Category Archives: Procedural Law

New Directive on the Mergers of Public Limited Liability Companies

Directive 2011/35/EU concerning mergers of public limited liability companies has been published in the Official Journal. The directives sets rules for merger by acquisition, merger by formation of a new company, and other operations treated as mergers. The main objective of the directive is that the shareholders of merging companies be kept adequately informed.

Why Reforming Schengen is Not That Easy

France and Italy have signaled their desire to push for a reform of the Schengen framework for border control. One of the most important proposals is the procedural right to temporarily re-establish border controls between two countries. The European Commission is scheduled to present its own plans for amending the Schengen rules next week (4 May).

The Schengen border security legal framework is now part of the EU acquis. Any revision of the Schengen framework goes through a codecision procedure, where the European Parliament is a co-legislator with the Council (see art. 77, para. 2 TFEU). More, the Commission is the only body that can propose legislation on border checks, asylum and immigration (see a contrario art. 76 TFEU). Whatever France and Italy propose is of no relevance; the Member States do not have a right of initiative on these matters.

On all these accounts I am quite skeptical that Italy and France will succeed to push an amendment of the Schengen framework that seriously undermines the principles of the current regime. Any significant policy overhaul must be accompanied by a careful impact assessment and discussions not only among governments of Member States, but also with relevant stakeholders. It will take more than a bilateral summit to do that.

New Directive on Human Trafficking

The new Directive 2011/36/EU on preventing and combating trafficking in human beings and protecting its victims has been published in the Official Journal. The directive repeals the old Council Framework Decision 2002/629/JHA.

The directive adopts a broader concept of what should be considered trafficking in human beings and includes additional forms of exploitation. These include forced begging, exploitation of criminal activities, etc.

Is OLAF Authorized to Search EP Premises?

The simple answer is yes. Some justification follows.

First – some background of the case. The English newspaper Sunday Times has conducted an investigation, claiming that several MEPs were willing to take money in exchange for filing legislative amendments. Three MEPs were named – the Austrian centre-right Ernst Strasser, the Slovenian Socialist Zoran Thaler and the Romanian Socialist Adrian Severin. OLAF decided to open a formal investigation immediately and OLAF investigators attempted to collect evidence from the offices of the concerned MEPs located at the premises of the European Parliament in Brussels on Tuesday 22 March. However, the EP authorities refused to give access to these offices and claimed these would be secured by EP security personnel.

The EP clearly erred here. As OLAF has pointed out in its statement, its competences are outlined in art. 325 TFEU, and Regulation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF). Art. 1, para. 3 of Regulation (EC) No 1073/1999 specifically points out that OLAF shall conduct administrative investigations within the institutions for the purpose of fighting fraud, corruption and any other illegal activity affecting the financial interests of the EU. Art. 4, para. 2 clearly says that OLAF has the right of immediate and unannounced access to any information held by the institutions, bodies, offices and agencies, and to their premises. In addition, Annex XII to the Rules of Procedure of the EP the services and any official or servant of the EP is required to cooperate fully with the Office’s agents and to lend any assistance required to the investigation.

Now, someone might claim that by providing the documents in question, the EP might have cooperated in good faith without granting physical access to OLAF. This is not true, however. First, the purpose of immediate and unannounced access to information and documents is to prevent any opportunity for tampering the evidence. Second, the EP officials are not trained and do not have legal authorization to open locked premises, document containers, etc.

Political Compromise on New Comitology Regime

This is a very special day. The European Parliament has confirmed today the agreement with the Council on the new regulation on implementing powers for the Commission. This new regulation, will enter into force on 1st March and will automatically replace the existing system.

As in the past, the mechanism of control foreseen by the regulation is based on “comitology” – i.e. committees composed by representatives of Member States to which the Commission submits draft implementing measures – but, contrary to the present system, there can be no intervention from the Council as an appeal body. In some specific cases there might be a need to go to an “appeal committee”, but this is just a “normal” committee, chaired by the Commission, albeit of a higher level of representation. It provides the opportunity to reconsider the draft measures or to r make changes if need be.

The regulation foresees that implementing measures in policy areas such as trade defence measures will be included in the normal regime. Until now these measures were submitted to special procedures in which the Council frequently had the last word.

The new procedures also give more flexibility to the Commission and a greater political responsibility. In the absence of a qualified majority against or in favour of a Commission draft implementing act, the Commission will have the choice between adopting the act or reviewing it.

I am currently writing an article on the new legal regime of comitology, which will be available on this blog somewhere in February 2011.

The Wikileaks Cablegate – a Legal Backgrounder

Apart from the understandable hype surrounding the Wikileaks Cablegate, there are many legal questions that need clarification. I have tried here to summarize available sources and comments on the different aspects of the Cablegate.

1. Wikileaks Cablegate as a violation of espionage laws

Australian and US law enforcement agencies are reportedly studying the possibility of criminal charges against WikiLeaks founder Julian Assange, including charges under the Espionage Act, for publishing classified US diplomatic cables. The US Espionage Act was adopted in 1917. There are some opinions that the Espionage Act is generally viewed as outdated in light of more modern case law on the First Amendment, also shown in the federal government loss in the Pentagon Papers case. Others say that if the US really believes that the Espionage Act is a constitutional law that ought to be enforced then they’d better be prepared to go after the New York Times, Le Monde, Der Spiegel, and El Pais, all of which published the classified cables after being granted early access and were part of a clear conspiracy with Wikileaks to break the Espionage Act.

U.S. Congressman Peter King has also vowed for the US to declare Wikileaks a terrorist organization, which would presumably allow the US to use anti-terrorist legislation, possibly Title VIII of the Patriot Act. There, however, provisions allow prosecuting the person who gained unauthorized access and caused subsequent damage to a protected computer, which could only be applied to the person who stole the cables in the first place.

In conclusion, it is possible for the US government to use the Espionage Act, but it will face many hurdles due to its potential unconstitutionality.

2. Julian Assange’s Rape Conviction

INTERPOL has made public the Red Notice, or international wanted persons alert, for WikiLeaks founder Julian Assange at the request of Swedish authorities who want to question him in connection with a number of sexual offences. However, INTERPOL cannot demand that any member country arrests the subject of a Red Notice.

Assange’s lawyer, Mark Stephens has previously said that the allegations were made after Assange had consensual sex with two women who turned on him after becoming aware of each other’s relationships. Sweden’s Supreme Court was reviewing Assange’s appeal of the order to detain him. Court official Kerstin Norman, who is handling the case, said a decision is expected late Wednesday or Thursday.

There is reportedly also a European arrest warrant for Assange by the Swedish authorities, but it was incorrectly filled out.

3. Amazon Hosting for Wikileaks

Amazon Web Services has stopped hosting Wikileaks. This was done for unspecified reasons, but as Larry Dignan points out, Amazon states clearly in its terms of service that it can host you as well as terminate an agreement at will.

4. Death Threats to Julian Assange

Certain individuals in the US have publicly called for the murder of Julian Assange. In US case law advocacy of violence can only be prohibited when there is clear incitement of an imminent violent act. I am not an expert in US law, but it appears to me that these threats constitute a violation. However, it is not clear whether someone in the US or Australia would want to prosecute those threats. In Bulgaria or in the European Union in general these threats would be prosecuted.

5. Conclusion

Three developments should be observed:

  • if and how the US decides to prosecute Wikileaks and/or the newspapers that leaked the cables, and
  • how the criminal case against Julian Assange is processed by the Swedish prosecution and courts, and
  • whether some legal action is taken against individuals that incite the killing of Mr. Assange.

 

 

Commission Wins on Salaries Dispute with Council

This may not be hot news, but raises some questions. The ECJ has partially annulled Council Regulation (EU, Euratom) 1296/2009 on the adjustment of the remuneration and pensions of officials of the European Union.

In November 2009, the Commission proposed a salary increase of 3.7%. On 23 December 2009, the Council decided on an increase, in the contested regulation. It considered that the Commission’s proposal for adjusting salaries should be modified to take account of the economic and financial crisis. It fixed new salary levels on the basis of an increase of 1.85%.

The Commission brought an action for annulment against the provisions of the regulation setting out those amounts. It argued that the Staff Regulations establish an automatic method for adjusting salaries that leaves no margin of discretion to the Council that would allow it to reject the Commission’s proposal.

The ECJ has concluded that the Council has no margin of discretion allowing it to decide upon a salary adjustment different to that proposed by the Commission on the basis of the criteria laid down in Article 3 of Annex XI of the Staff Regulations alone, except under the special procedure provided for by Article 10 of that Annex.

Interestingly, the ECJ has held that in order to avoid creating a legal vacuum in the EU salary regime, the effects of those articles are maintained until such time as a new regulation, adopted by the Council, enters into force.

Here are the questions:

What was the Council Legal Service actually thinking? Did they explain to Council members that they were about to make a blatant violation of relevant EU law? If yes, did the Council adopt the regulation anyway to score a political point against the Commission?

 

 

New Insights on Possible Treaty Amendments

The idea for an amendment of the founding Treaties in order to accommodate a permanent bail-out mechanism is on the table after the last European Council meeting. Now there are new developments and opinions that touch on this subject.

CEPS has published three reports that contemplate on possible Treaty amendments – a post-mortem on the European Council, an overview of revision procedures under the Lisbon Treaty, and a more specific overview of the practicalities of the Lisbon Treaty revision(s). All documents suggest that a limited revision of the Treaties is achievable. The more specific proposals are:

  • amending art. 122 TFEU, and including a reference to financial stability (plus a permanent European Financial Stability Facility – EFSF, created on an intergovernmental basis), or
  • adding a reference to art. 143 TFEU – the legal basis to extend the existing EU support mechanism to non-euro area member countries in art. 136 TFEU – the special Treaty article for the euro area countries.

The authors note that the viability of both approaches will depend on the interpretation whether such an amendment would affect the no-bailout clause in Art. 125 TFEU, thereby changing the nature of monetary union and creating a fiscal transfer union (in German Transferunion). Additionally, it is arguable whether such an amendment would constitute a change to the “essential scope and objectives” of the EU, thus requiring an ordinary revision procedure.

Meanwhile some Dutch parties are trying to force a preliminary referendum on any pending Lisbon Treaty amendments.

It appears that any proposal for Treaty amendment must be considered very carefully in the light of possible ratification, as well as taking into account the no-bailout clause of art. 125 TFEU. My personal conviction is that any institutionalisation of a permanent bailout mechanism is legally troublesome, and in any case should be subject to ordinary revision procedure. But first of all we need to see the amendments in print before speculating on their legal essence.

New Directive on Combating Late Payment in Commercial Transactions

The European Parliament has approved the final text of a new directive on combating late payment in commercial transactions. As a general rule, the deadline for both public and private sectors to pay a bill for goods or services will now be 30 days. For business-to-business payments the general deadline is 30 days unless otherwise stated in the contract. If both parties agree, it is possible to go up to 60 days. The payment period may be extended beyond 60 days only if “expressly agreed” by the creditor and the debtor in the contract and provided that it is not “grossly unfair” to the creditor.

For public-to-business payments the general deadline is 30 days. If the two parties wish to extend the payment period, this has to be “expressly agreed” and “objectively justified in the light of the particular nature or features of the contract”. Member states may choose a payment deadline of up to 60 days for public entities providing healthcare.

Strategy for the Implementation of the Charter of Fundamental Rights

The European Commission has adopted its Strategy for the effective implementation of the Charter of Fundamental Rights by the European Union. The main points:

1. Guaranteeing that the EU is beyond reproach in upholding fundamental rights

All proposals for EU legislation must respect the Charter. On the basis of a fundamental rights “check list,” the Commission services will identify which fundamental rights could be affected by a proposal and assess systematically the impact on these rights of each envisaged policy option.

The Commission will launch an inter-institutional dialogue to determine methods for dealing with amendments that raise questions of compatibility with fundamental rights.

The Commission will use all tools available, including infringement proceedings when necessary, to ensure compliance with the Charter in the implementation of EU law.

2. Improving information for citizens

Citizens will have access to information about legal remedies in all Member States through the Commission’s new e-Justice portal in 2011.

The Commission will explain when it can and cannot intervene on fundamental rights complaints where these are outside the scope of EU competence.

3. Monitoring progress

The Commission will publish an Annual Report on the application of the Charter. The report will monitor progress in the areas where the EU has powers to act: showing how the Charter has been taken into account in concrete cases (such as when new legislation is proposed).