Akerberg and Melloni: what the ECJ said, did and may have left open

John Morijn

In the first of two posts on the CJEU’s important recent judgments in Akerberg and Melloni, John considers the Akerberg case and in particular its interpretation of article 51(1) of the Charter of Fundamental Rights.

In dealing with Akerberg and Melloni in a coordinated way, the CJEU’s Grand Chamber took a conscious first step towards developing a general theory on how to apply the EU Charter of Fundamental Rights (CFR). First, it engaged with a long running debate about the Charter’s scope of application with regard to Member States’ actions, interpreting the article 51(1) CFR wording of “only when implementing Union law”. Second,  it interpreted article 53 CFR which states that “nothing in the CFR shall be interpreted as restricting or adversely affecting human rights … as recognised by [principally] the ECHR and by the Member States’ constitutions”.

Union law insiders will probably recognise an expansionist streak in the ECJ’s approach in the first case, Akerberg, to equate “implementing Union law” to “acting within its scope”. For (national) human rights law practioners less familiar with Union law’s subtleties and simply wondering when the now binding Charter and its sometimes higher human rights standards apply, the ECJ may have done little more than re-word the dilemma in Union law Babylonian. In the second case, Melloni, in an effort to protect its understanding of Union law, the ECJ turned the wording and rationale of article 53 CFR completely on its head, practically positioning the CFR as a maximum rather than a minimum standard of human rights protection. Both cases seem to leave room for interpretation, however, allowing details of the general theory to be ironed out in future cases. But perhaps the main message of 26 February 2013 is that the ECJ left no doubts about the institution in charge of any such future ironings out: itself.

Akerberg was about a Swedish fisherman. The Swedish tax authorities accused him of incorrectly reporting his income, impacting inter alia on the assessment of Value Added Tax (VAT) due. He was given a fine for tax offences, part of which was a VAT offence. At a later stage the Public Prosecutor also commenced criminal proceedings against the fisherman for tax evasion relating to the same year. In the context of the latter proceedings, the Swedish referring court  wanted to know whether the duplication in admininstrative and criminal proceedings was problematic in the light of article 50 CFR (ne bis in idem; otherwise known as ‘double jeopardy’). A number of Member States intervened, as well as the  European Commission, to argue that on these facts the Member State could not be reasonably viewed as “implementing Union law” . Also the Advocate General opined that on the facts a connection with Union law was too far removed. I will focus the discussion here on the (prior) question of applicability of the Charter, disregarding the specific questions relating to article 50 CFR.

The dilemma for the Court in deciding Akerberg was summarised very neatly as follows by Hancox in her post of June 2012 on the King’s Students Law Review Blog Series:

Prior to the Charter, “implementing” EU law referred to an ‘agency situation’: the EU confers a power onto a Member State to introduce EU secondary legislation into national law. Implementing was the giving of ‘hands and feet’ to EU law in order for it to become effective. This included the application or execution of a regulation, the transposition of a directive, and the application of a directive through an executive act … The Charter has called into question this established meaning of implementing EU law. This is due to the complex interplay between the Charter and the Explanations relating to the Charter which are to be given ‘due regard.’ Article 51(1) of the Charter states that fundamental rights are binding on Member States “only when they are implementing Union law.” This would place a clear limit on the scope of EU fundamental rights, if it was not for the Explanations. These state that “it follows unambiguously from the case-law of the Court of Justice” that Member States are bound by fundamental rights “when they act within the scope of EU law” [expanding the scenarios in which Member States need to respect EU fundamental rights to those in which they act ‘within the scope of Union law’ in the sense of acting or omitting to act in areas directly governed by obligations of primary Union law, or when Member States derogate from free movement rules as laid down in primary Union law, jm]. This introduces a difficult conflict between two alternatives. The first option is to ignore the explicit wording of the Charter and follow the Explanations, attributing to implementing EU law the meaning of ‘within the scope of EU law.’ This would dramatically alter the meaning of the concept. The second option is to rely on the express wording of the Charter and take this as a limit to the scope of fundamental rights.

Just how sensitive the topic has remained became evident in another way very recently. The European Ombudsman had to intervene in December last year to force the European Commission to release five internal Commission documents from 2007 (available here). The relate to how the Commission viewed the legal aspects of the options available in the light of the UK’s political wish to limit the Charter’s applicability to Member States’ actions (it is well known that this led to Protocol 30, which was sold as an opt-out, but not actually seen as such by the CJEU in NS – see here). This issue explicitly linked to the CFR applicability to Member States’actions, remains somewhat delicate, because the Czech Republic eventually made its acceptance of the Lisbon Treaty conditional on being able to be treated on the basis of Protocol 30  as well – something that will be settled formally with the Croatian accession to the EU.

Even in light of the past and future political delicacy of the matter, the Court in Akerberg went squarely for the first of the two options described by Hancox. Rather than seeing its menu as a stark choice between two options, it went for fusion cuisine – suggesting that there is a continuity between the Charter’s text and the Explanations referring to its own previous case-law. Here is the relevant passage of the CJEU’s judgment that will probably receive most of the attention (for brevity’s sake without all the mentioned case-law):

17. It is to be recalled in respect of those submissions that the Charter’s field of application so far as concerns action of the Member States is defined in Article 51(1) thereof, according to which the provisions of the Charter are addressed to the Member States only when they are implementing European Union law.

18. That article of the Charter thus confirms the Court’s case-law relating to the extent to which actions of the Member States must comply with the requirements flowing from the fundamental rights guaranteed in the legal order of the European Union.

19. The Court’s settled case-law indeed states, in essence, that the fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by European Union law, but not outside such situations. In this respect the Court has already observed that it has no power to examine the compatibility with the Charter of national legislation lying outside the scope of European Union law. On the other hand, if such legislation falls within the scope of European Union law, the Court, when requested to give a preliminary ruling, must provide all the guidance as to interpretation needed in order for the national court to determine whether that legislation is compatible with the fundamental rights the observance of which the Court ensures.

20. That definition of the field of application of the fundamental rights of the European Union is borne out by the explanations relating to Article 51 of 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. According to those explanations, ‘the requirement to respect fundamental rights defined in the context of the Union is only binding on the Member States when they act in the scope of Union law’.

21. Since the fundamental rights guaranteed by the Charter must therefore be complied with where national legislation falls within the scope of European Union law, situations cannot exist which are covered in that way by European Union law without those fundamental rights being applicable. The applicability of European Union law entails applicability of the fundamental rights guaranteed by the Charter.

22.Where, on the other hand, a legal situation does not come within the scope of European Union law, the Court does not have jurisdiction to rule on it and any provisions of the Charter relied upon cannot, of themselves, form the basis for such jurisdiction.

Against this background  the ECJ went on to point out that the penalties imposed upon the fisherman were connected “in part” to VAT (par. 24). It recalled that Member States on the basis of Council Directive 2006/112/EC on the common system of value added tax are under an obligation to arrange for effective measures to collect VAT (par. 25) because this relates to the financial interests of the European Union itself (par. 26). After all, the European Union’s own resources are partly based on revenue from VAT (par. 26) (see also here). According to the Court the fact that the national measures on the basis of which the  tax penalties were imposed did not actually refer to the the relevant Directive did not matter, since the overarching goal of these national measures corresponded to the goal of the directive: imposing effective penalties for conduct prejudicial to the financial interests of the EU (par. 28). Even if this link with the Directive and some underlying clauses of primary Union law was not made explicit in the application of the relevant measure, it was – said the Court – still “implementation of Union law” in the sense of article 51(1) CFR (par. 27).

Of course from one angle this can be read to suggest that the Court here reads article 51(1) CFR’s wording of “only when implementing Union law” as “any Member State action or inaction within the scope of Union law”. Quite when that is, will of course remain for the ECJ itself to decide. But considering that national measures need only be related “in part” to, for example, the content of any directive, and considering that such national measures need not even explicitly implement or transpose Union legislation as long its purpose or intention corresponds to those formulated in primary or secondary Union law, one could imagine it may become a sensible option for both national legislators and national courts to pre-emptively “Charter-proof” each and every national measure, including national constitutions (see more about that in part 2 of this post – about Melloni). This judicial reading doesn’t quite correspond to the political sensitivities leading to the convoluted instruction of the Masters of the Treaties on how to apply the CFR to Member States.

Still, much less sweeping readings of Akerberg are arguably possible too. The case could quite reasonably be construed in the light of, or reduced to, its very specific facts. We were here dealing with Member States’ specific role in gathering the EU’s own financial resources. A task so fundamental to EU membership, and so clearly defined in both primary and secondary Union law, that it goes without saying that it very clearly falls within the obligations of Member States. It is the primary agent-situation in which a Member State could find itself, and therefore one that could be easily framed as an implementing act in the narrow sense of the Court’s previous case-law. On this reading Akerberg was simply a way for the Court to table, as it has so often done, a grand theory in a straightforward case, await reactions on it, and then refine it in harder cases. On this reading there would be plenty of room to iron out the details of precisely when Member States are “only implementing Union law”.

Given the political minefield surrounding this issue, the solution chosen by the ECJ was quite brave at this point in time – no matter how one views the merits of its approach on the specifics of some scenarios (e.g. whether its approach to view situations where Member States derogate from Union law as within the purview of EU fundamental rights protection actually makes sense). Nonetheless, it should be pointed out that Akerberg is very much a judgment for Union law lawyers by Union law lawyers. It may, however, be helpful to think of the future already and look at Akerberg from a somewhat different perspective, that of a (national) human rights lawyer simply wanting to know how to apply a new legally binding tool.

Imagine a national constitutional court applying a (new) human rights document with (newly gained) constitutional status that is to bind specific entities on its territories “only when they are implementing a (pre-existing) specific set of norms.” Imagine that there was unclarity about when precisely that is, including for those who may only have become really interested in the “specific set of norms” because it has come to stand side-by-side with a human rights documents (i.e. human rights lawyers). So the court would be asked to clarify. In reply we would hear from it that the human rights document applies simply “in all situations governed by that specific set of norms, but not outside such situations”, that those situations relate only to matters “within the scope of the specific set of norms, and therefore not those that are not” and that the field of application of the human rights document is therefore to be understood as excluding situations “not covered by the specific set of norms” (see Akerberg par. 19 and 21 for terminology). We would probably feel there is a certain circularity (did I say circularity?) (remind me, did I already say circularity?) in this reasoning. We would perhaps suspect that the court avoided specifics on the question of applicability of the human rights document for reason of jealously guarding its prerogatives of (expansive) interpretation. We would also expect human rights lawyers to continue trying their luck with the new human rights document for the time to come, since you would never really know whether you would find yourself covered by/governed by/within the scope of of the pre-existing specific set of norms.

In other words, after Akerberg in which the ECJ said that it views the CFR’s article 51(1) wording as a continuation of its previous case-law, what it should do next is avoid the formulaic circular wordings and simply lay down, in one judgment, using the CFR’s own wording and without references to previous case-law, general rules about when Union law applies and when it does not, justifying each of these situations in some detail. This would correspond to the new reality that the CFR has become legally binding, including when it comes to specified Member States’ actions. In that way it could become crystal-clear to everybody, including those (national) practioners not so familiar with the specificities of Union law, what to actually look for in answering the question of when the CFR applies to Member States’ (in)actions. It would also respond to the true rationale behind the many instructions given by the Masters of the Treaties in applying the CFR, even if that may be something that Luxembourg will not like to hear: that the CFR should not be(come), or seen to be(come), a vehicle for expansion of Union competences, nor for any other form of judicial activism.

 John Morijn contributes in a personal capacity; the opinions expressed cannot in any way be attributed to the Dutch government.

One thought on “Akerberg and Melloni: what the ECJ said, did and may have left open

  1. Pingback: A Letter To My British Friends – Legally Opinionated

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