The EU’s common rules on detention: how serious are Member States about protecting fundamental rights?

By Debbie Sayers, Legal Research Consultant, http://interalia.org.uk

On 5 February 2014, the Commission published a damning report on its ‘common rules on detention’ confirming that, at best, only 18 of 28 Member States have implemented any of the instruments. This is a quantitative not qualitative study: there has been no evaluation of how well these rules have been applied or whether they have improved the lot of individuals.

The poor level of implementation of these very basic commitments to improve the rights of detainees is of concern. Every year, tens of thousands of EU citizens are prosecuted for alleged crimes or convicted in another Member State of the EU yet there is significant evidence of unacceptable disparity in standards of detention within Europe. Fair Trials International (FTI) has long noted the existence of lengthy pre-trial detention and the inconsistent availability of alternatives to detention such as electronic tagging as well as “overcrowding, violence, poor healthcare and lack of facilities”. Likewise, the former Council of Europe Commissioner on Human Rights, Thomas Hammarberg, has described the use of pre-trial detention as “virtually systematic in a number of European countries" with rates of 42% in Italy.The structural and systemic problem of overcrowding in the Italian prison system led to a pilot judgment by the ECtHR in 2013 which condemned Italy for inhuman and degrading treatment in overcrowded jails. The evidence of the need for action is clear.

Mutual recognition and a lack of mutual trust

To start at the beginning, the term ‘common detention rules’ relates to three mutual recognition Framework Decisions (FD) agreed by the EU to be implemented by 2011 and 2012 by all Member States. They form part of a broader judicial cooperation agenda which has focussed on the mutual recognition of judicial decisions and the approximation of law. The European Arrest Warrant [EAW] is the most notorious of these instruments.

Mutual recognition allows judicial decisions to ‘move’ freely between EU Member States based on the presumed existence of “mutual trust” between them. The approach has been predominantly prosecutorial, but, as experience with the operation of the EAW has demonstrated the fallacy of assumptions about trust, there have been increased efforts to establish specific individual safeguards to support the mutual recognition agenda. In 2009, the Council of the EU set out a ‘Roadmap’ for harmonizing some criminal procedural standards to “enhance citizens' confidence that the European Union and its Member States will protect and guarantee their rights”. To date, three Directives (the Directiveon the right to interpretation and translation in criminal proceedings; the Directiveon the right to information in criminal proceedings; and the Directiveon the right of access to a lawyer) have been agreed with a further packagerecently proposed.

However, the EU had already taken action in respect of EU citizens who were non-residents in a Member State where they face criminal proceedings as it was recognised that, too often, they may end up in detention where residents may not. This can occur pre-trial, because of the fear of flight, and also at sentence, where non-custodial sentences may be considered inappropriate. The three instruments agreed were:

·         The Framework Decision on the Transfer of Prisoners to be implemented by 5.12.11. It allows a Member State to execute a prison sentence issued by another Member State against a person who remains in the first Member State. It also establishes a system for transferring convicted prisoners back to the Member State of nationality or habitual residence (or to another Member State with which they have close ties) to serve their prison sentence.

·         The Framework Decision on probation and alternative sanctions to be implemented by 6.12.11.  It applies to many alternatives to custody and to measures facilitating early release (e.g. an obligation not to enter certain localities, to carry out community service or instructions relating to residence or training or professional activities). The probation decision or other alternative sanction can be executed in another Member State, as long as the person consents.

·         The European Supervision Order (ESO) to be implemented by 1.12.12. It enables a non-custodial supervision (e.g. an obligation to remain at a specified place or an obligation to report at specified times to a specific authority) to be transferred from the Member State where non-resident is suspected of having committed the offence to Member State where they are normally resident., thus, hopefully avoiding pre-trial detention.

In relation to detention conditions, a Commission Green Paper on Detention was also published in 2011 acknowledging that “excessively long periods of pre-trial detention are detrimental to the individual, can prejudice judicial cooperation between the member states and do not represent the values for which the European Union stands”. Pragmatically, mutual trust is undermined by inconsistent and unfair detention arrangements and the EU needs to address this.

“Fewer than half of EU Member States have implemented common rules on detention”

It is in this context that the Commission published its report on the implementation of these ‘common rules on detention’. Rates of compliance are poor:

·         FD on the Transfer of Prisoners: only 18 Member States have implemented it. Austria, Belgium, Czech Republic, Denmark, Finland, France, Croatia, Hungary, Italy, Luxembourg, Latvia, Malta, Netherlands, Poland, Romania, Slovenia, Slovakia and the UK. Only Denmark, Finland, Italy, Luxembourg and the UK had implemented it by the deadline. This is the only instrument the UK has implemented.

·         FD on probation and alternative sanctions: only 14 Member States have implemented it - Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, Croatia, Hungary, Latvia, Netherlands, Poland, Romania, Slovenia, and Slovakia.  Only Denmark and Finland had implemented it by the deadline.

·         European Supervision Order: only 12 Member States have implemented it - Austria, Czech Republic, Denmark, Finland, Croatia, Hungary, Latvia, Netherlands, Poland, Romania, Slovenia, Slovakia. Only Denmark, Finland, Latvia and Poland had implemented it by the deadline.

In relation to the implementation legislation itself, the Commission has now highlighted some key concerns arising from its analysis which will need to be addressed by all Member States:

·         Member States must set out an effective procedure to give a role to “the person concerned in the transfer process” under the various FDs.

·         The principle of mutual trust is to be respected by achieving “the right balance” between respect for the sentence originally imposed and the legal traditions of Member States.

·         Member States must properly implement the duty to provide information about the sentence to avoid any differences discouraging use of the instruments.

·         The Commission’s view is that adding additional grounds for refusal and making them mandatory “seem[s] to be both contrary to the letter and spirit of the Framework Decisions”.

·         The time limits are to be respected and should be exceeded only in exceptional circumstances”.

·         Those provisions which link the FD and the EAW should be implemented. For example, Article 21 (which allows for the return of a person by EAW if s/he has not complied with an ESO) have not properly been implemented. The Commission describes this as ‘regrettable’ as Article 21 “would be very useful to allow persons awaiting trial for relatively minor offences to go home”

·         The Commission rules the declarations made by four Member States (Ireland, Malta, Netherlands and Poland) in relation to transitional provisions on the transfer of prisoners invalid because they were made after the adoption of the FD.

Those who have transposed the instruments are still requested “to review and align their national implementation legislation with the provisions of the Framework Decisions”.

Enforcing compliance and creating trust

The three FDs are interconnected and linked to the EAW. In its press release, the Commission confirms pragmatically that

“The rules [are].. an essential element of a common European area of justice ….[and]… important tools to further social rehabilitation of prisoners and reduce the use of pre-trial detention. Their proper implementation is crucial.”

They also have “the potential to reduce prison overcrowding and reduce prison budgets”.

There is an evident need for swift action to address these failures. From the perspective of the ‘suspect’, the non-adoption of the ESO by many Member States is concerning as it is a crucial ‘flanking measure’ for the EAW. FTI has long campaigned on the issue of bail in the EU, producing clear evidence of discrimination in the operation of decision-making (e.g. see the House of Lords report in 2007 on the European Supervision Order). The excessive and unfair use of detention for the non-resident suspect also undermines the right to a fair trial because it affects the suspect’s exercise of fair trial rights as well as the presumption of innocence. These fundamental rights are enshrined in Article 5 and 6 ECHR and Articles 6, 47 and 48 of the EU Charter of Fundamental Rights and merit active protection in practice. From the prosecution perspective too, cooperation cannot be made effective with such partial transposition.

 So what can be done? Infringement action against Member States is not possible until 1 December 2014 because of Article 10 of Protocol 36, which provides for a five-year waiting period before the Commission can sue Member States for non-implementation of EU ‘third pillar’ (criminal law and policing measures) adopted before the entry into force of the Treaty of Lisbon, such as these FDs. Whether the Commission will take such action at that point remains to be seen.

However, there is a broader point at stake: will these laws be used even if the FDs are implemented domestically and will they make any difference? The Commission’s reportnotes that the “limited figures available show that the Transfer of Prisoners is already used whereas no transfers have yet taken place under Probation and Alternative Sanctions and European Supervision Order”. We need to explore fully the reasons for the lack of commitment to these instruments. Is it a reflection of the prosecutorial drive behind the mutual recognition agenda or the absence of commitment to human rights protection? Is it the result of a lack of understanding (see FTI’s report) or weaknesses in training? Is it connected to resources, occupational cultures or a reluctance to cooperate? Or is it a mixture of all these factors? Over a hundred years ago, Roscoe Pound concluded that legislation which has not been the product of preliminary study of the conditions to which it was meant to apply will not respond accurately to social needs.Consequently, the process of making effective laws must go beyond statistics and data gathering to consider the human impact of its implementation.


Barnard & Peers: chapter 25

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Family Reunion for EU citizens living in their own Member State: Clarifying the Surinder Singh and Carpenter judgments

Chiara Berneri, Lecturer at BPP Law School

When can an EU citizen who lives in his or her own Member State claim a right under EU law to be joined by his or her family members? The Court of Justice of the European Union (CJEU) finally has a chance to clarify its judgments in Surinder Singh and Carpenter, concerning respectively family reunion for EU citizens who move to another Member State and then return to their home State (‘returnees’), and family reunion for EU citizens who provide services in another Member State.

Facts of the cases

On the 12th of December 2013 Advocate-General (A.G.) Sharpston delivered her opinion on the Joined Cases of O and S (Cases C-456/12 and C-457/12). The first case is about two separate families: O and B. In 2007 O (a third-country national) and sponsor O (ie the Dutch citizen related to O) took residence in Spain. A residence document valid until September 2014 attests that. In reality, two months after arriving in Spain, in 2007, sponsor O returned to the Netherlands because she could not find a job there. However, since her departure, she continuously flew to Spain over weekends and enjoyed services there. Since 1 July 2010 O has been registered as residing with sponsor O in the Netherlands. However, his application for a document showing lawful residence was refused.

B is a Moroccan national who lived in the Netherlands, since 2002, with sponsor B (a Dutch citizen). After being sentenced to two months’ imprisonment for using a false passport he invoked the ‘Belgian route’ well-known to Dutch immigration lawyers, moving to Belgium where sponsor B rented out a flat for them. Since sponsor B was not able to find a job in Belgium she moved back to the Netherlands but came back every week end to spend time with B. The couple got married in Morocco in 2007. In 2009 the Netherlands lifted the declaration of undesirability against B. The couple moved to the Netherlands. B applied for a document showing his lawful residence but it was refused.

The second case is also about two separate families: S and G. S is a Ukrainian national. Her son-in-law, sponsor S, has worked since 2002 for an employer established in the Netherlands but spends 30% of his time preparing and making business trips to Belgium, to which he goes at least once a week. S looks after her son-in-law’s child. S applied for a document certifying lawful residence in the Netherlands but it was refused. 

G is a Peruvian national. She married sponsor G in Peru. Sponsor G lives in the Netherlands but works for a Belgian employer and he travels daily to Belgium. G’s application for a document certifying lawful residence in the Netherlands was rejected.

In each of these cases each third country national has family ties with a Dutch national who is his/her sponsor. The Dutch Council of State is asking whether the movement exercised by the Dutch sponsors suffices to establish that EU law applies and to generate a derived right of residence for the third country national family members.

The Opinion

In her preliminary remarks A.G. Sharpston clarifies the two points on which the opinion focuses. First of all, the aim of this opinion is to find out whether denying lawful residence to these third country nationals would amount to a restriction of the right of their sponsors to move and reside freely within the territory of the Member States. Secondly, in this opinion she focuses on trying to outline the parameters within which derived residence rights for third country national family members arise in the home Member State of an EU citizen who has exercised free movement rights without necessarily exercising full residence rights in another Member State.

On the first point –why derived rights of residence exist- the A.G. starts from a historical development. She points out that the concept that third-country national family members of EU citizens should enjoy derived rights of residency was developed in the context of the economic freedom of movement. However, with the introduction of the concept of EU citizenship the exercise of the right of free movement became independent from the economic freedom of movement and from the pursuit of economic activity.

Unlike previously, according to A.G. Sharpston, under Directive 2004/38 EC (the ‘citizens’ Directive’), the existence of a derived right of residence no longer depends on showing the possible effect on the EU citizen of denying family members residence: rights are granted automatically to a select group of family members. A.G. Sharpston then states that since derived rights of residence only exist where these are necessary to ensure that the EU citizens can exercise their free movement and residence rights effectively, the questions that the Court should ask itself would be a) whether the EU citizen has exercised or is exercising such rights; b) whether denying their family members residence would restrict such rights.

A.G. Sharpston starts engaging with these questions by stating that this case is different from Zambrano, McCarthy and Dereci because in this case all the applicants exercised rights of free movement and/or residence to another Member State. With regard to these cases, and in particular Dereci, A.G. Sharpston points out that the Court seems to suggest that there are three separate bases under EU law according to which derivative family rights can be granted: a) the right to respect for private and family life (Art. 7 of the Charter); b) the right of free movement and residence of EU citizens (Art. 21 TFEU); c) the denial of the genuine enjoyment of the substance of the rights conferred on an EU citizen (Art. 20 TFEU).

However, according to her, there is a different way of approaching the matter. As a matter of fact, the Charter can apply only when EU law applies. Therefore, the right to respect for private and family rights is not an independent way through which residence family rights can be granted to third country national family members but it applies only when the given situation concerning EU citizens falls within the scope of EU law. So it is necessary for the Court to give clear guidance to national courts as to the circumstances in which an EU right, read according to the Charter, is triggered. On the basis of these guidelines given by the Court it is up to the national court to find out whether the EU right, applied to the facts of the case, precludes the application of the national measure.

After this preamble A.G. Sharpston argues that the citizens’ Directive cannot be applied in these cases. In particular, she points out that, in general, EU citizens can move (within the EU) in three directions: a) between two Member States of which they are not nationals; b) from their home Member State to another Member State; c) from another Member State back to their home Member State (ie returnees). The citizens’ Directive (Art. 3(1)) just protects situations a and b while the circumstances at stake seem to fall under the third situation.

Since the citizens’ Directive cannot apply, she suggests then that the position of the applicants should be considered under the EU treaties and, in particular, under Art. 21 TFEU. In her view, pursuant to Art. 21, Member States should not restrict the rights of EU citizens to move and reside freely within the territory of the EU and the same principle applies to EU citizens who marry third country nationals and seek to exercise free movement. In fact, if a couple is precluded from living together in the Member State of which the EU citizen is a national they either will be forced not to live together or will be obliged to move elsewhere outside the European Union or in another Member State.

In the first hypothesis the EU citizen will be stripped of his/her EU citizenship rights as that status has just limited importance outside the EU. In the second case the measure results in more movement. However, while facilitation of free movement is an objective of the EU, imposing free movement is not. According to this understanding, the home Member State cannot treat its own nationals returning to reside on its territory less favourably than the treatment that they enjoyed in the host Member State. Because of the first movement, the rights under EU law are “passported” and remain with the EU citizen on his or her return to his or her home Member State (referring to the prior CJEU case-law, namely Eind and Surinder Singh).

A.G. Sharpston then moves on to face the second issue in the case: trying to define the concept of residence. After pointing out that no secondary and primary measures provide a clear definition of what residence is, she states that she does not think that residence requires necessarily the constant physical presence in the territory of a single Member State, or that when a EU citizen has taken up residence in another Member State that has to be the only place of residence. In fact, provided that the test for establishing residence is complied with in one Member State, it should not matter that the EU citizen might keep some form of residence elsewhere and this rule seems to be implied also in the citizens’ Directive.

She does not agree with the idea that the EU citizen must have resided three months in the host Member State before he/she can claim the derived rights of family reunification for his/her third country national family member as a returnee. Although the length of an EU citizen’s stay in another Member State is a relevant criterion to define residence it cannot be the only absolute threshold that defines whether he/she has or has not exercised rights of residence and can therefore be joined by his her family members.

What about the position of EU citizens who move to a Member State without necessarily taking up residence there? Here, the opinion builds on the case of Carpenter where the A.G. points out that neither Singh nor Eind cover this scenario. However, in Carpenter derived rights of residence in the Member State of nationality and residence can be available to third country EU national family members who have exercised single market freedoms to another Member State. In particular, in that case, providing services in other Member States was sufficient for a British publisher to invoke the right under EU law to be joined by his wife.

A.G Sharpston points out that the reasoning in Carpenter, regarding the provision of services, is relevant both a) for the active exercise of rights of movement without residence as a worker and b) to the passive exercise of the right to receive services. On the first point she finds that the exercise of the right of free movement in connection with an activity by an EU citizen may trigger the necessity to be joined by his/her family members in his/her home Member State. There is no difference between an EU citizen who lives in his or her home Member State and works for an employer based in another Member State, and an EU citizen who lives in his or her home Member State, works for an employer based in the same State but has to travel to other Member States for work. In both cases in fact the worker is obliged to cross the border to keep his/her job. The question then is whether or not a restriction on the presence of the third country national in the home Member State is going to prevent the worker crossing the border in order to perform his/her job. Whether the third country national can claim such a right depends on some variables: a) the level of family connection with the EU citizen; b) the EU citizen’s exercise of the right of free movement; c) the causal link between the residence of the third country national and the EU citizen’s exercise of rights of free movement.

With regards to the right to receive services, Sharpston points out that any EU citizen who moves to another Member State in order to enjoy a service there falls within the scope of application of EU law. However, although moving to another Member State in order to receive services is definitely an exercise of an economic freedom, it is usually not the type of activity which enables EU citizens to support or make them dependent on their family members. However, she does not rule out that there could be some exceptional circumstances, for example in case of illness, in which such dependency can be triggered.

Finally, A.G. Sharpston contemplates the hypothesis of a EU citizen moving to another Member State just in order to exercise the right of family reunification with his/her family member and finds that a national measure that imposes movement restricts the choice to decide whether to move or not to move and, therefore, is contrary to Art. 21(1) TFEU.

After having explained the conditions that govern the exercise of derived rights of residence, A.G. Sharpston concludes by pointing out what determines the derived rights of residence of O, B, S and G. In the case of O, she finds that sponsor O should not be treated less favourably when she returns to work and live in the Netherlands and, therefore, O would have under EU law a right to lawful residence in the Netherlands. In the case of B, the applicant does not seem to fall either under the citizens’ Directive or under the citizenship provisions of the Treaty. However, B could still claim a derived right of residence in the Netherlands provided that the decision to join sponsor B was taken in the exercise of their right to a family life.

In the case of S, sponsor S exercises his right of free movement in connection with an economic activity and there seems a family connection (S is a dependent family member in the ascending line within the meaning of the citizens’ Directive, and sponsor S materially supports S). With regard to the presence of a causal link the referring Court should examine whether denying residence to S would cause sponsor S to seek alternative employment that would not involve the exercise of right of free movement or cause him to move with his family, including S, to another Member State.In the case of G, sponsor G is a frontier worker and married with G in Peru. As spouses, they must be considered to be dependant economically and emotionally. Denying G residence in the Netherlands might force him to move somewhere else in the EU. That would consist in a restriction of his choice of being a frontier worker, an economic freedom guaranteed by Art. 45 TFEU.

Comments

The opinion of A.G. Sharpston is extremely interesting and relevant as it seeks to clarify the circumstances in which the third country national family member of an EU citizen who is residing in his home Member State but who is exercising his rights of free movement can claim derived rights of residence in that home Member State under EU law. Normally, family reunion for EU citizens living in their own Member State is wholly subject to national law, leaving it open for the Member State in question (notably the UK and Netherlands) to lay down much stricter conditions for family reunion. So the ability to rely on EU law can be crucial for the families concerned.

The Advocate-General makes a good effort to define what amounts to the right of residence. Her interesting finding is that EU citizens are not necessarily required to have one place of residence. This means that EU citizens can still reside in their Member State of nationality but have their centre of interest in another Member State. As long as they cross the border they are entitled to claim derived rights for their third country national family members in their Member State of origin provided that they fulfil the requirement of being family members and there is a causal link between the residence of the third country national and the EU citizen’s exercise of rights of free movement. Building upon Carpenter, EU citizens are also entitled to claim derived rights for their third country national family members in their home Member State in case the exercise of the right of free movement was sufficiently connected to the position of the family members. Nevertheless, the Advocate-General finds that the simple move to another Member State in order to receive services, even though that situation falls within the scope of EU law, cannot usually trigger derived family reunification rights under EU law.

A.G. Sharpston has found a legally grounded solution to circumstances that, apparently, seem to fall within the area of national law. Her approach, if adopted by the CJEU, will be able to expand the protection of the right to family life of EU citizens who still officially reside in their own Member State. Hopefully the Court will not ignore her clear analysis or, at least, will take the opportunity to give a structured guidance to solve these and similar cases.


Barnard & Peers: chapter 13

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The EU’s Data Retention Directive: Fighting Back against mass surveillance in the EU’s Court of Justice

Steve Peers

I’m writing this post on ‘The Day We Fight Back’ against mass surveillance. So it seems a suitable day to comment (a bit belatedly) on the Advocate-General’s opinion from last December on the validity of the EU’s data retention Directive (Directive 2006/24; Cases C-293/12 Digital Rights and C-594/12 Seitlinger).

Overall context

These cases, referred from the Irish and Austrian courts, present the Court of Justice of the EU (CJEU) with its best chance yet to deliver an iconic judgment relating to the EU’s Charter of Fundamental Rights. The Test-Achats judgment of 2011, concerning the invalidity of EU rules permitting insurance discrimination between men and women, just didn’t amount to such a judgment, resulting as it did in higher car insurance rates for women drivers without much analysis of the key issues by the CJEU.

This time around, the CJEU is aware that: the constitutional courts of Germany and Romania have criticised the Directive on fundamental rights grounds; the European Court of Human Rights is dubious about mass surveillance (cf the S and Marper judgment); and there is considerable public concern across the EU about mass surveillance, in particular in the current context of revelations about spying by American security agencies.

As for the Directive itself, it requires Member States to compel telecom and Internet access providers to keep records of all phone calls, Internet use and mobile phone location data for at least six months, with no real fixed upper limit, so the police can access those records for the purposes of investigations into serious crime. (There is a nominal two-year upper limit for keeping this data, but Member States can keep in place any higher limits that they already applied, or ask the Commission for the power to set new higher limits in place if they didn’t already apply them). Other EU laws giving Member States an option to require that telecom providers keep such data for other reasons were unaffected. Overall, as I pointed out at the time, ‘Member States could insist on (or at least request) the retention of any type of data for any type of security purpose for any period at all’.

Furthermore, the Directive set no safeguards as regards the use of that data which industry was required to retain. This was because the Directive had to limit itself to regulation of the telecoms industry, due to its ‘internal market’ legal base (upheld by the CJEU in Case C-301/06 Ireland v EP and Council), so it couldn’t regulate what police forces did with the data when they got it.

While it is possible that this mass surveillance may assist in the prosecution of crime or the prevention of terrorism, that does not automatically excuse it. No doubt there is less crime in totalitarian states, but democratic states need to strike a balance between liberty and security. According to the long-standing case law of the European Court of Human Rights, targeted surveillance is only acceptable if the law in question is very precise and sets out detailed safeguards for the persons concerned. This must surely apply a fortiori to laws such as this Directive, which provide for mass surveillance – if indeed such surveillance can ever be justified at all.

The Advocate-General’s opinion

The opinion takes as its starting point (correctly) that the data retention Directive interferes with the rights to privacy and data protection (Articles 7 and 8 of the Charter). So the focus of the case is whether such interference can be justified. Article 52(1) of the Charter allows restriction of Charter rights where those restrictions are provided for by law, respect the essence of the rights, and are proportionate to protecting a public interest recognised by EU law or the rights of others. Here there is clearly a public interest, so the Advocate-General examines the other facets of the test.

He concludes that the EU Directive is not ‘prescribed by law’, within the meaning of that phrase set out in the jurisprudence of the European Court of Human Rights. The crucial problem here is the quality of the law set out in the Directive. In particular, it is not sufficiently precise as regards the limitation on Charter rights, and it does not set out guarantees for use of the data.

This raises an issue specific to the nature of the relationship between the EU and its Member States. Since Directives must be applied by Member States in their national law, it could potentially be left to the Member States to provide for such precise details concerning the interference with Charter rights when they transpose the Directive. It would be possible for the CJEU to clarify further what such rules must address, as it has in a line of case law concerning interference with privacy rights justified by the protection of intellectual property (ie downloads of music, et al, in breach of copyright).

The Advocate-General rejects that possibility here – and quite rightly. The difference is that the data retention Directive requires the Member States to interfere with Charter rights, whereas the legislation at issue in the other cases merely permits them to do so. In such a case the EU must surely bear a significant part of the responsibility – if not the whole responsibility – for satisfying the ‘quality of law’ test. This would be consistent with the case law of the European Court of Human Rights in the Bosphorus Airways v Ireland case, and the draft EU accession agreement for the ECHR, which both distinguish between cases where the EU requires its Member States to act, and where it simply permits them to do so.

Yet on this point, there is another complication arising from the nature of EU law. Before the entry into force of the Treaty of Lisbon, the legal order of the Union was divided into three so-called ‘pillars’. While the internal market was part of the first pillar (Community law), police cooperation was part of the third pillar (policing and criminal law). So a Directive based on the internal market could not address issues relating to police cooperation, and this Directive does not. That was precisely why the CJEU rejected the Irish government’s challenge to the Directive in 2009.

To address this problem, the Advocate-General suggests that the EU should at least have agreed some guarantees informally. But this would not be good enough, as non-binding guarantees would not satisfy the ‘quality of law’ test. The EU could, however, have adopted a third pillar ‘Framework Decision’ setting out such guarantees before the Treaty of Lisbon; and now it can set them out in the form of a Directive.

Finally, the Advocate-General concludes that the Directive is also disproportionate, since there is not a good enough reason for the possibly unlimited period of retaining personal data. Yet it must be pointed out that Member States’ power to retain existing national laws allowing for longer periods of data retention is built into the internal market rules of the Treaty. To disable the application of those provisions, the Court of Justice would have to rule that the Charter took priority over the Treaty (ie, other EU primary law).

Conclusions

These cases give the opportunity to the CJEU to add a lot of flesh to the bones of the rules concerning interference with Charter rights – in particular the application of the ‘quality of law’ test, which the CJEU has not referred to at all before. The difficulties created by the previous division of EU law into pillars, and the particular rules set out in the internal market provisions of the Treaties, must also be addressed. Yet in light of the overall context of these cases, the established jurisprudence of the European Court of Human Rights, and the strong opinion of the Advocate-General, it would simply be shocking if the Court of Justice did not either rule the Directive invalid, or at the very least lay down detailed rules which Member States have to follow when applying it.


Barnard & Peers: chapter 9

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The Swiss vote against free movement of people and the implications for the UK's membership of the EU

Steve Peers

There are two implications of the narrow vote in the Swiss referendum to renegotiate treaties with the EU in order to permit a quota on labour migration? First, and most immediately, the vote will affect Swiss relations with the EU. Secondly, the vote foreshadows key aspects of the debate concerning the UK’s relationship with the EU, and the possible renegotiation of EU membership.

The Swiss implications

The details of what the Swiss voted for have been incisively analysed in the Kent EU rights blog post, here: http://blogs.kent.ac.uk/eu-rights-clinic/

So what are the broader implications? There is now a domestic constitutional obligation for the Swiss government to renegotiate its free movement treaty with the EU, so that labour quotas are allowed. Of course, such a renegotiation is technically possible, but will be politically difficult, since the EU insisted upon this treaty as a quid pro quo as part of a broader package that included treaties on six other issues, such as public purchasing and aviation access. The EU can, and probably will, insist on renegotiation of some of these other treaties as a consequence.

The EU should not be criticised if it demands a renegotiation of other treaties, as it had always insisted upon this link, which is set out expressly in all the treaties concerned. The Swiss public was also always aware of it. Indeed, undoubtedly the link with the other treaties explains why the Swiss public has voted for the free movement agreement in three previous referenda (once to approve it initially, and twice to extend it to new Member States). And it is clear that the supporters of a ‘no’ vote in the new referendum made the link clear to the voting public. We must conclude that the narrow majority who voted ‘yes’ thought that this would be a price worth paying.

After all, any agreement contains an element of quid pro quo. For instance, employees might like to be paid even if they don’t work, while employers might prefer it if employees worked without pay. Obviously both sides compromise; and a ‘pick-and-choose’ approach will have consequences. If employees start working for 3 days a week instead of 5, they won’t still receive full-time pay.

The implications for the UK

When re-negotiating with Switzerland, at least some Member States will be thinking about the UK. While it used to be the case that the cost of the UK’s net contribution to the EU was the main cause for Eurosceptics, that has been joined first by doubts about the EU’s democratic legitimacy and second by concerns about large-scale immigration from new Member States. Could the UK hold a referendum like Switzerland’s?

Legally speaking, no. The UK does not have a specific free movement agreement with the EU (linked to other treaties) like Switzerland does. Rather, free movement is part and parcel of our membership of the EU. If we want to be rid of it, we either have to renegotiate our entire membership or leave the EU. As a matter of domestic law, we could hold a referendum or otherwise change the free movement rules, and breach EU law while remaining a Member. But that course would be dishonest and disreputable. If the majority of the British people don’t like a key aspect of our arrangement with the EU, we should either leave or try to change that arrangement, while being aware of the consequences of doing so.

So we could ask to renegotiate our membership as far as free movement of people is concerned (among other things, of course). This is legally possible, but politically even more difficult than the Swiss case. Indeed, as I suggested already, the negotiations with Switzerland could serve as a proxy for the possible future negotiation with the UK – much as any EU negotiations concerning an independent Scotland would be a proxy for many Member States’ concerns about their separatist movements. Spanish politicians look at Edinburgh, and think of Barcelona.

It seems likely, then, that we are about to witness a ‘dry run’ for a possible British renegotiation process. This will provide a useful laboratory to test the theory that renegotiating the UK’s EU membership, or the UK leaving the EU, would only have (in Eurosceptics’ view) positive consequences for the UK.  


Barnard & Peers: Chapter 24

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Clash of the Judicial Titans: Will the Euro survive?

Steve Peers

The German Federal Constitutional Court (BVerfG) has finally sent a reference to the Court of Justice of the European Union (CJEU). Moreover, it has chosen a crucially important issue to ask questions about. This issue is the validity of the Outright Monetary Transactions (OMT) policy of the European Central Bank (ECB) – the very policy which is credited with keeping the EU’s single currency alive, perhaps single-handedly. If either of these courts rules that this policy is invalid, the very existence of the EU’s single currency could be called into question.

 In a nutshell, the OMT constitutes a promise made by the ECB, back in the summer of 2012, that it would if necessary purchase the government bonds of troubled eurozone Member States on the secondary market (ie, from banks and other financial institutions which own those bonds). The purpose of the policy was to shore up confidence as regards the specific economies in question, and therefore in the single currency in general. In return, among other things, the countries concerned would have to sign up to austerity programmes. While the OMT has never actually been triggered, the mere possibility of its use appears to have calmed financial markets’ doubts about the survival of the single currency (and about the continued use of the euro by all the EU Member States which currently use it) considerably. The BVerfG’s decision to send any question to the CJEU is itself historic. It comes soon after the first references to the Court of Justice from the Spanish Constitutional Court (Melloni) and the French Constitutional Court (Case C-168/13 F, which concerned Jeremy Forrest, the British schoolteacher who ran off with one of his pupils). So all the big beasts among Europe’s constitutional courts have now engaged with the CJEU.

 However, it is clear that the BVerfG at least still does not really regard the CJEU as the king of the jungle. It asserts its intention to find that the OMT programme breaches the German constitution, depending on what the CJEU has to say. On the other hand, the CJEU has always asserted that it is the sole judge of whether an EU act is valid (going back to the judgment in Foto-Frost). Can the single currency survive this conflict between constitutional principles?

The legal issues 

The BVerfG (along with many others, particularly in Germany) doubts that the OMT programme is legal, because it constitutes economic policy (rather than monetary policy) and because it amounts to the ECB buying up eurozone governments’ debt, which is not permitted under the Treaties which the EU is founded up.

Let’s have a closer look at these arguments. First of all, is the OMT programme an economic policy? While the EU has established an economic and monetary union (EMU) among eurozone Member States, and economic and monetary policies are obviously closely related, there is nonetheless a sharp legal difference between the two policies as a matter of EU law. Monetary policy is an exclusive competence of the EU, as far as the eurozone Member States are concerned. Within the EU, the ECB is in charge of that policy.

On the other hand, economic policy is primarily a matter for Member States; the Union (primarily the Council) only coordinates such policies.While this division may not make much economic sense, any significant shift of powers over economic policy to the EU would have been impossible to agree politically, and have raised great(er) doubts about the EU’s legitimacy.

In its Pringle judgment of 2012, the CJEU ruled that the treaty establishing the European Stability Mechanism (ESM), which establishes a system for eurozone Member States to lend financial support to each other, was an act of economic policy, not monetary policy. But the CJEU did not define what ‘monetary policy’ consisted of.

The BVerfG doubts that the OMT programme is valid because it constitutes an independent economic policy of the ECB. But as the BVerfG itself notes, the Treaties provide (in Art. 127(1) TFEU) that the European System of Central Banks (which the ECB forms a key part of) ‘shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union’ set out in Art. 3 TEU. Arguably the OMT programme is exactly that: support for the economic policies of Member States (including the ESM) as regards the EU’s objective of establishing and maintaining a single currency. As long as the economic conditionality linked to the OMT programme is no different from, or at least consistent with, the economic conditionality linked to the ESM and the EU rules on economic governance (ie, control of excessive deficits), then the OMT programme cannot be said to constitute a separate economic policy of the ECB.

Secondly, does the OMT programme circumvent the ban on buying government debt? Article 123 TFEU specifies that the ECB and national central banks cannot ‘purchase directly’ the ‘debt instruments’ of eurozone Member States’ governments. Obviously, the word ‘directly’ is significant; if the authors of the Treaties had wanted to ban the ECB from ever owning a government bond issued by a eurozone Member State, they would have left that word out. So it can hardly be doubted that the ECB can purchase such bonds from financial institutions, at least on a modest and non-systematic basis. 

But the BVerfG is concerned about the underlying purpose of the ban on direct purchases of government bonds: to prevent governments from being ‘propped up’ by the central bank. If all government bonds issued by Eurozone Member States were systematically snapped up by the ECB from the financial institutions which had initially bought them, the ECB would arguably be circumventing the ban on direct purchases.

The best approach to this objection is to interpret the ECB’s powers in light of its obligation to contribute to achieving the EU’s objectives, in particular the development of the single currency. In the ordinary course of events, purchasing significant numbers of eurozone government bonds directly on the secondary market might not have a strong link to the existence of the single currency. But in the current circumstances, it does. So this justifies a flexible approach to the limits which might otherwise apply to the ECB’s actions – provided that such purchases are on secondary markets, and are necessary to ensure the single currency’s survival.

The judicial politics 

The BVerfG states clearly what it expects the CJEU to do: to interpret the OMT programme in accordance with its specified constraints, otherwise it will rule that the programme is in breach of the German constitution. But the BVerfG has warned the CJEU before, and then not gone through with its threats. It has come to resemble an angry parent issuing increasingly dire threats to a naughty child – and then not following through on them. The naughty child soon realises that the threats won’t be carried out, and adapts her (mis)behaviour accordingly. 

And there is another factor at play here. When the BVerfG was asked if Germany could ratify (for instance) the Lisbon Treaty, there was a clear route to ensure that its judgment was carried out. Very simply, it could have ordered the German government not to ratify that Treaty. Similarly, in cases concerning the EU’s banana market legislation, or the interpretation of EU age discrimination rules, it could have ordered the German administration and courts not to apply the rules concerned. But it is less clear exactly what it can do to stop the actions of the ECB, which presumably would not consider itself bound by a BVerfG decision. The BVerfG refers to requiring the German government to act (unless there is a retroactive amendment of the German constitution), but exactly how that will stop the application of the OMT programme is unclear. So our naughty child in Luxembourg – and her naughty brother in Frankfurt – must know that their ostensibly strict parent probably can’t carry out this particular threat.

In that case, how will they behave? It might be expected that many of the concerns raised by the BVerfG can be addressed, but not all. In particular, it is hard to see how the OMT programme could achieve its objectives if the ECB does not have the power to buy significant number of government bonds on secondary markets. Possibly the CJEU will allow such purchases to continue, subject to certain conditions – which the BVerfG may decide are strict enough to meet its concerns. Judging from the overall tone of the latter court’s ruling, it is looking to find a way to uphold the validity of the OMT programme despite its fundamental objections.


Barnard & Peers: chapter 19

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Jailing the bankers: the new EU Directive on criminal penalties for market abuse

Steve Peers

It must come as a relief to EU politicians to find that there is still one group in society which is much less popular than they are: the bankers. Indeed, bankers’ unpopularity has only grown as the austerity caused by the global financial crisis has an ever-greater impact on ordinary people in many Member States.  No politician ever lost an election because he or she demonised unpopular groups of persons, and so the EU institutions have duly agreed on legislation which would lead to jail terms for particular types of bad behaviour by bankers.

Context of the Directive

The new Directive was approved by the European Parliament today, and will likely be formally adopted by the Council in March. It will apply in parallel alongside a Regulation on market abuse, which requires administrative sanctions to be applied for certain behaviour by bankers. Member States will have to apply the Directive by two years after its adoption.

The ‘legal base’ for the Directive is Article 83(2) of the TFEU, which allows the EU to adopt legislation setting out ‘minimum rules’ for the ‘definition of criminal offences and sanctions’ if this ‘proves essential to ensure the effective implementation of a Union policy in an area which has been subject to harmonisation measures’. Clearly this area has been subject to harmonisation measures, and the preamble to the new Directive sets out the reasons why, in the EU legislature’s view, it was ‘essential’ to adopt an EU measure concerning criminal liability on this issue. Basically, the Council and European Parliament were convinced by information that Member States imposed weak and diverse sanctions to enforce the previous EU legislation on this subject (Directive 2003/6, on market abuse).

Article 83(2) requires the criminal law rules to be adopted by the same legislative method as was used to adopt the main legislation that the criminal law Directive is supplementing. In this case, the market abuse Regulation was adopted on the basis of the EU’s internal market powers, ie the ordinary legislative procedure. So the market abuse criminal law Directive was adopted by the same method. This meant that the European Parliament could have a significant influence on the text, as detailed below.

Substance of the Directive

The Directive requires Member States to criminalise three types of activity, as further defined in detail therein: insider dealing; unlawful disclosure of inside information; and market manipulation. The first of these offences also extends to recommending or inducing another person to engage in insider trading. Member States must also criminalise inciting, aiding and abetting and attempting most of these offences. In each case criminalisation is only required where the acts were committed intentionally and ‘in serious cases’. The European Parliament had also wanted to oblige Member States to criminalise reckless acts which entailed market manipulation, but the Council resisted this. Also, the Council insisted on limiting Member States’ obligations to ‘serious cases’. The preamble to the Directive lists certain factors which should indicate whether the case is ‘serious’, such as the impact on market integrity and the profit derived or loss avoided.

On the other hand, the European Parliament successfully insisted that specific rules for criminal penalties for natural persons appear in the Directive. Member States must ensure that bankers guilty of insider dealing or market manipulation could potentially be subject to a maximum penalty of at least four years, and those guilty of unlawful disclosure of inside information could potentially be subject to a maximum penalty of at least two years.  The Directive also includes standard rules on liability for legal persons, but this need not be criminal liability, in deference to those Member States which do not impose criminal liability on legal persons.

The European Parliament also insisted that the Directive include rules on criminal jurisdiction. Member States must criminalise the relevant behaviour where an act was committed on a Member State’s territory, or where the act was committed by a Member State’s citizen outside its territory, at least if the act was criminal in the country where it was committed.  Furthermore, the European Parliament convinced the Council to add a provision on training judges, prosecutors et al about the relevant crimes. However, the European Parliament did not convince the Council to add provisions on investigative techniques and media coverage of the relevant crimes.

Comments

This is the first time that the EU has used the legal powers conferred by Article 83(2) TFEU, which was added to the Treaties by the Treaty of Lisbon. Previously, it has used only Article 83(1) TFEU as regards substantive criminal law. Article 83(1), also added to the Treaties by the Treaty of Lisbon, lists ten crimes which are deemed to have such sufficient cross-border impact that the EU can legislate upon them. The EU has used this power to adopt legislation on cyber-crime, sexual offences against children and trafficking in persons, and negotiations on legislation concerning counterfeiting currency are underway. The Commission has also suggested criminal law rules on fraud against the EU budget on the basis of Article 325, a legal base dealing with that specific issue, but the Council (and probably the European Parliament, when it defines its position) believe that Article 83(2) will again have to be used in order to adopt that legislation.

Prior to the Treaty of Lisbon, the EU’s Court of Justice, in a controversial line of case law, ruled that European Community law (as it was then) could be used to adopt criminal law measures closely related to the environment (Cases C-176/03 and C-440/05). The EU then adopted Directives to that end (Directive 2008/99 and Directive 2009/123), as well as a Directive imposing criminal liability for employing illegal immigrants (Directive 2009/52). But the CJEU ruled that prior to the Treaty of Lisbon, such European Community measures could not specify criminal penalties. In practice, those measures did not contain jurisdiction rules either. So the market abuse Directive breaks new ground on these issues.

The Directive also breaks new ground by imposing criminal liability in a new area. All of the other post-Lisbon substantive criminal law Directives or proposals (referred to above) simply replace pre-Lisbon measures on the same subjects, but there was no pre-Lisbon measure imposing criminal liability for market abuse. The market abuse Directive is also particularly detailed when compared to the EU’s other substantive criminal law measures, no doubt because it is enmeshed within the broader EU legislative framework imposing highly detailed regulation on the financial sector.
Will the Directive be effective at curbing bad behaviour by bankers? First of all, as with any crime, perpetrators have to be caught and punished, and the behaviour concerned is technically complex.

Secondly, it must be borne in mind that the two-year and four-year sentences referred to in the Directive must merely be on the books; there is no obligation to impose them in any particular situation. So even if bankers commit the activities criminalised by the Directive, and are caught and convicted, their sentences might be lighter (or indeed heavier: Member States can set a higher potential maximum penalty if they wish). And it is hard to imagine that many bankers will spend much jail time inside the unpleasant institutions where (say) burglars and muggers are incarcerated – even if the bankers’ crimes were far more lucrative and had a much bigger impact upon the economy.

More profoundly, the United Kingdom, the home of the largest proportion of the EU’s financial industry, has opted out of this Directive – although the UK is subject to the parallel Regulation (Denmark is in the same situation). And even if a French national (for instance) commits the acts criminalised by the Directive while working in the City of London, it must be recalled that Member States are only obliged to criminalise the acts concerned if committed by their citizens in a State which also criminalises that activity. So it is up to the UK to decide whether to criminalise some or all of the acts referred to in the Directive, and only if it does so are other Member States obliged to criminalise the acts of their citizens when committed in the UK.

Barnard & Peers: chapter 25

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Should EU citizens who move retain the right to vote in their Member State of origin?

Steve Peers

The European Commission has recently produced a communication and a recommendation on the loss of EU citizens' right to vote when they move between Member States. According to the Commission, while Member States' national identity entails the right to decide who makes up a national electorate, Member States must consider whether their policies of disenfranchisement lead to a loss of the right to political participation. Many such citizens retain an interest in the politics of their country of origin, it is no longer difficult to keep in touch with political developments at home, and there is an ongoing trend toward allowing expatriates to retain their voting rights.

Five Member States disenfranchise their citizens who move abroad. Denmark, Ireland, Malta and Cyprus disenfranchise their citizens if they leave the country between 6 months and 2 years, while the UK disenfranchises its citizens after 15 years abroad. The European Court of Human Rights has recently upheld the British restrictions as compatible with the right to free elections, as set out in the First Protocol to the ECHR (Shindler v UK, 2013). Moreover, those who move to another Member State do not obtain the right to vote there in general elections (except in the UK, for Irish and Commonwealth citizens). They only have the right to vote (pursuant to EU law) in local and European Parliament elections.

The Commission believes that this disenfranchisement is: out of keeping with the premise of EU citizenship (ie, adding to national citizenship rights, not taking them away); could lead to complications regarding the exercise of free movement rights; and leads to a gap in political participation. In particular, the Commission points out that while all EU citizens resident in the EU qualifying to vote have the opportunity to vote for the European Parliament, those who move and are disenfranchised cannot influence the composition of the Council.  (One could add that they cannot influence the make-up of the European Council either).

Two possible options for solving this problem are rejected: obtaining the host State's citizenship would be at odds with the transnational and complex nature of EU citizenship, and mutual recognition of voting rights.

Therefore the Commission suggests a number of short-term solutions within the EU framework. In particular, Member States should allow citizens to remain enfranchised if they move between Member States, at least if they express an interest in doing so. And in the longer term, the idea of enfranchisement in the host country (including for regional elections) should be further encouraged.

These principles and suggestions (except for the longer-term ideas) are then set out in the preamble and main text of the Commission Recommendation. 

Comments

The Commission hints that Member States' disenfranchisement policies might infringe EU free movement and citizenship law. While the jurisprudence of the Court of Justice of the EU in this area can be hard to predict (I did not expect either of the Rottmann or Ruiz Zambrano rulings, for instance), at first sight it appears that this interpretation cannot be correct.  The Treaties lay out the rights of EU citizens, including the right to vote and stand for election in another Member State's local elections, or in voting for the European Parliament. Then Article 25 TFEU sets out the possibility for adding new rights for EU citizens, subject to a unanimous vote in the Council and national ratification.  The obvious implication is that further political rights for EU citizens are subject to the adoption of such further measures by the Council.

Would it be a good idea to adopt such a measure? While political citizenship is obviously a key element of citizenship as traditionally defined, and the particular context of the EU suggests that voting rights should not be lost due to exercising free movement rights, and as regards the make-up of the Council (as co-legislator), it does not necessarily follow that those rights should be retained in the country of origin. It seems more sensible that they be transferred to the country of residence, given that the citizen has voting rights for the European Parliament there, along with local voting rights. Moreover, the main thrust of EU citizenship for those who move between Member States is about their equal treatment and integration into the host State, not the retention of links with their home State. EU citizens who have moved between Member States have the right to return to their home State without being prejudiced by their time away: but it is a different matter to say that they should be treated as if they had never left while they are still abroad. While it is true to say (as the Commission does) that expatriates retain some interest in taxation decisions in their country of origin, they are nonetheless likely to be paying most or all of their taxes in their host State.

Having said that, Member States obviously prefer retaining voting rights for their own citizens who move away, instead of extending them to foreigners who move to that country. The Commission's suggestion is therefore going with the flow, rather than spitting in the wind. So it has more chance of being successful than the more logical alternative.

Oddly, the Commission only briefly mentions the issue of regional elections, and does not mention referendums at all. On the first point, it would make even less sense to allow expatriates to continue voting in such elections, since those elections are more inherently territorial. On the second point (and there are of course regional and local referendums too), both expatriates and the citizens of other EU Member States who have exercised free movement rights have an obvious special interest in voting in national referendums on EU Treaty amendments, and (possibly soon in the UK) on whether the relevant Member State should remain part of the EU. One might expect that British expatriates living in other EU Member States, and citizens of other Member States living in the UK, would be particularly likely to vote to stay in the EU. Indeed, perhaps their votes could swing a close election - although there will always be some turkeys who vote for Christmas.


Barnard & Peers: chapter 13

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