Judicial Review of Procedural Acts of the European Public Prosecutor’s Office

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Department of Law Spring Term 2020

Master’s Thesis in EU Law 30 ECTS

Judicial Review of Procedural Acts of the European Public Prosecutor’s

Office

A Legal Analysis of Article 42 of the Regulation on the Establishment of the European Public Prosecutor’s Office Author: Gustav Birkeland

Supervisor: Associate Professor Maria Bergström

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Abstract

The European Public Prosecutor’s Office (the EPPO), established under enhanced cooperation by a Council Regulation (the Regulation), will be the first supranational criminal law enforcement body in the European Union (the EU) with direct powers vis- à-vis individuals. It will be responsible for investigating, prosecuting and bringing to judgments the perpetrators of offences against the Union’s financial interests. Measures taken by the EPPO may therefore seriously interfere with fundamental rights of individuals. As the EU is based on the rule of law, an effective judicial review of the acts produced by the EPPO is essential in order to allow individuals to protect their rights and legitimate interests against unlawful and arbitrary decision-making. In accordance with the Treaty framework of judicial review, the main rule in EU law on the division of jurisdiction between national courts of the Member States and the Court of Justice of the European Union (the CJEU) is that acts adopted by Union institutions and bodies are to be reviewed by Union courts, while acts adopted by national institutions and bodies are to be reviewed by the national courts. Although the EPPO is an indivisible Union body, the judicial review of the procedural acts of the EPPO will first and foremost be a task for the national courts according to Article 42 of the Regulation. Since it follows from the hierarchy of norms that secondary law must comply with primary law, this thesis examines whether the system of judicial review of procedural acts of the EPPO, as prescribed in Article 42 of the Regulation, complies with the Treaty framework of judicial review and the right to effective judicial protection enshrined in Article 47 of the Charter of Fundamental rights of the European Union (the Charter). The main finding of the thesis is that the system of judicial review of procedural acts of the EPPO, as prescribed in the Article 42 of the Regulation, does not comply with the Treaty framework of judicial review or the right to effective judicial protection enshrined in Article 47 of the Charter.

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1 Introduction

1.1 Background

In 2017 the Council adopted the Regulation on the establishment of the European Public Prosecutor’s Office (the EPPO) under enhanced cooperation.¹ The legal basis for the establishment of this supranational criminal law enforcement body is found in Article 86(1) of the Treaty on the Functioning of the European Union (TFEU).² According to that article the aim of the establishment is to combat crimes affecting the financial interests of the Union. The EPPO will be responsible for investigating, prosecuting and bringing to judgment the perpetrators of offences against the Union’s financial interest (‘PIF- offences’).³ For the first time in the history of EU law, an EU body will have direct powers vis-à-vis individuals in the field of criminal law. Hence, measures taken by this body may seriously interfere with fundamental rights and therefore an effective judicial review of the acts produced by it is essential.⁴

However, due to its highly complex organisation as an indivisible Union body with a decentralised structure,⁵ concerns have been raised how to arrange judicial review of the acts produced by the body. At all events, it follows from the hierarchy of norms that secondary legislation must comply with primary law, and Article 326 TFEU explicitly prescribes that any enhanced cooperation must comply with the Treaties and Union law.

In its original proposal the Commission proposed that judicial review of procedural measures adopted by the EPPO would be a task exclusively for the national courts of the Member States.⁶ This exclusion of judicial review before the Court of Justice of the European Union (the CJEU)⁷ was heavily criticised for being at odds with the Treaties

1 Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office, O.J. L 283/1. Hereinafter ‘the Regulation’.

References to ‘Articles’ without further indications refer to the Regulation unless otherwise indicated.

2 Consolidated version of the Treaty on the Functioning of the European Union, O.J. 2012/C 326/47.

3 PIF stands for ‘protection des intérêts financiers’.

4 Böse, M., ‘Judicial Control of the European Public Prosecutor’s Office’ in Rafaraci, T and Belfiore, R. (eds.), EU Criminal Justice: Fundamental Rights, Transnational Proceedings and the European Public Prosecutor's Office (2019), p. 192.

5 Article 8 of the Regulation. See further section 3.2 on the structure of the EPPO.

6 Proposal for a Council Regulation on the establishment of the European Public Prosecutor’s Office, 17 July 2013, COM (2013) 534 final, Article 36.

7 In accordance with Article 19(1) TEU the Court of Justice of the European Union composes of the Court of Justice, the General Court and the Civil Service (often referred to as the ‘Union Courts’).

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and the rule of law, as well as fundamental rights of the Union.⁸ Especially, the proposal was hard to reconcile with Articles 263 and 267 TFEU which provides the CJEU with jurisdiction over acts of EU bodies.

The proposed provision on judicial review was subject to several amendments and the provisions finally adopted under Article 42 of the Regulation differs in many aspects from the Commission’s original proposal.⁹ The judicial review of the procedural acts of the EPPO will nevertheless primarily be a task for the national courts also under the Regulation. Similar to the original proposal, Article 42(1) of the Regulation prescribes that the national courts are competent to review procedural acts of the EPPO that are intended to produce legal effects vis-à-vis third parties, in accordance with the requirements and procedures laid down by national law. However, Article 42(2)(a) prescribes that the CJEU shall have jurisdiction to give preliminary rulings on the validity of procedural acts of the EPPO, in so far as a question of validity is raised directly on the basis of Union law. The CJEU is also competent according to Article 42(3) to review decisions of the EPPO to dismiss a case, in so far as they are contested directly on the basis of Union law, when an action for annulment is brought in accordance with Article 263(4) TFEU.

Consequently, the system of judicial review as laid down in the Regulation entails that most of the procedural acts taken by the EPPO will be subject to judicial review before the national courts, and only exceptionally before the CJEU. As the Union is based on the rule of law, the CJEU has consistently held that it is of utmost importance that the acts of the Union institutions and bodies are subject to judicial review.¹⁰ 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, upon which the Union is based.¹¹ It has further made clear

8 See e.g. Mitsilegas, V. and Giuffrida, F., ‘The European Public Prosecutor’s Office and Human Rights’ in Geelhoed,W., et. al. (eds.), Shifting Perspectives on the European Public Prosecutor's Office (2018), Meij, A., ‘Some Explorations into the EPPO’s Administrative Structure and Judicial Review’ and Inghelram, J., ‘Search and Seizure Measures and Their Review’ in Erkelens, L., et. al.

(eds.), The European Public Prosecutor’s Office: An extended arm or a Two-Headed dragon?

(2015).

9 See for an earlier version of the provision: Council Document 12774/1/16 REV 1, p. 57, Council Document 11350/1/16 REV 1, p. 72.

10 Case C-294/83, Parti écologiste ‘Les Verts’ v European Parliament, EU:C:1986:166, para. 23; Case C-50/00 P, Unión de Pequeños Agricultores v Council, EU:C:2002:462, paras. 38-39.

11 Case C-72/15, Rosneft v Her Majesty's Treasury and Others, EU:C:2017:236, para. 73; Case C-362/14, Maximillian Schrems v Data Protection Commissioner, EU:C:2015:650, para. 95.

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that only the CJEU has the jurisdiction to declare EU acts invalid.¹² Thus, although the provisions in Article 42(2) – (3) to some degree have extended the jurisdiction of the CJEU to review procedural acts of the EPPO compared to the initial proposal, the review will first and foremost be a task for the national courts in accordance with Article 42(1).

Therefore, uncertainty still remains as to whether that system of judicial review fully complies with the Treaty framework of judicial review and the right to effective judicial protection enshrined in Article 47 of the Charter of Fundamental rights of the European Union (the Charter).¹³

1.2 Aim and Research Question

Against this background, the aim of this thesis is to examine whether the system of judicial review of procedural acts of the EPPO, as prescribed in Article 42 of the Regulation, complies with the Treaty framework of judicial review and the right to effective judicial protection enshrined in Article 47 of the Charter.

1.3 Delimitations

This thesis will only focus on the judicial review of procedural acts of the EPPO. The reason why the examination is limited to the judicial review of procedural acts is that only this type of acts will be subject to the deviating rules regarding judicial review in Article 42(1) – (3). Acts taken by the EPPO which are not procedural will be subject to judicial review before the CJEU.¹⁴ While the Regulation does not provide for any definition of

‘procedural acts’, Article 86(3) TFEU states that the Regulation shall determine ‘the rules applicable to the judicial review of procedural measures taken by it in the performance of its function’. Thus, the procedural acts of the EPPO relate to its task of investigating, prosecuting and bringing to judgment the perpetrators of offences against the Union’s financial interests. Consequently, the EPPO will, inter alia, take decisions on the opening of an investigation (Article 26(1)), decisions to merge, reallocate or split a case (Article 26(5)), decisions to bring a case to judgment (Article 36) and decisions to dismiss a case (Article 39). Moreover Article 42(8) indicates that administrative decisions, such as

12 Case C-314/85, Foto Frost v Hauptzollamt Lübeck-Ost, EU:C:1987:452, para. 17.

13 Consolidated version of the Charter of Fundamental Rights of the European Union, O.J. 2012/C 326/02.

14 See Articles 42(4) – (8) of the Regulation.

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decisions of the EPPO concerning the right of public access to documents or decisions dismissing European Delegated Prosecutors adopted pursuant to Article 17(3) of the Regulation, are not procedural acts.

1.4 Method and Sources

In order to achieve the aim of this thesis, a legal dogmatic method is applied. The essence of the legal dogmatic method can be described as finding solutions to a legal problem by applying rules deriving from generally recognised sources of law.¹⁵ The method chosen appears suitable for examining the presented research question which identifies a legal problem of potentially conflicting norms. Thus, since the legal problem is identified, this section will provide for a brief overview of the generally recognised sources of law and the methods of interpretation which will be applied to find a solution to the legal problem.

For that purpose, a particular norm is part of the EU law if it is recognised as one of the sources of EU law. The list of these sources are to some extent found in the Treaties and to some extent outside the Treaties, in the institutional and judicial practice of the EU institutions.¹⁶ The system of sources in EU law is characterised by a clear hierarchy between primary law and secondary law. Primary law, on the one hand, can be described as ‘the law that is “given” to the EU institutions, by setting the framework for their activity’.¹⁷ Primary law is constituted not only by the Treaties, but also the Charter and the general principles of Union law. Secondary law, on the other hand, can be described as ‘the law that is “made” by the EU institutions on the basis of the powers given to them by the Treaties’.¹⁸ Secondary law essentially takes the form of regulations, directives and decisions.¹⁹

The primacy of primary law over secondary law is not merely theoretical but can be enforced before the CJEU by means of an action for annulment or a preliminary reference on validity. This hierarchy of sources gives rise to two essential rules in legal practice.

The first rule, which is a general principle of interpretation, entails that norms of

15 Kleinman, J., ‘Rättsdogmatisk metod’, in Nääv, M., and Zamboni, M. (eds.), Juridisk metodlära (2018), p. 21.

16 De Witte, B. and Smulders, B., ‘Sources of European Union Law’, in Kuijper, P. J., et. al. (eds.) The Law of the European Union (2018), p. 193.

17 Ibid.

18 Ibid.

19 Article 288 TFEU.

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secondary law must be interpreted in conformity with primary law.²⁰ More specific, norms of secondary law 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.²¹ The second rule entails that where norms of secondary law cannot be interpreted in conformity with primary law, the conflict of norms is to be resolved by the CJEU declaring the secondary law norm invalid on the basis of an action for annulment or a preliminary ruling.

As regards the methods of interpretation used by CJEU, at least three main methods can be distinguished. While there is no hierarchical relationship between those methods, normally the CJEU begins the process of interpretation by analysing the wording of the provision.²² The interpretation of the wording is often not sufficient to establish the meaning of a legal rule. A specific provision can therefore also be interpreted systematically, that is to say, in its context as part of a system of the law.²³ Finally, it may be necessary to take into account the regulatory purpose in order to determine the meaning of a legal rule.²⁴ In this regard, while recitals to the preamble of a legislative act are not legally binding, they may provide information about the legislator’s intent.²⁵

The relevance of the case-law of the CJEU as a source of EU law should also be emphasised. According to Article 19(1) of the Treaty on European Union (TEU),²⁶ the Court ‘shall ensure that in the interpretation and application of the Treaties the law is observed’. However, this article has been interpreted as meaning that the Court’s task extends to more than a mere application of the Treaty provisions. It also falls on the Court to supplement the Treaties with additional unwritten norms, in particular by finding the general principles of Union law which are common to the legal traditions of the Member

20 On the method of interpretation in conformity with primary law, see e.g. Leible, S. and Domröse, R., ‘Interpretation in Conformity with Primary Law’, in Riesenhuber, K. (ed.), European Legal Methodology (2017), pp. 171-201.

21See e.g. Case C-218/82, Commission v Council, EU:C:1983:369, para. 15; Case C-149/10, Zoi Chatzi v Ipourgos Ikonomikon, EU:C:2010:534, para. 43; Case C-12/11, Denise McDonagh v Ryanair Ltd, EU:C:2013:43, para. 44.

22 Case C-53/81, D. M. Levin and Staatssecretaris van justitie, EU:C:1982:105, para. 9; Case C- 251/95, Sabel BV v Puma AG, Rudolf Dassler Sport, EU:C:1997:528, para. 18; Case C-404/06, Quelle AG v Bundesverband der Verbraucherzentralen und Verbraucherverbände, EU:C:2008:231, paras. 31-33.

23 Joined Cases C‑402/07 and C‑432/07, Sturgeon v Condor Flugdienst GmbH and Böck v Air France SA, EU:C:2009:716, paras. 29-39; Case C-283/81, CILFIT v Ministry of Health, EU:C:1982:335, para. 20.

24 Case C-465/04, Honyvem Informazioni Commerciali Srl v Mariella De Zotti, EU:C:2006:199, paras. 17-22.

25 Case C-423/97, Travel Vac SL v Manuel José Antelm Sanchis, EU:C:1999:197, para. 42.

26 Consolidated version of the Treaty on European Union, O.J. 2012/C 326/01.

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States.²⁷ In fact, the case-law of the CJEU has been regarded as often the most important source of law.²⁸ Due to the vagueness of many of the Treaty provisions and provisions in secondary law, and to the fact that the EU is a relatively new legal order, the case-law of the CJEU is more important than in most other legal orders.²⁹ Consequently, while it would not be feasible to consistently provide for exhaustive references to the case-law of the CJEU, the ambition of this thesis is as far as possible to take into due account the relevant case-law of the CJEU.

It can finally be noticed that the EU is not yet a party to the European Convention for the Protection of Human Rights and Fundamental Freedoms (the ECHR)³⁰ and therefore not bound under international law to comply with the convention. Nevertheless, for reasons which are explained in further detail in Chapter 5, the ECHR and the case-law of the European Court of Human Rights (the ECtHR) ‘are of fundamental importance for the EU and do serve as a source of EU fundamental rights, as a matter of EU law’.³¹

1.5 Disposition

The structure of the thesis will be as follows. Chapter 2 will set out an overview of the Treaty framework of judicial review as well as related landmark cases of the CJEU on the interpretation of this framework. While the intention is not to provide an exhaustive and complete overview of this framework, the chapter will focus on aspects which are of particular relevance to the aim of this thesis. Chapter 3 will briefly set out the background and structure of the EPPO. Next, Chapter 4 will examine the first part of the research question, namely the compliance of the system of judicial review laid down in Article 42 of the Regulation with the Treaty framework of judicial review. In carrying out this examination, the specific provisions in Article 42 of the Regulation are discussed in more detail, including the rationale behind the system of judicial review opted for under that article as well as the legal basis for regulating judicial review in the Regulation. Chapter

27 De Witte, B. and Smulders, B., supra note 12, p. 196. Cf. Koopmans, T., ‘The Birth of European Law at the CrossRoads of Legal Traditions’, The American Journal of Comparative Law, Vol. 39, No. 3, 1991, pp. 495-496.

28 Schermers, H. G. and Waelbroeck, D. F., Judicial Protection in the European Union (2001), p. 133.

29 Ibid.

30 European Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950, entry into force on 3 September 1953.

31 Claes, M., ’Fundamental Rights’, in Kuijper, P. J., et. al. (eds.) The Law of the European Union (2018), p. 112.

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5 will then examine the second part of the research question, that is to say, the compliance of the system of judicial review laid down in Article 42 of the Regulation with the right to effective judicial protection enshrined in Article 47 of the Charter. In particular the chapter will discuss the preliminary reference procedure as an effective remedy and its interrelation to the action for annulment. Further, the relationship between effective judicial protection and legal certainty will be analysed. In this regard it can be noticed that as a key requirement for the rule of law, legal certainty forms a crucial aspect of the right to effective judicial protection. There can be no effective judicial protection unless the system of judicial review is sufficiently coherent and clear. In this chapter the possibility of limiting the right of access to court will also be examined. Finally, Chapter 6 will summarise the findings of the thesis and provide a conclusion to the research question.

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2 The Treaty Framework of Judicial Review

2.1 Preliminary Remarks

Bearing in mind that the aim of this thesis is to examine the compliance of the system of judicial review as laid down in Article 42 of the Regulation with the Treaty framework of judicial review, it is appropriate to first provide a general overview of the latter in order to set the scene. The overview encompasses the topic of how the specific nature of EU law influences the roles and the competences of the CJEU and the national courts, and the way they interact. As will be shown, the Union legal order has established a complete and coherent system of judicial protection under the rule of law. It is against this complete and coherent system of judicial protection that the system of judicial review under the Regulation must be examined.

2.2 A Complete and Coherent System of Judicial Protection under the Rule of Law

The rational for the system of judicial protection in EU law stems from the early case-law of the Court of Justice constitutionalising the Treaties of the EU. In van Gend en Loos the Court held that ‘the Community constitutes a new legal order of international law’ the subjects of which are both the Member States and their nationals.³² It further held in Costa v ENEL that ‘[b]y contrast with ordinary international treaties, the EEC Treaty has created its own legal system which, on the entry into force of the Treaty, became an integral part of the legal systems of the Member States and which their courts are bound to apply’.³³ It follows from these early landmark cases that the Treaties of the Union have created an autonomous legal order, the essential characteristics of which ‘are in particular its primacy over the laws of the Member States and the direct effect of a whole series of provisions which are applicable to their nationals and to the Member States themselves’.³⁴

Moreover, the Union is founded on the rule of law according to Article 2 of the TEU.

The practical consequence of this principle in relation to judicial review has been proclaimed by the Court of Justice in its seminal ruling Les Verts, where the Court held

32 Case C-26/62, Van Gend en Loos v Administratie der Belastingen, EU:C:1963:1, p. 12.

33 Case C-6/64, Costa v E.N.E.L., EU:C:1964:66, p. 593.

34 Opinion 1/91 of 14 December 1991 on the European Economic Area, EU:C:1991:490, para 21;

Opinion 1/09 of 8 March 2011 on the Draft agreement creating a Unified Patent Litigation System (European and Community Patents Court), EU:C:2011:123, para. 65.

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that the Community is ‘based on the rule of law, inasmuch as neither its Member States nor its institutions can avoid a review of the question whether the measures adopted by them are in conformity with the basic constitutional charter, the Treaty’.³⁵ Judicial review is a crucial aspect of any legal system acknowledging the rule of law, inter alia because it allows individuals to protect their rights and legitimate interests against unlawful or arbitrary decision-making.³⁶ In this regard, the principle of the rule of law is further reaffirmed in the preamble to the Charter which has the same legal value as the Treaties by virtue of Article 6(1) TEU. The substance of the principle of the rule of law is expressed in Article 47 of the Charter which states that 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 relation between the right to an effective judicial remedy and the rule of law has been outlined in the case-law of the Court of Justice Case, where it has emphasised 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.³⁷ Further, the Commission has stressed the importance of the rule of law as ‘a dominant organisational model of modern constitutional law and international organisations to regulate the exercise of public powers’.³⁸ The principle of the rule of law ensures ‘that all public powers act within the constraints set out by law, in accordance with the values of democracy and fundamental rights, and under the control of independent and impartial courts’.³⁹

In this context, the question arises as to how individuals may assert the Union law rights that are conferred upon them. While the first sentence of Article 19(1) TEU prescribes that it is the task of the CJEU to ensure that the law is observed in the interpretation and application of the Treaties, the second sentence prescribes that the Member States shall provide remedies sufficient to ensure effective legal protection in the field covered by Union law. The Court of Justice has made clear that it is evident from these provisions that the guardians of the established legal order and the judicial system

35 Case C-294/83, ‘Les Verts’, supra note 10, para. 23.

36 Türk, A, Judicial Review in EU Law (2009), p. 1.

37 Case C-50/00 P, UPA, supra note 10, paras. 38-39; Case C-72/15, Rosneft, supra note 11, para. 73;

Case C-362/14 Schrems, supra note 11, para. 95.

38 Communication from the Commission, A new EU Framework to strengthen the Rule of Law, 11 March 2014, COM (2014) 158 final, pp. 3-4. For a comprehensive overview of the rule of law in the EU, see e.g. Konstadinides, T., The Rule of Law in the European Union (2017).

39 Communication from the Commission, supra note 38, p. 4.

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of the EU are the CJEU and the courts and tribunals of the Member States.⁴⁰ Also it is for the CJEU to ensure respect for the autonomy of the EU legal order created by the Treaties.⁴¹ Consequently, alongside the CJEU, national courts and tribunals are under the obligation to apply Union law in its entirety and to protect rights conferred by it on individuals.⁴²

Thus, an individual whose rights guaranteed by Union law have been infringed, may seek judicial protection before the CJEU or before the national court. The decisive factor for determining which court is competent to rule on the matter, is whether the matter falls within the jurisdiction of the CJEU or the national court. The natural point of departure when deciding on the jurisdiction of the CJEU and the courts of the Member States, is to ascertain their competences as laid down by the Treaties. From this standpoint, Article 1 TEU makes clear that the Member States confer competences on the Union to attain objectives they have in common. Article 5(1) TEU further states that the limits of Union competences are governed by the principle of conferral while Article 5(2) TEU supplements that under this principle, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties.⁴³ In the second sentence, Article 5(2) TEU reiterates what is already prescribed in Article 4(1) TEU, namely that competences not conferred upon the Union in the Treaties remain with the Member States.

The consequence of the principle of conferral is therefore that the Union courts only have jurisdiction in cases where there is a specific competence conferred upon them by the Treaties or by secondary legislation.⁴⁴ Thus, the Union courts do not have inherent jurisdiction merely because of the fact that a certain matter involves Union law.⁴⁵ Instead, where such competence is not specifically provided for under the Treaties, the case will in principle fall within the residual competence of the national courts.⁴⁶ The Treaty system of judicial protection does not provide for the creation of ‘Union courts’ in the

40 Opinion 1/09, supra note 34, para. 66.

41 Opinion 1/09, supra note 34, para 35; Opinion 1/09, supra note 34, para. 67.

42 Case C-36/77, Rewe v Landwirtschaftskammer für das Saarland, EU:C:1976:188, para. 5; Case C- 106/77, Amministrazione delle finanze dello Stato v Simmenthal, EU:C:1978:49, para 21.

43 See also Article 13(2) TEU.

44 Case C- 396/03 P, Killinger v Germany and Others, EU:C:2005:355, para 26. In exceptional cases the Court has held that it has inherent jurisdiction which is not expressly provided for in the Treaties, see e.g. Case C-70/88, European Parliament v Council, EU:C:1991:373, para. 3.

45 Case C-196/09, Miles and Others, EU:C:2011:388, paras. 43-45.

46 See Article 274 TFEU.

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Member States.⁴⁷ Instead, by filling their functions as Union courts of general jurisdiction, the national courts enforces EU law in their own right.⁴⁸ Nevertheless, although the jurisdiction of the CJEU constitutes an exception to the general jurisdiction of the national courts, the exceptional jurisdiction is also exclusive.⁴⁹ Article 19(3) TEU prescribes the main competences of the CJEU, implementing the main objective set out in the first paragraph. The CJEU shall, in accordance with the Treaties, rule on actions brought by a Member States, an institution or a natural or legal person; give preliminary rulings on the interpretation and validity of Union law; and rule in other cases provided for in the Treaties.⁵⁰

In Les Verts the Court further elaborated that, by Articles 173 (now Article 263 TFEU) and 184 EEC (now Article 277 TFEU), on the one hand, and Article 177 (now Article 267 TFEU), on the other, ‘the Treaty established a complete system of legal remedies and procedures designed to permit the Court of Justice to review the legality of measures adopted by the institutions’.⁵¹ Thus, under the rule of law, of which the existence of effective judicial review is essential, the Union has by its Treaties developed a complete and coherent system of judicial protection against the Union institutions and bodies. In this regard, the ‘complete’ system of judicial protection entails that there exists sufficient legal remedies and procedures which can be relied upon before the Union and national courts in order to enforce Union law rights and to ensure the judicial review of the legality of Union acts.⁵² By the ‘coherent’ system of judicial protection is understood that Union law rights can be enforced and the legality of Union acts can be reviewed directly and indirectly, both ways involving different roles for the Union courts and the national courts

47 Lenaerts, K., et. al., and Nowak, J. (ed.), EU Procedural Law (2014) para 2.02.

48 Craig, P., EU Administrative Law (2012) p. 262.

49Cf. Opinion 2/13 of 18 December 2014 on the accession by the Union to the European Convention for the Protection of Human Rights and Fundamental Freedoms, EU:C:2014:2454, para. 246; Case C-314/85, Foto Frost, supra note 12, which will be discussed in section 2.4. See also Lock, T., ‘The European Court of Justice: What are the Limits of Its Exclusive Jurisdiction?’, Maastricht Journal of European and Comparative Law, Vol. 16 No. 3, (2009), pp. 293-294; Meij, A., supra note 8, p.

113.

50 The specific Treaty provisions on the jurisdiction of the CJEU and on the procedures are found in Articles 256 – 279 TFEU. Further provisions can also be found in Protocol No. 3 on the Statue of the Court of Justice of the European Union, O.J. L 265/1, 29.9.2012 as amended by O.J. L 173, 26.6.2013, p. 65 and O.J. L 217, 12.8.2016, p. 69.

51 Case C-294/83, ‘Les Verts’, supra note 10, para. 23. See also Case C-50/00 P, UPA, supra note 10, para 40; Case C-583/11 P, Inuit Tapiriit Kanatami and Others v Parliament and Council, EU:C:2013:625, para 92; Case C-72/15, Rosneft, supra note 11, para 66.

52 Lenaerts, K., ‘The Rule of Law and the Coherence of the Judicial System of the European Union’, Common Market Law Review, Vol. 44, Iss. 6, (2007) p. 1626.

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as regulated by the Treaties.⁵³ However, it should be mentioned that the alleged completeness and coherency of the system of judicial protection has been subject to severe criticism.⁵⁴ The Treaty provisions which ensure the complete and coherent system of judicial protection in the Union will be outlined in more detail in the following sections.

2.3 The Action for Annulment

In line with the Les Verts case the action for annulment plays a key role in the complete and coherent system of judicial protection in the Union by providing for direct review of the legality of binding Union measures before the CJEU. In this regard the CJEU has clarified that according to the principles set out in the Les Verts case, ‘the general scheme of the Treaty is to make a direct action available against all measures adopted by the institutions which are intended to produce legal effects’.⁵⁵ In particular, the first paragraph of Article 263 TFEU gives the CJEU competence to review the legality of acts of bodies, offices or agencies of the Union intended to produce legal effects vis-á-vis third parties. Further, Article 264 TFEU makes clear that the CJEU shall declare the act void if the action is well founded. Thus, the Treaty framework of judicial review confers upon the CJEU an exclusive jurisdiction to declare a particular Union act void.⁵⁶

The applicants that are able to bring an action for annulment before the CJEU can be divided in three groups: privileged applicants, semi-privileged applicants and non- privileged applicants. The privileged applicants are listed in the second paragraph of Article 263 TFEU and consist of the Member States, the European Parliament, the Council and the Commission. These applicants may always bring an action for annulment against any binding Union measure without any obligation of proving their interests in bringing proceedings.⁵⁷ The semi-privileged applicants are the European Central Bank, the Court of Auditors, and the Committees of Regions which are listed in the third paragraph of the same article. They differ from the privileged applicants in the respect that they may only bring an action of annulment for the purpose of protecting their

53 Lenaerts, K., supra note 27, p. 1632.

54 This criticism will be addressed in section 5.4.1 where the right to an effective judicial protection is discussed.

55 Case C-439/13 P, Elitaliana v Eulex Kosovo, EU:C:2015:753, para. 67.

56 See also Case C-314/85, Foto Frost, supra note 12, para. 17. The case will be further discussed in section 2.4 on the preliminary reference procedure.

57 Case C- 45/86, Italy v Commission, EU:C:1987:163, para. 3.

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prerogatives.⁵⁸ The last group of applicants, the non-privileged, consists of natural and legal persons. Under 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.⁵⁹

The action for annulment brought before the CJEU may not be raised on just any type of plea. According to the second paragraph of Article 263 TFEU, the CJEU only has jurisdiction in actions on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers. Finally, the sixth paragraph of the article provides for a two month time limit after the publication of the measure, or of its notification to the plaintiff, or, in the absence thereof, of the day on which it came to the knowledge of the latter. Proceedings must be instituted within this time limit.⁶⁰

In connection to Article 263 TFEU and the action for annulment, it is relevant to also mention Article 265 TFEU which in its first paragraph confers upon the CJEU a competence to review, in infringement of the Treaties, the failure to act of any EU institution, body, office or agency. The third paragraph of the same article provides that any natural or legal person may complain to the Court that an institution, body, office or agency of the Union has failed to address that person any act other than a recommendation or an opinion.

2.4 Preliminary Rulings on the Validity and Interpretation of Union Acts

The complete and coherent system of judicial protection in Union law is fulfilled by the indirect route of preliminary rulings on the validity of Union acts where the direct route of the action for annulment is unavailable. Consequently, the review of the act will fall within the general jurisdiction of the national courts which are under the obligation to apply Union law and to safeguard rights conferred by it on individuals. The coherence in this multilevel system of judicial protection is ensured by the preliminary reference

58 Case C-70/88, European Parliament v Council, supra note 44, para. 27.

59 For a discussion on the requirements relating to the admissibility of actions for annulment brought by natural and legal persons, see e.g. Lenaerts, K., et. al. and Nowak, J. (ed.), supra note 47, pp. 312- 337.

60 See also Article 277 TFEU.

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procedure provided for under Article 267 TFEU, which is ‘essential for the preservation of the Community character of the law established by the Treaty and has the object of ensuring that in all circumstances this law is the same in all States of the Community’.⁶¹

Under the first paragraph of Article 267 TFEU the CJEU is given jurisdiction to give preliminary rulings concerning (a) the interpretation of the Treaties and (b) the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union.

According to the second paragraph of that article, any court or tribunal of a Member State may request the Court to give a ruling on such a question, if the national court or tribunal considers that a decision on the question is necessary to enable it to give judgement.

However, if the question arises in a case pending before a court or tribunal of a Member State against whose decision there is no judicial remedy under national law, that court or tribunal must, according to the third paragraph, bring the matter before the Court.⁶² In fact, the failure of a national court of last instance to comply with the obligation to refer a question to the CJEU may constitute an infringement of the Treaties.⁶³ Such an infringement may in turn give rise to state liability.⁶⁴

Requests for preliminary rulings on the validity of Union law differ in some important aspects from actions for annulment. First of all, while the applicant institutes an action for annulment before the CJEU on his own initiative, it is a task for the national court solely to decide whether or not to refer a question to the CJEU.⁶⁵ It follows that the parties to the main proceedings, including the public prosecutor, cannot compel the national court to request a preliminary ruling since the national court shall exercise its discretion independently.⁶⁶ Secondly, the jurisdiction of the CJEU to give a preliminary ruling on the validity of Union law is not limited to the grounds listed in the second paragraph of Article 263 TFEU for the action for annulment. Instead the jurisdiction extends to all grounds capable of invalidating the measures contested.⁶⁷ Thirdly, a request for a preliminary ruling is not subject to any time limit. However, a natural or legal person who

61 Case C-166/73, Rheinmühlen Düsseldorf v Einfuhr- und Vorratsstelle für Getreide und Futtermittel, EU:C:1974:3, para 2.

62 For exceptions to this obligation see Case C-283/81, CILFIT, supra note 23, paras. 10, 13 and 16.

63 Case C-416/17, Commission v France, EU:C:2018:811, paras. 105-114.

64 Case C-224/01, Gerhard Köbler v Republik Österreich, EU:C:2003:513, para. 50.

65 Joined Cases C-31/62 and C-33/62, Wöhrmann and Others v Commission, EU:C:1962:49, p. 507.

66 Case C-93/78, Lothar Mattheus v Doego Fruchtimport und Tiefkühlkost eG., EU:C:1978:206, paras.

4-6.

67 Joined Cases C-21/72 – C-24/72, International Fruit Company NV and others v Produktschap voor Groenten en Fruit, EU:C:1972:115, para. 5.

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without a doubt has the right under Article 263 TFEU to bring an action for annulment of a Union act, may not question the lawfulness of that act in subsequent proceedings before the national courts by way of a preliminary ruling on validity under Article 267 TFEU.⁶⁸ To rule otherwise ‘would in effect enable the person concerned to overcome the definitive nature which the decision assumes as against that person once the time-limit for bringing an action has expired’.⁶⁹ Contrariwise, would there remain doubt as to whether the natural or legal person can bring an admissible action for annulment, the possibility for the national court to refer a preliminary ruling must be left intact.⁷⁰

The Court has in its ruling in Foto-Frost further made clear that the national court or tribunal does not have the competence to declare Union acts invalid.⁷¹ While this already follows from Article 263 TFEU and 264 TFEU regarding actions for annulment, Article 267 TFEU did not settle the question whether those courts themselves may declare that acts of Union institutions are invalid.⁷² In fact, it has even been argued that a literal interpretation of Article 267 TFEU submits that it confers on the national courts a competence to declare Union acts invalid.⁷³ However, in its judgement the Court brought forward three reasons why this competence is exclusive for the CJEU.

First, the Court recalled that the main purpose of the powers conferred on the Court by Article 267 TFEU is to ensure that Union law is applied uniformly by national courts, since divergences between the national courts would jeopardies the very unity of the Union legal order and detract from the fundamental requirement of legal certainty.⁷⁴ Secondly, the Court considered the necessary coherence of the system of judicial protection established by the Treaty. It reaffirmed its ruling in Les Verts where the Court found that the Treaty established a complete system of legal remedies and procedures designed to permit the Court of Justice to review the legality of measures adopted by the

68 Case C-188/92, TWD Textilwerke Deggendorf GmbH v Bundesrepublik Deutschland, EU:C:1994:90, para. 17.

69 Case C-188/92, TWD, supra note 68, para. 18.

70 Case C-441/05, Roquette Frères v Ministre de l'Agriculture, de l'Alimentation, de la Pêche et de la Ruralité, EU:C:2007:150, paras. 35-48.

71 Case C-314/85, Foto Frost, supra note 12, para. 17.

73 Peers, S. and Costa, M., Court of Justice of the European Union (General Chamber), Judicial review of EU Acts after the Treaty of Lisbon; Order of 6 September 2011, Case T-18/10 Inuit Tapiriit Kanatami and Others v Commission & Judgment of 25 October 2011, Case T-262/10 Microban v Commission, European Constitutional Law Review, Vol. 8, Iss. 1 (2012), p. 102.

74 Case C-314/85, Foto Frost, supra note 12, para. 15; see also Case C-26/62, Van Gend en Loos, supra note 32, p. 12.

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institutions. It then held that requests for preliminary rulings, like actions for annulment, constitutes means for reviewing the legality of acts of the Union institutions and Article 263 TFEU gives the Court exclusive jurisdiction to declare a Union act void. From this the Court reached the conclusion that the coherence of the system requires that the power to declare the act invalid must be reserved to the CJEU even where the validity of a Union act is challenged before a national court.⁷⁵ Thirdly, as an additional reason the Court emphasised that it is in the best position to decide on the validity of Union acts since Union institutions whose acts are challenged are entitled to participate in the proceedings in order to defend the validity of the acts in question.⁷⁶

2.5 Concluding Remarks

At least two important conclusions can be drawn from this chapter. First, by virtue of Article 263 TFEU and 267 TFEU, the Treaty has established a complete system of legal remedies and procedures designed to permit the CJEU to review the legality of measures adopted by the institutions. The former article provides for direct review before the CJEU, while the latter provides for a system which establishes direct cooperation between the CJEU and the national courts. Under this direct cooperation the national courts are closely involved in the correct application and uniform interpretation of EU law as well as in the protection of fundamental rights of individuals conferred by that law.⁷⁷ In this regard, ‘the tasks attributed to the national courts and to the Court of Justice respectively are indispensable to the preservation of the very nature of the law established by the Treaties’.⁷⁸ Consequently, any deviation from this complete and coherent system of judicial protection puts at risk the correct and uniform interpretation of EU law and the rights conferred by it on individuals, and in the end threatens the rule of law upon which it is based.

Secondly, according to the principle of conferral, the CJEU only have jurisdiction in cases where the Treaty provisions have conferred jurisdiction on it. The residual and general jurisdiction remain within the competent national courts. In this complete and coherent system of judicial protection, the CJEU has exclusive jurisdiction over the

75 Case C-314/85, Foto Frost, supra note 12, para. 16-17.

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definitive interpretation of EU law and exclusive jurisdiction to declare a Union act invalid. Conversely, the CJEU is in principle not competent to rule on the validity of national law.⁷⁹ Thus, in conclusion it follows that the court competent to review the validity of an act (on national or EU level) depends on the origin of the act undertaken.

In other words, it is the nature of the body producing the act that decides within which jurisdiction the interpretation and validity review will fall. Acts adopted by Union bodies are to be reviewed by Union courts while acts adopted by national bodies are to be reviewed by national courts.⁸⁰

79 Case C-396/03 P, Killinger, supra note 44, para 28. Formally, it is the national court that declares a national measure invalid. The preliminary rulings given by the Court of Justice are, however, more or less determinative of the outcome in the national proceedings. However, infringement actions under Articles 258-260 TFEU may be brought before the CJEU.

80 Meij, A., supra note 8, p. 114; Böse, M., supra note 4, p. 199. Cf. Leczykiewicz, D., ‘Effective Judicial Protection of Human Rights After Lisbon: Should National Courts be Empowered to Review EU Secondary Law?’, European Law Review, Vol. 35, No. 3 (2010), pp. 326-348, where it is argued that national courts under certain limited circumstances should be able to review EU secondary law.

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3 Background and Structure of the EPPO

3.1 The Need for Effective Protection of the Financial Interests of the EU

One of the objectives of the Union as set out in the Treaties is the prevention and combating of crime (Articles 3(2) TEU and 67(3) TFEU). Further, Article 325 TFEU puts a clear obligation on the Union and the Member States to counter fraud and any other illegal activities affecting the financial interests of the Union. Nevertheless, according to the Commission, the Union’s financial interests are still not sufficiently protected by several Member States, and in practice the Union lacks control over the expenditure by Member States. Moreover, it has no power to intervene when EU funds are subject to criminal misuse.⁸¹ This seems to be the result of a system where the EU budget is essentially managed by national authorities, while at the same time the competence to conduct criminal investigations and prosecutions with respect to PIF-offences affecting the EU budget remains within the Member States. Allegedly, the divergent legislation and uneven enforcement efforts in the Member States constitutes the main impediments for an effective protection of the financial interests of the EU.⁸² Due to the deficiency in the available data and the inherent difficulties in measuring undetected criminal activities, the annual loss to the EU budget caused by fraud is broadly estimated to be at least €500 million to €3 billion.⁸³

However, the effective protection of the financial interests of the EU is not a recent topic but has rather been discussed since the distribution of own financial resources to the European Community began in the 1970’s, such as common agricultural policy, structural funds, etc.⁸⁴ Several actions have already been taken in the fight against fraud. For instance, the European Anti-fraud Office (OLAF) is an EU body established in 1999 which is responsible for protecting the financial interest of the Union by combating fraud,

81 Commission Staff Working Document, Impact Assessment Accompanying the Proposal for a Council Regulation on the establishment of the European Public Prosecutor’s Office, COM (2013) 534 final, SWD (2013) 275 final, p. 6.

82 Ibid, p. 6.

83 Ibid, pp. 6-7.

84 Ligeti, K., ’The European Public Prosecutor’s Office’ in Mitsilegas, et. al. (eds.) Research Handbook on EU Criminal Law (2016), p 480.

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corruption and other illegal activities.⁸⁵ It conducts administrative anti-fraud investigations and supports the Commission in the implementation of fraud prevention and detection policies. Nevertheless, OLAF lacks any competence to initiate and conduct criminal investigations. This is also true for Europol, the EU agency for law enforcement cooperation established in 1997,⁸⁶ and Eurojust, the EU agency for cross-border judicial cooperation in criminal matters established in 2001.⁸⁷ The Commission has from the start taken the position that administrative sanctions are insufficient to adequately protect the financial interests of the EU and stressed the need for criminal sanctions.⁸⁸ However, criminal law is and has been a sensitive area for the Member States since it is strongly linked to the idea of state sovereignty.⁸⁹ It was not until the entry into force of the Maastricht Treaty in 1992⁹⁰ and the creation of the Third pillar that competence to act in the field of criminal law was expressly conferred on the EU at Treaty level.⁹¹ Nevertheless, the law adopted under the Third pillar kept its purely international law character and entailed no direct effect, which meant that the instruments adopted always had to be implemented into national law.⁹²

Despite the criminal law competence under the Third pillar, or perhaps because of it, the Member States were slow and to some extent reluctant to ratify the agreements adopted under it. As a response, the European Parliament (EP) asked the Commission to carry out a study on the possibilities of harmonising criminal law and criminal procedure

85 Regulation (EU, EURATOM) NO 8883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999, O.J. L 248/1. OLAF took over the tasks of the unit for the coordination of the fight against fraud (UCLAF) set up in 1988.

86 Regulation (EU) 2016/794 of the European Parliament and of the Council of 11 May 2016 on the European Union Agency for Law Enforcement Cooperation (Europol) and replacing and repealing Council Decisions 2009/371/JHA, 2009/934/JHA, 2009/935/JHA, 2009/936/JHA and 2009/968/JHA, O.J. L 135/53.

87 Regulation (EU) 2018/1727 of the European Parliament and of the Council of 14 November 2018 on the European Union Agency for Criminal Justice Cooperation (Eurojust), and replacing and repealing Council Decision 2002/187/JHA, O.J. L 295/138.

88 See the Commission’s ‘Draft for a Treaty amending the Treaties establishing the European Communities so as to permit the adoption of common rules on the protection under criminal law of the financial interests of the Communities and the prosecution of infringements of the provisions of the said Treaties’, COM (1976) 418 O.J. C 222.

89 On the development of EU Criminal Law, see e.g. Miettinen, S., Criminal Law and Policy in the European Union (2013), pp. 58-95.

90 Treaty on European Union, 7 February 1992, consolidated version O.J. 2002, C 325/1.

91 Miettinen, S., supra note 89, p. 23.

92 Klip, A., European Criminal Law: An Integrative Approach (2016), p. 20.

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in respect of the effective protection of the EU’s financial interests. The study was conducted by a group of academics and resulted in the Corpus Juris, which inter alia proposed the establishment of a new body responsible for the investigation and prosecution of crimes against the EU’s financial interests.⁹³

However, the Commission’s proposal to include provisions on the establishment of a European Public Prosecutor in the EU Treaty in 2000 failed.⁹⁴ Only one year later in 2001 the Commissions made another attempt and put forward a Green Paper on the criminal law protection of the financial interests of the Community and the establishment of a European Prosecutor.⁹⁵ Once again nothing concrete resulted from it. The discussion on the European Public Prosecutor nevertheless proceeded and eventually resulted in the inclusion of the EPPO into the draft Constitutional Treaty.⁹⁶ While the draft of the Constitutional Treaty never succeeded, Article III-274 of that draft providing for the establishment of the EPPO, was copied into Article 86 TFEU. In addition, the latter provision also opened up the possibility to introducing the EPPO through enhanced cooperation among at least nine Member States.

Since the entry into force of the Lisbon Treaty, the EU has an explicit competence under Article 83 TFEU to adopt substantive harmonising criminal law measures. On this legal basis the EP and the Council recently adopted a directive on the fight against fraud to the Union’s financial interests which establishes minimum rules concerning the definition of criminal offences and sanctions.⁹⁷ The objective of that directive is to strengthen protection against criminal offences which affect the Union’s financial interests, such as fraud. However, it is still the Commission’s view that the actions taken so far, including inter alia the Directive on the fight against fraud and the establishment of the EU bodies involved in this fight, cannot fully ensure the functioning of the EU system to prevent and sanction fraud. There is a need for effective investigation and prosecution measures ensuring that the perpetrators of these crimes are actually

93 Delmas-Marty, M. and Vervaele. J. (eds.), The Implementation of the Corpus Juris in the Member States: penal provisions for the protection of european finances (2000), vol. I.

94Communication from the Commission, Additional Commission contribution to the Intergovernmental Conference on institutional reform: the Criminal Protection of the Community’s Financial Interests: A European Prosecutor, 29 September 2000, COM (2000) 608 final.

95 Green Paper on Criminal-Law Protection of the Financial Interests of the Community and the Establishment of a European Prosecutor, 11 December 2001, COM (2001) 715 final.

96 Treaty establishing a Constitution for Europe, 29 October 2004, O.J. C 310/01.

97 Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law, O.J. L 198/29.

Judicial Review of Procedural Acts of the European Public Prosecutor’s Office

Department of Law Spring Term 2020

Master’s Thesis in EU Law 30 ECTS