Enforcement of Fines and Other Pecuniary Obligations Imposed by the ECB

1.2.1. Art. 299 TFEU: Regulatory Content and Purpose

When enforcing sanctions imposed by the ECB (i.e. fines, periodic penalty payments, administrative penalties and penalty interest), the following elements stemming from European law must be taken into account: Art. 299 (1) TFEU firstly provides that acts of the ECB which ‘impose a pecuniary obligation on persons other than States’ are enforceable. Secondly, it entrusts the issuance of the order of enforceability, which is limited to the examination of the authenticity of the title (Art. 299 (2) TFEU), and the enforcement itself to the MSs (Art. 299 (3) TFEU). Thirdly, it specifies the jurisdiction of the CJEU and the national courts to the effect that the CJEU shall have sole jurisdiction for a ‘suspension’ of the enforcement, whereas the national courts have jurisdiction for ‘complaints that enforcement is being carried out in an irregular manner’ (Art. 299 (4) TFEU). Art. 299 TFEU therefore contains provisions concerning the title, the order for the enforcement and the enforcement. Besides its obvious main objective of ensuring the effective enforcement of pecuniary obligations, the provision also aims at preventing the MSs/national authorities from interfering with the content and validity of the (European) legal act itself. Art. 299 TFEU therefore can be understood as an accompanying provision to the (sole) jurisdiction of the CJEU to review the legality of legislative acts of the ECB (Art. 19 (1) TEU; Art. 261, 263 TFEU). Concerning especially the order for the enforcement, the additional notion of adherence to national sovereignty can be identified.^[7]

1.2.2. Further Requirements Stemming from Union Law

Union law provides – beyond Art. 299 TFEU – for further requirements regarding the enforceability of the title, e. g. that the legal act must be final^[8] and decisive in terms of the obligation and the debtor.^[9] In this context formal legal force is not a prerequisite though (unless secondary law provides for a lex specialis as for example Art. 3 (8) Sanction-Reg^[10] does),^[11] and the decision does not have to be unconditional.^[12] Concerning the examination of authenticity, which is specified neither in Union law nor in most domestic legal systems, Art. 3 (1) eIDAS-Reg^[13] (in contrast to e. g. Art. 3 (1) (i) Succession-Law-Reg^[14]) could serve as a guide to close this gap. This would result in the examination of origin and integrity of the title, or precisely: whether the title (signature and content) originates from the ECB and whether it has been submitted in a complete and unaltered manner. Moreover, the first assessment by national authorities covers logical premises, i. e. elements that have to be ascertained in order to decide whether Art. 299 TFEU is applicable in the first place (e. g. concerning the availability of a translation or the jurisdiction of the authority called upon). Regarding both the procedure of the order for the enforcement and the enforcement, however, a révision au fond^[15], the ordre public^[16] or other reasons laid down in Art. 45, 46 Brussels Ibis such as proper notice, irreconcilability of decisions and human rights infringements (see also Art. 7 Framework Decision 2005/214/JHA)^[17] cannot be addressed on a national level; here the CJEU has to be called upon.^[18]

Apart from requirements enshrined in Art. 299 TFEU and secondary law, the MSs also have to safeguard general principles of Union law (i.e. principle of effectiveness, equivalence, proportionality, etc.) and fundamental rights within the enforcement proceedings. Concerning the latter, substantive rights (e. g. right to property, liberty and inviolability of the home) as well as procedural rights (e. g. Art. 47 CFR) may be interfered with. Against the background of the purposes of the enforcement procedure (fast and effective satisfaction of the creditor), fundamental rights of the debtor may be subject to a twofold limitation in the event of enforcement of ECB sanctions: firstly, (criminal) procedural safeguards are in general applicable due to the criminal character of the sanctions but, since they do not form part of the core area of criminal law, they do not have to be applied in their full rigour given that graduations are possible (see in detail regarding the justification of this assumption Part I, 3.2.3.2.2.). Secondly, the enforcement procedure constitutes a mere annex procedure sharing the legal nature of the main proceedings where not all procedural safeguards ought to be (re-)granted and if so, they may be limited in case there is a conflict with the purpose of the enforcement.

Concerning the distribution of competences, Art. 299 (2) TFEU makes it clear with regard to the first instance which authority should be competent to issue the order for the enforcement (= authority notified).^[19] However, concerning the competence within the ‘main’ enforcement procedure, Art. 299 (4) TFEU raises more questions than it answers. To resolve them, the better considerations speak for the assumption that Art. 299 (4) 1^st Sentence TFEU (jurisdiction of the CJEU to suspend proceedings) depends on main proceedings before the CJEU and that it is only a lex specialis with regard to interim measures enshrined in Arts. 278, 279 TFEU. Therefore, the same substantial criteria would be applicable as is the case for Arts. 278, 279 TFEU, namely: necessity (fumus boni iuris concerning the main proceedings), urgency and weighing up of interests.^[20] However, the analysis in Part I of the study has shown that there is no separate action for suspension before the CJEU (see in detail Part I, 2.4.2.2.2.). The remaining gaps in protection^[21] concerning not only but especially the suspension of enforcement proceedings must be closed, in particular in the light of the European multi-level constitutional order and the necessity to effectively interlink European and national legal protection (Art. 19 (1) TEU and Art. 47 CFR)^[22].^[23] It is suggested to distribute the competences to suspend (and discontinue) proceedings along the following grounds: If (indirectly) the grounds for actions/preliminary procedures before the CJEU were invoked, the latter would be responsible for suspension; whereas national authorities would have jurisdiction, firstly if enforcement/enforcement measures were carried out in an irregular manner and secondly, if the claim enshrined in the title had ceased to exist or was deferred.

2.2.1. Authorities Involved

In the light of efficient procedural management, it may first be examined which and how many authorities are involved in the process. With each additional authority involved, the process naturally slows down, and there is a risk of time delays and information gaps, which can be avoided through a one-stop-shop principle.

Against this background, it might be relevant how many (different) authorities must be called upon by the ECB:^[40] the survey showed that in only two of the MSs consulted (EE and EL) the same authority is responsible for the order for the enforcement and the enforcement and, in another two MSs (AT, EE), the law provides for a combination of the two procedural steps. In BG it is worth noting that the order for the enforcement is in general waived; in other MSs, by contrast, the order involves three authorities (e. g. the authenticity is verified by one Ministry, which sends it via another Ministry as intermediary to a court issuing the order, see Part I 2.4.2.1.). Concerning the further involvement of other authorities (in particular NCBs, NCAs) in the enforcement proceedings, no domestic provision was mentioned, which would go beyond the establishment of a purely general obligation to provide assistance to the ECB. In at least 15 MSs, authorities such as NCBs and NCAs are normally not involved.^[41]

A considerable amount of time and costs could be saved here in future should the order be waived altogether or (at least) by establishing a ‘one-stop shop’. It cannot be assumed that a mere concentration of responsibilities would reduce the legal protection of the undertakings or third parties. The order for the enforcement is, after all, a mere formality (Art. 299 (2) TFEU) which serves primarily to protect national sovereignty.^[42] It has to be noted, in this context, that even the aspect of sovereignty, which is more developed the more extensive the examination is, hardly comes into play due to the very strict limitation of the examination to an authenticity check (see Part I of the study, 2.3.1.2.).

2.2.2. Steps to be Taken

Furthermore, from an efficiency point of view, it might be of interest which concrete measures the creditor has to take for an enforcement. The more measures, such as e. g. a necessary translation or notarisation, stand between the determination of the content of the legal act to be enforced and its actual effectuation, the more time (and costs) the creditor will have to spend. Especially in enforcement proceedings, however, the time factor can be of great importance because, without a speedy procedure, the debtor has the possibility to conceal assets in the meantime.

In relation to the enforcement of ECB sanctions, emphasis should be given first to the examination of authenticity of the title governed by Art. 299 (2) TFEU (see Part I, 2.3.1.2.). The survey showed in this regard that, in the absence of corresponding provisions (at the European as well as national level), it is often unclear what the examination actually relates to and how it should be carried out. Where concrete provisions exist (e. g. in BG), they may generally be fulfilled by presenting the title in the original together with an accompanying translation. In none of the MSs surveyed are any additional formalities required of the creditor, such as, for example, a notarial deed. The practice thus complies with the strict case law of the CJEU.^[43]

Concerning the subsequent enforcement procedure, it should be stressed that the majority of the MSs consulted (AT, BE, DE, FR, IT, LV, MT, NL, PL, PT, SI, SK and principally also CZ and DK) provide that it is in general for the ECB as a creditor – and not the executing authority –^[44] to choose the appropriate enforcement measure (concerning the available measures, see next para.). Choosing the appropriate remedy inevitably entails additional effort in terms of asset localisation on the part of the ECB; however, if this is also the case for other creditors within the respective MS, it will have to be accepted de lege lata in the light of the MS’ procedural autonomy. From the undertakings point of view, it should be emphasised that the ECB (as the authority issuing the enforceable act and equally in its capacity as creditor) as well as the executing authority are subject to the principle of effet utile on the one hand and especially the CFR and the principle of proportionality under Union law on the other hand. Against this background, the difference between who is responsible for the choice of measure should have no impact on the undertaking’s rights stemming from Union law and they ought to be protected either way.^[45]

With a view to efficient enforcement measures, it may not only make a difference how many steps the creditor has to go through, but also which steps or measures are made available to him. An ongoing execution concerning a part of the income until the full amount of the claim is reached may be more inefficient than the immediate forced sale of a property. Conversely, in the case of credit institutions in particular, it will be relevant in practice whether claims can also be seized. The survey showed in view thereof that most MSs, apart from enforcement on movables^[46] and immovable property^[47], especially also provide for the enforcement on claims^[48]. In connection with the enforcement measures, it should also be noted that there is a lack of explicit provisions for the adoption of interim measures in some MSs.^[49] This may result in lacunae in the protection of the ECB as creditor, as the debtor may be able to hide or set aside assets. Against the background and especially the case law of the ECJ, it should therefore be pointed out that the obligation for national authorities to adopt interim measures may not arise from national law but rather from Union law.^[50] Despite the absence of express national rules, undertakings or credit institutions therefore cannot presume to be exempt from interim measures where there is a risk of concealment of assets.

2.2.3. Cost Bearing and Enforcement

In the context of an efficient enforcement of a legal act, it will also be relevant for the creditor what fees or other costs may incur concerning certain procedural steps and who will have to bear them (provisionally or ultimately) under which circumstances. In this context, the survey showed that costs^[51] of the procedure vary from one system to another: while in some MSs no fees are foreseen for the order for the enforcement (eg BE, LT, NL), in some MSs, in the case of issuance, these fees will mainly be borne by the undertaking.^[52] Only in LV does the ECB or the creditor have to pay them. With regard to the enforcement itself, the picture is more uniform; here it is usually the undertaking or debtor who ultimately has to bear the costs of the execution.^[53] This ‘principle of success’ or ‘loser pays principle’, which is also contained in Art. 14 IP-Rights-Directive, for example, is to be welcomed in terms of uniformity.

It is noteworthy that a large number of MSs have not made use of the option within the prepared questionnaire^[54] that the cost bearing of court fees of the enforcement proceedings depends on the granting of the motion or the success of the execution.^[55] It seems reasonable that the domestic legal system does not link the cost bearing to the success of enforcement; otherwise the ECB or creditor would also have to bear the costs, e. g. if the undertaking or debtor does not have sufficient assets. Regarding the dependence on the ‘approval of the motion’, it does not seem that reasonable: it may, however, be assumed that the MSs had the default case in mind, namely that the ECB application for enforcement is granted. Within this context, it is conceivable that the undertaking bears the costs since it was its unwillingness to pay that caused them initially. However, the bearing of costs by the undertaking will be problematic (in terms of fundamental rights and the rule of law) if the cost bearing rule also covers constellations where the motion of the ECB is not granted (e. g. because the ECB has turned to an authority that is not competent or has not submitted the issued order for the enforcement). Against this background, it has to be mentioned that the AT Constitutional Court has already considered a general granting/exclusion of reimbursement of costs if the enforced claim exceeds/falls below a certain amount and irrespective of the necessity for (appropriate) legal action to be contrary to the right to equality.^[56] Apart from that, concerning the bearing of lawyers’ fees and translation costs, the survey furthermore showed that, in AT, BE, BG, DE, EE, IT, LV, PL, PT, SI and SK, the rule on the bearing of costs (undertaking, ECB or depending on e. g. the approval of the motion) corresponds to the rule governing court fees.

With regard to the aspect of effectiveness, it might also be interesting whether and, if so how, procedural costs themselves are enforced. If the creditor has to initiate further proceedings, possibly even following different procedural rules, this can be an obstacle to efficient enforcement. In this context, the survey has revealed that costs arising from the main proceedings (annulment proceedings before the CJEU)^[57] may be enforced e. g. in AT, BE, (DK), FR, LV and SK in the same procedure as the monetary obligation of the ECB and according to the same procedural rules; in IT and SI, within a different proceeding but under the same procedural rules and, in BG, EE and PT, within a different proceeding and under different procedural rules. There is no doubt that the first group is also the most efficient alternative for the ECB or the creditor. However, also from the undertaking’s point of view, there is no apparent reason why a combination would affect its legal position or protection; it could rather also be in its interest. In the absence of harmonisation and due to the procedural autonomy of the MSs, all three alternatives must be accepted de lege lata though. With regard to the first two groups in particular, it should furthermore be noted that it could be advantageous for the ECB to wait until the annulment proceedings have been won before enforcement is initiated. Otherwise the ECB or the creditor might be exposed to claims for damages in the case of a premature execution.^[58]

2.2.4. Structure of the Proceedings

From the creditor’s point of view, any possible objection or legal remedy by the debtor can make the proceedings more expensive and prolong them. Therefore, proceedings may be particularly effective (for the creditor) if they are conducted only unilaterally and without the debtor’s participation. Concerning the structure of the proceedings (unilateral or bilateral), the survey showed that the majority of the consulted MSs^[59] have provided for an issuance of the order for the enforcement (Art 299 (2) TFEU) ex parte, i. e. without involvement of the undertaking or the credit institution. A legal remedy is explicitly provided for only in a few MSs.^[60] Furthermore, it may be mentioned in this context that there are short time limits concerning the issuance of the order for the enforcement e. g. in LT (the decision has to be taken within five days upon receipt of the request), NL (one week) and PT (three days). The enforcement procedure at first instance (Art. 299 (3) TFEU) is structured more heterogeneously: in AT, BE, DK, FR, NL, PL, PT, SI and SK it is in general unilateral. However, that does not exclude the possibility that only the decision of the authority is taken ex parte whereas the undertaking may raise objections after the decision of the court but within the first instance procedure. On the contrary, in BG, EE, FI, DE, IT, LV, LT and MT, the first instance procedure is bilateral. Most of the MSs surveyed provide for a legal remedy or an appeal^[61] at this stage of enforcement (the possibility to call upon a third instance is rather limited though).^[62]

For the creditor, however, it is not only relevant if the debtor may raise objections or lodge an appeal, but also whether these have a suspensive effect and enforcement may be temporarily stopped in the meantime. In view of this, the survey demonstrated that the remedy has a suspensory effect in DK, NL, LV and PL (in NL this effect can be revoked). In contrast, in AT, BG, DE, EE, FI, IT, LT and PT, a suspensory effect may be accorded in individual cases; in FR the appeal procedure is accelerated and in SI it generally has no suspensory effect at all.

Concerning the aforementioned differing structural aspects, the lack of harmonisation becomes apparent, which inevitably leads, under Brussels I as well as Art. 299 TFEU, to 27 different degrees of effectiveness in enforcement proceedings. For undertakings that have assets in several MSs, this entails imminent legal uncertainties and corresponding additional costs. However, this is not a specific problem of enforcement of ECB sanctions or enforcement of monetary obligations under Art. 299 TFEU. Rather, it is merely a consequence of the lack of harmonisation in precisely the field of civil procedure law, which is transferred to Art. 299 TFEU.

2.2.5. Possible Objections

Closely related to the previous section and the question of whether the debtor may be involved in the individual procedural steps at all is the question of the extent to which this is the case. While supra 2.2.4. focused on the question of procedural involvement, the substantive aspect of the objections will now be examined. This aspect might be of relevance for the creditor insofar as the more objections the debtor or third parties can raise, the more complex and time-consuming the process becomes. In this area in particular, it has become clear via the survey that the imprecise wording of Art. 299 (4) TFEU creates uncertainty and also an inhomogeneous situation in the MSs’ legal regimes:^[63] it has been shown that many MSs especially allow objections at national level (in the same procedure or by initiating a separate procedure), which at first sight appear to be easily covered by the term ‘complaints that enforcement is being carried out in an irregular manner’. In fact, at least 12 MSs would qualify a complaint by the undertaking (third parties) permissible if the subject of the complaint concerns the fact that the enforcement is carried out extensively, meaning, for example, that it covers a higher amount than the obligation vis-à-vis the ECB; 11 MSs would qualify it permissible if it concerns the fact that the enforcement intervenes in assets of the undertaking that are not subject to enforcement proceedings and 10 MSs if it concerns the fact that the enforcement measures (not: the sanctioning procedure or the legal act of the ECB) violate fundamental rights.

Moreover, prerequisites which lead to the applicability of Art. 299 TFEU can also be addressed in several MSs by the undertakings or credit institutions, e. g. a lack of the title or the order for the enforcement or their annulment (permissible in at least 12 MSs), lack of authenticity of the title (12 MSs) or lack of jurisdiction of the national authority called upon by the ECB (13 MSs). Since the aforementioned objections cannot be raised at EU level, gaps in legal protection of the undertaking can be avoided in this respect. On the other hand, in those MSs which consider the corresponding objections to be inadmissible because they understand ‘irregular manner’ in too narrow a sense, those gaps may arise. Against this background, an – albeit autonomous – but broader interpretation would be conceivable in order to avoid those gaps in protection.

Especially interesting is the fact that several MSs would even qualify objections regarding the lapse or deferral of the obligation enshrined in the ECB’s decision as permissible: between nine to ten MSs would assess as hypothetically successful objections concerning the fact that the ECB has granted payment facilities (such as a deferral) or that the claim has ceased to exist, e. g. due to payment. It cannot be assumed that this high number is due to a possible lack of awareness that the title of the ECB itself may not be modified at national level.^[64] Rather, it is to be assumed that the MSs will, as far as possible against the background of Art. 299 TFEU, adhere to their national legal protection system. This is to be welcomed to a certain extent, as this corresponds with the concept of distribution of competences, which would follow from a (systematic and teleological) interpretation of Art. 299 TFEU as shown in Part I (2.4.). This system would be suitable to resolve the hybrid mismatch underlying Art. 299 TFEU, to ensure a coherent legal protection of the undertakings and third parties within the European multi-level constitutional order and to effectively interlink European and national legal protection as required by Art. 19 (1) TEU and Art. 47 CFR^[65].^[66] Besides the distribution of powers, however, there is no doubt that objections potentially slow down the procedure from the ECB’s perspective. Within this context, de lege ferenda the focus may be directed towards MT, where a middle path is taken and opposition to the execution generally may not be considered until the execution has been effected.