present judgment that the Canberra Convention empowers the CCAMLR, to which the reflection paper and the envisaged measures were addressed, to adopt measures the main component and purpose and, therefore, the sphere of application of which is essentially the protection of the environment.119On the other hand, it is apparent that the area covered by the multiannual position and by Regulations No 600/2004 and No 601/2004 is, in essence, limited to fisheries. First, it is apparent from Article 1 of the multiannual position and point 2 of Annex I thereto that the multiannual position covers the positions to be taken on behalf of the European Union within the CCAMLR when that body is called upon to adopt decisions having legal effects in areas connected with the CFP. Second, it follows from recitals 4 and 5 of Regulation No 600/2004 and recital 6 of Regulation No 601/2004 and from the wording of Article 1 of each of those regulations that the latter are essentially intended to govern fishing activities in the area covered by the Canberra Convention.120Thus, the sphere of application of the international commitments concerned cannot be regarded, in any event, as falling ‘to a large extent’ within that already covered by the multiannual position or by Regulations No 600/2004 and No 601/2004.121In the second place, the Commission has not provided sufficient evidence or arguments relating to the nature of the alleged risk of an effect.122So far as concerns the multiannual position, the Commission merely states that it does not lay down an obligation that the European Union must act jointly with the Member States. In that regard, it need only be noted that Article 1 of the multiannual position specifies that the latter concerns solely establishment of the position of the European Union in the annual meeting of the CCAMLR when that body is called upon to adopt decisions having legal effects in relation to matters pertaining to the CFP. It follows that, in any event, the multiannual position did not predetermine in the slightest whether the contested decisions, whose main component and purpose fall within environmental policy, had to be adopted by the European Union alone or by the European Union acting with the participation of the Member States.123Likewise, so far as concerns Regulations No 600/2004 and No 601/2004, the Commission has admittedly set out a number of common rules which, in its submission, could be adversely affected by the envisaged measures if they were to be adopted and has thus put forward some evidence or arguments that might demonstrate that the envisaged measures fall, at any rate in part, within the sphere of application of Regulations No 600/2004 and No 601/2004. However, it has not identified, in order to demonstrate that the envisaged measures may affect the meaning, scope and effectiveness of those regulations, the provisions of those measures which are said to give rise to those adverse effects, or even specified in what the adverse effects consist.124Therefore, the Commission’s argument that the contested decisions were adopted in breach of Article 3(2) TFEU must be rejected as unfounded.125As for the Commission’s argument that the Council has confused the concepts of ‘shared competence’ and of ‘joint nature of external action’ and, consequently, has not accepted that, in an area of shared competence, the European Union may act alone, that argument cannot succeed.126It is true that the Court has had occasion to state that the mere fact that international action of the European Union falls within a competence shared between it and the Member States does not preclude the possibility of the required majority being obtained within the Council for the European Union to exercise that external competence alone (see, to that effect, judgment of 5 December 2017, Germany v Council, C‑600/14, EU:C:2017:935, paragraph 68, citing paragraph 244 of Opinion 2/15 (EU-Singapore Free Trade Agreement) of 16 May 2017, EU:C:2017:376).127That said, in accordance with settled case-law, when the European Union decides to exercise its powers they must be exercised in observance of international law (see, to that effect, inter alia, judgment of 3 September 2008, Kadi and Al Barakaat International Foundation v Council and Commission, C‑402/05 P and C‑415/05 P, EU:C:2008:461, paragraph 291 and the case-law cited).128In the specific context of the system of Antarctic agreements, exercise by the European Union of the external competence at issue in the present cases that excludes the Member States would be incompatible with international law.129It is clear from reading Article VII(2)(c) of the Canberra Convention in conjunction with Article XXIX(2) thereof that a regional economic integration organisation, such as the European Union, can accede to that convention and become a member of the CCAMLR only if its Member States are members. On the other hand, no analogous condition is laid down tying the presence of those States within the CCAMLR to the fact that the regional organisation concerned is also a member of that commission.130Consequently, the Canberra Convention does not grant regional integration organisations, such as the European Union, a fully autonomous status within the CCAMLR.131That is all the more the case given that the set of treaties and international agreements applicable to the Antarctic forms an organised and coherent system, headed by the oldest and most general treaty among them, namely the Antarctic Treaty, a fact which is reflected by Article V of the Canberra Convention. It follows from Article V that even the parties to the Canberra Convention which are not parties to the Antarctic Treaty acknowledge the special obligations and responsibilities of the Antarctic Treaty consultative parties and, consequently, observe the various measures recommended by them. Therefore, the Antarctic Treaty consultative parties have primary responsibility for developing the aforesaid set of Antarctic agreements and for safeguarding its coherence.132The European Union is one of the Contracting Parties to the Canberra Convention to which the provisions of Article V(1) and (2) of that convention are addressed, since it is not a party to the Antarctic Treaty. It follows, in particular, that it is required to acknowledge the special obligations and responsibilities of the Antarctic Treaty consultative parties, including of those of its Member States which have that status, whether or not they are members of the CCAMLR.133In those circumstances, to permit the European Union to have recourse, within the CCAMLR, to the power which it has to act without the participation of its Member States in an area of shared competence, when, unlike it, some of them have the status of Antarctic Treaty consultative parties, might well, given the particular position held by the Canberra Convention within the system of Antarctic agreements, undermine the responsibilities and rights of those consultative parties — which could weaken the coherence of that system of agreements and, ultimately, run counter to Article V(1) and (2) of the Canberra Convention.134It follows that the second plea, put forward in the alternative, must be dismissed.135As neither of the two pleas has been upheld, the action must be dismissed in its entirety. Costs 136Article 138(1) of the Rules of Procedure provides that the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. In the present instance, since the Commission has been unsuccessful, it must, in accordance with the forms of order sought by the Council, be ordered to bear its own costs and to pay those incurred by the Council.137In addition, Article 140(1) of the Rules of Procedure provides that the Member States and institutions which have intervened in the proceedings are to bear their own costs. Consequently the Kingdom of Belgium, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom are to bear their own costs.On those grounds, the Court (Grand Chamber) hereby: 1. Dismisses the actions; 2. Orders the European Commission to bear its own costs and to pay those incurred by the Council of the European Union; 3. Orders the Kingdom of Belgium, the Federal Republic of Germany, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Portuguese Republic, the Republic of Finland, the Kingdom of Sweden and the United Kingdom of Great Britain and Northern Ireland to bear their own costs. [Signatures]( *1 ) Language of the case: French. | f288d-5dfc2bf-40f5 | EN |
The General Court annuls the Commission’s decision not to raise objections to the aid scheme establishing a capacity market in the UK | 15 November 2018 ( *1 )(State aid — United Kingdom capacity market — Aid scheme — Article 108(2) and (3) TFEU — Concept of doubts within the meaning of Article 4(3) or (4) of Regulation (EC) No 659/1999 — Guidelines on State aid for environmental protection and energy 2014-2020 — Decision not to raise any objections — No initiation of the formal investigation procedure — Procedural rights of interested parties)In Case T‑793/14, Tempus Energy Ltd, established in Worcester (United Kingdom), Tempus Energy Technology Ltd, established in Cheltenham (United Kingdom),represented initially by J. Derenne, J. Blockx, C. Ziegler and M. Kinsella, subsequently by J. Derenne, J. Blockx and C. Ziegler, and finally by J. Derenne and C. Ziegler, lawyers,applicants,v European Commission, represented by É. Gippini Fournier, R. Sauer, K. Herrmann and P. Němečková, acting as Agents,defendant,supported by United Kingdom of Great Britain and Northern Ireland, represented initially by C. Brodie and L. Christie, acting as Agents, and G. Facenna QC, subsequently by S. Simmons, M. Holt, C. Brodie and S. Brandon, acting as Agents, and G. Facenna QC, subsequently by M. Holt, C. Brodie, S. Brandon and D. Robertson, acting as Agents, and G. Facenna QC, and finally by S. Brandon, acting as Agent,intervener,APPLICATION under Article 263 TFEU for annulment of Commission Decision C(2014) 5083 final of 23 July 2014 not to raise objections to the aid scheme for the capacity market in the United Kingdom, on the ground that that scheme is compatible with the internal market pursuant to Article 107(3)(c) TFEU (State aid 2014/N-2) (OJ 2014 C 348, p. 5).THE GENERAL COURT (Third Chamber, Extended Composition),composed of S. Frimodt Nielsen, President, V. Kreuschitz, I.S. Forrester, N. Półtorak (Rapporteur) and E. Perillo, Judges,Registrar: P. Cullen, Administrator,having regard to the written part of the procedure and further to the hearing on 11 July 2017,gives the following Judgment I. Background to the dispute A. Applicants and subject matter of the dispute 1The applicants, Tempus Energy Ltd, formerly known as Alectrona Grid Services Ltd, and Tempus Energy Technology Ltd (together, ‘Tempus’) sell electricity consumption management technology, also known as ‘demand-side response’ (‘DSR’), to individuals and professionals and hold a licence to operate as an electricity supply business in the United Kingdom.2The service that Tempus provides to its clients is intended to create cost efficiencies for its clients in the electricity supply chain by combining DSR technology with the services provided by an electricity supplier. Tempus sells electricity and helps its customers to move their non-time critical electricity usage to periods when wholesale prices are low, either because demand is low or because power from renewable sources is plentiful and therefore cheaper.3It is apparent from the documents before the Court that it is customary for demand-side response operators (‘DSR operators’) to enter into contracts with energy customers, which are often industrial and commercial customers or small- to medium-sized enterprises, under which the customer agrees to be flexible in the consumption of their electricity at a particular time period. The DSR operator calculates the total capacity available from all of the flexible customers at any one time and can then offer that capacity to the electricity network operator — National Grid (‘NG’) in the present case — in exchange for a payment, which it passes back to the flexible customer, whilst retaining a small profit margin for itself.4By its action, Tempus seeks the annulment of Commission Decision C(2014) 5083 final of 23 July 2014 not to raise objections to the aid scheme for the capacity market in the United Kingdom, on the ground that that scheme is compatible with the internal market pursuant to Article 107(3)(c) TFEU (State aid 2014/N-2) (OJ 2014 C 348, p. 5) (‘the contested decision’). B. The contested measure 5Through the aid scheme that is the subject of the contested decision (‘the measure at issue’), the United Kingdom of Great Britain and Northern Ireland establishes a capacity market involving centrally-managed auctions to procure the level of capacity required to ensure capacity adequacy. That aid scheme involves remunerating electricity capacity providers in exchange for their commitment to provide electricity or reduce or delay their electricity consumption during times of system stress (recital 4 of the contested decision).6The legal basis for the measure at issue is the UK Energy Act 2013 and the regulatory acts adopted on the basis of that Act, in particular the Electricity Capacity Regulations 2014 and the Capacity Market Rules 2014.7The capacity market works as follows: the amount of capacity required is decided centrally and the appropriate price for the supply of that amount is determined by the market through auctions in which all eligible capacity providers compete (recital 145 of the contested decision). The United Kingdom Government decides the amount of capacity required by taking into account, inter alia, recommendations from the electricity network operator, NG (recital 11 of the contested decision).8With regard to the auctions, the measure at issue provides as follows: each year, during the main auction, the capacity to be delivered four years later is auctioned (‘the T‑4 auction’); the capacity that was auctioned in 2014, for example, was to be delivered in 2018/2019, the delivery period running from 1 October 2018 to 30 September 2019 (recital 43 of the contested decision). Another auction takes place during the year prior to the delivery year of the main auction (‘the T‑1 auction’).9Some capacity will be systematically held back from the T‑4 auction and ‘reserved’ for the T‑1 auction; the amount of reserved capacity is to be based on an estimate of the amount of the ‘cost-effective’ DSR that could participate in the T‑1 auction and will be made public when the demand curve for the T‑4 auction is published (recital 45 of the contested decision). If demand falls between the T‑4 auction and the T‑1 auction, the amount of capacity auctioned in the T‑1 auction will be reduced. However, the contested decision notes that, because the T‑1 auctions provide a better route for DSR operators to access the market, the United Kingdom Government commits to procure in the T‑1 auctions at least 50% of the capacity ‘reserved’ four years earlier. The contested decision adds that flexibility will be retained to remove this guarantee if DSR does not prove cost-effective in the long run or if the DSR industry is considered sufficiently mature (recital 46 of the contested decision). The T‑4 auction and the T‑1 auction form the enduring regime.10With the temporary exception of interconnectors and foreign capacity providers, existing and new generators, DSR operators and storage operators are allowed to participate in the enduring auctions (recitals 4 and 149 of the contested decision).11In addition to the enduring regime, there is a transitional regime. Prior to the delivery period 2018/2019, ‘transitional’ auctions are scheduled, principally aimed at DSR operators. The first transitional auction was scheduled for 2015 for a delivery period running from October 2016 to September 2017; the second transitional auction was scheduled for 2016 for a delivery period running from October 2017 to September 2018 (recital 51 of the contested decision).12Generating and DSR resources participating in the capacity market are called ‘Capacity Market Units’ (‘CMUs’). Generating CMUs may participate individually as a CMU or in the aggregate with other eligible generating units subject to certain conditions. One of those conditions is that the aggregate capacity of all the units must be between the 2 megawatt (MW) de minimis threshold and 50 MW (recital 16 of the contested decision).13DSR CMUs are defined with reference to a commitment to reduce demand. Such commitment requires the DSR operator to cause its customer to reduce the import of electricity (as measured by half hourly meters) and/or export electricity generated by on-site generating units. Each component of a DSR CMU must be connected to a half-hourly meter and the provider’s total DSR capacity must be between 2 MW and 50 MW (recital 17 of the contested decision).14Eligible capacity providers have to undergo a pre-qualification process, which, in addition to basic administrative details, includes specific requirements depending on whether the potential participant is an existing or prospective operator (recital 26 of the contested decision). New capacity-generating providers and unproven DSR capacity providers (as opposed to proven DSR capacity providers, the declared capacity of which has been proved by the provider in a test) are also to be required to submit a bid bond of GBP 5000 (around EUR 5650) per megawatt for T‑4 auctions and T‑1 auctions and of GBP 500 (around EUR 565) per megawatt for transitional auctions.15The electricity network operator, NG, is responsible for organising the auctions in order to obtain the capacity level required to ensure electrical capacity adequacy.16Each auction will be a descending-clock, pay-as-clear auction in which all successful participants are paid the last-accepted bid. A high price is announced at the beginning of the auction, and participants submit bids to indicate how much capacity they are willing to supply at that price. This process is repeated in successive rounds according to a predetermined schedule until the auction discovers the lowest price at which demand equals supply, being the clearing price. All successful participants are paid the same clearing price (pay-as-clear model) (recital 49 of the contested decision).17Therefore, if successful at the auction, capacity providers are awarded a capacity agreement at the clearing price. The capacity agreements bid for by the applicants differ in terms of their length. Most existing capacity providers are to have access to one year agreements. Capacity providers undertaking capital expenditure above a GBP 125 per kilowatt (kW) (around EUR 141) threshold (plants to be refurbished) are to be eligible for capacity agreements of up to a maximum of 3 years. Capacity providers undertaking capital expenditure above a GBP 250 per kW (around EUR 282) threshold (new plants) are to be eligible for capacity agreements of up to a maximum of 15 years (recital 57 of the contested decision). Agreements longer than one year will only be available to participants in T‑4 auctions. In each case, the terms of the capacity agreement, including the capacity price, apply throughout the length of the contract.18Successful participants secure a steady payment during the term of their capacity agreement, which is financed through a levy on electricity providers. In return, they commit to deliver electricity at times of system stress. Financial penalties apply if successful participants do not deliver the amount of energy according to their capacity obligation set out in their agreement (recital 4 of the contested decision). Further, the capacity market is subject to a review process (recital 6 of the contested decision).19The costs incurred to fund capacity payments are to be paid by all licensed electricity suppliers (‘the cost recovery method’). Electricity suppliers’ charges are to be determined based on their forecast market share and calculated based on demand measured between 16.00 and 19.00 on all weekdays from November to February in order to incentivise suppliers to reduce their customers’ electricity demand at those times when demand is typically highest. According to the contested decision, this should reduce the amount of capacity that is needed, thereby also reducing the cost of the capacity market (recital 69 of the contested decision).20The gross capacity revenues paid to capacity providers have been modelled to be between GBP 0.9 billion and GBP 2.6 billion (around EUR 1.02 billion and EUR 2.94 billion) per year, that is between GBP 8.1 billion and GBP 23.4 billion (around EUR 9.14 billion and EUR 26.4 billion) in the period between 2018 and 2024, with that amount varying according to the level of ‘new build capacity’ required (recital 7 of the contested decision). C. Relevant guideline provisions 21It should be borne in mind that, in the specific field of State aid, the European Commission may adopt guidelines on the exercise of its powers of assessment and, in so far as those guidelines do not contradict Treaty rules, the policy rules that they contain are to be followed by that institution (judgment of 13 June 2002, Netherlands v Commission, C‑382/99, EU:C:2002:363, paragraph 24 and the case-law cited).22Further, in its answers to the written questions put by the Court and again during the hearing, Tempus expressly confirmed that it did not contest the establishment of a capacity market as such, but only, first, the assessment of the elements provided by the United Kingdom regarding the impact of DSR and, second, the procedures envisaged to allow DSR operators to participate in the capacity market.23Among the various provisions of the Guidelines on State aid for environmental protection and energy 2014-2020 (OJ 2014 C 200, p. 1; ‘the Guidelines’) adopted by the Commission on 9 April 2014 and which entered into force on 1 July 2014, when considering a situation in which the principle of aid to procure the level of capacity required to ensure capacity adequacy is accepted (see paragraph 22 above), the relevant provisions for the purposes of the outcome of the dispute are the following.24First, in paragraph 224(b) under point 3.9.2, ‘Need for State intervention’, the Guidelines provide that, in its assessment of the elements provided by the relevant State, the Commission is to take account of, inter alia, the ‘assessment of the impact of demand-side participation, including a description of measures to encourage demand side management’.25Second, in paragraph 226, under point 3.9.3, ‘Appropriateness’, the Guidelines state as follows:‘The measure should be open and provide adequate incentives to both existing and future generators and to operators using substitutable technologies, such as demand-side response or storage solutions. The aid should therefore be delivered through a mechanism which allows for potentially different lead times, corresponding to the time needed to realise new investments by new generators using different technologies. The measure should also take into account to what extent interconnection capacity could remedy any possible problem of generation adequacy.’26Third, as stated in paragraph 229, under point 3.9.5, ‘Appropriateness’, the Guidelines note that a ‘competitive bidding process on the basis of clear, transparent and non-discriminatory criteria, effectively targeting the defined objective, will be considered as leading to reasonable rates of return under normal circumstances’.27Fourth, in paragraph 232(a), under point 3.9.6, ‘Avoidance of undue negative effects on competition and trade’, the Guidelines point out, inter alia, that ‘the measure should be designed in a way so as to make it possible for any capacity which can effectively contribute to addressing the generation adequacy problem to participate in the measure, in particular, taking into account ... the participation of generators using different technologies and of operators offering measures with equivalent technical performance, for example, demand side management, interconnectors and storage’. That provision also observes that restriction on participation ‘can only be justified on the basis of insufficient technical performance required to address the generation adequacy problem.’ D. The contested decision 28In the contested decision, with regard to Article 107(1) TFEU, the Commission took the view that the measure at issue did constitute State aid (recitals 109 to 115 of the contested decision).29Concerning the compatibility of the measure at issue with the internal market, the Commission noted that it had based its assessment on the conditions established under point 3.9 of the Guidelines, which sets specific conditions for procuring the level of capacity required to ensure capacity adequacy.30Under point 3.3.1, ‘Objective of common interest and necessity of the aid’, of the contested decision, the Commission states as follows:‘(118)The Commission finds that the measure contributes to an objective of common interest and is necessary as required by Sections 3.9.1 and 3.9.2 of [the Guidelines] ...(119)First, the UK has put in place a methodology to identify the generation adequacy concern. The modelling work undertaken by the UK shows that the enduring reliability adequacy standard — indicator chosen to measure generation adequacy — may reach critical levels as of 2018/2019. The findings are broadly consistent with those published by ENTSO-E [European Network of Transmission System Operators for Electricity] in its latest system adequacy report. ...(120)NG’s Electricity Capacity report has been examined by an independent Panel of Technical Experts (“PTE”) appointed by [the Department of Energy and Climate Change]. On 30 June 2014, the [Department of Energy and Climate Change] published the PTE’s report on the analysis underpinning NG’s recommendations on the amount of capacity to procure for the first auction. PTE concluded that NG’s overall Scenario and model-based approach is in principle sound, and NG sought to take account of evidence and stakeholders’ views. However, PTE’s consensus view is that NG tended to take an overly conservative view on a few key assumptions, most notably interconnector flows which would overestimate the amount of capacity to procure. PTE also noted that less conservative assumptions could be enough to avoid the need for procuring new generation capacity.(121)The UK authorities explained that they have taken into account both NG’s advice and PTE’s report and have considered carefully the differences in their respective analyses. ... The UK explained that, based on the evidence presented, Ministers decided to follow the advice of NG as system operator.(122)As for the contribution of DSR, the UK submitted that holding the first auction in December 2014 will be key to revealing information about DSR and DSR potential. In response to the PTE’s report, NG has suggested a joint project with the Energy Networks Association (including Distribution Network Operators) to understand the current and potential DSR capacity. In addition, the UK has developed transitional auction arrangements to support the growth of DSR from 2015 to [2016] and a [GBP 20] million Electricity Demand Reduction pilot. Finally, the UK explained that it will also carry out evaluations of data coming from the first T‑4 auction and ensure demand curves are adjusted appropriately, which will feed into NG’s Future Energy Scenario process for Electricity Capacity Reports ahead of subsequent auctions....(124)The Commission appreciates the initiatives launched by the UK to address the recommendations from the PTE. The Commission considers that some of the issues identified by PTE are serious; in particular the appreciation of an overly conservative estimate that interconnectors render a zero-net contribution during stress events. ...(125)The Commission considers that [the commitments made by the UK] address the methodological concerns over the contribution of interconnectors during stress events.(128)Fourth, the notified measure may result in support to fossil fuel generation. However, as reported in recitals (88) to (94), the UK is considering or is implementing additional measures to address the identified market failures. These measures aim at improving DSR, reforming the cash-out arrangements and promoting increased levels of interconnection. The Commission considers that these alternative measures should therefore lead to a reduction of the amounts of capacity to procure under the notified measure. In addition, the Commission notes that the UK is bringing forward ad hoc measures to support low-carbon generation (e.g. Contracts for Differences) and has passed stringent emission performance standards to prevent commissioning high carbon intensive generation. As a result, the Commission considers that the UK has explored sufficiently means of mitigating the negative impacts that the notified measure may have on the objective of phasing out environmentally harmful subsidies. Furthermore, the Commission notes that the generation adequacy assessment — conducted on an annual basis — takes into account the amount of generation, the contribution of interconnectors while being open to all types of capacity providers, including demand side management operators.(129)With regards to the submission by the DSR operators, the Commission shares the UK’s view that 15-year capacity agreements may be justified for new plants while existing plants and DSR, in view of their lower capital cost requirements (indicating a reduced importance of securing financing) may not benefit significantly from longer contracts ... . As such, the Commission does not consider that shorter contracts clearly put existing plants and DSR at a disadvantage to new generation. The measure is technology neutral and therefore does not strengthen the position of fossil fuel generation operators. The Commission also notes that the cost charging methodology retains an incentive to reduce demand at peak times, while being predictable for suppliers.’31Under point 3.3.2, ‘Appropriateness of the aid’, of the contested decision, the Commission states as follows:‘(130)The Commission finds that the measure is appropriate as required by Section 3.9.3 of [the Guidelines]. ...(131)First, the measure addresses the identified market failures as shown in Table 1. Furthermore, the measure has been designed to support and complement ongoing developments in the market and to be consistent with the internal energy market and EU energy policies: i.e. the development of an active demand response, increased competition and investment in interconnected capacity. ...–The Capacity Market will support the development of an active demand side. Demand side resources will be able to receive capacity payments, and there will be specific measures to help build the capability of this industry which is still in its infancy. The Capacity Market will support increased liquidity and competition (in both the capacity and electricity markets).(134)Third, the measure is open to existing and new generators, to storage operators and to DSR operators. The auctioning process has been designed to consider different lead times to make capacity available. Capacity providers can bid for lead times of one or four years ahead, which should cater for the needs of new generation plants and for the refurbishment of existing plants.(140)Regarding the submission by DSR providers, the Commission notes that the exclusion of DSR providers holding a capacity agreement for the enduring regime from participating in the transitional auctions for DSR is in fact intended to promote the development of the DSR sector. In addition, in light of the objective pursued by the scheme, the Commission finds the lack of additional remuneration for the savings in transmission and distribution losses from DSR justifiable.’32Under point 3.3.5, ‘Avoidance of negative effects on competition and trade’, of the contested decision, the Commission notes as follows:‘(149)... the measure is open to all existing and new generators, DSR and storage operators subject to the eligibility requirements listed in recitals (15) to (18).’ II. Procedure and forms of order sought 33By application lodged at the Court Registry on 4 December 2014, Tempus brought the present action.34By document lodged at the Court Registry on 15 April 2015, the United Kingdom applied for leave to intervene in the present case in support of the form of order sought by the Commission. By order of 30 June 2015, the President of the Eighth Chamber of the Court granted leave to intervene. The United Kingdom lodged a statement in intervention and the main parties submitted their observations on that statement within the prescribed periods.35Following a change in the composition of the Court, the case was assigned to a different Judge-Rapporteur on 27 April 2016.36Following a change in the composition of the Chambers of the Court, the Judge-Rapporteur was assigned to the Third Chamber, to which the present case was therefore assigned.37By a measure of organisation of procedure of 20 December 2016, the Court invited the Commission to submit to it the notification of the measure at issue that had been sent to it by the United Kingdom.38By document lodged at the Court Registry on 13 February 2017, the Commission presented to the Court a non-confidential version of the notification that had been sent to it by the United Kingdom. It maintained that the notification at issue was a confidential document protected by Article 339 TFEU, and therefore could not be sent to Tempus. It stated that it could not send that document to the Court on the basis of a measure of organisation of procedure pursuant to Article 90 of the Rules of Procedure of the Court. The Commission indicated that, if the Court ordered it to produce that document on the basis of Article 91 of the Rules of Procedure, it would immediately comply with that measure of inquiry.39By order of 9 March 2017, relating to a measure of inquiry concerning the production of documents, the Court instructed the Commission, pursuant to Article 91(b), Article 92(1) and Article 103(1) of the Rules of Procedure, to produce the notification of the measure at issue that had been sent to it by the United Kingdom. The Commission complied with that request on 16 March 2017.40By measure of organisation of procedure of 3 April 2017, the Court communicated to the Commission and the United Kingdom its intention to include a number of extracts from the notification in the case-file. The Court invited them to submit observations regarding the disclosure of those extracts. The United Kingdom and the Commission submitted their respective observations in respect of the disclosure of those extracts on 19 April 2017 and 24 April 2017.41On 5 May 2017, some of the extracts from the notification, which were assessed as being relevant and non-confidential, were added to the case-file and sent to Tempus (‘the notification’).42By a measure of organisation of procedure of 5 May 2017, the Court invited all of the parties to provide replies to a series of questions. In essence, the Court’s questions to the parties related to certain paragraphs of the Guidelines and certain concepts that they refer to. The questions to the parties concerned, inter alia, the information available when the contested decision was adopted regarding the assessment of DSR and its possible technology developments with respect to security of supply in the United Kingdom. Further, the Commission was invited to outline its position with regard to certain statements in the contested decision and the elements available to it when it assessed the measure at issue. In addition, the Court invited Tempus to comment on the Commission’s statements in its rejoinder relating to the cost recovery method. The Commission was also invited to indicate the elements on which it had based its assessment in respect of the financing needs of the DSR operators, and Tempus was invited to indicate what evidence of their financing needs they had provided to the United Kingdom and the Commission.43On 22 May 2017, the parties complied with that measure.44By documents lodged at the Court Registry on 17 May 2017 and 9 June 2017, Tempus submitted observations on the report for the hearing.45By document lodged at the Court Registry on 29 June 2017, Tempus requested, on the basis of the principle of the equality of arms, that the Court re-examine Annex B to the notification, on which the Commission and the United Kingdom relied in their replies to the measure of organisation of procedure of 5 May 2017, and decide whether other parts of that annex that had not yet been disclosed had to be sent to the Court.46By order of 3 July 2017, relating to a measure of inquiry concerning the production of documents, the Court instructed the Commission, pursuant to Article 91(b), Article 92(1) and Article 103(1) of the Rules of Procedure, to produce Annex B to the notification. The Commission complied with that request on 4 July 2017. On 6 July 2017, that annex, which the Court found to be relevant and non-confidential, was added to the case-file and sent to Tempus.47Tempus claims that the Court should:annul the contested decision;order the Commission to pay the costs.48The Commission contends that the Court should:dismiss the action as inadmissible, or, in any case, as unfounded;order Tempus to pay the costs.49The United Kingdom supports the form of order sought by the Commission and seeks the dismissal of the action. III. Law A. Admissibility 50The Commission notes, in its defence, that, in order for it to be admissible, the action of an interested party must be intended to safeguard the procedural rights available to it under Article 108(2) TFEU and Article 6(1) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1). Therefore, Tempus’s arguments in respect of its first plea in law should be taken into account only to the extent that they seek to show that the Commission had not succeeded in overcoming the serious doubts that it must have encountered during the preliminary examination phase and that this affected Tempus’s procedural rights.51In that regard, it should be noted that the aim of the Commission’s argument is not to contest the admissibility of the action in its entirety, but only the part of the application that does not relate to the defence of Tempus’s procedural rights. During the hearing, the Commission accepted that the parties could agree that it was admissible for Tempus to defend its procedural rights. Moreover, it must be noted that the Commission has not specified the arguments that, in its view, should not be taken into account on the ground that they do not relate to Tempus’s procedural rights.52Having regard to the foregoing, the Commission’s argument relating to the admissibility of the first plea in law cannot be upheld. B. Substance 53As an interested party and in order to safeguard the procedural rights available to it under Article 108(2) TFEU and Article 6(1) of Regulation No 659/1999, Tempus submits two pleas in law in support of its action alleging, first, infringement of Article 108(2) TFEU and of several other rules and, second, a failure to state grounds. 1. The first plea in law, alleging infringement of Article 108(2) TFEU, infringement of the principles of non-discrimination, proportionality and protection of legitimate expectations and incorrect assessment of the facts (a) Preliminary observations 54As the United Kingdom and the Commission state, respectively, in the notification and the contested decision, there is a risk that the electricity available in the United Kingdom will be insufficient in the near future for the purposes of satisfying high-demand periods. The oldest generating plants will shortly be closing, and the electricity market is at risk of failing sufficiently to encourage generators to develop new generation capacities to make up for those closures. Equally, the electricity market does not offer sufficient encouragement to consumers to reduce their demand in order to remedy the situation. In order to guarantee the security of electricity supply, the United Kingdom therefore concluded that it was necessary to establish a capacity market.55The fundamental objective of the capacity market was to encourage capacity providers, that is to say, principally, both electricity generators (power plants, including those using fossil fuels) and DSR operators, who offer a service whereby consumption is rescheduled or reduced, to take into account the difficulties that may arise during high-demand periods. Thus, even if they intervene at different levels — supply for generation, demand for consumption — generators and DSR operators are essential elements for the structure and functioning of the capacity market envisaged by the United Kingdom.56Tempus takes the view that the Commission could not conclude, following a preliminary examination and in the light of the information available at the time when the contested decision was adopted, that the capacity market envisaged did not raise doubts as to its compatibility with the internal market. In that respect, Tempus highlights, as a DSR operator, seven aspects of the capacity market that do give rise to such doubts within the meaning given to that concept in Article 4 of Regulation No 659/1999. In essence, it submits that the capacity market privileges generation over DSR in a discriminatory and disproportionate manner that goes beyond what is necessary to achieve the objectives of the aid scheme and satisfy the relevant rules arising from EU law. (b) Concept of doubts and the Commission’s decision whether or not to initiate a formal investigation procedure 57As is apparent from Article 108(3) TFEU, if, after having been informed of a plan to grant aid, the Commission considers that any such plan is not compatible with the internal market, it is to initiate without delay the procedure provided for in Article 108(2) TFEU. In accordance with the procedure envisaged by that provision, the Commission is then obliged to give the parties concerned notice to present their observations.58In that regard, Article 4 of Regulation No 659/1999 notes that, in so far as the plan notified by the relevant Member State does actually constitute a grant of aid, it is the presence or absence of doubts as to the compatibility of that plan with the internal market that allows the Commission to decide whether or not to initiate a formal investigation procedure after a preliminary examination, and provides as follows:‘1. The Commission shall examine the notification as soon as it is received. ...2. Where the Commission, after a preliminary examination, finds that the notified measure does not constitute aid, it shall record that finding by way of a decision.3. Where the Commission, after a preliminary examination, finds that no doubts are raised as to the compatibility with the [internal] market of a notified measure, in so far as it falls within the scope of Article [107](1) [TFEU], it shall decide that the measure is compatible with the [internal] market ([“the] decision not to raise objections”). The decision shall specify which exception under the Treaty has been applied.4. Where the Commission, after a preliminary examination, finds that doubts are raised as to the compatibility with the [internal] market of a notified measure, it shall decide to initiate proceedings pursuant to Article [108](2) TFEU ([“the] decision to initiate the formal investigation procedure”). ...’59Article 6 of Regulation No 659/1999 then sets out the detailed rules for the formal investigation procedure:‘1. The decision to initiate the formal investigation procedure shall summarise the relevant issues of fact and law, shall include a preliminary assessment of the Commission as to the aid character of the proposed measure and shall set out the doubts as to its compatibility with the [internal] market. The decision shall call upon the Member State concerned and upon other interested parties to submit comments within a prescribed period which shall normally not exceed one month. ...2. The comments received shall be submitted to the Member State concerned. ... The Member State concerned may reply to the comments submitted ... .’60Under the procedure for reviewing State aid, it is therefore necessary to distinguish between the preliminary stage of the procedure for reviewing aid under Article 108(3) TFEU, which is governed, inter alia, by Article 4 of Regulation No 659/1999 and is intended merely to allow the Commission to form a prima facie opinion on the partial or complete conformity of the aid in question, and the investigation stage envisaged by Article 108(2) TFEU, which is governed, inter alia, by Article 6 of Regulation No 659/1999 and is designed to enable the Commission to be fully informed of all the facts of the case (see judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraphs 57 and the case-law cited).61The Commission may restrict itself to the preliminary stage under Article 108(3) TFEU in order to take a decision favourable to an aid measure if it can satisfy itself, after having undertaken a preliminary investigation, that the project concerned is compatible with the FEU Treaty. However, where that preliminary investigation has led the Commission to the opposite conclusion or if such an investigation does not permit all the difficulties involved in determining whether the aid is compatible with the internal market to be overcome, the Commission is under a duty to carry out all the requisite consultations and for that purpose to initiate the procedure under Article 108(2) TFEU (see judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraphs 58 and 59 and the case-law cited).62With regard to the concept of ‘doubts’ as to the compatibility of the notified measure with the internal market, referred to in Article 4(3) and (4) of Regulation No 659/1999, three requirements have been established by case-law to act as a framework for the Commission’s assessment.63First, that concept is exclusive. Thus, the Commission may not decline to initiate the formal investigation procedure in reliance on other circumstances, such as third-party interests, considerations of economy of procedure or any other ground of administrative or political convenience (see, to that effect, judgments of 10 February 2009, Deutsche Post and DHL International v Commission, T‑388/03, EU:T:2009:30, paragraph 90 and the case-law cited, and of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 78).64Second, it follows, inter alia, from Article 4(4) of Regulation No 659/1999 that, when the Commission does not succeed in eliminating all doubt within the meaning of that provision, it is obliged to initiate the formal investigation procedure. It has no discretion in that regard (see, to that effect, judgments of 22 December 2008, British Aggregates v Commission, C‑487/06 P, EU:C:2008:757, paragraph 113 and the case-law cited, and of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 79 and the case-law cited).65Third, the concept of doubts referred to in Article 4(3) and (4) of Regulation No 659/1999 is an objective one. Whether or not such doubts exist requires investigation of both the circumstances under which the contested measure was adopted and its content. That investigation must be conducted objectively, comparing the grounds of the decision with the information available to the Commission when it took a decision on the compatibility of the disputed aid with the internal market. It follows that judicial review by the Court of the existence of serious doubts will, by nature, go beyond consideration of whether or not there has been a manifest error of assessment (see, to that effect, judgments of 2 April 2009, Bouygues and Bouygues Télécom v Commission, C‑431/07 P, EU:C:2009:223, paragraph 63, and of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 80 and the case-law cited).66In that context, in terms of a review of the legality of the Commission’s decision not to raise objections, it is for the Court to examine the argument put forward by Tempus to establish that, after a preliminary examination, doubts are raised as to the compatibility with the internal market of the notified measure within the meaning of Article 4(3) and (4) of Regulation No 659/1999, which should have led to the adoption of a decision to initiate a formal investigation procedure. Such an investigation is all the more important for Tempus given that those arguments correspond, in essence, to those that it could have put forward as an interested party exercising its procedural rights during the formal investigation procedure under Article 108(2) TFEU if such procedure had been initiated; it claims that, in the present case, those procedural rights have been infringed.67To that end, Tempus bears the burden of proof, which it can discharge by reference to a body of consistent indications, concerning, first, the circumstances and the length of the preliminary examination procedure and, second, the content of the contested decision (see, to that effect, judgment of 10 February 2009, Deutsche Post and DHL International v Commission, T‑388/03, EU:T:2009:30, paragraph 93). In particular, the insufficient or incomplete nature of the examination carried out by the Commission during the preliminary examination procedure constitutes an indication of the existence of doubts within the meaning of Article 4 of Regulation No 659/1999 (see judgment of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 81 and the case-law cited). As an interested party, Tempus has neither powers of investigation nor, in principle, investigatory capabilities that are comparable to those enjoyed by the Commission, which can, where necessary, request the cooperation of a Member State in order to complete its examination of the notified measure.68Accordingly, in the present case and as is apparent from paragraphs 79 and 82 below, at a stage of the procedure when the parties concerned have not yet been given notice to present their observations by a decision to initiate a formal investigation procedure, it is sufficient that Tempus set out its reasons for concluding, in the light of the contested decision, that the Commission should have had doubts as to the compatibility of the notified measure with the internal market. Therefore, it is not necessary for it to present sufficient evidence to establish the incompatibility of the aid scheme notified.69In that regard, it should be noted that, in order to be in a position to carry out a sufficient examination for the purposes of the rules that apply to State aid, the Commission is not obliged to limit its analysis to the information contained in the notification of the measure at issue. It can and, where necessary, must seek relevant information so that, when it adopts the contested decision, it has at its disposal assessment factors that can reasonably be considered to be sufficient and clear for the purposes of its assessment. By way of illustration, it has already been held that the Commission had carried out an ‘active and thorough’ examination of the compatibility of an aid measure as it had questioned the substance of the arguments put forward by the Member State (see, to that effect, judgment of 10 December 2008, Kronoply and Kronotex v Commission, T‑388/02, not published, EU:T:2008:556, paragraph 127), whereas an examination was held to be ‘insufficient’ on the basis that the Commission had failed to obtain information that would have allowed it to assess a measure (see, to that effect, judgment of 10 February 2009, Deutsche Post and DHL International v Commission, T‑388/03, EU:T:2009:30, paragraphs 109 and 110).70Therefore, in order to establish the existence of doubts within the meaning of Article 4(4) of Regulation No 659/1999, it is sufficient that Tempus show that the Commission has not researched and examined, thoroughly and impartially, all of the relevant information for the purposes of that analysis or that it has failed duly to take them into account in such a way as to eliminate all doubt as to the compatibility of the notified measure with the internal market.71In addition, it is established case-law that the lawfulness of a decision concerning State aid is to be assessed in the light of the information available to the Commission when the decision was adopted (see, to that effect, judgment of 15 April 2008, Nuova Agricast, C‑390/06, EU:C:2008:224, paragraphs 54 and 55 and the case-law cited). The information ‘available’ to the Commission includes that which appeared to be relevant for the assessment that the Commission had to carry out pursuant to Article 108(2) and (3) TFEU and Article 4(3) or (4) of Regulation No 659/1999.72In order to establish doubts as to the compatibility of the aid with the internal market, Tempus may therefore rely on all relevant information that was or could have been available to the Commission on the date when it adopted the contested decision. Equally, for the purposes of the review of lawfulness that the Court is required to carry out in that regard, the Court can take into consideration any information included in the contested decision in support of the assessment made by the Commission therein.73In the present case, it is therefore appropriate to review whether, in the light of the information available to the Commission when the contested decision was adopted, the elements put before the Court by Tempus were capable of raising doubts as to the partial or total compatibility of the notified measure with the internal market, therefore requiring the Commission to initiate the formal investigation procedure, without prejudice to the subsequent exercise by the Commission of its power to assess the compatibility of that measure with the internal market following the initiation of that procedure. (c) Length of the discussions between the Member State and the Commission and the circumstances surrounding the adoption of the contested decision 74Tempus notes the significance of the questions that the Commission was confronted with in this case, which was the first investigation procedure relating to a capacity market and the first application of the Guidelines. In the present case, Tempus is of the view that the length of the discussions between the United Kingdom and the Commission prior to the notification went beyond what is required for the adoption of a decision not to raise objections and constituted an indication that may establish that there were doubts. Tempus also notes that it is paradoxical that the Commission takes the view, on the one hand, that it is not necessary to initiate a formal investigation procedure in respect of the first capacity market notified and, on the other hand, that it is appropriate subsequently to carry out the first sector inquiry ever initiated on the topic of State aid in order ‘to better understand these measures and ensure compliance with EU ... Rules’ and to reach ‘stakeholders who are not heard in ordinary State aid procedures’ (see Commission Decision C(2015) 2814 final of 29 April 2015 initiating an inquiry on capacity mechanisms in the electricity sector pursuant to Article 20a of Regulation No 659/1999 and associated press release).75The Commission contends that, in the absence of a complaint, it is the date of the notification alone that matters for determining whether the preliminary assessment procedure is of such a length as to raise doubts. As that procedure lasted less than two months, it is not of sufficient length to establish that there were doubts; rather, it implies that doubts did not arise. In any case, as the capacity market was designed in the context of a national public consultation that ended shortly before the notification was made, any contact the United Kingdom may have had with the Commission prior to notification is necessarily irrelevant for the purposes of knowing whether the Commission may have had doubts as to the measure that was ultimately notified. With regard to the paradox referred to by Tempus, the Commission claims that the lawfulness of the contested decision is to be assessed in the light of the information available when it came to its decision, without taking account of decisions adopted subsequently, which are included for their ‘psychological effect’. In any event, the ultimate decision to initiate a sector inquiry on capacity mechanisms in Member States other than the United Kingdom had the objective of ‘[gaining] a better understanding of the existence and functioning of [such] mechanisms’. With regard to the UK capacity market, such understanding had already been gained through its individual analysis of the notified measure.76The United Kingdom, in turn, submits that the length of discussion preceding notification does not give rise to doubts.77Under Article 108(3) TFEU, ‘the Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid’. That obligation to notify allows the Commission to carry out a prior review of any proposed aid. Article 4(1) of Regulation No 659/1999 states that ‘the Commission shall examine the notification as soon as it is received’. If the notified measure raises doubts as to its compatibility with the internal market, Article 4(5) of Regulation No 659/1999 also specifies that the Commission has a period of ‘two months’, ‘[beginning] on the day following the receipt of a complete notification’, to take a decision in respect of a preliminary examination of the notification provided for in Article 108(3) TFEU, in order, where relevant, to initiate the formal procedure provided for in Article 108(2) TFEU.78In that regard, it must be recalled that the scale of the area of investigation covered by the Commission during the preliminary examination and the complexity of the matter under consideration may indicate that the procedure at issue considerably exceeded what is normally required for an initial examination carried out pursuant to the provisions of Article 108(3) TFEU. That circumstance constitutes probative evidence of the existence of doubts within the meaning of Article 4(3) and (4) of Regulation No 659/1999 (see judgment of 7 November 2012, CBI v Commission, T‑137/10, EU:T:2012:584, paragraph 285 and the case-law cited).79In the present case, it must be noted that the notified measure is significant, complex and novel.80First, in the contested decision, the Commission authorised for a period of ten years the implementation of an aid scheme intended to span several years (see recitals 6 and 162 of the contested decision). The amounts involved in the scheme are particularly high, namely between GBP 0.9 billion and GBP 2.6 billion per year (see recital 7 of the contested decision), that is between GBP 8.1 billion and GBP 23.4 billion over a period of 10 years, as was confirmed by the Commission during the hearing. Thus, for the period 2018-2019, the first delivery year envisaged by the capacity market, the United Kingdom had made known its intention to auction a capacity of 53.3 gigawatts (GW).81Second, both the definition and the implementation of that aid scheme are proving to be complex. The situations described to justify its existence are numerous and are based on probabilities (see recitals 79 to 82 of the contested decision). Different categories of operator are affected according to the modalities, which may vary from one category to another and which require certain eligibility criteria to be satisfied (see recitals 15 to 27 of the contested decision). Various auction mechanisms are described, which involve a number of stages (see, inter alia, recitals 28 to 51 of the contested decision). The measure is capable of producing significant, long-term effects, potentially continuing far beyond the authorised 10-year period, given that it allows certain capacity providers to enter into a contract of up to 15 years at each annual T‑4 auction (see recital 57 of the contested decision). In particular, those who will be impacted by such effects are existing and new generators and DSR operators, those effects being long term and experienced directly as well as indirectly.82Third, as Tempus states and as the Vice-President of the Commission responsible for competition explained when he summarised the contents of the contested decision in a press release, it is the first time the Commission has assessed a capacity market in the light of the Guidelines. The measure at issue is therefore novel in terms of both its subject matter and its implications for the future.83Other factors to be pointed out are the initiation of a sector inquiry relating to capacity markets and the subsequent initiation, in certain cases and for reasons specific to each case, of formal investigation procedures relating to capacity markets envisaged by other Member States, such factors having been pointed out by Tempus with the sole purpose of emphasising the complexity and novelty of the questions with which the Commission was confronted in the present case. However, as those events all occurred after the Commission adopted the contested decision, they cannot have any effect on the Court’s assessment of the lawfulness of the contested decision.84Yet, in the present case, it is apparent that, on 23 July 2014, following a preliminary examination lasting a month, the Commission concluded that the measure notified by the United Kingdom on 23 June 2014 did not give rise to doubts as to its compatibility with the internal market and that it could issue a decision not to raise objections in respect of the measure. The various capacity providers were not invited to submit their observations during that procedure, as the Commission took the view that it was not necessary.85Contrary to what is maintained by the Commission, given the circumstances of the present case, the fact that the preliminary examination lasted only a month is not, however, a reliable indication allowing it to be established that doubts had not arisen by the end of the first investigation of the measure at issue. As Tempus points out, it is also important to take into account the length and the content of the contact between the United Kingdom and the Commission before the measure was notified. While such contact is not unheard of, and is in fact encouraged by the Commission, in the present case, it does nonetheless have certain characteristics that highlight the complexity and novelty of the measure at issue.86As a preliminary point, it should be noted that the pre-notification phase, which arose as a result of the Commission’s experience in conducting State aid control proceedings, was formally established in the Best Practices Code on the conduct of State aid control proceedings, adopted by the Commission on 16 June 2009 (OJ 2009 C 136, p. 13; ‘the Best Practices Code’). Even though, as is stated in paragraph 8 of the Best Practices Code, the code does not alter any rights or obligations set out in the FEU Treaty and in the various regulations providing a framework for the procedures relating to State aid, the Best Practices Code does make clear the purpose, the length and the detailed rules of such informal contact.87According to paragraph 10 of the Best Practices Code, the pre-notification phase provides the Commission and the Member State with the possibility to discuss the legal and economic aspects of a proposed aid project informally prior to notification, and thereby enhance the quality and completeness of notifications. This phase thus paves the way for a more speedy treatment of notifications, once formally submitted to the Commission.88As the Best Practices Code points out, the purpose of the pre-notification phase is to facilitate the notification of the proposed aid in order to allow the Commission to carry out its preliminary examination optimally as soon as the notification is received. According to Article 2(2) of Regulation No 659/1999, the notification is to provide all necessary information in order to enable the Commission to take a decision pursuant to Articles 4 (decisions on preliminary examination of the notification) and 7 (decisions to close the formal investigation procedure) of the regulation.89The essential objective of the pre-notification phase is, therefore, to reduce the risk that the notification is found to be incomplete, thereby delaying the examination procedure of the notified project. In accordance with Article 5(1) of Regulation No 659/1999, the Commission can request all necessary additional information during the preliminary examination phase if it concludes that the information provided is incomplete.90By contrast, the purpose of the pre-notification phase is not to assess the compatibility of the notified measure with the internal market, especially in cases that are particularly novel or complex. Indeed, the Commission notes in paragraph 16 of the Best Practices Code that, in such a case, its services will not, in principle, provide at the end of the pre-notification phase an ‘informal preliminary assessment’ of the conformity of the draft notification and the prima facie compatibility of the planned project with the internal market. In any event, such guidance from the Commission in the form of informal, advance contact during the pre-notification phase cannot be considered to be the official position of the Commission, which is adopted after examining the notification.91As is stated in Article 4(1) of Regulation No 659/1999, it is only once the notification is received that the Commission is to start its examination. A prior statement on the completeness of the notification of the planned project cannot, in the light of the applicable rules, therefore be considered to be equivalent to an assessment carried out in the context of the procedures in place to monitor State aid laid down by the FEU Treaty and by Regulation No 659/1999. The Commission must not confuse the — possibly prior — phase of the preparation of the notification with the phase for the examination of the notification, which initially occurs as a preliminary examination and, where necessary, subsequently takes the form of a formal investigation, if it proves necessary in order to allow it to gather all the information needed to assess the compatibility of the aid and collect, to that end, the observations of the interested parties.92In that context, in the first place, it is apparent from the notification that the pre-notification phase, which includes all contact between the Commission and the relevant Member State prior to the notification, was significantly longer than the two-month period that is envisaged, as a general rule, by the Best Practices Code.93Preparations by the United Kingdom Government for establishing a capacity market started in 2010. In December 2012, that is to say around 18 months before the Commission commenced its preliminary examination of the notification pursuant to Article 4 of Regulation No 659/1999, the United Kingdom informed the Commission of the content of the planned measure.94As part of that informal contact, the Commission sent the United Kingdom a first set of questions regarding that measure, which the United Kingdom answered in July 2013.95It is also apparent from the notification that, on 25 March 2014, the Commission sent a second set of questions to the United Kingdom. In those 47 questions, the Commission asked the United Kingdom, inter alia, to provide information on the role of interconnection, the possibility of DSR participating in the capacity market and the various lengths of contract proposed to generators. By way of example, in question 32, the Commission asked the United Kingdom whether DSR operators were to be allowed to participate in the capacity market, and how they were to be treated. Further, in question 33, the Commission wishes to know the extent to which interconnected capacity was to be taken into account. On 31 March 2014, the United Kingdom answered those questions and sent the Commission an updated version of the planned measure.96On 17 June 2014, according to a letter from the United Kingdom of 27 June 2014 produced by the Commission before the Court, the Commission informed the United Kingdom that following a ‘preliminary assessment’ — carried out outside of the formal framework laid down in Article 4 of Regulation No 659/1999, as the preliminary examination starts only upon receipt of the notification — it concluded that the capacity market was prima facie compatible with Article 107(3)(c) TFEU in the light of the Guidelines.97Also on 17 June 2014, the Commission sent to the United Kingdom a third set of questions relating, inter alia, to the incentive effect of the planned measure, its proportionality and potential discrimination between capacity providers. The United Kingdom answered those questions directly in the notification in, inter alia, Annex H thereto, and provided a summary of those answers in its letter of 27 June 2014 referred to above.98However, in accordance with the Guidelines (see, inter alia, paragraphs 3.9.4, 3.9.5 and 3.9.6), questions relating to incentive effect, proportionality and the existence of potential discrimination are matters that must necessarily be assessed in the context of the examination of the compatibility of an aid measure that seeks to remedy problems of capacity adequacy, such as the measure at issue. In other words, contrary to the Best Practices Code for cases that are particularly novel or complex and despite the fact that such a non-binding, ‘informal preliminary assessment’ was not envisaged in paragraph 16 of that code, the Commission already concluded during that phase, even before its preliminary examination pursuant to Regulation No 659/1999, that the planned measure was prima facie compatible with the applicable rules, despite considering it necessary simultaneously to request information on key aspects of such an examination.99In the second place, in parallel to the discussions referred to above between the United Kingdom and the Commission, the United Kingdom organised a national public consultation from 10 October to 24 December 2013 relating to the planned capacity market. However, that consultation did not relate to the matter of compatibility of that measure with the applicable rules on State aid. It merely alluded to the requirement of authorisation from the Commission prior to the implementation of the planned measure.100In that regard, it cannot be held, as is suggested at times by the arguments submitted by the United Kingdom and the Commission, that a national consultation can be treated in the same way as a procedure allowing the interested parties to submit their observations, as would have been the case if the Commission had initiated the formal investigation procedure. In the context of State aid control proceedings, the relevant Member State providing the aid cannot substitute itself for the Commission, which must, as the guardian of the Treaties and in accordance with Article 108 TFEU, examine all projects intending to establish schemes of aid. It is for the Commission, rather than the Member State, where relevant and in the context of the procedure envisaged to that end, to gather all information necessary to allow it to assess the compatibility of the aid. Further, it is to the Commission, rather than to the Member State intending to provide the aid, that the interested parties must submit their observations, if they consider it necessary, in order to allow the Commission to come to a decision with full knowledge of the facts.101In the third place, even if the Commission takes the view that it did not receive any complaints (see paragraph 75 above), it is apparent from the notification and the contested decision that, in the light of the information available to them when they intervened, three types of operator wished to communicate directly and spontaneously to the Commission their observations on the compatibility of the aid.102Thus, on 30 May 2014 and 26 June 2014, the Commission received observations from a provider of balancing services asserting that the aid was not compatible with the Guidelines (see recitals 96 and 97 of the contested decision).103Further, on 9 June 2014, the Commission received observations from the UK Demand Response Association (‘UKDRA’), which also stated that the planned measure infringed the Guidelines. In particular, UKDRA referred to the different contract lengths available to DSR operators and generators, the mutual exclusivity between participation in the transitional auctions and the enduring auctions, the capacity market cost recovery method, and the failure to take into account the fact that DSR allows savings in electricity transmission and distribution costs. UKDRA also noted that, subsequent to the national consultation carried out by the United Kingdom, major changes had been made to the planned project, in order, inter alia, to support the generation of electricity from fossil fuels (see recitals 101 and 102 of the contested decision).104Finally, on 25 June 2014 and 3 July 2014, the Commission received letters from an operator that had acquired existing power plants. That operator claimed that the difference in treatment between existing and new plants — restricting existing plants, inter alia, to one year capacity contracts — infringed EU law (see recitals 98 to 100 of the contested decision).105The observations of the United Kingdom in response to those interventions were submitted to the Commission in Annex I to the notification. The United Kingdom noted, in that regard, that it responded to the statements contained in the two ‘complaints’ that had been annexed by the Commission to the third set of questions sent on 17 June 2014 — namely, those submitted on 30 May 2014 and 9 June 2014 — as well as to the statements made in ‘another complaint’ which, according to the United Kingdom, was to be sent to the Commission shortly afterwards by an operator that had acquired existing power plants (see recitals 103 to 107 of the contested decision, headed ‘Observations by the UK’). Further, in an email of 28 June 2014 sent to the Commission, the United Kingdom submitted, first, amongst information relating to contract length, operating reserve management and nuclear power, a table summarising difference in treatment between capacity providers and, second, noted that ‘for each of the complaints there is additional information within the notification, primarily in Annex I’.106It is apparent from the foregoing that the length of the pre-notification phase was significantly longer than the two-month period that is envisaged, as a general rule, in the Best Practices Code.107It is also apparent that, in addition to giving rise, from the very beginning, to a number of difficulties pointed out by the Commission in terms of the pre-notification phase, the planned measure also continued to give rise to such difficulties until the end of that phase. After more than a year of informal contact, the Commission asked the United Kingdom about the role of interconnection, the status of DSR and the difference in treatment between generators. Further, at the end of that informal procedure, the Commission asked the United Kingdom for further details on a number of points referred to by the Guidelines, which served as the framework for the analysis of the planned measure that was to be brought into force.108However, at that stage of the procedure, although the Commission was on the verge of starting its preliminary examination of the notification and three different types of operator had intervened by submitting to it their concerns as to the compatibility of the planned measure, it concluded that it did not have any doubts and therefore that it was not necessary to request observations from the interested parties on the various choices made by the United Kingdom in the notification.109In such circumstances, the length and the circumstances of the pre-notification phase, which attest to the difficulties caused by the need to gather relevant information to allow the Commission to examine the notification of the aid scheme in the light of the relevant provisions of the FEU Treaty, Regulation No 659/1999 and the Guidelines, as well as by the multiplicity of observations submitted in respect of that aid scheme by three different types of operator, are not such as to allow it to be concluded that the brevity of the preliminary examination procedure is an indication that there were no doubts as to the compatibility of that scheme with the internal market, and are, on the contrary, likely to constitute an indication that such doubts did exist.110In addition, it is not apparent from the documents before the Court that, during the month-long period of the preliminary examination of the notification, the Commission carried out a specific investigation into the role of DSR within the capacity market. The only document provided by the Commission to the Court in that regard is the email of the United Kingdom of 28 June 2014 (see paragraph 105 above). In that email, the United Kingdom sets out, inter alia, a summary, in the form of a table, of differences in treatment between capacity providers in response to concerns raised in that regard, most likely by the operator that had acquired existing power plants. The contested decision does not formally refer to that exchange and does not allow it to be concluded that, after it received that table or other information contained in the email, the Commission considered their content, insofar as concerns the role of DSR within the capacity market, either, for a second time, from the point of view of the United Kingdom or from the point of view of the interested parties. In any event, that table simply summarises the differences within the capacity market proposed in the notification between the following three types of operator: first, existing and refurbished power plants; second, new power plants; and, third, DSR operators. That document does not provide evidence allowing it to be established that the Commission carried out an independent assessment with regard to the criteria set out in the Guidelines (see, on that point, paragraph 117 et seq. below).111Consequently, with regard to the length of the discussions between the Member State and the Commission and to the circumstances surrounding the adoption of the contested decision, it is apparent from the foregoing that the notified measure is significant, complex and novel, and that it gave rise to a long pre-notification phase, during which the Commission asked the United Kingdom a number of questions in order to clarify important matters, particularly with regard to the assessment of the notified measure in the light of the Guidelines. It is also apparent that the notified measure was challenged in three respects by various operators who were supposed to benefit from it.112Similarly, it is not apparent from the documents before the Court that, under those circumstances, the Commission carried out a specific investigation during its preliminary examination concerning the information sent by the United Kingdom with regard to the role of DSR within the capacity market.113Taking into account the characteristics of the aid scheme at issue and the particular characteristics of its pre-notification phase, the Commission was not in a situation where it could simply rely on the information provided by the relevant Member State without carrying out its own investigation in order to examine and, if necessary, seek relevant information from, where appropriate, interested parties for the purposes of its assessment (see paragraph 69 above).114Given that the Commission has provided no evidence showing that such an examination was carried out, it can therefore be assumed that, in the present case, the Commission simply requested and reproduced the information submitted by the relevant Member State without carrying out its own analysis.115As Tempus claims, such circumstances are an indication that is capable of establishing that there were doubts as to the compatibility of the notified measure with the internal market.116Therefore, it is appropriate to examine whether elements relating to the content of the contested decision may, taking into account the observations submitted in that regard by Tempus in the present case, also indicate that the Commission should have had doubts following the preliminary examination of the notified measure. (d) Assessment by the Commission at the preliminary examination stage of the role of DSR within the capacity market in the light of the available information 117Tempus claims that the Commission failed properly to assess the role of DSR within the capacity market with regard to, inter alia, the Guidelines, the objective of which is to ‘facilitate’ and ‘encourage’ DSR. Tempus also refers to the Commission documents mentioning the need to recognise ‘the potential for demand side to participate in the system’ to avoid ‘stranded investments in generation’. Thus, rather than simply approving the United Kingdom’s position, which is that ‘holding the first auction in December 2014 will be key to revealing information about DSR and DSR potential’ and that the transitional auctions should be sufficient (see recital 122 of the contested decision), the Commission should have required or carried out itself an appropriate assessment of the potential of DSR. The effect of that analysis would have been to reduce the ‘amount of generation capacity’ available from the first T‑4 auctions and avoid wasting public resources, which is detrimental to the consumer. The fact that DSR operators could participate in the T‑1 auctions was insufficient to compensate for that situation, due to the low capacity reserved for those auctions and the United Kingdom’s commitment to reduce, if possible, the ‘amount of capacity to procure in the year-ahead auction planned in 2017’. In such circumstances, generation from fossil fuels is ‘locked in’ from the outset, which risks blocking for years capacity that might have been provided by DSR.118Moreover, the other measures referred to by the Commission in its defence cannot be treated as measures supporting DSR within the aid scheme or measures specifically designed to deal with a capacity adequacy problem. Similarly, contrary to what is claimed by the Commission in its defence, the entry threshold of 2 MW which applies exclusively to DSR operators wanting to participate in the enduring regime is not ‘low’, as shown by a number of examples from other systems, such as the Pennsylvania Jersey Maryland (‘PJM’) capacity market and the New York Independent System Operator (‘NYISO’), where the entry threshold of 100 kW is 20 times lower.119The Commission observes that DSR would be insufficient in itself to prevent the risk of capacity shortages. Further, it maintains that Tempus has failed to establish that the Commission incorrectly analysed the potential role of DSR and that, as a result, it should have had doubts, obliging it to initiate a formal investigation procedure. Thus, Tempus failed to refer to the general measures supporting DSR implemented in the United Kingdom outside of the capacity market. Further, Tempus failed to take into account the characteristics of the UK capacity market intended to encourage DSR, such as the ‘low ... threshold of 2 MW’ required to participate in enduring auctions and the aggregation procedure for operators whose CMU falls below that threshold. Lastly, the Commission claims that DSR is not excluded from T‑4 auctions and DSR operators can bid for the contracts of the same length as existing generators. The risk of any ‘lock-in’ of capacity has been minimised and any remaining risk is outweighed by the positive effects of incentivising new investment as a prerequisite to address the capacity adequacy challenge.120The United Kingdom takes the view that Tempus complains that the United Kingdom ought to have done more to encourage and facilitate DSR without, however, establishing that there were doubts as to the capacity market’s compatibility with the internal market. It maintains that DSR is insufficient in itself to ensure the security of supply. Thus, while it is important to ensure that DSR operators can fully participate in the capacity market, the market was not designed specifically to encourage DSR operators above all else. The United Kingdom contests that awarding capacity contracts to existing or new generators is a waste of resources, given the importance of such contracts in achieving the objective of security of supply. (1) Equivalence and advantages of generation and DSR 121It is apparent from the replies to the written questions asked by the Court on 5 May 2017 that the Commission recognises that, for the purposes, inter alia, of the implementation of paragraph 232(a) of the Guidelines, both the capacity offered by generators and that offered by DSR operators are capable of contributing to solving the capacity adequacy problem identified by the United Kingdom. When questioned on that point, the Commission observed that ‘in principle, both capacities are capable of contributing, by their technical performance, to address the residual market failures identified by the UK’ (including the ‘missing money’ problem referred to in recital 85 of the contested decision).122The Commission also agrees with Tempus that the concept of technical equivalence does not, however, mean that the two are identical.123In its replies, the Commission stated as follows:‘It should however be noted that both types of capacity have their specific capabilities and benefits. (New) generation capacity (incl. renewable energies) is required as a basis to have electricity fed into the grid, whereas peak shaving and peak shifting by demand response can reduce the need for generation capacity which would only be required in a limited amount of hours during the year (and constructing new generation capacities would therefore be overly expensive for that purpose).’124In that regard, Tempus noted the following:‘DSR has a successful track record of exceeding the minimum technical performance requirement to deliver capacity, especially when legislators take the time to understand the nature of DSR and design the regulatory framework to best facilitate and encourage it. DSR is not the same as generation, nor should it be. “Equivalent technical performance” does not mean “the same” performance, it only means being technically capable of achieving the same result/outcome, ... A secure and reliable energy system requires diversity of sources, with different strengths. In addition to being a flexible and cost-effective source of capacity, DSR lowers network cost constraints by easing pressure on distribution and transmission infrastructure and reducing the need for expensive infrastructure upgrades, improves network reliability, encourages a smart and engaged customer side, boosts supply market innovation and competition, improves the value and viability of intermittent renewable generation by matching supply patterns without the need for a doubling up of generation through “back-up” fossil fuel plant, and overall plays a unique and significant role in ensuring security of supply at the lowest possible cost to customers.’125It is apparent from the foregoing that although generation and DSR can both contribute to remedying the capacity adequacy problem identified by the United Kingdom, each has its own advantage. Generation capacity supplies the network with electricity, while DSR capacity allows for peak shaving and peak shifting, thereby reducing the need to generate capacity which would only be required for a limited amount of hours during the year; that therefore avoids new generation capacities being built which, in such circumstances, would be too expensive.126Consequently, pursuant to paragraph 232(a) of the Guidelines, it was for the Commission to satisfy itself that the aid scheme was designed to allow DSR to participate alongside generation, because their respective capacities provide an effective solution to the capacity adequacy problem.127In that context, as follows, inter alia, from paragraph 226 of the Guidelines, the aid measures should be open and provide adequate incentives to the relevant operators.128The main question in the present case therefore is not whether DSR can play a role in ensuring the functioning of the capacity market, which it can, or, as the Commission and the United Kingdom claim, whether it is capable of dealing, as such and in the short term, with the capacity adequacy problem, which is not Tempus’s position. Rather, the key question is whether the role that DSR is capable of playing was assessed adequately having regard to the principles set out in the Guidelines.129The Court will examine, in the light of the foregoing, Tempus’s arguments criticising the Commission for authorising the measure at issue, following a one-month preliminary examination, without initiating the formal investigation procedure envisaged to allow the Commission to gather all the information needed to evaluate the compatibility of the aid and to allow the interested parties to submit their observations. (2) Positive role of DSR 130As follows from the Commission document of 5 November 2013 headed ‘Commission Staff Working Document, Generation Adequacy in the internal electricity market — guidance on public interventions’ (SWD(2013) 438 final), quoted by the United Kingdom in paragraph 219 of the notification: ‘capacity mechanisms should be designed fully taking into account the particular characteristics of demand response rather than defining products on the assumption that it will be filled by new generation’.131In that regard, in paragraph 220 of the notification, the United Kingdom observed that ‘demand side response ... [had] the potential to offer reliable capacity and a more cost effective way of delivering security of supply’. In that same paragraph, the United Kingdom presented DSR as an alternative to investment in generation capacity which was cheaper for consumers. For the United Kingdom, further development of the DSR is an important step towards a more efficient electricity market, in which participators respond better to price signals by reducing demand when electricity is scarce and prices are high and by consuming electricity when generation exceeds demand.132Further, the United Kingdom observed in paragraphs 61 and 188 of the notification that the participation of DSR operators in the capacity market was beneficial for competition in the capacity market, but also more widely in the energy market.133Likewise, in its notification the United Kingdom stresses that the bigger DSR becomes, the smaller the need for a capacity market will become. The United Kingdom notes that the capacity market will be withdrawn when it is no longer necessary, which should occur as DSR gradually develops (see pages 7, 8, 45 and 46 of the notification).134In essence, that analysis is identical to that set out by Tempus in the application, in which it maintains that DSR technology enables customers physically to move non-time-critical needs, thereby shedding demand peaks. Thus, usual consumption is replaced by highly reactive, optimised consumption. In that context, DSR, which allows peak demand to be reduced or enables reduction of demand during periods where production is scarce, is an alternative to generation, in particular to the type of generation that is most costly for the environment.135These statements from both the United Kingdom and Tempus show the real potential of DSR within the capacity market. Thus, the more quickly and comprehensively the United Kingdom implements this particular element of the mix of technologies, the smaller its reliance on generation capacity will have to be to solve the capacity adequacy problem. (3) Available information on the potential of DSR 136It should be noted that in Annex B to the notification, headed ‘UK Checklist against the Commission Staff Working Document on Generation Adequacy in the internal electricity market — guidance on public interventions’, the United Kingdom gave the following reply to a question asking whether ‘the potential for demand side management and a realistic time horizon for it to materialise [had been] integrated into the analysis’:‘DSR is expected to benefit from direct participation in the Capacity Market, as well as participation in the Transitional Arrangements. ... Each year, National Grid will assess the amount of DSR that currently exists and will estimate the potential DSR that could come forward over the period — as part of the analysis that will inform decisions on the amount of capacity to procure in the capacity auctions. The PJM Capacity Market in the US has brought forward about 15 GW of DSR over 10 years [that figure having been reached, according to the table, in delivery period 2015/2016]. However, the PJM market includes approximately triple the demand of the GB market. National Grid estimates that DSR could provide around 3 GW of capacity in 2018/19. Estimates of DSR development are very uncertain and difficult to obtain. However, the transitional arrangements will support the development of the sector and encourage greater DSR participation in the main Capacity Market.’137In paragraph 221 of the notification, the United Kingdom also refers to the results observed in the United States and notes that ‘evidence from the US has demonstrated that central auction capacity markets have been extremely successful at bringing forward DSR’. According to the graph submitted by the United Kingdom in the notification, from the period 2012/2013, the capacity provided by DSR in the annual PJM capacity market auctions was higher than 5 GW and reached 15 GW for contracts awarded in 2015/2016.138In addition, when questioned on the various points of information available on the evaluation of DSR’s potential, Tempus refers, inter alia, to reports compiled by Sustainability First in September 2012 and January 2014, commissioned by significant stakeholders in the electricity market, including NG, and claims that, in those reports, it was mentioned that 4 to 5 GW of capacity provided by DSR could presently be shifted from clients in the industrial sector. Tempus also submits other information from a report by Element Energy — De Montfort University Leicester headed ‘Demand side response in the non-domestic sector’ and dated July 2012, which specifies that between 1.2 GW and 4.4 GW can be shifted on a peak winter day in 2012 from non-industrial and non-residential buildings. For Tempus, that means that at least 5 GW of DSR capacity could have been available and taken into account on the capacity market, and the actual figure could have been even greater.139Finally, upon reading the contested decision, it appears that, when the Commission took its decision on the aid scheme notified, it was aware of the report compiled by a panel of technical experts (‘the PTE’), who were commissioned by the United Kingdom to examine NG’s recommendations concerning the capacity to be auctioned on the capacity market in December 2014, which was published on 30 June 2014 by the UK Department of Energy and Climate Change (‘DECC’). The Commission quotes the conclusions of the PTE report in recital 120 of the contested decision.140That report, which sets out the work carried out by the PTE from February 2014, contains a number of observations that could be made on the upcoming implementation of the first T‑4 auction in December 2014 for delivery period 2018/2019.141First, when it sets out its approach to examining NG’s findings, the PTE notes the following in paragraph 19 of its report in order to point out, inter alia, how useful the experience acquired by other capacity markets can be, in particular from the PJM capacity market, with regard to the integration of DSR:‘The Panel has also drawn from the experience of its members in other Capacity Mechanism markets, such as PJM and New England, as well as its experience in other key areas where the need to procure capacity includes the demand side. The Panel has been somewhat reassured that DECC has drawn on the PJM experience, but the Panel remains concerned that not enough evidence has been provided on the potential contribution that the demand side might make, particularly the extent to which embedded generation might become available, with some retrofitting and aggregation, and the extent to which [combined heat and power] can deliver additional power to the system over and above its own demand in stress periods.’142Second, when it examined the contribution that could be made to the capacity market by DSR, the PTE observed as follows in paragraphs 96 to 106 of that report:‘96.Distributed Energy Resources (“DER”) is the term we prefer to use when discussing the contribution that can be made to managing situations when transmission connected generators are unable to meet the demand for electricity. We prefer this term to the commonly used “Demand Side Response”, which possibly imports a preconception that the only (or main) contribution of the demand side is the temporary reduction in demand. DER, on the other hand, implies the full range of resource that can mitigate the need for solving capacity problems other than building new power stations. There is a pressing need to initiate the gathering of more information in this area to inform future decisions, especially as there is no over-arching organisation analysing the totality of the electricity system. These resources include: (a) Direct load control (b) Embedded generation (c) Standby generation (d) Demand response (e) Energy Efficiency (f) Fuel substitution (burn gas instead of electricity for example) (g) Interruptible loads (h) Integrated DSM project (such as using the batteries of parked electric cars as reserve power) (i) Load shifting (j) Smart metering (k) Power factor correction.97.It is important to recognise that the list of candidates who could provide demand side capacity is quite extensive so as to be aware of what is being modelled. It is also important to note that there are qualitative differences between these resources.98.For example, load shifting could involve a user of electricity for refrigeration being incentivised to curtail its demand for electricity for a few hours and to rely on thermal inertia to avoid harm. Such a user may well have a supply contract for perhaps two years that is renegotiated annually or biannually, in which case that consumer would be responsive to short term auction signals.99.On the other hand, another potential resource may be considering installing a co-generation plant or building energy management system to optimise demand side response, but needs the certainty of a long-term capacity contract to secure finance. The essential point is that in estimating demand side response, it is essential to identify the potential resources which are likely to respond to capacity market signals and those who will not because the incentives do not meet their needs.100.We note that the DECC methodology for determining the level of contribution to capacity made by DSR is very much in line with approaches adopted in New England and PJM (except impact on losses). To this extent this precipitates an opportunity to validate assumptions by using those systems as a means to compare and contrast.101.In conversations with DECC and NG, we were made aware that the demand side is not yet understood as well as conventional generation. This is not a criticism as it has not been part of NG’s role. NG is quite separate from the Distribution Network Operators and licensed electricity suppliers, and there is no one who has both an overall detailed understanding of, together with the incentive to, marshal demand side data. For example, the answers to questions such as “what is the average availability of embedded [combined heat and power] at times of system stress” is not known, even if annual averages are known.102.For all these reasons, we fully appreciate that NG were unable to carry out analysis on the demand side with the rigour and distinction that has been the hallmark of much of their other work. Nevertheless, this implies an urgent need to create a systematic process for ensuring that the resources of the demand side are not wasted only for new generation to step into the inefficiency gap.104.Although the Panel does not claim to know the full potential demand side resource that might be available, the Panel believes that the design as it stands necessitates relatively modest assumptions regarding the capacity that can be sourced. One aspect of this is that the capacity mechanism is more suited to some behaviours, methods and technologies than others. 105.Therefore, although the international experience of DER, particularly in the US, that the Panel circulated suggest the potential for significant and successful participation of DER in the capacity markets, which in turn led to the reduction in the need for additional generation capacity, the expectations in the current UK design need to be more modest. We would argue as further evidence for modest expectations is that, for example, conventional generation that will receive [Transmission Network Use of System] related payments and revenues from the capacity mechanism, whereas distributed generation could be in a position that is less incentivised than conventional generation if it cannot access both triad avoidance benefits and capacity mechanism revenues.106.Based on the Panel’s interpretation of the proposed capacity market for DER, we believe that there will be limited uptake of the total potential that has been demonstrated in other markets with capacity auctions, particularly those in the US and that, the cure to understanding this would be a greatly enhanced understanding of the range of demand resources available. The key modelling impact is that its impact on the assumed level of peak demand, which is the primary driver of the capacity to procure, is not as open to challenge as might be expected.’143Both Tempus’s application and the analysis above highlight the urgent need to identify adequate incentives to allow DSR to participate effectively in the capacity market, taking into account its full potential. The conclusion of such an analysis is therefore that the capacity market’s modalities should not ‘spoil’ the potential of DSR and replace it with new generation capacity. In that regard, the PTE notes that it is regrettable that currently no organisation is even collecting the data needed to understand and gather information on the various aspects of the potential of DSR, despite some already being available.144Although NG and the UK DECC are criticised in that respect by the PTE, it can be concluded that, through its formal investigation procedure, the Commission does have sufficient means to request and obtain the relevant information to assess the situation in order, inter alia, to identify the potential need and, where relevant, the level of incentive necessary to allow the real potential of DSR to be exploited in response to the capacity adequacy problem identified by the United Kingdom.145Third, as part of its conclusions and recommendations, the PTE stated the following in paragraph 6(c) and in paragraphs 119 and 132 of its report, outlining its concerns on the lack of information and understanding of DSR in the United Kingdom:‘The Panel raised concerns regarding the lack of information and understanding regarding Demand Side Reduction (DSR). The Panel prefers the term Distributed Energy Resources (DER) which imports the full range of contribution that could come from sources other than conventional generation whereas the term DSR appears to constrain demand-side awareness to mere reductions in demand and embedded generation. Noting the importance of building a strong institutional knowledge of DER amongst DECC and NG, the Panel recommended a programme to investigate this area further so that opportunities are captured in the future.... NG’s overall Scenario and model-based approach is in principle sound, and it has sought to take account of evidence and stake-holders’ views. However, the Panel’s consensus view is that NG tended to take an overly conservative view on a few key assumptions, most notably interconnector flows, and by treating that (and weather) as sensitivities rather than including interconnector capacities based on their estimated availability probabilities (as with generation plant), it exaggerated the amount to procure. If instead the expected net interconnector flows are 2.25 GW (described as 75% imports) then the range of capacity to be procured would correspondingly decrease and, with a little more effort to procure DSR and accelerate interconnector commissioning, as well as expecting more coal plant to be offered into the auction, could be enough to avoid new [combined cycle gas turbines].... Recommendation 9: ... a programme to research the full potential of DER should be instituted as soon as possible to inform future auctions with particular focus on the full range of peak demand mitigation resources that are referred to in this report.’146At this stage of the Court’s assessment, it appears that, when the Commission carried out its preliminary examination, it was in a position to analyse elements allowing it not only to envisage the current role of DSR — a technology that was found to be reliable and cost-effective by the UK authorities, the usefulness and effectiveness of which was already shown by US examples — but also to envisage the real potential of DSR, as illustrated, inter alia, by NG’s estimate, quoted by the United Kingdom in its notification, according to which DSR could provide around 3 GW of capacity in 2018/2019.147Similarly, the Commission was aware of the difficulties referred to by the PTE regarding the appreciation of the potential of DSR in the capacity market. As in the case of the appreciation of the potential of interconnection, in respect of which the concerns of the PTE were described as ‘serious’ by the Commission in recital 124 of the contested decision, and as is apparent from paragraphs 141 to 145 above, there was a risk that the capacity market envisaged would fail sufficiently to take into account the potential of DSR or, more widely, all potential that may reduce the need to resort to generation capacity in response to the capacity adequacy problem.148In that regard, it must be recalled that it is apparent from paragraph 224 of the Guidelines that the assessment of the impact of DSR operator participation is one of the elements of the examination to be carried out by the Commission when it takes a decision on the need for State intervention.149However, in that context, it is apparent from the contested decision that the Commission considered that, for the purposes of assessing the actual appreciation of DSR — and in order no longer to be in a situation where it could have doubts in that respect as to the compatibility of the aid scheme with the internal market — it was sufficient to accept the modalities envisaged by the United Kingdom in that regard.150According to the Commission’s statement in recital 122 of the contested decision in respect of its assessment of the compatibility of the aid and the need for State intervention and with regard to the contribution of DSR, it is sufficient to note as follows:‘the UK submitted that holding the first auction in December 2014 will be key to revealing information about DSR and DSR potential’ and ‘the UK explained that it will also carry out evaluations of data coming from the first T‑4 auction and ensure demand curves are adjusted appropriately, which will feed into NG’s Future Energy Scenario process for Electricity Capacity Reports ahead of subsequent auctions’;‘in response to the PTE’s report, NG has suggested a joint project with the Energy Networks Association (including Distribution Network Operators)’;‘in addition the UK has developed transitional auction arrangements to support the growth of DSR from 2015 to [2016] and a [GBP 20] million Electricity Demand Reduction pilot.’151The Commission also observed, in recital 128 of the contested decision, that, even if the aid scheme ‘may [have resulted] in support to fossil fuel generation’, it was able to establish that the evaluation of the capacity adequacy problem, which was carried out annually, took into consideration all types of operator, including DSR operators (see also recitals 134 and 149 of the contested decision at other stages of the analysis). It therefore concluded, in recital 129 of the contested decision, that ‘the measure is technology neutral’ and therefore does not strengthen the position of fossil fuel generation operators.152Taking into account the elements available to the Commission, referred to above, and the elements that could have been available to it through the means it could use pursuant to Regulation No 659/1999, and given the size of the role that could be played by DSR within the capacity market in order, inter alia, best to decide whether State intervention is needed and to limit aid for fossil fuel generation to the appropriate amount, such assessments are insufficient to allow the Commission to dispel doubts emerging from the elements that were already in its possession or that could have been available to it when it adopted the contested decision.153In particular, as is apparent from paragraphs 226 and 232(a) of the Guidelines, according to which the aid measures ‘should be open’, but should also ‘provide adequate incentives to both existing and future generators and to operators using substitutable technologies, such as demand-side response’, and ‘should be designed in a way so as to make it possible for any capacity which can effectively contribute to addressing the generation adequacy problem to participate in the measure’, it is particularly important for the Commission to ensure that the capacity market at issue allows all solutions genuinely and effectively to participate in solving the generation adequacy problem, as each solution has its advantages and disadvantages.154Contrary to what is claimed by the Commission in the contested decision, given the elements available and taking into account the role of DSR, in the present case, the Commission could not be satisfied merely by the ‘openness’ of the measure and conclude, consequently, that it was technology neutral, without examining in greater detail the reality and the effectiveness of the appreciation of that technological solution in the capacity market.155Although it is apparent from the contested decision that the Commission examined the elements referred to by the United Kingdom with regard to the appreciation of generation capacity in the capacity market and, as a result, inter alia, of the concerns expressed by the PTE report, the elements provided subsequently concerning the appreciation of the capacity provided by interconnection, no element referred to in the contested decision proves that the Commission carried out its own examination concerning the actual appreciation of DSR, the potential of which was recognised and expedient, for the purposes of that market. By way of example, in the contested decision there is no reference to the NG’s 3 GW estimate. By failing to examine the potential role and capacity of DSR within the capacity market, the Commission accepted the United Kingdom’s information and assumptions (see paragraphs 149 to 151 above), despite their influence on the level of capacity auctioned and the amount of aid necessary for the capacity market.156Thus, with regard to the outcome of the first T‑4 auction in December 2014, given that that auction is being carried out in accordance with modalities that appear to fail sufficiently to take into account the potential of DSR, there is a risk — which is referred to in the PTE report — that generation capacity is granted a larger role than is strictly necessary. Therefore, it cannot be excluded that if the Commission had carried out its own examination of the potential of DSR, in particular with regard to the modalities of the appreciation of the NG’s estimates and of other sources and with regard to the reasons for the success of the US examples, the detailed rules for the participation of DSR operators would have been different.157Further, with regard to the T‑1 auction, it must be recalled that, according to recitals 45 to 47 of the contested decision, some capacity will be held back from the T‑4 auction and ‘reserved’ for the T‑1 auction, based on an assessment of the amount of the ‘cost-effective’ DSR that could participate in an auction. If demand falls between the T‑4 auction and the T‑1 auction, the amount of capacity auctioned in the T‑1 auction could also be reduced. As was confirmed during the hearing, it is apparent from those recitals that the United Kingdom Government committed to auction at least 50% of the ‘reserved’ capacity in the T‑1 auction, while retaining the flexibility to resile from that commitment if DSR did not prove to be ‘cost effective in the long run’ or if the DSR sector was considered sufficiently mature. Regulation 10 of the Electricity Capacity Regulations 2014, headed ‘Determining whether capacity auction is to be held’, provides, for example, in paragraph 3 that the relevant Secretary of State may determine that a T‑1 auction is not to be held if the forecasts show that no DSR providers will apply to bid in such an auction. Therefore, as the T‑1 auction requires, inter alia, an assessment of the ‘cost-effective’ DSR capacity that will participate in the auction, the potential capacity of DSR and the assessment thereof should have been analysed by the Commission in the contested decision.158In such circumstances, taking into account, inter alia, the importance of the role that could be played by DSR within the capacity market, the available elements concerning the potential of DSR are such as to give an indication that there were doubts as to the compatibility of that scheme with the internal market, which, upon reading the contested decision, cannot be held to have been allayed following the Commission’s preliminary examination. (e) Presumed discriminatory or disadvantageous treatment of DSR within the capacity market 159Tempus maintains, in essence, that the assessment of the measure at issue should have given rise to doubts as to its compatibility with the internal market due to several infringements of the principles of equal treatment, protection of legitimate expectations and proportionality to the detriment of, inter alia, DSR operators. In particular, Tempus complains of the treatment of DSR operators concerning the length of capacity contracts, the capacity market’s cost recovery method, the conditions of participation in the auctions and the lack of additional remuneration for DSR operators in respect of the savings in the amount of electricity lost during transmission and distribution. (1) Length of capacity contracts 160Tempus submits, in essence, that the Commission should have had doubts as to the compatibility of the measure at issue with the internal market as it limits the possibility of granting capacity contracts of longer than one year to generators who have exceeded a certain threshold of capital expenditure, thereby violating the principle of equal treatment to the detriment of DSR operators. Such discriminatory treatment is contrary to the objective that the measure at issue be technology neutral, gives a competitive advantage to generators and locks in a significant part of demand which could have been avoided through DSR.161Tempus claims that that inequality in treatment is not justified by the higher investment costs borne by generators who refurbish existing plants or build new ones. DSR operators and their customers also incur investment costs. Further, the customers of DSR operators want a guarantee that they will receive income over a number of years before they make such an investment. In that regard, Tempus submits that information had been sent to the United Kingdom and that the latter could not simply assert in the notification that the DSR sector had failed to provide ‘quantitative’ evidence that contracts with a longer term are necessary to support the participation of DSR operators in the auction.162The Commission contends, in essence, that it properly examined the measure at issue with regard to the treatment of DSR operators compared with that of other capacity providers and found that that measure allowed them to be competitive, taking into account their specific characteristics. The different contract lengths offered are justified by the central objective of the measure at issue, which is securing sufficient capacity in the future, including by incentivising investments in new plants. DSR operators are not permitted to have contracts that are longer than one year because they do not have the same financial needs as generators refurbishing an existing plant or building a new one. In that regard, the Commission argues that, during the administrative procedure, neither Tempus nor UKDRA submitted a substantiated argument that DSR operators need investment at a level comparable to projects for the refurbishment of existing plants or the building of new plants and provided no quantitative evidence whatsoever to that effect.163In its replies to the written questions of the Court, the Commission claims that, given the high level of capital costs, if plants to be refurbished and new plants were offered only one-year contracts, they would probably not participate at all or would exit from the auction as their bids would be above the price cap; even if they could bid, this would likely be at a very high price, which would become the clearing price for the entire auction. The Commission argues that not only would this produce significant windfall profits for existing generation capacity and DSR operators, but it would involve higher costs for all final customers and, consequently, a disproportionate amount of aid.164In that regard, according to settled case-law, the general principle of equal treatment, as a general principle of EU law, requires that comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified. The comparability of different situations must be assessed with regard to all the elements which characterise them. These elements must in particular be determined and assessed in the light of the subject matter and purpose of the European Union act which makes the distinction in question. The principles and objectives of the field to which the act relates must also be taken into account (see judgment of 12 December 2014, Banco Privado Português and Massa Insolvente do Banco Privado Português v Commission, T‑487/11, EU:T:2014:1077, paragraph 139 and the case-law cited).165In the present case, as an initial point, it must first be noted that the measure at issue gives DSR operators no opportunity to be granted capacity contracts of longer than one year.166The contested decision states that only capacity providers undertaking capital expenditure above a GBP 125/kW threshold (plants to be refurbished) will be eligible for capacity agreements of up to a maximum of 3 years and only capacity providers undertaking capital expenditure above GBP 250/kW (new plants) will be eligible for capacity agreements up to a maximum of 15 years (recital 57 of the contested decision).167Although recital 57 of the contested decision uses the technology neutral term ‘capacity providers’, it is apparent from the notification and from a reading of Regulation 2(1) of the Electricity Capacity Regulations 2014 in conjunction with Regulations 4, 5 and 11(3) thereto that capacity contracts of up to a maximum of 3 years and 15 years are expressly limited to generating CMUs undertaking capital expenditure exceeding thresholds established by the Secretary of State to the exclusion of DSR CMUs.168Consequently, first, DSR operators are ineligible to be issued contracts of up to 3 or 15 years, even if they establish that they have undertaken capital expenditure above the thresholds set for generating CMUs in the measure at issue. Second, the measure at issue contains no capital expenditure threshold for DSR CMUs that gives DSR operators the possibility of being issued capacity contracts of longer than one year.169In the contested decision, the Commission approved the United Kingdom’s position that it was sufficient to offer capacity contracts of up to 3 or 15 years to generating CMUs with a capital expenditure exceeding a certain threshold set by the Secretary of State and it was justified to offer to DSR CMUs only one-year contracts (recitals 106, 129 and 145 of the contested decision). Thus, it decided that DSR operators needed lower capital expenditure than generating CMUs building or refurbishing plants. On that basis, the Commission accepted that new-build and refurbishment generation capacities involving high investment costs are eligible for longer capacity contracts in order to allow operators to obtain necessary financing and concluded that offering shorter capacity contracts to DSR operators did not disadvantage them vis-à-vis operators of plants to be refurbished or new plants. Consequently, it concluded that the measure at issue was technology neutral and did not strengthen the position of fossil fuel generation operators.170It is therefore appropriate to verify whether the Commission could approve the difference in treatment between DSR operators and generators without initiating a formal investigation procedure or whether the fact that it was impossible for DSR operators to be issued capacity contracts of longer than one year should have led the Commission to have doubts as to the compatibility of the measure at issue with the internal market.171In that regard, in the first place, it should be noted that the measure at issue seeks to be technology neutral, in accordance with the requirements in paragraph 226 of the Guidelines.172It is apparent from the contested decision that the measure at issue aims to procure the necessary amount of capacity to ensure the security of the UK’s electricity supply (recitals 4 and 126 of the contested decision).173In more detail, it is apparent from the notification that the main aim of the measure at issue is to enable the provision of adequate reliable capacity in the UK electricity market at minimum cost to consumers in a way that minimises unintended consequences and risks, and supports the delivery of wider government objectives, such as enabling the decarbonisation of the electricity system, the development of a more responsive demand side and further integration of the internal energy market (paragraph 139 of the notification). Further, in order to achieve the objective of guaranteeing the UK’s electricity supply, the notification specifies that the measure at issue seeks to incentivise sufficient investment in generation and non-generation capacity, including specific support for DSR (paragraph 140 of the notification). Those objectives correspond to those referred to in paragraphs 216 to 221 of the Guidelines as being lawful for aid measures promoting capacity adequacy.174With regard to the main objective of guaranteeing security of electricity supply, as referred to previously in paragraph 121 above and as the Commission expressly recognised in its replies to the Court’s written questions of 5 May 2017, the parties agree that both generation capacity and DSR capacity can, in principle, contribute to solving the generation capacity adequacy problem.175Similarly, with regard to the secondary objective of incentivising sufficient investment in new capacity, it should be noted that the objective of the measure at issue is aimed at both generation capacity and other capacity, such as DSR. The notification also expressly points out in paragraph 355 that the capacity market does not seek to procure specific volumes of capacity on the basis of technology type. On the contrary, the measure at issue seeks to allow the market to determine what is the optimum quantity of each type of capacity (new generation capacity, generation capacity from plants to be refurbished, generation capacity from existing plants, existing DSR capacity, unproven DSR capacity) in order to reach the level of security of supply determined by the United Kingdom.176It follows that DSR operators must be considered to be in an equivalent situation to that of generators with regard to the objectives of security of electricity supply pursued by the measure at issue, which are technology neutral. That is particularly true, given that the Guidelines require that aid measures implementing a capacity market be open and provide adequate incentives to both existing and future generators and to operators using substitutable technologies, such as DSR or storage solutions (paragraph 226 of the Guidelines). It was therefore for the Commission to check whether the limitation on capacity contracts longer than one year to only generation capacity would nonetheless allow the capacity market to be technology neutral without distorting competition between generators and DSR operators.177In the second place, it is apparent from the contested decision that the fact that capacity contracts of longer than one year are offered to certain capacity providers is justified by their high capital expenditure and by their difficulties in securing financing.178Thus, according to the contested decision, the rationale for longer term contracts for new entrants is to help promote competitive new entry into the market. Allowing new entrants to receive a long term contract enables new entrants to secure lower-cost financing for their investment. This can help mitigate barriers to entry for independent firms who cannot finance investment in new capacity on the back of revenues from other plants in their portfolio. By encouraging competition in the market, longer term contracts can therefore help to lower costs for consumers in both the energy and capacity markets. Longer term contracts should also reduce the risk that participants with high investment or refurbishment costs load all of these costs into a single year agreement (recital 59 of the contested decision).179It is apparent from the contested decision that the use of longer capacity contracts seeks to achieve the technology-neutral objectives, recalled in paragraph 173 above, of guaranteeing the security of electricity supply and incentivising sufficient investment in capacity. Further, although the contested decision stresses that it is necessary to encourage new entrants onto the market, it has to be noted that granting contracts of longer than one year pursues a wider goal insomuch as operators refurbishing existing plants are also eligible for capacity contracts for a maximum of three years. It follows that the main reason for granting capacity contracts of longer than one year is to mitigate the financing difficulties of certain operators, due to the size of their capital expenditure, by guaranteeing them an income over a number of years and giving them the means to make a competitive bid during the auction, by allowing them to recoup their costs over a number of years.180It should therefore be noted that the decisive criterion referred to by the measure at issue to decide which operators are eligible for capacity contracts of longer than one year is the level of capital expenditure and the financing difficulties that could prevent those operators from participating in the capacity market.181As longer contracts were found to be needed in order to create a level playing field, it was necessary to consider what length was required to allow each category of capacity provider fully to participate in the capacity market, having regard to their investment costs and their financing difficulties, in order to comply with the obligation to provide sufficient incentives to all operators. It was therefore for the Commission to investigate whether reserving capacity contracts of longer than one year to certain technologies was discriminatory and was contrary to the objective of establishing a technology neutral capacity market, thereby contravening the requirements under the Guidelines.182In the third place, it should be noted that the Commission approved the United Kingdom’s position that it was not necessary to offer capacity contracts of longer than one year to DSR operators without examining whether their capital expenditure and their financing difficulties could require the possibility of their obtaining such contracts in order to allow them to participate in the auction, while avoiding an excessively high clearing price.183It is apparent from the contested decision that the Commission examined in detail the financing needs of capacity providers engaged in building new plants or refurbishing existing ones. The Commission expressly requested that the United Kingdom provide it with additional information in support of its choices relating to the length of capacity contracts, as longer contacts were in principle more problematic and had to be justified meticulously (table 16, page 161 of the notification). The Commission was therefore able to rely on detailed information provided by the United Kingdom regarding the capital expenditure and the financing difficulties associated with the building of new plants in order to determine the optimum length of capacity contracts and the capital expenditure thresholds that had to be a condition to being granted one of those contracts. This was a question of helping those operators to obtain the necessary financing and avoiding that their participation in the capacity market lead to an excessively high clearing price, while not allowing them to recover all of their fixed investment costs simply on the basis of income from the capacity market. The information provided by the United Kingdom included, inter alia, a number of detailed case studies analysing different scenarios as well as model business plans of various operators and various plants (paragraphs 4.3.1, 4.6.5 and C.4.3 of the notification).184On the other hand, it is apparent from the contested decision that the Commission did not attempt to analyse in detail the capital expenditure and financing needs of DSR operators. Indeed, after the Commission received UKDRA’s letter of 9 June 2014, by which it drew the Commission’s attention to the difference in treatment between generators and DSR operators, the Commission did ask the United Kingdom to respond. However, the Commission then merely took formal note of the United Kingdom’s response in which it simply stated, first, that DSR operators did not have the same capital needs as operators of new plants and, second, that UKDRA had not provided a single piece of quantitative evidence to support the suggestion that longer capacity contracts are necessary to support DSR participation in the auction (paragraph 511 of the notification).185Firstly, it should be noted that the United Kingdom has provided no detailed analysis supporting its position, in striking contrast to the information relating to the financing needs of generators. Indeed, the lack of information on United Kingdom DSR has also been pointed out by the PTE in its report (see, inter alia, paragraphs 19, 96 and 101 of the report quoted in paragraphs 141 and 142 above). Although the Commission quotes some of the conclusions from the PTE’s report in recital 120 of the contested decision, it did not deem it appropriate to gather more information itself on DSR to make up for the lack of information provided by the United Kingdom. Therefore, it must be held that neither the contested decision nor the notification contains a detailed examination of the capital needs of DSR operators.186Secondly, it must be pointed out that equal treatment, with regard to the length of the capacity contracts for which the various capacity providers could bid, was the DSR operators’ main claim against both the United Kingdom Government and the Commission. It is apparent from UKDRA’s contribution to the public consultation, to which the Commission could have had access when it adopted the contested decision, that UKDRA contested not only the fact that the capacity contracts of longer than one year were reserved for generating CMUs with capital expenditure exceeding a certain threshold, but also the capital expenditure threshold selected. In particular, UKDRA expressly invited the United Kingdom to create a model of the financing needs of the various technology types and to review the amount of the thresholds on that basis. In addition, by its letter of 9 June 2014, UKDRA communicated its doubts to the Commission as to the compatibility of 15 year contracts with the Guidelines and, independently of the matter of the length of the contracts granted, reiterated the desire of DSR operators to be able to bid for capacity contracts of the same length as those offered to generators.187Thirdly, both UKDRA and Tempus accept that new DSR operators do not necessarily have the same capital expenditure as generators building new plants. Nevertheless, they submit that, much like new generating CMUs, new DSR CMUs have capital expenditure and financing difficulties that justify them being granted capacity contracts of longer than one year in order to allow them to participate fully in the capacity market. In particular, Tempus claims that DSR operators must develop a sufficiently wide portfolio of clients to enable them to cover open-ended capacity events. Further, the investment necessary to allow the electrical consumption of each of those clients to be flexible over time, the financing of which DSR operators may be required to contribute, can be significant and can require longer capacity contracts. Similarly, the PTE observes expressly in paragraph 99 of its report that certain investments relating to DSR ‘[need] the certainty of a long term capacity contract to secure finance’ and concludes that it is essential to identify the potential DSR resources which are not likely to respond to capacity market signals because the existing incentives do not meet their needs. Indeed, DSR operators were not the first to claim that all capacity providers should be able to bid for contracts of the same length, regardless of the technology used, in order to create a level playing field. Indeed, it is apparent from the notification that a number of vertically integrated electricity companies had pointed out that, in order to enable a fair capacity price comparison, all capacity providers should have access to contracts with the same length and that each capacity provider should have the freedom to choose the length of the contract that allows it to be competitive in the auction (page 79 of the notification).188Fourthly, contrary to what is claimed by the Commission, Tempus and UKDRA cannot be criticised for failing to present more detailed information during the administrative procedure. According to case-law, where appropriate, the Commission must seek relevant information (see paragraph 69 above) so that, when it adopts the contested decision, it has at its disposal elements that can reasonably be considered to be sufficient and clear for the purposes of its assessment (see, to that effect, judgments of 10 December 2008, Kronoply and Kronotex v Commission, T‑388/02, not published, EU:T:2008:556, paragraph 127, and of 10 February 2009, Deutsche Post and DHL International v Commission, T‑388/03, EU:T:2009:30, paragraph 109). Therefore, in order to establish doubts within the meaning of Article 4(4) of Regulation No 659/1999, it is sufficient that Tempus show that the Commission has neither researched nor examined, thoroughly and impartially, all of the relevant information for the purposes of that analysis or that it has failed duly to take them into account in such a way as to eliminate all doubt as to the compatibility of the notified measure with the internal market.189In the present case, having regard to the considerations set out in paragraphs 171 to 176 above and given the lack of information on the capital needs of DSR operators, it is for the Commission to inform itself further on the matter by, for example, accepting UKDRA’s offer in its letter of 9 June 2014 to provide it with further information to determine whether granting contracts of a different length to DSR operators and other capacity providers was compatible with the principle of equal treatment. That is particularly so given that the DSR sector is highly diversified and it is established that UK authorities had little knowledge of that sector when compared with the generation sector (see paragraphs 141 to 145 above).190Finally, it should be pointed out that granting contracts of up to 3 or 15 years to certain generators has an effect on competition throughout the length of that contract. As the Commission concluded in recital 131 of the contested decision that the DSR sector is still in its infancy in the United Kingdom, it was for the Commission to examine whether the fact that it was impossible for DSR operators to bid for contracts of the same length as generators did not reduce their opportunities of contributing to solving the UK capacity adequacy problem when the sector was more developed. The granting of contracts of 3 or 15 years reduces in the future the capacity auctioned on the capacity market.191Fifthly, in paragraph 102 of its report, the PTE described the risk associated with the implementation of the UK capacity market in the absence of sufficient information relating to DSR as follows:‘For all these reasons, we fully appreciate that NG were unable to carry out analysis on the demand side with the rigour and distinction that has been the hallmark of much of their other work. Nevertheless, this implies an urgent need to create a systematic process for ensuring that the resources of the demand side are not wasted only for new generation to step into the inefficiency gap.’192Therefore, it must be noted that the Commission approved the United Kingdom position that it was not necessary to offer contracts of longer than one year to DSR operators without examining how high the capital expenditure associated with new DSR CMUs was or investigating whether it was necessary to set specific thresholds for DSR CMUs having regard to their financial needs and the objectives pursued by the measure.193In the light of the foregoing, it is appropriate to conclude that the difference in the length of the capacity contracts offered to DSR operators and that of those offered to generators indicates that there were doubts as to the compatibility of the measure at issue with the internal market. It was for the Commission to examine the level of capital expenditure and the financial needs of DSR operators for the purposes of establishing that there was no infringement of the principle of equal treatment between generating CMUs and DSR CMUs, despite it being impossible for DSR operators to be granted capacity contracts of longer than one year. Having regard to the technology neutral objectives pursued by the measure at issue and the criteria established by the measure at issue, it was necessary to carry out such an examination prior to reaching a conclusion that the measure was compatible with the internal market. Therefore, the fact that the Commission did not have all the information with regard to the United Kingdom’s decision not to allow DSR operators to bid for contracts of the same lengths as those of other technologies, in the context of the preliminary examination procedure, indicates that there were doubts. (2) Cost recovery method 194Tempus submits, in essence, that the Commission should have had doubts as to whether the measure at issue was proportionate and, consequently, as to whether it was compatible with the internal market, due to the cost recovery method selected, which fails sufficiently to incentivise consumers to reduce their consumption during demand peaks and therefore does not allow the total amount of aid to be limited to the minimum amount necessary.195Thus, Tempus claims that the cost recovery method adopted, namely cost recovery based on electricity consumption between 16.00 and 19.00 each weekday in winter, rather than consumption during the three highest annual demand peaks (‘the triad’), disadvantages DSR operators and infringes the principle of proportionality by increasing the amount of aid granted. Such a method makes it more difficult for consumers not to contribute to capacity market costs by reducing their consumption, that is to say their demand, at the relevant time, taking into account the fact that that consumption is inevitable for businesses and families. That is particularly the case given that small businesses and residential consumers could not avoid capacity market costs through DSR due to the fact that, in the United Kingdom, they would be categorised according to their profile and not according to the settlement of their consumption, which is divided up into half-hour periods.196Further, by failing sufficiently to incentivise consumers to reduce their electricity demand precisely when demand is highest and capacity is weakest, Tempus claims that the method adopted increases the amount of aid granted, by obliging the United Kingdom to procure more capacity than is necessary. According to Tempus, the United Kingdom does not contest that a clearer price signal is likely to lead to a decrease in the amount of aid, given that, originally, it had opted for a method based on the triad, before subsequently changing its mind after the close of the national public consultation.197In addition, Tempus states that the change in cost recovery method was specifically requested by vertically integrated suppliers, which benefited from the change. On 26 June 2014, one month before the adoption of the contested decision, the United Kingdom Office of Gas and Electricity Management (‘Ofgem’) decided formally to request that the United Kingdom Competition and Markets Authority carry out an investigation into the market for the supply of gas and electricity to individuals and small businesses due to, inter alia, concerns caused by the strong position of vertically integrated suppliers, in particular with regard to access to a market in which competition is already weak (Annex E3 to the observations on the statement in intervention, paragraphs 3.16 to 3.18, and Annex E4 to the observations on the statement in intervention, paragraph 1.39).198The Commission responds that the cost recovery method belongs to the financing side of the capacity market, which is not (at least not directly) relevant for the compatibility assessment of the measure at issue. The cost recovery method used in the present instance is an attempt to balance the interest in maintaining a demand reduction incentive with the need to reduce uncertainty for electricity suppliers as to their share of costs, the analysis in the contested decision being based on explanations provided by the United Kingdom Government in the notification in response to UKDRA’s letter. The Commission submits that the cost recovery method benefits DSR operators and that, in any event, it adds an additional layer of peak demand charging, which would not be the case with other methods such as flat charges or general taxation. The United Kingdom adds that, during the national public consultation, participants were specifically asked to suggest alternatives to the cost recovery method based on the triad.199In that regard, the Guidelines state that an aid measure is considered to be proportionate only if its amount is limited to the minimum needed to reach the objective aimed for (paragraphs 27(e) and 69 of the Guidelines). Further, with regard to aid measures promoting capacity adequacy, they must be constructed so as to ensure that the price paid for capacity availability automatically tends to zero when the level of capacity supplied is expected to be adequate to meet the level of capacity demanded (paragraph 231 of the Guidelines).200In the present case, first of all it should be noted that the method of recovering costs incurred in financing the capacity contracts adopted as part of the measure at issue consists of a charge levied on all licensed electricity suppliers, which is calculated on the basis of their market share of the electricity demand registered between 16.00 and 19.00 on weekdays from November until February (recital 69 of the contested decision).201Next, it should be stated that, in the contested decision, the Commission approved the cost recovery method adopted in the measure at issue. Thus, it concluded that the cost recovery method was an incentive to reduce electricity demand during peak times, while being predictable for electricity suppliers (recital 129 of the contested decision).202Therefore, it is appropriate to determine whether the Commission was able to approve the cost recovery method adopted in the measure at issue without initiating a formal investigation procedure or whether that method should have led the Commission to have doubts as to whether the measure at issue was compatible with the internal market.203In that regard, in the first place, contrary to the submissions of the Commission, it should be noted that the cost recovery method is relevant when assessing whether the measure at issue is compatible with the internal market and, in particular, whether it is proportionate.204Firstly, the amount of aid depends on the volume of capacity purchased through the capacity market and the auction clearing price. On the one hand, the volume of the capacity auctioned by the United Kingdom is determined by an electricity demand recommendation in combination with the available capacity and the application of a reliability standard seeking to achieve the adequacy level desired during demand peaks (recital 32 of the contested decision). The necessary capacity volume is therefore directly linked to the level of capacity consumed during demand peaks. The lower the demand peaks, the less necessary it is for the United Kingdom to purchase capacity to reach the desired level of security of electricity supply. On the other hand, a reduction in the capacity volume auctioned may also lead to a reduction in the clearing price insofar as it leads to a greater number of capacity providers competing for the same capacity volume. As the United Kingdom points out in its notification, greater competition leads to a lower auction clearing price (point 2, ‘Box 2 — When will it be possible to withdraw the Capacity Market ?’ of the notification). Indeed, the notification acknowledges that a reduction in electricity consumption during demand peaks leads, in due course, to an exit from the capacity market (see figures 8 and 9 on page 47 of the notification, which show that the ‘missing money’ problem will be reduced as DSR progresses).205Secondly, the United Kingdom accepted that the capacity market cost recovery method influences the volume of capacity auctioned. The United Kingdom explains that linking the charges intended to finance the recovery of the costs of the capacity market to the consumption of electricity during demand peaks is a clear incentive for the parties concerned to reduce their consumption during demand peaks, which reduces the amount of capacity needing to be purchased in order to reach the desired level of security of supply and, consequently, also reduces costs for consumers (point 624 of the capacity market project that was the subject of public consultation).206In the second place, it is apparent from the notification that the United Kingdom amended the cost recovery method after the public consultation. It was initially envisaged that the amount of the charges would be calculated on the basis of the electricity suppliers’ market share in the electricity demand registered during the so-called ‘triad’ periods, that is to say the three half-hour periods registering the highest annual electricity consumption in the United Kingdom during the period from November to February (paragraphs 521 and 522 of the notification). It was only after the public consultation that the United Kingdom decided to amend the cost recovery method to adopt one based on electricity consumption between 16.00 and 19.00 during winter weekdays, as described in paragraph 200 above.207In the third place, it should be noted that the Commission approved the United Kingdom’s position without examining the consequences of that amendment on the total amount of aid and, consequently, on whether the measure at issue was proportionate.208In its letter of 9 June 2014, UKDRA notified the Commission of its concerns following the amendment of the cost recovery method. UKDRA took the view that that method would blunt the price signal that should be sent to consumers during the highest demand peaks to reduce their demand. Further, the Commission’s attention was also drawn to the fact that residential consumers were categorised according to pre-established profiles and could not avoid capacity market costs by changing their consumption between 16.00 and 19.00.209Indeed, following UKDRA’s letter of 9 June 2014, the Commission asked the United Kingdom to respond. However, the Commission then simply noted the United Kingdom’s response, in which it merely affirmed that the cost recovery method ultimately adopted retained an incentive to reduce electricity consumption at peak times, while being predictable for suppliers (recital 129 of the contested decision). In particular, according to the United Kingdom, as the triad periods were identified after the event, using them as a reference period for calculating the charges created uncertainty for suppliers regarding the amount of their contribution to the financing of the system, which could incentivise them to make consumers pay a higher price. The United Kingdom also maintained that taking a predictable and defined period for the calculation of the charges was also intended to encourage the development of time-of-use tariffs, an approach that could also benefit residential consumers, who would then be able to respond and reduce their consumption between 16.00 and 19.00 on winter weekdays (paragraph 522 of the notification).210Despite the acknowledgment that the cost recovery method influences the volume of capacity needing to be procured on the capacity market, it is apparent from the contested decision that the Commission did not investigate whether the new cost recovery method effectively maintained an equivalent incentive to reduce electricity consumption during demand peaks by, inter alia, encouraging the development of DSR.211The Commission also did not investigate whether the cost recovery method adopted affected, inter alia, DSR operators’ access to the market, in particular by increasing the barriers to entry and expansion resulting from the strong position of vertically integrated suppliers. An aid measure may also have distortive effects on competition by strengthening or maintaining substantial market power of the beneficiary. Even where aid does not strengthen substantial market power directly, it may do so indirectly, by discouraging the expansion of existing competitors or inducing their exit or discouraging the entry of new competitors (paragraph 92 of the Guidelines).212With regard to the United Kingdom’s argument that the method initially proposed could incentivise electricity suppliers to impose higher premiums on end consumers, the Commission did not explain how that risk had any effect on the total amount of aid. Further, the Commission did not examine whether, with regard to consumers, such a premium could be offset by reducing the volume of capacity purchased on the capacity market, or even the clearing price, for the reasons set out in paragraphs 204 and 205 above.213In the light of the foregoing, it must be concluded that it was for the Commission to examine the potential effect of the change to the cost recovery method on whether the measure at issue is proportionate and, consequently, whether it is compatible with the internal market. Therefore, the fact that the Commission did not have all the information with regard to the consequences of changing the cost recovery method, in the context of the preliminary examination procedure, was another indication that there were doubts. (3) Conditions of participation in the capacity market 214Tempus submits, in essence, that the Commission should have had doubts as to whether the measure at issue was compatible with the internal market, insofar as it infringed the Guidelines, and, in particular, the obligation to encourage and provide adequate incentives to DSR operators, due to the conditions of participation in the capacity market to which DSR operators were subject and which made it difficult for them to participate in the capacity market.215Firstly, Tempus submits that the interplay between the transitional auctions and the enduring auctions encourages DSR operators to participate in the transitional auctions due to their more favourable participation conditions, which leads them to be de facto excluded from the first T‑4 auctions. Instead of encouraging DSR operators to participate in the capacity market by giving them additional opportunities to bid, the transitional auctions thus actually lead to their participation in the enduring actions being restricted.216Secondly, Tempus submits that the measure at issue disadvantages DSR operators by obliging all capacity market participants to guarantee open-ended capacity events, whereas the majority of capacity events are time bound. By doing so, the measure at issue failed sufficiently to take into account the specific nature of DSR operators and discouraged them from participating in the capacity market.217Thirdly, Tempus submits that imposing the same bid bond requirement on participants in the capacity market may cause a market entry problem for DSR operators, given that the sector is still in its infancy. The problem is aggravated by the requirement to bid to cover open-ended capacity events. Indeed, the United Kingdom had initially intended to require a bid bond from new DSR operators that was lower than new generators. The measure at issue therefore discourages DSR operators from participating in the capacity market.218Fourthly, in response to the Commission’s argument in its defence that a 2 MW de minimis threshold for participation in the enduring auction was low and encouraged DSR operators to participate, Tempus submits that the threshold was actually rather high, in particular in the light of the threshold adopted in the US capacity market examples, and worsened the problems associated with the amount of the bid bond.219The Commission, supported by the United Kingdom, submits, firstly, that the measure at issue does not require DSR operators to choose between the transitional auctions and the enduring auctions, but, on the contrary, offers an additional chance to DSR operators who were not able to participate in the first T‑4 auctions or who participated in them unsuccessfully, with a view to support growth in the sector. Since the transitional auctions do not aim to provide additional support to DSR operators that are capable of winning enduring auctions, the exclusion from transitional auctions of DSR operators that have successfully participated in enduring auctions is entirely justified.220Secondly, the Commission submits that, in the light of the objective pursued by the measure at issue, namely security of supply regardless of the actual duration of each stress event on the system, the fact that it was not possible to bid for time-bound capacity events does not constitute discrimination against DSR operators insofar as providing for such an eventuality would limit the reliability of DSR operators vis-à-vis other capacity providers, would make the auctions more complicated and could also force the United Kingdom to procure more capacity. The United Kingdom adds that although the possibility of bidding for time-bound capacity events may be appropriate in the DSR sector, as such bidding is more familiar there and allows DSR operators to bid more accurately, it is not justified in the enduring regime insofar as it risks compromising the objective pursued or making it more expensive.221Thirdly, the Commission concludes that the bid bond conditions are reasonable. It observes that such a bond is intended to demonstrate the seriousness of the intention of new operators to participate and encourage them to provide the capacity necessary to reach the objective of security of supply. It notes that no discrimination issue was raised in that regard during the administrative procedure. The Commission also points out that the difference between the amounts of the bid bond required in the context of the enduring regime and those required in the context of the transitional regime is due to the fact that the latter regime was specifically designed to encourage new DSR operators. The United Kingdom adds that the majority of responses to the public consultation supported the inclusion of a collateral requirement for DSR operators and considered that the proposed level was appropriate.222Lastly, in its rejoinder, the Commission submits that Tempus’s arguments relating to the 2 MW de minimis threshold are inadmissible as they were only made at the reply stage. Further, it submits that the 2 MW de minimis threshold is low.223In that regard, it should be noted that paragraph 226 of the Guidelines states that the measure should be open and provide adequate incentives to both existing and future generators and to operators using substitutable technologies, such as DSR or storage solutions.224In the present case, it should first be noted that the notification indicates that the measure at issue contains some measures designed to encourage the development of DSR.225Firstly, the notification states that the organisation of transitional auctions is expressly intended to support the growth of DSR and provide the best possible chance that DSR operators are able to compete successfully in the enduring regime subsequently. In addition to their existence, the transitional auctions have certain features designed to encourage the development of DSR. The bid bond required to participate in the transitional auctions is set at 10% of the level required to participate in the enduring auctions. Further, the transitional auctions allow bids to cover time-bound capacity events, whereas the enduring auctions require participants to commit to cover open-ended capacity events (paragraphs 222 and 223 of the notification).226Secondly, the notification states that DSR is encouraged to develop by the organisation of the T‑1 auctions and, in particular, the guarantee from the United Kingdom to procure during those auctions at least 50% of the volume of its capacity initially reserved for such auctions, regardless of how need has developed between the date when the T‑4 auctions were organised and the date when the T‑1 auctions are organised (paragraphs 224 to 226 of the notification).227Thirdly, the notification states that DSR is also encouraged to develop by some of the conditions of participation in the enduring auctions. In particular, those conditions include the setting of a 2 MW de minimis threshold, the possibility of aggregating and the possibility for DSR operators of influencing the clearing price (paragraph 224 of the notification).228In the contested decision, the Commission approved the United Kingdom’s position. It states expressly in recital 131 of the contested decision that the measure at issue supports the development of DSR and that it includes measures specifically designed to help to develop the sector, which is still in its infancy. It is apparent from the contested decision that those measures include, inter alia, the fact that the transitional auctions are ‘limited’ to DSR operators and are specifically designed to encourage the development of DSR, by helping DSR operators that are not yet mature enough to be competitive in the enduring auctions (recitals 51 and 107 of the contested decision). They also include the guarantee that T‑1 auctions, which are ‘a better route to market’ for DSR operators than the T‑4 auctions, are organised and that the United Kingdom ‘commits’ to procure at least 50% of the capacity reserved in such auctions, while retaining some flexibility in the long term (recital 46 of the contested decision).229Therefore, it is appropriate to determine whether the Commission was able to confirm that the measure at issue provided adequate incentives to DSR without initiating a formal investigation procedure or whether the Commission should have had doubts as to whether the measure at issue was compatible with the internal market. (i) Transitional auctions 230Tempus submits, in essence, that the more favourable participation conditions will lead DSR operators to favour participating in transitional auctions. According to Tempus, that would lead to a de facto exclusion of DSR operators from the first T‑4 auction. That would also lead to long-term capacity allocated to generators during the auctions being locked into the market.231In that regard, firstly, it should be noted that the measure at issue does not exclude DSR operators from the enduring T‑4 and T‑1 auctions, provided that they satisfy the participation conditions.232Secondly, contrary to what is claimed by Tempus, it should be pointed out that there is no genuine mutual exclusion between participation in the transitional auctions and participation in the enduring auctions. DSR operators whose bids have not been successful in the first T‑4 auction are still able to participate in the transitional auction. DSR operators that have bid successfully in the transitional auction are still able to participate in the subsequent T‑4 and T‑1 auctions. Therefore, the measure at issue does not require DSR operators to choose between participating in the transitional auction or the enduring auction.233Indeed, DSR operators that have obtained a capacity contract after the first T‑4 auction are not eligible to participate in the transitional auction. However, contrary to what is claimed by Tempus, that limitation is not tantamount to excluding DSR operators from the first T‑4 auction. The transitional auction is intended only to help DSR operators that are not sufficiently mature to participate successfully in the first enduring auction to develop by giving them an additional chance to receive a payment for capacity from 2015 and 2016 in order to be more competitive in the subsequent enduring auctions. In that regard, as the Commission rightly claims, the fact that the DSR sector is still in its infancy does not mean that some DSR operators have not already reached a sufficient level of maturity to be able to participate competitively in the enduring auction from the first T‑4 auction.234Thirdly, with regard to the risk of market lock-in due to the lower level of participation of DSR operators in the T‑4 auctions and due to the successive granting of an excessive amount of long capacity contracts to generators, that argument will be examined with those relating to the interaction between the T‑4 auctions and the T‑1 auctions. The risk of market lock-in referred to by Tempus assumes that the capacity volume reserved for T‑1 auctions does not allow DSR to develop.235It must be concluded that the interaction between the transitional auctions and the enduring auctions does not lead DSR operators to be excluded from the enduring auctions.236However, it must also be held that, by definition, the transitional auctions are not part of the enduring regime. Further, contrary to what is claimed by the Commission in recital 51 of the contested decision, it is apparent from the documents before the Court that the transitional auctions are not reserved solely for DSR operators, but are also open to small CMUs, as is observed in Regulation 29 of the Electricity Capacity Regulations 2014. In such circumstances, it is appropriate also to examine whether the enduring auctions provide DSR operators with adequate incentives. (ii) T‑1 auctions and their interaction with T‑4 auctions 237Tempus maintains, in essence, that the enduring auctions do not provide DSR operators with adequate incentives because, first, T‑4 auctions have not been designed to consider the lead time of DSR operators and, second, the capacity volume reserved for the T‑1 auctions is limited.238In that regard, at the outset, it should be noted that the T‑1 auctions are particularly important for DSR operators.239The parties are in agreement that the T‑1 auctions may be better adapted for DSR operators than the T‑4 auctions due to those operators’ lead times. Thus, according to the contested decision, the T‑1 auctions are a ‘better route to market’ for DSR operators (recital 46 of the contested decision). Similarly, in its application, Tempus claims that it may be difficult for DSR operators to participate in the T‑4 auctions as those auctions require participants to bid and make investments immediately to provide capacity four years later and also receive payment only four years later (paragraph 75 of the application).240Indeed, the volume of capacity reserved for the T‑1 auction is calculated in the measure at issue on the basis of an assessment of the amount of cost-effective DSR that could participate in the auction (recital 45 of the contested decision).241However, firstly, it should be noted that the volume of capacity reserved in the T‑1 auctions is limited when compared with the volume of capacity auctioned during the T‑4 auctions. Further, the T‑1 auctions are in no way reserved for DSR operators and a part of the volume of capacity auctioned in the T‑1 auctions must therefore be attributed to capacity providers other than DSR operators.242Secondly, contrary to what is claimed by the Commission in recital 46 of the contested decision, it is apparent from the documents before the Court that there is no guarantee that the United Kingdom will organise a T‑1 auction if a T‑4 auction is organised or that it will procure through the T‑1 auction at least 50% of the volume initially reserved for that auction. While Regulations 7(4)(b), 10 and 26 of the Electricity Capacity Regulations 2014, read together, mean that the Secretary of State may decide not to organise T‑1 auctions, the text is silent on the commitment to auction at least 50% of the volume of capacity initially reserved for those auctions. At the hearing, when answering the Court’s questions, the representatives of the Commission and of the United Kingdom were also unable to point to the legal provision confirming the existence of such a guarantee, aside from the United Kingdom’s political statements.243In the light of the foregoing, it is appropriate to conclude that, although the organisation of T‑1 auctions may genuinely encourage the development of DSR, the Commission should have had doubts as to the size of the incentive in the present case, having regard to the limited volume of capacity reserved to the T‑1 auction and the absence of an express legal provision guaranteeing that the United Kingdom would procure at last 50% of the volume reserved for those auctions. (iii) Conditions of participation in the enduring auctions 244Tempus claims, in essence, that the conditions of participation in the enduring auctions fail adequately to incentivise DSR operators. According to Tempus, in practice, it is unlikely, having regard to some of the conditions of participation, that DSR operators are in a position to participate in the T‑4 auctions. Tempus relies, inter alia, on that fact that it is impossible for DSR operators to bid for a time-bound capacity obligation and on the amount of the bid bond.245In the first place, with regard to the duration of the capacity events, Tempus claims that the measure at issue discriminates against DSR operators by treating all participants in the enduring auctions equally and by requiring that everyone, including DSR operators, submit bids in respect of open-ended capacity events.246In that regard, as Tempus points out, the United Kingdom decided, in respect of the enduring regime, to require all operators to be capable of responding to open-ended capacity events. Conversely, under the transitional auctions, Article 29(3) of the Electricity Capacity Regulations 2014 allows DSR operators to elect whether to bid for either a time-bound or an open-ended capacity obligation. Further, as the United Kingdom acknowledges in its written pleadings before the Court, time-bound capacity obligations are more familiar to DSR operators and can help them accurately to quantify their risk exposure, meaning they can make more accurate bids in the enduring regime.247However, the Commission rightly claims that bids restricted to covering time-bound capacity events provide a lower level of security of supply vis-à-vis bids covering open-ended capacity events, and therefore do not allow the desired level of security of supply to be reached as easily. Requiring all capacity providers to cover open-ended capacity events, thereby making DSR operators responsible for the risk of default during ongoing capacity events, is therefore insufficient to give rise to doubts as to the compatibility of the measure at issue, insofar as that measure takes into account the financing needs relevant to each technology in order to allow all capacity providers to participate effectively in the capacity market. As is set out in paragraphs 182 to 192 above, it does not appear, however, that the Commission sought to verify whether the measure at issue took into account the financing needs of DSR operators.248In the second place, with regard to the bid bond, Tempus submits that imposing the same bid bond requirement on all participants in the capacity market may cause a market entry problem for DSR operators, given that the sector is still in its infancy.249In that regard, firstly, it should be noted that the United Kingdom accepted that the bid bond could be a barrier to new DSR operators accessing the market. It is apparent from the documents before the Court that the United Kingdom had initially envisaged reducing the amount of the bid bond for unproven DSR CMUs to avoid that bid bond being a barrier to entry for DSR operators new to the market (point 565 of the capacity market project that was the subject of public consultation). Further, during the public consultation, some DSR operators had also stated that the amount of the bid bond was a barrier to entry for new DSR operators. The amount of the bid bond may constitute a barrier to entry for new DSR operators in particular as all participants in the capacity market had to commit to covering open-ended capacity events while DSR operators may have more difficulty than generators in covering an ongoing capacity event. As DSR operators risk potentially being perceived as more likely to default, they may therefore have more difficulties in financing the amount of the bid bond.250Secondly, it should be observed that, following observations from generators and distributors in response to the public consultation, the United Kingdom decided, in the measure at issue, to align the bid bond imposed on unproven DSR CMUs with that imposed on new generating CMUs that are not yet operational. Therefore, the measure at issue is less favourable to DSR operators than the system initially envisaged in order to respond to the financing difficulties encountered by those operators.251However, as the Commission points out in its defence, while the United Kingdom had initially intended that the bid bond would be entirely forfeited in the event of a supply default, it should be noted that the measure at issue provides that the bid bond will be forfeited only pro rata to the volume of capacity that was not actually supplied by the DSR operators, provided that they provide at least 90% of the volume of capacity that they had committed to. Therefore, the measure at issue contains a measure specifically designed to make up for the fact that DSR operators lost the advantage that they had in the reduced bid bond amount when the amount of the bid bond required from unproven DSR CMUs was aligned with that of new generating CMUs.252Consequently, in the light of the goal pursued by the bid bond, aligning the amount of the bid bond required from unproven DSR CMUs with that of new generating CMUs is insufficient in itself to give rise to doubts as to the compatibility of the measure at issue, insofar as the measure takes into account the financing needs relevant to each technology in order to allow all capacity providers to participate effectively in the capacity market. As is set out in paragraphs 182 to 192 above, it does not appear, however, that the Commission sought to verify whether the measure at issue took into account the financing needs of DSR operators.253In the third place, in response to the arguments put forward by the Commission in its defence, Tempus claims that the setting of a 2 MW de minimis threshold is a barrier to entry to the capacity market for new DSR operators.254At the outset, it should be stated that Tempus’s arguments with regard to that threshold relate to the line of argument in the application concerning the discriminatory or disadvantageous treatment of DSR operators within the capacity market, as pointed out by Tempus at the hearing. Further, this argument responds to the Commission’s claims in its defence that the threshold was low and favourable to DSR. Thus, in the present case, the argument in question has not only a close connection with the application, but results, further, from the normal evolution of debate in proceedings before the Court (see, to that effect, judgment of 26 November 2013, Groupe Gascogne v Commission, C‑58/12 P, EU:C:2013:770, paragraph 31). Contrary to the Commission’s claims, that argument must therefore be considered merely to amplify a plea set out in the application.255Then, it should be observed that the notification presents the 2 MW de minimis participation threshold as low having regard to the participation threshold adopted by NG in the context of other measures and, consequently, as incentivising DSR operators to participate in the capacity market (paragraph 224 of the notification).256However, firstly, it should be noted that the participation threshold for the PJM capacity market was only 100 kW, being 20 times lower than the threshold adopted by the measure at issue. The PJM capacity market is expressly taken as a reference by the United Kingdom in the notification in support of its statement that the measure at issue allows the DSR sector to develop (paragraph 221 of the notification).257Secondly, while it is true that it is indeed possible for DSR operators to aggregate several sites in order to reach the 2 MW de minimis threshold, it should be noted that they are liable to pay a bid bond on the whole of the 2 MW, if even a tiny proportion of that volume is unproven DSR capacity. For the reasons set out in paragraphs 249 to 252 above, the amount of the bid bond may constitute a barrier to entry for new DSR operators.258Consequently, the Commission should have had doubts as to the statement that the setting of a 2 MW de minimis participation threshold was a measure encouraging DSR. (iv) Conclusion 259It is apparent from the entirety of the foregoing that the interplay between the T‑4 and the T‑1 auctions and some of the conditions of participation in the capacity market applicable to DSR operators should have led the Commission to have doubts as to, first, the capacity of the measure at issue to reach the objectives claimed by the United Kingdom in terms of development of DSR and, second, its compatibility with the requirements of the Guidelines in terms of adequate incentives for DSR operators and, consequently, as to the compatibility of the measure at issue with the internal market. (f) Lack of additional remuneration for DSR operators in respect of the savings in the amount of electricity lost during transmission and distribution 260Tempus claims that the measure at issue gives rise to doubts as to its compatibility with the internal market in that it does not remunerate DSR operators for the savings in the amount of electricity lost during transmission and distribution. According to Tempus, the capacity provided by DSR operators reduces not only the overall amount of capacity required and circulating in the capacity market, but also the amount of the capacity lost in transmission and distribution of the electricity by around 7-8%. It takes the view that those savings should be incorporated into the remuneration of DSR operators in order to incentivise improvements to grid efficiency.261The Commission, supported by the United Kingdom, takes the view that the lack of additional remuneration for savings in the amount of electricity lost during transmission and distribution was analysed in the notification and was examined in the contested decision. Thus, the Commission adopted the explanation of the United Kingdom Government, according to which the capacity market has the sole objective of guaranteeing the availability of sufficient capacity on the system, not to reward all other benefits provided by each type of technology.262In essence, Tempus claims that the measure at issue gives rise to doubts as to its compatibility with the internal market in that it does not remunerate DSR operators for the savings in the amount of electricity lost during transmission and distribution.263In the contested decision, the Commission concluded that the measure at issue remunerates providers solely for making capacity available to the exclusion of all other services, such as delivering energy (recital 132 of the contested decision). It then took the view that, in the light of the objective pursued by the measure at issue, namely ensuring capacity adequacy in order to reach the desired level of security of supply, the lack of additional remuneration in respect of the savings in the amount of electricity lost during transmission and distribution was justified (recital 140 of the contested decision).264In that regard, it must be held that the measure at issue essentially establishes a capacity market that seeks to remedy the UK’s capacity adequacy problem.265The Guidelines expressly provide that the appropriateness of aid measures such as the one at issue is conditional on ‘the aid [remunerating] solely the service of pure availability provided by the generator, that is to say, the commitment of being available to deliver electricity and the corresponding compensation for it, for example, in terms of remuneration per MW of capacity being made available’ and that ‘the aid should not include any remuneration for the sale of electricity, that is to say, remuneration per MWh sold’.266Having regard to those considerations, it must be held that the lack of additional remuneration in respect of the savings in the amount of electricity lost during transmission and distribution did not give rise to doubts within the meaning of Article 4(3) and (4) of Regulation No 659/1999 that should have led the Commission to initiate the formal investigation procedure referred to in Article 108(2) TFEU. Consequently, Tempus’s arguments in that regard must be rejected. (g) Conclusion 267It is apparent from examination of the first plea that there is a body of objective and consistent indications, based (i) on the length and circumstances of the pre-notification phase and (ii) on the incomplete and insufficient content of the contested decision owing to the lack of appropriate investigation by the Commission at the preliminary examination stage with regard to some aspects of the capacity market, that demonstrates that the Commission adopted the contested decision despite the existence of doubts. Without needing to adjudicate on Tempus’s other arguments, the Court concludes that the assessment of the compatibility of the measure notified with the internal market gave rise to doubts within the meaning of Article 4 of Regulation No 659/1999, which should have led the Commission to initiate the procedure referred to in Article 108(2) TFEU.268The contested decision must therefore be annulled. 2. The second plea in law, alleging a failure to state reasons 269In view of the annulment of the contested decision, which is necessary in the light of the first plea in law, there is no need to examine the second plea in law. Costs 270Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay the costs incurred by Tempus Energy Ltd and Tempus Energy Technology Ltd, in accordance with the form of order sought by them.271Under Article 138(1) of the Rules of Procedure, the Member States which have intervened in the proceedings are to bear their own costs. Consequently, the United Kingdom must be ordered to bear its own costs.On those grounds,hereby: 1. Annuls Commission Decision C(2014) 5083 final of 23 July 2014 not to raise objections to the aid scheme for the capacity market in the United Kingdom, on the ground that that scheme is compatible with the internal market pursuant to Article 107(3)(c) TFEU (State aid 2014/N-2); 2. Orders the European Commission to bear its own costs and to pay the costs incurred by Tempus Energy Ltd and Tempus Energy Technology Ltd; 3. Orders the United Kingdom to bear its own costs. Frimodt NielsenKreuschitzForresterPółtorakPerilloDelivered in open court in Luxembourg on 15 November 2018.E. CoulonRegistrarS. GervasoniPresidentTable of contentsI. Background to the disputeA. Applicants and subject matter of the disputeB. The contested measureC. Relevant guideline provisionsD. The contested decisionII. Procedure and forms of order soughtIII. LawA. AdmissibilityB. Substance1. The first plea in law, alleging infringement of Article 108(2) TFEU, infringement of the principles of non-discrimination, proportionality and protection of legitimate expectations and incorrect assessment of the facts(a) Preliminary observations(b) Concept of doubts and the Commission’s decision whether or not to initiate a formal investigation procedure(c) Length of the discussions between the Member State and the Commission and the circumstances surrounding the adoption of the contested decision(d) Assessment by the Commission at the preliminary examination stage of the role of DSR within the capacity market in the light of the available information(1) Equivalence and advantages of generation and DSR(2) Positive role of DSR(3) Available information on the potential of DSR(e) Presumed discriminatory or disadvantageous treatment of DSR within the capacity market(1) Length of capacity contracts(2) Cost recovery method(3) Conditions of participation in the capacity market(i) Transitional auctions(ii) T‑1 auctions and their interaction with T‑4 auctions(iii) Conditions of participation in the enduring auctions(iv) Conclusion(f) Lack of additional remuneration for DSR operators in respect of the savings in the amount of electricity lost during transmission and distribution(g) Conclusion2. The second plea in law, alleging a failure to state reasonsCosts( *1 ) Language of the case: English. | 97143-5f7fa8b-495c | EN |
Air carriers who do not express air fares for intra-Community flights in euros are required to indicate those fares in a local currency objectively linked to the service offered | 15 November 2018 ( *1 )(Reference for a preliminary ruling — Regulation (EC) No 1008/2008 — Article 2(18) — Article 23(1) — Transport — Common rules for the operation of air services in the European Union — Information — Indication of the final price to be paid — Inclusion of the air fare in the final price to be paid — Obligation to indicate air fares in euros or local currency — Choice of the relevant local currency — Connecting factors)In Case C‑330/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesgerichtshof (Federal Court of Justice, Germany), made by decision of 27 April 2017, received at the Court on 2 June 2017, in the proceedings Verbraucherzentrale Baden-Württemberg eV v Germanwings GmbH, THE COURT (Fifth Chamber),composed of K. Lenaerts, President of the Court, acting as President of the Fifth Chamber, F. Biltgen (Rapporteur) and E. Levits, Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: C. Strömholm, Administrator,having regard to the written procedure and further to the hearing on 19 April 2018,after considering the observations submitted on behalf of:–Verbraucherzentrale Baden-Württemberg eV, by B. Stillner, Rechtsanwalt,Germanwings GmbH, by P. Baukelmann and N. Tretter, Rechtsanwälte,the European Commission, by W. Mölls and F. Wilman, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 28 June 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 2(18) and Article 23(1) of Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community (OJ 2008 L 293, p. 3).2The request has been made in proceedings between Germanwings GmbH and Verbraucherzentrale Baden-Württemberg eV (consumers’ association of the Land of Baden-Württemberg, Germany) (‘the Verbraucherzentrale’) concerning the indication by Germanwings of air fares in pounds sterling for a flight from London (United Kingdom) to Stuttgart (Germany). Legal context 3Recital 16 of Regulation No 1008/2008 reads as follows:‘Customers should be able to compare effectively the prices for air services of different airlines. Therefore the final price to be paid by the customer for air services originating in the Community should at all times be indicated, inclusive of all taxes, charges and fees. Community air carriers are also encouraged to indicate the final price for their air services from third countries to the Community.’4Article 1 of that regulation, ‘Subject matter’, provides in paragraph 1:‘This Regulation regulates the licensing of Community air carriers, the right of Community air carriers to operate intra-Community air services and the pricing of intra-Community air services.’5Article 2 of the regulation, ‘Definitions’, states inter alia:‘For the purposes of this Regulation:…18.“air fares” means the prices expressed in euro or in local currency to be paid to air carriers or their agents or other ticket sellers for the carriage of passengers on air services and any conditions under which those prices apply, including remuneration and conditions offered to agency and other auxiliary services’.6Article 22 of the regulation, ‘Pricing freedom’, provides in paragraph 1:‘Without prejudice to Article 16(1), Community air carriers and, on the basis of reciprocity, air carriers of third countries shall freely set air fares and air rates for intra-Community air services.’7Article 23 of the regulation, ‘Information and non-discrimination’, provides in paragraph 1:‘Air fares and air rates available to the general public shall include the applicable conditions when offered or published in any form, including on the Internet, for air services from an airport located in the territory of a Member State to which the Treaty applies. The final price to be paid shall at all times be indicated and shall include the applicable air fare or air rate as well as all applicable taxes, and charges, surcharges and fees which are unavoidable and foreseeable at the time of publication. In addition to the indication of the final price, at least the following shall be specified:(a)air fare or air rate;(b)taxes;(c)airport charges; and(d)other charges, surcharges or fees, such as those related to security or fuel;where the items listed under (b), (c) and (d) have been added to the air fare or air rate. Optional price supplements shall be communicated in a clear, transparent and unambiguous way at the start of any booking process and their acceptance by the customer shall be on an “opt-in” basis.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 8Germanwings is an air carrier established in Germany.9In early September 2014 a customer in Germany booked a flight from London to Stuttgart on the website www.germanwings.de operated by Germanwings.10On that website the fare for the flight was indicated in pounds sterling only. After booking the flight, the customer received an invoice also showing the fare and other charges in pounds sterling.11Taking the view that that practice was unfair conduct and that the fares had to be shown in euros, the Verbraucherzentrale, which had been notified by the customer, brought proceedings for a prohibitory order against Germanwings before the Landgericht Köln (Regional Court, Cologne, Germany), which that court granted.12Germanwings appealed against that court’s decision to the Oberlandesgericht Köln (Higher Regional Court, Cologne, Germany), which allowed the appeal on the ground that Regulation No 1008/2008 does not prohibit air carriers from indicating air fares in a currency other than the euro.13The Bundesgerichtshof (Federal Court of Justice, Germany), which is hearing the appeal on a point of law against the appellate court’s judgment, considers that the outcome of the dispute in the main proceedings depends on the interpretation of Article 23(1) and Article 2(18) of Regulation No 1008/2008.14The referring court is uncertain, in the first place, whether Article 23(1) of that regulation must be interpreted as meaning that, for intra-Community flights, air fares must, if not indicated in euros, be expressed in a particular local currency, or whether air carriers are free to choose the relevant local currency in this respect.15The referring court observes that the theory that air carriers are free to indicate air fares in the local currency of their choice is supported a priori by the lack of an obligation to indicate air fares in a specific currency, which follows expressly from Article 23(1) of Regulation No 1008/2008, and by the wording of Article 22(1) of the regulation, which provides that air carriers are in principle to set their fares freely for intra-Community air services. However, the referring court considers that the objective of Regulation No 1008/2008, which, according to recital 16, is to make it possible for customers to compare effectively the prices for air services of different airlines, would be compromised if air carriers were given such a margin of discretion.16In the second place, should the Court take the view that air fares, if not expressed in euros, should be indicated in a predetermined local currency, the referring court is uncertain essentially as to the interpretation of the term ‘local currency’ in Article 2(18) of that regulation, in particular where an air carrier whose seat is in one Member State offers a flight to a customer on the internet and the place of departure of the flight is in the territory of another Member State whose currency is not the euro.17According to the referring court, there are several local currencies that might be relevant in this respect, namely the currency which is legal tender in the Member State in whose territory the air carrier is established, the one which is legal tender in the Member State where the customer is present, the one to which the ‘top-level domain of the air carrier’s website’ refers, or the one which is legal tender in the Member State of the place of departure of the flight concerned.18The referring court considers that the choice of the currency which is legal tender in the Member State of the place of departure of the flight would comply best with the objective of Regulation No 1008/2008. It notes, moreover, that it is the practice of air carriers to use that currency. Nevertheless, the Court has not yet ruled on the point.19In those circumstances the Bundesgerichtshof (Federal Court of Justice) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Must air fares for intra-Community air services, to be indicated under the second and third sentences of Article 23(1) of Regulation No 1008/2008, be indicated in a particular currency, in so far as they are not expressed in euros?(2)If Question 1 is answered in the affirmative:In which local currency may the fares referred to in Article 2(18) and the second and third sentences of Article 23(1) of Regulation No 1008/2008 be indicated, where an air carrier established in one Member State (in this case Germany) advertises and offers an air service with a place of departure in another Member State (in this case the United Kingdom) to a consumer on the internet?In this connection, is it decisive that an internet address is used with a country-specific top-level domain (in this case www.germanwings.de) that refers to the Member State in which the air carrier is established, and the consumer is present in that Member State?Is it relevant that all or the overwhelming majority of air carriers indicate the fares in question in the local currency used at the place of departure?’ Consideration of the questions referred 20By its questions, which should be considered together, the referring court essentially asks whether Article 23(1) in conjunction with Article 2(18) of Regulation No 1008/2008 must be interpreted as meaning that, when indicating air fares for intra-Community air services, air carriers who do not express those fares in euros may indicate them in any local currency of their choice. If not, the referring court wishes to know whether, in a situation such as that at issue in the main proceedings, in which an air carrier established in one Member State whose currency is the euro offers on the internet an air service for which the place of departure of the flight is in another Member State whose currency is not the euro, the air fares may, if they are not expressed in euros, be indicated in the currency which is legal tender in that other Member State.21To answer those questions, it must be recalled, first, that Article 23(1) of Regulation No 1008/2008 provides that, when offering air services from an airport located in the territory of a Member State, air carriers are required to indicate at all times the final price to be paid, including in particular the air fare. Second, Article 2(18) of that regulation, which defines ‘air fares’ as the prices to be paid to air carriers or their agents or other ticket sellers for the carriage of passengers on air services and any conditions under which those prices apply, including remuneration and conditions offered to agency and other auxiliary services, specifies that those prices are ‘expressed in euro or in local currency’.22However, the wording of those provisions does not contain any specification as to the local currency in which air fares must be indicated by air carriers, where those carriers do not express them in euros.23In this context, it should be recalled that, according to settled case-law of the Court, in interpreting a provision of EU law it is necessary to consider not only its wording but also the objectives of the legislation of which it forms part and the origin of that legislation (see, to that effect, judgment of 11 July 2018, E LATS, C‑154/17, EU:C:2018:560, paragraph 18 and the case-law cited).24As regards the objectives of Article 23(1) in conjunction with Article 2(18) of Regulation No 1008/2008, it is clear from both the heading and the content of Article 23(1) that it seeks to ensure in particular that there is information and transparency with regard to prices for air services from an airport located in a Member State, and thereby contributes to safeguarding protection of customers who use those services (judgment of 6 July 2017, Air Berlin, C‑290/16, EU:C:2017:523, paragraph 30 and the case-law cited).25As the Advocate General observes in point 47 of his Opinion, that price transparency makes it possible to ensure healthier competition between air carriers, since it avoids in particular certain air carriers offering an incomplete price at the start of the transaction and adding various price supplements before the end of the transaction.26Moreover, recital 16 of Regulation No 1008/2008 states that customers should be able to compare effectively the prices for air services of different airlines, and that the final price to be paid by the customer for air services originating at an airport located in the territory of the European Union should, therefore, at all times be indicated, inclusive of all taxes, charges and fees.27It follows that the purpose of Article 23(1) of Regulation No 1008/2008, read in conjunction with Article 2(18) and in the light of recital 16 of that regulation, is to ensure transparency of prices, consisting in all the elements of the final price to be paid, including the air fare, being indicated, so as not only to ensure healthier competition between air carriers but also to enable the customer at any time to compare, effectively and in their entirety, the prices offered by the various air carriers for the same service. Regulation No 1008/2008 is thus intended to ensure that the customer is in a position to evaluate the higher or lower nature of the final price to be paid offered by the various air carriers for the same service.28It is clear that that objective of effective comparability of prices would be compromised if Article 23(1) in conjunction with Article 2(18) of Regulation No 1008/2008 were to be interpreted as meaning that the choice available to air carriers for determining the currency in which they indicate air fares for intra-Community air services is not circumscribed in any way.29The consequence of that interpretation would be to allow different air carriers to indicate air fares for the same service in different currencies, without those currencies having any connection with the service offered or with the customer. Such a situation would not only be liable to lead the customer astray as to the prices actually applied, but would also make it more difficult for him to compare effectively the prices offered by different air carriers.30As regards the origin of the provisions in question, it should be recalled that Article 2(18) of Regulation No 1008/2008 replaced Article 2(a) of Council Regulation (EEC) No 2409/92 of 23 July 1992 on fares and rates for air services (OJ 1992 L 240, p. 15), which referred to ‘the prices expressed in ecus or in local currency’.31It should be noted that the ecu was not a local currency but a common standard that was used only to allow, generally, better price comparability, so that the indication by air carriers of air fares in ecus made it easier for the customers concerned to compare prices.32Although the EU legislature replaced the term ‘ecus’ by the term ‘euros’, so that Article 2(18) of Regulation No 1008/2008 now gives air carriers the choice of indicating air fares for intra-Community air services ‘in euro or in local currency’, the fact remains that the reasoning underlying that provision has not changed.33As the Advocate General essentially states in point 32 of his Opinion, it follows expressly, first, from recitals 2 and 6 and Article 2 of Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro (OJ 1997 L 162, p. 1) and, second, from recital 2 and Article 2 of Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (OJ 1998 L 139, p. 1) that, as from 1 January 1999, the ecu ceased to designate the European monetary unit and was replaced by the euro.34The euro must therefore be regarded as a reference currency, the use of which by air carriers for indicating air fares is, in the same way as the ecu, such as to ensure better comparability of prices, all the more so as it is the currency in force in 19 of the 28 Member States and is therefore likely to be familiar to a large number of persons.35In this context, it cannot be accepted that, by choosing to express air fares for intra-Community air services in a currency other than the euro, air carriers can make the comparison of prices by the customers concerned more difficult or even impossible in practice, without fundamentally calling into question the objective of price comparability pursued by Article 23(1) of Regulation No 1008/2008 and consequently depriving that provision of a great part of its effectiveness.36It should be added that, as the Advocate General essentially observes in point 64 of his Opinion, effective comparability of prices would be facilitated if air carriers indicated air fares in a local currency objectively linked to the service offered.37According to the Court’s case-law, the places of departure and arrival of the flight concerned must be regarded, equally, as the places of main provision of the air services (see, to that effect, judgment of 7 March 2018, flightright and Others, C‑274/16, C‑447/16 and C‑448/16, EU:C:2018:160, paragraph 68), since those are the places where the performance of those services respectively starts and finishes.38The local currency which is legal tender in the Member State in which the place of departure or arrival of the flight is located must therefore be regarded as closely linked to the service offered.39It follows from all the above considerations that Article 23(1) in conjunction with Article 2(18) of Regulation No 1008/2008 must be interpreted as meaning that, when indicating air fares for intra-Community air services, air carriers who do not express those fares in euros are required to choose a local currency that is objectively linked to the service offered. That is the case in particular of the currency which is legal tender in the Member State in which the place of departure or arrival of the flight is located.40Thus, in a situation such as that at issue in the main proceedings, in which an air carrier established in a Member State in which the euro is legal tender offers on the internet an air service for which the place of departure of the flight is located in another Member State in which a currency other than the euro is legal tender, the air fares may, if they are not expressed in euros, be indicated in the currency which is legal tender in that other Member State. Costs 41Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fifth Chamber) hereby rules: Article 23(1) in conjunction with Article 2(18) of Regulation (EC) No 1008/2008 of the European Parliament and of the Council of 24 September 2008 on common rules for the operation of air services in the Community must be interpreted as meaning that, when indicating air fares for intra-Community air services, air carriers who do not express those fares in euros are required to choose a local currency that is objectively linked to the service offered. That is the case in particular of the currency which is legal tender in the Member State in which the place of departure or arrival of the flight is located. Thus, in a situation such as that at issue in the main proceedings, in which an air carrier established in a Member State in which the euro is legal tender offers on the internet an air service for which the place of departure of the flight is located in another Member State in which a currency other than the euro is legal tender, the air fares may, if they are not expressed in euros, be indicated in the currency which is legal tender in that other Member State. [Signatures]( *1 ) Language of the case: German. | b1fe5-0138fd3-4ddc | EN |
The General Court upholds the decisions of the European Commission classifying the Spanish tax scheme for the amortisation of ‘financial’ goodwill as State aid incompatible with the internal market | 15 November 2018 ( *1 )(State aid — Tax scheme allowing undertakings which are tax resident in Spain to amortise the goodwill resulting from the acquisition of shareholdings in undertakings which are tax resident abroad — Decision declaring the aid to be incompatible with the internal market and ordering its partial recovery — Provision enabling the scheme to continue to apply in part — Application for a declaration that there is no need to adjudicate — Continuing interest in bringing proceedings — Legitimate expectations — Precise assurances given by the Commission — Legitimacy of the expectation — Temporal scope of the legitimate expectation)In Case T‑207/10, Deutsche Telekom AG, established in Bonn (Germany), represented initially by A. Cordewener and J. Schönfeld, and subsequently by J. Schönfeld, lawyers,applicant,v European Commission, represented initially by B. Martenczuk, T. Maxian Rusche and C. Urraca Caviedes, and subsequently by T. Maxian Rusche and C. Urraca Caviedes, and finally by T. Maxian Rusche, C. Urraca Caviedes and K. Blanck‑Putz, acting as Agents,defendant,supported by Ebro Foods, SA, established in Madrid (Spain), represented initially by J. Buendía Sierra, E. Abad Valdenebro, M. Muñoz de Juan and R. Calvo Salinero, and subsequently by J. Buendía Sierra, E. Abad Valdenebro and R. Calvo Salinero, lawyers,by Banco Santander, SA, established in Santander (Spain), represented initially by J. Buendía Sierra, E. Abad Valdenebro, M. Muñoz de Juan and R. Calvo Salinero, and subsequently by J. Buendía Sierra, E. Abad Valdenebro and R. Calvo Salinero, Iberdrola, SA, established in Bilbao (Spain), represented initially by J. Ruiz Calzado, M. Núñez Müller and J. Domínguez Pérez, and subsequently by J. Ruiz Calzado, J. Domínguez Pérez and S. Völcker, lawyers,and by Telefónica SA, established in Madrid, represented initially by J. Ruiz Calzado, M. Núñez Müller and J. Domínguez Pérez, and subsequently by J. Ruiz Calzado, J. Domínguez Pérez and S. Völcker, lawyers,interveners,APPLICATION based on Article 263 TFEU and seeking annulment of Article 1(2) and (3) of Commission Decision 2011/5/EC of 28 October 2009 on the tax amortisation of financial goodwill for foreign shareholding acquisitions C 45/07 (ex NN 51/07, ex CP 9/07) implemented by Spain (OJ 2011 L 7, p. 48),THE GENERAL COURT (Ninth Chamber),composed of S. Gervasoni (Rapporteur), President, K. Kowalik–Bańczyk and C. Mac Eochaidh, Judges,Registrar: C. Heeren, Administrator,having regard to the written part of the procedure and further to the hearing on 16 November 2017,gives the following Judgment Background 1By several written questions raised in 2005 and 2006 (E‑4431/05, E‑4772/05, E‑5800/06 and P‑5509/06), Members of the European Parliament asked the Commission of the European Communities whether the arrangement provided for in Article 12(5) — a provision introduced into the Ley del Impuesto sobre Sociedades (Spanish Law on corporate tax) by Ley 24/2001, de Medidas Fiscales, Administrativas y del Orden Social (Law 24/2001 on fiscal, administrative and social measures) of 27 December 2001 (BOE No 313 of 31 December 2001, p. 50493) — and in Real Decreto Legislativo 4/2004, de 5 de marzo, por el que se aprueba el Texto refundido de la Ley del Impuesto sobre Sociedades (Royal Legislative Decree 4/2004 approving the recast text of the Law on corporate tax) of 5 March 2004 (BOE No 61 of 11 March 2004, p. 10951) (‘the scheme at issue’), should be classified as State aid.2The following answer was given on 19 January 2006 to question E 4431/05:‘The Commission cannot confirm whether the high bids by Spanish companies are due to Spain’s tax legislation enabling undertakings to write off goodwill more quickly than their French or Italian counterparts. The Commission can confirm, however, that such national legislations do not fall within the scope of application of State aid rules, because they rather constitute general depreciation rules applicable to all undertakings in Spain.’3The following answer was given on 17 February 2006 to question E‑4772/05:‘According to the information currently in its possession, it would however appear to the Commission that the Spanish (tax) rules related to the write off of “goodwill” are applicable to all undertakings in Spain independently from their sizes, sectors, legal forms or if they are privately or publicly owned because they constitute general depreciation rules. Therefore, they do not appear to fall within the scope of application of the State aid rules. The Commission will of course thoroughly investigate any information that may come to its knowledge indicating the contrary.’4By letters of 15 January and 26 March 2007, the Commission asked the Spanish authorities to provide it with information in order to assess the scope and the effects of the scheme at issue. By letters of 16 February and 4 June 2007, the Kingdom of Spain provided the Commission with the information requested.5By fax of 28 August 2007, the Commission received a complaint from the applicant, Deutsche Telekom AG, claiming that the scheme at issue constituted State aid which was incompatible with the common market.6By decision of 10 October 2007, a summary of which was published on 21 December 2007 (OJ 2007 C 311, p. 21), the Commission initiated a formal investigation procedure in respect of the scheme at issue.7By letter of 5 December 2007, the Commission received comments from the Kingdom of Spain on that decision initiating the investigation procedure. Between 18 January and 16 June 2008, the Commission also received comments from 32 interested third parties, including comments from the applicant on 12 February 2008. By letters of 30 June 2008 and 22 April 2009, the Kingdom of Spain gave its reactions to the interested third parties’ comments.8The Commission terminated the procedure, as regards shareholding acquisitions within the European Union, by Decision 2011/5/EC of 28 October 2009 on the tax amortisation of financial goodwill for foreign shareholding acquisitions C 45/07 (ex NN 51/07, ex CP 9/07) implemented by Spain (OJ 2011 L 7, p. 48) (‘the contested decision’).9The contested decision declares that the scheme at issue, enabling undertakings liable to tax in Spain to amortise the goodwill resulting from the acquisition of shareholdings in foreign undertakings established in the European Union, is incompatible with the common market.10Article 1(2) and (3) of the contested decision, however, allow the scheme at issue to continue to apply for the entire amortisation period established by that scheme, respectively, to acquisitions of shareholdings which took place before the publication in the Official Journal of the European Union, on 21 December 2007, of the decision initiating the formal investigation procedure, and to acquisitions of shareholdings the completion of which, requiring the approval of a regulatory authority to which the operation had been notified before that date, took place irrevocably before 21 December 2007.11Article 4(1) of the contested decision provides that the recovery obligation imposed on the Kingdom of Spain does not cover aid relating to the shareholding acquisitions referred to in Article 1(2) thereof. The Commission explained at the hearing that the omission in Article 4 of the contested decision of the shareholding acquisitions referred to in Article 1(3) thereof was a clerical error, which the Court formally noted in the minutes of the hearing. Procedure and forms of order sought by the parties 12The applicant brought the present action by application lodged at the Court Registry on 6 May 2010.13By documents lodged at the Court Registry on 9 August and 7 September 2010, Ebro Foods, SA, Banco Santander, SA, Iberdrola, SA and Telefónica, SA applied for leave to intervene in the present case in support of the form of order sought by the Commission. By orders of 26 November 2010, the President of the Eighth Chamber of the General Court granted those applications and authorised Iberdrola and Telefónica to use English in the oral part of the procedure.14The proceedings were stayed on two occasions: first, by order of the President of the Second Chamber of the Court of 13 March 2014 pending final decisions in Cases T‑219/10, Autogrill España v Commission, and T‑399/11, Banco Santander and Santusa v Commission, and then, by order of the President of the Second Chamber of the Court of 9 March 2015 pending a final decision in the appeals lodged against the judgments delivered in those two cases (judgments of 7 November 2014, Banco Santander and Santusa v Commission, T‑399/11, EU:T:2014:938, and of 7 November 2014, Autogrill España v Commission, T‑219/10, EU:T:2014:939). The proceedings resumed on 21 December 2016 with delivery of the judgment in Commission v World Duty Free Group and Others (C‑20/15 P and C‑21/15 P, EU:C:2016:981) adjudicating on those appeals. By decision of 13 February 2017, the President of the Ninth Chamber of the Court rejected the applicant’s application to stay proceedings pending a final decision in Case T‑219/10 RENV World Duty Free Group v Commission.15By decisions of 20 and 30 October 2017, the President of the Ninth Chamber of the Court authorised the interveners to plead in Spanish at the hearing.16By document lodged at the Court Registry on 26 October 2017, the Commission submitted an application for a declaration that there is no need to adjudicate. That application was joined to the substance of the case by order of the Court of 13 November 2017.17The parties presented oral argument and answered the written and oral questions put by the Court at the hearing on 16 November 2017.18The applicant claims that the Court should:–‘annul … [the contested decision] in relation to the provision for the protection of the legitimate expectations of the Spanish investors detailed in Article 1(2) and (3) thereof’ (‘the contested provision’);order the Commission to pay the costs, except those arising from the interventions which should be borne by the interveners and, in the alternative, if the action is dismissed, order each party to bear its own costs;in the alternative, stay proceedings until a final decision has been delivered in the appeals lodged against Commission Decision (EU) 2015/314 of 15 October 2014 on the State aid SA.35550 (13/C) (ex 13/NN) (ex 12/CP) implemented by Spain — Scheme for the tax amortisation of financial goodwill for foreign shareholding acquisitions (OJ 2015 L 56, p. 38).19The Commission contends that the Court should:dismiss the action as inadmissible;in the alternative, declare that there is no need to adjudicate;in the further alternative, dismiss the action as unfounded;order the applicant to pay the costs.20Ebro Foods, Banco Santander, Iberdrola and Telefónica contend that the Court should:dismiss the action as inadmissible or, in the alternative, as unfounded; Law The application for a declaration that there is no need to adjudicate 21In support of its application for a declaration that there is no need to adjudicate on the action, the Commission submits that the applicant no longer has legal interest in bringing proceedings. According to the Commission, the acquisition by Telefónica, a competitor of the applicant, of a shareholding in the company O2 — which the applicant relies on to substantiate its interest in seeking the annulment of the contested provision, in so far as the provision allowed that competitor to apply the scheme at issue to the relevant shareholding acquisition — is not covered by the contested provision, as is apparent from the Spanish authorities’ new administrative interpretation of the scheme at issue (Binding Opinion V0608‑12 of 21 March 2012) and its assessment by the Commission in Decision 2015/314. The four interveners stated that they did not support the application for a declaration that there is no need to adjudicate and the grounds underpinning it because, among other things, the examination of those grounds would require the Court to rule on questions put forward in the pleas raised in support of their actions against Decision 2015/314 (Cases T‑12/15, Banco Santander and Santusa v Commission, T‑256/15, Telefónica v Commission, and T‑260/15, Iberdrola v Commission).22It should be borne in mind that according to settled case-law, an applicant’s interest in bringing proceedings must, in the light of the purpose of the action, exist at the time at which the action is brought, failing which the action will be inadmissible. That purpose must, like the interest in bringing proceedings, continue until the final decision, failing which there will be no need to adjudicate, which presupposes that the action must be liable, if successful, to procure an advantage for the party bringing it (see judgments of 7 June 2007, Wunenburger v Commission, C‑362/05 P, EU:C:2007:322, paragraph 42 and the case-law cited, and of 28 May 2013, Abdulrahim v Council and Commission, C‑239/12 P, EU:C:2013:331, paragraph 61 and the case-law cited).23In the present case, the Commission submits, in essence, that it is apparent from the circumstances subsequent to the bringing of this action that the contested provision did not permit Telefónica to apply the scheme at issue, with the result that it did not confer an advantage on it when it acquired O2. It follows that the applicant no longer has an interest in seeking the annulment of the contested provision so as to secure the retroactive elimination of the advantage granted to its competitor.24The continuation of an applicant’s legal interest in bringing proceedings must be assessed in the light of the specific circumstances, taking account, in particular, of the consequences of the alleged unlawfulness and of the nature of the damage claimed to have been sustained (see judgment of 28 May 2013, Abdulrahim v Counciland Commission, C‑239/12 P, EU:C:2013:331, paragraph 65 and the case-law cited).25In the present case, it must be held that even assuming, as the Commission maintains, that Telefónica was unable to benefit from the scheme at issue before the abovementioned administrative interpretation and was thus not covered by the contested provision, the applicant’s legal interest in securing the annulment of that provision continues.26Such an interest arises, first of all, from the applicant’s status as complainant and from the rejection in part and in substance of its complaint by the contested provision.27Even if the contested decision, and thus the contested provision, did not constitute an explicit response to the applicants’ complaint (see, to that effect, judgment of 12 February 2008, BUPA and Others v Commission, T‑289/03, EU:T:2008:29, paragraph 317 and the case-law cited), the fact remains that, in contrast to the applicant’s claims in its complaint, the Commission found in its decision that the scheme at issue could continue to apply in certain situations described therein. Such a rejection is sufficient to differentiate the applicant’s interest in bringing proceedings in the present case in so far as the annulment of that rejection on the basis of the single plea which it has raised is likely to procure an advantage for it, consisting in having the scheme at issue declared unlawful and prohibited, including in the situations envisaged by the contested provision.28It is not disputed that the applicant is an ‘interested party’ within the meaning of Article 1(h) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), as amended, ‘whose interests might be affected by the granting of aid’, who thus by definition has an ‘interest’ in the formal investigation procedure leading to the adoption of a decision by the Commission and, accordingly, in view of the rejection of its complaint by that decision, has an interest in bringing an action against that decision adversely affecting it. It must be noted that the applicant is also the interested party which submitted the complaint leading to the initiation of the formal investigation procedure and which, in the context of that complaint, explained the reasons for its submission, stating first, before the reference to the competitive disadvantage it was placed at as a result of the O2 transaction, the competitive advantage granted generally to Spanish companies in the telecommunications sector in which the applicant also operates as well as that granted generally to its Spanish competitor, Telefónica, irrespective of its shareholding acquisition in the company O2.29It follows that the circumstance claimed by the Commission and which allegedly arose after the present action was brought, to the effect that Telefónica was not able to benefit from the scheme at issue, declared unlawful by the contested decision, when it acquired its shareholding in the company O2 and was not permitted by the contested provision to apply that scheme to that shareholding acquisition, is not capable of calling into question the applicant’s legal interest in bringing proceedings against the contested provision. If it were otherwise, and particularly if the interested parties, in particular those at the origin of the initiation of the formal investigation procedure, were required also to prove, as the Commission in essence claims, that they were competitors of an actual beneficiary of the scheme at issue examined in the contested decision, the lines would be blurred between the essential and first prerequisite for all actions, which is the legal interest in bringing proceedings, which must continue until the case has been closed, and the requirement of locus standi, which are nonetheless distinct conditions which must be satisfied by a natural or legal person cumulatively (see judgment of 17 September 2015, Mory and Others v Commission, C‑33/14 P, EU:C:2015:609, paragraph 58 and 62 and the case-law cited).30In addition, it is not disputed that before the occurrence of the circumstances subsequent to the bringing of the present action on which the Commission relies, Telefónica had actually benefited from the scheme at issue as regards its shareholding acquisition in the company O2, as the Court held in the order of 21 March 2012, Telefónica v Commission (T‑228/10, not published, EU:T:2012:140, paragraph 26), and that such actual benefit from the scheme at issue for the competitor of a complainant, who specifically criticised in its complaint the advantage conferred in connection with that shareholding acquisition, also and in any event indicates that the complainant retains an interest in bringing proceedings against a decision rejecting that complaint.31Next, it must be found that the applicant also retains an interest in seeking the annulment of the contested decision in order to prevent its alleged unlawfulness recurring in the future (see, to that effect, judgment of 7 June 2007, Wunenburger v Commission, C‑362/05 P, EU:C:2007:322, paragraph 50 and the case-law cited). It should be pointed out in that regard that the alleged unlawfulness is liable to recur in the future notwithstanding the circumstances which gave rise to the present action since it undermines, irrespective of those circumstances, the interpretation of the general conditions for applying the principle of the protection of legitimate expectations and the temporal scope of the protection which may be granted under that principle (see, to that effect, judgment of 24 September 2008, Reliance Industries v Council and Commission, T‑45/06, EU:T:2008:398, paragraph 43).32It follows that the Commission’s application for a declaration that there is no need to adjudicate must be rejected, without it being necessary to adopt a position on the scope of Decision 2015/314 and, thus, without it being necessary to grant the application to stay proceedings made by the applicant solely if the Court were to rule on that decision, with the result that that application must therefore also be rejected. Substance of the action 33The applicant raises a single plea in law claiming that the principle of the protection of legitimate expectations was misapplied. It claims that the Commission was wrong to consider that it had to apply that principle to some beneficiaries of the scheme at issue even though the conditions for the application of that principle were not satisfied. The Commission was required to order the recovery of the aid granted under that scheme and not to permit its continued implementation for shareholdings acquired before publication of the decision to initiate the formal investigation procedure.34It should be recalled, in that regard, that the Commission justified the authorisation to continue to apply the scheme at issue to some acquisitions of shareholdings — those which took place before the publication in the Official Journal on 21 December 2007 of the decision initiating the formal investigation procedure and those acquisitions of shareholdings the completion of which, requiring the approval of a regulatory authority to which the operation had been notified before that date, took place irrevocably before 21 December 2007 — and the non-recovery of some corresponding tax reductions by reference to the existence of a legitimate expectation on the part of the beneficiaries that the aid in issue had been granted in accordance with the rules of the EC Treaty. According to the Commission, by its two statements of 19 January and 17 February 2006 in reply to parliamentary questions, it had given, until the date of publication of the decision initiating the formal investigation procedure on 21 December 2007, specific, unconditional and consistent assurances of a nature such that the beneficiaries of the scheme at issue entertained justified hopes that the scheme did not fall within the scope of the State aid rules (recitals 158 to 170 of the contested decision).35It should also be noted that, under Article 14 of Regulation 659/1999 ‘where negative decisions are taken in cases of unlawful aid, the Commission shall decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary’. The withdrawal of unlawful aid by means of recovery is the logical consequence of a finding that it is unlawful. The aim of obliging the State concerned to abolish aid found by the Commission to be incompatible with the internal market is to restore the previous situation (see judgment of 5 August 2003, P & O European Ferries (Vizcaya) and Diputación Foral de Vizcaya v Commission, T‑116/01 and T‑118/01, EU:T:2003:217, paragraph 223 and the case-law cited), causing the beneficiary to forfeit the advantage which it had enjoyed over its competitors (see judgments of 7 March 2002, Italy v Commission, C‑310/99, EU:C:2002:143, paragraph 99 and the case-law cited, and of 29 April 2004, Germany v Commission, C‑277/00, EU:C:2004:238, paragraph 75 and the case-law cited; judgment of 15 June 2010, Mediaset v Commission, T‑177/07, EU:T:2010:233, paragraph 169).36That provision specifies, however, that ‘the Commission shall not require recovery of the aid if this would be contrary to a general principle of Community law’.37It is settled case-law that the principle of the protection of legitimate expectations is a general principle of EU law. That principle has been progressively accepted into the EU legal order by case-law, which has described it as a ‘superior rule of law’ for the protection of individuals (judgment of 14 May 1975, CNTA v Commission, 74/74, EU:C:1975:59, paragraph 44), as ‘one of the fundamental principles of the Community’ (judgment of 7 June 2005, VEMW and Others, C‑17/03, EU:C:2005:362, paragraph 73) and as a ‘general principle’ (judgment of 4 October 2001, Italy v Commission, C‑403/99, EU:C:2001:507, paragraph 35). It is considered to be the corollary of the principle of legal certainty, which requires that EU legislation must be certain and its application foreseeable by persons subject to it, in that it seeks, where rules are altered, to ensure the protection of situations legitimately entered into by one or more natural or legal persons in particular (see, to that effect, judgment of 18 May 2000, Rombi and Arkopharma, C‑107/97, EU:C:2000:253, paragraph 66 and the case-law cited, and the Opinion of Advocate General Léger in joined cases Belgium and Forum 187 v Commission, C‑182/03 and C‑217/03, EU:C:2006:89, paragraph 367).38In the present case, it should be noted at the outset that the parties are in agreement that the scheme at issue was not notified to the Commission and that the notification obligation laid down in Article 108(3) TFEU was therefore not complied with.39It should also be observed that the applicant conceded at the hearing that the principle of the protection of legitimate expectations was applicable, exceptionally, to non-notified aid and thus withdrew its complaint claiming that it does not apply where an aid scheme is unlawful as a matter of form because it has not been notified, which the Court formally noted in the minutes of the hearing.40It follows from the case-law that legitimate expectations may protect the beneficiaries of non-notified aid, but only in exceptional circumstances.41Specifically, it has been held that in view of the fundamental role played by the notification obligation to render effective the Commission’s review of State aid, which is mandatory in nature, the undertakings in receipt of aid may not, in principle, entertain a legitimate expectation that the grant of the aid was lawful unless it was granted in compliance with the procedure provided for in Article 108 TFEU, and a diligent trader must normally be in a position to satisfy itself that that procedure has been followed. In particular, where aid is implemented without prior notification to the Commission, with the result that it is unlawful under Article 108(3) TFEU, the recipient of the aid cannot have at that time a legitimate expectation that its grant is lawful, unless there are exceptional circumstances (see, to that effect, judgments of 24 November 1987, RSV v Commission, 223/85, EU:C:1987:502, paragraphs 16 and 17; of 20 September 1990, Commission v Germany, C‑5/89, EU:C:1990:320, paragraphs 14 and 16; of 13 June 2013, HGA and Others v Commission, C‑630/11 P to C‑633/11 P, EU:C:2013:387, paragraph 134; of 27 January 1998, Ladbroke Racing v Commission, T‑67/94, EU:T:1998:7, paragraph 182; of 16 October 2014, Alcoa Trasformazioni v Commission, T‑177/10, EU:T:2014:897, paragraph 61; and of 22 April 2016, Ireland and Aughinish Alumina v Commission, T‑50/06 RENV II and T‑69/06 RENV II, EU:T:2016:227, paragraph 214).42The permissibility of that exception is justified, inter alia, by the different status of Member States and beneficiaries as regards the obligation to notify. Only the Member States are subject to that obligation. They cannot rely on their own unlawful conduct to defeat decisions of the Commission and the practical effect of Articles 107 and 108 TFEU, nor may they invoke their legitimate expectation as to the lawfulness of aid they did not notify (see judgment of 28 July 2011, Diputación Foral de Vizcaya and Others v Commission, C‑471/09 P to C‑473/09 P, not published, EU:C:2011:521, paragraph 65 and the case-law cited) or, in some cases, not even the legitimate expectation of the beneficiaries of that aid (judgments of 14 January 1997, Spain v Commission, C‑169/95, EU:C:1997:10, paragraphs 48 and 49, and of 22 April 2016, France v Commission, T‑56/06 RENV II, EU:T:2016:228, paragraph 43).43In contrast, since the beneficiaries of aid may not be criticised for failing to notify it, such non-notification cannot result in them being barred from relying on their legitimate expectation as to the lawfulness of the aid in issue.44The exception in favour of the aid beneficiaries is moreover justified by the fact that, as the Commission rightly pointed out, without it, the general principle of the protection of legitimate expectations would be meaningless in relation to State aid, since the recovery obligation which that principle seeks to mitigate applies only to non-notified aid implemented without the Commission’s approval. However, the Court has held that the adoption of Regulation No 659/1999 created a new situation for the recovery of aid incompatible with the internal market, by confirming recovery as the rule (first sentence of Article 14(1) of Regulation No 659/1999) whilst providing for an exception (second sentence of Article 14(1) of Regulation No 659/1999) when recovery runs counter to a general principle of EU law, all the legal consequences of which must be observed and which the Commission must take into account in adopting its decisions, including where it reverses a decision to require the recovery of aid incompatible with the internal market (judgment of 1 July 2010, ThyssenKrupp Acciai Speciali Terni v Commission, T‑62/08, EU:T:2010:268, paragraphs 275 and 276). Although the aid beneficiaries could not rely on legitimate expectations solely on the ground of non-notification of the aid, Article 14 of Regulation No 659/1999, inasmuch as it provides that the Commission is not to require recovery of the aid if this would be contrary to a general principle of law, would be rendered meaningless, even though it was adopted by the legislature precisely in order to limit the scope of the obligation to recover unlawful aid declared to be incompatible with the internal market by the Commission.45The applicant denies that there are exceptional circumstances in the present case capable of justifying the application of the principle of the protection of legitimate expectations for the benefit of some of the beneficiaries of the scheme at issue, arguing that none of the conditions for the application of that principle has been met.46It should be borne in mind, in that regard, that according to settled case-law, three cumulative conditions must be satisfied in order to claim entitlement to the protection of legitimate expectations. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given to the person concerned by the administrative authorities. Secondly, those assurances must be such as to give rise to a legitimate expectation on the part of the person to whom they are addressed. Thirdly, the assurances given must comply with the applicable rules (see judgments of 16 December 2008, Masdar (UK) v Commission, C‑47/07 P, EU:C:2008:726, paragraph 81 and the case-law cited, and of 23 February 2006, Cementbouw Handel & Industrie v Commission, T‑282/02, EU:T:2006:64, paragraph 77 and the case-law cited), bearing in mind that assurances given as to the non-recovery of aid, which may be the result of assurances given as to the non-classification of the measure at issue as aid, are compatible with Article 14 of Regulation No 659/1999 (see paragraph 44 above; see also, to that effect, today’s judgment in Banco Santander and Santusa v Commission, T‑399/11 RENV, paragraphs 272 to 278).47In the present case, the applicant does not dispute that the third condition is met, but argues that the first two are not. The first two conditions are in themselves restrictive and make it possible to discern exceptional circumstances, as evidenced by the paucity of cases in which those circumstances are met (see, to that effect, judgments of 1 July 2010, ThyssenKrupp Acciai Speciali Terni v Commission, T‑62/08, EU:T:2010:268, paragraphs 278 to 289; of 27 September 2012, Producteurs de légumes de France v Commission, T‑328/09, not published, EU:T:2012:498, paragraphs 25 to 30; and of 22 April 2016, Ireland and Aughinish Alumina v Commission, T‑50/06 RENV II and T‑69/06 RENV II, EU:T:2016:227, paragraphs 222, 225 and 252).48The applicant also claims that an additional condition is not met in the present case, a condition deriving from a number of judgments concerning the principle of the protection of legitimate expectations which require that the grant of the protection at issue must not infringe an overriding public interest (see the case-law cited in paragraph 83 below). It can be observed that the balancing of the competing interests — the individual interest of the person concerned and the public interest of the European Union — entailed by the examination of that condition also contributes in itself to the recognition of a legitimate expectation only in exceptional circumstances, since it makes it possible, even where the precise assurances given have created legitimate expectations and the first two conditions for such recognition are thus satisfied, for expectations which have nevertheless been recognised not to be protected on the ground that such protection is precluded by a public interest of the European Union.49In the light of all those considerations, it is therefore necessary to examine whether the Commission correctly assessed the three conditions for the recognition of a legitimate expectation which are challenged by the applicant and, if it did, whether it correctly defined the temporal scope of the legitimate expectation recognised, which is also disputed by the applicant. The precise assurances provided by the Commission’s answers to two parliamentary questions 50In the contested decision, the Commission inferred the existence of precise assurances provided by the EU authorities from the answers given on behalf of the Commission to two parliamentary questions. The Commission’s two answers, given in English by a member of the Commission, were partly reproduced and translated in recital 165 of the contested decision.51The answer given on 19 January 2006 to written question E‑4431/05 (‘the first answer’) states:‘5. The Commission cannot confirm whether the high bids by Spanish companies are due to Spain’s tax legislation enabling undertakings to write off goodwill more quickly than their French or Italian counterparts. The Commission can confirm, however, that such national legislations do not fall within the scope of application of State aid rules, because they rather constitute general depreciation rules applicable to all undertakings in Spain.’52The answer given on 17 February 2006 to written question E‑4772/05 (‘the second answer’) states:‘According to the information currently in its possession, it would however appear to the Commission that the Spanish (tax) rules related to the write off of “goodwill” are applicable to all undertakings in Spain independently from their sizes, sectors, legal forms or if they are privately or publicly owned because they constitute general depreciation rules. Therefore, they do not appear to fall within the scope of application of the State aid rules. The Commission will of course thoroughly investigate any information that would come to its knowledge indicating the contrary.’53It is settled case-law that precise, unconditional and consistent information that comes from authorised and reliable sources constitutes assurances capable of giving rise to legitimate expectations (judgments of 16 December 2010, Kahla Thüringen Porzellan v Commission, C‑537/08 P, EU:C:2010:769, paragraph 63; of 13 June 2013, HGA and Others v Commission, C‑630/11 P to C‑633/11 P, EU:C:2013:387, paragraph 132; and of 12 December 2014, Banco Privado Português and Massa Insolvente do Banco Privado Português v Commission, T‑487/11, EU:T:2014:1077, paragraph 125). In contrast, a person may not plead breach of the principle of the protection of legitimate expectations unless he has been given precise assurances by the authorities (judgments of 17 March 2011, AJD Tuna, C‑221/09, EU:C:2011:153, paragraph 72, and of 18 June 2013, Schenker & Co. and Others, C‑681/11, EU:C:2013:404, paragraph 41).54The applicant disputes the existence of precise assurances given by the Commission and to that end relies on the form and content of its two answers.– The form of the Commission’s two answers 55The Court has consistently held that the form in which the authorities’ assurances are communicated is irrelevant (judgments of 14 February 2006, TEA-CEGOS and Others v Commission, T‑376/05 and T‑383/05, EU:T:2006:47, paragraph 88, and of 24 September 2008, Kahla/Thüringen Porzellan v Commission, T‑20/03, EU:T:2008:395, paragraph 146).56The applicant does not challenge that case-law, which it moreover reiterates, but claims, in essence, that the alleged assurances given by the Commission ought, at the very least, to have been (i) directed at the beneficiaries of the scheme at issue, which is not the case as regards the Commission’s answers to parliamentary questions forming part of an interinstitutional legal discussion, and (ii) brought to the beneficiaries’ attention, which is not the case either, in view of the method of dissemination used.57However, first, there is nothing in the case-law to indicate that only the acts of institutions which are specifically addressed to or directed at traders are capable of causing them to entertain a legitimate expectation. Thus, it has been held that a practice of the Commission in merger cases not involving an operator may provide that operator with precise assurances (see, to that effect, judgment of 28 September 2004, MCI v Commission, T‑310/00, EU:T:2004:275, paragraphs 108 to 112). The same must apply, a fortiori, in the case of an act of an institution which relates specifically to the aid at issue. The Court also held, in its judgment of 22 June 2006, Belgium and Forum 187 v Commission (C‑182/03 and C‑217/03, EU:C:2006:416, paragraph 158), that an answer of the Commission to a parliamentary question, such as the questions at issue here, had given the beneficiaries of the contested scheme a legitimate expectation as to the lawfulness of the scheme.58It follows from the case-law cited by the applicant not that the interested party must, formally speaking, be the addressee of the act containing precise assurances, but that the reference to assurances ‘provided’ or ‘addressed’ to the interested party means that that party must be concerned by and informed about the assurances given (see, to that effect, judgment of 28 September 2004, MCI v Commission, T‑310/00, EU:T:2004:275, paragraphs 108 and 112). As regards the order of 13 December 2000, Sodima v Commission (C‑44/00 P, EU:C:2000:686, paragraph 50), on which the applicant also relies, it must be observed that in that order the Court indeed refused to find that the public statements of a member of the Commission had provided precise assurances to the applicant, but it did so primarily because of the wording of the statements at issue, which were considered to be overly general.59It should also be mentioned, as the Commission does, that the purpose of the parliamentary questions procedure — even if it involves two institutions, in this case the Parliament and the Commission — is to inform citizens’ representatives in the Parliament of the position of the institution to which the question is addressed — in the present case the Commission, which is the main institution responsible for State aid — on matters of concern to those citizens, thereby enabling them to decide on what action to take as a result.60Secondly, as the applicant concedes in the reply, the Court notes that the Commission’s answers were made public. Specifically, the number of the question, its author, the subject matter in varying degrees of detail, the addressee institution, and an indication of the existence and date of the answer were published in the Official Journal (OJ 2006 C 327, pp. 164 and 192), with a reference to the Parliament’s website containing the full text of the questions and answers, which is tantamount, according to the case-law (order of 19 September 2005, Air Bourbon v Commission, T‑321/04, EU:T:2005:328, paragraph 34, and judgment of 11 March 2009, TF1 v Commission, T‑354/05, EU:T:2009:66, paragraph 35), to publication and, in all cases, adequate publicity of the Commission’s answers.61Furthermore, contrary to the applicant’s assertions, the statement on the Parliament’s website that ‘the information published on this site is of a general nature only and has not been designed to meet any individual needs’ does not cast doubt on either the public nature of the information at issue or the possible classification of that information as precise assurances. Besides the fact that that disclaimer was not issued by the author of the information concerned, it should be pointed out that the provision of precise assurances implies that the recipient of them is concerned by those assurances but is not singled out by them, in the sense that he is one of the few or even the only recipient.62Similarly, it cannot be held, as the applicant submits, that the publication of some aspects of the Commission’s answers in the Official Journal creates legal uncertainty in the present case, in so far as the Commission used as the date of the event giving rise to the legitimate expectation (i) the date of its answers to the parliamentary questions in the contested decision, and (ii) the date of such publication in the Official Journal in the defence. As the Court will make clear in paragraphs 91 to 105 below, the date of the act giving rise to the legitimate expectation is not decisive for the purposes of identifying which aid may be exempted from the recovery obligation. The Court also observes that, in any event, the applicant’s claim, which in actual fact challenges a reference made in the Commission’s defence, cannot call into question the lawfulness of the contested provision.63It follows that, contrary to the applicant’s arguments, the nature and method of publication of the Commission’s answers are not capable, as such, of ruling out the possibility that those answers provided precise assurances to the beneficiaries of the scheme at issue. In fact, they were likely to strengthen the beneficiaries’ confidence in the lawfulness of the scheme.– The content of the Commission’s two answers 64As regards the Commission’s first answer, it must be noted that contrary to what the applicant suggests in its claim that the question raised is of a general nature, part 5 of that question clearly identifies the scheme at issue by referring to ‘Spain’s tax legislation, which enables undertakings to write off goodwill which they have paid’. Furthermore, the Commission gave an answer that was both precise, referring clearly to the legislation mentioned in part 5 of the question (first paragraph of part 5 of the answer), which it moreover contrasted with other Spanish tax legislation (second paragraph of part 5 of the answer), and unconditional, stating in emphatic and unequivocal terms that the scheme at issue was not State aid (‘The Commission can confirm, however, that such national legislations [governing the scheme at issue] do not fall within the scope of application of State aid rules’).65As regards the Commission’s second answer, it may indeed be stated, as the applicant does, that although it expresses the same meaning, it is couched in more cautious terms than the first answer. The Commission uses the verb ‘appear’ twice and ends its answer by stating that a thorough investigation will be carried out should any information to the contrary be brought to its attention.66It must, however, be held that this caution in no way undermines the precise, unconditional and consistent nature of the Commission’s views on the scheme at issue. Its cautious approach can be explained mainly by the fact that the question raised was specifically confined to the scheme at issue and sought to hold the Commission to account for its inaction in that respect, thus forcing it to provide explanations as regards compliance with its obligations under Regulation No 659/1999. As the Commission usefully pointed out, that is why it stated that if information were to come to light suggesting that the scheme at issue constituted State aid, it would thoroughly investigate the information in question, as required by Article 10(1) of that regulation, but not the scheme at issue, as the applicant claims.67The word ‘appear’ must also be considered alongside the fact that, first, the Commission thereafter sets out a reasoned position (‘it would … appear to the Commission that the Spanish (tax) rules related to the writeoff of “goodwill” are applicable to all undertakings in Spain independently from their sizes, sectors, legal forms or if they are privately or publicly owned because they constitute general depreciation rules’), and, secondly, it clearly contrasts that position with its lack of a position on the matter addressed in the previous sentence (‘the Commission cannot confirm whether … it would however appear’). It is also important to point out that the second answer follows on from the first, which was given less than one month earlier by the same member of the Commission and was along the same lines in that it used some of the same terms (‘constitute general depreciation rules’), thereby demonstrating that the information provided was consistent.68It follows from all of the foregoing that, contrary to what the applicant claims, the Commission’s answers in January and February 2006 to the parliamentary questions provided precise assurances to the beneficiaries of the scheme at issue that it did not fall within the scope of the State aid rules and consisted of general depreciation rules applicable to all undertakings in Spain. The Commission was therefore fully entitled to find, in the contested decision, that that condition for the application of the principle of the protection of legitimate expectations was satisfied. The legitimacy of the expectation created 69It is settled case-law that only a ‘legitimate’ expectation can be protected. Specifically, the expectation is protected only where the person concerned could reasonably count on the continuation or the stability of the situation created (Opinion of Advocate General Bot in Commission v Koninklijke FrieslandCampina, C‑519/07 P, EU:C:2009:256, point 78). The benchmark for the EU Courts’ assessment of whether the alleged expectation is legitimate is a reasonably prudent, discriminating and diligent trader (see judgment of 16 October 2014, Alcoa Trasformazioni v Commission, T‑177/10, EU:T:2014:897, paragraphs 60 and 72 and the case-law cited). They also take account of the area or subject matter covered by the alleged legitimate expectation. Thus, in view of the objective nature of the concept of State aid (judgment of 16 May 2000, France v Ladbroke Racing and Commission, C‑83/98 P, EU:C:2000:248, paragraph 25), the Commission’s assessment that a certain measure does not constitute State aid does not create a legal situation which may be regularly altered by the institutions in the exercise of their discretionary power, as may be the case particularly in an area such as that of the common organisation of the markets, the objective of which involves constant adjustment to reflect changes in economic circumstances (Opinion of Advocate General Léger in joined cases Belgium and Forum 187 v Commission, C‑182/03 and C‑217/03, EU:C:2006:89, point 419), so that traders cannot be justified in entertaining an expectation that an existing situation will be maintained (see judgment of 15 July 2004, Di Lenardo and Dilexport, C‑37/02 and C‑38/02, EU:C:2004:443, paragraph 70 and the case-law cited)70It follows that, as regards the claim that the beneficiaries of State aid entertained a legitimate expectation, a position taken by the Commission, which is the main authority with responsibility for implementing the State aid rules and the only authority responsible for assessing the compatibility of aid with the internal market, confers, on its own, legitimacy on the expectation resulting from such a position.71Therefore, it also follows that all acts and conduct not originating from the Commission, such as those of the press, the applicant, the beneficiaries or the Spanish authorities as referred to by the applicant, are irrelevant for the purpose of assessing whether the expectation entertained by the beneficiaries of the scheme at issue is legitimate.72In addition, even if the caution apparent in the Commission’s second answer were to require those acts and conduct to be considered further, it could not be inferred from them that the alleged expectation was not legitimate, in the sense that they should have caused the beneficiaries of the scheme at issue to anticipate the adoption of the contested decision.73As regards the articles in the international press relied on, it must be observed that, in essence, these simply report on the scheme at issue and its alleged economic consequences, and the only article referring to, but not providing details on, criticism levelled at the rules prohibiting State aid subsequently recounts the statements made by Commission officials to the effect that the scheme at issue does not satisfy the conditions to be classified as State aid, since it does not benefit specific undertakings or sectors.74As for the applicant’s complaint which the Commission received on 28 August 2007 and the press articles reporting it, it should be recalled that the provision of information regarding allegedly unlawful aid gives rise only to an obligation to examine such information without delay (Article 10(1) of Regulation No 659/1999) and to inform the complainant of the action taken on the complaint (Article 20(2) of Regulation No 659/1999); it does not require the opening of a formal investigation procedure or, a fortiori, the adoption of a ‘negative decision’ finding that the aid is incompatible with the internal market (Article 7(5) of Regulation No 659/1999). It may also be added that only one complaint about the scheme at issue was submitted to the Commission, even though that scheme had been in force for several years when the complaint was lodged.75Regarding the conduct of Telefónica, it is not apparent from that company’s letter, which postdates the contested decision and was produced by the applicant, that the company waived the application of the scheme at issue pending the Commission’s decision on it. In any event, the particular caution exercised by one of the beneficiaries of the scheme at issue cannot in itself lead to a finding that the expectations of the beneficiaries of the scheme were not legitimate.76As for the conduct of the Spanish authorities, which allegedly ‘discussed’ the compatibility of the scheme at issue with the State aid rules, suffice it to note that this is not supported by the evidence. It is true that the press articles annexed to the reply set out the difficulties encountered and recognised by the Spanish authorities in the implementation of the scheme at issue, but those difficulties are unrelated to the State aid rules. Moreover, the concerns about compliance with the rules prohibiting State aid referred to by those articles refer only to the concerns raised by the Commission (see paragraph 79 below).77The following considerations should also be borne in mind specifically as regards the acts and conduct of the Commission which are relied on.78First, in respect of the allegedly similar tax schemes which were considered by the Commission to be aid incompatible with the common market in 2000 (decision confirmed by the judgment of 15 July 2004, Spain v Commission, C‑501/00, EU:C:2004:438) and 2006, it must be held that the individual nature of the assessment of each aid that was notified or reported precludes the assessment of a given aid from casting doubt on the legitimacy of the expectation in relation to the assessment of a similar, but separate, aid. Just as a positive decision of the Commission in respect of a particular aid cannot form the basis for a legitimate expectation on the part of the potential beneficiaries of similar future aid projects in their compatibility with the common market (see judgment of 20 September 2011, Regione autonoma della Sardegna and Others v Commission, T‑394/08, T‑408/08, T‑453/08 and T‑454/08, EU:T:2011:493, paragraph 283 and the case-law cited), so a negative decision cannot undermine a legitimate expectation arising from precise assurances given regarding the compatibility of similar national schemes.79Secondly, as regards the measures taken by the Commission before the initiation of the formal investigation procedure (requests for information to the Spanish authorities), as reported in two press articles of February and June 2007 (see also paragraph 4 above), those did not entail, at the point in time when they occurred, the adoption of a position by the Commission on the lawfulness of the national legislation at issue (see also paragraph 111 below) and therefore cannot as such undermine the legitimacy of the expectation arising from precise assurances given, moreover, by the Commission (see, to that effect, judgment of 1 July 2010, ThyssenKrupp Acciai Speciali Terni v Commission, T‑62/08, EU:T:2010:268, paragraph 280).80It follows that the Commission was right to find in this case that the expectation entertained by the beneficiaries of the scheme at issue in its lawfulness was legitimate. It might be added that a prudent and discriminating trader would have even less reason to doubt the lawfulness of the scheme given that the Court itself held, in 2014, that the Commission had not established that that scheme, which was open to all undertakings without any category-based distinction, constituted State aid (judgments of 7 November 2014, Banco Santander and Santusa v Commission, T‑399/11, EU:T:2014:938, and of 7 November 2014, Autogrill España v Commission, T‑219/10, EU:T:2014:939, set aside by judgment of 21 December 2016, Commission v World Duty Free Group SA and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981). The weighing up of competing interests 81It should be recalled that the Commission found, in recital 168 of the contested decision, that ‘in line with previous case-law of the Court of Justice and Commission practice, in the absence of an overriding public interest, … the beneficiaries should be allowed to continue enjoying the benefits of the [scheme] at issue’.82It cannot therefore be considered, as the applicant does, that the Commission failed in the present case to examine the condition for recognition of a legitimate expectation relating to the lack of an overriding public interest precluding it. The Commission, albeit briefly, clearly referred to the absence, in the case of the scheme at issue, of a public interest in prohibiting its continued application and in ordering the recovery of aid granted under that scheme, despite the other conditions for recognition of a legitimate expectation having been met.83Although the applicant infers from the conciseness of the Commission’s assertion that it did not actually check whether an overriding public interest prevented the recognition of a legitimate expectation on the part of the beneficiaries of the scheme at issue, it must be pointed out that the condition relating to ‘overriding public interest’ (or ‘public policy interest’, an expression also used in the case-law) is a negative condition, in the sense that it must not exist for a legitimate expectation to be recognised (see, to that effect, judgments of 17 July 1997, Affish, C‑183/95, EU:C:1997:373, paragraph 57, and of 22 June 2006, Belgium and Forum 187 v Commission, C‑182/03 and C‑217/03, EU:C:2006:416, paragraph 148). It is thus apparent from the judgments validating the protection of legitimate expectations that the Court of Justice and the General Court have confined themselves to a mere reference to the lack of an overriding public interest (see, to that effect, judgment of 17 April 1997, de Compte v Parliament, C‑90/95 P, EU:C:1997:198, paragraph 39), such as that appearing in the contested decision, or have not referred to that interest at all if that condition has not been challenged by the parties (see, to that effect, judgments of 24 November 1987, RSV v Commission, 223/85, EU:C:1987:502, paragraphs 13 to 17, and of 5 June 2001, ESF Elbe-Stahlwerke Feralpi v Commission, T‑6/99, EU:T:2001:145, paragraphs 188 to 191).84It may be inferred from this that the Commission is not required to set out its examination of the condition at issue in more detail unless its intention is not to protect legitimate expectations on the ground that such protection is precluded by an overriding public interest, which is not the case here, or unless claims concerning a particular public interest have been submitted by the interested parties, which was also not the case. The documents relating to the administrative procedure included in the case file do not contain any claims, particularly by the applicant (in its complaint and in its comments on the initiation of the formal examination procedure), concerning the existence in the present case of an overriding public interest which would have precluded the recognition of a legitimate expectation on the part of the beneficiaries of the scheme at issue. Indeed, the applicant stated at the hearing in reply to a question put by the Court that it was not in a position to confirm that it had invoked an overriding public interest during the administrative procedure, arguing that responsibility for invoking such an interest did not lie with it, having regard to the obligation to withdraw and recover unlawful aid.85Although the applicant also submits, in particular by means of that argument, that the Commission should have given precedence to the overriding public interest in the full elimination of the advantages associated with the scheme at issue over the interests of the beneficiaries of that scheme, it must be noted that that public interest is essentially indissociable from the very principle of the recovery of unlawful aid, an exception to which is the protection of legitimate expectations. Accordingly, such an interest cannot, as the Commission rightly pointed out in its pleadings and at the hearing, come under the concept of overriding public interest in the area of State aid, since the latter is concerned with considerations other than those relating to the obligation to recover aid that is unlawful and incompatible with the internal market, such as the protection of health or the environment. Furthermore, even if such an interest could be included in the balancing exercise, the effect of giving too much weight to it would be to abolish the exception laid down in Article 14 of Regulation No 659/1999, which, it should be recalled, aims to ensure compliance with a ‘fundamental principle’ (see paragraph 37 above).86Thus, in the present case, the operations benefiting from the scheme at issue were long-term commitments, in view of the amortisation period of 20 years laid down by that scheme (see, in particular, recitals 168 and 169 of the contested decision), and such commitments may be regarded as capable of tipping the balance in favour of the individual interests of the beneficiaries of the aid (see, to that effect, judgment of 22 June 2006, Belgium and Forum 187 v Commission, C‑182/03 and C‑217/03, EU:C:2006:416, paragraphs 164 to 166). It is also important to point out that this continuity over the long term concerns only tax deductions for shareholdings acquired during the period covered by the protection of legitimate expectations (2002-2007) and does not mean that the scheme at issue continues to apply to shareholdings acquired after 2007. Lastly, the importance of the individual advantages conferred on the beneficiaries, invoked by the applicant, militates in favour of retaining those advantages to avoid causing the beneficiaries manifest and significant harm, rather than recovering the aid which might be justified if the extent of the adverse effects at EU level was itself significant, for example on account of the number of beneficiaries and shareholding acquisitions concerned, which is not even claimed by the applicant (see, to that effect, Opinion of Advocate General Léger in joined cases Belgium and Forum 187 v Commission, C‑182/03 and C‑217/03, EU:C:2006:89, points 428 and 429).87In the light of all those circumstances, it can be found in the present case that the Commission conducted an appropriate examination, on the form and on the substance, of the condition for recognition of a legitimate expectation on the part of the beneficiaries of the scheme at issue relating to the weighing up of interests. The temporal extent of the legitimate expectation protected 88The applicant complains that the Commission erred in extending the protection of legitimate expectations to all shareholdings acquired before 21 December 2007, including those acquired prior to the Commission’s two answers of 2006 and those acquired after an answer of the Commission of 5 February 2007 to a parliamentary question.– The inclusion of aid relating to shareholdings acquired before the Commission’s two answers of 2006 89It should be recalled that the Commission made the following findings in the contested decision:‘(164)As regards the impact of the Commission’s declarations on legitimate expectations of the beneficiaries, the Commission considers that a distinction should be drawn between two periods: (a) the period starting from the entry into force of the measure on 1 January 2002 until the date of publication of the initiating Decision in the Official Journal on 21 December 2007; and (b) the period following the publication of the initiating Decision in the Official Journal.(165)With reference to the first period, …(166)… any precise and unconditional statement on the Commission’s behalf to the effect that a national measure is not to be considered State aid will naturally be understood as meaning that the measure was “non-aid” from the outset (i.e. also before the statement in question). Any undertaking which had previously been uncertain as to whether or not it would in future be liable, under the State aid rules, to recovery of advantages it had obtained under the goodwill amortisation scheme arising from transactions entered into before the Commission statements could have concluded thereafter that such uncertainty was unfounded, as it could not be expected to demonstrate greater diligence than the Commission in this respect. In these specific circumstances, and bearing in mind that Community law does not require the demonstration of a causal link between the assurances given by a Community institution and the behaviour by citizens or undertakings to which such assurances relate …, any diligent entrepreneur could reasonably expect the Commission subsequently not to impose any recovery … as regards measures which it had itself previously classified, in a statement to another Community institution, as not constituting aid, irrespective of when the transaction benefiting from the aid measure was concluded.(167)Accordingly, the Commission concludes that the beneficiaries of the contested measure had a legitimate expectation that the aid would not be recovered and hence it is not requiring recovery of the fiscal aid granted to those beneficiaries in the context of any shareholdings held by a Spanish acquiring company, directly or indirectly in a foreign company before the date of publication … in the Official Journal of the European Union of the Commission Decision to initiate the formal investigation procedure under Article 88(2) of the Treaty, which could have then benefited from the measure at issue.’90The applicant challenges the Commission’s approach in so far as it resulted in the inclusion of operations completed before the date of the Commission’s answers of 2006 within the scope of the protection of legitimate expectations. It bases its argument on the principle of the protection of legitimate expectations, as recognised under German law, and on the Court’s case-law.91In the first place, it must be held that those two bases do not support the applicant’s proposition.92Regarding the principle of the protection of legitimate expectations, as recognised under German law, the first judgment establishing the principle of the protection of legitimate expectations under EU law inferred that principle, according to the traditional method of ‘discovery’ of the general principles of EU law, from a comparative law study of the six Member States of the European Coal and Steel Community (judgment of 12 July 1957, Algera and Others v Common Assembly, 7/56 and 3/57 to 7/57, EU:C:1957:7, p. 55). Thus, in so far as the applicant relies solely on the principle of German law, which requires the beneficiary of the legitimate expectation to give concrete expression to that expectation by an act of expectation that necessarily comes after the act giving rise to the expectation, that requirement cannot be regarded as also mandatory under EU law. It may also be noted that in his Opinion in Westzucker (1/73, EU:C:1973:61), cited by the applicant, Advocate General Roemer indeed referred to a judgment of the German Bundesverfassungsgericht (Federal Constitutional Court) (p. 741), but he also referred — in accordance with the abovementioned traditional method of identifying general principles of EU law — to a judgment of the French Cour de cassation (Court of Cassation) and one of the Belgian Cour d’Appel, (Court of Appeal) Brussels (p. 739).93The requirements under German law which must be satisfied in order to be eligible for the protection of legitimate expectations, particularly the requirement relating to the act of expectation, cannot, therefore, be applied here.94Furthermore, it cannot be inferred from the case-law cited by the applicant that only operations which took place after the legitimate expectation was acquired can be covered by that expectation.95In all of the judgments cited which apply the principle of the protection of legitimate expectations — the judgment of 18 March 1975, Deuka (78/74, EU:C:1975:44, paragraph 14), mainly concerned the principle of legal certainty — what was at issue was the specific situation, different from the situation here, in which the advantages protected by a legitimate expectation had been granted by the authorities of the European Union, where such grant also constituted the act giving rise to the expectation (grant of export certificates and prior fixing of compensation in the judgment of 14 May 1975, CNTA v Commission, 74/74, EU:C:1975:59; grant of non-marketing premiums in the judgments of 28 April 1988, Mulder, 120/86, EU:C:1988:213; of 28 April 1988, von Deetzen, 170/86, EU:C:1988:214; and of 10 January 1992, Kühn, C‑177/90, EU:C:1992:2). The necessary consequence of that overlap was that the legitimate expectation covered only the advantages granted on the basis of the act giving rise to the expectation, without it being possible to infer from this that, particularly in situations such as the present case where the advantage is granted by national authorities independently of the act giving rise to the expectation deriving from the Commission, such advantages alone could be protected.96In contrast, it is apparent from the judgment of 5 June 2001, ESF Elbe-Stahlwerke Feralpi v Commission (T‑6/99, EU:T:2001:145), cited by the Commission in the rejoinder, that the Court accepted, at least in principle, albeit in circumstances different from those of this case, that the benefit of legitimate expectations could be applied to operations completed prior to the act giving rise to the expectation. Indeed, in paragraph 190 of that judgment, the Court held that a guarantee granted by the German authorities to the applicant company at the end of 1994 was covered by the legitimate expectation arising out of precise assurances given by the Commission on 13 January 1995. Even though the time lapse between the grant of aid covered by the legitimate expectation and the act giving rise to that expectation was short, the fact remains that the Court accepted that the Commission could give precise assurances such as to create a legitimate expectation as to the lawfulness of aid granted previously. Similarly, contrary to what the applicant claimed at the hearing, the fact that the guarantee at issue bore similarities to another guarantee also covered by a legitimate expectation on account of assurances given on 1 March 1993 is not decisive, since, in line with the case-law referred to in paragraph 78 above, a positive decision of the Commission in respect of a particular aid cannot form the basis for a legitimate expectation on the part of the beneficiaries of similar subsequent aid projects in their compatibility with the common market.97In the second place, it must be pointed out that the applicant’s proposition confuses the date of acquisition of the legitimate expectation, being the date on which cognizance was taken of precise assurances (see, to that effect, judgment of 17 April 1997, de Compte v Parliament, C‑90/95 P, EU:C:1997:198, paragraph 38), and the subject matter to which the acquired legitimate expectation relates, which may cover operations completed before that date, in accordance with the wording of the precise assurances provided.98However, more often than not, and in particular in the present case, the legitimate expectation relates to the continuity of an existing situation, which by definition arose before the act giving rise to the expectation in its continuity. In those circumstances, contrary to the applicant’s assertions, the act giving rise to a legitimate expectation does not have retroactive effect, in the sense that it creates a legitimate expectation as from the earlier events at issue, but simply covers, from the date of its occurrence, events prior to that date and their future effects.99If the applicant’s proposition were to be accepted, the principle of the protection of legitimate expectations could not be validly relied on to challenge the recovery of unlawful aid which, by its very nature, is granted before the Commission, which is in the best position to provide precise, unconditional, consistent and reliable assurances, has been able to take any sort of decision on its classification as State aid and its compatibility with the internal market. Article 14 of Regulation No 659/1999 would thus be deprived of practical effect.100Accordingly, the Commission was fully entitled to find that the legitimate expectation arising from its answers of 2006 related to the continuity of the scheme at issue which had entered into force in 2002 and, therefore, covered shareholdings acquired after that date as well as aid granted under the scheme in respect of those acquisitions, even though such aid was granted before the answers of 2006.101That assessment is not called into question by the fact that the scheme at issue was not notified to the Commission in the present case and that the beneficiaries of the scheme may have a legitimate expectation that its grant was lawful only in exceptional circumstances (see paragraphs 39 and 40 above). While the beneficiary of non-notified aid may not entertain a legitimate expectation that such aid is lawful and will continue if there are no exceptional circumstances, the existence of such circumstances means that, once precise assurances have been given such as to cause that beneficiary of the aid to entertain a legitimate expectation as to the lawfulness of the aid — assurances which characterise those exceptional circumstances (see paragraphs 47 and 48 above) — and provided that the assurances given do not stipulate a time limit, the beneficiary may no longer be regarded as having legitimately been aware during a certain period of time of the unlawfulness of the aid in question.102Any other approach would amount to disregarding the precision and reliability of the assurances given, particularly as regards their temporal scope, and thus eliminating one of the conditions for recognition of legitimate expectations, which nonetheless contributes, in the case of non-notified aid, to legitimate expectations in the lawfulness of such aid being recognised only in exceptional circumstances (see paragraph 47 above). If legitimate expectations were to cover only operations subsequent to the act giving rise to an expectation, even though the act made clear that it covered previous operations, the result would be to limit the scope of such assurances in infringement of the principle of the protection of legitimate expectations.103One other consequence of the applicant’s proposed approach would be to require the beneficiaries of a tax measure, such as the advantage established by the scheme at issue, to demonstrate particular diligence going beyond the obligations incumbent on a reasonably diligent trader, diligence which is essentially on a par with that required of a person under a notification obligation, even though the classification of such a measure as State aid cannot be presumed and the very absence of a notification obligation on the beneficiaries is one of the reasons why they may be recognised as entertaining a legitimate expectation in the lawfulness of non-notified aid (see paragraphs 42 and 43 above).104It should be added that the applicant’s proposition would also, in the present case, lead to the denial of the legitimate expectation entertained by the beneficiaries of the scheme at issue in relation to aid granted under that scheme in respect of shareholdings acquired up to February 2006 and thereafter from November 2007. Besides the complex nature of the recovery obligation that would thus be entrusted to national authorities in connection with a tax deduction aid scheme that applied over a 20-year period, such an approach would, above all, make the scope of the expectation contingent on the vagaries of the acts giving rise to a legitimate expectation and thereby create legal uncertainty in the application of the principle of the protection of legitimate expectations, a principle that has been consistently held to be the corollary of the principle of legal certainty (see the case-law cited in paragraph 37 above).105Furthermore, although not conclusive (see, to that effect, judgment of 30 November 2009, France and France Télécom v Commission, T‑427/04 and T‑17/05, EU:T:2009:474, paragraph 277), the approach taken in the contested decision was also adopted in other decisions, as the Commission confirmed at the hearing, and that approach has never been called into question by the EU Courts.106It follows that in the present case, contrary to the applicant’s submissions, the Commission did not err in finding that the legitimate expectation covered aid granted under the scheme at issue from its entry into force in 2002.– The inclusion of aid relating to shareholdings acquired after 5 February 2007 107It should be recalled that in recitals 164 and 167 of the contested decision, the Commission found that the legitimate expectation entertained by the beneficiaries of the scheme at issue in the lawfulness of the scheme ended on 21 December 2007, the date of publication in the Official Journal of the Commission’s decision to initiate the formal investigation procedure in respect of that scheme, because, from that date onwards, a diligent trader ought to have taken into account the doubts expressed by the Commission as regards its lawfulness.108The applicant does not dispute that the legitimate expectation is liable to end on the date of publication of the decision to initiate the formal investigation procedure in respect of an aid measure, in this case on 21 December 2007, which is moreover confirmed by the case-law (see, to that effect, judgments of 22 April 2016, Ireland and Aughinish Alumina v Commission, T‑50/06 RENV II and T‑69/06 RENV II, EU:T:2016:227, paragraphs 221 and 224, and of 1 March 2017, SNCM v Commission, T‑454/13, EU:T:2017:134, paragraph 293 and the case-law cited). It submits, however, that the legitimate expectation of the beneficiaries of the scheme at issue ended in the present case on 5 February 2007, the date of the Commission’s answer to another parliamentary question.109The section of that answer relating to the scheme at issue reads as follows:‘In this case, the Commission has yet to give its opinion on the compatibility, from a State aid point of view, of the Spanish goodwill write-off provisions; they do not, however, appear to be contrary to the Fourth Accounting Directive … In any case, the Commission would point out that it is impossible to predict the outcome of any subsequent investigation of the possible aid measures referred to by the Honourable Member. In this regard, the Commission would reiterate that it may, by virtue of its State aid control powers, order the recovery of any incompatible or illegally granted aid so as to deprive the recipient of any advantage it may have enjoyed over its competitors, thereby restoring the pre-aid competitive market situation.’110It must be pointed out that it is apparent from the case-law cited in paragraph 108 above that a diligent trader can no longer entertain a legitimate expectation as to the lawfulness of the grant of aid once the decision to initiate the formal investigation procedure has been published, since the initiation of the formal investigation procedure means that the Commission harbours serious doubts as to the lawfulness of the national measure at issue in the light of the EU rules prohibiting State aid. Therefore, in order to bring an end to a legitimate expectation that has been properly created, the statement made by the Commission in its answer of 5 February 2007 should have, at the very least, raised serious doubts as to the lawfulness of the scheme at issue.111However, no such doubts emerge from the answer of 5 February 2007. In accordance with that answer, both the initiation of a formal investigation procedure in respect of the scheme at issue, which could have brought to light serious doubts as to the lawfulness of that scheme, and, a fortiori, the outcome of such a procedure, are hypothetical. It is true that the Commission refers, in essence, in the reply, to the request for information sent to the Spanish authorities on 15 January 2007 (see paragraph 4 above), but such a request in the present case concerns only the preliminary stage of the procedure for reviewing State aid, which is intended merely to allow the Commission to form a prima facie opinion on the national measure concerned (see judgment of 10 July 2012, Smurfit Kappa Group v Commission, T‑304/08, EU:T:2012:351, paragraph 45 and the case-law cited) and does not necessarily lead to the initiation of the formal investigation procedure, since the Commission may not go beyond the preliminary stage for the purpose of taking a decision favourable to a national measure if it is in a position to satisfy itself, on an initial examination, either that the measure does not constitute aid or, if it is to be classified as aid, that it is compatible with the Treaty FEU (judgments of 22 December 2008, British Aggregates v Commission, C‑487/06 P, EU:C:2008:757, paragraphs 186 and 187, and of 16 September 2013, Colt Télécommunications France v Commission, T‑79/10, not published, EU:T:2013:463, paragraph 31). It should also be noted that the Commission does not, in that reply, conduct any assessment, even of a summary or general nature, of the scheme at issue; it merely recalls the powers it has in respect of aid that is unlawful and incompatible with the internal market.112It follows from the above that the complaints concerning the temporal limitation of the legitimate expectation applied by the Commission in the contested decision cannot succeed.113Consequently, the single plea in law raised by the applicant must be dismissed.114The applicant therefore has no valid basis for seeking the annulment of the contested provision, so that, without there being any need to rule on the pleas of inadmissibility raised by the Commission, the present action must be dismissed (see, to that effect, judgment of 26 February 2002, Council v Boehringer, C‑23/00 P, EU:C:2002:118, paragraph 52). Costs 115Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, and since the Commission and interveners have applied for costs, the applicant must be ordered to pay the costs.On those grounds,THE GENERAL COURT (Ninth Chamber)hereby: 1. Dismisses the action; 2. Orders Deutsche Telekom AG to pay the costs. GervasoniKowalik-BańczykMac EochaidhDelivered in open court in Luxembourg on 15 November 2018.[Signatures]( *1 ) Language of the case: German. | 601d9-111a8f3-48ed | EN |
The Italian legislation prohibiting private companies from performing an activity of safekeeping of cinerary urns is contrary to EU law | 14 November 2018 ( *1 )(Reference for a preliminary ruling — Restrictions on freedom of establishment — Jurisdiction of the Court — Admissibility of the request for a preliminary ruling — Purely domestic situation — National legislation prohibiting any profit-making activity relating to the safekeeping of cinerary urns — Proportionality test — Coherence of national rules)In Case C–342/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunale amministrativo regionale per il Veneto (Regional Administrative Court for the Veneto Region, Italy), made by decision of 11 May 2017, received at the Court on 8 June 2017, in the proceedings Memoria Srl, Antonia Dall’Antonia v Comune di Padova, intervener: Alessandra Calore, THE COURT (Third Chamber),composed of M. Vilaras, President of the Fourth Chamber, acting as President of the Third Chamber, J. Malenovský (Rapporteur), L. Bay Larsen, M. Safjan and D. Šváby, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: R. Schiano, Administrator,having regard to the written procedure and further to the hearing on 16 April 2018,after considering the observations submitted on behalf of:–Memoria Srl and Ms Dall’Antonia, by G. Martini, A. Sitzia and P. Piva, avvocati,the Comune di Padova, by M. Lotto, V. Mizzoni, A. Sartori and P. Bernardi, avvocati,the Italian Government, by G. Palmieri, acting as Agent, and by E. De Bonis, avvocato dello Stato,the European Commission, by H. Tserepa-Lacombe and L. Malferrari, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 21 June 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 49 and 56 TFEU.2The request has been made in proceedings between Memoria Srl and Ms Antonia Dall’Antonia and the Comune di Padova (municipality of Padua, Italy) concerning legislation adopted by the municipality prohibiting recipients of cinerary urns from entrusting the safekeeping of those urns to private companies in return for payment. Legal context EU law 3Recital 8 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36) provides:‘(8)It is appropriate that the provisions of this Directive concerning the freedom of establishment and the free movement of services should apply only to the extent that the activities in question are open to competition, so that they do not oblige Member States either to liberalise services of general economic interest or to privatise public entities which provide such services or to abolish existing monopolies for other activities or certain distribution services.’4Under the first subparagraph of Article 1(3) of Directive 2006/123:‘This Directive does not deal with the abolition of monopolies providing services nor with aids granted by Member States which are covered by Community rules on competition.’ Italian law Law No 234 of 24 December 2012 5Article 53 of legge n. 234 — Norme generali sulla partecipazione dell’Italia alla formazione e all’attuazione della normativa e delle politiche dell’Unione europea (Law No 234 on the general rules on the participation of Italy in the development and implementation of the legislation and policies of the European Union) of 24 December 2012 (GURI No 3, 4 January 2013) states:‘Rules of the Italian legal order or domestic practices which have a discriminatory effect with respect to the condition and treatment guaranteed in Italy to citizens of the European Union are not to be applied to Italian citizens.’ Law No 130 of 30 March 2001 6Article 3 of legge n. 130 — Disposizioni in materia di cremazione e dispersione delle ceneri (Law No 130 on cremation and scattering of ashes) of 30 March 2001 (GURI No 91, 19 April 2001) provides:‘1. Within six months of the entry into force of the present Law, the [decreto del Presidente della Repubblica n. 285 approvazione del regolamento di polizia mortuaria (Decree of the President of the Republic No 285 approving the Regulation on burials) of 10 September 1990 (GURI No 239 of 12 October 1990),] may be amended by regulation adopted pursuant to Article 17(1) of Law No 400 of 23 August 1988, as amended, on a proposal from the Minister for Health, after consulting the Minister for the Interior and the Minister for Justice, and further to the opinion of the competent parliamentary committees, on the basis of the following principles:…(b)authorisation to perform a cremation shall be granted in accordance with the wishes expressed by the deceased or by a member of his family, in one of the following ways:(c)the scattering of ashes, in accordance with the wishes of the deceased, shall be permitted only in an area within a cemetery intended for that purpose, on open ground or on private land; scattering on private land must take place outdoors with the authorisation of the landowner and may not give rise to profit-making activities; in any event, the scattering of ashes is prohibited in residential areas …; scattering at sea, in lakes and in waterways is permitted in areas free from watercraft and buildings;(d)ashes shall be scattered by the spouse or by any other family member entitled, by the executor, or by the legal representative of the association referred to in subparagraph (b)(2) above of which the deceased was a member, or, failing that, by a person authorised to do so by the municipality;(f)transport of the urn containing the ashes shall not be subject to the precautionary health measures applicable to the transport of corpses, unless otherwise indicated by the health authorities;(i)an anteroom to the crematorium shall be set up to allow the funeral rites of the deceased to be performed and last respects to be paid with dignity.…’7Pursuant to Article 5(2) of that law:‘By decree of the Minister for the Interior, in consultation with the Minister for Health, and after hearing the views of the Associazione nationale dei comuni italiani (ANCI) (National Association of Italian Municipalities), the Confederazione nazionale dei servizi (Confservizi) (National Confederation of Services) and the most representative associations having among their objects the cremation of members, the pricing applicable to the cremation of corpses and the safekeeping or scattering of ashes in the appropriate areas within cemeteries shall be determined within six months of the entry into force of this Law.’ Decree of the President of the Republic No 285 of 10 September 1990 8Pursuant to Article 92(4) of Decree of the President of the Republic No 285 of 10 September 1990:‘No person shall grant plots for private graves to natural or legal persons seeking to profit from or speculate in them.’ Regional Law No 18 of 4 March 2010 9Legge regionale n. 18 — Norme in materia funeraria, della Regione del Veneto (Regional Law No 18 on funerals, Veneto Region) of 4 March 2010 entrusted municipalities with setting the requirements relating to the safekeeping of cinerary urns and their characteristics. Regulation on burial services of the municipality of Padua 10Article 52 of the Regulation on burial services of the municipality of Padua, as amended by Decision No 84 of the municipality of Padua of 30 November 2015, provides:‘1. Entrusting of the cremation urn for the purpose of safekeeping in a dwelling shall take place in accordance with the written arrangements made by the deceased during his lifetime. In the absence of such arrangements, entrusting may be requested by the spouse or, where there is no spouse, by the next of kin determined in accordance with Articles 74, 75, 76 and 77 of the Civil Code and, if there are several such relatives, by the absolute majority thereof.2. In the event of proven emotional ties or acknowledgement of kinship, safekeeping of the urn may also be entrusted to persons other than those referred to in the second sentence of the preceding paragraph, subject to prior agreement in writing by persons having an entitlement to the deceased’s estate.3. The recipient shall not in any circumstances be permitted to request a third party to keep the cinerary urn. This prohibition shall apply even if the deceased expressly stated his wishes during his lifetime.4. It is obligatory to keep the urn solely at the home of the recipient, in a space protected from any possible desecration or theft. Under no circumstances shall any apertures or holes be made in the urn.5. The burial service may at any time require the recipient to produce the cinerary urn for the purposes of verifying the integrity and state of that urn.9. A recipient may be asked at any time to move to a cemetery an urn he holds for safekeeping.10. In addition to the requirements set out in paragraph 4, in no circumstances may cinerary urns be kept for profit and economic activities relating, even non-exclusively, to the safekeeping of cinerary urns, for whatever purpose and for whatever period, shall therefore not be permitted. This prohibition shall apply even if the deceased expressly stated his wishes during his lifetime.’ The dispute in the main proceedings and the question referred for a preliminary ruling 11Memoria is a company incorporated on 1 December 2014, whose activity is to offer the families of cremated deceased a service of safekeeping of cinerary urns through contracts for the lease of spaces for the placing of urns in a columbarium. That service is presented as a service which allows families to avoid having to keep such urns at home, while offering them an easier access to the premises where those urns are stored than would be the case if they were placed in a cemetery. The premises where those urns are stored are places intended exclusively for their safekeeping in an aesthetically pleasant, quiet and protected environment suitable for contemplation and prayers in memory of the deceased.12From September 2015, Memoria inaugurated premises intended exclusively for the placing of cinerary urns, which it refers to as ‘places of remembrance’, spread across different neighbourhoods of the municipality of Padua. Access to those premises by members of the deceased’s family is subject to their acceptance of an internal code of conduct, which requires them in particular to comply with rules of good manners, propriety and dignity, imposes a ban on the consumption of alcoholic beverages and an obligation to wear proper attire.13Ms Dall’Antonia is a potential customer of Memoria since she plans to have her husband’s body cremated and his ashes transferred to one of those facilities.14Nevertheless, the municipality of Padua adopted Decision No 84 of 30 November 2015, which amended the Regulation on burial services of that municipality. The amendments have the effect of expressly prohibiting the recipient of a cinerary urn from using the services of a private company, managed independently of municipal burial services, for the purpose of storing cinerary urns outside the home.15On 15 February 2016, Memoria and Ms Dall’Antonia brought proceedings before the Tribunale amministrativo regionale per il Veneto (Regional Administrative Court for the Veneto Region, Italy) seeking annulment of that decision and, in the case of Memoria, compensation for the damage suffered as a result of that decision. In support of their action, they claim, in essence, that the national legislation at issue is incompatible with EU law and, more specifically, with the principles of freedom of establishment and freedom to provide services.16The referring court expresses doubts as to whether those principles may be relied on, since the national legislation at issue does not apply to the national territory as a whole, but only to the municipality of Padua. By contrast, if it is considered that those principles can be relied on, that court considers that there is reason to question the compatibility of the national legislation at issue with those principles because that legislation is not supported by grounds of public policy, public security or public health.17In those circumstances, the Tribunale amministrativo regionale per il Veneto (Regional Administrative Court for the Veneto Region) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘Must Articles 49 and 56 TFEU be interpreted as precluding the application of the following provisions of Article 52 of the Regulation on burial services of the municipality of Padua [as amended by Decision No 84 of the municipality of Padua of 30 November 2015, which provide that]:“The recipient shall not in any circumstances be permitted to request a third party to keep the cinerary urn. This prohibition shall apply even if the deceased expressly stated his wishes during his lifetime” (paragraph 3).“It is obligatory to keep the urn solely at the home of the recipient …” (paragraph 4).“… In no circumstances may cinerary urns be kept for profit and economic activities relating, even non-exclusively, to the safekeeping of cinerary urns, for whatever purpose and for whatever period, shall therefore not be permitted. This prohibition shall apply even if the deceased expressly stated his wishes during his lifetime” (paragraph 10)?’18By order of the President of the Court of 31 July 2017, the referring court’s request that the present reference for a preliminary ruling be dealt with under the expedited procedure provided for in Article 105 of the Rules of Procedure of the Court was refused. Consideration of the question referred Jurisdiction of the Court 19The Italian Government claims that the Court has no jurisdiction to answer the question referred because the provisions of EU law whose interpretation is sought do not apply to the dispute in the main proceedings, since that dispute relates to a purely domestic situation.20In accordance with Article 94 of the Rules of Procedure, it is for the referring court to indicate to the Court in what way the dispute pending before it, despite its purely domestic character, has a connecting factor with Articles 49 and 56 TFEU that makes their interpretation necessary for it to give judgment in that dispute (see, to that effect, judgment of 15 November 2016, Ullens de Schooten, C‑268/15, EU:C:2016:874, paragraph 55).21In the absence of such information, the request for a preliminary ruling must be declared inadmissible.22It is therefore necessary to examine the objection raised by the Italian Government in the context of the examination of the admissibility of the request for a preliminary ruling. Admissibility of the request for a preliminary ruling 23It must be recalled that a dispute, despite the fact that it is between nationals of a single Member State, must be considered to have a connecting factor with Articles 49 and 56 TFEU that makes the interpretation of those provisions necessary for it to give judgment in that dispute, where national law requires the referring court to grant the same rights to those nationals as the rights which a national of another Member State in the same situation would derive from EU law (see, to that effect, judgments of 21 February 2013, Ordine degli Ingegneri di Verona e Provincia and Others, C‑111/12, EU:C:2013:100, paragraph 35, and of 15 November 2016, Ullens de Schooten, C‑268/15, EU:C:2016:874, paragraph 52).24In the present case, the dispute in the main proceedings is admittedly between, on the one hand, a company incorporated under Italian law and an Italian national and, on the other, a municipality in the territory of Italy, but the referring court states that, under Article 53 of Law No 234 of 24 December 2012, it must allow that company and that national to enjoy the benefits of Articles 49 and 56 TFEU.25In those circumstances, it must be stated that the referring court has established how, despite its purely domestic nature, the dispute pending before it has a connecting factor with Articles 49 and 56 TFEU that makes the requested interpretation of EU law necessary for it to give judgment in that dispute and, accordingly, that the request for a preliminary ruling is admissible in this respect.26Furthermore, the municipality of Padua and the Italian Government submit that the request for a preliminary ruling is also inadmissible on other grounds.27First of all, they submit that the request does not contain all the necessary elements of fact and law to enable the Court to give a useful answer to the question referred. In particular, the referring court did not set out the arguments of the municipality of Padua seeking to highlight the matters of public interest for the protection of which the provisions at issue in the main proceedings were adopted.28In that regard, it must be recalled that, in accordance with Article 94(b) and (c) of the Rules of Procedure, a request for a preliminary ruling must set out the tenor of any national provisions applicable to the dispute in the main proceedings as well as the relationship that the referring court establishes between those provisions and the provisions of EU law whose interpretation is sought.29In the present case, the referring court cited the relevant provisions of the Regulation on funeral services of the municipality of Padua, as amended by Decision No 84 of the municipality of Padua of 30 November 2015, and explained that the interpretation of Articles 49 and 56 TFEU was requested because the legality of that regulation was challenged on account of its alleged incompatibility with the principles of freedom to provide services and freedom of establishment.30It follows that the referring court has met, to the requisite legal standard, its obligation to set out the tenor of any national provisions applicable to the dispute in the main proceedings as well as the relationship between those provisions and the provisions of EU law whose interpretation is sought.31Therefore, the plea of inadmissibility raised by the municipality of Padua and the Italian Government must be rejected.32Next, the Italian Government alleges that the reference for a preliminary ruling is premature. According to that government, before referring a question to the Court for a preliminary ruling, the referring court should have considered whether the national legislation at issue in the main proceedings prohibits or authorises the exercise of an economic activity concerning the safekeeping and storage of cinerary urns and, in the course of doing so, identified the objectives pursued by that legislation.33In that regard, it must be recalled that national courts have the widest discretion in referring matters to the Court if they consider that a case pending before them raises questions involving the interpretation of provisions of EU law, or consideration of their validity, which are necessary for the resolution of the case before them and, in particular, that they are free to exercise that discretion at whatever stage of the proceedings they consider appropriate (judgment of 5 July 2016, Ognyanov, C‑614/14, EU:C:2016:514, paragraph 17 and the case-law cited).34Consequently, a request for a preliminary ruling cannot be declared inadmissible simply because it was submitted at an early stage of the main proceedings.35Therefore, the plea of inadmissibility raised by the Italian Government must be rejected.36Finally, the municipality of Padua considers that since the national legislation at issue in the main proceedings concerns an individual’s most personal rights, the principles of legal certainty and protection of legitimate expectations in any event preclude that legislation from being called into question.37Nevertheless, although it cannot absolutely be ruled out that the principles of legal certainty and protection of legitimate expectations may be relevant, their possible interaction with free movement amounts to an issue of substance. Merely mentioning them is not therefore sufficient to establish that a request for a preliminary ruling lacks useful purpose since the referring court still requires an answer to that request in order to give judgment. Thus, such a request for a preliminary ruling is not inadmissible.38Accordingly, the plea of inadmissibility raised by the municipality of Padua must be rejected.39It follows from the foregoing that the request for a preliminary ruling is admissible. Substance Preliminary observations 40First, during the hearing, the European Commission submitted that there is no need to examine the national legislation at issue in the main proceedings in the light of the provisions of the FEU Treaty on the fundamental freedoms, since Directive 2006/123 applies in the main proceedings.41However, it must be noted that national legislation, such as that at issue in the main proceedings, which prohibits private companies from providing a safekeeping service of cinerary urns, has the effect, as is apparent from the order for reference, of conferring on municipal departments a monopoly of services for the safekeeping of those urns. It follows from Article 1(3) of Directive 2006/123, read in the light of recital 8 thereof, that that directive does not concern the abolition of monopolies providing services.42Consequently, such legislation does not fall within the scope of Directive 2006/123, and it must therefore be examined solely in the light of the provisions of the Treaty.43Second, the referring court referred in its question to both Article 49 TFEU and Article 56 TFEU.44Nevertheless, in that regard, it must be noted that only the first of those two provisions is applicable in the main proceedings. Where an operator intends actually to pursue its economic activity by means of a stable arrangement and for an indefinite period, its situation must be examined in the light of freedom of establishment, as defined in Article 49 TFEU (see, in particular, judgments of 29 September 2011, Commission v Austria, C‑387/10, not published, EU:C:2011:625, paragraph 22, and of 23 February 2016, Commission v Hungary, C‑179/14, EU:C:2016:108, paragraphs 148 to 150).45It appears that, in the main proceedings, Memoria wishes to provide on the territory of the municipality of Padua a safekeeping service of cinerary urns by means of a stable arrangement and for an indefinite period. It follows that the question referred must be regarded as concerning the interpretation of Article 49 TFEU only.46In the light of the above, the question referred must be understood as meaning that the referring court asks, in essence, whether Article 49 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which prohibits, even despite the express wishes of the deceased, the recipient of a cinerary urn from entrusting its safekeeping to a third party, and requires him to store the urn in his home, unless it is entrusted to a municipal cemetery, and furthermore prohibits any activity carried out for profit relating, even non-exclusively, to the safekeeping of cinerary urns, on whatever basis and for whatever period. The question 47From the outset, it should be recalled that Article 49 TFEU precludes any national measure constituting a restriction on the freedom of establishment, unless such a restriction is justified by overriding reasons in the public interest (see, to that effect, inter alia, judgment of 5 December 2013, Venturini and Others, C‑159/12 to C‑161/12, EU:C:2013:791, paragraphs 30 and 37).48In the first place, in accordance with settled case-law, any national measure which, albeit applicable without discrimination on grounds of nationality, prohibits, hinders or renders less attractive the exercise by EU nationals of the freedom of establishment guaranteed by the Treaty constitutes a restriction within the meaning of Article 49 TFEU (see, to that effect, judgment of 28 January 2016, Laezza, C‑375/14, EU:C:2016:60, paragraph 21).49In the present case, taking into account the statements of the referring court, it must be stated that national legislation, such as that at issue in the main proceedings, which prohibits EU nationals from providing a safekeeping service for the custody of cinerary urns in the Member State in question hinders those nationals from establishing themselves in that Member State for the purpose of performing such a safekeeping service and is therefore liable to hinder the exercise by those nationals of the freedom of establishment guaranteed by the Treaty.50Consequently, such legislation introduces a restriction on the freedom of establishment for the purposes of Article 49 TFEU.51In the second place, according to settled case-law, a restriction on freedom of establishment may be justified, if applied without discrimination on grounds of nationality, by overriding reasons in the public interest, provided that it is appropriate for securing the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain it (see, to that effect, inter alia, judgment of 9 March 2017, Piringer, C‑342/15, EU:C:2017:196, paragraph 53 and the case-law cited).52More specifically, it must also be recalled that national legislation is appropriate for ensuring attainment of the objective relied upon only if it genuinely reflects a concern to attain that objective in a consistent and systematic manner (see, to that effect, judgments of 10 March 2009, Hartlauer, C‑169/07, EU:C:2009:141, paragraph 55, and of 23 December 2015, Hiebler, C‑293/14, EU:C:2015:843, paragraph 65).53In the present case, the municipality of Padua and the Italian Government claim that the national legislation at issue in the main proceedings, which the parties agree applies without discrimination on grounds of nationality, is justified by overriding reasons in the public interest relating to the protection of public health, the need to ensure the respect owed to the memory of the deceased, and the protection of the moral and religious values prevailing in Italy, being values which oppose the existence of commercial and worldly activities related to the storage of ashes of the deceased and accordingly oppose the performance for profit of activities of safekeeping of mortal remains.54In that regard, as regards, first, the justification based on the protection of public health, it admittedly follows from settled case-law of the Court that the protection of public health is one of the overriding reasons in the public interest recognised by EU law and that Member States have a wide margin of discretion in this area (see, to that effect, judgment of 1 June 2010, Blanco Pérez and Chao Gómez, C‑570/07 and C‑571/07, EU:C:2010:300, paragraphs 44, 68 and 106).55However, that objective cannot justify the restriction at issue in the main proceedings in so far as cremation ashes, unlike corpses, are biologically inert, since they have been sterilised by heat, and accordingly their safekeeping cannot amount to a constraint imposed by public health considerations.56Consequently, the objective of protection of public health put forward by the municipality of Padua and the Italian Government is not appropriate for justifying the restrictions on freedom of establishment introduced by the national legislation at issue in the main proceedings.57As regards, second, the objective of protection of the respect owed to the memory of the deceased, this too is capable of amounting to an overriding reason in the public interest.58Moreover, it may indeed be considered that national legislation prohibiting private companies from holding cinerary urns for safekeeping is appropriate for ensuring that that objective is achieved. First, such a prohibition is likely to guarantee that the safekeeping of cinerary urns is entrusted to structures subject to specific obligations and checks designed to guarantee the respect owed to the memory of the deceased. Second, it is appropriate for ensuring that, in the event that the companies in question cease their safekeeping activities, the urns are not abandoned or their contents disposed of in an inappropriate way or place.59Nevertheless, it must be noted that there are less stringent measures which make it possible to achieve that objective, such as, in particular, the obligation to ensure the safekeeping of cinerary urns in similar conditions to those of municipal cemeteries and, in the event of cessation of activities, the obligation to transfer those urns to a public cemetery or to return them to the relatives of the deceased.60Accordingly, the national legislation at issue in the main proceedings goes beyond what is necessary to attain the objective of protection of the respect owed to the memory of the deceased.61In those circumstances, the restrictions on the freedom of establishment introduced by that legislation cannot be justified in terms of protection of the respect owed to the memory of the deceased.62As regards, third, the moral and religious values prevailing in the Member State in question, the Italian Government submits that they oppose activities of safekeeping of mortal remains being performed for profit.63Nevertheless, without it being necessary to take a view on the merit of such an objective, it must be noted that it is apparent from the actual wording of Article 5(2) of Law No 130 of 30 March 2001 that the activity of the safekeeping of cremated ashes is subject in that Member State to pricing fixed by the Minister for the Interior after consulting the Minister for Health and certain associations.64The opening up to private companies of activities of safekeeping of mortal remains could have been made subject to that pricing structure, which in itself is clearly not considered by the Member State in question to be contrary to its moral and religious values.65Therefore, as that was not done, the national legislation at issue in the main proceedings goes beyond what is necessary to attain the objective relied on, and, consequently, it cannot in any event be justified in the light of that objective.66It follows from the foregoing that the answer to the question referred is that Article 49 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which prohibits, even despite the express wishes of the deceased, the recipient of a cinerary urn from entrusting its safekeeping to a third party, and requires him to store the urn in his home, unless it is entrusted to a municipal cemetery, and furthermore prohibits any activity carried out for profit relating, even non-exclusively, to the safekeeping of cinerary urns, on whatever basis and for whatever period. Costs 67Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Third Chamber) hereby rules: Article 49 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which prohibits, even despite the express wishes of the deceased, the recipient of a cinerary urn from entrusting its safekeeping to a third party, and requires him to store the urn in his home, unless it is entrusted to a municipal cemetery, and furthermore prohibits any activity carried out for profit relating, even non-exclusively, to the safekeeping of cinerary urns, on whatever basis and for whatever period. [Signatures]( *1 ) Language of the case: Italian. | 7884f-cb65641-4432 | EN |
Advocate General Tanchev proposes that the Court should rule that a national law that allows loan contracts concluded with foreign lenders who were not authorised to provide credit services in that country to be retroactively annulled is contrary to EU law when the same law does not apply to Croatian lenders | 14 February 2019 ( *1 )(Reference for a preliminary ruling — Articles 56 and 63 TFEU — Freedom to provide services — Free movement of capital — National legislation providing that credit agreements featuring international elements concluded with a non-authorised lender are invalid — Regulation (EU) No 1215/2012 — Article 17(1) — Credit agreement concluded by a natural person with a view to the provision of tourist accommodation services — Concept of ‘consumer’ — Article 24, point 1 — Exclusive jurisdiction in matters relating to rights in rem in immovable property — Action for invalidity of a credit agreement and seeking the removal from the land register of the entry of a security interest)In Case C‑630/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Općinski sud u Rijeci — Stalna služba u Rabu (Municipal Court of Rijeka, Permanent Division, Island of Rab, Croatia), made by decision of 6 November 2017, received at the Court on 9 November 2017, in the proceedings Anica Milivojević v Raiffeisenbank St. Stefan-Jagerberg-Wolfsberg eGen, THE COURT (Second Chamber),composed of K. Lenaerts, President of the Court, acting as President of the Second Chamber, A. Prechal, C. Toader (Rapporteur), A. Rosas and M. Ilešič, Judges,Advocate General: E. Tanchev,Registrar: M. Aleksejev, Head of Unit,having regard to the written procedure and further to the hearing on 5 September 2018,after considering the observations submitted on behalf of:–Raiffeisenbank St. Stefan-Jagerberg-Wolfsberg eGen, by D. Malnar, M. Mlinac, P.G. Baučić, P. Novak, M. Sabolek, E. Garankić and A. Đureta, odvjetnici, and T. Borić, profesor,the Croatian Government, by T. Galli, acting as Agent,the European Commission, by M. Heller, L. Malferrari and M. Mataija, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 14 November 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 56 TFEU and 63 TFEU, Article 4(1), Article 17, Article 24, point 1 and Article 25 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2012 L 351, p. 1).2The request has been made in proceedings between Ms Anica Milivojević, domiciled in Croatia, and Raiffeisenbank St. Stefan-Jagerberg-Wolfsberg eGen (‘Raiffeisenbank’), a company incorporated under Austrian law, concerning an action brought by Ms Milivojević, for a declaration of invalidity of a credit agreement concluded with Raiffeisenbank and of a notarised deed related to the creation of a mortgage taken out to guarantee the debt arising out of that contract and the removal of that security from the land register. Legal context European Union law 3Recitals 6, 15 and 18 of Regulation No 1215/2012 state:‘(6)In order to attain the objective of free circulation of judgments in civil and commercial matters, it is necessary and appropriate that the rules governing jurisdiction and the recognition and enforcement of judgments be governed by a legal instrument of the Union which is binding and directly applicable.…(15)The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. …(18)In relation to insurance, consumer contracts and employment, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules provide for.’4Article 4(1) of that regulation provides:‘Subject to this regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.’5Article 8(4) of that regulation is worded as follows:‘A person domiciled in a Member State may also be sued:(4)in matters relating to a contract, if the action may be combined with an action against the same defendant in matters relating to rights in rem in immovable property, in the court of the Member State in which the property is situated.’6Under Article 17(1) of that regulation:‘In matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, jurisdiction shall be determined by this Section ...’7Article 18(1) and (2) of Regulation No 1215/2012 provides as follows:‘1. A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled.2. Proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled.’8In accordance with the provisions of Article 19 of that regulation:‘The provisions of this section may be departed from only by an agreement:(1)which is entered into after the dispute has arisen;(2)which allows the consumer to bring proceedings in courts other than those indicated in this Section; or(3)which is entered into by the consumer and the other party to the contract, both of whom are at the time of conclusion of the contract domiciled or habitually resident in the same Member State, and which confers jurisdiction on the courts of that Member State, provided that such an agreement is not contrary to the law of that Member State.’9Under the first paragraph of Article 24, point 1, of the regulation:‘The following courts of a Member State shall have exclusive jurisdiction, regardless of the domicile of the parties:in proceedings which have as their object rights in rem in immovable property or tenancies of immovable property, the courts of the Member State in which the property is situated.’10Under Article 25(1) and (4) of the regulation:‘1. If the parties, regardless of their domicile, have agreed that a court or the courts of a Member State are to have jurisdiction to settle any disputes which have arisen or which may arise in connection with a particular legal relationship, that court or those courts shall have jurisdiction, unless the agreement is null and void as to its substantive validity under the law of that Member State. Such jurisdiction shall be exclusive unless the parties have agreed otherwise. …4. Agreements or provisions of a trust instrument conferring jurisdiction shall have no legal force if they are contrary to Articles 15, 19 or 23, or if the courts whose jurisdiction they purport to exclude have exclusive jurisdiction by virtue of Article 24.’11Governing the application ratione temporis of Regulation No 1215/2012, Article 66(1) thereof provides:‘This Regulation shall apply only to legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded on or after 10 January 2015.’ Croatian law Law of obligations 12Article 322 of the Zakon o obveznim odnosima (Law of obligations), in the version applicable to the main proceedings (Narodne novine, br. 78/2015) (‘the Law of obligations’) provides:‘(1) Any agreement contrary to the Constitution of the Republic of Croatia, the mandatory rules of law or morality shall be null and void, unless the purpose of the rule infringed refers to another legal consequence or as otherwise provided by law in specific cases.(2) If only one of the parties to a given contract is prohibited from concluding that contract, the contract is nonetheless valid, unless the law stipulates otherwise in specific cases, and the party which has infringed a statutory prohibition shall be bound to bear the consequences thereof.’13Under Article 323(1) of that law:‘When a contract is null and void, each contracting party shall be bound to give restitution to the other party of everything it has received by virtue of the null and void contract and, if that is not possible or if the nature of that which was executed precludes restitution, an appropriate pecuniary indemnity must be provided, which is to be fixed as a function of the price in place on the date on which the judicial decision is rendered, unless the law stipulates otherwise.’ Law on consumer credit 14The Zakon o potrošačkom kreditiranju (Law on consumer credit, Narodne novine, br. 75/2009; ‘Law on consumer credit’) entered into force on 1 January 2010. Article 29(1) of that Law states that, subject to certain exceptions, it does not apply to credit agreements concluded before its entry into force.15That Law was amended by the Zakon o izmjeni i dopunama Zakona o potrošačkom kreditiranju (Law amending and supplementing the Law on consumer credit, Narodne novine, br. 102/2015; ‘the Law on consumer credit, as amended’).16Article 19j of the Law on consumer credit, as amended, entitled ‘Nullity of contracts and effects of invalidity’, reads as follows:‘(1) Where the credit agreement was concluded by a creditor or credit intermediary who does not hold the authorisation required for the provision of consumer credit services or to act as a credit intermediary to consumers, the contract shall be null and void.(2) Where what was received must be returned in accordance with paragraph 1 of this article, the consumer shall pay interest on the amount received, with effect from the day on which the decision declaring the invalidity becomes final.’17In accordance with Article 19 of the Law on consumer credit, as amended, entitled ‘Jurisdiction’:‘(1) In the context of disputes relating to a credit agreement, the action brought by a consumer against the other party to the contract may be brought before either the courts of the State in which the other party to the contract has its registered office or, irrespective of the registered office of the other party, before the courts for the place where the consumer is domiciled.(2) Proceedings may be brought against a consumer by the other party to the contract only in the courts of the Member State in which the consumer is domiciled.…’ Law on the invalidity of credit agreements featuring international elements 18Article 1, entitled ‘Subject matter of the law’, of the Zakon o ništetnosti ugovora o kreditu s međunarodnim obilježjima sklopljenih u Republici Hrvatske s neovlaštenim vjerovnikom (Law on the invalidity of credit agreements featuring international elements concluded in the Republic of Croatia with an non-authorised lender, Narodne novine, br. 72/2017; ‘the Law on the invalidity of credit agreements featuring international elements’) provides:‘(1) This law shall apply to credit agreements featuring international elements which have been concluded in the Republic of Croatia between debtors and non-authorised lenders …(2) The present law shall also apply to other legal acts established in the Republic of Croatia between debtors and non-authorised lenders that are consequential upon a credit contract featuring international elements referred to in the first paragraph of the present article or which are based on such a contract.’19Under Article 2 of that Law, entitled ‘Definitions’:‘For the purpose of the present law, the term:“debtor” shall refer to any physical or moral person to whom a credit has been granted by virtue of a credit contract featuring international elements, or any person who acts in the interest of a person to whom such a credit has been granted as a co-debtor, debtor creditor, co-debtor creditor, or guarantor;“non-authorised lender” shall refer to any moral person who has agreed to provide a credit to a debtor pursuant to a credit contract featuring international elements, and whose statutory seat is situated outside of the Republic of Croatia at the date of the contract featuring international elements and who proposes or supplies credit services in the Republic of Croatia, even though such a lender does not satisfy the conditions required by regulation for the supply of such services, and more precisely, it does not have the authorisations and/or approval of the competent authorities of the Republic of Croatia;“credit agreement featuring international elements” means any credit agreement, loan agreement or other agreement by which an non-authorised lender grants the debtor a certain sum of money and by which the debtor undertakes to pay the agreed interest and to reimburse the amount used within the time limit and in the manner agreed.’20Under the heading ‘Invalidity of credit agreements’, Article 3 of that Law provides:‘(1) Credit contracts featuring international elements which have been concluded in the Republic of Croatia between debtors and non-authorised lenders shall be null and void.(2) By way of derogation from paragraph 1 of this article, invalidity cannot be claimed where a contract has been performed in full.’21Article 4 of that Law, entitled ‘Invalidity of other legal acts’, provides:‘Any notarised act of a notary established on the basis of, or having a link with, an invalid contract within the meaning of Article 3 of the present law shall be null and void.22Article 7 of the Law on the cancellation of credit agreements featuring international elements, governing the ‘Effects of invalidity’, provides:‘Each contracting party shall be bound to give restitution to the other party of everything it has received by virtue of the invalid contract and, if that is not possible or if the nature of that which was executed precludes restitution, an appropriate pecuniary indemnity must be provided, which shall be fixed as a function of the price in place on the date on which the judicial decision is rendered.’23Article 8 of that Law lays down the rules of jurisdiction as follows:‘(1) In the framework of litigation concerning credit contracts featuring international elements, in the sense of the present law, an action initiated by the debtor against an non-authorised lender can be brought either before the courts of the State on the territory of which the non-authorised lender has its seat (whatever the seat of the non-authorised lender) or before the courts of the place where the debtor has his domicile or his seat.(2) The action instituted against the debtor by the non-authorised lender, in the sense of paragraph 1 of the present article, can only be brought before the courts of the State on the territory on which the debtor has his domicile or seat. The law applicable to null and void contracts in the sense of the present law is, exclusively, the law of Croatia and the court seised of an action concerning the invalidity of such a contract will apply the present law to such an action, without examining if there exist presumptions for the application of the law of the place of the conclusion of the contract by virtue of other legislative instruments.’24Article 10 of that law is drafted in the following terms:‘(1) Credit contracts featuring international elements, in the sense of the present law, which have been concluded in the Republic of Croatia, before the entry into force of the present law, between debtors and non-authorised lenders, shall be null and void from the date of their conclusion, resulting in the effects indicated in Article 7 of this law.(2) Other legal acts established in the Republic of Croatia, before the entry into force of the present law, between debtors and non-authorised lenders, which follow from a credit contract featuring international elements referred to in paragraph 1 of Article 1 of this law which are founded on such a contract, shall be null and void from the date of their establishment, entailing the effects set out in Article 7 of this law.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 25On 23 April 2015, Ms Milivojević brought a claim before the referring court, the Općinski sud u Rijeci — Stalna služba u Rabu (Municipal Court of Rijeka, Permanent Division, Island of Rab, Croatia) against Raffeisenbank for a declaration of invalidity of the credit agreement concluded by the parties on 5 January 2007, in the amount of EUR 47000 (‘the agreement at issue’) as well as of the notarised act relating to the creation of a mortgage taken out as a guarantee for the debt arising from that agreement and the removal from the land register of that security.26In support of her action, Ms Milivojević has relied on the provisions of Article 322(1) of the Law on obligations, under which a contract contrary to the Constitution of the Republic of Croatia, mandatory rules of law or morality, is null and void.27Although it is common ground in the main proceedings that Raiffeisenbank was a ‘non-authorised lender’ within the meaning of Article 2 of the Law on the invalidity of contracts featuring international elements, that is to say a lender established in another Member State has not been duly authorised by Hrvatska narodna banka (Croatian National Bank) to grant credit in Croatia, the referring court observes that the parties disagree on certain factual circumstances relating, in particular, to the place of the conclusion of the agreement at issue. While Raiffeisenbank submits that that agreement was concluded in Austria, Ms Milivojević claims that it was concluded in Croatia.28As is apparent from the order for reference, Ms Milivojević claimed to have concluded the agreement at issue via an intermediary to whom she paid a commission, with a view to extending and renovating her house, to create apartments to be let. It also appears from that order that it cannot be ruled out that part of the loan was used for private purposes. Ms Milivojević stated, furthermore, that she intended to repay the loan using the profits from that activity.29It is also apparent from the documents before the Court that the agreement at issue contained a clause conferring jurisdiction on either the Austrian courts or the courts of the debtor’s domicile.30The oral procedure was closed on 3 January 2017.31However, following the entry into force on 14 July 2017 of the Law on the invalidity of credit agreements featuring international elements, by order of 10 August 2017, the oral procedure was reopened.32The referring court considers that if the agreement at issue was concluded in Croatia, it could now be invalid on the basis of the provisions of that legislation, having regard to its retroactive application.33Accordingly, that court is doubtful, firstly, as to the compatibility of the Law on the invalidity of credit agreements featuring international elements with Articles 56 and 63 TFEU, in so far as that legislation is liable to prejudice the freedom of Raiffeisenbank to provide financial services. That court doubts whether the objectives put forward by the Croatian Government in support of the retroactive application of that law could justify such a prejudice.34The referring court also observes that the Law on consumer credit, as interpreted by the Vrhovni sud (Supreme Court, Croatia), cannot justify a finding of invalidity of credit agreements concluded before the entry into force of that law, as amended, namely 30 September 2015.35In that regard, the referring court states that following a meeting between the President of the Civil Chamber of the Vrhovni sud (Supreme Court) and the Presidents of the Civil Chambers of the Županijski sudovi (County Courts, Croatia) held on 11 and 12 April 2016, the Vrhovni sud (Supreme Court) decided, by a document dated 12 April 2016, that:‘3.1. (jurisdiction)In the context of disputes relating to the invalidity of credit agreements concluded between Croatian natural person applicants (consumers) and foreign legal entities (banks) in which the question of jurisdiction is settled after 1 July 2013, the competent Croatian court shall always be that which is determined by the provisions of Article 16 of Regulation [(EC) No 44/2001 of the Council of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1)] and Article 17 of Regulation [No 1215/2012].3.2. (Invalidity of the agreement)Although foreign institutions which did not hold the authorisation required to provide such services in the Republic of Croatia were precluded from concluding such agreements, those agreements are not null and void, since that consequence was not provided for by the Law on banks or by the Law on credit institutions before 30 September 2015, the date on which that consequence was enacted [following the entry into force of the Law on consumer credit, as amended].’36Secondly, the referring court has doubts as to various aspects connected with its international jurisdiction to hear the main proceedings, in the light of Regulation No 1215/2012. In that regard, that court states that it can, under the provisions of the Croatian Code of Civil Procedure, check its competence at that stage of the proceedings before it.37That court has doubts as to the compatibility of Article 8 of the Law on the invalidity of credit agreements featuring international elements with the rules of jurisdiction laid down in Regulation No 1215/2012. It is also unsure as to whether, having regard to the case-law of the Court, in particular in the judgments of 3 July 1997, Benincasa (C‑269/95, EU:C:1997:337), and of 20 January 2005, Gruber (C‑464/01, EU:C:2005:32), the agreement at issue could be classified as a ‘consumer contract’ and whether the dispute in the main proceedings falls within the rules of exclusive jurisdiction for actions in rem, under Article 24, point 1, of that regulation.38In those circumstances, the Općinski sud u Rijeci — Stalna služba u Rabu (Municipal Court of Rijeka, Permanent Division, Island of Rab) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Must Articles 56 and 63 [TFEU] be interpreted as precluding the provisions of the Law on invalidity of credit agreements featuring international elements concluded in the Republic of Croatia with an non-authorised lender, in particular the provisions of Article 10 of that law, which provides for the invalidity of credit agreements and other legal acts that are consequential upon the credit agreement concluded between a debtor (within the meaning of Article 1 and the first indent of Article 2 of that law) and an non-authorised lender (within the meaning of the second indent of Article 2 of that law) or are based on such an agreement, even if they were concluded before the entry into force of that law, that invalidity taking effect from the moment the contract was entered into, with the result that each of the contracting parties is obliged to return to the other party everything received by it on the basis of the void contract and, when that is impossible or when the nature of the action taken is incompatible with restoration, adequate pecuniary compensation must be paid, based on the prices in force on the date of delivery of the judicial decision?Must [Regulation No 1215/2012], in particular Articles 4(1) and 25 thereof, be interpreted as precluding the provisions of Article 8(1) and (2) of the Law on invalidity of credit agreements featuring international elements concluded in the Republic of Croatia with an non-authorised lender, in which it is laid down that, in disputes relating to credit agreements featuring international elements within the meaning of that law, the debtor may sue an non-authorised lender either before the courts of the State in which the latter has its registered office or, irrespective of where the non-authorised lender has its registered office, before the courts of the place where the debtor is domiciled or has his registered office, whereas an non-authorised lender, within the meaning of that law, may commence proceedings against the debtor only in the courts of the State in which the latter is domiciled or has his registered office?Is it a consumer contract within the meaning of Article 17(1) of Regulation No 1215/2012 and of the legal acquis of the European Union if the recipient of the loan is a natural person who has concluded a credit agreement in order to invest in holiday apartments with the aim of carrying on the business of offering tourists private board and lodging in his property?Must Article 24(1) of Regulation No 1215/2012 be interpreted as meaning that jurisdiction is enjoyed by the courts of the Republic of Croatia to hear and determine proceedings seeking a declaration of invalidity of a credit agreement and of the corresponding memoranda of guarantee, together with cancellation of the registration of a mortgage in the Land Registry, when, in order to guarantee performance of the obligations under the credit agreement, that mortgage was secured upon immovable property of the debtor situated within the Republic of Croatia?’ Consideration of the questions referred The jurisdiction of the Court to answer the first question 39The Croatian Government submits that the Court does not have jurisdiction to examine the first question in so far as the agreement at issue was concluded on 5 January 2007, namely before the accession of the Republic of Croatia to the European Union on 1 July 2013. The Court has no jurisdiction to reply to a question on the interpretation of EU law referred by a court of a Member State where the factual circumstances to which EU law applies occurred before the accession of that Member State to the European Union. At the hearing, that government also claimed that the agreement was terminated during 2012.40In that regard, it should be noted, in the first place, that the referring court entertains doubts, in the context of the first question, as to the compatibility with Articles 56 and 63 TFEU of the Law on invalidity of credit agreements featuring international elements, adopted after the accession of the Republic of Croatia to the European Union. By reason of its retroactive effect, that legislation is applicable to the main proceedings and affects credit agreements concluded before the accession and other legal acts consequent upon such agreements.41In the second place, while it is true that the credit agreement at issue was concluded prior to that accession and although it was allegedly terminated before it, a fact which is not stated in the request for a preliminary ruling, it is apparent, however, from that request that some of the effects connected with that agreement and the legal acts consequent upon it, in particular the registration of the mortgage of which Ms Milivojević seeks the annulment, continue to make themselves felt.42As follows from Article 2 of the Act concerning the conditions of access of the Republic of Croatia and the adjustments to the Treaty on European Union, the Treaty on the Functioning of the European Union and the Treaty establishing the European Atomic Energy Community (OJ 2012 L 112, p. 21), the provisions of the original Treaties, in particular Articles 56 TFEU and 63 TFEU, are binding on the Republic of Croatia from the date of its accession, with the result that they apply to the future effects of situations arising prior to its accession (see, by analogy, judgment of 29 January 2002, Pokrzeptowicz-Meyer, C‑162/00, EU:C:2002:57, paragraph 50).43It follows from the foregoing that the arguments put forward by the Croatian Government to contest the jurisdiction of the Court to hear the first question must be rejected, since, although the agreement at issue which forms the subject matter of the main proceedings was concluded before the accession of the Republic of Croatia to the European Union, the fact remains that that question relates, in the present case, to a question of interpretation of EU law the answer to which is capable of calling into question the compatibility with EU law of national legislation adopted by that Member State after that date, which also has legal effects on that agreement after that accession. Admissibility of the first to third questions 44Raiffeisenbank and the Croatian Government contend that the first question is hypothetical in nature since it asserts that it has not been established that the Law on the invalidity of credit agreements featuring international elements is applicable to the main proceedings.45The Croatian Government has also alleged that the second and third questions are inadmissible, taking the view that the provisions of law to which the referring court refers in its questions, namely Article 4(1) and Article 17(1) of Regulation No 1215/2012, could no longer be relied upon once Raiffeisenbank has appeared before that court. With regard to Article 25 of that regulation, that government claims that it is not apparent from the request for a preliminary ruling that the parties concluded an agreement conferring jurisdiction.46As regards the first question, it is appropriate to note that although, at the current stage of the proceedings before it, the referring court has not yet settled the factual question of the determination of the place in which the agreement at issue was concluded, a question essential to the application of the Law on the invalidity of credit agreements featuring international elements, in accordance with Article 3 of that law, that fact does not restrict its power to assess at what stage of those proceedings it is necessary, for the requirements of those proceedings, for it to request a preliminary ruling from the Court (see, to that effect, judgments of 22 June 2010, Melki and Abdeli, C‑188/10 and C‑189/10, EU:C:2010:363, paragraph 41, and of 4 June 2015, Kernkraftwerke Lippe-Ems, C‑5/14, EU:C:2015:354, paragraph 31), the choice of the most opportune moment to do so being in its exclusive competence (see, to that effect, judgment of 15 March 2012, Sibilio, C‑157/11, not published, EU:C:2012:148, paragraph 31).47As regards the second and third questions, it should be recalled that, according to the settled case-law of the Court, in the context of the cooperation between the Court and national courts provided for in Article 267 TFEU, it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgment of 6 March 2018, SEGRO and Horváth, C‑52/16 and C‑113/16, EU:C:2018:157, paragraph 42 and the case-law cited).48It is also settled case-law that questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance (judgment of 14 June 2017, Online Games and Others, C‑685/15, EU:C:2017:452, paragraph 42 and the case-law cited). The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it and to understand the reasons for the referring court’s view that it needs answers to those questions in order to rule in the dispute before it (see, to that effect, judgment of 8 September 2016, Politanò, C‑225/15, EU:C:2016:645, paragraph 22 and the case-law cited). However, contrary to the Croatian Government’s submissions, it does not appear that the issue raised in the second and third questions is hypothetical.49In those circumstances, it must be held that the first to third questions are admissible. The first question 50By its first question, the referring court asks, in essence, whether Article 56 TFEU and Article 63 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, which has the effect, inter alia, that credit agreements and legal acts based on such agreements concluded in that Member State between debtors and creditors established in another Member State, who do not hold a licence issued by the competent authorities of the first Member State to operate in that State, are null and void from the date on which they were concluded, even if they were concluded before the entry into force of that legislation. The relevant freedom of movement 51Since the question referred for a preliminary ruling concerns both Article 56 TFEU and Article 63 TFEU, it is necessary to establish, as a preliminary point, whether, and if so, to what extent, national legislation such as that at issue in the main proceedings is liable to affect the exercise of the freedom to provide services and/or the free movement of capital.52In the present case, it is apparent from the order for reference that the Law on the invalidity of credit agreements featuring international elements concerns financial services provided by credit institutions whose registered office is established outside Croatian territory and which do not hold licences and/or approvals from the competent Croatian authorities provided for to that end by national law.53In that regard, the Court has already held that such operations of a grant of credit on a commercial basis relate, in principle, both to the freedom to provide services within the meaning of Articles 56 TFEU et seq. and to the free movement of capital within the meaning of Articles 63 TFEU et seq. (judgment of 22 November 2018, Vorarlberger Landes- und Hypothekenbank, C‑625/17, EU:C:2018:939, paragraph 23 and the case-law cited).54Where a national measure relates to both the freedom to provide services and the free movement of capital, it is necessary to consider to what extent the exercise of those fundamental freedoms is affected and whether, in the circumstances of the main proceedings, one of them prevails over the other. The Court will, in principle, examine the measure in dispute in relation to only one of those two freedoms if it appears, in the circumstances of the case, that one of them is entirely secondary in relation to the other and may be considered together with it (judgment of 12 July 2012, SC Volksbank România, C‑602/10, EU:C:2012:443, paragraph 70 and the case-law cited).55In so far as, in the main proceedings, the Law on the invalidity of credit agreements featuring international elements provides for the invalidity of any agreement concluded in Croatia by an non-authorised lender whose registered office is outside that Member State, such a legal regime affects the access to financial services on the Croatian market of economic operators established in other Member States which do not satisfy the conditions required by that legislation and particularly affects the freedom to provide services. Since the restrictive effects of those rules on the free movement of capital are merely an inevitable consequence of the restriction imposed on the provision of services (judgment of 3 October 2006, Fidium Finanz, C‑452/04, EU:C:2006:631, paragraph 48 and the case-law cited), it is not necessary to examine the compatibility of that decision in the light of Articles 63 TFEU et seq.56In consequence, the question referred must be examined only in the light of Article 56 TFEU et seq. relating to the freedom to provide services, in the light of the premiss that the agreement at issue was concluded in Croatia, a factual aspect which it is, however, for the referring court to verify. Article 56 TFEU 57In that regard, it is clear from the settled case-law of the Court that the freedom to provide services under Article 56 TFEU requires not only the elimination of all discrimination on grounds of nationality against providers of services established in other Member States, but also the abolition of any restriction — even if it applies without distinction to national providers of services and to those from other Member States — which is liable to prohibit, impede or render less attractive the activities of a provider of services established in another Member State where he lawfully provides similar services (judgment of 18 July 2013, Citroën Belux, C‑265/12, EU:C:2013:498, paragraph 35 and case-law cited).58It also follows from the case-law of the Court that the business of a credit institution, consisting of granting credit, constitutes a service within the meaning of Article 56 TFEU (judgment of 12 July 2012, SC Volksbank România, C‑602/10, EU:C:2012:443, paragraph 72 and the case-law cited).59It is apparent from the request for a preliminary ruling that, in the Croatian legal order, the invalidity of credit agreements concluded with a non-authorised lender is laid down by both the Law on consumer credit, as amended, and the Law on the invalidity of credit agreements featuring international elements. However, the scope of those two laws is not identical, that of the latter being more extensive in so far as, as is clear from Article 1(1) thereof, it applies to all credit agreements, including those concluded for business purposes. By contrast, the Law on consumer credit, as amended, applies only to agreements concluded by consumers.60As is also apparent from the order for reference, from 1 July 2013, the date of accession of the Republic of Croatia to the European Union, to 30 September 2015, the date of entry into force of the Law on consumer credit, as amended, that invalidity is effective only in respect of credit agreements concluded by non-authorised lenders with their registered office outside the Republic of Croatia, by virtue of the retroactive application of the Law on the invalidity of credit agreements featuring international elements.61Indeed, it follows from the interpretation of the Law on consumer credit, as amended, provided by the Vrhovni sud (Supreme Court), that the rule that consumer credit agreements concluded with an non-authorised lender are invalid does not apply, on the basis of that law, retroactively to situations arising prior to its entry into force, that is to say before 30 September 2015.62Consequently, to the extent that the Law on the invalidity of credit agreements featuring international elements establishes a derogation for certain financial services based on the fact that the service provider has its registered office in a Member State other than that in which the service is provided, it must be concluded that the Croatian law directly discriminated against creditors established outside the Republic of Croatia until 30 September 2015, the date from which the invalidity of the credit agreements concluded with an non-authorised lender was extended to agreements with creditors established in that Member State.63From that date, since the invalidity regime was applicable without distinction to all creditors, the Law on the invalidity of credit agreements featuring international elements constitutes, for that period, a restriction on the exercise of the freedom to provide services.64Indeed, as is apparent from the case-law of the Court, the concept of restriction covers measures taken by a Member State which, although applicable without distinction, affect access to the market for economic operators from other Member States (judgment of 12 July 2012, SC Volksbank România, C‑602/10, EU:C:2012:443 paragraph 75 and the case-law cited). In the present case, the Law on the invalidity of credit agreements featuring international elements makes access to the Croatian financial services market for creditors based outside Croatia subject to their obtaining an authorisation issued by the Croatian Central Bank and thus makes the access to that market less attractive, so that it undermines the freedom guaranteed by Article 56 TFEU.65It is therefore necessary to examine, in the first place, whether the objectives which formed the basis of the adoption of that law can justify a derogation from Article 52 TFEU and, in the second place, whether that law is justified by overriding reasons of public interest provided, if that is the case, that it is suitable for securing the attainment of the objectives which it pursues and does not go beyond what is necessary in order to attain it see, to that effect, judgment of 18 July 2013, Citroën Belux, C‑265/12, EU:C:2013:498, paragraph 37 and the case-law cited).66With regard, first of all, to the period between the date of accession of the Republic of Croatia to the European Union and 30 September 2015, it follows from the case-law of the Court that, to the extent that the restrictive legislation at issue in the main proceedings is directly discriminatory, it is justified only by reasons of public order, public security or public health, provided for in Article 52 TFEU, to which Article 62 TFEU refers (see, to that effect, inter alia, judgments of 9 September 2010, Engelmann, C‑64/08, EU:C:2010:506, paragraph 34; of 22 October 2014, Blanco and Fabretti, C‑344/13 and C‑367/13, EU:C:2014:2311, paragraph 38; and of 28 January 2016, Laezza, C‑375/14, EU:C:2016:60, paragraph 26),67Recourse to such justification presupposes the existence of a genuine, sufficiently serious threat affecting one of the fundamental interests of society (judgment of 21 January 2010, Commission v Germany, C‑546/07, EU:C:2010:25, paragraph 49 and the case-law cited).68As is clear from the written observations and oral argument presented by the Croatian Government, the Law on the invalidity of credit agreements featuring international elements was adopted to protect a large number of Croatian citizens who had concluded agreements with lenders operating without having been duly authorised by the Croatian Central Bank. In that regard, the Croatian Government stated that, over the period between 2000 and 2010, approximately 3000 credit agreements were concluded by non-authorised creditors, in a total amount of approximately EUR 360 million. That legislation was adopted as a last resort, after several legislative acts, adopted before it, had tried in vain to remedy the consequences of such agreements, which justifies its retroactive application. That legislation thus seeks to maintain public order, the reputation and proper functioning of the financial sector, protection of the weaker party and, in particular, consumers’ rights.69In the light of the objectives pursued by the national legislation at issue in the main proceedings, it must be noted that, although the Croatian Government relies upon the concept of public order, it does not put forward any convincing argument which could be based on that concept which, as has already been pointed out in paragraph 67 of this judgment, presupposes the existence of a genuine, sufficiently serious threat affecting one of the fundamental interests of society, since economic considerations are not, furthermore, capable of justifying a derogation from Article 52 TFEU (see, by analogy, judgment of 21 January 2010, Commission v Germany, C‑546/07, EU:C:2010:25, paragraph 51).70Next, it is necessary to examine to what extent the restrictions which the regime of invalidity at issue entails are capable of being justified by overriding reasons in the public interest within the meaning of the case-law cited in paragraph 64 of this judgment, for the period from 30 September 2015.71In that regard, it should be noted that the overriding reasons of general interest relied on by the Republic of Croatia, include ones already accepted in the case-law of the Court, namely professional rules intended to protect recipients of services (judgment of 25 July 1991, Collectieve Antennevoorziening Gouda, C‑288/89, EU:C:1991:323, paragraph 14), the good reputation of the financial sector (judgment of 10 May 1995, Alpine Investments, C‑384/93, EU:C:1995:126, paragraph 44) and consumer protection (judgment of 18 July 2013, Citroën Belux, C‑265/12, EU:C:2013:498, paragraph 38).72Nonetheless, it must also be recalled that the reasons which may be relied on by a Member State by way of justification must be accompanied by appropriate evidence or by an analysis of the appropriateness and proportionality of the restrictive measure adopted by that State and precise evidence enabling its arguments to be substantiated. Thus, if a Member State wishes to rely on an objective that is capable of justifying an obstacle to the free movement of capital arising from a national restrictive measure, it is under a duty to supply the court called upon to rule on that question with all the evidence capable of enabling that court to be satisfied that that measure does indeed fulfil the requirements arising from the principle of proportionality (see, by analogy, judgment of 6 March 2018, SEGRO and Horváth, C‑52/16 and C‑113/16, EU:C:2018:157, paragraph 85).73In the absence of such evidence, it must be held that the Law on the invalidity of credit agreements featuring international elements clearly goes beyond what is necessary to achieve the objectives it seeks to pursue, since, through a general, automatic and retroactive rule, it provides for the invalidity of all credit agreements featuring international elements concluded with non-authorised lenders, with the exception of those which have been performed in full.74Furthermore, it should be noted, as does the European Commission, that other measures less prejudicial to the freedom to provide services, could have been adopted in order to permit a check of the legality of the credit agreements and the protection of the weaker party, namely, in particular, rules enabling the competent authorities to intervene, on the basis of a notification or on their own initiative, in the event of unfair commercial practices or infringement of consumers’ rights.75In the light of all the foregoing considerations, the answer to the first question is that Article 56 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, which has the effect, inter alia, that credit agreements and legal acts based on those agreements concluded in that Member State between debtors and creditors established in another Member State who do not hold an authorisation, issued by the competent authorities of the first Member State, to operate in that State, are invalid from the date on which they were concluded, even if they were concluded before the entry into force of that legislation. The second question 76By its second question, the referring court asks, in essence, whether Article 4(1) and Article 25 of Regulation No 1215/2012 preclude legislation of a Member State, such as that at issue in the main proceedings, which, in the context of disputes concerning credit agreements featuring international elements falling within the scope of that regulation, allows debtors to bring an action against non-authorised lenders either before the courts of the State on the territory of which those lenders have their registered office, or before the courts of the place where the debtors have their domicile or registered office and restricts jurisdiction to hear actions brought by those creditors against their debtors only to courts of the State on the territory of which those debtors have their domicile, whether the debtors are consumers or professionals.77As a preliminary point, it should be noted that Regulation No 1215/2012 applies to actions brought after 10 January 2015. Since the action at issue in the main proceedings was brought on 23 April 2015 and concerned, having regard to the legal relationship between the parties to the main proceedings, the basis and conditions for its exercise, civil and commercial matters within the meaning of Article 1(1) of that regulation, its provisions apply in the present case.78As is apparent from the order for reference, Article 8(1) and (2) of the Law on the invalidity of credit agreements featuring international elements gives the debtor the right to choose between the courts of the State in which the non-authorised lender has its registered office and those of his own domicile, while the creditor must apply to the courts of the debtor’s domicile.79Under Article 1(1) of the Law on the invalidity of credit agreements featuring international elements, that law applies to such agreements concluded in Croatia between debtors and non-authorised lenders, without taking account of the status of the debtor, whether he is a consumer or a professional.80In so far as Article 8(1) and (2) of that law also applies to disputes between professionals, it must be noted that it departs from the general rule of jurisdiction laid down in Article 4(1) of Regulation No 1215/2012, that is to say, the defendant’s domicile, in that it extends the scope of more protective jurisdictional rules, laid down as an exception in Article 18(1) of that regulation in favour only of consumers, to all debtors.81It is appropriate to recall that, in the scheme of Regulation No 1215/2012, the jurisdiction of the courts of the Member State within the territory of which the defendant is domiciled is the general principle. It is only by way of derogation from that principle that that regulation provides for an exhaustive list of cases in which the defendant may or must be sued before the courts of another Member State (see, to that effect, judgment of 25 January 2018, Schrems, C‑498/16, EU:C:2018:37, paragraph 27). Accordingly, the fact that a Member State provides in its national legislation for rules of jurisdiction which derogate from that general principle, which are not provided for in another provision of that regulation, runs counter to the system instituted by that regulation and, more particularly, by Article 4 thereof.82Article 25 of Regulation No 1215/2012 recognises, under certain conditions, the legitimacy of agreements on jurisdiction concluded by the parties to determine the court of a Member State having jurisdiction to hear disputes arising or which may arise in connection with a particular legal relationship. In that regard, it should be observed that it follows from Articles 17 to 19 of Regulation No 1215/2012 that jurisdiction to hear a dispute concerning a consumer contract is determined, in principle, by the same rules, and, in accordance with Article 25(4) of that regulation, a jurisdiction clause can apply to such a contract only to the extent that it is not contrary to the provisions of Article 19 of that regulation.83It appears from the wording of Article 8 of the Law on the invalidity of credit agreements featuring international elements, which is, however, a matter for the referring court to ascertain, that the rules of jurisdiction which it introduces apply, notwithstanding the fact that agreements on jurisdiction which meet the requirements laid down by Article 25 of Regulation No 1215/2012 would have been made freely.84In the light of those considerations, the answer to the second question is that Article 4(1) and Article 25 of Regulation No 1215/2012 preclude legislation of a Member State, such as that at issue in the main proceedings, which, in the context of disputes concerning credit agreements featuring international elements which fall within the scope of that regulation, allows debtors to bring an action against non-authorised lenders either before the courts of the State in which they have their registered office or before the courts of the place where the debtors have their domicile or head office and restricts jurisdiction to hear actions brought by creditors against their debtors only to courts of the State on the territory of which those debtors have their domicile, whether they are consumers or professionals. The third question 85By its third question, the referring court asks, in essence, whether Article 17(1) of Regulation No 1215/2012 must be interpreted as meaning that a debtor who has entered into a credit agreement in order to have renovation work carried out in an immovable property which is his domicile with the intention, in particular, of providing tourist accommodation services can be regarded as a ‘consumer’ within the meaning of that provision.86It is appropriate, first of all, to recall that, in accordance with the settled case-law of the Court, the concepts used in Regulation No 1215/2012, in particular those which appear in Article 17(1) of the regulation, must be interpreted independently, by reference principally to the general scheme and objectives of the regulation, in order to ensure that it is applied uniformly in all the Member States (see, to that effect, judgment of 25 January 2018, Schrems, C‑498/16, EU:C:2018:37, paragraph 28).87The notion of a ‘consumer’ for the purposes of Articles 17 and 18 of Regulation No 1215/2012 must be strictly construed, reference being made to the position of the person concerned in a particular contract, having regard to the nature and objective of that contract and not to the subjective situation of the person concerned, since the same person may be regarded as a consumer in relation to certain transactions and as an economic operator in relation to others (see, to that effect, judgment of 25 January 2018, Schrems, C‑498/16, EU:C:2018:37, paragraph 29 and the case-law cited).88In consequence, only contracts concluded outside and independently of any trade or professional activity or purpose, solely for the purpose of satisfying an individual’s own needs in terms of private consumption, are covered by the special rules laid down by the regulation to protect the consumer as the party deemed to be the weaker party. Such protection is, however, unwarranted in the case of contracts for the purpose of a trade or professional activity (judgment of 25 January 2018, Schrems, C‑498/16, EU:C:2018:37, paragraph 30 and the case-law cited).89That specific protection is also unwarranted in the case of contracts for the purpose of trade or professional activity, even if that activity is only planned for the future, since the fact that an activity is in the nature of a future activity does not divest it in any way of its trade or professional character (judgment of 3 July 1997, Benincasa, C‑269/95, EU:C:1997:337, paragraph 17).90It follows that the special rules of jurisdiction in Articles 17 to 19 of Regulation No 1215/2012 apply, in principle, only where the contract is concluded between the parties for the purpose of a use other than a trade or professional one of the relevant goods or services (see, to that effect, judgment of 25 January 2018, Schrems, C‑498/16, EU:C:2018:37, paragraph 31 and the case-law cited).91As regards, more particularly, a person who concludes a contract for a dual purpose, partly for use in his professional activity and partly for private matters, the Court has held that he could rely on those provisions only if the link between the contract and the trade or profession of the person concerned was so slight as to be marginal and, therefore, had only a negligible role in the context of the transaction in respect of which the contract was concluded, considered in its entirety (see, to that effect, judgment of 25 January 2018, Schrems, C‑498/16, EU:C:2018:37, paragraph 32 and the case-law cited).92It is in the light of those principles that it is for the referring court to determine whether, in the case before it, Ms Milivojević can be described as a ‘consumer’, within the meaning of Article 17(1) of Regulation No 1215/2012. For that purpose, the national court should take into consideration not only the content, nature and purpose of the contract, but also the objective circumstances in which it was concluded (judgment of 20 January 2005, Gruber, C‑464/01, EU:C:2005:32, paragraph 47).93In that regard, the referring court can take into consideration the fact that Ms Milivojević states that she concluded the credit agreement at issue for renovation of her house, in order, inter alia, to create flats for rent, without, however, excluding the fact that part of the sum borrowed was used for private purposes. In those circumstances, it follows from the case-law cited in paragraph 91 above that Ms Milivojević can be considered to have concluded the agreement at issue as a consumer only if the link between that contract and the professional activity in the form of tourist accommodation services is so marginal and negligible that it appears clearly that that contract was concluded essentially for private purposes.94Having regard to those considerations, the answer to the third question is that Article 17(1) of Regulation No 1215/2012 must be interpreted as meaning that a debtor who has entered into a credit agreement in order to have renovation work carried out in an immovable property which is his domicile with the intention, in particular, of providing tourist accommodation services cannot be regarded as a ‘consumer’ within the meaning of that provision, unless, in the light of the context of the transaction, regarded as a whole, for which the contract has been concluded, that contract has such a tenuous link to that professional activity that it appears clear that the contract is essentially for private purposes, which is a matter for the referring court to ascertain. The fourth question 95By its fourth question, the referring court asks, in essence, whether the first subparagraph of point 1 of Article 24 of Regulation No 1215/2012 must be interpreted as meaning that an action ‘relating to rights in rem in immovable property’ within the meaning of that provision, constitutes an action for a declaration of the invalidity of a credit agreement and of the notarised deed relating to the creation of a mortgage taken out as a guarantee for the debt arising out of that agreement and for the removal from the land register of the mortgage on a building.96It follows from the wording of the first subparagraph of point 1 of Article 24 of Regulation No 1215/2012 that the courts of the Member State in which the property is situated have exclusive jurisdiction to hear and determine actions in matters relating to rights in rem in immovable property, without taking account of the domicile of the parties.97As follows from the settled case-law of the Court, an independent definition must be given in EU law to the phrase ‘in proceedings which have as their object rights in rem in immovable property’, in order to ensure its uniform application in all the Member States (see, to that effect, judgments of 3 April 2014, Weber, C‑438/12, EU:C:2014:212, paragraph 40, and of 17 December 2015, Komu and Others, C‑605/14, EU:C:2015:833, paragraph 23).98The Court has also held that the provisions of the first subparagraph of point 1 of Article 24 of Regulation No 1215/2012 must not be given a wider interpretation than is required by their objective. Those provisions have the effect of depriving the parties of the choice of forum which would otherwise be theirs and, in certain cases, of resulting in their being brought before a court which is not that of the domicile of any of them (see, to that effect, judgment of 16 November 2016, Schmidt, C‑417/15, EU:C:2016:881, paragraph 28).99Furthermore, the Court has stated that the exclusive jurisdiction of the courts of the Contracting State in which the property is situated does not encompass all actions concerning rights in rem in immovable property, but only those which both come within the scope of that regulation and are actions which seek to determine the extent, content, ownership or possession of immovable property or the existence of other rights in rem therein and to provide the holders of those rights with protection for the powers which attach to their interest (judgment of 16 November 2016, Schmidt, C‑417/15, EU:C:2016:881, paragraph 30 and the case-law cited).100It is important to note that, according to the settled case-law of the Court, the difference between a right in rem and a right in personam lies in the fact that the former, existing in corporeal property, has effect erga omnes, whereas the latter can be claimed only against the debtor (judgment of 16 November 2016, Schmidt, C‑417/15, EU:C:2016:881, paragraph 31 and the case-law cited).101In the present case, with regard to the claims seeking a declaration of the invalidity of the agreement at issue and of the notarised deed related to the creation of a mortgage, it is clear that they are based on a right in personam which can be claimed only against the defendant. Therefore, those claims do not fall within the scope of the exclusive jurisdiction rule contained in Article 24, point 1, of Regulation No 1215/2012.102However, with regard to the request for removal from the land register of the registration of a mortgage, it must be noted that the mortgage, once duly constituted in accordance with the procedural and substantive rules laid down by the relevant national legislation, is a right in rem which has effects erga omnes.103Such an application, seeking the enforcement of powers arising from a right in rem, falls under the exclusive jurisdiction of the courts of the Member State in which the property is situated, pursuant to the first subparagraph of point 1 of Article 24 of Regulation No 1215/2012 (judgment of 16 November 2016, Schmidt, C‑417/15, EU:C:2016:881, paragraph 41).104It should be added that, in the light of that exclusive jurisdiction of the court of the Member State in which the immovable property is situated to the request for removal from the land register for the registration of mortgages, that court also has a non-exclusive jurisdiction based on related actions, pursuant to Article 8(4) of Regulation No 1215/2012, to hear claims seeking annulment of the credit agreement and the notarised deed related to the creation of that mortgage, to the extent that these claims are brought against the same defendant and are capable, as is apparent from the material in the file available to the Court, of being joined.105In the light of those considerations the answer to the fourth question is that the first subparagraph of point 1 of Article 24 of Regulation No 1215/2012 must be interpreted as meaning that an action ‘relating to rights in rem in immovable property’ within the meaning of that provision, constitutes an action for the removal from the land register of the mortgage on a building, but that an action for a declaration of the invalidity of a credit agreement and of the notarised deed relating to the creation of a mortgage taken out as a guarantee for the debt arising out of that agreement does not fall within that concept. Costs 106Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. Article 56 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, which has the effect, inter alia, that credit agreements and legal acts based on those agreements concluded in that Member State between debtors and creditors established in another Member State who do not hold an authorisation, issued by the competent authorities of the first Member State, to operate in that State, are invalid from the date on which they were concluded, even if they were concluded before the entry into force of that legislation. 2. Article 4(1) and Article 25 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters preclude legislation of a Member State, such as that at issue in the main proceedings, which, in the context of disputes concerning credit agreements featuring international elements which fall within the scope of that regulation, allows debtors to bring an action against non-authorised lenders either before the courts of the State in which they have their registered office or before the courts of the place where the debtors have their domicile or head office and restricts jurisdiction to hear actions brought by creditors against their debtors only to courts of the State on the territory of which those debtors have their domicile, whether they are consumers or professionals. 3. Article 17(1) of Regulation No 1215/2012 must be interpreted as meaning that a debtor who has entered into a credit agreement in order to have renovation work carried out in an immovable property which is his domicile with the intention, in particular, of providing tourist accommodation services cannot be regarded as a ‘consumer’ within the meaning of that provision, unless, in the light of the context of the transaction, regarded as a whole, for which the contract has been concluded, that contract has such a tenuous link to that professional activity that it appears clear that the contract is essentially for private purposes, which is a matter for the referring court to ascertain. 4. The first subparagraph of point 1 of Article 24 of Regulation No 1215/2012 must be interpreted as meaning that an action ‘relating to rights in rem in immovable property’ within the meaning of that provision, constitutes an action for the removal from the land register of the mortgage on a building, but that an action for a declaration of the invalidity of a credit agreement and of the notarised deed relating to the creation of a mortgage taken out as a guarantee for the debt arising out of that agreement does not fall within that concept. [Signatures]( *1 ) Language of the case: Croatian. | 73b9f-ff192ad-45e9 | EN |
For failing to recover the State aid granted to Ellinika Nafpigeia, Greece is ordered to pay a lump sum of €10 million and a periodic penalty payment of more than €7 million for every six months of delay | 14 November 2018 ( *1 )(Failure of a Member State to fulfil obligations — State aid — Aid declared unlawful and incompatible with the internal market — Recovery requirement — Judgment of the Court establishing a failure to fulfil its obligations — Undertaking which engages in both civil and military activities — Non-implementation — Essential interests of the security of a Member State — Article 346(1)(b) TFEU — Financial penalties — Periodic penalty payment — Lump sum — Ability to pay — ‘N’ Factor — Factors which are the basis for the assessment of the ability to pay — Gross domestic product — Weighting of votes of the Member State in the Council of the European Union — New voting rules in the Council)In Case C‑93/17,ACTION for failure to fulfil obligations under Article 260(2) TFEU, brought on 22 February 2017, European Commission, represented by A. Bouchagiar and B. Stromsky, acting as Agents,applicant,v Hellenic Republic, represented by K. Boskovits and A. Samoni-Rantou, acting as Agents,defendant,THE COURT (First Chamber),composed of R. Silva de Lapuerta, Vice-President, acting as President of the First Chamber, J.-C. Bonichot, A. Arabadjiev (Rapporteur), C.G. Fernlund and S. Rodin, Judges,Advocate General: M. Wathelet,Registrar: R. Schiano, Administrator,having regard to the written procedure and further to the hearing on 15 March 2018,after hearing the Opinion of the Advocate General at the sitting on 16 May 2018,gives the following Judgment 1By its action, the European Commission claims that the Court should:–declare that, by failing to adopt the measures necessary to comply with the judgment of 28 June 2012, Commission v Greece (C‑485/10, not published, EU:C:2012:395) (‘the judgment establishing the infringement’), the Hellenic Republic has failed to fulfil its obligations under Article 260(1) TFEU,order the Hellenic Republic to pay to the Commission a penalty payment in the sum of EUR 34974 for delay in complying with the judgment establishing the infringement from the day on which judgment is delivered in the present case until the day on which the judgment establishing the infringement has been complied with;order the Hellenic Republic to pay to the Commission a lump sum whose amount is derived from multiplying a daily sum of EUR 3828 by the number of days that will have elapsed from the day of delivery of the judgment establishing the infringement until the day on which the infringement has ended or, if there has not been compliance, until the day on which judgment is delivered in the present case;order the Hellenic Republic to pay the costs. Legal context 2Article 346(1)(b) TFEU reads:‘The provisions of the Treaties shall not preclude the application of the following rules:…(b)any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes.’ Background to the dispute 3Hellenic Shipyards SA (Ellinika Nafpigeia AE, ‘ENAE’), the owner of a Greek civil and military shipyard in Skaramagkas (Greece), is specialised in the construction of military vessels. In 1985, ENAE ceased its activities and was wound up. In September 1985, Elliniki Trapeza Viomichanikis Anaptixeos AE (‘ETVA’), a Greek bank owned by the Greek State, acquired ENAE. On 18 September 1995, ETVA sold 49% of the shares in ENAE to employees of that undertaking.4In 1998, within the framework of a project to modernise is fleet of submarines, the Hellenic Republic concluded a contract with ENAE called ‘Archimedes’ for the construction of three ‘HDW Type 214’ submarines and the option to construct a fourth submarine, and a contract ‘Neptune II’ for the modernisation of three ‘HDW Type 209’ submarines.5In 2001, the Hellenic Republic decided to privatise ENAE. On 11 October 2001, a sale agreement for the shares in ENAE was signed between ETVA and the employees of ENAE, on one hand, and a consortium constituted by Howaldswerke-Deutsche Werft GmbH (‘HDW’) and Ferrostaal AG (together ‘HDW-Ferrostaal’) on the other. HDW-Ferrostaal created Greek Naval Shipyard Holding (Elliniki Nafpigokataskevastiki AE Chartofylakeiou, ‘GNSH’), held equally by HDW and Ferrostaal, with the aim of managing their shareholding in ENAE.6In January 2005 ThyssenKrupp AG bought HDW. In November 2005 ThyssenKrupp purchased the GNSH shares held by Ferrostaal. Therefore, from that date, ThyssenKrupp held 100% of the shares in ENAE and controlled that undertaking. GNSH and HDW are part of ThyssenKrupp Marine Systems AG, a division of ThyssenKrupp specialising in systems for naval vessels and specialised merchant ships.7In that context, between 1996 and 2003, the Hellenic Republic took a certain number of measures, consisting in capital contributions, guarantees and loans in favour of ENAE, which were the subject of several decisions of the Council of the European Union and the Commission.8On 2 July 2008, the Commission adopted Decision 2009/610/EC of 2 July 2008 on the measures C 16/04 (ex NN 29/04, CP 71/02 and CP 133/05) implemented by Greece in favour of Hellenic Shipyards SA (OJ 2009 L 225, p. 104), Articles 2, 3, 8, 9 and 11 to 15 of which state that those measures are aid incompatible with the internal market.9In accordance with Article 5 and 6 of that decision, the aid specified therein, although it was previously authorised by the Commission, had been misused so that it had to be recovered.10Under Article 16 of Decision 2009/610, the indemnification guarantee granted by ETVA to HDW/Ferrostaal providing that ETVA would indemnify HDW/Ferrostaal for any State aid recovered from ENAE constitutes aid that has been put into effect in contravention of Article 108(3) TFEU which is incompatible with the internal market. Therefore, that guarantee was to be stopped immediately.11Finding that the aid to be recovered exclusively benefited ENAE’s civil activities, the Commission decided, in Article 17 of that decision, that that aid had to be recovered from the civil activities of that undertaking.12Article 18 of Decision 2009/610 required the Hellenic Republic to immediately recover the aid defined in Articles 2, 3, 5, 6, 8, 9 and 11 to 15 of that decision. According to Article 18, Greece was to take the measures necessary to implement that decision within 4 months following 13 August 2008, the date of its notification.13In light of ENAE’s difficult financial situation, the Hellenic Republic argued that the full reimbursement of the aid at issue might cause it to go bankrupt and, therefore, affect its military activities, including the construction and modernisation of ‘HDW Type 214’ and ‘HDW Type 209’ submarines, so that it could adversely affect the essential interests of the security of the Hellenic Republic, within the meaning of Article 346 TFEU. In order to avoid such a possibility, after negotiations between June and October 2010 and commitment letters from ENAE and the Hellenic Republic, dated 27 and 29 October 2010 respectively, the Commission, the Hellenic Republic and ENAE reached an agreement under which Decision 2009/610 was deemed to have been correctly implemented subject to compliance with the following undertakings:ENAE’s civil activities to be suspended for a period of 15 years from 1 October 2010;the assets related to ENAE’s civil activities to be sold and the proceeds of the sale paid to the Greek authorities. If the auction did not result in the sale of all or part of the civil assets, ENAE was to transfer them to the Greek State as an alternative means of implementing the obligation to recover the aid at issue. In that case, the Greek State had to ensure that none of those shares were reacquired by ENAE or its current or future shareholders during the abovementioned period of 15 years.ENAE was to give up the concession of a dry dock, the use of which was unnecessary for the pursuit of its military activities. The Greek State was to ensure that that concession and the land concerned would not be reacquired by ENAE or its current or future shareholders during the abovementioned 15 year period;ENAE was to waive the indemnification guarantee set out in Article 16 of Decision 2009/610 and would not initiate any proceedings based on that guarantee or in connection with it. The Hellenic Republic was to invoke the invalidity of that guarantee before any court or tribunal;in the 6 months following the acceptance of the list of commitments by the Commission, the Hellenic Republic was to provide evidence of the restitution of the dry dock to the Greek State and up-to-date information relating to the sale at auction of ENAE’s civil assets. In addition the Hellenic Republic was to notify the Commission each year as to the progress of the recovery of incompatible State aid, inter alia by submitting evidence that ENAE no longer pursued civil activities, information on the ownership and use of the assets returned to the Greek State and the use of the land covered by the concession of the dry dock.14On 8 October 2010, taking the view that the Hellenic Republic had failed to comply with its obligations under Decision 2009/610, the Commission brought an action for failure to fulfil obligations against the Hellenic Republic under Article 108(2) TFEU seeking a declaration that the latter had failed to take all the measures necessary to comply with that decision during the period prescribed.15By letter of 1 December 2010, the Commission informed the Hellenic Republic that, if the undertakings set out in paragraph 13 of the present judgment were actually implemented, the Commission would consider Decision 2009/610 to be implemented in full. In that letter, the Commission states that ENAE’s assets assigned to its civil activities were to be sold or transferred to the Greek State within the 6 months following that letter.16On 28 June 2012, by its judgment establishing a failure to fulfil obligations, the Court held that, by failing to take all the measures necessary for the implementation of Decision 2009/610 and by failing to submit to the Commission, within the period prescribed, the information set out in Article 19 of that decision, the Hellenic Republic has failed to fulfil its obligations under Articles 2, 3, 5, 6, 8, 9 and 11 to 19 thereof. Pre-litigation procedure 17Following the delivery of the judgment establishing a failure to fulfil obligations, members of the Commission staff exchanged a number of letters with the Greek authorities about the progress in recovering the incompatible State aid.18In that context, the Greek Parliament adopted Law No 4099/2012, which entered into force on 20 December 2012. Article 169(2) of that law states that ‘from the entry into force of this Law, the exclusive right of use, granted to [ENAE] in Article 1(15) of Law No 2302/1995 … as supplemented by Article 6(1) of Law No 2941/2011, shall be withdrawn in so far as it concerns the part of the State land ABK 266 with an area of … (216 663.985 m2) indicated [on the topographic map published in Annex I to this Law] and the coastal area situated in front of State land ABK mentioned above’.19On 11 January 2013, ENAE and its owners on that date brought an action before the International Court of Arbitration of the International Chamber of Commerce (‘the ICC Court of Arbitration’) for damages against the Hellenic Republic on account of an alleged infringement, (i) of a Framework Agreement concluded in March 2010 between the Hellenic Republic, ENAE, HDW, ThyssenKrupp and Abu Dhabi Mar LLC (which in 2009 repurchased 75.1% of the shares in ENAE held by ThyssenKrupp), Article 11 of which referred to the Hellenic Republic’s obligation to recover the State aid; (ii) an Implementation Agreement between the same parties to the Framework Agreement which was to resolve a number of disputes concerning the implementation of the ‘Archimedes’ and ‘Neptune II’ contracts; and (iii) contracts for the construction and modernisation of submarines concluded in the context of those agreements. On 23 April 2014, the Hellenic Republic also brought an action before the ICC Court of Arbitration for damages against ENAE and its shareholders for breach of the Implementation Agreement and the contracts for the construction and modernisation of submarines and, in particular, the obligation to deliver the submarines under the conditions and within the periods stipulated.20Further, the Greek Parliament adopted Law No 4237/2014, which entered into force on 12 February 2014, Article 12 of which states that, in the light of the national security interests of the Hellenic Republic, the pursuit of any type of enforcement against the movable and immovable property of ENAE was to be suspended.21By means of Article 26 of Law No 4258/2014, which entered into force on 14 April 2014, the Hellenic Republic awarded the project relating to the construction and modernisation of submarines to the Navy, on account of the fact that ENAE had failed to comply with its contractual undertakings to ensure the operational capacities necessary for defence and national security. That provision also provided that the Navy would continue, without consideration, the work on the submarines in ENAE’s facilities and would pay the salaries and social security contributions of the employees in return for their work.22On 27 November 2014, taking the view that Decision 2009/610 had not yet been implemented, the Commission sent a letter of formal notice to the Greek authorities under Article 260(2) TFEU giving them a deadline of 2 months.23By the letter of formal notice, the Commission stated that the Greek authorities had not recovered the incompatible aid and had failed to provide it with any information about the implementation of Decision 2009/610.24The Greek authorities replied to the letter of formal notice on 23 January 2015. First, they described the obstructive behaviour and lack of cooperation on the part of ENAE with regard to the implementation of the commitments listed in the letter of 1 December 2010. Second, they mentioned the necessity for that undertaking to remain in operation for a further 18 to 20 months in order for the Navy to finish the construction and modernisation of submarines stipulated in the ‘Archimedes’ and Neptune II’ contracts at ENAE’s facilities.25On 4 December 2015, the Greek authorities sent ENAE a recovery order in the sum of EUR 523 352 889.23, which represented approximately 80% of the amount to be recovered, including interest until 30 November 2015. On 5 February 2016, ENAE brought an action before the Dioikitiko Protodikeio Athinion (Administrative Court of First Instance, Athens, Greece) seeking the annulment of that recovery order. In March 2016, the Greek tax authorities adopted implementing measures with respect to that recovery order. On 13 April 2016, ENAE lodged a counterclaim before the same court against the implementing acts. On 23 May 2016, ENAE lodged applications for suspension of operation of the acts mentioned above before that court. The Commission intervened as amicus curiae in those cases, pursuant to Article 29(2) of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9).26On 29 September 2016, the Dioikitiko Protodikeio Athinon (Administrative Court of First Instance, Athens) dismissed the applications to stay enforcement lodged by ENAE.27Following the dismissal of those applications, on 3 February 2017, the Greek authorities initiated enforcement proceedings against ENAE’s civil assets. On 6 February 2017, those authorities served garnishee orders on three banks with which ENAE had bank accounts. However, the Hellenic Republic has not recovered any money on account of previous garnishee orders made by other creditors as a result of that undertaking’s financial difficulties.28In parallel, on 12 May 2016, ENAE and its shareholders brought an action before the ICC Court of Arbitration for interim measures against the national administrative acts adopted by the Greek authorities in December 2015 and March 2016 seeking to recover the State aid concerned. The ICC Court of Arbitration dismissed that application for interim measures. They also sought an order from the ICC Court of Arbitration prohibiting the Greek authorities from initiating any insolvency proceedings against ENAE during the arbitration proceedings.29By order of 5 August 2016, the ICC Court of Arbitration dismissed the application by ENAE and its shareholders, holding that it could not interfere in the implementation of Decision 2009/610. However, it held that the recovery of the aid at issue could cause ENAE to go bankrupt and, therefore, it prohibited the Hellenic Republic from nationalising that undertaking, taking the administration of that undertaking under its control or making that undertaking and its assets subject to insolvency proceedings without giving that court prior notification.30On 13 February 2017, the Greek authorities informed the Commission of their intention to subject ENAE to a special liquidation procedure, pursuant to Law No 4307/2014, which entered into force on 15 November 2014 (‘special management’) and requested a meeting with the Commission to discuss the conditions for implementing that procedure.31In those circumstances, on 22 February 2017 the Commission brought the present proceedings. Developments after the case was brought before the Court 32A meeting relating to the placement of ENAE under special management was held on 8 March 2017. During that meeting, the Greek authorities submitted a detailed plan to the Commission with a view to placing ENAE under the special management proposed.33On 21 March 2017, two floating docks owned by ENAE were seised.34On 10 April 2017, ENAE lodged an application for interim measures before the ICC Court of Arbitration seeking the adoption of protective measures prohibiting the Greek authorities from initiating a procedure to subject that undertaking to special management pursuant to Law No 4307/2014. In its decision of 27 June 2017, the ICC Court of Arbitration indicated that its award was imminent. Therefore, it held that the initiating of a special management procedure against ENAE would deprive ENAE’s shareholders of their control over the undertaking and that the special administrator chosen by the creditors might take decisions affecting ENAE’s position in the arbitration proceedings. In that context, the ICC Court of Arbitration decided that, until the adoption of its final award, the Greek authorities should avoid taking any measures which might lead directly or indirectly to a change in control of the management of ENAE, including insolvency proceedings or the placement of that undertaking into special management.35On 29 June 2017, the Greek authorities sent a letter to ENAE, requesting it to pay the outstanding 20% of the aid to be recovered, including interest until 30 June 2017, that is EUR 95 098 200.99. Since that payment was not made, the tax authorities were instructed to recover that sum by letter of 31 July 2017 from the Ypourgeio Oikonomias kai Anaptyxis (Ministry of Economy and Development, Greece).36On 12 October 2017, the Greek authorities brought proceedings before the Greek courts seeking to make ENAE subject to the special administration procedure laid down by Article 68 of Law No 4307/2014, which entered into force on 15 November 2014.37In the course of the proceedings, the Court of Justice upheld three applications from the Hellenic Republic concerning the production of new documents pursuant to Article 128(2) of the Rules of Procedure of the Court of Justice. On each occasion, a period was prescribed to enable the Commission to adopt a position on those documents.38It is clear from those documents, first, that by its judgment No 725/2018 of 8 March 2018, the Monomeles Protodikeio Athinon (Court of First Instance (Single Judge), Athens, Greece) upheld the application by the Greek authorities to place ENAE in special administration and appoint a special administrator.39Second, it is apparent from those documents that, on 26 March 2018, the Independent Authority for Public Revenue attempted, by schedule of liabilities of 22 March 2018, to present to the special administrator the debts of the Hellenic Republic relating to the recovery of the aid concerned in the context of the special management procedure with respect to that undertaking. More specifically, that authority announced an amount of EUR 713 883 282.19 with surcharges for late payment of the debt. That sum includes EUR 524 896 095.75 and EUR 95 171 888.92 that the Greek State must recover in order to comply with Decision 2009/610 and therefore with the judgment establishing the failure to fulfil obligations.40The special administrator received notification of all those actions by registered letter deposited at the post office.41Third, it is clear from the documents produced by the Hellenic Republic in accordance with Article 128(2) of the Rules of Procedure that, on 26 June 2018, by means of a delivery protocol, ENAE, represented by its special administrator, relinquished possession of the land ABK 266 and the part of the coast situated in front of it to Etaireia Akiniton Dinousiou A.E. (State Real Estate Company S.A., ‘ETAD’). The failure to fulfil obligations Arguments of the parties 42The Commission criticises the Hellenic Republic for failing to take the measures for compliance with the judgment establishing the failure to fulfil obligations because although a number of years have passed since the adoption of Decision 2009/610 and the delivery of that judgment the Greek authorities have failed to recover the State aid at issue from ENAE.43In the first place, the Commission claims that the Hellenic Republic has failed to take all the measures which are necessary, in principle, for the implementation of a decision such as Decision 2009/610.44By introducing the moratorium provided for in Article 12 of Law No 4237/2014, the Greek authorities have made the recovery of the aid more difficult.45It was only in December 2015 and March 2016 that the Greek authorities adopted national administrative measures intended to recover part of the State aid at issue from ENAE. However, those acts have not resulted in the recovery of any of the aid from that undertaking.46In the second place, the Commission claims that the Hellenic Republic has also failed to comply with the commitments set out in the letter of 1 December 2010, the latter being regarded as an alternative means of implementing Decision 2009/610.47In that connection, the Commission maintains, first, that the sale of ENAE’s civil assets did not take place and that ENAE challenged the list of civil assets.48Second, the Commission observes that although the Greek Parliament has passed a law concerning the restitution of the dry dock, the Hellenic Republic has not yet sent the relevant map showing precisely the area recovered or any evidence that that land is no longer used by ENAE.49Third, apart from the resolution taken by ENAE’s management board on 14 April 2010, according to which that undertaking would cease its civil activities, the Greek authorities have not provided any evidence to show that that undertaking has ceased all civil activities from the date of that resolution.50Fourth, those authorities have never sent any documents establishing that the indemnification guarantee mentioned in Article 16 of Decision 2009/610 has been stopped or that it has never been used.51Fifth, those authorities have never submitted a report on the progress on implementing that decision.52Sixth, the Commission states that the only ground of defence which the Hellenic Republic could rely on is the absolute impossibility to implement Decision 2009/610 properly by establishing the absence of recoverable assets. In such a case, the Member State must bring about the winding-up of the recipient undertaking and cause it definitively to cease its activities.53In the present case, the Greek authorities have never argued that it was absolutely impossible to recover the aid at issue. On one hand, they merely stated that complete recovery would lead to the liquidation of the naval shipyards, which would have a negative impact on national defence interests and, on the other hand, they blamed the lack of recovery on obstruction by ENAE, even though such obstruction does not justify failure to implement Decision 2009/610.54As to the national defence interests relied on by the Hellenic Republic which concern only the construction of submarines for the Navy at ENAE’s facilities, the Commission observes that the derogation provided for in Article 346 TFEU concerns exceptional cases which are clearly defined and thus does not lend itself to a broad interpretation. Therefore, it is for that Member State to establish that that derogation is necessary for the protection of essential interests of security.55In that context, the Commission challenges the merits of the security interests relied on by the Hellenic Republic. The Greek authorities have never explained why the construction and modernisation of the submarines had to take place at ENAE’s facilities and not in those of other Greek shipyards, in particular, after the award to the Navy of the project for the construction and modernisation of submarines provided for in Article 26 of Law No 4258/2014.56The Hellenic Republic replies that it took all the measures necessary in order to enforce the judgment establishing the infringement.57That Member State observes that Article 12 of Law No 4237/2014 does not constitute a measure which would make the recovery of the aid at issue more difficult because the suspension of enforcement against ENAE’s assets provided for by that article applies only to the extent that enforcement would affect the construction and maintenance of Navy submarines, which is consistent with Article 346(1)(b) TFEU. Furthermore, the fact that the Greek authorities subsequently adopted enforcement measures against ENAE shows that Article 12 of that law does not prevent that recovery.58Next, the Hellenic Republic relies on essential interests of security, within the meaning of Article 346(1)(b) TFEU, arguing that recovery must not hinder the pursuit of military activities of larger and more productive shipyards in Greece nor the broad discretion it has to choose the measures it considers necessary.59The Hellenic Republic could not put ENAE into bankruptcy as that procedure would affect all the assets of that undertaking and jeopardise the pursuit of the military activities at the shipyard and, therefore, the defence capabilities of that Member State. It is for those reasons that the Greek authorities gave priority to the implementation of the commitments set out in the letter of 1 December 2010.60In that connection, the Hellenic Republic observes that, as regards the sale of ENAE’s civil assets, it encountered opposition from that undertaking which did not agree with the list of civil assets to be sold.61On account of those obstructions, the Greek authorities sent recovery orders and garnishee orders to that undertaking.62Since those measures did not result in any repayment on account of the previous garnishee orders of other creditors and the fact that ENAE clearly lacked sufficient assets, the Greek authorities took the view that it was better to place that undertaking under special management under the provisions of Law No 4307/2014. According to the Hellenic Republic, after the award of the construction of submarines to the Navy, the Greek authorities were able to take measures to liquidate ENAE without compromising the pursuance of military programmes.63In that context, the Hellenic Republic submits that placing ENAE under special management is the most appropriate measure to liquidate that undertaking, that measure being fully consistent with the requirements of EU law because the procedure allows the sale at public auction of all or part of the branches of the undertaking or of single assets belonging to it under the responsibility of an independent administrator and under judicial supervision. That special management procedure, which may be completed within a period of 12 months from the appointment of the special administrator, gives at least the same guarantees as those of the ordinary insolvency procedure, is much faster and more transparent. That procedure helps to avoid a depreciation in the value of the assets concerned and guarantees the sale of ENAE’s military assets as one unit, in accordance with the essential interests of security of the Hellenic Republic.64As far as concerns the restitution of the land granted to ENAE for its exclusive use, the Hellenic Republic submits that, on 20 December 2012, the right to use that land was withdrawn by Article 169(2) of Law No 4099/2012. The Hellenic Republic states that copies of the transcript at the geographically competent mortgage registry office, sent to the Commission, show that that land was relinquished. According to that Member State, that land is no longer used by ENAE because that undertaking has not pursued any civil activities since 2010.65Furthermore, the Hellenic Republic takes the view that the restitution of the land at issue is a measure implementing Decision 2009/610 as, in the absence of sufficient assets, the Greek authorities are required to liquidate all of ENAE’s civil assets. That being the case, that Member State submits that the valuation of the land, at 2008 prices, shows that it represents 60% of the total value of ENAE’s civil assets, or 58% of the non-military infrastructure of the shipyard. Having regard to that calculation, the sale of ENAE’s civil assets concern, in reality, only a small part of the value of the civil branch of that undertaking.66As regards the cessation of ENAE’s civil activities, the Hellenic Republic states that the Management Board of that undertaking expressly adopted a decision on that issue and that the new management of that undertaking confirmed on several occasions that ENAE has not pursued any civil activities since 2010. That Member State adds that ENAE has not published any statement of accounts since 30 September 2011 as a result of its poor economic situation.67Finally, as far as concerns the indemnification guarantee referred to in Article 16 of Decision 2009/610, the Hellenic Republic states that it is incumbent on ENAE to waive it. Furthermore, that Member State states that the applicability of that guarantee has not arisen in any case so that the Greek authorities were not in a position to rely on its invalidity. Findings of the Court 68As a preliminary point, it must be recalled that it is clear from the case-law of the Court that the Member State to which a decision requiring recovery of unlawful aid declared incompatible with the internal market is addressed is obliged under Article 288 TFEU to take all measures necessary to ensure implementation of that decision. It must succeed in actually recovering the sums owed in order to eliminate the distortion of competition caused by the anticompetitive advantage procured by that aid (judgment of 9 November 2017, Commission v Greece, C‑481/16, not published, EU:C:2017:845, paragraph 23).69The recovery of unlawful aid declared incompatible with the internal market must be effected without delay and in accordance with the procedures under the national law of the Member State concerned, provided that they allow the immediate and effective execution of the Commission’s decision. To this effect, the Member States concerned are required to take all necessary steps which are available in their respective legal systems, including provisional measures, without prejudice to EU law (see, to that effect, judgment of 9 November 2017, Commission v Greece, C‑481/16, not published, EU:C:2017:845, paragraph 24).70As regards situations in which unlawfully paid State aid must be recovered from the recipient companies which are in difficulty or are bankrupt, it must be recalled that such difficulties do not affect the obligation to recover the aid. The Member State is therefore required, as the case may be, to bring about the winding-up of that company, to have its claim registered as one of that company’s liabilities or to take any other measure enabling the aid to be recovered (judgment of 17 January 2018, Commission v Greece, C‑363/16, EU:C:2018:12, paragraph 36).71In the present case, it is clear from the file that, in the light of ENAE’s difficult economic situation and in order to prevent that undertaking from going bankrupt or jeopardising the implementation of the ‘Archimedes’ and ‘Neptune II’ programmes for the Navy and, therefore, to avoid adversely affecting the essential interests of security of the Hellenic Republic, within the meaning of Article 346 TFEU, the Commission, that Member State and ENAE undertook to implement an alternative recovery method so that the Commission could consider Decision 2009/610 to be fully implemented.72Therefore, in order to determine whether the Hellenic Republic has taken all the measures necessary in order to comply with the judgment establishing the failure to fulfil obligations, it must be ascertained whether that Member State has observed the commitments set out in the letter of 1 December 2010, whether the State aid at issue, as described in Articles 2, 3, 5, 6, 8, 9 and 11 to 15 of Decision 2009/610, has been recovered in full by that Member State, and whether the information set out in Article 19 of that decision was submitted to the Commission.73Concerning infringement proceedings under Article 260(2) TFEU, the reference date which must be used for assessing whether there has been a failure to fulfil obligations is that of the expiry of the period prescribed in the letter of formal notice issued under that provision (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 32).74In the present case, as noted in paragraph 22 above, the Commission having sent the Hellenic Republic a supplementary letter of formal notice, on 27 November 2014, in accordance with the procedure laid down in Article 260(2) TFEU, the reference date mentioned in the previous paragraph is the date of expiry of the period prescribed in that letter, namely 27 January 2015.75As far as concerns the commitments referred to in the letter of 1 December 2010, it is common ground that, on 27 January 2015, the Greek authorities had not complied with them.76It is clear from the file that the only measure taken by the Hellenic Republic on that date is the adoption of Law No 4099/2012 which entered into force on 20 December 2012.77However, it is clear from the file that both the ICC Court of Arbitration and the Monomeles Protodikeio Athinon (Court of First Instance (Single Judge), Athens) stated that, despite the entry into force of that law, ENAE had not in fact relinquished the State land mentioned in the dry dock concession.78According to the protocol of 26 June 2018, ENAE relinquished possession of the land designated ABK 266, including the dry dock the use of which had been granted to it by a concession and the part of the coast situated in front of it. However, the Hellenic Republic has failed to show that that undertaking had actually given up possession of that land to the Greek State before 27 January 2015.79Thus, it cannot be held that ENAE gave up the dry dock concession as required by the commitments mentioned in the letter of 1 December 2010.80As far as concerns the Hellenic Republic’s argument that the fact that the land is no longer used by ENAE is due to the fact that that undertaking has not pursued any civil activities since 2010, which is clear from the decision of ENAE’s Management Board of 14 April 2010, it must be held that it is not apparent either from that decision or from the file that ENAE has suspended its civil activities, for the purposes of the commitments set out in the letter of 1 December 2010.81That decision of the Management Board cannot relate to the commitment to suspend ENAE’s civil activities for a period of 15 years from 1 December 2010 because that decision predates ENAE’s letter of commitment of 27 October 2010. That decision simply mentions the fact that, in connection with a loan agreement with ENAE, ‘non-naval activities have currently been discontinued in their entirety’.82Furthermore, when requested by the Court, the Hellenic Republic was unable to provide any documents establishing that ENAE had complied with the obligation to discontinue its civil activities for a period of 15 years.83Therefore, in the absence of any evidence establishing that ENAE discontinued its civil activities from 1 December 2010, the Hellenic Republic has failed to prove that that undertaking no longer used the State land covered by the dry dock concession.84As regards the undertaking relating to the sale of ENAE’s civil assets or their restitution to the Greek State, it is clear that the sale or restitution has not taken place. Therefore, that commitment has not been honoured.85As regards the indemnification guarantee referred to in Article 16 of Decision 2009/610, it should be noted that, according to the letter of 1 December 2010, ENAE undertook to waive it and not to bring any proceedings on the basis of that guarantee or in connection with it. There is nothing in the file to show any such waiver or that the Hellenic Republic stopped that guarantee by enacting legislation. Therefore, it did not honour that undertaking.86According to the agreement between the Commission, the Hellenic Republic and ENAE resulting from the letter of 1 December 2010, all the commitments were to be honoured in order to establish that Decision 2009/610 had been correctly implemented. Therefore, it suffices that one of those undertakings was not honoured for a finding that that method of recovery failed. It must be held that the commitments set out in paragraph 13 of the present judgment have not been implemented.87As regards the Hellenic Republic’s principal obligation to recover in full the State aid at issue, as defined in Articles 2, 3, 5, 6, 8, 9 and 11 to 15 of Decision 2009/610, it is clear that the Greek authorities have failed to comply with that obligation and that they have failed to transmit to the Commission the information specified in Article 19 thereof.88As far as concerns the Hellenic Republic’s argument that its essential interests of security, within the meaning of Article 346(1)(b) TFEU, did not allow it to cause ENAE to go into bankruptcy, as such a procedure would affect all the assets of that undertaking and would have jeopardised the continuation of the military activities of the shipyard and, therefore, the defence capabilities of that Member State when there was a more appropriate measure to liquidate that undertaking which took account of the essential interests of security of that Member State, namely placing it in special management, it must be stated that the possibility to place ENAE under special management was open to the Greek authorities before the expiry of the period prescribed in the letter of formal notice, that is 27 January 2015, since Law No 4307/2014 entered into force on 15 November 2014.89It is clear from the file that the application for the initiation of that procedure was not lodged until 12 October 2017.90Therefore, even if the Hellenic Republic could reasonably rely on its essential interests of security, within the meaning of Article 346(1)(b) TFEU, at the recovery stage for the State aid at issue, it suffices to observe that on 27 January 2015 that Member State had not taken the measure that it itself considered appropriate with regard to its essential interests of security.91Thus, the Hellenic Republic cannot reasonably argue that it has taken all the measures necessary in order to implement the procedure for the recovery of the State aid concerned. Therefore, the judgment establishing the failure to fulfil obligations had still not been enforced on 27 January 2015.92Consequently, it must be held that, by failing to take all the measures to comply with the judgment establishing the failure to fulfil obligations, by the date on which the period prescribed expired, the Hellenic Republic has failed to fulfil its obligations under Article 260(1) TFEU. Financial penalties Penalty payment 93In the first place, the Commission takes the view that the Hellenic Republic’s alleged failure to fulfil obligations continued at the time of the examination of the facts by the Court.94More specifically, as far as concerns the schedule of liabilities of 22 March 2018, by which the Hellenic Republic informed ENAE’s special administrator of its debts relating to the recovery of the aid concerned in the context of the special management procedure for that undertaking, the Commission takes the view that it is the entry in the schedule of liabilities of the debts relating to the recovery of the aid concerned which may be regarded, in principle, as being an appropriate measure ensuring the elimination of the distortion of competition, provided that such a measure is followed either by the full recovery of the amount of that aid, or the liquidation of the undertaking and the complete cessation of its activities if such recovery is still impossible in the course of the insolvency proceedings. The mere declaration of those debts is insufficient to establish that that Member State has fulfilled its recovery obligation. The Commission adds that, in accordance with Article 77 of Law No 4307/2014, formal entry on the schedule of liabilities is to be made after the transfer of the assets of the undertaking concerned resulting from the special management to which that undertaking is subject, and not before the transfer.95As far as concerns the delivery protocol by which ENAE relinquished possession of the land designated ABK 266 and the part of the coast situated in front of it to ETAD, the Commission observes that that protocol is dated 26 June 2018. Therefore, that delivery was delayed since, according to the letter of 1 December 2010, it should have been made within 6 months of that letter. Furthermore, the Commission claims that the Hellenic Republic has not yet sent a map clearly indicating the land returned to the State or evidence establishing that ENAE no longer uses it.96In the second place, as regards the amount of the periodic penalty payment, the Commission bases its argument on its Communication SEC(2005) 1658 of 12 December 2005, entitled ‘Application of Article [260 TFEU]’ (OJ 2007 C 126, p. 15), to propose that the amount of the periodic penalty payment should be calculated by multiplying a standard flat rate of EUR 670 by a coefficient for seriousness of 5 on a scale of 1 to 20 and a coefficient for duration of 3, that is the maximum coefficient. The result obtained is then multiplied by an ‘n’ factor calculated at 3.48 for the Hellenic Republic, which is intended to reflect the ability to pay of the defendant Member State and which, for that purpose, takes as evidence the gross domestic product (GDP) of that Member State and the number of votes it has in the Council.97As far as concerns the coefficient of seriousness, the Commission emphasises the fundamental nature of the provisions of the FEU Treaty on State aid, the detrimental effect that the incompatible and unrecovered aid has on the shipbuilding sector, the considerable amount of unrecovered aid and the repetition of the unlawful conduct of that Member State in the field of State aid.98As regards the coefficient of duration, the Commission observes that the infringement has persisted for a number of years from the delivery of the judgment establishing the failure to fulfil obligations and more than 8 years since the notification of Decision 2009/610.99As to the ‘n’ factor, the Commission argues that the calculation must be made on the basis of the GDP evolution of the Hellenic Republic during the most recent year for which reliable economic data is available and the weighting of the votes of that Member State in the Council.100As regards the weighting of the votes in the Council, the Commission takes the view that the modification of the voting system in the Council from 1 April 2017 does not mean that it is required to adapt its proposed ‘n’ factor. It adds that, when the action was initiated, the former system for the weighting of votes had not expired. Therefore, the factor which derives from the old system of weighting of votes continued to be a useful baseline for the calculation of penalties.101In those circumstances, the Commission considers that a periodic penalty payment of EUR 34974 per day is appropriate to the circumstances and proportionate to the failure to fulfil obligations in question and to the ability to pay of the Member State concerned.102The Hellenic Republic argues, in the first place, that, by schedule of liabilities of 22 March 2018, it lodged its claims under the special management procedure to ENAE’s special administrator. That Member State adds that, by means of the protocol of 26 June 2018, that undertaking relinquished possession of the land denominated ABK 266, including the dry dock whose use it was granted by a concession together with the part of the coast situated in front of it. According to that Member State relinquishment of possession is an important part of the fulfilment of the obligation to recover the State aid at issue.103In the second place, the Hellenic Republic challenges the coefficients of seriousness and duration of the infringement used by the Commission.104In that connection, it argues that the Commission failed to take into account a number of factors which mitigate the seriousness of the infringement, such as the fact that ENAE has not pursued any civil activities since 2010 and, therefore, no longer exerts any competitive pressure on other undertakings in the shipbuilding sector. It also mentions a number of difficulties that it encountered in the implementation of Decision 2009/610 including the decision of the ICC Court of Arbitration of 27 June 2017. It also challenges the alleged repetition of the unlawful conduct on its part in the field of State aid. For those reasons, it considers that the coefficients of seriousness and duration cannot be greater than 1.105As regards the ability to pay, the Hellenic Republic considers, first, that the ‘n’ factor must be updated with the help of the most recent financial data. In that connection, that Member State submits that the Commission has not taken into account the current state of the Greek economy and, in particular, the fact that it is still subject to a macroeconomic adjustment programme as it cannot self-finance effectively on the financial markets.106Second, the Hellenic Republic takes the view that the ‘n’ factor is not calculated correctly as from 1 April 2017 the Treaty abandoned the system of weighted votes in the Council and replaced it with a double majority system for Member States and populations, according to which each Member State has only a single vote in the Council. The Hellenic Republic therefore considers that the Member States with a population and GDP comparable to its own have suffered a serious loss of influence in the Council.107As a preliminary point, it should be recalled that, in each case, it is for the Court to determine, in the light of the circumstances of the case before it and according to the degree of persuasion and deterrence which appears to it to be required, the financial penalties appropriate, in particular, for preventing the recurrence of similar infringements of EU law (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 63).108According to settled case-law, the imposition of a penalty payment is, in principle, justified only in so far as the failure to comply with an earlier judgment of the Court continues up to the time of the Court’s examination of the facts (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 64).109In the present case, the Hellenic Republic submits that, on the date of the examination of the facts by the Court, it had implemented the commitments set out in the letter of 1 December 2010 and Decision 2009/610.110In that connection, the Hellenic Republic claims that it produced its debts in connection with the special management procedure to ENAE’s special administrator and that it surrendered the possession of the land denominated ABK 266 including the dry dock the use of which was granted to it by concession, and the part of the coast situated in front of it.111In the first place, as regards the arguments concerning the lodging of claims, in the present case, it is clear that, on the date of the examination of the facts by the Court, the Hellenic Republic had not entered the claims relating to the recovery of the aid concerned on the schedule of liabilities. There is no evidence in the file that the special administrator entered those debts in the schedule of liabilities. Furthermore, in accordance with Article 77 of Law No 4307/2014, formal entry on the schedule of liabilities is effected after the transfer of the assets of the undertaking concerned resulting from the special management to which it is subject, and not before that transfer. It is common ground that such a transfer of assets has not taken place. Therefore, the Hellenic Republic cannot reasonably argue that, by the declaration of claims of 22 March 2018, it lodged its claims in the context of the special management procedure with ENAE’s special administrator.112In any event, the entry in the schedule of liabilities of the claims relating to the recovery of the aid concerned is not sufficient in itself to satisfy the obligation to implement the judgment establishing the failure to fulfil obligations (judgment of 11 December 2012, Commission v Spain, C‑610/10, EU:C:2012:781, paragraph 103). Such a registration is regarded as being, in principle, an appropriate measure capable of ensuring the elimination of the distortion of competition, provided that such a measure is followed either by the recovery of the full amount of that aid or by the winding-up of the undertaking and the definitive cessation of its activities, if such recovery remains impossible throughout the insolvency proceedings (judgment of 17 January 2018, Commission v Greece, C‑363/16, EU:C:2018:12, paragraph 42).113In the second place, as regards the argument concerning the surrender of the possession of the land designated ABK 266, it suffices to state that, in any event, that represents only partial implementation of the recovery obligation. That transfer does not, in itself, ensure the full recovery of the State aid concerned or compliance with the commitments set out in the letter of 1 December 2010.114Therefore, the Hellenic Republic cannot claim that, on the date of the examination of the facts by the Court, it had taken all the measures necessary for the purpose of implementing the judgment establishing the failure to fulfil obligations.115In the light of the foregoing, it must be held that the failure to fulfil obligations of which the Hellenic Republic is criticised continued up until the examination of the facts by the Court.116In those circumstances, an order imposing a periodic penalty payment on the Hellenic Republic is an appropriate financial means by which to encourage the Hellenic Republic to take the measures necessary to put an end to the infringement established and to ensure full compliance with the judgment establishing failure to fulfil obligations.117According to settled case-law, the penalty payment must be decided upon according to the degree of persuasion needed in order for the Member State which has failed to comply with a judgment establishing a breach of obligations to alter its conduct and bring to an end the infringement established (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 68).118In exercising its discretion in the matter, it is for the Court to set the penalty payment so that it is both appropriate to the circumstances and proportionate to the infringement established and the ability to pay of the Member State concerned (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 69).119The Commission’s proposals regarding the penalty payment cannot bind the Court and are merely a useful point of reference. Similarly, guidelines such as those set out in the communications of the Commission are not binding on the Court but contribute to ensuring that the Commission’s own actions are transparent, foreseeable and consistent with legal certainty when that institution makes proposals to the Court. In proceedings under Article 260(2) TFEU relating to a failure to fulfil obligations on the part of a Member State that has persisted notwithstanding the fact that that same failure to fulfil obligations has already been established in a first judgment delivered under Article 258 TFEU or Article 108(2) TFEU, the Court must remain free to set the penalty payment to be imposed in an amount and in a form that the Court considers appropriate for the purposes of inducing that Member State to bring to an end its failure to comply with the obligations arising under that first judgment of the Court (see, to that effect, judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 70).120For the purposes of determining the amount of a penalty payment, the basic criteria which must be taken into consideration in order to ensure that that payment has coercive effect and that EU law is applied uniformly and effectively are, in principle, the seriousness of the infringement, its duration and the ability to pay of the Member State in question. In applying those criteria, regard must be had, in particular, to the effects on public and private interests of the failure to comply and to how urgent it is for the Member State concerned to be induced to fulfil its obligations (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 71).121In the first place, as regards the seriousness of the infringement, as the Advocate General observed in point 124 of his Opinion, the fundamental nature of the provisions of the Treaty on State aid should be recalled.122The rules which are the subject of Decision 2009/610 and the judgment establishing the failure to fulfil obligations are the expression of one of the essential missions conferred on the European Union by virtue of Article 3(3) TEU, that is the establishment of the internal market and Protocol (No 27) on the internal market and competition, which, in accordance with Article 51 TEU, is an integral part of the Treaties and under which the internal market concludes a system guaranteeing that competition is not distorted.123The importance of the EU rules infringed in a case such as this is reflected, in particular, in the fact that repayment of aid declared unlawful and incompatible with the internal market eliminates the distortion of competition caused by the competitive advantage afforded by the aid and that, by repaying the aid, the recipient forfeits the advantage which it had enjoyed over its competitors on the market (see, to that effect, judgment of 11 December 2012, Commission v Spain, C‑610/10, EU:C:2012:781, paragraph 127).124As to the failure to fulfil obligations established in the present case, it must be recalled, first, that the Hellenic Republic has neither recovered the State aid at issue in full nor complied with the commitments set out in the letter of 1 December 2010. However, in view of the principle set out in paragraph 118 above, according to which the penalty payment must be adopted so that it is both appropriate to the circumstances and proportionate to the infringement established, account must be taken of the fact that ENAE, represented by its special administrator, surrendered possession of the land denominated ABK 266, including the dry dock the use of which had been granted to it by a concession, and the part of the coast situated in front of it to ETAD and that the land represented an important part of ENAE’s civil assets.125Second, it must be noted that the amount of the unrecovered aid is a considerable sum. As the Advocate General observed, in point 125 of his Opinion, the amount to be recovered is continuously increasing by the interest payable and, at the time of the hearing, exceeded EUR 670 million, that is 2.6 times the original amount.126Third, account must be taken of the fact that the shipbuilding market is cross-border. That economic sector is scattered throughout almost all Member States. Consequently, the harmful effects of the unrecovered incompatible aid have an impact on undertakings not only in Greece, but also in the rest of the European Union.127Fourth, as far as concerns the argument of the Hellenic Republic that there are circumstances mitigating the seriousness of the infringement, in particular difficulties such as the obstruction and complete lack of cooperation of ENAE with regard to the implementation of the commitments set out in the letter of 1 December 2010 and the effects of the decision of the ICC Court of Arbitration of 27 June 2017, it must be recalled that, according to settled case-law, legal, political or practical difficulties encountered by the Member State concerned in implementing a decision ordering the recovery of unlawful aid, without taking genuine steps to recover the aid from the undertakings concerned and without proposing any alternative means of implementing such a decision to the Commission which would have enabled those difficulties to be overcome, cannot justify the failure by that Member State to fulfil its obligations under EU law. The same is true with regard to the alleged domestic problems encountered in the implementation of the Commission’s decision (judgment of 9 November 2017, Commission v Greece, C‑481/16, not published, EU:C:2017:845, paragraph 29). Therefore, in those circumstances, the difficulties relied on by the Hellenic Republic cannot be regarded as being mitigating circumstances in the present case.128Finally, it must be held that there is a repetition of the conduct infringing the State aid rules by that Member State. The Hellenic Republic has been declared to have failed to fulfil obligations in actions under Article 108(2) TFEU for failure to implement decisions ordering the recovery of aid in the cases which gave rise to the judgments of 1 March 2012, Commission v Greece (C‑354/10, not published, EU:C:2012:109), of 17 October 2013, Commission v Greece (C‑263/12, not published, EU:C:2013:673), of 9 November 2017, Commission v Greece (C‑481/16, not published, EU:C:2017:845), and of 17 January 2018, Commission v Greece (C‑363/16, EU:C:2018:12), and, second, in an action under Article 228(2), third paragraph, EC in the case which gave rise to the judgment of 7 July 2009, Commission v Greece (C‑369/07, EU:C:2009:428).129It must be held that, in the present case, the infringement of the rules of the Treaty on State aid is very serious.130In the second place, as regards the duration of the infringement, it should be recalled that that duration must be assessed by reference to the date on which the Court assesses the facts and not the date on which proceedings are brought before it by the Commission (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 78).131In those circumstances, as the Hellenic Republic has been unable to prove that it has put an end to its failure to fulfil its obligations to comply in full with the judgment establishing the failure to fulfil obligations, it must be held that that infringement has continued for more than 6 years after the date of delivery of that judgment, which is a considerable period of time.132In the third place, as regards the ability to pay, and more particularly the Commission’s proposal to multiply the basic amount by a specific coefficient applicable to the Hellenic Republic, the Court has ruled on numerous occasions that that method of calculation is an appropriate means of reflecting the ability to pay of the Member State concerned while keeping the variation between Member States within a reasonable range (judgment of 7 July 2009, Commission v Greece, C‑369/07, EU:C:2009:428, paragraph 123).133As the Advocate General observed, in point 132 of his Opinion, the Court has consistently accepted that, in order to calculate financial penalties, account should be taken of the GDP of the Member State concerned and the number of its votes in the Council (see, to that effect, judgments of 4 July 2000, Commission v Greece, C‑387/97, EU:C:2000:356, paragraph 88; of 25 November 2003,Commission v Spain, C‑278/01, EU:C:2003:635, paragraph 59; of 10 January 2008, Commission v Portugal, C‑70/06, EU:C:2008:3, paragraph 48; and of 4 June 2009, Commission v Greece, C‑109/08, EU:C:2009:346, paragraph 42).134As far as concerns the GDP criterion, it is apparent from the case-law of the Court that it is necessary to take account of recent trends in that Member State’s GDP at the time of the Court’s examination of the facts (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 81 and the case-law cited).135Therefore, account must be taken of the fact that, first, the GDP of the Hellenic Republic has decreased by more than 25% between 2010 and 2016 and, second, in 2017, the GDP has increased for the first time since 2007. The extent of that economic crisis is therefore duly taken into consideration by the Court for the determination of the amount of the periodic penalty payment.136As regards the criterion of the number of votes a Member State has in the Council, it must be stated that, pursuant to Article 3(1) of Protocol (No 36) on transitional provisions, since 1 November 2014, a new qualified majority procedure, the double majority, took effect.137In accordance with Article 3(2) of that protocol, until 31 March 2017, Member States may still request a vote on the basis of the previous qualified majority rule.138Thus, since 1 April 2017, the system of weighted votes is replaced by the double majority system according to which the qualified majority is reached if it includes 55% of the members of the Council, or 72% if the proposal does not come from the Commission of the High Representative of the Union for Foreign Affairs and Security Policy and represents at least 65% of the total population of the European Union.139Taking account of the detailed rules for the new system of double majority and the differences that it presents as compared with the old system of weighted voting, the new double majority system is not directly transposable to the mechanism for calculating penalties and therefore cannot effectively substitute the old system of weighted votes for those purposes.140As the Advocate General observed, in point 140 of his Opinion, the new double majority system does not provide satisfactory criteria for determining the capacity of the ability of Member States to pay.141Furthermore, it must be observed that, in its case-law prior to 1 April 2017, the date on which the old system of weighted votes ceased to apply, for the purposes of evaluating the ability of Member States to pay the Court only takes into account the GDP of the Member State concerned (judgments of 22 February 2018, Commission v Greece, C‑328/16, EU:C:2018:98, and of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358).142In that context, for the evaluation of the Hellenic Republic’s ability to pay, there is no need to take account of the criterion of the number of votes that that Member State has in the Council or the new system of double majority voting, as the GDP of that Member State is to be the predominant factor.143As far as concerns the periodicity of the financial penalty, account must be taken of the specificity of the operations for the recovery of the aid concerned.144It appears that it will be extremely difficult for the Hellenic Republic to implement Decision 2009/610 within a short period, or the judgment establishing failure to fulfil obligations, given that the operations involved cannot be undertaken quickly and their impact is not noticeable straightaway.145In view of that special factor, it is conceivable that the Hellenic Republic will manage significantly to increase the extent of its implementation of Decision 2009/610 but not to implement it fully in the short term.146It follows that any finding that the infringement has come to an end could be made only after a period allowing an overall assessment to be made of the results obtained.147Therefore, it is appropriate to impose a 6-monthly penalty payment to enable the Commission to assess the progress of the measures implementing that judgment, having regard to the situation prevailing at the end of the period concerned.148The Court therefore orders the Hellenic Republic to pay to the Commission a penalty payment in the amount of EUR 7294000 per 6 months of delay in implementing the measures necessary to comply with the judgment establishing the failure to fulfil obligations, from the date of delivery of the present judgment until compliance with that judgment. Lump sum payment 149As regards the amount of the lump sum, the Commission proposes that the Court should calculate it by multiplying a daily amount by the number of days during which the infringement continues.150For calculation of the lump sum, the Commission proposes that the same coefficient for seriousness and the same fixed ‘n’ factor as for penalty payments should be applied. However, the basic amount for the calculation of the lump sum should be fixed at EUR 220 per day. In contrast with the calculation of the penalty payment, a coefficient for duration is not applied, given that the duration of the infringement has already been taken into account by multiplying the daily amount by the number of days the infringement persists.151On that basis, the Commission proposes that a lump sum calculated by multiplying EUR 3828 by the number of days from the delivery of the judgment establishing the failure to fulfil obligations and the date on which the Member State has fulfilled its obligations or, otherwise, the date of the delivery of the present judgment.152The Hellenic Republic has not submitted any specific arguments relating to the lump sum. Since, for its calculation, the Commission uses criteria identical to those used for the calculation of the penalty payment, such as the seriousness and duration of the infringement, the arguments submitted by the Hellenic Republic relating to the penalty payment must be taken into account.153As a preliminary point it must be recalled that, in exercising the discretion conferred on it in such matters, the Court is empowered to impose a penalty payment and a lump sum payment cumulatively (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 96).154The imposition of a lump sum payment and the fixing of that sum must depend in each individual case on all the relevant factors relating both to the characteristics of the failure to fulfil obligations established and to the conduct of the Member State involved in the procedure initiated under Article 260 TFEU. That provision confers a wide discretion on the Court in deciding whether to impose such a penalty and, if it decides to do so, in determining the amount (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 97).155In the present case, all the legal and factual circumstances culminating in the breach of obligations established indicate that, if the future repetition of similar infringements of European Union law is to be effectively prevented, a dissuasive measure must be adopted, such as a lump sum payment.156In those circumstances, it is for the Court, in the exercise of its discretion, to fix the lump sum in an amount appropriate to the circumstances and proportionate to the infringement (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 99).157Relevant considerations in this respect include factors such as the seriousness of the infringement and the length of time for which the infringement has persisted since the delivery of the judgment establishing it (judgment of 31 May 2018, Commission v Italy, C‑251/17, not published, EU:C:2018:358, paragraph 100).158The circumstances of the present case which must be taken into account are apparent from the considerations set out in paragraphs 120 to 142 above regarding the seriousness and the duration of the infringement and the ability to pay of the Member State in question.159In the light of all the foregoing, the Court considers that proper account of the circumstances of the present case will be taken by setting the amount of the lump sum which the Hellenic Republic will have to pay at EUR 10000000.160The Hellenic Republic must therefore be ordered to pay to the Commission a lump sum of EUR 10000000. Costs 161Under Article 138(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission applied for costs and the Hellenic Republic has been unsuccessful, the latter must be ordered to pay the costs.On those grounds, the Court (First Chamber) hereby: 1. Declares that, by failing to take, on the date on which the period prescribed in the letter of formal notice issued on 27 November 2014 by the European Commission, all the measures necessary to comply with the judgment of 28 June 2012, Commission v Greece (C‑485/10, not published, EU:C:2012:395), the Hellenic Republic has failed to fulfil its obligations under Article 260(1) TFEU; 2. Orders the Hellenic Republic to pay the European Commission a periodic penalty payment of EUR 7294000 for each six month period from the date of delivery of the present judgment until the date of compliance with the judgment of 28 June 2012, Commission v Greece (C‑485/10, not published, EU:C:2012:395); 3. Orders the Hellenic Republic to pay to the European Commission a lump sum EUR 10000000; 4. Orders the Hellenic Republic to pay the costs. [Signatures]( *1 ) Language of the case: Greek. | 93257-06210b1-404b | EN |
The taste of a food product is not eligible for copyright protection | 13 November 2018 ( *1 )(Reference for a preliminary ruling — Intellectual property — Harmonisation of certain aspects of copyright and related rights in the information society — Directive 2001/29/EC — Scope — Article 2 — Reproduction rights — Concept of ‘work’ — Taste of a food product)In Case C‑310/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Gerechtshof Arnhem-Leeuwarden (Regional Court of Appeal, Arnhem-Leeuwarden, Netherlands), made by decision of 23 May 2017, received at the Court on 29 May 2017, in the proceedings Levola Hengelo BV v Smilde Foods BV, THE COURT (Grand Chamber),Composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, J.‑C. Bonichot, A. Arabadjiev, M. Vilaras (Rapporteur), E. Regan, T. von Danwitz and C. Toader, Presidents of Chamber, A. Rosas, E. Juhász, M. Ilešič, M. Safjan, C.G. Fernlund, C. Vajda and S. Rodin, Judges,Advocate General: M. Wathelet,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 4 June 2018,after considering the observations submitted on behalf of:–Levola Hengelo BV, by S. Klos, A. Ringnalda and J.A.K. van den Berg, advocaten,Smilde Foods BV, by T. Cohen Jehoram and S.T.M. Terpstra, advocaten,the Netherlands Government, by C.S. Schillemans, acting as Agent,the French Government, by D. Segoin and D. Colas, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and by P. Gentili, avvocato dello Stato,the United Kingdom Government, by G. Brown and Z. Lavery, acting as Agents, and by N. Saunders, Barrister,the European Commission, by J. Samnadda and F. Wilman, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 25 July 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of the concept of a ‘work’, as referred to in Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10).2The request has been made in proceedings between Levola Hengelo BV (‘Levola’) and Smilde Foods BV (‘Smilde’) concerning an alleged infringement, by Smilde, of Levola’s intellectual property rights relating to the taste of a food product. Legal context International law 3Article 1 of the Berne Convention for the Protection of Literary and Artistic Works (Paris Act of 24 July 1971), as amended on 28 September 1979 (‘the Berne Convention’), provides:‘The countries to which this Convention applies constitute a Union for the protection of the rights of authors in their literary and artistic works.’4Article 2(1) and (2) of the Berne Convention states:‘(1) The expression “literary and artistic works” shall include every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression, such as books, pamphlets and other writings; lectures, addresses, sermons and other works of the same nature; dramatic or dramatico-musical works; choreographic works and entertainments in dumb show; musical compositions with or without words; cinematographic works to which are assimilated works expressed by a process analogous to cinematography; works of drawing, painting, architecture, sculpture, engraving and lithography; photographic works to which are assimilated works expressed by a process analogous to photography; works of applied art; illustrations, maps, plans, sketches and three-dimensional works relative to geography, topography, architecture or science.(2) It shall, however, be a matter for legislation in the countries of the Union to prescribe that works in general or any specified categories of works shall not be protected unless they have been fixed in some material form.’5Under Article 9(1) of the Berne Convention, authors of literary and artistic works protected by that convention are to have the exclusive right of authorising the reproduction of these works, in any manner or form.6Article 9 of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is in Annex 1 C to the Agreement establishing the World Trade Organisation (WTO), signed in Marrakesh on 15 April 1994 and approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1), provides as follows:‘1. Members shall comply with Articles 1 through 21 of the Berne Convention … and the Appendix thereto. …2. Copyright protection shall extend to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such.’7The World Intellectual Property Organisation (‘WIPO’) adopted in Geneva on 20 December 1996 the WIPO Copyright Treaty, which entered into force on 6 March 2002. That treaty was approved on behalf of the European Community by Council Decision 2000/278/EC of 16 March 2000 (OJ 2000 L 89, p. 6; ‘the WIPO Copyright Treaty’). According to Article 1(4) of the WIPO Copyright Treaty:‘Contracting Parties shall comply with Articles 1 to 21 and the Appendix of the Berne Convention.’8Article 2 of that treaty states:‘Copyright protection extends to expressions and not to ideas, procedures, methods of operation or mathematical concepts as such.’ European Union law Directive 2001/29 9Articles 1 to 4 of Directive 2001/29 contain the following provisions:‘Article 1Scope1. This Directive concerns the legal protection of copyright and related rights in the framework of the internal market, with particular emphasis on the information society.2. Except in the cases referred to in Article 11, this Directive shall leave intact and shall in no way affect existing [EU] provisions relating to:(a)the legal protection of computer programs;(b)rental right, lending right and certain rights related to copyright in the field of intellectual property;(c)copyright and related rights applicable to broadcasting of programmes by satellite and cable retransmission;(d)the term of protection of copyright and certain related rights;(e)the legal protection of databases.Article 2Reproduction rightMember States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:for authors, of their works;…Article 3Right of communication to the public of works and right of making available to the public other subject matter1. Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.Article 4Distribution right1. Member States shall provide for authors, in respect of the original of their works or of copies thereof, the exclusive right to authorise or prohibit any form of distribution to the public by sale or otherwise.…’10Article 5 of Directive 2001/29 sets out a series of exceptions to, and limitations on, the exclusive rights which Articles 2 to 4 of the directive confer on authors over their works. Rules of Procedure of the Court of Justice 11Article 94 of the Rules of Procedure of the Court of Justice provides:‘In addition to the text of the questions referred to the Court for a preliminary ruling, the request for a preliminary ruling shall contain:a summary of the subject matter of the dispute and the relevant findings of fact as determined by the referring court or tribunal, or, at least, an account of the facts on which the questions are based;the tenor of any national provisions applicable in the case and, where appropriate, the relevant national case-law;a statement of the reasons which prompted the referring court or tribunal to inquire about the interpretation or validity of certain provisions of European Union law, and the relationship between those provisions and the national legislation applicable to the main proceedings.’ Netherlands law 12Article 1 of the Auteurswet (the Copyright Law) provides:‘Copyright is the exclusive right of the author of a literary, scientific or artistic work, or of his successors in title, to communicate that work to the public and to reproduce it, subject to the limitations laid down by law.’13Article 10(1) of the Copyright Law is worded as follows:‘For the purposes of this Law, “literary, scientific or artistic works” shall mean:1.books, brochures, newspapers, periodicals and other written material;2.dramatic and dramatico-musical works;3.lectures and addresses;4.choreographic works and entertainments in dumb show;5.musical compositions with or without words;6.works of drawing, painting, architecture, sculpture, engraving and lithography;7.maps;8.plans, sketches and three-dimensional works relative to architecture, geography, topography or other sciences;9.photographic works;10.cinematographic works;11.works of applied art and industrial designs;12.computer programmes and preparatory material;and, in general, every production in the literary, scientific or artistic domain, whatever may be the mode or form of its expression.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 14‘Heksenkaas’ or ‘Heks’nkaas’(‘Heksenkaas’) is a spreadable dip containing cream cheese and fresh herbs, which was created by a Dutch retailer of vegetables and fresh produce in 2007. By an agreement concluded in 2011 and in return for remuneration linked to the turnover to be achieved by sales of Heksenkaas, its creator transferred his intellectual property rights over that product to Levola.15A patent for the method of manufacturing Heksenkaas was granted on 10 July 2012.16Since January 2014 Smilde has been manufacturing a product called ‘Witte Wievenkaas’ for a supermarket chain in the Netherlands.17Levola took the view that the production and sale of ‘Witte Wievenkaas’ infringed its copyright in the ‘taste’ of Heksenkaas and brought proceedings against Smilde before the Rechtbank Gelderland (Gelderland District Court, Netherlands).18After stating that, from its point of view, copyright in a taste refers to the ‘overall impression on the sense of taste caused by the consumption of a food product, including the sensation in the mouth perceived through the sense of touch’, Levola asked the Rechtbank Gelderland (Gelderland District Court) to rule (i) that the taste of Heksenkaas is its manufacturer’s own intellectual creation and is therefore eligible for copyright protection as a work, within the meaning of Article 1 of the Copyright Law, and (ii) that the taste of the product manufactured by Smilde is a reproduction of that work. It also asked that court to issue a cease and desist order against Smilde in relation to all infringements of its copyright and, in particular, in relation to the production, purchase, sale, supply or other trade in the product known as ‘Witte Wievenkaas’.19By judgment of 10 June 2015, the Rechtbank Gelderland (Gelderland District Court) held that it was not necessary to rule on whether the taste of Heksenkaas was protectable under copyright law, given that Levola’s claims had, in any event, to be rejected since it had not indicated which elements, or combination of elements, of the taste of Heksenkaas gave it its unique, original character and personal stamp.20Levola appealed against that judgment before the referring court.21The latter considers that the key issue in the case before it is whether the taste of a food product may be eligible for copyright protection. It adds that the parties to the main proceedings have adopted diametrically opposed positions on this issue.22According to Levola, the taste of a food product may be classified as a work of literature, science or art that is eligible for copyright protection. Levola relies by analogy, inter alia, on the judgment of 16 June 2006 of the Hoge Raad der Nederlanden (Supreme Court of the Netherlands), Lancôme (NL:HR:2006:AU8940), in which that court accepted in principle the possibility of recognising copyright in the scent of a perfume.23Conversely, Smilde submits that the protection of tastes is not consistent with the copyright system, as the latter is intended purely for visual and auditory creations. Moreover, the instability of a food product and the subjective nature of the taste experience preclude the taste of a food product qualifying for copyright protection as a work. Smilde further submits that the exclusive rights of the author of a work of intellectual property and the restrictions to which those rights are subject are, in practical terms, inapplicable in the case of tastes.24The referring court notes that the Cour de cassation (Court of Cassation, France) has categorically rejected the possibility of granting copyright protection to a scent, in particular in its judgment of 10 December 2013 (FR:CCASS:2013:CO01205). There is therefore divergence in the case-law of the national supreme courts of the European Union when it comes to the question –– which is similar to that raised in the case in the main proceedings –– as to whether a scent may be protected by copyright.25In those circumstances, the Gerechtshof Arnhem-Leeuwarden (Regional Court of Appeal, Arnhem-Leeuwarden, Netherlands) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Does EU law preclude the taste of a food product — as the author’s own intellectual creation — being granted copyright protection? In particular:Is copyright protection precluded by the fact that the expression “literary and artistic works” in Article 2(1) of the Berne Convention, which is binding on all the Member States of the European Union, includes “every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression”, but that the examples cited in that provision relate only to creations which can be perceived by sight and/or by hearing?Does the (possible) instability of a food product and/or the subjective nature of the taste experience preclude the taste of a food product being eligible for copyright protection?Does the system of exclusive rights and limitations, as governed by Articles 2 to 5 of Directive [2001/29], preclude the copyright protection of the taste of a food product?(2)If the answer to question 1(a) is in the negative:What are the requirements for the copyright protection of the taste of a food product?Is the copyright protection of a taste based solely on the taste as such or (also) on the recipe of the food product?What evidence should a party who, in infringement proceedings, claims to have created a copyright-protected taste of a food product, put forward? Is it sufficient for that party to present the food product involved in the proceedings to the court so that the court, by tasting and smelling, can form its own opinion as to whether the taste of the food product meets the requirements for copyright protection? Or should the applicant (also) provide a description of the creative choices involved in the taste composition and/or the recipe on the basis of which the taste can be considered to be the author’s own intellectual creation?How should the court in infringement proceedings determine whether the taste of the defendant’s food product corresponds to such an extent with the taste of the applicant’s food product that it constitutes an infringement of copyright? Is a determining factor here that the overall impressions of the two tastes are the same?’ Consideration of the questions referred Admissibility 26Smilde claims that the present request for a preliminary ruling is inadmissible because the action in the main proceedings should, in any event, be dismissed. It argues that Levola has not identified the elements of Heksenkaas which allegedly make it its author’s own intellectual creation.27It must be recalled in that regard that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is, in principle, bound to give a ruling (judgments of 10 March 2009, Hartlauer, C‑169/07, EU:C:2009:141, paragraph 24, and of 1 July 2010, Sbarigia, C‑393/08, EU:C:2010:388, paragraph 19).28Indeed, it is settled case-law that questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgments of 24 June 2008, Commune de Mesquer, C‑188/07, EU:C:2008:359, paragraph 30 and the case-law cited, and of 21 May 2015, Verder LabTec, C‑657/13, EU:C:2015:331, paragraph 29).29In the light of the information provided by the referring court, it cannot be held that the questions raised bear no relation to the actual facts of the main action or its purpose or concern a hypothetical problem. A different conclusion cannot be reached merely because the lower court, whose decision has been challenged before the referring court, took the view –– unlike the referring court –– that it was in a position to rule on the dispute before it without deciding upon the preliminary issue of whether the taste of a food product may be eligible for copyright protection.30Moreover, the referring court has, in accordance with Article 94 of the Rules of Procedure, provided the Court with the factual and legal material necessary to enable it to answer the questions raised.31Accordingly, the questions referred are admissible. The first question 32By its first question, the referring court asks, in essence, whether Directive 2001/29 must be interpreted as precluding (i) the taste of a food product from being protected by copyright under that directive and (ii) national legislation from being interpreted in such a way that it grants copyright protection to such a taste.33In that regard, Articles 2 to 4 of Directive 2001/29 state that the Member States are to provide for a set of exclusive rights relating, in the case of authors, to their ‘works’, while Article 5 sets out a series of exceptions and limitations to those rights. The directive makes no express reference to the laws of the Member States for the purpose of determining the meaning and scope of the concept of a ‘work’. Accordingly, in view of the need for a uniform application of EU law and the principle of equality, that concept must normally be given an autonomous and uniform interpretation throughout the European Union (see, to that effect, judgments of 16 July 2009, Infopaq International, C‑5/08, EU:C:2009:465, paragraphs 27 and 28, and of 3 September 2014, Deckmyn and Vrijheidsfonds, C‑201/13, EU:C:2014:2132, paragraphs14 and 15).34It follows that the taste of a food product can be protected by copyright under Directive 2001/29 only if such a taste can be classified as a ‘work’ within the meaning of the directive (see, by analogy, judgment of 16 July 2009, Infopaq International, C‑5/08, EU:C:2009:465, paragraph 29 and the case-law cited).35In that regard, two cumulative conditions must be satisfied for subject matter to be classified as a ‘work’ within the meaning of Directive 2001/29.36First, the subject matter concerned must be original in the sense that it is the author’s own intellectual creation (judgment of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, paragraph 97 and the case-law cited).37Secondly, only something which is the expression of the author’s own intellectual creation may be classified as a ‘work’ within the meaning of Directive 2001/29 (see, to that effect, judgments of 16 July 2009, Infopaq International, C‑5/08, EU:C:2009:465, paragraph 39, and of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, paragraph 159).38It should be recalled in that regard that although the European Union is not a party to the Berne Convention, it is nevertheless obliged, under Article 1(4) of the WIPO Copyright Treaty, to which it is a party and which Directive 2001/29 is intended to implement, to comply with Articles 1 to 21 of the Berne Convention (see, to that effect, judgments of 9 February 2012, Luksan, C‑277/10, EU:C:2012:65, paragraph 59 and the case-law cited, and of 26 April 2012, DR and TV2 Danmark, C‑510/10, EU:C:2012:244, paragraph 29).39Under Article 2(1) of the Berne Convention, literary and artistic works include every production in the literary, scientific and artistic domain, whatever the mode or form of its expression may be. Moreover, in accordance with Article 2 of the WIPO Copyright Treaty and Article 9(2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which is mentioned in paragraph 6 of this judgment and which also forms part of the EU legal order (see, to that effect, judgment of 15 March 2012, SCF, C‑135/10, EU:C:2012:140, paragraphs 39 and 40), copyright protection may be granted to expressions, but not to ideas, procedures, methods of operation or mathematical concepts as such (see, to that effect, judgment of 2 May 2012, SAS Institute, C‑406/10, EU:C:2012:259, paragraph 33).40Accordingly, for there to be a ‘work’ as referred to in Directive 2001/29, the subject matter protected by copyright must be expressed in a manner which makes it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form.41That is because, first, the authorities responsible for ensuring that the exclusive rights inherent in copyright are protected must be able to identify, clearly and precisely, the subject matter so protected. The same is true for individuals, in particular economic operators, who must be able to identify, clearly and precisely, what is the subject matter of protection which third parties, especially competitors, enjoy. Secondly, the need to ensure that there is no element of subjectivity –– given that it is detrimental to legal certainty –– in the process of identifying the protected subject matter means that the latter must be capable of being expressed in a precise and objective manner.42The taste of a food product cannot, however, be pinned down with precision and objectivity. Unlike, for example, a literary, pictorial, cinematographic or musical work, which is a precise and objective form of expression, the taste of a food product will be identified essentially on the basis of taste sensations and experiences, which are subjective and variable since they depend, inter alia, on factors particular to the person tasting the product concerned, such as age, food preferences and consumption habits, as well as on the environment or context in which the product is consumed.43Moreover, it is not possible in the current state of scientific development to achieve by technical means a precise and objective identification of the taste of a food product which enables it to be distinguished from the taste of other products of the same kind.44It must therefore be concluded, on the basis of all of the foregoing considerations, that the taste of a food product cannot be classified as a ‘work’ within the meaning of Directive 2001/29.45In view of the requirement, referred to in paragraph 33 of this judgment, for a uniform interpretation of the concept of a ‘work’ throughout the European Union, it must also be concluded that Directive 2001/29 prevents national legislation from being interpreted in such a way that it grants copyright protection to the taste of a food product.46Accordingly, the answer to the first question is that Directive 2001/29 must be interpreted as precluding (i) the taste of a food product from being protected by copyright under that directive and (ii) national legislation from being interpreted in such a way that it grants copyright protection to such a taste. The second question 47In the light of the answer to the first question, there is no need to reply to the second question. Costs 48Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as precluding (i) the taste of a food product from being protected by copyright under that directive and (ii) national legislation from being interpreted in such a way that it grants copyright protection to such a taste. [Signatures]( *1 ) Language of the case: Dutch. | dbaa1-32cad00-4d3d | EN |
Legislation of a Member State under which a recipient of services can be ordered to suspend payments and to pay a security to guarantee payment of a possible fine which might be imposed on the provider of services, established in another Member State, for an infringement of the labour law of the first Member State is contrary to EU law | 13 November 2018 ( *1 )(Reference for a preliminary ruling — Article 56 TFEU — Freedom to provide services — Restrictions — Services in the internal market — Directive 2006/123/EC — Labour law — Posting of workers in order to carry out construction works — Reporting of workers — Retention and translation of payslips — Suspension of payments — Payment of a security by the recipient of the services — Surety for a possible fine to be imposed on the service provider)In Case C‑33/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bezirksgericht Bleiburg/Okrajno Sodišče Pliberk (District Court, Bleiburg, Austria), made by decision of 17 January 2017, received at the Court on 23 January 2017, in the proceedings Čepelnik d.o.o. v Michael Vavti, THE COURT (Grand Chamber),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, A. Arabadjiev, M. Vilaras, E. Regan and C. Toader, Presidents of Chambers, A. Rosas, E. Juhász, L. Bay Larsen (Rapporteur), M. Safjan, D. Šváby, C.G. Fernlund and C. Vajda, Judges,Advocate General: N. Wahl,Registrar: M. Aleksejev, Administrator,having regard to the written procedure and further to the hearing on 26 February 2018,after considering the observations submitted on behalf of:–Čepelnik d.o.o., by R. Grilc, R. Vouk, M. Škof and M. Ranc, Rechtsanwälte, and M. Erman, odvetnica,the Austrian Government, by G. Hesse, acting as Agent,the Czech Government, by M. Smolek, J. Pavliš and J. Vláčil, acting as Agents,the French Government, by E. de Moustier and R. Coesme, acting as Agents,the Hungarian Government, by M.M. Tátrai, M.Z. Fehér and G. Koós, acting as Agents,the Polish Government, by B. Majczyna, acting as Agent,the Slovenian Government, by A. Grum, acting as Agent,the Slovak Government, by B. Ricziová, acting as Agent,the European Commission, by M. Kellerbauer, L. Malferrari and M. Kocjan, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 8 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 56 TFEU and Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services and amending Regulation (EU) No 1024/2012 on administrative cooperation through the Internal Market Information System (‘the IMI Regulation’) (OJ 2014 L 159, p. 11).2The request has been made in proceedings between Čepelnik d.o.o. and Mr Michael Vavti concerning the payment of EUR 5000 claimed by Čepelnik from Mr Vavti pursuant to a contract for works. Legal context EU law 3Recitals 7 and 14 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36) read as follows:‘(7)This Directive establishes a general legal framework which benefits a wide variety of services while taking into account the distinctive features of each type of activity or profession and its system of regulation. … Provision should be made for a balanced mix of measures involving targeted harmonisation, administrative cooperation, the provision on the freedom to provide services and encouragement of the development of codes of conduct on certain issues. That coordination of national legislative regimes should ensure a high degree of Community legal integration and a high level of protection of general interest objectives, especially protection of consumers, which is vital in order to establish trust between Member States. This Directive also takes into account other general interest objectives, including the protection of the environment, public security and public health as well as the need to comply with labour law.…(14)This Directive does not affect terms and conditions of employment, including maximum work periods and minimum rest periods, minimum paid annual holidays, minimum rates of pay as well as health, safety and hygiene at work, which Member States apply in compliance with Community law, nor does it affect relations between social partners, including the right to negotiate and conclude collective agreements, the right to strike and to take industrial action in accordance with national law and practices which respect Community law, nor does it apply to services provided by temporary work agencies. This Directive does not affect Member States’ social security legislation.’4Article 1(6) of Directive 2006/123 provides:‘This Directive does not affect labour law, that is any legal or contractual provision concerning employment conditions, working conditions, including health and safety at work and the relationship between employers and workers, which Member States apply in accordance with national law which respects Community law. Equally, this Directive does not affect the social security legislation of the Member States.’ Austrian law 5Paragraph 7b of the Arbeitsvertragsrechts-Anpassungsgesetz (Law adapting employment contract law, BGBl. 459/1993), in the version applicable to the dispute in the main proceedings (‘the AVRAG’), provides in subparagraphs 3 and 8:‘3. Employers within the meaning of subparagraph 1 are to report the employment of workers who are posted to Austria in order to perform work, one week at the latest before the start of work, to the Central Coordinating Body for the monitoring of illegal employment …8. A person who, as an employer within the meaning of subparagraph 1,1.contrary to subparagraph 3 does not make, or does not make in good time or completely, the declaration or the declaration of subsequent amendments to the information (amending declaration) …commits an administrative offence and shall be punished by the district administrative authority by a fine for each worker …’6Paragraph 7i(4) of the AVRAG reads as follows:‘A person whoas employer within the meaning of Paragraph 7, 7a(1) or 7b(1) and (9), contrary to Paragraph 7d, does not have the pay documents available …7Paragraph 7m of the AVRAG provides:‘1. Where there is reasonable suspicion of an administrative offence under Paragraph 7b(8), 7i or 7k(4), and if it is to be presumed on the basis of certain facts that prosecution or enforcement of penalties will be impossible or substantially more difficult for reasons connected with the person of the employer (contractor) or the person hiring out workers, the tax authorities in connection with investigations under Paragraph 7f and the construction workers’ leave and employment termination payment fund may require in writing the person commissioning the works, or in the case of hiring out of workers the employer, not to pay the price still owed for the works or the remuneration still owed for hiring out workers, or parts thereof (suspension of payments). …3. Where there is reasonable suspicion of an administrative offence under Paragraph 7b(8), 7i or 7k(4), and if it is to be presumed on the basis of certain facts that prosecution or enforcement of penalties will be impossible or substantially more difficult for reasons connected with the person of the employer (contractor) or the person hiring out workers, the district administrative authority may, by a decision, order the person commissioning the works, or in the case of hiring out of workers the employer, to pay the price still owed for the works or the remuneration still owed for hiring out workers, or parts thereof, as security within a reasonable time. …5. Payment under subparagraph 3 shall have the effect, for the person commissioning the works or the employer, of releasing him from his debt as against the contractor or the person hiring out workers, to the extent of the payment.…’ The dispute in the main proceedings and the questions referred for a preliminary ruling 8Čepelnik is a limited liability company established in Slovenia.9It concluded a contract with Mr Vavti for construction works in Mr Vavti’s house in Austria for a total amount of EUR 12200.10They agreed on a down payment of EUR 7000, which was paid by Mr Vavti.11On 16 March 2016 the Finanzpolizei/Finančna policija (Financial Police, Austria) made an on-site check and found, first, that the employment of two posted workers on the site had not been reported by Čepelnik to the competent national authority, in breach of Paragraph 7b(8)(1) of the AVRAG in conjunction with Paragraph 7b(3) of the AVRAG, and, second, that Čepelnik did not have payslips in German available for four posted workers, in breach of Paragraph 7i(4)(1) of the AVRAG in conjunction with the first and second sentences of Paragraph 7d(1) of the AVRAG.12As a result of that finding, the Financial Police ordered Mr Vavti to suspend payments for the works. It also requested the Bezirkshauptmannschaft Völkermarkt/Okrajno glavarstvo Velikovec (District Administrative Authority, Völkermarkt, Austria) to require him to pay a security in an amount equivalent to the price still owed for the works, namely EUR 5200.13On 17 March 2016 the District Administrative Authority, Völkermarkt, acceded to that request and ordered Mr Vavti to pay a security of EUR 5200 as a guarantee of the fine that might be imposed on Čepelnik in subsequent proceedings. Mr Vavti did not raise an objection against that decision, and he paid the security on 20 April 2016.14By decisions of 11 and 12 October 2016, Čepelnik was fined EUR 1000 and EUR 8000 respectively for the two administrative offences alleged by the Financial Police at the inspection on 16 March 2016. On 2 November 2016 Čepelnik appealed against those decisions. The appeals were pending on the date of the order for reference.15After completing the works, Čepelnik sought payment of the sum of EUR 5000 from Mr Vavti. When he did not pay that sum, Čepelnik brought proceedings before the referring court.16Before the referring court Mr Vavti submits that, having paid a security of EUR 5200 to the District Administrative Authority, Völkermarkt, he no longer owes that sum to Čepelnik. In accordance with the applicable Austrian legislation, the payment of the security released him from the debt.17In those circumstances, the Bezirksgericht Bleiburg/Okrajno Sodišče Pliberk (District Court, Bleiburg, Austria) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Are Article 56 TFEU and [Directive 2014/67] to be interpreted as prohibiting a Member State from ordering a person in that State who has commissioned works to suspend payments and pay a security equal to the price still owed for the works, if the suspension of payments and the payment of the security serve solely to guarantee payment of a possible fine, to be imposed only subsequently in separate proceedings against a service provider established in another Member State?(2)If that question is answered in the negative:(a)Are Article 56 TFEU and [Directive 2014/67] to be interpreted as prohibiting a Member State from ordering a person in that State who has commissioned works to suspend payments and pay a security equal to the price still owed for the works, if the service provider established in another Member State on whom a fine is to be imposed has no legal remedy against the decision ordering the payment of a security in the proceedings relating to the security, and if an appeal against that decision by the domestic person commissioning the works has no suspensory effect?(b)Are Article 56 TFEU and [Directive 2014/67] to be interpreted as prohibiting a Member State from ordering a person in that State who has commissioned works to suspend payments and pay a security equal to the price still owed for the works solely because the service provider is established in another Member State?(c)Are Article 56 TFEU and [Directive 2014/67] to be interpreted as prohibiting a Member State from ordering a person in that State who has commissioned works to suspend payments and pay a security equal to the price still owed for the works, even though that sum is not yet due and the final price has not yet been determined on account of counterclaims and rights of retention?’ Consideration of the questions referred Admissibility 18The Austrian Government submits, as a preliminary point, that the request for a preliminary ruling is inadmissible because an answer by the Court to the questions referred is not necessary for the referring court to be able to deliver judgment in the main proceedings.19It submits that the questions relate to administrative proceedings in which the person commissioning works is ordered to suspend payments and pay a security, whereas the referring court is hearing only a civil action concerning the price of the works still due following the payment of the security. In the civil proceedings the referring court must confine itself to taking account of the releasing effect on the person commissioning the works of the payment of the security ordered, without being able to amend or annul the decision imposing that security. Such a decision can be contested only in separate administrative proceedings.20It must be recalled that, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court, before which the dispute has been brought and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is, in principle, bound to give a ruling (judgment of 5 June 2018, Wirtschaftsakademie Schleswig-Holstein, C‑210/16, EU:C:2018:388, paragraph 47 and the case-law cited).21It follows that questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its object, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 6 September 2016, Petruhhin, C‑182/15, EU:C:2016:630, paragraph 20 and the case-law cited).22In the present case, it is apparent from the order for reference that the dispute in the main proceedings is closely linked to the effects of the measures that are the subject of the questions referred, in that the answer to the question of the compatibility of those measures with EU law could influence the outcome of the dispute. The referring court explains that Mr Vavti based his refusal — which gave rise to the dispute — to pay Čepelnik the sum of EUR 5000 corresponding to the price still owed for the works on the fact that under Paragraph 7m(5) of the AVRAG the payment of the security of EUR 5200 which had been required of him under Paragraph 7m(3) of the AVRAG had had the effect of releasing him from his debt towards Čepelnik.23In those circumstances, it cannot be considered that the interpretation of EU law sought bears no relation to the actual facts of the main action or its object.24Furthermore, as the Austrian Government’s argument concerning the inadmissibility of the reference for a preliminary ruling is based in part on the fact that national law does not allow the referring court, in the main proceedings, to make a decision relating to the fines imposed on Čepelnik, it must be recalled that, since in proceedings of the kind provided for in Article 267 TFEU the interpretation of national law falls exclusively to the referring court (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 28), that argument cannot suffice to rebut the presumption of relevance referred to in paragraph 21 above.25It follows from the above that the request for a preliminary ruling is admissible. Substance 26By its questions, which should be considered together, the referring court essentially asks whether Article 56 TFEU and Directive 2014/67 must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, under which the competent authorities can order a commissioning party established in that Member State to suspend payments to his contractor established in another Member State, or even to pay a security in an amount equivalent to the price still owed for the works in order to guarantee payment of the fine which might be imposed on that contractor in the event of a proven infringement of the labour law of the first Member State. Preliminary observations 27It should be noted at the outset that, as the Advocate General observes in point 41 of his Opinion, it may be deduced from the observations submitted to the Court that Directive 2014/67, the period for the transposition of which expired on 18 June 2016 in accordance with Article 23 of the directive, was transposed into Austrian law by legislation enacted in June 2016 which entered into force on 1 January 2017. Since the facts at issue in the main proceedings took place in March 2016, Directive 2014/67 is not applicable to them, and the questions referred need not be answered in so far as they refer to that directive (see, by analogy, judgment of 3 December 2014, De Clercq and Others, C‑315/13, EU:C:2014:2408, paragraphs 49 to 51).28In addition, several interested parties who have submitted observations to the Court submit that the Court should also base its answer to the questions referred on Directive 2006/123.29In this respect, it must be observed that, under Article 1(6) of that directive, it ‘does not affect labour law’.30According to that provision, the concept of ‘labour law’ within the meaning of that directive covers legal or contractual provisions concerning employment conditions, working conditions, including health and safety at work, and the relationship between employers and workers, which Member States apply in accordance with national law which respects EU law.31Article 1(6) of Directive 2006/123, read in the light of recital 14 of the directive, thus defines ‘labour law’ broadly.32That provision does not distinguish between substantive rules of labour law, on the one hand, and rules relating to the measures provided for in order to ensure compliance with those substantive rules and those intended to ensure the effectiveness of the penalties imposed in the event of non-compliance with those rules, on the other.33It should also be observed that, as may be seen from recital 7 of that directive, by adopting the directive the EU legislature intended to ensure that a balance was observed between the objective of eliminating obstacles to the freedom of establishment of providers and the free movement of services, on the one hand, and, on the other, the requirement of ensuring a high level of protection of objectives in the general interest, including the need to comply with labour law (see, by analogy, judgment of 11 July 2013, Femarbel, C‑57/12, EU:C:2013:517, paragraph 39).34The establishment by national legislation such as that at issue in the main proceedings of deterrent measures for the purpose of ensuring compliance with the substantive rules of labour law and with rules intended to ensure the effectiveness of penalties imposed in the event of non-compliance with those substantive rules contributes to ensuring a high level of protection of the objective in the general interest consisting in the need to comply with labour law.35It follows that the concept of ‘labour law’ within the meaning of Article 1(6) of Directive 2006/123 covers such national legislation.36In the light of the above, it must be concluded that Directive 2006/123 does not apply to measures such as those laid down by the national legislation at issue in the main proceedings, although, in accordance with the wording of Article 1(6) of that directive, that conclusion does not dispense with the obligation to ascertain whether such legislation is consistent with EU law, in particular Article 56 TFEU, mentioned in the referring court’s questions. Restriction of the freedom to provide services 37It must be recalled at the outset that, according to settled case-law of the Court, all measures which prohibit, impede or render less attractive the exercise of the freedom to provide services must be regarded as restrictions of that freedom (judgment of 4 May 2017, Vanderborght, C‑339/15, EU:C:2017:335, paragraph 61 and the case-law cited).38Moreover, according to settled case-law, Article 56 TFEU confers rights not only on the provider of services himself but also on the recipient of those services (judgments of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraph 23, and of 3 December 2014, De Clercq and Others, C‑315/13, EU:C:2014:2408, paragraph 52).39It is clear that measures such as those at issue in the main proceedings which require a commissioning party to suspend the payments owed to his contractor and to pay a security in an amount equivalent to the price still owed for the works where there are reasonable grounds for suspecting an administrative offence by the service provider against the national legislation in the field of labour law are liable both to dissuade commissioning parties from the Member State concerned from having recourse to service providers established in another Member State and to dissuade those service providers from offering their services to those commissioning parties.40As the Advocate General observes in points 37 and 38 of his Opinion, such measures are liable in particular, first, to bring forward the time when the recipient of the services is required to pay the price still owed for the works and thus to deprive him of the possibility, provided for as a general rule by the applicable national legislation, of retaining part of that sum as compensation for faulty or late performance of the works. Second, those measures are liable to deprive service providers established in other Member States of the right to claim from their Austrian customers payment of the price still owed for the works, and thereby expose them to the risk of delayed payment.41Consequently, measures such as those provided for by the national legislation at issue in the main proceedings must be regarded as a restriction of the freedom to provide services. Justification for the restriction of the freedom to provide services 42According to well-established case-law of the Court, national measures which are liable to restrict or to make less attractive the exercise of the fundamental freedoms guaranteed by the FEU Treaty may nonetheless be permitted where they serve overriding reasons in the public interest, are appropriate for attaining their objective, and do not go beyond what is necessary to attain that objective (judgment of 18 May 2017, Lahorgue, C‑99/16, EU:C:2017:391, paragraph 31 and the case-law cited).43In the present case, the Austrian Government argues that the restriction of the freedom to provide services at issue in the main proceedings is justified by the objectives of the social protection of workers and of combating fraud, particularly social security fraud, and preventing abuse.44On this point, it must be observed that the social protection of workers and combating fraud, particularly social security fraud, and preventing abuse are objectives that are among the overriding reasons in the public interest capable of justifying a restriction of the freedom to provide services (see, to that effect, judgments of 19 December 2012, Commission v Belgium, C‑577/10, EU:C:2012:814, paragraph 45, and of 3 December 2014, De Clercq and Others, C‑315/13, EU:C:2014:2408, paragraph 65 and the case-law cited).45Measures such as those provided for by the national legislation at issue in the main proceedings which are intended in particular to ensure the effectiveness of the penalties that might be inflicted on the service provider in the event of an infringement of the legislation on labour law may be regarded as appropriate for ensuring that those objectives are realised.46As regards the proportionality of such legislation with respect to those objectives, it must be observed, first, that it makes it possible for the competent authorities to require the commissioning party to suspend his payments to the service provider and to pay a security in the amount of the price still owed for the works, on the basis of ‘reasonable suspicion of an administrative offence’ against the national rules in the field of labour law. That legislation thus allows such measures to be adopted even before a finding is made by the competent authority of an administrative offence disclosing fraud, in particular social security fraud, or abuse or a practice capable of affecting the protection of workers.47Next, that legislation does not provide that the service provider against whom there is such reasonable suspicion can, before the adoption of those measures, put forward his observations on the acts of which he is accused.48Finally, the amount of the security that may be required from the recipient of the services corresponds, in accordance with the national legislation at issue in the main proceedings, to the price still owed for the works at the time of the adoption of that measure. Since the amount of the security may thus be fixed by the competent authorities without taking account of possible construction faults or other defective performance of the contract for works by the service provider, it could exceed, perhaps substantially, the amount that the commissioning party would in principle have to pay on completion of the works.49For each of the reasons set out in the three preceding paragraphs, national legislation such as that at issue in the main proceedings must be regarded as going beyond what is necessary for attaining the objectives of the protection of workers and combating fraud, in particular social security fraud, and preventing abuse.50In the light of all the foregoing, the answer to the questions referred is that Article 56 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, under which the competent authorities can order a commissioning party established in that Member State to suspend payments to his contractor established in another Member State, or even to pay a security in an amount equivalent to the price still owed for the works in order to guarantee payment of the fine which might be imposed on that contractor in the event of a proven infringement of the labour law of the first Member State. Costs 51Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 56 TFEU must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, under which the competent authorities can order a commissioning party established in that Member State to suspend payments to his contractor established in another Member State, or even to pay a security in an amount equivalent to the price still owed for the works in order to guarantee payment of the fine which might be imposed on that contractor in the event of a proven infringement of the labour law of the first Member State. [Signatures]( *1 ) Languages of the case: German and Slovenian. | 83011-26c5d82-4c84 | EN |
The General Court annuls EUIPO’s decision revoking the rights of the proprietor of the EU trade mark SPINNING | 8 November 2018 ( *1 )(EU trade mark — Revocation proceedings — EU word mark SPINNING — Partial revocation — Article 51(1)(b) of Regulation (EC) No 207/2009 (now Article 58(1)(b) of Regulation (EU) 2017/1001))In Case T‑718/16, Mad Dogg Athletics, Inc., established in Los Angeles, California (United States), represented by J. Steinberg, lawyer,applicant,v European Union Intellectual Property Office (EUIPO), represented by D. Walicka, acting as Agent,defendant,the intervener before the General Court, formerly Aerospinning Master Franchising, Ltd., s.r.o., the other party to the proceedings before the Board of Appeal of EUIPO, being Aerospinning Master Franchising, s.r.o., established in Prague (Czech Republic), represented by K. Labalestra, lawyer,ACTION brought against the decision of the Fifth Board of Appeal of EUIPO of 21 July 2016 (Case R 2375/2014-5), relating to revocation proceedings between Aerospinning Master Franchising and Mad Dogg Athletics,THE GENERAL COURT (Ninth Chamber),composed of S. Gervasoni, President, K. Kowalik-Bańczyk and C. Mac Eochaidh (Rapporteur), Judges,Registrar: I. Dragan, Administrator,having regard to the application lodged at the Court Registry on 4 October 2016,having regard to the response of EUIPO lodged at the Court Registry on 17 March 2017,having regard to the response of the intervener lodged at the Court Registry on 24 March 2017,further to the hearing on 15 March 2018,gives the following Judgment Background to the dispute 1On 1 April 1996 the applicant, Mad Dogg Athletics, Inc., filed an application for registration of the word mark SPINNING (‘the contested mark’) with the European Union Intellectual Property Office (EUIPO), pursuant to Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1), as amended, itself replaced by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (OJ 2017 L 154, p. 1)).2On 3 April 2000 the contested mark was registered in respect of goods and services in Classes 9, 28 and 41 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and corresponding, for each of those classes, to the following description:–Class 9: ‘Audio and video cassettes’;Class 28: ‘Exercise equipment’;Class 41: ‘Exercise training’.3On 8 February 2012 the intervener, Aerospinning Master Franchising, s.r.o., filed an application for partial revocation of the contested mark pursuant to Article 51(1)(b) of Regulation No 207/2009 (now Article 58(1)(b) of Regulation 2017/1001). That application concerned the goods in Class 28 and the services in Class 41.4On 21 July 2014 the Cancellation Division revoked the applicant’s rights in their entirety.5On 12 September 2014 the applicant filed a notice of appeal with EUIPO against the Cancellation Division’s decision.6By decision of 21 July 2016 (‘the contested decision’), the Fifth Board of Appeal of EUIPO annulled the decision of the Cancellation Division in part in so far as it concerned the goods in Class 9, even though those goods were not the subject matter of the application for partial revocation filed by the intervener. On the basis of Article 51(1)(b) of Regulation No 207/2009, the appeal was dismissed as to the remainder. In that regard, first, the Board of Appeal stated, in paragraphs 23 to 27 of the contested decision, that the grounds for revocation had to be assessed as at the date of filing of the application for revocation. Second, in paragraphs 28 to 33 of the contested decision, it considered that the supposed transformation of the contested mark into a common name for the goods and services at issue had to be examined by taking into account the perception of Czech end users. Accordingly, it refused to examine the evidence to the contrary submitted by the applicant concerning its activities defending its trade mark in Member States other than the Czech Republic. Third, in paragraphs 34 to 47 of the contested decision, the Board of Appeal considered that the evidence which had been submitted during the course of the proceedings proved that the term ‘spinning’ had become, in the Czech Republic, the common name for a type of ‘exercise training’ and for the ‘exercise equipment’ used for that training. Fourth, in paragraphs 48 to 56 of the contested decision, it considered that the fact that the contested mark had become a common name was due to insufficient activity by the applicant to protect its trade mark in the Czech Republic. Fifth, in paragraphs 57 to 61 of the contested decision, it considered that several decisions of the Úřad průmyslového vlastnictví (Office of Industrial Property, Czech Republic) and the Czech courts confirmed that the applicant had not been sufficiently vigilant and had not made reasonable efforts to protect its trade mark in the Czech Republic. Forms of order sought 7The applicant claims that the Court should:annul the contested decision in so far as it has revoked the contested mark in respect of ‘exercise equipment’ in Class 28 and ‘exercise training’ in Class 41;order EUIPO to pay the costs.8EUIPO contends that the Court should:dismiss the action;order the applicant to pay the costs.9The intervener contends that the Court should: Law 10In support of its action the applicant relies on, in essence, three pleas in law alleging infringement of (i) Article 51(1)(b) of Regulation No 207/2009, (ii) Article 41(2)(a) of the Charter of Fundamental Rights of the European Union and (iii) Article 41(2)(c) of the Charter of Fundamental Rights.11The first plea is based, in essence, on four complaints, the first, second and third alleging errors of law as regards the relevant date to be taken into account for the purposes of assessing the ground for revocation, the relevant territory to be taken into account for the purposes of assessing the ground for revocation and the relevant public to be taken into account for the purposes of assessing the ground for revocation, respectively, and the fourth alleging an incorrect assessment of the evidence. First complaint of the first plea in law, alleging an error of law as regards the relevant date to be taken into account for the purposes of assessing the ground for revocation 12The applicant submits, in essence, that the Board of Appeal infringed Article 51(1)(b) of Regulation No 207/2009 by considering that the relevant time for assessing the ground for revocation was the date on which the intervener filed its application for revocation of the contested mark. In the applicant’s view, the relevant time for assessing whether the contested mark has transformed into a common name is not the date on which the application for revocation is filed but the date on which the revocation decision responding to that application, which has the force of res judicata, is adopted. According to the applicant, the ground for revocation must still apply at the time when the revocation decision is adopted.13EUIPO and the intervener dispute those arguments.14In that regard, in the first place, it should be noted that Article 55(1) of Regulation No 207/2009 (now Article 62(1) of Regulation 2017/1001) provides:‘The EU trade mark shall be deemed not to have had, as from the date of the application for revocation or of the counterclaim, the effects specified in this Regulation, to the extent that the rights of the proprietor have been revoked. An earlier date, on which one of the grounds for revocation occurred, may be fixed in the decision at the request of one of the parties’.15As the Board of Appeal correctly stated in paragraph 24 of the contested decision, in the event of the revocation of an EU trade mark, that revocation is effective as from the date of the application for revocation or, at the request of one of the parties, an earlier date on which one of the grounds for that revocation occurred.16By contrast, the EU legislature has not made provision for revocation to take effect from a date following the date of the application for revocation.17It is thus apparent from the wording of Article 55(1) of Regulation No 207/2009 that the revocation decision must be based on one of the grounds referred to in Article 51 of that regulation which applied at the latest on the date of filing of the application for revocation. Consequently, contrary to the applicant’s assertions, it follows from that provision that the applicability of the ground for revocation must be examined in the light of the factual and legal context on that date at the latest.18In the second place, it has already been held, concerning Article 12(1) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1) and Article 51(1)(a) of Regulation No 207/2009 (now Article 58(1)(a) of Regulation 2017/1001), which are identically worded, that, regarding the revocation of a trade mark on the ground of a lack of genuine use, only circumstances which arise before the filing of the application for revocation may be taken into account, without prejudice to the possibility of taking into consideration circumstances arising after that filing which may make it possible to confirm or better assess the extent to which the trade mark was used during the relevant period and the real intentions of the proprietor during that time (order of 27 January 2004, La Mer Technology, C‑259/02, EU:C:2004:50, paragraphs 29 to 33, and judgment of 2 February 2016, Benelli Q. J. v OHIM — Demharter (MOTOBI B PESARO), T‑171/13, EU:T:2016:54, paragraph 87).19First, contrary to the applicant’s assertions, as the context of that case-law was the revocation of the rights of the proprietor of a trade mark on the ground of a lack of genuine use, it can be transposed, mutatis mutandis, to the context of examining an application for revocation of a trade mark on the ground that it has become the common name for a product or a service in the trade. This approach is required because the rule set out in Article 55(1) of Regulation No 207/2009 applies without distinguishing between the grounds for revocation referred to in Article 51(1) thereof.20Second, it is apparent from the case file that, contrary to the requirements of the case-law recalled in paragraph 18 above, the applicant is not seeking, by producing evidence relating to the period after the application for revocation, to confirm or better assess circumstances prevailing on or arising before that date. On the contrary, it seeks to give itself an opportunity to show that the ground for revocation might no longer apply after the filing of the application for revocation. To follow the applicant’s argument would be to ignore the letter of Article 55(1) of Regulation No 207/2009, because that provision has not envisaged such a possibility.21In the third place, the applicant submits that account should be taken of the efforts made by the proprietor of a trade mark following the filing of the application for revocation in so far as those efforts have resulted in a change in the perception of the relevant public. In such a situation, the contested sign would thus have been regarded, by the relevant public, as a common name at the time of filing of the application for revocation, but would then have lost that generic character to be viewed once again as a trade mark by that public at the time of adoption of the revocation decision.22Even allowing for the possibility of such a change of perception, this would not permit derogation from the rule set out in Article 55(1) of Regulation No 207/2009, which requires that the ground for revocation be examined in the light of the factual and legal context on the date of filing of the application for revocation at the latest. In any event, if that change of perception were established, the applicant could re-apply to EUIPO for registration of its mark.23Finally, the applicant asserts, in paragraph 8 of the application, that it is entitled, at every stage of the procedure before the decision of EUIPO acquires the force of res judicata, to submit evidence of efforts made or actions taken following the application for revocation to educate the public about the nature of the word sign SPINNING as a trade mark or to protect that mark.24That line of argument cannot succeed.25First, it runs counter to the assertion, expressed in paragraph 7 of the application and making implicit reference to Article 76(2) of Regulation No 207/2009 (now Article 95(2) of Regulation 2017/1001), that the parties may produce evidence only within the periods laid down by EUIPO for submitting observations.26Second, under Article 76(2) of Regulation No 207/2009, consideration of evidence which was not submitted within the period prescribed by EUIPO but was submitted at a later stage of the proceedings cannot be accepted, except by way of complement to the evidence submitted within that period (see, to that effect, judgments of 18 July 2013, New Yorker SHK Jeans v OHIM, C‑621/11 P, EU:C:2013:484, paragraph 30, and of 26 September 2013, Centrotherm Systemtechnik v OHIM and centrotherm Clean Solutions, C‑610/11 P, EU:C:2013:593, paragraphs 113 and 114). While that provision thus allows for evidence which is submitted late but is complementary to be taken into account, it does not, by contrast, authorise the Board of Appeal to extend its discretion to new evidence (see, to that effect, judgment of 21 July 2016, EUIPO v Grau Ferrer, C‑597/14 P, EU:C:2016:579, paragraphs 25 to 27).27The application of that case-law, which permits evidence submitted late to be accepted, subject to conditions, nevertheless cannot entail disregard for the letter and effectiveness of Article 55(1) of Regulation No 207/2009. Evidence submitted late, in particular if it relates to facts arising after the date of filing of the application for revocation, thus cannot be taken into account unless, in accordance with what is stated in paragraphs 18 to 20 above, it confirms or makes it possible to better assess circumstances arising before, or prevailing on, the date of the application for revocation.28In view of all of those factors, the first complaint must be rejected as unfounded. Second complaint of the first plea in law, alleging an error of law as regards the relevant territory to be taken into account for the purposes of assessing the ground for revocation 29The applicant submits, in essence, that the Board of Appeal infringed Article 51(1)(b) of Regulation No 207/2009 by considering that the relevant territory for assessing the ground for revocation was limited to the Czech Republic. In the applicant’s view, an assessment limited to that Member State alone is not sufficient for revocation of the contested mark, which has a reputation throughout the European Union. Revocation of the contested mark could be envisaged only if that trade mark were perceived as a common name by the relevant public throughout the European Union or at least in an overwhelming part of it, according to the applicant.3031In that regard, it should be borne in mind that, pursuant to the principle of the unitary character of the EU trade mark, expressed in recital 3 of Regulation No 207/2009 (now recital 4 of Regulation 2017/1001) and specified in Article 1(2) of that regulation (now Article 1(2) of Regulation 2017/1001), EU trade marks are given uniform protection and produce their effects throughout the entire area of the European Union. Under that latter provision, the EU trade mark may not, save as otherwise provided in Regulation No 207/2009, be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor may its use be prohibited, save in respect of the whole of the European Union (judgment of 20 July 2017, Ornua, C‑93/16, EU:C:2017:571, paragraph 26).32Furthermore, Article 51(2) of Regulation No 207/2009 (now Article 58(2) of Regulation 2017/1001) states that there may be a partial revocation in respect of some of the goods or services concerned. While that provision thus allows for the possibility of adjusting the revocation from a substantive point of view, it must be pointed out that the EU legislature has made no provision for such an adjustment with regard to territory.33It is therefore apparent from the provisions referred to in paragraphs 31 and 32 above that a revocation decision has binding force for the whole of the territory of the European Union.34Thus, where it is established that an EU trade mark has lost all distinctive character in a limited part of the territory of the European Union or, as the case may be, in a single Member State, that finding necessarily means that the mark is no longer capable of producing the effects listed by Regulation No 207/2009 throughout the European Union. Accordingly, contrary to the applicant’s assertions, it is sufficient that the transformation of such a mark into a common name be established in a single Member State for its proprietor’s rights to be revoked in respect of the whole of the European Union.35That solution is, moreover, consistent with the objectives pursued by Regulation No 207/2009 and the principle of the unitary character of the EU trade mark which gives concrete expression to those objectives.36If recitals 2, 4 and 6 of Regulation No 207/2009 (now recitals 3, 5, and 7 of Regulation 2017/1001) are read together, it is apparent that the regulation seeks to remove the barrier of territoriality of the rights conferred on proprietors of trade marks by the laws of the Member States by enabling undertakings to adapt their activities for the internal market and carry them out without restriction. The EU trade mark thus enables its proprietor to distinguish its goods and services by identical means throughout the entire European Union, regardless of frontiers. On the other hand, undertakings which do not wish to protect their trade marks at EU level may choose to use national trade marks and are not obliged to apply for registration of their marks as EU trade marks. The purpose of the system of EU trade marks is thus — as can be seen from recital 2 of Regulation No 207/2009 — to offer on the internal market conditions which are similar to those obtaining in a national market (see, to that effect, judgment of 19 December 2012, Leno Merken, C‑149/11, EU:C:2012:816, paragraphs 40 and 42).37In that regard, the applicant submits that, in order for a revocation application to be accepted, the mark at issue must have become a common name, owing to the activity or inactivity of its proprietor, throughout the European Union or in an overwhelming part of it.38That argument cannot be accepted. As is correctly emphasised, in essence, by EUIPO and the intervener, protection of a trade mark at EU level means that, in return, its proprietor must exercise sufficient vigilance in defending and asserting its rights throughout the European Union. Accordingly, the proprietor of a trade mark must have its rights revoked if, owing to the proprietor’s inactivity, the trade mark in question is transformed into a common name even in a limited part of the territory of the European Union or, as the case may be, in a single Member State.39Revocation thus permits other operators freely to use the registered sign. It thus pursues an aim which is in the public interest, namely that signs or indications which have become a common name for goods or services in respect of which a trade mark has been registered may be available to or freely used by all. Thus, Article 51(1)(b) of Regulation No 207/2009 seeks to guarantee the distinctive character of a trade mark as an indication of origin and to avoid generic terms being reserved indefinitely for a single undertaking by reason of their having been registered as trade marks (see, to that effect and by analogy, concerning Article 12(2)(a) of Directive 89/104, Opinion of Advocate General Léger in Björnekulla Fruktindustrier, C‑371/02, EU:C:2003:615, points 53 and 54).40Moreover, by revoking the rights of the proprietor of the trade mark in question for the whole of the territory of the European Union, even where the transformation of that mark into a common name is established in only a limited part of that territory or, as the case may be, in a single Member State, it is possible to prevent inconsistent decisions on the part of EUIPO and national courts or tribunals ruling as EU trade mark courts and, as a result, to ensure that, here too, the unitary character of EU trade marks is not undermined (see, to that effect and by analogy, judgment of 19 October 2017, Raimund, C‑425/16, EU:C:2017:776, paragraph 28).41Those findings are not called into question by the applicant’s other arguments.42First, the applicant considers that the Board of Appeal erred in referring, in paragraph 30 of the contested decision, to the judgment of 6 October 2009, PAGO International (C‑301/07, EU:C:2009:611), to substantiate its reasoning.43In that regard, the Court has previously held that that case-law concerns the interpretation of provisions relating to the extended protection conferred on trade marks that have a reputation or are well known in the European Union or in the Member State in which they have been registered. However, the requirements laid down by Article 51 of Regulation No 207/2009, which could result in the trade mark being revoked, pursue a different objective from those provisions (see, to that effect, judgments of 19 December 2012, Leno Merken, C‑149/11, EU:C:2012:816, paragraph 53, and of 3 September 2015, Iron & Smith, C‑125/14, EU:C:2015:539, paragraph 21).44While it is true that the reference to the judgment of 6 October 2009, PAGO International (C‑301/07, EU:C:2009:611), is incorrect, it cannot entail the annulment of the contested decision, because it is an ancillary element in the Board of Appeal’s reasoning. It was not on the basis of that case-law, but on the basis of the principle of the unitary character of the EU trade mark, that the Board of Appeal decided, in paragraph 31 of the contested decision, to limit its examination to the territory of the Czech Republic.45Second, the applicant considers that the Board of Appeal was wrong to draw a parallel between the conditions for the registration of a sign, which prohibit, in particular, the registration of a sign where there is an absolute ground for refusal in only one part of the European Union, and the conditions for the revocation of the rights of the proprietor of an EU trade mark. For the applicant, the conditions laid down by Article 7 of Regulation No 207/2009 (now Article 7 of Regulation 2017/1001) differ considerably from those laid down by Article 51(1)(b) of that regulation.46That argument must be rejected. As was correctly noted by the Board of Appeal in paragraph 31 of the contested decision and as was recalled by EUIPO during the hearing, the unitary character of the EU trade mark is the basic legal principle underpinning the entirety of Regulation No 207/2009. That principle implies, in particular, that an EU trade mark is, at the time of its registration, distinctive throughout the European Union, and retains that distinctive character by not becoming, in even a limited part of the European Union or, as the case may be, in a single Member State, the common name in the trade for the goods and services in respect of which it was registered.47Furthermore, the applicant’s argument that Article 52 of Regulation No 207/2009 (now Article 59 of Regulation 2017/1001) refers to Article 7(2) of Regulation No 207/2009 (now Article 7(2) of Regulation 2017/1001), whereas Article 51(1)(b) of that regulation contains no such reference, cannot be accepted. First, Article 52 of Regulation No 207/2009 concerns the invalidity of an EU trade mark and not, as in the present case, the revocation of its proprietor’s rights. Second, as is apparent from paragraph 46 above, the unitary character of the EU trade mark constitutes the basic legal principle underpinning the entirety of Regulation No 207/2009. It is therefore irrelevant that certain provisions of that regulation, such as Article 7(2), explicitly give concrete expression to that principle, while others do not.48Third, during the hearing the applicant asserted that it would be serious and unfair to revoke the rights of the proprietor of an EU trade mark if that mark had become, in a single Member State, the common name in the trade for a product or a service in respect of which it was registered.49The Court notes that a revocation decision based on such a ground, however far-reaching its consequences for the proprietor of the trade mark in question, is inherent in the rule of law sought by the EU legislature, as can be seen from, in particular, Article 1(2) of Regulation No 207/2009. Further, in view of the principles of institutional balance and conferral of powers as enshrined in Article 13(2) TEU (see judgment of 28 July 2016, Council v Commission, C‑660/13, EU:C:2016:616, paragraphs 31 and 32 and the case-law cited), the General Court does not have jurisdiction to adjust that regulation. Accordingly, those rules can be amended only through intervention by the EU legislature. Moreover, the applicant has not raised any plea of illegality in respect of Article 51(1)(b) of Regulation No 207/2009.50In view of all of those factors, it must be held that the Board of Appeal did not err in law in relying, in order to revoke the contested mark, on evidence limited to the Czech Republic and the second complaint must, accordingly, be rejected as unfounded. Third complaint of the first plea in law, alleging an error of law as regards the relevant public to be taken into account for the purposes of assessing the ground for revocation 51In support of the third complaint of the first plea in law, the applicant submits that the Board of Appeal infringed Article 51(1)(b) of Regulation No 207/2009 by considering, in essence, that the relevant public for the assessment of the ground for revocation was confined to end users and that it was therefore not necessary to take the perception of the professionals concerned into account.5253In that regard, it is apparent from case-law that the question whether a trade mark has become the common name in the trade for a product or service in respect of which it is registered must be assessed not only in the light of the perception of consumers or end users but also, depending on the characteristics of the market concerned, in the light of the perception of professionals, such as sellers. However, in general, the perception of consumers or end users will play a decisive role. Thus, in a situation characterised by the loss of distinctive character of the trade mark concerned from the point of view of end users, that loss may result in the revocation of the rights conferred on the proprietor of the mark in question. The fact that sellers are aware of the existence of that trade mark and of the origin which it indicates cannot, on its own, preclude such revocation (see, to that effect and by analogy, concerning Article 12(2)(a) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks (OJ 2008 L 299, p. 25), judgment of 6 March 2014, Backaldrin Österreich The Kornspitz Company, C‑409/12, EU:C:2014:130, paragraphs 28 and 29 and the case-law cited).54It follows from that case-law that the relevant public, whose views must be taken into account in determining whether the contested mark has become the common name in the trade for a product or service in respect of which it is registered, must be defined in the light of the characteristics of the market for that product or service (see, to that effect and by analogy, judgment of 29 April 2004, Björnekulla Fruktindustrier, C‑371/02, EU:C:2004:275, paragraph 26; Opinion of Advocate General Cruz Villalón in Backaldrin Österreich The Kornspitz Company, C‑409/12, EU:C:2013:563, points 58 and 59).55In the present case, the Board of Appeal considered, in paragraph 32 of the contested decision, that it was necessary to examine only the perception of Czech end users of the goods and services in question. According to the Board of Appeal, it was not established that the markets for ‘exercise training’ and ‘exercise equipment’ had characteristics requiring the perception of professionals operating on those markets to be taken into consideration.56In its application, the applicant submits that the majority of its indoor cycles are sold to commercial operators of gyms, sports facilities and rehabilitation facilities.57In response to a written question from the Court, the applicant stated that, unlike commercial operators of gyms, sports facilities and rehabilitation facilities, end users very rarely buy its indoor cycles owing to their high purchase price. During the hearing, the applicant also stated, without being contradicted by the other parties, that its indoor cycles were sold to professional customers in 95% of cases.58At the hearing, all the parties agreed, in response to an oral question from the Court, that the sporting activity in question was practised on indoor cycles, in a group, generally in gyms, and under the guidance of a fitness instructor. Furthermore, the Court observes that that description is similar to the one used by the Cancellation Division and recalled by the Board of Appeal in the ‘Summary of the facts’ section of the contested decision.59The Board of Appeal was therefore wrong to consider, in paragraph 32 of the contested decision, that professional customers were not part of the relevant public as regards ‘exercise equipment’, since, in general, those indoor cycles are purchased by commercial operators of gyms, sports facilities and rehabilitation facilities.60It is true that, as was maintained by EUIPO at the hearing, the category of ‘exercise equipment’ is not limited to indoor cycles and that the other goods in question may be purchased by individuals. However, it is apparent from paragraph 57 above that, in view of their high purchase price, indoor cycles are rarely purchased by individuals. EUIPO’s argument does not therefore permit the exclusion of professional customers from the relevant public as regards ‘exercise equipment’.61In view of those factors, the Board of Appeal was wrong to exclude the perception of professional customers as regards ‘exercise equipment’ from its analysis in order to assess whether the contested mark had become the common name in the trade for the ‘exercise equipment’ in respect of which it was registered. Accordingly, the Board of Appeal made an error of assessment in defining the relevant public as regards the market for ‘exercise equipment’ in Class 28 by failing to take account of the perception of professional customers operating on that market.62That conclusion is not undermined by the fact that, as the intervener maintained during the hearing, the contested decision refers, in paragraphs 41, 45 to 47, 49, 53 and 62 thereof, to the perception of commercial operators. It must be pointed out that those references concern only the sporting activity in question, and not the ‘exercise equipment’. Only paragraph 44 of the contested decision makes explicit reference to the perception of the contested mark by commercial operators with regard to indoor cycles and shoes, but that reasoning concerns only the sellers of those sporting goods.63By contrast, the contested decision contains nothing relating to the perception of the contested mark by professional customers, such as, inter alia, operators of gyms, sporting facilities and rehabilitation facilities, acting as buyers of those goods. As is apparent from paragraphs 58 and 59 above, it is those operators who, as a general rule, purchase indoor cycles and subsequently make them available to their own customers in order to enable them to practise the sporting activity in question.64It must therefore be found, first, that those operators play a central role on the ‘exercise equipment’ market and, second, that they have a decisive influence on the selection, by end users, of ‘exercise training’ services. Through their knowledge of the contested mark’s function as an indication of origin, those operators thus enable the process of communication between providers and end users of those services to be successfully carried out (see, to that effect and by analogy, Opinion of Advocate General Cruz Villalón in Backaldrin Österreich The Kornspitz Company, C‑409/12, EU:C:2013:563, point 59).65That error of assessment in defining the relevant public vitiates the contested decision in its entirety and, accordingly, justifies its annulment.66However, as the applicant has limited the subject matter of the present action to the ‘exercise equipment’ in Class 28 and ‘exercise training’ in Class 41 covered by the contested mark, the effects of the contested decision must be maintained in respect of the ‘audio and video cassettes’ in Class 9 covered by that mark.67In the light of all of the foregoing, and without its being necessary to examine either the fourth complaint of the present plea in law or the second and third pleas raised in the present action, the third complaint of the first plea in law must be upheld and, accordingly, the contested decision must be annulled in so far as it concerns the goods in Class 28 and the services in Class 41 covered by the contested mark. Costs 68Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.69Since EUIPO and the intervener have been unsuccessful, first, EUIPO must be ordered to bear its own costs and to pay those incurred by the applicant, in accordance with the form of order sought by the latter, and, second, the intervener must be ordered to bear its own costs.On those grounds,THE GENERAL COURT (Ninth Chamber)hereby: 1. Annuls the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 21 July 2016 (Case R 2375/2014-5) in so far as it concerns the goods in Class 28 and the services in Class 41 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended; 2. Orders EUIPO to bear its own costs and to pay those incurred by Mad Dogg Athletics, Inc.; 3. Orders Aerospinning Master Franchising, s.r.o. to bear its own costs. GervasoniKowalik-BańczykMac EochaidhDelivered in open court in Luxembourg on 8 November 2018.E. CoulonRegistrarS. GervasoniPresident( *1 ) Language of the case: English. | 7fc0e-88f703b-4012 | EN |
The General Court annuls the regulation on the energy labelling of vacuum cleaners | 8 November 2018 ( *1 )(Directive 2010/30/EU — Indication by labelling and standard product information of the consumption of energy and other resources by energy-related products — Commission delegated regulation supplementing the directive — Energy labelling of vacuum cleaners — Essential element of an enabling act)In Case T‑544/13 RENV, Dyson Ltd, established in Malmesbury (United Kingdom), represented by F. Carlin, Barrister, E. Batchelor and M. Healy, Solicitors, and A. Patsa, lawyer,applicant,v European Commission, represented by L. Flynn, K. Herrmann and K. Talabér-Ritz, acting as Agents,defendant,APPLICATION pursuant to Article 263 TFEU seeking the annulment of Commission Delegated Regulation (EU) No 665/2013 of 3 May 2013 supplementing Directive 2010/30/EU of the European Parliament and of the Council with regard to energy labelling of vacuum cleaners (OJ 2013 L 192, p. 1),THE GENERAL COURT (Fifth Chamber),composed of D. Gratsias, President, I. Labucka (Rapporteur) and I. Ulloa Rubio, Judges,Registrar: N. Schall, Administrator,having regard to the written part of the procedure and further to the hearing on 13 March 2018,gives the following Judgment 1By its application, the applicant, Dyson Ltd, a company incorporated under the law of England and Wales that employs 4400 people worldwide and designs, manufactures and markets bagless vacuum cleaners in over 60 countries, seeks the annulment of Commission Delegated Regulation (EU) No 665/2013 of 3 May 2013 supplementing Directive 2010/30/EU of the European Parliament and of the Council with regard to energy labelling of vacuum cleaners (OJ 2013 L 192, p. 1) (‘the contested regulation’). Legal context 2The contested regulation was adopted by the European Commission in order to supplement Directive 2010/30/EU of the European Parliament and of the Council of 19 May 2010 on the indication by labelling and standard product information of the consumption of energy and other resources by energy-related products (OJ 2010 L 153, p. 1), with respect to energy labelling of vacuum cleaners. Directive 2010/30 3According to Article 1(1) and (2) thereof, Directive 2010/30 ‘establishes a framework for the harmonisation of national measures on end-user information, particularly by means of labelling and standard product information, on the consumption of energy and where relevant of other essential resources during use, and supplementary information concerning energy-related products, thereby allowing end-users to choose more efficient products’, with the directive applying ‘to energy-related products which have a significant direct or indirect impact on the consumption of energy and, where relevant, on other essential resources during use’.4Article 5(a) of Directive 2010/30 provides that Member States are to ensure that ‘suppliers placing on the market or putting into service products covered by a delegated act supply a label and a fiche in accordance with [that directive] and the delegated act’.5Article 10 of Directive 2010/30, entitled ‘Delegated acts’, provides:‘1. The Commission shall lay down details relating to the label and the fiche by means of delegated acts in accordance with Articles 11 to 13, relating to each type of product in accordance with this Article.Where a product meets the criteria listed in paragraph 2, it shall be covered by a delegated act in accordance with paragraph 4.Provisions in delegated acts regarding information provided on the label and in the fiche on the consumption of energy and other essential resources during use shall enable end-users to make better informed purchasing decisions and shall enable market surveillance authorities to verify whether products comply with the information provided.Where a delegated act lays down provisions with respect to both energy efficiency and consumption of essential resources of a product, the design and content of the label shall emphasise the energy efficiency of the product.2. The criteria referred to in paragraph 1 are the following:(a)according to most recently available figures and considering the quantities placed on the Union market, the products shall have a significant potential for saving energy and, where relevant, other essential resources;(b)products with equivalent functionality available on the market shall have a wide disparity in the relevant performance levels;(c)the Commission shall take into account relevant Union legislation and self-regulation, such as voluntary agreements, which are expected to achieve the policy objectives more quickly or at lesser expense than mandatory requirements.3. In preparing a draft delegated act, the Commission shall:take into account those environmental parameters set out in Annex I, Part 1, to Directive 2009/125/EC which are identified as significant in the relevant implementing measure adopted under Directive 2009/125/EC and which are relevant for the end-user during use;assess the impact of the act on the environment, end-users and manufacturers, including small and medium-sized enterprises (SMEs), in terms of competitiveness including on markets outside the Union, innovation, market access and costs and benefits;carry out appropriate consultation with stakeholders;(d)set implementing date(s), any staged or transitional measures or periods, taking into account in particular possible impacts on SMEs or on specific product groups manufactured primarily by SMEs.4. The delegated acts shall specify in particular:the exact definition of the type of products to be included;the measurement standards and methods to be used in obtaining the information referred to in Article 1(1);the details of the technical documentation required pursuant to Article 5;the design and content of the label referred to in Article 4, which as far as possible shall have uniform design characteristics across product groups and shall in all cases be clearly visible and legible. The format of the label shall retain as a basis the classification using letters from A to G; the steps of the classification shall correspond to significant energy and cost savings from the end-user perspective.Three additional classes may be added to the classification if required by technological progress. Those additional classes will be A+, A++, and A+++ for the most efficient class. In principle the total number of classes will be limited to seven, unless more classes are still populated.The colour scale shall consist of no more than seven different colours from dark green to red. The colour code of only the highest class shall always be dark green. If there are more than seven classes, only the red colour can be duplicated.The classification shall be reviewed in particular when a significant proportion of products on the internal market achieves the two highest energy efficiency classes and when additional savings may be achieved by further differentiating products.Detailed criteria for a possible reclassification of products are, where appropriate, to be determined on a case-by-case basis in the relevant delegated act;(e)…(f)the content and, where appropriate, the format and other details concerning the fiche or further information specified in Article 4 and Article 5(c). The information on the label shall also be included on the fiche;(g)the specific content of the label for advertising, including, as appropriate, the energy class and other relevant performance level(s) of the given product in a legible and visible form;(h)the duration of label classification(s), where appropriate, in accordance with [subparagraph] (d);(i)the level of accuracy in the declarations on the label and fiches;(j)the date for the evaluation and possible revision of the delegated act, taking into account the speed of technological progress.’6Article 11 of Directive 2010/30, entitled ‘Exercise of the delegation’, states as follows:‘1. The powers to adopt the delegated acts referred to in Article 10 shall be conferred on the Commission for a period of five years beginning on 19 June 2010. The Commission shall make a report in respect of the delegated powers not later than six months before the end of the five-year period. The delegation of powers shall be automatically extended for periods of an identical duration, unless the European Parliament or the Council revokes it in accordance with Article 12.2. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.…’ Contested regulation 7In order to supplement Directive 2010/30 with respect to energy labelling of vacuum cleaners, the Commission adopted the contested regulation on 3 May 2013.8Article 1(1) of the contested regulation states that it ‘establishes requirements for the labelling and the provision of supplementary product information for electric mains-operated vacuum cleaners, including hybrid vacuum cleaners’.9Article 3 of the contested regulation, entitled ‘Responsibilities of suppliers and timetable’, provides:‘1. Suppliers shall ensure that from 1 September 2014:each vacuum cleaner is supplied with a printed label in the format and containing the information set out in Annex II;a product fiche, as set out in Annex III, is made available;the technical documentation as set out in Annex IV is made available on request to the authorities of the Member States and to the Commission;any advertisement for a specific model of vacuum cleaner contains the energy efficiency class, if the advertisement discloses energy-related or price information;any technical promotional material concerning a specific model of vacuum cleaner which describes its specific technical parameters includes the energy efficiency class of that model.2. The format of the label set out in Annex II shall be applied according to the following timetable:for vacuum cleaners placed on the market from 1 September 2014 labels shall be in accordance with label 1 of Annex II;for vacuum cleaners placed on the market from 1 September 2017 labels shall be in accordance with label 2 of Annex II.’10Article 5 of the contested regulation, entitled ‘Measurement methods’, states that the ‘information to be provided under Articles 3 and 4 shall be obtained by reliable, accurate and reproducible measurement and calculations methods, which take into account the recognised state-of-the-art measurement and calculation methods, as set out in Annex VI’.11Article 7 of the contested regulation, entitled ‘Revision’, provides:‘The Commission shall review this Regulation in light of technological progress no later than five years after its entry into force. The review shall in particular assess the verification tolerances set out in Annex VII, whether full size battery operated vacuum cleaners should be included in the scope and whether it is feasible to use measurement methods for annual energy consumption, dust pick-up and dust re-emission that are based on a partly loaded rather than an empty receptacle.’12Point 1 of Annex VI to the contested regulation states:‘For the purposes of compliance and verification of compliance with the requirements of this Regulation, measurements and calculations shall be made using … reliable, accurate and reproducible methods that take into account the generally recognised state-of-the-art measurement and calculation methods, including harmonised standards the reference numbers of which have been published for the purpose in the Official Journal of the European Union. They shall meet the technical definitions, conditions, equations and parameters set out this Annex.’13The contested regulation was published in the Official Journal of the European Union of 13 July 2013. Proceedings before the General Court and the Court of Justice 14By application lodged at the General Court Registry on 7 October 2013, the applicant claimed that the General Court should annul the contested regulation.15In support of its action, the applicant put forward three pleas in law, alleging, first, lack of competence on the part of the Commission, secondly, a failure to provide a statement of reasons for the contested regulation and, thirdly, an infringement of the principle of equal treatment.16The Commission lodged a defence at the General Court Registry on 18 November 2013 whereby it requested the General Court to dismiss the action and order the applicant to bear the costs.17By judgment of 11 November 2015, Dyson v Commission (T‑544/13, ‘the initial judgment’, EU:T:2015:836), the General Court dismissed the action and ordered the applicant to pay the costs.18By application lodged at the Registry of the Court of Justice on 25 January 2016, the applicant brought an appeal against the initial judgment.19By judgment of 11 May 2017, Dyson v Commission (C‑44/16 P, ‘the judgment on appeal’, EU:C:2017:357), the Court of Justice set aside the initial judgment, in so far as it had rejected the first part of the first plea in law and the third plea in law put forward at first instance, referred the case back to the General Court for it to give judgment on the first part of the first plea in law and the third plea in law put forward at first instance, and reserved the costs. Procedure and forms of order sought after referral back 20After delivery of the judgment on appeal and in accordance with Article 215 of the Rules of Procedure of the General Court, the present case was assigned to the Fifth Chamber of the General Court.21In accordance with Article 217(1) of the Rules of Procedure, the applicant and the Commission lodged within the prescribed time limits their written observations on the conclusions to be drawn from the judgment on appeal for the outcome of the proceedings.22In accordance with Article 217(3) of the Rules of Procedure, the applicant submitted a request that it be allowed to lodge a supplementary statement on the Commission’s written observations.23By decision of the President of the Fifth Chamber of the Court of 9 August 2017, the Court refused the applicant’s request.24In accordance with Article 67(2) of the Rules of Procedure, the applicant requested that the Court give priority to the present proceedings.25By decision of the President of the Fifth Chamber of the Court of 9 August 2017, the Court decided to give priority to the present case.26In accordance with Article 106(2) of the Rules of Procedure, the applicant and the Commission submitted a request, on 29 and 30 August 2017 respectively, to be heard at an oral hearing.27By letter of 21 February 2018, the applicant requested the use of technical means at the hearing in order to incorporate a PowerPoint presentation into its oral submissions.28By decision of the President of the Fifth Chamber of the Court of 26 February 2018, the Court authorised the applicant to use the technical means requested.29Without formally objecting to the use of technical means at the hearing, the Commission requested that the applicant be ordered to identify clearly in its PowerPoint presentation the places in the case file which were being referred to, on pain of inadmissibility.30In addition, the Commission requested that the applicant be ordered to provide a copy of the PowerPoint presentation two working days before the hearing.31By a measure of organisation of procedure dated 7 March 2018, the Court (Fifth Chamber) requested the applicant to produce a hard copy of the Powerpoint presentation in advance of the hearing.32On 12 March 2018, the applicant forwarded to the Court Registry a hard copy of its PowerPoint presentation.33The parties presented oral argument on 13 March 2018.34At the hearing, the Commission argued that the diagrams relating to the third plea in law in the action, included in the PowerPoint presentation, did not correspond with the case file in Case T‑544/13 or in the present case and requested the Court to declare them inadmissible.35The applicant claims that the Court should:–annul the contested regulation;order the Commission to pay all of the costs.36The Commission contends that the Court should:dismiss the action;order the applicant to pay the costs. Law Scope of the action after referral back 37In support of its action at first instance, the applicant puts forward three pleas in law. The first alleges lack of competence on the part of the Commission, the second a failure to provide a statement of reasons for the contested regulation, and the third an infringement of the principle of equal treatment.38By the judgment on appeal, the Court of Justice, first, set aside the initial judgment in so far as the General Court had rejected the first part of the first plea in law and the third plea in law put forward at first instance and, secondly, referred the case back to the General Court for it to rule again on the first part of the first plea in law and the third plea in law put forward at first instance (judgment on appeal, points 1 and 2 of the operative part).39As regards the first plea in law in the action, the extent to which the initial judgment is set aside is limited to the first part of that plea.40According to the Court of Justice, the appeal lodged by the applicant did not aim to contest the General Court’s reasoning which led to the rejection of the second part of that plea (judgment on appeal, paragraph 48).41Consequently, in the present case the General Court must only examine the legality of the contested regulation in the light of the first part of the first plea in law and the third plea in law. The first plea in law in the action, alleging lack of competence on the part of the Commission The characterisation of the first plea in law in the action 42By the judgment on appeal, the Court of Justice held that the General Court had erred in law by failing to rule on one of the pleas in law in the application (judgment on appeal, paragraph 54).43That error of law stems, according to the Court of Justice, from the General Court’s mischaracterisation of the first plea in law in the action, in that the General Court considered that the applicant was not alleging lack of competence per se on the part of the Commission to adopt the contested regulation, but rather was in essence challenging the exercise of that competence. The General Court had, therefore, found that the first plea in law in the action essentially alleged a manifest error of assessment (judgment on appeal, paragraph 51).44However, according to the Court of Justice, it is clear beyond dispute from the application that the first plea in law in support of annulment alleges that the Commission is not competent to adopt the contested regulation (judgment on appeal, paragraph 50).45More particularly, in the view of the Court of Justice, the applicant essentially complains that in adopting the contested regulation the Commission had disregarded an essential element of the enabling act by taking as the method of calculating the energy performance of vacuum cleaners a method based on tests with an empty receptacle, whereas Article 10 of Directive 2010/30 requires that method to reflect normal conditions of use (judgment on appeal, paragraph 50).46The Court of Justice adds that the extent of the discretion conferred by the enabling act is a different point of law from the question of compliance with the limits of the power conferred by the enabling act (judgment on appeal, paragraph 52).47Consequently, in accordance with the judgment on appeal, the first plea in law in the action must be regarded as alleging that the Commission had disregarded an essential element of the enabling act comprised by Directive 2010/30, and not as alleging a manifest error of assessment by the Commission in the adoption of the contested regulation. The first part of the first plea in the action, alleging a failure by the Commission to take account of an essential element of the enabling act comprised by Directive 2010/30 48By the first part of the first plea in the action, the applicant submits that the contested regulation will mislead consumers as to the energy efficiency of vacuum cleaners, because the cleaning performance is measured with tests where the vacuum cleaner’s receptacle is empty and, therefore, not ‘during use’, as a result of which the contested regulation infringes the terms, the objectives and the general scheme of Directive 2010/30, regarding the energy efficiency of vacuum cleaners.49In order to argue a lack of competence on the part of the Commission, the applicant, first of all, observes that the objective of Directive 2010/30 is to promote energy efficiency by providing end-users with accurate information relating to the consumption of energy and other essential resources ‘during use’.50The purpose of Directive 2010/30 is, therefore, first, to allow end-users to choose more efficient products and, secondly, to encourage vacuum cleaner manufacturers to take steps to reduce energy consumption.51Next, the applicant submits that the contested regulation does not satisfy the terms, the objectives or the general scheme of Directive 2010/30.52According to the applicant, the contested regulation does not allow consumers to be provided with accurate information on energy efficiency since, first, the tests for taking account of a vacuum cleaner’s energy performance provided for by the contested regulation lead to incorrect results, in the sense that those tests are carried out with an empty receptacle, not a dust-loaded one, and, secondly, the tests carried out with an empty receptacle cannot duly take into account a vacuum cleaner’s energy performance since those tests are not carried out during actual usage conditions.53In addition, the contested regulation does not encourage manufacturers to opt for the best design choice since there is no incentive for them to invest in order to work around the loss of suction and, thereby, reduce the increase in energy consumption stemming from a dust-loaded receptacle.54Lastly, the applicant submits that the contested regulation could lead to an increase in energy consumption, whereas the objective of Directive 2010/30 is to reduce energy consumption.55In its observations on the judgment on appeal, the applicant interprets the latter as meaning that the General Court must determine whether the Commission can demonstrate that, at the time of adoption of the contested regulation, no scientifically valid method of determining the energy performance of a vacuum cleaner with a dust-loaded receptacle could have been used; if the Commission cannot, it acted ‘ultra vires’.56The applicant further submits that the Commission acknowledges that a test carried out with a dust-loaded receptacle is sufficiently accurate, reliable and reproducible, that that method has been the subject of ‘inter-laboratory testing’, confirming its reproducible nature, that national authorities and national courts have accepted that the tests with a dust-loaded receptacle were scientifically valid and that the Commission should have persevered in the development of a method of calculation based on dust-loaded tests.57In its observations on the judgment on appeal, the Commission interprets the latter to the effect that the General Court must assess whether the method adopted in the contested regulation was as close as possible to actual conditions of use and was so at the moment when the contested regulation was adopted.58The Commission maintains that it acted within the limits of its powers with regard to an essential element of Directive 2010/30, which is to adopt a test method which is as close as possible to actual conditions of use.59According to the Commission, that follows from the mandate issued to the European Committee for Electrotechnical Standardisation (Cenelec), from the grant agreement concluded with the latter and from subsequent research, in so far as, with no particular method imposed in advance, studies performed by Cenelec all lead to the conclusion that only a test with an empty receptacle can present scientifically comparable results between several laboratories.60That conclusion cannot be called into question, according to the Commission, by the fact that it allows a dust-loaded test in the durability study for vacuum cleaner motors, required by Commission Regulation (EU) No 666/2013 of 8 July 2013 implementing Directive 2009/125/EC of the European Parliament and of the Council with regard to ecodesign requirements for vacuum cleaners (OJ 2013 L 192, p. 24).61Consequently, in the context of the first plea in law in so far as it alleges a lack of competence on the part of the Commission, the applicant submits, in the first part of that plea, that the Commission infringed the delegated power it derived from Article 10(1) of Directive 2010/30.62The Court must, therefore, ascertain, first, whether the contested regulation failed to have regard to essential elements of Directive 2010/30, in the light of its terms, and if so determine, secondly, the effect of such a failure.63In the first place, it must be noted that in the judgment on appeal the Court of Justice held precisely that information for consumers on the energy efficiency of products during use, as stemmed from Article 1 and the third subparagraph of Article 10(1) of Directive 2010/30, was an essential objective of that directive, and reflected a political choice falling within the responsibilities of the EU legislature (judgment on appeal, paragraph 64).64It follows, first, from recitals 5 and 8 of Directive 2010/30 that the ‘provision of accurate, relevant and comparable information on the … energy consumption’ of products ‘plays a key role in the operation of market forces’ and hence in the guiding of consumption towards products which ‘consume … less energy … during use’ (judgment on appeal, paragraph 64).65Secondly, Article 1(1) of Directive 2010/30 provides that the aim of that directive is to harmonise national measures on information for end-users on energy consumption ‘during use’, so that they can choose ‘more efficient’ products (judgment on appeal, paragraph 64).66In addition, as is apparent from the judgment on appeal, the interpretation of the expression ‘during use’ in the third subparagraph of Article 10(1) of Directive 2010/30 as referring to the actual conditions of use is not an ‘excessively broad’ interpretation of Article 10 of that directive, but the very meaning of that specification (judgment on appeal, paragraph 66).67That statement cannot be called into question, according to the judgment on appeal, by the fact that the contested regulation seeks only to supplement the directive, not to amend it (judgment on appeal, paragraph 65).68Consequently, according to the Court of Justice, it is apparent from the foregoing that the Commission was obliged, in order not to disregard an essential element of Directive 2010/30, to adopt in the contested regulation a method of calculation which made it possible to measure the energy performance of vacuum cleaners in conditions as close as possible to actual conditions of use, requiring the vacuum cleaner’s receptacle to be filled to a certain level, having regard nevertheless to the requirements concerning the scientific validity of the results obtained and the accuracy of the information supplied to consumers, as mentioned in particular in recital 5 and Article 5(b) of that directive (judgment on appeal, paragraph 68).69In that regard, it is apparent from paragraph 68 of the judgment on appeal that, in order for the method adopted by the Commission to accord with the essential elements of Directive 2010/30, two cumulative conditions must be met.70First, in order to measure the energy performance of vacuum cleaners in conditions as close as possible to actual conditions of use, a vacuum cleaner’s receptacle must be filled to a certain level.71Secondly, the method adopted must satisfy certain requirements concerning the scientific validity of the results obtained and the accuracy of the information supplied to consumers.72In the present case, it is apparent from both Article 7 of the contested regulation and the whole of the file in the present case that the Commission adopted a method for calculating the energy performance of vacuum cleaners based on an empty receptacle.73It must, therefore, be found that the first condition laid down by the enabling act as interpreted by the judgment on appeal is not met.74That finding is sufficient to conclude that the Commission failed to have regard to an essential element of the enabling act.75Indeed, since the method adopted by the Commission does not meet the first condition, there is no need to adjudicate on whether that method meets the second condition laid down by the enabling act comprised by Directive 2010/30.76In addition, if no method of calculation carried out with a receptacle filled to a certain level met the requirements concerning the scientific validity of the results obtained and the accuracy of the information supplied to consumers, it remained open to the Commission to exercise its right of legislative initiative, in accordance with Article 289(1) TFEU, in order to propose an amendment of the enabling act to the EU legislature.77Consequently, the first part of the first plea in law must be upheld.78In the second place, according to the case-law, the General Court may not, merely because it considers a plea relied on by the appellant in support of its action for annulment to be well founded, automatically annul the challenged act in its entirety. Annulment of the act in its entirety is not acceptable where it is obvious that that plea, directed only at a specific part of the challenged act, is such as to provide a basis only for partial annulment (judgment of 11 December 2008, Commission v Département du Loiret, C‑295/07 P, EU:C:2008:707, paragraph 104).79It is settled case-law that partial annulment of an EU act is possible only if the elements the annulment of which is sought may be severed from the remainder of the act. That requirement of severability is not satisfied in the case where the partial annulment of an act would have the effect of altering its substance (see judgment of 11 December 2008, Commission v Département du Loiret, C‑295/07 P, EU:C:2008:707, paragraphs 105 and 106 and the case-law cited).80In the present case, it must be found that a partial annulment of the contested regulation, that is only in so far as by that regulation the Commission adopted a calculation method based on an empty receptacle, cannot be accepted.81The latter element cannot be severed from the remainder of the act, since the entirety of the information which the energy labelling of vacuum cleaners must cover is meant to be collected on the basis of such a calculation method.82The contested regulation must, therefore, be annulled in its entirety, and there is no need to adjudicate on either the third plea in law in the action or the claims that the diagrams presented at the hearing, which relate to the third plea, are inadmissible. Costs 83Pursuant to Article 219 of the Rules of Procedure, in decisions of the General Court given after its decision has been set aside and the case referred back to it, it is to decide on the costs relating to the proceedings instituted before it and to the proceedings on the appeal before the Court of Justice.84Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the applicant, in accordance with the form of order sought by the latter, including the costs relating to the proceedings on appeal before the Court of Justice.On those grounds,THE GENERAL COURT (Fifth Chamber)hereby: 1. Annuls Commission Delegated Regulation (EU) No 665/2013 of 3 May 2013 supplementing Directive 2010/30/EU of the European Parliament and of the Council with regard to energy labelling of vacuum cleaners; 2. Orders the European Commission to pay the costs, including those relating to the proceedings on appeal before the Court of Justice. GratsiasLabuckaUlloa RubioDelivered in open court in Luxembourg on 8 November 2018.E. CoulonRegistrarD. GratsiasPresident( *1 ) Language of the case: English. | c3e2e-c3363a6-4f22 | EN |
The exclusive operation of a national mobile payment system by an undertaking controlled by the Hungarian State is contrary to EU law | 7 November 2018 ( *1 )(Failure of a Member State to fulfil obligations — Directive 2006/123/EC — Articles 15 to 17 — Article 49 TFEU — Freedom of establishment — Article 56 TFEU — Freedom to provide services — National mobile payment system — Monopoly)In Case C‑171/17,ACTION under Article 258 TFEU for failure to fulfil obligations, brought on 5 April 2017, European Commission, represented by V. Bottka and H. Tserepa-Lacombe, acting as Agents,applicant,v Hungary, represented by M.Z. Fehér and G. Koós, acting as Agents,defendant,THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Seventh Chamber, acting as President of the Fourth Chamber, K. Jürimäe (Rapporteur), C. Lycourgos, E. Juhász, and C. Vajda, Judges,Advocate General: Y. Bot,Registrar: I. Illéssy, Administrator,having regard to the written procedure and further to the hearing on 14 March 2018,after hearing the Opinion of the Advocate General at the sitting on 14 June 2018,gives the following Judgment 1By its application, the European Commission asks the Court to find that, by instituting and maintaining in force the national mobile payment system governed by a nemzeti mobil fizetési rendszerről szóló 2011. évi CC. törvény (Magyar Közlöny 2011/164) (Law CC of 2011 on the national mobile payment system; ‘the mobile payment system law’) and by 356/2012. (XII. 13.) Korm. rendelet a nemzeti mobil fizetési rendszerről szóló törvény végrehajtásáról (Governmental Decree No 356/2012 implementing the mobile payment system law; ‘the Governmental Decree’), Hungary has failed to fulfil its obligations under Article 15(2)(d) and Article 16(1) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36), and, in the alternative, under Articles 49 and 56 TFEU. I. Legal context A. European Union law 2Recitals 8, 17, 70 and 72 of Directive 2006/123 state:‘(8)It is appropriate that the provisions of this directive concerning the freedom of establishment and the free movement of services should apply only to the extent that the activities in question are open to competition, so that they do not oblige Member States either to liberalise services of general economic interest or to privatise public entities which provide such services or to abolish existing monopolies for other activities or certain distribution services.…(17)This Directive covers only services which are performed for an economic consideration. Services of general interest are not covered by the definition in Article [57 TFEU] and therefore do not fall within the scope of this Directive. Services of general economic interest are services that are performed for an economic consideration and therefore do fall within the scope of this Directive. However, certain services of general economic interest, such as those that may exist in the field of transport, are excluded from the scope of this Directive and certain other services of general economic interest, for example, those that may exist in the area of postal services, are the subject of a derogation from the provision on the freedom to provide services set out in this Directive. …(70)For the purposes of this directive, and without prejudice to Article [14 TFEU], services may be considered to be services of general economic interest only if they are provided in application of a special task in the public interest entrusted to the provider by the Member State concerned. This assignment should be made by way of one or more acts, the form of which is determined by the Member State concerned, and should specify the precise nature of the special task.(72)Services of a general economic interest are entrusted with important tasks relating to social and territorial cohesion. The performance of these tasks should not be obstructed as a result of the evaluation process provided for in this directive. Requirements which are necessary for the fulfilment of such tasks should not be affected by this process while, at the same time, unjustified restrictions on the freedom of establishment should be addressed.’3Article 1 of the directive provides:‘…2. This Directive does not deal with the liberalisation of services of general economic interest, reserved to public or private entities, nor with the privatisation of public entities providing services.3. This Directive does not deal with the abolition of monopolies providing services nor with aids granted by Member States which are covered by [EU] rules on competition.This Directive does not affect the freedom of Member States to define, in conformity with [EU] law, what they consider to be services of general economic interest, how those services should be organised and financed, in compliance with State aid rules, and which specific obligations they should be subject to.…’4Article 2(2) of that directive states:‘This directive shall not apply to the following activities:(a)non-economic services of general interest;(i)activities which are connected with the exercise of official authority as set out in Article [51 TFEU];5Article 4, point 7, of that directive defines ‘requirement’ as ‘any obligation, prohibition, condition or limit provided for in the laws, regulations or administrative provisions of the Member States or in consequence of case-law, administrative practice, the rules of professional bodies, or the collective rules of professional associations or other professional organisations adopted in the exercise of their legal autonomy ...’.6Article 15 of Directive 2006/123, entitled ‘Requirements to be evaluated’, provides:‘1. Member States shall examine whether, under their legal system, any of the requirements listed in paragraph 2 are imposed and shall ensure that any such requirements are compatible with the conditions laid down in paragraph 3. Member States shall adapt their laws, regulations or administrative provisions so as to make them compatible with those conditions.2. Member States shall examine whether their legal system makes access to a service activity or the exercise of it subject to compliance with any of the following non-discriminatory requirements:(d)requirements, other than those concerning matters covered by Directive 2005/36/EC [of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22)] or provided for in other [EU] instruments, which reserve access to the service activity in question to particular providers by virtue of the specific nature of the activity;3. Member States shall verify that the requirements referred to in paragraph 2 satisfy the following conditions:non-discrimination: requirements must be neither directly nor indirectly discriminatory according to nationality nor, with regard to companies, according to the location of the registered office;(b)necessity: requirements must be justified by an overriding reason relating to the public interest;(c)proportionality: requirements must be suitable for securing the attainment of the objective pursued; they must not go beyond what is necessary to attain that objective and it must not be possible to replace those requirements with other, less restrictive measures which attain the same result.4. Paragraphs 1, 2 and 3 shall apply to legislation in the field of services of general economic interest only in so far as the application of these paragraphs does not obstruct the performance, in law or in fact, of the particular task assigned to them.7Article 16(1) of that directive is worded as follows:‘Member States shall respect the right of providers to provide services in a Member State other than that in which they are established.The Member State in which the service is provided shall ensure free access to and free exercise of a service activity within its territory.Member States shall not make access to or exercise of a service activity in their territory subject to compliance with any requirements which do not respect the following principles:non-discrimination: the requirement may be neither directly nor indirectly discriminatory with regard to nationality or, in the case of legal persons, with regard to the Member State in which they are established;necessity: the requirement must be justified for reasons of public policy, public security, public health or the protection of the environment;proportionality: the requirement must be suitable for attaining the objective pursued, and must not go beyond what is necessary to attain that objective.’8Article 17, point 1, of that directive provides that Article 16 of the directive does not apply to services of general economic interest (‘SGEIs’), which are provided in another Member State, inter alia in the sectors set out in Article 17, point 1. B. Hungarian law 1. The mobile payment system law 9The mobile payment system law changed the legal framework for mobile payment services with effect from 1 April 2013, although it only became binding as from 2 July 2014.10Article 1(d) of that law provides:‘For the purposes of this law:mobile payment system shall mean any system in which a customer buys a service using an electronic marketing [(“e-commerce”)] system accessible wirelessly, using telecommunications equipment, digital equipment or other computing equipment.’11Article 2 of that law provides:‘The following shall be deemed to be a centralised mobile commerce service:the public parking service (car parks) in accordance with a közúti közlekedésről szóló 1988. évi I. törvény (Law No I of 1988 on road traffic; “the Road Traffic Law”);access to the road network for transport purposes for payment of a user charge or toll;the passenger transport service supplied as a public service by a service provider in which the State or a local authority has a majority holding;any service not falling within the categories listed in points (a) to (c) above, provided as a public service by a body in which the State or a local authority has a majority holding.’12Article 3 of that law provides:‘(1) The service provider is required to employ a mobile payment system to supply a service subject to centralised mobile commerce — with the exception of the service referred to in Article 2(d).(2) The service provider shall fulfil its obligation under paragraph 1 where it is:wholly owned by the State, orwholly owned by a body which is itself wholly owned by the State, using the uniform national system (“national mobile payment system”) operated by the government-appointed body (“national mobile payment body”).(3) If the service provider offers the service referred to in Article 2(d) via a mobile payment system, it may offer that service using only the national mobile payment system.(4) Operation of the national mobile payment system is a public service in respect of which the Minister for Information Technology and the national mobile payment body shall enter into a public service agreement.(5) The operation of the national mobile payment system is an economic activity exclusive to the State, which the national mobile payment body shall carry out without a concession contract being concluded. 2. The Governmental Decree 13The Governmental Decree, which entered into force on 1 April 2013, contains the provisions implementing the mobile payment system law.14Article 8 of that decree provides:‘(1) Unless otherwise specified, the fee to be paid by the client as a fee for the mobile payment product corresponds to the charge that the client would pay if he had purchased the service without using the national mobile payment system. The service provider may encourage the acquisition of the service as a mobile payment product by means of discounts.(2) In addition to the fee for the mobile payment product in accordance with paragraph 1, the client shall pay the national mobile payment body a convenience fee in the amount indicated below, for the specified services:50 [Hungarian] forints [(HUF)] per transaction in respect of the marketing of the public service for parking (car park),[HUF] 50 per transaction in respect of the marketing of tolls referred to in Article 33/A of the Road Traffic Law,(3) The national mobile payment body shall invoice the client for the convenience fee — if the purchase of the centralised mobile commerce service is completed — together with the fee for the centralised mobile commerce service.15Article 24/A(1) of that decree provides:‘In addition to the fee for the mobile payment product in accordance with Article 8(1), the trader shall pay the national mobile payment body a convenience fee in the amount indicated below, for the specified services:[HUF] 40 per transaction in respect of the marketing of the public parking service (car park),[HUF] 0 per transaction in respect of the marketing of tolls in accordance with Article 33/A of the Road Traffic Law,[HUF] 0 per transaction in respect of the marketing of tolls according to the Law on tolls,[HUF] 0 per transaction in respect of the marketing of a public transport ticket,(e)[HUF] 75 per transaction in respect of the services referred to in Article 2(d) of the mobile payment system law.’16Article 31 of that decree concerns the resale fee. Article 31(1) is worded as follows:‘The resale fee shall be calculated on the basis of the amount excluding [value added tax] of the fee payable by the client in accordance with Article 8(1) and shall be set at:10% in respect of the marketing of the public parking service (car park),5% in respect of the marketing of tolls in accordance with Article 33/A of the Road Traffic Law,5% in respect of the marketing of a transport ticket,5% in respect of the marketing of tolls according to the Law on tolls.’ II. Pre-litigation procedure and the proceedings before the Court 17On 14 December 2012, the Commission, finding that the application of the mobile payment system law and the Governmental Decree would lead to the operation by a single, State-controlled undertaking of a national mobile payment system the use of which is mandatory, opened EU Pilot procedure No 4372/12/MARK, in the context of which the Commission sent Hungary a request for information. The Hungarian authorities replied to that request on 22 February 2013.18The Commission, having found that reply to be inadequate and taking the view that, by the adoption of Article 3(2) to (5) of the mobile payment system law, Hungary had failed to fulfil its obligations under Articles 15 and 16 of Directive 2006/123 and Articles 49 and 56 TFEU, sent a letter of formal notice, on 21 November 2013, to that Member State.19By a letter of 22 January 2014, Hungary responded to that letter of formal notice. It argued, first, that the Member States have a broad discretion in defining SGEIs, which the Commission may call into question only in the event of manifest error. The national mobile payment system in question is an SGEI, since it has certain specific characteristics as compared with ordinary economic activities, it is accessible to all and market forces alone could not provide the service in a satisfactory manner. Secondly, through a standardisation enabling uniform implementation, individualisation and interoperability, Hungary satisfies the requirements of mobile payment systems, which were defined by the Commission in particular in its Green Paper entitled ‘Towards an integrated European market for card, internet and mobile payments’ (COM(2011) 941 final). Thirdly, it is in the public interest and not for economic reasons that that Member State has removed the services offered by the platform in question from the effects of competition. Mobile payment of parking spaces is thus the only payment method which enables calculation of the fee for the actual duration of parking. Fourthly, the private providers who previously offered that service have not suffered any loss that that Member State would be bound to make good, since they could continue, as resellers, to operate, in the same manner, the platform and the infrastructure which they had put in place. Fifthly, it is only through a central, national platform, based on an exclusive right, that it would be possible to offer customers a uniform and guaranteed service. Sixthly, Hungary argues that the national mobile payment system at issue operates as a monopoly providing services. Under Article 1(3) of Directive 2006/123, such a monopoly falls outside the scope of that directive.20On 11 July 2014, the Commission issued a reasoned opinion in which it maintained the position which it had set out in its letter of formal notice. Hungary replied to that reasoned opinion by letter of 19 September 2014, in essence reiterating the observations it had made in its letter of 22 January 2014.21Since the Commission found the response provided by the Hungarian authorities to be unsatisfactory, it decided to bring the present proceedings. III. The action A. Preliminary observations 22As a preliminary point, it is appropriate to note that, since 1 July 2014, Nemzeti Mobilfizetési Zrt., which is wholly owned by Magyar Fejlesztési Bank, and through it, the Hungarian State, operates the national mobile payment system at issue, the use of which is mandatory in various areas of application, namely public parking, provision of the road network for traffic use, transport of persons by a State undertaking and other services offered by a State body.23The Commission explains that the mobile payment system law created a national monopoly of mobile payment services, since the Nemzeti Mobilfizetési Zrt.enjoys an exclusive right to conclude contracts with car park operators and to charge tolls for use of the road network. This creates an obstacle to entry to the wholesale market in mobile payments, which was previously open to competition.24In its action the Commission claims, primarily, that, because of their restrictive nature, the mobile payment system law and the Governmental Decree instituting a national mobile payment system infringe Article 15(2)(d) and Article 16(1) of Directive 2006/123. In the alternative, it submits that that legislation constitutes an infringement of Articles 49 and 56 TFEU. B. The applicable provisions 1. Arguments of the parties 25With regard to the applicability of Directive 2006/123, the Commission rejects the position adopted by Hungary during the pre-litigation procedure that the national mobile payment system in question has become an SGEI that does not fall within the scope of that directive, under Article 1(2) and (3) thereof.26First, Article 1(2) and (3) of Directive 2006/123, read in conjunction with recital 8 thereof, excludes from that directive only SGEIs and existing monopolies. However, the mobile payment system law granted an exclusive right to Nemzeti Mobilfizetési Zrt. after the entry into force of that directive.27Secondly, the Commission does not share the opinion of Hungary that the service in question can be classified as an SGEI. Nevertheless, even assuming that that service could be classified as such, Directive 2006/123 applies, as confirmed by the fact that it provides for a number of safeguards and exceptions for SGEIs which do fall within its scope. Thus, in the opinion of the Commission, Article 16 of that directive does not apply to SGEIs supplied in another Member State, by virtue of Article 17, point 1, thereof. In consequence, if it were established that a service, such as that at issue, is an SGEI, Article 15(2)(d) of Directive 2006/123 would remain applicable to it, as would Articles 49 and 56 TFEU.28Thirdly, the Commission argues that Directive 2006/123 excludes from its scope, by virtue of Article 2(2)(a) and (i), ‘non-economic services of general interest’ and ‘activities which are connected with the exercise of official authority’. However, Hungary has not denied that the service in question constitutes an economic activity and has not been of the view either that this service is connected with the exercise of official authority.29Fourthly, the Commission submits, by reference to the case-law of the Court, that, even if the service concerned effectively must, for whatever reason, be excluded from the scope of Directive 2006/123, the rules in question should nevertheless comply with Articles 49 and 56 TFEU.30Hungary argues that neither Directive 2006/123 nor Articles 49 and 56 TFEU are applicable in the present case.31First, the operation of the national mobile payment system in question constitutes an SGEI. Hungary states, in that regard, that, under Article 106(2) TFEU, Article 1 of Protocol (No 26) on services of general interest, and Article 1(3) of Directive 2006/123, definition of activities that are considered to be SGEIs falls within the competence of the Member States. Hungary recalls, moreover, referring to certain Commission communications in the area of State aid, that the existence of an SGEI requires the presence of three conditions, namely that the service has specific characteristics as compared to other economic activities that could be regarded as constituting an SGEI, the service is accessible to all and that market forces alone do not lead to a satisfactory provision of the service.32First of all, the Commission does not deny that the second of those conditions is satisfied.33Next, with regard to the first condition, Hungary states that the mobile payment service in question is connected with the use of public services, the State being responsible for ensuring that users have access to those services in a uniform, convenient, immediate and affordable manner, regardless of the place of use. It is for reasons in the public interest and not on the basis of economic considerations that Hungary created a national mobile payment system.34Hungary also argues that the mobile payment of parking fees cannot be regarded as a service of ‘convenience’, as the Commission claims. On the contrary, it constitutes the only solution which takes into account the interests of users, in so far as that payment method allows the fee corresponding to the actual period of parking to be calculated. In any event, it is clear from the judgment of 12 February 2008, BUPA and Others v Commission (T‑289/03, EU:T:2008:29, paragraph 188), that ‘luxury’ services can be defined as SGEIs.35Finally, as regards the third of those conditions, Hungary claims that the previous system did not allow the market to function in a satisfactory manner for consumers and for resellers, whether in terms of market conditions or geographical coverage. Thus, it states, in particular, that, prior to the establishment of the national mobile payment system at issue, 23 car park operators did not offer mobile payment, so that the Commission’s claim that the largest market operator, EME Zrt., was present during 2012 in 90% of the public car parks is incorrect.36The national mobile payment system is intended to remedy the deficiencies in the market’s previous way of operating. Its objective is, on the one hand, to implement coverage of the entire national territory and, on the other, management of the technical platform by the Hungarian State as effectively as possible in terms of cost and in as uniform a manner as possible. The proper functioning of a uniform and interoperable system requires the creation of a single platform, which is possible only on a centralised basis, since operators cannot establish such a platform and have no interest in doing so.37Secondly, as regards the applicability of Directive 2006/123 to an SGEI, Hungary notes that that directive merely provides that it does not require Member States to liberalise SGEIs. It does not provide that it does not require Member States to liberalise ‘existing’ SGEIs. The argument on which the Commission relies in that regard would render the right of Member States to create SGEIs nugatory.38Hungary therefore maintains its position that, in accordance with Article 1(2) of that directive, the services at issue in the present case do not fall within its scope. Another reason why the directive is not applicable flows from the fact that, by virtue of Article 1(3) thereof, it does not address the abolition of service monopolies.39In any event, even if Directive 2006/123 were applicable, since the national mobile payment system at issue is, in the view of Hungary, an SGEI, it is appropriate, in accordance with Article 15(4) of that directive, not to take account of Article 15(2)(d) of that directive, referred to by the Commission, because its application would obstruct the achievement of the task given to that national system. 2. Findings of the Court 40In so far as the Commission’s action is based, principally, on infringement of the provisions of Directive 2006/123 concerning the freedom of establishment and the freedom to provide services, it is appropriate, first of all, to respond to Hungary's argument that that directive is not applicable in the present case, under Article 1(2) and (3) of that directive, in order to assess, next, whether Articles 15 and 16 are applicable to the mobile payment service at issue. (a) Applicability of Directive 2006/123 41Under Article 1(2) of Directive 2006/123, that directive does not deal with the liberalisation of SGEIs, reserved to public or private entities, nor with the privatisation of public entities providing services. Further, it is clear from Article 1(3) of the directive that it does not deal with the abolition of monopolies providing services nor with aids granted by Member States which are covered by EU rules on competition.42In that regard, recital 8 of Directive 2006/123 states that the provisions of that directive should apply only to the extent that the activities in question are open to competition, so that they do not oblige Member States either to liberalise SGEIs or to privatise public entities which provide such services or to abolish existing monopolies for other activities or certain distribution services.43It follows that, as the Commission argues, Article 1(2) and (3) of Directive 2006/123 seeks to exclude from the scope of that directive only SGEIs, reserved to public or private entities, or monopolies which, unlike those introduced by the mobile payment system law and the Governmental Decree, existed at the date on which the directive entered into force.44In addition, while it is true that Article 2(2)(a) and (i) of the directive excludes from its scope non-economic services of general interest and activities which are connected with the exercise of official authority, it is common ground that the service at issue does not fall within either of those categories.45Consequently, Hungary’s arguments, alleging that the mobile payment system law and the Governmental Decree, fall outside, under Article 1(2) and (3) of Directive 2006/123, the scope of that directive, must be rejected. (b) The applicability of Articles 15 and 16 of Directive 2006/123 46Since the Commission asks the Court to declare that the national mobile payment system governed by the mobile payment system law and by the Governmental Decree runs counter to Article 15(2)(d) and Article 16(1) of Directive 2006/123, it is necessary to determine whether, as Hungary argues, the mobile payment service at issue can be classified as an SGEI.47Indeed, as the Advocate General observed in point 56 of his Opinion, Directive 2006/123 contains specific provisions regarding the application of its provisions to SGEIs, namely Article 15(4) and Article 17 thereof.48Under Article 1 of Protocol No 26 on services of general interest, the Member States enjoy a wide discretion in providing, commissioning and organising SGEIs tailored as closely as possible to the needs of the users.49The Member States are thus entitled, while complying with EU law, to define the scope and the organisation of their SGEIs, taking particular account of objectives pertaining to their national policy. In that regard, Member States enjoy a wide discretion which can be called into question by the Commission only in the event of manifest error (judgment of 20 December 2017, Comunidad Autónoma del País Vasco and Others v Commission, C‑66/16 P to C‑69/16 P, EU:C:2017:999, paragraphs 69 and 70).50In particular, in the context of Directive 2006/123, that discretion has been reaffirmed by the EU legislature, in the second subparagraph of Article 1(3) of that directive, which states that the directive does not affect the freedom of Member States to define, in conformity with EU law, what they consider to be SGEIs, how those services should be organised and financed in compliance with the State aid rules, and to what specific obligations they should be subject.51In accordance with the case-law of the Court, a service may be of general economic interest where that interest has specific characteristics in comparison to the general economic interest of other economic activities (see, to that effect, judgments of 10 December 1991, Merci convenzionali porto di Genova, C‑179/90, EU:C:1991:464, paragraph 27; of 18 June 1998, Corsica Ferries France, C‑266/96, EU:C:1998:306, paragraph 45; of 23 May 2000, Sydhavnens Sten & Grus, C‑209/98, EU:C:2000:279, paragraph 75; and of 3 March 2011, AG2R Prévoyance, C‑437/09, EU:C:2011:112, paragraphs 71 and 72).52In addition, recital 70 of Directive 2006/123 states that, in order to be classified as an SGEI, a service needs to be provided in application of a special task of public interest entrusted to the provider by the Member State concerned.53In that regard, the Commission submits that Hungary has made a manifest error of assessment in classifying the mobile payment service in question as an SGEI. However, it must be stated that the evidence on which the Commission bases its contention does not suffice to deprive that classification of its plausibility.54It must be noted that the Commission argues, in essence, that, before the establishment of a national monopoly of mobile payment services, those services were already offered by operators active on the market. It is of the opinion that that market functioned satisfactorily, while recognising the existence of some issues, relating in particular to the lack of a standardised uniform platform and of interoperability.55However, the mere fact that a service classified as an SGEI by a Member State is already provided by operators on the market concerned is not sufficient to show that that classification is vitiated by a manifest error of assessment.56Indeed, as the Commission itself points out, referring to paragraph 48 of the Communication from the Commission on the application of the European Union rules on State aid for compensation for the provision of services of general economic interest (OJ 2012 C 8, p. 4), the fact that a service is already provided on the market, but on unsatisfactory conditions not consistent with the public interest, as it is defined by the Member State concerned, is capable of justifying the classification of that service as an SGEI.57This is the case in particular when a Member State takes the view, on the basis of the discretion which it has, that the market does not allow the objectives of continuity and access to the service that it has defined to be met.58In the present case, Hungary argues that the national mobile payment system in question, which it classifies as an SGEI, aims to compensate for the failure of the market to ensure coverage of that service over the entire national territory, on uniform conditions for all users of that service. By covering the entire national territory, the mobile payment service is likely to be accessible to the entire Hungarian population irrespective of whether the region served provides any profit. In addition, that system seeks to ensure mobile payment for services of general economic interest such as public parking and public transport of persons and thus contributes to the meeting of a general economic interest.59In that regard, it must be held that the Commission merely asserts that, contrary to Hungary’s submissions, that market functioned satisfactorily and that it would probably have grown, without, however, providing evidence to support those claims.60In those circumstances, the Commission has not adduced any evidence to show that that Member State had made a manifest error of assessment in classifying that mobile payment service as an SGEI.61Accordingly, for the purposes of the application, in this case, of the provisions of Directive 2006/123, it must be held that, first, as regards the freedom of establishment, the conformity of the relevant Hungarian legislation to Directive 2006/123 must be assessed in the light of Article 15(4) of that directive.62In that regard, it must be stated, however, that, contrary to Hungary’s submissions, that provision does not automatically exclude SGEIs from the scope of Article 15 of Directive 2006/123. Article 15(4) of that directive provides that paragraphs 1, 2 and 3 of that article are to apply to legislation in the field of SGEIs only to the extent that their application does not obstruct the performance, in law and in fact, of the particular task assigned to them.63With regard, secondly, to the freedom to provide services, it is appropriate to note that, in accordance with Article 17, point 1, of Directive 2006/123, Article 16 of that directive does not apply to services of general economic interest which are provided in another Member State. It is therefore necessary to consider, as the Commission submits in the alternative, the Hungarian legislation at issue in the light of Article 56 TFEU. 3. The complaints raised (a) Arguments of the parties 64The Commission is of the opinion that the introduction and the maintenance in force of the national mobile payment system at issue, under the mobile payment system law and the Governmental Decree infringe Article 15(2)(d) of Directive 2006/123 and Article 56 TFEU.65First, as regards the restrictive effect of the mobile payment system law and the Governmental Decree, the Commission is of the view that the operation of the national mobile payment system has become a State monopoly, making it impossible for other providers of mobile payments and mobile telephony to exercise their activity on the market concerned. The introduction of this system thus impedes access to the wholesale mobile payment market, irrespective of the methods of provision of service.66Second, the Commission accepts that some of the factors put forward by Hungary during the pre-litigation procedure to justify the introduction of that national mobile payment system, in particular the protection of consumers and recipients of services, the fairness of commercial transactions and the fight against fraud, can be regarded as overriding reasons in the public interest. However, the Commission regards those reasons as incapable of justifying the restrictions brought about by the mobile payment system law, as they do not meet the requirements of necessity and proportionality.67Third, with regard to necessity and proportionality, the Commission submits that the intervention of the Hungarian State was not necessary. Indeed, it has in no way been proven that the market, both in respect of public parking and the provision of the road network for traffic, previously functioned in an unsatisfactory manner. Although the Commission does not deny that standardisation has certain advantages for the expansion of mobile payment services, it nevertheless takes the view that the creation of a State monopoly was not the only or best way of achieving that objective.68In addition, the Commission regards the Hungarian State’s intervention as disproportionate. Other less restrictive measures could have solved the problems in the functioning of the market reported by the Hungarian authorities. In particular, standardisation and interoperability could have been achieved through legislation while preserving the existing market structure. Similarly, a new State-owned body could have been created, one without exclusive rights. It would also have been possible to put in place a system of concessions for the operation of the platform of the national mobile payment system at issue or to create a monopoly only for a limited period.69Hungary argues that, pursuant to Article 106(2) TFEU, Articles 49 and 56 TFEU are not applicable. Furthermore, the mobile payment system at issue is a State monopoly which it is appropriate to examine on the basis of Article 37 TFEU, not on the basis of other provisions of the FEU Treaty. In the event that the Court should nonetheless consider that Articles 49 and 56 TFEU are applicable, Hungary contends that those provisions were not infringed.70First, the rules on the national mobile payment system are not discriminatory, since the mobile payment system law and the Governmental Decree contain uniform rules for all providers in comparable situations. Hungary states, in that regard, that it is possible to allege discrimination only if the undertakings are subject to different regulations depending on their places of origin or establishment or their domestic or foreign origin.71Secondly, the grounds advanced by Hungary as the objective and justification of the national mobile payment system at issue, in particular consumer protection and the fairness of commercial transactions or combating fraud, have been recognised in the Court’s case-law as overriding reasons in the public interest.72Thirdly, the establishment and maintenance of that national mobile payment system were necessary and are consistent with the principle of proportionality.73First of all, Hungary argues that, before 1 July 2014, the relevant market was not working satisfactorily. It did not cover the whole of the national territory and there was no interoperability or operating platform. The market was thus made up of fragmented and closed systems.74Next, according to Hungary, the establishment of that national mobile payment system is such as to stimulate competition and enable the provision of a satisfactory service.75Finally, Hungary refutes the Commission’s argument that the earlier fragmented systems could integrate through the series of obligations imposed by legislation, cooperation and competition on the market, pointing out that that claim is not supported by any example at an international level. In any event, that Member State points out that since the service concerned is the responsibility of local authorities, it would have been necessary to use public procurement procedures. That would have meant, on the one hand, that the mobile payment system for parking would be established only in locations where the supplier could expect to obtain significant revenue, so that complete national coverage could not be guaranteed, and, on the other, that different suppliers would have been awarded the contracts by the various local authorities, which would have led to a total lack of interoperability. (b) Findings of the Court (1) The complaint alleging infringement of Article 15(2)(d) of Directive 2006/123 76It must be borne in mind that each Member State is obliged, by virtue of the first sentence of Article 15(1) of Directive 2006/123, to examine whether, under their legal system, one or more of the requirements listed in Article 15(2) of that directive are imposed and, if so, to ensure that such requirements are compatible with the conditions of non-discrimination, necessity and proportionality laid down in Article 15(3) of that directive. In accordance with the second sentence of Article 15(1) of that directive, the Member States must adapt their laws, regulations or administrative provisions so as to make them compatible with those conditions (judgment of 30 January 2018, X and Visser, C‑360/15 and C‑31/16, EU:C:2018:44, paragraph 129).77In the first place, the concept of ‘requirement’ in Article 15(2) of Directive 2006/123 must be understood, in accordance with Article 4, point 7, of that directive, as referring, in particular, to ‘any obligation, prohibition, condition or limit provided for in the laws, regulations or administrative provisions of the Member States’ (see, to that effect, judgment of 30 January 2018, X and Visser, C‑360/15 and C‑31/16, EU:C:2018:44, paragraph 119).78The requirements that are thus to be assessed include, as follows from Article 15(2)(d) of Directive 2006/123, those which reserve access to the service activity in question to particular providers by virtue of the specific nature of the activity concerned and which relate neither to matters covered by Directive 2005/36 or to those laid down in other EU instruments.79In the present case, it must be held that, as the Commission submits, the national mobile payment system governed by the mobile payment system law and the Governmental Decree constitutes a requirement, within the meaning of Article 15(2)(d) of Directive 2006/123. It is common ground that that system restricts access to the activity of providing mobile payment services to Nemzeti Mobilfizetési Zrt., by establishing a monopoly in favour of that public undertaking, without that monopoly constituting a requirement as regards the matters covered by Directive 2005/36 or a requirement laid down in other EU instruments.80In the second place, the cumulative conditions listed in Article 15(3) of Directive 2006/123 relate, first, to the non-discriminatory nature of the requirements concerned, which cannot be directly or indirectly discriminatory on the basis of nationality or, with regard to companies, of the location of their registered office; secondly, to their necessity, that is to say they must be justified by an overriding reason in the public interest, and, thirdly, to their proportionality, it being necessary that those requirements are suitable for ensuring the achievement of the objective pursued, do not go beyond what is necessary to achieve that objective and that other less restrictive measures do not enable the same result to be achieved.81In that regard, it must be noted that, in the present case, the requirement introduced by the mobile payment system law and the Governmental Decree is not such as to satisfy the condition relating to absence of less restrictive measures to attain the objective pursued.82It is appropriate to note that Hungary has accepted that there are less restrictive measures which do not restrict the freedom of establishment to the same extent as those flowing from the mobile payment system law and the Governmental Decree and which enable the objectives relied on by the Hungarian Government to be achieved, such as, for example, a system of concessions based on a competitive process instead of the monopoly granted to Nemzeti Mobilfizetési Zrt.83Since the requirements set out in Article 15(3) of Directive 2006/123 are cumulative, that finding is sufficient to establish non-compliance with that provision (see, to that effect, judgment of 23 February 2016, Commission v Hungary, C‑179/14, EU:C:2016:108, paragraphs 69 and 90).84In the third place, it must be noted that, by virtue of Article 15(4) of Directive 2006/123, paragraphs 1, 2 and 3 of that article is to apply to legislation in the field of SGEIs only in so far as the application of those paragraphs does not obstruct the performance, in law or in fact, of the particular task assigned to them.85In that context, it is therefore necessary to interpret Article 15 thereof as meaning that that provision does not preclude national legislation imposing a requirement, within the meaning of Article 15(2)(d), provided that the requirement is necessary to the performance, in a cost-effective manner, of the particular public service task in question (see, to that effect, judgments of 3 March 2011, AG2R Prévoyance, C‑437/09, EU:C:2011:112, paragraph 76, and of 8 March 2017, Viasat Broadcasting UK v Commission, C‑660/15 P, EU:C:2017:178, paragraph 29).86In that regard, although the Hungarian Government relies on the fact that the national mobile payment service governed by the mobile payment system law and the Governmental Decree constitutes an SGEI, that government has not stated the reasons for its view that the performance of the particular task with which the service is entrusted required the creation of a monopoly by granting exclusive rights to Nemzeti Mobilfizetési Zrt., even though it has acknowledged that there were less restrictive measures than the creation of that monopoly, able to allow the performance of that task, thus making even a limited review by the Court impossible.87Having regard to the foregoing, the complaint alleging infringement of Article 15(2)(d) of Directive 2006/123 must be upheld. It is not necessary, therefore, to examine the complaint alleging infringement of Article 49 TFEU. (2) The complaint alleging infringement of Article 56 TFEU 88First, it is settled case-law that national legislation, such as the mobile payment system law and the Governmental Decree, under which exclusive rights to carry on an economic activity are conferred on a single, private or public, operator, constitutes a restriction of the freedom to provide services (see, to that effect, judgment of 23 February 2016, Commission v Hungary, C‑179/14, EU:C:2016:108, paragraph 164 and the case-law cited).89That restriction cannot be justified unless it serves overriding reasons relating to the public interest, is suitable for securing the attainment of the public interest objective which it pursues and does not go beyond what is necessary in order to attain it (see, to that effect, judgment of 23 February 2016, Commission v Hungary, C‑179/14, EU:C:2016:108, paragraph 166 and the case-law cited).90In that regard, without it being necessary to rule on the grounds put forward by the Hungarian Government to justify the restriction on the freedom to provide services resulting from the grant of a monopoly to Nemzeti Mobilfizetési Zrt., it must be held that, for the reasons set out in paragraph 82 of this judgment, the measure concerned appears, in any event, disproportionate, since it is common ground that there were less restrictive measures, which restricted the freedom to provide services to a lesser extent than those flowing from the mobile payment system law and the Governmental Decree, enabling the objectives pursued to be achieved.91With regard to Hungary’s argument that, by virtue of Article 106(2) TFEU, the introduction of the mobile payment system at issue lies outside the scope of Article 56 TFEU on the ground that that system constitutes an SGEI, it must be recalled that, under Article 106(2) TFEU, undertakings entrusted with managing SGEIs are to be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them.92In that regard, in accordance with the case-law of the Court, it is for the Member State which relies on Article 106(2) TFEU to show that all the conditions for application of that provision are fulfilled (judgment of 29 April 2010, Commission v Germany, C‑160/08, EU:C:2010:230, paragraph 126 and the case-law cited).93However, as has been noted in paragraph 86 of this judgment, the Hungarian Government has not stated the reasons for its view that the performance of the particular task with which the service concerned is entrusted required the creation of a monopoly by granting exclusive rights to Nemzeti Mobilfizetési Zrt., even though it has acknowledged that there were less restrictive measures than the creation of that monopoly able to ensure the achievement of that task.94It follows therefrom that Hungary’s line of argument based on Article 106(2) TFEU must be rejected.95Finally, with regard to Hungary’s argument that Article 37 TFEU is applicable to the present case, it is sufficient to recall that that provision concerns trade in goods and thus cannot concern a monopoly to provide services which does not affect the trade in goods between the Member States (see, to that effect, judgments of 30 April 1974, Sacchi, 155/73, EU:C:1974:40, paragraph 10, and of 4 May 1988, Bodson, 30/87, EU:C:1988:225, paragraph 10).96It follows from the foregoing considerations that the complaint alleging an infringement of Article 56 TFEU must be upheld.97In the light of all the foregoing considerations, it must be found that, by instituting and maintaining in force the national mobile payment system governed by the mobile payment system law and by the Governmental Decree, Hungary has failed to fulfil its obligations under Article 15(2)(d) of Directive 2006/123 and Article 56 TFEU.98The action must be dismissed as to the remainder. IV. Costs 99Under Article 138(3) of the Rules of Procedure of the Court, where each party succeeds on some and fails on other heads, the parties are to bear their own costs. Since the Commission and Hungary have each succeeded on some and failed on other heads, they must be ordered to bear their own costs.On those grounds, the Court (Fourth Chamber) hereby: 1. Declares that, by instituting and maintaining in force the national mobile payment system governed by a nemzeti mobil fizetési rendszerről szóló 2011. évi CC. törvény (Law CC of 2011 on the national mobile payment system) and by 356/2012. (XII. 13.) Korm. rendelet a nemzeti mobil fizetési rendszerről szóló törvény végrehajtásáról (Governmental Decree No 356/2012 implementing the mobile payment system law), Hungary has failed to fulfil its obligations under Article 15(2)(d) of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market and Article 56 TFEU; 2. Dismisses the action as to the remainder; 3. Orders the European Commission and Hungary to bear their own costs. [Signatures]( *1 ) Language of the case: Hungarian. | 2ddef-830b86d-4bdc | EN |
The Court annuls the Commission’s decision not to order recovery of unlawful aid granted by Italy in the form of an exemption from municipal tax on real property | 6 November 2018 ( *1 )(Appeal — State aid — Decision declaring the recovery of State aid incompatible with the internal market to be impossible — Decision finding that there is no State aid — Actions for annulment brought by competitors of beneficiaries of State aid — Admissibility — Regulatory act not entailing implementing measures — Direct concern — Concept of ‘absolute impossibility’ of recovery of State aid incompatible with the internal market — Concept of ‘State aid’ — Concepts of ‘undertaking’ and ‘economic activity’)In Joined Cases C‑622/16 P to C‑624/16 P,THREE APPEALS under Article 56 of the Statute of the Court of Justice of the European Union, brought on 25 November 2016, Scuola Elementare Maria Montessori Srl, established in Rome (Italy), represented by E. Gambaro and F. Mazzocchi, avvocati,appellant,the other parties to the proceedings being: European Commission, represented by D. Grespan, P. Stancanelli and F. Tomat, acting as Agents,defendant at first instance, Italian Republic, represented by G. Palmieri, acting as Agent, and G. De Bellis and S. Fiorentino, avvocati dello Stato,intervener at first instance (C‑622/16 P), European Commission, represented by P. Stancanelli, D. Grespan and F. Tomat, acting as Agents, Scuola Elementare Maria Montessori Srl, established in Rome, represented by E. Gambaro and F. Mazzocchi, avvocati,applicant at first instance,intervener at first instance (C‑623/16 P),and Pietro Ferracci, residing in San Cesareo (Italy),intervener at first instance (C‑624/16 P),THE COURT (Grand Chamber),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, J.-C. Bonichot, A. Arabadjiev, A. Prechal, T. von Danwitz (Rapporteur) and C. Toader, Presidents of Chambers, D. Šváby, M. Berger, C.G. Fernlund and C. Vajda, Judges,Advocate General: M. Wathelet,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 6 February 2018,after hearing the Opinion of the Advocate General at the sitting on 11 April 2018,gives the following Judgment 1By their appeals in Cases C‑622/16 P and C‑623/16 P Scuola Elementare Maria Montessori Srl and the European Commission seek to have set aside the judgment of the General Court of the European Union of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), dismissing as unfounded the action brought by Scuola Elementare Maria Montessori for the annulment of Commission Decision 2013/284/EU of 19 December 2012 on State aid SA.20829 (C 26/2010, ex NN 43/2010 (ex CP 71/2006)) Scheme concerning the municipal real estate tax exemption granted to real estate used by non-commercial entities for specific purposes implemented by Italy (OJ 2013 L 166, p. 24, ‘the decision at issue’).2By its appeal in Case C‑624/16 P the Commission seeks to have set aside the judgment of the General Court of 15 September 2016, Ferracci v Commission (T‑219/13, EU:T:2016:485), dismissing as unfounded the action brought by Mr Pietro Ferracci for the annulment of the decision at issue. Legal context 3Article 1(d) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1) defines ‘aid scheme’ as ‘any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount’.4Article 14(1) of that regulation states:‘Where negative decisions are taken in cases of unlawful aid, the Commission shall decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary (hereinafter referred to as a “recovery decision”). The Commission shall not require recovery of the aid if this would be contrary to a general principle of Community law.’ Background to the disputes 5For the purposes of the present proceedings, the background to the disputes, as set out in paragraphs 1 to 20 of the judgments of the General Court of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), and of 15 September 2016, Ferracci v Commission (T‑219/13, EU:T:2016:485), (together ‘the judgments under appeal’) may be summarised as follows.6Mr Ferracci is the owner of a tourist bed and breakfast establishment consisting of two bedrooms. Scuola Elementare Maria Montessori is a private educational establishment. In 2006 and 2007 they brought complaints to the Commission, claiming that, first, the amendment to the scope of the national scheme of the Imposta comunale sugli immobili (municipal tax on real property, ‘ICI’) by the Italian Republic and, second, Article 149(4) of the Testo unico delle imposte sui redditi (single text of taxes on income, ‘the TUIR’) constituted State aid that was not compatible with the internal market.7The amendment to the scope of ICI aimed essentially to establish that the exemption from that tax enjoyed from 1992 by non-commercial entities carrying on, on their real property, exclusively social assistance, welfare, health care, educational, accommodation, cultural, recreational, sports and religious activities should be understood as also applicable to those activities ‘even if they were of a commercial nature’. Article 149(4) of the TUIR essentially exempted ecclesiastical bodies recognised as legal persons governed by civil law and amateur sports clubs from the application of the criteria laid down in that provision for all other entities for the purpose of determining the loss of the status of non-commercial entity.8On 12 October 2010 the Commission decided to open the formal investigation procedure under Article 108(2) TFEU concerning the exemption from ICI and Article 149(4) of the TUIR.9On 15 February 2012 the Italian authorities informed the Commission that they intended to adopt new rules on the municipal tax on real property and announced that the exemption from ICI would be replaced as from 1 January 2012 by the exemption under the new rules on the Imposta municipale unica (single municipal tax, ‘IMU’). Those rules were adopted on 19 November 2012.10On 19 December 2012 the Commission adopted the decision at issue, in which it found, first, that the exemption granted under the ICI rules to non-commercial entities carrying on specific activities on their real property constituted State aid that was incompatible with the internal market and had been unlawfully implemented by the Italian Republic, in breach of Article 108(3) TFEU. Next, the Commission considered that, in view of the particular circumstances of the case, it would be absolutely impossible for the Italian Republic to recover the unlawful aid, so that the Commission did not order it to do so in the decision at issue. Finally, the Commission found that neither Article 149(4) of the TUIR nor the exemption under the new IMU scheme constituted State aid within the meaning of Article 107(1) TFEU. The actions before the General Court and the judgments under appeal 11By applications lodged with the Registry of the General Court on 16 April 2013, Mr Ferracci and Scuola Elementare Maria Montessori each brought an action for the annulment of the decision at issue, in so far as the Commission had found in that decision that it would be impossible for the Italian authorities to recover the aid considered to be unlawful and incompatible with the internal market (‘the first part of the decision at issue’), that Article 149(4) of the TUIR did not constitute State aid (‘the second part of the decision at issue’), and that the same applied to the new IMU scheme (‘the third part of the decision at issue’).12By documents lodged with the Registry of the General Court on 17 July 2013, the Commission raised objections of inadmissibility, which were joined to the substance by orders of the General Court of 29 October 2014.13In the judgments under appeal the General Court declared both actions admissible under the third limb of the fourth paragraph of Article 263 TFEU, taking the view that the decision at issue was a regulatory act of direct concern to Mr Ferracci and Scuola Elementare Maria Montessori which did not entail implementing measures with respect to them. The General Court dismissed both actions on the substance. Procedure before the Court of Justice and forms of order sought 14By its appeal in Case C‑622/16 P, Scuola Elementare Maria Montessori asks the Court to:–set aside the judgment of the General Court of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), and consequently annul the decision at issue in so far as the Commission decided not to order recovery of the aid granted by means of the exemption from ICI and found that the measures relating to the exemption from IMU did not fall within the scope of Article 107(1) TFEU;in any event, set aside those parts of that judgment covered by such grounds of appeal as the Court may find valid and well founded; andorder the Commission to pay the costs at first instance and on appeal.15The Commission, supported by the Italian Republic, contends that the Court should:dismiss the appeal in its entirety; andorder the applicant to pay the costs of the present proceedings and those at first instance.16By its appeals in Cases C‑623/16 P and C‑624/16 P, the Commission, supported by the Italian Republic, asks the Court to:set aside the judgments under appeal in so far as the General Court declared the actions at first instance admissible on the basis of the third limb of the fourth paragraph of Article 263 TFEU;declare the actions at first instance inadmissible on the basis of the second and third limbs of the fourth paragraph of Article 263 TFEU, and consequently dismiss them in their entirety; andorder Mr Ferracci and Scuola Elementare Maria Montessori to pay the costs incurred by the Commission both in the proceedings before the General Court and in the present proceedings.17Scuola Elementare Maria Montessori contends that the Court should:dismiss the Commission’s appeal in Case C‑623/16 P and uphold the judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), in so far as the General Court declared admissible the action brought by it against the decision at issue; andorder the Commission to pay the costs of the present proceedings.18By decision of the President of the Court of 11 April 2017, Cases C‑622/16 P to Case C‑624/16 P were joined for the purposes of the oral procedure and the judgment. The Commission’s appeals in Cases C‑623/16 P and C‑624/16 P 19In support of its appeals in Cases C‑623/16 P and C‑624/16 P, the Commission, supported by the Italian Republic, puts forward a single ground of appeal divided into three parts, arguing that the General Court misinterpreted and misapplied each of the three cumulative conditions in the third limb of the fourth paragraph of Article 263 TFEU. First part Arguments of the parties 20The Commission submits that the classification of the decision at issue as a regulatory act is vitiated by errors of law. First, the General Court wrongly considered that any non-legislative act of general application is necessarily a regulatory act. Second, the General Court wrongly deduced the regulatory nature of the decision at issue from the general application of the national measures which formed its subject matter. Third, in that the first part of the decision at issue concerned a limited class of persons, the General Court should not, in any event, have found that all three parts of the decision at issue were of general application.21Scuola Elementare Maria Montessori disputes those arguments. Findings of the Court 22In the first place, it should be recalled that by the Treaty of Lisbon a third limb was added to the fourth paragraph of Article 263 TFEU, relaxing the conditions of admissibility of actions for annulment brought by natural and legal persons. That limb, without subjecting the admissibility of actions for annulment brought by natural and legal persons to the condition of individual concern, allows such actions to be brought against ‘regulatory acts’ which do not entail implementing measures and are of direct concern to the applicant (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraph 57).23As regards the concept of ‘regulatory acts’, the Court has held that its scope is more restricted than that of the concept of ‘acts’ used in the first and second limbs of the fourth paragraph of Article 263 TFEU and refers to acts of acts of general application other than legislative acts (see, to that effect, judgment of 3 October 2013, Inuit Tapiriit Kanatami and Others v Parliament and Council, C‑583/11 P, EU:C:2013:625, paragraphs 58 to 61).24As the Advocate General observes in point 26 of his Opinion, the interpretation supported by the Commission, namely that there are non-legislative acts of general application, such as the decision at issue, that are not covered by the concept of ‘regulatory act’ within the meaning of the third limb of the fourth paragraph of Article 263 TFEU, cannot be accepted. There is no basis for that interpretation in the wording, origin or purpose of that provision.25As regards, first, the wording of the provision, it refers to ‘regulatory acts’ generally and contains no indication that that reference is only to certain kinds or subcategories of those acts.26As regards, next, the origin of the provision, it appears from the legislative history of Article III‑365(4) of the draft Treaty establishing a Constitution for Europe, the content of which was repeated in the same words in the fourth paragraph of Article 263 TFEU, that the addition of the third limb to that provision was intended to broaden the conditions of admissibility of actions for annulment with respect to natural and legal persons, and the only acts of general application for which a restrictive approach was to be maintained were legislative acts (see, in particular, Secretariat of the European Convention, Final report of the discussion circle on the Court of Justice, 25 March 2003 (CONV 636/03, point 22), and Cover note from the Praesidium to the Convention, 12 May 2003 (CONV 734/03, p. 20)).27As regards, finally, the purpose of the third limb of the fourth paragraph of Article 263 TFEU, as may be seen from paragraphs 22, 23 and 26 above, its objective is to relax the conditions of admissibility of actions for annulment brought by natural and legal persons against all acts of general application, with the exception of those of a legislative nature. To remove certain kinds or subcategories of non-legislative acts of general application from the scope of that provision would run counter to that objective.28Consequently, it must be considered that the concept of ‘regulatory act’ within the meaning of the third limb of the fourth paragraph of Article 263 TFEU extends to all non-legislative acts of general application. Since the decision at issue is not a legislative act, the General Court did not err in law by confining itself, for the purpose of examining the regulatory nature of the three parts of that decision, to assessing whether those parts are of general application.29In the second place, it should be recalled that, according to settled case-law of the Court, an act is of general application if it applies to objectively determined situations and produces legal effects with respect to categories of persons envisaged in a general and abstract manner (judgments of 11 July 1968, Zuckerfabrik Watenstedt v Council, 6/68, EU:C:1968:43, p. 415; of 15 January 2002, Libéros v Commission, C‑171/00 P, EU:C:2002:17, paragraph 28 and the case-law cited; and of 17 March 2011, AJD Tuna, C‑221/09, EU:C:2011:153, paragraph 51 and the case-law cited).30Article 1(d) of Regulation No 659/1999 defines ‘aid scheme’ as ‘any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount’.31As regards the second limb of the fourth paragraph of Article 263 TFEU, the Court has repeatedly held in the field of State aid that decisions of the Commission authorising or prohibiting a national scheme are of general application. That general application derives from the fact that such decisions apply to objectively determined situations and produce legal effects with respect to a category of persons envisaged in a general and abstract manner (see, to that effect, judgments of 22 December 2008, British Aggregates v Commission, C‑487/06 P, EU:C:2008:757, paragraph 31; of 17 September 2009, Commission v Koninglijke Friesland/Campina, C‑519/07 P, EU:C:2009:556, paragraph 53 and the case-law cited; and of 28 June 2018, Lowell Financial Services v Commission, C‑219/16 P, not published, EU:C:2018:508, paragraph 42 and the case-law cited).32As the Advocate General observes in points 48 and 49 of his Opinion, that case-law may be applied to the third limb of the fourth paragraph of Article 263 TFEU. The issue of whether or not an act is of general application concerns an objective characteristic of the act which cannot vary according to the different limbs of the fourth paragraph of Article 263 TFEU. Moreover, an interpretation according to which an act could at the same time be of general application in relation to the second limb of the fourth paragraph of Article 263 TFEU and not be of general application in relation to the third limb of the fourth paragraph of Article 263 TFEU would run counter to the objective behind the addition of that provision, which was to relax the conditions of admissibility for annulment actions brought by natural or legal persons.33Consequently, the General Court did not err in law in considering that the second and third parts of the decision at issue are of general application.34In the third place, as regards the first part of the decision at issue, it is true that, according to settled case-law of the Court, a recovery order is of individual concern to the beneficiaries of the aid scheme in question, in that, once such an order is adopted, they are exposed to the risk that the benefits they have received will be recovered and are therefore members of a restricted class (see, to that effect, judgments of 19 October 2000, Italy and Sardegna Lines v Commission, C‑15/98 and C‑105/99, EU:C:2000:570, paragraphs 33 to 35; of 29 April 2004, Italy v Commission, C‑298/00 P, EU:C:2004:240, paragraph 39; and of 9 June 2011, Comitato Venezia vuole vivere and Others v Commission, C‑71/09 P, C‑73/09 P and C‑76/09 P, EU:C:2011:368, paragraph 56).35However, contrary to the Commission’s arguments, it cannot be deduced from that case-law that the first part of the decision at issue is not of general application and is therefore not regulatory.36It follows from that case-law that the fact that that part is of individual concern to the restricted class of beneficiaries of the aid scheme concerned does not preclude that part from being regarded as of general application where it applies to objectively determined situations and produces legal effects for categories of persons envisaged in a general and abstract manner.37That is so in the present case.38Since the Commission considered, in the first part of the decision at issue, that it was not appropriate to order the recovery of the aid granted by virtue of the exemption from ICI despite its being unlawful and incompatible with the internal market, that decision preserves the anticompetitive effects of the general and abstract measure which that exemption constitutes with respect to an indefinite number of competitors of the beneficiaries of the aid granted under that measure. The decision therefore applies to objectively determined situations and produces legal effects for categories of persons envisaged in a general and abstract manner.39It follows that the General Court was entitled to consider that the first part of the decision at issue is of general application. Consequently, the first part of the single ground of appeal of the Commission’s appeals must be rejected. Second part 40The Commission submits that the General Court erred in law by concluding that Mr Ferracci and Scuola Elementare Maria Montessori were directly concerned on the sole basis that they might potentially compete with the beneficiaries of the national measures in question. The General Court’s approach was not consistent with that adopted by the Court in the judgments of 28 April 2015, T & L Sugars and Sidul Açúcares v Commission (C‑456/13 P, EU:C:2015:284), and of 17 September 2015, Confederazione Cooperative Italiane and Others v Anicav and Others (C‑455/13 P, C‑457/13 P and C‑460/13 P, not published, EU:C:2015:616). To show that he is directly concerned, an applicant must demonstrate that the contested measure entails sufficiently concrete effects on his situation.41Scuola Elementare Maria Montessori contests those arguments.42According to settled case-law of the Court, the condition that a natural or legal person must be directly concerned by the decision against which the action is brought, laid down in the fourth paragraph of Article 263 TFEU, requires two cumulative criteria to be met, namely, first, the contested measure must directly affect the legal situation of the individual and, second, it must leave no discretion to its addressees who are entrusted with the task of implementing it, such implementation being purely automatic and resulting from the EU rules alone without the application of other intermediate rules (judgments of 5 May 1998, Glencore Grain v Commission, C‑404/96 P, EU:C:1998:196, paragraph 41 and the case-law cited; of 13 October 2011, Deutsche Post and Germany v Commission, C‑463/10 P and C‑475/10 P, EU:C:2011:656, paragraph 66; and order of 19 July 2017, Lysoform Dr. Hans Rosemann and Ecolab Deutschland v ECHA, C‑666/16 P, not published, EU:C:2017:569, paragraph 42).43As regards specifically the rules on State aid, it must be noted that their objective is to preserve competition (see, to that effect, judgments of 15 June 2006, Air Liquide Industries Belgium, C‑393/04 and C‑41/05, EU:C:2006:403, paragraph 27 and the case-law cited, and of 17 July 2008, Essent Network Noord and Others, C‑206/06, EU:C:2008:413, paragraph 60). So, in that field, the fact that a Commission decision leaves intact all the effects of the national measures which the applicant, in a complaint addressed to that institution, claimed were not compatible with that objective and placed it in an unfavourable competitive position makes it possible to conclude that the decision directly affects its legal situation, in particular its right under the provisions on State aid of the FEU Treaty not to be subject to competition distorted by the national measures concerned (see, to that effect, judgment of 28 January 1986, Cofaz and Others v Commission, 169/84, EU:C:1986:42, paragraph 30).44In the present case, with respect to the first of the two criteria mentioned in paragraph 42 above, the General Court considered in substance, in paragraph 42 of the judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), and paragraph 45 of the judgment of 15 September 2016, Ferracci v Commission (T‑219/13, EU:T:2016:485), that it was satisfied because the services offered by Mr Ferracci and Scuola Elementare Maria Montessori respectively were similar to those offered by the beneficiaries of the national measures assessed in the decision at issue and, consequently, the former ‘might be in a competitive relationship’ with the latter.45As the Commission rightly submits, that reasoning is vitiated by an error of law.46While it is not for the EU judicature, at the stage of the examination of admissibility, to rule definitively on the competitive relationships between an applicant and the beneficiaries of the national measures assessed in a decision of the Commission on State aid, such as the decision at issue (see, to that effect, judgments of 28 January 1986, Cofaz and Others v Commission, 169/84, EU:C:1986:42, paragraph 28, and of 20 December 2017, Binca Seafoods v Commission, C‑268/16 P, EU:C:2017:1001, paragraph 59), a direct effect on such an applicant cannot be deduced from the mere potential existence of a competitive relationship, such as that found in the judgments under appeal.47Given that the condition of direct concern requires the contested measure to produce effects directly on the applicant’s legal situation, the EU judicature must ascertain whether the applicant has adequately explained the reasons why the Commission’s decision is liable to place him in an unfavourable competitive position and thus to produce effects on his legal situation.48It must nonetheless be recalled that, if the grounds of a decision of the General Court reveal an infringement of EU law but the operative part of the judgment can be seen to be well founded on other legal grounds, that infringement is not capable of leading to the annulment of that decision and a substitution of grounds must be made (judgment of 26 July 2017, Council v LTTE, C‑599/14 P, EU:C:2017:583, paragraph 75 and the case-law cited).49That is the case here.50It may be seen from the applications brought by Mr Ferracci and Scuola Elementare Maria Montessori before the General Court that they submitted, with evidence in support and without being contradicted by the Commission on this point, that their establishments were situated in the immediate vicinity of ecclesiastical or religious entities carrying on similar activities to theirs which were thus active in the same market for services and the same geographical market. In so far as such entities were a priori eligible for the national measures assessed in the decision at issue, it must be considered that Mr Ferracci and Scuola Elementare Maria Montessori have adequately explained the reasons why the decision at issue was liable to place them in an unfavourable competitive position and, consequently, that that decision directly affected their legal situation, in particular their right not to be subject in that market to competition distorted by the measures in question.51Contrary to the arguments of the Commission, that conclusion is not called into question by the judgments of 28 April 2015, T & L Sugars and Sidul Açúcares v Commission (C‑456/13 P, EU:C:2015:284), and of 17 September 2015, Confederazione Cooperative Italiane and Others v Anicav and Others (C‑455/13 P, C‑457/13 P and C‑460/13 P, not published, EU:C:2015:616). While the Court held in those judgments that the mere fact that provisions adopted as part of the common agricultural policy place an applicant in an unfavourable competitive position does not in itself allow it to be concluded that those provisions affect the applicant’s legal situation, that line of case-law cannot be transposed to actions brought by competitors of beneficiaries of State aid.52The cases cited in the preceding paragraph did not concern the rules on State aid, the objective of which is precisely to preserve competition, as noted in paragraph 43 above.53Consequently, the actions brought by Mr Ferracci and Scuola Elementare Maria Montessori satisfy the first of the two criteria mentioned in paragraph 42 above.54With respect to the second of those criteria, the General Court considered in paragraph 45 of the judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), and paragraph 48 of the judgment of 15 September 2016, Ferracci v Commission (T‑219/13, EU:T:2016:485), that the decision at issue, both in its first part and in its second and third parts, produces legal effects purely automatically on the basis of the EU rules alone without the application of other intermediate rules. As the Advocate General observes in substance in point 52 of his Opinion, that consideration, which is not contested by the Commission in these appeals, is not vitiated by any error of law.55It follows that the General Court was entitled to consider that Mr Ferracci and Scuola Elementare Maria Montessori were directly concerned by the decision at issue. The second part of the single ground of appeal of the Commission’s appeals must therefore be rejected. Third part 56The Commission submits that the General Court erred in law by considering that the national measures implementing the measures that were the subject of the decision at issue did not constitute implementing measures as regards Mr Ferracci and Scuola Elementare Maria Montessori. The General Court wrongly rejected its argument that they could have applied for the favourable tax treatment reserved to their competitors and brought proceedings before the national court against a refusal by the authorities, contesting on that occasion the validity of the decision at issue. The General Court’s approach was inconsistent with the line of case-law of the Court starting with the judgment of 19 December 2013, Telefónica v Commission (C‑274/12 P, EU:C:2013:852).5758According to settled case-law of the Court, the expression ‘does not entail implementing measures’ within the meaning of the third limb of the fourth paragraph of Article 263 TFEU must be interpreted in the light of the objective of that provision, which, as is apparent from its drafting history, is to ensure that individuals do not have to break the law in order to have access to a court. Where a regulatory act directly affects the legal situation of a natural or legal person without requiring implementing measures, that person could be denied effective judicial protection if he did not have a legal remedy before the EU judicature for the purpose of challenging the lawfulness of the regulatory act. In the absence of implementing measures, a natural or legal person, although directly concerned by the act in question, would be able to obtain judicial review of the act only after having infringed its provisions, by pleading that those provisions are unlawful in proceedings initiated against them before the national court (judgments of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraph 27, and of 13 March 2018, European Union Copper Task Force v Commission, C‑384/16 P, EU:C:2018:176, paragraph 35 and the case-law cited).59By contrast, where a regulatory act entails implementing measures, judicial review of compliance with the EU legal order is ensured irrespective of whether those measures were adopted by the European Union or the Member States. Natural or legal persons who are unable, because of the conditions of admissibility in the fourth paragraph of Article 263 TFEU, to challenge an EU regulatory act directly before the EU judicature are protected against the application to them of such an act by the ability to challenge the implementing measures which the act entails (judgments of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraph 28, and of 13 March 2018, European Union Copper Task Force v Commission, C‑384/16 P, EU:C:2018:176, paragraph 36 and the case-law cited).60Where responsibility for the implementation of such acts lies with the institutions, bodies, offices or agencies of the European Union, natural or legal persons are entitled to bring a direct action before the EU judicature against the implementing acts under the conditions stated in the fourth paragraph of Article 263 TFEU, and to plead in support of that action, pursuant to Article 277 TFEU, the unlawfulness of the basic act concerned. Where that implementation is a matter for the Member States, those persons may plead the invalidity of the basic act concerned before the national courts and cause them to refer questions to the Court for a preliminary ruling under Article 267 TFEU (judgments of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraph 29, and of 13 March 2018, European Union Copper Task Force v Commission, C‑384/16 P, EU:C:2018:176, paragraph 37 and the case-law cited).61The Court has, moreover, repeatedly held that the question whether a regulatory act entails implementing measures should be assessed by reference to the position of the person pleading the right to bring proceedings under the third limb of the fourth paragraph of Article 263 TFEU. It is therefore irrelevant whether the act in question entails implementing measures with regard to other persons. Furthermore, in that assessment, reference should be made exclusively to the subject matter of the action (see, to that effect, judgments of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraphs 30 and 31; of 27 February 2014, Stichting Woonpunt and Others v Commission, C‑132/12 P, EU:C:2014:100, paragraphs 50 and 51; and of 13 March 2018, European Union Copper Task Force v Commission, C‑384/16 P, EU:C:2018:176, paragraphs 38 and 39 and the case-law cited).62In the present case, in so far as the actions brought by Mr Ferracci and Scuola Elementare Maria Montessori sought the annulment of the first part of the decision at issue, it must be considered, as the Advocate General observes in point 69 of his Opinion, that, the materialisation of the legal effects of the decision not to order recovery of the aid found to be unlawful and incompatible with the internal market, which was the subject of that first part, did not need any implementing measures which could be the subject of judicial review by the EU judicature or the national courts. The General Court was therefore entitled to conclude that that part does not entail implementing measures within the meaning of the third limb of the fourth paragraph of Article 263 TFEU with respect to Mr Ferracci and Scuola Elementare Maria Montessori. Nor indeed does the Commission put forward any specific argument to challenge that conclusion.63As regards the second and third parts of the decision at issue, in which the Commission found that Article 149(4) of the TUIR and the exemption under the IMU scheme did not constitute State aid within the meaning of Article 107(1) TFEU, it must be recalled that the Court has indeed repeatedly held that, for the beneficiaries of an aid scheme, the national provisions establishing the scheme and the measures implementing those provisions, such as a tax notice, constitute implementing measures entailed by a decision declaring the aid scheme incompatible with the internal market or declaring it compatible with the internal market subject to compliance with commitments entered into by the Member State concerned (see, to that effect, judgments of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraphs 35 and 36; of 27 February 2014, Stichting Woonpunt and Others v Commission, C‑132/12 P, EU:C:2014:100, paragraphs 52 and 53; and of 27 February 2014, Stichting Woonlinie and Others v Commission, C‑133/12 P, EU:C:2014:105, paragraphs 39 and 40).64That case-law reflects the fact that a beneficiary of an aid scheme can, where he satisfies the conditions under national law for being eligible for that scheme, request the national authorities to grant him the aid as it would have been granted if there were an unconditional decision declaring the scheme compatible with the internal market, and contest before the national courts a measure refusing that request, pleading the invalidity of the Commission’s decision declaring the scheme incompatible with the internal market or compatible with that market subject to compliance with commitments entered into by the Member State concerned, in order to cause those courts to refer questions to the Court for a preliminary ruling on its validity (see, to that effect, judgment of 19 December 2013, Telefónica v Commission, C‑274/12 P, EU:C:2013:852, paragraphs 36 and 59, and order of 15 January 2015, Banco Bilbao Vizcaya Argentaria and Telefónica v Commission, C‑587/13 P and C‑588/13 P, not published, EU:C:2015:18, paragraphs 49 and 65).65However, that case-law cannot be applied to the situation of the competitors of beneficiaries of a national measure that has been found not to constitute State aid within the meaning of Article 107(1) TFEU, such as Mr Ferracci and Scuola Elementare Maria Montessori. The situation of such a competitor differs from that of the beneficiaries of aid referred to by that case-law, in that the competitor does not satisfy the conditions laid down by the national measure in question for eligibility for that aid.66In those circumstances, as the Advocate General observes in point 71 of his Opinion, it would be artificial to require that competitor to request the national authorities to grant him that benefit and to contest the refusal of that request before a national court, in order to cause the national court to make a reference to the Court on the validity of the Commission’s decision concerning that measure.67The General Court was therefore entitled to find that the decision at issue did not, either in its first or in its second and third parts, comprise implementing measures with respect to Scuola Elementare Maria Montessori and Mr Ferracci.68Consequently, the third part of the single ground of appeal of the Commission’s appeals must be rejected, and those appeals must therefore be dismissed in their entirety. Scuola Elementare Maria Montessori’s appeal in Case C‑622/16 P First ground of appeal 69Scuola Elementare Maria Montessori’s first ground of appeal, criticising the General Court for finding the first part of the decision at issue valid, is divided into four parts. By the first part, Scuola Elementare Maria Montessori argues that the General Court infringed Article 108 TFEU, Article 14(1) of Regulation No 659/1999 and Article 4(3) TEU by accepting that the Commission was entitled to find that it was absolutely impossible to recover unlawful aid even at the stage of the formal investigation procedure, and not solely at the stage of enforcement of an order for recovery. Absolute impossibility of recovering unlawful aid is not a general principle of law within the meaning of the second sentence of Article 14(1) of Regulation No 659/1999.70By the second and third parts, Scuola Elementare Maria Montessori submits that the General Court misinterpreted the concept of ‘absolute impossibility’ by ruling that the first part of the decision at issue was valid, in so far as the Commission derived the absolute impossibility of recovering the unlawful aid in question from the sole fact that it was not possible to obtain the necessary information for the recovery of that aid from the Italian land registry and tax databases. That circumstance was a purely internal difficulty which, in accordance with the Court’s case-law, could not allow the conclusion that recovery of the aid was absolutely impossible.71Furthermore, the General Court disregarded the burden of proof by rejecting Scuola Elementare Maria Montessori’s arguments on the existence of alternative means which would have allowed the recovery of the aid in question. According to Scuola Elementare Maria Montessori, it was not for it to show that it was possible to recover the aid, but for the Italian Republic to cooperate sincerely with the Commission by indicating alternative methods allowing it to be recovered, even if only in part.72By the fourth part, Scuola Elementare Maria Montessori criticises the General Court for distorting the evidence by finding that it was impossible to obtain the necessary information for the recovery of the aid in question from the Italian land registry and tax databases.73The Commission, supported by the Italian Republic, contends with respect to the first part that the absence of an order for recovery in the decision at issue is consistent with Article 14(1) of Regulation No 659/1999, which prohibits the Commission from ordering the recovery of unlawful aid where recovery is contrary to a general principle of EU law. By virtue of the general legal principle that ‘no one is obliged to do the impossible’, the Commission cannot impose an obligation the performance of which is objectively and absolutely impossible.74With respect to the second and third parts, the Commission submits that absolute impossibility of recovering unlawful aid may also derive from the national rules concerned. The argument that alternative methods exist which would have permitted recovery of the aid calls in question findings of fact which cannot be the subject of an appeal. The burden of proof for showing the existence of such methods was, in accordance with general principles, on Scuola Elementare Maria Montessori, which relied on their existence.75With respect to the fourth part, the argument concerning distortion of evidence is inadmissible and in any event unfounded.76As regards the first part of the first ground of appeal, it must be recalled that in accordance with the first sentence of Article 14(1) of Regulation No 659/1999, where negative decisions are taken in cases of unlawful aid, the Commission is to decide that the Member State concerned shall take all necessary measures to recover the aid from the beneficiary.77It is settled case-law that the adoption of an order to recover unlawful aid is the logical and normal consequence of a finding that it is unlawful. The principal objective of such an order is to eliminate the distortion of competition caused by the competitive advantage conferred by the unlawful aid (see, to that effect, judgments of 15 December 2005, Unicredito Italiano, C‑148/04, EU:C:2005:774, paragraph 113 and the case-law cited; of 1 October 2015, Electrabel and Dunamenti Erőmű v Commission, C‑357/14 P, EU:C:2015:642, paragraph 111 and the case-law cited; and of 21 December 2016, Commission v Aer Lingus and Ryanair Designated Activity, C‑164/15 P and C‑165/15 P, EU:C:2016:990, paragraph 116).78However, in accordance with the second sentence of Article 14(1) of Regulation No 659/1999, the Commission shall not require the recovery of the aid if this would be contrary to a general principle of EU law.79As the Advocate General observes in points 107 and 110 of his Opinion, the principle that ‘no one is obliged to do the impossible’ is among the general principles of EU law (see, to that effect, order of 3 March 2016, Daimler, C‑179/15, EU:C:2016:134, paragraph 42).80While it follows from settled case-law of the Court that the only defence that may be relied on by a Member State against an action for failure to fulfil obligations brought by the Commission on the basis of Article 108(2) TFEU is the absolute impossibility of implementing correctly the Commission’s decision to order recovery of the aid in question (see, to that effect, judgments of 15 January 1986, Commission v Belgium, 52/84, EU:C:1986:3, paragraph 14; of 1 June 2006, Commission v Italy, C‑207/05, not published, EU:C:2006:366, paragraph 45; and of 9 November 2017, Commission v Greece, C‑481/16, not published, EU:C:2017:845, paragraph 28 and the case-law cited), that case-law relates, however, solely to the pleas that can be raised in defence by the Member State against an order for recovery made by the Commission, not to whether or not the absolute impossibility of recovering the aid may already be established at the stage of the formal investigation procedure.81Moreover, and above all, Scuola Elementare Maria Montessori’s argument that the absolute impossibility of recovering unlawful aid can be established only after the adoption of an order for recovery conflicts with the very wording of the second sentence of Article 14(1) of Regulation No 659/1999, under which the Commission is not to adopt an order for recovery if that would be contrary to a general principle of EU law.82The Court has previously held that the Commission cannot, on pain of its being invalid, adopt an order for recovery which, from the moment of its adoption, is objectively and absolutely impossible to implement (see, to that effect, judgment of 17 June 1999, Belgium v Commission, C‑75/97, EU:C:1999:311, paragraph 86).83In so far as Scuola Elementare Maria Montessori also bases the first part of its first ground of appeal on the principle of sincere cooperation, it must be recalled that under Article 4(3) TEU that principle applies throughout the procedure for the examination of a measure by reference to the provisions of EU law on State aid (see, to that effect, judgments of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraph 147 and the case-law cited, and of 21 December 2016, Club Hotel Loutraki and Others v Commission, C‑131/15 P, EU:C:2016:989, paragraph 34).84Thus where, as in the present case, the Member State concerned already claims during the formal investigation procedure that recovery is absolutely impossible, the principle of sincere cooperation requires the Member State, at that stage, to submit to the Commission for assessment the reasons underlying that claim and requires the Commission to examine them scrupulously. Consequently, contrary to Scuola Elementare Maria Montessori’s submission, that principle does not require the Commission to attach an order for recovery to every decision declaring aid to be unlawful and incompatible with the internal market, but requires it to take into consideration the arguments put to it by the Member State concerned on the existence of absolute impossibility of recovery.85It follows that the first part of the first ground of appeal must be rejected.86As regards the fourth part of this ground of appeal, it should be recalled that an appellant must, pursuant to Article 256 TFEU, the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union and Article 168(1)(d) of the Rules of Procedure of the Court of Justice, indicate precisely the evidence alleged to have been distorted by the General Court and demonstrate the errors of appraisal which, in his view, led to that distortion. In addition, it is settled case-law of the Court that the distortion must be obvious from the documents in the case file without there being any need to carry out a new assessment of the facts and the evidence (see, to that effect, judgments of 9 June 2011, Comitato Venezia vuole vivere and Others v Commission, C‑71/09 P, C‑73/09 P and C‑76/09 P, EU:C:2011:368, paragraphs 152 and 153, and of 8 March 2016, Greece v Commission, C‑431/14 P, EU:C:2016:145, paragraph 32 and the case-law cited).87In the present case, Scuola Elementare Maria Montessori mentions only, in this fourth part, the Commission’s reply of 17 September 2015 to a question asked by the General Court as a measure of organisation of procedure, referred to in paragraph 100 of the judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), in which the Commission described the provisions of the Italian legislation on tax databases.88It must be stated, first, that Scuola Elementare Maria Montessori does not challenge in any way the presentation of the material content of that evidence in paragraphs 101 and 102 of that judgment, but confines itself to calling in question the assessment made by the General Court on the basis of that content. Second, Scuola Elementare Maria Montessori has not shown in what way the General Court’s assessment that the Italian tax databases did not make it possible retroactively to trace the kind of activities carried on by entities enjoying the exemption from ICI for their real property, or to calculate the amount of the unlawfully obtained exemptions, appears manifestly erroneous.89The fourth part of the first ground of appeal cannot therefore succeed.90As regards the second and third parts of this ground of appeal, which should be considered together, it must be recalled that, in accordance with the Court’s settled case-law on actions for failure to fulfil obligations brought on the ground of infringement of a decision ordering the recovery of unlawful aid, a Member State which encounters unforeseen and unforeseeable difficulties or becomes aware of consequences overlooked by the Commission must submit those problems to the Commission for consideration, together with proposals for suitable amendments to the decision at issue. In such a case, the Member State and the Commission must, by virtue of the principle of sincere cooperation, work together in good faith with a view to overcoming difficulties while fully observing the provisions of the FEU Treaty, in particular those on aid (see, to that effect, judgments of 2 July 2002, Commission v Spain, C‑499/99, EU:C:2002:408, paragraph 24, and of 22 December 2010, Commission v Italy, C‑304/09, EU:C:2010:812, paragraph 37 and the case-law cited).91However, the condition of absolute impossibility of implementation is not satisfied where the defendant Member State does no more than inform the Commission of the internal difficulties of a legal, political or practical nature, attributable to the national authorities’ own acts or omissions, raised by implementation of the decision at issue, without taking real steps to recover the aid from the undertakings concerned and without suggesting to the Commission alternative methods of implementing the decision which would allow those difficulties to be overcome (see, to that effect, judgments of 13 November 2008, Commission v France, C‑214/07, EU:C:2008:619, paragraph 50, and of 12 February 2015, Commission v France, C‑37/14, not published, EU:C:2015:90, paragraph 66 and the case-law cited).92That case-law is applicable mutatis mutandis to the assessment during the formal investigation procedure of whether it is absolutely impossible to recover unlawful aid. Thus a Member State which at that stage of the procedure encounters difficulties in recovering the aid concerned must submit those difficulties to the Commission for consideration and cooperate in good faith with the Commission with a view to overcoming them, in particular by suggesting alternative methods allowing recovery, if only in part, of the aid. In all cases, the Commission is required to undertake a detailed examination of the difficulties pleaded and the suggested alternative methods of recovery. Only if the Commission finds, following such a detailed examination, that there are no alternative methods allowing even partial recovery of the unlawful aid in question may that recovery be considered to be objectively and absolutely impossible to carry out.93In the present case, it follows from paragraphs 76 and 85 of the General Court’s judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), that the Commission confined itself, in the first part of the decision at issue, to deducing the absolute impossibility of recovering the unlawful aid in question solely from the fact that it was not possible to obtain the necessary information for recovery of the aid from the Italian land registry and tax databases, while omitting to consider the possible existence of alternative methods allowing recovery, if only in part, of the aid.94By upholding the decision on this point, the General Court erred in law.95As the Advocate General observes in points 116 and 117 of his Opinion, the circumstance that the information needed for recovery of the unlawful aid in question could not be obtained from the Italian land registry and tax databases must be regarded as caused by internal difficulties attributable to the national authorities’ own acts or omissions. According to the settled case-law of the Court cited in paragraph 91 above, such internal difficulties do not suffice for it to be concluded that there is absolute impossibility of recovery.96As may be seen from paragraphs 90 to 92 above, recovery of unlawful aid may be considered to be objectively and absolutely impossible only if the Commission finds, following a detailed examination, that two cumulative conditions are satisfied, namely that the difficulties relied on by the Member State concerned are real and that there are no alternative methods of recovery. As noted in paragraph 93 above, the General Court upheld the first part of the decision at issue despite the fact that the Commission had omitted to carry out, in that decision, a detailed examination of whether the second of those conditions was met.97The error of law which thus vitiates the General Court’s judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), overlaps with that also committed by the General Court by rejecting, in paragraphs 86 and 104 to 110 of that judgment, Scuola Elementare Maria Montessori’s argument that the Commission should have examined the existence of alternative methods enabling recovery, if only in part, of the aid in question, on the ground that Scuola Elementare Maria Montessori had not been able to demonstrate their existence.98In so far as Article 14(1) of Regulation No 659/1999 requires the Commission, as a general rule, to adopt an order to recover unlawful aid and allows it to refrain from doing so only exceptionally, it was for the Commission to show in the decision at issue that the conditions for it to decline to adopt such an order were satisfied, not for Scuola Elementare Maria Montessori to prove before the General Court that there existed alternative methods enabling recovery, if only in part, of the aid in question. In those circumstances, the General Court could not confine itself to observing that Scuola Elementare Maria Montessori had not succeeded before it in showing that such alternative methods existed.99Consequently, the second and third parts of the first ground of appeal must be allowed and the remainder of the ground of appeal must be rejected. Second ground of appeal 100Scuola Elementare Maria Montessori submits that the General Court erred in law by holding that the exemption from IMU which is the subject of the third part of the decision at issue did not constitute State aid within the meaning of Article 107(1) TFEU on the ground that the exemption did not apply to economic activities. In this respect, Scuola Elementare Maria Montessori argues that the General Court disregarded the case-law of the Court in rejecting its argument that the activities covered by that exemption were provided for consideration, on the ground that the exemption applies only to educational activities provided free of charge or against payment of a token amount. By defining as ‘token’ an amount that covers a fraction of the actual cost of the service, the Italian legislation allows the exemption to be granted to operators who finance their educational services primarily from the consideration they receive from pupils or their parents.101Scuola Elementare Maria Montessori further criticises the General Court for holding that the non-applicability of the exemption from IMU to economic activities is also ensured by the fact that the exemption extends only to activities which by their nature are not in competition with the activities of other operators who seek a profit. That fact is of no relevance to educational activities, since they compete by their nature with the activities of other operators in the market.102The Commission and the Italian Republic contest those arguments.103According to the Court’s settled case-law, EU competition law, in particular the prohibition in Article 107(1) TFEU, applies to the activities of undertakings. In this context, the concept of ‘undertaking’ covers any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed (see, to that effect, judgments of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraph 107, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraphs 39 and 41 and the case-law cited).104Any activity consisting in offering services on a given market, that is, services normally provided for remuneration, is an economic activity. The essential characteristic of remuneration lies in the fact that it is consideration for the service in question (see, to that effect, judgments of 11 September 2007, Schwarz and Gootjes-Schwarz, C‑76/05, EU:C:2007:492, paragraphs 37 and 38, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraphs 45 and 47).105As regards educational activities, the Court has held that courses provided by educational establishments financed essentially by private funds that do not come from the provider itself constitute services, since the aim of such establishments is to offer a service for remuneration (judgment of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 48 and the case-law cited).106In the present case, the General Court found in paragraphs 136 and 140 of the judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), that the exemption from IMU applied only to educational activities provided free of charge or against payment of a token amount covering only part of the actual cost of the service, with that part not being related to the cost.107It must be recalled that, in the case of an interpretation of national law by the General Court, the Court of Justice has jurisdiction on appeal only to determine whether that law was distorted, and the distortion must be obvious from the documents in the case file (judgment of 21 December 2016, Commission v Hansestadt Lübeck, C‑524/14 P, EU:C:2016:971, paragraph 20 and the case-law cited).108As Scuola Elementare Maria Montessori does not claim that there was distortion, its argument that the Italian legislation allows the exemption from IMU to be granted to educational activities that are financed primarily by pupils or their parents must be rejected at the outset as inadmissible.109As to Scuola Elementare Maria Montessori’s argument that the General Court disregarded the Court’s case-law cited in paragraphs 103 to 105 above, it must be considered that, as the Advocate General observes in points 142 to 144 of his Opinion, since the General Court found in its interpretation of national law that the exemption from IMU applies only to educational activities provided free of charge or against payment of a token amount not related to the cost of the service, it was able to reject, without committing an error of law, Scuola Elementare Maria Montessori’s complaint that the exemption applied to educational services provided for remuneration.110In so far as Scuola Elementare Maria Montessori additionally criticises the General Court for holding that the non-applicability of the exemption from IMU to economic activities is also ensured by the fact that the exemption extends only to activities which by their nature are not in competition with the activities of other operators who seek a profit, its argument must be rejected as ineffective, since it relates to a ground included for the sake of completeness.111It follows that the second ground of appeal must be rejected.112Since the second and third parts of the first ground of appeal have, however, been allowed, the judgment of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), must be set aside in so far as the General Court found the first part of the decision at issue to be valid, and the appeal must be dismissed as to the remainder. The action before the General Court in Case T‑220/13 113In accordance with the second sentence of the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, if the appeal is well founded and the decision of the General Court is set aside, the Court of Justice may itself give final judgment in the matter where the state of the proceedings so permits.114115It suffices to observe that, as Scuola Elementare Maria Montesori submits in substance in its first plea in law, the first part of the decision at issue is vitiated by an error of law for the reasons set out in paragraphs 90 to 99 above, in so far as the Commission found that it was absolutely impossible to recover the unlawful aid granted by virtue of the ICI scheme without examining scrupulously all the conditions required by the Court’s case-law for it to be possible to make such a finding.116Consequently, the first plea in law of Scuola Elementare Maria Montessori must be upheld, and the decision at issue must be annulled to that extent. Costs 117In accordance with Article 184(2) of the Rules of Procedure, where the appeal is unfounded or where the appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs. Under Article 138(1) of those Rules, which applies to appeal proceedings by virtue of Article 184(1), the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.118Article 138(3) of the Rules of Procedure, which applies to appeal proceedings by virtue of Article 184(1), further provides that where each party succeeds on some and fails on other heads, the parties are to bear their own costs. However, if it appears justified in the circumstances of the case, the Court may order that one party, in addition to bearing its own costs, is to pay a proportion of the costs of the other party.119Finally, under Article 140(1) of the Rules of Procedure, which applies to the procedure on appeal by virtue of Article 184(1), the Member States and institutions which have intervened in the proceedings are to bear their own costs.120In the present case, as regards the appeal in Case C‑622/16 P, it should be decided, having regard to the circumstances of the case, that Scuola Elementare Maria Montessori is to bear half of its own costs and the Commission, in addition to bearing its own costs, is to pay half of Scuola Elementare Maria Montessori’s costs. As regards the action before the General Court in Case T‑220/13, since only the first of the pleas in law put forward by Scuola Elementare Maria Montessori has ultimately been accepted, Scuola Elementare Maria Montessori is to pay two-thirds of the Commission’s costs and bear two-thirds of its own costs, and the Commission is to pay one-third of the costs of Scuola Elementare Maria Montessori’s costs and bear one-third of its own costs.121As regards the appeal in Case C‑623/16 P, since Scuola Elementare Maria Montessori has applied for costs against the Commission and the Commission has been unsuccessful, the Commission must be ordered to pay the costs.122As regards the appeal in Case C‑624/16 P, since Mr Ferracci has not applied for costs against the Commission and the Commission has been unsuccessful, the Commission must be ordered to bear its own costs.123The Italian Republic is to bear its own costs in Cases C‑622/16 P to C‑624/16 P.On those grounds, the Court (Grand Chamber) hereby: 1. Sets aside the judgment of the General Court of the European Union of 15 September 2016, Scuola Elementare Maria Montessori v Commission (T‑220/13, not published, EU:T:2016:484), in so far as it dismissed the action brought by Scuola Elementare Maria Montessori for the annulment of Commission Decision 2013/284/EU of 19 December 2012 on State aid SA.20829 (C 26/2010, ex NN 43/2010 (ex CP 71/2006)) Scheme concerning the municipal real estate tax exemption granted to real estate used by non-commercial entities for specific purposes implemented by Italy, to the extent that the European Commission did not order recovery of the unlawful aid granted by means of the exemption from the Imposta communale sugli immobili (municipal tax on real property); 2. Dismisses the appeal in Case C‑622/16 P as to the remainder; 3. Annuls Decision 2013/284 to the extent that the European Commission did not order recovery of the unlawful aid granted by means of the exemption from the Imposta communale sugli immobili (municipal tax on real property); 4. Dismisses the appeals in Cases C‑623/16 P and C‑624/16 P; 5. Orders Scuola Elementare Maria Montessori Srl to bear half of its own costs incurred in connection with the appeal in Case C‑622/16 P and to pay two-thirds of the European Commission’s costs and bear two-thirds of its own costs in connection with the action before the General Court of the European Union in Case T‑220/13; 6. Orders the European Commission, as regards its own costs, to bear one-third of the costs in connection with the action before the General Court of the European Union in Case T‑220/13 and to bear the costs in connection with the appeals in Cases C‑622/16 P to C‑624/16 P and, as regards the costs of Scuola Elementare Maria Montessori Srl, to pay one-third of the costs in connection with the action before the General Court of the European Union in Case T‑220/13, to pay half the costs in connection with the appeal in Case C‑622/16 P, and to pay the costs incurred in Case C‑623/16 P; 7. Orders the Italian Republic to bear its own costs in Cases C‑622/16 P to C‑624/16 P. [Signatures]( *1 ) Language of the case: Italian. | 64ce7-aba631a-4588 | EN |
A worker cannot automatically lose his acquired rights to paid annual leave because he did not apply for leave | 6 November 2018 ( *1 )(Reference for a preliminary ruling — Social policy — Organisation of working time — Directive 2003/88/EC — Article 7 — Right to paid annual leave — National legislation providing for the loss of annual leave not taken and of the payment in lieu thereof, where the worker did not submit a request for leave before the termination of the employment relationship)In Case C‑619/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Oberverwaltungsgericht Berlin-Brandenburg (Higher Administrative Court, Berlin-Brandenburg, Germany), made by decision of 14 September 2016, received at the Court on 29 November 2016, in the proceedings Sebastian W. Kreuziger v Land Berlin, THE COURT (Grand Chamber),composed of K. Lenaerts, President, J.-C. Bonichot, A. Prechal (Rapporteur), M. Vilaras, T. von Danwitz, F. Biltgen, K. Jürimäe, and C. Lycourgos, Presidents of Chambers, M. Ilešič, J. Malenovský, E. Levits, L. Bay Larsen and S. Rodin, Judges,Advocate General: Y. Bot,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 9 January 2018,after considering the observations submitted on behalf of:–Mr Kreuziger, representing himself,Land Berlin, by B. Pickel and S. Schwerdtfeger, acting as Agents, and by L. von Laffert, Rechtsanwältin,the German Government, by T. Henze and J. Möller, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and F. Di Matteo, avvocato dello Stato,the Hungarian Government, by E. Sebestyén and M.Z. Fehér, acting as Agents,the Austrian Government, by G. Eberhard, acting as Agent,the European Commission, by M. van Beek and T.S. Bohr, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 29 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ 2003 L 299, p. 9).2The request has been made in proceedings between Mr Sebastian W. Kreuziger and his former employer, Land Berlin (the Land of Berlin, Germany) concerning the latter’s refusal to pay Mr Kreuziger an allowance in lieu of paid annual leave not taken before the employment relationship between them was terminated. Legal context European Union law 3Recitals 4 and 5 of Directive 2003/88 state:‘(4)The improvement of workers’ safety, hygiene and health at work is an objective which should not be subordinated to purely economic considerations.(5)All workers should have adequate rest periods. The concept of “rest” must be expressed in units of time, i.e. in days, hours and/or fractions thereof. [European Union] workers must be granted minimum daily, weekly and annual periods of rest and adequate breaks. ...’4Article 7 of Directive 2003/88, entitled ‘Annual leave’, is worded as follows:‘1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.’5Article 17 of that directive provides that Member States may derogate from certain of its provisions. However, no derogation is permitted in respect of Article 7 of the directive. German law 6Paragraph 9 of the Verordnung über den Erholungsurlaub der Beamten und Richter (Regulation on the annual leave of officials and judges) of 26 April 1988 (GVBl. 1988, p. 846) (‘the EUrlVO’) states:‘1. The official shall take, so far as possible within a single period, the annual leave to which he is entitled. Upon request by the interested party, leave may be granted in separate periods. In general, however, leave should not be divided into more than two periods. Where leave is divided, it shall be granted to the official for at least two consecutive weeks.2. Leave must generally be taken during the leave year. Leave which has not been taken within 12 months after the end of the leave year shall lapse. ...’7The EUrlVO does not make provision for the grant of an allowance in lieu of paid annual leave not taken upon termination of the employment relationship.8Paragraph 7(4) of the Bundesurlaubsgesetz (Federal Law on leave), of 8 January 1963 (BGBl. 1963, p. 2), in its version of 7 May 2002 (BGBl. 2002 I, p. 1529) (‘the BUrlG’), provides:‘If, because of the termination of the employment relationship, the leave can no longer be granted in full or in part, an allowance in lieu thereof shall be paid.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 9From 13 May 2008 to 28 May 2010, Mr Kreuziger worked as a Rechtsreferendar (legal trainee) with the Land of Berlin, as part of a course of training governed by public law but not by the staff regulations of officials. His successful completion, on 28 May 2010, of the oral part of the second State examination marked the end of that traineeship and of that course of training with the Land.10Mr Kreuziger did not take paid annual leave between 1 January 2010 and the date on which his training ended. On 18 December 2010 he requested an allowance in lieu of the paid annual leave not taken. That request was first of all refused by decision of the President of the Kammergericht (Higher Regional Court, Germany) of 7 January 2011, then, on appeal, by decision of 4 May 2011 of the Gemeinsames Juristisches Prüfungsamt der Länder Berlin und Brandenburg (Joint Legal Review Board of the Länder of Berlin and Brandenburg, Germany), on the grounds that the EUrlVO does not provide for such a right to an allowance, that Directive 2003/88 applies only to workers, and that, in any event, the allowance in lieu provided for in Article 7(2) of that directive is based on the premiss that the person concerned was unable to take his leave for reasons not attributable to him.11Mr Kreuziger brought an action before the Verwaltungsgericht Berlin (Administrative Court, Berlin, Germany) against those decisions, which was dismissed by judgment of 3 May 2013. In that judgment, that court also noted that the EUrlVO does not provide for any entitlement to the payment of an allowance in lieu of paid annual leave not taken upon termination of the employment relationship. It also takes the view that, although it produces a direct effect, Article 7(2) of Directive 2003/88 does not provide the basis for such an entitlement in Mr Kreuziger’s favour, since that entitlement is based on the premiss that the person concerned had not been able, for reasons beyond his control, to exercise his right to paid annual leave before the employment relationship was terminated.12Furthermore, having noted that Paragraph 9 of the EUrlVO places an obligation on the worker to take his paid annual leave and that that provision therefore entails for the person concerned a requirement to apply for leave, the Verwaltungsgericht Berlin (Administrative Court, Berlin) ruled that national legislation relating to the conditions for the exercise of the right to paid annual leave is compatible with Article 7(1) of Directive 2003/88. Since Mr Kreuziger had voluntarily failed to submit such an application, even though he was aware that his employment relationship was to be terminated on 28 May 2010, his entitlement to paid annual leave expired on that date.13Mr Kreuziger brought proceedings on appeal against that judgment before the referring court, the Oberverwaltungsgericht Berlin-Brandenburg (Higher Administrative Court, Berlin-Brandenburg, Germany). That court notes, in turn, that the EUrlVO does not lay down any rule justifying the entitlement to payment of an allowance in lieu of paid annual leave not taken by Mr Kreuziger, as a result of which, in the absence of the transposition of Article 7(2) of Directive 2003/88 into national law, such an entitlement can only be derived in the present case from the direct effect of that provision.14In that regard, the referring court takes the view, first of all, that, as a legal trainee, Mr Kreuziger does fall within the scope ratione personae of Directive 2003/88.15Furthermore, Mr Kreuziger also meets the two conditions expressly set out in Article 7(2) of that directive, namely that, when he claimed an allowance in lieu, his employment relationship had been terminated, and he had not taken all the annual leave to which he was entitled at the time that the relationship was terminated.16Finally, however, the referring court states that it has doubts as to whether, in addition to those two express conditions, and as held by the Verwaltungsgericht Berlin (Administrative Court, Berlin), the right to an allowance in lieu of paid annual leave not taken may be precluded where the worker failed, before the employment relationship was terminated, to apply for the leave he was entitled to, although he had been in a position to do so, and whether, more generally, that right is based on the premiss that the worker had not been able, for reasons beyond his control, to exercise his right to paid annual leave before the employment relationship was terminated.17In those circumstances, the Oberverwaltungsgericht Berlin-Brandenburg (Higher Administrative Court, Berlin-Brandenburg) decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Is Article 7(2) of Directive [2003/88] to be interpreted as precluding national legislation or practice in accordance with which the entitlement to an allowance in lieu on termination of the employment relationship is excluded where the worker did not apply for paid annual leave even though he could have [done so]?(2)Is Article 7(2) of Directive [2003/88] to be interpreted as meaning that it precludes national legislation or practice in accordance with which the entitlement to an allowance in lieu on termination of the employment relationship presupposes that, for reasons beyond his control, the worker was unable to exercise his right to paid annual leave before the end of the employment relationship?’ Consideration of the questions referred Preliminary observations 18As a preliminary point, it should be noted that it is apparent from the order for reference that the national legislation applicable to the dispute in the main proceedings does not make provision for the payment to legal trainees of an allowance in lieu of paid annual leave not taken upon termination of the employment relationship. The BUrlG provision providing for such an allowance does not apply to them.19In view of that fact, the referring court states, moreover, that the request of the applicant in the main proceedings for the payment of such an allowance may be upheld only in so far as the person concerned is entitled to such an allowance directly on the basis of Article 7(2) of Directive 2003/88.20In that regard, it should be recalled that it is the settled case-law of the Court that, whenever the provisions of a directive appear, so far as their subject matter is concerned, to be unconditional and sufficiently precise, they may be relied upon before the national courts by individuals against the State where the latter has failed to implement the directive in domestic law by the end of the period prescribed or where it has failed to implement the directive correctly (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 33 and the case-law cited). In addition, where a person involved in legal proceedings is able to rely on a directive against a State, he may do so regardless of the capacity in which the latter is acting, whether as an employer or as a public authority. In either case it is necessary to prevent the State from taking advantage of its own failure to comply with EU law (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 38 and the case-law cited).21On the basis of those considerations, the Court has held that provisions of a directive that are unconditional and sufficiently precise may be relied upon by individuals, in particular against a Member State and all the organs of its administration, including decentralised authorities (see, to that effect, judgment of 7 August 2018, Smith, C‑122/17, EU:C:2018:631, paragraph 45 and the case-law cited).22As regards Article 7(2) of Directive 2003/88, it is apparent from the case-law of the Court that that provision does not lay down any condition for entitlement to an allowance in lieu other than that relating to the circumstance, first, that the employment relationship has ended and, secondly, that the worker has not taken all the annual leave to which he was entitled on the date that that relationship ended. That right is conferred directly by the directive and does not depend on conditions other than those which are explicitly provided for therein (see, to that effect, judgments of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraphs 23 and 28, and of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 27). That provision thus fulfils the criteria of unconditionality and sufficient precision, and thus meets the conditions required for it to have direct effect.23It follows, in the present case, that the fact that the applicable national law does not provide for the payment of an allowance in lieu of paid annual leave not taken at the time that the employment relationship of legal trainees is terminated cannot, of itself, preclude Mr Kreuziger from obtaining, on the direct legal basis of Article 7(2) of Directive 2003/88, that allowance from his former employer, the Land Berlin, which has the status of a public authority. Provided that it is established that Mr Kreuziger meets the requirements laid down by that provision, national courts will thus be required to disapply national rules or practices which preclude the payment of such an allowance. The first question 24As regards the first question, it should be noted at the outset that, although the national court does not identify, in that question, the national legislation referred to in the present case, it may be inferred from the information set out in the order for reference that it is Paragraph 9 of the EUrlVO.25Although the referring court does not express a view on the scope of Paragraph 9 of the EUrlVO in the context of the dispute in the main proceedings, it is apparent from paragraph 12 of the present judgment, that, in the judgment which is the subject of the appeal before it, the Verwaltungsgericht Berlin (Administrative Court, Berlin) held that that national provision requires the worker to apply to take his paid annual leave. According to that court, in the event that that obligation — which in its view is consistent with Article 7(1) of Directive 2003/88 — is not fulfilled, Mr Kreuziger’s right to paid annual leave lapsed on the date of the termination of the employment relationship.26Moreover, the national court further states, as is recalled in paragraph 16 of the present judgment, that it is referring a request for a preliminary ruling to the Court because it has doubts as to the compatibility of the interpretation of the Verwaltungsgericht Berlin (Administrative Court, Berlin) with Directive 2003/88.27In those circumstances, the first question should be understood as seeking to ascertain whether Article 7 of Directive 2003/88 must be interpreted as precluding national legislation such as Paragraph 9 of the EUrlVO, in so far as that legislation entails that, in the event that the worker did not ask to exercise his right to paid annual leave prior to the termination of the employment relationship, he automatically loses the days of paid annual leave to which he is entitled under EU law on the date of termination, and, accordingly, his entitlement to an allowance in lieu of paid annual leave not taken.28In that regard, it should be recalled at the outset that, according to the settled case-law of the Court, every worker’s right to paid annual leave must be regarded as a particularly important principle of EU social law from which there may be no derogations and whose implementation by the competent national authorities must be confined within the limits expressly laid down by Directive 2003/88 (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 15 and the case-law cited).29Moreover, the right to paid annual leave, as a principle of EU social law, is not only particularly important, but is also expressly laid down in Article 31(2) of the Charter of Fundamental Rights of the European Union, which Article 6(1) TEU recognises as having the same legal value as the Treaties (judgment of 30 June 2016, Sobczyszyn, C‑178/15, EU:C:2016:502, paragraph 20 and the case-law cited).30Since the case in the main proceedings relates to a refusal to pay an allowance in lieu of paid annual leave not taken on the date of termination of the employment relationship which existed between the parties in the main proceedings, it should be recalled that, when the employment relationship ends, it is no longer in fact possible for a worker to take the paid annual leave to which he is entitled. In order to prevent this impossibility leading to a situation in which the worker loses all enjoyment of that right, even in pecuniary form, Article 7(2) of Directive 2003/88 provides that the worker is entitled to an allowance in lieu for the days of annual leave not taken (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 17 and the case-law cited).31As set out in paragraph 22 of the present judgment, the Court has noted that Article 7(2) of Directive 2003/88 does not set out any conditions for entitlement to an allowance in lieu other than that relating to the fact, first, that the employment relationship has ended and, secondly, that the worker has not taken all annual leave to which he was entitled on the date that that relationship ended.32In that regard, it is apparent from the case-law of the Court that that provision must be interpreted as meaning that it precludes national legislation or practices which provide that, upon termination of the employment relationship, no allowance in lieu of paid annual leave not taken is to be paid to a worker who has not been able to take all the annual leave to which he was entitled before the end of that employment relationship, in particular because he was on sick leave for all or part of the leave year and/or of a carry-over period (judgments of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 62; of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 31; and of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 65).33The Court has also held that Article 7 of Directive 2003/88 cannot be interpreted as meaning that the right to paid annual leave and therefore, to the allowance in lieu provided for in paragraph 2 of this Article, may lapse because of the worker’s death. In that regard, the Court has in particular pointed out that, if the obligation to pay such an allowance were to lapse because of the termination of the employment relationship resulting from the worker’s death, the consequence of that circumstance would be an unintended occurrence retroactively leading to the total loss of the entitlement to paid annual leave itself, as set out in Article 7 (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraphs 25, 26 and 30).34As regards the case in the main proceedings, it should be noted that, according to the information in the order for reference and as has been stated in paragraphs 25 to 27 of the present judgment, the refusal of Mr Kreuziger’s former employer to pay him an allowance in lieu of paid annual leave not taken before the employment relationship was terminated is based, inter alia, on national legislation, in this case Paragraph 9 of the EUrlVO, pursuant to which the right to that leave lapsed not as a consequence of the termination of the employment relationship as such, but as a result of the fact that Mr Kreuziger did not apply to take it in the course of the employment relationship.35The referring court is therefore essentially asking whether, in the light of the case-law of the Court cited in paragraph 31 of the present judgment, on the date on which the employment relationship at issue in the main proceedings was terminated, Mr Kreuziger was still entitled to paid annual leave capable of being converted into an allowance in lieu on account of the termination of that relationship.36That question thus relates, first and foremost, to the interpretation of Article 7(1) of Directive 2003/88 and is intended to ascertain whether that provision precludes the right which it guarantees, in the event that annual leave is not taken, from lapsing automatically on the ground that the worker did not exercise that right during the course of the employment relationship.37In that regard, first, it cannot be inferred from the Court’s case-law mentioned in paragraphs 30 to 33 of the present judgment that Article 7 of Directive 2003/88 should be interpreted as meaning that, irrespective of the circumstances underlying the worker’s failure to take paid annual leave, that worker should still be entitled to the right to annual leave referred to in Article 7(1), and, in the event of the termination of the employment relationship, to an allowance by way of substitution therefor, pursuant to Article 7(2).38Secondly, while it is, admittedly, settled case-law that, in order to ensure compliance with the fundamental workers’ right to paid annual leave affirmed in EU law, Article 7 of Directive 2003/88 may not be interpreted restrictively at the expense of the rights that workers derive from it (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 22 and the case-law cited), it must also be noted, however, that the holiday pay required by Article 7(1) is intended to enable the worker actually to take the leave to which he is entitled (see, to that effect, judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 49).39According to the settled case-law of the Court, the right to annual leave laid down in Article 7 of Directive 2003/88 is intended to enable the worker to rest from carrying out the work he is required to do under his contract of employment and to enjoy a period of relaxation and leisure (judgment of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 34 and the case-law cited).40Thus, by providing that the minimum period of paid annual leave may not be replaced by an allowance in lieu, except in the event of termination of the employment relationship, Article 7(2) of Directive 2003/88 aims in particular to ensure that workers are entitled to actual rest, with a view to ensuring effective protection of their health and safety (see, to that effect, judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 60 and the case-law cited).41Thirdly, as is apparent from the very wording of Article 7 of Directive 2003/88 and the case-law of the Court, it is for the Member States to lay down, in their domestic legislation, conditions for the exercise and implementation of the right to paid annual leave, by prescribing the specific circumstances in which workers may exercise the right (judgment of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 28 and the case-law cited).42In that regard, the Court has in particular held that Article 7(1) of Directive 2003/88 does not in principle preclude national legislation which lays down conditions for the exercise of the right to paid annual leave expressly conferred by the directive, including even the loss of that right at the end of a leave year or of a carry-over period, provided, however, that the worker who has lost his right to paid annual leave has actually had the opportunity to exercise the right conferred on him by the directive (judgment of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 43).43National legislation such as Paragraph 9 of the EUrlVO falls within the scope of the procedures for exercising paid annual leave, within the meaning of Article 7(1) of Directive 2003/88 and the case-law of the Court referred to in the previous paragraph.44Such legislation forms part of the rules and procedures of national law applicable to the scheduling of workers’ leave, which seek to take into account the various interests involved (see, to that effect, judgment of 10 September 2009, Vicente Pereda, C‑277/08, EU:C:2009:542, paragraph 22).45However, as is apparent from paragraph 42 of the present judgment, it is important to ensure that the application of those provisions of national law cannot lead to the loss of the rights to paid annual leave acquired by the worker, even though he has not actually had the opportunity to exercise those rights.46In the present case, it should be noted that it is apparent from the order for reference that Paragraph 9 of the EUrlVO appears to be interpreted by the Verwaltungsgericht Berlin (Administrative Court, Berlin) as meaning that the fact that a worker did not request to take the paid annual leave to which he was entitled before the termination of the employment relationship automatically entails the consequence that, when the relationship is terminated, the worker loses his entitlement to that leave and, accordingly, the right to an allowance in lieu of leave not taken.47As noted by the Advocate General in point 34 of his Opinion, such an automatic loss of the entitlement to paid annual leave, which is not subject to prior verification that the worker was in fact given the opportunity to exercise that right, fails to have regard to the limits, recalled in paragraph 42 of the present judgment, which are binding on Member States when specifying the conditions for the exercise of that right.48The worker must be regarded as the weaker party in the employment relationship, and it is therefore necessary to prevent the employer from being in a position to impose upon him a restriction of his rights. On account of that position of weakness, such a worker may be dissuaded from explicitly claiming his rights vis-à-vis his employer where, in particular, doing so may expose him to measures taken by the employer likely to affect the employment relationship in a manner detrimental to that worker (see, to that effect, judgment of 25 November 2010, Fuß, C‑429/09, EU:C:2010:717, paragraphs 80 and 81 and the case-law cited).49In addition, incentives not to take leave or to encourage employees not to do so are incompatible with the objectives of the right to paid annual leave, as recalled in paragraphs 39 and 40 of the present judgment, relating in particular to the need to ensure that workers enjoy a period of actual rest, with a view to ensuring effective protection of their health and safety (see, to that effect, judgment of 6 April 2006, Federatie Nederlandse Vakbeweging, C‑124/05, EU:C:2006:244, paragraph 32). Thus, any practice or omission of an employer that may potentially deter a worker from taking his annual leave is equally incompatible with the purpose of the right to paid annual leave (judgment of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 39 and the case-law cited).50In those circumstances, it is important to avoid a situation in which the burden of ensuring that the right to paid annual leave is actually exercised rests fully on the worker, while the employer may, as a result thereof, take free of the need to fulfil its own obligations by arguing that no application for paid annual leave was submitted by the worker.51In that regard, while it should be made clear that compliance with the requirement, for employers, under Article 7 of Directive 2003/88 should not extend to requiring employers to force their workers to actually exercise their right to paid annual leave (see, to that effect, judgment of 7 September 2006, Commission v United Kingdom, C‑484/04, EU:C:2006:526, paragraph 43), the fact remains that employers must, however, ensure that workers are given the opportunity to exercise such a right (see, to that effect, judgment of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 63).52To that end, as the Advocate General also observed in points 43 to 45 of his Opinion, the employer is in particular required, in view of the mandatory nature of the entitlement to paid annual leave and in order to guarantee the effectiveness of Article 7 of Directive 2003/88, to ensure, specifically and transparently, that the worker is actually given the opportunity to take the paid annual leave to which he is entitled, by encouraging him, formally if need be, to do so, while informing him, accurately and in good time so as to ensure that that leave is still capable of procuring for the person concerned the rest and relaxation to which it is supposed to contribute, that, if he does not take it, it will be lost at the end of the reference period or authorised carry-over period, or upon termination of the employment relationship where the termination occurs during such a period.53In addition, the burden of proof in that respect is on the employer (see, by analogy, judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 68 and the case-law cited). Should the employer not be able to show that it has exercised all due diligence in order to enable the worker actually to take the paid annual leave to which he is entitled, it must be held that the loss of the right to such leave, and, in the event of the termination of the employment relationship, the corresponding absence of a payment of an allowance in lieu of annual leave not taken constitutes a failure to have regard, respectively, to Article 7(1) and Article 7(2) of Directive 2003/88.54However, if the employer is able to discharge the burden of proof in that regard, as a result of which it appears that it was deliberately and in full knowledge of the ensuing consequences that the worker refrained from taking the paid annual leave to which he was entitled after having been given the opportunity actually to exercise his right thereto, Article 7(1) and (2) of Directive 2003/88 does not preclude the loss of that right or, in the event of the termination of the employment relationship, the corresponding absence of an allowance in lieu of the paid annual leave not taken.55As noted by the Advocate General in points 52 and 53 of his Opinion, any interpretation of Article 7 of Directive 2003/88 which is liable to encourage the worker to refrain deliberately from taking his paid annual leave during the applicable reference or authorised carry-over periods in order to increase his remuneration upon termination of the employment relationship is, as is apparent from paragraph 49 of the present judgment, incompatible with the objectives pursued by the introduction of the right to paid annual leave.56In the light of the foregoing considerations, the answer to the first question is that Article 7 of Directive 2003/88 must be interpreted as precluding national legislation, such as that at issue in the main proceedings, in so far as it entails that, in the event that the worker did not ask to exercise his right to paid annual leave prior to the termination of the employment relationship, that worker loses — automatically and without prior verification of whether the employer had in fact enabled him, in particular through the provision of sufficient information, to exercise his right to leave prior to the termination of that relationship — the days of paid annual leave to which he was entitled under EU law on the date of the termination of that relationship, and, accordingly, his right to an allowance in lieu of paid annual leave not taken. The second question 57Given the answer to the first question, there is no need to reply to the second question. Costs 58Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time must be interpreted as precluding national legislation such as that at issue in the main proceedings, in so far as it entails that, in the event that the worker did not ask to exercise his right to paid annual leave prior to the termination of the employment relationship, that worker loses — automatically and without prior verification of whether the employer had in fact enabled him, in particular through the provision of sufficient information, to exercise his right to leave prior to the termination of that relationship — the days of paid annual leave to which he was entitled under EU law on the date of the termination of that relationship, and, accordingly, his right to an allowance in lieu of paid annual leave not taken. [Signatures]( *1 ) Language of the case: German. | bcbb7-96cd187-48cd | EN |
The heirs of a deceased worker may claim from the latter's former employer an allowance in lieu of the paid annual leave not taken by the worker | 6 November 2018 ( *1 ) ( 1 ) (Reference for a preliminary ruling — Social policy — Organisation of working time — Directive 2003/88/EC — Article 7 — Right to paid annual leave — Employment relationship terminated by the death of the worker — National legislation preventing the payment of an allowance to the legal heirs of a worker in lieu of paid annual leave not taken by him — Obligation to interpret national law in conformity with EU law — Charter of Fundamental Rights of the European Union — Article 31(2) — Whether it may be relied upon in a dispute between individuals)In Joined Cases C-569/16 and C-570/16,REQUESTS for a preliminary ruling under Article 267 TFEU made by the Bundesarbeitsgericht (Federal Labour Court, Germany), by decisions of 18 October 2016, received at the Court on 10 November 2016, in the proceedings Stadt Wuppertal v Maria Elisabeth Bauer (C‑569/16) andand Volker Willmeroth, in his capacity as owner of TWI Technische Wartung und Instandsetzung Volker Willmeroth e.K. Martina Broßonn (C‑570/16),THE COURT (Grand Chamber),composed of K. Lenaerts, President, J.-C. Bonichot, A. Prechal (Rapporteur), M. Vilaras, T. von Danwitz, F. Biltgen, K. Jürimäe, and C. Lycourgos, Presidents of Chambers, M. Ilešič, J. Malenovský, E. Levits, L. Bay Larsen and S. Rodin, Judges,Advocate General: Y. Bot,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:–Stadt Wuppertal, by T. Herbert, Rechtsanwalt,Mrs Broßonn, by O. Teubler, Rechtsanwalt,the European Commission, by M. van Beek and T.S. Bohr, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 29 May 2018,gives the following Judgment 1The present requests for a preliminary ruling concern the interpretation of Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ 2003 L 299, p. 9) and of Article 31(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The requests have been made in two sets of proceedings between, in Case C‑569/16, Stadt Wuppertal (town of Wuppertal, Germany) and Mrs Maria Elisabeth Bauer and, in Case C‑570/16, Mr Volker Willmeroth, in his capacity as owner of TWI Technische Wartung und Instandsetzung Volker Willmeroth e.K., and Mrs Martina Broßonn, concerning the refusal by Stadt Wuppertal and Mr Willmeroth, respectively, in their capacity as former employers of the late husbands of Mrs Bauer and Mrs Broßonn, to pay Mrs Bauer and Mrs Broßonn an allowance in lieu of the paid annual leave not taken by their spouses before their death. Legal context European Union law 3The fourth recital of Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time (OJ 1993 L 307, p. 18), stated:‘Whereas the Community Charter of the Fundamental Social Rights of Workers, adopted at the meeting of the European Council held at Strasbourg on 9 December 1989 by the Heads of State or of Government of 11 Member States, and in particular … [point] 8 … thereof, declared that:“…8.Every worker in the European Community shall have a right to a weekly rest period and to annual paid leave, the duration of which must be progressively harmonised in accordance with national practices....”’4As is apparent from recital 1, Directive 2003/88, which repealed Directive 93/104, codified the provisions of the latter.5According to recitals 4 to 6 of Directive 2003/88:‘(4)The improvement of workers’ safety, hygiene and health at work is an objective which should not be subordinated to purely economic considerations.(5)All workers should have adequate rest periods. The concept of “rest” must be expressed in units of time, i.e. in days, hours and/or fractions thereof. [European Union] workers must be granted minimum daily, weekly and annual periods of rest and adequate breaks. …(6)Account should be taken of the principles of the International Labour Organisation with regard to the organisation of working time, including those relating to night work.’6Article 7 of Directive 2003/88, which is identical to Article 7 of Directive 93/104, is worded as follows:‘1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.’7Article 17 of Directive 2003/88 provides that Member States may derogate from certain provisions of that directive. However, no derogation is permitted in respect of Article 7 of the directive. German law 8Paragraph 7(4) of the Bundesurlaubsgesetz (Federal Law on leave), of 8 January 1963 (BGBl. 1963, p. 2), in its version of 7 May 2002 (BGBl. 2002 I, p. 1529) (‘the BUrlG’), provides:‘If, because of the termination of the employment relationship, leave can no longer be granted in whole or in part, an allowance shall be paid in lieu.’9Paragraph 1922(1) of the Bürgerliches Gesetzbuch (Civil Code) (‘the BGB’) provides, under the heading ‘Universal Succession’:‘Upon the death of a person (devolution of an inheritance), that person’s property (estate) passes as a whole to one or several other persons (heirs).’ The disputes in the main proceedings and the questions referred for a preliminary ruling 10Mrs Bauer is the sole legal heir of her husband, who died on 20 December 2010, and who was employed by Stadt Wuppertal. The latter rejected Mrs Bauer’s request for an allowance in the amount of EUR 5 857.75, corresponding to the 25 days of outstanding paid annual leave which her husband had not taken at the time of his death.11Mrs Broßonn is the sole legal heir of her husband, who had been employed by Mr Willmeroth since 2003 and had died on 4 January 2013, having been unable to work since July 2012 due to illness. Mr Willmeroth rejected Mrs Broßonn’s request for an allowance in the amount of EUR 3 702.72, corresponding to the 32 days of outstanding paid annual leave which her husband had not taken at the time of his death.12Mrs Bauer and Mrs Broßonn both brought an action before the Arbeitsgericht (Labour Court, Germany) having jurisdiction, seeking payment of those allowances. Those actions were upheld, and the appeals brought, respectively, by Stadt Wuppertal and by Mr Willmeroth against the judgments delivered at first instance were dismissed by the Landesarbeitsgericht (Higher Labour Court, Germany) having jurisdiction. Stadt Wuppertal and Mr Willmeroth thereupon appealed to the referring court, the Bundesarbeitsgericht (Federal Labour Court, Germany), on a point of law against those decisions.13In the orders for reference in each of those two cases, the referring court points out that the Court has already held, in its judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755), that Article 7 of Directive 2003/88 must be interpreted as precluding national legislation or practice which provides that the entitlement to paid annual leave is lost without conferring entitlement to an allowance in lieu of outstanding paid annual leave, where the employment relationship is terminated by the death of the worker.14The referring court asks, however, whether the same applies where national law precludes an allowance in lieu from forming part of the estate of the deceased.15In that regard, that court states that, read together, Paragraph 7(4) of the BUrlG and Paragraph 1922(1) of the BGB lead to the right to paid annual leave lapsing upon the worker’s death, as a result of which it cannot be converted into an entitlement to an allowance in lieu or be part of the estate. It states, furthermore, that any other interpretation of those provisions would be contra legem and cannot therefore be accepted.16First, the referring court recalls that the Court held, in the judgment of 22 November 2011, KHS (C‑214/10, EU:C:2011:761), that the right to paid annual leave could lapse after 15 months from the end of the reference year, since it had not yet satisfied the purpose of the leave, which was to enable the worker to rest and to enjoy a period of relaxation and leisure. Moreover, noting that that objective does not appear capable of being attained where the worker dies, the referring court asks whether the loss of the right to paid annual leave and to an allowance in lieu of paid annual leave not taken may also be accepted in the latter case. According to that court, to hold otherwise would suggest that the minimum paid annual leave guaranteed by Directive 2003/88 and the Charter is also intended to provide cover for the heirs of the deceased worker.17In that context, the referring court is also uncertain whether Article 7 of Directive 2003/88 or Article 31(2) of the Charter may have the effect of requiring the employer to pay an allowance in lieu of paid annual leave not taken to the worker’s heirs, notwithstanding the fact that, in the present case, the provisions of national law mentioned in paragraph 15 of the present judgment preclude such a possibility.18Finally, in Case C‑570/16, the referring court, which observes that the dispute in the main proceedings is between two individuals, asks whether those provisions of EU law are capable of producing direct effect in such a context.19It is in those circumstances that the Bundesarbeitsgericht (Federal Labour Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling, the first of those questions being asked in identical terms in respect of Cases C‑569/16 and C‑570/16, and the second only in respect of Case C‑570/16:‘(1)Does Article 7 of Directive [2003/88] or Article 31(2) of the [Charter] grant the heir of a worker who died while in an employment relationship a right to financial compensation for the worker’s minimum annual leave prior to his death, which is precluded by Paragraph 7(4) of the [BUrlG], read in conjunction with Paragraph 1922(1) of the [BGB]?(2)If the first question is answered in the affirmative: Does this also apply where the employment relationship is between two private persons?’ Consideration of the questions referred Admissibility 20Mrs Broßonn casts doubt on the admissibility of the requests for a preliminary ruling on the ground, first, that the Court has already held, in its judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755), that Article 7 of Directive 2003/88 precludes national legislation or practices, such as that at issue in the main proceedings, under which, in the event of the death of the worker, the right to paid annual leave lapses without giving rise to an entitlement to an allowance in lieu of paid annual leave not taken. To hold that that provision does not preclude the national legislation at issue, in so far as it prevents the allowance from being passed on to the heirs, would render ineffective the guidance resulting from the judgment of the Court. Moreover, many national courts and academic legal writings take the view that it is possible to interpret the national legislation at issue in a manner consistent with that guidance.21In that regard, however, it should first be recalled that, even when there is case-law of the Court resolving the point of law at issue, national courts remain entirely at liberty to bring a matter before the Court if they consider it appropriate to do so; the fact that the provisions whose interpretation is sought have already been interpreted by the Court does not deprive the Court of jurisdiction to give a further ruling (judgment of 17 July 2014, Torresi, C‑58/13 and C‑59/13, EU:C:2014:2088, paragraph 32 and the case-law cited).22It follows that the fact that the Court, in the judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755), has already interpreted Article 7 of Directive 2003/88 in the light of the same national legislation as that at issue in the main proceedings, cannot lead to the inadmissibility of the questions referred in the present cases.23Secondly, it is settled case-law that, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgment of 6 March 2018, SEGRO and Horváth, C‑52/16 and C‑113/16, EU:C:2018:157, paragraph 42 and the case-law cited).24The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought is unrelated to the actual facts of the main action or its object, or where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 6 March 2018, SEGRO and Horváth, C‑52/16 and C‑113/16, EU:C:2018:157, paragraph 43 and the case-law cited).25In that regard, and in respect of Mrs Broßonn’s submission that the national legislation at issue in the main proceedings could be interpreted in such a way as to ensure its compliance with Article 7 of Directive 2003/88, as interpreted by the Court in the judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755), it is admittedly true that the question whether a national provision must be disapplied inasmuch as it conflicts with EU law arises only if no compatible interpretation of that provision proves possible (see, to that effect, judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 23).26However, it should also be recalled that the principle that national law must be interpreted in conformity with EU law has certain limits. Thus the obligation on a national court to refer to the content of a directive when interpreting and applying the relevant rules of domestic law is limited by general principles of law and cannot serve as the basis for an interpretation of national law contra legem (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 25 and the case-law cited).27In the case in the main proceedings, and as is apparent from paragraph 15 of the present judgment, the referring court states that it is faced with precisely such a limitation. In its view, Paragraph 7(4) of the BUrlG, read in conjunction with Paragraph 1922(1) of the BGB is not open to an interpretation which is compatible with Article 7 of Directive 2003/88, as interpreted by the Court in the judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755).28In those circumstances, the requests for a preliminary ruling cannot be held inadmissible in that the questions referred concern the issue of whether the provisions of EU law to which they relate can, where it is not possible to interpret national law in a manner consistent with EU law, result in the national court being obliged, where necessary, to disapply that national legislation, in particular in the context of a dispute between two individuals.29In the light of the foregoing, the requests for a preliminary ruling must be regarded as admissible. Substance Preliminary observations 30It should be noted that, as is apparent from the grounds of the orders for reference set out in paragraphs 13 to 17 of the present judgment and in the light of which the question in Case C‑569/16 and the first question in Case C‑570/16 must be read, those questions include two separate parts.31First, the referring court asks, in essence, whether Article 7 of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding legislation such as that at issue in the main proceedings, and whether the Court’s interpretation in its judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755) should be reconsidered or qualified in that regard.32Secondly, and assuming that the Court upholds that interpretation, the referring court asks whether those provisions of EU law must be interpreted as meaning that they have direct effect, as a result of which the national court is required to set aside that national legislation in so far as it cannot be interpreted in a manner consistent with the requirements deriving from those provisions.33Finally, by its second question in Case C‑570/16, the referring court wishes to know whether any such exclusionary effect in respect of the national legislation at issue is also applicable in a dispute between two private parties.34In those circumstances, it is appropriate to examine, first, the first part of the question referred in Case C‑569/16 and the first part of the first question in Case C‑570/16 and, secondly, and in the light of the connection between them, the second part of those questions and the second question referred in Case C‑570/16. The first part of the question in Case C‑569/16 and the first part of the first question in Case C‑570/16 35By the first part of its question in Case C‑569/16 which is identical to the first part of its first question in Case C‑570/16, the referring court asks, in essence, whether Article 7 of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which, where the employment relationship is terminated by the death of the worker, the right to paid annual leave acquired under those provisions, and not taken by the worker before his death, lapses without being able to give rise to an entitlement to an allowance in lieu of that leave which may be passed on to the worker’s legal heirs by inheritance.36As regards, first, Article 7 of Directive 2003/88, it should be recalled that, as the referring court observes, in the judgment of 12 June 2014, Bollacke (C‑118/13, EU:C:2014:1755), in a case involving a similar factual context to that of the present joined cases and relating to the same national legislation as that at issue in the main proceedings, the Court held, in paragraph 30 of that judgment, that that provision of EU law must be interpreted as meaning that it precludes national legislation or practices which provide that the right to paid annual leave lapses without conferring any right to an allowance in lieu of leave not taken where the employment relationship is terminated by the death of the worker.37As is apparent from the orders for reference and from paragraphs 14 to 16 of the present judgment, the referring court, however, has doubts concerning the interpretation adopted by the Court, on the ground, essentially, that the purpose of the right to paid annual leave, which is to enable the worker to rest and to enjoy a period of relaxation and leisure, no longer appears to that court to be capable of being met once the person concerned has died.38In that regard, it should be recalled at the outset that, according to the settled case-law of the Court, every worker’s right to paid annual leave must be regarded as a particularly important principle of EU social law from which there may be no derogations and whose implementation by the competent national authorities must be confined within the limits expressly laid down by Directive 2003/88 (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 15 and the case-law cited). Similarly, and in order to ensure respect for that fundamental right affirmed in EU law, Article 7 of Directive 2003/88 may not be interpreted restrictively at the expense of the rights that workers derive from it (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 22 and the case-law cited).39It is settled case-law that the right to annual leave constitutes only one of two aspects of the right to paid annual leave as an essential principle of EU social law, that right also including the entitlement to payment. The expression ‘paid annual leave’, used, inter alia, by the EU legislature in Article 7 of Directive 2003/88, means that, for the duration of the annual leave within the meaning of that directive, the worker’s remuneration must be maintained. In other words, workers must continue to receive their normal remuneration throughout that period of rest and relaxation (judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraphs 20 and 21 and the case-law cited).40The holiday pay required by Article 7(1) of Directive 2003/88 is intended to enable the worker actually to take the leave to which he is entitled (judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 49).41According to the settled case-law of the Court, the right to annual leave laid down in Article 7 of Directive 2003/88 is intended to enable the worker to rest from carrying out the work he is required to do under his contract of employment and to enjoy a period of relaxation and leisure (judgment of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 34 and the case-law cited).42Thus, by providing that the minimum period of paid annual leave may not be replaced by an allowance in lieu, except in the event of termination of the employment relationship, Article 7(2) of Directive 2003/88 aims in particular to ensure that workers are entitled to actual rest, with a view to ensuring effective protection of their health and safety (see, to that effect, judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraph 60 and the case-law cited).43Upon termination of the employment relationship, the actual taking of paid annual leave to which a worker was entitled is no longer possible. It is in order to prevent this impossibility from leading to a situation in which the worker loses all enjoyment of that right, even in pecuniary form, that Article 7(2) of Directive 2003/88 provides that the worker is entitled to an allowance in lieu for the days of annual leave not taken (see, to that effect, judgments of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 56; of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 17; and of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 27).44That provision lays down no condition for entitlement to an allowance in lieu other than that relating to the fact, first, that the employment relationship has ended and, secondly, that the worker has not taken all the annual leave to which he was entitled on the date that that relationship ended (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 23).45Thus, the reason for which the employment relationship is terminated is not relevant as regards the entitlement to an allowance in lieu provided for in Article 7(2) of Directive 2003/88 (see, to that effect, judgment of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 28).46As noted by the referring court, while the worker’s death admittedly has the inevitable consequence of depriving him of any effective possibility of enjoying the period of rest and relaxation attaching to the right to paid annual leave to which he was entitled at the time of his death, it cannot be accepted that his death retroactively entails the total loss of the right thus acquired which, as recalled in paragraph 39 of the present judgment, includes a second aspect of equal importance, namely the entitlement to a payment (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 25).47In that regard, it should also be noted that the Court has already held that Article 7(2) of Directive 2003/88 must be interpreted as meaning that a worker is entitled, upon retirement, to an allowance in lieu of paid annual leave not taken due, for example, to the fact that he has not performed his duties because of illness (see judgment of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraphs 31 and 32 and the case-law cited). Nor is such a worker able to enjoy leave as a period intended to allow him to rest and relax with a view to the future pursuit of his occupational activity, since he has, in principle, entered a period of occupational inactivity and is thus, in essence, able to benefit only from the financial aspect of paid annual leave.48Moreover, from a financial perspective, the right to paid annual leave acquired by a worker is purely pecuniary in nature and, as such, is therefore intended to become part of the relevant person’s assets, as a result of which the latter’s death cannot retrospectively deprive his estate and, accordingly, those to whom it is to be transferred by way of inheritance, from the effective enjoyment of the financial aspect of the right to paid annual leave.49The loss of a worker’s acquired right to paid annual leave or his corresponding right to payment of an allowance in lieu of leave not taken upon termination of the employment relationship, without the worker having actually had the opportunity to exercise that right to paid annual leave, would undermine the very substance of that right (see, to that effect, judgment of 19 September 2013, Review of Commission v Strack, C‑579/12 RX-II, EU:C:2013:570, paragraph 32).50Thus, receipt of financial compensation if the employment relationship is terminated by reason of the worker’s death is essential to ensure the effectiveness of the entitlement to paid annual leave granted to the worker (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 24).51Secondly, it must be recalled that the right to paid annual leave, as a principle of EU social law, is not only particularly important, but is also expressly laid down in Article 31(2) of the Charter, which Article 6(1) TEU recognises as having the same legal value as the Treaties (judgment of 30 June 2016, Sobczyszyn, C‑178/15, EU:C:2016:502, paragraph 20 and the case-law cited).52The fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by EU law (judgment of 15 January 2014, Association de médiation sociale, C‑176/12, EU:C:2014:2, paragraph 42 and the case-law cited).53Since the national legislation at issue in the main proceedings is an implementation of Directive 2003/88, it follows that Article 31(2) of the Charter is intended to apply to the cases in the main proceedings (see, by analogy, judgment of 15 January 2014, Association de médiation sociale, C‑176/12, EU:C:2014:2, paragraph 43).54In that regard, it follows, first, from the wording of Article 31(2) of the Charter that that provision enshrines the ‘right’ of all workers to an ‘annual period of paid leave’.55Next, according to the explanations relating to Article 31 of the Charter, which, in accordance with the third subparagraph of Article 6(1) TEU and Article 52(7) of the Charter, must be taken into consideration for the interpretation of the Charter, Article 31(2) of the Charter is based on Directive 93/104 and on Article 2 of the European Social Charter, signed in Turin on 18 October 1961 and revised in Strasbourg on 3 May 1996, and on point 8 of the Community Charter of the Fundamental Social Rights of Workers, adopted at the meeting of the European Council in Strasbourg on 9 December 1989 (judgment of 19 September 2013, Review of Commission v Strack, C‑579/12 RX-II, EU:C:2013:570, paragraph 27).56As is apparent from the first recital of Directive 2003/88, that directive codified Directive 93/104. Article 7 of Directive 2003/88 concerning the right to paid annual leave reproduces the terms of Article 7 of Directive 93/104 exactly (judgment of 19 September 2013, Review of Commission v Strack, C‑579/12 RX-II, EU:C:2013:570, paragraph 28).57In that context, it is important, finally, to recall that the Court has already held that the expression ‘paid annual leave’ in Article 7(1) of Directive 2003/88, which should be given the same meaning as that of ‘annual period of paid leave’ in Article 31(2) of the Charter, means that, for the duration of annual leave within the meaning of those provisions, remuneration must be maintained and, in other words, workers must receive their normal remuneration for that period of rest (see, to that effect, judgment of 15 September 2011, Williams and Others, C‑155/10, EU:C:2011:588, paragraphs 18 and 19).58As was recalled in paragraph 39 of the present judgment, the right to annual leave constitutes only one of two aspects of the right to paid annual leave as an essential principle of EU social law reflected in Article 7 of Directive 93/104 and Article 7 of Directive 2003/88, now expressly enshrined as a fundamental right in Article 31(2) of the Charter. As well as an entitlement to a payment, that fundamental right also includes, as a right which is consubstantial with the right to ‘paid’ annual leave, the right to an allowance in lieu of annual leave not taken upon termination of the employment relationship.59In that regard, limitations may be imposed on that right only under the strict conditions laid down in Article 52(1) of the Charter and, in particular, of the essential content of that right. Thus, Member States may not derogate from the rule laid down in Article 7 of Directive 2003/88, read in the light of Article 31(2) of the Charter, that the right to paid annual leave acquired cannot be lost at the end of the leave year and/or of a carry-over period fixed by national law, when the worker has been unable to take his leave (see, to that effect, judgment of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 56).60As was recalled in paragraph 46 of the present judgment, Member States are similarly precluded from deciding that termination of the employment relationship caused by death leads retroactively to the complete loss of the right to paid annual leave acquired by the worker, since such a right, aside from the right to leave as such, includes a second aspect of equal importance, namely the entitlement to a payment, justifying the payment to the person concerned or his legal heirs of an allowance in lieu of annual leave not taken upon termination of the employment relationship.61Therefore, in relation to situations falling within the scope of Article 31(2) of the Charter, that provision has the effect, in particular, that it is not open to Member States to adopt legislation pursuant to which the death of a worker retroactively deprives him of the right to paid annual leave acquired before his death, and, accordingly, his legal heirs of the allowance in lieu thereof by way of the financial settlement of those rights.62In the light of the foregoing, and in view of what has been stated in paragraphs 38 to 50 of the present judgment, it must be held that, where an employment relationship is terminated by the death of the worker, it follows not only from Article 7(2) of Directive 2003/88 but also from Article 31(2) of the Charter that, in order to prevent the fundamental right to paid annual leave acquired by that worker from being retroactively lost, including the financial aspect of those rights, the right of the person concerned to an allowance in lieu of leave which has not been taken may be passed on by inheritance to his legal heirs.63It follows that the answer to the first part of the question in Case C-569/16 and to the first part of the first question in Case C-570/16 is that Article 7 of Directive 2003/88 and Article 31(2) of the Charter must be interpreted as precluding national legislation, such as that at issue in the main proceedings, under which, upon termination of the employment relationship because of the worker’s death, the right to paid annual leave acquired under those provisions and not taken by the worker before his death lapses without being able to give rise to a right to an allowance in lieu of that leave which is transferable to the employee’s legal heirs by inheritance. The second part of the question in Case C‑569/16 and the second part of the first question and the second question in Case C‑570/16 64By the second part of its question in Case C‑569/16 and by the second part of its first question in Case C‑570/16, the referring court asks, in essence, whether, in the event that it is impossible to interpret a national rule such as that at issue in the main proceedings in such a way as to ensure compliance with Article 7 of Directive 2003/88 and Article 31(2) of the Charter, the provisions of EU law must be interpreted as meaning that they entail that such national legislation must be disapplied by the national court and that the legal heir of the deceased worker must be granted, by the former employer, an allowance in lieu of paid annual leave acquired under those provisions and not taken by that worker. By its second question in Case C‑570/16, the referring court asks whether such an interpretation of those provisions of EU law must, in the present case, also prevail in the context of a dispute between the legal heir of a deceased worker and his former employer where the employer is a private individual.65As a preliminary point, it should be recalled that the question whether a national provision must be disapplied in as much as it conflicts with EU law arises only if no interpretation of that provision which is compatible with EU law proves possible.66In that regard, it should be noted that, when national courts apply domestic law, they are bound to interpret it, so far as possible, in the light of the wording and the purpose of the directive concerned in order to achieve the result sought by the directive, and consequently comply with the third paragraph of Article 288 TFEU (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 24 and the case-law cited).67It should further be noted that the principle that national law must be interpreted in conformity with EU law requires national courts to do whatever lies within their jurisdiction, taking the whole body of domestic law into consideration and applying the interpretative methods recognised by it, with a view to ensuring that the directive in question is fully effective and to achieving an outcome consistent with the objective pursued by it (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 27 and the case-law cited).68As has been held by the Court, the requirement to interpret national law in conformity with EU law entails, in particular, the obligation for national courts to change established case-law, where necessary, if it is based on an interpretation of national law that is incompatible with the objectives of a directive. Consequently, a national court cannot, in particular, validly claim that it is impossible for it to interpret a provision of national law in a manner that is consistent with EU law merely because that provision has consistently been interpreted in a manner that is incompatible with EU law (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraphs 72 and 73 and the case-law cited).69It is, in the present case, for the referring court to fulfil its obligation under EU law to check, in the light of the principles set out in the three preceding paragraphs of the present judgment, if an interpretation which is consistent with EU law is possible.70That being so, and as regards, first, the possible direct effect that it may be appropriate to acknowledge Article 7 of Directive 2003/88 as producing, it is clear from the settled case-law of the Court that, whenever the provisions of a directive appear, so far as their subject matter is concerned, to be unconditional and sufficiently precise, they may be relied upon before the national courts by individuals against the State where the latter has failed to implement the directive in domestic law by the end of the period prescribed or where it has failed to implement the directive correctly (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 33 and the case-law cited). In addition, where a person involved in legal proceedings is able to rely on a directive against a State, he may do so regardless of the capacity in which the latter is acting, whether as an employer or as a public authority. In either case, it is necessary to prevent the State from taking advantage of its own failure to comply with EU law (judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 38 and the case-law cited).71On the basis of those considerations, the Court has held that provisions of a directive that are unconditional and sufficiently precise may be relied upon by individuals, in particular against a Member State and all the organs of its administration, including decentralised authorities (see, to that effect, judgment of 7 August 2018, Smith, C‑122/17, EU:C:2018:631, paragraph 45 and the case-law cited).72The Court has already held that Article 7(1) of Directive 2003/88 satisfies those criteria of unconditionality and sufficient precision, as it imposes on Member States, in unequivocal terms, a precise obligation as to the result to be achieved that is not coupled with any condition regarding application of the rule laid down by it, which gives every worker entitlement to at least four weeks’ paid annual leave. That article thus fulfils the conditions required to produce direct effect (see, to that effect, judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraphs 34 to 36).73As regards Article 7(2) of that directive, as recalled in paragraph 44 of the present judgment, that provision does not lay down any condition for entitlement to an allowance in lieu other than that relating to the fact, first, that the employment relationship has ended and, secondly, that the worker has not taken all the annual leave to which he was entitled on the date that that relationship ended. That right is conferred directly by the directive and does not depend on conditions other than those which are explicitly provided for (see, to that effect, judgment of 12 June 2014, Bollacke, C‑118/13, EU:C:2014:1755, paragraph 28). Article 7(2) thus fulfils all the conditions necessary for it to have direct effect.74In the present case, as regards Case C‑569/16, it is not disputed, first, that Mr Bauer had not, at the time of his death which caused the employment relationship with Stadt Wuppertal to be terminated, taken all paid annual leave to which he was entitled on that date, and, second, that the status of the employer is that of a decentralised public authority.75Since Article 7 of Directive 2003/88 fulfils, as is apparent from paragraphs 72 and 73 of the present judgment, the conditions required to produce direct effect, it follows that Mr Bauer, or in the light of his death, his legal heir, has, as is clear from the case-law of the Court referred to in paragraphs 70 and 71 of this judgment, the right to obtain, from Stadt Wuppertal, an allowance in lieu of paid annual leave acquired under that provision and not taken by the individual, national courts being, in that regard, required to disapply national legislation which, like that at issue in the main proceedings, precludes the award of such an allowance.76However, as regards the dispute in the main proceedings in Case C‑570/16 between Ms Broßonn, as the legal heir of her late husband, and his former employer, Mr Willmeroth, it should be recalled that, according to the Court’s settled case-law, a directive cannot of itself impose obligations on an individual and cannot therefore be relied upon as such against an individual. If the possibility of relying on a provision of a directive that has not been transposed, or has been incorrectly transposed, were to be extended to the sphere of relations between individuals, that would amount to recognising a power in the European Union to enact obligations for individuals with immediate effect, whereas it has competence to do so only where it is empowered to adopt regulations (judgment of 7 August 2018, Smith, C‑122/17, EU:C:2018:631, paragraph 42 and the case-law cited).77Thus, even a clear, precise and unconditional provision of a directive seeking to confer rights on or impose obligations on individuals cannot of itself apply in a dispute exclusively between private persons (judgment of 7 August 2018, Smith, C‑122/17, EU:C:2018:631, paragraph 43 and the case-law cited).78As the Court has already held, Article 7 of Directive 2003/88 cannot therefore be invoked in a dispute between individuals in order to ensure the full effect of the right to paid annual leave and to set aside any contrary provision of national law (judgment of 26 March 2015, Fenoll, C‑316/13, EU:C:2015:200, paragraph 48).79In the light of the foregoing, it is necessary, secondly, to examine the scope of Article 31(2) of the Charter, in order to determine whether that provision, for which it has been established, in paragraphs 52 to 63 of the present judgment, that it is intended to apply to situations such as those in the main proceedings and must be interpreted as meaning that it precludes legislation such as that at issue in the main proceedings, may be invoked in a dispute between individuals, such as that arising in Case C‑570/16, in order to require that the national court sets aside that national legislation and grants the deceased worker’s legal heirs an allowance, payable by the former employer, in lieu of paid annual leave not taken to which that worker was entitled under EU law at the time of his death.80In that regard, it should be recalled that the right to paid annual leave constitutes an essential principle of EU social law.81That principle is itself mainly derived both from instruments drawn up by the Member States at EU level, such as the Community Charter of the Fundamental Social Rights of Workers, which is moreover mentioned in Article 151 TFEU, and from international instruments on which the Member States have cooperated or to which they are party. Among them is the European Social Charter, to which all Member States are parties in so far as they ratified it in its original version, its revised version or both versions, also referred to in Article 151 TFEU. Mention should also be made of Convention No 132 of the International Labour Organisation of 24 June 1970 concerning Annual Holidays with Pay (revised) which, as the Court noted in paragraphs 37 and 38 of the judgment of 20 January 2009, Schultz-Hoff and Others (C‑350/06 and C‑520/06, EU:C:2009:18), sets out certain principles of that organisation which recital 6 of Directive 2003/88 states must be taken into account.82In that regard, the fourth recital of Directive 93/104 states, in particular, that paragraph 8 of the Community Charter of the Fundamental Social Rights of Workers provides that every worker in the Union has a right, inter alia, to paid annual leave, the duration of which must be progressively harmonised in accordance with national practices (see, to that effect, judgment of 26 June 2001, BECTU, C‑173/99, EU:C:2001:356, paragraph 39).83Article 7 of Directive 93/104 and Article 7 of Directive 2003/88 did not, therefore, themselves establish the right to paid annual leave, which is based in particular on various international instruments (see, by analogy, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 75) and is, as an essential principle of EU social law, mandatory in nature (see, to that effect, judgment of 16 March 2006, Robinson-Steele and Others, C‑131/04 and C‑257/04, EU:C:2006:177, paragraphs 48 and 68), that essential principle including, as noted in paragraph 58 of the present judgment, the right to ‘paid’ annual leave as such and the right, inherent in the former, to an allowance in lieu of annual leave not taken upon termination of the employment relationship.84By providing in mandatory terms that ‘every worker’ has ‘the right’‘to an annual period of paid leave’ without referring in particular in that regard — like, for example, Article 27 of the Charter which led to the judgment of 15 January 2014, Association de médiation sociale (C‑176/12, EU:C:2014:2) — to ‘the cases and … conditions provided for by Union law and national laws and practices’, Article 31(2) of the Charter reflects the essential principle of EU social law from which there may be derogations only in compliance with the strict conditions laid down in Article 52(1) of the Charter and, in particular, the fundamental right to paid annual leave.85The right to a period of paid annual leave, affirmed for every worker by Article 31(2) of the Charter, is thus, as regards its very existence, both mandatory and unconditional in nature, the unconditional nature not needing to be given concrete expression by the provisions of EU or national law, which are only required to specify the exact duration of annual leave and, where appropriate, certain conditions for the exercise of that right. It follows that that provision is sufficient in itself to confer on workers a right that they may actually rely on in disputes between them and their employer in a field covered by EU law and therefore falling within the scope of the Charter (see, by analogy, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 76).86Article 31(2) of the Charter therefore entails, in particular, as regards the situations falling within the scope thereof, first, that the national court must disapply national legislation such as that at issue in the main proceedings pursuant to which the death of a worker retroactively deprives him of his entitlement to paid annual leave acquired before his death, and, accordingly, his legal heirs of the entitlement to the allowance in lieu thereof by way of the financial settlement of those rights, and, second, that employers cannot rely on that national legislation in order to avoid payment of the allowance in lieu which they are required to pay pursuant to the fundamental right guaranteed by that provision.87With respect to the effect of Article 31(2) of the Charter on an employer who is a private individual, it should be noted that, although Article 51(1) of the Charter states that the provisions thereof are addressed to the institutions, bodies, offices and agencies of the European Union with due regard for the principle of subsidiarity and to the Member States only when they are implementing EU law, Article 51(1) does not, however, address the question whether those individuals may, where appropriate, be directly required to comply with certain provisions of the Charter and cannot, accordingly, be interpreted as meaning that it would systematically preclude such a possibility.88First of all, as noted by the Advocate General in point 78 of his Opinion, the fact that certain provisions of primary law are addressed principally to the Member States does not preclude their application to relations between individuals (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 77).89Next, the Court has, in particular, already held that the prohibition laid down in Article 21(1) of the Charter is sufficient in itself to confer on individuals a right which they may rely on as such in a dispute with another individual (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 76), without, therefore, Article 51(1) of the Charter preventing it.90Finally, as regards, more specifically, Article 31(2) of the Charter, it must be noted that the right of every worker to paid annual leave entails, by its very nature, a corresponding obligation on the employer, which is to grant such periods of paid leave.91In the event that the referring court is unable to interpret the national legislation at issue in a manner ensuring its compliance with Article 31(2) of the Charter, it will therefore be required, in a situation such as that in the particular legal context of Case C‑570/16, to ensure, within its jurisdiction, the judicial protection for individuals flowing from that provision and to guarantee the full effectiveness thereof by disapplying if need be that national legislation (see, by analogy, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 79).92In the light of all the foregoing considerations, the answer to the second part of the question in Case C‑569/16 and the second part of the first question and the second question in Case C‑570/16 is that, where it is impossible to interpret a national rule such as that at issue in the main proceedings in a manner consistent with Article 7 of Directive 2003/88 and Article 31(2) of the Charter, the national court, before which a dispute between the legal heir of a deceased worker and the former employer of that worker has been brought, must disapply that national legislation and ensure that the legal heir receives payment from the employer of an allowance in lieu of paid annual leave acquired under those provisions and not taken by the worker before his death. That obligation on the national court is dictated by Article 7 of Directive 2003/88 and Article 31(2) of the Charter where the dispute is between the legal heir and an employer which has the status of a public authority, and under the second of those provisions where the dispute is between the legal heir and an employer who is a private individual. Costs 93Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time and of Article 31(2) of the Charter of Fundamental Rights of the European Union, must be interpreted as precluding national legislation such as that at issue in the main proceedings, under which, where the employment relationship is terminated by the death of the worker, the right to paid annual leave acquired under those provisions and not taken by the worker before his death lapses without being able to give rise to a right to an allowance in lieu of that leave which is transferable to the employee’s legal heirs by inheritance. 2. Where it is impossible to interpret a national rule such as that at issue in the main proceedings in a manner consistent with Article 7 of Directive 2003/88 and Article 31(2) of the Charter of Fundamental Rights, the national court, before which a dispute between the legal heir of a deceased worker and the former employer of that worker has been brought, must disapply that national legislation and ensure that the legal heir receives payment from the employer of an allowance in lieu of paid annual leave acquired under those provisions and not taken by the worker before his death. That obligation on the national court is dictated by Article 7 of Directive 2003/88 and Article 31(2) of the Charter of Fundamental Rights where the dispute is between the legal heir and an employer which has the status of a public authority, and under the second of those provisions where the dispute is between the legal heir and an employer who is a private individual. [Signatures]( *1 ) Language of the case: German.( 1 ) The wording of paragraph 84 of this document has been modified after it was first put online. | f36d1-a983231-453b | EN |
DEVIN, the name of a Bulgarian town, can be registered as an EU trade mark for mineral water | 25 October 2018 ( *1 )(EU trade mark — Cancellation proceeding — European Union word mark DEVIN — Absolute ground for refusal — Descriptive character — Geographical name — Article 7(1)(c) of Regulation (EC) No 207/2009 (now Article 7(1)(c) and (3) of Regulation (EU) 2017/1001))In Case T‑122/17, Devin AD, established in Devin (Bulgaria), represented by B. Van Asbroeck, lawyer,applicant,v European Union Intellectual Property Office (EUIPO), represented by S. Di Natale and D. Gája, acting as Agents,defendant,the other party to the proceedings before the Board of Appeal of EUIPO, and intervener before the General Court, being Haskovo Chamber of Commerce and Industry, established in Haskovo (Bulgaria), represented by D. Dimitrova, lawyer,concerning an action brought against the decision of the Second Board of Appeal of EUIPO of 2 December 2016 (Case R 579/2016-2) relating to invalidity proceedings between Devin AD and Haskovo Chamber of Commerce and Industry,THE GENERAL COURT (Eighth Chamber),composed of A.M. Collins, President, M. Kancheva (Rapporteur) and J. Passer, Judges,Registrar: I. Dragan, Administrator,having regard to the application lodged at the Court Registry on 22 February 2017,having regard to the response of EUIPO lodged at the Court Registry on 8 May 2017,having regard to the response of the intervener lodged at the Court Registry on 9 May 2017,further to the hearing on 14 March 2018, in which the intervener did not participate,gives the following Judgment I. Background to the dispute 1On 21 January 2011, the applicant, Devin AD, obtained from the European Union Intellectual Property Office (EUIPO) registration under number 9408865 of the European Union word mark DEVIN (‘the contested mark’) pursuant to Regulation (EC) No 207/2009 of the Council of 26 February 2009 on the European Union trademark (OJ 2009 L 78, p. 1), as amended (replaced by Regulation (EU) 2017/1001 of the European Parliament and the Council of 14 June 2017, on the European Union trademark (OJ 2017 L 154, p. 1)).2The goods in respect of which the mark was registered fall within Class 32 of the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, corresponding to the following description: ‘Non-alcoholic drinks; mineral water; seltzer waters; fruit-flavoured beverages; juices; syrups and other preparations for making beverages; aperitifs, non-alcoholic; spring water; flavoured water; non-alcoholic fruit extracts; non-alcoholic fruit juices beverages; table water; waters (beverages); seltzer mineral water; vegetable juices (beverages); isotonic drinks; cocktails, non-alcoholic; fruit nectars, non-alcoholic; soda water.’3On 11 July 2014, the intervener, Haskovo Chamber of Commerce and Industry (HCCI, Bulgaria), filed a request for a declaration of invalidity of the contested mark on the grounds of Article 52(1)(a) of Council Regulation (EC) No 207/2009 (replaced by Article 59(1)(a) of Regulation 2017/1001) in conjunction with Article 7(1)(c), (f) and (g) of that regulation (now Article 7(1)(c), (f) and (g) of Regulation 2017/1001).4By a decision of 29 January 2016, the Cancellation Division of EUIPO rejected the invalidity requests based on Article 7(1)(f) and (g) of Regulation No 207/2009. However, it accepted the request for a declaration of invalidity based on Article 7(1)(c) of that regulation and declared the mark invalid in its entirety. Specifically, it considered that the geographical name Devin fell within the scope of that provision inasmuch as, nowadays, it was understood by the general public in Bulgaria and a part of the public in neighbouring countries as a description of the geographical origin of the goods concerned and, in future, would potentially be understood by a wider European public in view of the marketing efforts being made and the growth of the Bulgarian tourism sector. It further observed that the applicant had provided no evidence of the distinctive character acquired by the contested mark in markets other than the Bulgarian market.5On 23 March 2016, the applicant filed an appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009 (now Articles 66 to 71 of Regulation 2017/1001), against the decision of the Opposition Division.6By decision of 2 December 2016 (‘the contested decision’), the Second Board of Appeal of EUIPO dismissed the appeal. In essence, it considered that the Bulgarian town of Devin was known to the general public in Bulgaria and a significant part of consumers in neighbouring countries such as Greece and Romania, especially as a spa town, and that the name of that town was linked by the relevant public with the designated goods in Class 32 covered by the contested mark, especially mineral waters. It therefore ‘confirmed the decision [of the Cancellation Division] that, for a significant part of the relevant public outside of Bulgaria, the town of Devin is associated with the goods designated by the contested mark, ... and can, in the eyes of that public, serve to designate the geographical origin of the goods’. It concluded that, for a significant part of the relevant Bulgarian and non-Bulgarian public, in particular the public of those neighbouring countries, the contested mark was descriptive of the geographical origin of the goods covered. II. Forms of order sought 7The applicant claims that the Court should:–annul the contested decision;annul the decision of the Cancellation Division of 29 January 2016;entirely, or at least partially, reject the request for cancellation of the contested mark;order EUIPO to pay the costs of the applicant and to bear its own costs.8EUIPO and the intervener contend that the Court should:dismiss the application;order the applicant to pay the costs. III. Law 9In support of the action, the applicant advances two pleas. In the first place, it alleges that the Board of Appeal infringed Article 52(1)(a) of Regulation No 207/2009 in conjunction with Article 7(1)(c) of that regulation by ruling that, in the eyes of the relevant public, the contested mark is descriptive of the geographical origin of the goods in Class 32 covered by the mark. In the second place, it alleges that to the extent that the Board of Appeal did not infringe Article 7(1)(c) of the regulation, it did infringe Article 7(3) of that regulation (now Article 7(3) of Regulation 2017/1001) by ruling that the contested mark has not acquired distinctiveness through use in those parts of the European Union where it has been found descriptive.10It must be pointed out at the outset that the applicant’s second and third heads of claim, requesting the Court to annul the decision of the Cancellation Division and to entirely, or at least partially, reject the request for cancellation of the contested mark, in reality ask the Court to take the decision which, in the applicant’s submission, the Board of Appeal should have taken when it was seised of the case. At the hearing, the applicant confirmed that those heads of claim should be construed as an application for alteration.11In that regard, it is apparent from the second sentence of Article 64(1) of Regulation No 207/2009 (now the second sentence of Article 71(1) of Regulation 2017/1001) that the Board of Appeal may annul the decision of the EUIPO department which was responsible for the decision appealed and exercise any power within the competence of that department, in the present case ruling on the application for invalidity and rejecting it. Consequently, that measure is one of those which may be taken by the General Court in the exercise of its power to alter decisions under Article 65(3) of Regulation No 207/2009 (now Article 72(3) of Regulation 2017/1001) (see, to that effect, judgments of 14 December 2011, Völkl v OHIM — Marker Völkl (VÖLKL), T‑504/09, EU:T:2011:739, paragraph 40; of 13 May 2015, easyGroup IP Licensing v OHIM — Tui (easyAir-tours), T‑608/13, not published, EU:T:2015:282, paragraph 20; and of 4 May 2017, Kasztantowicz v EUIPO — Gbb Group (GEOTEK), T‑97/16, not published, EU:T:2017:298, paragraph 17).12It is necessary to examine, at the outset, the application for annulment of the contested decision resulting from the applicant’s first plea in law. A. The application for annulment 1. The first plea in law, alleging infringement of Article 52(1)(a) of Regulation No 207/2009, in conjunction with Article 7(1)(c) of that regulation 13By the first plea, the applicant alleges that the Board of Appeal erred in law in finding that the mark is descriptive in relation to the goods in Class 32 covered by it. That plea consists of two parts, the first relating to the degree of recognition by the relevant public of the word ‘devin’ as a geographical name, and the second relating to the link between the contested mark and all the goods concerned.14By the first part of the first plea in law, which should be examined first, the applicant essentially claims that the Board of Appeal erred in finding, on the basis of mere presumptions, that a large part of the relevant public was likely to link the word ‘Devin’ with the geographical origin of the goods covered by the contested mark. In this respect, it distinguishes between three geographical categories of average consumers, namely, first, those from Bulgaria, secondly, those from Greece and Romania and, thirdly, those from the other Member States of the European Union. The applicant concludes from this that the Board of Appeal did not establish that there was a sufficient degree of familiarity with the town of Devin among average consumers of European Union countries and erred in law in applying Article 7(1)(c) of Regulation No 207/2009, at least with respect to average consumers of the neighbouring countries Greece and Romania, and all other countries of the European Union, with the sole exception of Bulgaria.15EUIPO disputes the applicant’s arguments. It is of the view that the core of the dispute is whether the contested mark was, at the time of its filing, descriptive in territories situated outside Bulgaria, in particular in the neighbouring countries of Greece and Romania. It states that the contested decision is not vitiated by any error in finding that the evidence on the file suffices to establish that at the date of application for registration of the contested mark it was likely that a considerable, or at least, a non-negligible portion of the relevant public in Greece and Romania, would make an association between the sign DEVIN, understood as the name of a spa town in Bulgaria, and the geographical origin of the designated goods, in particular waters included in Class 32. It contends that the Board of Appeal is not precluded by precedent from drawing inferences to find that a significant part of the Greek or Romanian public associated the word ‘devin’ with the geographical origin of the goods concerned. It asserts that, on the basis of the evidence produced, the Board of Appeal was justified in taking the view that the ‘undoubted reputation’ of Devin as a spa town with natural healing waters did not stop at the Bulgarian boarder, but extended to neighbouring countries and that it was reasonable to assume that awareness of Devin by consumers outside Bulgaria is considerable. According to EUIPO, the applicant is wrong to believe that ‘the town of Devin is protected somehow by natural fortification, without information, and that all this would make it almost inaccessible’. For its part, it is of the view that the low numbers of the registered visits of Greek and Romanian tourists in hotels in the town of Devin, its small size and its geographical location cannot invalidate the contested decision. It concludes that the Board of Appeal rightly protected the general interest in preserving the availability of a geographical name such as that of the spa town of Devin.16The intervener disputes the applicant’s arguments. It contends that the conclusion of the Board of Appeal that the relevant public in the European Union perceives the word ‘devin’ as a geographical term is based on objective facts and data, such as the number of foreign tourists who visited Bulgaria, the considerable tourist infrastructure of the town of Devin, or the information available online, especially the promotion of Devin’s famous mineral springs on the official tourism portal of Bulgaria. It also stresses the marketing efforts made locally and nationally to promote Devin as an international tourist destination throughout the year and a place famous for its mineral water, evidenced in particular by a letter from the regional tourism association Rhodopes. According to the intervener, in view of the ‘National Strategy for Sustainable Development of Tourism in the Republic of Bulgaria till 2030’, adopted by the Bulgarian Government in 2014, as well as ‘geopolitical factors’ including ‘the increased threat of terrorism in Turkey, Egypt and Tunisia and the unstable political situation in these countries’, which it is claimed ‘redirected part of the tourist flow to Bulgaria’ thanks, above all, to ‘the safety of the country’, it would be reasonable to assume that Bulgaria will become a more desirable tourist destination with European tourists throughout the year and that, as a result, the number of tourists searching for information on certain tourist destinations in the country, including Devin, will increase.17According to a combined reading of Article 52(1)(a) and Article 7(1)(c) of Regulation No 207/2009, the registered EU trade mark is declared invalid when it consists exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service. Pursuant to Article 7(2) of that regulation (now Article 7(2) of Regulation 2017/1001), paragraph 1 thereof is to apply notwithstanding that the ground for refusal to register or the ground for invalidity obtain in only part of the European Union.18According to settled case-law, the signs and indications covered by Article 7(1)(c) of Regulation No 207/2009 are those which may serve in normal usage from the point of view of the relevant public to designate, either directly or by reference to one of their characteristics, the goods or services in respect of which registration is sought or contested (see, to that effect, judgments of 20 September 2001, Procter & Gamble v OHIM, C‑383/99 P, EU:C:2001:461, paragraph 39, and of 10 September 2015, Laverana v OHIM (BIO organic), T‑610/14, not published, EU:T:2015:613, paragraph 14). It follows that, for a sign to be caught by the prohibition set out in that provision, there must be a sufficiently direct and specific link between the sign and the goods or services in question to enable the relevant public immediately to perceive, without further thought, a description of the goods or services in question or of one of their characteristics (judgments of 22 June 2005, Metso Paper Automation v OHIM (PAPERLAB), T‑19/04, EU:T:2005:247, paragraph 25, and of 7 December 2017, Colgate-Palmolive v EUIPO (360°), T‑332/16, not published, EU:T:2017:876, paragraph 15). It is sufficient that a ground of refusal or a ground of invalidity exists in relation to a non-negligible part of the target public and it is unnecessary to examine whether other consumers belonging to the relevant public were also aware of that sign (see judgment of 6 October 2017, Karelia v EUIPO (KARELIA), T‑878/16, not published, EU:T:2017:702, paragraph 27 and the case-law cited).19The public interest underlying Article 7(1)(c) of Regulation No 207/2009 is that of ensuring that descriptive signs relating to one or more characteristics of the goods or services in respect of which registration as a mark is sought may be freely used by all traders offering such goods or services (judgment of 10 March 2011, Agencja Wydawnicza Technopol v OHIM, C‑51/10 P, EU:C:2011:139, paragraph 37). That provision prevents such signs or indications from being reserved to one undertaking alone because they have been registered as trade marks (judgment of 23 October 2003, OHIM v Wrigley, C‑191/01 P, EU:C:2003:579, paragraph 31) and prevents an undertaking from monopolising the use of a descriptive term to the detriment of other undertakings, including its competitors, whose range of available vocabulary for describing their own goods would thereby be limited (see judgment of 7 December 2017, 360°, T‑332/16, not published, EU:T:2017:876, paragraph 17 and the case-law cited). However, the application of that provision does not depend on the existence of a real, current or serious need to leave a sign free (see, to that effect, judgment of 7 October 2015, Cyprus v OHIM (XAΛΛOYMI and HALLOUMI), T‑292/14 and T‑293/14, EU:T:2015:752, paragraph 55 and the case-law cited).20As regards, more particularly, signs or indications that may serve to designate the geographical origin or destination of the categories of goods, or the place of performance of the categories of services, in respect of which a European Union trade mark has been applied for, it is in the public interest that geographical names remain available, not least because they may be an indication of the quality and other characteristics of the categories of goods or services concerned, and may also, in various ways, influence consumer preferences by, for instance, associating the goods or services with a place that may evoke positive feelings (judgments of 25 October 2005, Peek & Cloppenburg v OHIM (Cloppenburg), T‑379/03, EU:T:2005:373, paragraph 33; of 15 January 2015, MEM v OHIM (MONACO), T‑197/13, EU:T:2015:16, paragraph 47; and of 27 April 2016, Niagara Bottling v EUIPO (NIAGARA), T‑89/15, not published, EU:T:2016:244, paragraph 15).21Furthermore, it may be noted, first, that the registration of geographical names as trade marks where they designate specified geographical locations which are already famous, or are known for the category of goods or services concerned, and which are therefore associated with that category in the mind of the relevant class of persons, is excluded as, secondly, is the registration of geographical names which are liable to be used by undertakings and must remain available to such undertakings as indications of the geographical origin of the category of goods or services concerned (judgments of 25 October 2005, Cloppenburg, T‑379/03, EU:T:2005:373, paragraph 34; of 15 January 2015, MONACO, T‑197/13, EU:T:2015:16, paragraph 48; and of 27 April 2016, NIAGARA, T‑89/15, not published, EU:T:2016:244, paragraph 16).22However, it must be noted that, in principle, Article 7(1)(c) of Regulation No 207/2009 does not preclude the registration of geographical names which are unknown to the relevant class of persons — or at least unknown as the designation of a geographical location — or of names in respect of which, because of the type of place they designate, such persons are unlikely to believe that the category of goods or services concerned originates there (judgments of 25 October 2005, Cloppenburg, T‑379/03, EU:T:2005:373, paragraph 36; of 15 January 2015, MONACO, T‑197/13, EU:T:2015:16, paragraph 49; and of 27 April 2016, NIAGARA, T‑89/15, not published, EU:T:2016:244, paragraph 17).23In the light of all the above, the descriptive character of a sign can be assessed only by reference to the goods or services concerned and to the way in which it is understood by the relevant public (judgments of 25 October 2005, Cloppenburg, T‑379/03, EU:T:2005:373, paragraph 37; of 15 January 2015, MONACO, T‑197/13, EU:T:2015:16, paragraph 50; and of 27 April 2016, NIAGARA, T‑89/15, not published, EU:T:2016:244, paragraph 18).24In making that assessment, EUIPO is bound to establish that the geographical name is known to the relevant class of persons as the designation of a place. Furthermore, the name in question must suggest a current association, in the mind of the relevant class of persons, with the category of goods or services concerned, or else it must be reasonable to assume that such a name may, in the view of those persons, designate the geographical origin of that category of goods or services. In making that assessment, particular consideration should be given to the relevant class of persons’ degree of familiarity with the geographical name in question, with the characteristics of the place designated by that name, and with the category of goods or services concerned (judgments of 25 October 2005, Cloppenburg, T‑379/03, EU:T:2005:373, paragraph 38; of 15 January 2015, MONACO, T‑197/13, EU:T:2015:16, paragraph 51; and of 27 April 2016, NIAGARA, T‑89/15, not published, EU:T:2016:244, paragraph 19).25Moreover, it is settled case-law that the only relevant date for the purpose of assessing an application for a declaration of invalidity based on Article 52(1)(a) of Regulation No 207/2009 is that of the filing of the application for registration of the contested mark. The fact that the case-law allows material subsequent to that date to be taken into account, far from weakening that interpretation of that article, reinforces it, since it is only possible to take such material into account if it relates to the situation on the date of filing of the trade mark application (see, to that effect, orders of 23 April 2010, OHIM v Frosch Touristik, C‑332/09 P, not published, EU:C:2010:225, paragraphs 52 and 53, and of 4 October 2018, Safe Skies v EUIPO, C‑326/18 P, not published, EU:C:2018:800, paragraph 5; judgments of 3 June 2009, Frosch Touristik v OHIM — DSR touristik (FLUGBÖRSE), T‑189/07,EU:T:2009:172, paragraphs 18 and 19, and of 26 February 2016, provima Warenhandels v OHIM — Renfro (HOT SOX), T‑543/14, not published, EU:T:2016:102, paragraph 44). In the present case, the relevant date for assessing whether the contested mark complies with Article 7 of Regulation No 207/2009 was that on which the application for registration was filed, namely 21 January 2011.26It is in the light of those considerations that the first part of the applicant’s first plea in law must be examined.27In the present case, it is common ground that Devin (Latinised form of Девин) is a town in southern Bulgaria, located in the Rhodopes mountain range. In paragraphs 30 to 33 of the contested decision, the Board of Appeal provided further details, which were not contested by the parties. Accordingly, the town of Devin ‘possesses an abundance of hot springs and spa resorts’ as well as water reserves, including a V-5 (or B-5) bore-hole currently operated by the applicant under an authorisation granted by the Bulgarian State. Bulgaria’s official tourism portal, which has a section devoted to Devin, refers to ‘the development of its “spa tourism” and “famous” mineral springs’ and to the ‘healing properties’ known since antiquity. For its part, the applicant states, without being challenged, that Devin has a population of approximately 7000 inhabitants and, as such, ranks approximately 109th among Bulgarian towns in terms of population.28The Board of Appeal also stated that Devin water, associated with the source ‘Devin sondazh 5’, is included in the official list of natural mineral waters recognised by Bulgaria and the other Member States, published in the Official Journal of the European Union (OJ 2010 C 65, p. 1) pursuant to Article 1 of Directive 2009/54/EC of the European Parliament and of the Council of 18 June 2009 on the exploitation and marketing of natural mineral waters (OJ 2009 L 164, p. 45). The Board of Appeal also referred to a geographical indication ‘Devin Natural Mineral Water’, registered in Bulgaria under number 190-01/1995, and an identical appellation of origin, registered under number 883/2006 in certain Member States of the European Union, including Greece and Romania, which are parties to the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, of 31 October 1958, as revised and amended.29In this respect, it should be noted that the present dispute does not concern a possible ground for refusal (or ground for invalidity) based on the new Article 7(1)(j) of Regulation 2017/1001, according to which ‘the following shall not be registered … trade marks which are excluded from registration, pursuant to Union legislation or national law or to international agreements to which the Union or the Member State concerned is party, providing for protection of designations of origin and geographical indications’, nor on Regulation (EU) No 1151/2012 of the European Parliament and of the Council on quality schemes for agricultural products and foodstuffs (OJ 2012 L 343, p. 1).30Moreover, in paragraph 27 of the contested decision, the Board of Appeal found that, since the goods concerned are daily consumer goods, the relevant public is the average consumer of the European Union, who is reasonably well informed and reasonably observant and circumspect. Since the average consumer of such everyday consumer products is the general public, there is no reason to question this finding, which is, moreover, approved by the applicant.31It is necessary to examine, in turn, the perception of the word ‘devin’ by the average consumer in the European Union and the availability of the geographical name Devin. (a) On the perception of the word ‘devin’ by the average EU consumer 32The Board of Appeal considered that the perception of the word ‘devin’ by the general public outside Bulgaria was the ‘central point of the dispute’ between the parties. The Court, like the applicant, considers that, in its assessment of the descriptive character of the contested trade mark, the Board of Appeal has, in essence, made a distinction between three geographical categories of average consumers, consisting of (i) average Bulgarian consumers, (ii) average consumers of the neighbouring countries Greece and Romania and (iii) average consumers of the remaining Member States of the European Union. (1) Average Bulgarian consumers 33As far as the average Bulgarian consumer is concerned, the applicant does not dispute that he or she might perceive the word ‘devin’ as the name of a town in Bulgaria. However, the applicant submits that that word is also known and clearly recognised as a water brand by a significant portion of Bulgarian consumers. According to the applicant, the only consumers likely to understand the word ‘devin’ as an indication of geographical origin, namely Bulgarian consumers, are also familiar with the mark because of its distinctive character acquired through use within the meaning of Article 7(3) of Regulation No 207/2009. Thus, the contested mark does not, it is claimed, simply indicate the geographical origin, but is a clear indication of the commercial origin of the goods concerned. The applicant infers from this that the contested mark is valid in Bulgaria, even if it may be perceived as a reference to the name of a town, because there it is better known as a trade mark. It adds that not only did the word ‘devin’ acquire distinctive character through use, but it also acquired a highly distinctive character in Bulgaria, where it was considered to be a well-known trade mark for water. To that end, the applicant refers to Decision No OM-22 of the Патентно ведомство на Република България (Patent Office of the Republic of Bulgaria) of 19 March 2010, valid for five years and declaring that the Bulgarian word mark Девин (Devin), registered under number 24137 and held by the applicant, has been well known in the territory of Bulgaria since 1 December 2005 for goods in Class 32, namely ‘mineral water’. At the hearing, the applicant stated that, even if this decision could not be renewed in 2015 because of a legislative repeal, the factual finding underlying it remained valid.34In that regard, it suffices to note that the absence of any challenge by the applicant to the recognition by the average Bulgarian consumer of the word ‘devin’ as the geographical name of a Bulgarian town is by no means decisive in the present case, since the applicant hastens to add that the contested mark has acquired an increased distinctive character, and even a reputation, for mineral waters in the mind of the average Bulgarian consumer.35Moreover, it should be noted that, since the Bulgarian word mark Devin has been recognised as having a reputation by the Patent Office of the Republic of Bulgaria, it appears, prima facie, extremely implausible that the contested mark, namely the European Union word mark DEVIN, has not acquired there, at the very least, normal distinctive character, without there being any need to rule on its increased distinctive character or its reputation. (2) Average Greek or Romanian consumers 36As far as average consumers in neighbouring countries (Greece and Romania) are concerned, the applicant claims that the intervener has not submitted any evidence allowing the Board of Appeal to establish that the word ‘devin’ would be perceived by those consumers as a geographical location. It claims that the Board of Appeal, in reaching such a conclusion, relied on unsubstantiated deductions or assumptions based essentially on the number of tourists visiting Bulgaria. In addition, the applicant submits that, although it does not bear the burden of proof, it produced reliable and concrete evidence in support of the reverse argument that an average consumer in Greece or Romania would not make a direct link between the contested mark and a geographical origin.37It is necessary to examine the evidence retained by the Board of Appeal in order to conclude that the contested mark was descriptive for the average consumer in Greece and Romania.38First, the Board of Appeal, following the Cancellation Division, relied on several sources of data relating to tourism, in particular the Official Tourism Portal of Bulgaria and other websites. Relying on the fact that more than 5.4 million foreign tourists visited Bulgaria in 2014, an ‘impressive’ figure bearing in mind the country’s 7.3 million inhabitants, the Board of Appeal estimated that, ‘even if it were true that most of these tourists finally elected to spend their vacations in sea-side or winter ski resorts, as argued by the [applicant], this does not rule out knowledge of other areas or other locations’. It considered that ‘when a person chooses a vacation, he or she will generally consider beforehand a variety of destinations before settling on one in particular’ and concluded from that ‘a person wishing to visit Bulgaria, and after considering the range of destinations on offer, will almost certainly come across lesser known or less accessible destinations even if, in the end, the potential tourist decides on a different destination’. On the basis of those mere hypotheses, the Board of Appeal speculated that it was ‘very unlikely ... that Devin, and its association with spa waters, would not appear on internet searches for holiday destinations in Bulgaria’.39However, it must be acknowledged, as the applicant has, that the mere fact that the town of Devin has a detectable presence on the internet cannot suffice to establish, in line with the required legal and case-law standards, that it would be known by a significant part of the relevant public of Greece and Romania. As the applicant points out, reasoning such as that of the Board of Appeal, taken to its extreme, would lead to the conclusion that foreign consumers could, by simply browsing on the internet, know every town in the world, of any size, even small ones.40The Board of Appeal also mentioned that ‘Devin has a detectable presence on internet websites providing reviews of travel-related content and interactive travel forums (e.g. Trip Advisor, Booking.com)’. In passing, it rejected the applicant’s remark that Devin occupied only the 68th (or now 59th according to the intervener) place out of the 70 most popular destinations in Bulgaria in the ranking of the website ‘TripAdvisor.com’, on the ground that this demonstrated the existence of at least a non-negligible tourist profile on the internet, unlike the hundreds of towns and villages in Bulgaria which were not included.41However, the existence of a ‘non-negligible tourist profile on the internet’, in itself, does not suffice to establish the knowledge of a small town by the relevant public abroad. In that regard, the fact that Devin is not one of Bulgaria’s most popular destinations on the ‘TripAdvisor.com’ website is at the very least relevant, since it is reasonable to consider that the relevant foreign public only knows the main attractions of a third country such as Bulgaria.42Secondly, the Board of Appeal relied on the ‘considerable’ or ‘substantial’ tourism infrastructure of the municipality of Devin, comprising, according to it, ‘nearly two dozen hotels in the area’, including many spa hotels and five-star luxury hotels.43However, that simple fact, in itself, does not does not warrant the conclusion that an average Greek or Romanian consumer could have knowledge of the town of Devin beyond its borders or establish a direct link with it. It cannot be ruled out that that tourism infrastructure could be used mainly by the average Bulgarian consumer, whose knowledge of the town of Devin is not in dispute, and incidentally by a small proportion of average foreign consumers who visit Bulgaria as tourists.44Furthermore, the Board of Appeal, in paragraph 41 of the contested decision, speculated that the fact that the hotel registers in Devin report low numbers of foreigners ‘may not accurately reflect visits to the town’ since ‘a high proportion of visitors who are attracted by nature will not necessarily stay in luxury hotels, but will opt for camping or bed-and-breakfast accommodation in nearby towns or villages’, going on to state that ‘the popular resort of Pamporovo is only a little over half an hour away by car’. It also made the assumption that ‘it would be extremely surprising ... if tourists staying in Pamporovo (16th most popular resort in Bulgaria, according to [TripAdvisor.com]) did not venture out to visit an area of allegedly stunning natural beauty only a stone’s throw away’.45However, it must be noted that none of the evidence provided by the intervener supports any of those hypotheses and that the probative value of those hypotheses is less than that of each statement to the contrary.46Above all, with regard to all the above evidence, it should be stressed that the legal criterion to be applied is not to count bit by bit the number of foreign tourists visiting the town of Devin, but to establish the perception of the word ‘devin’ by the whole relevant public of the European Union, including those who do not necessarily visit Devin or Bulgaria, and who constitute the majority of that public. The Board of Appeal’s argument does not concern that great majority of average consumers in the European Union, in particular Greeks and Romanians, who do not visit Bulgaria, but focuses on the minimal fraction of those who plan to visit that country, and above all the very small fraction of those who visit Devin or do research about it.47In that respect, it is important to note that the average consumer of mineral water and beverages in the European Union does not have a high degree of specialisation in geography or tourism. Accordingly, by analogy, in the case giving rise to the judgment of 15 October 2008, Powerserv Personalservice v OHIM — Manpower (MANPOWER) (T‑405/05, EU:T:2008:442, paragraphs 85, 89 and 93), the General Court dismissed as ‘far too vague’ allegations that ‘tourism by English and German citizens generates linguistic exchange’ in other countries of the European Union, and found that the Board of Appeal had not taken into account the entire relevant public, consisting of the entire population of working age, by wrongly focusing on employers who were looking for staff.48In the present case, it must be noted that the Board of Appeal, by wrongly focusing on foreign tourists, in particular Greeks or Romanians, who visit Bulgaria or Devin, did not take into consideration the entire relevant public, consisting of the average consumer of the European Union, in particular from Greece and Romania, but wrongly limited itself to a very small or minimal fraction of the relevant public, which, in any event, is negligible and cannot be considered sufficiently representative of it in the light of the case-law cited in paragraph 18 above. It is such a limitation to a very small or minimal fraction of the relevant public, namely foreign tourists visiting Bulgaria or Devin, which explains why the evidence relied on by the Board of Appeal is of very little probative value, to the point of being almost irrelevant. In short, the Board of Appeal applied a wrong test, which inevitably led it to an incorrect factual assessment of the perception of the word ‘devin’ by the relevant public.49Finally, in paragraph 55 of the contested decision, the Board of Appeal stated that it was ‘convince[d] ... that the undoubted reputation of Devin as a spa town with natural water does not arbitrarily stop at the Bulgarian border, but extends beyond to neighbouring countries’ and concluded by declaring that ‘[it] would be strange ... if the considerable fame that Devin enjoys in Bulgaria for its waters should mysteriously vanish on crossing the Bulgarian-Greek border’.50However, it must be noted, as the applicant did, that such a declaration cannot serve as valid evidence to establish knowledge of the town of Devin ‘by a “considerable proportion” of consumers in neighbouring countries such as Greece and Romania’, as the Board of Appeal found in line with the Cancellation Division on that point. Furthermore, it should be noted that the town of Devin, which is not easily accessible and is separated from the Greek border by a mountain range, has particular geographic circumstances that render that declaration even more unlikely.51By analogy, it should be recalled that, in the case leading to the judgment of 25 October 2005, Cloppenburg (T‑379/03, EU:T:2005:373, paragraphs 39 and 46), concerning the town of Cloppenburg, located in Lower Saxony (Germany) and having a population of approximately 30000, more than four times the population of Devin, the General Court was able to leave open the question of whether the public concerned, namely the average German consumer, knew the city of Cloppenburg as a geographical place and, in any event, considered that, given the ‘small size’ of that town, even if German consumers did know it, that knowledge must be regarded as slight or, at the most, as moderate. In that case, the General Court did not even contemplate that that German town of such a small size could be known by the average consumer in the other Member States of the European Union.52It follows that the reasons set out in the contested decision to demonstrate that the average consumer in Greece and Romania knows Devin as a geographical place are neither convincing nor conclusive.53In addition, the applicant provided further evidence in support of its argument that an average consumer in Greece and Romania would not make a direct link between the contested mark and any geographical origin.54Accordingly, the applicant produced an official summary issued by the municipality of Devin itself, stating, on the basis of statements by hotel owners, the number of foreign tourists who visited the town of Devin in 2014, which was allegedly a ‘record year’. That document shows that, during that year, less than 3500 foreign tourists of all nationalities visited the town of Devin and that, among them, there were only 400 Greek tourists and 50 Romanian tourists. Compared with the figure of 5.4 million foreign tourists who visited Bulgaria in 2014 (see paragraph 38 above) and the populations of the Member States of the European Union, in particular Greece and Romania —10.7 million and 19.6 million inhabitants respectively on 1 January 2017 according to the Statistical Office of the European Union (Eurostat) — that data suggests that the town of Devin does not represent a major attraction for foreign tourists, particularly Greek and Romanian, and, a fortiori, is not known to the average consumer abroad.55The applicant also produced data resulting from an ‘omnibus’ market survey carried out in several Member States, including Greece (mainland and Crete), Romania, Germany and the United Kingdom (‘the omnibus survey’). With regard to the survey conducted in Greece and covering a sample of 1007 people from the Greek public, the results seemed to show that less than 1% of that sample associated the word ‘devin’ with a place in Bulgaria, and less than 3% with any place at all.56The Board of Appeal considered this omnibus survey to be ‘flawed on several points’ listed in paragraphs 44 to 47 of the contested decision. According to it, first, the investigation was trying to prove a negative fact, namely that the public did not know the town of Devin, and because of that questionable premiss, most of the data collected was ambiguous. The interviewees should have been ‘prompted to be more precise’, but it did not specify how. Secondly, there was no indication as to whether or to what extent people living in border regions of Bulgaria had taken part in the Greek survey. Thirdly, the results of the Greek survey were vitiated by errors and the data suffered from occasional unreliability (in the order of an erroneous total of 71 instead of 72). Fourthly, even if the data were interpreted in its most favourable sense from the applicant’s point of view, it should be taken into account that, in the Greek survey, 30 respondents replied that Devin was either a ‘town’, a ‘location’ or a ‘region in Bulgaria’. It inferred that those 30 respondents, out of sample of 1007, correspond to more than 270000 inhabitants out of a total Greek population of 11 million, which was not an insignificant number. Of all these, the Board of Appeal concluded that the survey data was ‘clearly ... not convincing’ and ‘not conclusive’.57Even if that omnibus survey were to suffer from the shortcomings identified by the Board of Appeal, it must be held that its conclusions can at least be taken into account, with a sufficient margin of error and without being decisive. Accordingly, even if the actual percentage of the Greek public recognising Devin as a geographical place (in Bulgaria or elsewhere) is 3%, or even two or three times higher, that is still a small percentage, which cannot be considered as representing the average Greek consumer.58Above all, even if the number of 270000 inhabitants is not insignificant in absolute terms, the relevant question is the perception by the entire public concerned, with regard to which a relative percentage of 3% is very unrepresentative. The same result can also be read as meaning that 97% (or an approaching percentage) of the Greek population does not recognise the word ‘devin’ as a ‘town’, ‘place’ or ‘region of Bulgaria’, which is much more convincing and conclusive.59Moreover, as regards the absence of any indication in the Greek survey of persons bordering Bulgaria, it suffices to recall that, in any case, a very large majority of average Greek consumers does not live close to the Bulgarian border.60Finally, EUIPO’s allegation in the response, that the fact that Greece and Romania are parties to the Lisbon Agreement implies that the citizens of those Member States know Devin as a geographical indication of Bulgarian mineral water must be rejected. Such an allegation is clearly lacking in fact, in that it presumes on the part of the average Greek or Romanian consumer an extremely high degree of knowledge that they clearly do not possess, including international treaties and the list of protected geographical indications in their country. Moreover, the legal protection by a Member State of a geographical indication cannot suffice to automatically establish the recognition, by the average consumer in that Member State, of the word corresponding to that indication as descriptive of a geographical origin.61Consequently, it must be concluded, as the applicant claims, that the Board of Appeal did not comply with the requirements established by the settled case-law cited in paragraph 24 above, namely that it should ‘establish’ that the word ‘devin’ is known as the designation of a geographical origin by the average consumer in Greece and Romania. (3) The average consumer in other EU Member States 62The Board of Appeal, having found that the contested trade mark was descriptive for the average Greek or Romanian consumer, hardly examined that issue from the point of view of the average consumer in the other Member States of the European Union. In paragraph 47 of the contested decision, it merely considered that it could be deduced by extrapolation from the omnibus survey, which it had however dismissed as ‘not convincing’, that around 455000 German consumers would perceive the word ‘devin’ as the name of a town or a town in Bulgaria. In paragraph 55 of that decision, it added that ‘it would be unrealistic to claim that none of these members of the general public from other Member States [who visit Bulgaria] would fail to familiarise themselves with Bulgarian culture, history and natural attractions, which would include the town of Devin, when considering their travel arrangements’.63It must be noted, as did the applicant, that 455000 consumers would correspond to less than 0.6% of the total German population, which hardly qualifies as a considerable proportion or an average German consumer of mineral water and drinks. Further, the mere fact that consumers answered ‘town’ to a question in the survey is inconclusive, as it cannot be equated with the knowledge of a particular town or particular direct link with the goods at issue.64As for the characterisation of the average EU consumer as a tourist preparing a trip to Bulgaria and familiarising himself with a relatively minor attraction of the country, this seems much more ‘unrealistic’ than the contrary finding. In that respect, it should be noted again that the average consumer of mineral water and beverages in the European Union does not have a high degree of specialisation in geography or tourism (see paragraph 47 above).65Moreover, the intervener did not present any specific evidence to establish that the average consumer of the European Union perceives the word ‘devin’ as a geographical place in Bulgaria.66As regards the Cancellation Division’s assertion that the geographical name Devin, in the future, would potentially be understood by the public in the European Union as a description of the geographical origin of the relevant goods, taking into account the marketing efforts made and the growth of the Bulgarian tourism sector (see paragraph 4 above), it should be noted that such an assertion is not supported by the facts of the case and is a mere hypothesis, in particular because the town of Devin is not one of Bulgaria’s 50 main destinations and benefits only very marginally from the growth of foreign tourism in that country. It is therefore not ‘reasonable’, within the meaning of the case law cited in paragraph 24 above, to consider that the name Devin could, in the eyes of the public of the European Union, designate the geographical origin of the goods concerned. Moreover, the burden of proof cannot be reversed by requiring the applicant to demonstrate a negative fact, namely that the town of Devin could not be visited or known in the future.67It must be concluded that it does not appear from the file that the word ‘devin’ is recognised as the designation of a geographical origin by the average consumer in the Member States of the European Union other than Bulgaria.68In view of the general interest in preserving the availability of geographical names (see paragraph 20 above), it is necessary to consider the consequences of the above conclusion on the availability of the geographical name Devin. (b) The availability of the geographical name Devin 69The Board of Appeal, in paragraph 8 of the contested decision, recalled that the Cancellation Division had stressed the general interest in preserving the availability of geographical names. According to the Cancellation Division, the case of Devin illustrated the underlying logic of Article 7(1)(c) of Regulation No 207/2009, namely the need for certain geographical descriptions to remain available for other operators to use them, and that the existence of a European Union trademark should not hinder current and future economic efforts to develop the reputation of a traditional spa town beyond the country’s borders. The Cancellation Division had rejected the applicant’s argument that the water concession was granted to one company only, on the ground that it did not take into account the settled case-law that the general or public interest in leaving descriptive or potentially descriptive marks free for third parties to use was pre-established and presumed.70The Board of Appeal itself, in paragraphs 49 to 52 of the contested decision, rejected an ‘essential argument’ of the applicant described by the Board of Appeal as relating to ‘the alleged “exclusivity” of its contract allowing it to exploit Devin’s water reserves’, a provision of Bulgarian law according to which ‘an extraction concession … is granted to a single concessionaire’ (Article 47(11) of the Water Act) as well as a ‘factual monopoly over the [geographical indication] “Devin Natural Mineral Water”’ (see paragraph 28 above) precluding, according to that Board, that it ‘be left free for other traders’.71To this end, the Board of Appeal first considered that the applicant’s potential monopoly is limited in time and can be terminated for various commercial or legal reasons. Furthermore, it considered that the ‘exploitation’ of a natural source and its subsequent bottling may involve different undertakings, each of which must have the right to include the word ‘devin’ on its labels. Finally, it observed that ‘regardless of the current legal constraints in Bulgaria ... Directive [2009/54] does not restrict the exploitation of mineral water sources to one undertaking’, that ‘Article 8(2), of [the directive] only imposes the restriction that water from one spring should be marketed always under one and the same “trade description”, but does not limit the marketing to one undertaking’ and that ‘[that provision] does not seek to regulate the number of “concessionaires”[as the applicant seemed to argue]’.72The Board of Appeal, in paragraph 54 of the contested decision, addressed another argument of the applicant, pointing out that EUIPO had registered the European Union word marks VITTEL (under number 958322) and EVIAN (under number 1422716) for, inter alia, ‘mineral waters’ included in Class 32. The Board of Appeal countered that it was not necessarily EUIPO’s ‘practice’ to accept the registration of such marks unchallenged, as an examination of the history of the latter mark revealed that an objection had been raised against it during the examination of the absolute grounds for refusal, although it was later waived after the submission of evidence.73EUIPO, both in the response and at the hearing, considers that the Board of Appeal rightly protected the general interest in preserving the availability of a geographical name such as that of the spa town of Devin. It specifies that the applicant may of course continue exploiting its well-known trade mark in Bulgaria. However, it adds, the fact that it has a well-known trade mark in Bulgaria does not give it a right to have an EU-wide monopoly on the descriptive word ‘devin’, which would hinder economic efforts to develop the reputation of a traditional spa town beyond Bulgaria’s borders. Nor does it rule out that other competitors might, in the future, have a legitimate interest to use the descriptive indication ‘devin’ in other Member States of the European Union, where Devin is known and associated with its waters, but where it had not acquired any distinctiveness by virtue of use.74The applicant claims that Article 7(1)(c) of Regulation No 207/2009 is not an absolute block on the registration of descriptive signs as trade marks. It states that, when a descriptive sign has acquired a secondary meaning as a trade mark by use, it can be registered, which does not prevent other parties from making descriptive use of the sign.75In that regard, in the first place, it should be recalled that, under Article 12(1)(b) of Regulation No 207/2009 (now, in slightly amended form, Article 14(1)(b) of Regulation 2017/1001), ‘[an EU] trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade indications concerning the ... geographical origin ... of the goods or of rendering of the service, or other characteristics of the goods or service’.76The Court of Justice considered that, by thus limiting the effects of the exclusive rights of a trade mark proprietor, Article 12 of Regulation No 207/2009 seeks to reconcile the fundamental interests of trade mark protection with those of free movement of goods and freedom to provide services in the internal market in such a way that trade mark rights are able to fulfil their essential role in the system of undistorted competition which the TFEU seeks to establish and maintain (see, to that effect and by analogy, judgment of 10 April 2008, Adidas and Adidas Benelux, C‑102/07, EU:C:2008:217, paragraph 45 and the case-law cited).77Specifically, Article 12(1)(b) of Regulation No 207/2009 seeks to ensure that all economic operators have the opportunity to use descriptive indications. That provision therefore gives expression to the requirement of availability. However, the requirement of availability cannot in any circumstances constitute an independent restriction of the effects of the trade mark in addition to those expressly provided for in that article (see, to that effect and by analogy, judgment of 10 April 2008, Adidas and Adidas Benelux, C‑102/07, EU:C:2008:217, paragraphs 46 and 47 and the case-law cited).78Admittedly, it should be noted that, in circumstances that are different from the present case, it has been held that the case-law principle, referred to in paragraphs 19 and 20 above, concerning the general interest underlying Article 7(1)(c) of Regulation No 207/2009, is not contradicted by Article 12(1)(b) of that regulation, which also does not have a decisive influence on the interpretation of the first provision. Indeed, Article 12(1)(b) of Regulation No 207/2009, which aims, inter alia, to resolve the problems posed by registration of a mark consisting wholly or partly of a geographical name, does not confer on third parties the right to use the name as a trade mark, but merely guarantees their right to use it descriptively, that is to say, as an indication of geographical origin, provided that it is used in accordance with honest practices in industrial or commercial matters (see, to that effect judgments of 15 October 2003, Nordmilch v OHIM (OLDENBURGER), T‑295/01, EU:T:2003:267, paragraph 55, and of 20 July 2016, Internet Consulting v EUIPO — Provincia Autonoma di Bolzano-Alto Adige (SUEDTIROL), T‑11/15, EU:T:2016:422, paragraph 55; see also, to that effect and by analogy, judgment of 4 May 1999, Windsurfing Chiemsee, C‑108/97 and C‑109/97, EU:C:1999:230, paragraphs 26 to 28).79In particular, a descriptive use of the name ‘Devin’ is thus permitted in order to promote the town as a tourist destination. Contrary to what the intervener fears, the contested mark cannot therefore constitute an impediment to the economic efforts to develop, beyond the borders of Bulgaria, the reputation of the town of Devin for its spa waters.80For the sake of clarity, it should be pointed out that this legislative and jurisprudential reminder does not amount to advocating a minimum control of the grounds for refusal in Article 7 of Regulation No 207/2009 at the time when the application for registration is considered, on the pretext that the risk that operators might appropriate certain signs which ought to remain available would be neutralised by the limits which Article 12 of that regulation imposes at the stage when advantage is taken of the effects of the registered mark. The assessment of the grounds for refusal set out in Article 7 of that regulation must be carried out by the competent authority for the registration procedure or invalidity proceedings of the trademark, and cannot be withdrawn from it in order to transfer it to the courts with responsibility for ensuring that the rights conferred by the trade mark can actually be exercised (see, to that effect and by analogy, judgment of 6 May 2003, Libertel, C‑104/01, EU:C:2003:244, paragraph 58).81With regard to the citation by the Board of Appeal of the judgment of 23 October 2003, OHIM v Wrigley (C‑191/01 P, EU:C:2003:579, paragraph 32), according to which ‘a word sign must be refused registration … if at least one of its possible meanings designates a characteristic of the goods or services concerned’, it suffices to recall that that case-law answers, in the negative, the question of whether it is ‘necessary that the signs and indications composing the mark ... be in use at the time of the application for registration in a way that is descriptive’. However, in the present case, the relevant issue is not this one — since the word ‘devin’ is descriptive in Bulgaria, subject to distinctiveness acquired through the use of the contested mark for the goods concerned — but instead concerns the perception of that word by the relevant public outside Bulgaria.82In that regard, while the likelihood of a geographical indication of origin influencing competitive relationships is strong in the case of a large region with a reputation for the quality of a wide range of goods or services, it is, however, weak in the case of a well-defined place the reputation of which is limited to a restricted number of goods or services (see, to that effect, judgments of 15 December 2011, Mövenpick v OHIM (PASSIONATELY SWISS), T‑377/09, not published, EU:T:2011:753, paragraph 41, and of 20 July 2016, SUEDTIROL, T‑11/15, EU:T:2016:422, paragraph 44). However, in the present case, Devin is a well-defined place, known to the average consumer only in Bulgaria and largely unknown to the average consumer in the rest of the European Union, the reputation of which is limited to its waters.83In the second place, it is important to note that, assuming that the contested trade mark has acquired a secondary meaning and distinctive character in Bulgaria, the only Member State where the word ‘devin’ is descriptive, and therefore valid as a trade mark of the European Union, the fact remains that Regulation No 207/2009 provides, in the very definition of the exclusive right conferred by such a mark, safeguards to protect the interests of third parties.84Accordingly, the Court recalled that the purpose of Regulation No 207/2009 is generally to strike a balance between the interest which the proprietor of a trade mark has in safeguarding its essential function, on the one hand, and the interests of other economic operators in having signs capable of denoting their products and services, on the other. It follows that the protection of rights that the proprietor of a trade mark derives under that regulation is not unconditional (see, to that effect and by analogy, judgments of 27 April 2006, Levi Strauss, C‑145/05, EU:C:2006:264, paragraphs 29 and 30 and the case-law cited; of 22 September 2011, Budějovický Budvar, C‑482/09, EU:C:2011:605, paragraphs 34 and 48; of 6 February 2014, Leidseplein Beheer and de Vries, C‑65/12, EU:C:2014:49, paragraphs 41 to 43; and of 30 May 2018, Tsujimoto v EUIPO, C‑85/16 P and C‑86/16 P, EU:C:2018:349, paragraph 90).85First, the protection of the function of indicating the origin of the trade mark, provided for in Article 9(2)(a) and (b) of Regulation No 207/2009 (now Article 9(2)(a) and (b) of Regulation 2017/1001), covers its use for identical or similar goods (or services) only and requires a risk of confusion on the part of the relevant public, which is assumed in the case of double identity of signs and goods.86Secondly, the protection of the advertising function of a reputed trademark, provided for in Article 9(2)(c) of Regulation No 207/2009 (now Article 9(2)(c) of Regulation 2017/1001), also covers dissimilar products, but requires a risk of dilution, tarnishing or free-riding and, in addition, does not cover uses with a ‘due cause’.87According to the case-law of the Court, the concept of ‘due cause’ should not be interpreted as being limited to objectively overriding reasons, but may also relate to the subjective interests of a third party using a sign which is identical or similar to the mark with a reputation. That concept is intended, not to resolve a conflict between a mark with a reputation and a similar sign which was being used before that trade mark was filed or to restrict the rights which the proprietor of that mark is recognised as having, but to strike a balance between the interests in question by taking account, in the specific context of Article 9(2)(c) of Regulation No 207/2009 and in the light of the enhanced protection enjoyed by that mark, of the interests of the third party using that sign (see, to that effect and by analogy, judgment of 6 February 2014, Leidseplein Beheer and de Vries, C‑65/12, EU:C:2014:49, paragraphs 45 to 48).88It follows from Article 9(2)(c) of Regulation No 207/2009 that the proprietor of a trade mark with a reputation may be obliged, pursuant to the concept of ‘due cause’, to tolerate the use by a third party of a sign similar to that mark in relation to a product which is identical to that for which that mark was registered, if it is demonstrated that that sign was being used before that mark was filed and that the use of that sign in relation to the identical product is in good faith. Similarly, pursuant to Article 8(5) of that regulation (now Article 8(5) of Regulation 2017/1001), that proprietor may not oppose the registration of such a sign (judgment of 5 July 2016, Future Enterprises v EUIPO — McDonald’s International Property (MACCOFFEE), T‑518/13, EU:T:2016:389, paragraph 113; see also, to that effect and by analogy, judgment of 6 February 2014, Leidseplein Beheer and de Vries, C‑65/12, EU:C:2014:49, paragraph 60).89In the present case, it follows from the above that the name of the town of Devin remains available to third parties not only for descriptive use, such as the promotion of tourism in that town, but also as a distinctive sign in cases of ‘due cause’ and where there is no likelihood of confusion excluding the application of Articles 8 and 9 of Regulation No 207/2009.90The general interest in preserving the availability of a geographical name such as that of the spa town of Devin can thus be protected by allowing descriptive uses of such names and by means of safeguards limiting the exclusive right of the proprietor of the contested mark, without requiring cancellation of that mark and the total suppression of the exclusive right that it confers for the goods in Class 32 covered by the registration.91Moreover, it is this necessary balance between the rights of the proprietors and the interests of third parties which allows the registration of trade marks originating from an eponymous geographical name, such as the European Union word marks VITTEL and EVIAN mentioned by the applicant, under certain conditions relating in particular to the acquisition of a secondary meaning and distinctive character by use in territories where the sign is intrinsically descriptive of a geographical origin and where that sign is not deceptive as regards that origin. 2. Conclusion on the first plea in law and on the request for annulment 92In view of the above considerations, in particular paragraphs 32 to 67 above, it must be concluded, as the applicant submits, that the Board of Appeal has not established the existence of a sufficient degree of recognition of the town of Devin by the average European Union consumer, in particular Greek or Romanian consumers, and that the intervener has not supported its request for a declaration of invalidity with any evidence that the average European Union consumer would associate the word ‘devin’ with a town in Bulgaria. While it must be held that a proportion of European Union consumers know the town of Devin, that proportion must, in any event, be considered to be very small. That conclusion in no way calls into question the natural beauty of Devin and the healing properties of its spa waters, nor the economic efforts made to promote tourism in Bulgaria.93According to the case-law cited in paragraph 22 above, in principle, Article 7(1)(c) of Regulation No 207/2009 does not preclude the registration of geographical names which are unknown in the circles concerned or, at the very least, unknown as a designation of a geographical place. In the present case, however, while the geographical name Devin is known to the relevant class of persons in Bulgaria, in which country the applicant claims that the contested mark has acquired distinctive character, it must be noted that, as regards the relevant class of persons in the other Member States of the European Union, in particular Greece and Romania, the geographical name Devin is largely unknown to them or, at the very least, unknown as a designation of a geographical place.94Similarly, according to the case-law cited in paragraph 24 above, in making its assessment, EUIPO was bound to establish that the geographical name is known to the relevant class of persons as the designation of a place. In the present case, however, it must be noted that, with respect to the relevant class of persons, which is made up of average consumers, the geographical name Devin is, for a large majority of the public, unknown. The part of the relevant public that knows that name as a geographical place represents only a very small and negligible minority of one or a few percent at most. Moreover, that percentage seems, prima facie, to be lower than that representing the part of the relevant public who know Devin as a brand of mineral water.95It follows from the foregoing that the Board of Appeal erred in its assessment by concluding that the contested trade mark was descriptive of a geographical origin as regards the average consumer in the neighbouring countries of Bulgaria, namely Greece and Romania, and in all the other Member States of the Union, with the sole exception of Bulgaria. In doing so, it infringed Article 52(1)(a) of Regulation No 207/2009 in conjunction with Article 7(1)(c) of that regulation.96Consequently, the first part of the first plea should be upheld and, consequently, the contested decision should be annulled, in accordance with the applicant’s first head of claim, without the need to examine the second part of the first plea or the second plea, including the pleas of inadmissibility raised against them respectively by the intervener or by EUIPO, nor to rule on the admissibility of certain annexes that, according to the applicant, were submitted by the intervener for the first time before the General Court. B. The claim for alteration 97As regards the applicant’s second and third heads of claim, seeking the rejection of the intervener’s application for a declaration of invalidity in its entirety and, in essence, requesting the alteration of the contested decision (see paragraph 10 above), it must be borne in mind that the power of the General Court to alter decisions pursuant to Article 65(3) of Regulation No 207/2009 does not have the effect of conferring on that court the power to carry out an assessment on which the Board of Appeal has not yet adopted a position. Exercise of the power to alter decisions must therefore, in principle, be limited to situations in which the General Court, after reviewing the assessment made by the Board of Appeal, is in a position to determine, on the basis of the matters of fact and of law as established, what decision the Board of Appeal was required to take (judgments of 5 July 2011, Edwin v OHIM, C‑263/09 P, EU:C:2011:452, paragraph 72, and of 13 May 2015, easyAir-tours, T‑608/13, not published, EU:T:2015:282, paragraph 68).98In the present case, the conditions for the exercise of the General Court’s power to alter decisions, as set out in the judgment of 5 July 2011, Edwin v OHIM (C‑263/09 P, EU:C:2011:452), are not satisfied. While it is true that it follows from the considerations set out in paragraph 95 above that the Board of Appeal was required to declare that the contested trade mark was not descriptive in respect of the non-Bulgarian part of the relevant public, in particular for the average Greek or Romanian consumer, the fact remains that the Board of Appeal — in so far as it considered, wrongly, that the alleged descriptive character of the contested mark for the Greek or Romanian part of the relevant public was sufficient to establish the existence of a ground of invalidity justifying the dismissal of the appeal against the decision of the Cancellation Division — did not clearly rule on the acquisition of distinctive character by the use of the contested mark as regards the Bulgarian part of the relevant public, the only part for which the contested mark is descriptive of a geographical origin. Since the issue of whether distinctive character had been acquired by the use of the contested trade mark in Bulgaria was not clearly examined by the Board of Appeal, it is not for the General Court to examine it, for the first time, in its review of the legality of the contested decision (see, to that effect, judgments of 5 July 2011, Edwin v OHIM, C‑263/09 P, EU:C:2011:452, paragraphs 72 and 73, and of 13 May 2015, easyAir-tours, T‑608/13, not published, EU:T:2015:282, paragraphs 69 and 70 and the case-law cited).99It follows that, as the case currently stands, the General Court cannot exercise its power to review the contested decision in order to annul the decision of the Cancellation Division of 29 January 2016 — which had, moreover, considered, on that point, that, ‘in view of the materials submitted by the [applicant] ... there can be no doubt that the trade mark “Devin” has acquired distinctive character in Bulgaria’ — and to reject the request for a declaration of invalidity of the contested mark.100The applicant’s second and third heads of claim must therefore be rejected. IV. Costs 101Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.102Since EUIPO and the intervener have been unsuccessful for the most part, first, EUIPO must be ordered to bear its own costs and to pay those incurred by the applicant, in accordance with the form of order sought by the latter, and, secondly, the intervener must be ordered to bear its own costs.On those grounds,THE GENERAL COURT (Eighth Chamber)hereby: 1. Annuls the decision of the Second Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 2 December 2016 (Case R 579/2016-2); 2. Dismisses the action as to the remainder; 3. Orders EUIPO to bear its own costs and to pay those incurred by Devin AD; 4. Orders Haskovo Chamber of Commerce and Industry to bear its own costs. CollinsKanchevaPasserDelivered in open court in Luxembourg on 25 October 2018.E. CoulonRegistrarM. KanchevaPresidentTable of contentsI. Background to the disputeII. Forms of order soughtIII. LawA. The application for annulment1. The first plea in law, alleging infringement of Article 52(1)(a) of Regulation No 207/2009, in conjunction with Article 7(1)(c) of that regulationa) On the perception of the word ‘devin’ by the average EU consumer(1) Average Bulgarian consumers(2) Average Greek or Romanian consumers(3) The average consumer in other EU Member States(b) The availability of the geographical name Devin2. Conclusion on the first plea in law and on the request for annulmentB. The claim for alterationIV. Costs( *1 ) Language of the case: English. | 6612b-bf7ac1f-4252 | EN |
According to Advocate General Szpunar, a simple military report cannot enjoy copyright protection | 29 July 2019 ( *1 )(Reference for a preliminary ruling — Copyright and related rights — Directive 2001/29/EC — Information Society — Harmonisation of certain aspects of copyright and related rights — Article 2(a) — Reproduction right — Article 3(1) — Communication to the public — Article 5(2) and (3) — Exceptions and limitations — Scope — Charter of Fundamental Rights of the European Union)In Case C‑469/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesgerichtshof (Federal Court of Justice, Germany), made by decision of 1 June 2017, received at the Court on 4 August 2017, in the proceedings Funke Medien NRW GmbH v Bundesrepublik Deutschland, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Arabadjiev, M. Vilaras, T. von Danwitz, C. Toader, F. Biltgen and C. Lycourgos, Presidents of Chambers, E. Juhász, M. Ilešič (Rapporteur), L. Bay Larsen and S. Rodin, Judges,Advocate General: M. Szpunar,Registrar: M. Aleksejev, Head of Unit,having regard to the written procedure and further to the hearing on 3 July 2018,after considering the observations submitted on behalf of:–Funke Medien NRW GmbH, by T. von Plehwe, Rechtsanwalt,the German Government, by T. Henze, M. Hellmann, E. Lankenau and J. Techert, acting as Agents,the French Government, by E. Armoët, D. Colas and D. Segoin, acting as Agents,the United Kingdom Government, by Z. Lavery and D. Robertson, acting as Agents, and by N. Saunders, Barrister,the European Commission, by H. Krämer, T. Scharf and J. Samnadda, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 25 October 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 2(a), Article 3(1) and Article 5(2) and (3) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10).2The request has been made in proceedings between Funke Medien NRW GmbH (‘Funke Medien’), which operates the website of the German daily newspaper Westdeutsche Allgemeine Zeitung, and the Bundesrepublik Deutschland (Federal Republic of Germany) concerning the publication by Funke Medien of certain documents ‘classified for restricted access’ drawn up by the German Government. Legal context European Union law 3Recitals 1, 3, 6, 7, 9, 31 and 32 of Directive 2001/29 state:‘(1)The [EC] Treaty provides for the establishment of an internal market and the institution of a system ensuring that competition in the internal market is not distorted. Harmonisation of the laws of the Member States on copyright and related rights contributes to the achievement of these objectives.…(3)The proposed harmonisation will help to implement the four freedoms of the internal market and relates to compliance with the fundamental principles of law and especially of property, including intellectual property, and freedom of expression and the public interest.(6)Without harmonisation at [EU] level, legislative activities at national level which have already been initiated in a number of Member States in order to respond to the technological challenges might result in significant differences in protection and thereby in restrictions on the free movement of services and products incorporating, or based on, intellectual property, leading to a refragmentation of the internal market and legislative inconsistency. The impact of such legislative differences and uncertainties will become more significant with the further development of the information society, which has already greatly increased transborder exploitation of intellectual property. …(7)The [EU] legal framework for the protection of copyright and related rights must, therefore, also be adapted and supplemented as far as is necessary for the smooth functioning of the internal market. … [D]ifferences not adversely affecting the functioning of the internal market need not be removed or prevented.(9)Any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation. Their protection helps to ensure the maintenance and development of creativity in the interests of authors, performers, producers, consumers, culture, industry and the public at large. Intellectual property has therefore been recognised as an integral part of property.(31)A fair balance of rights and interests between the different categories of rightholders, as well as between the different categories of rightholders and users of protected subject matter must be safeguarded. The existing exceptions and limitations to the rights as set out by the Member States have to be reassessed in the light of the new electronic environment. … In order to ensure the proper functioning of the internal market, such exceptions and limitations should be defined more harmoniously. The degree of their harmonisation should be based on their impact on the smooth functioning of the internal market.(32)This Directive provides for an exhaustive enumeration of exceptions and limitations to the reproduction right and the right of communication to the public. … Member States should arrive at a coherent application of these exceptions and limitations …’4Under the heading ‘Reproduction right’, Article 2 of Directive 2001/29 reads as follows:‘Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:(a)for authors, of their works;…’5Article 3 of the directive, under the heading ‘Right of communication to the public of works and right of making available to the public other subject matter’, provides, in paragraph 1:‘Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.’6Article 5 of the directive, under the heading ‘Exceptions and limitations’, provides, in paragraph 3(c) and (d), and in paragraph 5:‘3. Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the following cases:(c)reproduction by the press, communication to the public or making available of published articles on current economic, political or religious topics or of broadcast works or other subject matter of the same character, in cases where such use is not expressly reserved, and as long as the source, including the author’s name, is indicated, or use of works or other subject matter in connection with the reporting of current events, to the extent justified by the informatory purpose and as long as the source, including the author’s name, is indicated, unless this turns out to be impossible;(d)quotations for purposes such as criticism or review, provided that they relate to a work or other subject matter which has already been lawfully made available to the public, that, unless this turns out to be impossible, the source, including the author’s name, is indicated, and that their use is in accordance with fair practice, and to the extent required by the specific purpose;5. The exceptions and limitations provided for in paragraphs 1, 2, 3 and 4 shall only be applied in certain special cases which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rightholder.’ German law 7Under the heading ‘Reporting on current events’, Paragraph 50 of the Gesetz über Urheberrecht und verwandte Schutzrechte — Urheberrechtsgesetz (Law on copyright and related rights) of 9 September 1965 (BGBl. 1965 I, p. 1273; ‘the UrhG’) provides:‘For the purposes of reporting on current events by broadcasting or similar technical means in newspapers, periodicals and other printed matter or other data carriers mainly devoted to current events, as well as on film, the reproduction, distribution and communication to the public of works which become perceivable in the course of these events shall be permitted to the extent justified by the purpose of the report.’8Under the heading ‘Quotations’, Paragraph 51 of the UrhG reads as follows:‘It shall be permissible to reproduce, distribute and communicate to the public a published work for the purpose of quotation so far as such use is justified to that extent by the particular purpose. This shall be permissible in particular where:1.subsequent to publication, individual works are included in an independent scientific work for the purpose of explaining the contents;2.subsequent to publication, passages from a work are quoted in an independent work;3.individual passages from a released musical work are quoted in an independent musical work.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 9The Federal Republic of Germany prepares a military status report every week on the deployments of the Bundeswehr (Federal armed forces, Germany) abroad and on developments at the deployment locations. The reports are referred to as ‘Unterrichtung des Parlaments’ (‘Parliament briefings’; ‘UdPs’), and are sent to selected members of the Bundestag (Federal Parliament, Germany), to sections of the Bundesministerium der Verteidigung (Federal Ministry of Defence, Germany) and other federal ministries, and to certain bodies subordinate to the Federal Ministry of Defence. UdPs are categorised as ‘Classified Documents — Restricted’, which is the lowest of the four levels of confidentiality laid down under German law. At the same time, the Federal Republic of Germany publishes summaries of UdPs known as ‘Unterrichtung der Öffentlichkeit’ (‘public briefings’), which are available to the public without any restrictions.10Funke Medien operates the website of the German daily newspaper Westdeutsche Allgemeine Zeitung. On 27 September 2012, it applied for access to all UdPs drawn up between 1 September 2001 and 26 September 2012. That application was refused by the competent authorities on the ground that disclosure of the information in those UdPs could have adverse effects on security-sensitive interests of the Federal armed forces. In that context, the competent authorities referred to the regularly published public briefings, which are versions of UdPs that do not affect those interests. Funke Medien nevertheless obtained, by unknown means, a large proportion of the UdPs, which it published in part as the ‘Afghanistan Papiere’ (‘the Afghanistan papers’) and could be read online as individually scanned pages accompanied by an introductory note, further links and a space for comments.11The Federal Republic of Germany, which takes the view that Funke Medien thereby infringed its copyright over the UdPs, brought an action for an injunction against Funke Medien, which was upheld by the Landgericht Köln (Regional Court, Cologne, Germany). The appeal brought by Funke Medien was dismissed by the Oberlandesgericht Köln (Higher Regional Court, Cologne, Germany). In its appeal on a point of law (Revision), brought before the referring court, Funke Medien maintained its contention that the action for an injunction should be dismissed.12The referring court notes that the reasoning of the Oberlandesgericht Köln (Higher Regional Court, Cologne) is based on the premiss that UdPs may be protected under copyright as ‘literary works’ and that they are not official texts excluded from the protection emanating from that right. It nevertheless states that that court has not made any finding of fact from which it can be concluded that UdPs are original creations.13However, the referring court considers that it is not possible to dismiss the judgment of the Oberlandesgericht Köln (Higher Regional Court, Cologne) and to remit the case to that court to allow it to make findings to that effect a posteriori, if copyright infringement of UdPs, which must be presumed for the purposes of an appeal on a point of law (Revision), is, in any event, covered by the derogation relating to reporting current events or quotations, laid down in Paragraphs 50 and 51 of the UrhG, or if such an infringement is justified by freedom of information or the freedom of the press, laid down respectively in the first and second sentences of Article 5(1) of the Grundgesetz für die Bundesrepublik Deutschland (Basic Law for the Federal Republic of Germany) of 23 May 1949 (BGBl. 1949 I, p. 1; ‘the GG’) and in Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’). According to the referring court, if that is the case, then judgment could be given in the case to the effect that the referring court would be required to amend the judgment of the Landgericht Köln (Regional Court, Cologne) and dismiss the action for an injunction which the Federal Republic of Germany brought before it.14The referring court considers, in that regard, that the interpretation of Article 2(a), Article 3(1) and Article 5(3)(c) and (d) of Directive 2001/29 read in the light of fundamental rights, in particular of freedom of information and of freedom of the press, is not obvious. It asks inter alia whether those provisions allow any discretion for the purposes of their transposition into national law. It notes in that regard that, according to the case-law of the Bundesverfassungsgericht (Federal Constitutional Court, Germany), national legislation which transposes an EU directive must be measured, as a rule, not against the fundamental rights guaranteed by the GG, but solely against the fundamental rights guaranteed by EU law, where that directive does not allow the Member States any discretion in its transposition.15In those circumstances, the Bundesgerichtshof (Federal Court of Justice, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:Do the provisions of Union law on the exclusive right of authors to reproduce (Article 2(a) of Directive 2001/29) and publicly communicate their works, including the right to make works available to the public (Article 3(1) of Directive 2001/29), and the exceptions or limitations to these rights (Article 5(2) and (3) of Directive 2001/29) allow any latitude in terms of implementation in national law?(2)In which way are the fundamental rights of the [Charter] to be taken into account when ascertaining the scope of the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29 to the exclusive right of authors to reproduce (Article 2(a) of Directive 2001/29) and publicly communicate their works, including the right to make works available to the public (Article 3(1) of Directive 2001/29)?Can the fundamental rights of freedom of information (second sentence of Article 11(1) of the Charter) or freedom of the media (Article 11(2) of the Charter) justify exceptions or limitations to the exclusive rights of authors to reproduce (Article 2(a) of Directive 2001/29) and publicly communicate their works, including the right to make works available to the public (Article 3(1) Directive 2001/29), beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29?’ Consideration of the questions referred Preliminary observations 16The referring court notes that, in dismissing Funke Medien’s appeal, the Oberlandesgericht Köln (Higher Regional Court, Cologne) relied on the premiss that UdPs can be protected under copyright as ‘literary works’, but has not made any finding of fact from which it can be concluded that UdPs are original creations.17In that regard, the Court considers it appropriate to make the following clarifications.18Article 2(a) and Article 3(1) of Directive 2001/29 provide that the Member States are to provide authors with the exclusive right to authorise or prohibit direct or indirect reproduction by any means and in any form of their ‘works’ and with the exclusive right to authorise or prohibit any communication to the public of those ‘works’. Thus, subject matter can be protected by copyright under Directive 2001/29 only if such subject matter can be classified as a ‘work’ within the meaning of those provisions (see, to that effect, judgment of 13 November 2018, Levola Hengelo, C‑310/17, EU:C:2018:899, paragraph 34).19As is clear from well-established case-law, in order for subject matter to be regarded as a ‘work’, two conditions must be satisfied cumulatively. First, the subject matter must be original in the sense that it is its author’s own intellectual creation. In order for an intellectual creation to be regarded as an author’s own it must reflect the author’s personality, which is the case if the author was able to express his creative abilities in the production of the work by making free and creative choices (see, to that effect, judgment of 1 December 2011, Painer, C‑145/10, EU:C:2011:798, paragraphs 87 to 89).20Second, only something which is the expression of the author’s own intellectual creation may be classified as a ‘work’ within the meaning of Directive 2001/29 (judgment of 13 November 2018, Levola Hengelo, C‑310/17, EU:C:2018:899, paragraph 37 and the case-law cited).21In the present case, Funke Medien has contended that UdPs cannot be protected under copyright, since they are reports the structure of which consists of a standard form, drawn up by different authors, of a purely factual nature. As far as concerns the German Government, it claims that the very creation of such a standard form may be protected under copyright.22It is for the national court to determine whether military status reports, such as those at issue in the main proceedings, or certain elements thereof, may be regarded as ‘works’ within the meaning of Article 2(a) and of Article 3(1) of Directive 2001/29 and therefore be protected by copyright (see, to that effect, judgment of 16 July 2009, Infopaq International, C‑5/08, EU:C:2009:465, paragraph 48).23In order to determine whether that is in fact the case, it is for the national court to ascertain whether, in drawing up those reports, the author was able to make free and creative choices capable of conveying to the reader the originality of the subject matter at issue, the originality of which arises from the choice, sequence and combination of the words by which the author expressed his or her creativity in an original manner and achieved a result which is an intellectual creation (see, to that effect, judgment of 16 July 2009, Infopaq International, C‑5/08, EU:C:2009:465, paragraphs 45 to 47), whereas the mere intellectual effort and skill of creating those reports are not relevant in that regard (see, by analogy, judgment of 1 March 2012, Football Dataco and Others, C‑604/10, EU:C:2012:115, paragraph 33).24If military status reports, such as those at issue in the main proceedings, constitute purely informative documents, the content of which is essentially determined by the information which they contain, so that such information and the expression of those reports become indissociable and that those reports are thus entirely characterised by their technical function, precluding all originality, it should be considered, as the Advocate General stated in point 19 of his Opinion, that, in drafting those reports, it was impossible for the author to express his or her creativity in an original manner and to achieve a result which is that author’s own intellectual creation (see, to that effect, judgments of 22 December 2010, Bezpečnostní softwarová asociace, C‑393/09, EU:C:2010:816, paragraphs 48 to 50, and of 2 May 2012, SAS Institute, C‑406/10, EU:C:2012:259, paragraph 67 and the case-law cited). It would then be incumbent on the national court to find that such reports were not ‘works’ within the meaning of Article 2(a) and of Article 3(1) of Directive 2001/29 and, therefore, that they cannot enjoy the protection conferred by those provisions.25It follows that it must be held that military status reports, such as those at issue in the main proceedings, can be protected by copyright only if those reports are an intellectual creation of their author which reflect the author’s personality and are expressed by free and creative choices made by that author in drafting those reports, which must be ascertained by the national court in each case.26The questions referred for a preliminary ruling must be answered subject to those qualifications. The first question 27As a preliminary matter, it should be noted, as is clear from paragraphs 13 and 14 above, that the first question relates to the application by the referring court, for the purposes of disposing of the case in the main proceedings, of the rules on the reporting of current events and quotations, laid down respectively in Paragraphs 50 and 51 of the UrhG, which transpose Article 5(3)(c) and (d) of Directive 2001/29.28Although the referring court has not specifically referred a question on the interpretation of those provisions of Directive 2001/29 to the Court, since the referring court has specifically indicated that, according to the Oberlandesgericht Köln (Higher Regional Court, Cologne), Funke Medien’s publication of the UdPs on its website did not satisfy the conditions set out in Paragraphs 50 and 51 of the UrhG, it nevertheless harbours doubts as to whether Article 2(a) and Article 3(1) of that directive allow the Member States discretion in their transposition, since, according to the case-law of the Bundesverfassungsgericht (Federal Constitutional Court), national legislation which transposes an EU directive must be measured, as a rule, not against the fundamental rights guaranteed by the GG, but solely against the fundamental rights guaranteed by EU law, where that directive does not allow the Member States any discretion in its transposition.29In that context, by its first question, the referring court asks, in essence, whether Article 2(a) and Article 3(1) of Directive 2001/29 first, and Article 5(3)(c), second case, and (d) of Directive 2001/29 second, must be interpreted as constituting measures of full harmonisation.30In that regard, it should be stated that, by virtue of the principle of primacy of EU law, which is an essential feature of the EU legal order, rules of national law, even of a constitutional order, cannot be allowed to undermine the effectiveness of EU law in the territory of that State (judgment of 26 February 2013, Melloni, C‑399/11, EU:C:2013:107, paragraph 59).31It should be noted in that connection that, since the transposition of a directive by the Member States is covered, in any event, by the situation, referred to in Article 51 of the Charter, in which the Member States are implementing Union law, the level of protection of fundamental rights provided for in the Charter must be achieved in such a transposition, irrespective of the Member States’ discretion in transposing the directive.32That said, where, in a situation in which action of the Member States is not entirely determined by EU law, a national provision or measure implements EU law for the purposes of Article 51(1) of the Charter, national authorities and courts remain free to apply national standards of protection of fundamental rights, provided that the level of protection provided for by the Charter, as interpreted by the Court, and the primacy, unity and effectiveness of EU law are not thereby compromised (judgments of 26 February 2013, Melloni, C‑399/11, EU:C:2013:107, paragraph 60, and of 26 February 2013, Åkerberg Fransson, C‑617/10, EU:C:2013:105, paragraph 29).33Thus, it is consistent with EU law for national courts and authorities to make that application subject to the condition, emphasised by the referring court, that the provisions of a directive ‘allow [some] discretion in terms of implementation in national law’, provided that that condition is understood as referring to the degree of the harmonisation effected in those provisions, since such an application is conceivable only in so far as those provisions do not effect full harmonisation.34In the present case, the objective of Directive 2001/29 is to harmonise only certain aspects of the law on copyright and related rights, of which a number of provisions also disclose the intention of the EU legislature to grant a degree of discretion to the Member States in the implementation of the directive (see, to that effect, judgment of 5 March 2015, Copydan Båndkopi, C‑463/12, EU:C:2015:144, paragraph 57).35As regards, in the first place, the exclusive right of holders referred to in Article 2(a) and in Article 3(1) of Directive 2001/29, it has been stated, in paragraph 18 above, that, according to that provision Member States are to provide authors, respectively, with the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction of their works by any means and in any form, and the exclusive right to authorise or prohibit the communication to the public of their works.36Those provisions therefore define a copyright holder’s exclusive right in the European Union of reproduction and making available to the public in unequivocal terms. Furthermore, those provisions are not qualified by any condition, or subject, in their implementation or effects, to any measure being taken in any particular form.37The Court has moreover previously held in that regard that those provisions form a harmonised legal framework ensuring a high and even level of protection for the rights of reproduction and making available to the public (Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 119 and the case-law cited; see also, as regards the right to make available to the public, judgments of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraph 41, and of 1 March 2017, ITV Broadcasting and Others, C‑275/15, EU:C:2017:144, paragraph 22 and the case-law cited).38It follows that Article 2(a) and Article 3(1) of Directive 2001/29 constitute measures of full harmonisation of the corresponding substantive law (see, by analogy, as regards the exclusive right of an EU trade mark proprietor, judgments of 20 November 2001, Zino Davidoff and Levi Strauss, C‑414/99 to C‑416/99, EU:C:2001:617, paragraph 39, and of 12 November 2002, Arsenal Football Club, C‑206/01, EU:C:2002:651, paragraph 43).39In the second place, it should be noted, as is clear from recital 32 of Directive 2001/29, Article 5(2) and (3) of that directive sets out a list of exceptions and limitations to the exclusive rights of reproduction and of communication to the public.40In that regard, it is clear from the case-law of the Court that the scope of the Member States’ discretion in the transposition into national law of a particular exception or limitation referred to in Article 5(2) or (3) of Directive 2001/29 must be determined on a case-by-case basis, in particular, according to the wording of the provision in question (see, to that effect, judgments of 21 October 2010, Padawan, C‑467/08, EU:C:2010:620, paragraph 36; of 3 September 2014, Deckmyn and Vrijheidsfonds, C‑201/13, EU:C:2014:2132, paragraph 16; and of 22 September 2016, Microsoft Mobile Sales International and Others, C‑110/15, EU:C:2016:717, paragraph 27; Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 116), the degree of the harmonisation of the exceptions and limitations intended by the EU legislature being based on their impact on the smooth functioning of the internal market, as stated in recital 31 of Directive 2001/29.41Under Article 5(3)(c), second case, and (d) of Directive 2001/29, the exceptions or limitations referred to are comprised respectively of ‘use of works or other subject matter in connection with the reporting of current events, to the extent justified by the informatory purpose and as long as the source, including the author’s name, is indicated, unless this turns out to be impossible’ and ‘quotations for purposes such as criticism or review, provided that they relate to a work or other subject matter which has already been lawfully made available to the public, that, unless this turns out to be impossible, the source, including the author’s name, is indicated, and that their use is in accordance with fair practice, and to the extent required by the specific purpose’.42As is clear from its content, that provision does not constitute full harmonisation of the scope of the exceptions or limitations which it contains.43It is clear, first, from the use, in Article 5(3)(c), second case, and (d) of Directive 2001/29 of the wording ‘to the extent justified by the informatory purpose’ and ‘in accordance with fair practice, and to the extent required by the specific purpose’ respectively, that, in the transposition of that provision and its application under national law, the Member States enjoy significant discretion allowing them to strike a balance between the relevant interests. Second, Article 5(3)(d) of that directive sets out, in respect of cases of permissible quotation, merely an illustrative list of such cases, as is clear from the use of the words ‘for purposes such as criticism or review’.44The existence of that discretion is supported by the legislative drafts which preceded the adoption of Directive 2001/29. Thus, it is stated in the Explanatory Memorandum to the Proposal for a European Parliament and Council Directive on the harmonisation of certain aspects of copyright and related rights in the Information Society of 10 December 1997 (COM(97) 628 final), relating to the limitations which are now provided for, in essence, in Article 5(3)(c) and (d) of Directive 2001/29, that, in view of their more limited economic importance, those limitations are deliberately not dealt with in detail in the framework of the proposal, which only sets out minimum conditions for their application, and it is for the Member States to define the detailed conditions for their use, albeit within the limits set out by that provision.45Notwithstanding the foregoing considerations, the Member States’ discretion in the implementation of Article 5(3)(c), second case, and (d) of Directive 2001/29 is circumscribed in several regards.46First, the Court has repeatedly held that the Member States’ discretion in the implementation of the exceptions and limitations provided for in Article 5(2) and (3) of Directive 2001/29 must be exercised within the limits imposed by EU law, which means that the Member States are not in every case free to determine, in an unharmonised manner, the parameters governing those exceptions or limitations (see, to that effect, judgments of 6 February 2003, SENA, C‑245/00, EU:C:2003:68, paragraph 34; of 1 December 2011, Painer, C‑145/10, EU:C:2011:798, paragraph 104; and of 3 September 2014, Deckmyn and Vrijheidsfonds, C‑201/13, EU:C:2014:2132, paragraph 16; Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 122).47The Court thus made clear that the option open to the Member States of implementing an exception or limitation to the harmonised rules laid down in Articles 2 and 3 of Directive 2001/29 is highly circumscribed by the requirements of EU law (see, to that effect, Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 126).48In particular, Member States may provide, in their law, for an exception or limitation referred to in Article 5(2) and (3) of Directive 2001/29 only if they comply with all the conditions laid down in that provision (see, by analogy, Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 123 and the case-law cited).49The Member States are also required, in that context, to comply with the general principles of EU law, which include the principle of proportionality, from which it follows that measures which the Member States may adopt must be appropriate for attaining their objective and must not go beyond what is necessary to achieve it (judgment of 1 December 2011, Painer, C‑145/10, EU:C:2011:798, paragraphs 105 and 106).50Second, the Court has reaffirmed that the discretion enjoyed by the Member States in implementing the exceptions and limitations provided for in Article 5(2) and (3) of Directive 2001/29 cannot be used so as to compromise the objectives of that directive that consist, as is clear from recitals 1 and 9 thereof, in establishing a high level of protection for authors and in ensuring the proper functioning of the internal market (see, to that effect, judgments of 1 December 2011, Painer, C‑145/10, EU:C:2011:798, paragraph 107, and of 10 April 2014, ACI Adam and Others, C‑435/12, EU:C:2014:254, paragraph 34; Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 124 and the case-law cited).51Nonetheless, it is also for the Member States, in effecting that implementation, to safeguard the effectiveness of the exceptions and limitations thereby established and to permit observance of their purpose (see, to that effect, judgments of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, paragraph 163, and of 3 September 2014, Deckmyn and Vrijheidsfonds, C‑201/13, EU:C:2014:2132, paragraph 23), in order to safeguard a fair balance of rights and interests between the different categories of rightholders, as well as between the different categories of rightholders and users of protected subject matter, as stated in recital 31 of that directive.52Third, the Member States’ discretion in the implementation of the exceptions and limitations relevant to Article 5(2) and (3) of Directive 2001/29 is also circumscribed by Article 5(5) of the directive, which makes those exceptions or limitations subject to three conditions, namely that those exceptions or limitations may be applied only in certain special cases, that they do not conflict with a normal exploitation of the work and that they do not unreasonably prejudice the legitimate interests of the copyright holder (Opinion 3/15 (Marrakesh Treaty on access to published works) of 14 February 2017, EU:C:2017:114, paragraph 125 and the case-law cited).53Lastly, fourth, as set out in paragraph 31 above, the principles enshrined in the Charter apply to the Member States when implementing EU law. It is therefore for the Member States, in transposing the exceptions and limitations referred to Article 5(2) and (3) of Directive 2001/29, to ensure that they rely on an interpretation of the directive which allows a fair balance to be struck between the various fundamental rights protected by the European Union legal order (judgments of 27 March 2014, UPC Telekabel Wien, C‑314/12, EU:C:2014:192, paragraph 46, and of 18 October 2018, Bastei Lübbe, C‑149/17, EU:C:2018:841, paragraph 45 and the case-law cited; see also, by analogy, judgment of 26 September 2013, IBV & Cie, C‑195/12, EU:C:2013:598, paragraphs 48 and 49 and the case-law cited).54In the light of the foregoing considerations, the answer to the first question is that Article 2(a) and Article 3(1) of Directive 2001/29 must be interpreted as constituting measures of full harmonisation of the scope of the exceptions or limitations which they contain. Article 5(3)(c), second case, and (d) of Directive 2001/29 must be interpreted as not constituting measures of full harmonisation of the scope of the relevant exceptions or limitations. The third question 55By its third question, which it is appropriate to consider in the second place, the referring court asks, in essence, whether freedom of information and freedom of the press, enshrined in Article 11 of the Charter, are capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public, referred to, respectively, in Article 2(a) and Article 3(1) of that directive.56First of all, it should be noted that it is clear both from the Explanatory Memorandum to Proposal COM(97) 628 final and from recital 32 of Directive 2001/29 that the list of exceptions and limitations contained in Article 5 of that directive is exhaustive, as the Court has also pointed out on several occasions (judgments of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 34, and of 7 August 2018, Renckhoff, C‑161/17, EU:C:2018:634, paragraph 16).57As follows from recitals 3 and 31 of Directive 2001/29, the harmonisation effected by that directive aims to safeguard, in particular in the electronic environment, a fair balance between, on the one hand, the interest of the holders of copyright and related rights in the protection of their intellectual property rights guaranteed by Article 17(2) of the Charter and, on the other hand, the protection of the interests and fundamental rights of users of protected subject matter, in particular their freedom of expression and information guaranteed by Article 11 of the Charter, as well as of the public interest (see, to that effect, judgment of 7 August 2018, Renckhoff, C‑161/17, EU:C:2018:634, paragraph 41).58The mechanisms allowing those different rights and interests to be balanced are contained in Directive 2001/29 itself, in that it provides inter alia, first, in Articles 2 to 4 thereof, rightholders with exclusive rights and, second, in Article 5 thereof, for exceptions and limitations to those rights which may, or even must, be transposed by the Member States, since those mechanisms must nevertheless find concrete expression in the national measures transposing that directive and in their application by national authorities (see, to that effect, judgment of 29 January 2008, Promusicae, C‑275/06, EU:C:2008:54, paragraph 66 and the case-law cited).59The Court has repeatedly held that the fundamental rights now enshrined in the Charter, the observance of which the Court ensures, draw inspiration from the constitutional traditions common to the Member States and from the guidelines supplied by international instruments for the protection of human rights on which the Member States have collaborated or to which they are signatories (see, to that effect, judgment of 27 June 2006, Parliament v Council, C‑540/03, EU:C:2006:429, paragraph 35 and the case-law cited).60As regards the exceptions and limitations provided for in Article 5(3)(c), second case, and (d) of Directive 2001/29 in respect of which the referring court has doubts, it is to be noted that they are specifically aimed at favouring the exercise of the right to freedom of expression by the users of protected subject matter and to freedom of the press, which is of particular importance when protected as a fundamental right, over the interest of the author in being able to prevent the use of his or her work, whilst ensuring that the author has the right, in principle, to have his or her name indicated (see, to that effect, judgment of 1 December 2011, Painer, C‑145/10, EU:C:2011:798, paragraph 135).61Article 5(5) of that directive also contributes to the fair balance mentioned in paragraphs 51 and 57 above, in that, as has been stated in paragraph 52 above, it requires that the exceptions and limitations provided for in Article 5(1) to (4) of the directive be applied only in certain special cases which do not conflict with a normal exploitation of the work or other subject matter and do not unreasonably prejudice the legitimate interests of the rightholder.62In that context, to allow, notwithstanding the express intention of the EU legislature, set out in paragraph 56 above, each Member State to derogate from an author’s exclusive rights, referred to in Articles 2 to 4 of Directive 2001/29, beyond the exceptions and limitations exhaustively set out in Article 5 of that directive, would endanger the effectiveness of the harmonisation of copyright and related rights effected by that directive, as well as the objective of legal certainty pursued by it (judgment of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraphs 34 and 35). It is expressly clear from recital 31 of the directive that the differences that existed in the exceptions and limitations to certain restricted acts had direct negative effects on the functioning of the internal market of copyright and related rights, since the list of the exceptions and limitations set out in Article 5 of Directive 2001/29 is aimed at ensuring such proper functioning of the internal market.63In addition, as is clear from recital 32 of the directive, the Member States are required to apply those exceptions and limitations consistently. The requirement of consistency in the implementation of those exceptions and limitations could not be ensured if the Member States were free to provide for such exceptions and limitations beyond those expressly set out in Directive 2001/29 (see, to that effect, judgment of 12 November 2015, Hewlett-Packard Belgium, C‑572/13, EU:C:2015:750, paragraphs 38 and 39), since the Court has moreover previously held that no provision of Directive 2001/29 envisages the possibility for the scope of such exceptions or limitations to be extended by the Member States (see, to that effect, judgment of 10 April 2014, ACI Adam and Others, C‑435/12, EU:C:2014:254, paragraph 27).64In the light of the foregoing considerations, the answer to the third question is that freedom of information and freedom of the press, enshrined in Article 11 of the Charter, are not capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public, referred to in Article 2(a) and Article 3(1) of that directive respectively. The second question 65By its second question, the referring court asks, in essence, whether, in striking the balance which it is incumbent on a national court to undertake between the exclusive rights of the author referred to in Article 2(a) and Article 3(1) of Directive 2001/29 on the one hand, and, on the other, the rights of the users of protected subject matter referred to in Article 5(3)(c), second case, and (d) of that directive, the latter derogating from the former, a national court may depart from a restrictive interpretation of the latter provisions in favour of an interpretation which takes full account of the need to respect freedom of expression and freedom of information, enshrined in Article 11 of the Charter.66The referring court harbours doubts in that regard as to the possibility of applying, in the present case, Article 5(3)(c), second case, of Directive 2001/29 to Funke Medien’s use of UdPs on the ground that Funke Medien did not add any distinct act of summary to the publication of the UdPs.67As set out in paragraph 53 above, it is for the Member States, in transposing the exceptions and limitations referred to in Article 5(2) and (3) of Directive 2001/29, to ensure that they rely on an interpretation of those exceptions and limitations which allows for a fair balance to be struck between the various fundamental rights protected by the EU legal order.68Subsequently, when applying the measures transposing that directive, the authorities and courts of the Member States must not only interpret their national law in a manner consistent with that directive but also make sure that they do not rely on an interpretation of it which would be in conflict with those fundamental rights or with the other general principles of EU law, as the Court has repeatedly held (see, to that effect, judgments of 29 January 2008, Promusicae, C‑275/06, EU:C:2008:54, paragraph 70; of 27 March 2014, UPC Telekabel Wien, C‑314/12, EU:C:2014:192, paragraph 46; and of 16 July 2015, Coty Germany, C‑580/13, EU:C:2015:485, paragraph 34).69It is certainly the case, as the referring court notes, that any derogation from a general rule must, in principle, be interpreted strictly.70However, although Article 5 of Directive 2001/29 is expressly entitled ‘Exceptions and limitations’, it should be noted that those exceptions or limitations do themselves confer rights on the users of works or of other subject matter (see, to that effect, judgment of 11 September 2014, Eugen Ulmer, C‑117/13, EU:C:2014:2196, paragraph 43). In addition, that article is specifically intended, as has been stated in paragraph 51 above, to ensure a fair balance between, on the one hand, the rights and interests of rightholders, which must themselves be given a broad interpretation (see, to that effect, judgment of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraphs 30 and 31 and the case-law cited) and, on the other hand, the rights and interests of users of works or other subject matter.71It follows that the interpretation of the exceptions and limitations provided for in Article 5 of Directive 2001/29 must allow, as is clear from paragraph 51 above, their effectiveness to be to safeguarded and their purpose to be observed, since such a requirement is of particular importance where those exceptions and limitations aim, as do those provided for in Article 5(3)(c) and (d) of Directive 2001/29, to ensure observance of fundamental freedoms.72In that context, first, it should be added that the protection of intellectual property rights is indeed enshrined in Article 17(2) of the Charter. There is, however, nothing whatsoever in the wording of that provision or in the Court’s case-law to suggest that that right is inviolable and must for that reason be protected as an absolute right (judgments of 24 November 2011, Scarlet Extended, C‑70/10, EU:C:2011:771, paragraph 43; of 16 February 2012, SABAM, C‑360/10, EU:C:2012:85, paragraph 41; and of 27 March 2014, UPC Telekabel Wien, C‑314/12, EU:C:2014:192, paragraph 61).73Second, it has been stated in paragraph 60 above that Article 5(3)(c) and (d) of Directive 2001/29 is aimed at favouring the exercise of the right to freedom of expression by the users of protected subject matter and to freedom of the press, enshrined in Article 11 of the Charter. In that regard, it should be noted that, in so far as the Charter contains rights which correspond to those guaranteed by the Convention for the Protection of Human Rights and Fundamental Freedoms, signed at Rome on 4 November 1950 (‘the ECHR’), Article 52(3) of the Charter seeks to ensure the necessary consistency between the rights contained in it and the corresponding rights guaranteed by the ECHR, without thereby adversely affecting the autonomy of EU law and that of the Court of Justice of the European Union (see, by analogy, judgments of 15 February 2016, N., C‑601/15 PPU, EU:C:2016:84, paragraph 47, and of 26 September 2018, Staatssecretaris van Veiligheid en justitie (Suspensory effect of the appeal), C‑180/17, EU:C:2018:775, paragraph 31 and the case-law cited). Article 11 of the Charter contains rights which correspond to those guaranteed by Article 10(1) of the ECHR (see, to that effect, judgment of 14 February 2019, Buivids, C‑345/17, EU:C:2019:122, paragraph 65 and the case-law cited).74As is clear from the case-law of the European Court of Human Rights, for the purpose of striking a balance between copyright and the right to freedom of expression, that court has, in particular, referred to the need to take into account the fact that the nature of the ‘speech’ or information at issue is of particular importance, inter alia in political discourse and discourse concerning matters of the public interest (see, to that effect, ECtHR, 10 January 2013, Ashby Donald and Others v. France, CE:ECHR:2013:0110JUD003676908, § 39).75In the present case, according to the case file, Funke Medien not only published the UdPs on its website, but also presented them in a structured form in conjunction with an introductory note, further links and a space for comments. Accordingly, supposing that UdPs were regarded as ‘works’ within the meaning of Article 2(a) and of Article 3(1) of Directive 2001/29, it would need to be held that the publication of those documents may amount to ‘use of works … in connection with … reporting’. Such publication would therefore be capable of falling within Article 5(3)(c), second case, of Directive 2001/29, provided that the other conditions set out in that provision were satisfied, which is for the referring court to ascertain.76In the light of the foregoing considerations, the answer to the second question is that, in striking the balance which is incumbent on a national court between the exclusive rights of the author referred to in Article 2(a) and in Article 3(1) of Directive 2001/29 on the one hand, and, on the other, the rights of the users of protected subject matter referred to in Article 5(3)(c), second case, and (d) of that directive, the latter of which derogate from the former, a national court must, having regard to all the circumstances of the case before it, rely on an interpretation of those provisions which, whilst consistent with their wording and safeguarding their effectiveness, fully adheres to the fundamental rights enshrined in the Charter. Costs 77Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Article 2(a) and Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as constituting measures of full harmonisation of the scope of the exceptions or limitations which they contain. Article 5(3)(c), second case, and (d) of Directive 2001/29 must be interpreted as not constituting measures of full harmonisation of the scope of the relevant exceptions or limitations. 2. Freedom of information and freedom of the press, enshrined in Article 11 of the Charter of Fundamental Rights of the European Union, are not capable of justifying, beyond the exceptions or limitations provided for in Article 5(2) and (3) of Directive 2001/29, a derogation from the author’s exclusive rights of reproduction and of communication to the public, referred to in Article 2(a) and Article 3(1) of that directive respectively. 3. In striking the balance which is incumbent on a national court between the exclusive rights of the author referred to in Article 2(a) and in Article 3(1) of Directive 2001/29 on the one hand, and, on the other, the rights of the users of protected subject matter referred to in Article 5(3)(c), second case, and (d) of that directive, the latter of which derogate from the former, a national court must, having regard to all the circumstances of the case before it, rely on an interpretation of those provisions which, whilst consistent with their wording and safeguarding their effectiveness, fully adheres to the fundamental rights enshrined in the Charter of Fundamental Rights of the European Union. [Signatures]( *1 ) Language of the case: German. | 1c5c7-95e0785-4911 | EN |
Workers in the sector of activity of operatic and orchestral foundations cannot be excluded from protection against the abuse of fixed-term employment contracts | 25 October 2018 ( *1 )(Reference for a preliminary ruling — Social policy — Directive 1999/70/EC — Framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP — Clause 5 — Measures to prevent the misuse of successive fixed-term employment contracts or relationships — National legislation excluding the application of those measures in the sector of activity of operatic and orchestral foundations)In Case C‑331/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Corte d’appello di Roma (Court of Appeal, Rome, Italy), made by decision of 15 May 2017, received at the Court on 1 June 2017, in the proceedings Martina Sciotto v Fondazione Teatro dell’Opera di Roma, THE COURT (Tenth Chamber),composed of K. Lenaerts, President of the Court, acting as President of the Tenth Chamber, F. Biltgen (Rapporteur) and E. Levits, Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: R. Schiano, Administrator,having regard to the written procedure and further to the hearing on 14 June 2018,after considering the observations submitted on behalf of:–Ms Sciotto, by F. Andretta, M. Speranza, V. De Michele and S. Galleano, avvocati,the Fondazione Teatro dell’Opera di Roma, by D. De Feo, M. Marazza and M. Marazza, avvocati,the Italian Government, by G. Palmieri, acting as Agent, and by G. Albenzio, avvocato dello Stato,the European Commission, by M. van Beek and G. Gattinara, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Clause 5 of the framework agreement on fixed-term work concluded on 18 March 1999 (‘the Framework Agreement’), which is set out in the Annex to Council Directive 1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP (OJ 1999 L 175, p. 43).2The request has been made in proceedings between Ms Martina Sciotto and the Fondazione Teatro dell’Opera di Roma concerning a request that her successive fixed-term employment contracts concluded for services carried out between 2007 and 2011 be reclassified as an employment relationship of an indefinite duration. Legal context European Union law 3In accordance with Article 1 of Directive 1999/70, the purpose of the directive is ‘to put into effect the [Framework Agreement] concluded … between the general cross-industry organisations (ETUC, UNICE and CEEP)’.4The second and third paragraphs in the preamble to the Framework Agreement are worded as follows:‘The parties to this agreement recognise that contracts of an indefinite duration are, and will continue to be, the general form of employment relationship between employers and workers. They also recognise that fixed-term employment contracts respond, in certain circumstances, to the needs of both employers and workers.This agreement sets out the general principles and minimum requirements relating to fixed-term work, recognising that their detailed application needs to take account of the realities of specific national, sectoral and seasonal situations. It illustrates the willingness of the Social Partners to establish a general framework for ensuring equal treatment for fixed-term workers by protecting them against discrimination and for using fixed-term employment contracts on a basis acceptable to employers and workers.’5Paragraphs 6 to 8 and 10 of the general considerations of the Framework Agreement are worded as follows:‘6.Whereas employment contracts of an indefinite duration are the general form of employment relationships and contribute to the quality of life of the workers concerned and improve performance;7.Whereas the use of fixed-term employment contracts based on objective reasons is a way to prevent abuse;8.Whereas fixed-term employment contracts are a feature of employment in certain sectors, occupations and activities which can suit both employers and workers;…10.Whereas this agreement refers back to Member States and social partners for the arrangements for the application of its general principles, minimum requirements and provisions, in order to take account of the situation in each Member State and the circumstances of particular sectors and occupations, including the activities of a seasonal nature.’6According to Clause 1 of the Framework Agreement, the purpose of that agreement is, first, to improve the quality of fixed-term work by ensuring the application of the principle of non-discrimination and, second, to establish a framework to prevent abuse arising from the use of successive fixed-term employment contracts or relationships.7Clause 2 of the Framework Agreement, entitled ‘Scope’, provides, at point 1:‘This Agreement applies to fixed-term workers who have an employment contract or employment relationship as defined in law, collective agreements or practice in each Member State.’8Clause 3 of the Framework Agreement, entitled ‘Definitions’, provides:‘1.For the purpose of this agreement the term “fixed-term worker” means a person having an employment contract or relationship entered into directly between an employer and a worker where the end of the employment contract or relationship is determined by objective conditions such as reaching a specific date, completing a specific task, or the occurrence of a specific event.2.For the purpose of this agreement, the term “comparable permanent worker” means a worker with an employment contract or relationship of indefinite duration, in the same establishment, engaged in the same or similar work/occupation, due regard being given to qualifications/skills. ...’9Clause 4 of the Framework Agreement, headed ‘Principle of non-discrimination’, provides, at point 1:‘In respect of employment conditions, fixed-term workers shall not be treated in a less favourable manner than comparable permanent workers solely because they have a fixed-term contract or relation unless different treatment is justified on objective grounds.’10Clause 5 of the Framework Agreement, entitled ‘Measures to prevent abuse’, states, at point 1:‘To prevent abuse arising from the use of successive fixed-term employment contracts or relationships, Member States, after consultation with social partners in accordance with national law, collective agreements or practice, and/or the social partners, shall, where there are no equivalent legal measures to prevent abuse, introduce in a manner which takes account of the needs of specific sectors and/or categories of workers, one or more of the following measures:(a)objective reasons justifying the renewal of such contracts or relationships;(b)the maximum total duration of successive fixed-term employment contracts or relationships;(c)the number of renewals of such contracts or relationships.’ Italian law 11Article 3 of legge n. 426 — Provvedimenti straordinari a sostegno delle attività musicali (Law No 426 laying down exceptional measures to support musical activities) of 22 July 1977 (GURI No 206 of 28 July 1977) prohibits, on pain of nullity, ‘renewals of employment relationships which, on the basis of legislative or contractual provisions, would involve the transformation of fixed-term contracts into contracts of indefinite duration’.12Article 1 of decreto legislativo n. 368 — Attuazione della direttiva 1999/70/CE relativa all’accordo quadro sul lavoro a tempo determinato concluso dall’UNICE, dal CEEP e dal CES (Legislative Decree No 368 implementing Directive 1999/70/EC concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP) of 6 September 2001 (GURI No 235 of 9 October 2001), in the version applicable at the time of the facts in the main proceedings (‘Legislative Decree No 368/2001’) provides, in paragraph 01 thereof, that employment contracts of indefinite duration are to constitute the usual form of employment relationship, in paragraph 1 thereof, that a term may be set for technical, production-related, organisational or replacement reasons, and, in paragraph 2 thereof, that those reasons must be in the written form.13Article 4 of Legislative Decree No 368/2001 provides that the term of a fixed-term contract can be extended, with the worker’s consent, only when the initial duration of the contract is less than three years. The extension is to be permitted once, provided that it is done on objective grounds and relates to the same activity. The burden of proving objective grounds is a matter for the employer.14In accordance with Article 5 of Legislative Decree No 368/2001, where, by operation of successive contracts, the employment relationship exceeds, as a whole, a duration of 36 months, the employment relationship is considered to be of indefinite duration.15Pursuant to Article 11(4) of Legislative Decree No 368/2001, the rules laid down in Articles 4 and 5 thereof are not to apply to the artistic and technical personnel of musical foundations.16Article 3(6) of decreto-legge n. 64 — recante disposizioni urgenti in materia di spettacolo e attività culturali (Decree-Law No 64 laying down urgent measures regarding the entertainment industry and cultural sector) of 30 April 2010 (GURI No 100 of 30 April 2010), converted into law, with amendments, by legge n. 100 (Law No 100) of 29 June 2010 (GURI No 150 of 30 June 2010, p. 2), provides that Article 3(4) and (5) of Law No 426 of 22 July 1977 laying down exceptional measures to support musical activities will continue to apply to operatic and orchestral foundations notwithstanding their transformation into entities governed by private law and, moreover, that the provisions of Article 1(01) and (2) of Legislative Decree No 368/2001 are not to apply to operatic and orchestral foundations. The facts of the dispute in the main proceedings and the question referred for a preliminary ruling 17Ms Sciotto was employed as a ballet dancer by the Fondazione Teatro dell’Opera di Roma under multiple fixed-term contracts which were renewed on the basis of various artistic performances programmed during the period from 26 June 2007 to 30 October 2011.18Taking the view that she had been a permanent member of the theatre’s staff and that she had performed the same roles as those of employees on contracts of indefinite duration, the applicant in the main proceedings brought proceedings, on 20 April 2012, before the Tribunale di Roma (District Court, Rome, Italy), claiming that her employment contracts did not indicate the existence of specific technical, organisational or production-related requirements which justified the fixed term to the employment contracts. In connection with that action, she sought to have the fixed terms applied to those contracts declared unlawful, the conversion of her employment relationship into a contract of unlimited duration and compensation for the loss incurred.19By judgment of 22 November 2013, the Tribunale di Roma (District Court, Rome) dismissed that action on the ground that the specific national rules applicable to operatic and orchestral foundations exclude the application to those foundations of rules governing common law employment contracts and thus preclude the conversion of the employment contracts concluded by those foundations into employment relationships of indefinite duration.20In her appeal brought before the Corte d’appello di Roma (Court of Appeal, Rome, Italy), Ms Sciotto claims, relying on the judgment of the Court of Justice of 26 February 2015, Commission v Luxembourg (C‑238/14, EU:C:2015:128), that the specific national rules applicable to operatic and orchestral foundations are incompatible with EU law.21The referring court observes that the rules specific to the sector of activity of operatic and orchestral entities are highly complex and have been through three periods, during which those entities changed their legal form, passing successively from the status as a legal person governed by public law to the status as a public economic entity, then to the status as a legal person governed by private law in the form of a foundation.22According to the referring court, Legislative Decree No 368/2001, adopted during the third period, provides, in Article 11(4) thereof, that the provisions set out in Articles 4 and 5 of that legislative decree are not to apply to the artistic and technical personnel of musical foundations. Moreover, Article 11 of decreto-legge n. 91 — recante Disposizioni urgenti per la tutela, la valorizzazione e il rilancio dei beni e delle attivita’ culturali e del turismo (Decree-Law No 91 laying down urgent measures to protect, promote and relaunch cultural assets and activities and tourism) of 8 August 2013 (GURI No 186 of 9 August 2003), converted into law, with amendments, by legge n. 112 (Law No 112) of 7 October 2013 (GURI No 236 of 8 October 2013, p. 1), entitled ‘Urgent measures for the reorganisation of operatic and orchestral foundations and the relaunch of the national music system of excellence’, provides, in paragraph 19 thereof, that employment relationships of indefinite duration with operatic and orchestral foundations are to be concluded solely by means of appropriate public selection procedures.23The referring court raises the question of whether the protection of workers who have concluded, with operatic and orchestral foundations, successive fixed-term employment contracts for a total period exceeding three years complies with the requirements of EU law, where the national legislation applicable to that sector does not require a statement of the objective reasons justifying the renewal of the contracts, does not mention the maximum duration of the contracts, does not specify the maximum number of times those fixed-term contracts may be renewed, does not contain any legislative measures and does not restrict the conclusion of fixed-term contracts in that sector to reasons of replacement.24In those circumstances, the Corte d’appello di Roma (Court of Appeal, Rome) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Are the national rules (in particular under Article 3(6) of Decree-Law No 64 of 30 April 2010 [laying down urgent measures regarding the entertainment industry and cultural sector], converted into law, with amendments, by Law No 100 of 29 June 2010, in so far as they determine that “the provisions of Article 1(01) and (2) of Legislative Decree [No 368/2001] shall not apply to operatic and orchestral foundations”) incompatible with Clause 5 of the [Framework Agreement]?’ Consideration of the question referred 25By its question, as it is formulated, the referring court asks the Court of Justice to rule on whether certain provisions of national law are compatible with EU law.26The defendant in the main proceedings claims that such request is inadmissible since the Court of Justice does not have jurisdiction to rule on the interpretation of national law.27In that connection, it must be recalled that the system of cooperation established by Article 267 TFEU is based on a clear division of responsibilities between the national courts and the Court of Justice. In proceedings brought on the basis of that article, the interpretation of provisions of national law is a matter for the courts of the Member States, not for the Court of Justice, and the Court has no jurisdiction to rule on the compatibility of rules of national law with EU law. On the other hand, the Court does have jurisdiction to provide the national court with all the guidance as to the interpretation of EU law necessary to enable that court to rule on the compatibility of national rules with EU law (judgment of 15 October 2015, Iglesias Gutiérrez and Rion Bea, C‑352/14 and C‑353/14, EU:C:2015:691, paragraph 21 and the case-law cited).28Although it is true that, on a literal reading of the referring court’s questions, the Court is being asked to rule on the compatibility of a provision of national law with EU law, there is nothing to prevent the Court from giving an answer that will be of use to the national court, by providing the latter with guidance as to the interpretation of EU law which will enable that court to rule itself on the compatibility of the national rules with EU law (judgment of 15 October 2015, Iglesias Gutiérrez and Rion Bea, C‑352/14 and C‑353/14, EU:C:2015:691, paragraph 22 and the case-law cited).29Therefore, the question referred must be understood as asking essentially whether Clause 5 of the Framework Agreement must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which the common law rules governing employment relationships and intended to penalise the misuse of successive fixed-term contracts by the automatic transformation of the fixed-term contract into a contract of indefinite duration where the employment relationship goes beyond a specific date are not applicable to the sector of activity of operatic and orchestral foundations.30It should be recalled that the purpose of Clause 5(1) of the Framework Agreement is to implement one of the objectives of that agreement, namely to place limits on successive recourse to fixed-term employment contracts or relationships, which are regarded as a potential source of abuse to the detriment of workers, by laying down as a minimum a number of protective provisions designed to prevent the status of employees from being insecure (judgments of 4 July 2006, Adeneler and Others, C‑212/04, EU:C:2006:443, paragraph 63; of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 72; and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 25).31As is apparent from the second paragraph of the preamble to the Framework Agreement and from paragraphs 6 to 8 of its general considerations, the benefit of stable employment is viewed as a major element in the protection of workers, whereas it is only in certain circumstances that fixed-term employment contracts can respond to the needs of both employers and workers (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 73; of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 36; and of 14 September 2016, Pérez López, C‑16/15, EU:C:2016:679, paragraph 27).32Accordingly, Clause 5(1) of the Framework Agreement requires, with a view to preventing abuse of successive fixed-term employment contracts or relationships, the effective and binding adoption by Member States of at least one of the measures listed in that provision, where their domestic law does not already include equivalent legal measures. The measures listed in Clause 5(1)(a) to (c), of which there are three, relate, respectively, to objective reasons justifying the renewal of such contracts or relationships, the maximum total duration of successive fixed-term employment contracts or relationships, and the number of renewals of such contracts or relationships (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 74; of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 37; and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 26).33The Member States enjoy a certain discretion in this regard since they have the choice of relying on one or more of the measures listed in Clause 5(1)(a) to (c) of the Framework Agreement, or on existing equivalent legal measures (see, to that effect, judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 75; of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 38; and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 27).34In that way, Clause 5(1) of the Framework Agreement assigns to the Member States the general objective of preventing such abuse, while leaving to them the choice as to how to achieve it, provided that they do not compromise the objective or the practical effect of the Framework Agreement (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 76; of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 39; and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 28).35Moreover, Clause 5(1) of the Framework Agreement, the third paragraph of its preamble and paragraphs 8 and 10 of its general considerations give Member States the discretion, when implementing the agreement, to take account of the particular needs of the specific sectors and/or categories of workers involved, provided that that is justified on objective grounds (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 70 and the case-law cited, and of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 40).36In this case, it is established that the national legislation at issue in the main proceedings allows the recruitment, in the sector of operatic and orchestral foundations, of workers by means of successive fixed-term employment contracts, without providing for any of the limits referred to in Clause 5(1)(b) and (c) of the Framework Agreement regarding the maximum total duration of those contracts or the number of renewals of such contracts. In particular, it is clear from the order for reference that the employment contracts in that sector are expressly excluded from the scope of the national provision which permits the transformation of successive fixed-term employment contracts beyond a certain duration into an employment relationship of indefinite duration.37In so far as it is also clear from the order for reference that that national legislation does not contain, so far as concerns staff employed on a fixed-term basis in the sector of activity of operatic and orchestral foundations, any legal measure equivalent to those set out in Clause 5(1) of the Framework Agreement, it needs to be verified whether the recourse, in that sector, to successive fixed-term employment contracts may be justified by an objective reason within the meaning of Clause 5(1)(a) of the Framework Agreement.38As is apparent from paragraph 7 of the general considerations in the Framework Agreement, the signatory parties to that agreement took the view that the use of fixed-term employment contracts based on objective reasons is a way to prevent abuse (see, to that effect, judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 86 and the case-law cited, and of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 43).39In that regard, the concept of ‘objective reasons’ must be understood as referring to precise and concrete circumstances characterising a given activity, which are therefore capable, in that particular context, of justifying the use of successive fixed-term employment contracts. Those circumstances may result, in particular, from the specific nature of the tasks for the performance of which such contracts have been concluded and from the inherent characteristics of those tasks or, as the case may be, from pursuit of a legitimate social policy objective of a Member State (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 87 and the case-law cited, and of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 44).40On the other hand, a national provision which merely authorises recourse to successive fixed-term employment contracts in a general and abstract manner by a rule of statute or secondary legislation does not accord with the requirements stated in the previous paragraph. Such a provision, which is of a purely formal nature, does not permit objective and transparent criteria to be identified in order to verify whether the renewal of such contracts actually responds to a genuine need, is capable of achieving the objective pursued and is necessary for that purpose. Such a provision therefore carries a real risk that it will result in misuse of that type of contract and, accordingly, is not compatible with the objective of the Framework Agreement and the requirement that it have practical effect (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 88 and the case-law cited, and of 26 February 2015, Commission v Luxembourg, C‑238/14, EU:C:2015:128, paragraph 45).41The Italian Government submits that the national legislation at issue in the main proceedings does not establish a general and abstract authorisation to have recourse to successive fixed-term employment contracts, but contains, on the contrary, specific and precise provisions in that connection.42The Italian Government essentially notes, first of all, that operatic and orchestral foundations such as the defendant in the main proceedings are comparable to public entities notwithstanding the fact that they take the form of legal persons governed by private law. It then relies on the fact that employment contracts in the sector of activity of those foundations are traditionally concluded for a fixed period and, in particular, emphasises in that context the constitutionally protected objective of the development of Italian culture and the safeguarding of Italian historic and artistic heritage. It also emphasises characteristics peculiar to that sector, in that each artistic performance is of a particular nature and employment contracts concluded for the purpose of an artistic performance must be distinguished from those concluded for the purpose of previous artistic performances. Lastly, the Italian Government explains that the statutory prohibition on transforming fixed-term employment contracts into employment relationships of indefinite duration in that sector is based on two considerations closely linked to the inherently public nature of entities such as the defendant in the main proceedings, one relating to the need to contain public expenditure linked to the financing of such entities, and the other seeking to avoid circumvention of the rule that the recruitment of workers for an indefinite duration is made subject to the organisation of competitions. The Italian Government takes the view that adequate protection of workers is guaranteed by the engagement of the liability of directors of operatic and orchestral foundations when they have recourse to contracts contrary to the applicable legal provisions.43As regards, in the first place, the argument pertaining to the public nature of operatic and orchestral foundations such as the defendant in the main proceedings, the Court notes that such a public nature has no bearing on the protection enjoyed by a worker under Clause 5 of the Framework Agreement. According to settled case-law, Directive 1999/70 and the Framework Agreement are also intended to apply to fixed-term employment contracts concluded with public authorities and other public-sector bodies (see, to that effect, judgments of 4 July 2006, Adeneler and Others, C‑212/04, EU:C:2006:443, paragraph 54, and of 7 September 2006, Vassallo, C‑180/04, EU:C:2006:518, paragraph 32), since the definition of the concept of ‘fixed-term workers’ within the meaning of the Framework Agreement, set out in Clause 3(1) thereof, encompasses all workers without drawing a distinction according to whether their employer is in the public or private sector (see, to that effect, judgments of 4 July 2006, Adeneler and Others, C‑212/04, EU:C:2006:443, paragraph 56; of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 67; and of 14 September 2016, Pérez López, C‑16/15, EU:C:2016:679, paragraph 24).44So far as concerns, in the second place, the argument that employment contracts in the sector of activity of operatic and orchestral foundations are traditionally concluded for a fixed period, it must be held that allowing a Member State to invoke a continuity of the rules over time in order to be able to avoid complying with the general obligation incumbent on it under Clause 5(1) of the Framework Agreement, namely the effective and binding adoption of at least one of the measures listed in that provision designed to prevent the misuse of successive fixed-term employment contracts, not only finds no legal basis in the provisions of the Framework Agreement, but it would also clearly be contrary to one of the objectives pursued by the Framework Agreement, noted in paragraph 31 of the present judgment, namely stable employment, which is viewed as a major element in the protection of workers, and would therefore significantly reduce the categories of persons that could benefit from the protective measures provided for in that clause.45In addition, it should be noted that, even if the development of Italian culture and the safeguarding of Italian historic and artistic heritage may be regarded as objectives which are worthy of constitutional protection, the Italian Government does not explain how the pursuit of those objectives would require employers in the cultural and artistic sector to take on only fixed-term staff. It does not appear that that sector, unlike other public utility services such as national health or education, requires the number of workers who are employed there to be constantly in keeping with the number of potential users, or that it must cope with childcare services that must be ensured permanently or other factors which it is difficult to foresee.46In the third place, with regard to the argument relating to the characteristics peculiar to the sector of activity of operatic and orchestral foundations, it is indeed the case that the annual programming of artistic spectacles necessarily entails temporary recruitment needs for the employer.47Thus, the temporary employment of a worker in order to satisfy the employer’s temporary and specific staffing requirements may, in principle, constitute an ‘objective reason’ within the meaning of Clause 5(1)(a) of the Framework Agreement (see, to this effect, judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 91, and of 14 September 2016, Pérez López, C‑16/15, EU:C:2016:679, paragraph 44).48The artistic or technical requirements linked to the performance of a spectacle may be such that temporary employment is necessary. The same is true where the replacement of an unavailable artist or technician must be provided for, in particular on account of illness or maternity.49By contrast, it cannot be accepted that fixed-term employment contracts may be renewed for the purpose of the performance, in a fixed and permanent manner, of tasks in the cultural establishments at issue which normally come under the activity of the sector of activity of operatic and orchestral foundations.50In that regard, compliance with Clause 5(1)(a) of the Framework Agreement requires that it be specifically verified that the renewal of successive fixed-term employment contracts or relationships is intended to cover temporary needs.51However, the national legislation at issue in the main proceedings does not provide any condition of that nature for the derogation which it introduced from the common law rules applicable to employment contracts and intended to penalise the misuse of successive fixed-term contracts.52Moreover, the conclusion of the successive employment contracts at issue in the main proceedings does not appear to have met the simple temporary needs of the employer, but it appears instead to have fallen within the employer’s usual programming needs.53Although the annual programming of different spectacles might require the employment of specific or additional workers, it is not, however, apparent from the file before the Court how the artistic performances for which the contracts of the applicant in the main proceedings were concluded were specific or why they gave rise to only temporary staffing needs.54In addition, the various fixed-term employment contracts by which the applicant was employed gave rise to the performance of similar tasks over several years, with the result that that employment relationship could have satisfied a need which was not temporary but, on the contrary, long-term; this, however, is for the referring court to verify.55In the fourth place, with regard to the arguments concerning budgetary considerations, it should be borne in mind that, whilst such considerations may underlie a Member State’s choice of social policy and influence the nature or scope of the measures which it wishes to adopt, they do not in themselves constitute an aim pursued by that policy and, therefore, cannot justify the lack of any measure preventing the misuse of successive fixed-term employment contracts as referred to in Clause 5(1) of the Framework Agreement (judgment of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 110, and order of 21 September 2016, Popescu, C‑614/15, EU:C:2016:726, paragraph 63).56In the fifth place, it must be borne in mind that national legislation permitting the renewal of successive fixed-term employment contracts to replace staff pending the outcome of competition procedures organised for the purposes of recruiting workers for an indefinite duration is not in itself contrary to the Framework Agreement and can be justified by an objective reason.57The actual application of that reason must, however, be consistent with the requirements of the Framework Agreement, having regard to the particular features of the activity concerned and to the conditions under which it is carried out (see, to that effect, judgment of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraphs 91 and 99; and order of 21 September 2016, Popescu, C‑614/15, EU:C:2016:726, paragraph 64).58However, in the present case, the file before the Court contains no information regarding the possibility for the applicant in the main proceedings of having been able to participate in the competition procedures organised by her employer, or indeed as to the very existence of such procedures.59As regards, in the last place, the prohibition laid down by the national legislation on transforming, in the sector of operatic and orchestral foundations, fixed-term employment contracts into employment relationships of indefinite duration, it should be recalled that the Framework Agreement does not lay down a general obligation on the Member States to provide for the conversion of fixed-term employment contracts into contracts of indefinite duration. Indeed, Clause 5(2) of the Framework Agreement in principle leaves it to the Member States to determine the conditions under which fixed-term employment contracts or relationships are to be regarded as contracts or relationships of indefinite duration. It follows that the Framework Agreement does not specify the conditions under which fixed-term contracts may be used (judgment of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 80, and order of 11 December 2014, León Medialdea, C‑86/14, not published, EU:C:2014:2447, paragraph 47).60However, in order for national legislation such as that at issue in the main proceedings — which, in the sector of operatic and orchestral foundations, prohibits a succession of fixed-term contracts from being converted into a contract of indefinite duration — to be regarded as compatible with the Framework Agreement, the domestic law of the Member State concerned must include, in that sector, another effective measure to prevent and, where relevant, punish the abuse of successive fixed-term contracts (see, by analogy, judgments of 14 September 2016, Martínez Andrés and Castrejana López, C‑184/15 and C‑197/15, EU:C:2016:680, paragraph 41, and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 34).61However, it is established that, even in the case of abuse, workers in the operatic and orchestral foundations sector are not entitled to the transformation of their fixed-term employment contracts into an employment relationship of indefinite duration, nor do they benefit from other forms of protection such as the setting of a limit to the possibility of having recourse to fixed-term contracts.62It follows that the Italian legal system does not include, in the operatic and orchestral foundations sector, any effective measure, within the meaning of the case-law cited in paragraph 60 of this judgment, punishing the abuse of successive fixed-term contracts, despite staff in that sector not being entitled — unlike the workers at issue in the case giving rise to the judgment of 7 March 2018, Santoro (C‑494/16, EU:C:2018:166, paragraphs 35 and 36) — to claim the allocation of compensation for the loss incurred.63So far as concerns the engagement of the liability of directors, invoked by the Italian Government as an effective measure, it is important to recall that the national legislation obliges the authorities to recover from the directors responsible any sums paid to the workers by way of compensation for the loss incurred as a result of the infringement of provisions on recruitment and employment where that infringement is intentional or is the result of gross misconduct. That obligation placed on the authorities constitutes only one of the measures designed to prevent and punish the misuse of fixed-term employment contracts and it is for the referring court to determine whether the engagement of that liability is sufficiently effective and dissuasive to ensure that the provisions adopted pursuant to the Framework Agreement are fully effective (see, to that effect, judgment of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraphs 52 and 53).64In that regard, where EU law does not lay down any specific penalties in the event that instances of abuse are nevertheless established, it is incumbent on the national authorities to adopt measures that are not only proportionate, but also sufficiently effective and a sufficient deterrent to ensure that the provisions adopted pursuant to the Framework Agreement are fully effective (judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 77 and the case-law cited, and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 29).65Therefore, where abuse of successive fixed-term employment contracts or relationships has taken place, a measure offering effective and equivalent guarantees for the protection of workers must be capable of being applied in order duly to punish that abuse and nullify the consequences of the breach of EU law (see, to that effect, judgments of 26 November 2014, Mascolo and Others, C‑22/13, C‑61/13 to C‑63/13 and C‑418/13, EU:C:2014:2401, paragraph 79 and the case-law cited, and of 7 March 2018, Santoro, C‑494/16, EU:C:2018:166, paragraph 31).66Therefore, if the referring court were to find that, in the national law at issue in the main proceedings, there is no other effective measure to prevent and penalise abuses that may be identified in respect of staff employed in the operatic and orchestral foundations sector, such a situation would be likely to undermine the purpose and practical effect of Clause 5 of the Framework Agreement.67In accordance with settled case-law, the Member States’ obligation, arising from a directive, to achieve the result envisaged by that directive, and their duty under Article 4 TEU to take all appropriate measures, whether general or particular, to ensure fulfilment of that obligation, is binding on all the authorities of Member States including, for matters within their jurisdiction, the courts (judgment of 14 September 2016, Martínez Andrés and Castrejana López, C‑184/15 and C‑197/15, EU:C:2016:680, paragraph 50 and the case-law cited).68Accordingly, it is for all the authorities of the Member State concerned to ensure that Clause 5(1) of the Framework Agreement is complied with, by ensuring that workers who have experienced abuse resulting from the use of successive fixed-term employment contracts are not deterred, in the hope of continued employment in the particular sector, from asserting before the national authorities, including the courts, the rights conferred upon them under national law which arise from the implementation by that law of all the preventive measures set out in Clause 5(1) of the Framework Agreement (see, to that effect, judgment of 14 September 2016, Martínez Andrés and Castrejana López, C‑184/15 and C‑197/15, EU:C:2016:680, paragraph 51 and the case-law cited).69More specifically, it is for the court seised of the case, so far as possible, and where there has been misuse of successive fixed-term employment contracts, to interpret and apply the relevant provisions of national law in such a way that it is possible duly to penalise the abuse and to nullify the consequences of the breach of EU law (order of 11 December 2014, León Medialdea, C‑86/14, not published, EU:C:2014:2447, paragraph 56).70In this case, given that the national law at issue in the main proceedings contains rules applicable to common law employment contracts which are intended to penalise the abuse of successive fixed-term contracts, by providing for the automatic transformation of a fixed-term contract into a contract of indefinite duration where the employment relationship goes beyond a specific date, an application of that rule in the case in the main proceedings could therefore constitute a measure preventing such abuse, as provided for in Clause 5 of the Framework Agreement.71In any event, as has been argued by the Commission, since the national law at issue in the main proceedings does not in any case allow, in the sector of activity of operatic and orchestral foundations, for the conversion of fixed-term employment contracts into a contract of indefinite duration, it is likely to lead to discrimination between fixed-term workers in that sector and fixed-term workers in other sectors, as the latter may become, after the transformation of their employment contract in the case of infringement of the rules on the conclusion of fixed-term contracts, comparable permanent workers within the meaning of Clause 4(1) of the Framework Agreement.72In the light of all the foregoing, the answer to the question referred is that Clause 5 of the Framework Agreement must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which the common law rules governing employment relationships and intended to penalise the misuse of successive fixed-term contracts by the automatic transformation of the fixed-term contract into a contract of indefinite duration if the employment relationship goes beyond a specific date are not applicable to the sector of activity of operatic and orchestral foundations, where there is no other effective measure in the domestic legal system penalising abuses identified in that sector. Costs 73Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Tenth Chamber) hereby rules: Clause 5 of the framework agreement on fixed-term work concluded on 18 March 1999, which is set out in the Annex to Council Directive 1999/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP, must be interpreted as precluding national legislation, such as that at issue in the main proceedings, pursuant to which the common law rules governing employment relationships and intended to penalise the misuse of successive fixed-term contracts by the automatic transformation of the fixed-term contract into a contract of indefinite duration if the employment relationship goes beyond a specific date are not applicable to the sector of activity of operatic and orchestral foundations, where there is no other effective measure in the domestic legal system penalising abuses identified in that sector. [Signatures]( *1 ) Language of the case: Italian. | 8b897-edbb108-41f9 | EN |
Advocate General Szpunar proposes that the Court should rule that the ‘Returns Directive’ must be applied to third-country national where internal border controls have been reinstated | 19 March 2019 ( *1 )(Reference for a preliminary ruling — Area of freedom, security and justice — Border control, asylum and immigration — Regulation (EU) 2016/399 — Article 32 — Temporary reintroduction of border control by a Member State at its internal borders — Illegal entry of a third-country national — Equation of internal borders with external borders — Directive 2008/115/EC — Scope — Article 2(2)(a))In Case C‑444/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour de cassation (Court of Cassation, France), made by decision of 12 July 2017, received at the Court on 21 July 2017, in the proceedings Préfet des Pyrénées-Orientales v Abdelaziz Arib, Procureur de la République près le tribunal de grande instance de Montpellier, Procureur général près la cour d’appel de Montpellier, THE COURT (Grand Chamber),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, A. Prechal, E. Regan, T. von Danwitz, C. Toader and C. Lycourgos (Rapporteur), Presidents of Chambers, A. Rosas, E. Juhász, M. Ilešič, J. Malenovský, M. Safjan, D. Šváby, C.G. Fernlund and C. Vajda, Judges,Advocate General: M. Szpunar,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 12 June 2018,after considering the observations submitted on behalf of:–the préfet des Pyrénées-Orientales, by F.-H. Briard and S. Bonichot, avocats,the French Government, by E. de Moustier, E. Armoët and D. Colas, acting as Agents,the German Government, by R. Kanitz, acting as Agent,the European Commission, by C. Cattabriga and G. Wils, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 17 October 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 32 of Regulation (EU) 2016/399 of the European Parliament and of the Council of 9 March 2016 on a Union Code on the rules governing the movement of persons across borders (Schengen Borders Code) (OJ 2016 L 77, p. 1) (‘Schengen Borders Code’), and of Articles 2(2)(a) and 4(4) of Directive 2008/115/EC of the European Parliament and of the Council of 16 December 2008 on common standards and procedures in Member States for returning illegally staying third-country nationals (OJ 2008 L 348, p. 98).2The request has been made in proceedings between the préfet des Pyrénées-Orientales (Prefect of the Pyrénées-Orientales, France) (‘the Prefect’), on the one hand, and Mr Abdelaziz Arib, the procureur de la République près le tribunal de grande instance de Montpellier (Public Prosecutor at the Regional Court, Montpellier, France) and the procureur général près la cour d’appel de Montpellier (Principal Public Prosecutor at the Court of Appeal, Montpellier), on the other hand, concerning the extension of the administrative detention of Mr Arib, who entered France illegally. Legal context EU law The CISA 3The Convention implementing the Schengen Agreement of 14 June 1985 between the Governments of the States of the Benelux Economic Union, the Federal Republic of Germany and the French Republic on the gradual abolition of checks at their common borders, signed in Schengen on 19 June 1990, which entered into force on 26 March 1995 (OJ 2000 L 239, p. 19) (‘the CISA’), forms part of the Schengen acquis.4Article 26 of the CISA reads:‘1. The Contracting Parties undertake, subject to the obligations resulting from their accession to the Geneva Convention relating to the Status of Refugees of 28 July 1951, as amended by the New York Protocol of 31 January 1967, to incorporate the following rules into their national law:(a)If aliens are refused entry into the territory of one of the Contracting Parties, the carrier which brought them to the external border by air, sea or land shall be obliged immediately to assume responsibility for them again. At the request of the border surveillance authorities the carrier shall be obliged to return the aliens to the third State from which they were transported or to the third State which issued the travel document on which they travelled or to any other third State to which they are certain to be admitted.(b)The carrier shall be obliged to take all the necessary measures to ensure that an alien carried by air or sea is in possession of the travel documents required for entry into the territories of the Contracting Parties.2. The Contracting Parties undertake, subject to the obligations resulting from their accession to the Geneva Convention relating to the Status of Refugees of 28 July 1951, as amended by the New York Protocol of 31 January 1967, and in accordance with their constitutional law, to impose penalties on carriers which transport aliens who do not possess the necessary travel documents by air or sea from a Third State to their territories.3. Paragraphs 1(b) and 2 shall also apply to international carriers transporting groups overland by coach, with the exception of border traffic.’ The Schengen Borders Code 5Under Article 2 of the Schengen Borders Code:‘For the purposes of this Regulation the following definitions apply:1.“internal borders” means:the common land borders, including river and lake borders, of the Member States;the airports of the Member States for internal flights;(c)sea, river and lake ports of the Member States for regular internal ferry connections;2.“external borders” means the Member States’ land borders, including river and lake borders, sea borders and their airports, river ports, sea ports and lake ports, provided that they are not internal borders;…’6Article 5 of the code provides:‘1. External borders may be crossed only at border crossing points and during the fixed opening hours. The opening hours shall be clearly indicated at border crossing points which are not open 24 hours a day.Member States shall notify the list of their border crossing points to the Commission in accordance with Article 39.…3. Without prejudice to the exceptions provided for in paragraph 2 or to their international protection obligations, Member States shall introduce penalties, in accordance with their national law, for the unauthorised crossing of external borders at places other than border crossing points or at times other than the fixed opening hours. Those penalties shall be effective, proportionate and dissuasive.’7Article 13(1) of the code provides:‘The main purpose of border surveillance shall be to prevent unauthorised border crossings, to counter cross-border criminality and to take measures against persons who have crossed the border illegally. A person who has crossed a border illegally and who has no right to stay on the territory of the Member State concerned shall be apprehended and made subject to procedures respecting Directive 2008/115/EC.’8Under Article 14 of the Schengen Borders Code:‘1. A third-country national who does not fulfil all the entry conditions laid down in Article 6(1) and does not belong to the categories of persons referred to in Article 6(5) shall be refused entry to the territories of the Member States. This shall be without prejudice to the application of special provisions concerning the right of asylum and to international protection or the issue of long-stay visas.4. The border guards shall ensure that a third-country national refused entry does not enter the territory of the Member State concerned.6. Detailed rules governing refusal of entry are given in Part A of Annex V.’9Article 23 of the code, entitled ‘Checks within the territory’, states:‘The absence of border control at internal borders shall not affect:the exercise of police powers by the competent authorities of the Member States under national law, insofar as the exercise of those powers does not have an effect equivalent to border checks; that shall also apply in border areas. Within the meaning of the first sentence, the exercise of police powers may not, in particular, be considered equivalent to the exercise of border checks when the police measures:(i)do not have border control as an objective;(ii)are based on general police information and experience regarding possible threats to public security and aim, in particular, to combat cross-border crime;(iii)are devised and executed in a manner clearly distinct from systematic checks on persons at the external borders;(iv)are carried out on the basis of spot-checks;10Article 25 of the code provides:‘1. Where, in the area without internal border control, there is a serious threat to public policy or internal security in a Member State, that Member State may exceptionally reintroduce border control at all or specific parts of its internal borders for a limited period of up to 30 days or for the foreseeable duration of the serious threat if its duration exceeds 30 days. The scope and duration of the temporary reintroduction of border control at internal borders shall not exceed what is strictly necessary to respond to the serious threat.2. Border control at internal borders shall only be reintroduced as a last resort, and in accordance with Articles 27, 28 and 29. The criteria referred to, respectively, in Articles 26 and 30 shall be taken into account in each case where a decision on the reintroduction of border control at internal borders is considered pursuant, respectively, to Article 27, 28 or 29.3. If the serious threat to public policy or internal security in the Member State concerned persists beyond the period provided for in paragraph 1 of this Article, that Member State may prolong border control at its internal borders, taking account of the criteria referred to in Article 26 and in accordance with Article 27, on the same grounds as those referred to in paragraph 1 of this Article and, taking into account any new elements, for renewable periods of up to 30 days.4. The total period during which border control is reintroduced at internal borders, including any prolongation provided for under paragraph 3 of this Article, shall not exceed six months. Where there are exceptional circumstances as referred to in Article 29, that total period may be extended to a maximum length of two years, in accordance with paragraph 1 of that Article.’11Article 32 of the Schengen Borders Code reads:‘Where border control at internal borders is reintroduced, the relevant provisions of Title II shall apply mutatis mutandis.’12Articles 5, 13 and 14 of the code form part of Title II thereof, entitled ‘External borders’, whereas Articles 23, 25 and 32 of the code form part of Title III thereof, entitled ‘Internal borders’.13Under point 2 of Part A of Annex V to the Schengen Borders Code:‘If a third-country national who has been refused entry is brought to the border by a carrier, the authority responsible locally shall:order the carrier to take charge of the third-country national and transport him or her without delay to the third country from which he or she was brought, to the third country which issued the document authorising him or her to cross the border, or to any other third country where he or she is guaranteed admittance, or to find means of onward transportation in accordance with Article 26 of the [CISA] and Council Directive 2001/51/EC …;pending onward transportation, take appropriate measures, in compliance with national law and having regard to local circumstances, to prevent third-country nationals who have been refused entry from entering illegally.’ Directive 2008/115 14Recital 5 of Directive 2008/115 states:‘This Directive should establish a horizontal set of rules, applicable to all third-country nationals who do not or who no longer fulfil the conditions for entry, stay or residence in a Member State.’15Article 2 of the directive provides:‘1. This Directive applies to third-country nationals staying illegally on the territory of a Member State.2. Member States may decide not to apply this Directive to third-country nationals who:are subject to a refusal of entry in accordance with Article 13 of the Schengen Borders Code, or who are apprehended or intercepted by the competent authorities in connection with the irregular crossing by land, sea or air of the external border of a Member State and who have not subsequently obtained an authorisation or a right to stay in that Member State;are subject to return as a criminal law sanction or as a consequence of a criminal law sanction, according to national law, or who are the subject of extradition procedures.16Under Article 3 of the directive:‘For the purpose of this Directive the following definitions shall apply:(2)“illegal stay” means the presence on the territory of a Member State, of a third-country national who does not fulfil, or no longer fulfils the conditions of entry as set out in Article 5 of the Schengen Borders Code or other conditions for entry, stay or residence in that Member State;(3)“return” means the process of a third-country national going back — whether in voluntary compliance with an obligation to return, or enforced — to:his or her country of origin, ora country of transit in accordance with Community or bilateral readmission agreements or other arrangements; oranother third country, to which the third-country national concerned voluntarily decides to return and in which he or she will be accepted;17Article 4(4) of the directive provides:‘With regard to third-country nationals excluded from the scope of this Directive in accordance with Article 2(2)(a), Member States shall:ensure that their treatment and level of protection are no less favourable than as set out in Article 8(4) and (5) (limitations on use of coercive measures), Article 9(2)(a) (postponement of removal), Article 14(1)(b) and (d) (emergency health care and taking into account needs of vulnerable persons), and Articles 16 and 17 (detention conditions) andrespect the principle of non-refoulement.’ French law 18Under the first and second paragraphs of Article L. 621-2 of the code de l’entrée et du séjour des étrangers et du droit d’asile (Code on the entry and stay of foreign nationals and the right of asylum) as amended by Law No 2012-1560 of 31 December 2012 (‘the Ceseda’):‘A foreign national who is not a national of a Member State of the European Union shall be liable to a sentence of one year’s imprisonment and a fine of EUR 3750:(1)if he has entered the territory of Metropolitan France without satisfying the conditions laid down in Article 5(1)(a), (b) or (c) of Regulation (EC) No 562/2006 of the European Parliament and of the Council of 15 March 2006 establishing a Community Code on the rules governing the movement of persons across borders (Schengen Borders Code) [(OJ 2006 L 105, p. 1)] and without having been admitted to that territory pursuant to Article 5(4)(a) and (c) of that regulation; the same shall apply where an alert has been issued for the purpose of refusing the foreign national entry pursuant to an enforceable decision adopted by another State party to the [CISA];or if, arriving directly from the territory of a State party to that convention, he has entered the territory of Metropolitan France without complying with the requirements of Article 19(1) or (2), Article 20(1) and Article 21(1) or (2) thereof, with the exception of the conditions referred to in Article 5(1)(e) of Regulation (EC) No 562/2006 … and in Article 5(1)(d) thereof where the alert for the purpose of refusing entry does not result from an enforceable decision adopted by another State party to the [CISA];For the purposes of this article, criminal proceedings may be instituted only in cases where the facts have been found in the circumstances provided for in Article 53 of the Code of Criminal Procedure.’19Article 53 of the code de la procédure pénale (Code of Criminal Procedure), in the version applicable to the dispute in the main proceedings, provides:‘A crime or other offence shall be classified as in flagrante delicto where it is in the course of being committed or has just been committed. A crime or other offence shall also be so classified where, at a time very close to the act, the person suspected is pursued by hue and cry, is found in the possession of articles, or has on or about him traces or clues so as to give grounds for believing that he has taken part in the crime or other offence.Following the discovery of a crime or other offence classified as in flagrante delicto, the investigation conducted under the supervision of the public prosecutor under the conditions provided for by the present chapter may continue without interruption for eight days.Where the investigations necessary for establishing the truth in relation to a crime or other offence punishable by a term of at least five years’ imprisonment cannot be postponed, the public prosecutor may decide to extend the investigation, subject to the same conditions, by a maximum of eight days.’20Article 62-2 of the Code of Criminal Procedure states:‘Police custody is a coercive measure decided upon by a senior law-enforcement officer, under the supervision of the courts, whereby a person reasonably suspected on one or more grounds of having committed or attempted to commit a crime or other offence punishable by imprisonment is held at the disposal of investigators.21Article 78-2 of Code of Criminal Procedure provides:‘Senior law-enforcement officers and, upon their orders and under their responsibility, the law-enforcement officers and assistant law-enforcement officers referred to in Articles 20 and 21-1 may ask any person to prove his identity by any means, where one or more plausible reasons exist for suspecting that:the person has committed or attempted to commit an offence;or the person is preparing to commit a crime or other offence;or the person is likely to provide information useful for the investigation in the event of a crime or other offence;or the person has breached the obligations or prohibitions to which he is subject in the context of judicial supervision, house arrest with electronic surveillance, a sentence or a measure followed by the judge responsible for the execution of sentences;or the person is the subject of inquiries ordered by a judicial authority.On the public prosecutor’s written recommendations for the purposes of the investigation and prosecution of offences specified by him, the identity of any person may also be checked, in accordance with the same rules, in the places and for a period of time determined by the public prosecutor. The fact that the identity check uncovers offences other than those referred to in the public prosecutor’s recommendations shall not constitute a ground for invalidating related proceedings.The identity of any person, regardless of his conduct, may also be checked pursuant to the rules set out in the first paragraph to prevent a breach of public order, in particular, an offence against the safety of persons or property.In an area between the land border of France with the States party to the [CISA] and a line drawn 20 kilometres inside that border, and in the publicly accessible areas of ports, airports and railway or bus stations open to international traffic and designated by order, for the prevention and investigation of cross-border crime, the identity of any person may also be checked, in accordance with the rules provided for in the first paragraph, in order to ascertain whether the obligations laid down by law to hold, carry and produce papers and documents are fulfilled. … Where there is a section of motorway starting in the area referred to in the first sentence of this paragraph and the first motorway tollbooth is situated beyond the 20-kilometre line, the identity check may also take place up to that first tollbooth on parking areas and on the site of that tollbooth and the adjoining parking areas. The tollbooths concerned by this provision shall be designated by order. The fact that the identity check uncovers an offence other than the non-observance of the aforementioned obligations shall not constitute a ground for invalidating related proceedings. For the purposes of this paragraph, checks related to the obligations laid down by law to hold, carry and produce papers and documents may only be carried out in any given location for a period not exceeding six consecutive hours and may not consist in systematic checks on persons present in or moving within the areas or places referred to in this paragraph. The dispute in the main proceedings and the questions referred for a preliminary ruling 22Following the temporary reintroduction in France of border control at its common internal borders with other Member States forming part of the Schengen area, under Article 25 of the Schengen Borders Code, Mr Arib, a Moroccan national, was checked on 15 June 2016 in the area between the border of France with Spain and a line drawn 20 kilometres inside that border, under the conditions set out in the ninth paragraph of Article 78-2 of the Code of Criminal Procedure. Mr Arib, who had previously left France pursuant to a removal order notified to him on 10 August 2013, was on board a coach travelling from Morocco.23Mr Arib was held in police custody on suspicion of illegal entry into French territory, an offence under Article L. 621-2 of the Ceseda. The following day, the Prefect made an order against Mr Arib requiring him to leave France and ordered his administrative detention.24By order of 21 June 2016, the judge responsible for matters relating to liberty and detention at the tribunal de grande instance de Perpignan (Regional Court, Perpignan, France) decided to annul Mr Arib’s detention in police custody and subsequent proceedings, including his administrative detention on the ground, essentially, that it was not possible to detain him. He observed, in that respect, that Mr Arib, an illegally staying third-country national, had crossed an internal border between France and Spain, which, in his view, triggered the application of Directive 2008/115 under which no term of imprisonment can be imposed in circumstances such as those in the present case.25By order of 22 June 2016, the delegated magistrate at the cour d’appel de Montpellier (Court of Appeal, Montpellier, France) upheld the decision taken at first instance. The Prefect lodged an appeal in cassation against that order before the referring court, the Cour de cassation (Court of Cassation, France), submitting, inter alia, that where there is a serious threat to public policy or internal security, a Member State may exceptionally reintroduce border control at its internal borders, thus partially disapplying Directive 2008/115. According to the Prefect, since the protective measures laid down in the directive are not applicable in such a case, a person who entered France illegally may be checked in accordance with the ninth paragraph of Article 78-2 of the Code of Criminal Procedure and, by virtue of his or her illegal stay, face a term of imprisonment and, accordingly, be held in custody.26The referring court notes that (i) the Schengen Borders Code lays down the principle of free movement within the Schengen area and provides for the absence of internal border control between Member States, and (ii) where there is a serious threat to public policy or internal security in a Member State, the latter may nevertheless exceptionally reintroduce border control at all or specific parts of its internal borders for a limited period under Article 25 of the code.27The referring court also argues that, according to Article 32 of the Schengen Borders Code, where border control is reintroduced at internal borders, the relevant provisions of Title II of the code relating to external borders apply mutatis mutandis. The referring court notes, in that regard, that under Article 5(3) of the code, Member States are to introduce effective, proportionate and dissuasive penalties for the unauthorised crossing of external borders. In addition, Article 13 of the code states that the objective of border surveillance is to prevent unauthorised border crossings and to take measures against persons who have crossed the border illegally, so that a person who has crossed a border illegally and who has no right to stay on the territory of the Member State concerned is to be apprehended and made subject to procedures respecting Directive 2008/115.28According to the referring court, Directive 2008/115 requires Member States to issue a removal order against any third-country national illegally staying on their territory, who may be detained only to prepare his or her return or carry out the removal process in so far as no other sufficient but less coercive measures can be applied effectively. The referring court recalls the judgment of 7 June 2016, Affum (C‑47/15, EU:C:2016:408), in which the Court held that Directive 2008/115 precludes legislation of a Member State which permits a third-country national in respect of whom the return procedure established by that directive has not yet been completed to be imprisoned merely on account of illegal entry across an internal border, resulting in an illegal stay.29The referring court points out that, under Article L. 621-2 of the Ceseda, illegal entry into the territory is punishable by a term of imprisonment and a fine in cases of flagrante delicto.30In the light of that provision, the referring court asks, first, whether border control that has been reintroduced at an internal border of a Member State may be equated with border control at an external border in connection with the crossing of that border by a third-country national who does not have a right of entry, when the control is carried out in cases of flagrante delicto.31Should the answer to that question be in the affirmative, the referring court takes the view that the rules governing that control would have to be determined. In that regard, the referring court notes that, on the one hand, Article 2(2)(a) of Directive 2008/115 permits the Member States to continue to apply simplified national return procedures at their external borders, without having to follow all the procedural stages prescribed by the directive, in order to be able to remove more swiftly third-country nationals intercepted when crossing those borders. It points out that, on the other hand, Article 4(4) of Directive 2008/115 regulates the exercise by the Member States of the power provided for in Article 2(2)(a) thereof, given that the Member States have to observe certain minimum guarantees, which include, in particular, the conditions of detention laid down in Articles 16 and 17 of the directive.32The referring court therefore asks whether a State that has reintroduced border control at internal borders may rely upon Article 2(2)(a) in order to exclude from the scope of Directive 2008/115 a third-country national who crosses one such border illegally and has not yet stayed in national territory.33Should the answer be in the affirmative, the question then arises as to whether Article 4(4) of Directive 2008/115 is to be interpreted as not precluding the imprisonment of third-country nationals in the factual context of the present case.34In those circumstances, the Cour de cassation (Court of Cassation) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Is Article 32 of [the Schengen Borders Code] — which provides that, when border control at internal borders is reintroduced, the relevant provisions of Title II (relating to external borders) are to apply mutatis mutandis — to be interpreted as meaning that border controls reintroduced at an internal border of a Member State may be equated with border controls at an external border, when that border is crossed by a third-country national who has no right of entry?In the same circumstances of reintroduction of controls at internal borders, do that [code] and Directive 2008/115 … permit the application, to the situation of a third-country national crossing a border at which controls have been reintroduced, of the power, conferred on the Member States by Article 2(2)(a) of the directive, to continue to apply simplified national return procedures at their external borders?Should the answer to the previous question be in the affirmative, do the provisions of Article 2(2)(a) and of Article 4(4) of the directive preclude national legislation such as Article L. 621-2 of the [Ceseda], which penalises with a term of imprisonment the illegal entry into national territory of a third-country national in respect of whom the return procedure established by that directive has not yet been completed?’ Consideration of the questions referred The first and second questions 35By its first and second questions, which should be examined together, the referring court asks, in essence, whether Article 2(2)(a) of Directive 2008/115, read in conjunction with Article 32 of the Schengen Borders Code, must be interpreted as applying to the situation of a third-country national who was apprehended in the immediate vicinity of an internal border of a Member State, where that Member State has reintroduced border control at that border, pursuant to Article 25 of the code, on account of a serious threat to public policy or internal security in that Member State.36As a preliminary point, it is important to note that, as mentioned in paragraphs 22 and 23 of this judgment, Mr Arib, a Moroccan national, is not subject to a refusal of entry into French territory but that he was checked by French authorities in the immediate vicinity of the border between France and Spain after border control at that border was reintroduced in accordance with Article 25 of the Schengen Borders Code, and was held in custody following that check on suspicion of having committed the offence of illegal entry into French territory set out in Article L. 621-2 of the Ceseda.37It should be pointed out, in that regard, first, that it follows from both the definition of the concept of ‘illegal stay’, set out in Article 3(2) of Directive 2008/115, and recital 5 of the directive, according to which the directive applies ‘to all third-country nationals who do not or who no longer fulfil the conditions for entry, stay or residence’, that a third-country national who, after entering the territory of a Member State illegally, is present on that territory without fulfilling the conditions for entry, stay or residence is, by virtue of that fact, staying there illegally, without such presence being subject to a condition requiring a minimum duration or an intention to remain on that territory (see, to that effect, judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraphs 48 and 59).38A third-country national who, like Mr Arib, after entering the territory of a Member State illegally is intercepted on the territory of that Member State in the immediate vicinity of one of its internal borders, without fulfilling the conditions for entry, stay or residence in that territory, must accordingly be regarded as staying illegally on the territory of that Member State.39A third-country national in that situation falls, under Article 2(1) of Directive 2008/115, and without prejudice to Article 2(2) of the directive, within the scope of the directive. He must therefore, in principle, be subject to the common standards and procedures laid down by the directive for the purpose of his removal, as long as his stay has not, as the case may be, been regularised (see, to that effect, judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraph 61).40In that respect, it should be noted, secondly, that according to the Court’s case-law, Directive 2008/115 does not preclude legislation of a Member State which permits the imprisonment of a third-country national to whom the return procedure established by the directive has been applied and who either is staying illegally on the territory of that Member State without a justified ground for non-return or has re-entered the territory in breach of an entry ban (see, to that effect, judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraphs 54 and 64).41It is apparent, however, from the case file before the Court and from the replies to the Court’s questions submitted at the hearing that Mr Arib does not find himself in either of the situations mentioned in the previous paragraph.42It must be stated, thirdly, that Article 2(2)(a) of Directive 2008/115 allows Member States not to apply the directive, without prejudice to the provisions in Article 4(4) thereof, in two particular instances, namely where third-country nationals are subject to a refusal of entry across an external border of a Member State in accordance with Article 14 of the Schengen Borders Code, or where third-country nationals are apprehended or intercepted in connection with the irregular crossing of an external border and have not subsequently obtained an authorisation or a right to stay in that Member State.43As set out in paragraph 36 of this judgment, Mr Arib is not subject to a refusal of entry into French territory. It follows that he cannot, in any event, fall within the first of the two situations covered by Article 2(2)(a) of Directive 2008/115.44Accordingly, it should be determined whether a third-country national who is staying illegally on the territory of a Member State and was apprehended in the immediate vicinity of an internal border of that Member State comes under the second situation covered by Article 2(2)(a) of Directive 2008/115, where the Member State concerned has reintroduced border control at that border on account of a serious threat to public policy or internal security in that Member State, in accordance with Article 25 of the Schengen Borders Code.45In that context, it must be recalled, first, that according to the Court’s case-law, the two situations covered by Article 2(2)(a) of Directive 2008/115 relate exclusively to the crossing of the external border of a Member State, as defined in Article 2 of the Schengen Borders Code, and therefore do not concern the crossing of a common border of Member States forming part of the Schengen area (judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraph 69).46Specifically, the second situation covered by Article 2(2)(a) of Directive 2008/115 implies a direct temporal and spatial link between the apprehension or interception of the third-country national and the crossing of an external border. That situation therefore concerns third-country nationals who have been apprehended or intercepted by the competent authorities at the very time of the irregular crossing of the border or near that border after it has been so crossed (see, to that effect, judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraph 72).47Accordingly, Article 2(2)(a) of Directive 2008/115 must be interpreted as not permitting Member States to exclude certain illegally staying third-country nationals from the directive’s scope on the ground of illegal entry across an internal border (judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraphs 69 and 77).48It should however be determined, secondly, whether the fact that border control was reintroduced by a Member State at its internal borders, in accordance with Article 25 of the Schengen Borders Code, is such as to cause the situation of a third-country national who is staying illegally on the territory of that Member State and has been apprehended near that internal border fall within Article 2(2)(a) of Directive 2008/115.49Article 25 of the Schengen Borders Code allows, exceptionally and under certain conditions, a Member State to reintroduce temporarily border control at all or specific parts of its internal borders where there is a serious threat to public policy or internal security in that Member State. Under Article 32 of the code, where border control at internal borders is reintroduced, the relevant provisions of the code relating to external borders are to apply mutatis mutandis.50In that regard, it should be noted, first, that as a derogation from the scope of Directive 2008/115, the exception in Article 2(2)(a) of the directive must be interpreted strictly.51It is already apparent from paragraphs 45 and 47 of this judgment that this provision, according to its own terms that are unambiguous in this respect, concerns the situation of a third-country national who finds himself at the ‘external border’ of a Member State or in the immediate vicinity of one such external border. There is no mention of the fact that the situation of a third-country national who finds himself at an internal border at which border control has been reintroduced pursuant to Article 25 of the Schengen Borders Code, or in the immediate vicinity of one such internal border, may be equated with the situation mentioned in the previous sentence, even though on the day on which the directive was adopted, Articles 23 and 28 of Regulation No 562/2006 already provided (i) that the Member States could exceptionally reintroduce border control at their internal borders where there was a serious threat to their public policy and internal security and (ii) that in such a case the relevant provisions of that regulation relating to external borders were to apply mutatis mutandis.52With regard, secondly, to the intended purpose of Article 2(2)(a) of Directive 2008/115, the Court has previously held that it permits the Member States, in the two situations covered by that article, to continue to apply simplified national return procedures at their external borders, without having to follow all the procedural stages prescribed by the directive, in order to be able to remove more swiftly third-country nationals intercepted in connection with the crossing of one such border (judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraph 74).53In that context, it should be stated that Article 2(2)(a) of Directive 2008/115 treats equally interceptions or apprehensions in the immediate vicinity of the external border of a Member State, which are covered by Article 13 of the Schengen Borders Code, and the adoption of a refusal of entry for the purpose of Article 14 of the code.54If indeed, as confirmed by Article 14(4) of the Schengen Borders Code, the adoption of a refusal of entry into the territory of the Schengen area aims to preclude the third-country national subject to that refusal from entering that territory, the apprehension or interception of that person, who is staying illegally, in connection with the crossing of an external border or in the immediate vicinity of one such border, also allows the competent national authorities to take the necessary measures easily and swiftly, given the place where that person was apprehended, in order to prevent that person from staying on that territory by immediately returning that person to the external border that he or she has crossed illegally.55In those circumstances, which are characterised, inter alia, by the vicinity to an external border, a Member State may be justified in failing to follow all the procedural stages prescribed by Directive 2008/115 in order to speed up the return to a third country of third-country nationals staying on its territory illegally.56Conversely, the mere reintroduction of border control at the internal borders of a Member State does not mean that an illegally staying third-country national apprehended in connection with the crossing of that border, or in the immediate vicinity thereof, may be removed more swiftly or more easily from the territory of the Schengen area by being returned immediately to an external border than if he had been apprehended in connection with a police check for the purpose of Article 23(a) of the Schengen Borders Code, in the same place, without border control having been reintroduced at those borders.57Contrary to the argument submitted, in essence, by the German Government, that conclusion is not called into question when account is taken of the obligations imposed on carriers under point 2 of Part A of Annex V to the Schengen Borders Code and Article 26 of the CISA.58Indeed, even if such obligations were, under Article 32 of the Schengen Borders Code, to apply also where border control at internal borders has been reintroduced, it should nevertheless be noted that point 2 of Part A of Annex V to the Schengen Borders Code and Article 26 of the CISA impose on carriers an obligation of onward transportation of the third-country national they are transporting only when that person has been refused entry across the border and not, as for Mr Arib, when that person is apprehended or intercepted after crossing the border illegally.59It follows that, in the light of the objective pursued by Article 2(2)(a) of Directive 2008/115, there is no need to treat differently the situation of an illegally staying third-country national, apprehended in the immediate vicinity of an internal border, depending on whether or not border control has been reintroduced at that border.60Thirdly, the need for the scope of Article 2(2)(a) of Directive 2008/115 to be interpreted restrictively is further supported by an analysis of the context of which that provision forms part and, specifically, a systematic reading of the Schengen Borders Code.61In this respect, the Court notes, first, that it follows from the Schengen Borders Code that an internal border at which border control has been reintroduced by a Member State under Article 25 of the code is not tantamount to an external border for the purpose of that code.62Under Article 2 of the Schengen Borders Code, the concepts of ‘internal borders’ and ‘external borders’ are mutually exclusive. As it is, Article 32 of the code merely provides that, where border control at internal borders is reintroduced by a Member State, only the relevant provisions of the code relating to external borders are to apply mutatis mutandis. However, Article 32 of the code does not provide, as the Advocate General has noted, in essence, in point 52 of his Opinion, that in such a case Article 2(2)(a) of Directive 2008/115 is to be applied. The very wording of the Schengen Borders Code therefore precludes, for the purposes of that directive, an internal border at which border control has been reintroduced under Article 25 of the code from being equated with an external border.63It is also true, as the referring court points out, that Article 5(3) of the Schengen Borders Code requires Member States to introduce effective, proportionate and dissuasive penalties for the unauthorised crossing of an external border other than at border crossing points or at times other than the fixed opening hours.64However, and regardless of whether that provision is a relevant provision, within the meaning of Article 32 of the Schengen Borders Code, and thus applies mutatis mutandis where border control is reintroduced by a Member State at its internal borders, the Court notes, in any event, that this provision is not in any way intended to derogate from the common standards and procedures established by Directive 2008/115, as expressly confirmed in Article 13(1) of the code, which provides that measures are to be taken against persons who have crossed an external border illegally and that, if that person has no right to stay on the territory of the Member State concerned, he or she is to be apprehended and made subject to the procedures respecting Directive 2008/115 (see, to that effect, judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraph 90).65Article 13(1) of the Schengen Borders Code thus explains the relationship between border surveillance and the implementation of the return procedures provided for in Directive 2008/115 (judgment of 26 July 2017, Jafari, C‑646/16, EU:C:2017:586, paragraph 69). Accordingly, the measures adopted by Member States, in particular in compliance with Article 5(3) of the Schengen Borders Code, in order to ensure effective border surveillance, cannot lead to a modification of the obligations imposed on Member States by that directive.66Lastly, it is important to recall that Directive 2008/115 does not prevent Member States from being able to impose a sentence of imprisonment to punish the commission of offences other than those stemming from the mere fact of illegal entry, including in situations where the return procedure established by the directive has not yet been completed (judgment of 7 June 2016, Affum, C‑47/15, EU:C:2016:408, paragraph 65). Therefore, the directive does not preclude either the apprehension or detention in custody of an illegally staying third-country national where such measures are adopted on the ground that that person is suspected of having committed an offence other than merely having entered into national territory illegally, in particular an offence that is likely to pose a threat to public policy or internal security in the Member State concerned.67It follows from the foregoing that the answer to the first and second questions is that Article 2(2)(a) of Directive 2008/115, read in conjunction with Article 32 of the Schengen Borders Code, must be interpreted as not applying to the situation of an illegally staying third-country national who was apprehended in the immediate vicinity of an internal border of a Member State, even where that Member State has reintroduced border control at that border, pursuant to Article 25 of the code, on account of a serious threat to public policy or internal security in that Member State. The third question 68In view of the answer to the first and second questions, there is no need to answer the third question. Costs 69Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 2(2)(a) of Directive 2008/115/EC of the European Parliament and of the Council of 16 December 2008 on common standards and procedures in Member States for returning illegally staying third-country nationals, read in conjunction with Article 32 of Regulation (EU) 2016/399 of the European Parliament and of the Council of 9 March 2016 on a Union Code on the rules governing the movement of persons across borders (Schengen Borders Code), must be interpreted as not applying to the situation of an illegally staying third-country national who was apprehended in the immediate vicinity of an internal border of a Member State, even where that Member State has reintroduced border control at that border, pursuant to Article 25 of the regulation, on account of a serious threat to public policy or internal security in that Member State. [Signatures]( *1 ) Language of the case: French. | 1b7a7-046d3f1-4791 | EN |
A provision of national law which, for the purpose of determining the duration of paid annual leave to which a worker is entitled, does not include a period of parental leave taken by that worker complies with EU law | 4 October 2018 ( *1 )(Reference for a preliminary ruling — Social policy — Organisation of working time — Directive 2003/88/EC — Right to paid annual leave — Directive 2010/18/EU — Revised Framework Agreement on parental leave — Parental leave not regarded as a period of actual work)In Case C‑12/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania), made by decision of 11 October 2016, received at the Court on 10 January 2017, in the proceedings Tribunalul Botoşani, Ministerul Justiţiei v Maria Dicu, intervening parties: Curtea de Apel Suceava, Consiliul Superior al Magistraturii, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, M. Ilešič, L. Bay Larsen, T. von Danwitz and E. Levits (Rapporteur), Presidents of Chambers, A. Borg Barthet, A. Arabadjiev, F. Biltgen, K. Jürimäe and C. Lycourgos, Judges,Advocate General: P. Mengozzi,Registrar: R. Şereş, Administrator,having regard to the written procedure and further to the hearing on 15 January 2018,after considering the observations submitted on behalf of:–the Consiliul Superior al Magistraturii, by M. Ghena, acting as Agent,the Romanian Government, initially by R.-H. Radu, O.-C. Ichim, L. Liţu and E. Gane, and subsequently by C.-R. Canţăr, O.-C. Ichim, L. Liţu and E. Gane, acting as Agents,the German Government, by D. Klebs and T. Henze, acting as Agents,the Estonian Government, by A. Kalbus, acting as Agent,the Spanish Government, by S. Jiménez García, acting as Agent,the Italian Government, by G. Palmieri, acting as Agent, and G. De Socio, avvocato dello Stato,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by M. van Beek and C. Hödlmayr, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 20 March 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ 2003 L 299, p. 9).2The request has been made in connection with a dispute between the Tribunalul Botoșani (Regional Court, Botoșani, Romania) and the Ministerul Justiției (Ministry of Justice, Romania), on the one hand, and Ms Maria Dicu, on the other, concerning the determination of her annual paid leave entitlement for 2015. Legal context European Union law Directive 2003/88 3Recital 6 of Directive 2003/88 states as follows:‘Account should be taken of the principles of the International Labour Organisation with regard to the organisation of working time, including those relating to night work.’4Article 1 of Directive 2003/88, entitled ‘Purpose and scope’, provides as follows:‘1. This Directive lays down minimum safety and health requirements for the organisation of working time.2. This Directive applies to:(a)minimum periods of … annual leave…’5Article 7 of that directive, entitled ‘Annual leave’, states as follows:‘1. Member States shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.2. The minimum period of paid annual leave may not be replaced by an allowance in lieu, except where the employment relationship is terminated.’6Article 15 of the directive is worded as follows:‘This Directive shall not affect Member State’ right to apply or introduce laws, regulations or administrative provisions more favourable to the protection of the safety and health of workers or to facilitate or permit the application of collective agreements or agreements concluded between the two sides of industry which are more favourable to the protection of the safety and health of workers.’7Article 17 of Directive 2003/88 provides that Member States may derogate from certain provisions of the directive. However, no derogation is permitted in respect of Article 7 of the directive. Directive 2010/18/EU 8The revised Framework Agreement on parental leave concluded on 18 June 2009 (‘the Framework Agreement on parental leave’), annexed to Council Directive 2010/18/EU of 8 March 2010 implementing the revised Framework Agreement on parental leave concluded by BUSINESSEUROPE, UEAPME, CEEP and ETUC and repealing Directive 96/34/EC (OJ 2010 L 68, p. 13), provides, in Clause 2(1) thereof, as follows:‘This agreement entitles men and women workers to an individual right to parental leave on the grounds of the birth or adoption of a child …’9Clause 2(2) of the Framework Agreement on parental leave provides:‘The leave shall be granted for at least a period of four months and, to promote equal opportunities and equal treatment between men and women, should, in principle, be provided on a non-transferable basis. To encourage a more equal take-up of leave by both parents, at least one of the four months shall be provided on a non-transferable basis. The modalities of application of the non-transferable period shall be set down at national level through legislation and/or collective agreements taking into account existing leave arrangements in the Member States.’10Clause 5 of that agreement is worded as follows:‘1.At the end of parental leave, workers shall have the right to return to the same job or, if that is not possible, to an equivalent or similar job consistent with their employment contract or employment relationship.2.Rights acquired or in the process of being acquired by the worker on the date on which parental leave starts shall be maintained as they stand until the end of parental leave. At the end of parental leave, these rights, including any changes arising from national law, collective agreements and/or practice, shall apply.3.Member States and/or social partners shall define the status of the employment contract or employment relationship for the period of parental leave.11Clause 8(1) of the Framework Agreement on parental leave states that the Member States may apply or introduce more favourable provisions than those set out in the agreement. Romanian law 12The Legea nr. 53/2003 privind Codul muncii (Law No 53/2003 establishing the Labour Code), in the version applicable at the material time (‘the Labour Code’), provides in Article 10 thereof as follows:‘An individual employment contract is an agreement under which a natural person, referred to as a worker, undertakes to work for and under the direction of an employer, a natural or legal person, for remuneration, referred to as a salary.’13Under Article 49(1), (2) and (3) of the Labour Code:‘(1) The individual employment contract may be suspended by operation of law, by agreement between the parties or by a unilateral act on the part of one of the parties.(2) Following suspension of the individual employment contract, the worker shall suspend the provision of work and the employer shall suspend the payment of remuneration.(3) During the period of suspension, the rights and obligations of the parties, other than those referred to in paragraph (2), may, however, persist, if so provided in special laws, in the applicable collective labour agreement, in individual employment contracts or in rules of procedure.’14According to Article 51(1)(a) of the Labour Code:‘An individual employment contract may be suspended on the initiative of the worker in the following cases:parental leave to care for a child under the age of 2 …’15Article 145(4) to (6) of that code provides:‘(4) In determining the duration of the period of annual leave, periods of temporary incapacity for work and periods of maternity leave, maternal risk leave and leave to take care of a sick child shall be considered periods of actual work.(5) Where the temporary incapacity for work or the maternity leave, maternal risk leave or leave to take care of a sick child occurs during a period of annual leave, that period shall be interrupted, with the result that the worker shall be allowed to take the remaining annual leave once the [situation giving rise to the interruption] has come to an end. Where that is not possible, the days of annual leave not taken shall be rescheduled.(6) The worker shall be entitled to annual leave even where the temporary incapacity for work persists, in accordance with the conditions laid down by law, for a full calendar year, and the employer shall be obliged to grant the annual leave within 18 months of the beginning of the year following that in which the worker was on sick leave.’16Article 2(1) and (2) of the Hotărârea Consiliului Superior al Magistraturii nr. 325/2005 pentru aprobarea Regulamentului privind concediile judecătorilor și procurorilor (Decision No 325/2005 of the Governing Council of the Judiciary approving the regulations on the leave of judges and prosecutors) provides as follows:‘(1) Judges and prosecutors shall be entitled to 35 days’ paid annual leave. Such entitlement may not be relinquished or limited.(2) The duration of the annual leave provided for in [the regulations on the leave of judges and prosecutors] shall be calculated by reference to days worked during a calendar year. In determining the duration of annual leave, periods of temporary incapacity for work and periods of maternity leave, maternal risk leave and leave to take care of a sick child shall be considered periods of actual work.’ The dispute in the main proceedings and the question referred for a preliminary ruling 17Ms Dicu is a judge at the Tribunalul Botoșani (Regional Court, Botoșani). In 2014, she first took her entire annual leave entitlement and was then on maternity leave from 1 October 2014 to 3 February 2015. Subsequently, she took parental leave from 4 February 2015 until 16 September 2015, during which period her employment relationship was suspended. Lastly, she took 30 days’ paid annual leave from 17 September to 17 October 2015.18Pursuant to Romanian law, which provides for 35 days’ paid annual leave, Ms Dicu asked the court to which she had been appointed to grant her the five remaining days of paid annual leave for 2015, which she intended to take on working days over the end-of-year holiday period.19The Tribunalul Botoșani (Regional Court, Botoșani) refused that request on the ground that, under Romanian law, the duration of paid annual leave is commensurate with the period of time actually worked during the current year and, in that regard, that the period of parental leave she took in 2015 could not be regarded as a period of actual work for the purpose of determining her paid annual leave entitlement. The Tribunalul Botoșani (Regional Court, Botoșani) also indicated that the paid annual leave taken by Ms Dicu between 17 September and 17 October 2015 in respect of 2015 included 7 days’ leave taken in advance in respect of 2016.20Ms Dicu brought proceedings against the Tribunalul Botoșani (Regional Court, Botoșani), the Curtea de Apel Suceava (Court of Appeal, Suceava, Romania), the Ministry of Justice and the Consiliul Superior al Magistraturii (Governing Council of the Judiciary) before the Tribunalul Cluj (Regional Court, Cluj, Romania), seeking a declaration that, for the purpose of determining her paid annual leave entitlement for 2015, the period she took as parental leave is to be regarded as a period of actual work.21By judgment of 17 May 2016, the Tribunalul Cluj (Regional Court, Cluj) granted Ms Dicu’s application. The Tribunalul Botoșani (Regional Court, Botoșani) and the Ministry of Justice appealed against that decision before the referring court.22In those circumstances, the Curtea de Apel Cluj (Court of Appeal, Cluj, Romania) has stayed the proceedings and referred the following question to the Court for a preliminary ruling:‘Does Article 7 of Directive 2003/88/EC preclude a provision of national law which, for the purpose of determining the duration of a worker’s annual leave, does not consider a period of parental leave to care for a child under the age of two to be a period of actual work?’ Consideration of the question referred 23By its question, the referring court seeks to ascertain, in essence, whether Article 7 of Directive 2003/88 is to be interpreted as precluding a provision of national law, such as the provision at issue in the main proceedings, which, for the purpose of determining a worker’s entitlement to paid annual leave, as guaranteed by that article for a worker in respect of a given reference period, does not regard the amount of time spent by that worker on parental leave during that reference period as a period of actual work.24In that regard, it should be noted that, as is apparent from the wording of Article 7(1) of Directive 2003/88 itself, every worker is entitled to paid annual leave of at least four weeks, a right which, according to the Court’s established case-law, must be regarded as a particularly important principle of EU social law (judgment of 20 July 2016, Maschek, C‑341/15, EU:C:2016:576, paragraph 25 and the case-law cited).25Moreover, that right, which is enjoyed by all workers, is expressly set out in Article 31(2) of the Charter of Fundamental Rights of the European Union, which Article 6(1) TEU recognises as having the same legal value as the Treaties (judgment of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 33 and the case-law cited).26It should further be noted that, while Member States are not entitled to make the very existence of the right to paid annual leave, which derives directly from Directive 2003/88, subject to any preconditions whatsoever (see, inter alia, judgments of 26 June 2001, BECTU, C‑173/99, EU:C:2001:356, paragraph 53; of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 28; and of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 34), the issue raised in the present case is whether a period of parental leave must be treated as a period of actual work for the purpose of determining paid annual leave entitlement.27In that regard, it is appropriate to recall the purpose of the right to paid annual leave, conferred on every worker by Article 7 of Directive 2003/88, which is to enable the worker both to rest from carrying out the work he is required to do under his contract of employment and to enjoy a period of relaxation and leisure (see, inter alia, judgments of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 25; of 22 November 2011, KHS, C‑214/10, EU:C:2011:761, paragraph 31; and of 30 June 2016, Sobczyszyn, C‑178/15, EU:C:2016:502, paragraph 25).28That purpose, which distinguishes paid annual leave from other types of leave having different purposes, is based on the premiss that the worker actually worked during the reference period. The objective of allowing the worker to rest presupposes that the worker has been engaged in activities which justify, for the protection of his safety and health, as provided for in Directive 2003/88, his being given a period of rest, relaxation and leisure. Accordingly, entitlement to paid annual leave must, in principle, be determined by reference to the periods of actual work completed under the employment contract (see, to that effect, judgment of 11 November 2015, Greenfield, C‑219/14, EU:C:2015:745, paragraph 29).29Admittedly, it is apparent from established case-law that, in certain specific situations in which the worker is unable to perform his duties as he is, for instance, on duly certified sick leave, the right to paid annual leave cannot be made subject by a Member State to a condition that the worker has actually worked (see, inter alia, judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 20 and the case-law cited). Thus, with regard to entitlement to paid annual leave, workers who are absent from work on sick leave during the reference period are to be treated in the same way as those who have in fact worked during that period (see, inter alia, judgment of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 40).30The same applies as regards workers on maternity leave, who are, as a result, unable to perform the duties required by virtue of their employment relationship and whose right to paid annual leave must be guaranteed when they are on maternity leave; it must be possible to exercise that right during a different period from that in which they are on maternity leave (see, to that effect, judgment of 18 March 2004, Merino Gómez, C‑342/01, EU:C:2004:160, paragraphs 34, 35 and 38).31However, the case-law cited in the previous two paragraphs cannot be applied mutatis mutandis to the situation of a worker, such as Ms Dicu, who took parental leave during a reference period.32It should be noted, first of all, that incapacity for work owing to sickness is, as a rule, not foreseeable (judgment 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 51) and beyond the worker’s control (see, to that effect, judgment of 29 November 2017, King, C‑214/16, EU:C:2017:914, paragraph 49). As the Court previously stated in paragraph 38 of the judgment of 20 January 2009, Schultz-Hoff and Others (C‑350/06 and C‑520/06, EU:C:2009:18), Convention No 132 of the International Labour Organisation of 24 June 1970 concerning Annual Holidays with Pay, as revised, the principles of which must be taken into account, as stated in recital 6 of Directive 2003/88, when interpreting that directive, counts, in Article 5(4) thereof, absences on account of illness among absences from work ‘for such reasons beyond the control of the employed person concerned’ which must be ‘counted as part of the period of service’. On the other hand, where a worker takes parental leave, that is not unforeseeable and, in most cases, is a reflection of the worker’s wish to take care of his or her child (see, to that effect, judgment of 20 September 2007, Kiiski, C‑116/06, EU:C:2007:536, paragraph 35).33Next, inasmuch as a worker on parental leave is not subject to physical or psychological constraints caused by an illness, he is in a situation different from that resulting from an inability to work due to his state of health (see, by analogy, judgment of 8 November 2012, Heimann and Toltschin, C‑229/11 and C‑230/11, EU:C:2012:693, paragraph 29).34The situation of a worker on parental leave is equally different to that of a worker who has exercised her right to maternity leave. Maternity leave is intended, first, to protect a woman’s biological condition during and after pregnancy and, second, to protect the special relationship between a woman and her child over the period which follows pregnancy and childbirth, by ensuring that the relationship is not disturbed by the need to perform multiple tasks which would result if the woman continued to work at the same time (see, to that effect, judgments of 18 March 2004, Merino Gómez, C‑342/01, EU:C:2004:160, paragraph 32, and of 20 September 2007, Kiiski, C‑116/06, EU:C:2007:536, paragraph 46).35Lastly, while, admittedly, a worker on parental leave remains, during that period, a worker for the purposes of EU law (judgment 20 September 2007, Kiiski, C‑116/06, EU:C:2007:536, paragraph 32), the fact nonetheless remains that where, as in the present case, such a worker’s employment relationship is suspended pursuant to national law, as permitted by Clause 5(3) of the Framework Agreement on parental leave, the reciprocal obligations of the employer and the worker as regards work and salary are correspondingly suspended temporarily, in particular the obligation on the latter to perform the duties required of him or her in connection with that relationship (see, by analogy, judgment of 8 November 2012, Heimann and Toltschin, C‑229/11 and C‑230/11, EU:C:2012:693, paragraph 28).36It follows that, in a situation such as that in the main proceedings, the period of parental leave taken by the worker concerned during the reference period cannot be treated as a period of actual work for the purpose of determining that worker’s entitlement to paid annual leave under Article 7 of Directive 2003/88.37It should also be noted that, while it is, admittedly, apparent from the Court’s settled case-law that a period of leave guaranteed by EU law cannot affect the right to take another period of leave guaranteed by that law which has a different purpose from the former (see, to that effect, judgment of 20 January 2009, Schultz-Hoff and Others, C‑350/06 and C‑520/06, EU:C:2009:18, paragraph 26 and the case-law cited), it cannot be inferred from that case-law, which was developed in the context of situations where the periods to which those two respective types of leave related overlapped or coincided, that Member States are required to treat a period of parental leave taken by a worker during the reference period as a period of actual work for the purpose of determining that worker’s paid annual leave entitlement under Directive 2003/88.38It follows from all the foregoing considerations that the answer to the question referred is that Article 7 of Directive 2003/88 is to be interpreted as not precluding a provision of national law, such as the provision at issue in the main proceedings, which, for the purpose of determining a worker’s entitlement to paid annual leave, as guaranteed by that article for a worker in respect of a given reference period, does not treat the amount of time spent by that worker on parental leave during that reference period as a period of actual work. Costs 39Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 7 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time is to be interpreted as not precluding a provision of national law, such as the provision at issue in the main proceedings, which, for the purpose of determining a worker’s entitlement to paid annual leave, as guaranteed by that article for a worker in respect of a given reference period, does not treat the amount of time spent by that worker on parental leave during that reference period as a period of actual work. [Signatures]( *1 ) Language of the case: Romanian. | af316-f1d5439-4988 | EN |
The Brussels I Regulation does not preclude legislation of a Member State which provides for the application of a time limit for the enforcement of a preventive attachment order from being applied in the case of such an order which has been adopted in another Member State and is enforceable in the Member State in which enforcement is sought | 4 October 2018 ( *1 )(Reference for a preliminary ruling — Judicial co-operation in civil matters — Regulation (EC) No 44/2001 — Recognition and enforcement of decisions in civil and commercial matters — Time limit laid down in the law of the Member State addressed for enforcing a preventive attachment order — Applicability of that time limit to a preventive attachment instrument obtained in another Member State and declared enforceable in the Member State in which enforcement is sought)In Case C‑379/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesgerichtshof (Federal Court of Justice, Germany), made by decision of 11 May 2017, received at the Court on 26 June 2017, in the proceedings brought by Società Immobiliare Al Bosco Srl THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Rosas, C. Toader (Rapporteur), A. Prechal and E. Jarašiūnas, Judges,Advocate General: M. Szpunar,Registrar: M. Aleksejev, Administrator,having regard to the written procedure and further to the hearing on 11 April 2018,after considering the observations submitted on behalf of:–the German Government, by T. Henze, J. Techert and M. Hellmann, acting as Agents,the European Commission, by M. Heller and M. Wilderspin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 20 June 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 38(1) of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1).2The request has been made in proceedings brought by Società Immobiliare Al Bosco Srl (‘Al Bosco’) seeking the enforcement in Germany, by registration of a debt-securing mortgage against real property, of a preventive attachment order issued by the Tribunale di Gorizia (District Court, Gorizia, Italy) against Mr Gunter Hober and declared enforceable in Germany by the Landgericht München (Regional Court, Munich, Germany). Legal context European Union law 3Recitals 2, 6, 10, 16 and 17 of Regulation No 44/2001 are worded as follows:‘(2)Certain differences between national rules governing jurisdiction and recognition of judgments hamper the sound operation of the internal market. Provisions to unify the rules of conflict of jurisdiction in civil and commercial matters and to simplify the formalities with a view to rapid and simple recognition and enforcement of judgments from Member States bound by this Regulation are essential.…(6)In order to attain the objective of free movement of judgments in civil and commercial matters, it is necessary and appropriate that the rules governing jurisdiction and the recognition and enforcement of judgments be governed by a Community legal instrument which is binding and directly applicable.(10)For the purposes of the free movement of judgments, judgments given in a Member State bound by this Regulation should be recognised and enforced in another Member State bound by this Regulation …(16)Mutual trust in the administration of justice in the Community justifies judgments given in a Member State being recognised automatically without the need for any procedure except in cases of dispute.(17)By virtue of the same principle of mutual trust, the procedure for making enforceable in one Member State a judgment given in another must be efficient and rapid. To that end, the declaration that a judgment is enforceable should be issued virtually automatically after purely formal checks of the documents supplied, without there being any possibility for the court to raise of its own motion any of the grounds for non-enforcement provided for by this Regulation.’4Article 38(1) of Regulation No 44/2001 provides:‘A judgment given in a Member State and enforceable in that State shall be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there.’5Article 41 of that regulation provides:‘The judgment shall be declared enforceable immediately on completion of the formalities in Article 53 without any review under Articles 34 and 35. The party against whom enforcement is sought shall not at this stage of the proceedings be entitled to make any submissions on the application.’6Under Article 66(2) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2012 L 351, p. 1), which repealed Regulation No 44/2001:‘... Regulation (EC) No 44/2001 shall continue to apply to judgments given in legal proceedings instituted, to authentic instruments formally drawn up or registered and to court settlements approved or concluded before 10 January 2015 which fall within the scope of that Regulation.’ German law 7Paragraph 929 of the Zivilprozessordnung (Civil Procedure Code; ‘the ZPO’), headed ‘Order for enforcement; time limit for enforcement’, is part of Section 5, on preventive attachments and precautionary measures, of Book 8 of the ZPO, on enforcement measures. Subparagraphs 2 and 3 of that provision state the following:‘(2) Enforcement of the attachment order shall not be permitted if one month has elapsed since the date on which the order was issued or on which it was served on the requesting party.(3) Enforcement before the order has been served on the debtor shall be permitted. However, it shall be ineffective if service is not effected within one week of the enforcement and prior to the expiry of the period specified for this purpose in the preceding subparagraph.’8Under Paragraph 932 of the ZPO, headed ‘Attachment by registration of a mortgage’:‘(1) Enforcement of an attachment order against real property … shall be effected by registering a debt-securing mortgage in respect of the debt …(3) For the purposes of Paragraph 929(2) and (3), the application to register the mortgage shall be regarded as the enforcement of the attachment order.’ The dispute in the main proceedings and the question referred for a preliminary ruling 9On 19 November 2013, Al Bosco, a property company established under Italian law, obtained from the Tribunale di Gorizia (District Court, Gorizia, Italy) a preventive attachment order authorising it to obtain preventive attachment in a maximum amount of EUR 1 million against the debtor’s movable and immovable, tangible and intangible assets.10On 22 August 2014, that preventive attachment order was declared enforceable in Germany by the Landgericht München (Regional Court, Munich) pursuant to Regulation No 44/2001.11On 23 April 2015, Al Bosco applied for the registration of a mortgage against the debtor’s real property located in Germany, namely a residential apartment and two underground parking spaces. Its application was rejected by the Amtsgericht München — Grundbuchamt (Land Registry attached to the Local Court, Munich, Germany).12Al Bosco challenged the decision of that court before the Oberlandesgericht München (Higher Regional Court, Munich, Germany). The latter court dismissed the action on the ground that the time limit of one month, laid down in Paragraph 929(2) of the ZPO, had expired. It considered that that time limit applies to the enforcement of the preventive attachment instrument issued by an Italian court which, having been recognised in Germany, is comparable to a seizure instrument issued by a German court. Moreover, it found that that provision concerned the enforcement of such an instrument obtained in another Member State, which is a matter for the lex fori, rather than the validity of a preventive attachment instrument.13On 15 June 2016, Al Bosco brought an appeal against the decision of the Oberlandesgericht München (Higher Regional Court, Munich). In its appeal, it submitted that the time limit for enforcement of the attachment laid down in Article 675 of the Italian Civil Procedure Code — whereby the order authorising the attachment loses its effects if it is not enforced within the period of 30 days from the date on which the order was made — had been observed, as preventive attachments had been effected within the period of 30 days from the date of the order of 19 November 2013. It maintains that there can be no requirement to observe the time limit laid down in German law in addition to that laid down in Italian law.14The referring court is unclear as to whether a national provision, such as Paragraph 929(2) of the ZPO, relates to the enforceability of the order authorising a preventive attachment which, in accordance with Article 38 of Regulation No 44/2001, comes within the remit of the law of the Member State in which that instrument was issued, or whether that provision refers to the enforcement, in the strict sense, of an enforceable instrument issued in another Member State, since such rules come, in principle, within the scope of the law of the Member State addressed.15The referring court notes that the basis of the enforcement in Germany of a foreign preventive attachment instrument adopted in another Member State is the national decision relating to the declaration of enforceability. Where the registration of a debt-securing mortgage is sought, the enforcement conditions laid down by German law are examined independently by the Land Registry. According to the referring court, the appeal court correctly classed, without it being disputed in the appeal, the preventive attachment delivered in Italy, in the light of its function, as a seizure instrument as provided for in German law which is enforced, in accordance with Paragraph 932 of the ZPO, by means of an application for the registration of a debt-securing mortgage. The enforcement conditions applicable in the present case would therefore be those laid down in the German provisions on the enforcement of seizure orders, in particular Paragraph 929(2) of the ZPO.16The referring court states that, where the time limit laid down in Paragraph 929(2) of the ZPO has expired, the preventive attachment order can no longer be enforced. In that connection, the referring court specifies that, where it applies to decisions given in other Member States, that time limit is calculated from the date on which the declaration of enforceability is notified to the creditor. The purpose of that provision is to protect debtors so as to prevent decisions adopted further to summary proceedings for interim relief remaining enforceable for a relatively long period of time, despite any changes in the situation at hand.17The referring court considers that, first and from a technical perspective, the time limit for enforcement is likely to come within the remit of the national law of the court seised and is not governed by Regulation No 44/2001, as is apparent from the case-law of the Court (judgments of 3 October 1985, Capelloni and Aquilini, 119/84, EU:C:1985:388, paragraph 16; of 29 April 1999, Coursier, C‑267/97, EU:C:1999:213, paragraph 28; and of 28 April 2009, Apostolides, C‑420/07, EU:C:2009:271, paragraph 69). Secondly, that time limit leads to the instrument ceasing to be enforceable as a result of the passage of time. The effect of that time limit would ultimately be no different to the instrument being set aside in the appeal proceedings. Accordingly, the application of that time limit with respect to a preventive attachment order issued in another Member State could be incompatible with the case-law of the Court of Justice, according to which the application of the procedural rules of the Member State in which enforcement is sought must not undermine the effectiveness of Regulation No 44/2001 by frustrating the principles laid down by the regulation itself (judgments of 3 October 1985, Capelloni and Aquilini, 119/84, EU:C:1985:388, paragraph 21, and of 28 April 2009, Apostolides, C‑420/07, EU:C:2009:271, paragraph 69).18Lastly, the referring court states that national case-law and jurisprudence are divided so far as concerns the scope of Paragraph 929(2) of the ZPO. In that connection, some German courts have declared that that provision concerns the enforceability of orders authorising preventive attachments and can apply only to German attachment instruments, while other courts have held that that provision also applies to attachment instruments issued in other Member States and which have been declared enforceable in Germany. The appeal court considered that it is appropriate to examine the observance of the time limit for enforcement laid down by the law of the Member State of origin in the enforceability procedure together with that laid down by the law of the Member State addressed during enforcement in the strict sense.19Moreover, as an aspect of comparative law, the referring court notes that the Tribunal Supremo (Supreme Court, Spain) takes the view that it is appropriate to apply the enforcement period of five years, laid down in Article 518 of the Ley de Enjuiciamiento Civil (Civil Procedure Code), also to judicial decisions given in the other Member States and which are meant to be declared enforceable in Spain, in accordance with Article 38 et seq of Regulation No 44/2001.20In those circumstances, the Bundesgerichtshof (Federal Court of Justice, Germany) decided to stay proceedings and refer the following question to the Court for a preliminary ruling:‘Is it compatible with Article 38(1) of Regulation No 44/2001 to apply a time limit which is laid down in the law of the State in which enforcement is sought, and on the basis of which an instrument may no longer be enforced after the expiry of a particular period, also to a functionally comparable instrument issued in another Member State and recognised and declared enforceable in the State in which enforcement is sought?’ Consideration of the question referred 21By its question, the referring court is asking, in essence, whether Article 38 of Regulation No 44/2001 must be interpreted as precluding legislation of a Member State, such as that at issue in the main proceedings, which provides for the application of a time limit for the enforcement of a preventive attachment order, from being applied in the case of such an order which has been adopted in another Member State and is enforceable in the Member State in which enforcement is sought.22As a preliminary point, it should be recalled that, pursuant to Article 66(2) of Regulation No 1215/2012, Regulation No 44/2001 continues to apply to decisions given in legal actions brought before 10 January 2015 which come within the scope of the latter regulation. This is the situation, in the present case, regarding the order of 22 August 2014 by which the preventive attachment instrument was declared enforceable in Germany.23It is clear from the wording of Article 38(1) of Regulation No 44/2001 that a judgment given in a Member State and enforceable in that State is to be enforced in another Member State when, on the application of any interested party, it has been declared enforceable there.24As is clear from Article 41 of Regulation No 44/2001, for the purposes of issuing the declaration as to the enforceability of a decision given in a Member State other than the Member State in which enforcement is sought, the authorities of the Member State in which enforcement is sought must confine themselves to a purely formal check of the documents required in accordance with Article 53 of that regulation (see, to that effect, judgment of 13 October 2011, Prism Investments, C‑139/10, EU:C:2011:653, paragraphs 28 to 30).25The limited nature of that review is justified by the purpose of that procedure, which is not to initiate new proceedings, but rather to agree, on the basis of mutual trust in the administration of justice in the Member States, to the judgment delivered by a court or tribunal of a Member State other than the Member State in which enforcement is sought being enforced by means of incorporation into the latter Member State’s legal order. That procedure thereby enables a judgment delivered in a Member State other than the Member State in which enforcement is sought to have the effect in the latter Member State of a national enforceable judicial decision (judgment of 13 October 2011, Prism Investments, C‑139/10, EU:C:2011:653, paragraph 31).26It must also be recalled that Regulation No 44/2001 merely regulates the procedure for obtaining an order for the enforcement of enforceable instruments issued by a court of a Member State other than the Member State in which enforcement is sought, and does not deal with enforcement in the strict sense, which continues to be governed by the domestic law of the court in which enforcement is sought, unless, for the purposes of the enforcement of a judgment, the application of the procedural rules of the Member State in which enforcement is sought may impair the effectiveness of the scheme laid down by the regulation as regards enforcement orders, by frustrating the principles laid down in that regard, whether expressly or by implication, by the regulation itself (judgment of 28 April 2009, Apostolides, C‑420/07, EU:C:2009:271, paragraph 69).27Accordingly, it is necessary to determine, in the first place, whether the time limit laid down in Paragraph 929(2) of the ZPO relates to the enforceability of the order authorising a preventive attachment issued by a court of a Member State other than the Member State in which enforcement is sought, or whether that provision comes within the scope of enforcement in the strict sense.28In that connection, it should be recalled that the purpose of the enforceability procedure is to recognise the effects of a decision from another Member State in the Member State in which enforcement is sought. That recognition concerns the specific characteristics of that decision, without reference to the matters of fact and law relating to enforcement of the obligations arising from it (judgment of 13 October 2011, Prism Investments, C‑139/10, EU:C:2011:653, paragraph 39).29In the present case, it is apparent from the order for reference that the preventive attachment order given by the Tribunale di Gorizia (District Court, Gorizia) was declared enforceable in Germany, in accordance with the enforcement rules.30It is apparent from the provisions of German law, and in particular from Paragraph 932(1) of the ZPO, that a preventive attachment order is enforced through the registration of a debt-securing mortgage in the Land Register. Moreover, the enforcement of a preventive attachment order is not authorised after the expiry of the time limit provided for in Paragraph 929(2) of the ZPO. As is apparent from the order for reference, that time limit for enforcement restricts the enforcement of a preventive attachment order, but not its validity.31Both the registration of a debt-securing mortgage with the Land Registry, and the time limit applicable to the completion of that registration, come within the remit of the enforcement of an order authorising a preventive attachment issued by a court of a Member State other than the Member State in which enforcement is sought, such as that at issue in the main proceedings, which becomes enforceable following its recognition in the Member State in which enforcement is sought. They therefore come within the remit of procedural rules laid down in German law for the enforcement of orders authorising preventive attachments.32The fact that the application of a time limit for enforcement, such as that laid down in Paragraph 929(2) of the ZPO, entails a temporal limitation on the enforceability of a decision given by a court of a Member State other than the Member State in which enforcement is sought, does not call into question the interpretation whereby that time limit is part of the phase of enforcement in the strict sense.33Since the enforcement, in the strict sense, of a decision issued by a court of a Member State other than the Member State in which enforcement is sought, and which is enforceable in the latter Member State, has not been the subject of harmonisation by the EU legislature, the procedural rules of the Member State in which enforcement is sought are to apply to matters relating to enforcement.34In particular, it is clear that, in so far as Regulation No 44/2001 has not laid down rules concerning the enforcement of decisions given by a court of a Member State other than the Member State in which enforcement is sought, the latter remains free to make provision, in its own legal order, for the application of a time limit for enforcing such decisions, which have been recognised and declared enforceable in the latter Member State.35In that regard, it is settled case-law that, once that judgment is incorporated into the legal order of the Member State in which enforcement is sought, national legislation of that Member State relating to enforcement applies in the same way as to judgments delivered by national courts (judgment of 13 October 2011, Prism Investments, C‑139/10, EU:C:2011:653, paragraph 40 and the case-law cited).36The procedural rules of the Member State in which enforcement is sought alone are applicable. The courts of that Member State are not required to apply any provisions of the national legislation of the Member State of origin which, in respect of the enforcement of decisions given by the courts of the Member State of origin, lay down time limits which differ from those laid down by the law of the Member State in which enforcement is sought.37That interpretation is borne out by recital 26 of Regulation No 1215/2012, read in conjunction with Article 39 thereof, which incorporated the case-law cited in paragraph 35 of the present judgment, and whereby any decision given by the courts of a Member State ought to be treated as though it had been given in the Member State in which enforcement is sought.38From a broader systematic perspective, it should be noted that that interpretation is also supported by Article 23 of Regulation (EC) No 655/2014 of the European Parliament and of the Council of 15 May 2014 establishing a European Account Preservation Order procedure to facilitate cross-border debt recovery in civil and commercial matters (OJ 2014 L 189, p. 59), according to which the preservation order is to be enforced in accordance with the procedures applicable to the enforcement of equivalent national orders in the Member State of enforcement.39The fact that the failure by the applicant to observe the time limit laid down in Paragraph 929(2) of the ZPO has the effect of rendering impossible the enforcement of an order authorising a preventive attachment, issued by a court of a Member State other than the Member State in which enforcement is sought, by means of the registration of a debt-securing mortgage in the land register, even though that decision remains enforceable in the Member State of origin, is not such as to call that interpretation into question.40Although recognition must have the effect, in principle, of conferring on judgments the authority and effectiveness accorded to them in the Member State in which they were delivered, there is, however, no reason for granting to a decision, when it is enforced, effects that a similar decision given directly in the Member State in which enforcement is sought would not have (see, to that effect, judgment of 13 October 2011, Prism Investments, C‑139/10, EU:C:2011:653, paragraph 38 and the case-law cited).41It should be noted that the application of a time limit, such as that laid down in Paragraph 929(2) of the ZPO, meets the requirements arising from the case-law cited in the preceding paragraph.42First, once the order authorising a preventive attachment given by a court, such as the Italian court at issue in the case in the main proceedings, is declared enforceable in Germany, it can enjoy, in the latter Member State, the same authority and effectiveness which it had in the Member State of origin. Secondly, the non-application of the time limit for enforcement laid down in Paragraph 929(2) of the ZPO for the same type of decision in the Member State in which enforcement is sought would lead to orders authorising a preventive attachment, granted by the courts of a Member State other than the Federal Republic of Germany, after having been recognised as enforceable, having different effects to those granted by national law to orders authorising preventive attachments issued by a national court; in particular, they may be enforced without a time limit or for a disproportionately longer period of time than national decisions.43Moreover, an interpretation whereby a time limit, laid down for the enforcement of preventive attachment orders, relates to the enforceability of decisions, which is governed by the procedural law of the Member State of origin, in such a way that the time limit for enforcement which may be laid down by the latter ought to apply to the enforcement of orders authorising preventive attachments delivered by a court of a Member State other than the Member State in which enforcement is sought and which are enforceable in the latter Member State, would entail a disproportionate burden for the competent authorities in enforcing such an order. As the referring court states in its request for a preliminary ruling, in the present case, the German Land Registry cannot determine whether a time limit for enforcement is laid down in the law of the Member State in which the preventive attachment order was delivered, or the arrangements for that enforcement; nor can it be authorised to apply a legal rule from that Member State.44In the second place, as is clear from paragraph 26 of the present judgment, it is appropriate to examine whether the application of the procedural rules of the Member State in which enforcement is sought is liable to undermine the effectiveness of the system set out in Regulation No 44/2001.45As regards the objectives of Regulation No 44/2001, it is clear from recitals 2, 6, 16 and 17 thereof that it seeks to ensure the free movement of judgments from Member States in civil and commercial matters by simplifying the formalities with a view to their rapid and simple recognition and enforcement (judgment of 7 July 2016, Lebek, C‑70/15, EU:C:2016:524, paragraph 33).46That objective cannot, however, be achieved at the cost of another important principle, namely that of the legal certainty of registrations in land registers, for the protection both of rightsholders registered therein and third parties.47Such a temporal limitation for enforcement is also justified in the light of the nature of preventive attachment proceedings, which can be identified by their interim nature, being generally subject to a requirement of urgency in order to guarantee the payment of a debt, the recovery of which appears to be in jeopardy. That conception is shared in the majority of Member States, in order to ensure legal certainty in debt recovery.48As the referring court notes, that temporal limitation for enforcement aims to prevent decisions adopted following summary proceedings from remaining enforceable for long periods of time, despite any changes in the situation concerned.49Moreover, a time limit for the enforcement of orders authorising preventive attachment, such as that laid down in Paragraph 929(2) of the ZPO, does not undermine the effectiveness of Regulation No 44/2001, given that decisions delivered in a Member State other than the Federal Republic of Germany are, in principle, recognised and declared enforceable automatically in the latter Member State so as to comply with the objective of that regulation, which is to ensure the free movement of judicial decisions. That time limit, which is applied as a procedural rule for the enforcement of preventive attachment orders in accordance with the law of the Member State in which enforcement is sought, constitutes a condition to which the enforcement of an enforceable instrument is subject.50The time limit of one month thus laid down for the enforcement of preventive attachment orders, including in the context of orders delivered by the courts of Member States other than the Member State in which enforcement is sought, and which is calculated from the date on which the declaration of enforceability was notified to the creditor, does not entail any real risk that the latter cannot enforce a preventive attachment order issued in another Member State and which is enforceable.51It follows from the foregoing that the answer to the question referred for a preliminary ruling is that Article 38 of Regulation No 44/2001 must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, which provides for the application of a time limit for the enforcement of a preventive attachment order, from being applied in the case of an order which has been adopted in another Member State and is enforceable in the Member State in which enforcement is sought. Costs 52Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: Article 38 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction, recognition and enforcement of judgments in civil and commercial matters must be interpreted as not precluding legislation of a Member State, such as that at issue in the main proceedings, which provides for the application of a time limit for the enforcement of a preventive attachment order, from being applied in the case of an order which has been adopted in another Member State and is enforceable in the Member State in which enforcement is sought. [Signatures]( *1 ) Language of the case: German. | 426d9-5a56652-40f7 | EN |
A creditor’s action seeking to render a fraudulent disposal of property by its debtor ineffective as regards that creditor is a ‘matter related to a contract’ within the meaning of the regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters | 4 October 2018 ( *1 )(Reference for a preliminary ruling — Area of freedom, security and justice — Regulation (EU) No 1215/2012 — Jurisdiction and the recognition and enforcement of judgments in civil and commercial matters — Special jurisdiction — Article 7(1)(a) — Concept of ‘matters relating to a contract’ — Actio pauliana)In Case C‑337/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Sąd Okręgowy w Szczecinie (Szczecin Regional Court, Poland), made by decision of 29 May 2017, received at the Court on 7 June 2017, in the proceedings Feniks sp. z o.o. v Azteca Products & Services SL, THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Rosas, C. Toader (Rapporteur), A. Prechal and E. Jarašiūnas, Judges,Advocate General: M. Bobek,Registrar: R. Schiano, Administrator,having regard to the written procedure and further to the hearing on 11 April 2018,after considering the observations submitted on behalf of:–Feniks sp. z o.o., by P. Zimmerman and B. Sierakowski, radcowie prawni,Azteca Products & Services SL, by M. Świrgoń, adwokat,the Polish Government, by B. Majczyna and M. Nowak and by K. Majcher, acting as Agents,the Swiss Government, by M. Schöll, acting as Agent,the European Commission, by M. Wilderspin and by M. Heller and A. Stobiecka-Kuik, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 21 June 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 7(1)(a) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2012 L 351, p. 1).2The request has been made in proceedings between Feniks sp. z o.o. and Azteca Products & Services SL (‘Azteca’) concerning a contract for the sale of immovable property, concluded between Azteca and a debtor of Feniks, the contract being allegedly detrimental to the rights of Feniks. Legal context European Union law Regulation No 1215/2012 3Recitals 15, 16 and 34 of Regulation No 1215/2012 are worded as follows:‘(15)The rules of jurisdiction should be highly predictable and founded on the principle that jurisdiction is generally based on the defendant’s domicile. Jurisdiction should always be available on this ground save in a few well-defined situations in which the subject matter of the dispute or the autonomy of the parties warrants a different connecting factor. The domicile of a legal person must be defined autonomously so as to make the common rules more transparent and avoid conflicts of jurisdiction.(16)In addition to the defendant’s domicile, there should be alternative grounds of jurisdiction based on a close connection between the court and the action or in order to facilitate the sound administration of justice. The existence of a close connection should ensure legal certainty and avoid the possibility of the defendant being sued in a court of a Member State which he could not reasonably have foreseen. This is important, particularly in disputes concerning non-contractual obligations arising out of violations of privacy and rights relating to personality, including defamation.…(34)Continuity between the Convention [of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1978 L 304, p. 36)], Regulation (EC) No 44/2001 [of the Council of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1)] and this Regulation should be ensured, and transitional provisions should be laid down to that end. The same need for continuity applies with regard to the interpretation by the Court of Justice of the European Union of the 1968 Brussels Convention and of the Regulations replacing it.’4Under Chapter I of this regulation entitled ‘Scope and definitions’, Article 1 provides:‘1. This Regulation shall apply in civil and commercial matters whatever the nature of the court or tribunal. …2. This Regulation shall not apply to:(b)bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings;…’5Chapter II of this regulation entitled ‘Jurisdiction’, contains in particular Section 1 ‘General provisions’ and Section 2 ‘Special jurisdiction’. Article 4(1), which can be found in Section 1, provides:‘Subject to this Regulation, persons domiciled in a Member State shall, whatever their nationality, be sued in the courts of that Member State.’6Article 7, which can be found in Section 2 of the same regulation, is worded as follows:‘A person domiciled in a Member State may be sued in another Member State:(1)(a)in matters relating to a contract, in the courts for the place of performance of the obligation in question;for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be:in the case of the sale of goods, the place in a Member State where, under the contract, the goods were delivered or should have been delivered,in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided; Regulation (EC) No 1346/2000 7Article 1 entitled ‘Scope of application’, of Regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings (OJ 2000 L 160, p. 1), provides in paragraph 1:‘This Regulation shall apply to collective insolvency proceedings which entail the partial or total divestment of a debtor and the appointment of a liquidator.’ Polish law 8Article 527 et seq. of the ustawa Kodeks cywilny (Law on the Civil Code) of 23 April 1964 (Dz. U. of 1964, No 16, position 93), in the version applicable to the case in the main proceedings (Dz. U. of 2017, position 459) (‘the Civil Code’) governing the so-called actio pauliana, which may render a transaction whereby the debtor has effected a disposition in fraud of the creditor’s rights ineffective in relation to the creditor. Article 527 of the Civil Code states:‘(1) If, as a result of a legal act of a debtor done to the detriment of creditors, a third party has obtained an economic advantage, any of the creditors may request that that act be declared ineffective in respect of him, where the debtor knowingly acted to the detriment of the creditor, and the third party knew or, in the exercise of due diligence, could have known, about it.(2) A legal act of a debtor is done to the detriment of creditors if, as a result of such act, the debtor has become insolvent or insolvent to a greater degree than he was before the act was done.(3) If, as a result of a legal act of a debtor done to the detriment of creditors, a person who is in a close relationship with the debtor has obtained an economic advantage, it shall be presumed that such person knew that the debtor knowingly acted to the detriment of the creditors.(4) If, as a result of a legal act of a debtor done to the detriment of creditors, an undertaking in a permanent commercial relationship with the debtor has obtained an economic advantage, it shall be presumed that it was aware that the debtor knowingly acted to the detriment of the creditors.’9Article 528 of the Civil Code reads as follows:‘If, as a result of a legal act of a debtor done to the detriment of creditors, a third party has obtained an economic advantage free of charge, a creditor may request that the act be declared ineffective even though the person did not know and, even in the exercise of due diligence, could not have known, that the debtor knowingly acted to the detriment to the creditors.’10Article 530 of this code states:‘The provisions of the preceding articles shall apply mutatis mutandis where a debtor acted with the intention of causing detriment to future creditors. If, however, a third party has obtained economic advantage in return for payment, a creditor may request that the act be declared ineffective only if the third party knew of the debtor’s intention.’11Article 531 of the same code provides:‘(1) An act of a debtor done to the detriment of creditors shall be declared ineffective through an action or plea raised against the third party who has obtained an economic advantage as a result of that act.(2) Where a third party has disposed of the advantage obtained, the creditor may directly sue the person to whom the disposition was made if that person knew of circumstances justifying the debtor’s act being declared ineffective or if the disposition was free of charge.’12Under Article 532 of the Civil Code:‘A creditor in respect of whom the legal act of a debtor has been declared ineffective may, with priority over third-party creditors, obtain satisfaction from items of property which, as a result of the act being declared ineffective, were removed from, or not included in, the debtor’s assets.’13Article 533 is worded as follows:‘A third party who has obtained an economic advantage as a result of a legal act of the debtor done to the detriment of creditors may be exempted from meeting a claim raised by a creditor requesting that the act be declared ineffective if he satisfies that creditor, or indicates to him, property of the debtor sufficient to satisfy him.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 14Coliseum 2101 sp. z o.o. (‘Coliseum’), established in Poland, acting as a general contractor, concluded with Feniks, also established in Poland, acting as an investor, a contract concerning the performance of construction works as part of an immovable property investment project located in Gdańsk (Poland). For the purpose of fulfilling the contract, Coliseum concluded a number of subcontracts.15As Coliseum had not been able to meet its obligations in respect of some of its subcontractors, Feniks was required to pay a sum of money to them on account of the provisions in the Civil Code on the joint and several liability of the investor and thus became a creditor of Coliseum for a total sum of 1396495,48 Polish zloty (PLN) (approximately EUR 336174).16Pursuant to agreements concluded on 30 and 31 January 2012 in Szczecin (Poland), Coliseum sold to Azteca, established in Alcora (Spain), immovable property located in Szczecin for a sum of PLN 6079275 (approximately EUR 1463445), in partial fulfilment of prior claims by Azteca. The latter was nevertheless still required to pay to Coliseum the sum of PLN 1091413,70 (approximately EUR 262732). According to the information provided by Feniks, on the date on which the sale was concluded, 30 January 2012, the President of the management body of Coliseum was also the representative of Horkios Gestion SA, established in Alcora, the latter being the only member of the management body of Azteca.17Coliseum being insolvent, on 11 July 2016 Feniks brought an action, based on Article 527 et seq. of the Civil Code, against Azteca before the Sąd Okręgowy w Szczecinie (Szczecin Regional Court, Poland), the referring court, seeking a declaration that the contract of sale referred to above is ineffective in relation to it, because of the fact that it was concluded by his debtor in fraud of the creditor’s rights.18In establishing the jurisdiction of that court, Feniks relied on Article 7(1)(a) of Regulation No 1215/2012.19Azteca raised an objection alleging that the Polish courts lack jurisdiction. It stated that the international jurisdiction of a court to hear and determine an action seeking to have a legal act declared ineffective should be established according to the general rule laid down in Article 4(1) of Regulation No 1215/2012, in favour of the Spanish courts. Furthermore it claimed that such an action would not be qualified as ‘matters relating to a contract’ within the meaning of Article 7(1)(a) of the same regulation.20In analysing this plea of lack of international jurisdiction, the referring court describes the main features of the actio pauliana in Polish law, as can be seen in the provisions of the Civil Code, cited in paragraphs 8 to 13 of the present judgment, and it explained that this action is an exception to the principle according to which the creditor only has access to the debtor’s assets. The referring court adds that Article 527(3) of the Civil Code infers from the existence of a close relationship between the debtor and the third party a presumption that by the act, which is requested to be declared ineffective, the third party knew that the debtor knowingly acted to the detriment of the creditor. This presumption means that the creditor must merely show, in such a scenario, that a close relationship exists between the debtor and the third party.21The referring court considers that the international jurisdiction of Polish courts to hear and determine an action such as the one which was brought before it, can be supported only by Article 7(1)(a) of Regulation No 1215/2012. In this regard, it argues that while admittedly this dispute is not between the parties to the contract relating to the performance of construction works, namely Feniks and Coliseum, and does not concern the validity of this contract, it is still up to the referring court to examine whether the contract concluded between Azteca and Coliseum is or is not effective with regard to Feniks.22The national court submits that Article 7(1)(a) of Regulation No 1215/2012 relates to all disputes having a link with a contract. Indeed, regarding the dispute before it, there is a link between the resolution of that dispute and the contract concluded between Azteca and Coliseum which is alleged to be ineffective so far as Feniks is concerned.23Moreover, while acknowledging that Article 7(1)(a) of Regulation No 1215/2012 must be interpreted strictly, the national court nevertheless emphasises the disadvantages, which, according to it, would be created by the application of the general rule regarding jurisdiction in Article 4(1) of this regulation, if the applicant — in the context of proceedings concerning the ineffectiveness of several legal acts concluded by his debtor with other contracting parties established in other Member States — were obliged to bring separate actions before the courts of the various Member States and thus incur costs disproportionate to the objective of the proceedings.24According to this court, although in the judgment of 17 June 1992, Handte (C‑26/91, EU:C:1992:268) the Court of Justice held that ‘matters relating to a contract’ is not to be understood as covering a situation in which there is no obligation freely assumed by one party towards another, the factual context of that case was special, because it concerned a chain of international contracts in which the parties’ contractual obligations might vary from contract to contract.25Nonetheless, in this case, one of the specificities of the actio pauliana in Polish law is the perception which the third party must or may have as to the fact that the debtor knowingly acted to the detriment to the creditors, and as a result, that creditors who have suffered detriment may make a claim against it.26It is against this background that the Sąd Okręgowy w Szczecinie (Szczecin Regional Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Does a case brought against a buyer established in one Member State, seeking a declaration that a contract for the sale of immovable property situated in the territory of another Member State, which was concluded and performed in its entirety in the territory of another Member State, is ineffective on the ground of detriment to the seller’s creditors, constitute a ‘matter relating to a contract’ within the meaning of Article 7(1)(a) of [Regulation No 1215/2012]?(2)Must the above question be answered applying the principle of acte éclairé with reference to the judgment of 17 June 1992, Handte (C‑26/91, EU:C:1992:268), despite the fact that it concerned the liability for defects in goods of a manufacturer who could not foresee to whom the goods would subsequently be sold, and thus who would be able to bring claims against him, whereas the present action against a buyer “seeking a declaration that a contract for the sale of immovable property is ineffective” on the ground of detriment to the seller’s creditors, requires, in order to be effective, knowledge on the part of the buyer that the legal act (contract of sale) was done with detriment to creditors, and thus the buyer must anticipate that such an action may be brought by a personal creditor of the seller?’ Consideration of the questions referred 27By these two questions, which must be examined together, the national court asks in essence whether an actio pauliana, whereby the person entitled to a debt requests that an act by which his debtor has transferred an asset to a third party and which is allegedly detrimental to his rights be declared ineffective in relation to the creditor, is covered by the rule of international jurisdiction provided for in Article 7(1)(a) of Regulation No 1215/2012. Applicability of Regulation No 1215/2012 28As can be seen from the request for a preliminary ruling, the enforcement proceedings begun against Coliseum were terminated because of a lack of assets, as this company is currently insolvent.29Therefore, the question arises as to whether the main proceedings fall within the scope of Regulation No 1215/2012 or rather, whether they fall within the scope of an insolvency procedure governed by Regulation No 1346/2000, applicable ratione temporis to the main proceedings.30In this regard, it should be recalled that the Court has held that Regulations No 1215/2012 and No 1346/2000 should be interpreted in such a way as to avoid any overlap between the rules of law that those instruments lay down and any legal vacuum. Accordingly, actions excluded under Article 1(2)(b) of Regulation No 1215/2012 from the application of that regulation because they come under ‘bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings’, fall within the scope of Regulation No 1346/2000. Correspondingly, actions which fall outside the scope of Regulation No 1346/2000 fall within the scope of Regulation No 1215/2012 (judgment of 20 December 2017, Valach and Others, C‑649/16, EU:C:2017:986, paragraph 24 and the case-law cited).31The Court has also held that an action is related to bankruptcy or winding-up if it derives directly from the bankruptcy or winding-up and is closely connected with the proceedings for the liquidation of assets or composition proceedings (judgment of 12 February 2009, Seagon, C‑339/07, EU:C:2009:83, paragraph 19 and the case-law cited).32However, in this case, the action brought by Feniks does not seem to be at all connected with proceedings for the liquidation of assets or composition proceedings. Furthermore, during the hearing before the Court, Feniks, in response to a question put by the Court, stated that no insolvency proceedings were begun against Coliseum; that is, however, for the national court to verify.33In so far as the action in the main proceedings, based on Article 527 et seq. of the Civil Code, aims to preserve the creditor’s own interests and not to increase the assets of Coliseum, it falls within the notion of ‘civil and commercial matters’ within the meaning of Article 1(1) of Regulation No 1215/2012. Substance 34It should be recalled that Regulation No 1215/2012 aims to harmonise the rules regarding conflicting jurisdictions in civil and commercial matters by means of creating rules governing jurisdiction that are highly predictable. Therefore, the purpose of this regulation is to strengthen the legal protection of persons established in the European Union by enabling the applicant to identify easily the court in which he may sue and a normally well-informed defendant to reasonably foresee in which court he may be sued (see, to that effect, judgment of 14 July 2016, Granarolo, C‑196/15, EU:C:2016:559, paragraph 16 and the case-law cited).35According to the Court’s settled case-law, the system of common rules on conferment of jurisdiction laid down in Chapter II of Regulation No 1215/2012 is based on the general rule, set out in Article 4(1) of that regulation, that persons domiciled in a Member State are to be sued in the courts of that State, irrespective of the nationality of the parties. It is only by way of derogation from that fundamental principle attributing jurisdiction to the courts of the defendant’s domicile that Section 2 of Chapter II of Regulation No 1215/2012 makes provision for certain special jurisdictional rules, such as those laid down in Article 7(1)(a) of that regulation (see, to that effect, judgment of 14 July 2016, Granarolo, C‑196/15, EU:C:2016:559, paragraph 17 and the case-law cited).36In addition to the aforementioned jurisdiction of the courts of the defendant’s domicile there should be, as stated in recital 16 of this regulation, alternative grounds of jurisdiction based on a close connection between the court and the action or facilitation of the sound administration of justice.37The special jurisdictional rules must be interpreted restrictively and cannot give rise to an interpretation going beyond the cases expressly envisaged by that regulation (judgment of 14 July 2016, Granarolo, C‑196/15, EU:C:2016:559, paragraph 18 and the case-law cited).38Concerning the special jurisdiction laid down in Article 7(1)(a) of Regulation No 1215/2012 in actions concerning the concept of ‘matters relating to a contract’, this concept must be interpreted independently in order to ensure that it is applied uniformly in all the Member States (judgment of 7 March 2018, flightright and Others, C‑274/16, C‑447/16 and C‑448/16, EU:C:2018:160, paragraph 58 and the case-law cited).39As the Court has consistently held, the application of this rule of special jurisdiction presupposes the establishment of a legal obligation freely consented to by one person towards another and on which the claimant’s action is based (see, to that effect, judgments of 20 January 2005, Engler, C‑27/02, EU:C:2005:33, paragraph 51; of 18 July 2013, ÖFAB, C‑147/12, EU:C:2013:490, paragraph 33; and of 21 January 2016, ERGO Insurance and Gjensidige Baltic, C‑359/14 and C‑475/14, EU:C:2016:40, paragraph 44).40The actio pauliana is based on the creditor’s personal claim against the debtor and seeks to protect whatever security he may have over the debtor’s estate (judgments of 10 January 1990, Reichert and Kockler, C‑115/88, EU:C:1990:3, paragraph 12, and of 26 March 1992, Reichert and Kockler, C‑261/90, EU:C:1992:149, paragraph 17).41It thus preserves the interests of the creditor with a view in particular to a subsequent enforcement of the debtor’s obligations (judgment of 26 March 1992, Reichert and Kockler, C‑261/90, EU:C:1992:149, paragraph 28).42Although it can be seen from the request for a preliminary ruling that Feniks paid the subcontractors used by Coliseum for the performance of construction works because of a provision in national law which establishes the joint and several liability of the investor towards the performers of the works, the fact remains that both the security that Feniks has over the debtor’s estate and the present action regarding the ineffectiveness of the sale concluded by the debtor with a third party originate in the obligations freely consented to by Coliseum with regard to Feniks upon the conclusion of their contract relating to those construction works.43By this action the creditor seeks a declaration that the transfer of assets by the debtor to a third party has caused detriment to the creditor’s rights deriving from the binding nature of the contract and which correspond with the obligations freely consented to by the debtor. The cause of this action therefore lies essentially in the breach of these obligations towards the creditor to which the debtor agreed.44It follows that the actio pauliana, once it is brought on the basis of the creditor’s rights created upon the conclusion of a contract, falls within ‘matters relating to a contract’ within the meaning of the case-law cited in paragraph 39 of this judgment. It is thus necessary that in addition to the forum of the defendant’s domicile, there should be a supplementary ground of jurisdiction, namely that prescribed by Article 7(1)(a) of Regulation No 1215/2012, such jurisdiction meeting, with regard to the contractual origin of the relationship between the creditor and debtor, both the requirement for legal certainty and foreseeability and the aim to facilitate the sound administration of justice.45Were it otherwise, the creditor would be forced to bring proceedings before the court of the place where the defendant is domiciled, that forum, as prescribed by Article 4(1) of Regulation No 1215/2012, possibly having no link to the place of performance of the obligations of the debtor with regard to his creditor.46Therefore, it is for the creditor who holds the claim derived from a contract and who intends to bring an actio pauliana, to bring this action before the courts in ‘the place of performance of the obligation in question’ as prescribed by Article 7(1)(a) of Regulation No 1215/2012. In the present case, as the action brought by the creditor aims to preserve its interests in the performance of the obligations derived from the contract concerning construction works, it follows that ‘the place of performance of the obligation in question’ is, according to Article 7(1)(b) of this regulation, the place where, under the contract, the construction services were provided, namely Poland.47Such a conclusion meets the objective concerning the predictability of the rules relating to jurisdiction, all the more since a professional who has concluded a contract for the sale of immovable property may, where the creditor of the other contracting party objects that the contract obstructs the performance of obligations which the other contracting party has towards that creditor, reasonably expect to be sued in the courts of the place of performance of these obligations.48That conclusion reached in the previous paragraph is not in any way invalidated by the fact, arising in the present case from Article 531(1) of the Civil Code, that the action was brought against the third party and not the debtor. It must be borne in mind in that regard that the rule of special jurisdiction in matters relating to a contract provided for in Article 7(1)(a) of Regulation No 1215/2012 is based on the cause of action, not the identity of the parties (see, to that effect, judgment of 7 March 2018, flightright and Others, C‑274/16, C‑447/16 and C‑448/16, EU:C:2018:160, paragraph 61 and the case-law cited).49Therefore, the answer to the questions referred for a preliminary ruling, is that, in a situation such as that at issue in the main proceedings, an actio pauliana, whereby the person entitled to a debt arising under a contract requests that an act by which his debtor has transferred an asset to a third party and which is allegedly detrimental to his rights be declared ineffective in relation to the creditor, is covered by the rule of international jurisdiction provided for in Article 7(1)(a) of Regulation No 1215/2012. Costs 50Since this request is, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: In a situation such as that at issue in the main proceedings, an actio pauliana , whereby the person entitled to a debt arising under a contract requests that an act by which his debtor has transferred an asset to a third party and which is allegedly detrimental to his rights be declared ineffective in relation to the creditor, is covered by the rule of international jurisdiction provided for in Article 7(1)(a) of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.[Signatures]( *1 ) Language of the case: Polish. | 3de5a-9f19cb2-439e | EN |
The requirement to submit sustainability certificates imposed by Italy on intermediaries which do not take physical possession of the bioliquids which are the subject of the transaction in which those intermediaries are involved complies with EU law | 4 October 2018 ( *1 )(Reference for a preliminary ruling — Environment — Promotion of the use of energy from renewable sources — Bioliquids used for a thermal energy plant — Directive 2009/28/EC — Article 17 — Sustainability criteria for bioliquids — Article 18 National sustainability certification systems — Implementing Decision 2011/438/EU — Voluntary sustainability certification systems for biofuels and bioliquids approved by the European Commission — National legislation requiring intermediary operators to submit sustainability certificates — Article 34 TFEU — Free movement of goods)In Case C‑242/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Consiglio di Stato (Council of State, Italy), made by decision of 26 January 2017, received at the Court on 8 May 2017, in the proceedings Legatoria Editoriale Giovanni Olivotto (L.E.G.O.) SpA v Gestore dei servizi energetici (GSE) SpA, Ministero dell’Ambiente e della Tutela del Territorio e del Mare, Ministero dello Sviluppo Economico, Ministero delle Politiche Agricole e Forestali, intervening parties: ED & F Man Liquid Products Italia Srl, Unigrà Srl, Movendi Srl, THE COURT (Second Chamber),Composed of M. Ilešič, President of the Chamber, A. Rosas, C. Toader (Rapporteur), A. Prechal and E. Jarašiūnas, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 28 February 2018,after considering the observations submitted on behalf of:–Legatoria Editoriale Giovanni Olivotto (L.E.G.O.) SpA, by A. Fantini and G. Scaccia, avvocati,Gestore dei servizi energetici (GSE) SpA, by S. Fidanzia and A. Gigliola, avvocati,ED & F Man Liquid Products Italia Srl, by C.E. Rossi and F.P. Francica, avvocati,the Italian Government, by G. Palmieri, acting as Agent, and by G. Palatiello, avvocato dello Stato,the European Commission, by G. Gattinara and K. Talabér-Ritz, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 16 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 18 of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC (OJ 2009 L 140, p. 16), read in conjunction with Commission Implementing Decision 2011/438/EU of 19 July 2011 on the recognition of the ‘International Sustainability and Carbon Certification’ [ISCC] scheme for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC of the European Parliament and of the Council (OJ 2011 L 190, p. 79).2The request has been made in the context of proceedings between Legatoria Editoriale Giovanni Olivotto (L.E.G.O.) SpA, Gestore dei servizi energetici (GSE) SpA, the Ministero dell’Ambiente e della Tutela del Mare e del Territorio (Ministry of the Environment and Territorial and Sea Protection, Italy), the Ministero dello Sviluppo Economico (Ministry of Economic Development, Italy) and the Ministero delle Politiche Agricole e Forestali (Ministry of Agricultural and Forestry Policy), concerning the non-submission of sustainability certificates for bioliquids used to operate L.E.G.O.’s thermal energy plant, leading to the disqualification of the plant from the green certificate incentive scheme. Legal context EU law Directive 2009/28 3Recitals 65, 67, 76 and 79 of Directive 2009/28 state that:‘(65)Biofuel production should be sustainable. Biofuels used for compliance with the targets laid down in this Directive, and those that benefit from national support schemes, should therefore be required to fulfil sustainability criteria.…(67)The introduction of sustainability criteria for biofuels will not achieve its objective if those products that do not fulfil the criteria and would otherwise have been used as biofuels are used, instead, as bioliquids in the heating or electricity sectors. For this reason, the sustainability criteria should also apply to bioliquids in general.(76)Sustainability criteria will be effective only if they lead to changes in the behaviour of market actors. Those changes will occur only if biofuels and bioliquids meeting those criteria command a price premium compared to those that do not. According to the mass balance method of verifying compliance, there is a physical link between the production of biofuels and bioliquids meeting the sustainability criteria and the consumption of biofuels and bioliquids in the [European Union], providing an appropriate balance between supply and demand and ensuring a price premium that is greater than in systems where there is no such link. To ensure that biofuels and bioliquids meeting the sustainability criteria can be sold at a higher price, the mass balance method should therefore be used to verify compliance. This should maintain the integrity of the system while at the same time avoiding the imposition of an unreasonable burden on industry. Other verification methods should, however, be reviewed.(79)It is in the interests of the Community to encourage the development of multilateral and bilateral agreements and voluntary international or national schemes that set standards for the production of sustainable biofuels and bioliquids, and that certify that the production of biofuels and bioliquids meets those standards. For that reason, provision should be made for such agreements or schemes to be recognised as providing reliable evidence and data, provided that they meet adequate standards of reliability, transparency and independent auditing.’4The second paragraph of Article 2 of Directive 2009/28 defines the concepts of ‘biomass’, ‘bioliquids’ and ‘biofuels’ as follows:‘…e)“biomass” means the biodegradable fraction of products, waste and residues from biological origin from agriculture (including vegetal and animal substances), forestry and related industries including fisheries and aquaculture, as well as the biodegradable fraction of industrial and municipal waste;h)“bioliquids” means liquid fuel for energy purposes other than for transport, including electricity and heating and cooling, produced from biomass;i)“biofuels” means liquid or gaseous fuel for transport produced from biomass’.5Article 17 of that directive, entitled ‘Sustainability criteria for biofuels and bioliquids’, provides, in paragraph 1:‘Irrespective of whether the raw materials were cultivated inside or outside the territory of the [European Union], energy from biofuels and bioliquids shall be taken into account for the purposes referred to in points (a), (b) and (c) only if they fulfil the sustainability criteria set out in paragraphs 2 to 6:(a)measuring compliance with the requirements of this Directive concerning national targets;(b)measuring compliance with renewable energy obligations;(c)eligibility for financial support for the consumption of biofuels and bioliquids.…’6Article 17(2) to (6) of that directive defines the sustainability criteria for the production of biofuels and bioliquids.7Article 17(8) of the same directive provides as follows:‘For the purposes referred to in points (a), (b) and (c) of paragraph 1, Member States shall not refuse to take into account, on other sustainability grounds, biofuels and bioliquids obtained in compliance with this Article.’8Article 18 of Directive 2009/28, entitled ‘Verification of compliance with the sustainability criteria for biofuels and bioliquids’, provides as follows:‘1. Where biofuels and bioliquids are to be taken into account for the purposes referred to in points (a), (b) and (c) of Article 17(1), Member States shall require economic operators to show that the sustainability criteria set out in Article 17(2) to (5) have been fulfilled. For that purpose they shall require economic operators to use a mass balance system which:allows consignments of raw material or biofuel with differing sustainability characteristics to be mixed;requires information about the sustainability characteristics and sizes of the consignments referred to in point (a) to remain assigned to the mixture; andprovides for the sum of all consignments withdrawn from the mixture to be described as having the same sustainability characteristics, in the same quantities, as the sum of all consignments added to the mixture.3. Member States shall take measures to ensure that economic operators submit reliable information and make available to the Member State, on request, the data that were used to develop the information. Member States shall require economic operators to arrange for an adequate standard of independent auditing of the information submitted, and to provide evidence that this has been done. The auditing shall verify that the systems used by economic operators are accurate, reliable and protected against fraud. It shall evaluate the frequency and methodology of sampling and the robustness of the data.The information referred to in the first subparagraph shall include in particular information on compliance with the sustainability criteria set out in Article 17(2) to (5), appropriate and relevant information on measures taken for soil, water and air protection, the restoration of degraded land, the avoidance of excessive water consumption in areas where water is scarce and appropriate and relevant information concerning measures taken in order to take into account the issues referred to in the second subparagraph of Article 17(7).The obligations laid down in this paragraph shall apply whether the biofuels or bioliquids are produced within the [European Union] or imported.4. …The Commission may decide that voluntary national or international schemes setting standards for the production of biomass products contain accurate data for the purposes of Article 17(2) or demonstrate that consignments of biofuel comply with the sustainability criteria set out in Article 17(3) to (5). The Commission may decide that those schemes contain accurate data for the purposes of information on measures taken for the conservation of areas that provide, in critical situations, basic ecosystem services (such as watershed protection and erosion control), for soil, water and air protection, the restoration of degraded land, the avoidance of excessive water consumption in areas where water is scarce and on the issues referred to in the second subparagraph of Article 17(7). …5. The Commission shall adopt decisions under paragraph 4 only if the agreement or scheme in question meets adequate standards of reliability, transparency and independent auditing. In the case of schemes to measure greenhouse gas emission saving, such schemes shall also comply with the methodological requirements in Annex V. …7. When an economic operator provides proof or data obtained in accordance with an agreement or scheme that has been the subject of a decision pursuant to paragraph 4, to the extent covered by that decision, a Member State shall not require the supplier to provide further evidence of compliance with the sustainability criteria set out in Article 17(2) to (5) nor information on measures referred to in the second subparagraph of paragraph 3 of this Article. Implementing Decision 2011/438 9In accordance with Article 2 thereof, Implementing Decision 2011/438 was valid for 5 years from the date of its entry into force, that is, until 9 August 2016. Nevertheless, given the date of the facts giving rise to the main proceedings, regard must be had to that implementing decision.10Recitals 4 and 6 to 8 of that implementing decision stated as follows:‘(4)The Commission may decide that a voluntary national or international scheme demonstrates that consignments of biofuels comply with the sustainability criteria set out in Article 17(3) to (5) of [Directive 2009/28] or that a voluntary national or international scheme to measure greenhouse gas emission savings contains accurate data for the purposes of Article 17(2) of this Directive.(6)When an economic operator provides proof or data obtained in accordance with a scheme that has been recognised by the Commission, to the extent covered by that recognition decision, a Member State shall not require the supplier to provide further evidence of compliance with the sustainability criteria.(7)The “International Sustainability and Carbon Certification” (hereinafter “ISCC”) scheme was submitted on 18 March 2011 to the Commission with the request for recognition. The scheme has a global scope and can cover a wide range of different biofuels. The recognised scheme will be made available at the transparency platform established under [Directive 2009/28]. The Commission will take into account considerations of commercial sensitivity and may decide to only partially publish the scheme.(8)Assessment of the ISCC scheme found it to adequately cover the sustainability criteria of [Directive 2009/28], as well as applying a mass balance methodology in line with the requirements of Article 18(1) of [Directive 2009/28].’11Under Article 1 of the same implementing decision:‘The [ISCC scheme] for which the request for recognition was submitted to the Commission on 18 March 2011 demonstrates that consignments of biofuels comply with the sustainability criteria as laid down in Article 17(3)(a), (b) and (c) and Article 17(4) and (5) of [Directive 2009/28] … The scheme also contains accurate data for purposes of Article 17(2) of [Directive 2009/28] and Article 7b(2) of Directive 98/70/EC [of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC (OJ 1998 L 350, p. 58)].Furthermore, it may be used for demonstrating compliance with Article 18(1) of [Directive 2009/28] and Article 7c(1) of [Directive 98/70].’ Italian law 12Article 2(2)(i) and (p) and (3) of the decreto interministeriale che istituisce il ‘Sistema di certificazione nazionale della sostenibilità dei biocarburanti e dei bioliquidi’ (interministerial decree on the ‘National certification scheme for biofuels and bioliquids’) of 23 January 2012 (GURI No 31 of 7 February 2012) (‘the interministerial decree of 23 January 2012’), sets out the following definitions:‘2. …(i)sustainability certificate: a statement issued by the last operator in the supply chain, by way of self-certification, … together with any subsequent amendments thereto, containing the information necessary to establish that the consignment of biofuels or bioliquids is sustainable.(p)supply chain or control chain: the methodology allowing a connection to be established between the information or declarations about the raw materials or intermediate products and the finished products. This methodology shall include all stages from the production of the raw materials to the supply of biofuels or bioliquids for consumption.3. An economic operator … is:any natural or legal person established in the [European Union] or in a third country who offers or makes available to third parties, whether or not in return for payment, biofuels and bioliquids intended for the [domestic] market, or any natural or legal person established in the European Union who produces biofuels or bioliquids and subsequently uses them on its own account within the national territory; orany natural or legal person established in the [European Union] or in a third country who offers or makes available to third parties, whether or not in return for payment, raw materials, intermediate products, waste, by-products or mixtures thereof for the production of biofuels and bioliquids intended for the [domestic] market.’13Article 8 of the interministerial decree of 23 January 2012 deals with the situation of operators who do not belong to the national certification scheme and provides as follows:‘1. In relation only to matters covered by a voluntary scheme that is the subject of a decision adopted under the second subparagraph of Article 7c(4) of [Directive 98/70] …, economic operators who sign up to such voluntary schemes must demonstrate the accuracy of the information and declarations supplied to the next economic operator in the supply chain, that is to say, to the supplier or user, by providing the proof or data relating to the consignment required under those schemes. That evidence or data shall be self-certified …4. If the voluntary schemes referred to in the first paragraph and the agreements referred to in the second paragraph do not include an audit of all the sustainability criteria and the use of a mass balance methodology, the economic operators in the supply chain belonging to the scheme must in any event complete the audit, to the extent that it is not covered by the voluntary schemes or agreements, through the national certification scheme.14Under Article 12 of the interministerial decree of 23 January 2012:‘1. For the purposes of this decree, by way of exception to the provisions of Article 8(1), economic operators in the bioliquids supply chain may sign up to voluntary schemes that are the subject of a decision adopted under the second subparagraph of Article 7c(4) of [Directive 98/70] in relation to biofuels insofar as they fulfil the requirements in paragraph 2.2. The operators in the bioliquids supply chain referred to in paragraph 1 must include in the declaration or on the certificate accompanying the consignments for the entirety of the supply chain the information provided for in Article 7(5), (6), (7) and (8) …’ The dispute in the main proceedings and the questions referred for a preliminary ruling 15L.E.G.O. is a company incorporated under Italian law which owns a printing plant. Within the printing plant, the company commissioned a thermal energy plant with an average annual power rating of 0.840 megawatts, powered by crude palm oil, a bioliquid.16On 20 May 2011, the energy plant was recognised by GSE, a public company incorporated under Italian law responsible for the payment of grants for renewable energy production, as being powered from renewable sources. L.E.G.O. was therefore able to participate in the green certificate (GC) incentive scheme for the period 2012-2014, in respect of 14698 GCs worth EUR 1 610 421.58.17By decision of 29 September 2014, GSE found, on the basis of documentation supplied by L.E.G.O., that the company did not meet the eligibility criteria under the support scheme and demanded the full return of the amounts granted for the period 2012-2014.18The reason given by GSE for its decision was chiefly that no sustainability certificates had been submitted by the company that had installed the thermal energy plant, Movendi Srl. Movendi also operates as an intermediary for the purchase of the bioliquids used to fuel the plant, from ED & F Man Liquid Products Italia Srl and Unigrà Srl. Although the bioliquids were directly sold and delivered to L.E.G.O., GSE claimed that Movendi should be regarded as an ‘economic operator’ within the meaning of the interministerial decree of 23 January 2012 and had to submit sustainability certificates, even where certificates had already been supplied by ED & F Man Liquid Products Italia and Unigrà. In addition, the sustainability certificates issued by those two suppliers were allegedly dated after the effective date of transport, whereas, according to GSE, they should have been issued to accompany each consignment of bioliquids.19L.E.G.O. brought an action against that decision before the Tribunale Regionale Amministrativo per il Lazio (Regional Administrative Court for Lazio, Italy) which, in its judgment of 29 January 2016, held that GSE had been correct to regard Movendi as an economic operator within the meaning of Italian law and that Movendi was therefore obliged to supply its own sustainability certificate for the bioliquids in question.20According to the Tribunale Regionale Amministrativo per il Lazio (Regional Administrative Court for Lazio), although Directive 2009/28 does not in fact specify who can be regarded as an economic operator, it nonetheless allows Member States to determine the necessary information and the persons subject to compliance with the sustainability criteria. Therefore, any person involved in the supply chain should be regarded as an ‘economic operator’, including intermediaries such as Movendi, who do not take physical possession of the bioliquids concerned.21On 13 May 2016, L.E.G.O. brought an appeal against that judgment before the referring court, the Consiglio di Stato (Council of State, Italy).22The referring court considers it essential to clarify the scope of EU law in order to establish whether it precludes domestic law, in particular Articles 8 and 12 of the interministerial decree of 23 January 2012, which oblige operators who have signed up to a voluntary certification scheme to complete, where applicable, the audit under that scheme through the national certification scheme and to include in the declaration or on the certificates accompanying consignments for the entirety of the supply chain the information referred to in Article 17(2) to (5) of Directive 2009/28.23In that regard, the referring court notes that L.E.G.O. submits in its appeal that the suppliers ED & F Man Liquid Products Italia and Unigrà had signed up to the voluntary ISCC scheme, recognised by Implementing Decision 2011/438, and that the national scheme cannot impose requirements over and above the voluntary scheme, such as the requirement for intermediaries to supply sustainability certificates.24The referring court therefore explains that its request for a preliminary ruling concerns, first, the ability to compel economic operators who generally sign up to voluntary schemes that are the subject of decisions of the Commission to comply with further checks imposed by the national certification system and, secondly, the ability to compel economic operators who form part of the supply chain to complete declarations or accompanying certificates with the required information. In that regard, the referring court states that, since the purpose of the domestic legislation is to ensure the traceability of the product and its sustainability throughout the entirety of the supply chain, intermediaries, such as Movendi, should not be excluded from that obligation.25In those circumstances, the Consiglio di Stato (Council of State) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Does EU law, and more specifically Article 18(7) of [Directive 2009/28], in conjunction with [Implementing Decision 2011/438], preclude national provisions, such as the [interministerial decree of 23 January 2012], and in particular Articles 8 and 12 thereof, which impose specific requirements that are both different from and more extensive than the requirements which are satisfied by signing up to a voluntary scheme which is the subject of a decision of the European Commission adopted in accordance with Article 18(4) of [Directive 2009/28]?(2)If the answer to Question [1] is in the negative, must economic operators which are involved in the product supply chain, even though their role is merely that of a trader or intermediary and they do not possess physical availability of the product in question, be held to be subject to the provisions of EU law cited in Question [1]?’ Consideration of the questions referred The first question 26By its first question, the referring court asks, in essence, whether Article 18(7) of Directive 2009/28, read in conjunction with Implementing Decision 2011/438, must be interpreted as precluding national provisions, such as those at issue in the case in the main proceedings, which impose on economic operators specific requirements that are both different from and more extensive than the requirements under a voluntary sustainability certification scheme, such as the ISCC scheme, recognised by that implementing decision, adopted by the Commission pursuant to Article 18(4) of that directive.27As a preliminary point, it should be noted that Article 17(2) to (5) of Directive 2009/28 sets out the sustainability criteria that must be fulfilled in order for biofuels and bioliquids to be regarded as a source of renewable energy.28It is apparent from Article 17 of Directive 2009/28, read in the light of recitals 65 and 67 thereof, that the EU legislature intended, by taking as its basis Article 114 TFEU, in particular, to harmonise the sustainability criteria which it is mandatory for biofuels and bioliquids to fulfil in order for the energy produced from them to be taken into account, within each Member State, for three purposes set out in Article 17(1)(a), (b) and (c) respectively. Those purposes are measuring the Member States’ compliance with their national targets referred to in Article 3 of that directive; measuring their compliance with renewable energy obligations; and eligibility for national financial support for the consumption of biofuels and bioliquids (see, to that effect, judgment of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraph 28).29Harmonisation of those sustainability criteria is exhaustive, since Article 17(8) of Directive 2009/28 states that Member States may not, for those same three purposes, refuse to take into account, on other sustainability grounds, biofuels and bioliquids which fulfil the sustainability criteria set out in that article (see, to that effect, judgment of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraph 32).30As for verifying compliance of biofuels and bioliquids with the sustainability criteria, it is clear from the first sentence of Article 18(1) of Directive 2009/28 that where biofuels and bioliquids are to be taken into account for the three purposes referred to in Article 17(1) of that directive, Member States shall require economic operators to show that the sustainability criteria set out in Article 17(2) to (5) have been fulfilled.31For that purpose, Member States are obliged, as is clear from the second sentence of Article 18(1) of Directive 2009/28, to require economic operators to use a mass balance system which, as set out in points (a) to (c) of that provision, first, allows consignments of raw material or biofuel with differing sustainability characteristics to be mixed; secondly, requires information about the sustainability characteristics and sizes of those consignments to remain assigned to the mixture; and, thirdly, provides for the sum of all consignments withdrawn from the mixture to be described as having the same sustainability characteristics, in the same quantities, as the sum of all consignments added to the mixture.32In that context, the mass balance system may be implemented, as noted by the Advocate General in point 42 of his Opinion, by a national system provided for by the competent authority of each Member State, pursuant to Article 18(3) of Directive 2009/28, or by national or international voluntary schemes recognised by the Commission, such as the ISCC scheme, in accordance with the requirements of Article 18(4) and (5) of that directive.33In that regard, Article 18(7) of that directive provides that, when an economic operator provides proof or data obtained in accordance with an agreement or scheme that has been the subject of a decision adopted by the Commission on the basis of Article 18(4) of Directive 2009/28, to the extent covered by that decision, a Member State cannot require the supplier to provide further evidence of compliance with the sustainability criteria set out in Article 17(2) to (5) of that directive.34However, where the Commission has not adopted a decision in relation to a certain certification scheme, or where that decision specifies that the scheme does not cover all the sustainability criteria laid down in Article 17(2) to (5) of Directive 2009/28, Member States are free to require economic operators, to that extent, to comply with national provisions the aim of which is to ensure that fulfilment of those criteria is monitored.35Therefore, in order to answer the first question, it is necessary to determine the scope of Implementing Decision No 2011/438, adopted by the Commission on the basis of Article 18(4) of Directive 2009/28, concerning the certification system at issue in the main proceedings.36In that regard, it should be noted that the recognition accorded by that implementing decision to the ISCC scheme for a period of 5 years applies only to establishing the sustainability of biofuels and not that of bioliquids, as is clear from the first paragraph of Article 1 of the implementing decision. Accordingly, to the extent that the ISCC scheme that is the subject of Implementing Decision 2011/438 uses mass balance methodology to prove the sustainability of biofuels, it does not appear to limit the ability of Member States, under Article 18(1) and (3) of Directive 2009/28, to determine the procedures for verifying compliance with the sustainability criteria set out in Article 17(2) to (5) of Directive 2009/28 in relation to bioliquids.37Article 18(4) of Directive 2009/28, permitting the Commission to decide that a voluntary national or international scheme demonstrates compliance with the sustainability criteria set out in Article 17(2) to (5) of the directive, applied only to biofuels until the adoption of Directive (EU) 2015/1513 of the European Parliament and of the Council of 9 September 2015 amending Directive 98/70 and amending Directive 2009/28 (OJ 2015 L 239, p. 1), which came into force on 15 October 2015 and which introduced the possibility of certifying the sustainability of bioliquids through voluntary schemes.38In that regard, it should be noted from points (h) and (i) of the second paragraph of Article 2 of Directive 2009/28 that bioliquids and biofuels are distinct concepts, in that biofuels refers only to liquid fuel used for transport purposes while bioliquids are liquid fuels for energy purposes other than for transport.39In the present case, L.E.G.O. benefited from the GC incentive scheme for the period 2012-2014, for a thermal energy plant fuelled by renewable energy sources through the use of a bioliquid, namely palm oil. By a decision of 29 September 2014, the competent authority demanded the return of the amount granted, owing to a failure to comply with the obligations under the national certification scheme to prove the sustainability of the bioliquids.40In those circumstances and given that Implementing Decision 2011/438 led to the recognition of the ISCC scheme only in respect of biofuels, the additional requirements imposed by Italian legislation in relation to sustainability monitoring of bioliquids does not fall within the scope of the prohibition in Article 18(7) of Directive 2009/28.41In the light of the foregoing, the answer to the first question is that Article 18(7) of Directive 2009/28, read in conjunction with Implementing Decision 2011/438, must be interpreted as meaning that it does not preclude national provisions, such as that at issue in the main proceedings, which impose on economic operators specific requirements which, for the certification of the sustainability of bioliquids, are different from and more extensive than the requirements under a voluntary sustainability certification system, such as the ISCC scheme, recognised by that implementing decision, adopted by the European Commission pursuant to Article 18(4) of that directive, in so far as that scheme was approved only in respect of biofuels and in so far as those requirements concern only bioliquids. The second question 42The second question, which is raised only in the event of a negative answer to the first, seeks, in essence, to ascertain whether EU law, in particular, Article 18(1) and (3) of Directive 2009/28, must be interpreted as meaning that it does not preclude national provisions, such as those at issue in the main proceedings, which impose a national sustainability verification scheme for bioliquids under which all the economic operators involved in the supply chain of the product in question, even when they are intermediaries who do not take physical possession of the consignments of bioliquids, are bound by certain requirements relating to certification, communication and the provision of information under that scheme.43It is clear from the settled case-law of the Court that the fact that a national court has, formally speaking, worded a question referred for a preliminary ruling with reference to certain provisions of EU law does not preclude the Court from providing the national court with all the elements of interpretation that may be of assistance in adjudicating on the case pending before it, whether or not that court has referred to them in its questions. In that regard, it is for the Court to extract from all the information provided by the national court, in particular from the grounds of the decision referring the questions, the points of EU law which require interpretation, having regard to the subject matter of the dispute (judgment of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraph 72 and the case-law cited).44In the present case, although the referring court has not formally asked the Court about the interpretation of provisions affecting the free movement of goods, it is appropriate, as recommended by the Advocate General in point 87 of his Opinion, to also examine whether Article 34 TFEU precludes national provisions such as those at issue in the main proceedings. The interpretation of Directive 2009/28 45In the first place, it must be noted that, while Directive 2009/28 uses the concept of an ‘economic operator’, it does not define it. Bearing in mind the general way in which the criteria set out in Article 18(1)(a) to (c) of the directive are worded, the Court has already held that that provision has not fully harmonised the verification system connected with the mass balance system. Provided there is compliance with the general requirements set out in Article 18(1)(a) to (c), Member States therefore retain a wide discretion when they must determine, more precisely, the specific conditions under which the economic operators concerned will use such a system (see, to that effect, judgment of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraphs 40 and 77).46In the second place, as can be seen from recital 76 of Directive 2009/28, the mass balance method referred to in Article 18(1) thereof is based on a physical link between the production and the consumption of bioliquids within the European Union for the purposes of verifying compliance, while at the same time avoiding the imposition of an unreasonable burden on industry.47In the present case, it follows from the wording of Article 12(2) of the interministerial decree of 23 January 2012, read in the light of Article 2(1)(i)f of the legislative decree No 66/2005 and of Article 2(3)(a) of the aforementioned interministerial decree, that those provisions impose on all economic operators involved in the supply chain of bioliquids, including intermediaries who do not take physical possession of the products, an obligation to enter on the declaration or certificate accompanying the consignments of bioliquids the information enabling their sustainability to be determined.48It is apparent from the order for reference that the purpose of classifying intermediaries as ‘economic operators’ is to ensure the traceability of consignments of bioliquids throughout the entirety of the supply chain, in accordance with the requirements of Article 18(3) of Directive 2009/28, and thus enable better monitoring of their production and marketing in order to reduce the risk of fraud.49In that respect, it should be noted that, under Article 18(3) of Directive 2009/28, Member States shall take measures to ensure that economic operators submit reliable information and make available to the Member State, on request, the data that were used to develop the information about the sustainability characteristics of the product in question. Member States shall also require economic operators to arrange for an adequate standard of independent auditing of the information submitted, and to provide evidence that this has been done, consisting of verifying that the systems used by economic operators are accurate, reliable and protected against fraud.50Given that the concept of ‘economic operators’ is not defined by Directive 2009/28, and given the current state of harmonisation by the EU legislature as to the details of the verification method connected with the mass balance system, Member States must be regarded as having a margin of discretion in determining, in accordance with EU law, which economic operators have an obligation to provide evidence of compliance with the sustainability criteria set out in Article 17(2) to (5) of that directive.51In the light of the foregoing, Article 18(1) and (3) of Directive 2009/28 must be interpreted as meaning that it does not preclude national provisions, such as those at issue in the main proceedings, which impose a national sustainability verification scheme for bioliquids under which all the economic operators involved in the supply chain of the product in question, even when they are intermediaries who do not take physical possession of the consignments of bioliquids, are bound by certain requirements relating to certification, communication and the provision of information imposed by that scheme. The interpretation of Article 34 TFEU 52It should be recalled, from the outset, that, where a matter has been the subject of exhaustive harmonisation at EU level, any national measure relating thereto must be assessed in the light of the provisions of that harmonising measure and not in the light of primary law (judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 57).53Far from seeking to bring about exhaustive harmonisation of national support schemes for green energy production, the EU legislature — as is apparent, inter alia, from recital 25 to Directive 2009/28 — based its approach on the finding that Member States apply different support schemes and on the principle that it is important to ensure the proper functioning of those schemes in order to maintain investor confidence and to enable those States to define effective national measures in order to achieve their mandatory national overall targets under the directive (judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 59).54Furthermore, as is clear from paragraph 45 of the present judgment, Article 18 of Directive 2009/28 has not achieved exhaustive harmonisation for the verification system connected with the mass balance system, so that Member States retain a wide discretion when they implement that article. In doing so, they must still comply with Article 34 TFEU (see to that effect, judgment of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraph 78).55It is therefore appropriate to proceed to interpret the Treaty provisions relating to the free movement of goods in order to determine whether Article 34 TFEU precludes national provisions, such as those at issue in the main proceedings, which provide for the economic operators involved in the supply chain for the product, even when they are intermediaries who do not take physical possession of the consignments of bioliquids, to be bound by certain requirements in relation to certification, communication and the provision of information under a national sustainability verification scheme.56In the present case, as is apparent from the file submitted to the Court and from the information supplied by ED & F Man Liquid Products Italia at the hearing, the bioliquid at issue in the main proceedings, palm oil, is produced in Indonesia, imported into the European Union, put into free circulation and stored in France before being transported to Italy to be sold to L.E.G.O.57Under Article 28(2) TFEU, the prohibition on quantitative restrictions on imports between Member States, provided for in Articles 34 to 37 TFEU, applies equally to products originating in Member States and to products coming from third countries which are in free circulation in Member States.58It is settled case-law that, in prohibiting between Member States measures having equivalent effect to quantitative restrictions on imports, Article 34 covers any national measure capable of hindering, directly or indirectly, actually or potentially, intra-Community trade (judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 66 and the case-law cited).59Obstacles to the free movement of goods resulting, in the absence of harmonisation of national legislations, from the application by a Member State to goods coming from other Member States, in which they are lawfully manufactured and marketed, of rules relating to conditions with which those goods must comply, even if those rules apply without distinction to all products, must constitute measures having equivalent effect to quantitative restrictions on imports within the meaning of Article 34 TFEU (see, to that effect, judgment of 22 September 2016, Commission v Czech Republic, C‑525/14, EU:C:2016:714, paragraph 35).60In the present case, it should be noted that the obligation to submit sustainability certificates, imposed by national legislation such as that at issue in the main proceedings on intermediaries who do not take physical possession of the bioliquids which are the subject of the transaction in which they are involved, is liable to hinder the import of goods from other Member State, at least indirectly and potentially.61The effect of such an obligation is to make the import of bioliquids more difficult in that mere intermediaries, who have no such certification obligation under Article 18 of Directive 2009/28, must nonetheless, when they are importing a bioliquid into Italy, carry out that certification and are therefore subject to administrative obligations and the costs associated therewith.62Accordingly, national legislation constitutes a measure having equivalent effect to quantitative restrictions on imports and is thus in principle incompatible with Article 34 TFEU, unless that legislation can be objectively justified (see, by analogy, judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 75). Potential justification 63National legislation or a national practice that constitutes a measure having equivalent effect to quantitative restrictions may be justified on one of the public interest grounds listed in Article 36 TFEU or by overriding requirements. In either case, the national provision must, in accordance with the principle of proportionality, be appropriate for ensuring attainment of the objective pursued and must not go beyond what is necessary in order to attain that objective (judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 76).64In that regard, according to settled case-law of the Court, national measures that are capable of hindering intra-EU trade may inter alia be justified by overriding requirements relating to protection of the environment. The use of renewable energy sources for the production of electricity, which legislation such as that at issue in the main proceedings seeks to promote, is useful for the protection of the environment inasmuch as it contributes to the reduction in greenhouse gas emissions, which are amongst the main causes of climate change that the European Union and its Member States have pledged to combat (see, to that effect, judgment of 13 March 2001, PreussenElektra, C‑379/98, EU:C:2001:160, paragraph 73; of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraphs 77, 78 and 82; and of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraphs 85 to 88).65As a consequence, national provisions such as those at issue, which promote the use of renewable energy sources, also contribute to the protection of the health and life of humans, animals and plants, which are among the public interest grounds listed in Article 36 TFEU (see, to that effect, judgment of 22 June 2017, E.ON Biofor Sverige, C‑549/15, EU:C:2017:490, paragraph 89).66In addition, as the Advocate General observed in point 97 of his Opinion, to the extent that national provisions, such as those in the main proceedings, oblige all the operators involved in the production and distribution of sustainable bioliquids, including intermediaries, to provide sustainability certificates, they contribute to combatting fraud in the bioliquid supply chain.67According to settled case-law of the Court, national measures capable of hindering intra-Community trade may be justified by the objective of protection of the environment and combating fraud provided that the measures in question are proportionate to the aim pursued (judgment of 6 October 2011, Bonnarde, C‑443/10, EU:C:2011:641, paragraph 34).68As is clear from paragraph 63 of the present judgment, it is therefore necessary to be sure whether national legislation, such as that in the main proceedings, meets the requirements flowing from the principle of proportionality, that is to say, whether it is appropriate for securing the attainment of the legitimate objective pursued and whether it is necessary for those purposes (see, to that effect, judgment of 1 July 2014, Ålands Vindkraft, C‑573/12, EU:C:2014:2037, paragraph 83).69In that regard, it should be noted that a national provision such as Article 12(2) of the interministerial decree of 23 January 2012 ensures the traceability of the product in the production and transportation chain and the sustainability of the product in order to avoid the risk of the palm oil being altered or counterfeited. An intermediary, such as Movendi, who buys the bioliquid at issue in the main proceedings and retains legal ownership of it together with all the relevant documentation would have the ability, prior to its sale to the end user, to modify its properties, make it available to third parties or mix it with other liquids or uncertified bioliquids. Therefore, by targeting all operators in the bioliquids supply chain, the national provision in question helps to prevent fraud in connection with the sustainability of the bioliquid. Accordingly, it is a measure that is appropriate for securing the attainment of the legitimate objective pursued.70Thus, the national legislation at issue in the main proceedings may also contribute to the protection of the health and life of humans, animals and plants, as referred to in paragraphs 63 to 66 of this judgment.71As to the necessity of such legislation, it should be noted that, even though an intermediary, such as Movendi in the main proceedings, does not take physical possession of the bioliquids that are the subject of the transaction in which it is involved, it nonetheless has legal ownership of them for a time and, in principle, therefore, has the ability to relocate them, alter the substance of them, or falsify the documentation relating to them. Therefore, it must be accepted that the Italian Republic was entitled to form the view that, by preventing those risks, the measure in question was necessary in order to attain the objectives pursued.72It follows from all the foregoing considerations that the answer to the second question is that EU law, in particular Article 34 TFEU and Article 18(1) and (3) of Directive 2009/28, must be interpreted as meaning that it does not preclude national legislation, such as that at issue in the main proceedings, which imposes a national sustainability verification system for bioliquids under which all the economic operators involved in the supply chain of the product, even when they are intermediaries who do not take physical possession of the bioliquids, are bound by certain requirements relating to certification, communication and the provision of information imposed by that system. Costs 73Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. Article 18(7) of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, read in conjunction with Commission Implementing Decision 2011/438/EU of 19 July 2011 on the recognition of the ISCC (International Sustainability and Carbon Certification) system for demonstrating compliance with the sustainability criteria under Directives 2009/28/EC and 2009/30/EC of the European Parliament and of the Council, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which imposes requirements on economic operators which, for the certification of the sustainability of bioliquids, are specific, different and more extensive than those imposed by a voluntary sustainability certification system, such as the ISCC system, recognised by that implementing decision, adopted by the European Commission in accordance with Article 18(4) of that directive, in so far as that system was approved only in respect of biofuels and in so far as those conditions concern only bioliquids. 2. EU law, in particular Article 34 TFEU and Article 18(1) and (3) of Directive 2009/28, must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which imposes a national sustainability verification system for bioliquids under which all the economic operators involved in the supply chain of the product, even when they are intermediaries which do not take physical possession of the batches of bioliquids, are bound by certain requirements relating to certification, communication and the provision of information imposed by that system. [Signatures]( *1 ) Language of the case: Italian. | 81ab6-39d21c0-47b2 | EN |
Advocate General Wathelet proposes that the Court of Justice should rule that the decision of the ECB establishing a programme for the purchase of government bonds on secondary markets is valid | 11 December 2018 ( *1 )(Reference for a preliminary ruling — Economic and monetary policy — Decision (EU) 2015/774 of the European Central Bank — Validity — Secondary markets public sector asset purchase programme — Articles 119 and 127 TFEU — Powers of the ECB and the European System of Central Banks — Maintenance of price stability — Proportionality — Article 123 TFEU — Prohibition of monetary financing of Member States in the euro area)In Case C‑493/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesverfassungsgericht (Federal Constitutional Court, Germany), made by decision of 18 July 2017, received at the Court on 17 August 2017, in the proceedings brought by Heinrich Weiss and Others, Bernd Lucke and Others, Peter Gauweiler, Johann Heinrich von Stein and Others, Interested parties: Bundesregierung, Bundestag, Deutsche Bundesbank, THE COURT (Grand Chamber),Composed of K. Lenaerts, President, A. Prechal, M. Vilaras, E. Regan, T. von Danwitz, C. Toader and C. Lycourgos, Presidents of Chamber, A. Rosas, E. Juhász, M. Ilešič, L. Bay Larsen (Rapporteur), M. Safjan, D. Šváby, C.G. Fernlund and C. Vajda, Judges,Advocate General: M. Wathelet,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 10 July 2018,after considering the observations submitted on behalf of:–Mr Weiss and Others, by C. Degenhart,Mr Lucke and Others, by H.-D. Horn and G. Beck, Barrister,Mr Gauweiler, by D. Murswiek,Mr von Stein and Others, by M.C. Kerber, Rechtsanwalt,the Deutsche Bundesbank, by A. Guericke, acting as Agent, and by U. Soltész, C. von Köckritz and B. Herz, Rechtsanwälte,the German Government, by T. Henze, J. Möller and U. Häde, acting as Agents,the Greek Government, by K. Boskovits, S. Charitaki and A. Magrippi, acting as Agents,the French Government, by D. Colas, D. Segoin and E. de Moustier, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and by F. De Luca and P. Gentili, avvocati dello Stato,the Portuguese Government, by L. Inez Fernandes, M. Figueiredo, T. Larsen and P. Machado, acting as Agents,the Finnish Government, by S. Hartikainen, acting as Agent,the European Commission, by L. Flynn, J.-P. Keppenne, C. Ladenburger and B. Martenczuk, acting as Agents,the European Central Bank (ECB), by C. Zilioli, K. Kaiser and C. Kroppenstedt, acting as Agents, and by H.-G. Kamann, Rechtsanwalt,after hearing the Opinion of the Advocate General at the sitting on 4 October 2018,gives the following Judgment 1This request for a preliminary ruling concerns the validity of Decision (EU) 2015/774 of the European Central Bank of 4 March 2015 on a secondary markets public sector asset purchase programme (OJ 2015 L 121, p. 20), as amended by Decision (EU) 2017/100 of the European Central Bank of 11 January 2017 (OJ 2017 L 16, p. 51) (‘Decision 2015/774’), and the interpretation of Article 4(2) TEU and Articles 123 and 125 TFEU.2The request has been made in the context of four constitutional actions brought by Mr Heinrich Weiss and others, Mr Bernd Lucke and others, Mr Peter Gauweiler and Mr Johann Heinrich von Stein and others, concerning the applicability, in Germany, of various decisions of the European Central Bank (ECB), the participation of the Deutsche Bundesbank (German Central Bank) in the implementation of those decisions or its alleged failure to act with regard to those decisions, and the alleged failure of the Bundesregierung (Federal Government, Germany) and the Deutscher Bundestag (Lower House of the German Federal Parliament), to act in respect of that participation and those decisions. Legal context Decision 2015/774 3Recitals 2 to 4 and 7 of Decision 2015/774 are worded as follows:‘(2)On 4 September 2014, the Governing Council decided to initiate a third covered bond purchase programme (hereinafter the “CBPP3”) and an asset-backed securities purchase programme (ABSPP). Alongside the targeted longer-term refinancing operations introduced in September 2014, these asset purchase programmes are aimed at further enhancing the transmission of monetary policy, facilitating credit provision to the euro area economy, easing borrowing conditions of households and firms and contributing to returning inflation rates to levels closer to 2%, consistent with the primary objective of the ECB to maintain price stability.(3)On 22 January 2015, the Governing Council decided that asset purchases should be expanded to include a secondary markets public sector asset purchase programme (hereinafter the “PSPP”). Under the PSPP the [national central banks], in proportions reflecting their respective shares in the ECB’s capital key, and the ECB may purchase outright eligible marketable debt securities from eligible counterparties on the secondary markets. This decision was taken as part of the single monetary policy in view of a number of factors that have materially increased the downside risk to the medium-term outlook on price developments, thus jeopardising the achievement of the ECB’s primary objective of maintaining price stability. These factors include lower than expected monetary stimulus from adopted monetary policy measures, a downward drift in most indicators of actual and expected euro area inflation — both headline measures and measures excluding the impact of volatile components, such as energy and food — towards historical lows, and the increased potential of second-round effects on wage and price-setting stemming from a significant decline in oil prices.(4)The PSPP is a proportionate measure for mitigating the risks to the outlook on price developments, as it will further ease monetary and financial conditions, including those relevant to the borrowing conditions of euro area non-financial corporations and households, thereby supporting aggregate consumption and investment spending in the euro area and ultimately contributing to a return of inflation rates to levels below but close to 2% over the medium term. In an environment where key ECB interest rates are at their lower bound, and purchase programmes focusing on private sector assets are judged to have provided measurable, but insufficient, scope to address the prevailing downside risks to price stability, it is necessary to add to the Eurosystem’s monetary policy measures the PSPP as an instrument that features a high transmission potential to the real economy. Thanks to its portfolio re-balancing effect, the sizable purchase volume of the PSPP will contribute to achieving the underlying monetary policy objective of inducing financial intermediaries to increase their provision of liquidity to the interbank market and credit to the euro area economy.…(7)In terms of the size of the PSPP, the ABSPP and the CBPP3, the liquidity provided to the market by the combined monthly purchases will amount to EUR 60 billion. Purchases are intended to be carried out until the end of September 2016 and will, in any case, be conducted until the Governing Council sees a sustained adjustment in the path of inflation which is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.’4Article 1 of Decision 2015/774 provides:‘The Eurosystem hereby establishes the PSPP under which the Eurosystem central banks shall purchase eligible marketable debt securities, as defined in Article 3, on the secondary markets, from eligible counterparties, as defined in Article 7, under specific conditions.’5Article 3 of that decision provides:‘1. Subject to the requirements laid down in Article 3, euro-denominated marketable debt securities issued by central, regional or local governments of a Member State whose currency is the euro, recognised agencies located in the euro area, international organisations located in the euro area and multilateral development banks located in the euro area shall be eligible for purchases by the Eurosystem central banks under the PSPP. In exceptional circumstances, where the envisaged purchase amount cannot be attained, the Governing Council may decide to purchase marketable debt securities issued by other entities located in the euro area …2. In order to be eligible for purchases under the PSPP, marketable debt securities shall comply with the eligibility criteria for marketable assets for Eurosystem credit operations pursuant to Part Four of Guideline (EU) 2015/510 of the European Central Bank [of 19 December 2014 on the implementation of the Eurosystem monetary policy framework (ECB/2014/60) (OJ 2015 L 91, p. 3)], subject to the following requirements:(a)the issuer or guarantor of the marketable debt securities shall have a credit quality assessment of at least Credit Quality Step 3 in the Eurosystem’s harmonised rating scale …(d)if the credit assessment … for the issuer, guarantor or issue does not comply with at least Credit Quality Step 3 in the Eurosystem’s harmonised rating scale, marketable debt securities shall be eligible only if they are issued or fully guaranteed by the central governments of euro area Member States under a financial assistance programme and in respect of which the application of the Eurosystem’s credit quality threshold is suspended by the Governing Council …(e)in the event of a review of an ongoing financial assistance programme, eligibility for PSPP purchases shall be suspended and shall resume only in the event of a positive outcome of the review.3. In order to be eligible for purchase under the PSPP, debt securities, within the meaning of paragraphs 1 to 2, shall have a minimum remaining maturity of 1 year and a maximum remaining maturity of 30 years at the time of their purchase by the relevant Eurosystem central bank. In order to facilitate smooth implementation, marketable debt instruments with a remaining maturity of 30 years and 364 days shall be eligible under the PSPP. National central banks shall also carry out substitute purchases of marketable debt securities issued by international organisations and multilateral development banks if the envisaged amounts to be purchased in marketable debt securities issued by central, regional or local governments and recognised agencies cannot be attained.5. Purchases of nominal marketable debt instruments at a negative yield to maturity (or yield to worst) equal to or above the deposit facility rate are permitted. Purchases of nominal marketable debt instruments at a negative yield to maturity (or yield to worst) below the deposit facility rate are permitted to the extent necessary.’6Article 4(1) of Decision 2015/774 provides:‘To permit the formation of a market price for eligible securities, no purchases shall be permitted in a newly issued or tapped security and the marketable debt instruments with a remaining maturity that are close in time, before and after, to the maturity of the marketable debt instruments to be issued, over a period to be determined by the Governing Council (“blackout period”). ...’7Article 5(1) and (2) of Decision 2015/774 is worded as follows:‘1. Subject to Article 3, an issue share limit per international securities identification number (ISIN) shall apply under the PSPP to marketable debt securities fulfilling the criteria laid down in Article 3, after consolidating holdings in all of the portfolios of the Eurosystem central banks. The issue share limit shall be as follows:50% per ISIN for eligible marketable debt securities issued by eligible international organisations and multilateral development banks;(b)33% per ISIN for other eligible marketable debt securities; …2. All marketable debt securities eligible for purchase under the PSPP and which have the remaining maturities specified in Article 3 shall be subject to an aggregate limit, after consolidating holdings in all of the portfolios of the Eurosystem central banks, of:50% of the outstanding securities of an issuer which is an eligible international organisation or a multilateral development bank; or33% of the outstanding securities of an issuer other than an eligible international organisation or a multilateral development bank.’8Article 6 of that decision provides:‘1. Of the book value of purchases of marketable debt securities eligible under the PSPP, 10% shall be purchased in securities issued by eligible international organisations and multilateral development banks, and 90% of that book value shall be purchased in securities issued by eligible central, regional or local governments and recognised agencies … This allocation is subject to revision by the Governing Council. Purchases of debt securities issued by eligible international organisations, multilateral development banks and regional and local governments shall be made by NCBs only.2. The NCBs’ share of the book value of purchases of marketable debt securities eligible under the PSPP shall be 90%, and the remaining 10% shall be purchased by the ECB. The distribution of purchases across jurisdictions shall be in accordance with the key for subscription of the ECB’s capital as referred to in Article 29 of the Statute of the [European System of Central Banks].3. Eurosystem central banks shall apply a specialisation scheme for the allocation of marketable debt securities to be purchased under the PSPP. The Governing Council shall allow for ad hoc deviations from the specialisation scheme should objective considerations obstruct the achievement of the said scheme or otherwise render deviations advisable in the interests of attaining the overall monetary policy objectives of the PSPP. In particular, each NCB shall purchase eligible securities of issuers of its own jurisdiction. Securities issued by eligible international organisations and multilateral development banks may be purchased by all NCBs. The ECB shall purchase securities issued by central governments and recognised agencies of all jurisdictions.’9Article 8 of the decision provides:‘1. The Eurosystem shall publish on a weekly basis the aggregate book value of the securities held under the PSPP in the commentary of its consolidated weekly financial statement.2. The Eurosystem shall publish on a monthly basis the weighted average residual maturity by issuer residence, separating international organisations and multilateral development banks from other issuers, of its PSPP holdings.3. The book value of securities held under the PSPP shall be published on the ECB’s website under the open market operations section on a weekly basis.’ Decision 2015/2464 10Recitals 2 to 5 of Decision (EU) 2015/2464 of the European Central Bank of 16 December 2015 amending Decision 2015/774 (OJ 2015 L 344, p. 1) state:On 3 December 2015, the Governing Council decided, in line with its mandate to ensure price stability, to revise certain of the PSPP’s design features, to secure a sustained adjustment in the path of inflation towards levels that are below, but close to 2%, over the medium term. The revisions are in line with the Governing Council’s monetary policy mandate and duly reflect risk management considerations.Accordingly, in order to achieve the PSPP’s objectives, the Governing Council decided to extend the intended horizon of purchases under the PSPP until the end of March 2017, or beyond, if necessary, and in any event until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term. The Governing Council decided to extend the intended horizon of the purchases under the CBPP3 and the ABSPP accordingly.The Governing Council also decided that, in order to enhance the flexibility of the PSPP and thereby support the continued smooth implementation of purchases at least until its intentional end date, euro-denominated marketable debt instruments issued by regional and local governments located in the euro area will be eligible for regular purchases under the PSPP by the national central banks of the jurisdiction in which the issuing entity is located.(5)The Governing Council also decided to reinvest the principal payments of the securities purchased under the APP [(expanded asset purchase programme)] as the underlying securities mature, for as long as necessary, thus contributing to favourable liquidity conditions and to an appropriate monetary policy stance.’ Decision 2016/702 11Recitals 2, 3 and 5 of Decision (EU) 2016/702 of the European Central Bank of 18 April 2016 amending Decision 2015/774 (OJ 2016 L 121, p. 24) state:In line with the Governing Council’s mandate to ensure price stability, certain features of the PSPP should be modified in order to ensure a sustained adjustment in the path of inflation towards levels that are below, but close to 2%, over the medium term. The changes are in line with the Governing Council’s monetary policy mandate and duly reflect risk management considerations.More specifically, in order to achieve the PSPP’s objectives, the liquidity provided to the market through the combined monthly purchases under the APP should be increased to EUR 80 billion.Starting in April 2016, the allocation between purchases of eligible marketable debt securities issued by international organisations and multilateral development banks and purchases of other eligible marketable debt securities under the PSPP should be modified in order to achieve the PSPP’s objectives and ensure its smooth implementation for the duration of the PSPP and at its increased purchase volume.’ Decision 2017/100 12Recitals 3 to 6 of Decision 2017/100 are worded as follows:‘(3)On 8 December 2016, the Governing Council decided, in line with its mandate to ensure price stability, that certain parameters of the APP should be adjusted in order to achieve the APP’s objectives. The adjustments are in line with the Governing Council’s monetary policy mandate, fully comply with the obligations of the Eurosystem central banks under the Treaties and duly reflect risk management considerations.More specifically, the intended horizon of purchases under the APP should be extended until the end of December 2017, or beyond, if necessary, and in any event until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.The liquidity provided to the market through the combined monthly purchases under the APP should continue to amount to EUR 80 billion until the end of March 2017. From April 2017, the combined monthly purchases under the APP should proceed at a pace of EUR 60 billion until the end of December 2017, or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim. If, in the meantime, the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council intends to increase the programme in terms of size and/or duration.(6)To ensure the continued smooth implementation of purchases under the APP over the intended horizon, the maturity range of the PSPP should be broadened by decreasing the minimum remaining maturity for eligible securities from two years to one year. Moreover, purchases of securities under the APP with a yield to maturity below the interest rate on the ECB’s deposit facility should be permitted to the extent necessary.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 13Several groups of individuals have brought various constitutional actions before the Bundesverfassungsgericht (Federal Constitutional Court, Germany) concerning various decisions of the ECB, the participation of the German Central Bank in the implementation of those decisions or its alleged failure to act with regard to those decisions and the alleged failure of the Federal Government and the Federal Parliament to act in respect of that participation and those decisions.14In support of those actions, the applicants in the main proceedings maintain, in essence, that the decisions of the ECB in question together amount to an ultra vires act, inasmuch as (i) they fail to observe the division of competences between the European Union and the Member States provided for in Article 119 TFEU, since they do not fall within the scope of the ECB’s mandate, as defined in Article 127(1) and (2) TFEU and Articles 17 to 24 of Protocol No 4 on the Statute of the European System of Central Banks and of the European Central Bank (‘the Protocol on the ESCB and the ECB’), and (ii) they infringe Article 123 TFEU. They also argue that those decisions infringe the principle of democracy laid down by the Grundgesetz (German Basic Law) and thereby undermine German constitutional identity.15The Bundesverfassungsgericht (Federal Constitutional Court) states that if Decision 2015/774 exceeds the mandate of the ECB or infringes Article 123 TFEU, it must uphold these various actions. The same applies if the rules on the sharing of losses stemming from that decision affect the budgetary powers of the Federal Parliament.16In those circumstances, the Bundesverfassungsgericht (Federal Constitutional Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Does Decision … 2015/774 … as amended by … Decision … 2016/702 … or the method of its implementation, infringe Article 123(1) TFEU?Does it infringe Article 123(1) TFEU in particular if in the course of the public sector asset purchase programme (PSPP),details of the purchases are communicated in a way that creates de facto certainty on the markets that the Eurosystem will purchase part of the bonds to be issued by the Member States?even after the event no details are given about compliance with minimum periods between the issue of a debt instrument on the primary market and its purchase on the secondary market, with the result that a review by the courts is not possible in that regard?(c)all bonds purchased are not resold but held until maturity and thus withdrawn from the market?the Eurosystem purchases marketable debt instruments with a negative yield at maturity?(2)Does the Decision referred to in [the first question] then infringe Article 123 TFEU in any event if, in view of changes in conditions on the financial markets, in particular as a result of a shortage of bonds available for purchase, its continued implementation requires a continual loosening of the originally agreed purchase rules and [if] the restrictions laid down in the case-law of the Court of Justice for a bond purchase programme, such as the PSPP, lose their effect?Does the current version of Decision … 2015/774 … infringe Article 119 and Article 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the [ESCB and the ECB] because it exceeds the monetary policy mandate of the ECB laid down in those provisions and for that reason encroaches upon the competence of the Member States?Is the mandate of the ECB exceeded in particular as a result of the fact that:on the basis of the volume of the PSPP, which amounted to EUR 1 534.8 billion on 12 May 2017, the Decision referred to in [the first question] materially influences the refinancing terms of the Member States?in view of the improvement in the refinancing terms of the Member States referred to in (a) above and their effect on the commercial banks, the Decision referred to in [the first question] has not only indirect economic policy consequences but its objectively ascertainable effects suggest that an economic policy aim of the programme is at least of equal priority as the monetary policy aim?on account of its powerful economic policy effects, the Decision referred to in [the first question] infringes the principle of proportionality?in the absence of a specific statement of reasons during the period of more than two years of implementation, it is not possible to examine whether the Decision referred to in [the first question] is still necessary and proportionate?Does the Decision referred to in [the first question] infringe Article 119 and Article 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the [ESCB and the ECB] in any event because its volume and implementation period of more than two years and the resulting economic policy effects give grounds for a different view of the need for and proportionality of the PSPP and consequently, from a certain point in time, it exceeds the monetary policy mandate of the [ECB]?Does the unlimited sharing of risks between the national central banks of the Eurosystem that may be provided for under the Decision referred to in [the first question], in the event of the non-repayment of bonds of the central governments and of equivalent issuers, infringe Article 123 and Article 125 TFEU and Article 4(2) TEU, if as a result it may be necessary for national central banks to be recapitalised using budget funds?’ Consideration of the questions referred Admissibility of the request for a preliminary ruling 17The Italian Government submits that the present request for a preliminary ruling must be declared inadmissible in its entirety by the Court.18That government argues in that regard, first, that the referring court is in reality asking the Court of Justice to provide an opinion, since the referring court does not accept that the answer that might be given to this request for a preliminary ruling is binding but rather considers that it is itself ultimately responsible for deciding upon the validity of Decision 2015/774 in the light of the conditions and limits laid down by the German Basic Law.19However, those arguments do not give grounds for finding the request for a preliminary ruling to be inadmissible given that (i) this request directly concerns the interpretation of EU law and the validity of EU acts and (ii) a judgment in which the Court gives a preliminary ruling is binding on the national court, as regards the interpretation of that law or the validity of such acts, for the purposes of the decision to be given in the main proceedings (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 14 and 16).20The Italian Government goes on to argue that the national proceedings which have given rise to the present request are not compatible with the system for reviewing the validity of EU acts established by Articles 263 and 267 TFEU. In its view, those proceedings circumvent that system in the sense that they open the way to a direct action against the validity of an EU act before the national courts, when in fact those courts can properly ask the Court of Justice for a preliminary ruling concerning the validity of an EU act only when the origin of the request is to be found in national measures implementing the EU act.21In that regard, the Court has consistently held, however, that a request for a preliminary ruling concerning the validity of an EU act is admissible when the referring court is called upon, as is the case in the main proceedings, to hear a genuine dispute in which the question of the validity of an EU act is raised indirectly (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 29 and the case-law cited).22Lastly, the Italian Government argues that the questions raised are based on complaints that challenge the choices made by the ECB in the exercise of its discretion and in the implementation of Decision 2015/774. It submits that the Court’s review cannot concern the implementation of such a decision and is limited, in the sphere of monetary policy, to procedural aspects.23It should first be observed in that regard that, in accordance with the principle of conferred powers set out in Article 5(2) TEU, the European System of Central Banks (ESCB) must act within the limits of the powers conferred upon it by primary law and it cannot therefore validly adopt and implement a programme which falls outside the area assigned to monetary policy by primary law. In order to ensure that the principle of conferral is complied with, the acts of the ESCB are, under the conditions laid down by the Treaties, subject to review by the Court (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 41).24Next, it is true that the ESCB must be allowed a broad discretion since, when it prepares and implements an open market operations programme, it is required to make choices of a technical nature and to undertake complex forecasts and assessments. The fact remains, however, that the Court is required to ascertain, in its review of the proportionality of the measures entailed by such a programme in relation to monetary policy objectives, whether the ESCB made a manifest error of assessment in that regard (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 68, 74, 81 and 91).25Finally, the foregoing considerations concern the scope of the examination of the validity of Decision 2015/774 which the Court must undertake. They are not, however, capable of calling into question the Court’s obligation to undertake that examination when a question is referred to it for a preliminary ruling on validity and, accordingly, they cannot give grounds for finding the present request for a preliminary ruling to be inadmissible.26Consequently, it is not appropriate to declare the request for a preliminary ruling to be inadmissible as a whole. The first to fourth questions 27By its first to fourth questions, which it is appropriate to consider together, the referring court is, in essence, asking the Court of Justice to assess the validity of Decision 2015/774 in the light of Article 119, Article 123(1), Article 127(1) and (2) and the second paragraph of Article 296 TFEU and of Articles 17 to 24 of the Protocol on the ESCB and the ECB.28As a preliminary point, the Court notes that, in view of the grounds of the order for reference and as the Advocate General has stated in points 31 and 32 of his Opinion, account must be taken, in answering those questions, not only of the ECB decisions mentioned by the referring court but also of Decisions 2015/2464 and 2017/100. Compliance with the obligation to state reasons laid down in the second paragraph of Article 296 TFEU 29The referring court is uncertain whether the ECB has complied with the obligation to state reasons arising under the second paragraph of Article 296 TFEU, first, because of the alleged absence of any specific statement of reasons for the ECB decisions relating to the PSPP, in particular so far as the necessity, extent and duration of the economic policy effects of that programme were concerned, and, secondly, because details of the ‘blackout period’, as referred to in Article 4(1) of Decision 2015/774, were not subsequently published.30In that regard, in so far as concerns the alleged absence of a specific statement of reasons for the ECB decisions relating to the PSPP, it should be recalled that, in situations such as that at issue in the present case, in which an EU institution enjoys broad discretion, a review of compliance with certain procedural safeguards –– including the obligation for the ESCB to examine carefully and impartially all the relevant elements of the situation in question and to give an adequate statement of the reasons for its decisions –– is of fundamental importance (see, to that effect, judgments of 21 November 1991, Technische Universität München, C‑269/90, EU:C:1991:438, paragraph 14, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 68 and 69).31According to settled case-law of the Court, although the statement of reasons for an EU measure, which is required by the second paragraph of Article 296 TFEU, must show clearly and unequivocally the reasoning of the author of the measure in question, so as to enable the persons concerned to ascertain the reasons for the measure and to enable the Court to exercise its power of review, it is not required to go into every relevant point of fact and law (judgments of 19 November 2013, Commission v Council, C‑63/12, EU:C:2013:752, paragraph 98, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 70).32In particular, in the case of a measure intended to have general application, which makes clear the essential objective pursued by the institutions, a specific statement of reasons for each of the technical choices made by the institutions cannot be required (see, to that effect, judgments of 10 January 2006, IATA and ELFAA, C‑344/04, EU:C:2006:10, paragraph 67; of 12 December 2006, Germany v Parliament and Council, C‑380/03, EU:C:2006:772, paragraph 108; and of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 76).33The question whether the duty to state reasons has been satisfied must, moreover, be assessed by reference not only to the wording of the measure but also to its context and to the whole body of legal rules governing the matter in question (judgments of 19 November 2013, Commission v Council, C‑63/12, EU:C:2013:752, paragraph 99, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 70).34In the present case, recitals 3 and 4 of Decision 2015/774 outline the objective of the PSPP, the economic context justifying the establishment of that programme as well as the mechanisms for bringing about the intended effects of the programme.35While the statements of reasons for Decisions 2015/2464, 2016/702 and 2017/100 do not reproduce those reasons relating to the PSPP, they do include explanations concerning the considerations underpinning the amendments which those decisions made to the rules governing the PSPP.36Furthermore, various documents published by the ECB at the time when each of those decisions was adopted supplement the reasoning given in the decisions by setting out, in detail, the economic analyses underpinning the decisions, the various options considered by the Governing Council and the reasons justifying the choices made, in the light, in particular, of the observed and anticipated effects of the PSPP.37Thus, as the Advocate General has observed at points 133 to 138 and 144 to 148 of his Opinion, the successive decisions of the ECB relating to the PSPP have consistently been clarified by the publication of press releases, introductory statements of the President of the ECB at press conferences, accompanied by answers to the questions raised by the press, and by the accounts of the ECB Governing Council’s monetary policy meetings, which outline the discussions within that body.38In that regard, attention should be drawn in particular to the fact that those accounts include, inter alia, explanations of the upward then downward trends in the monthly volume of purchases of bonds and of the reinvestment of the sums received on maturity of the bonds. They show, in that context, that the potential side effects of the PSPP, including its possible impact on the budgetary decisions of the Member States concerned, were taken into account.39The President of the ECB explained at successive press conferences that it was the exceptionally low level of inflation rates, by comparison with the objective of maintaining price stability by returning annual inflation rates to levels closer to 2%, that justified establishing the PSPP and making regular adjustments to that programme. Indeed, prior to the adoption of Decisions 2015/774, 2015/2464, 2016/702 and 2017/100, the annual rate of inflation was, respectively –0.2%, 0.1%, 0.3% and 0.6%. It was only at his press conference on 7 September 2017 that the President of the ECB announced that the annual rate of inflation had reached 1.5%, thus approaching the target.40In addition to the various documents mentioned in paragraph 37 of this judgment, which were made available both at the time when the PSPP was set up and whenever that programme was reviewed and amended, mention can also be made of the publication, in the ECB’s Economic Bulletin, of general analyses of the monetary situation in the euro area and of a number of specific studies dealing with the effects of the APP and the PSPP.41It follows from all those factors that the ESCB explained how persistently low levels of inflation and the exhaustion of the instruments normally used for the conduct of its monetary policy led it to consider that the adoption and implementation, with effect from 2015, of an asset purchase programme with the features of the PSPP was necessary, both in principle and in its various practical aspects.42Having regard to the principles referred to in paragraphs 31 to 33 of this judgment, those factors establish that the ECB duly stated the reasons for Decision 2015/774.43As regards the absence of any subsequent publication of details relating to the black-out period, the Court observes that, since the purpose of such publication would be to show the precise content of the measures adopted by the ESCB rather than the reasons justifying those measures, it cannot be required by virtue of the obligation to state reasons.44In view of the foregoing, it must be found that Decision 2015/774 is not vitiated by any defect in the statement of reasons such as to render it invalid. Article 119 and Article 127(1) and (2) TFEU and Articles 17 to 24 of the Protocol on the ESCB and the ECB 45The referring court asks whether Decision 2015/774 falls within the ambit of the powers of the ESCB, as defined by primary law, in view, inter alia, of the scale of the effects of the decision, which follow from the volume of bonds that may be acquired under the PSPP and from the duration of that programme.– The powers of the ESCB 46It should be noted that under Article 119(2) TFEU, the activities of the Member States and the Union are to include a single currency, the euro, as well as the definition and conduct of a single monetary policy and exchange-rate policy (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 48, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 34).47As regards more particularly monetary policy, Article 3(1)(c) TFEU states that the Union is to have exclusive competence in that area for the Member States whose currency is the euro (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 50, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 35).48Under Article 282(1) TFEU, the ECB and the central banks of the Member States whose currency is the euro, which constitute the Eurosystem, are to conduct the monetary policy of the Union. According to Article 282(4) TFEU, the ECB is to adopt such measures as are necessary to carry out its tasks in accordance with Articles 127 to 133 and Article 138 TFEU, as well as with the conditions laid down in the Statute of the ESCB and of the ECB (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 49, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 36).49Within that framework, it is for the ESCB, pursuant to Article 127(2), Article 130 and Article 282(3) TFEU, to define and implement that policy, acting independently and in compliance with the principle of conferral of powers, while it is for the Court, in the exercise of its power of review, to safeguard, under the conditions laid down by the Treaties, the principle of conferral (see, to that effect, judgments of 10 July 2003, Commission v ECB, C‑11/00, EU:C:2003:395, paragraph 134, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 37, 40 and 41).50It must be pointed out in this regard that the FEU Treaty contains no precise definition of monetary policy but defines both the objectives of monetary policy and the instruments which are available to the ESCB for the purpose of implementing that policy (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 53, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 42).51Thus, under Article 127(1) and Article 282(2) TFEU, the primary objective of the Union’s monetary policy is to maintain price stability. The same provisions further stipulate that, without prejudice to that objective, the ESCB is to support the general economic policies in the Union, with a view to contributing to the achievement of its objectives, as laid down in Article 3 TEU (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 54, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 43).52As to the means assigned to the ESCB by primary law for the purpose of achieving those objectives, Chapter IV of the Protocol on the ESCB and the ECB, which describes the monetary functions and operations assured by the ESCB, sets out the instruments to which the ESCB may have recourse within the framework of monetary policy (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 45).– Delimitation of the Union’s monetary policy 53The Court has held that in order to determine whether a measure falls within the area of monetary policy it is appropriate to refer principally to the objectives of that measure. The instruments which the measure employs in order to attain those objectives are also relevant (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraphs 53 and 55, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 46).54In the first place, so far as the objectives of Decision 2015/774 are concerned, it is apparent from recital 4 of that decision that the purpose of the latter is to contribute to a return of inflation rates to levels below, but close to, 2% over the medium term.55In that regard, it is important to point out that the authors of the Treaties chose to define the primary objective of the Union’s monetary policy –– namely the maintenance of price stability –– in a general and abstract manner, but did not spell out precisely how that objective was to be given concrete expression in quantitative terms.56It does not appear that the specification of the objective of maintaining price stability as the maintenance of inflation rates at levels below, but close to, 2% over the medium term, which the ESCB chose to adopt in 2003, is vitiated by a manifest error of assessment and goes beyond the framework established by the FEU Treaty. As the ECB has explained, such a choice can properly be based, inter alia, on the fact that instruments for measuring inflation are not precise, on the appreciable differences in inflation within the euro area and on the need to preserve a safety margin to guard against the possible emergence of a risk of deflation.57It follows that, as the ECB submits and as the referring court has indeed noted, the specific objective set out in recital 4 of Decision 2015/774 can be attached to the primary objective of the Union’s monetary policy, as set out in Article 127(1) and Article 282(2) TFEU.58That conclusion is not called into question by the fact, to which the referring court draws attention, that the PSPP allegedly has considerable effects on the balance sheets of commercial banks as well as on the refinancing terms of the Member States of the euro area.59In the present case, it is undisputed that, by virtue of its underlying principle and its procedures, the PSPP is capable of having an impact both on the balance sheets of commercial banks and on the financing of the Member States covered by that programme and that such effects might possibly be sought through economic policy measures.60It must be emphasised in that regard that Article 127(1) TFEU provides, inter alia, that (i) without prejudice to its primary objective of maintaining price stability, the ESCB is to support the general economic policies in the Union and that (ii) the ESCB must act in accordance with the principles laid down in Article 119 TFEU. Accordingly, within the institutional balance established by the provisions of Title VIII of the FEU Treaty, which includes the independence of the ESCB guaranteed by Article 130 and Article 282(3) TFEU, the authors of the Treaties did not intend to make an absolute separation between economic and monetary policies.61In that connection, it should be recalled that a monetary policy measure cannot be treated as equivalent to an economic policy measure for the sole reason that it may have indirect effects that can also be sought in the context of economic policy (see, to that effect, judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 56, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 52).62The Court cannot concur with the referring court’s view that any effects of an open market operations programme that were knowingly accepted and definitely foreseeable by the ESCB when the programme was set up should not be regarded as ‘indirect effects’ of the programme.63First, both in the judgment of 27 November 2012, Pringle (C‑370/12, EU:C:2012:756) and in the judgment of 16 June 2015, Gauweiler and Others (C‑62/14, EU:C:2015:400), the Court regarded as indirect effects, having no consequences for the purposes of classification of the measures at issue in the cases that gave rise to those judgments, effects which, even at the time of adoption of the measures, were foreseeable consequences of those measures, which must therefore have been knowingly accepted at that time.64Secondly, the conduct of monetary policy will always entail an impact on interest rates and bank refinancing conditions, which necessarily has consequences for the financing conditions of the public deficit of the Member States (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 110).65More specifically, as the ECB explained before the Court, the transmission of the ESCB’s monetary policy measures to price trends takes place via, inter alia, facilitation of the supply of credit to the economy and modification of the behaviour of businesses and individuals with regard to investment, consumption and saving.66Consequently, in order to exert an influence on inflation rates, the ESCB necessarily has to adopt measures that have certain effects on the real economy, which might also be sought –– to different ends –– in the context of economic policy. In particular, when the maintenance of price stability requires the ESCB to seek to raise inflation, the measures that it must adopt to ease monetary and financial conditions in the euro area for that purpose may entail an impact on the interest rates of government bonds because, inter alia, those interest rates play a decisive role in the setting of the interest rates applicable to the various economic actors (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 78 and 108).67That being so, if the ESCB were precluded altogether from adopting such measures when their effects are foreseeable and knowingly accepted, that would, in practice, prevent it from using the means made available to it by the Treaties for the purpose of achieving monetary policy objectives and might –– in particular in the context of an economic crisis entailing a risk of deflation –– represent an insurmountable obstacle to its accomplishing the task assigned to it by primary law.68In the second place, as regards the means used in Decision 2015/774 to achieve the objective of maintaining price stability, it is common ground that the PSPP is based on the purchase of government bonds on secondary markets.69It is clear from Article 18.1 of the Protocol on the ESCB and the ECB, which forms part of Chapter IV of that protocol, that in order to achieve the objectives of the ESCB and to carry out its tasks, as provided for in primary law, the ECB and the central banks of the Member States may, in principle, operate in the financial markets by buying and selling outright marketable instruments denominated in euros. It follows that the operations provided for by Decision 2015/774 use one of the monetary policy instruments for which primary law provides (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 54).70In view of the foregoing, it follows that, taking account of its objective and of the means provided for achieving that objective, a decision such as Decision 2015/774 falls within the sphere of monetary policy.– Proportionality in relation to the objectives of monetary policy 71It follows from Article 119(2) TFEU and Article 127(1) TFEU, read in conjunction with Article 5(4) TEU, that a bond-buying programme forming part of monetary policy may be validly adopted and implemented only in so far as the measures that it entails are proportionate to the objectives of that policy (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 66).72According to settled case-law of the Court, the principle of proportionality requires that acts of the EU institutions should be suitable for attaining the legitimate objectives pursued by the legislation at issue and should not go beyond what is necessary to achieve those objectives (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 67 and the case-law cited).73As regards judicial review of compliance with those conditions, since the ESCB is required, when it prepares and implements an open market operations programme of the kind provided for in Decision 2015/774, to make choices of a technical nature and to undertake complex forecasts and assessments, it must be allowed, in that context, a broad discretion (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 68 and the case-law cited).74As regards, first, the suitability of the PSPP for attaining the ESCB’s objectives, it follows from recital 3 of Decision 2015/774, from the documents published by the ECB at the time of adoption of that decision and from the observations submitted to the Court that Decision 2015/774 was adopted in the light of a number of factors that materially increased the risk of a decline in prices over the medium term, in the context of an economic crisis entailing a risk of deflation.75It can be seen from the documents before the Court that, in spite of the monetary policy measures adopted, annual rates of inflation in the euro area were at that time far below the 2% target fixed by the ESCB, as they were no higher than ‑0.2% in December 2014, and that the forecasts available at that time as to how inflation rates would move anticipated that such rates would remain very low or negative over the following months. Although monetary and financial conditions in the euro area subsequently improved gradually, it is the case that, at the date of adoption of Decision 2015/774, actual annual inflation rates continued to be appreciably below 2%, the rate being 0.6% in November 2016.76Against that background, recital 4 of Decision 2015/774 states that, for the purpose of achieving the objective of inflation rates at levels below, but close to, 2%, the PSPP is intended to ease monetary and financial conditions, including those of non-financial corporations and households, thereby supporting aggregate consumption and investment spending in the euro area and ultimately contributing to a return of inflation rates to the levels sought over the medium term.77The ECB has referred in this regard to the practices of other central banks and to various studies, which show that large-scale purchases of government bonds can contribute to achieving that objective by means of facilitating access to financing that is conducive to boosting economic activity by giving a clear signal of the ESCB’s commitment to achieving the inflation target set, by promoting a reduction in real interest rates and, at the same time, by encouraging commercial banks to provide more credit in order to rebalance their portfolios.78Accordingly, in view of the information before the Court, it does not appear that the ESCB’s economic analysis –– according to which the PSPP was appropriate, in the monetary and financial conditions of the euro area, for contributing to achieving the objective of maintaining price stability –– is vitiated by a manifest error of assessment.79It must therefore be determined, in the second place, whether the PSPP does not go manifestly beyond what is necessary to achieve that objective.80In that regard, the PSPP programme was adopted in a context which the ECB described as characterised, on the one hand, by persistently low inflation that risked triggering a cycle of deflation and, on the other, by an inability to counter that risk by means of the other instruments available to the ESCB for increasing inflation rates. Concerning the latter point, it is to be noted, inter alia, that key interest rates were at levels close to the bottom of their conceivable range and that the ESCB had, for several months, already been implementing a programme of large-scale purchases of private sector assets.81In those circumstances, in view of the foreseeable effects of the PSPP and given that it does not appear that the ESCB’s objective could have been achieved by any other type of monetary policy measure entailing more limited action on the part of the ESCB, it must be held that, in its underlying principle, the PSPP does not manifestly go beyond what is necessary to achieve that objective.82As regards the procedures for implementing the PSPP, the way that programme is set up also helps to guarantee that its effects are limited to what is necessary to achieve the objective concerned, in particular because, since the PSPP is not selective, the ESCB’s action will have an impact on financial conditions across the whole of the euro area and will not meet the specific financing needs of certain Member States of that area.83Likewise, the decision, reflected in Article 3 of Decision 2015/774, to make the purchase of bonds under the PSPP subject to stringent eligibility criteria has the effect of limiting that programme’s impact on the balance sheets of commercial banks, by ensuring that the programme is not implemented in such a way as to allow those banks to resell securities with a high level of risk to the ESCB.84In addition, the PSPP has, from the start, been intended to apply only during the period necessary for attaining the objective sought and is therefore temporary in nature.85It thus follows from recital 7 of Decision 2015/774 that it was initially anticipated that the PSPP’s period of application would run until the end of September 2016. That period was subsequently extended until the end of March 2017 and then until the end of December 2017, as is stated in recital 3 of Decision 2015/2464 and recital 4 of Decision 2017/100 respectively. To that end, the decisions taken in that regard were incorporated into Article 2(2) of the Guideline on a secondary markets public sector asset purchase programme (ECB/2015/NP3) (‘the Guideline’), which is binding on the central banks of the Member States in accordance with Article 12(1) of the Protocol on the ESCB and the ECB.86It does not appear that that initial period or the successive extensions thereof manifestly go beyond what was necessary to achieve the objective sought, since they always covered relatively short periods and were decided upon in view of the fact that the observed changes in inflation rates were not sufficient to achieve the objective sought by Decision 2015/774.87As to the volume of bonds that can be purchased under the PSPP, it must first be emphasised that a set of rules has been adopted to limit that volume in advance.88Thus, that volume was, from the outset, circumscribed by setting a monthly asset purchase amount under the APP. That amount, which was regularly revised in order to restrict it to what was necessary in order to achieve the stated objective, is found in recital 7 of Decision 2015/774, recital 3 of Decision 2016/702 and recital 5 of Decision 2017/100 and was incorporated in Article 2(2) of the Guideline. It also follows from the last-mentioned provision that priority is given to bonds issued by private operators for the purpose of reaching the monthly asset purchase volume under the APP as a whole.89In addition, the extent of the ESCB’s possible intervention on secondary markets, within the framework of the PSPP, is also restricted by the rules in Article 5 of Decision 2015/774, which lay down strict purchase limits per issue and per issuer.90Next, although it is true that, despite those various limits, the total volume of securities that may be acquired under the PSPP remains substantial, the ECB has made the valid point that the efficacy of such a programme through the mechanisms described in paragraph 77 of this judgment depends on a large volume of government bonds being purchased and held. That means not only that the volume of purchases must be sufficient, but also that it may prove necessary — in order to achieve the objective pursued by Decision 2015/774 –– to hold the bonds purchased on a lasting basis and to reinvest the sums realised when those bonds are repaid on maturity.91In that regard, the fact that that reasoned analysis is disputed does not, in itself, suffice to establish a manifest error of assessment on the part of the ESCB, since, given that questions of monetary policy are usually of a controversial nature and in view of the ESCB’s broad discretion, nothing more can be required of the ESCB apart from that it use its economic expertise and the necessary technical means at its disposal to carry out that analysis with all care and accuracy (see, to that effect, judgment of 16 June 2005, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 75).92Finally, having regard to the information in the documents before the Court and to the broad discretion enjoyed by the ESCB, it is not apparent that a government-bonds purchase programme of either more limited volume or shorter duration would have been able to bring about –– as effectively and rapidly as the PSPP –– changes in inflation comparable to those sought by the ESCB, for the purpose of achieving the primary objective of monetary policy laid down by the authors of the Treaties.93In the third place, as the Advocate General has stated in point 148 of his Opinion, the ESCB weighed up the various interests involved so as effectively to prevent disadvantages which are manifestly disproportionate to the PSPP’s objective from arising on implementation of the programme.94In particular, as the Court has already had occasion to note, in paragraph 125 of the judgment of 16 June 2015, Gauweiler and Others (C‑62/14, EU:C:2015:400), the open market operations authorised by the authors of the Treaties inevitably entail a risk of losses. However, the ESCB has adopted various measures designed to circumscribe that risk and to take it into account.95Thus, the rules mentioned in paragraphs 83 and 89 of this judgment also reduce that risk, by limiting the ESCB’s exposure in the event of a default of the issuer of some of the bonds purchased and by ensuring that bonds with a significant default risk cannot be purchased under the PSPP. It follows, moreover, from Article 4(3) of the Guideline that the ECB monitors the central banks of the Member States on an ongoing basis to ensure that they are complying with those rules.96In addition, in order to prevent the position of a central bank of one Member State from being weakened in the event of an issuer in another Member State failing to make a repayment, Article 6(3) of Decision 2015/774 provides that each national central bank is to purchase eligible securities of issuers of its own jurisdiction.97If, despite those preventive measures, the purchase of securities under the PSPP were to result in, possibly significant, losses, the information provided to the Court indicates that the rules on loss allocation, which were established right at the start of the programme and have subsequently been maintained, provide that, in the case of any losses of a national central bank that are related to the programme, the only losses to be shared are those generated by securities issued by eligible international organisations; under Article 6(1) of Decision 2015/774, such securities represent 10% of the total value of the PSPP. By contrast, the ESCB has not adopted any rule allowing for the sharing of losses of a central bank of a Member State that derive from securities issued by issuers of that Member State. Nor has the adoption of such a rule been announced by the ESCB.98It follows from the foregoing that the ESCB duly took into consideration the risks to which the substantial volume of asset purchases under the PSPP might possibly expose the central banks of the Member States and that, having considered the interests involved, it took the view that it was not appropriate to establish a general rule on loss sharing.99As regards possible PSPP-related losses of the ECB, especially in the event of its purchasing, within the limit of the 10% share allocated to it by Article 6(2) of Decision 2015/774, exclusively or predominantly securities issued by national authorities, it must be observed that the ESCB has not adopted –– beyond the safeguards against such a risk that are afforded both by the high eligibility criteria set out in Article 3 of that decision and by the purchase limits per issue and per issuer under Article 5 of the decision –– any rule derogating from the general scheme for the allocation of losses of the ECB under Article 32(5) of the Protocol on the ESCB and the ECB in conjunction with Article 33 thereof. It follows, in essence, that such losses may be offset against the ECB’s general reserve fund and, if necessary, following a decision by the Governing Council, against the monetary income of the relevant financial year in proportion and up to the amounts allocated to the national central banks in accordance with the rule that allocation is in proportion to their respective paid-up shares in the capital of the ECB.100It follows from those considerations that Decision 2015/774 does not infringe the principle of proportionality. Article 123(1) TFEU 101The referring court is uncertain whether Decision 2015/774 is compatible with Article 123(1) TFEU.102According to the wording of Article 123(1) TFEU, that provision prohibits the ECB and the central banks of the Member States from granting overdraft facilities or any other type of credit facility to public authorities and bodies of the Union and of Member States and from purchasing directly from them their debt instruments.103It follows that that provision prohibits all financial assistance from the ESCB to a Member State, but does not preclude, generally, the possibility of the ESCB purchasing from the creditors of such a State, bonds previously issued by that State (judgments of 27 November 2012, Pringle, C‑370/12, EU:C:2012:756, paragraph 132, and of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 95).104As regards Decision 2015/774, it should be observed that under the PSPP the ESCB is not entitled to purchase bonds directly from public authorities and bodies of the Member States, but only to do so indirectly, on the secondary markets. The intervention by the ESCB provided for by that programme thus cannot be equated with a measure granting financial assistance to a Member State.105However, the Court has held that Article 123(1) TFEU imposes two further limits on the ESCB when it adopts a programme for purchasing bonds issued by the public authorities and bodies of the Union and the Member States.106First, the ESCB cannot validly purchase bonds on the secondary markets under conditions which would, in practice, mean that its intervention has an effect equivalent to that of a direct purchase of bonds from the public authorities and bodies of the Member States (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 97).107Secondly, the ESCB must build sufficient safeguards into its intervention to ensure that the latter does not fall foul of the prohibition of monetary financing in Article 123 TFEU, by satisfying itself that the programme is not such as to reduce the impetus which that provision is intended to give the Member States to follow a sound budgetary policy (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 100 to 102 and 109).108The safeguards which the ESCB must provide so that those two restrictions are observed will depend both on the particular features of the programme under consideration and on the economic context in which that programme is adopted and implemented. Whether those safeguards are sufficient must then be determined by the Court in the event of the programme being challenged.– The alleged equivalence of intervention under the PSPP and the purchase of bonds on the primary markets 109The referring court considers that the PSPP procedures may create, for private operators, de facto certainty that the bonds that they may acquire from the Member States will subsequently be purchased by the ESCB on the secondary markets.110In that regard, it should be observed that the ESCB’s intervention would be incompatible with Article 123(1) TFEU if the potential purchasers of government bonds on the primary markets knew for certain that the ESCB was going to purchase those bonds within a certain period and under conditions allowing those market operators to act, de facto, as intermediaries for the ESCB for the direct purchase of those bonds from public authorities and bodies of the Member State concerned (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 104).111In the present case, it is true that the foreseeability of the ESCB’s intervention under the PSPP is –– deliberately –– increased by publishing in advance a set of features of that programme, which, as the Commission and the ECB have emphasised, is intended to contribute to the effectiveness and proportionality of the programme, by limiting the volume of bonds that actually have to be purchased to achieve the objective sought.112In particular, the announcement, both in decisions of the ESCB and in communications intended for the public, of the monthly volume of asset purchases envisaged under the APP, the expected duration of that programme, the rules for allocating those volumes between the various central banks of the Member States, or the eligibility criteria governing the purchase of a security, is such as to enable private operators to foresee, to some extent, significant aspects of the ESCB’s future actions on the secondary markets.113However, the ESCB has put in place various safeguards with a view to ensuring that a private operator is not able to act as if it were an intermediary of the ESCB.114Thus, observance of the blackout period provided for in Article 4(1) of Decision 2015/774, which is monitored by the ECB pursuant to Article 9 of the Guideline, ensures that bonds issued by a Member State cannot be purchased by the ESCB immediately after they are issued.115Although Article 4(1) of Decision 2015/774 does not specify the precise duration of the blackout period, which is fixed in Article 15 of the Guideline, the ECB has stated, in its written observations, that the length of the period is measured in days rather than weeks. Such a duration does not, however, give operators who are potential purchasers of government bonds on the primary markets the certainty that the ESCB is going to purchase those bonds very shortly thereafter.116Indeed, the absence of any publication, either in advance or after the event, of information concerning the duration of the blackout period, and the fact that the period in question is only a minimum period, on expiry of which the purchase of a security is permitted, avoid a situation in which a private operator is able to act, de facto, as an intermediary of the ESCB, since those factors limit the foreseeability, in terms of timing, of the ESCB’s interventions on the secondary markets. The fact that a purchase may thus take place several months or several years after a bond has been issued increases the uncertainty of private operators all the more, given that the ESCB has the option of reducing the monthly volume of bond purchases under the APP and has, moreover, already made use of that option on a number of occasions.117In addition, the ESCB has introduced a number of safeguards specifically to prevent private operators from predicting with certainty whether particular bonds will in fact be purchased on the secondary markets under the PSPP.118First, although the ESCB discloses the total volume of projected purchases under the APP, it does not disclose the volume of bonds issued by public authorities and bodies of a Member State which will in the normal course of events be purchased in a given month under the PSPP. In addition, the ESCB has laid down rules intended to ensure that that volume cannot be precisely determined in advance.119In that regard, first, the rules laid down in Article 2(2) of the Guideline provide that the volume set out therein applies for the whole of the APP and that PSPP purchases may be made only up to the residual amount. It follows that the volume of those purchases having to be made can vary from month to month depending on how many bonds issued by private operators are available on the secondary markets. That provision also enables the Governing Council to depart, by way of exception, from the monthly forecast volume, when specific market conditions so demand.120Secondly, although Article 6(2) of Decision 2015/774 provides that purchases are to be distributed among the central banks of the Member States in accordance with the key for subscription of the ECB’s capital, it cannot be deduced with certainty therefrom that the amount thus allocated to a central bank of a Member State will be used, to the extent provided for in Article 6(1) of that decision, for the purchase of bonds originating from public authorities and bodies of that Member State. Indeed, the allocation of securities purchased under the PSPP, as provided for in Article 6(1) of Decision 2015/774, is, under the second sentence of that provision, to be subject to revision by the Governing Council. Decision 2015/774 also includes various mechanisms that inject a degree of flexibility into purchases under the PSPP, in particular by permitting, in Article 3(3) and (4), substitute purchases to be carried out and, in Article 6(3), the Governing Council to allow ad hoc deviations from the specialisation scheme for the allocation of securities purchased under the PSPP. Article 2(3) of the Guideline enables the Eurosystem central banks to depart from the monthly purchase guidance in order to react appropriately to market conditions.121Next, it is apparent from Article 3(1), (3) and (5) of Decision 2015/774 that the ESCB has authorised the purchase of diversified securities under the PSPP, thereby reducing the possibilities for determining in advance the nature of the purchases that will be made for the purpose of achieving the programme’s monthly purchase targets.122Thus, it is possible in that context for not only bonds issued by central governments but also those issued by regional or local governments to be purchased. Similarly, those bonds can have a maturity of between 1 year and 30 years and 364 days and their yield may, where necessary, be negative, or even below the deposit facility rate.123It must also be noted that Decisions 2015/2464 and 2017/100 rightly amended, on these points, the scheme initially set up in order to extend the scope of asset purchases. Those decisions thus further limited, in the light of the changes in market conditions, the foreseeability of the ESCB’s purchases of Member State bonds.124Lastly, under Article 5(1) and (2) of Decision 2015/774, the Eurosystem central banks cannot purchase more than 33% of a particular issue of bonds of a central government of a Member State or more than 33% of the outstanding securities of one of those governments.125It follows from those purchase limits, compliance with which is monitored on a daily basis by the ECB in accordance with Article 4(3) of the Guideline, that the ESCB is not permitted to buy either all the bonds issued by such an issuer or the entirety of a given issue of those bonds. As has been pointed out by the governments that have taken part in the present proceedings and by the ECB, it follows that, when bonds are purchased from a central government of a Member State, a private operator necessarily runs the risk of not being able to resell them to the ESCB on the secondary markets, as a purchase of all the bonds issued is in all cases precluded.126The uncertainty that those purchase limits create in that regard is heightened by the restrictions which Article 8 of Decision 2015/774 places on the publication of information concerning the bonds held by the ESCB. As a result of those restrictions, only aggregate information is published, to the exclusion of any indication as to the proportion of bonds actually held by the ESCB following a given issue.127It follows from all the foregoing that, assuming that, as mentioned by the referring court, the ESCB is faced with a severe shortage of bonds issued by certain Member States –– which has been strongly disputed by the ECB ––, the safeguards built into the PSPP ensure that a private operator cannot be certain, when it purchases bonds issued by a Member State, that those bonds will actually be bought by the ESCB in the foreseeable future.128Accordingly, it must be found, as the Advocate General has stated in point 79 of his Opinion, that the fact that the PSPP procedures make it possible to foresee, at the macroeconomic level, that there will be a purchase of a significant volume of bonds issued by public authorities and bodies of the Member States does not afford a given private operator such certainty that he can act, de facto, as an intermediary of the ESCB for the direct purchase of bonds from a Member State.– Allegedly reduced impetus to conduct a sound budgetary policy 129The referring court asks whether Decision 2015/774 is compatible with Article 123(1) TFEU inasmuch as the certainty that that decision might create with regard to the ESCB’s intervention may distort market conditions by reducing the impetus for Member States to pursue a sound budgetary policy.130It should be borne in mind that the fact that implementation of an open market operations programme to some extent facilitates financing for the Member States concerned is not decisive, since the conduct of monetary policy will always entail an impact on interest rates and bank refinancing conditions, which necessarily has consequences for the financing conditions of the public deficit of the Member States (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 108 and 110).131Accordingly, although such a programme may make it foreseeable that, in the months ahead, a not inconsiderable proportion of the bonds issued by a Member State is likely to be purchased by the ESCB, which can facilitate that Member State’s financing, that does not in itself mean that the programme is incompatible with Article 123(1) TFEU.132However, in order to avoid a situation in which the Member States’ impetus to pursue a sound budgetary policy is reduced, the adoption and implementation of such a programme may not create certainty regarding a future purchase of Member State bonds, in consequence of which Member States might adopt a budgetary policy that fails to take account of the fact that they will be compelled, in the event of a deficit, to seek financing on the markets, or in consequence of which they would be protected against the consequences which a change in their macroeconomic or budgetary situation may have in that regard (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 113 and 114).133In that context, it must be stated, in the first place, that, according to recital 7 of Decision 2015/774, the PSPP is intended to be implemented only until the Governing Council sees a sustained adjustment in the path of inflation which is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term. Although the actual period of anticipated application of the PSPP has nonetheless been extended on a number of occasions, that principle has never been called into question when it was decided to adopt those extensions, as is confirmed by recital 3 of Decision 2015/2464 and recital 5 of Decision 2017/100.134It follows that the ESCB has, in its successive decisions, provided for the purchase of government bonds only in so far as necessary for the maintenance of price stability, that it has regularly revised the PSPP volume and that it has consistently preserved the temporary nature of that programme.135The programme’s temporary nature is also reinforced by the fact that, under Article 12(2) of the Guideline, the ESCB has retained the option of selling purchased bonds at any time, which enables it to adapt its programme according to the attitudes of the Member States concerned and means that the operators involved cannot be certain that the ESCB will not make use of that option (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 117 and 118).136Accordingly, Decision 2015/774 does not enable the Member States to determine their budgetary policy without taking account of the fact that, in the medium term, continuity in the implementation of the PSPP is in no way guaranteed and that they will thus be compelled, in the event of a deficit, to seek financing on the markets without being able to take advantage of the easing of financing conditions that implementation of the PSPP may entail (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraphs 112 and 114).137In the second place, it is important to note that Decision 2015/774 and the Guideline contain a series of safeguards designed to limit the effects of the PSPP on the impetus to pursue a sound budgetary policy.138First, the scale of the PSPP’s impact on the financing conditions of the Member States of the euro area is limited by the measures restricting the volume of Member State bonds eligible to be purchased under the PSPP (see, by analogy, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 116).139In that regard, it can be seen from the considerations in paragraph 88 of this judgment that the total volume of those bonds is limited, de jure, both by the setting of a monthly purchase amount under the APP and by the subsidiary nature of the PSPP within the APP, as described in Article 2(2) of the Guideline.140In addition, as the ECB has argued, the distribution, in accordance with Article 6(2) of Decision 2015/774, of those purchases between national central banks in accordance with the key for subscription of the ECB’s capital, as referred to in Article 29 of the Protocol on the ESCB and the ECB, rather than in accordance with other criteria such as, for example, the level of the respective debts of each Member State, in conjunction with the rule set out in Article 6(3) of that decision that each national central bank is to purchase securities of public issuers of its own Member State, means that the considerable increase in a Member State’s deficit resulting from the possible abandonment of a sound budgetary policy would reduce the proportion of that Member State’s bonds purchased by the ESCB. Implementation of the PSPP does not therefore enable a Member State to avoid the consequences, so far as financing is concerned, of any deterioration in its budgetary position.141Moreover, as a result of the purchase limits per issue and per issuer set out in Article 5(1) and (2) of that decision, in every case only a minority of the bonds issued by a Member State can be purchased by the ESCB under the PSPP, which means that that Member State has to rely chiefly on the markets to finance its budget deficit.142Next, Article 3(2) of Decision 2015/774 lays down stringent eligibility criteria based on a credit quality assessment, from which it is possible to depart only if the Member State concerned is subject to a financial assistance programme. Article 13(1) of the Guideline provides in addition that, in the event of a downgrade of the rating of a Member State’s bonds or of a negative review of a financial assistance programme, the Governing Council will have to decide whether to sell the bonds of the Member State concerned that have already been purchased.143It follows, as the Advocate General has stated in point 87 of his Opinion, that a Member State cannot rely on the financing possibilities to which the implementation of the PSPP may give rise in order to abandon a sound budgetary policy, without ultimately running the risk (i) of the bonds that it issues being excluded from the PSPP because they have been downgraded or (ii) of the ESCB selling the bonds of that Member State which it had previously purchased.144Accordingly, Decision 2015/774 does not reduce the impetus of the Member States concerned to conduct a sound budgetary policy.– Holding bonds until maturity and purchasing bonds at a negative yield to maturity 145The referring court expresses its doubts as to the compatibility of Decision 2015/774 with Article 123(1) TFEU with regard to (i) the possibility of the ESCB holding bonds purchased until maturity and (ii) the purchase of bonds at a negative yield.146As regards, in the first place, the possibility of the ESCB holding bonds purchased under the PSPP until maturity, it must be recalled that such a practice is in no way precluded by Article 18.1 of the Protocol on the ESCB and the ECB and that it does not imply that the ESCB waives its right to payment of the debt, by the issuing Member State, once the bond matures (judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 118).147The ESCB is thus entitled to evaluate, on the basis of the objectives and characteristics of an open market operations programme, whether it is appropriate to envisage holding the bonds purchased under that programme; selling the bonds is not to be regarded as the rule and holding them as the exception to that rule.148In the present case, although Decision 2015/774 does not provide any further details concerning the possible sale of bonds purchased under the PSPP, it is clear from Article 12(2) of the Guideline that the ESCB retains the option of selling such bonds at any time and without any specific conditions.149Furthermore, the absence of any obligation to sell the bonds purchased is not sufficient to establish an infringement of Article 123(1) TFEU.150First, the mere fact that the ESCB has the option of selling, should it so wish, all or part of the purchased bonds helps to maintain the impetus to conduct a sound budgetary policy, since –– as has been stated in paragraph 135 of this judgment –– that option allows the ESCB to adapt its programme according to the attitudes of the Member States concerned.151Secondly, should the ESCB continue to hold those bonds, that does not, in itself, mean that that impetus of the Member States concerned is diminished, particularly because, as the ECB has pointed out, such retention of the bonds is not accompanied by any obligation for the ESCB to purchase the new bonds which a Member State that ceased to follow a sound budgetary policy would inevitably have to issue.152Although such holding of bonds is nonetheless liable to have some influence on the functioning of the primary and secondary sovereign debt markets, that effect is inherent in purchases on the secondary markets which are authorised by primary law. That effect is, moreover, essential if those purchases are to be used effectively in the framework of monetary policy (see, to that effect, judgment of 16 June 2015, Gauweiler and Others, C‑62/14, EU:C:2015:400, paragraph 108) and are thereby to contribute to the objective of maintaining price stability, mentioned in paragraph 51 of this judgment.153As regards, in the second place, the purchase of government bonds at a negative yield to maturity, the first point to make is that Article 18.1 of the Protocol on the ESCB and the ECB authorises open market operations and does not provide that such operations must concern bonds with a minimum yield.154Secondly, Article 123(1) TFEU is not to be interpreted as preventing the ESCB from purchasing such bonds within the framework of the PSPP.155Although the issue of bonds at a negative yield to maturity is advantageous in financial terms for the Member States concerned, those bonds can be purchased, under the PSPP, only on the secondary markets and they do not therefore give rise to the grant of overdraft facilities or any other type of credit facility in favour of public authorities and bodies of the Member States, or to the direct purchase from them of their debt instruments.156As to the question whether the purchase by the ESCB of government bonds at a negative yield to maturity has an effect equivalent to that of a direct purchase of bonds from the public authorities and bodies of the Member States, it should be pointed out that, in the economic context in which Decision 2015/774 was adopted, authorising the purchase of bonds at a negative yield to maturity does not make it easier for private operators to identify the bonds that the ESCB will buy. It is more likely to reduce the certainty of operators on that point by broadening the range of bonds eligible for purchase under the PSPP. The easing of the yield criteria which Decision 2017/100 effects is, moreover, likely further to reinforce the safeguards adopted by the ESCB in that regard.157In addition, as the ECB has stated, since bonds with a negative yield can be issued only by Member States whose financial situation is assessed positively by operators in the sovereign debt markets, the purchase of such bonds cannot be considered to reduce the impetus of the Member States to follow a sound budgetary policy.158In view of all the foregoing, the answer to the first to fourth questions is that consideration of those questions has disclosed no factor of such a kind as to affect the validity of Decision 2015/774. The fifth question 159By its fifth question, the referring court asks, in essence, whether it is compatible with Article 4(2) TEU and Articles 123 and 125 TFEU for a decision of the ECB to provide for the entirety of the losses that might be sustained by one of the central banks following a potential default by a Member State to be shared between the central banks of the Member States, in a context in which the scale of those losses would make it necessary to recapitalise that central bank.160The Italian Government maintains that this question is inadmissible as it is clearly hypothetical.161Without formally submitting that the fifth question is inadmissible, the Greek, French, Portuguese and Finnish Governments, as well as the Commission and the ECB, observe that it is hypothetical in nature or, at least, that it is concerned with uncertain changes in EU law. The Portuguese Government and the Commission also emphasise that it would be inappropriate for the Court to rule on such changes when they amount to no more than a mere possibility.162In that regard, it should be noted that primary law includes no rules providing for the losses sustained by one of the central banks of the Member States in the course of open market operations to be shared between those central banks.163Moreover, it is undisputed that the ECB decided not to adopt a decision entailing sharing of the entirety of losses made by the central banks of the Member States during implementation of the PSPP. As the referring court points out, the ECB has, up until now, provided, so far as such losses are concerned, only for the sharing of losses generated by securities issued by international issuers.164It follows, first, that the potential volume of those losses is circumscribed by the rule, set out in Article 6(1) of Decision 2015/774, limiting the proportion of those securities to 10% of the book value of purchases under the PSPP and, secondly, that the losses that may be shared, should the case arise, between the central banks of the Member States cannot be the direct consequence of the default of a Member State, to which the referring court alludes.165In that regard, the Court has consistently held that, although questions concerning EU law enjoy a presumption of relevance, it must refuse to give a ruling on a question referred by a national court where it is quite obvious that the interpretation, or the determination of validity, of a rule of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to that effect, judgment of 10 July 2018, Jehovan todistajat, C‑25/17, EU:C:2018:551, paragraph 31 and the case-law cited).166Accordingly, the Court cannot, if it is not to exceed its powers, reply to the fifth question by delivering an advisory opinion on a problem which is, at this stage, hypothetical (see, to that effect, judgments of 10 November 2016, Private Equity Insurance Group, C‑156/15, EU:C:2016:851, paragraph 56, and of 28 March 2017, Rosneft, C‑72/15, EU:C:2017:236, paragraph 194).167Consequently, the fifth question must be found to be inadmissible. Costs 168Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. Consideration of the first to fourth questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of Decision (EU) 2015/774 of the European Central Bank of 4 March 2015 on a secondary markets public sector asset purchase programme, as amended by Decision (EU) 2017/100 of the European Central Bank of 11 January 2017. 2. The fifth question is inadmissible. [Signatures]( *1 ) Language of the case: German. | 2e3fe-190db30-4f0b | EN |
The Conseil d’État should have referred a question to the Court for a preliminary ruling concerning the interpretation of EU law, in order to determine whether it was necessary to refuse to take into account the tax incurred by a non-resident subsidiary on the profits underlying dividends redistributed by a non-resident company | 4 October 2018 ( *1 )(Failure of a Member State to fulfil obligations — Articles 49 and 63 TFEU and the third paragraph of Article 267 TFEU — Series of charges to tax — Difference in treatment according to the Member State of residence of the sub-subsidiary — Reimbursement of the advance payment of tax unduly paid — Requirements relating to the evidence establishing a right to such reimbursement — Capping of the right to reimbursement — Discrimination — National court adjudicating at last instance — Obligation to make a reference for a preliminary ruling)In Case C‑416/17,ACTION under Article 258 TFEU for failure to fulfil obligations, brought on 10 July 2017, European Commission, represented by J.-F. Brakeland and W. Roels, acting as Agents,applicant,v French Republic, represented by E. de Moustier, A. Alidière and D. Colas, acting as Agents,defendant,THE COURT (Fifth Chamber),composed of J.L. da Cruz Vilaça, President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Fifth Chamber, E. Levits (Rapporteur), M. Berger and F. Biltgen, Judges,Advocate General: M. Wathelet,Registrar: M.-A. Gaudissart, Deputy Registrar,having regard to the written procedure and further to the hearing on 20 June 2018,after hearing the Opinion of the Advocate General at the sitting on 25 July 2018,gives the following Judgment 1By its application, the European Commission asks the Court to declare that, by its discriminatory and disproportionate treatment of French parent companies which receive dividends from foreign subsidiaries with regard to the right to reimbursement of tax levied in breach of EU law, as interpreted by the Court in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), the French Republic has failed to fulfil its obligations under Article 49, Article 63 and the third paragraph of Article 267 TFUE, along with the principles of equivalence and effectiveness. National law 2In the version in force during the tax years at issue in the case which gave rise to the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), Article 146(2) of the code général des impôts (General Tax Code; ‘CGI’) provides as follows:‘Where distributions made by a parent company give rise to the application of the advance payment provided for in Article 223 sexies, that advance payment shall be reduced, where appropriate, by the amount of the tax credits which are applied to the income from shareholdings … received in the course of the tax years ending within the last five years at most.’3Article 158 bis(I) of the CGI, in the version in force during the tax years at issue in the case which gave rise to the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), provides as follows:‘Persons who receive dividends distributed by French companies shall be deemed in that respect to have received income in the form of:(a)the sums they receive from the company;(b)a tax credit represented by a credit opened with the Treasury.That tax credit shall be equal to half of the actual payments made by the company.It may be used only in so far as the income is included in the base of the income tax payable by the recipient.It shall be received as payment for that tax.It shall be refunded to natural persons where the amount of the tax credit exceeds the amount of the tax for which they are liable.’4The first paragraph of Article 223 sexies(1) of the CGI indicated, in the version applicable to distributions paid after January 1999:‘… Where the profits distributed by a company are subject to a deduction on the ground that that company has not been subject to corporation tax at the normal rate … that company is required to make an advance payment equal to the tax credit calculated under the conditions provided for in Article 158 bis(I). The advance payment shall be due with respect to distributions giving entitlement to a tax credit provided for in Article 158 bis, whoever the recipients are.’ Background to the dispute Judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581) 5In 2001, Accor, a company governed by French law, sought reimbursement from the French tax authority of the advance payment made when dividends received from its subsidiaries established in other Member States were redistributed. That application for reimbursement was linked to the fact that, when redistributing dividends only from resident companies, a parent company was entitled to set off the tax credit applied to the distribution of those dividends against the advance payment of tax for which it is liable. Following that authority’s refusal to grant that application, Accor brought an action before the French administrative courts.6Having been requested to deliver a preliminary ruling by the Conseil d’État (Council of State, France), the Court stated, in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), first, in paragraph 49, that, by contrast with dividends originating from resident subsidiaries, the French legislation did not permit avoidance of taxation at the level of the non-resident distributing subsidiary, while dividends received both from resident subsidiaries and from non-resident subsidiaries were subject to the advance payment when redistributed.7The Court held, in paragraph 69 of that judgment, that such a difference in treatment between dividends distributed by a resident subsidiary and those distributed by a non-resident subsidiary was contrary to Articles 49 and 63 TFEU.8Next, in paragraph 92 of that judgment, the Court held that a Member State had to be in a position to determine the amount of the corporation tax paid in the Member State in which the distributing company was established which must be the subject of the tax credit granted to the recipient parent company, and, accordingly, that it was not sufficient to provide evidence that the distributing company had been taxed, in the Member State in which it was established, on the profits underlying the dividends distributed, without providing information relating to the nature and rate of the tax actually charged on those profits.9The Court added, in paragraphs 99 and 101 of that judgment, that the evidence required should enable the tax authorities of the Member State of taxation to ascertain, clearly and precisely, whether the conditions for obtaining a tax advantage have been met and that the request for production of that information should be made within the statutory period for retention of administrative documents and accounts, as laid down by the law of the Member State in which the subsidiary is established, without it being required to provide documents covering a period significantly longer than that period.10The Court accordingly held that:‘1.Articles 49 TFEU and 63 TFEU preclude legislation of a Member State intended to eliminate economic double taxation of dividends, such as that at issue in the main proceedings, which allows a parent company to set off against the advance payment, for which it is liable when it redistributes to its shareholders dividends paid by its subsidiaries, the tax credit applied to the distribution of those dividends if they originate from a subsidiary established in that Member State, but does not offer that option if those dividends originate from a subsidiary established in another Member State, since, in that case, that legislation does not give entitlement to a tax credit applied to the distribution of those dividends by that subsidiary;…3.The principles of equivalence and effectiveness do not preclude the reimbursement to a parent company of sums which ensure the application of the same tax regime to dividends distributed by its subsidiaries established in France and those distributed by the subsidiaries of that company established in other Member States, and subsequently redistributed by that parent company, being subject to the condition that the person liable for the tax furnish evidence which is in its sole possession and relating, with respect to each dividend concerned, in particular to the rate of taxation actually applied and the amount of tax actually paid on profits made by subsidiaries established in other Member States, whereas, with respect to subsidiaries established in France, that evidence, known to the administration, is not required. Production of that evidence may however be required only if it does not prove virtually impossible or excessively difficult to furnish evidence of payment of the tax by the subsidiaries established in the other Member States, in the light in particular of the provisions of the legislation of those Member States concerning the avoidance of double taxation, the recording of the corporation tax which must be paid and the retention of administrative documents. It is for the national court to determine whether those conditions are met in the case before the national court.’ The judgments of the Conseil d’État 11Following the delivery of the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), the Conseil d’État (Council of State, France), in its judgments of 10 December 2012, Rhodia (FR:CESSR:2012:317074.20121210), and of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210) (‘the judgments of the Conseil d’État (Council of State)’) established the conditions for the reimbursement of advance payments made in breach of EU law.12With regard, first, to the scope of the reimbursement of the advance payments, the judgments of the Conseil d’État (Council of State) state that:–where a dividend redistributed to a French parent company by one of its subsidiaries established in another Member State has not been taxed at the level of that subsidiary, the tax paid by a sub-subsidiary does not have to be taken into account in determining the advance payment to be reimbursed to the parent company (judgments of the Conseil d’État (Council of State) of 10 December 2012, Rhodia, FR:CESSR:2012:317074.20121210, paragraph 29, and of 10 December 2012, Accor, FR:CESSR:2012:317075.20121210, paragraph 24);where a distributing company has paid effective tax in its Member State at a rate higher than the normal rate of the French tax, that is 33.33%, the amount of the tax credit which it may claim must be limited to one third of the dividends that it has received and redistributed (judgments of the Conseil d’État (Council of State) of 10 December 2012, Rhodia, FR:CESSR:2012:317074.20121210, paragraph 44, and of 10 December 2012, Accor, FR:CESSR:2012:317075.20121210, paragraph 40).13As regards, in the second place, the evidence to be provided in support of the applications for reimbursement, the Conseil d’État (Council of State) acknowledged:the binding effect of the advance payment declarations for the purposes of determining the amount of the dividends received from subsidiaries established in another Member State (judgments of the Conseil d’État (Council of State) of 10 December 2012, Rhodia, FR:CESSR:2012:317074.20121210, paragraphs 24 and 25, and of 10 December 2012, Accor, FR:CESSR:2012:317075.20121210, paragraphs 19 and 20);the need for a person to possess all the evidence capable of demonstrating that its application is well founded throughout the duration of the proceedings, without the expiry of the statutory period for retention exempting it from that obligation (judgments of the Conseil d’État (Council of State) of 10 December 2012, Rhodia, FR:CESSR:2012:317074.20121210, paragraph 35, and of 10 December 2012, Accor, FR:CESSR:2012:317075.20121210, paragraph 31). Pre-litigation procedure 14Following the judgments of the Conseil d’État (Council of State), the Commission received several complaints concerning the conditions for reimbursement of advance payments made by French companies which had received dividends of foreign origin.15Since the Commission was not satisfied with the information exchanged between it and the French Republic, on 27 November 2014, it sent a letter of formal notice to the French authorities in which it noted that certain conditions for the reimbursement of advance payments of tax established by the judgments of the Conseil d’État (Council of State) were likely to constitute infringements of EU law.16In its reply of 26 January 2015, the French Republic disputed the complaints made against it. On 29 April 2016, the Commission sent a reasoned opinion calling upon the French Republic to take steps to comply within a period of two months of receipt of that opinion.17Since the French Republic maintained its position in its reply of 28 June 2016, the Commission brought the present action for failure to fulfil obligations on the basis of Article 258 TFEU. The application 18In support of its application, the Commission relies on four complaints, the first three alleging infringement of Articles 49 and 63 TFEU, as interpreted by the Court in the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), and of the principles of equivalence and effectiveness, and the fourth alleging infringement of the third paragraph of Article 267 TFEU. The first complaint, alleging infringement of Articles 49 and 63 TFEU due to a restriction of the right to reimbursement of the advance payment resulting from the failure to take into account the taxation of sub-subsidiaries established in a Member State other than the French Republic Arguments of the parties 19The Commission considers that the judgments of the Conseil d’État (Council of State) did not remedy the incompatibility, found by the Court in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), of the French legislation with Articles 49 and 63 TFEU. By virtue of the judgments of the Conseil d’État (Council of State), the taxation levied on the non-resident subsidiaries from which the dividends underlying the dividends distributed by the non-resident subsidiary to the resident parent company originate, is not taken into account for the purposes of reimbursement of the advance payment made by the parent company on redistribution of the dividends. Conversely, in a purely domestic chain of interests, economic double taxation is neutralised, since the distribution of dividends between a sub-subsidiary and the subsidiary gives rise to a tax credit of an amount equivalent to the advance payment due on account of that distribution.20Moreover, that difference in treatment on the basis of the head office of the distributing sub-subsidiary cannot be objectively justified.21First, the Commission maintains that the lack, in French law, of the concept of a ‘sub-subsidiary’ cannot constitute the basis for failing to take into account the taxation of the profits underlying the dividends distributed by the non-resident sub-subsidiary to the parent company via its subsidiary, as the risk would arise that the tax credit mechanism would be applied too formalistically. In addition, the treatment of dividends is at issue on the basis of their origin and not on the basis of entities in a chain of interests. In that regard, the fact that a subsidiary benefited from a tax exemption is irrelevant, since, initially the dividends distributed by the sub-subsidiary were taxed.22Next, since there is an obligation under French law to make an advance payment when distributing dividends, it cannot be claimed that the additional tax burden applicable to dividends distributed by a resident company, which originate in a prior distribution of dividends between its non-resident subsidiary and sub-subsidiary, derives from the legislation of the Member States in which they are established.23Finally, the Commission maintains that the French Republic cannot avoid its obligation to prevent economic double taxation in the event of the distribution of dividends originating in the profits of a non-resident sub-subsidiary on the ground that it is not required to adapt its tax system to different tax regimes of other Member States. According to the Commission, the French Republic is required not to adapt its own tax system, but only to apply it equally, irrespective of the origin of the dividends distributed.24The French Republic does not dispute the fact that the arrangements for reimbursement of the advance payment as defined in the judgments of the Conseil d’État (Council of State) do not permit the tax levied on dividends distributed by a non-resident sub-subsidiary to be offset. However, it claims that the French system only ensures avoidance of double taxation at the level of each distributing company. A Member State is free to organise its taxation system, provided that it does not entail discrimination, with the result that it is not required to adapt its own tax system to those of other Member States.25In the present case, French tax legislation does not allow the taxation payable by a parent company to be offset against the taxes paid by its resident sub-subsidiaries. The tax credit is granted to the parent company solely on account of the tax levied on the profits of the distributing subsidiary. Accordingly, the French Republic is under no obligation to ensure that account is taken, when calculating the reimbursement of the advance payment made, of the taxation levied on non-resident sub-subsidiaries which distribute dividends.26The fact that the distribution of dividends by a sub-subsidiary to a subsidiary has been taxed is then the result of the application of tax legislation from outside the French Republic, which it is not for it to correct.27Furthermore, in so far as the French system for the elimination of double taxation is silent as regards sub-subsidiaries, the tax payable when dividends are distributed may be set off only in respect of the company which receives those dividends. In other words, it concerns a binary relationship between two entities, a distributor and a recipient, and in the event of redistribution by an intermediate company, the sub-subsidiary is then considered to be the subsidiary of the intermediate company.28In those circumstances, the French system must thus be distinguished from the UK system of advance corporation tax at issue in the cases giving rise to the judgments of 12 December 2006, Test Claimants in the FII Group Litigation (C‑446/04, EU:C:2006:774), and of 13 November 2012, Test Claimants in the FII Group Litigation (C‑35/11, EU:C:2012:707). The French system does not take into account the tax payable by sub-subsidiaries, irrespective of whether or not they are resident, since its approach is based on offsetting taxation and not group taxation. Findings of the Court 29By its first complaint, the Commission considers that the impossibility resulting from the judgments of the Conseil d’État (Council of State) of claiming, for reimbursement of the advance payment payable by a parent company resident in France when distributing dividends, the tax levied on the profits underlying those dividends made by a sub-subsidiary of that company established in another Member State, when they were redistributed to that parent company via a non-resident subsidiary, cannot remedy the incompatibility of the French mechanism for the avoidance of double taxation with Articles 49 and 63 TFEU, as found by the Court in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581).30In paragraph 69 of that judgment, the Court held that Articles 49 and 63 TFEU preclude legislation of a Member State intended to eliminate economic double taxation of dividends which allows a parent company to set off against the advance payment, for which it is liable when it redistributes to its shareholders dividends paid by its subsidiaries, the tax credit applied to the distribution of those dividends if they originate from a subsidiary established in that Member State, but does not offer that right if those dividends were distributed by a subsidiary established in another Member State, since, in that case, such distribution does not entail a tax credit applied to the distribution of those dividends by that subsidiary.31As the Commission maintains, the implementation by the Conseil d’État (Council of State) of the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), has the consequence that a resident parent company, which is a recipient of dividends distributed by one of its subsidiaries established in another Member State, is granted the advance payment reimbursement on account of the redistribution of those dividends to its shareholders, taking into account the tax levied on those dividends at subsidiary level only. By contrast, the tax levied on those dividends at an earlier stage, at a lower level of the chain of interests with respect to a sub-subsidiary, is not taken into account for the purpose of determining the amount to be reimbursed.32In that regard, the French Republic does not dispute that, in the context of a purely domestic chain of interests, the French system for the avoidance of economic double taxation automatically entails taking into account the taxation of dividends distributed at every level of a chain of interests. Every distribution of dividends by a subsidiary gives rise to an entitlement to a tax credit that the parent company can set off against the advance payment for which it is liable, as a subsidiary, when it redistributes those dividends to its own parent company, an advance payment which is equal to the tax credit. The system in question thus prevents economic double taxation of the profits distributed by granting a tax credit to the parent company which offsets the advance payment payable on the profits it has redistributed.33By contrast, in the case of cross-border distribution of dividends, the limitation, for calculation of the advance payment payable in the event of redistribution by a recipient resident parent company, to the taxation levied on those dividends in respect of the non-resident distributing subsidiary itself, entails, where the profits underlying those dividends were made by a sub-subsidiary, less favourable treatment of those dividends than in the case of a purely domestic chain of interests.34In the event that the dividends distributed by a non-resident subsidiary to its resident parent company have enjoyed a tax exemption in the Member State in which the subsidiary is established, the amount of the reimbursement of the advance payment due in the event of redistribution is zero, since the dividends were not taxed at subsidiary level. Failure to take into account the effective tax levied on the profits underlying the dividends which were distributed at an earlier stage, at a lower level of the chain of interests, that is to say by a sub-subsidiary of the subsidiary therefore entails economic double taxation of the benefits distributed.35As the French Republic claims, EU law currently in force does not lay down any general criteria for the attribution of areas of competence between the Member States in relation to the elimination of double taxation in the European Union. Thus, each Member State remains free to organise its system for taxing distributed profits, provided that the system in question does not entail discrimination prohibited by the FEU Treaty (see, to that effect, judgment of 13 November 2012, Test Claimants in the FII Group Litigation, C‑35/11, EU:C:2012:707, paragraph 40).36It should be recalled that, in the context of tax rules, such as those whose implementing rules are challenged by the Commission, which seek to prevent the economic double taxation of distributed profits, the situation of a corporate shareholder receiving foreign-sourced dividends is comparable to that of a corporate shareholder receiving nationally-sourced dividends in so far as, in each case, the profits made are, in principle, liable to be subject to a series of charges to tax (judgments of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 62; of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 45; and of 13 November 2012, Test Claimants in the FII Group Litigation, C‑35/11, EU:C:2012:707, paragraph 37).37Articles 49 and 63 TFEU require a Member State which has a system for the avoidance economic double taxation as regards dividends paid to residents by resident companies to accord equivalent treatment to dividends paid to residents by non-resident companies (judgments of 12 December 2006, Test Claimants in the FII Group Litigation, C‑446/04, EU:C:2006:774, paragraph 72; of 10 February 2011, Haribo Lakritzen Hans Riegel and Österreichische Salinen, C‑436/08 and C‑437/08, EU:C:2011:61, paragraph 60; and of 13 November 2012, Test Claimants in the FII Group Litigation, C‑35/11, EU:C:2012:707, paragraph 38) unless a difference in treatment is justified by overriding reasons in the public interest (judgments of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 44, and of 11 September 2014, Kronos International, C‑47/12, EU:C:2014:2200, paragraph 69).38Furthermore, the argument relied on by the French Republic alleging that the lack of the concept of a ‘sub-subsidiary’ in the French system for the avoidance of double taxation is irrelevant, with regard to the objective of the rules in question and the mechanism adopted for its implementation.39Even though the granting of the tax credit is provided for only in the context of a binary relationship between the parent company and its subsidiary, the fact remains that the tax regime in question also avoids economic double taxation of profits distributed by resident sub-subsidiaries on account of the successive granting, at all levels of the chain of interests of companies established in France, of the tax advantage in question.40The French Republic submits that the disadvantages which could arise from the parallel exercise of powers of taxation by different Member States do not constitute restrictions on the freedoms of movement to the extent that such an exercise is not discriminatory.41Indeed, the status of Member State of residence of the company receiving dividends cannot entail the obligation for that Member State to offset a fiscal disadvantage arising where a series of charges to tax is imposed entirely by the Member State in which the company distributing those dividends is established, in so far as the dividends received are neither taxed nor taken into account in a different way by the first Member State as regards companies established in that State (see, to that effect, judgment of 11 September 2014, Kronos International, C‑47/12, EU:C:2014:2200, paragraph 84).42However, as is apparent from paragraph 39 of the present judgment, the tax disadvantage in question arises from French tax legislation. That legislation subjects, by means of the advance payment, the redistribution of profits already taxed to tax but allows that economic double taxation to be eliminated where the redistributed profits were initially taxed in respect of a resident sub-subsidiary. By contrast, the same legislation subjects the redistribution of profits originating initially from a non-resident sub-subsidiary to tax even if those profits were previously taxed in the Member State in which that sub-subsidiary is established, without allowing the latter taxation to be taken into account for the purposes of eliminating the economic double taxation arising from the French legislation.43The French Republic was therefore required, in order to bring an end to the discriminatory treatment thus found in the application of that tax mechanism seeking to avoid the economic double taxation of distributed dividends, to take into account the taxation levied earlier on the distributed profits resulting from the exercise of the tax powers of the Member State in which the dividends originated, within the limits of its own powers of taxation (see, to that effect, judgment of 11 September 2014, Kronos International, C‑47/12, EU:C:2014:2200, paragraph 86), irrespective of the level of the chain of interests on which that tax was levied, that is to say a subsidiary or a sub-subsidiary.44It follows from paragraph 82 of the judgment of 13 November 2012, Test Claimants in the FII Group Litigation (C‑35/11, EU:C:2012:707), read in conjunction with the operative part of the judgment of 12 December 2006, Test Claimants in the FII Group Litigation (C‑446/04, EU:C:2006:774), that it is for the Member State, which allows a resident company that receives dividends from a non-resident company to deduct the amount of the tax paid by the second company from the amount payable by the first company in respect of corporation tax, to recognise that right for a resident company receiving dividends from a non-resident company, concerning tax corresponding to the profits distributed, irrespective of whether it was paid by a direct or indirect subsidiary of the first company.45In that regard, the difference between the French mechanism, based on the grant of a tax credit in question in the present case and the UK mechanism at issue in the cases giving rise to the judgments of 12 December 2006, Test Claimants in the FII Group Litigation (C‑446/04, EU:C:2006:774), and of 13 November 2012, Test Claimants in the FII Group Litigation (C‑35/11, EU:C:2012:707), does not affect the principle recalled in the preceding paragraph. That difference concerns only the taxation method used to achieve the same objective, that is to say eliminating economic double taxation of distributed profits. Thus, each Member State remains free to organise its system for the avoidance of economic double taxation of distributed profits, in so far as the system in question does not entail discrimination prohibited by the FEU Treaty (see, to that effect, judgment of 13 November 2012, Test Claimants in the FII Group Litigation, C‑35/11, EU:C:2012:707, paragraph 40).46It follows from the foregoing that, by refusing to take into account, in order to calculate the reimbursement of the advance payment made by a resident parent company in respect of the distribution of dividends paid by a non-resident sub-subsidiary via a non-resident subsidiary, the tax on the profits underlying those dividends incurred by that non-resident sub-subsidiary, in the Member State in which it is established, even though the national mechanism for the avoidance of economic double taxation allows, in the case of a purely domestic chain of interests, the tax levied on the dividends distributed by a company at every level of that chain of interests to be offset, the French Republic has failed to fulfil its obligations under Articles 49 and 63 TFEU. The second complaint, alleging that the evidentiary requirements laid down in order to establish the right to reimbursement of the advance payment unlawfully made are disproportionate 47The Commission’s second complaint consists of two parts.48By the first part of that complaint, the Commission claims that the requirement that the accounting documents relating to the dividends distributed are consistent with the minutes of general meetings of the subsidiaries recording the profits made in the form of distributable dividends makes it very difficult or impossible to prove that the dividends distributed are connected to a particular accounting result, since the minutes of general meetings often refer to an accounting aggregate, encompassing carry-overs from previous financial years.49In the second part, the Commission maintains that, by making the right to reimbursement of the advance payment conditional upon lodging a prior advance payment declaration identifying the advance payment amounts paid in respect of redistributions of dividends, the judgments of the Conseil d’État (Council of State) nullify that right in practice. This is particularly the case for companies which had not claimed the benefit of the tax credit for distributed dividends from non-resident subsidiaries before the delivery of the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581).50Since, by virtue of French legislation, resident companies could not be granted a tax credit in respect of the advance payment payable owing to the distribution of dividends from a non-resident subsidiary, those companies could not be required to record those dividends in their advance payment declarations.51Finally, the third part of that complaint alleges that, having indicated that the expiry of the statutory period for retention of the documents did not exempt the company seeking reimbursement of the advance payment unlawfully made from its obligation to produce all the evidence capable of demonstrating that its application was well founded, the judgments of the Conseil d’État (Council of State) make it extremely difficult or impossible to prove that tax was paid by the non-resident subsidiary on the dividends distributed.52First of all, the French Government maintains that the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581) expressly stated that reimbursements of the advance payment were conditional upon the applicant companies providing evidence, by any means, of the taxes paid by their subsidiaries in the Member State in which they are established.53In that context, the judgments of the Conseil d’État (Council of State) are marked by a particularly flexible approach, since that court has accepted any form of documents which allows the companies to show the tax rate to which their non-resident subsidiaries were subject.54First, the French Republic states that, according to the judgments of the Conseil d’État (Council of State), proof that the taxation in respect of which offsetting was sought had been charged on dividends corresponding to a particular financial year was not required. The tax paid on the basis of dividends is thus considered as a whole, regardless of the financial years from which they originated.55In addition, the fact that, in the cases which led to the adoption of the judgments of the Conseil d’État (Council of State), that court relied on the minutes of general meetings of non-resident subsidiaries stems from the fact that such documents were submitted by the companies concerned to prove the tax rate amount charged on the dividends distributed.56Second, the French Republic maintains that the advance payment forms make it technically possible to identify the amounts of the advance payments made in respect of dividend redistributions from non-resident subsidiaries. In addition, since the advance payment is payable only in the event of redistribution, the dividends in respect of which proof of the amount of taxation is required are necessarily those which have been redistributed.57Third, the judgments of the Conseil d’État (Council of State) did not require supporting evidence not covered by the statutory retention period to be produced. The Conseil d’État (Council of State) based its assessment on the documents submitted by the companies concerned. In any event, it is for a taxpayer who has submitted a tax claim to retain the documents required to prove that his application is well founded until the outcome of the administrative or litigation procedures, regardless of the statutory period for retention of those documents.– Preliminary observations 58It should be noted, first, that the tax authorities of a Member State are entitled to require the taxpayer to provide such proof as they may consider necessary in order to determine whether the conditions of a tax advantage provided for in the legislation at issue have been met and, consequently, whether to allow that advantage (see, to that effect, judgments of 3 October 2002, Danner, C‑136/00, EU:C:2002:558, paragraph 50; of 26 June 2003, Skandia and Ramstedt, C‑422/01, EU:C:2003:380, paragraph 43; of 27 January 2009, Persche, C‑318/07, EU:C:2009:33, paragraph 54; of 10 February 2011, Haribo Lakritzen Hans Riegel and Österreichische Salinen, C‑436/08 and C‑437/08, EU:C:2011:61, paragraph 95; of 30 June 2011, Meilickeand Others, C‑262/09, EU:C:2011:438, paragraph 45; and of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 82).59Second, in order to provide a practical remedy to the incompatibility of the French legislation with Articles 49 and 63 TFEU, as interpreted by the Court in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), the Court held that a Member State must be in a position to determine the amount of the corporation tax paid in the State in which the distributing company is established, which must be the subject of the tax credit granted to the recipient parent company, and stated that it is not sufficient to provide evidence that the distributing company has been taxed, in the Member State in which it is established, on the profits underlying the dividends distributed, without providing information relating to the nature and rate of the tax actually charged on those profits (judgment of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 92).– The first part 60It must be noted that, in its application, in order to establish that the French Republic imposes disproportionate evidential requirements by requiring that the accounting documents relating to the dividends distributed are consistent with the minutes of general meetings of the subsidiaries recording the profits made in the form of distributable dividends, the Commission refers to paragraphs 43 and 56 of the judgment of the Conseil d’État (Council of State) of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210) concerning the examination of reimbursable sums in respect of 1999 to 2001.61It follows that the Commission does not dispute the need for a parent company which seeks reimbursement of the advance payment unlawfully made to adduce evidence relating, for each dividend, to the tax rate actually applied and to the amount of tax actually paid in relation to profits made by non-resident subsidiaries.62It does not follow from the judgment of the Conseil d’État (Council of State) of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210), that that court intended to limit the evidence that the amounts for which reimbursement is sought actually concern distributed dividends to the submission of minutes of general meetings of subsidiaries recording such a distribution.63Although reference is made, in that judgment, to such documents, there are no grounds to conclude that recognition of the right to reimburse an advance payment unlawfully made necessarily requires that they be produced.64In that regard, it must be recalled that, in the context of proceedings brought under Article 258 TFEU for failure to fulfil obligations, it is for the Commission to prove the allegation that an obligation has not been fulfilled, by placing before the Court all the information required to enable the Court to establish that the obligation has not been fulfilled (judgment of 28 January 2016, Commission v Portugal, C‑398/14, EU:C:2016:61, paragraph 47).65In the light of the foregoing considerations, the Commission has failed to satisfy its requirement to adduce evidence, with the result that the first part of the second complaint cannot succeed.– The second part 66The Commission considers that French law, as applied in the judgments of the Conseil d’État (Council of State) and, more particularly, the limitation arising from the requirement to produce advance payment declarations and the ability to rely on the choices made by a parent company when making the advance payment at the time of those declarations constitutes an infringement of the principles of equivalence and effectiveness.67In that regard, it is common ground that, in order to remedy the incompatibility of the French legislation with Articles 49 and 63 TFEU, as interpreted by the Court in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), it was for the French Republic to reimburse the advance payments made by resident companies when redistributing dividends from their non-resident subsidiaries, taking into account the tax levied on the profits underlying those dividends in the State in which those subsidiaries are established, within the limits of the tax rate applicable in France.68Since, first, an application for reimbursement must be conditional upon the making of the earlier advance payment and, second, the chargeable event for making an advance payment is the distribution of dividends, such an application cannot be admissible if no advance payment has been made.69That is why the advance payment declarations concern the distribution of the dividends as a whole, irrespective of their origin, thereby allowing the amounts of the advance payment made in respect of the distribution of dividends from non-resident companies to be identified.70In that regard, the French Republic adduced evidence that the advance payment declaration forms require distributions of dividends from foreign subsidiaries to be mentioned, which the Commission ceased to dispute at the stage of its reply.71Accordingly, it cannot be held that objecting to the choices made by a parent company when making the advance payment in the relevant declaration constitutes an infringement of the principles of equivalence and effectiveness.72In those circumstances, having regard to the fact that the burden of proof lies with the Commission, as was noted in paragraph 64 of the present judgment, the second part of the second complaint must be rejected as unfounded.– The third part 73According to the Commission, the judgments of the Conseil d’État (Council of State) make it very difficult, or impossible, to prove that tax has been paid by a non-resident subsidiary on dividends distributed, in that they do not exempt the parent company claiming reimbursement of the advance payment from the obligation to produce supporting documents relating to the payment for which the statutory retention period, arising from the national law of another Member State, has expired.74It should be noted, as regards compliance with the principle of effectiveness that the evidence required should enable the tax authorities of the Member State of taxation to ascertain, clearly and precisely, whether the conditions for obtaining a tax advantage are met (see, to that effect, judgment of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 99).75In addition, the production of information relating, for each dividend to the tax rate actually applied and to the amount of tax actually paid on profits made by subsidiaries established in other Member States can only be required on condition that it is not virtually impossible or excessively difficult to furnish proof of payment of the tax by the subsidiaries established in the other Member States, in the light in particular of the provisions of the legislation of those Member States concerning the avoidance of double taxation, the recording of the corporation tax which must be paid and the retention of administrative documents (see, to that effect, judgment of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 100).76In that regard, the request for production of that information should be made within the statutory period for retention of administrative documents or accounts, as laid down by the law of the Member State in which the subsidiary is established. Thus, such a request cannot concern documents covering a period significantly longer than the statutory period for retention of administrative documents and accounts (see, to that effect, judgment of 15 September 2011, Accor, C‑310/09, EU:C:2011:581, paragraph 101).77Accordingly, it follows from the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), that the tax authorities of a Member State cannot require the production of administrative documents in support of an application for reimbursement after a period significantly longer than the statutory period for retention of those documents in the Member State of origin of those documents.78In that regard, it follows from paragraph 35 of the judgment of the Conseil d’État (Council of State) of 10 December 2012, Rhodia (FR:CESSR:2012:317074.20121210), and from paragraph 31 of the judgment of the Conseil d’État (Council of State) of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210), that a company which has submitted a claim must possess all the evidence capable of demonstrating that its application is well founded throughout the duration of the proceedings, without the expiry of the statutory period for retention of the documents exempting it from that obligation.79In those circumstances, as the Advocate General pointed out in point 64 of his Opinion, the relevant date for assessing the existence of any infringement of the principle of effectiveness, on account of the fact that the tax authorities of a Member State requested that an administrative document be produced in order to prove certain facts is the date on which that pre-litigation procedure was initiated.80Accordingly, the obligation to submit evidence capable of demonstrating that an application for reimbursement is well founded, in the context of a claim procedure, cannot constitute an infringement of the principle of effectiveness, to the extent that that obligation does not cover a period significantly longer than the statutory period for retention of administrative documents and accounts.81The judgments of the Conseil d’État (Council of State) do not point to any infringement of that principle in stating that the expiry of the statutory period for retaining the documents does not affect a company’s obligation to possess all the evidence capable of demonstrating that its application is well founded ‘throughout the entire procedure’, and in particular during the court proceedings. A company cannot claim that the expiry of that period automatically entails a right to reimbursement of the advance payment made.82As regards the alleged infringement of the principle of equivalence, the Commission does not put forward any argument to substantiate that complaint.83Consequently, since the third part of the second complaint is not well founded, the second complaint must be rejected in its entirety. The third complaint, alleging the capping of the amount reimbursable in respect of the advance payment unlawfully made at one third of the amount of the dividends distributed 84The Commission recalls that the judgments of the Conseil d’État (Council of State) impose a limit on the amount to be reimbursed to parent companies in respect of the advance payment made for the distribution of dividends received from a non-resident subsidiary, which amounts to one third of the amount of the dividends distributed.85According to the Commission, since the amount of the tax credit for dividends distributed by a resident subsidiary is always equal to half of those dividends, the judgments of the Conseil d’État (Council of State) did not put an end to the discrimination, found by the Court in the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), between dividends distributed by a resident company and those distributed by a non-resident company.86The French Republic submits that the cap on the reimbursement of the advance payment at one third of the dividends received corresponds to the amount of the advance payment actually made. The equal treatment of dividends distributed by resident subsidiaries and dividends distributed by non-resident subsidiaries is thus fully guaranteed.87In addition, such a cap on the reimbursement of the advance payment allows account to be taken of the tax charged on dividends distributed from the Member State in which the subsidiary is established, in the same way as that charged on dividends distributed by a resident subsidiary.88On that basis, that limitation could indeed, in practice, lead to a reimbursement of the advance payment which is lower than the tax actually paid by the distributing subsidiary in its Member State of establishment. However, that reimbursement corresponds exactly to the amount of the advance payment actually made by the resident company, with the result that the treatment of dividends of foreign origin is not more favourable than that of dividends distributed by a resident company.89In paragraph 87 of the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), the Court held that while it follows from the case-law that EU law requires a Member State which has a system for the avoidance of double economic taxation as regards dividends paid to residents by resident companies to treat dividends paid to residents by resident companies in the same way as dividends paid to residents by non-resident companies, that law does not require Member States to give taxpayers which have invested in foreign companies an advantage compared with those who have invested in domestic companies.90In the present case, it is common ground that, by virtue of the judgments of the Conseil d’État (Council of State), the amount to be reimbursed to the parent companies in respect of the advance payment, made with the distribution of the dividends received from a non-resident subsidiary, is capped at one third of the amount of the dividends received.91The Commission considers that, since the tax credit granted to a company distributing dividends received from a resident subsidiary is always equal to half of those dividends, the cap, in the event of distribution of dividends from a non-resident subsidiary, on the reimbursement of the advance payment made at one third of the amount of those dividends constitutes discrimination.92Such an argument cannot, however, be accepted.93As the Advocate General pointed out in point 74 of his Opinion, the application of the provisions of the CGI in force during the tax years at issue in the judgments of the Conseil d’État (Council of State) can lead, ultimately, to equivalent treatment of dividends redistributed by a parent company to its shareholders, irrespective of whether the subsidiary which initially made those profits was resident or non-resident.94In that regard, it follows from the wording of the first paragraph of Article 223 sexies(1) of the CGI that the advance payment that a parent company is required to make when redistributing dividends to its own shareholders is equal to the tax credit calculated under the conditions provided for in Article 158 bis of the CGI, that tax credit being equal to half of the dividends paid earlier by that parent company. That tax credit is used to offset, in respect of the parent company, the obligation to make the advance payment and eliminate the economic double taxation of the profits distributed.95As the French Republic set out in its defence, without being contradicted in that regard by the Commission, when the dividends distributed by a subsidiary are not matched by any tax credit, which is the case concerning a non-resident subsidiary, since the advance payment to be made by the parent company is equivalent to a third of the dividends distributed. It follows that the cap on the reimbursement of the advance payment to the parent company at a third of the dividends distributed may also, ultimately, avoid economic double taxation of the profits distributed.96In those circumstances, that cap can remedy the difference in treatment between those dividends and dividends from a resident subsidiary, as noted by the Court in its judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581). By virtue of the principles identified by the Court in that judgment, in particular in paragraph 88 thereof, a Member State cannot be required to grant a tax credit in respect of tax paid, in another Member State, on distributed profits which exceeds the amount of tax resulting from the application of its own tax legislation.97The Commission also argues, in its reply, that, when a parent company, after recovering the advance payment which was unlawfully made, distributes those amounts to its own shareholders, those shareholders are likely to experience a shortfall compared with a purely domestic distribution.98It suffices to note, in that regard, that the circumstances leading to the judgments of the Conseil d’État (Council of State) did not concern the situation of the ultimate shareholders of the distributing companies, since the actions of the parent companies in question in those cases concern the recovery of the advance payment made by the latter.99Therefore, the third complaint must be dismissed. Fourth complaint, alleging infringement of Article 267(3) TFEU 100According to the Commission, the Conseil d’État (Council of State) should have made a reference for a preliminary ruling to the Court before establishing the procedures for reimbursement of the advance payment, the levying of which was found to be incompatible with Articles 49 and 63 TFEU in accordance with the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581).101First, the Commission submits that the Conseil d’État (Council of State) is a court against whose decisions there is no judicial remedy under national law, within the meaning of the third paragraph of Article 267 TFEU, which is required to make a reference for a preliminary ruling when it is seised of a dispute that raises a question concerning the interpretation of EU law.102Second, the compatibility with EU law of the restrictions arising from the judgments of the Conseil d’État (Council of State) appears doubtful, at the very least, in the light, in particular, of the case-law established in the judgment of 13 November 2012, Test Claimants in the FII Group Litigation (C‑35/11, EU:C:2012:707). In any event, the mere fact that the Commission has a different understanding of the principles established in the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), from that expressed by the Conseil d’État (Council of State) shows that the solutions arising from those judgments cannot enjoy a presumption of compatibility with EU law.103The French Republic maintains that the Commission has failed to specify the difficulties with which the Conseil d’État (Council of State) was faced in the cases which gave rise to the judgments referred to by that institution and which justified a reference for a preliminary ruling under the third paragraph of Article 267 TFEU. The only difficulties faced by the Conseil d’État (Council of State) were, in reality, factual difficulties and not difficulties concerning the interpretation of EU law.104In any event, according to the French Republic, the Conseil d’État (Council of State) was justified in considering that the answers to the questions put to it could be clearly inferred from the case-law.105It is important to note that the Commission’s fourth complaint is based on the premiss that the Conseil d’État (Council of State), as a court adjudicating at last instance, was not entitled to interpret EU law, as it arises from the judgments of 10 December 2012, Rhodia (FR:CESSR:2012:317074.20121210), and of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210), without, first, making a reference for a preliminary ruling to the Court.106In that regard, it should be noted, first, that the obligation of the Member States to comply with the provisions of the FEU Treaty is binding on all their authorities, including, for matters within their jurisdiction, the courts.107Thus, a Member State’s failure to fulfil obligations may, in principle, be established under Article 258 TFEU whatever the agency of that State whose action or inaction is the cause of the failure to fulfil its obligations, even in the case of a constitutionally independent institution (judgments of 9 December 2003, Commission v Italy, C‑129/00, EU:C:2003:656, paragraph 29, and of 12 November 2009, Commission v Spain, C‑154/08, not published, EU:C:2009:695, paragraph 125).108Second, it must also be noted that, where there is no judicial remedy against the decision of a national court, that court is in principle obliged to make a reference to the Court within the meaning of the third paragraph of Article 267 TFEU where a question of the interpretation of the FEU Treaty is raised before it (judgment of 15 March 2017, Aquino, C‑3/16, EU:C:2017:209, paragraph 42).109Moreover, the obligation to make a reference laid down in that provision is intended in particular to prevent a body of national case-law that is not in accordance with the rules of EU law from being established in any of the Member States (judgment of 15 March 2017, Aquino, C‑3/16, EU:C:2017:209, paragraph 33 and the case-law cited).110Indeed, that court is not under such an obligation when it finds that the question raised is irrelevant or that the provision of EU law in question has already been interpreted by the Court or that the correct application of EU law is so obvious as to leave no scope for any reasonable doubt, and the existence of such a possibility must be assessed in the light of the specific characteristics of EU law, the particular difficulties to which its interpretation gives rise and the risk of divergences in judicial decisions within the European Union (see, to that effect, judgments of 6 October 1982, Cilfit and Others, 283/81, EU:C:1982:335, paragraph 21; of 9 September 2015, Ferreira da Silva e Brito and Others, C‑160/14, EU:C:2015:565, paragraphs 38 and 39; and of 28 July 2016, Association France Nature Environnement, C‑379/15, EU:C:2016:603, paragraph 50).111In that regard, as regards the matter examined in the context of the first complaint of the present action for failure to fulfil obligations, as the Advocate General observed in point 99 of his Opinion, the judgment of 15 September 2011, Accor (C‑310/09, EU:C:2011:581), being silent in that respect, the Conseil d’État (Council of State) chose to depart from the judgment of 13 November 2012, Test Claimants in the FII GroupLitigation (C‑35/11, EU:C:2012:707), on the ground that the British scheme at issue was different from the French tax credit and advance payment scheme, while it could not be certain that its reasoning would be equally obvious to the Court.112Furthermore, it follows from what was held in paragraphs 29 to 46 of the present judgment, in the context of examining the first complaint raised by the Commission, that the absence of a reference for a preliminary ruling on the part of the Conseil d’État (Council of State) in the cases giving rise to the judgments of 10 December 2012, Rhodia (FR:CESSR:2012:317074.20121210), and of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210), led that court to adopt, in those judgments, a solution based on an interpretation of the provisions of Articles 49 and 63 TFEU which is at variance with that of the present judgment, which implies that the existence of reasonable doubt concerning that interpretation could not be ruled out when the Conseil d’État (Council of State) delivered its ruling.113Consequently, there is no need to examine the other arguments put forward by the Commission in the context of the present complaint and it must be held that it was for the Conseil d’État (Council of State), as a court or tribunal against whose decisions there is no judicial remedy under national law, to request a preliminary ruling from the Court of Justice on the basis of the third paragraph of Article 267 TFEU in order to avert the risk of an incorrect interpretation of EU law (see, to that effect, judgment of 9 September 2015, Ferreira da Silva e Brito and Others, C‑160/14, EU:C:2015:565, paragraph 44).114Consequently, since the Conseil d’État (Council of State) failed to make a reference to the Court, in accordance with the procedure provided for in the third paragraph of Article 267 TFEU, in order to determine whether it was necessary to refuse to take into account, for the purpose of calculating the reimbursement of the advance payment made by a resident company in respect of the distribution of dividends paid by a non-resident company via a non-resident subsidiary, the tax incurred by that second company on the profits underlying those dividends, even though its interpretation of the provisions of EU law in the judgments of 10 December 2012, Rhodia (FR:CESSR:2012:317074.20121210), and of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210), was not so obvious as to leave no scope for doubt, the fourth complaint must be upheld. Costs 115Under Article 138(1) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the French Republic has been unsuccessful in part, each party must be ordered to bear its own costs.On those grounds, the Court (Fifth Chamber) hereby: 1. Declares that, by refusing to take into account, in order to calculate the reimbursement of the advance payment made by a resident company in respect of the distribution of dividends paid by a non-resident company via a non-resident subsidiary, the tax incurred by that second company on the profits underlying those dividends, even though the national mechanism for the avoidance of economic double taxation allows, in the case of a purely domestic chain of interests, the tax levied on the dividends distributed by a company at every level of that chain of interests to be offset, the French Republic has failed to fulfil its obligations under Articles 49 and 63 TFEU; 2. Declares that, since the Conseil d’État (Council of State, France) failed to make a reference to the Court of Justice of the European Union, in accordance with the procedure provided for in the third paragraph of Article 267 TFEU, in order to determine whether it was necessary to refuse to take into account, for the purpose of calculating the reimbursement of the advance payment made by a resident company in respect of the distribution of dividends paid by a non-resident company via a non-resident subsidiary, the tax incurred by that second company on the profits underlying those dividends, even though its interpretation of the provisions of EU law in the judgments of 10 December 2012, Rhodia (FR:CESSR:2012:317074.20121210), and of 10 December 2012, Accor (FR:CESSR:2012:317075.20121210), was not so obvious as to leave no scope for doubt, the French Republic failed to fulfil its obligations under the third paragraph of Article 267 TFEU; 3. Dismisses the action as to the remainder; 4. Orders the European Commission and the French Republic to bear their own costs. [Signatures]( *1 ) Language of the case: French. | 83c33-373f1d3-4eb4 | EN |
A person who publishes a number of sales advertisements on a website is not automatically a ‘trader’ | 4 October 2018 ( *1 )(Reference for a preliminary ruling — Consumer protection — Directive 2005/29/EC — Article 2(b) and (d) — Directive 2011/83/EU — Article 2(2) — Concepts of ‘trader’ and ‘commercial practices’)In Case C‑105/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Administrativen sad — Varna (Administrative Court, Varna, Bulgaria), made by decision of 16 February 2017, received at the Court on 28 February 2017, in the proceedings Komisia za zashtita na potrebitelite v Evelina Kamenova, other party: Okrazhna prokuratura — Varna, THE COURT (Fifth Chamber),composed of J.L. da Cruz Vilaça, President of the Chamber, E. Levits, A. Borg Barthet (Rapporteur), M. Berger and F. Biltgen, Judges,Advocate General: M. Szpunar,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:–the German Government, by T. Henze, M. Hellmann and J. Techert, acting as Agents,the European Commission, by A. Cleenewerck de Crayencour, Y. Marinova, G. Goddin and N. Ruiz García, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 31 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 2(b) and (d) of Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) (OJ 2005 L 149, p. 22).2The request has been made in proceedings between Ms Evelina Kamenova and the Komisia za zashtita na potrebitelite (Consumer Protection Commission, Bulgaria) (‘the CPC’) concerning an act adopted by the CPC imposing administrative fines on Ms Kamenova on the ground that she failed to provide information to consumers in advertisements for the sale of goods published on a website. Legal context EU law Directive 2005/29 3Article 2 of Directive 2005/29 provides:‘For the purposes of this Directive:(a)“consumer” means any natural person who, in commercial practices covered by this Directive, is acting for purposes which are outside his trade, business, craft or profession;(b)“trader” means any natural or legal person who, in commercial practices covered by this Directive, is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader;…(d)“business-to-consumer commercial practices” … means any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers;…’4Article 3(1) of that directive is worded as follows:‘This Directive shall apply to unfair business-to-consumer commercial practices, as laid down in Article 5, before, during and after a commercial transaction in relation to a product.’ Directive 2011/83/EU 5Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council (OJ 2011 L 304, p. 64) provides in its Article 2:(1)“consumer” means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business, craft or profession;(2)“trader” means any natural person or any legal person, irrespective of whether privately or publicly owned, who is acting, including through any other person acting in his name or on his behalf, for purposes relating to his trade, business, craft or profession in relation to contracts covered by this Directive;6That directive is to apply, in accordance with Article 3(1) thereof, ‘under the conditions and to the extent set out in its provisions, to any contract concluded between a trader and a consumer’.7Article 6(1) of Directive 2011/83 lists the information that must be provided by the trader before the consumer is bound by a distance or off-premises contract, or any corresponding offer.8Article 9(1) of that directive provides that the consumer has a period of 14 days in which to withdraw from a distance or off-premises contract. Bulgarian law 9Articles 47 and 50 of the Zakon za zashtita na potrebitelite (Law on Consumer Protection) (DV No 99 of 9 December 2005), in the version applicable to the main proceedings (‘the ZZP’), respectively transpose into the Bulgarian legal order Articles 6 and 9 of Directive 2011/83 relating, first, to information obligations in respect of distance contracts and, second, to the right of withdrawal.10Article 204 of the ZZP reads as follows:‘Any natural person who fails to fulfil the obligations to provide information to a consumer under Article 47(1), (2), (3), (5), (6) and (7) and Articles 48 and 49 shall be liable to a fine of between 100 and 1000 [Bulgarian leva (BGN)], and any sole trader and legal person so failing shall be liable to a fine of between BGN 500 and BGN 3000, as established on a case-by-case basis.’11Article 207(1) of the ZZP provides:‘Any person who hinders a consumer’s right under Article 50 to withdraw from a distance contract or from an off-premises contract shall be liable to a fine of between BGN 1000 and BGN 3000, as established on a case-by-case basis.’12Under point 13(2) of the Supplementary Provisions to the ZZP:‘The term “trader” means any natural or legal person who sells goods or offers them for sale, or provides services or concludes a contract with a consumer as part of his commercial or professional activity in the public or private sector, as well as any person acting for or on behalf of such a person.’ The dispute in the main proceedings and the question referred for a preliminary ruling 13A consumer bought a watch on the website www.olx.bg under a distance contract. Taking the view that that watch did not match the description given in the advertisement published on the website, he lodged a complaint with the CPC after the supplier had refused to accept the return of the item in exchange for a refund of the sum paid.14Following investigations, the CPC established that a Ms Kamenova, acting under the profile ‘eveto-ZZ’, had sold the watch. According to the manager of the website www.olx.bg, the person using that profile had published a total of eight sales advertisements for various products on that website, including the watch at issue in the main proceedings.15It is apparent from the order for reference that, after having consulted that website, the CPC established that, on 10 December 2014, eight sales advertisements for various products were still being published on the website under the profile ‘eveto-ZZ’.16By decision of 27 February 2015, the CPC found that Ms Kamenova had committed an administrative offence and imposed on her several fines on the basis of Articles 204 and 207 of the ZZP, for breach of Article 47(1), points (1) to ( 3), (5), (7), (8), and (12), as well as Article 50 of the ZZP. According to the CPC, Ms Kamenova had failed to state, in each of the advertisements, the trader’s name, postal address and email address, the total price of the product put on sale, inclusive of taxes and fees, the payment conditions, the conditions of delivery and performance, the consumer’s right to withdraw from the distance contract, the conditions, period and procedures for exercising this right as well as a reminder that there was a statutory guarantee that the goods sold would be in conformity with the sales contract.17Ms Kamenova brought an action against that decision before the Rayonen sad Varna (District Court, Varna, Bulgaria). By judgment of 22 March 2016, that court annulled that decision on the ground that Ms Kamenova was not a trader within the meaning of point 13(2) of the Supplementary Provisions to the ZZP and Directive 2005/29.18The CPC lodged an appeal on a point of law against that judgment before the referring court, the Administrativen sad — Varna (Administrative Court, Varna, Bulgaria). The referring court observes, first, that extensively-used consumer goods are widely bought and sold on the internet. It further points out that the objective of Directive 2005/29 is to guarantee a high level of consumer protection. In that context, it asks in essence whether, in circumstances such as those at issue in the main proceedings, in which a natural person sells online a relatively high number of goods of significant value, that person has the status of trader within the meaning of Directive 2005/29.19In those circumstances, the Administrativen sad — Varna (Administrative Court, Varna) decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling:‘Must Article 2(b) and (d) of [Directive 2005/29] be interpreted as meaning that the action of a natural person who is registered on a website for the sale of goods, and who published a total of eight advertisements at the same time for the sale of different items via the website, is the action of a trader within the meaning of the legal definition in Article 2(b), represents a business-to-consumer commercial practice within the meaning of Article 2(d) and comes within the scope of the directive pursuant to Article 3(1) thereof?’ Consideration of the question referred 20By its question, the referring court asks, in essence, whether a natural person who simultaneously publishes on a website a number of advertisements offering new and second-hand goods for sale may be classified as a ‘trader’, within the meaning of Article 2(b) of Directive 2005/29 and, secondly, whether such activity constitutes a ‘commercial practice’, within the meaning of Article 2(d) of that directive.21A preliminary point to be made is that, according to the Court’s settled case-law, in the procedure laid down in Article 267 TFEU, which provides for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to resolve the dispute before it. To that end, the Court may have to reformulate the questions referred to it and, in that context, to interpret all provisions of EU law which national courts require in order to resolve the disputes before them, even if those provisions are not expressly indicated in the questions referred to it by those courts (judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 39 and the case-law cited).22Consequently, even if, formally, the referring court has limited its question to the interpretation of provisions of Directive 2005/29, it is for the Court to extract from all the information provided by the national court, in particular from the grounds of the decision to make the reference, the points of EU law which require interpretation in view of the subject matter of the dispute (see, to that effect, judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 40 and the case-law cited).23In the present case it is apparent from the order for reference that the national provisions relevant to the main proceedings, namely Articles 47 and 50 of the ZZP, respectively transpose into Bulgarian law Articles 6 and 9 of Directive 2011/83. However, the referring court – which seeks, in particular, to ascertain whether a natural person, such as the person at issue in the main proceedings, who publishes simultaneously on a website several advertisements offering new and second-hand goods for sale, may be regarded as a ‘trader’ and, as such, must comply with the requirements set out in those articles – seeks, in the question which it has referred, only the interpretation of Directive 2005/29.24In this context, it must be understood that, by its question, the referring court is asking, in essence, whether a natural person who simultaneously publishes on a website a number of advertisements offering new and second-hand goods for sale may be classified as a ‘trader’, within the meaning of Article 2(b) of Directive 2005/29 and Article 2(2) of Directive 2011/83, and, secondly, whether such an activity constitutes a ‘commercial practice’, within the meaning of Article 2(d) of Directive 2005/29.25As regards, first, the concept of ‘trader’, it must be recalled that Article 2(b) of Directive 2005/29 defines a trader as ‘any natural or legal person who, in commercial practices covered by this Directive, is acting for purposes relating to his trade, business, craft or profession and anyone acting in the name of or on behalf of a trader’.26Article 2(2) of Directive 2011/83, for its part, defines a trader as ‘any natural or legal person, irrespective of whether privately or publicly owned, who is acting, including through any other person acting in his name or on his behalf, for purposes relating to his trade, business, craft or profession in relation to contracts covered by this Directive’.27Thus, the concept of ‘trader’ is defined almost identically in Directives 2005/29 and 2011/83.28In addition, as the Advocate General noted in point 32 of his Opinion, both Directive 2005/29 and Directive 2011/83 are based on Article 114 TFEU and, as such, pursue the same objectives, namely to contribute to the proper functioning of the internal market and to ensure a high level of consumer protection in the legislative, regulatory and administrative framework which they cover.29Therefore, it must be stated, as did the Advocate General in point 39 of his Opinion, that the concept of ‘trader’, as defined in those directives, must be interpreted uniformly.30That said, it should be noted that it follows from the wording of Article 2(b) of Directive 2005/29 that the EU legislature adopted a particularly broad notion of the term ‘trader’, which refers to ‘any natural or legal person’ who carries out a gainful activity and does not exclude from its scope either bodies pursuing a task of public interest or those which are governed by public law (judgment of 3 October 2013, Zentrale zur Bekämpfung unlauteren Wettbewerbs, C‑59/12, EU:C:2013:634, paragraph 32).31The same applies in regard to Article 2(2) of Directive 2011/83, in so far as that provision, first, as recalled in paragraph 26 of the present judgment, refers expressly to ‘any natural or legal person, irrespective of whether privately or publicly owned’ and, second, as stated in paragraph 29 above, must be interpreted in the same way as Article 2(b) of Directive 2005/29.32Furthermore, it is clear from the wording of Article 2(b) of Directive 2005/29 and of Article 2(2) of Directive 2011/83 that, in order to qualify as a ‘trader’, the person concerned must be acting ‘for purposes relating to his trade, business, craft or profession’ or in the name of or on behalf of a trader.33In that context, with regard to the actual wording of the definitions in Article 2(a) and (b) of Directive 2005/29 and in Article 2(1) and (2) of Directive 2011/83, the meaning and scope of the concept of ‘trader’, as used in those provisions, must be determined in relation to the related but diametrically opposed concept of ‘consumer’, which refers to any individual not engaged in commercial or trade activities (see, to that effect, judgment of 3 October 2013, Zentrale zur Bekämpfung unlauteren Wettbewerbs, C‑59/12, EU:C:2013:634, paragraph 33 and the case-law cited).34It is apparent from the case-law of the Court that, in relation to a trader, the consumer is in a weaker position, in that he must be deemed to be less informed, economically weaker and legally less experienced than the other party to the contract (judgments of 3 October 2013, Zentrale zur Bekämpfung unlauteren Wettbewerbs, C‑59/12, EU:C:2013:634, paragraph 35, and of 17 May 2018, Karel de Grote – Hogeschool Katholieke Hogeschool Antwerpen, C‑147/16, EU:C:2018:320, paragraph 54).35It follows that the notion of ‘trader’, within the meaning of Article 2(b) of Directive 2005/29 and Article 2(2) of Directive 2011/83, is a functional concept, requiring determination of whether the contractual relationship is amongst the activities that a person provides in the course of his or her trade, business or profession (see, by analogy, judgment of 17 May 2018, Karel de Grote – Hogeschool Katholieke Hogeschool Antwerpen, C‑147/16, EU:C:2018:320, paragraph 55 and the case-law cited).36Thus, in order to be regarded as a ‘trader’ within the meaning of Article 2(b) of Directive 2005/29 and Article 2(2) of Directive 2011/83, the natural or legal person must be acting ‘for purposes relating to his trade, business, craft or profession’ or in the name or on behalf of a trader.37With regard to the question whether an individual such as the defendant in the main proceedings comes within the concept of ‘trader’ within the meaning of those provisions, it must be stressed, as has been noted in point 50 of the Advocate General’s Opinion, that classification as a ‘trader’ requires a ‘case-by-case approach’. It follows that the referring court will have to examine, on the basis of all the facts in its possession, whether a natural person, such as the person at issue in the main proceedings, who published simultaneously on an online platform eight advertisements offering new and second-hand goods for sale, was acting for ‘purposes relating to his trade, business, craft or profession’ or in the name or on behalf of a trader.38As stated by the Advocate General in point 51 of his Opinion, in the context of that examination, the referring court will, in particular, have to verify whether the sale on the online platform was carried out in an organised manner, whether that sale was intended to generate profit, whether the seller had technical information and expertise relating to the products which she offered for sale which the consumer did not necessarily have, with the result that she was placed in a more advantageous position than the consumer, whether the seller had a legal status which enabled her to engage in commercial activities and to what extent the online sale was connected to the seller’s commercial or professional activity, whether the seller was subject to VAT, whether the seller, acting on behalf of a particular trader or on her own behalf or through another person acting in her name and on her behalf, received remuneration or an incentive; whether the seller purchased new or second-hand goods in order to resell them, thus making that a regular, frequent and/or simultaneous activity in comparison with her usual commercial or business activity, whether the goods for sale were all of the same type or of the same value, and, in particular, whether the offer was concentrated on a small number of goods.39It should be noted that the criteria set out in the preceding paragraph of this judgment are neither exhaustive nor exclusive, with the result that, in principle, compliance with one or more of those criteria does not, in itself, establish the classification to be used in relation to an online seller with regard to the concept of ‘trader’.40Thus, the mere fact that the sale is intended to generate profit or that a person publishes, simultaneously, on an online platform a number of advertisements offering new and second-hand goods for sale is not sufficient, by itself, to classify that person as a ‘trader’, within the meaning of Article 2(b) of Directive 2005/29 and Article 2(2) of Directive 2011/83.41As regards, secondly, the question whether the activity of an individual, such as the defendant in the main proceedings, is a ‘commercial practice’, within the meaning of Article 2(d) of Directive 2005/29, it should be recalled that, according to settled case-law, that provision defines, using a particularly broad formulation, the concept of ‘commercial practices’ as extending to ‘any act, omission, course of conduct or representation, commercial communication including advertising and marketing, by a trader, directly connected with the promotion, sale or supply of a product to consumers’ (judgment of 19 September 2013, CHS Tour Services, C‑435/11, EU:C:2013:574, paragraph 27 and the case-law cited).42Thus, in order for the activity in question to be regarded as a ‘commercial practice’, within the meaning of that provision, it must be established that that activity may be classified as a ‘practice that is commercial in nature’, that is to say, it must originate from a ‘trader’, and that it constitutes an act, omission, course of conduct or commercial communication ‘directly connected with the promotion, sale or supply of a product to consumers’ (see, to that effect, judgment of 17 October 2013, RLvS, C‑391/12, EU:C:2013:669, paragraph 37).43It follows from the foregoing that the existence of a ‘commercial practice’, within the meaning of Directive 2005/29, may be upheld only if that practice originates from a ‘trader’ as defined in Article 2(b) of that directive.44However, it must be recalled, as has been stated in paragraph 40 above, that the mere fact that the sale is intended to generate profit or that a natural person publishes, simultaneously, on an online platform a number of advertisements offering new and second-hand goods for sale cannot suffice, by itself, to classify that person as a ‘trader’ within the meaning of that provision. It follows that an activity such as that at issue in the main proceedings cannot be regarded as a ‘commercial practice’ within the meaning of Article 2(d) of Directive 2005/29.45In the light of the foregoing considerations, the answer to the question referred is that Article 2(b) and (d) of Directive 2005/29 and Article 2(2) of Directive 2011/83 must be interpreted as meaning that a natural person, such as the defendant in the main proceedings, who publishes simultaneously on a website a number of advertisements offering new and second-hand goods for sale can be classified as a ‘trader’, and such an activity can constitute a ‘commercial practice’, only if that person is acting for purposes relating to his trade, business, craft or profession, this being a matter for the national court to determine, in the light of all relevant circumstances of the individual case. Costs 46Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fifth Chamber) hereby rules: Article 2(b) and (d) of Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’) and Article 2(2) of Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European Parliament and of the Council and repealing Council Directive 85/577/EEC and Directive 97/7/EC of the European Parliament and of the Council must be interpreted as meaning that a natural person, such as the defendant in the main proceedings, who publishes simultaneously on a website a number of advertisements offering new and second-hand goods for sale can be classified as a ‘trader’, and such an activity can constitute a ‘commercial practice’, only if that person is acting for purposes relating to his trade, business, craft or profession, this being a matter for the national court to determine, in the light of all relevant circumstances of the individual case. [Signatures]( *1 ) Language of the case: Bulgarian. | c47ce-c7e9f2b-425d | EN |
The European Parliament may exercise some of its budgetary powers in Brussels, instead of Strasbourg, if that is required for the proper functioning of the budgetary procedure | 2 October 2018 ( *1 )(Action for annulment — Institutional law — Protocol on the location of the seats of the institutions and of certain bodies, offices, agencies and departments of the European Union — European Parliament — Concept of ‘budget session’ held in Strasbourg (France) — Article 314 TFEU — Exercise of budgetary powers during an additional plenary part-session in Brussels (Belgium))In Case C‑73/17,ACTION for annulment under Article 263 TFEU, brought on 9 February 2017, French Republic, represented by F. Alabrune, D. Colas, B. Fodda and E. de Moustier, acting as Agents,applicant,supported by: Grand Duchy of Luxembourg, represented by D. Holderer and C. Schiltz, acting as Agents,intervener,v European Parliament, represented by R. Crowe and U. Rösslein, acting as Agents,defendant,THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, M. Ilešič, T. von Danwitz (Rapporteur) and A. Rosas, Presidents of Chamber, E. Juhász, D. Šváby, A. Prechal, F. Biltgen, K. Jürimäe, C. Lycourgos and M. Vilaras, Judges,Advocate General: M. Wathelet,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 2 May 2018,after hearing the Opinion of the Advocate General at the sitting on 5 June 2018,gives the following Judgment 1By its application, the French Republic seeks the annulment of four acts of the European Parliament relating to the adoption of the annual budget of the European Union (EU) for the financial year 2017 (together ‘the contested acts’), namely:–the agenda for the plenary sitting of Parliament of 30 November 2016 (Document P8_0J (2016) 11-30), in so far as it includes the debates on the joint text on the draft annual budget of the EU for the financial year 2017;the agenda for the plenary sitting of the Parliament of 1 December 2016 (document P8_0J (2016)12-01), in so far as it includes a vote followed by explanations of votes on that joint text;the Parliament legislative resolution of 1 December 2016 (document T8‑0475/2016, P8_TA-PROV (2016)0475) on that joint text;the act of 1 December 2016 by which the President of the Parliament declared that the annual budget of the EU for the financial year 2017 had been definitively adopted. Legal context 2On 12 December 1992, the governments of the Member States adopted, on the basis of Article 216 of the EEC Treaty, Article 77 of the ECSC Treaty and Article 189 of the EAEC Treaty, a decision taken by common agreement on the location of the seats of the institutions and of certain bodies and departments of the European Communities (OJ 1992 C 341, p. 1; ‘the Edinburgh Decision’).3At the intergovernmental conference which led to the adoption of the Treaty of Amsterdam, it was decided to append the Edinburgh Decision to the EU, EC, ECSC and EAEC Treaties as a Protocol.4Currently, point (a) of the sole article of the Protocol on the location of the seats of the institutions and of certain bodies, offices, agencies and departments of the European Union (‘the Protocol concerning the seats of the institutions’) provides, in identical terms to those of Article 1(a) of the Edinburgh Decision:‘The European Parliament shall have its seat in Strasbourg where the 12 periods of monthly plenary sessions, including the budget session, shall be held. The periods of additional plenary sessions shall be held in Brussels. The Committees of the European Parliament shall meet in Brussels. The General Secretariat of the European Parliament and its departments shall remain in Luxembourg.’5Article 314 TFEU provides inter alia:‘The European Parliament and the Council, acting in accordance with a special legislative procedure, shall establish the Union’s annual budget in accordance with the following provisions.…3. The Council shall adopt its position on the draft budget and forward it to the European Parliament not later than 1 October of the year preceding that in which the budget is to be implemented. …4. If, within forty-two days of such communication, the European Parliament:(c)adopts amendments by a majority of its component members, the amended draft shall be forwarded to the Council and to the Commission. The President of the European Parliament, in agreement with the President of the Council, shall immediately convene a meeting of the Conciliation Committee. …5. The Conciliation Committee, which shall be composed of the members of the Council or their representatives and an equal number of members representing the European Parliament, shall have the task of reaching agreement on a joint text, by a qualified majority of the members of the Council or their representatives and by a majority of the representatives of the European Parliament within twenty-one days of its being convened, on the basis of the positions of the European Parliament and the Council.6. If, within the twenty-one days referred to in paragraph 5, the Conciliation Committee agrees on a joint text, the European Parliament and the Council shall each have a period of fourteen days from the date of that agreement in which to approve the joint text.7. If, within the period of fourteen days referred to in paragraph 6:(a)the European Parliament and the Council both approve the joint text or fail to take a decision, or if one of these institutions approves the joint text while the other one fails to take a decision, the budget shall be deemed to be definitively adopted in accordance with the joint text; or(b)the European Parliament, acting by a majority of its component members, and the Council both reject the joint text, or if one of these institutions rejects the joint text while the other one fails to take a decision, a new draft budget shall be submitted by the Commission; or(d)the European Parliament approves the joint text whilst the Council rejects it, the European Parliament may, within fourteen days from the date of the rejection by the Council and acting by a majority of its component members and three-fifths of the votes cast, decide to confirm all or some of the amendments referred to in paragraph 4(c). Where a European Parliament amendment is not confirmed, the position agreed in the Conciliation Committee on the budget heading which is the subject of the amendment shall be retained. The budget shall be deemed to be definitively adopted on this basis.9. When the procedure provided for in this Article has been completed, the President of the European Parliament shall declare that the budget has been definitively adopted.10. Each institution shall exercise the powers conferred upon it under this Article in compliance with the Treaties and the acts adopted thereunder, with particular regard to the Union’s own resources and the balance between revenue and expenditure.’6The Rules of Procedure of the Parliament, in the version applicable to the dispute (‘the EP Rules of Procedure’), provide, in Rule 156, entitled ‘Time limits’:‘Except in the cases of urgency referred to in Rules 135 and 154, a debate and vote shall not be opened on a text unless it has been distributed at least 24 hours earlier.’7Under Rule 158(1) of the EP Rules of Procedure, ‘all documents of Parliament shall be drawn up in the official languages’. Background to the dispute 8On 20 May 2015, the Parliament adopted the calendar of plenary part-sessions for 2016, providing, inter alia, for ordinary plenary part-sessions to be held in Strasbourg (France) from 24 to 27 October 2016, from 21 to 24 November 2016 and from 12 to 15 December 2016 and for an additional plenary part-session to be held on 30 November and 1 December 2016 in Brussels (Belgium).9On 18 July 2016, the Commission published a draft annual budget of the EU for the financial year 2017. On 14 September 2016, the Council forwarded to the Parliament its position on that draft. After a vote in the Committee on Budgets and debates during the ordinary plenary part-session held in Strasbourg from 24 to 27 October 2016, the Parliament adopted, on 26 October 2016, a legislative resolution containing amendments to that draft. On 27 October 2016, the budget conciliation procedure between the Parliament and the Council began. On 17 November 2016, that procedure resulted in an agreement on a joint text on the annual budget of the EU for the financial year 2017, which was forwarded to the Parliament and the Council on that day. The Commission services undertook a technical revision of the agreement in order to ‘transpose’ it into budgetary and legal terms. The joint text on the draft budget was thus finalised and provided to the Parliament in the course of the afternoon of 24 November 2016.10On 28 November 2016, the Council approved the joint text on the draft annual budget of the EU for the financial year 2017. The Parliament did not place the debate and vote on that text on the agenda for the ordinary plenary part-session which was held in Strasbourg from 21 to 24 November 2016, but on the agenda for the additional plenary part-session in Brussels on 30 November and 1 December 2016. By the legislative resolution of 1 December 2016, the Parliament approved the joint text. On the same day, the President of the Parliament declared, in plenary sitting, that the annual budget of the EU for the financial year 2017 had been definitively adopted. Procedure before the Court and forms of order sought 11The French Republic claims that the Court should:annul the contested acts;maintain the effects of the act by which the President of the Parliament declared that the annual budget of the EU for the financial year 2017 had been definitively adopted until that budget is definitively adopted by an act in conformity with the Treaties within a reasonable period of time after the date of judgment, andorder the Parliament to pay the costs.12The Parliament requests the Court to:declare that the action is inadmissible in so far as it concerns the two agendas for the plenary sittings of the Parliament on 30 November and 1 December 2016 and the Parliament’s legislative resolution of 1 December 2016;dismiss the action;order the French Republic to pay the costs.in the alternative, to maintain the effects of the act by which the President of the Parliament declared that the annual budget of the EU for the financial year 2017 had been definitively adopted until the entry into force, within a reasonable period of time, of a new act intended to replace it.13By order of the President of the Court of 7 June 2017, the Grand Duchy of Luxembourg was granted leave to intervene in support of the form of order sought by the French Republic. The action Admissibility 14The Parliament maintains that the action is inadmissible in so far as it concerns the two agendas for the plenary sittings of the Parliament on 30 November and 1 December 2016 and the Parliament’s legislative resolution of 1 December 2016. Those two agendas are measures of purely internal organisation of the Parliament with no legal effects vis-à-vis third parties. It submits that the legislative resolution is only a preparatory act prior to the act by which the President of the Parliament declared that the annual budget of the EU for the financial year 2017 had been definitively adopted.15The Court observes in that regard that the Parliament, by placing the debate and vote on the joint text on the annual budget of the EU for the financial year 2017 on the agendas for the plenary sittings of 30 November and 1 December 2016, decided to exercise its budgetary powers under Article 314(6) TFEU during an additional plenary part-session in Brussels. The question whether those two agendas are concerned exclusively with the Parliament’s internal organisation or whether they have legal effects vis-à-vis third parties, such effects arising as a result of the Parliament’s exercise of its powers, is inseparably associated with consideration of the content of those agendas and, consequently, with consideration of the substance of the actions, meaning that that question cannot be examined in the context of the admissibility of the action (see, to that effect, judgments of 10 February 1983, Luxembourg v Parliament, 230/81, EU:C:1983:32, paragraph 30; of 28 November 1991, Luxembourg v Parliament, C‑213/88 and C‑39/89, EU:C:1991:449, paragraph 16; and of 13 December 2012, France v Parliament, C‑237/11 and C‑238/11, EU:C:2012:796, paragraph 20).16So far as the Parliament’s legislative resolution of 1 December 2016 is concerned, the Court has already held that the Parliament’s debate and vote on the draft annual budget at second reading on the basis of Article 203(6) of the EEC Treaty could form the subject matter of an action for annulment. Under paragraph 10 of that Article (subsequently Article 203(10) of the EC Treaty, which then became Article 272(10) EC and is and now Article 314(10 TFEU), each institution is to exercise the powers conferred upon it in budgetary matters in compliance with the Treaties. If it were not possible to refer the various acts adopted by the budgetary authority under that Article for review by the Court, the institutions of which that authority is composed could encroach upon the powers of the Member States or of the other institutions or exceed the limits which have been set to their own powers (see, to that effect, judgment of 3 July 1986, Council v Parliament, 34/86, EU:C:1986:291, paragraph 12). Those considerations apply, mutatis mutandis, with regard to the Parliament’s legislative resolution of 1 December 2016 approving the joint text on the draft annual budget of the EU for the financial year 2017 at second reading on the basis of Article 314(6) TFEU.17It follows that the action is admissible. Substance Arguments of the parties 18The French Republic, supported by the Grand Duchy of Luxembourg, raises a single plea in law alleging that the contested acts infringe the Protocol concerning the seats of the institutions. By virtue of point (a) of the sole article of the protocol, the Parliament is obliged to exercise the budgetary powers conferred on it by Article 314 TFEU entirely during the ordinary plenary part-sessions held in Strasbourg. The French Republic submits that, in the present case, the Parliament infringed that rule (i) by including the debate and vote on the joint text on the annual budget of the EU for the financial year 2017, for the purposes of Article 314(6) TFEU, on the agenda for its additional plenary part-session in Brussels on 30 November and 1 December 2016 and (ii) by declaring at the same additional plenary part-session, by the act of the President of the Parliament under Article 314(9) TFEU, that the budget had been definitively adopted.19The French Republic argues that the rule in point (a) of the sole article of the Protocol concerning the seats of the institutions does not provide for any exceptions. Although the French Republic has not objected to certain acts relating to the implementation of the budget being adopted during periods of additional plenary part-session, in particular in order to deal with certain unforeseen events, that practice cannot be condoned in the case of the budgetary procedure under Article 314 TFEU, which results in the adoption of the annual budget of the EU and constitutes a key event in the democratic life of the European Union.20According to the French Republic, the provisions of Article 314 TFEU must be reconciled with the rules relating to the Parliament’s seat as set out in the Protocol concerning the seats of the institutions, which, in accordance with Article 51 TEU, form an integral part of the Treaties and have the same legal value as Article 314 TFEU. Thus the constraints arising from the time limits prescribed in Article 314 TFEU cannot take precedence over the obligations established by the protocol as regards the seat of the Parliament, especially as those constraints and obligations can be reconciled.21The French Republic submits in that regard that the Parliament is obliged to set the calendar for ordinary plenary part-sessions in Strasbourg in such a way that one of the part-sessions is scheduled to take place during the 14-day period laid down in Article 314(6) TFEU for the Parliament’s vote on the joint text on the draft annual budget adopted in the conciliation procedure. Given that the Conciliation Committee will, as a general rule, use the full conciliation period of 21 days provided for in Article 314(5) TFEU, it is possible, in the French Republic’s view, to foresee the date of the conciliation agreement concerning the joint text. Should the Conciliation Committee reach an agreement before the scheduled date, the ‘formalisation’ of that agreement and, accordingly, the date on which the 14-day period referred to above starts to run could be postponed.22Moreover, in the present case it would have been possible for the Parliament to include the debate and the vote on the joint text on the draft annual budget of the EU for the financial year 2017 on the agenda for a sitting during the ordinary plenary part-session that took place in Strasbourg from 21 to 24 November 2016 and still respect the 14-day period laid down in Article 314(6) TFEU. That period of ordinary plenary part-session took place in its entirety during that 14-day period and began 4 days after agreement on the joint text was reached on 17 November 2016. Thus, taking account of the only mandatory time limit preceding the opening of debate on a text (the 24-hour distribution period laid down in Rule 156 of the EP Rules of Procedure), the Parliament could perfectly well have included the debate and vote on the joint text on the agenda for the abovementioned ordinary plenary part-session. In that regard, the French Republic disputes that the matters raised by the Parliament concerning technical adjustments, translation and finalisation of the budgetary file made it impossible for the Parliament to vote on the joint text on the draft annual budget of the EU for the financial year 2017 during the ordinary plenary part-session that was held in Strasbourg from 21 to 24 November 2016.23Finally, as regards the act whereby the President of the Parliament declared the annual budget of the EU for the financial year 2017 to be adopted, the French Republic submits that nothing prevented the President from waiting until the next ordinary plenary part-session, which took place from 12 to 15 December 2016.24The Parliament argues that the words ‘budget session’ must be interpreted as referring to one single, specific plenary part-session, namely the part-session during which the Parliament exercises the powers that were initially conferred on it by Article 203 of the EEC Treaty to propose amendments to the initial draft budget, as amended by the Council. The Edinburgh Decision enshrined the Parliament’s previous practice of organising for that purpose, towards the end of October or at the beginning of November, a plenary part-session in Strasbourg. That period of plenary part-session, known as the ‘October II session’, was additional to the October ordinary plenary part-session, because of the Parliament’s practice of not holding a plenary part-session in August, and was used, essentially, for the first reading of the draft budget.25On the other hand, contrary to what is claimed by the French Republic, nothing in the Protocol concerning the seats of the institutions indicates that the subsequent debates and votes on the joint text on the draft annual budget adopted by the Conciliation Committee must also take place during an ordinary plenary part-session in Strasbourg. According to the Parliament, the interpretation put forward by the French Republic entails either (i) holding more than six periods of monthly plenary sessions in Strasbourg in the second part of the year, which would be in breach of the obligation laid down in that protocol to hold the 12 periods of monthly plenary sessions on a regular basis, or (ii) consequences that would be incompatible with the practical effectiveness of Article 314 TFEU.26Pointing to the 14-day period laid down in Article 314(6) TFEU for approval of the joint text on the draft annual budget, the Parliament argues that such an interpretation would require the Conciliation Committee systematically to adopt that text within the 14 days preceding the date of a plenary part-session in Strasbourg, thereby removing the freedom of that committee to adopt the text at any point in the 21-day conciliation period provided for in Article 314(5) TFEU. In addition, that interpretation would prevent the Parliament from holding a debate on the draft annual budget of the EU and from voting on that budget after the 12th ordinary plenary part-session in Strasbourg and would fail to take account of the possibility, referred to in Article 314(7)(b) and (d) TFEU, that the budget may have to be adopted in a new budgetary procedure or by a Parliament vote confirming all or some of its amendments. The failure to adopt the budget by the end of a financial year would then result in the application of Article 315 TFEU concerning the provisional budget.27Moreover, it would not have been possible in the present case for the Parliament to place the debate and the vote on the joint text on the draft annual budget of the EU for the financial year 2017 on the agenda for a sitting of the ordinary plenary part-session which took place in Strasbourg from 21 to 24 November 2016. Before the joint text could be submitted to the Parliament and the Council for approval, it was necessary to ‘transpose’ the political agreement annexed to the covering letters from the Conciliation Committee into legal and budgetary texts and to have those texts translated into all the official EU languages. The Parliament states that technical finalisation of the joint text always requires about one week’s work and is usually undertaken by the Commission services. In the present case, the Commission informed the Council and the Parliament that the finalised joint text was available –– solely in English –– only 18 minutes before the end of the November 2016 period of ordinary plenary part-session. Findings of the Court 28As Article 314(10) TFEU affirms, the Parliament is required to exercise the budgetary powers conferred upon it in compliance with the Treaties and the acts adopted thereunder.29In the first place, the Parliament must comply with the Protocol concerning the seats of the institutions which, in accordance with Article 51 TEU, forms an integral part of the Treaties. Point (a) of the sole article of the protocol provides that ‘the European Parliament shall have its seat in Strasbourg where the 12 periods of monthly plenary sessions, including the budget session, shall be held.’30The French Republic maintains that, under that provision, the Parliament is obliged to exercise all of its budgetary powers in Strasbourg, whereas, in the Parliament’s view, the said provision refers to a specific period of plenary part-session, namely the period relating to the first reading of the draft budget, meaning that the contested acts are, in its submission, outside the scope of the provision.31In that regard, the Court notes that point (a) of the sole article of the Protocol concerning the seats of the institutions refers to the ‘budget session’ but does not specify either a precise period of ordinary plenary part-session or the acts falling within the scope of the Parliament’s powers in the budgetary procedure which must be adopted during that period of plenary part-session. Under Article 314 TFEU, the Parliament may be required to take a decision upon the annual budget of the EU on more than one occasion and, in view of the deadlines and time limits laid down in that article, it may be required to do so during different periods of ordinary plenary part-session.32In the absence of any specific provision in point (a) of the sole article of that protocol, the words ‘budget session’ must be considered to refer to all the periods of plenary part-session during which the Parliament exercises its budgetary powers and to all the acts adopted by the Parliament for that purpose.33As regards Article 1(a) of the Edinburgh Decision, which is worded in identical terms to point (a) of the sole article of the Protocol concerning the seats of the institutions, the Court has already held that that provision defines the seat of the Parliament as the place where 12 ordinary plenary part-sessions must take place on a regular basis, including those during which the Parliament is to exercise the budgetary powers conferred upon it by the Treaty (see, to that effect, judgments of 1 October 1997, France v Parliament, C‑345/95, EU:C:1997:450, paragraph 29, and of 13 December 2012, France v Parliament, C‑237/11 and C‑238/11, EU:C:2012:796, paragraph 40).34It should be added that the exercise by the Parliament of its budgetary powers in plenary sitting is of particular importance for the transparency and democratic legitimacy of actions of the European Union based on its annual budget. Such transparency and legitimacy cannot be secured solely by the first reading of the draft budget in the budgetary procedure laid down in Article 314 TFEU where the Parliament, pursuant to Article 314(4)(c) TFEU, adopts amendments to that draft.35According to the Court’s case-law, the exercise by the Parliament of its budgetary powers in plenary sitting constitutes a fundamental event in the democratic life of the European Union and requires, inter alia, a public debate in plenary sitting enabling the citizens of the European Union to acquaint themselves with the various political orientations expressed and, as a result, to form a political opinion on the European Union’s actions (judgment of 13 December 2012, France v Parliament, C‑237/11 and C‑238/11, EU:C:2012:796, paragraph 68). Furthermore, the transparency afforded by a parliamentary debate in a plenary sitting is likely to strengthen the democratic legitimacy of the budgetary procedure in the eyes of citizens of the European Union and the credibility of the latter’s actions.36The conciliation procedure provided for in paragraphs 4(c) and 5 of Article 314 TFEU may result in significant amendments to the draft budget that have neither been examined at the Parliament’s first reading nor been publicly debated within the Conciliation Committee. As the Parliament confirmed at the hearing, sittings of that committee are not public and involve the participation of 28 Members of the Parliament, reflecting the majority relationships within the Parliament, whilst not fully representing the political interests of all the Members of the Parliament.37Accordingly, the words ‘budget session’ in point (a) of the sole article of the Protocol concerning the seats of the institutions encompass not only the ordinary plenary part-session during which the draft budget is considered at first reading, but also the second reading, under Article 314(6) TFEU, which guarantees a public debate and vote, in a plenary sitting, on the joint text on the draft annual budget adopted in the conciliation procedure.38In the second place, the Parliament is obliged to comply with the requirements that Article 314 TFEU imposes on it for the exercise of its budgetary powers in plenary sitting. The purpose of the deadlines and time limits laid down in that provision is to ensure that the annual budget of the EU is adopted by the end of the year preceding the financial year in question, as a possible failure to observe them can result in the application of Article 315 TFEU concerning a provisional budget.39Thus, in the event, in particular, of the Parliament failing to take a decision at second reading on the joint text on the draft annual budget within the 14-day period laid down in Article 314(6) TFEU and of the Council rejecting the joint text within that period, it follows from paragraph 7(b) of Article 314 TFEU that the Commission will submit a new draft budget and, consequently, that the budgetary procedure must be repeated in its entirety. In that situation, the Parliament will, in addition, lose the power arising under Article 314(7)(d) TFEU enabling it — should the Council reject the joint text on the draft annual budget — to decide alone on the adoption of the budget, acting by qualified majority in a further vote.40Moreover, if, within the 14-day period laid down in Article 314(6) TFEU, there has been no debate and vote in the Parliament on the joint text on the draft annual budget, the joint text may be adopted by the Council alone, under the conditions laid down in paragraph 7(a) of that article. As has been stated in paragraphs 34 to 36 of this judgment, it is of particular importance for the transparency and democratic legitimacy of action taken by the European Union, which are given expression through the procedure for adopting the annual budget, that the Parliament should exercise its powers under Article 314(6) TFEU and take a decision in plenary sitting on that joint text.41The Parliament is therefore required to act in this area with all the attention, rigour and commitment which such a responsibility demands (see, to that effect, judgment of 13 December 2012, France v Parliament, C‑237/11 and C‑238/11, EU:C:2012:796, paragraph 68), which presupposes that the parliamentary debate and vote be based on a text that has been made available to the Members in good time and been translated into all the official EU languages. The European Union is committed to multilingualism, the importance of which is stated in the fourth subparagraph of Article 3(3) TEU (see, to that effect, judgment of 5 May 2015, Spain v Council, C‑147/13, EU:C:2015:299, paragraph 42, and of 6 September 2017, Slovakia and Hungary v Council, C‑643/15 and C‑647/15, EU:C:2017:631, paragraph 203).42In the third place, given that point (a) of the sole article of the Protocol concerning the seats of the institutions and Article 314 TFEU have the same legal value, the obligations arising under the sole article of the protocol cannot, as such, prevail over those arising under Article 314 TFEU, and vice versa. Their application must be on a case-by-case basis and in a manner that reconciles those obligations and strikes a fair balance between them.43Moreover, it is settled case-law that the Protocol concerning the seats of the institutions is predicated on mutual respect on the part of the Member States and the Parliament for each other’s areas of competence and on a reciprocal duty of sincere cooperation (see, to that effect, judgments of 22 September 1988, France v Parliament, 358/85 and 51/86, EU:C:1988:431, paragraphs 34 and 35; of 1 October 1997, France v Parliament, C‑345/95, EU:C:1997:450, paragraphs 31 and 32; and of 13 December 2012, France v Parliament, C‑237/11 and C‑238/11, EU:C:2012:796, paragraphs 41, 42 and 60).44Thus, the Parliament is obliged to exercise its budgetary powers in an ordinary plenary part-session in Strasbourg, although that obligation, arising under point (a) of the sole article of the Protocol concerning the seats of the institutions, does not preclude the annual budget from being debated and voted on during an additional plenary part-session in Brussels, if that is called for by essential requirements relating to the proper conduct of the budgetary procedure that is laid down in Article 314 TFEU. If that procedure were conducted in such a way as to give absolute precedence to observance of point (a) of the sole article of the protocol to the detriment of Parliament’s full participation in the budgetary procedure, that would be incompatible with the need to reconcile the obligations arising under those provisions, to which reference has been made in paragraph 42 of this judgment.45As regards judicial review of compliance with the requirements stemming from paragraphs 42 to 44 of this judgment, it must be stated that when the Parliament undertakes the necessary reconciliation between the obligations under point (a) of the sole article of the Protocol concerning the seats of the institutions and those under Article 314 TFEU, it has a discretion deriving from the essential requirements relating to the proper conduct of the budgetary procedure. That judicial review therefore concerns the question whether the Parliament made errors of assessment by opting to exercise some of its budgetary powers in the course of an additional plenary part-session.46The question whether the contested acts respect the necessary reconciliation of the obligations arising under point (a) of the sole article of the Protocol concerning the seats of the institutions and those arising under Article 314 TFEU must be examined in the light of those considerations.47The French Republic submits in that regard that an adjustment of the parliamentary calendar would have enabled the debate and the vote on the joint text on the draft annual budget of the EU for the financial year 2017 to be held in Strasbourg, within the time limit laid down in Article 314(6) TFEU, and that such a debate and vote could, in any event, have taken place during the November 2016 ordinary plenary part-session. It also submits that the act whereby the President of the Parliament declared the annual budget of the EU for the financial year 2017 to be definitively adopted could still have been adopted during the next ordinary plenary part-session, from 12 to 15 December 2016.48As regards the 2016 parliamentary calendar, the French Republic’s argument is based, in essence, on the premiss that, since the date on which the Conciliation Committee would reach agreement on a joint text on the draft annual budget of the EU (17 November 2016) could reasonably be foreseen by the Parliament at the time when it adopted that calendar, the Parliament should have scheduled an ordinary plenary part-session for a time after 21 to 24 November 2016, so that, in the course of that part-session, a debate and vote at second reading on that draft could be held in due time.49None of the considerations put forward by the French Republic establish that, in this regard, the Parliament’s scheduling of its calendar of plenary part-sessions for 2016 was vitiated by an error of assessment.50Indeed, the premiss set out in paragraph 48 of this judgment cannot be accepted. Thus, at the time when the calendar of ordinary plenary part-sessions was adopted, it was fundamentally uncertain whether there would be a conciliation procedure and equally uncertain when that procedure would begin and, in the event of agreement on a joint text on the draft annual budget, when it would end. As the French Republic accepts, it could not therefore be ruled out at that time that, if the Conciliation Committee were convened, it would reach agreement on a joint text on the draft annual budget of the EU before 17 November 2016: that would have allowed the Parliament to hold a debate and to vote on the joint text at second reading during the ordinary plenary part-session of 21 to 24 November 2016 –– and to do so without failing to comply with the requirement to act with attention, rigour and commitment referred to in paragraph 41 of this judgment.51The last-mentioned finding cannot be called in question by the French Republic’s argument that, in the event of agreement within the Conciliation Committee before the expiry of the period laid down in Article 314(5) TFEU, it was conceivable that that committee would postpone formal approval of that agreement. Such an approach, which would entail artificially deferring the date of that agreement, is not compatible with Article 314(6) TFEU, from which it follows that the 14-day period which the Parliament and the Council have in order to approve the joint text starts to run on the date on which the Conciliation Committee reaches such agreement.52Consequently, it must be held that the Parliament did not exceed the bounds of the discretion referred to in paragraph 45 of this judgment when it adopted its calendar of ordinary plenary part-sessions for 2016.53It should also be determined whether, within the framework set by that calendar, the Parliament could, without making an error of assessment, exercise its budgetary powers, by means of the contested acts, during the additional plenary part-session held in Brussels on 30 November and 1 December 2016.54As regards, first, the agendas for the plenary part-sessions of the Parliament on 30 November and 1 December 2016 and the Parliament’s legislative resolution of 1 December 2016 concerning the joint text on the draft annual budget of the EU for the financial year 2017, it is not disputed that the Conciliation Committee’s agreement on the joint text was reached on 17 November 2016 and was forwarded to the Parliament and to the Council on the same day. The Parliament did not include the debate and vote on the joint text on the agenda for the ordinary plenary part-session in Strasbourg from 21 to 24 November 2016, but on the agenda for the additional plenary part-session which was held in Brussels on 30 November and 1 December 2016.55It must be noted in that regard that, in the present case, 1 December 2016 was the last day of the period laid down in Article 314(6) TFEU. As the Council had approved the joint text on the draft annual budget of the EU for the financial year 2017 on 28 November 2016, the failure of the Parliament to act within that period would have entailed adoption of the annual budget for the financial year 2017, pursuant to Article 314(7)(a) TFEU, without the Parliament participating in the budgetary procedure at second reading.56As regards the French Republic’s argument that the Parliament could have taken a decision on the joint text on the annual budget of the EU for the financial year 2017 at an earlier date, namely during the ordinary plenary part-session from 21 to 24 November 2016 in Strasbourg, it should be observed that the fact that the Parliament used the entirety of the period laid down in Article 314(6) TFEU cannot call in question the lawfulness of the agendas for the plenary sittings of the Parliament on 30 November and 1 December 2016, or of the Parliament’s legislative resolution of 1 December 2016, from the perspective of the Protocol concerning the seats of the institutions. The Parliament is entitled fully to utilise the periods afforded it by Article 314 TFEU. As the Parliament pointed out at the hearing before the Court, internal discussions within the various political groups and the Committee on Budgets take considerable time: that time is particularly important for preparing for the debate and vote on the budget in plenary session and, in particular, for securing a majority.57In addition, the agreement of the Conciliation Committee on the joint text on the annual budget of the EU for the financial year 2017 was worked on for the purposes of technical finalisation and was translated into all the official EU languages, the need for which is not disputed as between the parties. Nor do the parties contest the decision to make the Commission services responsible for that technical finalisation, by the Interinstitutional Agreement of 2 December 2013 between the European Parliament, the Council and the Commission on budgetary discipline, on cooperation in budgetary matters and on sound financial management (OJ 2013 C 373, p. 1).58In the present case, as a result of that technical finalisation, the joint text on the annual budget of the EU for the financial year 2017 was not made available to the Parliament until the afternoon of 24 November 2016, in other words the last day of the November 2016 ordinary plenary part-session, and only the English-language version was made available. In those circumstances, the debate and vote on the joint text could not, in accordance with Rules 156 and 158 of the EP Rules of Procedure, be included on the agenda for 24 November 2016. In accordance with those provisions, a debate and vote can be opened only on a document drawn up in the official EU languages which has been made available to the Members at least 24 hours earlier. Compliance with those minimum requirements is essential for the purpose of preparing for the debate and vote in plenary sitting on the joint text on the draft annual budget with all the necessary attention, rigour and commitment and, in particular, in the light of the requirements pertaining to multilingualism.59As to the duration of the technical finalisation of the Conciliation Committee’s agreement on the joint text on the draft annual budget of the EU for the financial year 2017 (which was seven days in the present case), the French Republic has not shown that it was excessive. The Parliament of course has to make sure that everything is done to ensure that the duration of that technical finalisation makes it possible, where necessary, for the requirements arising under point (a) of the sole article of the Protocol concerning the seats of the institutions to be observed. However, the French Republic has not put forward any specific matters demonstrating that the Parliament infringed that obligation and, consequently, that the period of technical finalisation could have been reduced, thus allowing the joint text to be made available to Parliament, in accordance with the conditions laid down by the EP Rules of Procedure, before 24 November 2016.60Even if that period could have been shorter, account must be taken of the time which, beyond the minimum requirements of Rule 156 of the EP Rules of Procedure, is necessary to prepare for the plenary sitting concerning the joint text on the draft annual budget, namely the time which the Members — particularly those of the parliamentary minority, none of whose representatives have participated in the conciliation procedure –– must have in order to enable them to acquaint themselves properly with the joint text and to debate and vote on it with all the necessary attention, rigour and commitment.61Accordingly, the Parliament did not make an error of assessment by including the debate and vote on the joint text on the draft annual budget of the EU for the financial year 2017 on the agenda for the additional plenary part-session that took place in Brussels on 30 November and 1 December 2016 and by approving that joint text by legislative resolution in that same plenary part-session.62As regards, second, the act declaring that the annual budget of the EU for the financial year 2017 had been definitively adopted, the Court notes that the FEU Treaty does not afford the President of the Parliament any time limit for adopting the budget: under Article 314(9) TFEU, that adoption has to take place when the procedure provided for in that article has been completed.63That act is in fact closely linked to the vote, at second reading, on the joint text on the annual budget. The act of the President of the Parliament formally declaring, after verification that the procedure has been conducted lawfully, that the annual budget of the EU has been definitively adopted constitutes the final stage of the procedure for the adoption of that budget and endows it with binding force (see, to that effect, judgment of 17 September 2013, Council v Parliament, C‑77/11, EU:C:2013:559, paragraph 50). Thus, when the Parliament, in the light of the necessary reconciliation of obligations to which reference has been made in paragraph 42 of this judgment, is entitled to debate and vote on the joint text on the annual budget during an additional plenary part-session in Brussels, the President of the Parliament makes that declaration during the same plenary part-session.64Moreover, in view of the importance of the adoption of the annual budget for the actions of the European Union, the President of the Parliament cannot be required to wait until the next period of ordinary plenary part-session in Strasbourg to declare the budgetary procedure definitively concluded and to confer binding force on the annual budget of the EU.65Accordingly, the President of the Parliament could, without making any error of assessment, declare, during the plenary sitting held on 1 December 2016 in Brussels, that the annual budget of the EU for the financial year 2017 was definitively adopted.66Having regard to all the foregoing, the French Republic’s single plea in law must be rejected and, consequently, the action must be dismissed. Costs 67Under Article 138(1) of the Rules of Procedure of the Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Parliament has applied for the French Republic to be ordered to pay the costs and the latter has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the Parliament. Under Article 140(1) of those rules, the Grand Duchy of Luxembourg, which has intervened in the proceedings, is to bear its own costs.On those grounds, the Court (Grand Chamber) hereby: 1. Dismisses the action; 2. Orders the French Republic to pay, in addition to its own costs, those of the European Parliament; 3. Orders the Grand Duchy of Luxembourg to bear its own costs. [Signatures]( *1 ) Language of the case: French. | c24d4-4e82437-401a | EN |
Criminal offences that are not particularly serious may justify access to personal data retained by providers of electronic communications services provided that that access does not constitute a serious infringement of privacy | 2 October 2018 ( *1 )(Reference for a preliminary ruling — Electronic communications — Processing of personal data — Directive 2002/58/EC — Articles 1 and 3 — Scope — Confidentiality of electronic communications — Protection — Article 5 and Article 15(1) — Charter of Fundamental Rights of the European Union — Articles 7 and 8 — Data processed in connection with the provision of electronic communications services — Access of national authorities to the data for the purposes of an investigation — Threshold of seriousness of an offence capable of justifying access to the data)In Case C‑207/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Audiencia Provincial de Tarragona (Provincial Court, Tarragona, Spain), made by decision of 6 April 2016, received at the Court on 14 April 2016, in the proceedings brought by Ministerio Fiscal, THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, T. von Danwitz (Rapporteur), J.L. da Cruz Vilaça, C.G. Fernlund and C. Vajda, Presidents of Chambers, E. Juhász, A. Borg Barthet, C. Toader, M. Safjan, D. Šváby, M. Berger, E. Jarašiūnas and E. Regan, Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: L. Carrasco Marco, Administrator,having regard to the written procedure and further to the hearing on 29 January 2018,after considering the observations submitted on behalf of–the Ministerio Fiscal, by E. Tejada de la Fuente,the Spanish Government, by M. Sampol Pucurull, acting as Agent,the Czech Government, by M. Smolek, J. Vláčil and A. Brabcová, acting as Agents,the Danish Government, by J. Nymann-Lindegren and M. Wolff, acting as Agents,the Estonian Government, by N. Grünberg, acting as Agent,Ireland, by M. Browne, L. Williams, E. Creedon and A. Joyce, acting as Agents, and by E. Gibson, Barrister-at-Law,the French Government, by D. Colas, E. de Moustier and E. Armoet, acting as Agents,the Latvian Government, by I. Kucina and J. Davidoviča, acting as Agents,the Hungarian Government, by M. Fehér and G. Koós, acting as Agents,the Austrian Government, by C. Pesendorfer, acting as Agent,the Polish Government, by B. Majczyna, D. Lutostańska and J. Sawicka, acting as Agents,the United Kingdom Government, by S. Brandon and C. Brodie, acting as Agents, and by C. Knight, Barrister, and G. Facenna QC,the European Commission, by I. Martínez del Peral, P. Costa de Oliveira, R. Troosters and D. Nardi, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 3 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns, in essence, the interpretation of Article 15(1) of Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications) (OJ 2002 L 201, p. 37), as amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 (OJ 2009 L 337, p. 11) (‘Directive 2002/58’), read in the light of Articles 7 and 8 of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The request has been made in proceedings brought by the Ministerio Fiscal (Public Prosecutor’s Office, Spain) against the decision of the Juzgado de Instrucción No 3 de Tarragona (Court of Preliminary Investigation No 3, Tarragona, Spain, ‘the investigating magistrate’) refusing to grant the police access to personal data retained by providers of electronic communications services. Legal context EU law Directive 95/46 3According to Article 2(b) of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ 1995 L 281, p. 31), ‘processing of personal data’ means ‘any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organisation, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction’.4Article 3 of the directive, entitled ‘Scope’, provides as follows:‘1. This Directive shall apply to the processing of personal data wholly or partly by automatic means, and to the processing otherwise than by automatic means of personal data which form part of a filing system or are intended to form part of a filing system.2. This Directive shall not apply to the processing of personal data:in the course of an activity which falls outside the scope of Community law, such as those provided for by Titles V and VI of the Treaty on European Union and in any case to processing operations concerning public security, defence, State security (including the economic well-being of the State when the processing operation relates to State security matters) and the activities of the State in areas of criminal law,by a natural person in the course of a purely personal or household activity.’ Directive 2002/58 5Recitals 2, 11, 15 and 21 of Directive 2002/58 state:‘(2)This Directive seeks to respect the fundamental rights and observes the principles recognised in particular by the [Charter]. In particular, this Directive seeks to ensure full respect for the rights set out in Articles 7 and 8 of that Charter.…(11)Like Directive [95/46], this Directive does not address issues of protection of fundamental rights and freedoms related to activities which are not governed by Community law. Therefore it does not alter the existing balance between the individual’s right to privacy and the possibility for Member States to take the measures referred to in Article 15(1) of this Directive, necessary for the protection of public security, defence, State security (including the economic well-being of the State when the activities relate to State security matters) and the enforcement of criminal law. Consequently, this Directive does not affect the ability of Member States to carry out lawful interception of electronic communications, or take other measures, if necessary for any of these purposes and in accordance with the European Convention for the Protection of Human Rights and Fundamental Freedoms, as interpreted by the rulings of the European Court of Human Rights. Such measures must be appropriate, strictly proportionate to the intended purpose and necessary within a democratic society and should be subject to adequate safeguards in accordance with the European Convention for the Protection of Human Rights and Fundamental Freedoms.(15)A communication may include any naming, numbering or addressing information provided by the sender of a communication or the user of a connection to carry out the communication. Traffic data may include any translation of this information by the network over which the communication is transmitted for the purpose of carrying out the transmission. …(21)Measures should be taken to prevent unauthorised access to communications in order to protect the confidentiality of communications, including both the contents and any data related to such communications, by means of public communications networks and publicly available electronic communications services. National legislation in some Member States only prohibits intentional unauthorised access to communications.’6Article 1 of Directive 2002/58, entitled ‘Scope and aim’, provides:‘1. This Directive provides for the harmonisation of the national provisions required to ensure an equivalent level of protection of fundamental rights and freedoms, and in particular the right to privacy and confidentiality, with respect to the processing of personal data in the electronic communication sector and to ensure the free movement of such data and of electronic communication equipment and services in the Community.2. The provisions of this Directive particularise and complement Directive [95/46] for the purposes mentioned in paragraph 1. Moreover, they provide for protection of the legitimate interests of subscribers who are legal persons.3. This Directive shall not apply to activities which fall outside the scope of the Treaty establishing the European Community, such as those covered by Titles V and VI of the Treaty on European Union, and in any case to activities concerning public security, defence, State security (including the economic well-being of the State when the activities relate to State security matters) and the activities of the State in areas of criminal law.’7Article 2 of Directive 2002/58, entitled ‘Definitions’, is worded as follows:‘Save as otherwise provided, the definitions in Directive [95/46] and in Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) [(OJ 2002 L 108, p. 33)] shall apply.The following definitions shall also apply:(b)“traffic data” means any data processed for the purpose of the conveyance of a communication on an electronic communications network or for the billing thereof;(c)“location data” means any data processed in an electronic communications network or by an electronic communications service, indicating the geographic position of the terminal equipment of a user of a publicly available electronic communications service;(d)“communication” means any information exchanged or conveyed between a finite number of parties by means of a publicly available electronic communications service. This does not include any information conveyed as part of a broadcasting service to the public over an electronic communications network except to the extent that the information can be related to the identifiable subscriber or user receiving the information;…’8Article 3 of Directive 2002/58, entitled ‘Services concerned’, provides:‘This Directive shall apply to the processing of personal data in connection with the provision of publicly available electronic communications services in public communications networks in the Community, including public communications networks supporting data collection and identification devices.’9Article 5 of Directive 2002/58, entitled ‘Confidentiality of the communications’, is worded as follows:‘1. Member States shall ensure the confidentiality of communications and the related traffic data by means of a public communications network and publicly available electronic communications services, through national legislation. In particular, they shall prohibit listening, tapping, storage or other kinds of interception or surveillance of communications and the related traffic data by persons other than users, without the consent of the users concerned, except when legally authorised to do so in accordance with Article 15(1). …3. Member States shall ensure that the storing of information, or the gaining of access to information already stored, in the terminal equipment of a subscriber or user is only allowed on condition that the subscriber or user concerned has given his or her consent, having been provided with clear and comprehensive information, in accordance with Directive [95/46], inter alia, about the purposes of the processing. …’10Article 6 of Directive 2002/58, entitled ‘Traffic data’, provides:‘1. Traffic data relating to subscribers and users processed and stored by the provider of a public communications network or publicly available electronic communications service must be erased or made anonymous when it is no longer needed for the purpose of the transmission of a communication without prejudice to paragraphs 2, 3 and 5 of this Article and Article 15(1).2. Traffic data necessary for the purposes of subscriber billing and interconnection payments may be processed. Such processing is permissible only up to the end of the period during which the bill may lawfully be challenged or payment pursued.11Article 15 of that directive, entitled ‘Application of certain provisions of Directive [95/46]’, provides, in paragraph 1 thereof:‘Member States may adopt legislative measures to restrict the scope of the rights and obligations provided for in Article 5, Article 6, Article 8(1), (2), (3) and (4), and Article 9 of this Directive when such restriction constitutes a necessary, appropriate and proportionate measure within a democratic society to safeguard national security (i.e. State security), defence, public security, and the prevention, investigation, detection and prosecution of criminal offences or of unauthorised use of the electronic communication system, as referred to in Article 13(1) of Directive [95/46]. To this end, Member States may, inter alia, adopt legislative measures providing for the retention of data for a limited period justified on the grounds laid down in this paragraph. All the measures referred to in this paragraph shall be in accordance with the general principles of Community law, including those referred to in Article 6(1) and (2) of the Treaty on European Union.’ Spanish law Law 25/2007 12Article 1 of Ley 25/2007 de conservación de datos relativos a las comunicaciones electrónicas y a la redes públicas de comunicaciones (Law 25/2007 on the retention of data relating to electronic communications and to public communication networks) of 18 October 2007 (BOE No 251 of 19 October 2007, p. 42517) provides:‘1. The purpose of this law is to regulate the obligation of operators to retain the data generated or processed in the context of the supply of electronic communications services or public communication networks, and the obligation to communicate those data to authorised agents whenever they are requested to do so by the necessary judicial authorisation, for the purposes of the detection, investigation and prosecution of serious offences provided for in the Criminal Code or in special criminal laws.2. This law shall apply to traffic data and to location data concerning both natural and legal persons, and to related data necessary in order to identify the subscriber or registered user. The Criminal Code 13Article 13(1) of Ley Orgánica 10/1995 del Código Penal (Criminal Code) of 23 November 1995 (BOE No 281 of 24 November 1995, p. 33987) is worded as follows:‘Serious offences are those which the law punishes with a serious penalty.’14Article 33 of the Criminal Code provides:‘1. Depending on their nature and duration, penalties shall be classified as serious, less serious and light.2. Serious penalties shall be:(a)imprisonment for life, subject to review.imprisonment for a period of more than five years. Code of Criminal Procedure 15After the facts in the main proceedings had taken place, the Ley de Enjuiciamiento Criminal (Code of Criminal Procedure) was amended by Ley Orgánica 13/2015 de modificación de la Ley de Enjuiciamiento Criminal para el fortalecimiento de las garantías procesales y la regulación de las medidas de investigación tecnológica (Organic Law 13/2015 amending the Code of Criminal Procedure in order to strengthen the procedural guarantees and regulate technological investigative measures) of 5 October 2015 (BOE No 239 of 6 October 2015, p. 90192).16The law entered into force on 6 December 2015. It brings the field of access to telephone and telematic communications data which have been retained by providers of electronic communications services within the purview of the Code of Criminal Procedure.17Article 579(1) of the Code of Criminal Procedure in the version as amended by Organic Law 13/2015 provides:‘1. The court may authorise the interception of private postal and telegraphic correspondence, including fax, Burofax and international money orders, which the suspect sends or receives, and also the opening and analysis of such correspondence where there are grounds for thinking that that will permit the discovery or verification of a fact or a factor of relevance for the case, provided that the investigation relates to one of the following offences:(1)Intentional offences punishable by a maximum penalty of at least three years’ imprisonment.(2)Offences committed in the context of a criminal organisation.(3)Terrorism offences.18Article 588 ter j of the Code is worded as follows:‘1. Electronic data retained by service providers or by persons who supply the communication pursuant to the legislation on the retention of electronic communications data, or on their own initiative for commercial or other reasons, and who are connected with communications processes, shall be communicated in order to be taken into account in the context of the proceedings only when authorised by the court.2. Where knowledge of those data is essential for the investigation, application must be made to the competent court for authorisation to access the information in the automated archives of the service providers, in particular for the purpose of a cross search or a smart search of the data, provided that the nature of the data of which it is necessary to have knowledge and the reasons justifying the communication of those data are specified.’ The main proceedings and the questions referred for a preliminary ruling 19Mr Hernandez Sierra lodged a complaint with the police for a robbery, which took place on 16 February 2015, during which he was injured and his wallet and mobile telephone were stolen.20On 27 February 2015, the police requested the investigating magistrate to order various providers of electronic communications services to provide (i) the telephone numbers that had been activated between 16 February and 27 February 2015 with the International Mobile Equipment Identity code (‘the IMEI code’) of the stolen mobile telephone and (ii) the personal data relating to the identity of the owners or users of the telephone numbers corresponding to the SIM cards activated with the code, such as their surnames, forenames and, if need be, addresses.21By order of 5 May 2015, the investigating magistrate refused that request. The latter held that the measure requested would not serve to identify the perpetrators of the offence. Moreover, it refused to grant the request on the ground that Law 25/2007 limited the communication of the data retained by the providers of electronic communications services to serious offences. Under the Criminal Code, serious offences are punishable by a term of imprisonment of more than five years, whereas the facts at issue in the main proceedings did not appear to constitute such an offence.22The Public Prosecutor’s Office appealed against that order before the referring court, claiming that communication of the data at issue ought to have been allowed by reason of the nature of the facts and pursuant to a judgment of the Tribunal Supremo (Supreme Court, Spain) of 26 July 2010 relating to a similar case.23The referring court explains that, subsequent to that order, the Spanish legislature amended the Code of Criminal Procedure by adopting Organic Law 13/2015. That legislation, which is relevant to the resolution of the case in the main proceedings, introduced two new alternative criteria for determining the degree of seriousness of an offence. The first is a substantive criterion, relating to conduct which corresponds to criminal classifications the criminal nature of which is specific and serious, and which is particularly harmful to individual and collective legal interests. Moreover, the national legislature relied on a formal normative criterion, based on the penalty prescribed for the offence in question. The threshold of three years’ imprisonment envisaged by that criterion does, however, cover the great majority of offences. In addition, the referring court considers that the State’s interest in punishing criminal conduct cannot justify disproportionate interferences with the fundamental rights enshrined in the Charter.24In that regard, the referring court considers that, in the main proceedings, Directives 95/46 and 2002/58 establish a link with the Charter. The national legislation at issue in the main proceedings therefore comes within its scope, in accordance with Article 51(1) of the Charter, despite the fact that Directive 2006/24/EC of the European Parliament and of the Council of 15 March 2006 on the retention of data generated or processed in connection with the provision of publicly available electronic communications services or of public communications networks and amending Directive 2002/58 (OJ 2006 L 105, p. 54) was annulled by the judgment of 8 April 2014, Digital Rights Ireland and Others (C‑293/12 and C‑594/12, EU:C:2014:238).25In that judgment, the Court recognised that the retention and communication of traffic data constitute particularly serious interferences with the rights guaranteed in Articles 7 and 8 of the Charter and established criteria for the assessment of whether the principle of proportionality has been observed, including the seriousness of the offences warranting the retention of data and access thereto for the purposes of an investigation.26In those circumstances, the Audiencia Provincial de Tarragona (Provincial Court, Tarragona, Spain) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Can the sufficient seriousness of offences, as a criterion which justifies interference with the fundamental rights recognised by Articles 7 and 8 of the [Charter], be determined taking into account only the sentence which may be imposed in respect of the offence investigated, or is it also necessary to identify in the criminal conduct particular levels of harm to individual and/or collective legally protected interests?If it were in accordance with the constitutional principles of the European Union, used by the Court of Justice in its judgment [of 8 April 2014, Digital Rights Ireland and Others, C‑293/12 and C‑594/12, EU:C:2014:238] as standards for the strict review of [Directive 2002/58], to determine the seriousness of the offence solely on the basis of the sentence which may be imposed, what should the minimum threshold be? Would it be compatible with a general provision setting a minimum of three years’ imprisonment?’ Procedure before the Court 27By decision of the President of the Court of 23 May 2016, the proceedings before the Court were stayed pending delivery of the judgment in Tele2 Sverige and Watson and Others, C‑203/15 and C‑698/15 (judgment of 21 December 2016, EU:C:2016:970, hereinafter ‘Tele2 Sverige and Watson and Others’). Further to the delivery of that judgment, the referring court was asked whether it wished to maintain or withdraw its request for a preliminary ruling. In its response by letter of 30 January 2017, received at the Court on 14 February 2017, the referring court stated that, in its view, that judgment did not enable it to assess with a sufficient degree of certainty the national legislation at issue in the main proceedings in the light of EU law. Consequently, the proceedings before the Court were resumed on 16 February 2017. Consideration of the questions referred 28The Spanish Government claims that, first, the Court lacks jurisdiction to reply to the request for a preliminary ruling and, secondly, the request is inadmissible. The jurisdiction of the Court 29In its written observations submitted to the Court, the Spanish Government expressed the view, endorsed by the United Kingdom Government during the hearing, that the Court does not have jurisdiction to answer the question referred for a preliminary ruling, on the ground that, in accordance with the first indent of Article 3(2) of Directive 95/46 and Article 1(3) of Directive 2002/58, the case in the main proceedings is excluded from the scope of those two directives. Therefore, the case does not fall within the scope of EU law, with the result that the Charter, in accordance with Article 51(1) thereof, is not applicable.30According to the Spanish Government, the Court did, admittedly, rule in Tele2 Sverige and Watson and Others that a legislative measure governing national authorities’ access to data retained by providers of electronic communications services comes within the scope of Directive 2002/58. However, the present case concerns a request for access made by a public authority, by virtue of a judicial decision in connection with a criminal investigation, to personal data retained by providers of electronic communications services. The Spanish Government infers that the request for access is part of national authorities’ exercise of jus puniendi, as a result of which it constitutes an activity of the State in areas of criminal law falling under the exception provided for in the first indent of Article 3(2) of Directive 95/46 and Article 1(3) of Directive 2002/58.31In order to assess the claim that the Court does not have jurisdiction, it must be observed that Article 1(1) of Directive 2002/58 states that the directive provides for the harmonisation of the national provisions required, inter alia, to ensure an equivalent level of protection of fundamental rights and freedoms, and in particular the right to privacy and confidentiality, with respect to the processing of personal data in the electronic communications sector. In accordance with Article 1(2) thereof, the directive particularises and complements Directive 95/46 for the purposes set out in Article 1(1).32Article 1(3) of Directive 2002/58 excludes from its scope ‘activities of the State’ in specified fields, including the activities of the State in areas of criminal law and in the areas of public security, defence and State security, including the economic well-being of the State when the activities relate to State security matters (Tele2 Sverige and Watson and Others, paragraph 69 and the case-law cited). The activities mentioned therein by way of example are, in any event, activities of the State or of State authorities and are unrelated to fields in which individuals are active (see, by analogy, in respect of the first indent of Article 3(2) of Directive 95/46, judgment of 10 July 2018, Jehovan Todistajat, C‑25/17, EU:C:2018:551, paragraph 38 and the case-law cited).33Article 3 of Directive 2002/58 states that the directive is to apply to the processing of personal data in connection with the provision of publicly available electronic communications services in public communications networks in the European Union, including public communications networks supporting data collection and identification devices (‘electronic communications services’). Consequently, that directive must be regarded as regulating the activities of the providers of such services (Tele2 Sverige and Watson and Others, paragraph 70).34As regards Article 15(1) of Directive 2002/58, the Court has previously held that the legislative measures that are referred to in that provision come within the scope of that directive, even if they concern activities characteristic of States or State authorities, and are unrelated to fields in which individuals are active, and even if the objectives that such measures must pursue overlap substantially with the objectives pursued by the activities referred to in Article 1(3) of Directive 2002/58. Article 15(1) necessarily presupposes that the national measures referred to therein fall within the scope of that directive, since it expressly authorises the Member States to adopt them only if the conditions laid down in the directive are met. Further, the legislative measures referred to in Article 15(1) of Directive 2002/58 govern, for the purposes mentioned in that provision, the activity of providers of electronic communications services (see, to that effect, Tele2 Sverige and Watson and Others, paragraphs 72 to 74).35The Court concluded that Article 15(1), read in conjunction with Article 3 of Directive 2002/58, must be interpreted as meaning that the scope of the directive extends not only to a legislative measure that requires providers of electronic communications services to retain traffic and location data, but also to a legislative measure relating to the access of the national authorities to the data retained by those providers (see, to that effect, Tele2 Sverige and Watson and Others, paragraphs 75 and 76).36The protection of the confidentiality of electronic communications and related traffic data, guaranteed by Article 5(1) of Directive 2002/58, applies to the measures taken by all persons other than users, whether private persons or bodies or State bodies. As confirmed in recital 21 of that directive, the aim of the directive is to prevent unauthorised access to communications, including ‘any data related to such communications’, in order to protect the confidentiality of electronic communications (Tele2 Sverige and Watson and Others, paragraph 77).37It should also be noted that legislative measures requiring providers of electronic communications services to retain personal data or to grant competent national authorities access to those data necessarily involve the processing, by those providers, of the data (see, to that effect, Tele2 Sverige and Watson and Others, paragraphs 75 and 78). Such measures, to the extent that they regulate the activities of such providers, cannot be regarded as activities characteristic of States, referred to in Article 1(3) of Directive 2002/58.38In the present case, as stated in the order for reference, the request at issue in the main proceedings, by which the police seeks judicial authorisation to access personal data retained by providers of electronic communications services, is based on Law 25/2007, read in conjunction with the Code of Criminal Procedure in the version applicable to the facts in the main proceedings, which governs the access of public authorities to such data. That legislation permits the police, in the event that the judicial authorisation applied for on the basis of that legislation is granted, to require providers of electronic communications services to make personal data available to it and, in so doing, in the light of the definition in Article 2(b) of Directive 95/46, which is applicable in connection with Directive 2002/58 pursuant to the first paragraph of Article 2 of the latter directive, to ‘process’ those data within the meaning of the two directives. That legislation therefore governs the activities of providers of electronic communications services and, as a result, falls within the scope of Directive 2002/58.39In those circumstances, the fact, noted by the Spanish Government, that the request for access was made in connection with a criminal investigation does not make Directive 2002/58 inapplicable to the case in the main proceedings by virtue of Article 1(3) of the directive.40It is also irrelevant in that regard that the request for access at issue in the main proceedings relates, as is apparent from the Spanish Government’s written answer to a question raised by the Court and confirmed by both that government and the Public Prosecutor’s Office during the hearing, to the granting of access to only the telephone numbers corresponding to the SIM cards activated with the IMEI code of the stolen mobile telephone and to the data relating to the identity of the owners of those cards, such as their surnames, forenames and, if need be, addresses, not to the data relating to the communications carried out with those SIM cards and the location data concerning the stolen mobile telephone.41As observed by the Advocate General in point 54 of his Opinion, Directive 2002/58, pursuant to Article 1(1) and Article 3 thereof, governs all processing of personal data in connection with the provision of electronic communications services. In addition, in accordance with subparagraph (b) of the second paragraph of Article 2 of the directive, the notion of ‘traffic data’ covers ‘any data processed for the purpose of the conveyance of a communication on an electronic communications network or for the billing thereof’.42In that connection, as regards, more specifically, data relating to the identity of owners of SIM cards, it is apparent from recital 15 of Directive 2002/58 that traffic data may include, inter alia, the name and address of the person sending a communication or using a connection to carry out a communication. Data relating to the identity of owners of SIM cards can also prove necessary in order to bill for the electronic communications services provided and therefore form part of traffic data as defined in subparagraph (b) of the second paragraph of Article 2 of the directive. Consequently, those data fall within the scope of Directive 2002/58.43The Court therefore has jurisdiction to reply to the question raised by the referring court. Admissibility 44The Spanish Government argues that the request for a preliminary ruling is inadmissible on the ground that it does not clearly identify the provisions of EU law on which the Court is asked to give a preliminary ruling. What is more, the police request at issue in the main proceedings does not concern the interception of communications made by means of the SIM cards activated with the IMEI code of the stolen mobile telephone, but rather the establishment of a link between the cards and their owners, in such a way that the confidentiality of the communications is not affected. Article 7 of the Charter, referred to in the questions referred for a preliminary ruling, is therefore irrelevant to the present case.45The Court has consistently held that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions put by national courts concern the interpretation of a provision of EU law, the Court is, in principle, bound to give a ruling. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 10 July 2018, Jehovan Todistajat, C‑25/17, EU:C:2018:551, paragraph 31 and the case-law cited).46In the present case, the order for reference contains sufficient factual and legal information required both for the definition of the provisions of EU law referred to in the questions referred for a preliminary ruling and for the understanding of the scope of those questions. More specifically, it is apparent from the order for reference that the questions referred for a preliminary ruling are intended to enable the referring court to assess whether, and to what extent, the national legislation, on which the police request at issue in the main proceedings is based, pursues an objective which is capable of justifying infringement of the fundamental rights enshrined in Articles 7 and 8 of the Charter. According to the statements of the referring court, that national legislation falls within the scope of Directive 2002/58, with the result that the Charter is applicable to the case in the main proceedings. The questions referred for a preliminary ruling are thus directly related to the subject matter of the main proceedings and cannot therefore be regarded as hypothetical.47In those circumstances, the questions referred for a preliminary ruling are admissible. Substance 48By its two questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 15(1) of Directive 2002/58, read in the light of Articles 7 and 8 of the Charter, must be interpreted as meaning that public authorities’ access to data for the purpose of identifying the owners of SIM cards activated with a stolen mobile telephone, such as the surnames, forenames and, if need be, addresses of the owners of the SIM cards, entails interference with their fundamental rights, enshrined in those articles of the Charter, which is sufficiently serious to entail that access being limited, in the area of prevention, investigation, detection and prosecution of criminal offences, to the objective of fighting serious crime and, if so, by reference to which criteria the seriousness of the offence at issue must be assessed.49In that regard, it is apparent from the order for reference that, as observed in essence by the Advocate General in point 38 of his Opinion, the request for a preliminary ruling does not seek to determine whether the personal data at issue in the main proceedings have been retained by providers of electronic communications services in a manner consistent with the requirements laid down in Article 15(1) of Directive 2002/58, read in the light of Articles 7 and 8 of the Charter. As stated in paragraph 46 of this judgment, the request concerns only whether, and to what extent, the objective pursued by the legislation at issue in the main proceedings is capable of justifying the access of public authorities, such as the police, to such data, without the other conditions for access deriving from Article 15(1) forming part of the subject matter of the request.50More specifically, the referring court is uncertain as to the factors that should be taken into consideration in order to assess whether the offences in respect of which the police may be authorised, for the purposes of an investigation, to have access to personal data retained by providers of electronic communications services are sufficiently serious to warrant the interference entailed by such access with the fundamental rights enshrined in Articles 7 and 8 of the Charter, as interpreted by the Court in its judgment of 8 April 2014, Digital Rights Ireland and Others (C‑293/12 and C‑594/12, EU:C:2014:238), and in Tele2 Sverige and Watson and Others.51As to the existence of an interference with those fundamental rights, it should be borne in mind, as observed by the Advocate General in points 76 and 77 of his Opinion, that the access of public authorities to such data constitutes an interference with the fundamental right to respect for private life, enshrined in Article 7 of the Charter, even in the absence of circumstances which would allow that interference to be defined as ‘serious’, without it being relevant that the information in question relating to private life is sensitive or whether the persons concerned have been inconvenienced in any way. Such access also constitutes interference with the fundamental right to the protection of personal data guaranteed in Article 8 of the Charter, as it constitutes processing of personal data (see, to that effect, Opinion 1/15 (EU-Canada PNR Agreement) of 26 July 2017, EU:C:2017:592, points 124 and 126 and the case-law cited).52As regards the objectives that are capable of justifying national legislation, such as that at issue in the main proceedings, governing the access of public authorities to data retained by providers of electronic communications services and thereby derogating from the principle of confidentiality of electronic communications, it must be borne in mind that the list of objectives set out in the first sentence of Article 15(1) of Directive 2002/58 is exhaustive, as a result of which that access must correspond, genuinely and strictly, to one of those objectives (see, to that effect, Tele2 Sverige and Watson and Others, paragraphs 90 and 115).53As regards the objective of preventing, investigating, detecting and prosecuting criminal offences, it should be noted that the wording of the first sentence of Article 15(1) of Directive 2002/58 does not limit that objective to the fight against serious crime alone, but refers to ‘criminal offences’ generally.54In that regard, the Court has admittedly held that, in areas of prevention, investigation, detection and prosecution of criminal offences, only the objective of fighting serious crime is capable of justifying public authorities’ access to personal data retained by providers of electronic communications services which, taken as a whole, allow precise conclusions to be drawn concerning the private lives of the persons whose data is concerned (see, to that effect, Tele2 Sverige and Watson and Others, paragraph 99).55However, the Court explained its interpretation by reference to the fact that the objective pursued by legislation governing that access must be proportionate to the seriousness of the interference with the fundamental rights in question that that access entails (see, to that effect, Tele2 Sverige and Watson and Others, paragraph 115).56In accordance with the principle of proportionality, serious interference can be justified, in areas of prevention, investigation, detection and prosecution of criminal offences, only by the objective of fighting crime which must also be defined as ‘serious’.57By contrast, when the interference that such access entails is not serious, that access is capable of being justified by the objective of preventing, investigating, detecting and prosecuting ‘criminal offences’ generally.58It should therefore, first of all, be determined whether, in the present case, in the light of the facts of the case, the interference with fundamental rights enshrined in Articles 7 and 8 of the Charter that police access to the data in question in the main proceedings would entail must be regarded as ‘serious’.59In that regard, the sole purpose of the request at issue in the main proceedings, by which the police seeks, for the purposes of a criminal investigation, a court authorisation to access personal data retained by providers of electronic communications services, is to identify the owners of SIM cards activated over a period of 12 days with the IMEI code of the stolen mobile telephone. As noted in paragraph 40 of the present judgment, that request seeks access to only the telephone numbers corresponding to those SIM cards and to the data relating to the identity of the owners of those cards, such as their surnames, forenames and, if need be, addresses. By contrast, those data do not concern, as confirmed by both the Spanish Government and the Public Prosecutor’s Office during the hearing, the communications carried out with the stolen mobile telephone or its location.60It is therefore apparent that the data concerned by the request for access at issue in the main proceedings only enables the SIM card or cards activated with the stolen mobile telephone to be linked, during a specific period, with the identity of the owners of those SIM cards. Without those data being cross-referenced with the data pertaining to the communications with those SIM cards and the location data, those data do not make it possible to ascertain the date, time, duration and recipients of the communications made with the SIM card or cards in question, nor the locations where those communications took place or the frequency of those communications with specific people during a given period. Those data do not therefore allow precise conclusions to be drawn concerning the private lives of the persons whose data is concerned.61In those circumstances, access to only the data referred to in the request at issue in the main proceedings cannot be defined as ‘serious’ interference with the fundamental rights of the persons whose data is concerned.62As stated in paragraphs 53 to 57 of this judgment, the interference that access to such data entails is therefore capable of being justified by the objective, to which the first sentence of Article 15(1) of Directive 2002/58 refers, of preventing, investigating, detecting and prosecuting ‘criminal offences’ generally, without it being necessary that those offences be defined as ‘serious’.63In the light of the foregoing considerations, the answer to the questions referred is that Article 15(1) of Directive 2002/58, read in the light of Articles 7 and 8 of the Charter, must be interpreted as meaning that the access of public authorities to data for the purpose of identifying the owners of SIM cards activated with a stolen mobile telephone, such as the surnames, forenames and, if need be, addresses of the owners, entails interference with their fundamental rights, enshrined in those articles of the Charter, which is not sufficiently serious to entail that access being limited, in the area of prevention, investigation, detection and prosecution of criminal offences, to the objective of fighting serious crime. Costs 64Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Article 15(1) of Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector (Directive on privacy and electronic communications), as amended by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009, read in the light of Articles 7 and 8 of the Charter of Fundamental Rights of the European Union, must be interpreted as meaning that the access of public authorities to data for the purpose of identifying the owners of SIM cards activated with a stolen mobile telephone, such as the surnames, forenames and, if need be, addresses of the owners, entails interference with their fundamental rights, enshrined in those articles of the Charter of Fundamental Rights, which is not sufficiently serious to entail that access being limited, in the area of prevention, investigation, detection and prosecution of criminal offences, to the objective of fighting serious crime. [Signatures]( *1 ) Language of the case: Spanish. | 41e51-7109a86-4ecb | EN |
Advocate General Campos Sánchez-Bordona proposes that the Court of Justice declare that the amendment to the criterion used for charging the fee which finances public service broadcasters in Germany does not constitute unlawful State aid | 13 December 2018 ( *1 )(Reference for a preliminary ruling — State aid — Article 107(1) TFEU — Article 108(3) TFEU — Public broadcasting institutions — Financing — Legislation of a Member State under which all adults possessing a dwelling within the country are required to pay a contribution to public broadcasters)In Case C‑492/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Landgericht Tübingen (Regional Court, Tübingen, Germany), made by decision of 3 August 2017, received at the Court on 11 August 2017, in the proceedings Südwestrundfunk v Tilo Rittinger, Patrick Wolter, Harald Zastera, Dagmar Fahner, Layla Sofan, Marc Schulte, THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Seventh Chamber, acting as President of the Fourth Chamber, K. Jürimäe (Rapporteur), C. Lycourgos, E. Juhász and C. Vajda, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 4 July 2018,after considering the observations submitted on behalf of:–Südwestrundfunk, by H. Kube, Hochschullehrer,the German Government, by T. Henze and J. Möller, acting as Agents,the Swedish Government, by A. Falk, H. Shev, C. Meyer-Seitz, L. Zettergren and A. Alriksson, acting as Agents,the European Commission, by K. Blanck-Putz, K. Herrmann, C. Valero and G. Braun, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 26 September 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Articles 49, 107 and 108 TFEU, Article 11 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and Article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms signed in Rome on 4 November 1950 (‘the ECHR’), and of the principles of equal treatment and non-discrimination.2The request has been made in proceedings between Südwestrundfunk (SWR), a Land broadcasting institution governed by public law, and Tilo Rittinger, Patrick Wolter, Harald Zastera, Marc Schulte, Lydia Sofan and Dagmar Fahner concerning enforcement instruments issued against them by SWR for recovery of the broadcasting contributions they failed to pay. Legal context EU law Regulation (EC) No 659/1999 3Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1) provided:‘For the purpose of this Regulation:(a)“aid” shall mean any measure fulfilling all the criteria laid down in Article [107](1) of the [FEU] Treaty;(b)“existing aid” shall mean:(i)… all aid which existed prior to the entry into force of the Treaty in the respective Member States, that is to say, aid schemes and individual aid which were put into effect before, and are still applicable after, the entry into force of the Treaty;(ii)authorised aid, that is to say, aid schemes and individual aid which have been authorised by the Commission or by the Council;…(c)“new aid” shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;…’4Regulation No 659/1999 was repealed by Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union (OJ 2015 L 248, p. 9). That regulation contains the same definitions as those cited in the preceding paragraph of this judgment. Regulation (EC) No 794/2004 5Article 4 of Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Regulation No 659/1999 (OJ 2004 L 140, p. 1, and corrigendum OJ 2005 L 25, p. 74), headed ‘Simplified notification procedure for certain alterations to existing aid’, provides:‘1. For the purposes of Article 1(c) of Regulation … No 659/1999, an alteration to existing aid shall mean any change, other than modifications of a purely formal or administrative nature which cannot affect the evaluation of the compatibility of the aid measure with the common market. However an increase in the original budget of an existing aid scheme by up to 20% shall not be considered an alteration to existing aid.2. The following alterations to existing aid shall be notified on the simplified notification form set out in Annex II:increases in the budget of an authorised aid scheme exceeding 20%;prolongation of an existing authorised aid scheme by up to six years, with or without an increase in the budget;tightening of the criteria for the application of an authorised aid scheme, a reduction of aid intensity or a reduction of eligible expenses;The Commission shall use its best endeavours to take a decision on any aid notified on the simplified notification form within a period of one month. German law 6On 31 August 1991 the Länder concluded the Staatsvertrag für Rundfunk und Telemedien (State Treaty for broadcasting and telemedia) (GBl. 1991, p. 745), last amended by the 19. Rundfunkänderungsstaatsvertrag (19th Amending State Broadcasting Treaty) of 3 December 2015 (GBl. 2016, p. 126). Paragraph 12 of the State Broadcasting Treaty, headed ‘Appropriate financial provision, principle of financial equalisation’, reads as follows:‘(1) The financial provision must put public-law broadcasting in a position to perform its constitutional and statutory tasks; it must in particular guarantee the maintenance and development of public-law broadcasting.(2) Financial equalisation between the broadcasting institutions of the Länder is a component of the financing system of the [Arbeitsgemeinschaft der öffentlich-rechtlichen Rundfunkanstalten der Bundesrepublik Deutschland (Consortium of public-law broadcasting institutions of the Federal Republic of Germany) (ARD)]; it guarantees in particular the proper performance of tasks by the institutions Saarländer Rundfunk (Saarland Radio) and Radio Bremen. The extent of the financial equalisation fund and its adjustment to the broadcasting contribution shall be determined in accordance with the Rundfunkfinanzierungsstaatsvertrag (State Treaty on Broadcasting Financing).’7Under Paragraph 13 of the State Broadcasting Treaty, headed ‘Financing’:‘Public-law broadcasting shall be financed by broadcasting contributions, income from advertising and other income; the primary source of financing shall be the broadcasting contribution. Programmes and offers within its mandate in return for special payment are not permitted; …’8Paragraph 14 of the State Broadcasting Treaty, headed ‘Financial needs of public-law broadcasting’, provides:‘(1) The financial needs of public-law broadcasting shall be examined and ascertained on a regular basis, in accordance with the principles of economy and thrift, including the associated rationalisation potential, on the basis of statements of need from the broadcasting institutions of the Länder which are members of the ARD, from [Zweites Deutsches Fernsehen (ZDF)] and from the public-law corporation “Deutschlandradio”, by the independent Kommission zur Überprüfung und Ermittlung des Finanzbedarfs der Rundfunkanstalten (Commission for examining and ascertaining the financial needs of broadcasting institutions).(2) The basis of examination and ascertainment of the financial needs shall be, in particular:1.the competitive continuation of existing broadcasting programmes, and the television programmes authorised by State treaty of all the Länder (existing needs),2.new broadcasting programmes, permitted under the law of the Länder, which participate in new technical broadcasting possibilities in the production and for the diffusion of broadcast programmes, and the possibility of organising new forms of broadcasting (development needs),3.the general development of costs and the specific development of costs in the media sector,4.the development of income from contributions, advertising income and other income,5.the investment, interest yield and targeted application of surpluses arising from the total annual income of the broadcasting institutions of the Länder which are members of the ARD, of ZDF or of Deutschlandradio exceeding total expenditure for the performance of their tasks.(4) The contribution shall be set by State treaty.’9The Land of Baden-Württemberg (Germany), by the Baden-Württembergisches Gesetz zur Geltung des Rundfunkbeitragsstaatsvertrags (Law of Baden-Württemberg on the application of the State Treaty on the Broadcasting Contribution) of 18 October 2011, last amended by Article 4 of the 19th Amending State Broadcasting Treaty of 3 December 2015 (‘the Law on the broadcasting contribution’), implemented the State Treaty on the Broadcasting Contribution which abolished the previous fee on 31 December 2012 and replaced it by the contribution. The law sets out the rules for collection of the contribution, payment of which became compulsory for those liable to pay it from 1 January 2013. It provides in Paragraph 1:‘The broadcasting contribution serves the appropriate provision of finance for public-law broadcasting within the meaning of Paragraph 12(1) of the State Broadcasting Treaty and the financing of the tasks set out in Paragraph 40 of the State Broadcasting Treaty.’10Paragraph 2 of the Law on the broadcasting contribution, headed ‘Broadcasting contribution in the private sphere’, provides:‘(1) In the private sphere, a broadcasting contribution is payable for each dwelling by its owner (the contribution debtor).(2) An owner of a dwelling is every adult who lives in the dwelling himself. Every person is presumed to be an owner whois registered there in accordance with the law on registration oris named as the lessee in the lease for the dwelling.(3) Where there are several contribution debtors, they shall be jointly and severally liable in accordance with Paragraph 44 of the Abgabenordnung (Code of taxation). …(4) No broadcasting contribution shall be payable by contribution debtors who enjoy privileges on the basis of Article 2 of the Gesetz zu dem Wiener Übereinkommen vom 18. April 1961 über diplomatische Beziehungen (Law on the Vienna Convention of 18 April 1961 on diplomatic relations) of 6 August 1964 (BGBl. 1964 II, p. 957) or equivalent provisions of law.’11Under Paragraph 10 of the Law on the broadcasting contribution:‘(1) The revenue from the broadcasting contribution shall belong to the Land broadcasting institution and, to the extent defined in the State Treaty on Broadcasting Financing, to [ZDF], Deutschlandradio and the Land media institution in whose territory the dwelling or business premises of the contribution debtor are situated or the vehicle is registered.(5) Arrears of broadcasting contributions shall be determined by the competent Land broadcasting institution. …(6) Payment notices shall be enforced by the administrative enforcement procedure. …(7) Each Land broadcasting institution shall itself assume the tasks allocated to it under this State Treaty and the associated rights and duties wholly or partly through the unit of the public-law Land broadcasting institutions operated within the framework of a public-law joint administrative body without legal capacity. The Land broadcasting institution is authorised to transfer to third parties individual activities in connection with collecting the contribution and ascertaining contribution debtors and to lay down detailed rules by the regulation under Paragraph 9(2). …’12Since the detailed rules on administrative recovery of debts (Beitreibung) are also within the competence of the Länder, the Land of Baden-Württemberg on 12 March 1974 adopted the Verwaltungsvollstreckungsgesetz für Baden-Württemberg, Landesverwaltungsvollstreckungsgesetz (Law of Baden-Württemberg on administrative enforcement). The disputes in the main proceedings and the questions referred for a preliminary ruling 13The applicants in the main proceedings are persons owing the broadcasting contribution (Rundfunkbeitrag) who did not pay it or did not pay it in full.14In 2015 and 2016 SWR, the competent Land broadcasting institution, sent the contribution debtors enforcement instruments for the purpose of recovering the unpaid amounts for the period from January 2013 to the end of 2016.15When the contribution debtors still did not pay the contribution, SWR sought to enforce its claims on the basis of those instruments.16According to the order for reference, the debtors brought proceedings before the courts with territorial jurisdiction over them, namely the Amtsgericht Reutlingen (Local Court, Reutlingen, Germany), the Amtsgericht Tübingen (Local Court, Tübingen, Germany) and the Amtsgericht Calw (Local Court, Calw, Germany), against the enforcement procedures concerning them.17The Amtsgericht Tübingen (Local Court, Tübingen) allowed the three applications brought before it by the debtors concerned. The actions brought before the Amtsgericht Reutlingen (Local Court, Reutlingen) and the Amtsgericht Calw (Local Court, Calw) were dismissed.18According to the documents before the Court, the parties whose claims were dismissed all appealed to the referring court against the judgments dismissing their claims.19The referring court, which has joined the cases, states that the disputes in the main proceedings essentially concern questions regarding the law on the enforcement of unpaid debts, but those questions are closely connected with the applicable provisions of substantive law.20The referring court takes the view that the provisions of the legislation in question are contrary to EU law.21First, the court observes that German public broadcasting is partly financed by the broadcasting contribution. The contribution must in principle be paid, on pain of a fine, by all adults living in Germany, and in the Land of Baden-Württemberg is paid in particular to the public broadcasters SWR and ZDF. The contribution constitutes State aid within the meaning of Article 107(1) TFEU in favour of those broadcasters which should have been notified to the Commission pursuant to Article 108(3) TFEU.22The court notes that the previous broadcasting fee, which was payable on the basis of possession of a receiving device, was substantially altered on 1 January 2013 with the entry into force of the obligation to pay the broadcasting contribution, in that it is now payable by every owner of a dwelling. It recalls that the German system of financing public broadcasting was assessed by the Commission in the context of the permanent examination of aid schemes existing in the Member States, under Article 108(1) TFEU. In this respect, it appears from the documents before the Court that, in the Commission’s decision of 24 April 2007 (C(2007) 1761 final — State aid E 3/2005 (ex CP 2/2003, CP 232/2002, CP 43/2003, CP 243/2004 and CP 195/2004) — Financing of public service broadcasters in Germany (ARD/ZDF)) (‘the decision of 24 April 2007’) concerning that system, the Commission found that the broadcasting fee was to be classified as existing aid. The referring court further considers that, because of the substantial amendments made to the financing of broadcasting by the Law on the broadcasting contribution, the new system of financing should have been notified. Furthermore, the resulting State aid is not compatible with the internal market in accordance with Article 107(3) TFEU.23Second, the broadcasting contribution is contrary to EU law, in so far as the revenue from that contribution is used to finance the establishment of a new terrestrial digital broadcasting system, DVB-T2, the use of which by foreign broadcasters is not provided for. In the referring court’s view, the situation is similar to that of the case in which judgment was given on 15 September 2011, Germany v Commission (C‑544/09 P, not published, EU:C:2011:584), concerning the transition from analogue to digital transmission technology.24The referring court considers that the contribution at issue in the main proceedings should in fact be equated to a special purpose tax (Zwecksteuer). The replacement of the broadcasting fee previously levied by a person-based broadcasting contribution was an essential change to the public broadcasting financing system. Thus, unlike the previous system of financing, payment of this contribution did not give rise to an individual counterpart for those liable to pay it. The entire adult population possessing a dwelling in Germany thus contributed to the financing of the public broadcasting service, as in the case of taxes. It is financing by the most part from the State within the meaning of the judgment of the Court of 13 December 2007, Bayerischer Rundfunk and Others (C‑337/06, EU:C:2007:786). The present system of contributions thus constitutes unlawful aid for the introduction of the DVB-T2 system, financed by taxation.25Third, as a result of the legislation at issue, public broadcasters enjoy a number of advantages not available to private broadcasters, which constitute an economic advantage and, in view of the general nature of the obligation to pay the broadcasting contribution, State aid. Those advantages consist in particular in the exceptions to the ordinary law which allow public broadcasters themselves to issue the enforcement instruments for the enforcement of those debts. That method of issuing enforcement instruments is quicker, simpler and cheaper than having recourse to judicial proceedings for the recovery of debts. Moreover, it is disadvantageous for users, in that their opportunity to bring proceedings and have a court review the case before the enforcement instrument is issued and enforced is excluded or made extremely difficult.26Fourth, the Law on the broadcasting contribution, in particular Paragraphs 2 and 3, infringes the freedom of information mentioned in Article 11 of the Charter and Article 10 of the ECHR. The broadcasting contribution is deliberately structured as an obstacle to access to all kinds of information transmitted by satellite, cable or mobile telephone network. The broadcasting contribution is payable by an individual regardless of whether he actually makes use of the public broadcasters’ programmes.27Fifth, according to the referring court, the broadcasting contribution is contrary to freedom of establishment. It also infringes the principle of equal treatment and produces discrimination against women. On that last point, the referring court observes that the contribution is payable per dwelling regardless of the number of persons living there, so that the amount of the contribution to be paid by an adult varies considerably according to the number of persons in the household. Single parents, a majority of whom are women, are disadvantaged compared to adults living together.28In those circumstances, the Landgericht Tübingen (Regional Court, Tübingen, Germany) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Is the [Law on the broadcasting contribution] … incompatible with EU law because the contribution unconditionally levied since 1 January 2013 in principle from every adult living in the German Land of Baden-Württemberg to finance the public service broadcasters SWR and ZDF constitutes preferential aid that infringes EU law for the exclusive benefit of those public service broadcasting bodies compared to private broadcasting organisations? Are Articles 107 and 108 TFEU to be interpreted as meaning that the Law on the broadcasting contribution should have been approved by the Commission and is invalid without that approval?(2)Are Articles 107 and 108 TFEU to be interpreted as encompassing the provision laid down in the [Law on the broadcasting contribution] under which a contribution for the exclusive benefit of official/public-law service broadcasters is unconditionally levied in principle from every adult living in Baden-Württemberg, because that contribution contains preferential aid that infringes EU law with the effect that broadcasters from EU States are excluded for technical reasons, as the contributions are used to set up a competing transmission method (DVB-T2 monopoly) whose use by foreign broadcasters is not provided for? Are Articles 107 and 108 TFEU to be interpreted as encompassing not only direct financial aid but also other privileges with economic relevance (right to issue enforcement instruments, authority to act both as an economic undertaking and also as an official body, better position in the calculation of debts)?(3)Is it compatible with the principle of equal treatment and the prohibition of preferential aid if, under a national Baden-Württemberg law, a German television broadcaster which is organised under public law and takes the form of a public body but which at the same time competes with private broadcasters in the advertising market is put in a privileged position compared to them, in that, unlike its private competitors, it does not have to go through the ordinary courts to obtain an enforcement instrument for its claims against viewers before being able to enforce these claims, but is entitled itself to create an instrument equally entitling it to enforcement without the need for a court?(4)Is it compatible with Article 10 of the ECHR/Article 11 of the Charter … that a Member State provides in a national Baden-Württemberg law that a television broadcaster which takes the form of a public body is entitled to demand a contribution, on pain of an administrative fine, to finance precisely that broadcaster from every adult living within the broadcasting territory, regardless of whether he even possesses a receiving device or uses only other broadcasters, namely foreign or private ones?(5)Is the [Law on the broadcasting contribution], in particular Paragraphs 2 and 3, compatible with the principle of equal treatment and the prohibition of discrimination in EU law if the contribution payable unconditionally by every resident for the purpose of financing a public-law television broadcaster burdens a single parent much more per head than a member of a shared household? Is [Council Directive 2004/113/EC of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services (OJ 2004 L 373, p. 37)] to be interpreted as also encompassing the contribution at issue and as meaning that an indirect disadvantage is sufficient when it is 90% women who are more heavily burdened in the actual circumstances?(6)Is the [Law on the broadcasting contribution], in particular Paragraphs 2 and 3, compatible with the principle of equal treatment and the prohibition of discrimination in EU law if the contribution payable unconditionally by every resident for the purpose of financing a public-law television broadcaster is twice as high for persons who need a second home for work reasons than for other workers?(7)Is the [Law on the broadcasting contribution], in particular Paragraphs 2 and 3, compatible with the principle of equal treatment in EU law, the prohibition of discrimination in EU law and the freedom of establishment in EU law if the contribution payable unconditionally by every resident for the purpose of financing a public service television broadcaster is organised as regards persons in such a way that, where the reception is the same, a German living immediately before the border with a neighbouring EU State owes the contribution solely because of the location of his place of residence, but a German living immediately beyond the border does not owe the contribution, and similarly a foreign EU citizen who for work reasons has to settle immediately beyond an internal EU border is charged the contribution while an EU citizen immediately before the border is not, even if neither is interested in receiving the German broadcaster?’ Admissibility of the request for a preliminary ruling 29SWR submits that, in accordance with the national procedural rules, the referring court, which consists of a single judge, should have transferred the proceedings to a formation of the court with several judges, so that the single judge was not entitled to make a reference to the Court for a preliminary ruling under Article 267 TFEU.30On this point, it suffices to recall that by virtue of the second paragraph of Article 267 TFEU, whenever a question that is capable of being the subject of a reference for a preliminary ruling is raised in a case pending before a court of a Member State, that court may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court to rule on it.31In this connection, it must be pointed out that the functioning of the system of cooperation between the Court of Justice and the national courts established by Article 267 TFEU requires, as does the principle of primacy of EU law, the national court to be free, at whatever point during the proceedings it considers appropriate, to refer to the Court for a preliminary ruling any question that it considers necessary (see, to that effect, judgment of 4 June 2015, Kernkraftwerk Lippe-Ems, C‑5/14, EU:C:2015:354, paragraph 35 and the case-law cited).32Furthermore, it should be recalled that it is not for the Court to determine whether the decision to make the reference was taken in accordance with the national rules on the organisation of the courts and their procedure (order of 6 September 2018, Di Girolamo, C‑472/17, not published, EU:C:2018:684, paragraph 24 and the case-law cited).33SWR’s argument based on an alleged failure to comply with the national rules on the organisation of the courts is not therefore capable of preventing the referring court from requesting the Court for a preliminary ruling under Article 267 TFEU.34The request for a preliminary ruling is therefore admissible. Consideration of the questions referred Admissibility 35SWR and the German Government submit essentially that, as regards most of the questions referred, the interpretation of EU law sought by the referring court bears no relation to the actual facts or purpose of the main actions and the problem raised is hypothetical. Only the questions relating to the public broadcaster’s privileges in connection with enforcement are relevant in this respect.36It must be recalled that, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted concern the interpretation of EU law, the Court is in principle bound to give a ruling (judgment of 26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraph 23 and the case-law cited).37Nonetheless, the Court cannot rule on a question submitted by a national court where it is quite obvious that the interpretation sought by that court of a rule of EU law bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 31 January 2008, Centro Europa 7, C‑380/05, EU:C:2008:59, paragraph 53).38It must be recalled that the need to provide an interpretation of EU law which will be of use to the national court means that the national court is bound to observe scrupulously the requirements concerning the content of a request for a preliminary ruling, expressly set out in Article 94 of the Rules of Procedure of the Court of Justice, of which the referring court should be aware (judgment of26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraph 27). Those requirements are, moreover, stated in the Court’s Recommendations to national courts and tribunals in relation to the initiation of preliminary ruling proceedings (OJ 2018 C 257, p. 1).39Thus it is essential, as is stated in Article 94(c) of the Rules of Procedure, that the reference for a preliminary ruling itself must contain a statement of the reasons which prompted the national court to inquire about the interpretation or validity of certain provisions of EU law, and the relationship between those provisions and the national legislation applicable to the case before the referring court. It is also essential, as is provided for in Article 94(a) of the Rules of Procedure, that the order for reference itself contains, at least, an account of the facts on which the questions are based. In accordance with the case-law of the Court, those requirements are of particular importance in the area of competition, where the factual and legal situations are often complex (judgment of 26 July 2017, Persidera, C‑112/16, EU:C:2017:597, paragraphs 28 and 29).40In the present case, first, by Questions 1 to 3 the referring court essentially questions the Court on the interpretation of Articles 107 and 108 TFEU, in order to determine whether the Commission should have been notified, pursuant to Article 108(3) TFEU, of the alteration to the German broadcasting finance system made by the Law on the broadcasting contribution, and whether Articles 107 and 108 TFEU preclude such a system.41Contrary to the submissions of SWR and the German Government, the fact that the disputes in the main proceedings concern the recovery of the broadcasting contribution does not rule out the possibility of the referring court having to interpret and apply the concept of aid in Article 107(1) TFEU, in particular to determine whether or not the broadcasting contribution should have been subjected to the advance review procedure under Article 108(3) TFEU and, if necessary, to ascertain whether the Member State concerned complied with that obligation.42It follows from the direct effect of Article 108(3) TFEU that national courts must guarantee to individuals that all the appropriate conclusions will be drawn from an infringement of that provision, in accordance with their national law, as regards the validity of implementing measures, the recovery of financial support granted in disregard of that provision and possible interim measures (see, to that effect, judgments of 11 July 1996, SFEI and Others, C‑39/94, EU:C:1996:285, paragraphs 39 and 40; of 16 April 2015, Trapeza Eurobank Ergasias, C‑690/13, EU:C:2015:235, paragraph 52; and of 11 November 2015, Klausner Holz Niedersachsen, C‑505/14, EU:C:2015:742, paragraphs 23 and 24).43Moreover, the Court can give the referring court full guidance on the interpretation of EU law in order to enable it to assess the compatibility of a national measure with that law for the purposes of deciding the case before it. In the case of State aid, the Court can in particular give the referring court guidance on interpretation in order to enable it to determine whether a national measure may be classified as State aid under EU law (judgment of 10 June 2010, Fallimento Traghetti del Mediterraneo, C‑140/09, EU:C:2010:335, paragraph 24) or whether that measure constitutes existing aid or new aid (see, to that effect, judgment of 19 March 2015, OTP Bank, C‑672/13, EU:C:2015:185, paragraph 60).44Consequently, with respect to the purpose of the disputes in the main proceedings, Questions 1 to 3 do not appear manifestly irrelevant, in that they concern the interpretation of Articles 107 and 108 TFEU.45Next, it must be stated that by the first part of Question 2 the referring court raises more specifically the question whether the broadcasting contribution at issue is compatible with Articles 107 and 108 TFEU, in so far as that contribution might involve State aid for the introduction of a transmission system using the DVB-T2 standard whose use by broadcasters established in other EU Member States is not provided for.46However, the order for reference does not contain the factual or legal material to enable the Court to give a useful answer to the referring court’s questions in this respect. In particular, while the referring court states that the broadcasting contribution enabled that system to be financed for the sole benefit of broadcasters in Germany, it does not explain the conditions of financing of that system or the reasons why other broadcasters are excluded from using the system.47Consequently, the first part of Question 2 is inadmissible. Questions 1 to 3 are otherwise admissible.48Second, by Questions 4 to 7 the referring court questions the Court on the interpretation of the right of freedom of expression and information laid down in Article 11 of the Charter and Article 10 of the ECHR, the provisions of Directive 2004/113, the principles of equal treatment and non-discrimination, and freedom of establishment.49However, the referring court provides no explanation as to the connection it finds between the provisions of EU law to which it directs those questions and the disputes in the main proceedings. In particular, it has not produced any specific element from which it might be considered that the persons in question in the main proceedings are in one of the situations referred to in those questions.50According to settled case-law of the Court, the justification for making a request for a preliminary ruling is not that it enables advisory opinions to be delivered on general or hypothetical questions, but rather that it is necessary for the effective resolution of a dispute concerning EU law (judgment of 21 December 2016, Tele2 Sverige and Watson and Others, C‑203/15 and C‑698/15, EU:C:2016:970, paragraph 130 and the case-law cited).51Questions 4 to 7 are therefore inadmissible.52In the light of all the above factors, only Question 1, the second part of Question 2, and Question 3 are admissible. Substance Question 1 53It should be recalled, as a preliminary point, that, as the Advocate General observes in point 45 of his Opinion, it is common ground that the adoption of the Law on the broadcasting contribution altered existing aid within the meaning of Article 1(c) of Regulation No 659/1999.54In those circumstances, it must be understood that by Question 1 the referring court is asking essentially whether Article 1(c) of Regulation No 659/1999 must be interpreted as meaning that an alteration to the system of financing the public broadcasting of a Member State which, like that at issue in the main proceedings, consists in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable in particular on the basis of occupation of a dwelling or business premises constitutes an alteration to existing aid within the meaning of that provision which should be notified to the Commission under Article 108(3) TFEU.55It must be recalled that the first sentence of Article 4(1) of Regulation No 794/2004 provides that, for the purposes of Article 1(c) of Regulation No 659/1999, an alteration to existing aid means any change, other than modifications of a purely formal or administrative nature which cannot affect the compatibility of the aid measure with the internal market. In that respect, the second sentence of Article 4(1) of Regulation No 794/2004 specifies that an increase in the original budget of an existing aid scheme by up to 20% is not to be considered an alteration to existing aid.56In order to provide the referring court with a useful answer, it must therefore be determined whether the Law on the broadcasting contribution, in that it alters the basis of the obligation to pay the contribution whose purpose is to finance public broadcasting in Germany by providing that it is no longer payable on the basis of possession of a receiving device but on the basis in particular of occupation of a dwelling, constitutes an alteration to existing aid within the meaning of the provisions referred to in the preceding paragraph.57That question ultimately means that it must be determined whether the adoption of the Law on the broadcasting contribution entails a substantial alteration to the existing aid that was the subject of the decision of 24 April 2007, or whether that law is confined to making a modification of a purely formal or administrative nature which cannot affect the compatibility of the aid measure with the internal market.58As SWR, the German and Swedish Governments and the Commission argued in the observations they submitted to the Court, and as also follows from material in the documents before the Court, the substitution of the broadcasting contribution for the broadcasting fee is no more than an alteration to the existing aid which was the subject of the decision of 24 April 2007, and that alteration cannot be classified as substantial.59The alteration to the basis of payment of the broadcasting contribution did not affect the constituent elements of the system of financing German public broadcasting, as assessed by the Commission in connection with the decision of 24 April 2007.60Thus, first, it is common ground that the Law on the broadcasting contribution did not change the objective pursued by the system of financing German public broadcasting, since the broadcasting contribution, like the broadcasting fee it replaced, is still intended to finance the public broadcasting service.61Second, it is also common ground that the class of beneficiaries of the system is identical to that which existed previously.62Third, it does not appear from the points raised in oral argument before the Court that the Law on the broadcasting contribution altered the public service task assigned to the public broadcasters or the activities of those broadcasters capable of being subsidised by the broadcasting contribution.63Fourth, the Law on the broadcasting contribution altered the basis of liability to pay the contribution.64However, as pointed out inter alia by SWR, the German Government and the Commission, the alteration at issue in the main proceedings pursued essentially an objective of simplifying the conditions of levying the broadcasting contribution, in a context of evolving technologies for receiving the public broadcasters’ programmes.65In addition, as the German Government and the Commission argued in the observations they submitted to the Court, and as the Advocate General observes in point 55 of his Opinion, the replacement of the broadcasting fee by the broadcasting contribution did not lead to a substantial increase in the compensation received by the public broadcasters to cover the costs associated with the public service tasks entrusted to them.66In those circumstances, in the light of the documentation available to the Court, it has not been shown that the Law on the broadcasting contribution entailed a substantial alteration to the system of financing public broadcasting in Germany which required the Commission to be notified of its adoption, pursuant to Article 108(3) TFEU.67In the light of the above, the answer to Question 1 is that Article 1(c) of Regulation No 659/1999 must be interpreted as meaning that an alteration to the system of financing the public broadcasting of a Member State which, like that at issue in the main proceedings, consists in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable in particular on the basis of occupation of a dwelling or business premises does not constitute an alteration to existing aid within the meaning of that provision which should be notified to the Commission under Article 108(3) TFEU. Second part of Question 2 and Question 3 68By the second part of Question 2 and Question 3, which should be considered together, the referring court essentially asks whether Articles 107 and 108 TFEU must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which confers on public broadcasters powers, as exceptions to the general law, allowing those broadcasters themselves to enforce claims in respect of unpaid broadcasting contributions.69As SWR and the German Government emphasised in the observations they submitted to the Court, the public authority rights enjoyed by public broadcasters in relation to recovery of the broadcasting contribution were taken into account by the Commission in its examination of the system of financing public broadcasting, and more particularly of that contribution, in connection with the decision of 24 April 2007. In the light of that decision, those rights, the aim of which is precisely to recover the contribution, must be regarded as an integral part of the existing aid constituted by the contribution.70As the Advocate General observes in point 87 of his Opinion, the Law on the broadcasting contribution made no alteration to those rights.71In those circumstances, it must be found that the Law on the broadcasting contribution is not liable to affect the assessment made by the Commission in connection with the decision of 24 April 2007 as regards those rights.72Moreover, as the Commission submitted in its written observations, and as the Advocate General stated in point 84 of his Opinion, the public authority rights enjoyed by public broadcasters in connection with the recovery of the broadcasting contribution are inherent in their public service tasks.73Consequently, the answer to the second part of Question 2 and to Question 3 is that Articles 107 and 108 TFEU must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which confers on public broadcasters powers, as exceptions to the general law, allowing those broadcasters themselves to enforce claims in respect of unpaid broadcasting contributions. Costs 74Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fourth Chamber) hereby rules: 1. Article 1(c) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] must be interpreted as meaning that an alteration to the system of financing the public broadcasting of a Member State which, like that at issue in the main proceedings, consists in replacing a broadcasting fee payable on the basis of possession of a receiving device by a broadcasting contribution payable in particular on the basis of occupation of a dwelling or business premises does not constitute an alteration to existing aid within the meaning of that provision which should be notified to the Commission under Article 108(3) TFEU. 2. Articles 107 and 108 TFEU must be interpreted as not precluding national legislation, such as that at issue in the main proceedings, which confers on public broadcasters powers, as exceptions to the general law, allowing those broadcasters themselves to enforce claims in respect of unpaid broadcasting contributions. [Signatures]( *1 ) Language of the case: German. | e72ee-57ac8de-4db0 | EN |
In the context of the cartel in the smart card chip market, the Court refers the case involving Infineon Technologies back to the General Court to assess the proportionality of the fine imposed, and dismisses the appeal lodged by Philips | 26 September 2018 (*)Table of contents Legal contextBackground to the dispute and the decision at issueThe procedure before the General Court and the judgment under appealForms of order sought by the parties to the appealThe appealThe first to third grounds of appeal, relating to the finding of a restriction of competition by objectThe first ground of appeal– Arguments of the parties– Findings of the CourtThe second ground of appealThe third ground of appealThe fourth and fifth grounds of appeal, relating to the concept of a single and continuous infringementThe fourth ground of appealThe fifth ground of appealThe sixth ground of appeal, relating to the fine imposed on the appellantsArguments of the partiesFindings of the CourtCosts(Appeal — Agreements, decisions and concerted practices — European market for smart card chips — Network of bilateral contacts — Exchanges of commercially sensitive information — Restriction of competition ‘by object’ — Single and continuous infringement — Participation in the infringement and awareness, by a participant in some of the bilateral contacts, of the other bilateral contacts — Judicial review)In Case C‑98/17 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 24 February 2017, Koninklijke Philips NV, established in Eindhoven (Netherlands), Philips France, established in Suresnes (France), represented by J.K. de Pree, A.M. ter Haar and T.M. Snoep, advocaten,appellants,the other party to the proceedings being: European Commission, represented by A. Biolan, A. Dawes and J. Norris-Usher, acting as Agents,defendant at first instance,THE COURT (Fourth Chamber),composed of T. von Danwitz, President of the Chamber, C. Vajda, E. Juhász, K. Jürimäe (Rapporteur) and C. Lycourgos, Judges,Advocate General: M. Wathelet,Registrar: L. Hewlett, Principal Administrator,having regard to the written procedure and further to the hearing on 28 February 2018,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1 By their appeal, Koninklijke Philips NV and Philips France SAS ask the Court to set aside the judgment of the General Court of the European Union of 15 December 2016, Philips and Philips France v Commission (T‑762/14, not published, ‘the judgment under appeal’, EU:T:2016:738), by which the General Court dismissed their action for annulment of Commission Decision C(2014) 6250 final of 3 September 2014 relating to proceedings under Article 101 TFEU and Article 53 of the EEA Agreement (Case AT.39574 — Smart Card Chips) (‘the decision at issue’) or, in the alternative, to cancel or reduce the fine imposed on them. Legal context 2 Article 23 of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101] and [102 TFEU] (OJ 2003 L 1, p. 1) states, in paragraphs 2 and 3:‘2. The Commission may by decision impose fines on undertakings and associations of undertakings where, either intentionally or negligently:(a) they infringe Article [101 or 102 TFEU]; or...3. In fixing the amount of the fine, regard shall be had both to the gravity and to the duration of the infringement. 3 As regards the calculation of the fines, points 20 to 23 of the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation (EC) No 1/2003 (OJ 2006 C 210, p. 2; ‘the 2006 Guidelines’) provide:‘20. The assessment of gravity will be made on a case-by-case basis for all types of infringement, taking account of all the relevant circumstances of the case.21. As a general rule, the proportion of the value of sales taken into account will be set at a level of up to 30% of the value of sales.22. In order to decide whether the proportion of the value of sales to be considered in a given case should be at the lower end or at the higher end of that scale, the Commission will have regard to a number of factors, such as the nature of the infringement, the combined market share of all the undertakings concerned, the geographic scope of the infringement and whether or not the infringement has been implemented.23. Horizontal price-fixing, market-sharing and output-limitation agreements …, which are usually secret, are, by their very nature, among the most harmful restrictions of competition. As a matter of policy, they will be heavily fined. Therefore, the proportion of the value of sales taken into account for such infringements will generally be set at the higher end of the scale.’ 4 Paragraphs 73 and 74 of the Guidelines on the applicability of Article [101 TFEU] to horizontal co-operation agreements (OJ 2011 C 11, p. 1, ‘the Horizontal Guidelines’) are worded as follows:‘73. Exchanging information on companies’ individualised intentions concerning future conduct regarding prices or quantities … is particularly likely to lead to a collusive outcome. Informing each other about such intentions may allow competitors to arrive at a common higher price level without incurring the risk of losing market share or triggering a price war during the period of adjustment to new prices … Moreover, it is less likely that information exchanges concerning future intentions are made for pro-competitive reasons than exchanges of actual data.74. Information exchanges between competitors of individualised data regarding intended future prices or quantities should therefore be considered a restriction of competition by object … In addition, private exchanges between competitors of their individualised intentions regarding future prices or quantities would normally be considered and fined as cartels because they generally have the object of fixing prices or quantities. ...’ Background to the dispute and the decision at issue 5 The background to the dispute and the essential elements of the decision at issue as apparent from paragraphs 1 to 40 of the judgment under appeal may be summarised as follows for the purposes of this case. 6 On 22 April 2008, Renesas Technology Corp. and its subsidiaries (‘Renesas’) informed the Commission of the existence of a cartel in the smart card chip sector and submitted an application for immunity from fines pursuant to the Commission Notice on immunity from fines and reduction of fines in cartel cases (OJ 2006 C 298, p. 17; ‘the Leniency Notice’). On 28 March 2011, after carrying out on-the-spot inspections at the premises of several companies in the sector and sending them requests for information, the Commission initiated proceedings, pursuant to Article 11(6) of Regulation No 1/2003, against, first, the appellants, second, Renesas, and, third, Samsung Electronics Co. Ltd and Samsung Semiconductor Europe GmbH (together, ‘Samsung’). 7 In April 2011, the Commission initiated settlement discussions, in accordance with Article 10a of Commission Regulation (EC) No 773/2004 of 7 April 2004 relating to the conduct of proceedings by the Commission pursuant to Articles [101] and [102 TFEU] (OJ 2004 L 123, p. 18) with Renesas, Samsung and the appellants. Those discussions were discontinued in October 2012. 8 On 18 April 2013, the Commission sent a statement of objections to Renesas, Hitachi Ltd, Mitsubishi Electric Corp., Samsung, Infineon Technologies AG (‘Infineon’) and the appellants. The hearing was held on 20 November 2013. 9 On 3 September 2014, the Commission adopted the decision at issue. 10 By that decision, the Commission found that four undertakings, namely Infineon, the appellants, Renesas and Samsung, had participated in a single and continuous infringement of Article 101(1) TFEU and of Article 53 of the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3) (‘the EEA Agreement’) in the smart card chip sector for the whole European Economic Area (EEA) (‘the infringement at issue’). The Commission found that that infringement lasted from 24 September 2003 to 8 September 2005 and related to smart card chips. 11 The market for smart card chips consisted of two segments, namely that of chips for SIM cards, which are used mainly for mobile phones (‘SIM chips’), and that of chips for non-SIM cards, for banking, security and ID (‘non-SIM chips’). At the time of the infringement at issue, that market was characterised by a constant fall in prices, downstream pressure on prices from the largest customers of smart card chip manufacturers, imbalances in the demand/supply ratio resulting from an increase in demand, constant, rapid technological development and the structure of contract negotiations with customers. 12 The Commission took the view, as regards the main characteristics of the infringement at issue, that the cartel penalised was based on a set of bilateral contacts, which were weekly in 2003 and 2004, between the addressees of the decision at issue. According to the Commission, the participants in the infringement coordinated their pricing behaviour for smart card chips through contacts on pricing, including specific prices offered to major customers, minimum price levels and target prices, the sharing of views on the price evolution for the coming semester and pricing intentions, but also on production capacity and capacity utilisation, future market conduct as well as on contract negotiations vis-à-vis common customers. The timing of the cartel contacts, a list of which appears in Table 4 of the decision at issue, follows the timing of the business cycle. The Commission found the existence of links between those bilateral contacts on account of the object of those contacts and their dates. When those bilateral contacts took place, the undertakings made open references to other bilateral contacts being held among the participants to the infringement at issue and the information gathered was transmitted to competitors. 13 The Commission classified the infringement at issue as a single and continuous infringement. The collusive contacts were linked and complementary in nature. By interacting, they contributed to the realisation of the set of anticompetitive effects within the framework of a global plan having a single objective. According to the Commission, Samsung, Renesas and the appellants were aware of the entire infringement. However, Infineon was held responsible for the infringement only in so far as it participated in collusive arrangements with Samsung and Renesas, as there was no evidence that it had contacts with the appellants or that it had the subjective perception of participating in the whole of the infringement at issue. 14 Finally, the Commission held that the behaviour of the undertakings in question had the object of restricting competition in the European Union and that it had an appreciable effect upon trade between Member States and between contracting parties of the EEA Agreement. 15 For the purposes of calculating the fines imposed pursuant to Article 23(2) of Regulation No 1/2003 and the 2006 Guidelines, the Commission found that the infringement at issue had been committed intentionally. In order to calculate the basic amount, that institution applied a proxy for the annual value of sales based on the actual value of sales made of cartelised products by the undertakings during the months of their active participation in the infringement at issue. The Commission applied a gravity multiplier of 16% for the infringement at issue. As regards the duration of that infringement, it took account of 11 months and 14 days in the case of the appellants, 18 months and 7 days in Infineon’s case, 23 months and 2 days in the case of Renesas and 23 months and 15 days in the case of Samsung. It applied a factor of 16% of the value of sales by way of additional amount. 16 On account of mitigating circumstances, the Commission granted Infineon a 20% reduction in the amount of the fine because it was responsible for the infringement at issue only in so far as it participated in collusive arrangements with Samsung and Renesas, and not with the appellants. Pursuant to the Leniency Notice, the Commission granted Renesas immunity from fines and granted Samsung a 30% reduction in the amount of the fine. 17 In Article 1 of the decision at issue, the Commission found that the following undertakings participated in a single and continuous infringement of Article 101(1) TFEU and of Article 53 of the EEA Agreement in the smart card chip sector for the whole EEA:– Infineon, from 24 September 2003 until 31 March 2005, ‘for its coordination with Samsung and Renesas’ (Article 1(a));– the appellants, from 26 September 2003 until 9 September 2004 (Article 1(b));– Renesas, from 7 October 2003 until 8 September 2005 (Article 1(c)); and– Samsung, from 24 September 2003 until 8 September 2005 (Article 1(d)). 18 In Article 2 of that decision, the Commission imposed fines of EUR 82 784 000 on Infineon (Article 2(a)), EUR 20 148 000 on the appellants (Article 2(b)), EUR 0 on Renesas (Article 2(c)) and EUR 35 116 000 on Samsung (Article 2(d)). The procedure before the General Court and the judgment under appeal 19 By application lodged at the Registry of the General Court on 13 November 2014, the appellants brought an action for annulment of the decision at issue in so far as it concerns them or, in the alternative, for the cancellation or reduction of the amount of the fine which had been imposed on them. 20 In support of their application, the appellants put forward nine pleas. By their first three pleas, they challenged the Commission’s assessment that they had infringed Article 101 TFEU and Article 53 of the EEA Agreement as regards, first, the existence of a restriction of competition by object, second, the inclusion of non-SIM chips within the scope of the infringement at issue and, third, the concept of a single and continuous infringement. Their fourth to sixth pleas essentially related to the conduct of the Commission’s investigation. By their seventh to ninth pleas, they challenged the amount of the fine that had been imposed on them by the decision at issue. 21 By the judgment under appeal, the General Court rejected those pleas and, therefore, dismissed the appellants’ action in its entirety. Forms of order sought by the parties to the appeal 22 By their appeal, the appellants claim that the Court should:– set aside the judgment under appeal;– annul the decision at issue in so far as it concerns them; and/or – annul or reduce the amount of the fine imposed on the appellants in that decision, and– order the Commission to pay the costs at first instance and on appeal; 23 The Commission contends that the Court should:– dismiss the appeal;– in the alternative, reject the request that the Court of Justice reduce the fine imposed on the appellants, and – order the appellants to pay the costs. The appeal 24 In support of their appeal, the appellants put forward six grounds of appeal. By their first three grounds of appeal, the appellants challenge the General Court’s assessment that there was a restriction of competition by object. The fourth and fifth grounds of appeal relate to the General Court’s assessment that there was a single and continuous infringement. The sixth ground of appeal concerns the General Court’s assessment of the amount of the fine imposed on the appellants. The first to third grounds of appeal, relating to the finding of a restriction of competition by object 25 By the first to third grounds of appeal, the appellants challenge the General Court’s assessment, in paragraphs 50 to 141 of the judgment under appeal, that there was a restriction of competition by object on the grounds that it applied the wrong legal standard when establishing such a restriction, that it exceeded its unlimited jurisdiction and that the reasoning in its judgment was contradictory, in breach of its obligation to state reasons. The first ground of appeal – Arguments of the parties 26 By their first ground of appeal, the appellants complain that the General Court applied the wrong legal standard when establishing a restriction of competition by object. 27 In their submission, it is apparent from the case-law of the Court of Justice that the essential legal criterion for finding such a restriction is based on the finding that the type of conduct at issue reveals in itself a sufficient degree of harm to competition. In order to assess the degree of harm of the conduct at issue, it is necessary to take into consideration all relevant aspects of the economic or legal context in which that conduct takes place. 28 In this respect, in the judgment 20 January 2016, Toshiba Corporation v Commission (C‑373/14 P, EU:C:2016:26, paragraphs 27 to 29), the Court drew a distinction between two types of restrictions by object. Certain types of conduct reveal by their very nature a sufficient degree of harm to competition, so that the analysis of the economic and legal context of which the conduct at issue forms a part may be limited to what is strictly necessary. Other types of conduct may only be considered to constitute a restriction by object in so far as they reveal a sufficient degree of harm to competition, following a full analysis of that context. 29 In the present case, in the first place, the General Court failed to assess whether the conduct at issue was of a type that, by its very nature, reveals a sufficient degree of harm to competition. The General Court merely set out the reasons why the conduct at issue was in its view capable of influencing the commercial conduct of competitors but did not explain in what respect that conduct is of a type that reveals in itself and by its very nature a sufficient degree of harm. By reference to the Horizontal Guidelines, the appellants add that the information exchanged in the present case did not concern individual data regarding intended future prices or quantities, the exchange of which could be considered to constitute an infringement by object, but that it was of a general and ad hoc nature. They refer, in that regard, to paragraphs 83, 84, 89, 113, 121, 122 and 134 of the judgment under appeal. 30 In the second place, the appellants submit that the General Court should have carried out a full analysis of the economic and legal context of which the conduct at issue formed a part in order to determine whether that conduct revealed a sufficient degree of harm to competition. However, the General Court failed to carry out such an analysis and merely ascertained whether the conduct could have been harmful to normal competition in view of that context, as is apparent inter alia from paragraphs 68 to 71 of the judgment under appeal. In particular, the General Court should have taken account of the need to continuously adapt pricing to that of Atmel Corporation (‘Atmel’). It should also have ascertained whether the information exchanged actually influenced the conduct of the undertakings, assessed whether that information provided useful indications of future conduct and, lastly, taken account of the specific characteristics of the market for non-SIM chips. 31 In the third place, whilst observing that parties’ intentions are not a necessary element in establishing a restriction of competition by object but may nevertheless be taken into account for that purpose, the appellants complain that the General Court failed to properly take into consideration and distorted their intentions in paragraph 80 of the judgment under appeal. First, they claim that they stated that it had been Samsung’s rather than their objective to improve Samsung’s market position through the information exchanges. Second, the General Court was not entitled to infer the existence of an anticompetitive object from Samsung’s intentions. 32 The Commission contests all those arguments.– Findings of the Court 33 By their first ground of appeal, the appellants essentially claim that the General Court applied the wrong legal standard when assessing whether there was a restriction of competition by object in the present case. 34 In that regard, it should be borne in mind that, according to the case-law of the Court, the essential legal criterion for ascertaining whether an agreement or a concerted practice involves a restriction of competition ‘by object’, for the purposes of Article 101(1) TFEU, is the finding that such an agreement or practice reveals in itself a sufficient degree of harm to competition for it to be considered that it is not appropriate to assess its effects (see, to that effect, judgment of 27 April 2017, FSL and Others v Commission, C‑469/15 P, EU:C:2017:308, paragraph 104 and the case-law cited). 35 In order to determine whether a type of coordination between undertakings reveals a sufficient degree of harm to competition that it may be considered a restriction of competition ‘by object’, regard must be had, inter alia, to its content, its objectives and the economic and legal context of which it forms a part. When determining that context, it is also necessary to take into consideration the nature of the goods or services affected, as well as the real conditions of the functioning and structure of the market or markets in question (see, to that effect, judgments of 5 December 2013, Solvay Solexis v Commission, C‑449/11 P, not published, EU:C:2013:802, paragraph 36; of 19 March 2015, Dole Food and Dole Fresh Fruit Europe v Commission, C‑286/13 P, EU:C:2015:184, paragraph 117 and the case-law cited; and of 27 April 2017, FSL and Others v Commission, C‑469/15 P, EU:C:2017:308, paragraph 105 and the case-law cited). 36 In the present case, after recalling in essence that case-law in paragraph 58 of the judgment under appeal, the General Court examined, in paragraphs 67 to 141 of that judgment, the appellants’ arguments aimed at challenging the existence of a restriction of competition by object. In that regard, it took account of the context of the market for smart card chips, as set out in paragraph 70 of that judgment, and assessed whether, as it essentially stated in paragraph 76 of that judgment, the information exchanged revealed, by its very nature, a sufficient degree of harm to competition that it could be considered to result in a restriction of competition by object. 37 In this respect, it is apparent from the General Court’s detailed findings that, in the light of the context of the market for smart card chips, the bilateral discussions between competitors at issue were capable of enabling them to slow down the price decrease inherent in that market and did in fact pursue that objective. According to those same findings of the General Court, inasmuch as the information exchanged during those discussions between the competitors related to their pricing intentions and their production capacities, it was sensitive information from the point of view of competition which was capable of influencing directly the commercial strategy of the competitors or was capable of affecting normal competition. 38 In so doing, contrary to the arguments put forward by the appellants, the General Court followed the case-law set out in paragraphs 34 and 35 of this judgment. The General Court examined the content of the bilateral discussions between the competitors, including the nature of the information exchanged, assessed the objectives pursued by the undertakings that participated in those discussions and took account of the context of the market on which those discussions took place. 39 In that regard, in the first place, it should be observed that, contrary to the appellants’ submission, it is apparent in particular from the findings set out in paragraphs 56, 63 and 71 of the judgment under appeal and from the analysis of each of the bilateral contacts that they challenge that the General Court examined whether the exchange of information at issue revealed, by itself and by its very nature, a sufficient degree of harm and that it explained its reasons for finding that that was the case. Since those reasons were sufficient to find the existence of a restriction of competition by object, the General Court was not required to examine in greater depth the degree of harm. 40 The appellants’ argument, based on the Horizontal Guidelines and on the premiss that the information exchanged was of a general rather than individual nature, is irrelevant in that regard. That premiss, which the General Court indeed rejected, in particular in paragraph 85 of the judgment under appeal, falls within the scope of a factual assessment. In that regard, it should be recalled that, under Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, an appeal lies on points of law only. The General Court has exclusive jurisdiction to find and appraise the relevant facts and to assess the evidence. The appraisal of those facts and evidence does not, therefore, save where they have been distorted, constitute a point of law which is subject, as such, to review by the Court of Justice on appeal (judgments of 9 October 2014, ICF v Commission, C‑467/13 P, not published, EU:C:2014:2274, paragraph 26, and of 16 February 2017, Tudapetrol Mineralölerzeugnisse Nils Hansen v Commission, C‑94/15 P, not published, EU:C:2017:124, paragraph 46). Since the appellants have not established or even alleged such a distortion, their argument is inadmissible. 41 In the second place, first of all, by their claim that the General Court could not merely find that the information exchanged was capable of influencing the conduct of the undertakings without setting out the reasons why it actually influenced that conduct, the appellants complain that the General Court failed to examine the effects of the bilateral contacts. However, according to the Court’s case-law, there is no need to consider the effects of a concerted practice where its anticompetitive object is established (judgment of 4 June 2009, T-Mobile Netherlands and Others, C‑8/08, EU:C:2009:343, paragraph 30). That line of argument cannot therefore succeed. 42 Next, the appellants cannot complain that the General Court failed to take account of the alleged need for the competitors to continuously adapt their pricing to that of Atmel. As the Commission correctly observes, that argument, which entails assessments of fact falling within the General Court’s exclusive jurisdiction, was not raised before that court. According to settled case-law, since, in an appeal, the jurisdiction of the Court of Justice is confined to a review of the findings of law on the pleas and arguments debated before the General Court, a party cannot raise for the first time before the Court of Justice an argument that it did not put forward before the General Court (see, to that effect, judgments of 8 November 2016, BSH v EUIPO, C‑43/15 P, EU:C:2016:837, paragraph 43, and of 13 December 2017, Telefónica v Commission, C‑487/16 P, not published, EU:C:2017:961, paragraph 84). Accordingly, the argument relating to Atmel’s pricing is inadmissible. 43 Lastly, nor can the appellants complain that the General Court failed to take account of the alleged specific conditions of the market for non-SIM chips. In their first plea raised before the General Court, which it assessed in paragraphs 50 to 141 of the judgment under appeal, the appellants in no way challenged the relevance, for those chips, of the characteristics of the market as set out by the Commission in recital 59 of the decision at issue and recalled by the General Court in paragraph 70 of the judgment under appeal. That argument is therefore inadmissible under the case-law cited in the previous paragraph of this judgment. 44 That finding cannot be called into question by the fact that, as they observed in reply to a question put by the Court of Justice at the hearing, the appellants had referred to certain ‘commercial differences’ between SIM chips and non-SIM chips in their second plea raised before the General Court relating to the alleged incorrect inclusion of non-SIM chips in the scope of the cartel found by the Commission. First, apart from a vague allusion to those differences, the appellants had not specifically challenged the relevance of those market characteristics. Second, it should be pointed out that the merits of the General Court’s assessment of the second plea raised before it are in no way called into question in this appeal. 45 In the third place, as regards the appellants’ argument that their intentions were insufficiently taken into account and that they were distorted, it should be observed that that argument is directed against paragraph 80 of the judgment under appeal. However, that paragraph, which starts with the words ‘as a preliminary point’, sets out a ground which is preliminary to the grounds relating to the detailed assessment of the disputed bilateral contacts, and has no bearing on that assessment. Moreover, as the appellants themselves acknowledge, it has been held that, although nothing prevents the Commission or the Courts of the European Union from taking account of the parties’ intentions, that intention is not a necessary factor in determining whether a type of coordination between undertakings is restrictive (see, to that effect, judgment of 19 March 2015, Dole Food and Dole Fresh Fruit Europe v Commission, C‑286/13 P, EU:C:2015:184, paragraph 118 and the case-law cited). In those circumstances, their argument must be rejected as ineffective. 46 Consequently, the first ground of appeal must be rejected in its entirety. The second ground of appeal 47 By their second ground of appeal, the appellants complain that the General Court exceeded the bounds of its unlimited jurisdiction by altering the constituent elements of the infringement determined by the Commission. In the appellants’ submission, in paragraphs 79 and 104 of the judgment under appeal, the General Court considered that in order to find a restriction of competition by object it was sufficient that only one of the bilateral contacts in which they had participated constituted a restriction of competition by object. The General Court held that each of those bilateral contacts constituted a separate infringement. By contrast, the Commission had found that the contacts as a whole, rather than each contact individually, had an anticompetitive object and stated, in recital 277 of the decision at issue, that it would be artificial to split up such continuous conduct into several separate infringements. 48 The Commission disputes that line of argument. 49 It should be noted that the system of judicial review of Commission decisions relating to proceedings under Articles 101 and 102 TFEU consists in a review of the legality of the acts of the institutions for which provision is made in Article 263 TFEU, which may be supplemented, pursuant to Article 261 TFEU and at the request of applicants, by the General Court’s exercise of unlimited jurisdiction with regard to the penalties imposed in that regard by the Commission (judgment of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraph 71). 50 In that regard, it must be stated that the Courts of the European Union cannot alter the constituent elements of the infringement lawfully determined by the Commission in the decision at issue either in the context of the review of legality or when exercising their unlimited jurisdiction. According to the Court’s case-law, those courts cannot, in the context of the review of legality referred to in Article 263 TFEU, substitute their own reasoning for that of the author of the contested act. The unlimited jurisdiction enjoyed by the General Court on the basis of Article 31 of Regulation No 1/2003 concerns solely the assessment by that Court of the fine imposed by the Commission (see, to that effect, judgment of 21 January 2016, Galp Energía España and Others v Commission, C‑603/13 P, EU:C:2016:38, paragraphs 73 and 77). 51 In the present case, in paragraphs 79 and 104 of the judgment under appeal, the General Court essentially took the view that the finding of the anticompetitive nature by object of a single bilateral contact, namely that of 26 September 2003, was sufficient to consider that the Commission had been right to conclude that the practices at issue constituted a restriction of competition by object. In paragraphs 105 to 140 of that judgment, the General Court nevertheless examined, in turn and for the sake of completeness, each of the four other contacts disputed by the appellants. 52 By examining in turn each of the five disputed bilateral contacts, the General Court assessed systematically the appellants’ arguments by which they challenged, before the General Court, the Commission’s assessments relating to each of those contacts. In those circumstances, it cannot be considered that the General Court altered the constituent elements of the infringement at issue. 53 The second ground of appeal must therefore be rejected. The third ground of appeal 54 By their third ground of appeal, the appellants essentially claim that, by giving contradictory reasoning in its judgment, the General Court infringed the obligation to state reasons for its decisions. 55 First, although the General Court found that the contact that they had with Samsung between 18 and 20 November 2003 (‘the fourth contact’) was not anticompetitive and not unlawful, it was wrong to consider, in paragraphs 129 and 130 of the judgment under appeal, that that contact was able to corroborate the finding that unlawful contacts had taken place and mentioned, in paragraphs 176 and 287 of that judgment, that the appellants participated in five bilateral contacts of an anticompetitive nature. 56 Second, the appellants criticise the General Court’s assessment, which is in their view inappropriate and contradictory, of the various exchanges of information. They submit that the General Court, in taking the view that the information exchanged during the fourth contact was not sufficiently precise to constitute a restriction of competition by object, even though, in their submission, that information does not differ meaningfully from the information exchanged during other contacts, which was recognised by the General Court as constituting restrictions of competition by object, without stating the reasons for such a distinction, gave contradictory reasoning in its judgment. In that regard, they compare the information exchanged during the various contacts in relation to (i) production capacities and (ii) pricing direction. 57 The Commission contests all those arguments. 58 First, it should be pointed out that, in paragraph 130 of the judgment under appeal, the General Court found that the fourth contact was on its own insufficient to establish the existence of a restriction of competition by object, whilst taking the view that that contact could corroborate the finding that the appellants had participated in unlawful information exchanges. In so doing, contrary to the appellants’ arguments, the General Court did not in any way contradict itself, but included that contact, which is not intrinsically anticompetitive, with other contacts in the body of evidence establishing the existence of a restriction of competition by object. 59 Such an approach is consistent with the case-law that the existence of anticompetitive practices or agreements must, in most cases, be inferred from a number of coincidences or indicia which, taken together, may, in the absence of another plausible explanation, constitute evidence of an infringement of the competition rules (judgment of 26 January 2017, Commission v Keramag Keramische Werke and Others, C‑613/13 P, EU:C:2017:49, paragraph 51 and the case-law cited). 60 Second, as regards the alleged contradiction between the fact that, according to the General Court, the fourth contact was not anticompetitive and the reference, in paragraphs 176 and 287 of the judgment under appeal, to five anticompetitive contacts, it should be pointed out that paragraph 287 of that judgment in no way classifies as anticompetitive contacts the five contacts which are mentioned in that paragraph and whose existence is not disputed, so that the appellants’ argument has no factual basis in this respect. Moreover, the reference to the five anticompetitive contacts in paragraph 176 of that judgment results at most from a clerical error which, in any event, had no effect on the General Court’s substantive assessment of the arguments relating to whether there was a single and continuous infringement liability for which could be imputed to the appellants. 61 Third, in so far as the appellants complain that the General Court contradicted itself in the assessment of the anticompetitive nature of the information exchanged on the occasion of the fourth contact and of the other disputed contacts, it should be pointed out that, in its assessment of the facts, the General Court considered, in paragraph 129 of the judgment under appeal, that that fourth contact had given rise to exchanges of information which ‘were not as specific … as during earlier contacts’, namely the first three contacts. Moreover, it is apparent from paragraph 134 of that judgment that, during the fifth contact, information more specific than that discussed during the fourth contact was exchanged. 62 In so far as the appellants have not claimed that that assessment by the General Court was vitiated by a distortion of the facts, it must be held that the General Court did not contradict itself in finding that, in view of the nature of the information exchanged during the fourth contact, that contact could not on its own be considered a restriction of competition by object, unlike the other unlawful contacts. 63 Consequently, the third ground of appeal must be rejected in its entirety. The fourth and fifth grounds of appeal, relating to the concept of a single and continuous infringement 64 By their fourth and fifth grounds of appeal, the appellants dispute the General Court’s assessments relating to the existence of a single and continuous infringement and to their participation in such an infringement, respectively. The fourth ground of appeal 65 By their fourth ground of appeal, directed against paragraphs 179 to 191 of the judgment under appeal, the appellants complain that the General Court made a manifest error of assessment and, therefore, distorted the evidence placed in the case file in taking the view that the existence, claimed by Samsung in its oral statements, of a common objective of the single and continuous infringement found support in other evidence. They submit in essence that the evidence mentioned in paragraphs 184, 185 and 187 of that judgment clearly does not support that claim. 66 Thus, it is apparent from the oral statement of Renesas, referred to in paragraph 184 of the judgment under appeal, that Renesas merely wished to understand the reasons for the price erosion but did not seek to slow down such erosion. The Renesas internal report, mentioned in paragraph 185 of that judgment, merely states that smart card chip makers, which are not moreover precisely identified, agreed that they wished to avoid price erosion and not to coordinate their conduct so as to avoid such price erosion. The oral statements of NXP Semiconductors NV referred to in paragraph 187 of that judgment merely provide a factual description of market conditions. In its oral statements mentioned in the same paragraph, Renesas only broadly indicated that it was interested in ‘gaining a better understanding of the market’. 67 The Commission contests all those arguments. 68 By their fourth ground of appeal, the appellants essentially claim that the General Court distorted the evidence on the basis of which it found the existence of the common objective pursued by the undertakings which participated in the single and continuous infringement. 69 It is apparent from the case-law of the Court of Justice recalled in paragraph 40 of this judgment that, since the General Court has exclusive jurisdiction to assess the evidence, the appraisal of that evidence does not, save where it has been distorted, constitute a point of law which is subject, as such, to review by the Court of Justice on appeal. 70 There is distortion where, without recourse to new evidence, the assessment of the existing evidence is clearly incorrect. It is for appellants to indicate precisely the evidence which has been distorted and show the errors of appraisal which have allegedly been made (see, to that effect, judgments of 17 June 2010, Lafarge v Commission, C‑413/08 P, EU:C:2010:346, paragraphs 16 and 17, and of 27 April 2017, FSL and Others v Commission, C‑469/15 P, EU:C:2017:308, paragraphs 47 and 48). 71 In the present case, in the context of examining whether there was a common objective for the purpose of classifying the infringement at issue as a single and continuous infringement, the General Court essentially held, in paragraphs 183 and 186 of the judgment under appeal, that the participants in that infringement pursued a common objective consisting in limiting the falls in prices resulting from Samsung’s aggressive pricing policy. 72 That assessment of the General Court is based on statements by Renesas and Samsung, which are mentioned in paragraph 184 of the judgment under appeal. In that regard, the General Court observed that, according to the statement of Renesas, one of the reasons underlying the contacts at issue was to gain a better understanding of the extent of the price fall. The General Court also specified that Samsung had stated that the purpose of the exchange of information between its employees and its competitors was to slow down the price decrease inherent in the smart card market. The General Court found that that common objective was corroborated by a report of a Renesas employee, which is referred to in paragraph 185 of that judgment, according to which ‘most [chip] makers agree[d] they wish[ed] to avoid further significant price erosion …’. The General Court added, in paragraph 187 of that judgment and in response to a line of argument put forward by the appellants, that, if, as was apparent from the statements of NXP Semiconductors and of Renesas, the purpose of the contacts between competitors was ‘to gain a better understanding of the market’, that could not have had an aim other than to seek to limit the fall in prices on that market. 73 It must be stated that the appellants do not challenge the account of the substantive content of that evidence as set out in paragraphs 184, 185 and 187 of the judgment under appeal. They merely challenge the assessment carried out by the General Court on the basis of that evidence. 74 Moreover, it should be pointed out that the appellants’ arguments do not support the conclusion that the General Court’s assessment that the undertakings which participated in the infringement sought to contain price erosion on the market appears to be manifestly incorrect for the purpose of the case-law recalled in paragraph 70 of this judgment. 75 The fourth ground of appeal must therefore be rejected. The fifth ground of appeal 76 By their fifth ground of appeal, the appellants criticise paragraphs 200 to 205 of the judgment under appeal inasmuch as they are vitiated by an error of law and a distortion of the evidence. 77 In the first place, by inferring, in paragraph 205 of that judgment, the appellants’ participation in a single and continuous infringement from the finding of their awareness of the anticompetitive actions of their competitors, the General Court applied the wrong legal standard, in disregard of its own case-law. Such participation could be found only if it were established that the undertaking in question was aware of the fact that the contacts were intended to contribute to achieving the cartel’s overall plan and of the general scope and essential characteristics of the cartel as a whole. 78 However, in the present case, the appellants possessed no information which would have enabled them to understand the general scope and essential characteristics of the cartel between Samsung and Renesas, as they were unaware that their competitors were communicating on a structural, almost weekly basis, and that they had the common objective of slowing down the price fall in the SIM chip market. Moreover, the appellants were not aware that their competitors were communicating about non-SIM chips. 79 In the second place, the assessments made in paragraphs 202 and 203 of the judgment under appeal are vitiated by a distortion of the evidence. First, it clearly does not follow from the internal email of 29 September 2003 that Samsung had provided the appellants with Infineon’s prices and capacities. Samsung only shared with the appellants Infineon’s alleged increase in yield. Second, Renesas’ internal handwritten notes of 17 October 2003 clearly illustrate that the appellants did not receive any information from Renesas, but provided very limited information on Samsung to Renesas, which suggests that they did not know that Samsung and Renesas were exchanging sensitive information directly. 80 The Commission contests all those arguments. 81 By their fifth ground of appeal, the appellants essentially dispute the General Court’s assessment of their participation in the single and continuous infringement on the market for smart card chips. 82 In the first place, the appellants claim that the General Court applied the wrong legal standard, which differs from that resulting from its own case-law, for the purpose of assessing their participation in that infringement. 83 In that regard, it must be stated that the General Court essentially recalled, in paragraphs 171 and 173 of the judgment under appeal, the case-law of the Court of Justice, according to which an undertaking which has participated in a single and complex infringement, by its own conduct, which meets the definition of an agreement or concerted practice having an anticompetitive object within the meaning of Article 101(1) TFEU and was intended to help bring about the infringement as a whole, may also be responsible for the conduct of other undertakings in the context of the same infringement throughout the period of its participation in the infringement. That is the position where it is shown that the undertaking intended, through its own conduct, to contribute to the common objectives pursued by all the participants and that it was aware of the offending conduct planned or put into effect by other undertakings in pursuit of the same objectives or that it could reasonably have foreseen it and was prepared to take the risk (judgments of 6 December 2012, Commission v Verhuizingen Coppens, C‑441/11 P, EU:C:2012:778, paragraph 42, and of 24 June 2015, Fresh Del Monte Produce v Commission and Commission v Fresh Del Monte Produce, C‑293/13 P and C‑294/13 P, EU:C:2015:416, paragraph 157). 84 Moreover, in paragraph 174 of the judgment under appeal, the General Court also noted that, according to its own case-law, the undertaking concerned must therefore be aware of the general scope and the essential characteristics of the cartel as a whole. It is in accordance with that case-law that it found, in paragraph 178 of that judgment, that it was necessary to ascertain, in particular, whether the appellants could be considered to have participated in the infringement at issue, on account of their awareness of the general scope and the essential characteristics of that infringement as a whole. Lastly, the General Court found, in paragraph 202 of that judgment, that the Commission had not erred in taking the view that the appellants were aware, for the purposes of that case-law, of the unlawful discussions in which their competitors participated in their absence. After adjudicating, in paragraph 204 of that judgment, on an argument of the appellants regarding their awareness of the discussions on non-SIM chips, the General Court found, in paragraph 205 of that judgment, that the Commission had established to the requisite legal standard that the appellants had been aware of the anticompetitive actions of their competitors. 85 It is thus apparent from reading paragraphs 174, 178 and 202 of the judgment under appeal together that the General Court specifically applied the legal standard resulting from its own case-law, which the appellants accuse it of disregarding. 86 Accordingly, the appellants’ line of argument alleging that the wrong legal standard was applied is the result of a misreading of the judgment under appeal. 87 As regards the merits of the General Court’s assessment of whether the appellants were in fact aware of the offending conduct planned or put into effect by other undertakings in pursuit of the objectives of the single and continuous infringement, it should be made clear that this is a question of fact which, other than in the case of a distortion, falls outside the jurisdiction of the Court of Justice on appeal in accordance with the case-law cited in paragraph 40 of this judgment. 88 In the second place, the appellants claim that the General Court distorted the evidence that it examined in paragraphs 202 and 203 of the judgment under appeal. 89 In paragraph 202 of that judgment, the General Court found that, as is apparent from the examination of the first plea raised before it, at the meetings of 26 September and 16 October 2003, the appellants were informed, first by Samsung, then by Renesas, of the bilateral discussions relating to prices and capacities that Samsung and Renesas had had earlier with their competitors, and Samsung and Renesas relayed to those competitors the information on prices and capacities that they had been sent at the time of earlier contacts. In paragraph 203 of that judgment, it rejected the appellants’ argument that they were unaware of the anticompetitive nature of the contacts that Samsung had with its competitors, on the ground that they had been informed by Samsung, in particular at the meeting of 26 September 2003, of the discussions on prices and capacities that Samsung had had with Infineon. 90 However, the evidence relating to the meeting of 16 October 2003 clearly shows, on the contrary, that it was the appellants that had relayed to Renesas information received earlier from their competitors. 91 It is thus apparent that the General Court presented the content of that evidence incorrectly. 92 However, the appellants in no way dispute the General Court’s finding that sensitive information received earlier from a competitor was in fact relayed to other competitors. Thus, it is apparent from paragraphs 81 to 83 of the judgment under appeal, which are not the subject of this appeal, that the appellants did not dispute before the General Court the finding, in recital 91 of the decision at issue, that, at the meeting of 26 September 2003, Samsung had informed them of the exchanges with Infineon and had communicated to them information relating to those two competitors’ capacities and to an increase in Infineon’s yield. Moreover, the appellants themselves assert before the Court of Justice that, at the meeting of 16 October 2003, they relayed to Renesas information regarding Infineon, as is indeed found in paragraph 110 of the judgment under appeal. 93 In those circumstances, the complaint alleging distortion of the evidence as that distortion was found in paragraph 90 of this judgment is ineffective. 94 Moreover, as regards the assessment in paragraph 204 of the judgment under appeal, by which the General Court rejected the appellants’ argument relating to their lack of awareness of their competitors’ discussions regarding non-SIM chips on the ground that, as was found in the context of the second plea for annulment brought before it, the anticompetitive practices at issue concerned both SIM chips and non-SIM chips, it must be stated that the appellants allege neither a distortion of the factual elements in that regard nor an error of law by the General Court of that second plea. It was only at the hearing before the Court of Justice that, for the first time and belatedly, the appellants submitted that that latter assessment related not to the awareness of the discussions between the competitors, but to the subject matter of the discussions in which they were directly involved. In the light of those matters, the appellants’ line of argument relating to paragraph 204 of the judgment under appeal must be considered in part inadmissible and in part ineffective. 95 Consequently, the fifth ground of appeal must be rejected in its entirety. The sixth ground of appeal, relating to the fine imposed on the appellants Arguments of the parties 96 By their sixth ground of appeal, the appellants claim that the General Court infringed the 2006 Guidelines and the principle of proportionality when setting the amount of the fine. 97 They submit that, by holding that the application of a gravity multiplier of 16% was proportionate to the infringement at issue on the grounds that that infringement consisted, in particular, in the coordination of prices and of future capacities and that it extended to the entire territory of the EEA, the General Court infringed points 20 and 22 of the 2006 Guidelines and the principle of proportionality. It thus failed to take into consideration all circumstances relevant to the objective gravity of the infringement and the relative gravity of the appellants’ participation. 98 As regards the objective gravity of the infringement at issue, the appellants submit that the General Court should have had regard to the strictly bilateral nature of the contacts, which could only have amounted to exchanges of information and not to price-fixing arrangements and to the fact that, given that Atmel did not participate at all, the ad hoc involvement of Infineon and the appellants and the appellants’ lack of involvement in the second half of the infringement, the contacts at issue could not have had any impact on the market. 99 As regards the relative gravity of their participation in the infringement at issue, the appellants submit that the General Court should have taken into account that it participated in only five contacts, that the information they shared with Renesas and Samsung could have contributed only de minimis to the structured information exchanges and that the contacts were all carried out at the initiative of Samsung or Renesas. 100 The Commission disputes this line of argument. Findings of the Court 101 It must be recalled that the General Court alone has jurisdiction to examine how in each particular case the Commission assessed the gravity of unlawful conduct. In an appeal, the purpose of review by the Court of Justice is, first, to examine to what extent the General Court took into consideration, in a legally correct manner, all the essential factors to assess the gravity of particular conduct in the light of Article 101 TFEU and Article 23 of Regulation No 1/2003 and, second, to consider whether the General Court responded to a sufficient legal standard to all the arguments raised in support of the claim for cancellation or reduction of the fine (judgment of 26 January 2017, Laufen Austria v Commission, C‑637/13 P, EU:C:2017:51, paragraph 58). 102 In the present case, the General Court essentially held, in paragraphs 313, 314, 316 and 317 of the judgment under appeal, that, on account of the very nature and of the geographic scope of the infringement at issue, the Commission was entitled to find that a gravity multiplier of 16% was proportionate. It found, in paragraph 317 of that judgment, that the matters raised by the appellants, on the assumption that they were proved, and relating to the facts that the contacts at issue were bilateral and rare, that they consisted merely in exchanges of information and not price-fixing agreements, that the appellants had not participated in all aspects of the infringement at issue and had played only a minor role, had no bearing on that assessment. In paragraph 321 of that judgment, the General Court moreover rejected the appellants’ claim for the reduction of that multiplier on account of its alleged inappropriateness; that claim was based on the same arguments as those put forward in support of the challenge to the lawfulness of the gravity multiplier. 103 First, the General Court thus complied with the case-law of the Court of Justice that, having regard to point 23 of the 2006 Guidelines, a gravity multiplier of 16% is warranted in view of the very nature of the infringement at issue, since, as the General Court noted, it is among the most harmful restrictions of competition for the purpose of point 23 of the 2006 Guidelines and that rate is among the lowest rates on the scale of penalties prescribed for such infringements under those guidelines (see, to that effect, judgment of 26 January 2017, Aloys F. Dornbracht v Commission, C‑604/13 P, EU:C:2017:45, paragraph 75). 104 Second, contrary to the appellants’ arguments, the General Court expressly took account of the matters raised by the appellants relating to the bilateral nature of the contacts, to the subject matter of those contacts and to the ad hoc involvement in the infringement at issue, by correctly rejecting, in the light of the case-law cited in the previous paragraph of this judgment, their relevance in determining the gravity multiplier. It is moreover common ground that, before the General Court, the appellants merely challenged the determination of the gravity multiplier, without claiming the existence of mitigating circumstances which might have led to a reduction of the amount of the fine imposed. 105 It should be added that, although it is true that, in the judgment under appeal, the General Court did not refer to the appellants’ argument alleging that, when evaluating the gravity of the infringement, the Commission should have taken into consideration the lack of effect of the contacts on the market, that omission is ineffective in the light of the case-law cited in paragraph 103 of this judgment. 106 Moreover, before the General Court, the appellants did not claim that, when assessing the gravity of the infringement at issue, the General Court was required to take account of Atmel’s complete lack of participation, on account both of the fact that the contacts took place at the initiative of Samsung or Renesas and of the fact that the appellants were allegedly not involved in the second half of the infringement. Their argument that, during that assessment, the General Court should have taken into account those three factual elements is therefore inadmissible at the appeal stage, in accordance with the case-law cited in paragraph 42 of this judgment. 107 Third, in so far as the appellants allege that the General Court infringed the principle of proportionality by refusing to reduce the gravity multiplier of 16% set by the Commission, it should be recalled that, according to settled case-law of the Court of Justice, it is not for the latter, when ruling on points of law in the context of an appeal, to substitute, on grounds of fairness, its own assessment for that of the General Court exercising its unlimited jurisdiction to rule on the amount of fines imposed on undertakings for infringements of EU law. Accordingly, only where the Court of Justice considers that the level of the penalty is not merely inappropriate, but also excessive to the point of being disproportionate, does it have to find that the General Court erred in law, on account of the inappropriateness of the amount of a fine (judgment of 30 May 2013, Quinn Barlo and Others v Commission, C‑70/12 P, not published, EU:C:2013:351, paragraph 57 and the case-law cited). However, the appellants have failed to show why the amount of the fine imposed on them is excessive, to the point of being disproportionate. 108 Consequently, it is necessary to reject the sixth ground of appeal and, therefore, the appeal in its entirety. Costs 109 In accordance with Article 184(2) of the Rules of Procedure of the Court, where the appeal is unfounded, the Court is to make a decision as to costs. Under Article 138(1) of those rules, which applies to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. 110 As the Commission has applied for costs against the appellants and the appellants have been unsuccessful, they must be ordered to bear their own costs and to pay those incurred by the Commission.On those grounds, the Court (Fourth Chamber) hereby:1. Dismisses the appeal; 2. Orders Koninklijke Philips NV and Philips France SAS to pay the costs. von DanwitzVajdaJuhászJürimäeLycourgosDelivered in open court in Luxembourg on 26 September 2018.A. Calot EscobarT. von DanwitzRegistrarPresident of the Fourth Chamber * Language of the case: English. | ce670-092eb95-4f44 | EN |
The General Court confirms the Parliament’s refusal to grant access to documents relating to MEPs’ subsistence allowances, travel expenses and parliamentary assistance allowances | 25 September 2018 ( *1 )(Access to documents — Regulation (EC) No 1049/2001 — European Parliament — Expenditure by Members of the Parliament of their allowances — Refusal to grant access — Non-existent documents — Personal data — Regulation (EC) No 45/2001 — Need to transfer the data — Specific and individual examination — Partial access — Excessive administrative burden — Obligation to state reasons)In Cases T‑639/15 to T‑666/15 and T‑94/16 Maria Psara, residing in Athens (Greece), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑639/15, Tina Kristan, residing in Ljubljana (Slovenia), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑640/15, Tanja Malle, residing in Vienna (Austria), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑641/15, Wojciech Cieśla, residing in Warsaw (Poland), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑642/15, Staffan Dahllof, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑643/15, Delphine Reuter, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑644/15, České centrum pro investigativní žurnalistiku o.p.s., established in Prague (Czech Republic), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Cases T‑645/15 and T‑654/15, Harry Karanikas, residing in Chalándri (Greece), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑646/15, Crina Boros, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Cases T‑647/15 and T‑657/15, Baltijas pētnieciskās žurnālistikas centrs Re:Baltica, established in Riga (Latvia), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Cases T‑648/15, T‑663/15 and T‑665/15, Balazs Toth, residing in Budapest (Hungary), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑649/15, Minna Knus-Galán, residing in Helsinki (Finland), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑650/15, Atanas Tchobanov, residing at Plessis-Robinson (France), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑651/15, Dirk Liedtke, residing in Hamburg (Germany), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑652/15, Nils Mulvad, residing in Risskov (Denmark), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑653/15, Hugo van der Parre, residing in Huizen (Netherlands) represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑655/15, Guia Baggi, residing in Florence (Italy), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑656/15, Marcos García Rey, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑658/15, Mark Lee Hunter, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑659/15, Kristof Clerix, residing in Brussels, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑660/15, Rui Araujo, residing in Lisbon (Portugal), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑661/15, Anuška Delić, residing in Ljubljana, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑662/15, Jacob Borg, residing in St Julian’s (Malta), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑664/15, Matilda Bačelić, residing in Zagreb (Croatia), represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑666/15, Gavin Sheridan, represented by N. Pirc Musar and R. Lemut Strle, lawyers,applicant in Case T‑94/16,v European Parliament, represented by N. Görlitz, C. Burgos and M. Windisch, acting as Agents,defendant,APPLICATIONS on the basis of Article 263 TFEU seeking annulment of Decisions A(2015) 8324 C, A(2015) 8463 C, A(2015) 8627 C, A(2015) 8682 C, A(2015) 8594 C, A(2015) 8551 C, A(2015) 8732 C, A(2015) 8681 C, A(2015) 8334 C, A(2015) 8327 C and A(2015) 8344 C of 14 September 2015, A(2015) 8656 C, A(2015) 8678 C, A(2015) 8361 C, A(2015) 8663 C, A(2015) 8360 C, A(2015) 8486 C and A(2015) 8305 C of 15 September 2015, A(2015) 8602 C, A(2015) 8554 C, A(2015) 8490 C, A(2015) 8659 C, A(2015) 8547 C, A(2015) 8552 C, A(2015) 8553 C, A(2015) 8661 C, A(2015) 8684 C and A(2015) 8672 C of 16 September 2015, and A(2015) 13844 C of 14 January 2016 of the European Parliament, by which the Parliament rejected, on the basis of Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (OJ 2001 L 145, p. 43), the applicants’ confirmatory applications for access to Parliament documents containing information on the allowances of its members,THE GENERAL COURT (Fifth Chamber, Extended Composition),composed of D. Gratsias, President, I. Labucka (Rapporteur), A. Dittrich, I. Ulloa Rubio and P.G. Xuereb, Judges,Registrar: S. Spyropoulos, Administrator,having regard to the written part of the procedure and further to the hearing on 19 October 2017,gives the following Judgment 1The present actions concern applications for annulment of Decisions A(2015) 8324 C, A(2015) 8463 C, A(2015) 8627 C, A(2015) 8682 C, A(2015) 8594 C, A(2015) 8551 C, A(2015) 8732 C, A(2015) 8681 C, A(2015) 8334 C, A(2015) 8327 C and A(2015) 8344 C of 14 September 2015, A(2015) 8656 C, A(2015) 8678 C, A(2015) 8361 C, A(2015) 8663 C, A(2015) 8360 C, A(2015) 8486 C and A(2015) 8305 C of 15 September 2015, A(2015) 8602 C, A(2015) 8554 C, A(2015) 8490 C, A(2015) 8659 C, A(2015) 8547 C, A(2015) 8552 C, A(2015) 8553 C, A(2015) 8661 C, A(2015) 8684 C and A(2015) 8672 C of 16 September 2015, and A(2015) 13844 C of 14 January 2016 of the European Parliament, by which the Parliament rejected, on the basis of Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (OJ 2001 L 145, p. 43), the confirmatory applications made by the applicants, Ms Maria Psara, Ms Tina Kristan, Ms Tanja Malle, Mr Wojciech Cieśla, Mr Staffan Dahllof, Ms Delphine Reuter, České centrum pro investigativní žurnalistiku o.p.s., Mr Harry Karanikas, Ms Crina Boros, Baltijas pētnieciskās žurnālistikas centrs Re:Baltica, Mr Balazs Toth, Ms Minna Knus-Galán, Mr Atanas Tchobanov, Mr Dirk Liedtke, Mr Nils Mulvad, Mr Hugo van der Parre, Ms Guia Baggi, Mr Marcos García Rey, Mr Mark Lee Hunter, Mr Kristof Clerix, Mr Rui Araujo, Ms Anuška Delić, Mr Jacob Borg, Ms Matilda Bačelić and Mr Gavin Sheridan, for access to Parliament documents containing information on the allowances of its members (‘the contested decisions’). Background to the dispute 2In July 2015, in Cases T‑639/15 to T‑666/15, and in November 2015, in Case T‑94/16, each applicant submitted to the Parliament an application for access to documents on the basis of Regulation No 1049/2001.3Those applications related to ‘copies of records, reports and other relevant documents showing details regarding how and when […] MEPs’ from each Member State ‘spent’, during various periods between June 2011 and July 2015, ‘their allowances (travel expenses, subsistence allowance and general expenditure allowance)’, documents showing ‘money allocated to them for staffing arrangements’, and the ‘records of MEPs’ bank accounts which [were] used specifically for general allowance payments’ (‘the documents requested’).4The applications concerned MEPs from Cyprus in Case T‑639/15, Slovenia in Cases T‑640/15 and T‑662/15, Austria in Case T‑641/15, Poland in Case T‑642/15, Sweden in Case T‑643/15, Luxembourg in Case T‑644/15, Slovakia in Case T‑645/15, Greece in Case T‑646/15, the United Kingdom of Great Britain and Northern Ireland in Case T‑647/15, Lithuania in Case T‑648/15, Hungary in Case T‑649/15, Finland in Case T‑650/15, Bulgaria in Case T‑651/15, Germany in Case T‑652/15, Denmark in Case T‑653/15, the Czech Republic in Case T‑654/15, the Netherlands in Case T‑655/15, Italy in Case T‑656/15, Romania in Case T‑657/15, Spain in Case T‑658/15, France in Case T‑659/15, Belgium in Case T‑660/15, Portugal in Case T‑661/15, Estonia in Case T‑663/15, Malta in Case T‑664/15, Latvia in Case T‑665/15, Croatia in Case T‑666/15, and Ireland in Case T‑94/16.5By letters of 20 July 2015 in Cases T‑639/15 to T‑666/15 and 25 November 2015 in Case T‑94/16, the Secretary-General of the Parliament rejected the applicants’ applications for access to documents, on the one hand, relying on the protection of personal data based on the exception provided for by Article 4(1)(b) of Regulation No 1049/2001, and on the other, stating that the Parliament does not hold MEPs’ bank account records.6By correspondence dated in August 2015 in Cases T‑639/15 to T‑666/15 and December 2015 in Case T‑94/16, each applicant lodged a confirmatory application with the Parliament for access to the requested documents.7By the contested decisions, the Parliament rejected those requests, on the one hand, stating that it did not hold some of the documents requested and, on the other, as to the remainder, relying on the dual basis of the exception laid down in Article 4(1)(b) of Regulation No 1049/2001, read in conjunction with Article 8(b) of Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (OJ 2001 L 8, p. 1), and the excessive administrative burden involved in the handling of these requests. Procedure and forms of order sought 8By applications lodged at the Court Registry on 13 November 2015 in Cases T‑639/15 to T‑666/15, and on 1 March 2016 in Case T‑94/16, the applicants brought the present actions.9When it lodged its defence in Cases T‑639/15 to T‑666/15 and T‑94/16, the Parliament also requested the General Court to join Cases T‑639/15 to T‑666/15, and then Cases T‑639/15 to T‑666/15 and T‑94/16.10The applicants in Cases T‑639/15 to T‑666/15 informed the General Court that they had no objection to Cases T‑639/15 to T‑666/15 being joined, provided, however, that Case T‑662/15 was designated the lead case.11On 17 March 2016, the applicants in Cases T‑643/15, T‑644/15, T‑647/15, T‑657/15 to T‑659/15 and T‑94/16 requested that, if the cases were joined, certain information in their applications should be treated as confidential vis-à-vis the public and the applicants in the other cases.12On the same date, in accordance with their requests, the applicants in Cases T‑643/15, T‑644/15, T‑647/15, T‑657/15 to T‑659/15 and T‑94/16 lodged a non-confidential version of their applications.13On 20 June 2016, the applicant in Case T‑94/16 informed the General Court that he had no objection to Cases T‑639/15 to T‑666/15 and T‑94/16 being joined.14By orders of 24 May and 20 July 2016, the President of the Fourth Chamber of the Court joined Cases T‑639/15 to T‑666/15 and T‑94/16 for the purpose of the written part of the procedure and granted the requests for confidential treatment lodged by the applicants in Cases T‑643/15, T‑644/15, T‑647/15, T‑657/15 to T‑659/15 and T‑94/16.15The composition of the Chambers of the Court having been altered, the Judge-Rapporteur was attached to the Fifth Chamber, to which this case has therefore been assigned.16On a proposal from the Judge-Rapporteur, the General Court (Fifth Chamber, Extended Composition) decided to open the oral part of the proceedings in the present cases and to join them for the purposes of that oral part.17The parties presented oral argument and replied to the Court’s oral questions at the hearing on 19 October 2017.18The applicants claim that the Court should:–annul the contested decisions;order the Parliament to pay the costs.19The Parliament contends that the Court should:dismiss the applications as unfounded;order the applicants to pay the costs. Law 20Pursuant to Article 68 of the Rules of Procedure of the General Court, the present cases are joined for the purposes of the decision closing the proceedings.21In support of their applications, the applicants put forward five pleas in law.22The first two pleas allege infringements of the combined provisions of Article 4(1)(b) of Regulation No 1049/2001 and Article 8(b) of Regulation No 45/2001, in that the documents requested do not contain personal data and that, in any event, the need for their transfer and the absence of any risk of prejudice to the legitimate interests of the persons concerned has been demonstrated.23The third plea alleges infringement of the general obligation to undertake a specific and individual examination of each of the documents requested, under the combined provisions of Articles 2, 4 and 6(3) of Regulation No 1049/2001, and the illegality of a refusal of access based on an excessive administrative burden.24The fourth plea alleges infringement of Article 4(6) of Regulation No 1049/2001, in that even partial access to the documents requested was denied.25The fifth and final plea alleges infringement of the obligation to state reasons laid down in Articles 7(1) and 8(1) of Regulation No 1049/2001.26In that regard, it must be borne in mind that, as is apparent from Article 1 of Regulation No 1049/2001, read, in particular, in the light of recital 4 of that regulation, that article seeks to give the fullest possible effect to the right of public access to documents held by the institutions (judgment of 1 February 2007, Sison v Council, C‑266/05 P, EU:C:2007:75, paragraph 61) and that, in the terms of recital 11 of Regulation No 1049/2001, ‘in principle, all documents of the institutions should be accessible to the public’.27Thus, the right of public access enshrined in Regulation No 1049/2001 concerns only those institution documents which the institutions effectively hold, in that that right cannot extend to documents which are not in the possession of the institutions or which do not exist (see, to that effect, judgment of 2 October 2014, Strack v Commission, C‑127/13 P, EU:C:2014:2250, paragraphs 38 and 46).28In the present case, the documents requested by the applicants include not only documents relating to the daily allowances, travel allowances and parliamentary assistance allowances of MEPs, but also documents detailing how and when the MEPs of each Member State spent, at various times, their general expenditure allowances and the records of MEPs’ bank accounts earmarked specifically for the use of the general expenditure allowance.29However, as regards documents detailing how and when the MEPs of each Member State spent, at various times, their general expenditure allowances, it is not in dispute that, under Articles 25 and 26 of the Decision of the Bureau of the European Parliament of 19 May and 9 July 2008 concerning implementing measures for the Statute of Members of the European Parliament (OJ 2009 C 159, p. 1), MEPs are to receive, on a monthly basis, a flat-rate allowance in, furthermore, an amount known to the public, following a single application submitted at the start of their mandate.30It follows therefrom that, having regard to the flat-rated nature of the general expenditure allowance, Parliament has no document detailing, physically or in time, the use by its members of those allowances.31The Parliament was therefore correct to state, in the contested decisions and in the legal basis of Article 25 of the decision of the Bureau of the Parliament referred to in paragraph 28 above, that it did not have any data on the actual expenditure incurred by MEPs in respect of the general expenditure allowance and that it was therefore not able to disclose the documents requested in that connection.32As regards records of MEPs’ bank accounts earmarked specifically for the use of general expenditure allowances, the Parliament explained in the contested decisions that it was not in possession of such documents.33In accordance with the presumption of legality attaching to EU acts, the non-existence of a document to which access has been requested is presumed when a statement to that effect is made by the institution concerned. That is, however, a simple presumption which the person requesting access may rebut in any way by relevant and consistent evidence (see, by analogy, judgment of 25 June 2002, British American Tobacco (Investments) v Commission, T‑311/00, EU:T:2002:167, paragraph 35).34In the present case, however, the applicants have not put forward any evidence capable of calling into question the non-existence of the documents in question. The applicants have merely contended that they found it difficult to believe that the Parliament did not have such documents, given that it had stated that its supervisory mechanisms for the use of its members’ allowances were sufficient. However, that statement does not in any way indicate that Parliament was in possession of records of its members’ bank accounts earmarked specifically for the use of the general expenditure allowance.35Accordingly, the Parliament, in the contested decisions, rightly rejected the applicants’ claims concerning documents relating to the expenditure of the general expenditure allowance and the records of its members’ bank accounts earmarked specifically for the use of those allowances.36The applicants’ arguments cannot call that finding into question.37It must be stated that, in their written pleadings, the applicants merely emphasise that MEPs undoubtedly receive a general expenditure allowance to cover expenses including the rental of a constituency office and telephone invoices, computer and everyday consumable products, which cannot be disputed.38The fact remains that it is common ground that those items of expenditure are paid as a lump sum, and not on presentation of receipts for the expenditure incurred, which cannot be called into question by the applicants’ doubts as to the fact that the Parliament does not have the documents requested in that connection, since they have not even sought to rely on any rule providing otherwise.39By their arguments, it is clear that the applicants are not so much challenging the legality of the contested decisions as, in essence, denouncing shortcomings and inefficiencies in the existing control mechanisms, which it is not for the Court to examine in the present proceedings.40Accordingly, it is necessary at the outset to reject all the pleas in law as being ineffective in so far as they concern documents relating to expenditure of the general expenditure allowance and the records of MEPs’ bank accounts earmarked specifically for the use of those allowances and to restrict the examination by the General Court of the pleas in law solely to the requests for access by the applicants concerning daily allowances, travel allowances and parliamentary assistance allowances. The first plea in law, alleging infringement of the combined provisions of Article 4(1)(b) of Regulation No 1049/2001 and Article 8(b) of Regulation No 45/2001 in that the latter provision is not applicable in the present case 41By the first plea in law, the applicants allege an infringement of the combined provisions of Article 4(1)(b) of Regulation No 1049/2001 and Article 8(b) of Regulation No 45/2001, of which provisions, furthermore, in essence, they dispute the legality. That plea thus consists of two parts.42In the context of the first part, the applicants claim that the contested decisions are vitiated by illegality in that, in essence, Regulation No 45/2001 is not applicable in the present case, the information in question not falling within the MEPs’ private sphere, but their public sphere, since the documents requested relate to the performance of their duties as elected representatives.43In other words, the applicants argue that the disclosure of the documents requested would not undermine the protection of privacy and the integrity of the individual, as defined in Article 4(1)(b) of Regulation No 1049/2001, in that, even if they contain personal data, those data do not relate to MEPs’ privacy.44In that regard, it must be recalled that, under Article 4(1)(b) of Regulation No 1049/2001, the institutions must refuse access to a document where disclosure would undermine the protection of privacy and the integrity of the individual, which provision must be implemented in accordance with EU law on the protection of personal data.45It is clear from that legislation, in particular from Article 2(a) of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ 1995 L 281, p. 31), and Article 2(a) of Regulation No 45/2001, that the term ‘personal data’ means any information relating to an identified or identifiable natural person.46In the present case, it is clear that all the documents requested contain information concerning identified natural persons.47That is the case of the documents held by the Parliament relating to travel costs and daily allowances, which necessarily identify every MEP concerned, if only for the purposes of payment of those allowances.48The same is true of the documents held by the Parliament relating to parliamentary assistance expenses, which necessarily identify every MEP concerned and the respective beneficiaries of those allowances, also if only for the purposes of payment of those allowances.49The applicants’ arguments cannot call that assessment into question.50Firstly, the distinction, advocated by the applicants, of the data concerned according to whether they are in the private or the public sphere is clearly a confusion between what is meant by personal data and what is regarded as relating to private life, while the concepts of personal data, within the meaning of Article 2(a) of Regulation No 45/2001, and of data relating to private life are not to be confused (judgment of 16 July 2015, ClientEarth and PAN Europe v EFSA, C‑615/13 P, EU:C:2015:489, paragraph 32).51Next, nor can the question of whether the risk of harm to MEPs’ legitimate interests does exist alter the classification of the data at issue as personal data, since that question falls within the examination of the second part of the second plea, which will be addressed in paragraph 96 below.52Finally, the fact that data concerning the persons in question are closely linked to public data on those persons, inter alia as they are listed on the Parliament's internet site, and are, in particular, MEPs’ names does not mean at all that those data can no longer be characterised as personal data, within the meaning of Article 2(a) of Regulation No 45/2001 (see, to that effect, judgment of 16 July 2015, ClientEarth and PAN Europe v EFSA, C‑615/13 P, EU:C:2015:489, paragraph 31).53In other words, the classification of the data at issue as personal data cannot be ruled out merely because those data are related to other data which are public, which is the case irrespective of whether disclosure of those data would undermine the legitimate interests of the persons concerned.54In the context of the second part of the first plea in law, the applicants allege, in essence, the illegality of Article 8(b) of Regulation No 45/2001 in the light of Article 7(f) of Directive 95/46.55According to the applicants, the precondition that the necessity for the transfer of the data requested be demonstrated, pursuant to Article 8(b) of Regulation No 45/2001, irrespective of the legitimacy of the interests of the person concerned, strengthens the protection of personal data contrary to Article 7(f) of Directive 95/46.56Without there being any need to assess its admissibility, which the Parliament disputes, the applicants’ argument must be rejected.57Indeed, the legality of Article 8(b) of Regulation No 45/2001 cannot be assessed against the yardstick of Article 7(f) of Directive 95/46, since those two texts, which, moreover, are both of secondary legislation, have different spheres of application and thus neither provides for the primacy of one over the other.58The legality of Article 8(b) of Regulation No 45/2001 can therefore be disputed only in the light of a provision of primary law.59However, it is clear that, in their written pleadings, the applicants have not referred to any such provision.60In any event, the protection of personal data guaranteed by Article 8(b) of Regulation No 45/2001 and that guaranteed by Article 7(f) of Directive 95/46 have, in their respective spheres of application, an analogous scope.61The first plea in law must therefore be rejected. The second plea in law, alleging infringement of the combined provisions of Article 4(1)(b) of Regulation No 1049/2001 and of Article 8(b) of Regulation No 45/2001 as regards the need to transfer personal data 62By the second plea in law, the applicants allege an infringement of the combined provisions of Article 4(1)(b) of Regulation No 1049/2001 and Article 8(b) of Regulation No 45/2001 in that the Parliament rejected the requests for access to the documents requested, although the conditions for disclosure were met.63It must be recalled, at the outset, that Article 15(3) TFEU provides that any citizen of the Union, and any natural or legal person residing or having its registered office in a Member State, are to have a right of access to the documents of the institutions of the European Union, subject to the principles and conditions defined in accordance with the procedure laid down in Article 294 TFEU (see judgment of 27 February 2014, Commission v EnBW, C‑365/12 P, EU:C:2014:112, paragraph 61 and the case-law cited).64As stated in recital 1 of Regulation No 1049/2001, that regulation reflects the intention expressed in the second paragraph of Article 1 TFEU, which was inserted by the Treaty of Amsterdam, to mark a new stage in the process of creating an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen. As is stated in recital 2 of Regulation No 1049/2001, the right of public access to documents of the institutions is connected with the democratic nature of those institutions (see judgment of 15 July 2015, Dennekamp v Parliament, T‑115/13, EU:T:2015:497, paragraph 35 and the case-law cited).65It must also be recalled that Article 4(1)(b) of Regulation No 1049/2001 is an indivisible provision and requires that any undermining of privacy and the integrity of the individual must always be examined and assessed in conformity with the legislation of the Union concerning the protection of personal data, in particular with Regulation No 45/2001. That provision thus establishes a specific and reinforced system of protection of a person whose personal data could, in certain cases, be communicated to the public (judgment of 29 June 2010, Commission v Bavarian Lager, C‑28/08 P, EU:C:2010:378, paragraphs 59 and 60).66It follows that, where a request based on Regulation No 1049/2001 seeks to obtain access to documents including personal data, the provisions of Regulation No 45/2001 become applicable in their entirety (judgment of 29 June 2010, Commission v Bavarian Lager, C‑28/08 P, EU:C:2010:378, paragraph 63).67In the present case, it is apparent from the examination of the first plea that all the requested documents contain personal data, so that the provisions of Regulation No 45/2001 are applicable in their entirety to the present case.68The Court has previously held that derogations from the protection of personal data must be interpreted strictly (see, by analogy, judgment of 9 November 2010, Volker und Markus Schecke and Eifert, C‑92/09 and C‑93/09, EU:C:2010:662, paragraph 77).69Thus, in the context of decisions by which an institution refuses a request for access to information containing personal data on the ground that it is covered by the exception set out in Article 4(1)(b) of Regulation No 1049/2001 concerning protection of privacy and the integrity of the individual, those data may be transferred only if their addressee shows that the transfer is necessary and if there is no reason to believe that that transfer could prejudice the legitimate interests of the person concerned, by virtue of Article 8(b) of Regulation No 45/2001, which the institutions are bound to follow when they receive a request for access to documents containing personal data (see, to that effect, judgment of 29 June 2010, Commission v Bavarian Lager, C‑28/08 P, EU:C:2010:378, paragraph 63).70Thus, it is clear from the wording of Article 8(b) of Regulation No 45/2001 that the regulation makes the transfer of personal data subject to two cumulative conditions being satisfied (judgment of 16 July 2015, ClientEarth and PAN Europe v EFSA, C‑615/13 P, EU:C:2015:489, paragraph 46).71In that context, whoever requests such a transfer must first establish that it is necessary. If it is demonstrated to be necessary, it is then for the institution concerned to determine that there is no reason to assume that that transfer might prejudice the legitimate interests of the person concerned (judgment of 16 July 2015, ClientEarth and PAN Europe v EFSA, C‑615/13 P, EU:C:2015:489, paragraph 47).72Thus, Article 8(b) of Regulation No 45/2001 requires the institution in receipt of an application for access initially to make an assessment of the necessity, and thus proportionality, of the transfer of personal data in the light of the applicant’s objective, satisfaction of the requirement for necessity laid down in Article 8(b) of Regulation No 45/2001, which is to be interpreted strictly, requiring the applicant to show that the transfer of personal data is the most appropriate of the possible measures for attaining the applicant’s objective and that it is proportionate to that objective, which requires the applicant to provide express and legitimate reasons to that effect (judgment of 15 July 2015, Dennekamp v Parliament, T‑115/13, EU:T:2015:497, paragraphs 54 and 59).73In the present case, in order to demonstrate the need for the transfer of the data in question, the applicants have indeed stated various objectives pursued by their requests for access to documents, namely, in essence, on the one hand, to enable the public to verify the appropriateness of the expenses incurred by MEPs in the exercise of their mandate and, on the other, to guarantee the public right to information and transparency.74In that regard, it must first be held that, because of their excessively broad and general wording, those objectives cannot, in themselves, establish the need for the transfer of the personal data in question.75Indeed, the Parliament cannot be criticised for not having deduced from such objectives, expressed in such broad and general terms, an express demonstration of the need to transfer those personal data (see, to that effect, judgments of 23 November 2011, Dennekamp v Parliament, T‑82/09, not published, EU:T:2011:688, paragraph 34, and of 21 September 2016, Secolux v Parliament, T‑363/14, EU:T:2016:521, paragraph 70 and the case-law cited).76A contrary view would oblige the institution, as a matter of principle, to infer from general considerations relating to the public interest in the disclosure of personal data that the necessity for the transfer of those data has, by implication, been established (see, to that effect, judgment of 23 November 2011, Dennekamp v Parliament, T‑82/09, not published, EU:T:2011:688, paragraph 35).77In the first place, as regards the first objective raised by the applicants, they do not show how the transfer of personal data at issue is necessary to ensure an adequate review of the expenditure incurred by MEPs to fulfil their mandate, in particular to remedy the alleged inadequacies of existing mechanisms for the review of that expenditure.78Thus, the evidence provided by the applicants to support the necessity of that transfer is unconvincing.79First of all, the references to journalistic inquiries relating to the expenditure of the MEPs of the United Kingdom of Great Britain and Northern Ireland are irrelevant in the light of the applicants’ objective to ensure public review of the expenditure of MEPs.80Furthermore, the reference to the annulment by the General Court in the case which gave rise to the judgment of 7 June 2011, Toland v Parliament (T‑471/08, EU:T:2011:252), of the Parliament’s decision to reject the application for access by a journalist to Report No 6/02 of the Internal Audit Service of the Parliament of 9 January 2008 on the parliamentary assistance allowance, cannot be transposed to the present case.81On the one hand, the request for access at issue in the case that gave rise to the judgment of 7 June 2011, Toland v Parliament (T‑471/08, EU:T:2011:252) related to an internal Parliament audit report, not to all the documents relating to the details of the use, by the MEPs, of the various allowances allocated to them.82On the other hand, as is apparent from paragraphs 42 to 85 of the judgment of 7 June 2011, Toland v Parliament (T‑471/08, EU:T:2011:252), the grounds for rejection of the application for access in question were not based on the exception set out in of Article 4(1)(b) of Regulation No 1049/2001 concerning the protection of personal data but on the exceptions set out in the third indent of Article 4(2) and Article 4(3) of that regulation concerning the protection of the purpose of inspections, investigations and audits and of the institution’s decision-making process. Accordingly, the applicant was not required, as in the present case, to demonstrate the need for access to the documents requested in the light of the objectives it pursued.83In any event, even if, by that reference to the case which gave rise to the judgment of 7 June 2011, Toland v Parliament (T‑471/08, EU:T:2011:252), the applicants intend to illustrate the need to have access to the documents requested in order to ensure an adequate review of MEPs’ expenditure, the annulment of the Parliament’s decision in that case having led, according to them, to a strengthening of the rules concerning the use of the parliamentary assistance allowance, that argument must nonetheless be rejected. Indeed, in the light of the differences between the audit report at issue in that case and the documents at issue in the present proceedings, the mere fact that the publication of the report had the effect claimed by the applicants, if it is established, cannot demonstrate the need to transfer the personal data contained in the documents requested.84Next, although the applicants have referred, in their confirmatory applications for access, to ‘many instances of fraud committed by the MEPs, confirmed or alleged in past years’, that reference, which is particularly abstract and general in nature, cannot justify the need for the transfer of the personal data of MEPs referred to in each of the applicants’ requests, let alone its proportionality.85In any event, it must be noted that the applicants cite only the example of one Bulgarian MEP.86However, that example cannot suffice to justify the transfer of the personal data of all MEPs.87Finally, although the applicants do indeed refer, in their application, to suspicions of fictitious employment in connection with MEPs, it must be noted that that evidence was not put to the Parliament in the context of their confirmatory applications for access.88It is appropriate to note that whoever requests such a transfer of personal data must first establish that it is necessary. If it is demonstrated to be necessary, it is then for the institution concerned to determine that there is no reason to assume that that transfer might prejudice the legitimate interests of the person concerned. In that regard, it is appropriate to note that the applicants did not put forward any argument relating to suspicions of fictitious employment in connection with MEPs before the adoption of the contested decisions (see, to that effect, judgment of 21 September 2016, Secolux v Commission, T‑363/14, EU:T:2016:521, paragraphs 36 and 37).89Accordingly, the evidence relating to suspicions of fictitious employment in connection with MEPs cannot be taken into account to justify the transfer of the personal data of those MEPs.90In the second place, with regard to the second objective pursued by the applicants, the wish to institute public debate cannot suffice to show the need for the transfer of personal data, since such an argument is connected solely with the purpose of the request for access to the documents (see, to that effect, judgment of 15 July 2015, Dennekamp v Parliament, T‑115/13, EU:T:2015:497, paragraph 84).91No automatic priority can be conferred on the objective of transparency over the right to protection of personal data (see, by analogy, judgment of 9 November 2010, Volker und Markus Schecke and Eifert, C‑92/09 and C‑93/09, EU:C:2010:662, paragraph 85).92In the third and last place, it should be noted that, if, as the applicants contend, it is clear from the judgment of 15 July 2015, Dennekamp v Parliament (T‑115/13, EU:T:2015:497), that the need for the transfer of personal data may be based on a general objective, such as the public’s right to information concerning the conduct of MEPs in the exercise of their duties, it follows from paragraph 81 of that judgment that only demonstration by the applicants of the appropriateness and proportionality to the objectives pursued by the request for disclosure of personal data would allow the Court to verify the need for that disclosure within the meaning of Article 8(b) of Regulation No 45/2001.93The applicants, however, have not submitted, in either their initial requests or their confirmatory applications for access, any express and legitimate reasons proving that the transfer of personal data at issue was the most appropriate of the possible measures, including the use of data and documents publicly available, in order to achieve the objective they pursued and that it was proportionate to that objective.94The reference in the confirmatory applications for access to the judgment of 16 July 2015, ClientEarth and Pan Europe v EFSA (C‑615/13 P, EU:C:2015:489) cannot succeed either, since, unlike in the present case, the Court had noted, in paragraph 65 of that judgment, that evidence of the need for the disclosure of personal data had been adduced by means of concrete evidence, such as, in particular, the links maintained by the majority of expert members of working groups of the European Food Safety Authority (EFSA) with pressure groups.95In any event, it must also be held that, by their arguments, the applicants are not so much seeking again to challenge the legality of the contested decisions but are, in essence, denouncing shortcomings in and the ineffectiveness of existing review mechanisms, which it is not for the Court to assess in the context of the present proceedings.96Accordingly, it must be held that the applicants have not shown the need for the transfer of the requested documents.97Since the conditions laid down in Article 8(b) of Regulation No 45/2001 are cumulative (judgment of 16 July 2015, ClientEarth and PAN Europe v EFSA, C‑615/13 P, EU:C:2015:489, paragraph 46), there is no need to ascertain whether there is reason to believe that the transfer of the requested documents could affect the legitimate interests of the persons concerned.98In consequence, the second plea in law must be rejected. The third plea in law, alleging infringement of the general obligation, arising from the combined provisions of Articles 2, 4 and 6(3) of Regulation No 1049/2001, to make a specific and individual examination of each document requested and the illegality of the refusal of access based on excessive administrative burden 99The applicants’ third plea in law consists of two parts which must be examined separately. First part of the third plea in law 100By the first part of the third plea, the applicants allege infringement of the general obligation, arising from the combined provisions of Articles 2, 4 and 6(3) of Regulation No 1049/2001, to make a specific and individual examination of each document requested.101To that effect, the applicants claim that, although it is possible to exempt an institution from examining each individual document, it is not possible in the present case, because the requested documents clearly do not belong to the same category since the diversity of their content is obvious.102In that regard, it must be borne in mind that, in accordance with established case-law, to justify a refusal to grant access to a document of which disclosure has been requested, it is not sufficient, in principle, for that document to concern an activity referred to in Article 4 of Regulation No 1049/2001 (see, to that effect, judgments of 1 July 2008, Sweden and Turco v Council, C‑39/05 P and C‑52/05 P, EU:C:2008:374, paragraph 49, and of 21 July 2011, Sweden v MyTravel and Commission, C‑506/08 P, EU:C:2011:496, paragraph 76).103Indeed, according to settled case-law, the examination required for the purpose of processing a request for access to documents must be specific in nature. Thus, firstly, the mere fact that a document concerns an interest protected by an exception is not sufficient to justify application of that exception. Secondly, the risk of a protected interest being affected must be reasonably foreseeable and not merely hypothetical. Consequently, the examination which the institution must undertake in order to apply an exception must be carried out in a specific manner and must be apparent from the reasons for the decision (see judgment of 13 April 2005, Verein für Konsumenteninformation v Commission, T‑2/03, EU:T:2005:125, paragraph 69 and the case-law cited).104That specific examination must, moreover, be carried out in respect of each document covered by the request. It is in fact apparent from Regulation No 1049/2001 that all the exceptions mentioned in Article 4 thereof are specified as being applicable to ‘a document’ (judgment of 13 April 2005, Verein für Konsumenteninformation v Commission, T‑2/03, EU:T:2005:125, paragraph 70).105The fact remains that the Court has acknowledged that it was open to the institutions, in order to explain how access to the documents requested could undermine an interest protected by an exception laid down in Article 4 of Regulation No 1049/2001, to base their decisions in that regard on general presumptions which apply to certain categories of documents, as considerations of a generally similar kind are likely to apply to requests for disclosure relating to documents of the same nature (see, to that effect, judgments of 1 July 2008, Sweden and Turco v Council, C‑39/05 P and C‑52/05 P, EU:C:2008:374, paragraph 50; of 29 June 2010, Commission v Technische Glaswerke Ilmenau, C‑139/07 P, EU:C:2010:376, paragraph 54; and of 27 February2014, Commission v EnBW, C‑365/12 P, EU:C:2014:112, paragraph 65).106In the present case, the Parliament has taken the view, in the contested decisions, that the requested documents, such as hotel bills, travel tickets, employment contracts or pay slips, all fell within the same categories. The applicants maintain that the diversity of the documents means that they cannot fall within the same category.107In order to reject that argument, on the one hand, it is sufficient to note that it is based on a false premiss, since the Parliament has not taken the view, in the contested decisions, that all the documents fell within a single category, but within various categories.108Thus, for example, for the purposes of applying the exception laid down in Article 4(1)(b) of Regulation No 1049/2001, the Parliament was of the view that all travel tickets fell within the category of travel tickets, hotel bills fell within the category of hotel bills, all employment contracts fell within the category of employment contracts or that all pay slips fell within the category of pay slips.109Consequently, the Parliament has not failed to carry out a specific and individual examination of each document requested under a single category, but under the various categories of documents which it had isolated.110On the other hand, it is necessary to recall that the documents within those various categories contain personal data, even if only the names of the MEPs concerned by each document in question.111Since the applicants’ claims refer to all documents enabling it to be determined how and when the MEPs referred to in each of those applications spent the various allowances listed in those requests, those requests necessarily mean that the documents requested contain elements to identify by name each of these MEPs.112That is the case of the daily allowances, travel expenses and parliamentary assistance allowance, if only for the purpose of their payment to the persons concerned.113Accordingly, the Parliament cannot be criticised for not having carried out a specific and individual examination of each document requested in the light of the exception referred to in Article 4(1)(b) of Regulation No 1049/2001.114Accordingly, the first part of the third plea in law must be rejected. The second part of the third plea in law 115By the second part of the third plea in law, the applicants rely on the illegality of the refusal, based on an excessive administrative burden, of access to the documents requested.116In that regard, it should be noted at the outset that, in the contested decisions, the Parliament rejected the confirmatory applications for access, in that, firstly and correctly, as is apparent from the examination of the first and second pleas in law, all those documents contained personal data, in respect of which the applicants had not demonstrated the need for the transfer, and, secondly, the disclosure in full of the documents requested in all of the requests meant an excessive administrative burden.117Thus, it is clear that, as regards the documents requested held by the Parliament, the refusal of access was justified on the basis of two alternative and independent grounds, so that one of the grounds is necessarily superfluous with regard to the other.118Consequently, since the General Court has rejected the first and second pleas in law, which called into question the legality of the first ground of the decision of the Parliament, the second part of the third plea in law, which concerns the second of those grounds, necessarily superfluous with regard to the first, must be rejected as ineffective.119For the same reasons, the Parliament cannot justifiably be criticised for not having consulted the applicants informally with a view to finding an equitable solution in accordance with Article 6(3) of Regulation No 1049/2001. Indeed, those provisions cannot be invoked, since, in the present case, the Parliament has found, correctly, that the documents requested were covered by the exception referred to in Article 4(1)(b) of that regulation, as is clear from the examination of the first and second pleas.120Consequently, the second part of the third ground of appeal must also be rejected as being ineffective and, accordingly, so must the third plea in law in its entirety. The fourth plea in law, alleging infringement of Article 4(6)(b) of Regulation No 1049/2001 121By the fourth plea in law, the applicants allege infringement of Article 4(6)(b) of Regulation No 1049/2001 in that even partial access to the documents requested was refused.122The applicants claim that the Parliament did not carry out a specific, individual assessment of the content of the documents requested, while it should, at the very least, have disclosed the documents requested which were not covered by an exception and that disclosure of those documents, even partial, would have satisfied the objective pursued by their requests for access.123In that respect, it should be noted that, in the contested decisions, the Parliament took the view that the redaction of personal data in the documents requested would not achieve the objectives pursued in the context of the requests for access and meant an excessive administrative burden.124The applicants’ arguments cannot affect the legality of the contested decisions in that regard.125Indeed, as is apparent from the examination of the pleas in law and the applicants’ confirmatory applications, the applicants wish to have access to documents relating to the individual expenditure of the MEPs referred to in each of those requests in order to check the appropriateness of the expenditure with regard to each of them.126However, it is clear that the disclosure of a version of the documents requested expunged of all personal data, including, in particular, those concerning the names of the MEPs, would have deprived the access to these documents of any useful effect in the light of those objectives, given that such access would not have enabled the applicants to monitor individually the expenditure of MEPs, since it would be impossible to link the documents requested to the persons concerned.127In any event, it cannot seriously be disputed that the redaction of all personal data in the documents requested meant an excessive administrative burden having regard to the volume of documents requested (see judgment of 2.October 2014, Strack v Commission, C‑127/13 P, EU:C:2014:2250, paragraphs 36 and 37).128Indeed, it is appropriate to note that the Parliament, in the contested decisions, estimated the number of accounting and financial documents related to reimbursements of travel expenses and to MEPs’ daily allowances at over 220000 per year, those documents, some of which are only in paper format, being retained by the Parliament only for certain administrative and financial purposes, which the applicants have not disputed in their pleadings.129During the hearing, the Parliament stated that there were, without being contradicted on that point by the applicants, an average of 5500 pages per MEP during the relevant periods, namely 33000 pages for the six Cypriot members, more than 500000 pages for the 96 German members and more than four million documents for all requests.130Thus, all the documents requested were clearly extremely voluminous, which also constituted a fact justifying the refusal of partial access to those documents.131Consequently, the applicants’ fourth plea in law must be rejected. The fifth plea in law, alleging infringement of the obligation to state reasons provided for in Articles 7(1) and 8(1) of Regulation No 1049/2001 132By the fifth plea in law, the applicants allege infringement of the obligation to state reasons provided for in Article 7(1) and Article 8(1) of Regulation No 1049/2001, in that the Parliament failed to examine all their arguments.133In that regard, it is clear that, in the context of their fifth plea, the applicants criticise the Parliament exclusively for not having responded, in the contested decisions, to all the arguments which they had put forward in the context of their confirmatory applications for access.134It is apparent from the case-law that the obligation to state reasons does not require the institution concerned to respond to each of the arguments put forward during the procedure preceding the adoption of the contested decision (see, to that effect, judgments of 14 July 1972, Cassella v Commission, 55/69, EU:C:1972:76, paragraph 22, and of 24 January 1992, La Cinq v Commission, T‑44/90, EU:T:1992:5, paragraph 41).135Consequently, the applicants’ arguments cannot be accepted.136In any event, it is also settled case-law that the statement of reasons required must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review (judgments of 2 April 1998, Commission v Sytraval and Brink’s France, C‑367/95 P, EU:C:1998:154, paragraph 63, and of 1 February 2007, Sison v Council, C‑266/05 P, EU:C:2007:75, paragraph 80).137In the present case, the statement of reasons for the contested decisions enabled the applicants to ascertain the reasons for the contested decisions and the Court to exercise its power of review, as is apparent from an examination of the first to fourth pleas in law.138Consequently, the fifth plea must be rejected and, accordingly, the action must be dismissed in its entirety. Costs 139Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.140Since the applicants have been unsuccessful, they must be ordered to pay the costs, in accordance with the form of order sought by the Parliament.On those grounds,hereby: 1. Orders the joinder of Cases T‑639/15 to T‑666/15 and T‑94/16 for the purposes of the judgment; 2. Dismisses the actions; 3. Orders Ms Maria Psara, Ms Tina Kristan, Ms Tanja Malle, Mr Wojciech Cieśla, Mr Staffan Dahllof, Ms Delphine Reuter, České centrum pro investigativní žurnalistiku o.p.s., Mr Harry Karanikas, Ms Crina Boros, Baltijas pētnieciskās žurnālistikas centrs Re:Baltica, Mr Balazs Toth, Ms Minna Knus-Galán, Mr Atanas Tchobanov, Mr Dirk Liedtke, Mr Nils Mulvad, Mr Hugo van der Parre, Ms Guia Baggi, Mr Marcos García Rey, Mr Mark Lee Hunter, Mr Kristof Clerix, Mr Rui Araujo, Ms Anuška Delić, Mr Jacob Borg, Ms Matilda Bačelić and Mr Gavin Sheridan to pay the costs. GratsiasLabuckaDittrichUlloa RubioXuerebDelivered in open court in Luxembourg on 25 September 2018.E. CoulonRegistrarD. GratsiasPresident( *1 ) Language of the case: English. | 70651-291a969-477a | EN |
The unfairness of an unclear contractual term which places the exchange rate risk on the borrower and does not reflect statutory provisions may be subject to judicial review | 20 September 2018 ( *1 )(Reference for a preliminary ruling — Consumer protection — Unfair terms — Directive 93/13/EEC — Scope — Article 1(2) — Mandatory statutory or regulatory provisions — Article 3(1) — Concept of ‘contractual term which has not been individually negotiated’ — Term incorporated in the contract after its conclusion following the intervention of the national legislature — Article 4(2) — Plain and intelligible drafting of a term — Article 6(1) — Examination by the national court of its own motion as to whether a term is unfair — Loan contract denominated in a foreign currency concluded between a seller or supplier and a consumer)In Case C‑51/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Ítélőtábla (Regional Court of Appeal, Budapest, Hungary), made by decision of 17 January 2017, received at the Court on 1 February 2017, in the proceedings OTP Bank Nyrt., OTP Faktoring Követeléskezelő Zrt. v Teréz Ilyés, Emil Kiss, THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Rosas, C. Toader, A. Prechal (Rapporteur) and E. Jarašiūnas, Judges,Advocate General: E. Tanchev,Registrar: I. Illéssy, Administrator,having regard to the written procedure and further to the hearing on 22 February 2018,after considering the observations submitted on behalf of:–OTP Bank Nyrt. and OTP Faktoring Követeléskezelő Zrt., by A. Lendvai, ügyvéd,Ms Ilyés and Mr Kiss, by P. Dantesz, ügyvéd,the Hungarian Government, by M. Z. Fehér, acting as Agent,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by A. Tokár and A. Cleenewerck de Crayencour, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 3 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 1(2), Article 3(1) and Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29), as well as point 1(i) of the annex thereto.2The request has been made in proceedings between OTP Bank Nyrt. and OTP Faktoring Követeléskezelő Zrt. (together, ‘OTP Bank’) and Ms Teréz Ilyés and Mr Emil Kiss (together, ‘the borrowers’) concerning an application for a declaration that certain terms in a loan contract denominated in Swiss francs (CHF), disbursed and repaid in Hungarian forints (HUF), are unfair. Legal context EU law 3According to the thirteenth recital of Directive 93/13:‘… the statutory or regulatory provisions of the Member States which directly or indirectly determine the terms of consumer contracts are presumed not to contain unfair terms; … therefore, it does not appear to be necessary to subject the terms which reflect mandatory statutory or regulatory provisions and the principles or provisions of international conventions to which the Member States or the [European Union] are party; … in that respect the wording “mandatory statutory or regulatory provisions” in Article 1(2) also covers rules which, according to the law, shall apply between the contracting parties provided that no other arrangements have been established’.4Article 1(2) of that directive provides:‘The contractual terms which reflect mandatory statutory or regulatory provisions and the provisions or principles of international conventions to which the Member States or the [European Union] are party, particularly in the transport area, shall not be subject to the provisions of this Directive.’5Article 3 of that directive is worded as follows:‘1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer.2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.…3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.’6Article 4 of the directive provides:‘1. Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent.2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.’7Article 6(1) of Directive 93/13 provides:‘Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.’8Article 7(1) of that directive is worded as follows:‘Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.’9The annex to Directive 93/13, entitled ‘Terms referred to in Article 3(3)’, contains point 1(i), which is worded as follows:‘Terms which have the object or effect of:(i)irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract’. Hungarian law The Law on credit institutions 10Pursuant to Paragraph 203 of the hitelintézetekről és a pénzügyi vállalkozásokról szóló 1996. évi CXII. törvény (Law CXII of 1996 on credit institutions and financial undertakings, ‘the Law on credit institutions’):‘1. The financial institution must inform both its current and potential customers, in a plain intelligible manner, of the conditions for using the services they provide, and the amendments to those conditions …6. In the case of contracts concluded with retail customers granting a foreign currency loan or containing an option to purchase real property, the financial institution must explain to the customer the risk he bears in the contractual operation and the customer shall append his signature to confirm that he is aware thereof.’ Law DH 1 11Paragraph 1(1) of the Kúriának a pénzügyi intézmények fogyasztói kölcsönszerződéseire vonatkozó jogegységi határozatával kapcsolatos egyes kérdések rendezéséről szóló 2014. évi XXXVIII. törvény (Law XXXVIII of 2014 regulating specific matters relating to the decision of the Kúria (Supreme Court, Hungary) to safeguard the uniformity of the law concerning loan contracts concluded by financial institutions with consumers, ‘Law DH 1’) provides:‘This Law shall apply to loan agreements concluded with consumers between 1 May 2004 and the date of entry into force of this Law. For the purposes of this Law, the concept of loan agreements concluded with consumers shall cover any foreign exchange based (linked to, or denominated in, a foreign currency and repaid in Hungarian forints) or Hungarian forint based credit or loan agreement, or any financial leasing agreement, concluded between a financial institution and a consumer, if it incorporates standard contract terms or any contract term which has not been individually negotiated for the purposes of Paragraph 3(1) or Paragraph 4(1).’12Paragraph 3(1), (2) and (5) of that law provides that:‘1. In loan agreements concluded with consumers, terms — with the exception of contractual terms which have been individually negotiated — pursuant to which the financial institution stipulates that, for the purpose of paying out the amount of finance granted for purchase of the subject of the loan or financial leasing, the buying rate is to apply, and that, for the purpose of repayment of the debt, the selling rate, or a different exchange rate from that set when the loan was paid out, is to apply, shall be void.2. Instead of the void term referred to in subparagraph 1 — without prejudice to subparagraph 3 — the official exchange rate set by the National Bank for the foreign currency concerned shall apply in relation to the disbursement and the repayment of the loan (including payment of the instalments and all the costs, fees and commissions expressed in foreign currencies).5. The financial institution must clear accounts with the consumer in accordance with the provisions of a special law.’13Paragraph 4 of that law provides:‘1. In the case of loan agreements concluded with consumers which include the right to amend the contract unilaterally, the terms of that contract — with the exception of those that have been negotiated individually — which permit the unilateral increase of the interest rate or the unilateral increase of costs and commissions shall be deemed to be unfair …2. A contractual term as referred to in subparagraph 1 shall be void if the credit institution has not … commenced civil proceedings or if the court has dismissed the action or discontinued the examination of the case, unless it is possible to bring the proceedings …, in respect of the contractual term, but those proceedings have not been commenced or, if they have been commenced, the court has not found the contractual term to be void under subparagraph 2a.2a. A contractual term as referred to in subparagraph 1 shall be void if a court has found that it is void under the special law on the settlement of accounts in proceedings brought in the public interest by the supervisory authority.3. In the cases referred to in subparagraphs 2 and 2a, the credit institution shall carry out a settlement of accounts with the consumer as provided for in the special law.’ Law DH 2 14It is apparent from the order for reference that, by adopting the Kúriának a pénzügyi intézmények fogyasztói kölcsönszerződéseire vonatkozó jogegységi határozatával kapcsolatos egyes kérdések rendezéséről szóló 2014. évi XXXVIII. törvényben rögzített elszámolás szabályairól és egyes egyéb rendelkezésekről szóló 2014. évi XL. törvény (Law XL of 2014 on the rules relating to the settlement of accounts referred to by Law XXXVIII of 2014, regulating specific matters relating to the decision of the Kúria (Supreme Court) to safeguard the uniformity of the law concerning loan contracts concluded by financial institutions with consumers, and other provisions, ‘Law DH 2’), the Hungarian legislature, inter alia, required credit institutions to rectify financially, by means of settlement of accounts, advantages wrongly obtained, to the consumer’s detriment, by those institutions on the basis of unfair terms. Law DH 3 15Under Paragraph 3(1) of the az egyes fogyasztói kölcsönszerződések devizanemének módosulásával és a kamatszabályokkal kapcsolatos kérdések rendezéséről szóló 2014. évi LXXVII. törvény (Law LXXVII of 2014 regulating various matters relating to the amendment of the currency of denomination of consumer loan contracts and to the rules governing interest, ‘Law DH 3’):‘Loan agreements concluded with consumers shall be amended by operation of this Law, in accordance with its provisions.’16Paragraph 10 of that law provides:‘As regards foreign currency mortgage loan agreements and foreign currency based mortgage loan agreements, the financial institution to which the debt is owed shall be required, within the period laid down for fulfilment of the obligation to settle accounts under [Law DH 2], to convert into a loan denominated in Hungarian forints the debt under a foreign currency mortgage loan agreement or a foreign currency based mortgage loan agreement concluded with a consumer, or the total debt derived from that agreement (also including interest, fees, commissions and costs charged in the foreign currency), both of which must be calculated on the basis of the settlement of accounts under [Law DH 2]. For the purposes of that conversion, whichever of the following two interest rates is the most favourable to the consumer on the reference date shall apply:(a)the average exchange rate for the foreign currency concerned officially set by the National Bank of Hungary in the period from 16 June 2014 to 7 November 2014, or(b)the exchange rate for the foreign currency concerned officially set by the National Bank of Hungary on 7 November 2014.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 17On 15 February 2008 the borrowers concluded with ELLA Első Lakáshitel Kereskedelmi Bank Zrt., the predecessor in law to OTP Bank, a loan denominated in Swiss francs, but disbursed and repaid in Hungarian forints (‘the loan contract at issue’). The loan contract at issue, secured by a non-ancillary pledge, was denominated in Swiss francs on the basis of the exchange rate of the day. The loan contract contained terms stipulating, first, a difference between the exchange rate applicable to the disbursement of the loan and that applicable to the repayment of the loan, respectively the buying rate and the selling rate used by OTP Bank and its predecessor in law (‘the difference in exchange rates’), and, secondly, a power to make unilateral amendments in favour of the lender, allowing it to increase the interest rate, costs or commissions (‘the power to make unilateral amendments’).18Paragraph 4.7.1 of the loan contract stated that ‘the debtor is required to fulfil the payment obligations to which he is subject, denominated in the currency of the loan, by transfer of the exchange value in Hungarian forints to the “credit” account … opened with [OTP Bank] for the purposes of this loan. The debtor is required to fulfil the applicable payment obligations at the latest on the day the debt becomes due, in accordance with the selling rates of the currency concerned, published under the provisions of the internal regulations, ensuring to replenish the account referred to above, at the latest on the due date, up to the exchange value in Hungarian forints. The creditor shall convert into Hungarian forints the debtor’s payment obligations denominated in a foreign currency in accordance with the rates referred to in this paragraph on the due date and it shall debit that sum from the “credit” account in Hungarian forints.’19Paragraph 10 of the loan contract at issue, entitled ‘Declaration of notification of risk’, was worded as follows:‘In relation to the loan risks, the debtor declares that he is aware of and understands the detailed information relating to this matter provided to him by the creditor, and is aware of the risk of taking out a foreign‑currency loan, a risk which he alone bears. With regard to the foreign exchange risk, he is aware, in particular, that, if during the term of the contract there were variations in the exchange rate between the Hungarian forint and the Swiss franc which were unfavourable (that is to say, in the event of depreciation of the exchange rate of the Hungarian forint as opposed to the exchange rate at the time of disbursement), it might even happen that the exchange value of the repayment instalments, which are fixed in foreign currency and payable in Hungarian forints, would increase significantly. By signing this contract, the debtor confirms that he is aware that the economic repercussions of this risk lie entirely with him. He also declares that he has carefully assessed the possible effects of the foreign exchange risk and that he accepts them, having weighed up the risk in the light of his solvency and economic situation, and that he will not be able to make any claim on the bank as a consequence of the foreign exchange risk.’20On 16 May 2013 the borrowers brought an action before the Fővárosi Törvényszék (Budapest High Court, Hungary) for annulment of the loan contract at issue, on the ground, inter alia, that they were not able to evaluate the extent of the foreign exchange risk, since the contractual term concerned had not been drafted in plain intelligible language.21Furthermore, on 22 July 2013 OTP Bank terminated the loan contract owing to the borrowers’ failure to perform it.22In OTP Bank’s view, its predecessor in law complied in full with its obligation to provide information in respect of the foreign exchange risk, in accordance with the obligations imposed by Paragraph 203 of the Law on credit institutions.23The Fővárosi Törvényszék (Budapest High Court) upheld the borrowers’ claim by judgment of 11 March 2016. It noted, first, that the conclusion of a loan contract in a foreign currency was at the time more favourable and cheaper than that of a contract denominated in Hungarian forints. Secondly, OTP Bank should have been aware, having regard to the incipient economic crisis, that recourse to the Swiss franc as a safe-haven currency presented considerable risks, but it failed to warn the borrowers in that regard. In addition, the contractual term relating to the foreign exchange risk was not drafted in plain intelligible language. That court decided to convert the borrowers’ outstanding debt into Hungarian forints, as if the loan contract at issue had been denominated in that currency.24OTP Bank brought an appeal against that judgment before the referring court, which is the Fővárosi Ítélőtábla (Regional Court of Appeal, Budapest, Hungary), on the ground that the court of first instance did not take into account the provisions of Hungarian law which had entered into force since the borrowers’ action had been brought, inter alia those of Law DH 2, and the procedural requirements which they contained and which the consumer must meet as an applicant in proceedings relating to a loan contract denominated in a foreign currency.25The borrowers, on the other hand, seek to have the judgment of the Fővárosi Törvényszék (Budapest High Court) upheld. In their view, Paragraph 3(1) and Paragraph 4(1) of Law DH 1 classify, in principle, as abusive any term providing for a difference in exchange rates or a power to make unilateral amendments, whereas the other terms of the contract, inter alia those relating to information about exchange-related risks, do not fall within those provisions and should be assessed on a case-by-case basis.26The referring court recalls that Law DH 1 was adopted following, on the one hand, Decision No 2/2014 PJE of the Kúria (Supreme Court, Hungary) (Magyar Közlöny 2014/91, p. 10975), delivered i safeguard uniformity of civil law and, on the other hand, the judgment of 30 April 2014, Kásler and Káslerné Rábai (C‑26/13, EU:C:2014:282). Paragraph 3(1) of that law provides that terms of loan agreements concluded with consumers which relate to the difference in exchange rates and which have not been individually negotiated are void. That law requires such a term to be replaced, with retroactive effect, by a provision providing for the application of the official exchange rate of the currency concerned set by the National Bank of Hungary.27Furthermore, it is apparent from the order for reference that, in the decision referred to in the previous paragraph, the Kúria (Supreme Court) decided that ‘a term in a consumer contract for a foreign currency loan under which the foreign exchange risk is borne without any limit by the consumer — in return for a more favourable interest rate — is a contractual term which refers to the main subject matter the unfairness of which, as a general rule, cannot be examined. This term may be examined and declared unfair only if, at the time the contract is concluded, and taking account of the text of the contract and the information received from the financial institution, its content was neither clear nor intelligible to an average consumer, who is reasonably well informed and reasonably observant and circumspect. Contractual terms relating to the foreign exchange risk shall be unfair, and consequently the contract will be wholly or partially invalid, where the consumer, owing to the inadequacy of the information received from the financial institution or the delay in receiving such information, has reason to believe that the foreign exchange risk is not genuine or that he bears the risk only to a limited extent.’28Subsequently, the Hungarian legislature, in adopting Law DH 2, imposed on credit establishments the obligation to rectify, by means of settlement of accounts, the amounts wrongly collected on the basis of the unfair terms referred to in Paragraphs 3 and 4 of Law DH 1. Law DH 3, for its part, provided that the loans concerned would be definitively converted into Hungarian forints, in accordance with the exchange rate laid down in Paragraph 10 thereof, in order to eliminate future exchange-related risks.29The referring court notes that, in adopting laws such as Law DH 1 and Law DH 3, the Hungarian legislature attempted to address the issue arising from the conclusion of a considerable number of loan contracts denominated in a foreign currency, inter alia by annulling the difference in exchange rates and imposing the application of the exchange rate set by the National Bank of Hungary. However, that court states that, even though that rate is more favourable to the consumer than that provided for in the loan contract, the fact remains that the risk of fluctuation in the exchange rate of the foreign currency in relation to the repayment currency is, in the event of a rise in the value of the foreign currency or a depreciation of the national currency, still borne by the borrower.30Nevertheless, first, such a replacement of contractual terms by provisions laid down by national law could have the result, according to the referring court, that those terms are no longer covered by Directive 93/13, as they are not ‘contractual terms which have not been individually negotiated’ within the meaning of that directive. Secondly, should those terms be classified as ‘contractual terms’ within the meaning of that directive, the term relating to the foreign exchange risk could fall within the exclusion laid down by Article 1(2) of the directive, since it may constitute a contractual term which ‘reflects mandatory statutory or regulatory provisions’ within the meaning of that provision, and would therefore not be subject to the provisions of Directive 93/13.31Should the exclusion laid down by Article 1(2) of Directive 93/13 not be applicable in the present case, the referring court notes that it must assess whether the term relating to the foreign exchange risk is drafted in plain intelligible language, in so far as the borrowers received only general information in respect of the foreign exchange risk.32In that context, the referring court is uncertain whether, in proceeding with the examination of that term, it would be permissible for it also to take account of any other unfair terms, as they appeared in the contract at the time of its conclusion, even though, at a later date, they were annulled and, where necessary, replaced pursuant to provisions of national law.33Finally, regarding the identification of unfair terms by the national court of its own motion, the referring court states that the Kúria (Supreme Court) interpreted the Court’s case-law having regard, as the Court did, to the observance of the principle that the parties have the right to delimit the subject matter of an action, according to which an action should proceed on the basis of the facts and pleadings set out by the parties, having regard to the claim made. Thus, the referring court is uncertain whether it has the power, or indeed the obligation, to assess whether any terms that have not been relied on by the consumer in support of his claim, in his capacity as an applicant, are unfair.34In those circumstances, the Fővárosi Ítélőtábla (Regional Court of Appeal, Budapest) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Is a contractual term which places the foreign exchange risk on the consumer and which, owing to the removal of an unfair contractual term which established a bid-offer spread and the obligation to bear the corresponding foreign exchange risk, has become part of the contract with ex tunc effects as a consequence of the intervention of the legislature following disputes concerning validity which affected a large number of contracts considered to be a “term which has not been individually negotiated” within the meaning of Article 3(1) of Directive 93/13 and which therefore falls within the scope of the directive?(2)If a contractual term which places the foreign exchange risk on the consumer falls within the scope of Directive 93/13, is the exclusion in Article 1(2) of the directive to be interpreted as also referring to a contractual term which reflects mandatory statutory provisions within the meaning of paragraph 26 of the [judgment of 21 March 2013, RWE Vertrieb (C‑92/11, EU:C:2013:180)], which have been adopted or have come into force after the conclusion of the contract? Does that exclusion also extend to a contractual term which has become part of the contract with ex tunc effects after the conclusion of the contract as a consequence of a mandatory statutory provision which remedies the invalidity caused by the unfairness of a contractual term which makes it impossible to perform the contract?(3)If, according to the replies to the above questions, it is possible to examine the unfairness of a contractual term which places the foreign exchange risk on the consumer, is it to be understood that the requirement for plain intelligible language to which Article 4(2) of Directive 93/13 refers is also met if the obligation to provide information required by law and formulated in necessarily general terms is fulfilled in the terms set out in the facts, or is it also necessary to communicate information concerning the risk to the consumer of which the financial institution is aware or to which it might have access at the time the contract is concluded?(4)Is the fact that, at the time the contract was concluded, the contractual terms relating to the power to make unilateral amendments and to the bid-offer spread — which, years later, turned out to be unfair — appeared in the contract together with the term relating to the assumption of the foreign exchange risk, so that, as a cumulative effect of those terms, the consumer had no means of foreseeing how the payment obligations or the mechanism for varying them would evolve, relevant from the point of view of the requirement for clarity and transparency and of the provisions in point 1(i) of the Annex to Directive 93/13? Or rather, should contractual terms subsequently declared to be unfair be disregarded in the assessment of the unfairness of the term which places the foreign exchange risk on the consumer?(5)If the national court declares that the contractual term which places the foreign exchange risk on the consumer is unfair, is it required, when determining the legal effects in accordance with the rules of national law, also to take into account, of its own motion, while respecting the right of the parties to present argument in inter partes proceedings, the unfairness of other contractual terms which have not been relied on by the applicants in their action? Does the principle that the court should act of its own motion in accordance with the case-law of the Court of Justice also apply if the applicant is a consumer or, having regard to the position occupied by the supplementary provisions in the whole proceedings and to the particular features of the proceedings, does the principle that the parties have the right to delimit the subject matter of an action, in that case, preclude examination by the court of its own motion?’ Consideration of the questions referred Admissibility of the questions referred 35OTP Bank submits that the first to fourth questions are inadmissible on the grounds, in essence, that they are hypothetical and that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose. According to OTP Bank, the referring court started from the incorrect premiss that Laws DH 1 and DH 3 had the effect of placing the foreign exchange risk linked to loan contracts denominated in a foreign currency on consumers. Those laws, as well as the decisions of the Kúria (Supreme Court), inter alia its Decision No 2/2014 PJE, did not have the effect of imposing the ex tunc amendment of terms relating to the foreign exchange risk that were already present in existing contracts. In addition, the Kúria (Supreme Court) has held that it is for the national court to assess the plainness and intelligibility of the wording of each term put before it, pursuant to Article 4(2) of Directive 93/13. The provisions of Laws DH 1 and DH 3 did not alter the content of that decision of the Kúria (Supreme Court).36As regards the fifth question, OTP Bank submits that the Court has previously held that, under Article 6(1) of Directive 93/13, the national court is required to examine of its own motion the unfairness of a contractual term. As the parties are in agreement on that aspect, it bears no relation to the actual facts of the case.37It must be borne in mind at the outset that, according to the Court’s settled case‑law, questions on the interpretation of EU law referred by a national court in the factual and legislative context which that court is responsible for defining, the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to that effect, judgment of 17 April 2018, Krüsemann and Others, C‑195/17, C‑197/17 to C‑203/17, C‑226/17, C‑228/17, C‑254/17, C‑274/17, C‑275/17, C‑278/17 to C‑286/17 and C‑290/17 to C‑292/17, EU:C:2018:258, paragraph 24 and the case-law cited).38As regards OTP Bank’s claim that Laws DH 1 and DH 3 do not change the consumer’s situation in respect of the foreign exchange risk and that, consequently, the questions are hypothetical, it must be noted that the referring court states, in essence, that the adoption of those laws has, at the very least, some impact on that risk.39Admittedly, it is apparent from the information submitted to the Court, including the order for reference itself, that the existence of such a risk stems from the very nature of the contract, which, in the present case, finds specific expression in paragraph 4.7.1 of the loan contract at issue, according to which the debtor is required to fulfil the payment obligations to which he is subject, denominated in the currency of the loan, by transfer of the exchange value in Hungarian forints, calculated in accordance with the selling rates of the currency on the due date.40However, according to the referring court, Paragraph 3(2) of Law DH 1, pursuant to which the void term on the difference in exchange rates is to be replaced by a provision providing for the application of the official exchange rate set by the National Bank of Hungary for the corresponding currency, and Paragraph 10 of Law DH 3, according to which loan contracts denominated in a foreign currency are to be automatically converted into contracts denominated in Hungarian forints, the exchange rate at the time of that conversion being set on the basis of an average, still have the effect that, in practice, the foreign exchange risk continues to be borne by the consumer.41The presumption of relevance referred to in paragraph 37 of the present judgment cannot be rebutted by the mere fact that one of the parties in the main proceedings disputes the referring court’s interpretation of provisions of national law and, as a result, the relevance of the question referred for a preliminary ruling to the resolution of the dispute in the main proceedings. The national court alone has jurisdiction to find and assess the facts in the case in the main proceedings and to interpret and apply national law (judgment of 8 June 2016, Hünnebeck, C‑479/14, EU:C:2016:412, paragraph 36 and the case-law cited).42As regards the fifth question, the referring court asks, in essence, whether the Court’s case-law relating to the obligation, for the national court, in certain circumstances, to raise of its own motion grounds which the parties have not raised before it is also applicable in a case such as that in the main proceedings, in which the consumer is not the defendant but the applicant.43In that regard, it need merely be recalled that, even when there is case‑law of the Court resolving the point of law at issue, national courts remain entirely at liberty to bring a matter before the Court if they consider it appropriate to do so, and the fact that the provisions whose interpretation is sought have already been interpreted by the Court does not deprive the Court of jurisdiction to give a further ruling (judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 21 and the case-law cited).44In the present case, it is not quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, nor that the problem is hypothetical, or that the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it.45It follows that the questions referred for a preliminary ruling are admissible. The first question 46By its first question, the referring court asks, in essence, whether the concept of ‘term which has not been individually negotiated’ in Article 3(1) of Directive 93/13 must be interpreted as meaning that it covers inter alia a contractual term amended by a mandatory national statutory provision, such as Paragraph 3(2) of Law DH 1, read in conjunction with Paragraph 10 of Law DH 3, adopted after the conclusion of a loan contract with a consumer, for the purposes of removing a term which is null and void from that contract, by imposing the application of an exchange rate set by the National Bank for the calculation of the outstanding amount of the loan.47According to Article 3(2) of that directive, a term is always to be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.48In the present case, owing to the fact that the terms at issue in the main proceedings were imposed by the national legislature, it is clear that the parties to the contract did not individually negotiate them.49Consequently, the answer to the first question is that the concept of ‘term which has not been individually negotiated’ in Article 3(1) of Directive 93/13 must be interpreted as meaning that it covers inter alia a contractual term amended by a mandatory national statutory provision adopted after the conclusion of a contract with a consumer, for the purpose of removing a term which is null and void from that contract. The second question 50As a preliminary point, it must be noted, as already stated in paragraph 39 of the present judgment and as is apparent from the file submitted to the Court, that, in the present case, a foreign exchange risk stems from the very nature of the loan contract at issue, in particular from paragraph 4.7.1 thereof. However, according to the referring court, the retention of that foreign exchange risk also results, at least in part, from the application of Paragraph 3(2) of Law DH 1, read in conjunction with Paragraph 10 of Law DH 3, in so far as those provisions of national law carry out an automatic amendment of current contracts, consisting of replacing the exchange rate of the currency in which the loan contract was denominated with an official exchange rate set by the National Bank of Hungary.51Thus, it must be considered that, by its second question, the referring court asks, in essence, whether Article 1(2) of Directive 93/13 must be interpreted as meaning that the scope of that directive covers terms amended by the effect of mandatory provisions of national law, adopted after the conclusion of a loan contract concluded with a consumer and intended to remove a term which is null and void from that contract, by imposing an official exchange rate set by the National Bank for the calculation of the outstanding amount of the loan, while retaining the foreign exchange risk placed on the consumer in the event of depreciation of the national currency in relation to the foreign currency in which the loan was taken out.52It should be recalled that Article 1(2) of Directive 93/13, which covers terms which reflect mandatory statutory or regulatory provisions, establishes an exclusion from the scope of that directive. The Court has already held that that exclusion requires two conditions to be met. First, the contractual term must reflect a statutory or regulatory provision and, secondly, that provision must be mandatory (see, to that effect, judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraphs 27 and 28 and the case-law cited).53That exclusion from the application of the rules of Directive 93/13 is justified by the fact that, in principle, it may legitimately be supposed that the national legislature struck a balance between all the rights and obligations of the parties to certain contracts (see, to that effect, judgment of 21 March 2013, RWE Vertrieb, C‑92/11, EU:C:2013:180, paragraph 28).54However, the Court has also held that a national court must take account of the fact that, having regard to the purpose of that directive, namely the protection of consumers against unfair terms included in contracts concluded with consumers by sellers or suppliers, the exception provided for in Article 1(2) of the directive is to be strictly construed (see, to that effect, judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 31 and the case-law cited).55As regards, in particular, that purpose and the general scheme of Directive 93/13, given the nature and significance of the public interest which constitutes the basis of the protection guaranteed to consumers, the directive requires Member States, first, under Article 6(1) thereof, to lay down ‘that unfair terms used in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer’ and, secondly, as is apparent from Article 7(1) thereof, to provide for adequate and effective means ‘to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers’ (see, to that effect, judgment of 21 April 2016, Radlinger and Radlingerová, C‑377/14, EU:C:2016:283, paragraph 98 and the case‑law cited).56Concerning, more specifically, Article 6(1) of Directive 93/13, the Court has previously held that while that provision requires the Member States to lay down that unfair terms are not to be binding on the consumer, ‘as provided for under their national law’, the fact remains that the regulation by national law of the protection guaranteed to consumers by Directive 93/13 may not alter the scope and, therefore, the substance of that protection (see, to that effect, judgment of 21 December 2016, Gutiérrez Naranjo and Others, C‑154/15, C‑307/15 and C‑308/15, EU:C:2016:980, paragraphs 64 and 65).57In the present case, it is common ground that Paragraph 3 of Law DH 1 and Paragraph 10 of Law DH 3 were adopted after the conclusion of loan contracts denominated in a foreign currency, the national legislature having considered the term on the difference in exchange rates generally included in such contracts to be unfair and having decided, in that context, to replace the exchange rate set in accordance with the contractual arrangements with an exchange rate set by the National Bank of Hungary.58It is apparent from the information before the Court that those laws were adopted in a specific context, in that they were based on Decision No 2/2014 PJE of the Kúria (Supreme Court) delivered to safeguard the uniformity of the law, by which that court ruled on the unfairness or the presumption of unfairness of terms on the difference in exchange rates and the power to make unilateral amendments contained in credit or loan contracts denominated in a foreign currency and concluded with consumers.59It follows from the order for reference that both that decision of the Kúria (Supreme Court) and Law DH 1 are based on the judgment of 30 April 2014, Kásler and Káslerné Rábai (C‑26/13, EU:C:2014:282).60The Court held, in paragraph 82 of that judgment, that, in certain circumstances, the substitution for an unfair term of a supplementary provision of national law is consistent with the objective of Article 6(1) of Directive 93/13, since, according to settled case-law, that provision is intended to substitute, for the formal balance established by the contract between the rights and obligations of the parties, an effective balance re‑establishing equality between them, and not to annul all contracts containing unfair terms.61If it were not permissible for a national court to replace an unfair term, without which the contract concerned could not continue in existence, with a supplementary provision of national law, that court would be required to annul the contract in its entirety. This might expose the consumer to particularly unfavourable consequences, since the consequence of such an annulment is that, in general, the outstanding balance of the loan becomes due forthwith, to a degree likely to be in excess of the consumer’s financial capacities and, as a result, tends to penalise the consumer rather than the lender who, as a consequence, might not be discouraged from inserting such terms in the contracts it offers (see, to that effect, judgment of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraphs 83 and 84).62As regards the case in the main proceedings, it is apparent from the information before the Court that, by replacing, pursuant to Paragraph 3(2) of Law DH 1 and Paragraph 10 of Law DH 3, the term relating to the difference in exchange rates with a term providing that the exchanged rate set by the National Bank of Hungary, in force on the due date, is applicable between the parties to the contract, the national legislature intended to establish certain conditions relating to the obligations contained in that type of loan contract.63In that regard, the Court has previously held that Article 1(2) of Directive 93/13 must be interpreted as meaning that that directive is not applicable to conditions contained in the contract between a seller or supplier and a consumer which are determined by national legislation (see, to that effect, order of 7 December 2017, Woonhaven Antwerpen, C‑446/17, not published, EU:C:2017:954, paragraph 31).64It follows that contractual terms, such as those referred to in paragraph 62 of the present judgment, which reflect mandatory statutory provisions, cannot fall within the scope of Directive 93/13.65However, such a consideration does not mean that another contractual term, such as that relating to the foreign exchange risk, is, in its entirety, also excluded from the scope of that directive and cannot therefore be examined in the light of the directive.66As recalled in paragraph 54 of the present judgment, Article 1(2) of Directive 93/13 is to be strictly construed. Thus, the fact that some terms which reflect statutory provisions fall outside the scope of that directive does not mean that the validity of other terms, which are included in the same contract and are not covered by statutory provisions, may not be assessed by the national court in the light of that directive.67In the present case, it is apparent from the file submitted to the Court that the amendments stemming from Paragraph 3(2) of Law DH 1 and Paragraph 10 of Law DH 3 were not intended to address in full the issue of the foreign exchange risk in respect of the period between the time when the loan contract at issue was concluded and its conversion into Hungarian forints, pursuant to Law DH 3.68In respect of contractual terms which address the issue of the foreign exchange risk and which are not covered by those statutory amendments, it follows from the Court’s case-law that such terms fall within the scope of Article 4(2) of Directive 93/13, and escape the assessment as to whether they are unfair only in so far as the national court having jurisdiction should form the view, following a case-by-case examination, that they were drafted by the seller or supplier in plain intelligible language (judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 43).69Furthermore, the fact that conditions relating to the difference in exchange rates are thus excluded from the scope of Directive 93/13 pursuant to Article 1(2) thereof does not prevent the requirements stemming from Article 6(1) and Article 7(1) of that directive and the Court’s case-law, as recalled inter alia in paragraphs 32 to 34 of the judgment of 31 May 2018, Sziber (C‑483/16, EU:C:2018:367), from remaining applicable for all other areas covered by that directive and, in particular, for the procedural rules serving to ensure that rights which individuals derive from that directive are respected.70In the light of the foregoing, the answer to the second question is that Article 1(2) of Directive 93/13 must be interpreted as meaning that the scope of that directive does not cover terms which reflect mandatory provisions of national law, inserted after the conclusion of a loan contract concluded with a consumer and intended to remove a term which is null and void from that contract, by imposing an exchange rate set by the National Bank. However, a term relating to the foreign exchange risk, such as that at issue in the main proceedings, is not excluded from that scope by virtue of that provision. The third question 71By its third question, the referring court asks, in essence, whether Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement for contractual terms to be drafted in plain intelligible language entails that the credit institution must provide detailed information about the foreign exchange risk, including a risk analysis in respect of the economic consequences which might arise from a depreciation of the national currency in relation to the foreign currency in which the loan was denominated.72In that regard, although it is for the national court alone to rule on the classification of terms in accordance with the particular circumstances of the case, the fact remains that the Court has jurisdiction to elicit from the provisions of Directive 93/13, in this case the provisions of Article 4(2) thereof, the criteria that the national court may or must apply when examining a contractual term (judgment of 23 April 2015, Van Hove, C‑96/14, EU:C:2015:262, paragraph 28 and the case-law cited).73In that regard, in the context of loan contracts denominated in a foreign currency, it is apparent from the Court’s case-law that Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement for a contractual term to be drafted in plain intelligible language cannot be reduced merely to it being formally and grammatically intelligible (see, to that effect, judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 44 and the case-law cited).74As regards foreign currency lending, like that at issue in the main proceedings, it must be noted, as the European Systematic Risk Board stated in its Recommendation ESRB/2011/1 of 21 September 2011 on lending in foreign currencies (OJ 2011 C 342, p. 1), that financial institutions must provide borrowers with adequate information to enable them to take well-informed and prudent decisions and should at least encompass the impact on instalments of a severe depreciation of the legal tender of the Member State in which a borrower is domiciled and of an increase of the foreign interest rate (Recommendation A — Risk awareness of borrowers, paragraph 1) (judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 49).75More specifically, the borrower must, first, be clearly informed of the fact that, in entering into a loan agreement denominated in a foreign currency, he is exposing himself to a certain foreign exchange risk which will, potentially, be difficult to bear in the event of a depreciation of the currency in which he receives his income in relation to the foreign currency in which the loan was granted. Second, the seller or supplier, in this case the bank, must be required to set out the possible variations in the exchange rate and the risks inherent in taking out a loan in a foreign currency (see, to that effect, judgment of 20 September 2017, Andriciuc and Others, C‑186/16, EU:C:2017:703, paragraph 50).76Finally, as stated in the twentieth recital of Directive 93/13, it is important that the consumer should actually be given an opportunity to examine all the terms of the contract. Information, provided in sufficient time before concluding a contract, on the terms of the contract and the consequences of concluding it, is of fundamental importance for a consumer in order to decide whether he wishes to be bound by the terms previously drawn up by the seller or supplier (see, to that effect, judgment of 30 April 2014, Kásler and Káslerné Rábai, C‑26/13, EU:C:2014:282, paragraph 70 and the case-law cited).77In the present case, in the light of the foregoing, it is for the referring court to take into account, inter alia, the presence in the loan contract at issue of paragraph 10 thereof, entitled ‘Declaration of notification of risk’, the wording of which was set out in paragraph 19 of the present judgment, read in conjunction with any additional information provided before the conclusion of that contract. In that last regard, it is apparent from the information before the Court that the borrowers received, inter alia, an additional information sheet relating to the foreign exchange risk, containing examples of specific calculations of the risk in the event of a depreciation of the Hungarian forint in relation to the Swiss franc, which it is nonetheless for the referring court to ascertain.78In the light of the foregoing, the answer to the third question is that Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement for a contractual term to be drafted in plain intelligible language requires financial institutions to provide borrowers with adequate information to enable them to take well-informed and prudent decisions. In that regard, that requirement means that a term relating to the foreign exchange risk must be understood by the consumer both at the formal and grammatical level and also in terms of its actual effects, so that the average consumer, who is reasonably well informed and reasonably observant and circumspect, would not only be aware of the possibility of a depreciation of the national currency in relation to the foreign currency in which the loan was denominated, but would also be able to assess the potentially significant economic consequences of such a term with regard to his financial obligations. The fourth question 79By its fourth question, the referring court asks, in essence, whether Article 4 of Directive 93/13 must be interpreted as requiring that the plainness and intelligibility of the contractual terms be assessed by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract, even though some of those terms have been declared or presumed to be unfair and annulled at a later time by the national legislature.80It is clear from the wording of Article 4(1) of Directive 93/13 that, in order to assess, in a situation in which the term in question relates to the definition of the main subject matter of the contract, whether that term is drafted in plain intelligible language within the meaning of Article 4(2) of that directive, account should be taken, inter alia, of all the terms of the contract that were included therein at the time of its conclusion, since it is at that moment that the consumer decides whether he wishes to be bound by the terms previously drawn up by the seller or supplier.81Accordingly, as regards the case in the main proceedings, the subsequent entry into force of Laws DH 1, DH 2 and DH 3, in so far as they made mandatory and ex tunc amendments to certain terms contained in the loan contract at issue, is not included among the circumstances which the referring court must take into account when assessing the transparency of the term relating to the foreign exchange risk.82It follows that it is for the referring court to take into account all of the circumstances of the case in the main proceedings as they existed at the time when the contract was concluded.83Consequently, the answer to the fourth question is that Article 4 of Directive 93/13 must be interpreted as requiring that the plainness and intelligibility of the contractual terms be assessed by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract, notwithstanding that some of those terms have been declared or presumed to be unfair and, accordingly, annulled at a later time by the national legislature. The fifth question 84By its fifth question, the referring court asks, in essence, whether Article 6(1) of Directive 93/13 must be interpreted as meaning that it is for the national court to identify of its own motion, in the place of the consumer in his capacity as an applicant, any unfairness of the terms of a contract which the consumer has concluded with a seller or supplier.85According to Article 6(1) of Directive 93/13, Member States are to lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.86Furthermore, it is apparent from Article 7(1) of Directive 93/13, read in conjunction with the twenty-fourth recital thereof, that Member States must ensure that the courts or administrative authorities have at their disposal adequate and effective means of preventing the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers. In that regard, the Court has recalled the nature and significance of the public interest constituted by the protection of consumers, who are in a position of weakness vis-à-vis sellers or suppliers (judgment of 31 May 2018, Sziber, C‑483/16, EU:C:2018:367, paragraph 33 and the case-law cited).87It should be recalled that, in the light of the foregoing, the national court is required to assess of its own motion whether a contractual term falling within the scope of Directive 93/13 is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier, provided that it has available to it the legal and factual elements necessary for that task (see, to that effect, judgment of 26 January 2017, Banco Primus, C‑421/14, EU:C:2017:60, paragraph 43 and the case-law cited).88That obligation for the national court has been regarded as necessary for ensuring that the consumer enjoys effective protection, in view in particular of the not insignificant risk that he is unaware of his rights or encounters difficulties in enforcing them (see, to that effect, judgment of 17 May 2018, Karel de Grote — Hogeschool Katholieke Hogeschool Antwerpen, C‑147/16, EU:C:2018:320, paragraph 31 and the case-law cited).89In addition, the Court of Justice has held that, in view of the nature and importance of the public interest underlying the protection which Directive 93/13 confers on consumers, Article 6 thereof must be regarded as a provision of equal standing to national rules which rank, within the domestic legal system, as rules of public policy (see, to that effect, judgment of 17 May 2018, Karel de Grote — Hogeschool Katholieke Hogeschool Antwerpen, C‑147/16, EU:C:2018:320, paragraph 35 and the case-law cited).90Accordingly, the protection intended by Directive 93/13 requires that the national court is to identify of its own motion, including, where necessary, in the place of the consumer in his capacity as an applicant, any unfairness of the terms in a contract concluded between a seller or supplier and that consumer, provided that it has available to it the legal and factual elements necessary for that task.91It follows that the answer to the fifth question is that Article 6(1) and Article 7(1) of Directive 93/13 must be interpreted as meaning that it is for the national court to identify of its own motion, in the place of the consumer in his capacity as an applicant, any unfairness of a contractual term, provided that it has available to it the legal and factual elements necessary for that task. Costs 92Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: 1. The concept of ‘term which has not been individually negotiated’ in Article 3(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts must be interpreted as meaning that it covers inter alia a contractual term amended by a mandatory national statutory provision adopted after the conclusion of a contract with a consumer, for the purpose of removing a term which is null and void from that contract. 2. Article 1(2) of Directive 93/13 must be interpreted as meaning that the scope of that directive does not cover terms which reflect mandatory provisions of national law, inserted after the conclusion of a loan contract concluded with a consumer and intended to remove a term which is null and void from that contract, by imposing an exchange rate set by the National Bank. However, a term relating to the foreign exchange risk, such as that at issue in the main proceedings, is not excluded from that scope under that provision. 3. Article 4(2) of Directive 93/13 must be interpreted as meaning that the requirement for a contractual term to be drafted in plain intelligible language requires financial institutions to provide borrowers with adequate information to enable them to take well-informed and prudent decisions. In that regard, that requirement means that a term relating to the foreign exchange risk must be understood by the consumer both at the formal and grammatical level and also in terms of its actual effects, so that the average consumer, who is reasonably well informed and reasonably observant and circumspect, would not only be aware of the possibility of a depreciation of the national currency in relation to the foreign currency in which the loan was denominated, but would also be able to assess the potentially significant economic consequences of such a term with regard to his financial obligations. 4. Article 4 of Directive 93/13 must be interpreted as requiring that the plainness and intelligibility of the contractual terms be assessed by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract, notwithstanding that some of those terms have been declared or presumed to be unfair and, accordingly, annulled at a later time by the national legislature. 5. Article 6(1) and Article 7(1) of Directive 93/13 must be interpreted as meaning that it is for the national court to identify of its own motion, in the place of the consumer in his capacity as an applicant, any unfairness of a contractual term, provided that it has available to it the legal and factual elements necessary for that task. [Signatures]( *1 ) Language of the case: Hungarian. | 1a0cf-77d9454-48c4 | EN |
Advocate General Wahl proposes that the Court find that products from animals that have been the subject of ritual slaughter without prior stunning can be issued the European ‘organic farming’ label | 26 February 2019 ( *1 )(Reference for a preliminary ruling — Article 13 TFEU — Animal welfare — Regulation (EC) No 1099/2009 — Protection of animals at the time of killing — Particular methods of slaughter prescribed by religious rites — Regulation (EC) No 834/2007 — Articles 3 and 14(1)(b)(viii) — Compatibility with organic production — Regulation (EC) No 889/2008 — First paragraph of Article 57 — Organic production logo of the European Union)In Case C‑497/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour administrative d’appel de Versailles (Administrative Court of Appeal, Versailles, France), made by decision of 6 July 2017, received at the Court on 10 July 2017, in the proceedings Œuvre d’assistance aux bêtes d’abattoirs (OABA) v Ministre de l’Agriculture et de l’Alimentation, Bionoor SARL, Ecocert France SAS, Institut national de l’origine et de la qualité (INAO), THE COURT (Grand Chamber),composed of K. Lenaerts, President, R. Silva de Lapuerta, Vice-President, J.-C. Bonichot, A. Arabadjiev, F. Biltgen, K. Jürimäe and C. Lycourgos, Presidents of Chambers, J. Malenovský, E. Levits, L. Bay Larsen, D. Šváby (Rapporteur), C. Vajda and S. Rodin, Judges,Advocate General: N. Wahl,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 19 June 2018,after considering the observations submitted on behalf of:–Œuvre d’assistance aux bêtes d’abattoirs (OABA), by A. Monod, avocat,Bionoor SARL, by N. Gardères, avocat,Ecocert France SAS, by D. de Laforcade, avocat,the French Government, by D. Colas, S. Horrenberger and E. de Moustier, acting as Agents,the Greek Government, by G. Kanellopoulos and A. Vasilopoulou, acting as Agents,the Norwegian Government, by A. Dalheim Jacobsen, T. Bjerre Leming and D. Sørlie Lund, acting as Agents,the European Commission, by A. Bouquet, A. Lewis and B. Eggers, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 20 September 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 13 TFEU, Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91 (OJ 2007 L 189, p. 1), Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Regulation No 834/2007 (OJ 2008 L 250, p. 1), as amended by Regulation (EU) No 271/2010 of 24 March 2010 (OJ 2010 L 84, p. 19), (‘Regulation No 889/2008’) and Council Regulation (EC) No 1099/2009 of 24 September 2009 on the protection of animals at the time of killing (OJ 2009 L 303, p. 1).2The request has been made in proceedings between the association Œuvre d’assistance aux bêtes d’abattoirs (‘OABA’) and the ministre de l’Agriculture et de l’Alimentation (Minister for Agriculture and Food; ‘the Minister for Agriculture’), Bionoor SARL, Ecocert France SAS (‘Ecocert’) and the Institut national de l’origine et de la qualité (‘INAO’) in relation to an application from OABA for the prohibition of the advertising and marketing of beef products bearing the brand ‘Tendre France’, certified ‘halal’ and showing the indication ‘organic farming’ (‘the “organic farming” indication’). Legal context EU law Regulation No 834/2007 3Recitals 1 and 3 of Regulation No 834/2007 state:‘(1)Organic production is an overall system of farm management and food production that combines best environmental practices, a high level of biodiversity, the preservation of natural resources, the application of high animal welfare standards and a production method in line with the preference of certain consumers for products produced using natural substances and processes. The organic production method thus plays a dual societal role, where it on the one hand provides for a specific market responding to a consumer demand for organic products, and on the other hand delivers public goods contributing to the protection of the environment and animal welfare, as well as to rural development.…(3)The [EU] legal framework governing the sector of organic production should pursue the objective of ensuring fair competition and a proper functioning of the internal market in organic products, and of maintaining and justifying consumer confidence in products labelled as organic. It should further aim at providing conditions under which this sector can progress in line with production and market developments.’4Article 1 of that regulation, headed ‘Aim and scope’, provides:‘1. This Regulation provides the basis for the sustainable development of organic production while ensuring the effective functioning of the internal market, guaranteeing fair competition, ensuring consumer confidence and protecting consumer interests.It establishes common objectives and principles to underpin the rules set out under this Regulation concerning:(a)all stages of production, preparation and distribution of organic products and their control;(b)the use of indications referring to organic production in labelling and advertising.3. This Regulation shall apply to any operator involved in activities, at any stage of production, preparation and distribution, relating to the products set out in paragraph 2.4. This Regulation shall apply without prejudice to other [provisions of EU law] or national provisions, in conformity with [EU] law concerning products specified in this Article, such as provisions governing the production, preparation, marketing, labelling and control, including legislation on foodstuffs and animal nutrition.’5Article 2 of that regulation, headed ‘Definitions’, provides:‘For the purposes of this Regulation, the following definitions shall apply:“organic production” means the use of the production method compliant with the rules established in this Regulation, at all stages of production, preparation and distribution;“stages of production, preparation and distribution” means any stage from and including the primary production of an organic product up to and including its storage, processing, transport, sale or supply to the final consumer, and where relevant labelling, advertising, import, export and subcontracting activities;(i)“preparation” means the operations of preserving and/or processing of organic products, including slaughter and cutting for livestock products, and also packaging, labelling and/or alterations made to the labelling concerning the organic production method;…’6Article 3 of that regulation sets out the objectives of organic production in the following terms:‘Organic production shall pursue the following general objectives:establish a sustainable management system for agriculture that:(iv)respects high animal welfare standards and in particular meets animals’ species-specific behavioural needs;(c)aim at producing a wide variety of foods and other agricultural products that respond to consumers’ demand for goods produced by the use of processes that do not harm the environment, human health, plant health or animal health and welfare.’7Article 5 of Regulation No 834/2007, headed ‘Specific principles applicable to farming’, states, in point (h) thereof, that organic farming is to be based on the specific principle of ‘the observance of a high level of animal welfare respecting species-specific needs’.8Article 14 of that regulation, the subject of which is ‘livestock production rules’, provides, in paragraph 1:‘In addition to the general farm production rules laid down in Article 11, the following rules shall apply to livestock production:with regard to husbandry practices and housing conditions:(viii)any suffering, including mutilation, shall be kept to a minimum during the entire life of the animal, including at the time of slaughter;9Article 25 of that regulation, concerning ‘organic production logos’, states:‘1. The [organic production logo of the EU] may be used in the labelling, presentation and advertising of products which satisfy the requirements set out under this Regulation.The [organic production logo of the EU] shall not be used in the case of in-conversion products and food as referred to in Article 23(4)(b) and (c).2. National and private logos may be used in the labelling, presentation and advertising of products which satisfy the requirements set out under this Regulation.3. The Commission shall, in accordance with the procedure referred to in Article 37(2), lay down specific criteria as regards presentation, composition, size and design of the [organic production logo of the EU].’ Regulation No 889/2008 10Recital 10 of Regulation No 889/2008 states that one of the priorities of organic farming is to ‘serve a high level of animal welfare’.11Article 57 of that regulation, headed ‘Organic production logo of the European Union ’, provides that:‘In accordance with Article 25(3) of Regulation [No 834/2007], the organic production logo of the European Union (hereinafter “Organic logo of the EU”) shall follow the model set out in Part A of Annex XI to this Regulation.’The Organic logo of the EU shall only be used if the product concerned is produced in accordance with the requirements of Regulation [No 2092/91] and its implementing regulations or Regulation [No 834/2007] and the requirements of this Regulation.’ Regulation No 1099/2009 12Recitals 2, 4, 18, 20, 24 and 43 of Regulation No 1099/2009 state:‘(2)Killing animals may induce pain, distress, fear or other forms of suffering to the animals even under the best available technical conditions. Certain operations related to the killing may be stressful and any stunning technique presents certain drawbacks. Business operators or any person involved in the killing of animals should take the necessary measures to avoid pain and minimise the distress and suffering of animals during the slaughtering or killing process, taking into account the best practices in the field and the methods permitted under this Regulation. Therefore, pain, distress or suffering should be considered as avoidable when business operators or any person involved in the killing of animals breach one of the requirements of this Regulation or use permitted practices without reflecting the state of the art, thereby inducing by negligence or intention, pain, distress or suffering to the animals.(4)Animal welfare is an EU value that is enshrined in the Protocol (No 33) on protection and welfare of animals annexed to the [EC Treaty] … The protection of animals at the time of slaughter or killing is a matter of public concern that affects consumer attitudes towards agricultural products. In addition, improving the protection of animals at the time of slaughter contributes to higher meat quality and indirectly has a positive impact on occupational safety in slaughterhouses.(18)Derogation from stunning in case of religious slaughter taking place in slaughterhouses was granted by [Council Directive 93/119/EC of 22 December 1993 on the protection of animals at the time of slaughter or killing (OJ 1993 L 340, p. 21)]. Since [EU] provisions applicable to religious slaughter have been transposed differently depending on national contexts and considering that national rules take into account dimensions that go beyond the purpose of this Regulation, it is important that derogation from stunning animals prior to slaughter should be maintained, leaving, however, a certain level of subsidiarity to each Member State. As a consequence, this Regulation respects the freedom of religion and the right to manifest religion or belief in worship, teaching, practice and observance, as enshrined in Article 10 of the Charter of Fundamental Rights of the European Union.(20)Many killing methods are painful for animals. Stunning is therefore necessary to induce a lack of consciousness and sensibility before, or at the same time as, the animals are killed. Measuring the lack of consciousness and sensibility of an animal is complex and needs to be performed under scientifically approved methodology. Monitoring through indicators, however, should be carried out to evaluate the efficiency of the procedure under practical conditions.(24)Depending on how they are used during the slaughtering or killing process, some stunning methods can lead to death while avoiding pain and minimising distress or suffering for the animals. Other stunning methods may not lead to death and the animals may recover their consciousness or sensibility during subsequent painful procedures. Such methods should, therefore, be completed by other techniques that lead to certain death before the recovery of the animals. It is, therefore, essential to specify which stunning methods need to be completed by a killing method.(43)Slaughter without stunning requires an accurate cut of the throat with a sharp knife to minimise suffering. In addition, animals that are not mechanically restrained after the cut are likely to endure a slower bleeding process and, thereby, prolonged unnecessary suffering. Animals of bovine, ovine and caprine species are the most common species slaughtered under this procedure. Therefore, ruminants slaughtered without stunning should be individually and mechanically restrained.’13Article 2 of Regulation No 1099/2009, headed ‘Definitions’, states:(f)“stunning” means any intentionally induced process which causes loss of consciousness and sensibility without pain, including any process resulting in instantaneous death;(g)“religious rite” means a series of acts related to the slaughter of animals and prescribed by a religion;14Article 3 of that regulation, headed ‘General requirements for killing and related operations’, provides in paragraph 1:‘Animals shall be spared any avoidable pain, distress or suffering during their killing and related operations.’15Article 4 of that regulation, which concerns ‘stunning methods’, states:‘1. Animals shall only be killed after stunning in accordance with the methods and specific requirements related to the application of those methods set out in Annex I. The loss of consciousness and sensibility shall be maintained until the death of the animal.The methods referred to in Annex I which do not result in instantaneous death (hereinafter referred to as simple stunning) shall be followed as quickly as possible by a procedure ensuring death such as bleeding, pithing, electrocution or prolonged exposure to anoxia.4. In the case of animals subject to particular methods of slaughter prescribed by religious rites, the requirements of paragraph 1 shall not apply provided that the slaughter takes place in a slaughterhouse.’ French law 16Article L. 641-13 of the code rural et de la pêche maritime (Rural and Maritime Fishing Code), in the version applicable to the dispute in the main proceedings, provides:‘The “organic farming” indication can be used in respect of processed and unprocessed agricultural products satisfying the requirements under [EU] law for organic production and the labelling of organic products or, where appropriate, the conditions established in technical specifications approved by order of the ministry or ministries concerned at the request of [INAO].’ The dispute in the main proceedings and the question referred for a preliminary ruling 17On 24 September 2012, OABA sent to the Minister for Agriculture an application requesting that he take measures to end the advertising and marketing of minced beef patties under the ‘Tendre France’ brand, certified ‘halal’ and bearing the ‘organic farming’ indication, the latter being the subject of Article L. 641-13 of the Rural and Maritime Fishing Code and issued by Ecocert, a private-law certification body operating on behalf of and under the authority of INAO. On the same date, OABA requested that INAO prohibit the use of the ‘organic farming’ indication for beef and veal derived from animals slaughtered without first being stunned.18Those applications having been implicitly dismissed, OABA brought an action by application of 23 January 2013 before the Conseil d’État (Council of State, France) alleging misuse of powers.19By judgment of 20 October 2014, the Conseil d’État (Council of State) held, inter alia, first, with regard to OABA’s application for annulment of the implicit refusal by the Minister of Agriculture and INAO to prohibit the use of the ‘organic farming’ indication for products containing beef and veal derived from animals slaughtered without first being stunned, that EU law defined exhaustively the rules relating to the organic farming of cattle without reference to the adoption of implementing legislation by Member States and without such legislation being necessary in order for that law to be fully effective. Therefore, the French legislature is not competent to enact national provisions reiterating, clarifying or supplementing EU law. Consequently, the Conseil d’État (Council of State) rejected the form of order sought by OABA.20Second, the Conseil d’État (Council of State) found that OABA’s application for annulment of Ecocert’s implicit refusal to take measures to end the advertising and marketing of products under the ‘Tendre France’ brand, certified ‘halal’ and bearing the ‘organic farming’ indication, in accordance with Regulation No 834/2007, could not be referred to it as a court of first instance from which no appeal lies. Consequently, it remitted that aspect of the case to the tribunal administratif de Montreuil (Administrative Court, Montreuil, France).21By judgment of 21 January 2016, the tribunal administratif de Montreuil (Administrative Court, Montreuil) dismissed that application.22OABA brought an appeal against that judgment before the referring court, the cour administrative d’appel de Versailles (Administrative Court of Appeal, Versailles, France). In support of that appeal, it claims that the ‘organic farming’ indication must not be placed on products derived from animals that have been slaughtered without first being stunned, as that slaughtering method does not comply with the ‘high animal welfare standards’ established in Articles 3 and 5 of Regulation No 834/2007.23In addition, it submits that, although Article 4(4) of Regulation No 1099/2009 establishes a derogation from the principle of stunning prior to slaughter in the context of the ritual killing of livestock, that derogation is included only in pursuance of the objectives of health and equal respect for religious beliefs and traditions.24The certification issued by Ecocert to meat certified as ‘halal’ derived from animals slaughtered without first being stunned also constituted a breach of the principle of consumer confidence in organic products.25The Minister for Agriculture, Bionoor, Ecocert and INAO all claim that OABA’s application should be dismissed.26First, the Minister for Agriculture submits that neither Regulation No 834/2007 nor Regulation No 889/2008 explicitly preclude a derogation, in accordance with Article 4(4) of Regulation No 1099/2009, from the rule requiring animals first to be stunned in the particular context of ritual killing.27Second, Bionoor argues that there is no incompatibility, either at an EU law or national law level, between the certification ‘halal’ and the ‘organic farming’ indication, since a requirement that animals be slaughtered after first being stunned is tantamount to an additional condition which is not expressly provided for under positive law.28In addition, while EU law does establish the principle that animals are to be stunned before being slaughtered, it is possible to derogate therefrom in pursuance of the freedom to practise one’s religion.29Third, both Ecocert and INAO argue that it cannot be inferred from the objectives of Regulation No 834/2007, including the objective of ensuring ‘high animal welfare standards’, that the principle of organic production is incompatible with ritual killing intended to guarantee the freedom to practise one’s religion.30Further, the principle of consumer confidence was not infringed, since those using the ‘organic farming’ indication were fully entitled to do so.31The referring court notes that no provision in Regulations Nos 834/2007, 889/2008 or 1099/2009 expressly defines the method or methods for the slaughtering of animals that would fulfil the objectives of animal welfare and reduction of animal suffering associated with organic production.32Accordingly, the matter of how to answer the claim that the ‘organic farming’ indication is not to be used for meat derived from animals that have been ritually slaughtered without pre-stunning, which is decisive for the outcome of the dispute in the main proceedings, raises a serious difficulty in the interpretation of EU law.33In those circumstances, the cour administrative d’appel de Versailles (Administrative Court of Appeal, Versailles) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Must the applicable rules of [EU] law, deriving from, inter alia:Article 13 [TFEU],Regulation [No 834/2007], the detailed rules for the implementation of which are laid down by [Regulation No 889/2008], and[Regulation No 1099/2009]be interpreted as permitting or prohibiting approval of the use of the European “organic farming” label in relation to products derived from animals which have been slaughtered in accordance with religious rites without first being stunned, where such slaughter is conducted in accordance with the requirements laid down by Regulation [No 1099/2009]?’ Consideration of the question referred 34As a preliminary point, it should be noted that, when the referring court and the parties to the main proceedings make reference to the European ‘organic farming’ label and the ‘organic farming’ indication respectively, they in fact intend to refer to the Organic logo of the EU for the purposes of Article 25 of Regulation No 834/2007 and Article 57 of Regulation No 889/2008.35Accordingly, it is appropriate to consider that, by its question, the referring court asks, in essence, whether Regulation No 834/2007, in particular Article 3 and Article 14(1)(b)(viii) thereof, read in the light of Article 13 TFEU, must be interpreted as authorising the placing of the Organic logo of the EU on products derived from animals which have been slaughtered in accordance with religious rites without first being stunned, where such slaughter is conducted in accordance with the requirements laid down by Regulation No 1099/2009, in particular Article 4(4) thereof.36In that regard, it should be noted that recital 1 of Regulation No 834/2007 states that organic production, which is an overall system of farm management and food production, involves ‘the application of high animal welfare standards’, while recital 10 of Regulation No 889/2008 acknowledges that animal welfare is ‘a priority in organic livestock farming’. Article 3(a)(iv) and (c) of Regulation No 834/2007 also provides that organic production seeks, inter alia, to ‘establish a sustainable management system for agriculture that … respects high animal welfare standards’ and to ‘[produce] a wide variety of foods and other agricultural products that respond to consumers’ demand for goods produced by the use of processes that do not harm … animal … welfare’. Article 5(h) of that regulation again states that organic farming involves ‘the observance of a high level of animal welfare respecting species-specific needs’.37The obligation to keep animal suffering to a minimum, as established in Article 14(1)(b)(viii) of Regulation No 834/2007, helps to give concrete expression to the objective of ensuring the observance of a high level of animal welfare.38By declaring on several occasions its desire to observe a high level of animal welfare in organic farming, the EU legislature intended to highlight that this method of agricultural production is characterised by the observance of enhanced standards with regard to animal welfare in all locations and at all stages of production where it is possible further to improve that welfare.39In accordance, in particular, with Article 1(3) of Regulation No 834/2007, that regulation is to apply to any operator involved in activities, at any stage of production, preparation and distribution, relating to the agricultural products set out in paragraph 2 of that provision. Article 2(i) of that regulation states that ‘preparation’ includes, inter alia, the slaughter of animals.40In that regard, that regulation merely states in Article 14(1)(b)(viii) that ‘any suffering, including mutilation, shall be kept to a minimum during the entire life of the animal, including at the time of slaughter’.41It is true that no provision of Regulation No 834/2007 or Regulation No 889/2008 expressly defines the method or methods for the slaughtering of animals that are most appropriate to minimise animal suffering and, consequently, to give concrete expression to the objective of ensuring a high level of animal welfare.42However, Regulation No 834/2007 cannot be read without reference to Regulation No 1099/2009.43First, Regulation No 1099/2009 governs animal slaughter specifically.44Second, the protection of animal welfare is the main objective pursued by Regulation No 1099/2009, as is clear from the title of the regulation and from recital 2 thereof, and such protection is as required by Article 13 TFEU, pursuant to which, in formulating and implementing the European Union’s policies, the European Union and the Member States are to pay full regard to the welfare requirements of animals (see, to that effect, judgment of 29 May 2018, Liga van Moskeeën en Islamitische Organisaties Provincie Antwerpen and Others, C‑426/16, EU:C:2018:335, paragraphs 63 and 64).45In that regard, Regulation No 1099/2009 contributes to ‘improving the protection of animals at the time of slaughter’ and encourages ‘stunning methods [that] can lead to death while avoiding pain and minimising distress or suffering for the animals’, as is set out in recitals 4 and 24 respectively.46In addition, under Article 3 of Regulation No 1099/2009, ‘animals shall be spared any avoidable pain, distress or suffering during their killing’. That general requirement applicable to the killing of animals is given particular concrete expression in Article 4(1) of that regulation, which provides, first, that ‘animals shall only be killed after stunning’ and, second, that ‘the loss of consciousness and sensibility shall be maintained until the death of the animal’.47Thus, Article 4(1) of Regulation No 1099/2009, read in conjunction with recital 20 of that regulation, lays down the principle that an animal should be stunned prior to its death and goes so far as to establish this as an obligation. As the Advocate General stated, in essence, in point 43 of his Opinion, scientific studies have shown that pre-stunning is the technique that compromises animal welfare the least at the time of killing.48While it is true that Article 4(4) of Regulation No 1099/2009, read in the light of recital 18 thereof, permits the practice of ritual slaughter as part of which an animal may be killed without first being stunned, that form of slaughter, which is authorised only by way of derogation in the European Union and solely in order to ensure observance of the freedom of religion (see, to that effect, judgment of 29 May 2018, Liga van Moskeeën en Islamitische Organisaties Provincie Antwerpen and Others, C‑426/16, EU:C:2018:335, paragraphs 55 to 57), is insufficient to remove all of the animal’s pain, distress and suffering as effectively as slaughter with pre-stunning, which, in accordance with Article 2(f) of that regulation, read in the light of recital 20 thereof, is necessary to cause the animal to lose consciousness and sensibility in order significantly to reduce its suffering.49In that regard, it should be noted that, while recital 43 of Regulation No 1099/2009 states that slaughter without pre-stunning requires an accurate cut of the throat with a sharp knife to ‘minimise’ the animal’s suffering, the use of that technique does not allow the animal’s suffering to be kept to ‘a minimum’ within the meaning of Article 14(1)(b)(viii) of Regulation No 834/2007.50Therefore, contrary to what is claimed by both the French Government and the defendants in the main proceedings in their written observations, the particular methods of slaughter prescribed by religious rites that are carried out without pre-stunning and that are permitted by Article 4(4) of Regulation No 1099/2009 are not tantamount, in terms of ensuring a high level of animal welfare at the time of killing, to slaughter with pre-stunning which is, in principle, required by Article 4(1) of that regulation.51It should also be noted that recital 3 of Regulation No 834/2007 lays down the objective of ‘maintaining and justifying consumer confidence in products labelled as organic’. In that regard, it is important to ensure that consumers are reassured that products bearing the Organic logo of the EU have actually been obtained in observance of the highest standards, in particular in the area of animal welfare.52Having regard to the findings above, the answer to the question referred is that Regulation No 834/2007, in particular Article 3 and Article 14(1)(b)(viii) thereof, read in the light of Article 13 TFEU, must be interpreted as not authorising the placing of the Organic logo of the EU on products derived from animals which have been slaughtered in accordance with religious rites without first being stunned, where such slaughter is conducted in accordance with the requirements laid down by Regulation No 1099/2009, in particular Article 4(4) thereof. Costs 53Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: Council Regulation (EC) No 834/2007 of 28 June 2007 on organic production and labelling of organic products and repealing Regulation (EEC) No 2092/91, in particular Article 3 and Article 14(1)(b)(viii) thereof, read in the light of Article 13 TFEU, must be interpreted as not authorising the placing of the organic production logo of the European Union, referred to in the first paragraph of Article 57 of Commission Regulation (EC) No 889/2008 of 5 September 2008 laying down detailed rules for the implementation of Regulation No 834/2007, as amended by Regulation (EU) No 271/2010 of 24 March 2010, on products derived from animals which have been slaughtered in accordance with religious rites without first being stunned, where such slaughter is conducted in accordance with the requirements laid down by Council Regulation (EC) No 1099/2009 of 24 September 2009 on the protection of animals at the time of killing, in particular Article 4(4) thereof. [Signatures]( *1 ) Language of the case: French. | 5dc26-de1de75-4631 | EN |
The notification, by the United Kingdom, of its intention to withdraw from the EU does not have the consequence that execution of a European arrest warrant issued by that Member State must be refused or postponed | 19 September 2018 ( *1 )(Reference for a preliminary ruling — Urgent preliminary ruling procedure — Police and judicial cooperation in criminal matters — European arrest warrant — Framework Decision 2002/584/JHA — Grounds for non-execution — Article 50 TEU — Warrant issued by the judicial authorities of a Member State that has initiated the procedure for withdrawal from the European Union — Uncertainty as to the law applicable to the relationship between that State and the Union following withdrawal)In Case C‑327/18 PPU,REQUEST for a preliminary ruling under Article 267 TFEU from the High Court (Ireland), made by decision of 17 May 2018, received at the Court on 18 May 2018, in proceedings relating to the execution of European arrest warrants issued with respect to RO, THE COURT (First Chamber),composed of R. Silva de Lapuerta, President of the Chamber, C.G. Fernlund (Rapporteur), A. Arabadjiev, S. Rodin and E. Regan, Judges,Advocate General: M. Szpunar,Registrar: L. Hewlett, Principal Administrator,having regard to the referring court’s request of 17 May 2018, received at the Court on 18 May 2018, that the reference for a preliminary ruling be dealt with under the urgent procedure, pursuant to Article 107 of the Rules of Procedure of the Court,having regard to the decision of the First Chamber of 11 June 2018 granting that request,having regard to the written procedure and further to the hearing on 12 July 2018,after considering the observations submitted on behalf of:–RO, by E. Martin-Vignerte and J. MacGuill, Solicitors, C. Cumming, Barrister-at-law, and P. McGrath, Senior Counsel,the Minister for Justice and Equality, by M. Browne, G. Hodge, A. Joyce and G. Lynch, acting as Agents, and by E. Duffy, Barrister-at-law, and R. Barron, Senior Counsel,the Romanian Government, by L. Liţu and C. Canţăr, acting as Agents,the United Kingdom Government, by S. Brandon and C. Brodie, acting as Agents, and by J. Holmes QC and D. Blundell, Barrister,the European Commission, by S. Grünheid, R. Troosters and M. Wilderspin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 7 August 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 50 TEU and of Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States (OJ 2002 L 190, p. 1), as amended by Council Framework Decision 2009/299/JHA of 26 February 2009 (OJ 2009 L 81, p. 24) (‘the Framework Decision’).2The request has been made in connection with the execution, in Ireland, of two European arrest warrants issued by the courts of the United Kingdom of Great Britain and Northern Ireland with respect to RO. Legal context The EU Treaty 3Article 50(1) to (3) TEU provide:‘1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union is to negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) [TFEU]. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.’ The Framework Decision 4Recitals 10 and 12 of the Framework Decision are worded as follows:‘(10)The mechanism of the European arrest warrant is based on a high level of confidence between Member States. Its implementation may be suspended only in the event of a serious and persistent breach by one of the Member States of the principles set out in [Article 2 TEU], determined by the Council pursuant to [Article 7(2) TEU] with the consequences set out in [Article 7(3) TEU]....(12)This Framework Decision respects fundamental rights and observes the principles recognised by [Articles 2 and 6 TEU] and reflected in the Charter of Fundamental Rights of the European Union ... in particular Chapter VI thereof. Nothing in this Framework Decision may be interpreted as prohibiting refusal to surrender a person for whom a European arrest warrant has been issued when there are reasons to believe, on the basis of objective elements, that the said arrest warrant has been issued for the purpose of prosecuting or punishing a person on the grounds of his or her sex, race, religion, ethnic origin, nationality, language, political opinions or sexual orientation, or that that person's position may be prejudiced for any of these reasons.’5Article 1(2) and (3) of the Framework Decision, that article being headed ‘Definition of the European arrest warrant and obligation to execute it’, provide:‘2. Member States shall execute any European arrest warrant on the basis of the principle of mutual recognition and in accordance with the provisions of this Framework Decision.3. This Framework Decision shall not have the effect of amending the obligation to respect fundamental rights and fundamental legal principles as enshrined in Article 6 [TEU].’6Article 26(1) of the Framework Decision, that article being headed ‘Deduction of the period of detention served in the executing Member State’, provides:‘The issuing Member State shall deduct all periods of detention arising from the execution of a European arrest warrant from the total period of detention to be served in the issuing Member State as a result of a custodial sentence or detention order being passed.’7Article 27(2) of the Framework Decision, that article being headed ‘Possible prosecution for other offences’, provides:‘... a person surrendered may not be prosecuted, sentenced or otherwise deprived of his or her liberty for an offence committed prior to his or her surrender other than that for which he or she was surrendered.’8Article 28 of the Framework Decision governs surrender or subsequent extradition to a State other than the executing Member State. Irish law 9The Framework Decision was transposed into Irish law by the European Arrest Warrant Act, 2003. The dispute in the main proceedings and the questions referred for a preliminary ruling 10RO is the subject of two European arrest warrants issued by the courts of the United Kingdom and sent to Ireland.11The first, issued on 27 January 2016, relates to crimes of murder and arson alleged to have been committed on 2 August 2015. The second, issued on 4 May 2016, relates to a crime of rape alleged to have been committed on 30 December 2003. Those crimes each carry potential sentences of life imprisonment.12RO was arrested and remanded in custody in Ireland on 3 February 2016. Since that date he has remained on remand in custody within that Member State, by virtue of the two European arrest warrants to which he is subject.13RO raised objections to his surrender to the United Kingdom on the basis of, inter alia, the withdrawal of that Member State from the European Union and Article 3 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), claiming that he could suffer inhuman and degrading treatment if he were to be imprisoned in Maghaberry prison in Northern Ireland.14Due to his state of health, RO’s case could not be heard until 27 July 2017.15By a decision of 2 November 2017, the High Court (Ireland), after examining RO’s claims in relation to the treatment that he might suffer in Northern Ireland, held that, on the basis of specific and updated information on the conditions of detention in Maghaberry prison, there was a real risk that, because of his vulnerability, RO might suffer inhuman and degrading treatment. The High Court considered it necessary, in the light of the judgment of 5 April 2016, Aranyosi and Căldăraru (C‑404/15 and C‑659/15 PPU, EU:C:2016:198), to ask for further information from the United Kingdom authorities on the conditions of RO’s detention in the event of his being surrendered.16On 16 April 2018 the judicial authority that had issued the European arrest warrants concerned, Laganside Court in Belfast (United Kingdom), provided information as to how the Northern Irish Prison Service would address the risks to RO of being subjected to inhuman or degrading treatment in Northern Ireland.17The High Court states that it has rejected all the objections raised by RO to his surrender with the exception of those relating to the withdrawal of the United Kingdom from the European Union and the objection in relation to Article 3 of the ECHR, considering that it could not make a decision on those objections before obtaining from the Court an answer to a number of questions referred for a preliminary ruling.18The High Court states that on 29 March 2017 the United Kingdom notified the President of the European Council of its intention to withdraw from the European Union, on the basis of Article 50 TEU, and that that notification should lead to the withdrawal of the United Kingdom from the European Union as from 29 March 2019.19The High Court states that if RO is surrendered, it is highly probable that he will remain in prison in the United Kingdom after 29 March 2019.20The High Court also observes that agreements may perhaps be entered into by the European Union and the United Kingdom to regulate the relationship of those parties immediately after that withdrawal or in the longer term, in areas such as those covered by the Framework Decision.21Nonetheless, currently, that possibility remains uncertain and the nature of the measures which will be adopted, particularly with respect to the jurisdiction of the Court to give preliminary rulings, is not known.22The High Court states that, in the view of the Minister for Justice and Equality (Ireland), the law should be applied as it stands today and not as it might become in the future after the withdrawal of the United Kingdom from the European Union. The referring court considers that the Minister is correct to conclude that the surrender of RO is mandatory on the basis of national law that gives effect to the Framework Decision.23The High Court sets out the contrary position of RO, who argues that, given the uncertainty as to the law which will be in place in United Kingdom after the withdrawal of that Member State from the European Union, it cannot be guaranteed that the rights which he enjoys under EU law will, in practice, be capable of enforcement as such, so that he ought not to be surrendered.24The referring court states that RO has identified four aspects of EU law which might theoretically be engaged, namely:the right to a deduction of a period spent in custody in the executing Member State, provided for in Article 26 of the Framework Decision;the so-called ‘specialty’ rule, the subject of Article 27 of the Framework Decision;the right limiting further surrender or extradition, the subject of Article 28 of the Framework Decision, andrespect for the fundamental rights of the person surrendered under the Charter of Fundamental Rights of the European Union (‘the Charter’).25In the view of the referring court, the question arises whether, in the event of a dispute concerning one of those four aspects and in the absence of measures conferring on the Court jurisdiction to give preliminary rulings with respect to them, the surrender of an individual, such as RO, gives rise to a significant risk, rather than a merely theoretical possibility, of injustice, with the consequence that the request for surrender ought not to be accepted.26In those circumstances, the High Court decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Having regard to:(a) the giving by the United Kingdom of notice under Article 50 [TEU];(b) the uncertainty as to the arrangements which will be put in place between the European Union and the United Kingdom to govern relations after the departure of the United Kingdom; and(c) the consequential uncertainty as to the extent to which [RO] would, in practice, be able to enjoy rights under the Treaties, the Charter or relevant legislation, should he be surrendered to the United Kingdom and remain incarcerated after the departure of the United Kingdom,Is a requested Member State required by European Union Law to decline to surrender to the United Kingdom a person the subject of a European arrest warrant, whose surrender would otherwise be required under the national law of the Member State,(i)in all cases?(ii)in some cases, having regard to the particular circumstances of the case?(iii)in no cases?(2)If the answer to Question 1 is that set out at (ii) what are the criteria or considerations which a court in the requested Member State must assess to determine whether surrender is prohibited?(3)In the context of Question 2 is the court of the requested Member State required to postpone the final decision on the execution of the European arrest warrant to await greater clarity about the relevant legal regime which is to be put in place after the withdrawal of the relevant requesting Member State from the Union(4)If the answer to Question 3 is that set out at (ii) what are the criteria or considerations which a court in the requested Member State must assess to determine whether it is required to postpone the final decision on the execution of the European arrest warrant?’ The urgent procedure 27The referring court requested that this reference for a preliminary ruling be dealt with under the urgent preliminary ruling procedure provided for in Article 107 of the Rules of Procedure of the Court.28In support of its request, that court has stated that the person concerned is currently remanded in custody in Ireland solely on the basis of the European arrest warrants issued by the United Kingdom for the purposes of conducting criminal prosecutions and that his surrender to that Member State is dependent on the Court’s answer. The referring court has stated that the ordinary procedure would significantly extend the duration of that person’s detention, while he is presumed to be innocent.29In that regard, it should be stated, in the first place, that the present reference for a preliminary ruling concerns the interpretation of the Framework Decision, which falls within the fields covered by Title V of Part Three of the FEU Treaty, relating to the area of freedom, security and justice. Consequently, this reference can be dealt with under the urgent preliminary ruling procedure.30In the second place, as regards the criterion relating to urgency, it is necessary, in accordance with the Court’s settled case-law, to take into account the fact that the person concerned is currently deprived of his liberty and that the question as to whether he may continue to be held in custody depends on the outcome of the dispute in the main proceedings. In addition, the situation of the person concerned must be assessed as it stands at the time when consideration is given to the request that the reference be dealt with under the urgent procedure (judgment of 10 August 2017, Zdziaszek, C‑271/17 PPU, EU:C:2017:629, paragraph 72 and the case-law cited).31In this case, it is undisputed, first, that at that time, RO was remanded in custody in Ireland and, second, that whether he continues to be so remanded is dependent on the decision that will be taken on his surrender to the United Kingdom, a decision that has been stayed pending the Court’s answer in the present case.32In those circumstances, on 11 June 2018, the First Chamber of the Court, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decided to grant the referring court’s request that the present reference be dealt with under the urgent preliminary ruling procedure. Consideration of the questions referred 33By its questions, which can be examined together, the referring court seeks, in essence, to ascertain whether Article 50 TEU must be interpreted as meaning that a consequence of the notification by a Member State of its intention to withdraw from the European Union in accordance with that article is that, in the event that that Member State issues a European arrest warrant with respect to an individual, the executing Member State must refuse to execute that European arrest warrant or postpone its execution pending clarification as to the law that will apply in the issuing Member State after its withdrawal from the European Union.34In that regard, it must be borne in mind that, as follows from Article 2 TEU, EU law is based on the fundamental premiss that each Member State shares with all the other Member States, and recognises that they share with it, a set of common values on which the European Union is founded. That premiss implies and justifies the existence of mutual trust between the Member States that those values will be recognised, and therefore, that EU law implementing them will be respected (judgments of 6 March 2018, Achmea, C‑284/16, EU:C:2018:158, paragraph 34, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 35).35The principle of mutual trust between the Member States requires, particularly as regards the area of freedom, security and justice, each of those States, save in exceptional circumstances, to consider all the other Member States to be complying with EU law and particularly with the fundamental rights recognised by EU law (see, to that effect, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 36).36The purpose of the Framework Decision, as is apparent, in particular, from Article 1(1) and (2) and recitals 5 and 7 thereof, is to replace the multilateral system of extradition based on the European Convention on Extradition of 13 December 1957 with a system of surrender between judicial authorities of convicted or suspected persons for the purpose of enforcing judgments or of conducting prosecutions, the system of surrender being based on the principle of mutual recognition. The Framework Decision thus seeks, by the establishment of that simplified and more effective system, to facilitate and accelerate judicial cooperation with a view to contributing to the attainment of the objective set for the European Union of becoming an area of freedom, security and justice, and has as its basis the high level of trust which must exist between the Member States (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraphs 39 and 40).37The principle of mutual recognition is applied in Article 1(2) of the Framework Decision, which lays down the rule that Member States are required to execute any European arrest warrant on the basis of the principle of mutual recognition and in accordance with the provisions of the Framework Decision. Executing judicial authorities may therefore, in principle, refuse to execute such a warrant only on the grounds for non-execution exhaustively listed in the Framework Decision. Accordingly, while execution of the European arrest warrant constitutes the rule, refusal to execute is intended to be an exception which must be interpreted strictly (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, paragraph 41).38Accordingly, the Framework Decision explicitly states the grounds for mandatory non-execution of a European arrest warrant (Article 3), the grounds for optional non-execution (Articles 4 and 4a), and the guarantees to be given by the issuing Member State in particular cases (Article 5) (judgments of 10 August 2017, Tupikas, C‑270/17 PPU, EU:C:2017:628, paragraph 51, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 42).39Nonetheless, the Court has recognised that limitations may be placed on the principles of mutual recognition and mutual trust between Member States ‘in exceptional circumstances’ (judgments of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 82, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 43).40The Court has thus acknowledged that, subject to certain conditions, the executing judicial authority has the power to bring the surrender procedure established by the Framework Decision to an end where that surrender may result in the requested person being subject to inhuman or degrading treatment within the meaning of Article 4 of the Charter (judgments of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 104, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 44).41For that purpose, the Court has relied, first, on Article 1(3) of the Framework Decision, which provides that that decision is not to have the effect of modifying the obligation to respect fundamental rights and fundamental legal principles as enshrined in Articles 2 and 6 TEU and, second, on the absolute nature of the fundamental right guaranteed by Article 4 of the Charter (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 45).42In order to assess whether there is a real risk that a person who is the subject of a European arrest warrant may suffer inhuman or degrading treatment, the executing judicial authority must, in particular, as the referring court has done in the main proceedings, pursuant to Article 15(2) of the Framework Decision, request from the issuing judicial authority any supplementary information that it considers necessary for assessing whether there is such a risk (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 76).43However, RO argues that, because of the notification by the United Kingdom of its intention to withdraw from the European Union pursuant to Article 50 TEU, he is exposed to the risk that a number of the rights he enjoys under the Charter and the Framework Decision may no longer be respected after the withdrawal of the United Kingdom from the European Union. According to RO, the principle of mutual trust, which is at the basis of mutual recognition, has been irreparably eroded by that notification, and consequently the surrender provided for by the Framework Decision ought not to be executed.44In that regard, the question arises whether mere notification by a Member State of its intention to withdraw from the European Union in accordance with Article 50 TEU is such as to justify, under EU law, a refusal to execute a European arrest warrant issued by that Member State on the ground that the person surrendered would not be able, after that withdrawal, to rely in the issuing Member State on the rights that he derives from the Framework Decision and to have the conformity with EU law of implementation of those rights by that Member State reviewed by the Court.45In that context, it must be observed that such a notification does not have the effect of suspending the application of EU law in the Member State that has given notice of its intention to withdraw from the European Union and, consequently, EU law, which encompasses the provisions of the Framework Decision and the principles of mutual trust and mutual recognition inherent in that decision, continues in full force and effect in that State until the time of its actual withdrawal from the European Union.46As is apparent from Article 50(2) and (3) TEU, that article lays down a procedure for withdrawal that consists of, first, notification to the European Council of the intention to withdraw, second, negotiation and conclusion of an agreement setting out the arrangements for withdrawal, taking into account the future relationship between the State concerned and the European Union and, third, the actual withdrawal from the Union on the date of entry into force of that agreement or failing that, two years after the notification given to the European Council, unless the latter, in agreement with the Member State concerned, unanimously decides to extend that period.47Such a refusal to execute a European arrest warrant would, as the Advocate General stated in point 55 of his Opinion, be the equivalent of unilateral suspension of the provisions of the Framework Decision and would, moreover, run counter to the wording of recital 10 of that decision, which states that it is for the European Council to determine a breach in the issuing Member State of the principles set out in Article 2 TEU, with a view to application of the European arrest warrant mechanism being suspended in respect of that Member State (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 71).48Consequently, mere notification by a Member State of its intention to withdraw from the European Union in accordance with Article 50 TEU cannot be regarded, as such, as constituting an exceptional circumstance, within the meaning of the case-law cited in paragraphs 39 and 40 of the present judgment, capable of justifying a refusal to execute a European arrest warrant issued by that Member State.49However, it remains the task of the executing judicial authority to examine, after carrying out a specific and precise assessment of the particular case, whether there are substantial grounds for believing that, after withdrawal from the European Union of the issuing Member State, the person who is the subject of that arrest warrant is at risk of being deprived of his fundamental rights and the rights derived, in essence, from Articles 26 to 28 of the Framework Decision, as relied on by RO and referred to in paragraph 24 of the present judgment (see, by analogy, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 73).50As regards the fundamental rights enshrined in Article 4 of the Charter, which correspond to those stated in Article 3 of the ECHR (judgment of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 86), in a situation where the referring court were to consider, as appears to be the case, given the wording of the questions referred for a preliminary ruling and the documents sent to the Court, that the information received enables it to discount the existence of a real risk that RO will suffer, in the issuing Member State, inhuman or degrading treatment, within the meaning of Article 4 of the Charter, it would not be appropriate, as a general rule, to refuse to surrender him on that basis, without prejudice to RO’s opportunity, after surrender, to have recourse, within the legal system of the issuing Member State, to legal remedies that may enable him to challenge, where appropriate, the lawfulness of the conditions of his detention in a prison of that Member State (see, to that effect, judgment of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 103).51However, the Court must also examine whether the referring court might contest that finding on the ground that the rights enjoyed by an individual following his surrender pursuant to the Framework Decision would no longer be safeguarded after the withdrawal from the European Union of the issuing Member State.52In that regard, it must be observed that, in this case, the issuing Member State, namely the United Kingdom, is party to the ECHR and, as stated by that Member State at the hearing before the Court, it has incorporated the provisions of Article 3 of the ECHR into its national law. Since its continuing participation in that convention is in no way linked to its being a member of the European Union, the decision of that Member State to withdraw from the Union has no effect on its obligation to have due regard to Article 3 of the ECHR, to which Article 4 of the Charter corresponds, and, consequently, cannot justify the refusal to execute a European arrest warrant on the ground that the person surrendered would run the risk of suffering inhuman or degrading treatment within the meaning of those provisions.53As regards the other rights relied on by RO, and, first, the rule of specialty which is the subject of Article 27 of the Framework Decision, it must be recalled that that rule is linked to the sovereignty of the executing Member State and confers on the person requested the right not to be prosecuted, sentenced or otherwise deprived of his or her liberty for an offence other than that for which he or she was surrendered (judgment of 1 December 2008, Leymann and Pustovarov, C‑388/08 PPU, EU:C:2008:669, paragraph 44).54As is apparent from that judgment, it is necessary that an individual should be able to challenge an alleged infringement of that rule before the courts or tribunals of the issuing Member State after his or her surrender.55It must, however, be observed that the order for reference and the observations submitted by RO to the Court do not mention any ongoing legal proceedings concerning that rule and further that they do not present any concrete evidence to suggest that legal proceedings on that subject are contemplated.56The same is true of the right that is the subject of Article 28 of the Framework Decision relating to the limits on subsequent surrender or extradition to a State other than the executing Member State, no evidence on that subject having been produced in the order for reference.57In addition, it must be emphasised that Articles 27 and 28 of the Framework Decision respectively reflect Articles 14 and 15 of the European Convention on Extradition of 13 December 1957. As was stated at the hearing before the Court, the United Kingdom has ratified that convention and has transposed the latter articles into its national law. It follows that the rights relied on by RO in those areas are, in essence, covered by the national legislation of the issuing Member State, irrespective of the withdrawal of that Member State from the European Union.58As regards the deduction by the issuing Member State of any period of custody served in the executing Member State, in accordance with Article 26 of the Framework Decision, the United Kingdom has stated that it has also incorporated that obligation into its national law and that it applies that obligation, irrespective of EU law, to any person who is extradited into the United Kingdom.59Since the rights resulting from Articles 26 to 28 of the Framework Decision and the fundamental rights laid down in Article 4 of the Charter are protected by provisions of national law in cases not only of surrender, but also of extradition, those rights are not dependent on the application of the Framework Decision in the issuing Member State. It therefore appears, though subject to verification by the referring court, that there is no concrete evidence to suggest that RO will be deprived of the opportunity to assert those rights before the courts and tribunals of that Member State after its withdrawal from the European Union.60The fact that it will undoubtedly not be possible, in the absence of a relevant agreement between the Union and the United Kingdom, for those rights to be the subject of a reference to the Court for a preliminary ruling, after the withdrawal of that Member State from the European Union, cannot alter that analysis. First, as follows from the preceding paragraph, the person surrendered should be able to rely on all those rights before a court or tribunal of that Member State. Second, it must be recalled that recourse to the mechanism of a preliminary ruling procedure before the Court has not always been available to the courts and tribunals responsible for the application of the European arrest warrant. In particular, as the Advocate General stated in point 76 of his Opinion, only on 1 December 2014, that is, five years after the entry into force of the Treaty of Lisbon, did the Court obtain full jurisdiction to interpret the Framework Decision, which was to be implemented in the Member States as from 1 January 2004.61Consequently, as the Advocate General stated in point 70 of his Opinion, in a case such as that in the main proceedings, in order to decide whether a European arrest warrant should be executed, it is essential that, when that decision is to be taken, the executing judicial authority is able to presume that, with respect to the person who is to be surrendered, the issuing Member State will apply the substantive content of the rights derived from the Framework Decision that are applicable in the period subsequent to the surrender, after the withdrawal of that Member State from the European Union. Such a presumption can be made if the national law of the issuing Member State incorporates the substantive content of those rights, particularly because of the continuing participation of that Member State in international conventions, such as the European Convention on Extradition of13 December 1957 and the ECHR, even after the withdrawal of that Member State from the European Union. Only if there is concrete evidence to the contrary can the judicial authorities of a Member State refuse to execute the European arrest warrant.62The answer to the questions referred is, therefore, that Article 50 TEU must be interpreted as meaning that mere notification by a Member State of its intention to withdraw from the European Union in accordance with that article does not have the consequence that, in the event that that Member State issues a European arrest warrant with respect to an individual, the executing Member State must refuse to execute that European arrest warrant or postpone its execution pending clarification of the law that will be applicable in the issuing Member State after its withdrawal from the European Union. In the absence of substantial grounds to believe that the person who is the subject of that European arrest warrant is at risk of being deprived of rights recognised by the Charter and the Framework Decision following the withdrawal from the European Union of the issuing Member State, the executing Member State cannot refuse to execute that European arrest warrant while the issuing Member State remains a member of the European Union. Costs 63Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (First Chamber) hereby rules: Article 50 TEU must be interpreted as meaning that mere notification by a Member State of its intention to withdraw from the European Union in accordance with that article does not have the consequence that, in the event that that Member State issues a European arrest warrant with respect to an individual, the executing Member State must refuse to execute that European arrest warrant or postpone its execution pending clarification of the law that will be applicable in the issuing Member State after its withdrawal from the European Union. In the absence of substantial grounds to believe that the person who is the subject of that European arrest warrant is at risk of being deprived of rights recognised by the Charter of Fundamental Rights of the European Union and Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States, as amended by Council Framework Decision 2009/299/JHA of 26 February 2009, following the withdrawal from the European Union of the issuing Member State, the executing Member State cannot refuse to execute that European arrest warrant while the issuing Member State remains a member of the European Union. Silva de LapuertaFernlundArabadjievRodinReganDelivered in open court in Luxembourg on 19 September 2018.A. Calot EscobarRegistrarR. Silva de LapuertaPresident of the First Chamber( *1 ) Language of the case: English. | aec2c-dc06fc1-47ca | EN |
Pregnant workers, workers who have recently given birth or are breastfeeding who work shifts, some of which are at night, must be regarded as performing night work and enjoy specific protection against the risks that night work is liable to pose | 19 September 2018 ( *1 )(Reference for a preliminary ruling — Directive 92/85/EEC — Articles 4, 5 and 7 — Protection of the safety and health of workers — Worker who is breastfeeding — Night work — Shift work performed in part at night — Risk assessment of her work — Prevention measures — Challenge by the worker concerned — Directive 2006/54/EC — Article 19 — Equal treatment — Discrimination on grounds of sex — Burden of proof)In Case C‑41/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Tribunal Superior de Justicia de Galicia (High Court of Justice of Galicia, Spain), made by decision of 30 December 2016, received at the Court on 25 January 2017, in the proceedings Isabel González Castro v Mutua Umivale, ProsegurEspaña SL, Instituto Nacional de la Seguridad Social (INSS), THE COURT (Fifth Chamber),composed of J.L. da Cruz Vilaça, President of the Chamber, E. Levits, A. Borg Barthet, M. Berger and F. Biltgen (Rapporteur), Judges,Advocate General: E. Sharpston,Registrar: L. Carrasco Marco, Administrator,having regard to the written procedure and further to the hearing on 22 February 2018,after considering the observations submitted on behalf of:–the Instituto Nacional de la Seguridad Social (INSS), by P. García Perea and A. Lozano Mostazo, acting as Agents,the Spanish Government, by S. Jiménez García, acting as Agent,the German Government, by T. Henze and D. Klebs, acting as Agents,the European Commission, by S. Pardo Quintillán and A. Szmytkowska, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 26 April 2018,gives the following Judgment 1This reference for a preliminary ruling concerns the interpretation of Article 19 of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) (OJ 2006 L 204, p. 23) and Articles 4, 5 and 7 of Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding (OJ 1992 L 348, p. 1).2The request has been made in the context of proceedings between Isabel González Castro and Mutua Umivale (‘mutual insurer Umivale’), her employer, Prosegur España SL (‘Prosegur’) and the Instituto Nacional de la Seguridad Social (INSS) (National Social Security Institute, Spain) (‘INSS’) concerning their refusal to suspend her employment contract and pay her an allowance for risk during breastfeeding. Legal context European Union law Directive 92/85 3The 1st, 8th to 11th and 14th recital of Directive 92/85 state:‘Whereas Article 118a of the [EEC] Treaty provides that the Council shall adopt, by means of directives, minimum requirements for encouraging improvements, especially in the working environment, to protect the safety and health of workers;…Whereas pregnant workers, workers who have recently given birth or who are breastfeeding must be considered a specific risk group in many respects and measures must be taken with regard to their safety and health;Whereas the protection of the safety and health of pregnant workers, workers who have recently given birth or workers who are breastfeeding should not treat women on the labour market unfavourably nor work to the detriment of directives concerning equal treatment for men and women;Whereas some types of activities may pose a specific risk, for pregnant workers, workers who have recently given birth or workers who are breastfeeding, of exposure to dangerous agents, processes or working conditions; whereas such risks must therefore be assessed and the result of such assessment communicated to female workers and/or their representatives;Whereas, further, should the result of this assessment reveal the existence of a risk to the safety or health of the female worker, provision must be made for such worker to be protected;Whereas the vulnerability of pregnant workers, workers who have recently given birth or who are breastfeeding makes it necessary for them to be granted the right to maternity leave of at least 14 continuous weeks, allocated before and/or after confinement, and renders necessary the compulsory nature of maternity leave of at least 2 weeks, allocated before and/or after confinement;…’4Article 1(1) of Directive 92/85 states:‘The purpose of this Directive, which is the tenth individual Directive within the meaning of Article 16(1) of [Council] Directive 89/391/EEC [of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work (OJ 1989 L 183, p. 1)], is to implement measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or who are breastfeeding.’5Article 2 of that directive, headed ‘Definitions’, provides:‘For the purposes of this Directive:(c) worker who is breastfeeding shall mean a worker who is breastfeeding within the meaning of national legislation and/or national practice and who informs her employer of her condition, in accordance with that legislation and/or practice.’6Article 3 of the Directive provides:‘1. In consultation with the Member States and assisted by the Advisory Committee on Safety, Hygiene and Health Protection at Work, the Commission shall draw up guidelines on the assessment of the chemical, physical and biological agents and industrial processes considered hazardous for the safety or health of workers within the meaning of Article 2.The guidelines referred to in the first subparagraph shall also cover movements and postures, mental and physical fatigue and other types of physical and mental stress connected with the work done by workers within the meaning of Article 2.2. The purpose of the guidelines referred to in paragraph 1 is to serve as a basis for the assessment referred to in Article 4(1).To this end, Member States shall bring these guidelines to the attention of all employers and all female workers and/or their representatives in the respective Member State.’7The guidelines mentioned in Article 3 of Directive 92/85, in the version applicable to the present case, are set out in Commission Communication of 20 November 2000 on the Guidelines on the assessment of chemical, physical and biological agents and industrial processes considered hazardous for the safety or health of pregnant workers and workers who have recently given birth or are breastfeeding (COM(2000) 466 final/2, ‘the Guidelines’).8As regards the risk assessment and informing workers of that assessment, Article 4 of Directive 92/85 provides:‘1. For all activities liable to involve a specific risk of exposure to the agents, processes or working conditions of which a non-exhaustive list is given in Annex I, the employer shall assess the nature, degree and duration of exposure, in the undertaking and/or establishment concerned, of workers within the meaning of Article 2, either directly or by way of the protective and preventive services referred to in Article 7 of [Directive 89/391], in order to:assess any risks to the safety or health and any possible effect on the pregnancies or breastfeeding of workers within the meaning of Article 2,decide what measures should be taken.2. Without prejudice to Article 10 of [Directive 89/391], workers within the meaning of Article 2 and workers likely to be in one of the situations referred to in Article 2 in the undertaking and/or establishment concerned and/or their representatives shall be informed of the results of the assessment referred to in paragraph 1 and of all measures to be taken concerning health and safety at work.’9As regards action further to the risk assessment, Article 5(1) to (3) of that directive provides:‘1. Without prejudice to Article 6 of [Directive 89/391], if the results of the assessment referred to in Article 4(1) reveal a risk to the safety or health or an effect on the pregnancy or breastfeeding of a worker within the meaning of Article 2, the employer shall take the necessary measures to ensure that, by temporarily adjusting the working conditions and/or the working hours of the worker concerned, the exposure of that worker to such risks is avoided.2. If the adjustment of her working conditions and/or working hours is not technically and/or objectively feasible, or cannot reasonably be required on duly substantiated grounds, the employer shall take the necessary measures to move the worker concerned to another job.3. If moving her to another job is not technically and/or objectively feasible or cannot reasonably be required on duly substantiated grounds, the worker concerned shall be granted leave in accordance with national legislation and/or national practice for the whole of the period necessary to protect her safety or health.’10Article 7 of Directive 92/85, entitled ‘Night work’, provides:‘1. Member States shall take the necessary measures to ensure that workers referred to in Article 2 are not obliged to perform night work during their pregnancy and for a period following childbirth which shall be determined by the national authority competent for safety and health, subject to submission, in accordance with the procedures laid down by the Member States, of a medical certificate stating that this is necessary for the safety or health of the worker concerned.2. The measures referred to in paragraph 1 must entail the possibility, in accordance with national legislation and/or national practice, of:(a)transfer to daytime work;or(b)leave from work or extension of maternity leave where such a transfer is not technically and/or objectively feasible or cannot reasonably be required on duly substantiated grounds.’ Directive 2006/54 11Article 1 of Directive 2006/54, entitled ‘Purpose’, provides:‘The purpose of this Directive is to ensure the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation.To that end, it contains provisions to implement the principle of equal treatment in relation to:access to employment, including promotion, and to vocational training;working conditions, including pay;occupational social security schemes.It also contains provisions to ensure that such implementation is made more effective by the establishment of appropriate procedures.’12‘1. For the purposes of this Directive, the following definitions shall apply:“direct discrimination”: where one person is treated less favourably on grounds of sex than another is, has been or would be treated in a comparable situation;“indirect discrimination”: where an apparently neutral provision, criterion or practice would put persons of one sex at a particular disadvantage compared with persons of the other sex, unless that provision, criterion or practice is objectively justified by a legitimate aim, and the means of achieving that aim are appropriate and necessary;2. For the purposes of this Directive, discrimination includes:any less favourable treatment of a woman related to pregnancy or maternity leave within the meaning of [Directive 92/85].’13Article 14(1) of Directive 2006/54 extends the prohibition of discrimination, inter alia, to working conditions and provides as follows:‘There shall be no direct or indirect discrimination on grounds of sex in the public or private sectors, including public bodies, in relation to:employment and working conditions, including dismissals, as well as pay as provided for in Article 141 of the [EC] Treaty;14As regards the burden of proof and access to the courts in the event of direct or indirect discrimination, Article 19(1) and (4) of that directive provides:‘1. Member States shall take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment.4. Paragraphs 1, 2 and 3 shall also apply to:the situations covered by Article 141 of the [EC] Treaty and, in so far as discrimination based on sex is concerned, by Directive [92/85] and [Council Directive] 96/34/EC [of 3 June 1996 on the framework agreement on parental leave concluded by UNICE, CEEP and the ETUC (OJ 1996 L 145, p. 4)]; Directive 2003/88/EC 15Recital 14 of Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time (OJ 2003 L 299, p. 9) provides:‘Specific standards laid down in other Community instruments relating, for example, to rest periods, working time, annual leave and night work for certain categories of workers should take precedence over the provisions of this Directive.’16Article 1 of that directive, entitled ‘Purpose and scope’, states:‘1. This Directive lays down minimum safety and health requirements for the organisation of working time.2. This Directive applies to:certain aspects of night work, shift work and patterns of work.17Article 2(3) and (4) of the Directive, entitled ‘Definitions’, provide:‘For the purposes of this Directive, the following definitions shall apply:3. “night time” means any period of not less than seven hours, as defined by national law, and which must include, in any case, the period between midnight and 5.00;4. “night worker” means:on the one hand, any worker who, during night time, works at least three hours of his daily working time as a normal course; andon the other hand, any worker who is likely during night time to work a certain proportion of his annual working time, as defined at the choice of the Member State concerned:(i)by national legislation, following consultation with the two sides of industry; or(ii)by collective agreements or agreements concluded between the two sides of industry at national or regional level; Spanish law 18The social benefit in respect of risk during breastfeeding was incorporated into Spanish law by Ley Orgánica 3/2007 para la igualdad efectiva de mujeres y hombres (Organic Law 3/2007 on real equality between women and men) of 22 March 2007 (BOE No 71, 23 March 2007, p. 12611, ‘Law 3/2007’).19The object of Law 3/2007 is to promote the integration of women into the workplace by enabling them to reconcile their work life with their private and family life.20The 12th supplementary provision of that law amended Article 26 of Ley 31/1995 de Prevención de Riesgos Laborales (Law 31/1995 on the Prevention of Occupational Risks) of 8 November 1995 (BOE No 269, 10 November 1995, p. 32590, ‘Law 31/1995’) by providing for the protection of female workers and their newborn children in situations of risk during breastfeeding when the conditions of employment are liable to have an adverse effect on the health of the worker or the child.21Article 26 of Law 31/1995, which transposes, inter alia, Articles 4 and 7 of Directive 92/85 into national law, is worded as follows:‘1. The assessment of the risks [for the safety and health of workers] referred to in Article 16 of this Law must include determination of the nature, degree and duration of exposure of pregnant workers or workers who have recently given birth to agents, processes or working conditions liable to have an adverse effect on the health of the workers or the foetus in any activity likely to present a specific risk. If the results of the assessment reveal a risk to safety or health or a possible effect on the pregnancy or breastfeeding of such workers, the employer shall adopt the measures necessary to avoid exposure to that risk by adjusting the working conditions and the working hours of the worker concerned.Such measures shall include, where necessary, the non-performance of night work or shift work.2. Where the adjustment of working conditions or working hours is not feasible or where, despite such adjustment, working conditions are liable to have an adverse effect on the health of the pregnant worker or the foetus and a certificate to that effect is issued by the medical department of the [INSS] or the mutual insurer, depending on the entity with which the undertaking has agreed cover for occupational risks, together with a report from the Servicio Nacional de Salud [National Health Service, Spain] medical practitioner who treats the worker, the latter will have to perform a different job or role compatible with her condition. After consultation with the workers’ representatives, the employer must determine the list of jobs that are risk-free for those purposes.A move to another job or role shall be effected in accordance with the rules and criteria applied in cases of functional mobility and shall take effect until such time as the worker’s state of health allows her to return to her previous job.3. If such a move to another job is not technically or objectively feasible or cannot reasonably be required on substantiated grounds, the worker concerned may have her contract suspended on the grounds of risk during pregnancy, pursuant to Article 45(1)(d) [of Real Decreto Legislativo 1/1995, por el que se aprueba el texto refundido de la Ley del Esatatuto de los Trabajadores (Royal Legislative Decree 1/1995 approving the consolidated text of the Law on the Workers’ Statute) of 24 March 1995 (BOE No 75, 29 March 1995, p. 9654)], for the period necessary for the protection of her safety and health and for as long as it remains impossible for her to return to her previous job or move to another job compatible with her condition.4. The provisions of paragraphs 1 and 2 of this article shall also be applicable during the period of breastfeeding if the working conditions are liable to have an adverse effect on the health of the woman concerned or her child and a certificate to that effect is issued by the medical department of the [INSS] or the mutual insurer, depending on the entity with which the company has agreed cover for occupational risks, together with a report from the National Health Service medical practitioner who treats the worker or her child. In addition, the worker concerned may have her contract suspended on the grounds of risk while breastfeeding children under nine months old, pursuant to Article 45(1)(d) of [Royal Legislative Decree 1/1995], if the conditions set out in paragraph 3 of this article are satisfied.22The 18th supplementary provision of Law 3/2007 amended the Spanish legislation in such a way that a period of breastfeeding was expressly recognised as one of the situations covered by the Ley General de la Seguridad Social — Real Decreto Legislativo 1/1994 por el que se aprueba el texto refundido de la Ley General de la Seguridad Social (Royal Legislative Decree 1/1994 approving the consolidated text of the General Law on Social Security) of 20 June 1994 (BOE No 154, 29 June 1994, p. 20658, ‘the General Law on Social Security’).23Article 135a of the General Law on Social Security provides:‘Protected situationFor the purposes of the financial allowance in respect of risk during breastfeeding, the period of suspension of the employment contract shall be deemed a protected situation in cases where, because the female worker has to move from one job to another compatible with her condition, as provided for in Article 26(4) of Law 31/1995, such a move to another job is not technically or objectively feasible or cannot reasonably be required on substantiated grounds.’24Article 135b of the General Law on Social Security provides:‘Financial allowanceA female worker shall be granted, in accordance with the terms and conditions laid down in this Law governing the financial allowance in respect of risk during pregnancy, the financial allowance in respect of risk during breastfeeding, which shall cease when the child reaches the age of nine months, unless the recipient returns before then to her previous job or to another job compatible with her condition.’25As regards procedural law, Article 96(1) of Ley 36/2011, reguladora de la jurisdicción social (Law 36/2011 governing the social courts) of 10 October 2011 (BOE No 245, 11 October 2011, p. 106584) provides:‘Burden of proof in the case of discrimination and accidents at work1. In proceedings in which the arguments of the parties reveal reliable evidence of discrimination on the grounds of gender, sexual orientation, racial or ethnic origin, religion or belief, disability, age, or of harassment, and in any other case of infringement of a fundamental right or public freedom, the respondent shall be required to produce an objective and reasonable justification, established to the requisite legal standard, for the measures adopted and for their proportionality.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 26It is apparent from the order for reference that Ms González Castro works as a security guard for Prosegur.27On 8 November 2014, she gave birth to a boy who was then breastfed.28Since March 2015, Ms González Castro has performed her duties in a shopping centre, on the basis of a variable rotating pattern of eight-hour shifts.29The security service she performs at her place of work is usually performed with another security guard, except for the following shifts, which she performs alone: Monday to Thursday from midnight to 8 a.m.; Friday from 2 a.m. to 8 a.m.; Saturday from 3 a.m. to 8 a.m. and Sunday from 1 a.m. to 8 a.m.30Ms González Castro initiated the procedure for obtaining an allowance in respect of risk during breastfeeding, laid down in Article 26 of Law 31/1995, with the mutual insurer Umivale, a non-profit private mutual insurance company providing cover for risks relating to accidents at work and occupational diseases. To that end, she requested that mutual insurer, in accordance with national legislation, to issue her with a medical certificate indicating the existence of a risk to breastfeeding posed by her work.31Her application having been rejected by the mutual insurer Umivale, she lodged a complaint which was also rejected.32Ms González Castro brought an action against that rejection before the Juzgado de lo Social No 3 de Lugo (Social Court No 3, Lugo, Spain).33Her action having been dismissed, Ms González Castro brought an appeal against that decision before the referring court, the Tribunal Superior de Justicia de Galicia (High Court of Justice of Galicia, Spain).34In the first place, the referring court asks for an interpretation of the concept of ‘night work’, within the meaning of Article 7 of Directive 92/85, where, as in the case before it, that night work is combined with shift work. According to the referring court, breastfeeding shift workers who only work certain shifts at night must enjoy the same protection as breastfeeding workers who perform night work but not on the basis of shifts.35In the second place, the referring court considers that it is possible that the risk assessment of Ms González Castro’s work, provided for under the procedure for obtaining an allowance in respect of risk during breastfeeding, in accordance with Article 26 of Law 31/1995 transposing Articles 4 and 7 of Directive 92/85, was not properly carried out and her work does in fact pose a risk to her health or safety, in particular because she performs night work and does shifts, sometimes alone, doing rounds and having to respond to emergencies, such as criminal behaviour, fire and other incidents of that kind, and there is no evidence that the workplace has anywhere suitable for breastfeeding or, as the case may be, for expressing breast milk.36In that context, the referring court seeks guidance as to whether it is appropriate to apply the rules reversing the burden of proof laid down in Article 19(1) of Directive 2006/54 in a situation such as that at issue in the case before it and, if so, it asks what are the conditions for the application of that provision, in particular as regards the issue whether it is for the worker concerned or the respondent, whether it be the employer or the organisation responsible for the payment of the allowance in respect of risk during breastfeeding, to demonstrate that the adjustment of the working conditions or the move of the worker concerned to another job are not technically or objectively feasible or cannot reasonably be required.37In those circumstances, the Tribunal Superior de Justicia de Galicia (High Court of Justice of Galicia) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Should Article 7 of [Directive 92/85] be interpreted as meaning that the night work, which those workers referred to in Article 2, including workers who are breastfeeding, must not be obliged to perform, includes not only work performed entirely during the night, but also shift work when, as in this case, some of those shifts are worked at night?(2)In proceedings in which the existence of a situation of risk for a worker who is breastfeeding is at issue, do the special rules on burden of proof in Article 19(1) of [Directive 2006/54], transposed into Spanish law by, inter alia, Article 96(1) of [Ley 36/2011], apply in conjunction with the requirements set out in Article 5 of [Directive 92/85], transposed into Spanish law by Article 26 of [Law 31/1995], relating to the granting of leave to a breastfeeding worker and, as the case may be, payment of the relevant allowance under national legislation by virtue of Article 11(1) of [Directive 92/85]?(3)In proceedings in which the existence of a risk during breastfeeding giving entitlement to leave, as provided for in Article 5 of [Directive 92/85] and transposed into Spanish law by Article 26 of [Law 31/1995], is at issue, can Article 19(1) of [Directive 2006/54] be interpreted as meaning that the following are “facts from which it may be presumed that there has been direct or indirect discrimination” in relation to a breastfeeding worker: (1) the fact that the worker does shift work as a security guard with some shifts being worked at night and alone; (2) in addition, that the work entails doing rounds and, where necessary, dealing with emergencies (criminal behaviour, fire and other incidents); and (3) furthermore that there is no evidence that the workplace has anywhere suitable for breastfeeding or, as the case may be, for expressing breast milk?(4)In proceedings in which the existence of a risk during breastfeeding giving entitlement to leave is at issue, when “facts from which it may be presumed that there has been direct or indirect discrimination” have been established in accordance with Article 19(1) of [Directive 2006/54] in conjunction with Article 5 of [Directive 92/85], transposed into Spanish law by Article 26 of [Law 31/1995], can a breastfeeding worker be required to demonstrate, in order to be granted leave in accordance with the domestic legislation transposing Article 5(2) and (3) of [Directive 92/85], that the adjustment of her working conditions and/or working hours is not technically and/or objectively feasible, or cannot reasonably be required and that moving her to another job is not technically and/or objectively feasible or cannot reasonably be required or are these matters for the respondents (the employer and the [Mutua Umivale] providing the social security benefit associated with the suspension of the contract of employment) to prove?’ Consideration of the questions referred The first question 38By its first question, the referring court asks, in essence, whether Article 7 of Directive 92/85 must be interpreted as applying to a situation, such as that at issue in the main proceedings, where the worker concerned does shift work in the context of which only part of her duties are performed at night.39In order to answer that question, it must be noted that, in accordance with the settled case-law of the Court, in interpreting a provision of EU law it is necessary to consider not only its wording but also its context and the objectives of the legislation of which it forms part (see, inter alia, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 44 and the case-law cited).40Under Article 7(1) of Directive 92/85, Member States must take the necessary measures to ensure that pregnant workers, workers who have recently given birth or workers who are breastfeeding are not obliged to perform night work during their pregnancy and for a period following childbirth which will be determined by the national authority competent for safety and health, subject to submission, in accordance with the procedures laid down by the Member States, of a medical certificate stating that this is necessary for the safety or health of the worker concerned.41Article 7(2) states that the measures referred to in paragraph (1) must entail the possibility, in accordance with national legislation and/or national practice, of a transfer to daytime work or of leave from work or an extension of maternity leave where such a transfer is not technically and/or objectively feasible or cannot reasonably by required on duly substantiated grounds.42The wording of that provision does not however contain any details as regards the exact scope of the concept of ‘night work’.43In that regard, it is apparent from Article 1 of Directive 92/85 that that directive is part of a series of directives, adopted on the basis of Article 118A of the EEC Treaty, seeking to set minimum requirements, especially as regards improvements in the working environment to protect the safety and health of workers.44As the Advocate General noted in point 44 of her Opinion, this is also true of Directive 2003/88, which sets minimum safety and health requirements for the organisation of working time and applies, in particular, to certain aspects of night work, shift work and patterns of work.45Directive 2003/88 defines, in Article 2(4), a night worker as ‘any worker, who, during night time, works at least three hours of his daily working time as a normal course’ and ‘any worker who is likely during night time to work a certain proportion of his annual working time’. Furthermore, Article 2(3) of that article states that the concept of ‘night time’ means ‘any period of not less than seven hours, as defined by national law, and which must include, in any case, the period between midnight and 5.00’.46It follows from the wording of those provisions, and in particular the use of the expressions ‘any period’, ‘at least three hours of his … working time’ and ‘a certain proportion of his … working time’, that a worker who, as in the case in the main proceedings, does shift work in the context of which only part of her duties are performed at night must be regarded as performing work during ‘night time’ and must therefore be classified as a ‘night worker’ within the meaning of Directive 2003/88.47It must be noted that, since it is in the interest of pregnant workers, workers who have recently given birth or are breastfeeding to be subject, in accordance with Recital 14 of Directive 2003/88, to the specific provisions laid down by Directive 92/85 relating to night work, in particular in order to strengthen the protection that those workers must enjoy in that regard, those specific provisions must not be interpreted less favourably than the general provisions of Directive 2003/88 which are applicable to other categories of workers.48Consequently, it must be held that a worker such as that at issue in the main proceedings carries out ‘night work’ within the meaning of Article 7 of Directive 92/85 and that she is covered by that provision.49That interpretation is supported by the purpose of Article 7 of Directive 92/85.50That provision aims to strengthen the protection enjoyed by pregnant workers and workers who have recently given birth or are breastfeeding by enshrining the principle that they are not obliged to perform night work when that work poses a risk to their health or safety.51If a breastfeeding worker who, as in the main proceedings, performs shift work were to be excluded from the scope of Article 7 of Directive 92/85 on the ground that only part of her duties are performed at night, that provision would be deprived in part of its effectiveness. The worker concerned may be exposed to a risk to her health or safety and the protection she is entitled to under that provision would be considerably reduced.52As regard the conditions for the application of Article 7 of Directive 92/85 to a situation such as that at issue in the main proceedings, it must be stated that, to benefit from the protection measures set out in Article 7(2), namely transfer to daytime work or, failing that, leave from work, the worker concerned must submit a medical certificate stating the need for such a measure for her safety or health, in accordance with the procedures laid down by the Member State in question. It is for the national court to determine whether that is the case in the main proceedings.53In the light of the foregoing, the answer to the first question is that Article 7 of Directive 92/85 must be interpreted as applying to a situation, such as that at issue in the main proceedings, where the worker concerned does shift work in the context of which only part of her duties are performed at night. The second to fourth questions 54As a preliminary point, it should be observed that, according to settled case-law, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court may have to reformulate the questions referred to it and, in that context, to interpret all provisions of EU law which national courts require in order to decide the actions pending before them, even if those provisions are not expressly indicated in the questions referred to the Court by those courts (judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 39 and the case-law cited).55Consequently, even if, formally, the referring court has limited its second to fourth questions to the interpretation of Article 19(1) of Directive 2006/54 and of Article 5 of Directive 92/85, it is for the Court to extract from all the information provided by the national court, in particular from the grounds of the decision to make the reference, the points of EU law which require interpretation in view of the subject matter of the dispute (see, to that effect, judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 40 and the case-law cited).56In the present case, it is apparent from the order for reference that the relevant national legislation in the case in the main proceedings, namely Article 26 of Law 31/1995, transposes into national law, without any clear distinction, inter alia, Articles 4 and 7 of Directive 92/85 and that legislation provides, in particular, that the suspension of the employment contract for risk during breastfeeding and the grant of the related allowance are possible only if it is established, following the assessment of the work of the worker concerned, that it poses such a risk and that it is not feasible to adjust the working conditions of that worker or move her to another job.57The referring court starts from the premiss that it is possible that, if the risk assessment of the work of the worker concerned provided for by the national legislation has been carried out properly, the existence of a risk to the health or safety of that worker might have been revealed, in particular in the light of Article 7 of Directive 92/85, on the basis that that worker performs night work and does shifts, sometimes alone, doing rounds and having to respond to emergencies, such as criminal behaviour, fire and other incidents of that kind and there is no evidence that the workplace has anywhere suitable for breastfeeding or, as the case may be, for expressing breast milk.58In that context, the referring court asks whether the rules of reversal of the burden of proof under Article 19(1) of Directive 2006/54 must be applied in a situation such as that at issue in the main proceedings, in which a worker, who has been refused a medical certificate indicating the existence of a risk to breastfeeding posed by her work and, accordingly, an allowance in respect of risk during breastfeeding, challenges, before a court or other competent authority of the Member State concerned, the risk assessment of her work. If so, the referring court asks what are the conditions for the application of that provision, in particular as regards whether it is for the worker concerned or the respondent, whether it be the employer or the organisation responsible for payment of the financial allowance in respect of risk during breastfeeding, to demonstrate that the adjustment of working conditions or the move of the worker concerned to another job are not technically or objectively feasible or cannot reasonably be required.59In the light of those considerations, it must be understood that, by its second to fourth questions, which it is appropriate to consider together, the referring court is asking, is essence, whether Article 19(1) of Directive 2006/54 must be interpreted as applying to a situation, such as that at issue in the main proceeding, in which a worker, who has been refused a medical certificate indicating the existence of a risk to breastfeeding posed by her work and, consequently, an allowance in respect of risk during breastfeeding, challenges, before a court or other competent authority of the Member State concerned, the risk assessment of her work and, if so, what are the conditions for application of that provision in such a situation.60It should be noted, in the first place, that under Article 19(1) of Directive 2006/54, Member States must take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or any other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it will be for the respondent to prove that there has been no breach of the principle of equal treatment.61Article 19(4)(a) of Directive 2006/54 states, inter alia, that the rules reversing the burden of proof in Article 19(1) apply also to situations covered by Directive 92/85 in so far as discrimination based on sex is concerned.62In that regard, the Court has held that Article 19(1) of Directive 2006/54 applies to a situation in which a breastfeeding worker challenges, before a court or other competent authority of the Member State concerned, the risk assessment of her work in so far as she claims that the assessment was not conducted in accordance with Article 4(1) of Directive 92/85 (judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 65).63Failure to assess the risk posed by the work of a breastfeeding worker in accordance with the requirements of Article 4(1) of Directive 92/85 must indeed be regarded as less favourable treatment of a woman related to pregnancy or maternity leave, within the meaning of that directive, and thus constitutes direct discrimination on grounds of sex, within the meaning of Article 2(2)(c) of Directive 2006/54 (judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraphs 62 and 63).64The Court stated, in that regard, that in order to be in conformity with the requirements of Article 4(1) of Directive 92/85, the risk assessment of the work of a breastfeeding worker must include a specific assessment taking into account the individual situation of the worker in question in order to ascertain whether her health or safety or that of her child is exposed to a risk (judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 51).65In the second place, it must be noted that the risk assessment provided for in Article 4 of Directive 92/85 is intended to protect pregnant workers and workers who have recently given birth or are breastfeeding and their children in that, when that assessment reveals that the work of such a worker poses a risk for her health or safety, or has an effect on her pregnancy or the breastfeeding of her child, the employer must, in accordance with Article 5 of that directive, take the necessary measures to ensure that the exposure to that risk is avoided.66As the Advocate General observed in point 61 of her Opinion, Article 4 of Directive 92/85 is the general provision which sets out the action to be taken in relation to all activities liable to involve a specific risk to pregnant workers and workers who have recently given birth or are breastfeeding. Article 7, on the other hand, is a specific provision which applies in cases of night work, which the legislature has singled out as liable to present a particular risk to pregnant workers and workers who have recently given birth or are breastfeeding.67Whereas Articles 4 and 7 of Directive 92/85 pursue the same aim of protecting pregnant workers and workers who have recently given birth or are breastfeeding against the risks posed by their jobs, Article 7 of Directive 92/85 aims, more specifically, to strengthen that protection by establishing the principle that pregnant workers and workers who have recently given birth or are breastfeeding are not obliged to perform night work as long as they submit a medical certificate indicating the need for such protection on the basis on their safety or health.68The risk assessment of the work of pregnant workers and workers who have recently given birth or are breastfeeding provided for under Article 7 of Directive 92/85 cannot, therefore, be subject to less stringent requirements than those that apply under Article 4(1) of that directive.69That interpretation is supported by the fact that the guidelines, the purpose of which is, in accordance with Article 3(2) of Directive 92/85, to serve as a basis for the assessment referred to in Article 4(1) of that directive, expressly refer to night work.70It follows, in particular, from the detailed table on the risk assessment of generic hazards and associated situations which are likely to be met by most pregnant women, women who have recently given birth or women who are breastfeeding, set out at page 13 of those guidelines, that night work may have a significant effect on the health of pregnant women, women who have recently given birth or women who are breastfeeding, the risks for those women vary with the type of work undertaken, working conditions and the individual concerned and, consequently, because of increased tiredness, some pregnant or breastfeeding women may not be able to work irregular or late shifts or work at night. That table also provides for preventive measures as regards night work.71Furthermore, it follows from the Guidelines that the risk assessment of the work of a breastfeeding worker must include a specific assessment taking into account the individual situation of the worker in question (judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraphs 46 and 51).72Consequently, it must be considered, as the Advocate General noted at point 50 of her Opinion, that the risk assessment of the work of the worker concerned, carried out under Article 7 of Directive 92/85, must include a specific assessment taking into account the individual situation of the worker in question in order to ascertain whether her health or safety or that of her child is exposed to a risk. If there is no such assessment, the situation amounts to less favourable treatment of a woman related to pregnancy or maternity leave, within the meaning of that directive, and constitutes direct discrimination on grounds of sex, within the meaning of Article 2(2)(c) of Directive 2006/54, enabling the application of Article 19(1) of that directive.73As regards the conditions for the application of that provision, it should be recalled that the rules of evidence that it provides do not apply at the time that the worker in question requests an adjustment of her working conditions or, as in the case in the main proceedings, an allowance in respect of risk during breastfeeding, and a risk assessment of her work must, accordingly, be carried out in accordance with Article 4(1) of Directive 92/85 or, where appropriate, Article 7 of Directive 92/85. It is only at a later stage, when a decision relating to that risk assessment is challenged by the worker in question before a court or any other competent authority, that those rules of evidence are to be applied (see, to that effect, judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 67).74Nevertheless, in accordance with Article 19(1) of Directive 2006/54, it is for a worker who considers herself wronged because the principle of equal treatment has not been applied to her to raise, before a court or any other competent authority, facts or evidence from which it may be presumed that there has been direct or indirect discrimination (see, to that effect, judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 68 and the case-law cited).75In a situation such as that at issue in the main proceedings, that means that the worker in question must adduce, before a court or any other competent authority of the Member State concerned, facts or evidence capable of indicating that the risk assessment of her work provided for under the national legislation transposing, in particular, Articles 4 and 7 of Directive 92/85 into national law did not include a specific assessment taking into account her individual situation and she has, therefore, been discriminated against.76In the present case, it is apparent from the order for reference and the documents before the Court that Ms González Castro initiated the procedure for obtaining an allowance in respect of risk during breastfeeding with the mutual insurer Umivale and, to that end, submitted, on 9 March 2015, a request for a medical certificate indicating the existence of a risk for breastfeeding posed by her work by means of a form provided by the mutual insurer in that regard.77In the context of that procedure, Prosegur sent, on 13 March 2015, to the mutual insurer Umivale a declaration in which it stated that it had not tried to adapt the working conditions of Ms González Castro’s work or to move her to another job since it considered that the duties she performed and her working conditions did not affect breastfeeding.78That declaration, which takes the form of a standard form provided by the mutual insurer Umivale, does not contain any reasons indicating how Prosegur reached that conclusion and it does not appear to be based on a specific assessment taking into account the individual situation of the worker concerned.79As regards the decision by which the mutual insurer Umivale dismissed the application made by Ms González Castro, it merely states that ‘there is no risk inherent to her work which may be harmful, after an exhaustive analysis of the documentation provided by the worker herself’. In the conclusions set out in the Annex to that decision, the mutual insurer Umivale referred to the Spanish Paediatric Association ‘Guidance on assessing workplace risk during breastfeeding’ published by the INSS, to conclude that they indicate that shift work or night work do not pose a risk to breastfeeding. The mutual insurer Umivale claims also, without any further explanation, that Ms González Castro is not exposed to substances which are harmful to her child and that her working conditions do not affect breastfeeding.80In these circumstances, it is apparent, as the Advocate General noted in points 70 and 77 of her Opinion, that the risk assessment of Ms González Castro’s work did not include a specific assessment taking into account her individual situation and that she was discriminated against. It is ultimately for the referring court, which alone has jurisdiction to assess the facts of the case before it, to verify whether that is indeed the case.81If so, it will be for the respondent in the main proceedings to prove that the risk assessment provided for by national legislation transposing, inter alia, Articles 4 and 7 of Directive 92/85 into national law included a specific assessment taking into account the individual situation of Ms González Castro, bearing in mind that documents such as a declaration by the employer that the duties performed by that worker and her working conditions do not affect breastfeeding, without any explanations capable of substantiating that assertion, combined with the fact that her work is not included in the list of jobs posing a risk to breastfeeding drawn up by the competent body of the Member State concerned, cannot alone provide an irrebuttable presumption that such is the case. Otherwise, both Articles 4 and 7 of Directive 92/85 and the rules of evidence provided for in Article 19 of Directive 2006/54 would be deprived of any useful effect (see, to that effect, judgment of 19 October 2017, Otero Ramos, C‑531/15, EU:C:2017:789, paragraph 74).82It should be noted that the same rules of evidence are applicable in the context of Article 5, or, where appropriate, Article 7(2) of Directive 92/85. In particular, in so far as a breastfeeding worker requests leave from work for the whole of the period necessary to protect her safety or health and provides evidence capable of showing that the protective measures provided for in Article 5(1) and (2) or the first subparagraph of Article 7(2) were impracticable, it is for the employer to establish that those measures were technically or objectively feasible and could reasonably be required in the situation of the worker concerned.83In the light of all the above considerations, the answer to the second to fourth questions is that Article 19(1) of Directive 2006/54 must be interpreted as applying to a situation, such as that at issue in the main proceeding, in which a worker, who has been refused a medical certificate indicating the existence of a risk to breastfeeding posed by her work and, consequently, an allowance in respect of risk during breastfeeding, challenges, before a court or other competent authority of the Member State concerned, the risk assessment of her work, provided that that worker adduces factual evidence to suggest that that evaluation did not include a specific assessment taking into account her individual situation and thus permitting the presumption that there is direct discrimination on the grounds of sex, within the meaning of Directive 2006/54, which it is for the referring court to ascertain. It is then for the respondent to prove that that risk assessment did actually include such a specific assessment and that, accordingly, the principle of non-discrimination was not infringed. Costs 84Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fifth Chamber) hereby rules: 1. Article 7 of Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding must be interpreted as applying to a situation, such as that at issue in the main proceedings, where the worker concerned does shift work during which only part of her duties are performed at night. 2. Article 19(1) of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) must be interpreted as applying to a situation, such as that at issue in the main proceeding, in which a worker, who has been refused a medical certificate indicating the existence of a risk to breastfeeding posed by her work and, consequently, an allowance in respect of risk during breastfeeding, challenges, before a court or other competent authority of the Member State concerned, the risk assessment of her work, provided that that worker adduces factual evidence to suggest that that evaluation did not include a specific assessment taking into account her individual situation and thus permitting the presumption that there is direct discrimination on the grounds of sex, within the meaning of Directive 2006/54, which it is for the referring court to ascertain. It is then for the respondent to prove that that risk assessment did actually include such a specific assessment and that, accordingly, the principle of non-discrimination was not infringed. [Signatures]( *1 ) Language of the case: Spanish. | 4efbf-bf276f6-4ed2 | EN |
The Court holds that the General Court of the European Union must reconsider whether the Commission was justified in classifying the implied and unlimited guarantee granted by the French Republic to the Institut français du pétrole as State aid | 19 September 2018 ( *1 )(Appeal — State aid — State aid scheme implemented by France — Unlimited State guarantee conferred on the Institut français du pétrole (IFP) by the grant of the status of publicly owned industrial and commercial establishment (EPIC) — Decision declaring that measure as partially not constituting State aid and as partially constituting State aid compatible with the Internal market, subject to certain conditions — Concept of ‘aid scheme’ — Presumption of the existence of an advantage — Burden and standard of proof)In Case C‑438/16 P,APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 4 August 2016, European Commission, represented by B. Stromsky and D. Grespan, acting as Agents,appellant,the other parties to the proceedings being: French Republic, represented by D. Colas and J. Bousin, acting as Agents, IFP Énergies nouvelles, established in Rueil-Malmaison (France), represented by E. Morgan de Rivery and E. Lagathu, avocats,applicants at first instance,THE COURT (Fifth Chamber),composed of J.L. da Cruz Vilaça, President of the Chamber, A. Tizzano (Rapporteur), Vice-President of the Court, A. Borg Barthet, M. Berger and F. Biltgen, Judges,Advocate General: M. Wathelet,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 28 September 2017,after hearing the Opinion of the Advocate General at the sitting on 7 December 2017,gives the following Judgment 1By its appeal, the European Commission seeks to have set aside the judgment of the General Court of the European Union of 26 May 2016, France and IFP Énergies nouvelles v Commission (T‑479/11 and T‑157/12, EU:T:2016:320) (‘the judgment under appeal’), in so far as, by that judgment, the General Court annulled Article 1(3), (4) and (5) and Articles 2 to 12 of Commission Decision 2012/26/EU of 29 June 2011 on State aid granted by France to the Institut Français du Pétrole (Case C 35/08 (ex NN 11/08)) (OJ 2012 L 14, p. 1) (‘the contested decision’). Legal context 2Article 1 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [108 TFEU] (OJ 1999 L 83, p. 1), in force at the time of the facts at issue, was worded as follows:‘For the purpose of this Regulation:(a)“aid” shall mean any measure fulfilling all the criteria laid down in Article [107(1) TFEU];…(c)“new aid” shall mean all aid, that is to say, aid schemes and individual aid, which is not existing aid, including alterations to existing aid;(d)“aid scheme” shall mean any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within the act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount;(e)“individual aid” shall mean aid that is not awarded on the basis of an aid scheme and notifiable awards of aid on the basis of an aid scheme;…’3Point 1.2 of Commission Notice on the application of Articles [107 and 108 TFEU] to State aid in the form of guarantees (OJ 2008 C 155, p. 10) (‘the Guarantee Notice’), entitled ‘Types of guarantee’, provides:‘In their most common form, guarantees are associated with a loan or other financial obligation to be contracted by a borrower with a lender; they may be granted as individual guarantees or within guarantee schemes.However, various forms of guarantee may exist, depending on their legal basis, the type of transaction covered, their duration, etc. Without the list being exhaustive, the following forms of guarantee can be identified:–unlimited guarantees as opposed to guarantees limited in amount and/or time. The Commission also regards as aid in the form of a guarantee the more favourable funding terms obtained by enterprises whose legal form rules out bankruptcy or other insolvency procedures or provides an explicit State guarantee or coverage of losses by the State. The same applies to the acquisition by a State of a holding in an enterprise if unlimited liability is accepted instead of the usual limited liability,4Point 2.1 of the Guarantee Notice, entitled ‘General remarks’, states:‘Article [107(1) TFEU] states that any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the common market.These general criteria equally apply to guarantees. As for other forms of potential aid, guarantees given directly by the State, namely by central, regional or local authorities, as well as guarantees given through State resources by other State-controlled bodies such as undertakings and imputable to public authorities, may constitute State aid.In order to avoid any doubts, the notion of State resources should thus be clarified as regards State guarantees. The benefit of a State guarantee is that the risk associated with the guarantee is carried by the State. Such risk-carrying by the State should normally be remunerated by an appropriate premium. Where the State forgoes all or part of such a premium, there is both a benefit for the undertaking and a drain on the resources of the State. Thus, even if it turns out that no payments are ever made by the State under a guarantee, there may nevertheless be State aid under Article [107(1) TFEU]. The aid is granted at the moment when the guarantee is given, not when the guarantee is invoked nor when payments are made under the terms of the guarantee. Whether or not a guarantee constitutes State aid, and, if so, what the amount of that State aid may be, must be assessed at the moment when the guarantee is given.5According to Point 2.2 of the Guarantee Notice, entitled ‘Aid to the borrower’:‘Usually, the aid beneficiary is the borrower. As indicated under point 2.1, risk-carrying should normally be remunerated by an appropriate premium. When the borrower does not need to pay the premium, or pays a low premium, it obtains an advantage. Compared to a situation without guarantee, the State guarantee enables the borrower to obtain better financial terms for a loan than those normally available on the financial markets. Typically, with the benefit of the State guarantee, the borrower can obtain lower rates and/or offer less security. In some cases, the borrower would not, without a State guarantee, find a financial institution prepared to lend on any terms. …’ Background to the dispute and the contested decision at issue 6IFP Énergies nouvelles (‘IFPEN’), known prior to 13 July 2010 as the Institut Français du Pétrole, is a French public body, responsible in particular for research and development in the fields of oil and gas prospecting and refining and petrochemicals technologies, for the training of engineers and technicians and for the provision of sector information and documentation.7Until 2006, IFPEN was a legal person governed by private law which, in accordance with provisions of French national law, operated under the economic and financial supervision of the French Government.8Under Law No 2005-781 of 13 July 2005, establishing the energy policy guidelines (JORF, 14 July 2005, p. 11570), IFPEN was converted, with effect from 6 July 2006, into a publicly owned industrial and commercial establishment (‘EPIC’).9Under French law, EPICs have a legal personality which is separate from that of the State, they are financially independent and they exercise certain special powers which usually include the performance of one or more public service tasks. As legal persons governed by public law, they are not subject to the ordinary law applicable to insolvency procedures by virtue of the general principle of the immunity from seizure enjoyed by public assets.10Since the specific features of the legal status of EPICs attracted the attention of the Commission, the latter, in its Decision 2010/605/EU of 26 January 2010 on State aid C 56/07 (ex E 15/05) granted by France to La Poste (OJ 2010 L 274, p. 1) (‘the “La Poste” decision’), examined that status in the light of the rules governing State aid in the European Union. In that regard, after having found that, on the basis of their status, EPICs benefit from an implied and unlimited State guarantee, the Commission considered, in that case, that such a guarantee constituted State aid for the purposes of Article 107(1) TFEU, in so far as it allowed La Poste to obtain more favourable borrowing terms than those that it would have obtained on its own merits.11It is in the context of the proceedings that led to the adoption of the ‘La Poste’ decision that, during 2006, the French authorities informed the Commission of IFPEN’s conversion from a legal person governed by private law into an EPIC. That information was communicated to the Commission in the context of proceedings initiated in 2005 in connection with the investigation, in the light of the rules governing State aid, of public funding granted to IFPEN by the French authorities.12The Commission decided to separate the investigation of whether IFPEN’s conversion into an EPIC was capable of constituting State aid for the purposes of Article 107(1) TFEU from the investigation of IFPEN’s public funding. Accordingly, first, on 16 July 2008, it closed the investigation of the public funding granted to IFPEN by adopting Decision 2009/157/EC on the aid measure implemented by France for the IFP Group (C 51/05 (ex NN 84/05)) (OJ 2009 L 53, p. 13). Secondly, that day, by a decision published in the Official Journal of the European Union (OJ 2008 C 259, p. 12), it decided to initiate a formal investigation procedure concerning the unlimited State guarantee in favour of IFPEN and invited interested parties to submit their comments.13On 29 June 2011, the Commission adopted the contested decision.14In that decision, the Commission, in the first place, considered, on the basis of reasoning similar to that in its ‘La Poste’ decision, that IFPEN’s conversion into an EPIC had conferred on that establishment, from 6 July 2006, the benefit of an implied and unlimited State guarantee.15In that regard, the Commission noted, in essence, that the particular features of EPIC’s status implied that the State plays the role of guarantor of last resort for the reimbursement of IFPEN’s debts. In that way, there is both an advantage to that establishment and a drain on public resources, since the State waives the remuneration that normally accompanies guarantees. Moreover, the guarantee creates the risk of a potential and future claim on the resources of the State, since the latter could find itself obliged to pay IFPEN’s debts.16In the second place, the Commission stated that the unlimited State guarantee arising from IFPEN’s EPIC status was capable of constituting State aid in so far as it covered its economic activities. It therefore decided to limit the scope of its investigation into the existence of State aid exclusively to the economic activities carried on by IFPEN.17In the third place, the Commission examined whether that implied and unlimited guarantee conferred a selective advantage on IFPEN, for the purposes of Article 107(1) TFEU, in its dealings with banks and financial institutions, with suppliers and with customers.18First of all, as regards dealings with banks and financial institutions, the Commission concluded that that establishment had not derived any real economic advantage from the State guarantee associated with its EPIC status during the period from its conversion into an EPIC, in July 2006, until the end of 2010 (‘the period at issue’). That institution nevertheless noted that such a conclusion was valid only retrospectively, since it could not make any presumptions about how market operators would behave in the future or how their perception of the impact of the State guarantee on the risk of default by IFPEN would evolve.19Next, as regards dealings with suppliers, the Commission concluded that IFPEN had benefited from a real economic advantage, consisting in a reduction of prices charged by its suppliers. That price reduction resulted from a more favourable assessment by the latter of the risk of default of IFPEN, since the latter could not be placed into judicial liquidation in virtue of its EPIC status. In that regard, it, in essence, considered that, in the absence of the State guarantee, a supplier wishing to benefit from a comparable guarantee would require the services of a specialised credit institution or insurance undertaking. Therefore, the price reduction could be expressed in terms of costs of equivalent risk cover.20Finally, as regards dealings with customers, the Commission considered that, in the light of the guarantee granted by the State to IFPEN, its customers were assured that the latter would never be subjected to compulsory winding up, and would therefore always be able to fulfil its contractual obligations, or, if it could not, that customers would be compensated. In the absence of that guarantee, a customer wishing to benefit from the same level of protection would be required to obtain a performance bond from a financial intermediary. Therefore, IFPEN benefited from a real economic advantage, consisting in the non-payment of a premium for a performance bond, or at the very least a best efforts guarantee, an advantage which it would have offered to its customers.21The Commission considered that the economic advantage derived by IFPEN from the State guarantee was selective, in so far as IFPEN’s competitors, who are subject to insolvency procedures provided for under ordinary law, did not benefit from a comparable State guarantee.22In the fourth place, the Commission examined the compatibility of that State aid in the light of the rules set out in the Community framework for State aid for research and development and innovation (OJ 2006 C 323, p. 1). It concluded that the State aid granted to the ‘IFPEN group’ was compatible with the internal market, subject to certain conditions spelled out in the contested decision. The procedure before the General Court and the judgment under appeal 23By applications lodged with the Registry of the General Court on 9 September 2011 (Case T‑479/11) and on 5 April 2012 (Case T‑157/12), the French Republic and IFPEN each brought actions for the annulment of the contested decision.24In support of their actions, the French Republic and IFPEN complained that the Commission failed to fulfil its evidential obligations with regard to State aid and wrongly interpreted the concept of ‘selective advantage’ for the purposes of Article 107(1) TFEU.25By order of 2 December 2013, the General Court stayed the proceedings in Cases T‑479/11 and T‑157/12 pending delivery of the judgment of the Court in Case C‑559/12 P, concerning the lawfulness of the ‘La Poste’ decision.26On 3 April 2014, the Court delivered the judgment in France v Commission (C‑559/12 P, EU:C:2014:217).27By decision of 8 September 2015, the General Court joined Cases T‑479/11 and T‑157/12 for the purposes of the oral part of the procedure and the decision closing the proceedings.28By the judgment under appeal, the General Court partially upheld the actions brought by the French Republic and by IFPEN in those cases and annulled the contested decision, in so far as it had classified as ‘State aid’, for the purposes of Article 107(1) TFEU, the guarantee deriving from IFPEN’s EPIC status and in so far as it had specified the consequences of that classification. The General Court dismissed the actions as to the remainder.29The grounds of the judgment under appeal, which are relevant to the present appeal, are in essence the following.30First of all, the General Court explained, in paragraphs 78 to 89 of the judgment under appeal, that the method chosen by the Commission to determine the existence of a selective advantage for the purposes of Article 107(1) TFEU — consisting in examining the benefit derived by IFPEN from its EPIC status in its dealings with banks and financial institutions and with suppliers and customers — was not erroneous.31Nevertheless, the General Court held, in paragraph 90 of that judgment, that the way the Commission had applied that method to the present case demonstrated considerable flaws, in particular as regards the definition of the alleged advantage which IFPEN derived from the unlimited State guarantee, inherent in its EPIC status, in its dealings with suppliers and customers. In particular, in paragraph 94 of that judgment, the General Court considered that the Commission’s conclusion, according to which that guarantee had created a ‘real economic advantage’ in favour of IFPEN, was based on purely hypothetical reasoning.32Therefore, first, as regards dealings between IFPEN and its suppliers, the General Court noted, in paragraph 95 of that judgment, that, according to the Commission, the advantage that that institution had been able to derive from the unlimited State guarantee consisted in a price reduction granted to it by its suppliers as a result of the absence of default risk.33However, in paragraph 99 of the judgment under appeal, the General Court noted that there was no evidence of the existence, on the market concerned or in the course of business in general, of a tendency for suppliers to grant price reductions to establishments benefiting from a State guarantee against the risk of insolvency.34Secondly, as regards IFPEN’s dealings with its customers, the General Court noted, in paragraph 111 of that judgment, that the Commission had identified the advantage which that establishment had been able to derive from the State guarantee associated with its status as being the non-payment of a premium for a performance bond or best efforts guarantee, an advantage which that establishment had been able to offer to its customers.35However, the General Court considered, in paragraph 114 of that judgment, that such reasoning presupposed that, under normal market conditions, customers of research institutes, such as IFPEN, avail themselves that type of guarantee in order to protect themselves against the risk of insolvency on the part of the other contracting party and that, in circumstances involving a guarantee such as that enjoyed by IFPEN, the latter’s customers no longer needed to themselves obtain an equivalent guarantee.36The General Court held that the Commission had adduced no evidence capable of demonstrating that that reasoning was well founded or likely.37Next, in paragraphs 133 to 181 of that judgment, the General Court rejected the arguments presented by the Commission concerning the scope and application of the presumption of advantage established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217).38In that regard, the General Court noted, in paragraph 136 of the judgment under appeal, that the possibility of using a presumption as a means of proof depended on the plausibility of the assumptions on which that presumption was based and pointed out, in paragraphs 139 and 140 of that judgment that the presumption established in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), was based on a twofold premiss that the Court had judged to be plausible, namely the existence of a favourable influence of the guarantee on the creditors’ assessment of the risk of default on the part of the beneficiary and a reduction in the cost of credit. However, the General Court held that, conversely, the Commission had not adduced, in the contested decision, any evidence capable of showing the plausibility of those assumptions, in particular the fact that IFPEN’s EPIC status was such as to encourage suppliers to agree to price reductions.39Therefore, the General Court noted, in paragraph 142 of its judgment, that the Commission could not rely on the presumption laid down by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), to establish the existence of an advantage in IFPEN’s dealings with its suppliers and even with its customers. That presumption serves only to establish the existence of an advantage in the form of more favourable credit terms and thus applies only to an EPIC’s dealings with banks and financial institutions.40The General Court also ruled, in paragraphs 162 et seq. of the judgment under appeal, on the argument presented by the Commission, based on EU case-law in that regard, according to which where it assesses an aid scheme, that institution may confine itself to examining the general characteristics of the scheme at issue in order to establish whether it involves elements of State aid.41In that regard, without ruling on the plea of inadmissibility raised by IFPEN and the French Republic against that argument, alleging that the contested decision did not classify the guarantee at issue as an ‘aid scheme’, the General Court rejected that argument as unfounded.42Although, in paragraph 168 of the judgment under appeal, the General Court considered that the guarantee associated with the EPIC status in general comes within the concept of ‘aid scheme’ for the purposes of Article 1(d) of Regulation No 659/1999, on the contrary, it held, in paragraphs 169 to 172 of that judgment, that IFPEN’s conversion into an EPIC, in so far as it could be classified as ‘State aid’, constituted aid granted on the basis of an aid scheme which must be notified, that is to say individual aid for the purposes of Article 1(e) of that regulation.43Finally, as regards the dealings between IFPEN and banks and financial institutions, the General Court held, in paragraph 187 of the judgment under appeal, that the Commission could, in principle, rely on the presumption established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217). However, in paragraphs 188 and 189 of the judgment under appeal, the General Court held that that presumption had been rebutted by the Commission itself, since the latter had concluded, in the contested decision, that IFPEN had derived no real economic advantage in the form of more favourable credit terms granted to it by banks and financial institutions in virtue of its EPIC status. The General Court concluded therefrom, in paragraph 190 of that judgment, that the investigation carried out by the Commission had shown that IFPEN had derived no advantage from its conversion into an EPIC in its dealings with banks and financial institutions during the period concerned.44At the conclusion of its reasoning, the General Court concluded, in paragraph 197 of the judgment under appeal, that the Commission had not, in the contested decision, shown the existence of an advantage that IFPEN could have derived from the State guarantee associated with its EPIC status, either in its dealings with banks and financial institutions or in those with suppliers or customers.45Consequently, the General Court annulled Article 1(3), (4) and (5) and Articles 2 to 12 of the contested decision, by which the Commission had classified the guarantee deriving from IFPEN’s EPIC status as ‘State aid’ for the purposes of Article 107(1) TFEU, and specified the consequences of that classification. Forms of order sought by the parties 46The Commission claims that the Court should:set aside the judgment under appeal;refer the case back to the General Court for reconsideration;reserve the costs.47The French Republic contends that the Court should:dismiss the appeal;order the Commission to pay the costs.48IFPEN contends that the Court should:order the Commission to pay all the costs, including those incurred before the General Court. The appeal 49The Commission puts forward three grounds in support of its appeal. The first ground of appeal 50By its first ground of appeal, divided into three parts, the Commission alleges that the General Court erred in law by prohibiting it from limiting its investigation to the general characteristics of the aid scheme at issue, and by wrongly concluding that the guarantee enjoyed by IFPEN in its dealings with banks and financial institutions does not constitute State aid, relying on the absence of a real advantage for that establishment in the past (first and second parts). The Commission also alleges that the General Court exceeded the limits of its judicial review by upholding a head of claim that had not been raised by IFPEN and which was not sufficiently substantiated by the French Republic (third part). First part of the first ground of appeal – Arguments of the parties 51In the context of the first part of the first ground of appeal, directed against paragraphs 162 and 164, and against paragraphs 168 to 173 of the judgment under appeal, the Commission claims that the General Court incorrectly held that the guarantee benefiting IFPEN did not come within the concept of ‘aid scheme’ referred to in Article 1(d) of Regulation No 659/1999 and that, consequently, it could not rely on the general characteristics of that guarantee in order to show that it constitutes State aid.52In that regard, the Commission states that that concept of ‘aid scheme’ covers measures which are characterised by the fact that certain elements are not defined and remain unspecified at the time of their adoption, or even, in some cases, during their application. Therefore, when the Commission assesses the scope of such measures in order to determine whether they constitute aid for the purposes of Article 107(1) TFEU, it may restrict itself to examining their general characteristics.53In the present case, the Commission considers that the State guarantee in favour of IFPEN, which is not linked to a specific project and which is granted to it for an indefinite period and for an indefinite amount, must be classified as an ‘aid scheme’. According to the Commission, it concerns, in particular, a ‘scheme of aid schemes’, given that the grant of the guarantee in favour of IFPEN itself belongs to a larger aid scheme, namely the implied and unlimited State guarantee associated by law with the EPIC status.54The Commission contests, therefore, the findings of the General Court, in paragraphs 168 to 170 of the judgment under appeal that the guarantee associated with the EPIC status must be classified as an ‘aid scheme’, whereas the recognition of the EPIC status, with the grant of the guarantee resulting therefrom, constitutes individual aid which must be notified to the Commission.55In that regard, the Commission states, first, that, contrary to the finding made in paragraph 171 of the judgment under appeal, the requirement to notify the aid in no way proves that the guarantee in favour of IFPEN does not constitute an aid scheme. Both aid schemes and individual aid must be notified to the Commission.56Secondly, the Commission highlights the fact that the General Court’s interpretation results in depriving it of the possibility of adopting appropriate measures in order to request the French authorities to terminate the guarantee for a specific EPIC. In accordance with Article 108(1) TFEU, the Commission may propose appropriate measures with respect solely to aid schemes, and not to individual aid.57IFPEN responds that the first part of the first ground of appeal is, in two respects, manifestly inadmissible.58In that regard, IFPEN notes, firstly, that the reasoning set out by the Commission is based on a novel interpretation of the concept of ‘aid scheme’, according to which the guarantee in favour of IFPEN is a ‘scheme of aid schemes’. Therefore, the first part is based on a new argument, which cannot be admitted at the appeal stage, in accordance with Article 170(1) of the Rules of Procedure of the Court.59Secondly, IFPEN points out that, as the General Court itself acknowledged in paragraph 164 of the judgment under appeal, the contested decision did not classify the grant of the guarantee in favour of IFPEN as a ‘scheme of aid schemes’. In fact, that decision was adopted on the basis of substantive and procedural rules of law of the Union which preclude the Commission from considering the measure examined to constitute an aid scheme.60On the substance, IFPEN and the French Government contest the Commission’s arguments.– Findings of the Court 61It should be noted, first, that, pursuant to Article 1(d) of Regulation No 659/1999, ‘aid scheme’ means any act on the basis of which, without further implementing measures being required, individual aid awards may be made to undertakings defined within that act in a general and abstract manner and any act on the basis of which aid which is not linked to a specific project may be awarded to one or several undertakings for an indefinite period of time and/or for an indefinite amount.62Secondly, Article 1(e) of that regulation defines the concept of ‘individual aid’ as any aid that is not awarded on the basis of an aid scheme, or which is awarded on the basis of an aid scheme, but which must be notified.63Moreover, as is apparent from the Court’s case-law in relation to State aid, the Commission may, in the case of an aid scheme, confine itself to examining the general characteristics of the scheme in question, without being required to examine each particular case in which it applies in order to establish whether that scheme involves elements of aid (judgments of 9 June 2011, Comitato Venezia vuole vivere and Others v Commission, C‑71/09 P, C‑73/09 P and C‑76/09 P, EU:C:2011:368, paragraph 130, and of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraph 122).64It is in the light of those considerations that it is necessary to verify whether, as the Commission claims, the General Court erred in law when it held, in paragraphs 169 to 172 of the judgment under appeal, that the guarantee in favour of IFPEN does not constitute an aid scheme and that the Commission cannot, therefore, rely on the general characteristics of that measure in order to demonstrate that it constitutes State aid.65In that regard, it must be noted, in the first place, that the General Court correctly held, in paragraph 169 of the judgment under appeal, that the measure examined in the contested decision was not, in general, the guarantee associated with the EPIC status, but, as is apparent in particular from recitals 21 to 24 of that decision, a specific measure, namely the conversion of IFPEN into an EPIC.66It must be pointed out that the measure at issue does not contain any provision on the basis of which it would be possible to grant aid, for the purposes of Article 1(d) of Regulation No 659/1999. That measure merely grants to a given legal person, in this case IFPEN, the benefit of an unlimited and implied State guarantee associated with the EPIC status, which results in the grant to that operator of such a guarantee.67Consequently, and contrary to what is maintained by the Commission, that measure does not come within the concept of ‘aid scheme’ referred to in Article 1(d) of Regulation No 659/1999.68In the second place, it should be noted, as does IFPEN, that, since the Commission decided to analyse the measure at issue as an ad hoc individual aid measure, it is in the light of that sole classification that the General Court is to examine the lawfulness of the contested decision.69In particular, as the General Court noted in paragraph 171 of the judgment under appeal, the Commission stated, in recitals 256 to 259 of the contested decision, that the conversion of IFPEN into an EPIC constituted new aid for the purposes of Article 1(c) of Regulation No 659/1999, subject to the notification obligation, and that, in so far as IFPEN’s change in status had not been formally notified to it, but only pointed out incidentally in the context of other proceedings, that obligation had not been fulfilled by the French authorities, so that the conversion of IFPEN into an EPIC constituted unlawful aid.70In those circumstances, it should be noted, as the Advocate General pointed out in point 78 of his Opinion, that the General Court did not err in law when it held, in paragraph 172 of the judgment under appeal, that, in so far as the conversion of IFPEN into an EPIC could be classified as ‘State aid’, it constituted aid granted on the basis of an aid scheme which had to be notified, that is to say individual aid for the purposes of Article 1(e) of Regulation No 659/1999.71Moreover, the Commission’s argument relating to the concept of ‘aid scheme’ cannot undermine that conclusion, since, as the Advocate General stated in point 80 of his Opinion, such a concept is not included in Regulation No 659/1999. In that regard, Article 1 of that regulation, which lists the different categories of aid, merely defines aid schemes and individual aid, without providing for the possibility that a measure coming within the concept of ‘aid scheme’ under Article 1(d) of that regulation could itself belong to a larger aid scheme.72The same applies to the Commission’s argument that the classification of the conversion of IFPEN into an EPIC as ‘individual aid’, established by the General Court, has the effect of depriving it of the possibility of adopting appropriate measures, for the purposes of Article 108(1) TFEU, to request the French authorities to terminate the guarantee for a specific EPIC.73In that regard, it suffices to point out, as was noted by the Advocate General in point 82 of his Opinion, that the General Court’s findings concerning the individual aid character of the measure examined, included in paragraphs 169 to 172 of the judgment under appeal, are based on the specific circumstances connected with the conversion of IFPEN into an EPIC and are not, in principle, applicable to all establishments of that type.74In those circumstances, and without it being necessary to rule on the admissibility of the first part of the first ground of appeal, it is necessary, in any event, to reject that part as unfounded. Second part of the first ground of appeal 75In the context of the second part of the first ground of appeal, the Commission claims that the General Court erred in law when it held that the guarantee associated with the EPIC status did not confer an advantage on IFPEN in its dealings with banks and financial institutions, by relying solely on the lack of a real advantage for that establishment in its dealings during the period concerned.76In that regard, the Commission notes, first of all, that, since the measure at issue constitutes an aid scheme, the General Court should have verified whether that guarantee was, in the light of its general characteristics, capable of conferring an advantage on IFPEN in the future, and that regardless of the lack of a real advantage in terms of credit conditions during the period concerned. The Commission points out in that regard that it examined the actual effects of the guarantee over that period with the sole aim of verifying whether a specific advantage had come into existence over that period and not in order to examine whether the guarantee constituted State aid, a question which depended exclusively on an assessment of the potential effects of that measure.77Moreover, according to the Commission, the approach adopted by the General Court amounts to treating Member States which do not notify the grant of unlimited guarantees more favourably than those which do so in accordance with Article 108 TFEU, although, according to a settled principle of State aid, the former Member States cannot be treated advantageously vis-à-vis the latter.78When a Member State notifies its intention of granting that type of guarantee, the Commission, in so far as it cannot know the actual effects of the measure, examines only the potential effects thereof. If, by contrast, a Member State grants such a guarantee without previously notifying it, it could then show that that measure has produced no specific effect and, consequently, exclude its classification as ‘State aid’. As a result, the Member States would be encouraged not to notify the grant of unlimited guarantees.79Alternatively, the Commission claims that, even if it can be considered that the guarantee in favour of IFPEN does not constitute an aid scheme but individual aid, the General Court should have based its examination on the potential effects of the guarantee, namely on the effects that that measure was likely to produce.80IFPEN and the French Government contest those arguments.81It should be noted at the outset, as was held in the context of the first part of the first ground of appeal, that the measure at issue does not constitute an aid scheme for the purposes of Article 1(d) of Regulation No 659/1999.82Therefore, the General Court was correct to conclude, in paragraph 173 of the judgment under appeal, that the case-law relating to the evidential obligations imposed on the Commission in the area of aid schemes was not applicable in the present case.83In those circumstances, in so far as the second part of the first ground of appeal is based on the mistaken premiss that the measure at issue constitutes an aid scheme, that part must be rejected as unfounded.84As regards the argument put forward in the alternative by the Commission, it is necessary to verify whether, as the latter claims, the General Court erred in law when it held that, in order to show the existence of an advantage for IFPEN in its dealings with banks and financial institutions, the Commission could not limit its examination to the potential effects that the measure at issue was capable of producing and that it should also have examined the actual effects produced by the guarantee associated with the EPIC status.85However, that argument is based on an erroneous reading of the judgment under appeal.86In paragraphs 79 and 182 of that judgment, the General Court stated that, in the contested decision, the Commission had acknowledged that, during the period concerned, IFPEN had derived no real economic advantage from the guarantee associated with its EPIC status in its dealings with banks and financial institutions. In particular, the General Court noted that, in recital 199 of that decision, the Commission had stated that the potential advantage which IFPEN could have derived from the unlimited guarantee in the form of more advantageous market rates did not materialise over the period concerned.87In the light of that finding, the General Court held, in paragraph 188 of the judgment under appeal, that the simple presumption for the purposes of the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), according to which the unlimited and implied State guarantee associated with the EPIC status results in an improvement in the financial position of the beneficiary undertaking concerned, had been rebutted in the present case.88Therefore, and contrary to what is claimed by the Commission, the General Court did not state that it should have verified the actual effects of the measure at issue over the period considered in order to establish the existence of an advantage for IFPEN in its dealings with banks and financial institutions. The General Court merely held that, since the Commission had itself noted the lack of actual effects over that period, the simple presumption established by the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), was rebutted.89Consequently, the second part of the first ground of appeal must be rejected in its entirety. Third part of the first ground of appeal 90By the third part of the first ground of appeal, the Commission complains that the General Court ruled on matters which were not the subject matter of pleas put forward by the parties as regards the existence of an advantage for IFPEN in its dealings with banks and financial institutions.91In that regard, the Commission notes that its analysis relating to the existence of such an advantage had not been criticised by IFPEN in its application at first instance. As regards the French Republic, it merely contested the existence of that advantage on the sole ground that the Commission had not demonstrated it, without putting forward any argument in support of that assertion.92Consequently, by upholding a claim that had not been raised by one of the applicants at first instance and which had been raised only in an insufficiently detailed way by the other applicant, the General Court failed to observe the limits of its jurisdiction.9394It should be noted, at the outset, that it is apparent from paragraphs 58 and 185 of the judgment under appeal, that the French Republic indeed contested, in the context of the first part of its plea in law before the General Court, the Commission’s conclusions, contained in the contested decision, relating to the existence of an advantage for IFPEN in its dealings with banks and financial institutions.95Likewise, as was noted by the Advocate General in point 92 of his Opinion, IFPEN contested on several occasions, in its application and its reply lodged before the General Court, the Commission’s analysis relating to the existence of such an advantage.96In those circumstances, the third part of the first ground of appeal must be rejected as unfounded.97Since none of the parts of the first ground of appeal have been upheld, it must be rejected. The second ground of appeal Arguments of the parties 98By its second ground of appeal directed, in essence, against paragraphs 134 to 137 and 188 to 193 of the judgment under appeal, the Commission complains that the General Court, first, erred in law concerning the definition of the scope of the presumption of the existence of an advantage established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), and, secondly, that it wrongly held that that presumption had, in the present case, been rebutted with respect to IFPEN’s dealings with banks and financial institutions.99In the context of that ground of appeal, the Commission notes, first of all, that, in accordance with that judgment, it is not required to show the actual effects of a guarantee in order to establish the existence of an advantage on the part of the entity benefiting from the EPIC status. It could rely, in that regard, on a simple presumption, resulting from the guarantee itself.100Next, the Commission notes that the General Court wrongly considered, in paragraphs 188 to 192 of the judgment under appeal, that the presumption of an advantage had been rebutted due to the absence of an actual effect on IFPEN’s dealings with banks and financial institutions during the period concerned, since that fact did not suffice to rebut that presumption. To establish that that presumption had been rebutted, it would have been necessary to show that the guarantee at issue was not capable, due to the particular characteristics of IFPEN, of conferring an advantage on that establishment in its dealings with those operators.101Finally, the Commission concludes that, by thus restricting the scope of the presumption of an advantage, the General Court infringed Article 107(1) TFEU and the rules of evidence for the existence of an advantage for the purposes of that provision.102IFPEN and the French Republic contest those arguments.103IFPEN claims that the General Court correctly held that, in the present case, the Commission could not rely on the presumption deriving from the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217).104IFPEN notes that that presumption constitutes an exception to the principle that it is for the Commission to show that a measure fulfils the conditions to be classified as ‘State aid’ for the purposes of Article 107(1) TFEU. Such a presumption should therefore be strictly construed and, consequently, applied only where the existence of a real advantage is plausible.105IFPEN adds that, in the contested decision, the Commission failed to specify the reasons why it is plausible to presume the existence of an advantage in favour of IFPEN. As a result, that decision does not meet the requirements to state reasons deriving from Article 296 TFEU.106As regards the rebuttal of the presumption, IFPEN notes that the General Court correctly held, in paragraphs 189 to 192 of the judgment under appeal, that during the period concerned, that establishment had derived no benefit from the guarantee associated with its EPIC status in its dealings with banks and financial institutions. Moreover, the Commission adduced no evidence capable of establishing a possible change to the situation after 2010, which would have resulted in IFPEN borrowing amounts under conditions which differ from market conditions.107The French Republic considers that the Commission’s second ground of appeal must be rejected as unfounded. In that regard, that government refers, in essence, to the arguments presented in the context of its response to the second part of the first ground of appeal. Findings of the Court 108It should be noted that, according to the settled case-law of the Court, the classification of a national measure as ‘State aid’ for the purposes of Article 107(1) TFEU requires that all the following conditions are fulfilled. Firstly, there must be intervention by the State or through State resources. Secondly, that intervention must be liable to affect trade between Member States. Thirdly, it must confer a selective advantage on the recipient. Fourthly, it must distort or threaten to distort competition (judgments of 21 December 2016, Commission v World Duty Free Group and Others, C‑20/15 P and C‑21/15 P, EU:C:2016:981, paragraph 53 and the case-law cited, and of 18 May 2017, Fondul Proprietatea, C‑150/16, EU:C:2017:388, paragraph 13).109As regards, in particular, the third of those conditions, it must be noted that, according to the Court’s equally settled case-law, measures that, whatever their form, are likely directly or indirectly to favour certain undertakings, or fall to be regarded as an economic advantage that the recipient undertaking would not have obtained under normal market conditions, are regarded as State aid (judgments of2 September 2010, Commission v Deutsche Post, C‑399/08 P, EU:C:2010:481, paragraph 40 and the case-law cited, and of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 65 and the case-law cited).110It must be noted that, as the General Court stated in paragraph 71 of the judgment under appeal, it is for the Commission to provide proof of the existence of State aid within the meaning of Article 107(1) TFEU. In particular, it is apparent from the Court’s case-law relating to the principles governing the administration of proof in the sector of State aid that the Commission is required to conduct a diligent and impartial examination of the contested measures, so that it has at its disposal, when adopting the final decision establishing the existence and, as the case may be, the incompatibility or unlawfulness of the aid, the most complete and reliable information possible for that purpose (judgment of 3 April 2014, France v Commission, C‑559/12 P, EU:C:2014:217, paragraph 63).111However, it follows from the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217, paragraphs 98 and 99), that, in the context of that examination, the Commission can rely on a simple presumption that the grant of an implied and unlimited State guarantee in favour of an undertaking which is not subject to the ordinary compulsory administration and winding-up procedures results in an improvement in its financial position through a reduction of the charges that would normally encumber its budget. Consequently, in the context of the procedure relating to existing aid, to prove the advantage obtained by such a guarantee to the recipient undertaking, it is sufficient for the Commission to establish the mere existence of that guarantee, without having to show the actual effects produced by it from the time that it is granted.112It is in the light of those considerations that it is necessary to verify whether, as the Commission claims, the General Court erred in law when it defined the scope of the simple presumption of the existence of an advantage established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), and, consequently, held that that presumption had been rebutted in the present case.113In that regard, it must be noted that, in paragraphs 134 to 137 of the judgment under appeal, the General Court, in the first place, emphasised that possibility of using a presumption as a means of proof depended on the plausibility of the assumptions on which that presumption was based. In particular, the presumption established in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), is based on the dual premiss, recognised as plausible by the Court, to the effect, first, that the existence of a guarantee by the public authorities of a Member State has a favourable influence on the assessment by creditors of the risk of default on the part of the beneficiary of that guarantee and, secondly, that that favourable influence is reflected in a reduction in the cost of credit.114In the second place, as regards IFPEN’s dealings with banks and financial institutions, the General Court held, in paragraphs 188 to 190 of the judgment under appeal, that the presumption thus established by the Court had, in the present case, been rebutted, because the investigation carried out by the Commission had revealed that, during the period concerned, IFPEN had not derived any real economic advantage from the guarantee associated with its EPIC status.115It must be noted that the reasoning of the General Court set out in paragraphs 134 to 137 and 188 to 190 of its judgment is vitiated by errors of law.116As the Advocate General, in essence, stated in point 123 of his Opinion, the mere fact that IFPEN benefits from a State guarantee was such as to enable the Commission to rely on the presumption of an advantage, as developed by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), since that presumption is based on the idea that, thanks to the guarantee associated with its status, an EPIC benefits or could benefit from better financial terms than those normally available on the financial markets. In order to rely on that presumption, the Commission was therefore not required to show the actual effects produced by the guarantee at issue (see, to that effect, judgment of 3 April 2014, France v Commission, C‑559/12 P, EU:C:2014:217, paragraph 99).117Therefore, although it is true that such a presumption is only a simple presumption, and thus rebuttable, it can nevertheless be rebutted only in so far as it is shown that, in light of the economic and legal context in which the guarantee associated with the EPIC status concerned takes place, the latter did not obtain in the past and, according to any plausibility, will not obtain in the future any real economic advantage from that guarantee.118In those circumstances, contrary to the findings of the General Court in paragraphs 134 to 137 and 188 to 190 of the judgment under appeal, the mere fact that the beneficiary of such a guarantee in the past derived no real economic advantage from its EPIC status does not suffice, in itself, to rebut the presumption of the existence of an advantage.119Consequently, the General Court was wrong to hold, in paragraphs 134 to 137 of the judgment under appeal, that the possibility of relying on the presumption established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), was based on the existence of actual effects on the part of the beneficiary of the guarantee, and, consequently, in paragraphs 188 to 190 of that judgment, that, with respect to IFPEN’s dealings with banks and financial institutions, that presumption had been rebutted.120Having regard to the foregoing, the second ground of appeal must be upheld. The third ground of appeal 121By its third ground of appeal directed against paragraphs 134 to 161 of the judgment under appeal, the Commission claims that the General Court wrongly concluded that it could not rely on a simple presumption of the existence of an advantage in favour of IFPEN in the context of its dealings with its suppliers and its customers.122According to the Commission, such a conclusion on the part of the General Court is based, first, on a mistaken interpretation of the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), and of the Guarantee Notice, and, secondly, on an alleged absence of plausible influence of the guarantee on IFPEN’s dealings with its suppliers and its customers.123In the first place, as regards the interpretation of the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), the Commission claims that it in no way follows from that judgment that the presumption of the existence of an advantage could not apply to an EPIC’s dealings with its suppliers and its customers. In that regard, it notes that the advantage identified by the Court in that judgment is based on two factors, namely improved credit conditions and the non-payment by the EPIC of the appropriate premium corresponding to the risk borne by the State. However, those considerations apply also to dealings between an EPIC, such as IFPEN, and its trade creditors.124Moreover, the fact that the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), and the Guarantee Notice refer, in the context of the examination of the presumption of the existence of an advantage, only to loans granted by banks or financial institutions does not exclude that that presumption may also be applied in the context of an EPIC’s dealings with its trade creditors, in so far as it is only by way of example that the Court, in that judgment, made such a reference.125In the second place, as regards the alleged absence of plausible influence of the guarantee over the dealings of an EPIC, such as IFPEN, with its suppliers and its customers, the Commission notes, first of all, that it cannot be reasonably maintained that trade creditors are in general indifferent to the repayment of their claims. On the contrary, in every credit transaction, whether it be financial credit or trade credit, the risk of non-repayment is a factor which weighs on the relationship between the contracting parties. Consequently, in the present case, the assurance for a trade creditor of IFPEN to have its credit repaid by the State in the event of default on the part of IFPEN would be of significant importance for that creditor.126Next, the Commission notes that, in paragraph 139 of the judgment under appeal, the General Court considered that the plausibility of the hypothesis of a favourable influence of the existence of a guarantee over IFPEN’s dealings with its suppliers, amounting to a reduction of the prices agreed by the latter, was not per se evident. According to the Commission, although a price reduction can derive from a variety of factors and not only from the existence of a guarantee associated with the EPIC status, it is nevertheless appropriate to reject the application of the presumption of an advantage established in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), in relation to the dealings of an EPIC with its suppliers.127IFPEN replies that, by its third ground of appeal, the Commission seeks in reality to contest the assessments of fact and evidence made by the General Court in paragraphs 90 to 131 of the judgment under appeal. That ground should therefore be rejected as inadmissible.128On the substance, IFPEN and the French Republic contest the Commission’s arguments.129IFPEN notes that, in so far as the grant of the guarantee associated with the EPIC status constitutes individual aid and the presumption established by the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), is not applicable in the present case, the General Court correctly concluded, in paragraph 129 of the judgment under appeal, that the Commission was obliged to examine the actual effects of the guarantee, in order to show the existence of an advantage for IFPEN.130Moreover, IFPEN maintains that, contrary to what the Commission claims in its appeal, the latter did not identify, in the contested decision, an advantage on the part of its creditors, in particular its suppliers and its customers.131In that regard, it notes that, in the contested decision and in its appeal, the Commission wrongly concluded, first, as regards IFPEN’s dealings with its suppliers, that the latter are exempt from paying a factoring commission in order to assign their claims to IFPEN, since they benefit from the implied State guarantee, and, secondly, as regards IFPEN’s dealings with its customers, that, thanks to the guarantee associated with its EPIC status, IFPEN was able to offer its customers a performance bond or best efforts guarantee. Therefore, the General Court correctly considered, respectively in paragraphs 99 to 108 and in paragraphs 111 to 120 of the judgment under appeal, that the hypothesis relied on by the Commission, in the light of the alleged advantage in favour of IFPEN in its dealings with customers and suppliers, was theoretical and not plausible.132The French Republic considers that the General Court did not err in law as regards the definition of the scope of application of the presumption of the existence of an advantage deriving from the implied and unlimited State guarantee. According to that Member State, the General Court was correct not to extend that guarantee to the EPIC’s dealings with its suppliers and customers.133In that regard, the French Republic notes that the presumption established by the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), is not based on an assumption concerning the EPIC’s dealings with its suppliers or customers so that the Commission could not rely on such an assumption in those circumstances.134In any event, as the General Court noted in paragraph 136 of the judgment under appeal, the possibility of recourse to such a presumption as a means of proof depends on the plausibility of the assumptions on which that presumption is based.135In that regard, the contested decision is based, first, on the assumption that the EPIC which benefits from a State guarantee enjoys a price reduction granted by its suppliers. The General Court correctly noted that a price reduction in dealings between a supplier and the EPIC concerned is based on a variety of factors, including the volume of orders placed by the customer, the payment terms granted by the supplier or the length of the contractual relationship. A price reduction therefore does not result from the existence of a guarantee by the public authorities in favour of the EPIC.136Secondly, as regards IFPEN’s dealings with its customers, that Member State claims that the General Court was correct to consider, in paragraph 141 of the judgment under appeal, that the Commission had not defined in the contested decision the advantage which IFPEN would derive from the existence of the State guarantee and that, consequently, the presumption it intended to rely on was, in that regard, devoid of purpose. According to the French Republic, the Commission has not shown how the implied and unlimited State guarantee associated with the EPIC status resulted in an improvement of its situation in its dealings with its customers.137Firstly, it should be noted that, contrary to what is maintained by IFPEN, the Commission does not seek, by its third ground of appeal, to contest the assessments of fact and evidence made by the General Court in the judgment under appeal.138By that ground of appeal, the Commission claims that the General Court erred in law when it held, in paragraphs 134 to 160 of the judgment under appeal, that it could not rely on the presumption of the existence of an advantage established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), to show the existence, in favour of IFPEN, in its dealings with its suppliers and customers, of an advantage deriving from the State guarantee.139In that regard, it is true that, in that judgment, the Court expressly recognised the existence of a simple presumption of advantage connected with the guarantee associated with the status of an EPIC in relation only to the dealings which the latter can have with banks and financial institutions. However, as was noted by the Advocate General in point 168 of his Opinion, it does not follow from that judgment that such a presumption could not, in principle, apply to the EPIC’s other dealings, in particular to those it has with its suppliers and its customers.140First of all, contrary to what was stated by the General Court in paragraph 147 of the judgment under appeal, no useful conclusion can be drawn from the fact that, in the ‘La Poste’ decision, which was contested in the context of the case that gave rise to the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), the demonstration of the existence of an advantage in favour of the EPIC had been made by the Commission by examining solely the EPIC’s dealings with banks and financial institutions, without examining its dealings with suppliers and customers. Such a circumstance was in no way stated by the Court in paragraphs 94 to 99 of that judgment, in which the simple presumption of an advantage associated with the EPIC status was established.141Next, as regards the consequences which the General Court drew, in paragraph 152 of the judgment under appeal, from the reference to the judgment of 8 December 2011, Residex Capital IV (C‑275/10, EU:C:2011:814), made by the Court in paragraph 96 of the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), it should be noted that, in the first of those judgments, the Court held, in essence, that national courts have jurisdiction under Article 108(3) TFEU to cancel a State guarantee in a situation in which unlawful aid was implemented by means of that guarantee, which had been given by a public authority in order to cover a loan granted by a finance company to an undertaking which would not have been able to secure such financing under normal market conditions.142In the case giving rise to the judgment of 8 December 2011, Residex Capital IV (C‑275/10, EU:C:2011:814), the classification of the guarantee granted by the public authority as State aid in favour of the borrower was not discussed before the Court, since it was common ground that, at the time when the guarantee was created, the borrower was already in difficulty and would not therefore have been able to obtain financing on the capital markets without it.143Therefore, contrary to what was held by the General Court in paragraph 152 of the judgment under appeal, the reference to that judgment supplies no useful information concerning the scope of the simple presumption of an advantage established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217).144Likewise, in paragraph 156 of the judgment under appeal, the General Court could not come to any conclusions about the scope of that presumption from the reference made by the Court, in paragraph 97 of the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), to points 1.2, 2.1 and 2.2 of the Guarantee Notice.145Admittedly, it is true that those paragraphs of the Guarantee Notice refer solely to the advantage which could be derived by the beneficiary of a State guarantee in the form of better credit terms, such as a lower lending rate or less stringent security requirements. However, the reference made by the Court to those paragraphs of the Guarantee Notice was justified in the light of the circumstances of the case giving rise to the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), which was concerned solely with the issue of the advantage that the EPIC at issue could derive from the guarantee associated with its status in its dealings with banks and financial institutions.146Finally, it should be noted that the argument which the General Court, in paragraph 159 of the judgment under appeal, intended to derive from the observations made by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), in particular in paragraph 104 thereof, lacks, at the very least, clarity. It is not clear how those observations confirm, as the General Court nevertheless stated, that the alleged means of proof accepted by the Court to establish whether an implied and unlimited State guarantee, associated with the EPIC status, constitutes an economic advantage is solely applicable to the case of a borrower who, as a result of that guarantee, benefits from lower interest rates or is able to provide less security.147In those circumstances, it must be noted that the General Court erred in law when it held, in paragraph 160 of the judgment under appeal, that the presumption of the existence of an advantage established by the Court in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), is restricted to dealings which involve a financing transaction, a loan or, more broadly, credit from an EPIC’s creditor, in particular that EPIC’s dealings with banks and financial institutions.148Consequently, the third ground of appeal must be upheld.149However, it must be noted that that judgment can also not be interpreted as meaning that that presumption can be automatically extended to the dealings of an EPIC with its suppliers and its customers, without it being necessary to examine, in advance, whether, in the light of the conduct of those operators, the advantage that the establishment could derive therefrom is similar to that it derives from its dealings with banks and financial institutions.150As was stated in paragraph 116 of the present judgment, the presumption established in the judgment of 3 April 2014, France v Commission (C‑559/12 P, EU:C:2014:217), is based on the hypothesis that, thanks to the guarantee associated with its status, the EPIC concerned benefits or could benefit from better financial conditions than those which are normally granted on the financial markets. Therefore, the application of that presumption to the EPIC’s dealings with suppliers and customers is justified only in so far as such more advantageous conditions arise also in the latter’s dealings on the markets concerned.151Consequently, when the Commission seeks to apply that presumption, it must examine the economic and legal context of the market affected by the dealings in question. In particular, the Commission is required to verify whether the conduct of players on the market concerned justifies a hypothesis of an advantage similar to that found in the EPIC’s dealings with banks and financial institutions.152It follows from all the foregoing that the judgment under appeal must be set aside in so far as, by that judgment, the General Court annulled Article 1(3), (4) and (5) and Articles 2 to 12 of the contested decision. Referral of the case back to the General Court 153According to the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, the latter may, where the decision of the General Court has been annulled, either itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court.154Since the state of the proceedings does not permit a decision on the arguments underlying the second and third grounds of appeal, the Court must refer the case back to the General Court for those grounds to be assessed. Costs 155Since the case has been referred back to the General Court, the costs relating to the present appeal proceedings must be reserved.On those grounds, the Court (Fifth Chamber) hereby: 1. Sets aside the judgment of the General Court of the European Union of 26 May 2016, France and IFP Énergies nouvelles v Commission (T‑479/11 and T‑157/12, EU:T:2016:320), in so far as, by that judgment, the General Court annulled Article 1(3), (4) and (5) and Articles 2 to 12 of Commission Decision 2012/26/EU of 29 June 2011 on State aid granted by France to the Institut Français du Pétrole (Case C-35/08 (ex NN 11/08)); 2. Refers the case back to the General Court of the European Union; 3. Reserves the costs. [Signatures]( *1 ) Language of the case: French. | 4c408-5033ad1-43cc | EN |
A person cannot be excluded from eligibility for subsidiary protection if he is deemed to have ‘committed a serious crime’ on the basis of the sole criterion of the penalty provided for under the law of the Member State concerned | 13 September 2018 ( *1 )(Reference for a preliminary ruling — Area of freedom, security and justice — Borders, asylum and immigration — Refugee status or subsidiary protection status — Directive 2011/95/EU — Article 17 — Exclusion from subsidiary protection status — Grounds — Conviction for a serious crime — Determination of seriousness on the basis of the penalty provided for under national law — Whether permissible — Need for an individual assessment)In Case C‑369/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Közigazgatási és Munkaügyi Bíróság (Budapest Administrative and Labour Court, Hungary), made by decision of 29 May 2017, received at the Court on 16 June 2017, in the proceedings Shajin Ahmed v Bevándorlási és Menekültügyi Hivatal, THE COURT (Second Chamber),composed of M. Ilešič, President of the Chamber, A. Rosas (Rapporteur), C. Toader, A. Prechal and E. Jarašiūnas, Judges,Advocate General: P. Mengozzi,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:–Mr Shajin Ahmed, by G. Győző, ügyvéd,the Hungarian Government, by M.Z. Fehér, G. Koós and M.M. Tátrai, acting as Agents,the Czech Government, by M. Smolek, J. Vláčil and A. Brabcová, acting as Agents,the French Government, by E. Armoët, E. de Moustier and D. Colas, acting as Agents,the Netherlands Government, by M.H.S. Gijzen and M.K. Bulterman, acting as Agents,the European Commission, by A. Tokár and M. Condou-Durande, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 17(1)(b) of Directive 2011/95/EU of the European Parliament and of the Council of 13 December 2011 on standards for the qualification of third-country nationals or stateless persons as beneficiaries of international protection, for a uniform status for refugees or for persons eligible for subsidiary protection, and for the content of the protection granted (OJ 2011 L 337, p. 9).2The request has been made in the context of a dispute between Mr Shajin Ahmed, an Afghan national, and the Bevándorlási és Menekültügyi Hivatal (Immigration and Asylum Office, Hungary), formerly the Bevándorlási és Állampolgársági Hivatal (Immigration and Nationality Office, Hungary) (‘the Office’), concerning the Office’s refusal to grant Mr Ahmed’s application for international protection. Legal context International law 3The Convention relating to the Status of Refugees, signed in Geneva on 28 July 1951 (United Nations Treaty Series, Vol. 189, p. 150, No 2545 (1954)), entered into force on 22 April 1954. It was supplemented and amended by the Protocol relating to the Status of Refugees, concluded in New York on 31 January 1967, which itself entered into force on 4 October 1967 (‘the Geneva Convention’).4Article 1 of the Geneva Convention, following the definition, in section A, of the term ‘refugee’, states in section F:‘The provisions of this Convention shall not apply to any person with respect to whom there are serious reasons for considering that:(a)he has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments drawn up to make provision in respect of such crimes;(b)he has committed a serious non-political crime outside the country of refuge prior to his admission to that country as a refugee;(c)he has been guilty of acts contrary to the purposes and principles of the United Nations.’ EU law 5Article 78(1) and (2) TFEU states:‘1. The [European] Union shall develop a common policy on asylum, subsidiary protection and temporary protection with a view to offering appropriate status to any third-country national requiring international protection and ensuring compliance with the principle of non‑refoulement. This policy must be in accordance with the [Geneva Convention] and other relevant treaties.2. For the purposes of paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, shall adopt measures for a common European asylum system comprising:a uniform status of asylum for nationals of third countries, valid throughout the Union;a uniform status of subsidiary protection for nationals of third countries who, without obtaining European asylum, are in need of international protection;…’6Directive 2011/95, adopted on the basis of Article 78(2)(a) and (b) TFEU, repealed Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status of third country nationals or stateless persons as refugees or as persons who otherwise need international protection and the content of the protection granted (OJ 2004 L 304, p. 12).7Recitals 3, 4, 8, 9, 12, 23, 24, 33 and 39 of Directive 2011/95 are worded as follows:‘(3)The European Council at its special meeting in Tampere on 15 and 16 October 1999 agreed to work towards establishing a Common European Asylum System, based on the full and inclusive application of the Geneva Convention …(4)The Geneva Convention … [provides] the cornerstone of the international legal regime for the protection of refugees.…(8)In the European Pact on Immigration and Asylum, adopted on 15 and 16 October 2008, the European Council noted that considerable disparities remain between one Member State and another concerning the grant of protection and the forms that protection takes and called for new initiatives to complete the establishment of a Common European Asylum System, provided for in the Hague Programme [adopted by the European Council on 4 November 2004 setting the objectives to be implemented in the area of freedom, security and justice in the period 2005-2010], and thus to offer a higher degree of protection.(9)In the Stockholm Programme [adopted in 2010], the European Council reiterated its commitment to the objective of establishing a common area of protection and solidarity, based on a common asylum procedure and a uniform status, in accordance with Article 78 [TFEU], for those granted international protection, by 2012 at the latest.(12)The main objective of this Directive is, on the one hand, to ensure that Member States apply common criteria for the identification of persons genuinely in need of international protection, and, on the other hand, to ensure that a minimum level of benefits is available for those persons in all Member States.(23)Standards for the definition and content of refugee status should be laid down to guide the competent national bodies of Member States in the application of the Geneva Convention.(24)It is necessary to introduce common criteria for recognising applicants for asylum as refugees within the meaning of Article 1 of the Geneva Convention.(33)Standards for the definition and content of subsidiary protection status should also be laid down. Subsidiary protection should be complementary and additional to the refugee protection enshrined in the Geneva Convention.(39)While responding to the call of the Stockholm Programme for the establishment of a uniform status for refugees or for persons eligible for subsidiary protection, and with the exception of derogations which are necessary and objectively justified, beneficiaries of subsidiary protection status should be granted the same rights and benefits as those enjoyed by refugees under this Directive, and should be subject to the same conditions of eligibility.’8Article 2 of Directive 2011/95 provides:‘For the purposes of this Directive the following definitions shall apply:“international protection” means refugee status and subsidiary protection status as defined in points (e) and (g);(f)“person eligible for subsidiary protection” means a third-country national or a stateless person who does not qualify as a refugee but in respect of whom substantial grounds have been shown for believing that the person concerned, if returned to his or her country of origin, or in the case of a stateless person, to his or her country of former habitual residence, would face a real risk of suffering serious harm as defined in Article 15, and to whom Article 17(1) and (2) does not apply, and is unable, or, owing to such risk, unwilling to avail himself or herself of the protection of that country;(g)“subsidiary protection status” means the recognition by a Member State of a third-country national or a stateless person as a person eligible for subsidiary protection;9In Chapter III of Directive 2011/95, entitled ‘Qualification for being a refugee’, Article 12, entitled ‘Exclusion’, provides, in its paragraphs 2 and 3:‘2. A third-country national or a stateless person is excluded from being a refugee where there are serious reasons for considering that:he or she has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments drawn up to make provision in respect of such crimes;he or she has committed a serious non-political crime outside the country of refuge prior to his or her admission as a refugee, which means the time of issuing a residence permit based on the granting of refugee status; particularly cruel actions, even if committed with an allegedly political objective, may be classified as serious non-political crimes;he or she has been guilty of acts contrary to the purposes and principles of the United Nations as set out in the Preamble and Articles 1 and 2 of the Charter of the United Nations [signed in San Francisco on 26 June 1945].3. Paragraph 2 applies to persons who incite or otherwise participate in the commission of the crimes or acts mentioned therein.’10Under the title ‘Revocation of, ending of or refusal to renew refugee status’, Article 14 of Directive 2011/95, which features in Chapter IV, provides, in its paragraph 4:‘Member States may revoke, end or refuse to renew the status granted to a refugee by a governmental, administrative, judicial or quasi-judicial body, when:there are reasonable grounds for regarding him or her as a danger to the security of the Member State in which he or she is present;he or she, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of that Member State.’11Chapter V of Directive 2011/95, entitled ‘Qualification for subsidiary protection’, includes Article 17, entitled ‘Exclusion’, according to which:‘1. A third-country national or a stateless person is excluded from being eligible for subsidiary protection where there are serious reasons for considering that:he or she has committed a serious crime;he or she has been guilty of acts contrary to the purposes and principles of the United Nations as set out in the Preamble and Articles 1 and 2 of the Charter of the United Nations;(d)he or she constitutes a danger to the community or to the security of the Member State in which he or she is present.2. Paragraph 1 applies to persons who incite or otherwise participate in the commission of the crimes or acts mentioned therein.3. Member States may exclude a third-country national or a stateless person from being eligible for subsidiary protection if he or she, prior to his or her admission to the Member State concerned, has committed one or more crimes outside the scope of paragraph 1 which would be punishable by imprisonment, had they been committed in the Member State concerned, and if he or she left his or her country of origin solely in order to avoid sanctions resulting from those crimes.’ Hungarian law 12Article 8 of the menedékjogról szóló 2007. évi LXXX. törvény (Law No LXXX of 2007 on the right to asylum) (Magyar Közlöny 2007/83; ‘the Law on the right to asylum’), states the following:‘1. No foreign national to whom one of the grounds for exclusion set out in Article 1, section D, E or F of the Geneva Convention applies may be granted refugee status.2. The term “serious non-political crime” within the meaning of Article 1(F)(b) of the Geneva Convention means any act in which — having regard to all the relevant circumstances, such as the purpose of the offence, its motive, the manner in which it was committed, the means used or envisaged — the criminal aspects of the offence prevail over its political aspects and for which, under Hungarian law, the penalty is a custodial sentence of five years or more.’13Article 11(3) of that law provides:‘The asylum authority shall revoke the granting of refugee status if the refugee has been definitively sentenced by a court for having committed a crime for which Hungarian law provides for a custodial sentence of five years or more.’14Article 15 of the Law on the right to asylum, which governs grounds for exclusion from subsidiary protection status, provides:‘Subsidiary protection status shall not be granted to a foreign nationalwhere there are serious reasons for considering that(aa)he or she has committed a crime against peace, a war crime, or a crime against humanity, as defined in the international instruments;(ab)he or she has committed a serious crime for which Hungarian law provides for a custodial sentence of five years or more;(ac)he or she has committed crimes contrary to the purposes and principles of the United Nations;[when his or her] stay on national territory constitutes a danger to national security.’ The dispute in the main proceedings and the question referred for a preliminary ruling 15Mr Ahmed obtained refugee status by decision of the Office of 13 October 2000 on account of the risk of persecution that he faced in his country of origin, as his father was a high-ranking officer in the Najibullah regime.16Criminal proceedings were subsequently brought in Hungary against Mr Ahmed, in the course of which he requested that the consulate of the Islamic Republic of Afghanistan be fully informed of the outcome.17Taking the view that it could be inferred from the request for protection which Mr Ahmed had voluntarily sent to his country of origin that the risk of persecution had ceased to exist, the Office initiated of its own motion a procedure to review his refugee status in 2014.18By a final judgment of 21 May 2014, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal, Hungary) imposed on Mr Ahmed a custodial sentence of two years and loss of civic rights for four years, for attempted murder. By a judgment of 14 July 2014, the Budapest Környéki Törvényszék (Budapest Regional Court, Hungary) imposed on him a custodial sentence of four years and loss of civic rights for three years, for attempted blackmail.19By decision of 4 November 2014, the Office withdrew Mr Ahmed’s refugee status pursuant to Article 11(3) of the Law on the right to asylum.20On 30 June 2015, Mr Ahmed filed a new application for refugee status and subsidiary protection status, which was rejected by the Office by decision of 9 December 2015.21Mr Ahmed brought an action against that decision before the Fővárosi Közigazgatási és Munkaügyi Bíróság (Budapest Administrative and Labour Court, Hungary). That court upheld the action and ordered the Office to initiate a new administrative procedure.22In the course of that new procedure, the Office, while noting the existence of an obstacle to refoulement, dismissed Mr Ahmed’s application both for refugee status and for subsidiary protection status by decision of 10 October 2016. The Office took the view that subsidiary protection could not be granted to Mr Ahmed due to the existence of a ground for exclusion within the meaning of the Law on the right to asylum, in that Mr Ahmed had committed a crime for which Hungarian law provides a custodial sentence of five years or more. In that regard, the Office took account of the sentences imposed on Mr Ahmed, as set out in the judgments referred to in paragraph 18 of the present judgment.23Mr Ahmed brought an action against that decision before the referring court, which is the Fővárosi Közigazgatási és Munkaügyi Bíróság (Budapest Administrative and Labour Court), in so far as, by that decision, the Office dismissed his application for the granting of subsidiary protection status.24According to Mr Ahmed, by using as a ground for exclusion from subsidiary protection status the fact that a person has committed a crime punishable, under Hungarian law, by five years’ imprisonment, the national legislation removes all discretion from the administrative bodies responsible for applying that law and the courts responsible for reviewing the legality of the decisions made by those bodies. The expression ‘he or she has committed a serious crime’ in Article 17(1)(b) of Directive 2011/95, which relates to grounds for exclusion from subsidiary protection status, implies, he submits, an obligation to assess all the circumstances of the individual case concerned.25The referring court notes that, according to the Hungarian legislation, the same criterion, namely, the fact that a person has been sentenced for having ‘committed a crime for which Hungarian law provides for a custodial sentence of five years or more’, serves as the basis both for revocation of refugee status, as provided for in Article 11(3) of the Law on the right to asylum, and for exclusion from subsidiary protection status, as follows from Article 15(a)(ab) of that law. By contrast, Directive 2011/95 lays down different criteria for revocation of refugee status and for exclusion from subsidiary protection status.26In that regard, the referring court states, concerning the revocation of refugee status, that Article 14(4)(b) of Directive 2011/95 uses as a criterion the conviction of the person concerned for a ‘particularly serious’ crime, implying that the convicted person clearly represents a danger to the community of the Member State in question, whereas, according to Article 17(1)(b) of that directive, exclusion from eligibility for subsidiary protection is based on the commission of a ‘serious crime’, suggesting that the offending conduct is less serious than that referred to in Article 14(4)(b) of the directive.27In the referring court’s view, the criterion used by Hungarian law, consisting of taking into consideration the duration of the penalty provided, does not make it possible to assess the seriousness of the crime actually committed.28Defining the concept of ‘serious crime’ on the basis of the sole criterion of the penalty provided would lead to any offence which may be punished, under Hungarian law, by a custodial sentence of five years or more, including offences for which the maximum possible penalty is a custodial sentence of five years, automatically being treated as serious. Moreover, a ground for exclusion based on the penalty provided could not take account of the fact that execution of the penalty might be suspended.29According to the referring court, the terms used in Article 14(4) and Article 17(1) of Directive 2011/95 imply a thorough assessment of all the circumstances of the individual case concerned and, for that case, the decision of the criminal court.30The referring court therefore considers it necessary to clarify the interpretation of Article 17(1)(b) of Directive 2011/95, which concerns exclusion from subsidiary protection status, in the light of, inter alia, the Court of Justice’s interpretation of Article 12(2)(b) and (c) of Directive 2004/83, now Article 12(2)(b) and (c) of Directive 2011/95, relating to exclusion from refugee status, in the judgment of 9 November 2010, B and D (C‑57/09 and C‑101/09, EU:C:2010:661, paragraph 87), according to which the competent authority of the Member State concerned cannot apply that provision until it has undertaken, for each individual case, an assessment of the specific facts within its knowledge, with a view to determining whether there are serious reasons for considering that the acts committed by the person in question, who otherwise satisfies the conditions for refugee status, are covered by one of the two grounds for exclusion laid down by that provision.31In those circumstances, the Fővárosi Közigazgatási és Munkaügyi Bíróság (Budapest Administrative and Labour Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Does it follow from the expression “he or she has committed a serious crime” used in Article 17(1)(b) of [Directive 2011/95] that the penalty provided for a specific crime under the law of the particular Member State may constitute the sole criterion to determine whether the person claiming subsidiary protection may be excluded from it?’ Consideration of the question referred 32By its question, the referring court asks, in essence, whether Article 17(1)(b) of Directive 2011/95 must be interpreted as precluding legislation of a Member State pursuant to which the applicant for subsidiary protection is deemed to have ‘committed a serious crime’ within the meaning of that provision, which may exclude him from that protection, on the basis of the sole criterion of the penalty provided for a specific crime under the law of that Member State.33In that regard, it should be noted that the concept of ‘serious crime’ in Article 17(1)(b) of Directive 2011/95 is not defined in that directive, nor does that directive contain any express reference to national law for the purpose of determining the meaning and scope of that concept.34The same is true with regard to the concept of ‘particularly serious crime’ referred to in Article 14(4)(b) of Directive 2011/95, relating to the revocation of refugee status, and the concept of ‘serious non‑political crime’, referred to in Article 12(2)(b) of that directive, relating to exclusion from refugee status.35According to the Czech and Hungarian Governments, as the EU legislature has not defined the concept of ‘serious crime’ in the context of applications for international protection, it is for the legislature of the Member States to define that concept. Against this, Mr Ahmed, the French and Netherlands Governments and the European Commission submit that that concept must, in the context of applications for international protection, be interpreted by taking into account the objectives and general principles of EU law applicable to refugees and that Article 17(1)(b) of Directive 2011/95 must, accordingly, be interpreted in the light of the Geneva Convention, in particular Article 1(F)(b) thereof, and of Article 12(2)(b) of that directive, which reproduces, in essence, the content of that provision.36In this regard, it must be recalled at the outset that, in accordance with the need for a uniform application of EU law and the principle of equality, the wording of a provision of EU law which makes no express reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous and uniform interpretation throughout the European Union, and that interpretation must take into account, inter alia, the context of that provision and the objective pursued by the rules of which it is part (see, to that effect, judgments of28 July 2016, JZ, C‑294/16 PPU, EU:C:2016:610, paragraphs 35 to 37; of 26 July 2017, Ouhrami, C‑225/16, EU:C:2017:590, paragraph 38; and of 12 April 2018, A and S, C‑550/16, EU:C:2018:248, paragraph 41).37It is apparent from recital 12 of Directive 2011/95 that one of its main objectives is to ensure that all Member States apply common criteria for the identification of persons genuinely in need of international protection. It also follows from Article 78(1) TFEU that the common policy which the European Union is to develop on asylum, subsidiary protection and temporary protection with a view to offering appropriate status to any third-country national requiring international protection and ensuring compliance with the principle of non-refoulement must be in accordance with the Geneva Convention.38In that context, it should be noted that, like Directive 2004/83, Directive 2011/95, in connection with the concept of ‘international protection’, refers to two separate systems of protection, namely the system governing refugee status and the system relating to subsidiary protection status (see, as regards Directive 2004/83, judgment of 8 May 2014, N., C‑604/12, EU:C:2014:302, paragraph 26).39As is apparent from recitals 6 and 33 of Directive 2011/95, subsidiary protection is intended to be complementary and additional to the protection of refugees enshrined in the Geneva Convention (judgment of 1 March 2016, Alo and Osso, C‑443/14 and C‑444/14, EU:C:2016:127, paragraph 31).40It is apparent from recitals 4, 23 and 24 of Directive 2011/95 that the Geneva Convention constitutes the cornerstone of the international legal regime for the protection of refugees and that the provisions of that directive for determining who qualifies for refugee status and the content thereof were adopted to guide the competent authorities of the Member States in the application of that convention on the basis of common concepts and criteria (judgment of 1 March 2016, Alo and Osso, C‑443/14 and C‑444/14, EU:C:2016:127, paragraph 28 and the case-law cited).41The Court of Justice had held on numerous occasions that the provisions of that directive, like those of Directive 2004/83, must, consequently, be interpreted in the light of its general scheme and purpose, and in a manner consistent with the Geneva Convention and the other relevant treaties referred to in Article 78(1) TFEU (judgments of 9 November 2010, B and D, C‑57/09 and C‑101/09, EU:C:2010:661, paragraph 78; of 1 March 2016, Alo and Osso, C‑443/14 and C‑444/14, EU:C:2016:127, paragraph 29; and of 31 January 2017, Lounani, C‑573/14, EU:C:2017:71, paragraph 42).42While those considerations are, in so far as they pertain to the Geneva Convention, relevant solely in relation to the conditions for determining who qualifies for refugee status and the content of that status, since the system laid down by the convention applies only to refugees and not to beneficiaries of subsidiary protection status, it is, however, apparent from recitals 8, 9 and 39 of Directive 2011/95 that the EU legislature intended to establish a uniform status for all beneficiaries of international protection (see, to that effect, judgment of 1 March 2016, Alo and Osso, C‑443/14 and C‑444/14, EU:C:2016:127, paragraphs 31 and 32).43As regards the grounds for exclusion from subsidiary protection status, it must be noted that the EU legislature drew inspiration from the rules applicable to refugees in order to extend them, so far as possible, to beneficiaries of subsidiary protection status.44The content and structure of Article 17(1)(a) to (c) of Directive 2011/95, concerning exclusion from eligibility for subsidiary protection, bear similarities to Article 12(2)(a) to (c) of that directive, relating to exclusion from refugee status, which itself reproduces, in essence, the content of Article 1(F)(a) to (c) of the Geneva Convention.45It is clear, furthermore, from the preparatory documents relating to Directive 2011/95, in the same way as those relating to Directive 2004/83 (see sections 4.5 and 7 of the explanatory memorandum concerning the proposal for a directive presented by the Commission on 30 October 2001 (COM(2001) 510 final) (OJ 2002 C 51 E, p. 325) and the proposal for a directive presented by the Commission on 21 October 2009 (COM(2009) 551 final)), that Article 17(1)(a) to (c) of Directive 2011/95 follows from the EU legislature’s intention to introduce grounds for exclusion from subsidiary protection similar to those applicable to refugees.46Nevertheless, while those grounds for exclusion are structured around the concept of ‘serious crime’, the scope of the ground for exclusion laid down by Article 17(1)(b) of Directive 2011/95 is broader than that of the ground for exclusion from refugee status laid down by Article 1(F)(b) of the Geneva Convention and Article 12(2)(b) of Directive 2011/95.47While the ground for exclusion from refugee status laid down by that provision refers to a serious non-political crime committed outside the country of refuge prior to admission of the person concerned as a refugee, the ground for exclusion from subsidiary protection laid down by Article 17(1)(b) of Directive 2011/95 refers more generally to a serious crime and is therefore limited neither territorially nor temporally, or as to the nature of the crimes at issue.48It should be recalled that, in the judgment of 9 November 2010, B and D (C‑57/09 and C‑101/09, EU:C:2010:661, paragraph 87), the Court held that it is clear from the wording of Article 12(2)(b) and (c) of Directive 2004/83, now Article 12(2)(b) and (c) of Directive 2011/95, that the competent authority of the Member State concerned cannot apply that provision until it has undertaken, for each individual case, an assessment of the specific facts within its knowledge, with a view to determining whether there are serious reasons for considering that the acts committed by the person in question, who otherwise satisfies the conditions for refugee status, are covered by one of the two grounds for exclusion laid down by that provision.49It follows that any decision to exclude a person from refugee status must be preceded by a full investigation into all the circumstances of his individual case and cannot be taken automatically (see, to that effect, judgment of 9 November 2010, B and D, C‑57/09 and C‑101/09, EU:C:2010:661, paragraphs 91 and 93).50Such a requirement must be transposed to decisions to exclude a person from subsidiary protection.51Like the grounds for exclusion from refugee status, the purpose underlying the grounds for exclusion from subsidiary protection is to exclude from subsidiary protection status persons who are deemed to be undeserving of the protection which that status entails and to maintain the credibility of the Common European Asylum System, which includes both the approximation of rules on the recognition of refugees and the content of refugee status and measures on subsidiary forms of protection, offering an appropriate status to any person in need of such protection (see, to that effect, as regards Directive 2004/83 and refugee status, judgment of 9 November 2010, B and D, C‑57/09 and C‑101/09, EU:C:2010:661, paragraphs 104 and 115).52It must be noted that Article 17(1)(b) of Directive 2011/95 permits a person’s exclusion from subsidiary protection status only where there are ‘serious reasons’ for taking the view that he has committed a serious crime. That provision sets out a ground for exclusion which constitutes an exception to the general rule stipulated by Article 18 of Directive 2011/95 and therefore calls for strict interpretation.53According to the referring court, the Law on the right to asylum leads, however, to any offence which may be punished, under Hungarian law, by a custodial sentence of five years or more automatically being classified as a serious crime.54The Commission correctly observes that that classification can cover a wide range of conduct of varying degrees of seriousness. In the Commission’s view, it is necessary for the authority or the competent national court ruling on the application for subsidiary protection to be able to examine, on the basis of criteria other than that of the penalty provided, whether the offence committed by the applicant, who otherwise satisfies the conditions for subsidiary protection status, is of such seriousness that it must lead to the rejection of his application for international protection.55In that regard, it is important to note that, while the criterion of the penalty provided for under the criminal legislation of the Member State concerned is of particular importance when assessing the seriousness of the crime justifying exclusion from subsidiary protection pursuant to Article 17(1)(b) of Directive 2011/95, the competent authority of the Member State concerned may apply the ground for exclusion laid down by that provision only after undertaking, for each individual case, an assessment of the specific facts brought to its attention with a view to determining whether there are serious grounds for taking the view that the acts committed by the person in question, who otherwise satisfies the qualifying conditions for the status applied for, come within the scope of that particular ground for exclusion (see, by analogy, judgments of 9 November 2010, B and D, C‑57/09 and C‑101/09, EU:C:2010:661, paragraph 87, and of 31 January 2017, Lounani, C‑573/14, EU:C:2017:71, paragraph 72).56That interpretation is supported by the report of the European Asylum Support Office (EASO) for the month of January 2016, entitled ‘Exclusion: Articles 12 and 17 of the Qualification Directive (2011/95/EU)’, which recommends, in paragraph 3.2.2 on Article 17(1)(b) of Directive 2011/95, that the seriousness of the crime that could result in a person being excluded from subsidiary protection be assessed in the light of a number of criteria such as, inter alia, the nature of the act at issue, the consequences of that act, the form of procedure used to prosecute the crime, the nature of the penalty provided and the taking into account of whether most jurisdictions also classify the act at issue as a serious crime. The EASO refers, in that regard, to a number of decisions taken by the highest courts of the Member States.57Similar recommendations are, furthermore, set out in the Handbook on Procedures and Criteria for determining Refugee Status under the 1951 Convention and the 1967 Protocol relating to the Status of Refugees (United Nations High Commissioner for Refugees (UNHCR), 1992, paragraphs 155 to 157).58In the light of the foregoing considerations, the answer to the question referred is that Article 17(1)(b) of Directive 2011/95 must be interpreted as precluding legislation of a Member State pursuant to which the applicant for subsidiary protection is deemed to have ‘committed a serious crime’ within the meaning of that provision, which may exclude him from that protection, on the basis of the sole criterion of the penalty provided for a specific crime under the law of that Member State. It is for the authority or competent national court ruling on the application for subsidiary protection to assess the seriousness of the crime at issue, by carrying out a full investigation into all the circumstances of the individual case concerned. Costs 59Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: Article 17(1)(b) of Directive 2011/95/EU of the European Parliament and of the Council of 13 December 2011 on standards for the qualification of third-country nationals or stateless persons as beneficiaries of international protection, for a uniform status for refugees or for persons eligible for subsidiary protection, and for the content of the protection granted, must be interpreted as precluding legislation of a Member State pursuant to which the applicant for subsidiary protection is deemed to have ‘committed a serious crime’ within the meaning of that provision, which may exclude him from that protection, on the basis of the sole criterion of the penalty provided for a specific crime under the law of that Member State. It is for the authority or competent national court ruling on the application for subsidiary protection to assess the seriousness of the crime at issue, by carrying out a full investigation into all the circumstances of the individual case concerned. [Signatures]( *1 ) Language of the case: Hungarian. | 79e0a-1a08ab7-4ac6 | EN |
National financial supervisory authorities may have an obligation to disclose information covered by professional secrecy in order to safeguard the rights of the defence or in order that the information may be used in civil or commercial proceedings | 13 September 2018 ( *1 )(Reference for a preliminary ruling — Approximation of laws — Directive 2004/39/EC — Article 54(1) and (3) — Scope of the obligation of professional secrecy on national financial supervisory authorities — Finding of the absence of good repute — Cases covered by criminal law — Charter of Fundamental Rights of the European Union — Articles 47 and 48 — Rights of the defence — Access to the file)In Case C‑358/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Cour administrative (Higher Administrative Court, Luxembourg), made by decision of 21 June 2016, received at the Court on 24 June 2016, in the proceedings UBS Europe SE, formerly UBS (Luxembourg) SA, Mr Alain Hondequin and Others other parties to the proceedings: DV, EU, Commission de surveillance du secteur financier (CSSF), Ordre des avocats du barreau de Luxembourg, THE COURT (Fifth Chamber),composed of J.L. da Cruz Vilaça (Rapporteur), President of the Chamber, A. Tizzano, Vice-President of the Court, E. Levits, M. Berger and F. Biltgen, Judges,Advocate General: J. Kokott,Registrar: V. Giacobbo-Peyronnel, Administrator,having regard to the written procedure and further to the hearing on 1 June 2017,after considering the observations submitted on behalf of–UBS Europe SE, the legal successor to UBS (Luxembourg) SA, by M. Elvinger and L. Arpetti, avocats,Mr Hondequin and Others, by V. Hoffeld and P. Urbany, avocats, and by E. Fronczak, advocate,DV and EU, by J.-P. Noesen, avocat,the Commission de surveillance du secteur financier (CSSF), by A. Rodesch and P. Sondhi, avocats,the German Government, by T. Henze, J. Möller and D. Klebs, acting as Agents,the Estonian Government, by N. Grünberg, acting as Agent,the Greek Government, by K. Georgiadis and Z. Chatzipavlou, acting as Agents,the Italian Government, by G. Palmieri, acting as Agent, and P. Gentili, avvocato dello Stato,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by V. Di Bucci, J. Rius and I.V. Rogalski, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 26 July 2017,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 54(1) and (3) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC (OJ 2004 L 145, p. 1), read in conjunction with Articles 41, 47 and 48 of the Charter of Fundamental Rights of the European Union (‘the Charter’).2The request has been made in third-party proceedings brought by UBS Europe SE, formerly UBS (Luxembourg) SA (‘UBS’), and Mr Alain Hondequin and Others against the judgment of 16 December 2014 of the Cour administrative (Higher Administrative Court, Luxembourg) ruling on the appeal brought by Mr DV and Mr EU against the judgment of 5 June 2014 of the tribunal administratif (Administrative Court, Luxembourg), concerning the refusal of the Commission de surveillance du secteur financier (Luxembourg financial supervisory authority, ‘the CSSF’) to disclose certain documents in proceedings between Mr DV and the CSSF further to its finding of the loss of Mr DV’s good repute. Legal context EU law 3Recitals 2 and 63 of Directive 2004/39 state:‘(2)... it is necessary to provide for the degree of harmonisation needed to offer investors a high level of protection and to allow investment firms to provide services throughout the Community, being a Single Market, on the basis of home country supervision. ……(63)… Due to increasing cross-border activity, competent authorities should provide each other with the relevant information for the exercise of their functions, so as to ensure the effective enforcement of this Directive, including in situations where infringements or suspected infringements may be of concern to authorities in two or more Member States. In the exchange of information, strict professional secrecy is needed to ensure the smooth transmission of that information and the protection of particular rights.’4In Title II of Directive 2004/39, concerning ‘Authorisation and operating conditions for investment firms’, Article 8 of the directive, entitled ‘Withdrawal of authorisations’, provides, in subparagraph (c), that the competent authority may withdraw the authorisation issued to an investment firm that no longer meets the conditions under which authorisation was granted.5In the same title, Article 9 of the directive, entitled ‘Persons who effectively direct the business’, provides:‘1. Member States shall require the persons who effectively direct the business of an investment firm to be of sufficiently good repute and sufficiently experienced as to ensure the sound and prudent management of the investment firm.3. The competent authority shall refuse authorisation if it is not satisfied that the persons who will effectively direct the business of the investment firm are of sufficiently good repute or sufficiently experienced, or if there are objective and demonstrable grounds for believing that proposed changes to the management of the firm pose a threat to its sound and prudent management.…’6Article 17 of the directive, entitled ‘General obligation in respect of on-going supervision’, provides in paragraph 1:‘Member States shall ensure that the competent authorities monitor the activities of investment firms so as to assess compliance with the operating conditions provided for in this Directive. Member States shall ensure that the appropriate measures are in place to enable the competent authorities to obtain the information needed to assess the compliance of investment firms with those obligations.’7Article 50 of Directive 2004/39, entitled ‘Powers to be made available to competent authorities’, provides:‘1. Competent authorities shall be given all supervisory and investigatory powers that are necessary for the exercise of their functions.2. The powers referred to in paragraph 1 shall be exercised in conformity with national law and shall include, at least, the rights to:(a)have access to any document in any form whatsoever and to receive a copy of it;(b)demand information from any person and if necessary to summon and question a person with a view to obtaining information;(l)refer matters for criminal prosecution;8Article 51 of that directive, entitled ‘Administrative sanctions’, provides in paragraph 1:‘Without prejudice to the procedures for the withdrawal of authorisation or to the right of Member States to impose criminal sanctions, Member States shall ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions be imposed against the persons responsible where the provisions adopted in the implementation of this Directive have not been complied with. Member States shall ensure that these measures are effective, proportionate and dissuasive.’9Article 52 of that directive, entitled ‘Right of appeal’, provides in paragraph 1:‘Member States shall ensure that any decision taken under laws, regulations or administrative provisions adopted in accordance with this Directive is properly reasoned and is subject to the right to apply to the courts. ...’10Article 54 of Directive 2004/39, entitled ‘Professional secrecy’, is worded as follows:‘1. Member States shall ensure that competent authorities, all persons who work or who have worked for the competent authorities or entities to whom tasks are delegated pursuant to Article 48(2), as well as auditors and experts instructed by the competent authorities, are bound by the obligation of professional secrecy. No confidential information which they may receive in the course of their duties may be divulged to any person or authority whatsoever, save in summary or aggregate form such that individual investment firms, market operators, regulated markets or any other person cannot be identified, without prejudice to cases covered by criminal law or the other provisions of this Directive.2. Where an investment firm, market operator or regulated market has been declared bankrupt or is being compulsorily wound up, confidential information which does not concern third parties may be divulged in civil or commercial proceedings if necessary for carrying out the proceeding.3. Without prejudice to cases covered by criminal law, the competent authorities, bodies or natural or legal persons other than competent authorities which receive confidential information pursuant to this Directive may use it only in the performance of their duties and for the exercise of their functions, in the case of the competent authorities, within the scope of this Directive or, in the case of other authorities, bodies or natural or legal persons, for the purpose for which such information was provided to them and/or in the context of administrative or judicial proceedings specifically related to the exercise of those functions. However, where the competent authority or other authority, body or person communicating information consents thereto, the authority receiving the information may use it for other purposes.4. Any confidential information received, exchanged or transmitted pursuant to this Directive shall be subject to the conditions of professional secrecy laid down in this Article. Nevertheless, this Article shall not prevent the competent authorities from exchanging or transmitting confidential information in accordance with this Directive and with other Directives applicable to investment firms, credit institutions, pension funds, [undertakings for collective investment in transferable securities (UCITS)], insurance and reinsurance intermediaries, insurance undertakings[,] regulated markets or market operators or otherwise with the consent of the competent authority or other authority or body or natural or legal person that communicated the information.5. This Article shall not prevent the competent authorities from exchanging or transmitting in accordance with national law, confidential information that has not been received from a competent authority of another Member State.’11Article 56(1) of Directive 2004/39, that article being headed ‘Obligation to cooperate’, provides:‘Competent authorities of different Member States shall cooperate with each other whenever necessary for the purpose of carrying out their duties under this Directive, making use of their powers whether set out in this Directive or in national law.Competent authorities shall render assistance to competent authorities of the other Member States. In particular, they shall exchange information and cooperate in any investigation or supervisory activities. Luxembourg law 12Article 19 of the Law of 5 April 1993 on the financial sector (Mémorial A No 27, p. 462), entitled ‘Professional reputation and experience’, provides in paragraph 1:‘In order to obtain authorisation, natural persons and, in the case of legal persons, the members of the administrative, management and supervisory bodies and the shareholders or members referred to in the previous article, must prove their good repute. Good repute shall be assessed on the basis of police records and any evidence that is likely to establish that the persons concerned are of good repute and display every guarantee that their conduct is beyond reproach.’13Article 32 of the Law of 13 July 2007 on markets in financial instruments and transposing, inter alia, Directive 2004/39 (Mémorial A No 116, p. 2076), entitled ‘Professional secrecy of the CSSF’, provides:‘(1) All persons working or who have worked for the [CSSF], as well as accredited auditors or experts acting on behalf of the [CSSF], shall be bound by the obligation of professional secrecy laid down in Article 16 of the amended Law of 23 December 1998 establishing a financial supervisory authority. This means that no confidential information which they may receive in the course of their duties may be divulged to any person or authority whatsoever, except in summary or collective form, such that no market operator, regulated market, [multilateral trading facility (MTF)] or any other relevant person or system can be identified, without prejudice to cases covered by criminal law or the other provisions of this title.(3) Without prejudice to cases covered by criminal law, the [CSSF] may use the confidential information received pursuant to this title only for the exercise of the functions conferred upon it by the present title or in the context of administrative or judicial proceedings specifically relating to the exercise of those functions. The dispute in the main proceedings and the questions referred for a preliminary ruling 14It is apparent from the order for reference that, by decision of 4 January 2010, the CSSF ordered Mr DV to resign from all his posts at the earliest opportunity on the ground that he was no longer trustworthy and was, therefore, no longer suitable to be a director of an entity regulated by the CSSF or to fulfil any other role subject to accreditation. The CSSF based its decision, inter alia, on the role played by Mr DV in the setting-up and operation of the company Luxalpha Sicav (‘Luxalpha’).15By applications lodged on 26 February and 31 March 2010 before the tribunal administratif (Administrative Court, Luxembourg), Mr DV brought an action for variation or, failing that, annulment of the decision of the CSSF referred to above.16On 11 November 2010, Mr DV requested the CSSF, in the context of those currently pending actions, to forward him a copy of a letter of 27 January 2009 sent to the CSSF by UBS in response to the CSSF’s request for information of 31 December 2008 in the context of the ‘Madoff case’. By decision of 13 December 2010, the CSSF denied that request. On 10 January 2011, Mr DV brought an action for variation or, failing that, annulment of the CSSF’s decision. On 15 December 2011, the Administrative Court ordered the CSSF to send that letter to Mr DV. By judgment of 18 July 2012, the tribunal administratif (Administrative Court) ruled that the action brought by Mr DV was founded in part and therefore annulled the CSSF’s decision of 13 December 2010 refusing to forward Mr DV the letter of 27 January 2009 referred to above, with the exception of certain pieces of information.17On 26 February 2013, Mr DV requested the CSSF, also in the context of the main sets of proceedings, to send him a number of documents, including ‘the CSSF’s letter of 31 December 2008 to [UBS] and the accompanying questionnaire’ and ‘all the investigations and/or inquiries conducted by the CSSF in connection with the Madoff case, with reference to Luxalpha, and all the documents received by the CSSF at that time’. According to Mr DV, those documents shed light on the role played by UBS in the establishment and setting-up of Luxalpha, and are as a result necessary in order to understand the roles of the various persons involved in the setting-up of that company.18By decision of 9 April 2013, the CSSF refused to forward the requested documents to Mr DV on the ground, inter alia, that they were not in the administrative file concerning Mr DV, that they were covered by its obligation of professional secrecy, that it had not referred to the documents requested at any point during the administrative procedure against Mr DV, and that Mr DV’s request was not sufficiently specific.19On 5 June 2013, Mr DV brought an action seeking, principally, the annulment and, in the alternative, the variation of the CSSF’s decision referred to above. By application lodged on 7 June 2013 before the tribunal administratif (Administrative Court), Mr EU stated that he wished to intervene voluntarily in the case on the ground that, like Mr DV, he had been the subject of an administrative procedure sanctioning him for, inter alia, his role in the setting-up and operation of Luxalpha. Mr EU also explained that he had brought court proceedings against the CSSF’s finding of absence of good repute on his part and that he required, in the context of those proceedings, various documents that the CSSF allegedly refused to send him.20By judgment of 5 June 2014, the tribunal administratif (Administrative Court), after having granted Mr EU’s voluntary application to intervene in the case, ordered the CSSF to forward him the letter sent on 31 December 2008 to UBS in the context of the ‘Madoff case’ and dismissed Mr DV’s application for annulment as to the remainder.21By application lodged on 26 June 2014, Mr DV and Mr EU brought an appeal against the judgment of the tribunal administratif (Administrative Court) before the Cour administrative (Administrative Court of Appeal).22By judgment of 16 December 2014, the Cour administrative (Higher Administrative Court) ruled that the appeal brought by Mr DV and Mr EU was well-founded in part and ordered the CSSF to submit, in the context of the main sets of proceedings, all the investigations or inquiries conducted by the CSSF in connection with the ‘Madoff case’, more specifically with reference to Luxalpha, and all the documents received by the CSSF at that time.23In that judgment, the Cour administrative (Higher Administrative Court) observed, in particular, that, in a procedure concerning an administrative sanction, especially when it amounts to a criminal procedure in the light of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (the ‘ECHR’), such as the procedure in question in the present case, no secrecy may in principle be relied on against a person who defends himself against the charge or brings an action against the sanction imposed on him. Thus, if the administration based its argument on a document which also concerned a third party, it could invoke professional secrecy against the person on whom a sanction had been imposed only within very strict limits, lest it infringe that person’s rights of defence. The Cour administrative (Higher Administrative Court) went on to observe that it is for the administration — which must, in principle, place in the case file lodged with it the complete administrative file containing all the evidence relating to the contested measure — to set out the grounds on which a document requested by the defence is not relevant. In the present case, the CSSF had merely invoked professional secrecy without explaining, in detail, the reasons which allegedly prevented it from disclosing to Mr DV all of the documents that appeared, on the face of it, to be relevant to his defence against the sanction imposed on him.24By applications lodged on 23 October 2015 and 3 March 2016 before the Cour administrative (Higher Administrative Court), respectively, UBS and Mr Alain Hondequin and Others, acting as former members of the board of directors of Luxalpha, brought third-party proceedings against that judgment. UBS submits, in essence, that the Cour administrative (Higher Administrative Court) failed to have regard to Article 54 of Directive 2004/39.25In that regard, the referring court considers that it is faced with two types of questions concerning the interpretation of Article 54 of Directive 2004/39. In the first place, it is uncertain as to the scope, in the light of Article 41 of the Charter, of the exception of ‘cases covered by criminal law’ referred to in Article 54(1) and (3). In the second place, it asks how the requirements and guarantees deriving from Articles 47 and 48 of the Charter and from Articles 6 and 13 ECHR should be reconciled with the obligation to maintain professional secrecy enshrined in Article 54 of the directive.26In those circumstances, the Cour administrative (Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:‘(1)Against the background in particular of Article 41 of the Charter enshrining the principle of good administration, does the exception of ‘cases covered by criminal law’ — found at the end of Article 54(1) of Directive 2004/39 and at the beginning of Article 54(3) — cover a situation concerning, according to national law, an administrative sanction, but considered from the point of view of the ECHR to be part of criminal law, such as the sanction at issue in the main proceedings, imposed by the national regulator, the national supervisory authority, and consisting in ordering a member of the national bar association to cease holding a post as director or any other post subject to accreditation in an entity supervised by that regulator and ordering him to resign from all his posts at the earliest opportunity?(2)Inasmuch as the aforementioned administrative sanction, regarded as such under national law, stems from administrative proceedings, to what extent is the obligation of professional secrecy, which a national supervisory authority may invoke under Article 54 of Directive 2004/39, subject to the requirements for a fair trial including an effective remedy as laid down in Article 47 of the Charter, examined in relation to the parallel requirements of Articles 6 and 13 ECHR relating to a fair trial and an effective remedy, [as well as] the safeguards provided for by Article 48 of the Charter, in particular as regards full access for the person on whom the administrative sanction has been imposed to the administrative file of the author of the sanction, which is also the national supervisory authority, for the purpose of protecting the interests and civil rights of the person on whom the sanction has been imposed?’ Consideration of the questions referred 27By its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 54(1) and (3) of Directive 2004/39, read in conjunction with Article 41 of the Charter, should be interpreted as meaning that the exception to the obligation of professional secrecy laid down in that provision and relating to ‘cases covered by criminal law’ applies to a situation in which the authorities established by the Member States for the purpose of fulfilling the functions set out in that directive (‘the competent authorities’) adopt a measure or a sanction covered by national administrative law. If this should not be the case, it seeks to ascertain to what extent that obligation of professional secrecy is in any event restricted by the right to an effective remedy and a fair trial and by the respect for the rights of the defence enshrined in Articles 47 and 48 of the Charter, read in the light of Articles 6 and 13 ECHR.28In the first place, with regard to the situations referred to by the phrase ‘cases covered by criminal law’ within the meaning of Article 54(1) and (3) of Directive 2004/39, read in conjunction with Article 41 of the Charter, it should be noted that it is clear from the wording of Article 41 of the Charter that it is addressed not to the Member States but solely to the institutions, bodies, offices and agencies of the European Union (judgments of 17 December 2015, WebMindLicenses, C‑419/14, EU:C:2015:832, paragraph 83 and of 9 March 2017, Doux, C‑141/15, EU:C:2017:188, paragraph 60). It follows that Article 41 of the Charter is irrelevant to the case in the main proceedings.29It should also be pointed out that neither Article 54 of Directive 2004/39 nor any other provision of that directive contains a definition of the phrase ‘cases covered by criminal law’ found in Article 54(1) and (3).30Account should therefore be taken, in accordance with well-established case-law, of the context of Article 54 of Directive 2004/39 and the objectives pursued by that directive (see, to that effect, judgment of 22 April 2015, Drukarnia Multipress, C‑357/13, EU:C:2015:253, paragraph 22 and the case-law cited).31It should be borne in mind that it is apparent from recital 2 of the directive that its purpose is to provide for the degree of harmonisation required to offer investors a high level of protection and to allow investment firms to provide services throughout the European Union on the basis of home country supervision (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 26).32It is also apparent from the second sentence of recital 63 of Directive 2004/39 that, due to increasing cross-border activity, competent authorities of the various Member States should provide each other with the information that is necessary for the exercise of their functions, so as to ensure the effective enforcement of that directive (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 27).33Thus, under Article 17(1) of Directive 2004/39, the Member States must ensure that the competent authorities continuously monitor the activities of investment firms so as to assess compliance with their obligations (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 28).34Article 50(1) and (2) of that directive provide that the competent authorities must have all supervisory and investigatory powers that are necessary for the exercise of their functions, including the rights to have access to any document and to demand information from any person (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 29).35Further, Article 56(1) of Directive 2004/39 states that competent authorities are to render assistance to competent authorities of the other Member States. In particular, they must exchange information and cooperate in any investigation or supervisory activities (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 30).36The effective monitoring of the activities of investment firms, through supervision within a Member State and the exchanging of information by the competent authorities of several Member States, as briefly described in the preceding paragraphs, requires that both the supervised entities and the competent authorities can have confidence that the confidential information provided will, in principle, remain confidential (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 31).37As is clear from, in particular, the last sentence of recital 63 of Directive 2004/39, the absence of such confidence is liable to compromise the smooth transmission of the confidential information that is necessary for monitoring (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 32).38Therefore, in order to protect not only the specific interests of the firms directly concerned, but also the public interest in the normal functioning of the markets in financial instruments of the European Union, Article 54(1) of Directive 2004/39 imposes, as a general rule, the obligation of professional secrecy (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 33).39In that regard, the Court has stated that Article 54 of Directive 2004/39 establishes the general rule that disclosure of confidential information held by the competent authorities is prohibited and lists exhaustively the specific cases where, exceptionally, that general prohibition does not preclude their communication or use (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 38).40In the present case, it should be noted that Article 54(1) and (3) of Directive 2004/39 provides that the obligation of professional secrecy on the competent authorities is applicable ‘without prejudice to cases covered by criminal law’.41As the phrase ‘cases covered by criminal law’, used in Article 54(1) and (3) of Directive 2004/39, is an exception to the general rule that disclosure of confidential information held by the competent authorities is prohibited, it must be interpreted strictly (see, to that effect, judgment of 22 April 2010, Commission v United Kingdom, C‑346/08, EU:C:2010:213, paragraph 39 and the case-law cited).42In that regard, it should be borne in mind that, pursuant to Article 50(2)(l) of Directive 2004/39, the competent authorities must have the right to refer matters for criminal prosecution.43In addition, Article 51(1) of the directive provides that, without prejudice to the procedures for the withdrawal of authorisation or to the right of Member States to impose criminal sanctions, Member States are to ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions be imposed against the persons responsible where the provisions adopted in the implementation of the directive have not been complied with.44In those circumstances, it must be held, as observed in essence by the Advocate General in points 47 and 48 of her Opinion, that Article 54(1) and (3) of Directive 2004/39, when it provides that the obligation of professional secrecy may exceptionally be disregarded in ‘cases covered by criminal law’, covers the communication or use of confidential information for the purpose of conducting proceedings or imposing sanctions in accordance with national criminal law.45Moreover, that interpretation is borne out by Article 76(1) and (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ 2014 L 173, p. 349), which recast Directive 2004/39, where it is now specified that the obligation of professional secrecy is applicable ‘without prejudice to requirements of national criminal … law’.46It should also be noted that, irrespective of how they are classified under national law — to which the referring court refers — the steps that must be taken by the competent authorities further to a finding that a person no longer satisfies the requirement of good repute laid down in Article 9 of Directive 2004/39 are part of the ‘procedures for the withdrawal of authorisation’ referred to in Article 51(1) of the directive; they do not, however, constitute sanctions within the meaning of that provision and their application is not related to cases covered by criminal law within the meaning of Article 54(1) and (3) of the directive.47Consequently, the Court finds that the exception to the general rule prohibiting disclosure of confidential information held by the competent authorities, which relates to ‘cases covered by criminal law’, does not apply in circumstances such as those of the main proceedings.48It is nonetheless appropriate to examine, in the second place, to what extent the obligation of professional secrecy provided for in Article 54(1) of Directive 2004/39 is in any event restricted by the right to an effective remedy and a fair trial and by the respect for the rights of the defence enshrined in Articles 47 and 48 of the Charter, read in the light of Articles 6 and 13 ECHR.49As a preliminary point, in so far as the referring court also refers to Articles 6 and 13 ECHR, it should be recalled that, whilst, as Article 6(3) TEU confirms, fundamental rights recognised by the ECHR constitute general principles of EU law and whilst Article 52(3) of the Charter provides that the rights contained in the Charter which correspond to rights guaranteed by the ECHR are to have the same meaning and scope as those laid down by the ECHR, the latter does not constitute, as long as the European Union has not acceded to it, a legal instrument which has been formally incorporated into EU law (judgment of 20 March 2018, Garlsson Real Estate and Others, C‑537/16, EU:C:2018:193, paragraph 24 and the case-law cited).50The explanations relating to the Charter, which, in accordance with the third subparagraph of Article 6(1) TEU and Article 52(7) of the Charter, have to be taken into consideration for the purpose of interpreting it (judgment of 15 February 2016, N., C‑601/15 PPU, EU:C:2016:84, paragraph 47), make clear that Articles 47 and 48 of the Charter ensure that the protection conferred by Articles 6 and 13 ECHR is safeguarded under EU law. It is therefore appropriate to refer to those articles of the Charter alone.51Furthermore, it should be borne in mind that the Court has consistently held that the fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by EU law and that the applicability of EU law entails applicability of the fundamental rights guaranteed by the Charter (judgment of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraph 49 and the case-law cited).52In the case in the main proceedings, it appears from the evidence submitted to the Court that the decisions of the CSSF at issue are based on national provisions designed to implement EU law within the meaning of Article 51(1) of the Charter. It follows that the provisions of the Charter are applicable in this case.53What is more, it should also be borne in mind that, in accordance with a general principle of interpretation, an EU measure must be interpreted, as far as possible, in such a way as not to affect its validity and in conformity with primary law as a whole and, in particular, with the provisions of the Charter (judgment of 15 February 2016, N., C‑601/15 PPU, EU:C:2016:84, paragraph 48).54In that regard, as concerns, first, the right to an effective remedy, the first paragraph of Article 47 of the Charter provides that everyone whose rights and freedoms guaranteed by EU law are infringed has the right to an effective remedy before a tribunal in compliance with the conditions laid down in that article.55In order to ensure the observance of that fundamental right within the European Union, the second subparagraph of Article 19(1) TEU lays down that Member States are to provide remedies sufficient to ensure effective legal protection in the fields covered by EU law (judgment of 26 September 2013, Texdata Software, C‑418/11, EU:C:2013:588, paragraph 78).56As regards, specifically, the existence of a right guaranteed by EU law within the meaning of the first paragraph of Article 47 of the Charter, it should be borne in mind that, according to settled case-law, protection against arbitrary or disproportionate intervention by public authorities in the sphere of the private activities of any natural or legal person constitutes a general principle of EU law. That protection may be invoked by a relevant person in respect of a measure adversely affecting him (see, to that effect, judgment of 16 May 2017, Berlioz Investment Fund, C‑682/15, EU:C:2017:373, paragraphs 51 and 52).57Moreover, it must be noted that the right to an effective remedy is reaffirmed by Directive 2004/39 itself, the first sentence of Article 52(1) of which provides that ‘Member States shall ensure that any decision taken under laws, regulations or administrative provisions adopted in accordance with this Directive is properly reasoned and is subject to the right to apply to the courts’.58The Court also observes that, in the case in the main proceedings, the decisions of the CSSF at issue were the subject of an application to the courts in order to examine the lawfulness of those decisions.59Secondly, as regards the right to a fair trial, guaranteed by the second paragraph of Article 47 of the Charter, it is important to note that respect for the rights of the defence is a particular aspect of the right to a fair trial (see, to that effect, ECtHR, 1 June 2010, Gäfgen v. Germany, ECLI:CE:ECHR:2010:0601JUD002297805, § 169, and judgment of 6 November 2012, Otis and Others, C‑199/11, EU:C:2012:684, paragraph 48). Respect for the rights of the defence is also enshrined in Article 48(2) of the Charter.60The Court has emphasised that the rights of the defence must be observed in all proceedings initiated against a person which may well culminate in a measure adversely affecting that person (see, to that effect, judgment of 13 February 1979, Hoffmann-La Roche v Commission, 85/76, EU:C:1979:36, paragraph 9; of 2 October 2003, ARBED v Commission, C‑176/99 P, EU:C:2003:524, paragraph 19, and of 26 September 2013, Texdata Software, C‑418/11, EU:C:2013:588, paragraph 83).61The right of access to the file is, in turn, the necessary corollary of the effective exercise of the rights of the defence (see, to that effect, judgments of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraph 316, and of 1 July 2010, Knauf Gips v Commission, C‑407/08 P, EU:C:2010:389, paragraph 22).62However, it is settled case-law that fundamental rights do not constitute unfettered prerogatives and may be restricted, provided that the restrictions in fact correspond to objectives of general interest pursued by the measure in question and that they do not involve, in the light of the objectives pursued, a disproportionate and intolerable interference which impairs the very substance of the rights guaranteed (judgments of 18 March 2010, Alassini and Others, C‑317/08 to C‑320/08, EU:C:2010:146, paragraph 63, and of 26 September 2013, Texdata Software, C‑418/11, EU:C:2013:588, paragraph 84).63Such restrictions may, in particular, be designed to protect requirements of confidentiality or professional secrecy, which are liable to be infringed by access to certain information and certain documents (see, to that effect, judgment of 9 November 2017, Ispas, C‑298/16, EU:C:2017:843, paragraph 36).64In that regard, in respect, specifically, of the obligation of professional secrecy on the competent authorities under Article 54(1) of Directive 2004/39, it should be borne in mind, as stated in paragraph 38 of this judgment, that that obligation is designed to protect not only the specific interests of the firms directly concerned but also the public interest in the normal functioning of the markets in financial instruments of the European Union.65In that connection, the Court has ruled that the general prohibition on the disclosure of confidential information laid down in Article 54(1) of Directive 2004/39 applies to information held by the competent authorities (i) which is not public and (ii) the disclosure of which is likely to affect adversely the interests of the natural or legal person who provided that information or of third parties, or the proper functioning of the system for monitoring the activities of investment firms that the EU legislature established in adopting Directive 2004/39 (judgment of 19 June 2018, Baumeister, C‑15/16, EU:C:2018:464, paragraph 35).66Moreover, as concerns the right of access to the file specifically, it is well-established case-law that it means that the person who is the subject of a measure adversely affecting him must have the opportunity to examine all of the documents in the investigation that might be relevant for his defence. Those documents comprise both inculpatory and exculpatory evidence, with the exception of business secrets concerning other persons, internal documents of the authority that adopted the measure and other confidential information (see, to that effect, judgments of 7 January 2004, Aalborg Portland and Others v Commission, C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P, EU:C:2004:6, paragraph 68, and of 25 October 2011, Solvay v Commission, C‑110/10 P, EU:C:2011:687, paragraph 49).67As for the documents that must be included in the investigation file, it must be noted that it is also apparent from the Court’s case-law that although it cannot be solely for the authority who notifies any objections and adopts the decision imposing a penalty to determine the documents of use in the defence of the person concerned, it is however allowed to exclude from the administrative procedure evidence which has no relation to the allegations of fact and of law in the statement of objections and which therefore has no relevance to the investigation (see, to that effect, judgments of 7 January 2004, Aalborg Portland and Others v Commission, C‑204/00 P, C‑205/00 P, C‑211/00 P, C‑213/00 P, C‑217/00 P and C‑219/00 P, EU:C:2004:6, paragraph 126 and the case-law cited).68It follows from the foregoing considerations that the right to disclosure of the documents relevant to the defence is not unlimited and unfettered. On the contrary, as observed by the Advocate General in essence in point 90 of her Opinion, the protection of the confidentiality of the information covered by the obligation of professional secrecy on the competent authorities in accordance with Article 54(1) of Directive 2004/39 must be guaranteed and implemented in such a way as to reconcile it with the rights of the defence.69Accordingly, in the event of a conflict of, on the one hand, the interest of the person who is the subject of a measure adversely affecting him in having access to the information necessary for him to be in a position to exercise fully his rights of defence and, on the other hand, the interests in connection with maintaining the confidentiality of the information covered by the obligation of professional secrecy, it is for the competent authorities or courts to seek to strike a balance between these opposing interests in the light of the circumstances of each case (see, to that effect, judgment of 14 February 2008, Varec, C‑450/06, EU:C:2008:91, paragraphs 51 and 52 and the case-law cited).70As a result, in circumstances such as those of the case in the main proceedings, if a competent authority invokes the obligation of professional secrecy provided for in Article 54(1) of Directive 2004/39 in order to refuse to disclose documents in its possession that are not in the file concerning the person who is the subject of a measure adversely affecting him, it is for the competent national court to ascertain whether that information is objectively connected to the complaints upheld against him and, if this should be the case, to weigh up the interests set out in the previous paragraph of this judgment, before taking a decision whether to communicate each of the requested pieces of information.71In the light of all the foregoing, the answer to the questions referred is that Article 54 of Directive 2004/39 must be interpreted as meaning that:the phrase ‘cases covered by criminal law’ in paragraphs 1 and 3 of that article do not cover the situation in which the competent authorities adopt a measure, such as that at issue in the main proceedings, consisting in prohibiting a person from holding a post as director or any other post subject to accreditation in an undertaking supervised by that regulator and ordering him to resign from all related posts at the earliest opportunity, on the ground that that person no longer fulfils the requirement of good repute provided for in Article 9 of that directive, which is part of the measures that the competent authorities are required to take when exercising the powers attributed to them under Title II of that directive. That provision, in providing that the obligation of professional secrecy may exceptionally be disregarded in such cases, covers the communication or use of confidential information for the purpose of conducting proceedings or imposing sanctions in accordance with national criminal law;the obligation of professional secrecy provided for in paragraph 1 of that article, read in conjunction with Articles 47 and 48 of the Charter, must be guaranteed and implemented in such a way as to reconcile it with the rights of the defence. Accordingly, it is for the competent national court, when a competent authority invokes that obligation in order to refuse to disclose documents in its possession that are not in the file concerning the person who is the subject of a measure adversely affecting him, to ascertain whether that information is objectively connected to the complaints upheld against him and, if this should be the case, to weigh up the interest of the person in question in having access to the information necessary for him to be in a position to exercise fully his rights of defence and the interests in connection with maintaining the confidentiality of the information covered by the obligation of professional secrecy, before taking a decision whether to communicate each of the requested pieces of information. Costs 72Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Fifth Chamber) hereby rules: Article 54 of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC must be interpreted as meaning that the phrase ‘cases covered by criminal law’ in paragraphs 1 and 3 of that article does not cover the situation in which the authorities established by the Member States for the purpose of fulfilling the functions set out in that directive adopt a measure, such as that at issue in the main proceedings, consisting in prohibiting a person from holding a post as director or any other post subject to accreditation in an undertaking supervised by that regulator and ordering him to resign from all related posts at the earliest opportunity, on the ground that that person no longer fulfils the requirement of good repute provided for in Article 9 of that directive, which is part of the measures that the competent authorities are required to take when exercising the powers attributed to them under Title II of that directive. That provision, in providing that the obligation of professional secrecy may exceptionally be disregarded in such cases, covers the communication or use of confidential information for the purpose of conducting proceedings or imposing sanctions in accordance with national criminal law; the obligation of professional secrecy provided for in paragraph 1 of that article, read in conjunction with Articles 47 and 48 of the Charter of Fundamental Rights of the European Union, must be guaranteed and implemented in such a way as to reconcile it with the rights of the defence. Accordingly, it is for the competent national court, when a competent authority invokes that obligation in order to refuse to disclose documents in its possession that are not in the file concerning the person who is the subject of a measure adversely affecting him, to ascertain whether that information is objectively connected to the complaints upheld against him and, if this should be the case, to weigh up the interest of the person in question in having access to the information necessary for him to be in a position to exercise fully his rights of defence and the interests in connection with maintaining the confidentiality of the information covered by the obligation of professional secrecy, before taking a decision whether to communicate each of the requested pieces of information. [Signatures]( *1 ) Language of the case: French. | bfd18-08952a5-4e6b | EN |
In the event of cancellation of a flight, the airline company must also reimburse commissions collected by intermediaries when tickets are bought, as long as it was aware of them | 12 September 2018 ( *1 )(Reference for a preliminary ruling — Air transport — Regulation (EC) No 261/2004 — Article 8(1) — Reimbursement of the price of a ticket in the event of cancellation of a flight — Commission collected by a person acting as an intermediary between the passenger and the air carrier when the ticket was bought — Included)In Case C‑601/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Amtsgericht Hamburg (Local Court, Hamburg, Germany), made by decision of 6 October 2017, received at the Court on 18 October 2017, in the proceedings Dirk Harms, Ann-Kathrin Harms, Nick-Julius Harms, Tom-Lukas Harms, Lilly-Karlotta Harms, Emma-Matilda Harms v Vueling Airlines SA, THE COURT (Eighth Chamber),composed of J. Malenovský (Rapporteur), President of the Chamber, D. Šváby and M. Vilaras, Judges,Advocate General: Y. Bot,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:–Vueling Airlines SA, by B. Liebert, Rechtsanwältin,the Polish Government, by B. Majczyna, acting as Agent,the European Commission, by G. Braun and N. Yerrell, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 8(1)(a) of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91 (OJ 2004 L 46, p. 1).2The request has been made in proceedings between Mr and Mrs Harms and their four children, on the one hand, and Vueling Airlines SA, on the other, concerning the reimbursement of the price of tickets bought through the intermediary Opodo Ltd. Legal context 3Article 2(f) of Regulation No 261/2004 defines the word ‘ticket’ as ‘a valid document giving entitlement to transport, or something equivalent in paperless form, including electronic form, issued or authorised by the air carrier or its authorised agent.’4Article 5 of that regulation, entitled ‘Cancellation’, provides, in paragraph 1 thereof:‘In case of cancellation of a flight, the passengers concerned shall:(a)be offered assistance by the operating air carrier in accordance with Article 8;…’5Article 8 of Regulation No 261/2004, entitled ‘Right to reimbursement or re‑routing’, provides, in paragraph 1 thereof:‘Where reference is made to this Article, passengers shall be offered the choice between:reimbursement within seven days, by the means provided for in Article 7(3), of the full cost of the ticket at the price at which it was bought …a return flight to the first point of departure …6Article 10 of that regulation, entitled ‘Upgrading and downgrading’, provides, in paragraph 2 thereof:‘If an operating air carrier places a passenger in a class lower than that for which the ticket was purchased, it shall within seven days, by the means provided for in Article 7(3), reimburse:30% of the price of the ticket for all flights of 1500 kilometres or less, or(b)50% of the price of the ticket for all intra-Community flights of more than 1500 kilometres … and for all other flights between 1500 and 3500 kilometres, or(c)75% of the price of the ticket for all flights not falling under (a) or (b) …’ The dispute in the main proceedings and the question referred for a preliminary ruling 7Mr Harms bought, on the website opodo.de, tickets allowing his wife, himself and their four children to fly from Hamburg (Germany) to Faro (Portugal) via Barcelona (Spain), by means of a flight operated by the airline company Vueling Airlines. Opodo invoiced Mr Harms an amount of EUR 1108.88 in respect of that purchase and sent him the corresponding confirmation, on which that amount was stated without further clarification. At the same time, Opodo transferred an amount of EUR 1031.88 to Vueling Airlines.8The flight to be taken by the Harms family was not, however, carried out in accordance with the travel plan scheduled by Vueling Airlines, a situation which, in the view of the referring court, had to be regarded as a cancellation of a flight for the purposes of Regulation No 261/2004.9Before the referring court, Mr and Mrs Harms, acting in their own name and on behalf of their four children, claim that Vueling Airlines is required, pursuant to Article 8(1)(a) of Regulation No 261/2004, to reimburse them the full amount of EUR 1108.88 which they were invoiced by Opodo. Vueling Airlines does not dispute that that claim is well founded in so far as it concerns the amount of EUR 1031.88 which was transferred to it by Opodo and was stated as the price of the tickets bought by Mr Harms. On the other hand, it contends that it does not have to reimburse him the difference between that amount and the amount of EUR 1108.88 collected by Opodo, submitting that the difference of EUR 77 is not part of the price.10In those circumstances, the Amtsgericht Hamburg (Local Court, Hamburg, Germany) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Must the concept of ‘reimbursement … by the means provided for in Article 7(3), of the full cost of the ticket at the price at which it was bought’ [set out in] Article 8(1)(a) of Regulation No 261/2004 be interpreted as referring to the amount paid by the passenger for the ticket in question, or is it the amount which the defendant air carrier has actually received, where an intermediary undertaking is involved in the booking process and collects the difference between what the passenger pays and what the air carrier receives without disclosing this?’ Consideration of the question referred 11By its question, the referring court asks, in essence, whether Regulation No 261/2004, and in particular Article 8(1)(a) thereof, must be interpreted as meaning that the price of the ticket to be taken into consideration for the purposes of determining the reimbursement owed by the air carrier to a passenger in the event of cancellation of a flight includes the difference between the amount paid by that passenger and the amount received by the air carrier, which corresponds to a commission collected by a person acting as an intermediary between those two parties.12In accordance with Article 8(1)(a) of Regulation No 261/2004, read in conjunction with Article 5(1)(a) of that regulation, the onus is on the air carrier, in the event of cancellation of a flight, to offer assistance to the passengers concerned in the form of offering them, inter alia, reimbursement of their ticket, at the price at which it was bought, and, where necessary, a return flight to their first point of departure.13The wording of Article 8(1)(a) of Regulation No 261/2004 establishes a direct link between the concept of ‘ticket’ and the expression ‘price at which it was bought’, it being possible for the passengers concerned to buy such a ticket either directly from the air carrier or through an intermediary such as, inter alia, an authorised agent referred to in Article 2(f) of Regulation No 261/2004.14When such an intermediary collects a commission from a passenger in that capacity, as in the case in the main proceedings, the question arises whether and to what extent that commission is a component of the price of the ticket to be reimbursed by the air carrier concerned to that passenger in the event of cancellation of the corresponding flight.15In that regard, it should be noted generally that the objectives of Regulation No 261/2004 are not only to ensure a high level of protection for passengers but also to strike a balance between the interests of passengers and those of air carriers (judgment of 19 November 2009, Sturgeon and Others, C‑402/07 and C‑432/07, EU:C:2009:716, paragraph 67).16In the light of those objectives, it must be considered that, while a commission collected by an intermediary from a passenger when a ticket was bought must, in principle, be regarded as a component of the price to be reimbursed to that passenger in the event of cancellation of the corresponding flight, its inclusion must nevertheless be subject to certain limits, in view of the interests of the air carriers which it affects.17In that regard, Article 2(f) of Regulation No 261/2004 defines a ‘ticket’ as a document or an equivalent in paperless form, including electronic form, issued or authorised by an air carrier or an agent authorised by such an air carrier. It follows from that definition that the various elements of such a ticket, including its price, must, if that ticket is not issued by the air carrier itself, in any event be authorised by it, and therefore cannot be set without its knowledge.18That interpretation is supported by the Court’s case-law, from which it follows that the reimbursement of a part of the ‘price of the ticket’ provided for in Article 10(2)(a) to (c) of Regulation No 261/2004, in the event that the air carrier places a passenger in a class lower than that for which the ticket was purchased, must be determined by reference to solely ‘unavoidable’ components of that price, in the sense that it is necessary to pay them in order to avail of the service proposed by the air carrier in return (judgment of 22 June 2016, Mennens, C‑255/15, EU:C:2016:472, paragraph 36).19A component of the price of the ticket which is set without the knowledge of the air carrier cannot be regarded as necessary in order to avail of the service proposed by the air carrier.20In the light of all the foregoing, the answer to the question referred is that Regulation No 261/2004, and in particular Article 8(1)(a) thereof, must be interpreted as meaning that the price of the ticket to be taken into consideration for the purposes of determining the reimbursement owed by the air carrier to a passenger in the event of cancellation of a flight includes the difference between the amount paid by that passenger and the amount received by the air carrier, which corresponds to a commission collected by a person acting as an intermediary between those two parties, unless that commission was set without the knowledge of the air carrier, which it is for the referring court to ascertain. Costs 21Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Eighth Chamber) hereby rules: Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, and in particular Article 8(1)(a) thereof, must be interpreted as meaning that the price of the ticket to be taken into consideration for the purposes of determining the reimbursement owed by the air carrier to a passenger in the event of cancellation of a flight includes the difference between the amount paid by that passenger and the amount received by the air carrier, which corresponds to a commission collected by a person acting as an intermediary between those two parties, unless that commission was set without the knowledge of the air carrier, which it is for the referring court to ascertain. [Signatures]( *1 ) Language of the case: German. | b407f-fa7f6b1-4ba7 | EN |
Dismissal of a Catholic doctor from a managerial position by a Catholic hospital due to his remarriage after a divorce may constitute unlawful discrimination on grounds of religion | 11 September 2018 ( *1 )(Reference for a preliminary ruling — Social policy — Directive 2000/78/EC — Equal treatment — Occupational activities within churches and other organisations the ethos of which is based on religion or belief — Occupational requirements — Acting in good faith and with loyalty to the ethos of the church or organisation — Definition — Difference of treatment on the basis of religion or belief — Dismissal of an employee of the Catholic faith performing managerial duties due to a second, civil marriage entered into after a divorce)In Case C‑68/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesarbeitsgericht (Federal Labour Court, Germany), made by decision of 28 July 2016, received at the Court on 9 February 2017, in the proceedings IR v JQ THE COURT (Grand Chamber),composed of K. Lenaerts, President, A. Tizzano, Vice-President, R. Silva de Lapuerta, T. von Danwitz, J.L. da Cruz Vilaça, A. Rosas and J. Malenovský, Presidents of Chambers, E. Juhász, M. Safjan, D. Šváby, A. Prechal, F. Biltgen (Rapporteur), K. Jürimäe, M. Vilaras and E. Regan, Judges,Advocate General: M. Wathelet,Registrar: K. Malacek, Administrator,having regard to the written procedure and further to the hearing on 27 February 2018,after considering the observations submitted on behalf of–IR, by B. Göpfert, Rechtsanwalt, M. Ruffert and G. Thüsing,the German Government, by T. Henze, J. Möller and D. Klebs, acting as Agents,the Polish Government, by B. Majczyna, A. Siwek and M. Szwarc, acting as Agents,the European Commission, by D. Martin and B.-R. Killmann, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 31 May 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 4(2) of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation (OJ 2000 L 303, p. 16).2The request has been made in a dispute between JQ and his employer, IR, in respect of the lawfulness of JQ’s dismissal, which was justified by an alleged infringement of the duty of good faith and loyalty to IR’s ethos. Legal context European Union law 3Recitals 4, 23, 24 and 29 of Directive 2000/78 state:‘(4)The right of all persons to equality before the law and protection against discrimination constitutes a universal right recognised by the Universal Declaration of Human Rights, the United Nations Convention on the Elimination of All Forms of Discrimination against Women, United Nations Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights and by the European Convention for the Protection of Human Rights and Fundamental Freedoms, to which all Member States are signatories. Convention No 111 of the International Labour Organisation (ILO) prohibits discrimination in the field of employment and occupation.…(23)In very limited circumstances, a difference of treatment may be justified where a characteristic related to religion or belief, disability, age or sexual orientation constitutes a genuine and determining occupational requirement, when the objective is legitimate and the requirement is proportionate. Such circumstances should be included in the information provided by the Member States to the Commission.(24)The European Union in its Declaration No 11 on the status of churches and non-confessional organisations, annexed to the Final Act of the Amsterdam Treaty, has explicitly recognised that it respects and does not prejudice the status under national law of churches and religious associations or communities in the Member States and that it equally respects the status of philosophical and non-confessional organisations. With this in view, Member States may maintain or lay down specific provisions on genuine, legitimate and justified occupational requirements which might be required for carrying out an occupational activity.(29)Persons who have been subject to discrimination based on religion or belief, disability, age or sexual orientation should have adequate means of legal protection. To provide a more effective level of protection, associations or legal entities should also be empowered to engage in proceedings, as the Member States so determine, either on behalf or in support of any victim, without prejudice to national rules of procedure concerning representation and defence before the courts.’4Article 1 of that directive provides:‘The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.’5Article 2(1) and (2) of that directive states:‘1. For the purposes of this Directive, the “principle of equal treatment” shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1.2. For the purposes of paragraph 1:(a)direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any of the grounds referred to in Article 1;…’6Article 4 of that directive is worded as follows:‘1. Notwithstanding Article 2(1) and (2), Member States may provide that a difference of treatment which is based on a characteristic related to any of the grounds referred to in Article 1 shall not constitute discrimination where, by reason of the nature of the particular occupational activities concerned or of the context in which they are carried out, such a characteristic constitutes a genuine and determining occupational requirement, provided that the objective is legitimate and the requirement is proportionate.2. Member States may maintain national legislation in force at the date of adoption of this Directive or provide for future legislation incorporating national practices existing at the date of adoption of this Directive pursuant to which, in the case of occupational activities within churches and other public or private organisations the ethos of which is based on religion or belief, a difference of treatment based on a person’s religion or belief shall not constitute discrimination where, by reason of the nature of these activities or of the context in which they are carried out, a person’s religion or belief constitute a genuine, legitimate and justified occupational requirement, having regard to the organisation’s ethos. This difference of treatment shall be implemented taking account of Member States’ constitutional provisions and principles, as well as the general principles of Community law, and should not justify discrimination on another ground.Provided that its provisions are otherwise complied with, this Directive shall thus not prejudice the right of churches and other public or private organisations, the ethos of which is based on religion or belief, acting in conformity with national constitutions and laws, to require individuals working for them to act in good faith and with loyalty to the organisation’s ethos.’7Article 9(1) of Directive 2000/78 provides:‘Member States shall ensure that judicial and/or administrative procedures, including where they deem it appropriate conciliation procedures, for the enforcement of obligations under this Directive are available to all persons who consider themselves wronged by failure to apply the principle of equal treatment to them, even after the relationship in which the discrimination is alleged to have occurred has ended.’8Article 10(1) of that directive states:‘Member States shall take such measures as are necessary, in accordance with their national judicial systems, to ensure that, when persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment.’ German law Basic Law 9Article 4(1) and (2) of the Grundgesetz für die Bundesrepublik Deutschland (Basic Law of the Federal Republic of Germany) of 23 May 1949 (BGBl. 1949 I, p. 1; ‘the GG’) states:‘(1) Freedom of belief and of conscience and freedom to profess a religious or philosophical creed shall be inviolable.(2) Every person shall have the right to practise his religion without interference.’10In accordance with Article 140 of the GG, the provisions of Articles 136 to 139 and 141 of the Weimarer Reichsverfasssung (Weimar Constitution) of 11 August 1919 (‘the WRV’) are an integral part of the GG.11Article 137 of the WRV provides:‘(1) There shall be no State church.(2) Freedom of association to form religious societies shall be guaranteed. There shall be no restrictions on the ability of religious societies to form associations within the territory of the State.(3) Each religious society shall organise and administer its affairs independently within the limits of the law that applies to all persons. It shall appoint its officers without any interference on the part of the State or the civil municipal authorities.(7) Associations whose purpose is to foster a philosophical belief in the community shall have the same status as religious societies.’12According to the case-law of the Bundesverfassungsgericht (Federal Constitutional Court, Germany), the right of self-determination, guaranteed by Article 140 of the GG in conjunction with Article 137(3) of the WRV, is enjoyed not only by churches themselves as religious communities, but also by all institutions specifically affiliated to them, if and to the extent that they are required, in accordance with the church’s faith-defined self-perception and with their own purpose or mission, to undertake and fulfil the church’s mandate and mission. Law on Protection against Dismissal 13Paragraph 1 of the Kündigungsschutzgesetz (Law on Protection against Dismissal) of 25 August 1969 (BGBl. 1969 I, p. 1317), in the version applicable to the dispute in the main proceedings, provides:‘Socially unjustified dismissals(1) The dismissal of an employee whose employment relationship has continued for more than six months without interruption with the same business or undertaking shall be void where it is socially unjustified.(2) A dismissal is socially unjustified when it is not based on reasons relating to the person or conduct of the employee, or is due to urgent operational requirements that preclude the employee’s continued employment with the business. ...’ General Law on Equal Treatment 14The Allgemeines Gleichbehandlungsgesetz (General Law on Equal Treatment) of 14 August 2006 (BGBl. 2006 I, p. 1897; ‘the AGG’) transposed Directive 2000/78 into German law.15Paragraph 1 of the AGG, which sets out the objective of the law, states:‘The objective of this law is to prevent or eliminate discrimination on grounds of race, ethnic origin, sex, religion or belief, disability, age or sexual identity.’16Paragraph 7(1) of the AGG provides:‘Workers shall not be discriminated against on any of the grounds mentioned in Paragraph 1; this also applies where the person responsible for the discrimination merely assumes in the course of the discriminatory conduct that one of the grounds mentioned in Paragraph 1 exists.’17Under Paragraph 9 of the AGG:‘(1) Without prejudice to Paragraph 8 [of this law], a difference of treatment on grounds of religion or belief in connection with employment by religious communities, institutions affiliated to them, regardless of their legal form, or associations that devote themselves to the communal nurture of a religion or belief shall also be permitted if a particular religion or belief constitutes a justified occupational requirement, having regard to the self-perception of the religious society or association concerned, in view of its right of self-determination, or the nature of the activities engaged in.(2) The prohibition of a difference of treatment on grounds of religion or belief shall not affect the right of the religious communities mentioned in subparagraph 1, institutions affiliated to them, regardless of their legal form, or associations that devote themselves to the communal nurture of a religion or belief, to require their employees to act in good faith and with loyalty in accordance with their self-perception.’ Canon law 18According to Canon 1085 of the Codex Iuris Canonici (Code of Canon Law):‘(1)Marriage by a person bound by the bond of a prior marriage, even if not consummated, is invalid.(2)Even if the prior marriage is invalid or dissolved for whatever reason, the person concerned shall not on that account be permitted to contract another marriage before the nullity or dissolution of the prior marriage is established lawfully and definitively.’19Article 1 of the Grundordnung des kirchlichen Dienstes im Rahmen kirchlicher Arbeitsverhältnisse (Basic regulations on employment relationships in the service of the Church) of 22 September 1993 (Amtsblatt des Erzbistums Köln 1993, p. 222; ‘the GrO 1993’) states as follows:‘Basic principles of service in the ChurchAll persons working in an institution of the Catholic Church shall work together, irrespective of their employment status, to ensure that the institution can play its part in the mission of the Church (community of service). ...’20Article 4 of the GrO 1993, headed ‘Duty of loyalty’, reads as follows:‘(1) Catholic employees are expected to recognise and observe the principles of Catholic doctrinal and moral teaching. In pastoral, catechetical and educational work in particular, as well as among employees who are working on the basis of a missio canonica [canonical mission], employees shall conduct themselves in a manner consistent with the principles of Catholic doctrinal and moral teaching. This also applies to employees performing managerial duties.(2) Non-Catholic Christian employees shall be expected to respect the truths and values of the Gospel and to contribute to giving them effect within the organisation.(4) All employees shall refrain from acting in a manner that is contrary to the Church. They must not, by their personal life and their conduct at work, undermine the credibility of the Church and the institution by which they are employed.’21Article 5 of the GrO 1993, headed ‘Breaches of the duty of loyalty’, states:‘(1) If an employee no longer complies with the requirements for employment, the employer shall attempt to counsel the employee to remedy this shortcoming on a lasting basis. … Dismissal shall be considered as a last resort.(2) For dismissal on grounds relating specifically to the Church, the following breaches of the duty of loyalty in particular shall be regarded by the Church as serious:– …entering into a marriage that is invalid according to the Church’s teachings and its legal system,(3) In the case of [employees] occupying managerial posts, conduct generally considered to be a possible ground for dismissal in accordance with paragraph 2 shall rule out any possibility of continued employment. In exceptional cases, dismissal may be avoided if there are serious reasons in the individual case indicating that such dismissal would be excessive.’22The Grundordnung für katholische Krankenhäuser in Nordrhein-Westfalen (Basic regulations for Catholic hospitals in North Rhine-Westphalia, Germany) of 5 November 1996 (Amtsblatt des Erzbistums Köln, p. 321) states as follows:‘A. Assignment to the church(6)The [GrO 1993], adopted on the basis of the statement issued by the German bishops on service in the Church, as amended and supplemented, shall be binding on the body responsible. Employees occupying managerial posts within the meaning of the abovementioned basic regulations include members of hospital management and heads of department.’ The dispute in the main proceedings and the questions referred for a preliminary ruling 23IR is a limited liability company established under German law. Its purpose is to carry out the work of Caritas (the international confederation of Catholic charitable organisations), as an expression of the life and nature of the Roman Catholic Church, through, among other things, the operation of hospitals. IR is primarily a non-profit organisation and is subject to the supervision of the Archbishop of Cologne (Germany).24JQ is of the Roman Catholic faith. He trained as a doctor and began working in 2000 as Head of the Internal Medicine Department of an IR hospital pursuant to an employment contract concluded on the basis of the GrO 1993.25JQ was married in accordance with the Roman Catholic rite. His first wife separated from him in 2005, and their divorce was granted in March 2008. In August 2008, JQ married his new partner in a civil ceremony without his first marriage having been annulled.26Having learned of the second marriage, IR dismissed JQ, by letter dated 30 March 2009, with effect from 30 September 2009.27JQ brought an action against the dismissal before the Arbeitsgericht (Labour Court, Germany), claiming that his remarriage was not a valid ground for the dismissal. In JQ’s view, the dismissal was an infringement of the principle of equal treatment because, under the GrO 1993, the remarriage of a head of department of the Protestant faith or of no faith would not have had any consequences for the employment relationship between that person and IR.28IR asserted that JQ’s dismissal was socially justified. Given that JQ occupied a managerial post within the meaning of Article 5(3) of the GrO 1993, by entering into a marriage that is invalid under canon law, he had clearly infringed his obligations under his employment contract with IR.29The Arbeitsgericht (Labour Court) upheld JQ’s application. As the appeal lodged by IR against that decision was dismissed by the Landesarbeitsgericht (Higher Labour Court, Germany), IR then brought an application for review on a point of law before the Bundesarbeitsgericht (Federal Labour Court, Germany), which dismissed the application, by judgment of 8 September 2011, holding, in essence, that JQ’s dismissal was not justified, as IR would not dismiss employees occupying the same post as JQ who were not of the Roman Catholic faith in the event of their remarriage.30IR brought the case before the Bundesverfassungsgericht (Federal Constitutional Court, Germany). By order of 22 October 2014, that court set aside the judgment of the Bundesarbeitsgericht (Federal Labour Court) and referred the case back to the latter court.31The Bundesarbeitsgericht (Federal Labour Court) considers that the outcome of the dispute in the main proceedings depends on whether JQ’s dismissal by IR is lawful under Paragraph 9(2) of the AGG. However, that court observes that that provision must be interpreted in accordance with EU law and that, consequently, the outcome of the dispute depends on the interpretation of the second subparagraph of Article 4(2) of Directive 2000/78, which was transposed into national law by Paragraph 9(2) of the AGG.32More specifically, the referring court is uncertain, in the first place, whether, as a private limited company owned by the Catholic Church, IR falls within the scope of the second subparagraph of Article 4(2) of Directive 2000/78 and is, therefore, entitled to require its employees to act in good faith and with loyalty to the ethos of that church. According to that court, it cannot be ruled out that EU law precludes such a company, which is established under private law, active in the healthcare sector and applies market practices, from invoking rights that are specific to the Church.33In that respect, the referring court is uncertain whether churches or other public or private organisations the ethos of which is based on religion or belief may themselves definitively determine what constitutes acting in good faith and with loyalty ‘to the ethos of the organisation’ within the meaning of the second subparagraph of Article 4(2) of Directive 2000/78, and whether in that regard they may also — as they are permitted under German constitutional law — independently impose a scale of loyalty requirements for the same managerial positions that takes into account only the denominational affiliation of the employee.34In the second place, the referring court notes that, after the Court has interpreted the second subparagraph of Article 4(2) of Directive 2000/78, it will be required, taking into account all the rules of national law and applying the interpretation methods recognised by that law, to decide whether and to what extent Article 9(2) of the AGG can be interpreted in a manner consistent with Article 4(2) of Directive 2000/78 and, if that provision of national law does not lend itself to such consistent interpretation, whether that provision must be disapplied in whole or in part.35The referring court is uncertain whether the prohibition of discrimination on grounds of religion or belief enshrined in Article 21(1) of the Charter of Fundamental Rights of the European Union (‘the Charter’) confers an individual right on a person that can be enforced by that person before the national courts and which, in disputes between private individuals, requires those courts not to apply national provisions that are incompatible with that prohibition. While it is aware that the Charter entered into force only on 1 December 2009 and the dismissal at issue in the main proceedings occurred in March 2009, the referring court notes that it is arguable that, prior to the entry into force of the Charter, a prohibition of all discrimination on grounds of religion or belief already existed as a general principle of EU law. In accordance with the principle of the primacy of EU law, that law takes precedence over national law, including constitutional law.36In the third place, the referring court seeks to ascertain which criteria are to be used to determine whether the requirement to act in good faith and with loyalty is consistent with the second subparagraph of Article 4(2) of Directive 2000/78.37In those circumstances, the Bundesarbeitsgericht (Federal Labour Court) decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling.Is the second subparagraph of Article 4(2) of [Directive 2000/78] to be interpreted as meaning that the [Catholic] Church can decide with binding effect that an organisation such as the defendant in the present proceedings is to differentiate, in connection with the requirement that employees in managerial positions act in good faith and with loyalty, between employees who belong to the same church and those who belong to another faith or to none at all?If the first question is answered in the negative:Must a provision of national law, in this case Article 9(2) of the [AGG], under which unequal treatment of this kind, based on the employee’s religious affiliation, is justified by reference to the Church’s self-perception, be disapplied in these proceedings?(b)What conditions apply, in accordance with the second subparagraph of Article 4(2) of [Directive 2000/78], in respect of the requirement that employees of a church or one of the other organisations mentioned in that provision act in good faith and with loyalty to the organisation’s ethos?’ Consideration of the questions referred The first question and the second part of the second question 38By its first question and the second part of its second question, which it is appropriate to consider together, the referring court asks, in essence, whether the second subparagraph of Article 4(2) of Directive 2000/78 must be interpreted as meaning that a church or other organisation the ethos of which is based on religion or belief and which manages a hospital in the form of a private limited company can definitively decide to subject its employees performing managerial duties to a requirement to act in good faith and with loyalty that differs according to the faith or lack of faith of such employees and, if that is not the case, what criteria are to be used to determine whether, in each individual case, such a requirement is consistent with that provision.39In the light of the explanation provided by the referring court in connection with its first question, it is necessary to determine, in the first place, with regard to the scope ratione personae of the second subparagraph of Article 4(2) of Directive 2000/78, whether the fact that, in the case in the main proceedings, the entity requiring that its employees act in good faith and with loyalty is a private limited company, is sufficient to prevent that company from relying on that provision.40In that respect, given the general nature of the terms used in the second subparagraph of Article 4(2) of Directive 2000/78 to define the scope ratione personae of that provision, namely ‘churches and other public or private organisations’, considerations as to the nature and legal form of the entity concerned cannot affect the applicability of that provision to a situation such as that in the main proceedings. In particular, the reference to private organisations covers establishments that, like IR, are established under private law.41That said, it must be noted, first, that the provisions of Article 4(2) of Directive 2000/78 apply only to churches and other public or private organisations ‘the ethos of which is based on religion or belief’.42Second, the second subparagraph of Article 4(2) of Directive 2000/78 refers to ‘individuals working’ for such churches or organisations, which means that the scope of that provision, like that of the first subparagraph of Article 4(2), covers the occupational activities of such individuals.43In the second place, with regard to the question of review by national courts of the application of the second subparagraph of Article 4(2) of Directive 2000/78, it must be noted that the Court has held, in a case relating to the interpretation of the first subparagraph of Article 4(2) of that directive, that the latter provision must be interpreted as meaning that, where a church or other organisation whose ethos is based on religion or belief asserts, in support of a decision or act such as a decision or act rejecting an application for employment with it, that, by reason of the nature of the activities concerned or the context in which the activities are to be carried out, religion constitutes a genuine, legitimate and justified occupational requirement, having regard to the ethos of the church or organisation, it must be possible for such an assertion to be subject, if need be, to effective judicial review by which it can be ensured that the criteria set out in that provision are satisfied in a particular case (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 59).44Furthermore, the fact that the first subparagraph of Article 4(2) of Directive 2000/78 refers to national legislation in force at the date of adoption of the directive and national practices existing at that date cannot be interpreted as authorising the Member States not to include compliance with the criteria set out in that provision in the scope of effective judicial review (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 54).45The reasons given by the Court in support of that requirement for effective judicial review, which are based on the objective of Directive 2000/78, on the context of Article 4(2), on the safeguards required from Member States, in Article 9 and 10 thereof, in order to ensure that the duties arising under that directive are complied with and the persons who consider themselves to be victims of discrimination are protected, and on the right to effective judicial protection enshrined in Article 47 of the Charter (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraphs 47 to 49) similarly apply in circumstances, such as those in the main proceedings, where a private organisation claims, in support of a decision to dismiss one of its employees, that the latter failed to act in good faith and with loyalty to the ethos of that organisation, within the meaning of the second subparagraph of Article 4(2) of the directive.46Unlike the first subparagraph of Article 4(2) of that directive, the second subparagraph stipulates that one of the occupational requirements that a church or other public or private organisation whose ethos is based on religion or belief can impose on its employees is the requirement that those individuals act in good faith and with loyalty to the ethos of that church or organisation. As is apparent from, inter alia, the clause ‘provided that its provisions are otherwise complied with’, that right must be exercised in a manner consistent with the other provisions of Directive 2000/78 and, in particular, the criteria set out in the first subparagraph of Article 4(2) of the directive, which must, where appropriate, be amenable to effective judicial review, as pointed out in paragraph 43 above.47Contrary to what is maintained by, in particular, IR and the German government, the lawfulness of a requirement to act in good faith and with loyalty imposed by a church or other organisation whose ethos is based on religion or belief cannot be examined by reference only to national law, but must take into account the provisions of Article 4(2) of Directive 2000/78 and the criteria set out therein, it not being possible to exclude the question of compliance with those criteria from effective judicial review.48Article 17 TFEU cannot invalidate that conclusion. First, the wording of that provision corresponds, in essence, to that of Declaration No 11 on the status of churches and non-confessional organisations, annexed to the Final Act of the Treaty of Amsterdam. The fact that Declaration No 11 is expressly mentioned in recital 24 of Directive 2000/78 shows that the EU legislature must have taken that declaration into account when adopting the directive, especially Article 4(2) thereof, since that provision refers specifically to national legislation and practices in force on the date of adoption of the directive. Second, while it is true that Article 17 TFEU expresses the neutrality of the European Union towards the organisation by the Member States of their relations with churches and religious associations and communities, that article is not such as to exempt compliance with the criteria set out in Article 4(2) of Directive 2000/78 from effective judicial review (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraphs 56 to 58).49In the third place, with regard to the conditions for the application of the second subparagraph of Article 4(2) of Directive 2000/78, it is to be noted, in the light of what was stated in paragraph 46 above, that a difference of treatment in respect of the requirement to act in good faith and with loyalty to the ethos of the employer, such as that at issue in the main proceedings, which the parties agree is based solely on the faith of the employees, must comply, inter alia, with the criteria set out in the first subparagraph of Article 4(2) of that directive.50In that regard, the Court has found that it is clear from that provision that it is on the basis of the ‘nature’ of the activities concerned or the ‘context’ in which they are carried out that religion or belief may, in certain circumstances, constitute a genuine, legitimate and justified occupational requirement in the light of the ethos of the church or organisation concerned within the meaning of that provision. Thus the lawfulness, in the light of that provision, of a difference of treatment on grounds of religion or belief depends on the objectively verifiable existence of a direct link between the occupational requirement imposed by the employer and the activity concerned. Such a link may arise either as a result of the nature of the activity, for example where it involves taking part in the determination of the ethos of the church or organisation in question or contributing to its evangelising mission, or of the circumstances in which the activity is to be carried out, for instance, where it is necessary to ensure that the church or organisation is presented in a credible fashion to the outside world (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraphs 62 to 63).51More specifically, with respect to the three criteria laid down in the first subparagraph of Article 4(2) of Directive 2000/78, the Court has stated, first of all, that the use of the adjective ‘genuine’ means that professing the religion or belief on which the ethos of the church or organisation is founded must be necessary because of the importance of the occupational activity in question for the promotion of that ethos or the exercise by the church or organisation of its right of autonomy, as recognised by Article 17 TFEU and Article 10 of the Charter (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraphs 50 and 65).52The Court then noted that use of the term ‘legitimate’ shows that the EU legislature intended to ensure that the requirement of professing the religion or belief on which the ethos of the church or organisation is founded is not used to pursue an aim that has no connection with that ethos or with the exercise by the church or organisation of its right of autonomy (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 66).53Lastly, the term ‘justified’ implies not only that a national court can review whether the criteria laid down in Article 4(2) of Directive 2000/78 are being complied with, but also that the church or organisation imposing the occupational requirement is obliged to show, in the light of the factual circumstances of the individual case, that the alleged risk of undermining its ethos or its right of autonomy is probable and substantial, so that the imposition of such a requirement is necessary (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 67).54In that regard, the requirement in the first subparagraph of Article 4(2) of Directive 2000/78 must be consistent with the principle of proportionality, which means that the national courts must ascertain whether the requirement in question is appropriate and does not go beyond what is necessary for attaining the objective pursued (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 68).55It follows from the considerations set out in paragraphs 49 to 54 above that a church or other public or private organisation the ethos of which is based on religion or belief can treat its employees in managerial positions differently, as regards the requirement to act in good faith and with loyalty to that ethos, depending on their affiliation to a particular religion or adherence to the belief of that church or other organisation only if, bearing in mind the nature of the occupational activities concerned or the context in which they are carried out, the religion or belief is a genuine, legitimate and justified occupational requirement in the light of that ethos.56In that regard, while it is ultimately for the national court, which has sole jurisdiction to appraise the facts, to determine whether requiring only employees in managerial positions who share the religion or belief on which the church or organisation concerned is based to act in good faith and with loyalty is in fact a genuine, legitimate and justified occupational requirement within the meaning of the first subparagraph of Article 4(2) of Directive 2000/78, the Court may nevertheless provide guidance, based on the file in the main proceedings and the written and oral observations submitted to it, in order to enable the national court to give judgment in the particular case before it.57In the present case, the requirement at issue in the main proceedings concerns the respect to be given to a particular aspect of the ethos of the Catholic Church, namely the sacred and indissoluble nature of religious marriage.58Adherence to that notion of marriage does not appear to be necessary for the promotion of IR’s ethos, bearing in mind the occupational activities carried out by JQ, namely the provision of medical advice and care in a hospital setting and the management of the internal medicine department which he headed. Therefore, it does not appear to be a genuine requirement of that occupational activity within the meaning of the first subparagraph of Article 4(2) of Directive 2000/78, which is, nevertheless, a matter for the referring court to verify.59The finding that adherence to that aspect of the ethos of the organisation concerned cannot, in the present case, constitute a genuine occupational requirement is corroborated by the fact, which was confirmed by IR during the hearing before the Court and referred to by the Advocate General in point 67 of his Opinion, that positions of medical responsibility entailing managerial duties, similar to that occupied by JQ, were entrusted to IR employees who were not of the Catholic faith and, consequently, not subject to the same requirement to act in good faith and with loyalty to IR’s ethos.60Next, it should be noted that, in the light of the documents submitted to the Court, the requirement at issue in the main proceedings does not appear to be justified within the meaning of the first subparagraph of Article 4(2) of Directive 2000/78. However, it is for the referring court to verify whether IR has established that, in the light of the circumstances of the main proceedings, there is a probable and substantial risk of undermining its ethos or its right of autonomy (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 67).61It follows from the foregoing considerations that the answer to the first question and the second part of the second question is that the second subparagraph of Article 4(2) of Directive 2000/78 must be interpreted as meaning:first, that a church or other organisation the ethos of which is based on religion or belief and which manages a hospital in the form of a private limited company cannot decide to subject its employees performing managerial duties to a requirement to act in good faith and with loyalty to that ethos that differs according to the faith or lack of faith of such employees, without that decision being subject, where appropriate, to effective judicial review to ensure that it fulfils the criteria laid down in Article 4(2) of that directive; andsecond, that a difference of treatment, as regards a requirement to act in good faith and with loyalty to that ethos, between employees in managerial positions according to the faith or lack of faith of those employees is consistent with that directive only if, bearing in mind the nature of the occupational activities concerned or the context in which they are carried out, the religion or belief constitutes an occupational requirement that is genuine, legitimate and justified in the light of the ethos of the church or organisation concerned and is consistent with the principle of proportionality, which is a matter to be determined by the national courts. The first part of the second question 62By the first part of its second question, the referring court essentially asks whether, under EU law, a national court is required, in a dispute between individuals, to disapply a provision of national law that cannot be interpreted in a manner that is consistent with the second subparagraph of Article 4(2) of Directive 2000/78.63It must be recalled that it is for the national courts, taking into account the whole body of rules of national law and applying methods of interpretation recognised by that law, to decide whether, and to what extent, a national provision, such as Paragraph 9(2) of the AGG, can be interpreted in a manner that is consistent with Article 4(2) of Directive 2000/78, without having recourse to an interpretation contra legem of the national provision (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 71 and the case-law cited).64The Court has held, moreover, that the requirement to interpret national law in a manner that is consistent with EU law includes the obligation for national courts to change their established case-law, where necessary, if it is based on an interpretation of national law that is incompatible with the objectives of a directive (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 72 and the case-law cited).65Consequently, a national court cannot validly claim that it is impossible for it to interpret a provision of national law in a manner that is consistent with EU law merely because that provision has consistently been interpreted in a manner that is incompatible with EU law (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 73 and the case-law cited).66In the present case, therefore, it is for the referring court to ascertain whether the national provision at issue in the main proceedings lends itself to an interpretation that is consistent with Directive 2000/78.67In the event that it is impossible to interpret the national provision at issue in the main proceedings in a manner that is consistent with EU law, it should be noted, first, that Directive 2000/78 does not itself establish the principle of equal treatment in the field of employment and occupation, which originates in various international instruments and constitutional traditions common to the Member States, but has the sole purpose of laying down, in that field, a general framework for combating discrimination on various grounds, including religion and belief, as may be seen from its title and from Article 1 (judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 75 and the case-law cited).68On the other hand, a national court that finds itself in the situation referred to in the paragraph above is under an obligation to provide, within the limits of its jurisdiction, the legal protection which individuals derive from EU law and to ensure the full effectiveness of that law, disapplying if need be any provision of national legislation contrary to the principle prohibiting discrimination on grounds of religion or belief (see, with regard to the principle prohibiting discrimination on grounds of age, judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraph 35).69Before the entry into force of the Treaty of Lisbon, which conferred on the Charter the same legal status as the treaties, that principle derived from the common constitutional traditions of the Member States. The prohibition of all discrimination on grounds of religion or belief, now enshrined in Article 21 of the Charter, is therefore a mandatory general principle of EU law and is sufficient in itself to confer on individuals a right that they may actually rely on in disputes between them in a field covered by EU law (see, to that effect, judgment of 17 April 2018, Egenberger, C‑414/16, EU:C:2018:257, paragraph 76).70Accordingly, in the main proceedings, if it considers that it is impossible for it to interpret the national provision at issue in a manner that is consistent with EU law, the referring court must disapply that provision.71In the light of the foregoing considerations, the answer to the first part of the second question is that a national court hearing a dispute between two individuals is obliged, where it is not possible for it to interpret the applicable national law in a manner that is consistent with Article 4(2) of Directive 2000/78, to provide, within the limits of its jurisdiction, the legal protection which individuals derive from the general principles of EU law, such as the principle prohibiting discrimination on grounds of religion or belief, now enshrined in Article 21 of the Charter, and to guarantee the full effectiveness of the rights that flow from those principles, by disapplying, if need be, any contrary provision of national law. Costs 72Since these proceedings are, for the parties to the main proceedings, a step in the action before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Grand Chamber) hereby rules: 1. The second subparagraph of Article 4(2) of Council Directive 2000/78/EC of 27 November 2000 establishing a general framework for equal treatment in employment and occupation must be interpreted as meaning: first, that a church or other organisation the ethos of which is based on religion or belief and which manages a hospital in the form of a private limited company cannot decide to subject its employees performing managerial duties to a requirement to act in good faith and with loyalty to that ethos that differs according to the faith or lack of faith of such employees, without that decision being subject, where appropriate, to effective judicial review to ensure that it fulfils the criteria laid down in Article 4(2) of that directive; and second, that a difference of treatment, as regards a requirement to act in good faith and with loyalty to that ethos, between employees in managerial positions according to the faith or lack of faith of those employees is consistent with that directive only if, bearing in mind the nature of the occupational activities concerned or the context in which they are carried out, the religion or belief constitutes an occupational requirement that is genuine, legitimate and justified in the light of the ethos of the church or organisation concerned and is consistent with the principle of proportionality, which is a matter to be determined by the national courts. 2. A national court hearing a dispute between two individuals is obliged, where it is not possible for it to interpret the applicable national law in a manner that is consistent with Article 4(2) of Directive 2000/78, to provide, within the limits of its jurisdiction, the legal protection which individuals derive from the general principles of EU law, such as the principle prohibiting discrimination on grounds of religion or belief, now enshrined in Article 21 of the Charter of Fundamental Rights of the European Union, and to guarantee the full effectiveness of the rights that flow from those principles, by disapplying, if need be, any contrary provision of national law. [Signatures]( *1 ) Language of the case: German. | ae66e-1dd163e-4c46 | EN |
A posted worker is covered by the social security system of his place of work if he replaces another posted worker, even if those workers were not posted by the same employer | 6 September 2018 ( *1 )(Reference for a preliminary ruling — Social security — Regulation (EC) No 987/2009 — Articles 5 and 19(2) — Workers posted in a Member State other than that in which the employer usually carries out its activities — Issue of the A1 attestations by the Member State of origin after recognition by the host Member State that the workers are subject to its social security scheme — Opinion of the Administrative Board — Incorrect issue of A1 certificates — Finding — Binding nature and retroactive effect of those certificates — Regulation (EC) No 883/2004 — Legislation applicable — Article 12(1) — Concept of a person ‘sent to replace another person’)In Case C‑527/16,REQUEST for a preliminary ruling under Article 267 TFEU from the Verwaltungsgerichtshof (Supreme Administrative Court, Austria), made by decision of 14 September 2016, received at the Court on 14 October 2016, in the proceedings Salzburger Gebietskrankenkasse, Bundesminister für Arbeit, Soziales und Konsumentenschutz, Interested parties: Alpenrind GmbH, Martin-Meat Szolgáltató és Kereskedelmi Kft, Martimpex-Meat Kft, Pensionsversicherungsanstalt, Allgemeine Unfallversicherungsanstalt, THE COURT (First Chamber),composed of R. Silva de Lapuerta, President of the Chamber, C.G. Fernlund, J.-C. Bonichot, S. Rodin and E. Regan (Rapporteur), Judges,Advocate General: H. Saugmandsgaard Øe,Registrar: M. Ferreira, Principal Administrator,having regard to the written procedure and further to the hearing on 28 September 2017,after considering the observations submitted on behalf of:–the Salzburger Gebietskrankenkasse, by P. Reichel, Rechtsanwalt,Alpenrind GmbH, by R. Haumer and W. Berger, Rechtsanwälte,Martimpex-Meat Kft and Martin-Meat Szolgáltató és Kereskedelmi Kft, by U. Salburg and G. Simonfay, Rechtsanwälte,the Austrian Government, by G. Hesse, acting as Agent,the Belgian Government, by L. Van den Broeck and M. Jacobs, acting as Agents,the Czech Government, by M. Smolek, J. Vláčil, J. Pavliš and O. Šváb, acting as Agents,the German Government, by T. Henze and D. Klebs, acting as Agents,Ireland, by L. Williams, G. Hodge, J. Murray and E. Creedon and by A. Joyce and N. Donnelly, acting as Agents,the French Government, by C. David, acting as Agent,the Hungarian Government, by M. Fehér, acting as Agent,the Polish Government, by B. Majczyna, acting as Agent, and by M. Malczewska, adwokat,the European Commission, by B.-R. Killmann and D. Martin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 31 January 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation, first, of Article 12(1) of Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (OJ 2004 L 166, p. 1, and corrigendum OJ 2004 L 200, p. 1), as amended by Commission Regulation (EU) No 1244/2010 of 9 December 2010 (OJ 2010 L 338, p. 35) (‘Regulation No 883/2004’) and, second, Article 5 and Article 19(2) of Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation No 883/2004 (OJ 2009 L 284, p. 1), as amended by Regulation No 1244/2010 (OJ 2010 L 338, p. 35) (‘Regulation No 987/2009’).2The request has been made in proceedings between Salzburger Gebietskrankenkasse (Salzburg Regional Health Insurance Fund) (‘the Health Insurance Fund’) and the Bundesminister für Arbeit, Soziales und Konsumentenschutz (Federal Minister of Labour, Social Affairs and Consumer Protection) (‘the Minister’) and Alpenrind GmbH, Martin-Meat Szolgáltató es Kereskedelmi Kft (‘Martin-Meat’), Martimpex-Meat Kft (‘Martimpex’), the Pensionsversicherungsanstalt (Pension Insurance Authority) and the Allgemeine Unfallversicherungsanstalt (General Accident Insurance Authority) concerning the social security legislation applicable to persons posted to work in Austria under an agreement between Alpenrind, established in Austria, and Martimpex, established in Hungary. Legal framework Regulation No 883/2004 3Recitals 1, 3, 5, 8, 15, 17 to 18a and 45 of Regulation No 883/2004 are worded as follows:‘(1)The rules for coordination of national social security systems fall within the framework of free movement of persons and should contribute towards improving their standard of living and conditions of employment.…(3)Council Regulation (EEC) No 1408/71 of 14 June 1971 on the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the [Union] has been amended and updated on numerous occasions in order to take into account not only developments at [Union] level, including judgments of the Court of Justice, but also changes in legislation at national level. Such factors have played their part in making the [Union] coordination rules complex and lengthy. Replacing, while modernising and simplifying, these rules is therefore essential to achieve the aim of the free movement of persons.(5)It is necessary, within the framework of such coordination, to guarantee within the [Union] equality of treatment under the different national legislation for the persons concerned.(8)The general principle of equal treatment is of particular importance for workers who do not reside in the Member State of their employment, including frontier workers.(15)It is necessary to subject persons moving within the [Union] to the social security scheme of only one single Member State in order to avoid overlapping of the applicable provisions of national legislation and the complications which could result therefrom.(17)With a view to guaranteeing the equality of treatment of all persons occupied in the territory of a Member State as effectively as possible, it is appropriate to determine as the legislation applicable, as a general rule, that of the Member State in which the person concerned pursues his/her activity as an employed or self-employed person.(18)In specific situations which justify other criteria of applicability, it is necessary to derogate from that general rule.(18a)The principle of single applicable legislation is of great importance and should be enhanced. …(45)Since the objective of the proposed action, namely the coordination measures to guarantee that the right to free movement of persons can be exercised effectively, cannot be sufficiently achieved by the Member States and can therefore, by reason of the scale and effects of that action, be better achieved at [Union] level, the [Union] may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty. …’4In Title II of that regulation entitled, ‘Determination of the legislation applicable’, Article 11, headed ‘General rules’, provides:‘1. Persons to whom this Regulation applies shall be subject to the legislation of a single Member State only. Such legislation shall be determined in accordance with this Title.3. Subject to Articles 12 to 16:(a)a person pursuing an activity as an employed or self-employed person in a Member State shall be subject to the legislation of that Member State.…’5Also in Title II, Article 12 of that regulation, entitled ‘Special rules’, provided in paragraph 1, in the version applicable at the beginning of the period from 1 February 2012 to 13 December 2013 (‘the period at issue’):‘A person who pursues an activity as an employed person in a Member State on behalf of an employer which normally carries out its activities there and who is posted by that employer to another Member State to carry out work on that employer’s behalf shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of such work does not exceed 24 months and that he/she is not sent to replace another person.’6During the period at issue, Article 12(1) of Regulation No 883/2004 was amended by Regulation (EU) No 465/2012 of the European Parliament and of the Council of 22 May 2012, amending Regulation No 883/2004 and Regulation No 987/2009 (OJ 2012 L 149, p. 4) adding the word ‘posted’ to the end of that paragraph.7Under Title IV of that regulation, entitled ‘Composition and working methods of the Administrative Commission’, Article 71(1) provides:‘The Administrative Commission for the Coordination of Social Security Systems (hereinafter called the the Administrative Commission) attached to the [European Commission] shall be made up of a government representative from each of the Member States, assisted, where necessary, by expert advisers. A representative of the [European Commission] shall attend the meetings of the Administrative Commission in an advisory capacity.’8Article 72 in Title IV, headed ‘Tasks of the Administrative Commission’, is worded as follows:‘The Administrative Commission shall:deal with all administrative questions and questions of interpretation arising from the provisions of this Regulation or those of [Regulation No 987/2009], or from any agreement concluded or arrangement made thereunder, without prejudice to the right of the authorities, institutions and persons concerned to have recourse to the procedures and tribunals provided for by the legislation of the Member States, by this Regulation or by the Treaty;(c)foster and develop cooperation between Member States and their institutions in social security matters in order, inter alia, to take into account particular questions regarding certain categories of persons; facilitate realisation of actions of cross border cooperation activities in the area of the coordination of social security systems;9Under Article 76, entitled ‘Cooperation’, in Title V of Regulation No 883/2004, itself headed ‘Miscellaneous Provisions’:‘1. The competent authorities of the Member States shall communicate to each other all information regarding:measures taken to implement this Regulation;(b)changes in their legislation which may affect the implementation of this Regulation.2. For the purposes of this Regulation, the authorities and institutions of the Member States shall lend one another their good offices and act as though implementing their own legislation. …’ Regulation No 987/2009 10Recitals 2, 6 and 12 of Regulation No 987/2009 state:‘(2)Closer and more effective cooperation between social security institutions is a key factor in allowing the persons covered by [Regulation No 883/2004] to access their rights as quickly as possible and under optimum conditions.(6)Strengthening certain procedures should ensure greater legal certainty and transparency for the users of [Regulation No 883/2004]. For example, setting common deadlines for fulfilling certain obligations or completing certain administrative tasks should assist in clarifying and structuring relations between insured persons and institutions.(12)Many measures and procedures provided for in this Regulation are intended to ensure greater transparency concerning the criteria which the institutions of the Member States must apply under [Regulation No 883/2004]. Such measures and procedures are the result of the case-law of the [Court], the decisions of the Administrative Commission and the experience of more than 30 years of application of the coordination of social security systems in the context of the fundamental freedoms enshrined in the Treaty.’11Under Title I of Regulation No 987/2009, entitled ‘General Provisions’, Chapter I dealing with definitions provides, in Article 1(2)(c) thereof, that ‘“document” means a set of data, irrespective of the medium used, structured in such a way that it can be exchanged electronically and which must be communicated in order to enable the operation of [Regulation No 883/2004] and [Regulation No 987/2009]’.12Title I, Chapter II, entitled ‘Provisions concerning cooperation and exchanges of data’, provides in Article 5, entitled ‘Legal value of documents and supporting evidence issued in another Member State’:‘1. Documents issued by the institution of a Member State and showing the position of a person for the purposes of the application of [Regulation No 883/2004] and of [Regulation No 987/2009], and supporting evidence on the basis of which the documents have been issued, shall be accepted by the institutions of the other Member States for as long as they have not been withdrawn or declared invalid by the Member State in which they were issued.2. Where there is doubt about the validity of a document or the accuracy of the facts on which the particulars contained therein are based, the institution of the Member State that receives the document shall ask the issuing institution for the necessary clarification and, where appropriate, the withdrawal of that document. The issuing institution shall reconsider the grounds for issuing the document and, if necessary, withdraw it.3. Pursuant to paragraph 2, where there is doubt about the information provided by the persons concerned, the validity of a document or supporting evidence or the accuracy of the facts on which the particulars contained therein are based, the institution of the place of stay or residence shall, insofar as this is possible, at the request of the competent institution, proceed to the necessary verification of this information or document.4. Where no agreement is reached between the institutions concerned, the matter may be brought before the Administrative Commission by the competent authorities no earlier than one month following the date on which the institution that received the document submitted its request. The Administrative Commission shall seek to reconcile the points of view within six months of the date on which the matter was brought before it.’13Under Article 6 of Chapter II, entitled ‘Provisional application of legislation and provisional granting of benefits’:‘1. Unless otherwise provided for in [Regulation No 987/2009], where there is a difference of views between the institutions or authorities of two or more Member States concerning the determination of the applicable legislation, the person concerned shall be made provisionally subject to the legislation of one of those Member States, the order of priority being determined as follows:the legislation of the Member State where the person actually pursues his employment or self-employment, if the employment or self-employment is pursued in only one Member State;3. Where no agreement is reached between the institutions or authorities concerned, the matter may be brought before the Administrative Commission by the competent authorities no earlier than one month after the date on which the difference of views, as referred to in paragraph 1 or 2 arose. The Administrative Commission shall seek to reconcile the points of view within six months of the date on which the matter was brought before it.14Under Title II of Regulation No 987/2009, entitled ‘Determination of the applicable legislation’, Article 15, headed ‘Procedures for the application of Article 11(3)(b) and (d), Article 11(4) and Article 12 of [Regulation No 883/2004] (on the provision of information to the institutions concerned)’, provided in paragraph 1, in the version in force at the beginning of the period concerned:‘Unless otherwise provided for by Article 16 of [Regulation No 987/2009], where a person pursues his activity in a Member State other than the Member State competent under Title II of [Regulation No 883/2004], the employer or, in the case of a person who does not pursue an activity as an employed person, the person concerned shall inform the competent institution of the Member State whose legislation is applicable thereof, whenever possible in advance. That institution shall without delay make information concerning the legislation applicable to the person concerned, pursuant to Article 11(3)(b) or Article 12 of the [Regulation No 883/2004], available to the person concerned and to the institution designated by the competent authority of the Member State in which the activity is pursued.’15During the period concerned, the second sentence of Article 15(1) of Regulation No 987/2009 was amended by Regulation No 465/2012. That amended version of that provision is worded as follows:‘… That institution shall issue the attestation referred to in Article 19(2) of the [Regulation No 987/2009] to the person concerned and shall without delay make information concerning the legislation applicable to that person, pursuant to Article 11(3)(b) or Article 12 of the [Regulation No 883/2004], available to the institution designated by the competent authority of the Member State in which the activity is pursued.’16Under the same title, Article 19, entitled ‘Provision of information to persons concerned and employers’, is worded as follows:‘1. The competent institution of the Member State whose legislation becomes applicable pursuant to Title II of [Regulation No 883/2004] shall inform the person concerned and, where appropriate, his employer(s) of the obligations laid down in that legislation. It shall provide them with the necessary assistance to complete the formalities required by that legislation.2. At the request of the person concerned or of the employer, the competent institution of the Member State whose legislation is applicable pursuant to Title II of [Regulation No 883/2004] shall provide an attestation that such legislation is applicable and shall indicate, where appropriate, until what date and under what conditions.’17Under Article 20 in Title II, headed ‘Cooperation between institutions’:‘1. The relevant institutions shall communicate to the competent institution of the Member State whose legislation is applicable to a person pursuant to Title II of [Regulation No 883/2004] the necessary information required to establish the date on which that legislation becomes applicable and the contributions which that person and his employer(s) are liable to pay under that legislation.2. The competent institution of the Member State whose legislation becomes applicable to a person pursuant to Title II of [Regulation No 883/2004] shall make the information indicating the date on which the application of that legislation takes effect available to the institution designated by the competent authority of the Member State to whose legislation that person was last subject.’18Under Title V, entitled ‘Miscellaneous transitional and final provisions’, Article 89, entitled ‘Information’, provides in paragraph 3:‘The competent authorities shall ensure that their institutions are aware of and apply all the [Union] provisions, legislative or otherwise, including the decisions of the Administrative Commission, in the areas covered by and within the terms of [Regulation No 883/2004] and [Regulation No 987/2009].’ The dispute in the main proceedings and the questions referred for a preliminary ruling 19Alpenrind is active in the livestock and meat sector. Since 1997 it has operated an abattoir in Salzburg, which it leases.20In 2007, Alpenrind, formerly S GmbH, entered into a contract with Martin-Meat, established in Hungary, under which Martin-Meat undertook to cut and pack 25 sides of beef per week. The work was performed at the premises of Alpenrind by workers posted to Austria. On 31 January 2012, Martin-Meat discontinued its meat-cutting operations and thereafter performed slaughterings for Alpenrind.21On 24 January 2012, Alpenrind concluded a contract with Martimpex, also established in Hungary, under which Martimpex undertook to cut 55000 tonnes of beef for Alpenrind in the period from 1 February 2012 to 31 January 2014. The work was performed at the premises of Alpenrind (which it had leased, including all factory equipment) by workers posted to Austria. Martimpex took charge of the sides of beef which were then cut and packed by its workers.22From 1 February 2014, Alpenrind again concluded an agreement with Martin-Meat for the latter to carry out the meat cutting work at the abovementioned premises.23For the more than 250 workers used by Martimpex during the period at issue, the competent Hungarian social security institution issued, sometimes retroactively and sometimes in cases where the Austrian social insurance institution had already determined that the worker concerned was subject to compulsory insurance under Austrian legislation, certificates attesting that the Hungarian social security regime was applicable to those workers, in accordance with Articles 11 to 16 of Regulation No 883/2004 and Article 19 of Regulation No 987/2009. Each of those certificates stated that Alpenrind was the employer at the place where the work was carried out.24The Salzburg Regional Health Insurance Fund determined that the abovementioned workers were subject to compulsory insurance in Austria during the period at issue, in accordance with Paragraph 4(1) and (2) of the Allgemeine Soialversicherungsgesetz (Social Security Code) and Paragraph 1(1)(a) of the Arbeitslosenversicherungsgesetz (Law on Unemployment Insurance), based on the work carried out for the joint undertaking of Alpenrind, Martin-Meat and Martimpex.25By the contested judgment before the referring court, the Verwaltungsgericht (Administrative Court, Austria) annulled the decision of the Salzburg Regional Health Insurance Fund on the ground that the Austrian social security institution was not competent. The Verwaltungsgericht (Administrative Court) based its decision, inter alia, on the fact that the competent Hungarian social security institution issued to each of the persons subject to compulsory insurance in Austria an A1 certificate establishing that that person was, from a specific date, employed in Hungary by Martimpex as a worker subject to compulsory insurance and was probably posted to Austria to work for Alpenrind for the period indicated in each certificate, including the period at issue.26In the appeal brought against that judgment before the referring court, the Salzburg Regional Health Insurance Fund and the Minister reject the idea that the A1 certificates have absolute binding effect. That binding effect is based, in their view, on observance of the principle of sincere cooperation between Member States, enshrined in Article 4(3) TEU. They consider that the Hungarian social security institution has breached that principle.27According to the referring court, Hungary observed that only a judicial decision could resolve the stalemate, which also affects Hungary, and that national Hungarian law prevents a withdrawal of the A1 certificates. The Salzburg Regional Health Insurance Fund takes the view that it does not have standing to bring proceedings in Hungary. In its view, the only way to bring about a decision in the matter is a ruling that insurance is compulsory in Austria, notwithstanding the A1 certificates issued by the competent Hungarian institution.28The referring court observes that the Minister has produced documents establishing that, on 20 and 21 June 2016, the Administrative Commission concluded that Hungary had wrongly declared itself competent with regard to the workers concerned and, therefore, that the A1 certificates should be withdrawn.29The referring court considers that the dispute before it raises certain questions concerning the interpretation of EU law.30In particular, that court observes, first, that according to the wording of Article 5 of Regulation No 987/2009, documents showing the position of a person for the purposes of the application of Regulations Nos 883/2004 and 987/2009 and supporting evidence on the basis of which the documents have been issued are only binding on the social security institutions of the Member States. Therefore, that court has doubts as to whether the binding effect also applies to the national courts.31Second, the referring court asks about the possible impact of the conduct of the proceedings before the Administrative Commission on the binding nature of the A1 certificates. In particular, that court wishes to know whether, after proceedings before the Administrative Commission which failed to reach an agreement or to a decision to withdraw the A1 certificates, those certificates are still binding and whether proceedings to determine whether insurance is compulsory should be instituted.32The referring court also observes that, in the present case, some A1 certificates were issued retroactively, and some only after the Austrian institution had already determined that insurance was compulsory. That court asks whether the issue of such documents also has a binding effect retroactively where compulsory insurance in the host Member State has already been formally established. According to that court, it is conceivable that the documents issued by the Austrian institutions establishing compulsory insurance are also ‘documents’ within the meaning of Article 5(1) of Regulation No 987/2009, so that they produce a binding effect under that provision.33Third, if, in certain circumstances, A1 certificates have only a limited binding effect, the referring court asks whether the condition, laid down in Article 12(1) of Regulation No 883/2004, that the person posted continues to be subject to the legislation of the Member State in which his employer is established, provided that he is not sent to replace another person, must be interpreted as meaning that a worker cannot be replaced immediately by another newly posted worker, regardless of which undertaking or Member State from which the newly posted worker originates. Although that strict interpretation may help to avoid abuse, it does not necessarily follow from the wording of Article 12(1) of Regulation No 883/2004.34In those circumstances the Verwaltungsgerichtshof (Supreme Administrative Court, Austria) decided to stay proceedings and to refer to the Court the following questions for a preliminary ruling:Does Article 5 of Regulation No 987/2009, which establishes the procedure for implementing Article 19(2) of [that regulation], also apply in proceedings before a court or tribunal within the meaning of Article 267 TFEU?(2)If the first question is answered in the affirmative:does the aforementioned binding effect also apply where proceedings had previously taken place before the [Administrative Commission] and such proceedings did not result either in agreement or in a withdrawal of the contested documents?does the aforementioned binding effect also apply where an A1 certificate is not issued until after the host Member State has formally determined that insurance is compulsory under its legislation? Does the binding effect also apply retroactively in such cases?In the event that, under certain conditions, the binding effect of documents within the meaning of Article 19(2) of Regulation No 987/2009 is limited:Does it contravene the prohibition on replacement set forth in Article 12(1) of Regulation No 883/2004 if the replacement occurs not in the form of a posting by the same employer but instead by another employer? Does it matter whetherthe second employer has its registered office in the same Member State as the first employer, andthe first and the second posting employers share staffing and/or organisational resources?’ Consideration of the questions referred The first question 35By its first question, the referring court asks essentially whether Article 5(1) of Regulation No 987/2009, read together with Article 19(2) thereof, must be interpreted as meaning that an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004 is binding not only on the institutions of the Member State in which that activity is carried out, but also on the courts of that Member State.36It should be stated from the outset that, according to Article 19(2) of Regulation No 987/2009, the competent institution of the Member State whose legislation is applicable pursuant to Title II of Regulation No 883/2004, which includes Article 12(1), is to provide an attestation that such legislation is applicable and indicate, where appropriate, until what date and under what conditions.37Article 5(1) of that regulation provides that documents issued by the institution of a Member State and showing the position of a person for the purposes of the application of Regulations Nos 883/2004 and 987/2009, and supporting evidence on the basis of which the documents have been issued, are to be accepted by the institutions of the other Member States for as long as they have not been withdrawn or declared to be invalid by the Member State in which they were issued.38It is true, as the referring court observes, that that provision states that the documents referred to therein are binding on the ‘institutions’ of Member States other than the Member State in which they were issued, without expressly mentioning the courts of those other Member States.39However, that provision also states that such documents are to be accepted ‘for as long as they have not been withdrawn or declared invalid by the Member State in which they were issued’, which suggests that, in principle, only the authorities and courts of the issuing Member State may, where appropriate, withdraw or declare the A1 certificates invalid.40That interpretation is supported by the legislative history of Article 5(1) of Regulation No 987/2009 and the context in which it is situated.41In particular, as regards the E 101 certificate, which preceded the A1 certificate, the Court has already held that the binding nature of the first certificate issued by the competent institution of a Member State, in accordance with Article 12a(1a) of Council Regulation (EEC) No 574/72 of 21 March 1972 laying down the procedure for implementing Regulation No 1408/71 (OJ, English Special Edition 1972(I), p. 160), binds both the institutions and the courts of the Member State in which the activity is carried out (see, to that effect, judgments of 26 January 2006, Herbosch Kiere, C‑2/05, EU:C:2006:69, paragraphs 30 to 32, and of 27 April 2017, A-Rosa Flussschiff, C‑620/15, EU:C:2017:309, paragraph 51).42Recital 12 of Regulation No 987/2009 provides, in particular, that the measures and procedures laid down by that regulation ‘are the result of the case-law of the [Court], the decisions of the Administrative Commission and the experience of more than 30 years of application of the coordination of social security systems in the context of the fundamental freedoms enshrined in the Treaty’.43Similarly, the Court has already held that Regulation No 987/2009 codified the Court’s case-law, affirming the binding nature of the E 101 certificate and the exclusive competence of the issuing institution to assess the validity of that certificate, and expressly reproducing the procedure as a means of resolving disputes concerning both the accuracy of documents drawn up by the competent institution of a Member State and the determination of the legislation applicable to the worker concerned (judgment of 27 April 2017, A-Rosa Flusschiff, C‑620/15, EU:C:2017:309, paragraph 59, and order of 24 October 2017, BeluBienstleistung and Nikless, C‑474/16, not published, EU:C:2017:812, paragraph 19).44It follows that, if, when Regulation No 987/2009 was adopted, the EU legislature wished to depart from the earlier case-law in that regard so that the courts of the Member State in which the activity is carried out are not bound by the A1 certificates issued in another Member State, it could have expressly provided for that.45Furthermore, as the Advocate General observed in point 35 of his Opinion, the considerations underlying the case-law of the Court relating to the binding effect of the E 101 certificates are as valid in the context of Regulations Nos 883/2004 and 987/2009. In particular, although the principle of legal certainty is mentioned, in recital 6 of Regulation No 987/2009, the principle of the affiliation of employees to a single social security scheme is set out in recital 15 and Article 11(1) of Regulation No 883/2004, while the importance of the principle of sincere cooperation derives from Article 76 of Regulation No 883/2004 and recital 2 and Article 20 of Regulation No 987/2009.46If it were to be accepted that, apart from cases of fraud or abuse of rights, the competent national institution could, by bringing proceedings before a court of the host Member State of the worker concerned to which that institution belongs, have an A1 certificate declared invalid, there would be a risk that the system based on sincere cooperation between the competent institutions of the Member States would be undermined (see, to that effect, as regards E 101 certificates, judgments of 26 January 2006, Herbosch Kiere, C‑2/05, EU:C:2006:69, paragraph 30; of 27 April 2017, A-Rosa Flusschiff, C‑620/15, EU:C:2017:309, paragraph 47; and of 6 February 2018, Altun and Others, C‑359/16, EU:C:2018:63, paragraphs 54, 55, 60 and 61).47Having regard to the foregoing, the answer to the first question is that Article 5(1) of Regulation No 987/2009, read together with Article 19(2) thereof, must be interpreted as meaning that an A1 certificate, issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, binds not only the institutions of the Member State in which the activity is carried out, but also the courts of that Member State. The second question The first part of the second question 48By the first part of the second question, the referring court asks essentially whether Article 5(1) of Regulation No 987/2009, read together with Article 19(2) thereof, must be interpreted as meaning that an A1 certificate, issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, binds both the social security institutions of the Member State in which the activity is carried out and the courts of that Member State so long as that certificate has not been withdrawn or declared invalid by the Member State in which it was issued, even if the competent authorities of the latter Member State and the Member State in which the activity is carried out have brought the matter before the Administrative Commission which held that that certificate has been incorrectly issued and must be withdrawn.– Admissibility 49The Hungarian Government submits, primarily, that the first part of the second question is hypothetical since, in the present case, the Administrative Commission found a solution which was accepted by both the Republic of Austria and Hungary and that the Hungarian authorities indicated that, as a consequence, they were prepared to withdraw the A1 certificates at issue.50In that regard it must be recalled, as the Court has consistently held, that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it refers to the Court. Consequently, where the questions submitted concern the interpretation or the validity of a rule of EU law, the Court is in principle bound to give a ruling (judgment of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 31 and the case-law cited).51It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred for a preliminary ruling by a national court only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 7 February 2018, American Express, C‑304/16, EU:C:2018:66, paragraph 32 and the case-law cited).52In the present case, it is apparent from the file before the Court that the Administrative Commission issued an opinion on 9 May 2016, according to which Article 12(1) of Regulation No 883/2004 must be interpreted as meaning that the A1 certificates at issue in the main proceedings should never have been issued and that they should be withdrawn, that opinion being subsequently approved by that commission during its 347th meeting on 20 and 21 June 2016.53However, it is common ground that those certificates have not been withdrawn by the competent institution in Hungary or declared invalid by the Hungarian courts.54It is also clear from the file submitted to the Court that the Republic of Austria and Hungary have not reached an agreement concerning the conditions for a possible withdrawal of those certificates or, at least, with regard to some of them. Furthermore, it appears from the file that the application of that opinion has been suspended in light of the present reference for a preliminary ruling in the context of which the Hungarian Government submits, inter alia, that the competent Hungarian institution rightly issued the A1 certificates at issue in the main proceedings under Article 12(1) of Regulation No 883/2004.55It follows that the factual circumstances characterising the dispute in the main proceedings, as they appear from the evidence submitted to the Court, correspond to the facts in the first part of the second question referred. In those circumstances, the fact that the Hungarian Government has, at least in principle, indicated its agreement with the findings made by the Administrative Commission adds nothing to the relevance of that question for the resolution of the dispute in the main proceedings.56Furthermore, the fact that the Administrative Commission found that the A1 certificates at issue in the main proceedings should be withdrawn cannot, in itself, justify the inadmissibility of the present reference for a preliminary ruling, the latter concerning precisely whether that finding is liable to have consequences concerning the binding nature of those certificates with regard to the authorities and the courts of the Member State in which the activity is carried on.57In those circumstances, it cannot be held that the first part of the second question is hypothetical so that the presumption of relevance referred to in paragraph 51 of that judgment is reversed.– Substance 58It must be recalled that, according to Article 72 of Regulation No 883/2004, which sets out the duties of the Administrative Commission, the latter is responsible, inter alia, for dealing with any administrative questions or questions of interpretation deriving from the provisions of that regulation or those of Regulation No 987/2009 or any agreement or arrangement concluded within the framework of those regulations, without prejudice to the right of the authorities, institutions or interested parties to have recourse to the procedures and to the courts laid down in the legislation of the Member States, by Regulation No 883/2004 and by the Treaty.59According to Article 72, the Administrative Commission is also responsible, first, for fostering and developing cooperation between Member States and their institutions in social security matters in order, inter alia, to take into account particular questions regarding certain categories of persons and, second, to facilitate realisation of actions of cross border cooperation activities in the area of the coordination of social security systems.60More specifically, as regards a situation such as that at issue in the main proceedings, in which a difference has arisen between the competent institution of one Member State and that of another Member State concerning the documents or evidence referred to in Article 5(1) of Regulation No 987/2009, paragraphs 2 to 4 thereof lay down a procedure for the purpose of resolving that difference of opinion. In particular, paragraphs 2 and 3 of that article lay down the steps that the institutions concerned are required to follow in the case of doubt about the validity of a document or the accuracy of the facts on which the particulars contained therein are based. Paragraph 4 of that article provides that where no agreement is reached between the institutions concerned, the matter may be brought before the Administrative Commission by the competent authorities which must ‘endeavour to reconcile the points of view’ within six months of the date on which the matter was brought before it.61As the Court has already held with regard to Regulation No 1408/71, if the Administrative Commission does not succeed in reconciling the points of view of the competent institutions on the question of the legislation applicable, the Member State in which the employee concerned actually works may, without prejudice to any legal remedies existing in the Member State to which the issuing institution belongs, at least bring infringement proceedings under Article 259 TFEU in order to enable the Court to examine in those proceedings the question of the legislation applicable to such an employee and, consequently, whether the information contained in the E 101 certificate is correct (judgment of 27 April 2017, A-Rosa Flusschiff, C‑620/15, EU:C:2017:309, paragraph 46).62Therefore, it must be held that the Administrative Commission’s role in the procedure laid down in Article 5(2) to (4) of Regulation No 987/2009 is merely to reconcile the points of view of the competent authorities of the Member State which brought the matter before it.63That finding is not called into question by Article 89(3) of Regulation No 987/2009, which provides that the competent authorities must ensure that their institutions are aware of and apply all the EU provisions, legislative or otherwise, including the decisions of the Administrative Commission, in the areas covered by Regulations Nos 883/2004 and 987/2009 and under the conditions for which they provide, since that provision does not intend in any way to change the role of the Administrative Commission within the framework of the procedure to which it refers in the preceding paragraph and thus the status of an opinion on the conclusions reached by that commission in that procedure.64Accordingly, the answer to the first part of the second question is that Article 5(1) of Regulation No 987/2009, read together with Article 19(2) thereof, must be interpreted as meaning that an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004 is binding on both the social security institutions of the Member State in which the activity is carried out and the courts of that Member State, so long as the certificate has not been withdrawn or declared invalid by the Member State in which was issued, even though the competent authorities of the latter Member State and the Member State in which the activity is carried out have brought the matter before the Administrative Commission which held that that certificate was incorrectly issued and should be withdrawn. The second part of the second question 65By the second part of the second question, the referring court asks essentially whether Article 5(1) of Regulation No 987/2009, read together with Article 19(2) thereof, must be interpreted as meaning that an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, binds both the social security institutions of the Member State in which the activity was carried out and the courts of that Member State, if necessary, with retroactive effect, even though that certificate was issued only after that Member State determined that the worker was subject to compulsory insurance under its legislation.66The Hungarian Government submits that the present question is hypothetical, since no A1 certificate was issued retroactively, after the Austrian authorities determined that the workers concerned were subject to compulsory insurance under Austrian law.67According to the information provided in the order for reference, some of the A1 certificates at issue in the main proceedings were issued retroactively. It is also clear from that decision that the Austrian institution had already determined that some of the workers concerned were subject to compulsory insurance under Austrian law before the competent Hungarian authority issued A1 certificates for those workers.68According to settled case-law, it is for the national court to find the facts and determine the relevance of the questions it wishes to ask (see, to that effect, judgments of 26 October 2016, Hoogstad, C‑269/15, EU:C:2016:802, paragraph 19, and of 27 April 2017, A-Rosa Flussschiff, C‑620/15, EU:C:2017:309, paragraph 35).69It follows that the second part of the second question must be regarded as admissible since, according to the information provided by the referring court, the answer given by the Court of Justice may be useful to that court in order to determine whether at least some of the A1 certificates at issue are binding.70First of all, it must be recalled that an E 101 certificate, issued in accordance with Article 11a of Regulation No 574/72, may have a retroactive effect. In particular, while it is preferable that such a certificate is issued before the beginning of the period concerned, it may also be issued during that period or indeed after its expiry (see, to that effect, judgment of 30 March 2000, Banks and Others, C‑178/97, EU:C:2000:169, paragraphs 52 to 57).71As is clear from Regulations Nos 883/2004 and 987/2009, there is no provision of EU law which prevents the application of that finding to A1 certificates.72In particular, it is true that Article 15(1) of Regulation No 987/2009 provided, in the version applicable at the beginning of the period concerned, that ‘where a person pursues his activity in a Member State other than the Member State competent under Title II of [Regulation No 883/2004], the employer or, in the case of a person who does not pursue an activity as an employed person, the person concerned shall inform the competent institution of the Member State whose legislation is applicable thereof, whenever possible in advance’ and that ‘that institution shall without delay make information concerning the legislation applicable to the person concerned … available to the person concerned and to the institution designated by the competent authority of the Member State in which the activity is pursued’. However, the issue of an A1 certificate during or even after the end of the period of employment concerned is still possible.73Therefore, it must then be determined whether an A1 certificate may apply with retroactive effect, even though, at the date on which that certificate was issued, there was already a decision of the competent institution of the Member State in which the activity is carried out according to which the worker concerned is subject to the legislation of that Member State.74In that connection, it must be recalled, as is clear from the answer to the first question set out in paragraphs 36 to 47 of the present judgment, that so long as it has not been withdrawn or declared invalid, an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, like its predecessor the E 101 certificate, binds both the social security institutions of the Member State in which the activity is carried out and the courts of that Member State.75Consequently, in those specific circumstances, it cannot be held that a decision such as that at issue in the main proceedings, by which the competent institution of the Member State in which the activity is carried out decides to make the workers concerned subject to compulsory insurance under its legislation, constitutes a document ‘showing’ the position of the person concerned, within the meaning of Article 5(1) of Regulation No 987/2009.76Finally, it must be added, as the Advocate General observed in point 66 of his Opinion, that the question whether the authorities concerned in the case in the main proceedings ought to have had recourse to the provisional application of one legislation under Article 6 of Regulation No 987/2009 according to the order of priority of the applicable legislation provided for therein, is without prejudice to the binding effect of the A1 certificates at issue. In particular, under Article 6(1) the rules governing a difference of views relating to the provisional application of legislation apply ‘unless otherwise provided for in [that regulation]’.77Having regard to the foregoing considerations, the answer to the second part of the second question is that Article 5(1) of Regulation No 987/2009, read together with Article 19(2) thereof, must be interpreted as meaning that an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, is binding on both the social security institutions of the Member State in which the activity is carried out and the courts of that Member State, if appropriate with retroactive effect, even though that certificate was issued only after that Member State determined that the worker concerned was subject to compulsory insurance under its legislation. The third question 78By its third question, the referring court asks essentially whether Article 12(1) of Regulation No 883/2004 must be interpreted as meaning that, in the case of a worker who is posted by his employer to work in another Member State, is replaced by another worker posted by another employer, the latter worker must be regarded as being ‘sent to replace another person’ within the meaning of that provision so that he cannot benefit from the specific rule laid down in that provision in order to remain subject to the legislation of the Member State in which his employer normally carries on its activities. That court also asks whether the fact that the employers of the two workers concerned have their registered office in the same Member State or the fact that they may have personal or organisational ties is relevant in that regard.79The Belgian Government submits that the third question is hypothetical in that it asks whether the fact that the second employer has its registered office in a Member State other than that in which the first employer has its registered office is relevant to the answer to the question referred, even though the two employers concerned in the case in the main proceedings are established in the same Member State.80In that connection, it must be stated that the third question is not hypothetical, for the reason set out in the preceding paragraph, since part of that question refers, by its very wording, to the fact that the registered offices of the employers in question are in the same Member State, a fact which corresponds to those in the main proceedings in that according to the information set out in the order for reference, both Martin-Meat and Martimpex are established in Hungary.81From the outset, it must be observed that the third question was referred only in the event the Court interpreted the second question as meaning that the binding nature of an A1 certificate, which follows from the answer to the first question, may be limited in one of the situations mentioned in the second question.82That being the case, according to settled case-law, the procedure provided for by Article 267 TFEU is an instrument of cooperation between the Court of Justice and national courts by means of which the former provides the latter with interpretation of such EU law as is necessary for them to give judgment in cases upon which they are called to adjudicate (see, to that effect, order of 7 September 2017, Alandžak and Others, C‑187/17, not published, EU:C:2017:662, paragraphs 9 and 10).83As the Austrian and German Governments and the Commission submit in substance, since the third question concerns the reach of the conditions, laid down in Article 12(1) of Regulation No 883/2004, according to which, in order to remain subject to the legislation of the Member State in which the employer normally carries out its activities, the person posted must not have been ‘sent to replace another person’ (‘the non-replacement condition’), that question relates to the subject matter of the dispute in the main proceedings. By that question, the referring court asks which of the interpretations put forward by the two Member States which have submitted their difference of opinion to the Administrative Commission is to be preferred, since their contradictory interpretations with regard to the scope of the non-replacement condition are, as is clear from the file submitted to the Court, at the origin of the disagreement between the parties in the main proceedings regarding the legislation applicable to the workers concerned.84Furthermore, the Austrian Government argues that it is conceivable that no E 101 or A1 form was issued by the competent Hungarian institution to some of the many workers concerned and that, consequently, the interpretation of the non-replacement condition is directly relevant to the resolution of the dispute in the main proceedings with regard to those workers.85In those circumstances, and although, as is clear from the answers to the first and second questions, the referring court is bound by the A1 certificates at issue in the main proceedings so long as they have not been withdrawn by the competent Hungarian institution or declared invalid by the Hungarian courts, it is appropriate to answer the third question.86In the case in the main proceedings, it is apparent that Martin-Meat’s workers were posted to Austria between 2007 and 2012 to carry out meat cutting in the premises of Alpenrind. From 1 February 2012 until 31 January 2014, thus including the period concerned, Martimpex’s workers were posted to Austria to perform the same work. From 1 February 2014, Martin-Meat’s workers again carried out that work on the same premises.87Therefore, it must be determined whether the non-replacement condition is satisfied in a case such as that at issue in the main proceedings during the period concerned, and whether and to what extent the location of the registered offices of the employers concerned or the existence of possible personal and organisational connections between them are relevant in such a context.88According to the Court’s settled case-law, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 21 September 2017, Commission v Germany, C‑616/15, EU:C:2017:721, paragraph 43 and the case-law cited).89As regards, first of all, the wording of Article 12(1) of Regulation No 883/2004, in the version in force at the beginning of the period concerned, it provided that ‘a person who pursues an activity as an employed person in a Member State on behalf of an employer which normally carries out its activities there and who is posted by that employer to another Member State to perform work on that employer’s behalf shall continue to be subject to the legislation of the first Member State, provided that the anticipated duration of such work does not exceed 24 months and that he/she is not sent to replace another person’.90Therefore, it follows from the wording of Article 12(1) of Regulation No 883/2004 and, in particular, the expression ‘provided that’ that the fact that a posted worker replaces another person prevents that replacement worker from remaining subject to the legislation of the Member State in which his employer usually carries out its activities and that the non-replacement condition applies to it in a cumulative manner, also laid down in that provision, relating to the maximum period of the employment concerned.91Furthermore, the absence of any express reference in the wording of that provision to the registered offices of the respective employers or to any personal or organisational connections between them tends to suggest that such facts are not relevant for the purposes of interpreting that provision.92Next, as regards the context of which Article 12(1) of Regulation No 883/2004 forms part, it must be observed that, according to the heading of that article, the rules which are laid down therein, including those in paragraph 1 thereof, are ‘special rules’ relating to the determination of the social security legislation applicable to persons covered by the scope of that regulation.93As is clear from Article 11(3)(a) of that regulation, that article being concerned with ‘General rules’, persons, such as the workers at issue in the main proceedings, pursuing an activity as an employed or self-employed persons in a Member State are subject to the legislation of the State in which they pursue that activity.94Likewise, it follows from recitals 17 and 18 of Regulation No 883/2004 that, ‘as a general rule’, the legislation applicable to persons pursuing an activity as an employed or self-employed person on the territory of a Member State is that of the latter and that it is necessary to ‘derogate from the general rule’ in specific situations which justify other criteria of applicability.95It follows that, in so far as Article 12(1) of Regulation No 883/2004 constitutes derogation from the general rule which applies in order to determine the legislation applicable to persons pursuing an activity as an employed or self-employed person in a Member State, it must be strictly interpreted.96Finally, with regard to the objectives of Article 12(1) of Regulation No 883/2004 and, more generally, the legal framework of which that provision is part, it must be held that, while Article 12(1) of Regulation No 883/2004 establishes a specific rule for the determination of the legislation applicable in the case of posted workers, that special situation which, in principle, justifies another criterion of applicability, the fact remains that the EU also intended to prevent that special rule from benefiting workers posted successively who carry out the same work.97Furthermore, to interpret Article 12(1) of Regulation No 883/2004 differently according to the location of the registered office of the employers concerned or the existence of personal or organisational links between them could undermine the objective pursued by the EU legislature, in principle, to subject workers to the legislation of the Member State in which the person concerned pursues his activity.98In particular, as is clear from recital 17 of Regulation No 883/2004, it is with a view to guaranteeing the equality of treatment of all persons occupied in the territory of a Member State as effectively as possible that it is considered appropriate to determine as the legislation applicable, as a general rule, that of the Member State in which the person concerned pursues his activity as an employed or self-employed person. Furthermore, it follows from recitals 5 and 8 of that regulation that it is necessary, within the framework of the coordination of national social security systems, to guarantee as effectively as possible equality of treatment for persons occupied in the territory of a Member State.99It follows from the findings set out in paragraphs 89 to 98 of the present judgment that the recurrent use of posted workers to fill the same post, even though the employers responsible for posting workers are different, does not comply with the wording or the objectives of Article 12(1) of Regulation No 883/2004 and is not consistent with the context of which that provision is part, so that a person posted cannot benefit from the special rule laid down in that provision if he replaces another worker.100Having regard to all of the foregoing considerations, the answer to the third question is that Article 12(1) of Regulation No 883/2004 must be interpreted as meaning that, if a worker who is posted by his employer to carry out work in another Member State is replaced by another worker posted by another employer, the latter employee must be regarded as being ‘sent to replace another person’, within the meaning of that provision, so that he cannot benefit from the special rules laid down in that provision in order to remain subject to the legislation of the Member State in which his employer normally carries out its activities. The fact that the employers of the two workers concerned have their registered offices in the same Member State or that they may have personal or organisational links is irrelevant in that respect. Costs 101Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (First Chamber) hereby rules: 1. Article 5(1) of Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down the procedure for implementing Regulation (EC) No 883/2004, as amended by Commission Regulation (EU) No 1244/2010 of 9 December 2010, read together with Article 19(2) of Regulation No 987/2009, as amended by Regulation No 1244/2010, must be interpreted as meaning that an A1 certificate, issued by the competent institution of a Member State under Article 12(1) of Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems, as amended by Regulation No 1244/2010, binds not only the institutions of the Member State in which the activity is carried out, but also the courts of that Member State. 2. Article 5(1) of Regulation No 987/2009, as amended by Regulation No 1244/2010, read together with Article 19(2) of Regulation No 987/2009, as amended by Regulation No 1244/2010, must be interpreted as meaning that an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, as amended by Regulation No 1244/2010, is binding on both the social security institutions of the Member State in which the activity is carried out and the courts of that Member State so long as the certificate has not been withdrawn or declared invalid by the Member State in which was issued, even though the competent authorities of the latter Member State and the Member State in which the activity is carried out have brought the matter before the Administrative Commission for the Coordination of Social Security Systems which held that that certificate was incorrectly issued and should be withdrawn. Article 5(1) of Regulation No 987/2009, as amended by Regulation No 1244/2010, read together with Article 19(2) thereof, as amended by Regulation No 1244/2010, must be interpreted as meaning that an A1 certificate issued by the competent institution of a Member State under Article 12(1) of Regulation No 883/2004, as amended by Regulation No 1244/2010, binds both social security institutions of the Member State in which the activity is carried out and the courts of that Member State, if appropriate with retroactive effect, even though that certificate was issued only after that Member State determined that the worker concerned was subject to compulsory insurance under its legislation. 3. Article 12(1) of Regulation No 883/2004, as amended by Regulation No 1244/2010, must be interpreted as meaning that, if a worker who is posted by his employer to carry out work in another Member State is replaced by another worker posted by another employer, the latter employee must be regarded as being ‘sent to replace another person’, within the meaning of that provision, so that he cannot benefit from the special rules laid down in that provision in order to remain subject to the legislation of the Member State in which his employer normally carries out its activities. The fact that the employers of the two workers concerned have their registered offices in the same Member State or that they may have personal or organisational links is irrelevant in that respect. [Signatures]( *1 ) Language of the case: German. | 41303-1b7d2b6-41d4 | EN |
Advocate General Szpunar: the UK’s decision to leave the EU should not affect the execution of a European arrest warrant issued by it | 19 September 2018 ( *1 )(Reference for a preliminary ruling — Urgent preliminary ruling procedure — Police and judicial cooperation in criminal matters — European arrest warrant — Framework Decision 2002/584/JHA — Grounds for non-execution — Article 50 TEU — Warrant issued by the judicial authorities of a Member State that has initiated the procedure for withdrawal from the European Union — Uncertainty as to the law applicable to the relationship between that State and the Union following withdrawal)In Case C‑327/18 PPU,REQUEST for a preliminary ruling under Article 267 TFEU from the High Court (Ireland), made by decision of 17 May 2018, received at the Court on 18 May 2018, in proceedings relating to the execution of European arrest warrants issued with respect to RO, THE COURT (First Chamber),composed of R. Silva de Lapuerta, President of the Chamber, C.G. Fernlund (Rapporteur), A. Arabadjiev, S. Rodin and E. Regan, Judges,Advocate General: M. Szpunar,Registrar: L. Hewlett, Principal Administrator,having regard to the referring court’s request of 17 May 2018, received at the Court on 18 May 2018, that the reference for a preliminary ruling be dealt with under the urgent procedure, pursuant to Article 107 of the Rules of Procedure of the Court,having regard to the decision of the First Chamber of 11 June 2018 granting that request,having regard to the written procedure and further to the hearing on 12 July 2018,after considering the observations submitted on behalf of:–RO, by E. Martin-Vignerte and J. MacGuill, Solicitors, C. Cumming, Barrister-at-law, and P. McGrath, Senior Counsel,the Minister for Justice and Equality, by M. Browne, G. Hodge, A. Joyce and G. Lynch, acting as Agents, and by E. Duffy, Barrister-at-law, and R. Barron, Senior Counsel,the Romanian Government, by L. Liţu and C. Canţăr, acting as Agents,the United Kingdom Government, by S. Brandon and C. Brodie, acting as Agents, and by J. Holmes QC and D. Blundell, Barrister,the European Commission, by S. Grünheid, R. Troosters and M. Wilderspin, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 7 August 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 50 TEU and of Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States (OJ 2002 L 190, p. 1), as amended by Council Framework Decision 2009/299/JHA of 26 February 2009 (OJ 2009 L 81, p. 24) (‘the Framework Decision’).2The request has been made in connection with the execution, in Ireland, of two European arrest warrants issued by the courts of the United Kingdom of Great Britain and Northern Ireland with respect to RO. Legal context The EU Treaty 3Article 50(1) to (3) TEU provide:‘1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union is to negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) [TFEU]. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.3. The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification referred to in paragraph 2, unless the European Council, in agreement with the Member State concerned, unanimously decides to extend this period.’ The Framework Decision 4Recitals 10 and 12 of the Framework Decision are worded as follows:‘(10)The mechanism of the European arrest warrant is based on a high level of confidence between Member States. Its implementation may be suspended only in the event of a serious and persistent breach by one of the Member States of the principles set out in [Article 2 TEU], determined by the Council pursuant to [Article 7(2) TEU] with the consequences set out in [Article 7(3) TEU]....(12)This Framework Decision respects fundamental rights and observes the principles recognised by [Articles 2 and 6 TEU] and reflected in the Charter of Fundamental Rights of the European Union ... in particular Chapter VI thereof. Nothing in this Framework Decision may be interpreted as prohibiting refusal to surrender a person for whom a European arrest warrant has been issued when there are reasons to believe, on the basis of objective elements, that the said arrest warrant has been issued for the purpose of prosecuting or punishing a person on the grounds of his or her sex, race, religion, ethnic origin, nationality, language, political opinions or sexual orientation, or that that person's position may be prejudiced for any of these reasons.’5Article 1(2) and (3) of the Framework Decision, that article being headed ‘Definition of the European arrest warrant and obligation to execute it’, provide:‘2. Member States shall execute any European arrest warrant on the basis of the principle of mutual recognition and in accordance with the provisions of this Framework Decision.3. This Framework Decision shall not have the effect of amending the obligation to respect fundamental rights and fundamental legal principles as enshrined in Article 6 [TEU].’6Article 26(1) of the Framework Decision, that article being headed ‘Deduction of the period of detention served in the executing Member State’, provides:‘The issuing Member State shall deduct all periods of detention arising from the execution of a European arrest warrant from the total period of detention to be served in the issuing Member State as a result of a custodial sentence or detention order being passed.’7Article 27(2) of the Framework Decision, that article being headed ‘Possible prosecution for other offences’, provides:‘... a person surrendered may not be prosecuted, sentenced or otherwise deprived of his or her liberty for an offence committed prior to his or her surrender other than that for which he or she was surrendered.’8Article 28 of the Framework Decision governs surrender or subsequent extradition to a State other than the executing Member State. Irish law 9The Framework Decision was transposed into Irish law by the European Arrest Warrant Act, 2003. The dispute in the main proceedings and the questions referred for a preliminary ruling 10RO is the subject of two European arrest warrants issued by the courts of the United Kingdom and sent to Ireland.11The first, issued on 27 January 2016, relates to crimes of murder and arson alleged to have been committed on 2 August 2015. The second, issued on 4 May 2016, relates to a crime of rape alleged to have been committed on 30 December 2003. Those crimes each carry potential sentences of life imprisonment.12RO was arrested and remanded in custody in Ireland on 3 February 2016. Since that date he has remained on remand in custody within that Member State, by virtue of the two European arrest warrants to which he is subject.13RO raised objections to his surrender to the United Kingdom on the basis of, inter alia, the withdrawal of that Member State from the European Union and Article 3 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), claiming that he could suffer inhuman and degrading treatment if he were to be imprisoned in Maghaberry prison in Northern Ireland.14Due to his state of health, RO’s case could not be heard until 27 July 2017.15By a decision of 2 November 2017, the High Court (Ireland), after examining RO’s claims in relation to the treatment that he might suffer in Northern Ireland, held that, on the basis of specific and updated information on the conditions of detention in Maghaberry prison, there was a real risk that, because of his vulnerability, RO might suffer inhuman and degrading treatment. The High Court considered it necessary, in the light of the judgment of 5 April 2016, Aranyosi and Căldăraru (C‑404/15 and C‑659/15 PPU, EU:C:2016:198), to ask for further information from the United Kingdom authorities on the conditions of RO’s detention in the event of his being surrendered.16On 16 April 2018 the judicial authority that had issued the European arrest warrants concerned, Laganside Court in Belfast (United Kingdom), provided information as to how the Northern Irish Prison Service would address the risks to RO of being subjected to inhuman or degrading treatment in Northern Ireland.17The High Court states that it has rejected all the objections raised by RO to his surrender with the exception of those relating to the withdrawal of the United Kingdom from the European Union and the objection in relation to Article 3 of the ECHR, considering that it could not make a decision on those objections before obtaining from the Court an answer to a number of questions referred for a preliminary ruling.18The High Court states that on 29 March 2017 the United Kingdom notified the President of the European Council of its intention to withdraw from the European Union, on the basis of Article 50 TEU, and that that notification should lead to the withdrawal of the United Kingdom from the European Union as from 29 March 2019.19The High Court states that if RO is surrendered, it is highly probable that he will remain in prison in the United Kingdom after 29 March 2019.20The High Court also observes that agreements may perhaps be entered into by the European Union and the United Kingdom to regulate the relationship of those parties immediately after that withdrawal or in the longer term, in areas such as those covered by the Framework Decision.21Nonetheless, currently, that possibility remains uncertain and the nature of the measures which will be adopted, particularly with respect to the jurisdiction of the Court to give preliminary rulings, is not known.22The High Court states that, in the view of the Minister for Justice and Equality (Ireland), the law should be applied as it stands today and not as it might become in the future after the withdrawal of the United Kingdom from the European Union. The referring court considers that the Minister is correct to conclude that the surrender of RO is mandatory on the basis of national law that gives effect to the Framework Decision.23The High Court sets out the contrary position of RO, who argues that, given the uncertainty as to the law which will be in place in United Kingdom after the withdrawal of that Member State from the European Union, it cannot be guaranteed that the rights which he enjoys under EU law will, in practice, be capable of enforcement as such, so that he ought not to be surrendered.24The referring court states that RO has identified four aspects of EU law which might theoretically be engaged, namely:the right to a deduction of a period spent in custody in the executing Member State, provided for in Article 26 of the Framework Decision;the so-called ‘specialty’ rule, the subject of Article 27 of the Framework Decision;the right limiting further surrender or extradition, the subject of Article 28 of the Framework Decision, andrespect for the fundamental rights of the person surrendered under the Charter of Fundamental Rights of the European Union (‘the Charter’).25In the view of the referring court, the question arises whether, in the event of a dispute concerning one of those four aspects and in the absence of measures conferring on the Court jurisdiction to give preliminary rulings with respect to them, the surrender of an individual, such as RO, gives rise to a significant risk, rather than a merely theoretical possibility, of injustice, with the consequence that the request for surrender ought not to be accepted.26In those circumstances, the High Court decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:‘(1)Having regard to:(a) the giving by the United Kingdom of notice under Article 50 [TEU];(b) the uncertainty as to the arrangements which will be put in place between the European Union and the United Kingdom to govern relations after the departure of the United Kingdom; and(c) the consequential uncertainty as to the extent to which [RO] would, in practice, be able to enjoy rights under the Treaties, the Charter or relevant legislation, should he be surrendered to the United Kingdom and remain incarcerated after the departure of the United Kingdom,Is a requested Member State required by European Union Law to decline to surrender to the United Kingdom a person the subject of a European arrest warrant, whose surrender would otherwise be required under the national law of the Member State,(i)in all cases?(ii)in some cases, having regard to the particular circumstances of the case?(iii)in no cases?(2)If the answer to Question 1 is that set out at (ii) what are the criteria or considerations which a court in the requested Member State must assess to determine whether surrender is prohibited?(3)In the context of Question 2 is the court of the requested Member State required to postpone the final decision on the execution of the European arrest warrant to await greater clarity about the relevant legal regime which is to be put in place after the withdrawal of the relevant requesting Member State from the Union(4)If the answer to Question 3 is that set out at (ii) what are the criteria or considerations which a court in the requested Member State must assess to determine whether it is required to postpone the final decision on the execution of the European arrest warrant?’ The urgent procedure 27The referring court requested that this reference for a preliminary ruling be dealt with under the urgent preliminary ruling procedure provided for in Article 107 of the Rules of Procedure of the Court.28In support of its request, that court has stated that the person concerned is currently remanded in custody in Ireland solely on the basis of the European arrest warrants issued by the United Kingdom for the purposes of conducting criminal prosecutions and that his surrender to that Member State is dependent on the Court’s answer. The referring court has stated that the ordinary procedure would significantly extend the duration of that person’s detention, while he is presumed to be innocent.29In that regard, it should be stated, in the first place, that the present reference for a preliminary ruling concerns the interpretation of the Framework Decision, which falls within the fields covered by Title V of Part Three of the FEU Treaty, relating to the area of freedom, security and justice. Consequently, this reference can be dealt with under the urgent preliminary ruling procedure.30In the second place, as regards the criterion relating to urgency, it is necessary, in accordance with the Court’s settled case-law, to take into account the fact that the person concerned is currently deprived of his liberty and that the question as to whether he may continue to be held in custody depends on the outcome of the dispute in the main proceedings. In addition, the situation of the person concerned must be assessed as it stands at the time when consideration is given to the request that the reference be dealt with under the urgent procedure (judgment of 10 August 2017, Zdziaszek, C‑271/17 PPU, EU:C:2017:629, paragraph 72 and the case-law cited).31In this case, it is undisputed, first, that at that time, RO was remanded in custody in Ireland and, second, that whether he continues to be so remanded is dependent on the decision that will be taken on his surrender to the United Kingdom, a decision that has been stayed pending the Court’s answer in the present case.32In those circumstances, on 11 June 2018, the First Chamber of the Court, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decided to grant the referring court’s request that the present reference be dealt with under the urgent preliminary ruling procedure. Consideration of the questions referred 33By its questions, which can be examined together, the referring court seeks, in essence, to ascertain whether Article 50 TEU must be interpreted as meaning that a consequence of the notification by a Member State of its intention to withdraw from the European Union in accordance with that article is that, in the event that that Member State issues a European arrest warrant with respect to an individual, the executing Member State must refuse to execute that European arrest warrant or postpone its execution pending clarification as to the law that will apply in the issuing Member State after its withdrawal from the European Union.34In that regard, it must be borne in mind that, as follows from Article 2 TEU, EU law is based on the fundamental premiss that each Member State shares with all the other Member States, and recognises that they share with it, a set of common values on which the European Union is founded. That premiss implies and justifies the existence of mutual trust between the Member States that those values will be recognised, and therefore, that EU law implementing them will be respected (judgments of 6 March 2018, Achmea, C‑284/16, EU:C:2018:158, paragraph 34, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 35).35The principle of mutual trust between the Member States requires, particularly as regards the area of freedom, security and justice, each of those States, save in exceptional circumstances, to consider all the other Member States to be complying with EU law and particularly with the fundamental rights recognised by EU law (see, to that effect, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 36).36The purpose of the Framework Decision, as is apparent, in particular, from Article 1(1) and (2) and recitals 5 and 7 thereof, is to replace the multilateral system of extradition based on the European Convention on Extradition of 13 December 1957 with a system of surrender between judicial authorities of convicted or suspected persons for the purpose of enforcing judgments or of conducting prosecutions, the system of surrender being based on the principle of mutual recognition. The Framework Decision thus seeks, by the establishment of that simplified and more effective system, to facilitate and accelerate judicial cooperation with a view to contributing to the attainment of the objective set for the European Union of becoming an area of freedom, security and justice, and has as its basis the high level of trust which must exist between the Member States (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraphs 39 and 40).37The principle of mutual recognition is applied in Article 1(2) of the Framework Decision, which lays down the rule that Member States are required to execute any European arrest warrant on the basis of the principle of mutual recognition and in accordance with the provisions of the Framework Decision. Executing judicial authorities may therefore, in principle, refuse to execute such a warrant only on the grounds for non-execution exhaustively listed in the Framework Decision. Accordingly, while execution of the European arrest warrant constitutes the rule, refusal to execute is intended to be an exception which must be interpreted strictly (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, paragraph 41).38Accordingly, the Framework Decision explicitly states the grounds for mandatory non-execution of a European arrest warrant (Article 3), the grounds for optional non-execution (Articles 4 and 4a), and the guarantees to be given by the issuing Member State in particular cases (Article 5) (judgments of 10 August 2017, Tupikas, C‑270/17 PPU, EU:C:2017:628, paragraph 51, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 42).39Nonetheless, the Court has recognised that limitations may be placed on the principles of mutual recognition and mutual trust between Member States ‘in exceptional circumstances’ (judgments of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 82, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 43).40The Court has thus acknowledged that, subject to certain conditions, the executing judicial authority has the power to bring the surrender procedure established by the Framework Decision to an end where that surrender may result in the requested person being subject to inhuman or degrading treatment within the meaning of Article 4 of the Charter (judgments of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 104, and of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 44).41For that purpose, the Court has relied, first, on Article 1(3) of the Framework Decision, which provides that that decision is not to have the effect of modifying the obligation to respect fundamental rights and fundamental legal principles as enshrined in Articles 2 and 6 TEU and, second, on the absolute nature of the fundamental right guaranteed by Article 4 of the Charter (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 45).42In order to assess whether there is a real risk that a person who is the subject of a European arrest warrant may suffer inhuman or degrading treatment, the executing judicial authority must, in particular, as the referring court has done in the main proceedings, pursuant to Article 15(2) of the Framework Decision, request from the issuing judicial authority any supplementary information that it considers necessary for assessing whether there is such a risk (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 76).43However, RO argues that, because of the notification by the United Kingdom of its intention to withdraw from the European Union pursuant to Article 50 TEU, he is exposed to the risk that a number of the rights he enjoys under the Charter and the Framework Decision may no longer be respected after the withdrawal of the United Kingdom from the European Union. According to RO, the principle of mutual trust, which is at the basis of mutual recognition, has been irreparably eroded by that notification, and consequently the surrender provided for by the Framework Decision ought not to be executed.44In that regard, the question arises whether mere notification by a Member State of its intention to withdraw from the European Union in accordance with Article 50 TEU is such as to justify, under EU law, a refusal to execute a European arrest warrant issued by that Member State on the ground that the person surrendered would not be able, after that withdrawal, to rely in the issuing Member State on the rights that he derives from the Framework Decision and to have the conformity with EU law of implementation of those rights by that Member State reviewed by the Court.45In that context, it must be observed that such a notification does not have the effect of suspending the application of EU law in the Member State that has given notice of its intention to withdraw from the European Union and, consequently, EU law, which encompasses the provisions of the Framework Decision and the principles of mutual trust and mutual recognition inherent in that decision, continues in full force and effect in that State until the time of its actual withdrawal from the European Union.46As is apparent from Article 50(2) and (3) TEU, that article lays down a procedure for withdrawal that consists of, first, notification to the European Council of the intention to withdraw, second, negotiation and conclusion of an agreement setting out the arrangements for withdrawal, taking into account the future relationship between the State concerned and the European Union and, third, the actual withdrawal from the Union on the date of entry into force of that agreement or failing that, two years after the notification given to the European Council, unless the latter, in agreement with the Member State concerned, unanimously decides to extend that period.47Such a refusal to execute a European arrest warrant would, as the Advocate General stated in point 55 of his Opinion, be the equivalent of unilateral suspension of the provisions of the Framework Decision and would, moreover, run counter to the wording of recital 10 of that decision, which states that it is for the European Council to determine a breach in the issuing Member State of the principles set out in Article 2 TEU, with a view to application of the European arrest warrant mechanism being suspended in respect of that Member State (judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 71).48Consequently, mere notification by a Member State of its intention to withdraw from the European Union in accordance with Article 50 TEU cannot be regarded, as such, as constituting an exceptional circumstance, within the meaning of the case-law cited in paragraphs 39 and 40 of the present judgment, capable of justifying a refusal to execute a European arrest warrant issued by that Member State.49However, it remains the task of the executing judicial authority to examine, after carrying out a specific and precise assessment of the particular case, whether there are substantial grounds for believing that, after withdrawal from the European Union of the issuing Member State, the person who is the subject of that arrest warrant is at risk of being deprived of his fundamental rights and the rights derived, in essence, from Articles 26 to 28 of the Framework Decision, as relied on by RO and referred to in paragraph 24 of the present judgment (see, by analogy, judgment of 25 July 2018, Minister for Justice and Equality (Deficiencies in the System of Justice), C‑216/18 PPU, EU:C:2018:586, paragraph 73).50As regards the fundamental rights enshrined in Article 4 of the Charter, which correspond to those stated in Article 3 of the ECHR (judgment of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 86), in a situation where the referring court were to consider, as appears to be the case, given the wording of the questions referred for a preliminary ruling and the documents sent to the Court, that the information received enables it to discount the existence of a real risk that RO will suffer, in the issuing Member State, inhuman or degrading treatment, within the meaning of Article 4 of the Charter, it would not be appropriate, as a general rule, to refuse to surrender him on that basis, without prejudice to RO’s opportunity, after surrender, to have recourse, within the legal system of the issuing Member State, to legal remedies that may enable him to challenge, where appropriate, the lawfulness of the conditions of his detention in a prison of that Member State (see, to that effect, judgment of 5 April 2016, Aranyosi and Căldăraru, C‑404/15 and C‑659/15 PPU, EU:C:2016:198, paragraph 103).51However, the Court must also examine whether the referring court might contest that finding on the ground that the rights enjoyed by an individual following his surrender pursuant to the Framework Decision would no longer be safeguarded after the withdrawal from the European Union of the issuing Member State.52In that regard, it must be observed that, in this case, the issuing Member State, namely the United Kingdom, is party to the ECHR and, as stated by that Member State at the hearing before the Court, it has incorporated the provisions of Article 3 of the ECHR into its national law. Since its continuing participation in that convention is in no way linked to its being a member of the European Union, the decision of that Member State to withdraw from the Union has no effect on its obligation to have due regard to Article 3 of the ECHR, to which Article 4 of the Charter corresponds, and, consequently, cannot justify the refusal to execute a European arrest warrant on the ground that the person surrendered would run the risk of suffering inhuman or degrading treatment within the meaning of those provisions.53As regards the other rights relied on by RO, and, first, the rule of specialty which is the subject of Article 27 of the Framework Decision, it must be recalled that that rule is linked to the sovereignty of the executing Member State and confers on the person requested the right not to be prosecuted, sentenced or otherwise deprived of his or her liberty for an offence other than that for which he or she was surrendered (judgment of 1 December 2008, Leymann and Pustovarov, C‑388/08 PPU, EU:C:2008:669, paragraph 44).54As is apparent from that judgment, it is necessary that an individual should be able to challenge an alleged infringement of that rule before the courts or tribunals of the issuing Member State after his or her surrender.55It must, however, be observed that the order for reference and the observations submitted by RO to the Court do not mention any ongoing legal proceedings concerning that rule and further that they do not present any concrete evidence to suggest that legal proceedings on that subject are contemplated.56The same is true of the right that is the subject of Article 28 of the Framework Decision relating to the limits on subsequent surrender or extradition to a State other than the executing Member State, no evidence on that subject having been produced in the order for reference.57In addition, it must be emphasised that Articles 27 and 28 of the Framework Decision respectively reflect Articles 14 and 15 of the European Convention on Extradition of 13 December 1957. As was stated at the hearing before the Court, the United Kingdom has ratified that convention and has transposed the latter articles into its national law. It follows that the rights relied on by RO in those areas are, in essence, covered by the national legislation of the issuing Member State, irrespective of the withdrawal of that Member State from the European Union.58As regards the deduction by the issuing Member State of any period of custody served in the executing Member State, in accordance with Article 26 of the Framework Decision, the United Kingdom has stated that it has also incorporated that obligation into its national law and that it applies that obligation, irrespective of EU law, to any person who is extradited into the United Kingdom.59Since the rights resulting from Articles 26 to 28 of the Framework Decision and the fundamental rights laid down in Article 4 of the Charter are protected by provisions of national law in cases not only of surrender, but also of extradition, those rights are not dependent on the application of the Framework Decision in the issuing Member State. It therefore appears, though subject to verification by the referring court, that there is no concrete evidence to suggest that RO will be deprived of the opportunity to assert those rights before the courts and tribunals of that Member State after its withdrawal from the European Union.60The fact that it will undoubtedly not be possible, in the absence of a relevant agreement between the Union and the United Kingdom, for those rights to be the subject of a reference to the Court for a preliminary ruling, after the withdrawal of that Member State from the European Union, cannot alter that analysis. First, as follows from the preceding paragraph, the person surrendered should be able to rely on all those rights before a court or tribunal of that Member State. Second, it must be recalled that recourse to the mechanism of a preliminary ruling procedure before the Court has not always been available to the courts and tribunals responsible for the application of the European arrest warrant. In particular, as the Advocate General stated in point 76 of his Opinion, only on 1 December 2014, that is, five years after the entry into force of the Treaty of Lisbon, did the Court obtain full jurisdiction to interpret the Framework Decision, which was to be implemented in the Member States as from 1 January 2004.61Consequently, as the Advocate General stated in point 70 of his Opinion, in a case such as that in the main proceedings, in order to decide whether a European arrest warrant should be executed, it is essential that, when that decision is to be taken, the executing judicial authority is able to presume that, with respect to the person who is to be surrendered, the issuing Member State will apply the substantive content of the rights derived from the Framework Decision that are applicable in the period subsequent to the surrender, after the withdrawal of that Member State from the European Union. Such a presumption can be made if the national law of the issuing Member State incorporates the substantive content of those rights, particularly because of the continuing participation of that Member State in international conventions, such as the European Convention on Extradition of13 December 1957 and the ECHR, even after the withdrawal of that Member State from the European Union. Only if there is concrete evidence to the contrary can the judicial authorities of a Member State refuse to execute the European arrest warrant.62The answer to the questions referred is, therefore, that Article 50 TEU must be interpreted as meaning that mere notification by a Member State of its intention to withdraw from the European Union in accordance with that article does not have the consequence that, in the event that that Member State issues a European arrest warrant with respect to an individual, the executing Member State must refuse to execute that European arrest warrant or postpone its execution pending clarification of the law that will be applicable in the issuing Member State after its withdrawal from the European Union. In the absence of substantial grounds to believe that the person who is the subject of that European arrest warrant is at risk of being deprived of rights recognised by the Charter and the Framework Decision following the withdrawal from the European Union of the issuing Member State, the executing Member State cannot refuse to execute that European arrest warrant while the issuing Member State remains a member of the European Union. Costs 63Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (First Chamber) hereby rules: Article 50 TEU must be interpreted as meaning that mere notification by a Member State of its intention to withdraw from the European Union in accordance with that article does not have the consequence that, in the event that that Member State issues a European arrest warrant with respect to an individual, the executing Member State must refuse to execute that European arrest warrant or postpone its execution pending clarification of the law that will be applicable in the issuing Member State after its withdrawal from the European Union. In the absence of substantial grounds to believe that the person who is the subject of that European arrest warrant is at risk of being deprived of rights recognised by the Charter of Fundamental Rights of the European Union and Council Framework Decision 2002/584/JHA of 13 June 2002 on the European arrest warrant and the surrender procedures between Member States, as amended by Council Framework Decision 2009/299/JHA of 26 February 2009, following the withdrawal from the European Union of the issuing Member State, the executing Member State cannot refuse to execute that European arrest warrant while the issuing Member State remains a member of the European Union. Silva de LapuertaFernlundArabadjievRodinReganDelivered in open court in Luxembourg on 19 September 2018.A. Calot EscobarRegistrarR. Silva de LapuertaPresident of the First Chamber( *1 ) Language of the case: English. | 5fe93-232b9f4-4833 | EN |
The posting on a website of a photograph that was freely accessible on another website with the consent of the author requires a new authorisation by that author | 7 August 2018 ( *1 )(Reference for a preliminary ruling — Copyright and related rights — Directive 2001/29/EC — Information society — Harmonisation of certain aspects of copyright and related rights — Article 3(1) — Communication to the public — Concept — Publication online, without the consent of the rightholder, of a photograph previously published on another website without any restrictions and with the consent of the rightholder — New public)In Case C‑161/17,REQUEST for a preliminary ruling under Article 267 TFEU from the Bundesgerichtshof (Federal Court of Justice, Germany), made by decision of 23 February 2017, received at the Court on 31 March 2017, in the proceedings Land Nordrhein-Westfalen v Dirk Renckhoff, THE COURT (Second Chamber),composed of M. Ilešič (Rapporteur), President of the Chamber, A. Rosas, C. Toader, A. Prechal and E. Jarašiūnas, Judges,Advocate General: M. Campos Sánchez-Bordona,Registrar: R. Şereş, Administrator,after considering the observations submitted on behalf of:–the Land Nordrhein-Westfalen, by M. Rümenapp, Rechtsanwalt,Mr Renckhoff, by S. Rengshausen, Rechtsanwalt,the French Government, by D. Segoin, acting as Agent,the Italian Government, by G. Palmieri, acting as Agent, and by F. De Luca, avvocato dello Stato,the European Commission, by J. Samnadda and T. Scharf, acting as Agents,having regard to the written procedure and further to the hearing on 7 February 2018,after hearing the Opinion of the Advocate General at the sitting on 25 April 2018,gives the following Judgment 1This request for a preliminary ruling concerns the interpretation of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10).2The request has been made in proceedings between the Land Nordrhein-Westfalen (Land of North Rhine-Westphalia, Germany) and Mr Dirk Renckhoff, a photographer, concerning the unauthorised use by a pupil of a school for which that Land is responsible of a photograph taken by Mr Renckhoff, which is freely accessible on one website, to illustrate a school presentation posted by that school on another website. Legal context 3Recitals 3, 4, 9, 10, 23 and 31 of Directive 2001/29 state:‘(3)The proposed harmonisation will help to implement the four freedoms of the internal market and relates to compliance with the fundamental principles of law and especially of property, including intellectual property, and freedom of expression and the public interest.(4)A harmonised legal framework on copyright and related rights, through increased legal certainty and while providing for a high level of protection of intellectual property, will foster substantial investment in creativity and innovation, including network infrastructure, and lead in turn to growth and increased competitiveness of European industry, both in the area of content provision and information technology and more generally across a wide range of industrial and cultural sectors. This will safeguard employment and encourage new job creation.…(9)Any harmonisation of copyright and related rights must take as a basis a high level of protection, since such rights are crucial to intellectual creation. Their protection helps to ensure the maintenance and development of creativity in the interests of authors, performers, producers, consumers, culture, industry and the public at large. Intellectual property has therefore been recognised as an integral part of property.(10)If authors or performers are to continue their creative and artistic work, they have to receive an appropriate reward for the use of their work, as must producers in order to be able to finance this work. The investment required to produce products such as phonograms, films or multimedia products, and services such as “on-demand” services, is considerable. Adequate legal protection of intellectual property rights is necessary in order to guarantee the availability of such a reward and provide the opportunity for satisfactory returns on this investment.(23)This Directive should harmonise further the author’s right of communication to the public. This right should be understood in a broad sense covering all communication to the public not present at the place where the communication originates. This right should cover any such transmission or retransmission of a work to the public by wire or wireless means, including broadcasting. This right should not cover any other acts.(31)A fair balance of rights and interests between the different categories of rightholders, as well as between the different categories of rightholders and users of protected subject matter must be safeguarded. …’4Article 3 of Directive 2001/29, entitled ‘Right of communication to the public of works and right of making available to the public other subject matter’, provides in paragraph 1:‘1. Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them.3. The rights referred to in paragraphs 1 and 2 shall not be exhausted by any act of communication to the public or making available to the public as set out in this Article.’5Article 5 of Directive 2001/29, entitled ‘Exceptions and limitations’, states in subparagraph 3(a):‘Member States may provide for exceptions or limitations to the rights provided for in Articles 2 and 3 in the following cases:(a)use for the sole purpose of illustration for teaching or scientific research, as long as the source, including the author’s name, is indicated, unless this turns out to be impossible and to the extent justified by the non-commercial purpose to be achieved.’ The dispute in the main proceedings and the question referred for a preliminary ruling 6Mr Renckhoff, the applicant who brought the proceedings before the Landgericht Hamburg (Hamburg Regional Court, Germany), is a photographer. Stadt Waltrop (City of Waltrop, Germany) which was originally the defendant at first instance, but which is no longer a party to the dispute in the main proceedings, has responsibility for the Gesamtschule Waltrop (Waltrop secondary school, ‘the school’). The Land of Nord Rhine-Westphalia, also a defendant at first instance, has responsibility for the educational supervision of the school and is the employer of the teaching staff working there.7From 25 March 2009, it was possible to access on the school website a presentation written by one of the school’s pupils as part of a language workshop it organised which included, by way of illustration, a photograph taken by Mr Renckhoff (‘the photographer’) that that pupil had downloaded from an online travel portal (‘the online travel portal’). The photograph was posted on the online travel portal without any restrictive measures preventing it from being downloaded. Below the photograph the pupil included a reference to that online portal.8Mr Renckhoff claims that he gave a right of use exclusively to the operators of the online travel portal and that the posting of the photograph on the school website infringes his copyright. He requested the court with jurisdiction at first instance to prohibit the Land of North Rhine-Westphalia, on pain of a financial penalty, from reproducing/having reproduced and/or making available/having made available to the public the photo and, in the alternative, from allowing school students to reproduce the photo for purposes of posting it on the internet. He also claimed payment of damages from the Land of North Rhine-Westphalia of EUR 400.9Since Mr Renckhoff’s action was upheld in part, the Land of North Rhine- Westphalia was ordered to remove the photograph from the school website and to pay EUR 300 plus interest.10Both parties appealed against that judgment before the Oberlandesgericht Hamburg (Higher Regional Court, Hamburg, Germany), which held, inter alia, that the photograph was protected by copyright and that posting it on the school website was an infringement of the reproduction right and the right to make available to the public held by Mr Renckhoff. That court found that the fact that the photograph was already accessible to the public without restriction on the internet before the acts at issue was irrelevant, since the reproduction of the photograph on the server and the making available to the public on the school website which followed led to a ‘disconnection’ with the initial publication on the online travel portal.11Hearing an appeal on point of law, the referring court considers that the outcome of that appeal depends on the interpretation of Article 3(1) of Directive 2001/29. In particular, that court has doubts as to whether the requirement, laid down in the case-law, according to which the communication to the public concerned must have been made to a ‘new’ public has been satisfied.12In those circumstances, the Bundesgerichtshof (Federal Court of Justice, Germany) decided to stay proceedings and refer the following question to the Court for a preliminary ruling:‘Does the inclusion of a work — which is freely accessible to all internet users on a third-party website with the consent of the copyright holder — on a person’s own publicly accessible website constitute a making available of that work to the public within the meaning of Article 3(1) of [Directive 2001/29] if the work is first copied onto a server and is uploaded from there to that person’s own website?’ Consideration of the question referred 13By its question, the referring court asks essentially whether the concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29, must be interpreted as meaning that it covers the posting on one website of a photograph which has been previously published without restriction and with the consent of the copyright holder on another website.14As a preliminary point, it must be recalled that a photograph may be protected by copyright, provided, which it is for the national court to determine in each case, that it is the intellectual creation of the author reflecting his personality and expressing his free and creative choices in the production of that photograph (see, to that effect, judgment of 1 December 2011, Painer, C‑145/10, EU:C:2011:798, paragraph 94).15As regards the question whether the posting on a website of a photograph previously published without any restrictions and with the consent of the copyright holder on another website constitutes a ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29, it must be recalled that that provision states that Member States are to provide authors with the exclusive right to authorise or prohibit any communication to the public of their works.16It follows that, subject to the exceptions and limitations laid down exhaustively in Article 5 of Directive 2001/29, any use of a work carried out by a third party without such prior consent must be regarded as infringing the copyright in that work (judgment of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 34 and the case-law cited).17As Article 3(1) of Directive 2001/29 does not define the concept of ‘communication to the public’, the meaning and scope of that concept must be determined in light of the objectives pursued by that directive and the context in which the provision being interpreted is set (judgment of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 21 and the case-law cited).18In that regard, it should be borne in mind that it follows from recitals 4, 9 and 10 of Directive 2001/29 that the latter’s principal objective is to establish a high level of protection for authors, allowing them to obtain an appropriate reward for the use of their works, including on the occasion of communication to the public. It follows that the concept of ‘communication to the public’ must be interpreted broadly, as recital 23 of the directive expressly states (judgment of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 22 and the case-law cited).19As the Court has consistently held, it is clear from Article 3(1) of Directive 2001/29 that the concept of ‘communication to the public’ includes two cumulative criteria, namely an ‘act of communication’ of a work and the communication of that work to a ‘public’ (judgments of 16 March 2017, AKM, C‑138/16, EU:C:2017:218, paragraph 22, and of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 24 and the case-law cited).20As regards the first of those elements, that is the existence of an ‘act of communication’, as is clear from Article 3(1) of Directive 2001/29, for there to be such an act it is sufficient, in particular, that a work is made available to a public in such a way that the persons forming that public may access it, irrespective of whether or not they avail themselves of that opportunity (judgments of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraph 19, and of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 31 and the case-law cited).21In the present case, the posting on one website of a photograph previously posted on another website, after it has been previously copied onto a private server, must be treated as ‘making available’ and therefore, an ‘act of communication’ within the meaning of Article 3(1) of Directive 2001/29. Such a posting gives visitors to the website on which it is posted the opportunity to access the photograph on that website.22So far as concerns the second of the abovementioned criteria, that is, that the protected work must in fact be communicated to a ‘public’, it follows from the case-law of the Court that the concept of ‘public’ refers to an indeterminate number of potential recipients and implies, moreover, a fairly large number of persons (judgments of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraph 21, and of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 27 and the case-law cited).23In the present case, it appears that an act of communication, such as that referred to in paragraph 21 of the present judgment, covers all potential users of the website on which the photograph is posted, that is an indeterminate and fairly large number recipients and must, in those circumstances, be regarded as a communication to a ‘public’ within the meaning of the case-law cited.24However, as is clear from settled case-law, in order to be treated as a ‘communication to the public’, the protected work must be communicated using specific technical means, different from those previously used or, failing that, to a ‘new public’, that is to say, to a public that was not already taken into account by the copyright holders when they authorised the initial communication to the public of their work (judgments of 13 February 2014, Svensson and Others, C‑466/12, EU:C:2014:76, paragraph 24; of 8 September 2016, GS Media, C‑160/15, EU:C:2016:644, paragraph 37; and of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 28).25In the present case, it is common ground that both the initial communication of the work on one website and its subsequent communication on another website were made with the same technical means.26The parties to the main proceedings and the interested parties referred to in Article 23 of the Statute of the Court of Justice of the European Union who have submitted written observations disagree, however, as to the question of whether the photograph has been communicated to a ‘new public’.27The Land of North Rhine-Westphalia and the Italian Government assert, in particular, on the basis of the judgment of 13 February 2014, Svensson and Others (C‑466/12, EU:C:2014:76), that there is no need to draw a distinction between the communication of a work by posting it on a website and the communication of such a work by including a hyperlink on a website which leads to another website on which that work was originally communicated without any restriction and with the consent of the copyright holder. Thus, in circumstances such as those at issue in the main proceedings, the work has not been communicated to a new public.28However, Mr Renckhoff and the French Government, at the hearing, and the Commission in its written observations, have argued essentially that the case-law referred to in the preceding paragraph of the present judgment is not applicable in circumstances such those at issue in the main proceedings. In particular, the communication of a work by means not of a hyperlink, but by a new posting on a different website from that on which it was initially communicated with the consent of the copyright holder, should be treated as a ‘new communication to the public’, in particular, having regard to the fact that, as a result of the making available of the photograph once again, the copyright holder is no longer in a position to exercise his power of control over the initial communication of that work.29In that connection, first, the Court has consistently held that, subject to the exceptions and limitations laid down in Article 5 of Directive 2001/29, all acts of reproduction or communication to the public of a work by a third party requires the prior consent of its author and that, under Article 3(1) of Directive 2001/29, authors have a right which is preventive in nature which allows them to intervene between possible users of their work and the communication to the public which such users might contemplate making, in order to prohibit such communication (see, to that effect, judgments of 31 May 2016, Reha Training, C‑117/15, EU:C:2016:379, paragraph 30; of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 33; and of 14 June 2017, Stichting Brein, C‑610/15, EU:C:2017:456, paragraph 20 and the case-law cited).30Such a right of a preventive nature would be deprived of its effectiveness if it were to be held that the posting on one website of a work previously posted on another website with the consent of the copyright holder did not constitute a communication to a new public. Such a posting on a website other than that on which it was initially posted might make it impossible or at least much more difficult for the holder of a right of a preventive nature to require the cessation of that communication, if necessary by removing the work from the website on which it was posted with his consent or by revoking the consent previously given to a third party.31Thus, it is clear that, even if the holder of the copyright holder decides no longer to communicate his work on the website on which it was initially communicated with his consent, that work would remain available on the website on which it had been newly posted. The Court has already held that the author of a work must be able to put an end to the exercise, by a third party, of rights of exploitation in digital format that he holds on that work, and to prohibit him from any future use in such a format, without having to submit beforehand to other formalities (see, by analogy, judgment of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 51).32Second, Article 3(3) of Directive 2001/29 specifically provides that the right of communication to the public referred to in Article 3(1) of that directive is not exhausted by any act of communication to the public or making available to the public within the meaning of that provision.33To hold that the posting on one website of a work previously communicated on another website with the consent of the copyright holder does not constitute making available to a new public would amount to applying an exhaustion rule to the right of communication.34In addition to the fact that it would be contrary to the wording of Article 3(3) of Directive 2001/29, that rule would deprive the copyright holder of the opportunity to claim an appropriate reward for the use of his work, set out in recital 10 of that directive, even though, as the Court stated, the specific purpose of the intellectual property is, in particular, to ensure for the rightholders concerned protection of the right to exploit commercially the marketing or the making available of the protected subject matter, by the grant of licences in return for payment of an appropriate reward for each use of the protected subject matter (see, to that effect, judgment of 4 October 2011, Football Association Premier League and Others, C‑403/08 and C‑429/08, EU:C:2011:631, paragraphs 107 and 108).35Taking account of those elements, it must be held, in the light of the case-law set out in paragraph 24 of the present judgment, that the posting of a work protected by copyright on one website other than that on which the initial communication was made with the consent of the copyright holder, in circumstances such as those at issue in the main proceedings, must be treated as making such a work available to a new public. In such circumstances, the public taken into account by the copyright holder when he consented to the communication of his work on the website on which it was originally published is composed solely of users of that site and not of users of the website on which the work was subsequently published without the consent of the rightholder, or other internet users.36It is irrelevant to the objective considerations set out in paragraphs 29 to 35 of the present judgment that, as in the case in the main proceedings, the copyright holder did not limit the ways in which internet users could use the photograph. The Court has already held that the enjoyment and the exercise of the right provided for in Article 3(1) of Directive 2001/29 may not be subject to any formality (see, to that effect, judgment of 16 November 2016, Soulier and Doke, C‑301/15, EU:C:2016:878, paragraph 50).37Furthermore, it is true the Court held, in particular in its judgment of 13 February 2014, Svensson and Others (C‑466/12, EU:C:2014:76, paragraphs 25 and 26), and in its order of 21 October 2014, BestWater International (C‑348/13, not published, EU:C:2014:2315, paragraph 16), regarding the making available of protected works by means of a clickable link referring to another website on which the original publication was made, that the public targeted by the original communication was all potential visitors to the website concerned, since, knowing that access to those works on that site was not subject to any restrictive measure, all internet users could access it freely. Therefore, it held that the publication of the works concerned by means of a clickable link, such as that at issue in the cases which gave rise to those judgments, did not result in a communication of those works to a new public.38However, that case-law cannot be applied in circumstances such as those at issue in the main proceedings.39First, that case-law was handed down in the specific context of hyperlinks which, on the internet, refer to protected works previously published with the consent of the copyright holder.40However, unlike hyperlinks which, according to the case-law of the Court, contribute in particular to the sound operation of the internet by enabling the dissemination of information in that network characterised by the availability of immense amounts of information (judgment of 8 September 2016, GS Media, C‑160/15, EU:C:2016:644, paragraph 45), the publication on a website without the authorisation of the copyright holder of a work which was previously communicated on another website with the consent of that copyright holder does not contribute, to the same extent, to that objective.41Therefore, to allow such a posting without the copyright holder being able to rely on the rights laid down in Article 3(1) of Directive 2001/29 would fail to have regard to the fair balance, referred to in recitals 3 and 31 of that directive, which must be maintained in the digital environment between, on one hand, the interest of the holders of copyright and related rights in the protection of their intellectual property, guaranteed by Article 17(2) of the Charter of Fundamental Rights of the European Union and, on the other hand, the protection of the interests and fundamental rights of users of protected subject matter, in particular their freedom of expression and information guaranteed by Article 11 of the Charter of Fundamental Rights, as well as the public interest.42In that context, the Land of North Rhine-Westphalia argues that, in circumstances such as those at issue in the main proceedings, in weighing the interests at issue, account must be taken of the right to education, laid down in Article 14 of the Charter of Fundamental Rights. In particular, the action of the pupil concerned is covered by the exercise of that right, since the photograph was placed on the first page of the presentation written by her, for illustration purposes, as part of a language workshop. However, in that connection, it suffices to state that the findings set out in paragraph 35 of the present judgment, relating to the concept of ‘new public’, are not based on whether the illustration used by the pupil for her school presentation is educational in nature, but on the fact that the posting of that work on the school website made it accessible to all the visitors to that website.43Moreover, it must be recalled that, as regards the pursuit of a balance between the right to education and the protection of the right to intellectual property, in Article 5(3)(a) of Directive 2001/29, the EU legislature provided an option for Member States to provide for exceptions or limits to the rights laid down in Articles 2 and 3 of that directive so long as it is for the sole purpose of illustration for teaching or scientific research and to the extent justified by the non-commercial purpose to be achieved.44Second, as stated in paragraph 29 of the present judgment, the rights guaranteed for authors by Article 3(1) of Directive 2001/29 are preventive in nature. As regards the act of communication constituted by the posting on a website of a hyperlink which leads to a work previously communicated with the authorisation of the copyright holder, the preventive nature of the rights of the holder are preserved, since it is open to the author, if he no longer wishes to communicate his work on the website concerned, to remove it from the website on which it was initially communicated, rendering obsolete any hyperlink leading to it. However, in circumstances such as those at issue in the main proceedings, the posting on another website of a work gives rise to a new communication, independent of the communication initially authorised. As a consequence of that posting, such a work may remain available on the latter website, irrespective of the prior consent of the author and despite an action by which the rightholder decides no longer to communicate his work on the website on which it was initially communicated with his consent.45Lastly, third, in its judgment of 13 February 2014, Svensson and Others (C‑466/12, EU:C:2014:76, paragraphs 27 and 28), the Court, in order to conclude that the communication at issue in the case which gave rise to that judgment was not to a new public, emphasised the lack of any involvement by the administrator of the site on which the clickable link had been inserted, which allowed access to the works concerned on the site on which it had been initially communicated, with the consent of the copyright holder.46In the present case, it is clear from the order for reference that the user of the work at issue in the main proceedings reproduced that work on a private server and then posted it on a website other than that on which the work was initially communicated. In so doing, that user played a decisive role in the communication of that work to a public which was not taken into account by its author when he consented to the initial communication.47Having regard to all of the foregoing considerations, the answer to the question referred is that the concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29, must be interpreted as meaning that it covers the posting on one website of a photograph previously posted, without any restriction preventing it from being downloaded and with the consent of the copyright holder, on another website. Costs 48Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.On those grounds, the Court (Second Chamber) hereby rules: The concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must be interpreted as meaning that it covers the posting on one website of a photograph previously posted, without any restriction preventing it from being downloaded and with the consent of the copyright holder, on another website. [Signatures]( *1 ) Language of the case: German. | ba4a4-9e6580b-4fd3 | EN |
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