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Case solved: CJEU releases its final interpretation of ‘regulatory act’

Dr. Agne Limante

MA candidate in EU Law at King’s College London

 

This short note is an update to our earlier post Inuit and Microban: ECJ explains notion of ‘regulatory act’.

 

Yesterday, 3 October 2013, the Court of Justice of the European Union (CJEU) released its final judgment in the Inuit case[i] – a case which concerns the standing requirements in annulment actions and which is an appeal against the earlier General Court’s interpretation.[ii]

Under Article 263(4) of the Treaty on the Functioning of the European Union (TFEU), establishing the basis for annulment actions of private applicants, 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”. Up until now there was still a doubt as to what a “regulatory act” might include as no further reference could be found in the Treaties, no final decision of the Court of Justice existed and appeal from the General Court was pending.

Inuit was the first case where the CJEU was called to interpret the notion of ‘regulatory act’, a novelty introduced by the Lisbon Treaty. The case concerned the European Parliament and Council Regulation No. 1007/2009 on trade in seal products, which the applicants claimed to be a regulatory act. However, the General Court (order of 6 September 2011) was of the opposite opinion. It concluded that ‘regulatory act’ for the purposes of Article 263(4) TFEU must be understood as covering all acts of general application apart from legislative acts. It dismissed the action for annulment as it was lodged against regulation adopted through the legislative procedure.

Hoping, that the Court of Justice will decide to introduce a more flexible interpretation of ‘regulatory act’, Inuit Tapiriit Kanatami and other applicants brought an appeal against the order of the General Court. However, yesterday’s decision dashed all hope. The Court of Justice decided to follow Advocate’s General Kokott opinion (delivered on 17January 2013) and to stick to interpretation of ‘regulatory act’ presented by the General Court.

The Court firstly noted that it is apparent from the third limb of the Article 263(4) TFEU that its scope is more restricted than that of the concept of ‘acts’ used in the first and second limbs of the Article 263(4) TFEU, in respect of the characterisation of the other types of measures which natural and legal persons may seek to have annulled. Thus, according to the Court, ‘regulatory act’ cannot refer to all acts of general application but relates to a more restricted category of such acts. The Court of Justice supported the position of the General Court agreeing that legislative acts, which, although they may also be of general application, are not covered by the concept of ‘regulatory acts’, and, therefore, continue to be subject to more stringent admissibility rules (applicants must prove direct and individual concern).

Thus, it can now finally be stated that the case is solved and it is clear what types of acts are ‘regulatory acts’ and might be subject to less stringent standing rules. According to the jurisprudence of the CJEU, for an act to fall under the concept of ‘regulatory act’, it shall satisfy the following requirements:

–       It shall be an act of general application (not an individual act)

–       It shall be non-legislative. Whether an act is legislative or not is determined by the procedure which led to its adoption: legislative is an act adopted through legislative procedure (ordinary or special).

Considering such case law, the ‘floodgates’ were not opened and the possibilities for private applicants to challenge legislative acts remain extremely limited. On the other hand, the doors for challenging non-legislative acts after Lisbon Treaty became more open. Well, as one would say, you cannot get it all at once…


[i] Case C-583/11 P Inuit Tapiriit Kanatami and Others v European Parliament and Council of the European Union. [2013] ECR II-0000.

[ii] Case T-18/10 Inuit Tapiriit Kanatami and Others v European Parliament and Council of the European Union [2011] ECR I-00164.

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Case Comment: C-523/11 and C-585/11 Prinz and Seeberger – AG Sharpston strikes again

 

Re-posted from the Eutopia Law Blog

 

Adrienne Yong

PhD Candidate at King’s College London

 

Yet another chapter of the European citizenship saga sought clarification by AG Sharpston in the Prinz and Seeberger Opinion delivered last week on February 21, 2013. Concerning one of the most prevalent categories of citizens claiming rights under the Art 20 and 21 TFEU – students – Prinz and Seeberger discusses a classic situation that has pervaded the over 20 years of Union citizenship development. Effectively, AG Sharpston aims to explicate the notion of proportionality in citizenship, which has for years escaped valid clarification. She discusses the different strands of objectives of integration, with more substantial meaning than it would appear at first.

 

Facts

In Prinz, a German moved from Germany to Tunisia with her family for her father’s job, then returned years later for secondary school, subsequently deciding to attend university in Holland. She was granted funding from German authorities for her first year, but was rejected for the second as she failed to satisfy the ‘three-year rule’ residency requirement, which stated that a citizen had to be resident in Germany for three years prior to the start of their course.

In Seeberger, a German who attended school in Germany, then moved to Spain with his family for his father’s work in the middle of secondary school, completed his secondary education in Spain and after some time qualifying to university in Spain, sought a grant to fund his studies in Spain from the German authorities. This was denied again on the ‘three-year rule’.

Both argued that Art 20 and 21 TFEU were contravened for impeding free movement, and the Court of Justice of the European Union (CJEU) was asked to clarify whether this ‘three-year rule’ was contrary to EU law.

 

AG Opinion

In her Opinion, AG Sharpston sought to explicate her perspectives on the meaning and justification behind integration and proportionality, particularly referring to the justification behind residency requirements often being the protection of national resources. It is questioned by AG Sharpston whether the consistent invocation of the unreasonable burden reasoning requires reconsideration. Beginning by eliminating the provisions inapplicable in order to conclusively consider the effect of suitable criteria, she then delivers her insightful comments regarding justifications, proportionality and interpretation of the ‘three-year rule’.

Evidently, the three-year rule is a restriction. Germany thus submits two justification objectives, one under the economic rationale, the other socially related. She separates the two and considers the legitimacy and appropriateness of both restrictions in a detailed analysis of each objective’s interpretation.

It is evident that AG Sharpston is unconvinced that Member States should simply lay out economic objectives based on avoiding unreasonable burdens on the financial resources of Member States. This was discussed in Bidar and Morgan and Bucher. She believes it is apt for the CJEU to perhaps guide Member States as to what may constitute reasonable or unreasonable burdens, as this highly variable concept is subject to an element of potential exploitation on the part of the protectionist Member States. Suggested is a thorough analysis of whether the burden truly risks interfering with the balance of Member State resources to avoid invoking protectionism behind a veil of valid justification. She then continues to distinguish an economic objective from an integration objective, which brings into play the political elements of a proportionality assessment.

The interplay between integration and economics as objectives of justifications becomes a sticky situation, but ultimately AG Sharpston aims to clarify whether it suffices to consider integration an objective on its own. There is an inconsistency if integration objectives are cited to justify rendering an economic objective proportionate. This is because choosing to require a degree of integration simply to meet budgetary concerns actually ignores the notion of being integrated.

She goes onto state the ‘three-year rule’ is far too restrictive given it requires uninterrupted periods of residence immediately prior to education, and whilst there is no direct mention of nationality, the inherent connection a national has renders it a difficult factor to ignore when considering proportionality. This is particularly relevant here, as both claimants are German. She opines there are certainly less restrictive measures possible, though interestingly does not suggest any outwardly. Though the ‘three-year rule’ is transparent, efficient and legally certain – the rationales behind Germany’s choice of restriction – this does not translate to it being necessarily proportionate.

Under the social objective put forward by the Germans, solidarity is a feature. Ultimately, AG Sharpston considers that the ‘three-year rule’ has little to achieve by means of social objectives given that the link between requiring citizens to reside three years prior to education and them remaining after their studies is tenuous at best. Again legal certainty, transparency and efficiency did not outweigh proportionality.

AG Sharpston answers the CJEU’s question in the positive: Art 20 and 21 TFEU would preclude the ‘three-year rule’ from preventing the claimants from being granted the funding needed for education outside their own home States. Whilst a simple question in effect, AG Sharpston has managed to delve deeper into the meaning and notion of proportionality in terms of what Member States use as justifications, deconstructing their generic excuses of integrationist and economic objectives to uncover what their argument really insinuates and striking them down by use of the famous tool, proportionality.