OPINION OF ADVOCATE GENERAL
CAMPOS SÁNCHEZ-BORDONA
delivered on 9 July 2019(1)
Case C‑414/18
Iccrea Banca SpA Istituto Centrale del Credito Cooperativo
v
Banca d’Italia
(Request for a preliminary ruling from the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy))
(Preliminary ruling — Admissibility — Lack of jurisdiction of national court to review the legality of acts of the Single Resolution Board — Requirement that acts of the Single Resolution Board must be challenged before the General Court — Harmonisation of legislation — Banking union — Recovery and resolution of credit institutions — Ordinary and extraordinary contributions to the national resolution fund — Determination of the 2016 ex ante contribution to the Single Resolution Fund — Contributions from cooperative credit institutions — Adjustment of the contributions in proportion to the risk profile — Article 5(1) of Delegated Regulation (EU) 2015/63 — Exclusion of certain liabilities from the calculation of contributions)
1. This reference for a preliminary ruling provides the Court of Justice with the opportunity to shed light on two matters of contention relating to the contributions that credit institutions are required to pay to the Single Resolution Fund (‘SRF’) and to a national resolution fund (‘NRF’) in order to finance those funds:
– First, who is responsible for judicially reviewing decisions of the Single Resolution Board (‘SRB’) relating to those contributions, where the decisions are notified to banks by a national resolution authority (‘NRA’) such as Banca d’Italia.
– Second, whether, for the purposes of calculating contributions to an NRF, it is necessary to take into account internal liabilities between institutions in a group of cooperative credit banks or whether those liabilities can be excluded.
I. Legal framework
A. EU law
1. Provisions on contributions from credit institutions to NRFs throughout the EU
(a) Directive 2014/59/EU (2)
2. I refer to the Opinion I delivered recently in Case C‑255/18, State Street Bank International (3) as regards the wording of Articles 100, 102, 103 and 104 of that directive.
(b) Delegated Regulation (EU) 2015/63 (4)
3. Recitals 8 and 9 state:
‘(8) The calculation of contributions at individual level would lead, in case of groups, to the double counting of certain liabilities when determining the basic annual contribution of the different group entities, since the liabilities related to the agreements that the entities of the same group conclude with each other would be, part of the total liabilities to be considered to determine the basic annual contribution of each entity of the group. Therefore, the determination of the basic annual contribution should be further specified in case of groups to reflect the interconnectedness of the group entities and avoid double counting intragroup exposures. …
(9) For the purpose of calculating the basic annual contribution of a group entity, the total liabilities to be considered should not include the liabilities arisen from any contract which that group entity concluded with any other entity which is part of the same group. However, such exclusion should only be possible where each group entity is established in the Union, is included in the same consolidation on a full basis, is subject to an appropriate centralised risk evaluation, measurement and control procedures, and if there are no current or foreseen material practical or legal impediments to the prompt repayment of the relevant liabilities when due. This should prevent liabilities from being excluded from the basis of calculation of the contributions if there are no guarantees that intragroup lending exposures would be covered where the financial health of the group deteriorates. …’
4. Article 4 (‘Determination of the annual contributions’) stipulates:
‘1. The resolution authorities shall determine the annual contributions to be paid by each institution in proportion to its risk profile on the basis of information provided by the institution in accordance with Article 14 and by applying the methodology set out in this Section.
2. The resolution authority shall determine the annual contribution referred to in paragraph 1 on the basis of the annual target level of the resolution financing arrangement by taking into account the target level to be reached by 31 December 2024 in accordance with paragraph 1 of Article 102 of Directive [2014/59] and on the basis of the average amount of covered deposits in the previous year, calculated quarterly, of all the institutions authorised in its territory.’
5. Article 5 (‘Risk adjustment of the basic annual contribution’) provides:
‘1. The contributions referred to in Article 103(2) of Directive [2014/59] shall be calculated by excluding the following liabilities:
(a) the intragroup liabilities arising from transactions entered into by an institution with an institution which is part of the same group, provided that all the following conditions are met:
(i) each institution is established in the Union;
(ii) each institution is included in the same consolidated supervision in accordance with Articles 6 to 17 of Regulation (EU) No 575/2013 [of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1)] on a full basis and is subject to an appropriate centralised risk evaluation, measurement and control procedures; and
(iii) there is no current or foreseen material practical or legal impediment to the prompt repayment of the liability when due;
…
(f) in case of institutions operating promotional loans, the liabilities of the intermediary institution towards the originating or another promotional bank or another intermediary institution and the liabilities of the original promotional bank towards its funding parties in so far as the amount of these liabilities is matched by the promotional loans of that institution.’
2. Provisions on contributions from credit institutions to the SRF within the banking union
(a) Regulation (EU) No 806/2014 (5)
6. According to recital 120:
‘The SRM brings together the Board, the Council, the Commission and the resolution authorities of the participating Member States. The Court of Justice has jurisdiction to review the legality of decisions adopted by the Board, the Council and the Commission, in accordance with Article 263 TFEU, as well as for determining their non-contractual liability. Furthermore, the Court of Justice has, in accordance with Article 267 TFEU, competence to give preliminary rulings upon request of national judicial authorities on the validity and interpretation of acts of the institutions, bodies or agencies of the Union. National judicial authorities should be competent, in accordance with their national law, to review the legality of decisions adopted by the resolution authorities of the participating Member States in the exercise of the powers conferred on them by this Regulation, as well as to determine their non-contractual liability.’
7. Article 67 states:
‘1. The Single Resolution Fund (‘the Fund’) is hereby established. It shall be filled in accordance with the rules on transferring the funds raised at national level towards the Fund as laid down in the Agreement.
…
3. The owner of the Fund shall be the Board.
4. Contributions referred to in Articles 69, 70 and 71 shall be raised from entities referred to in Article 2 by the national resolution authorities and transferred to the Fund in accordance with the Agreement.’
8. With regard to ex ante contributions, Article 70 provides:
‘1. The individual contribution of each institution shall be raised at least annually and shall be calculated pro-rata to the amount of its liabilities (excluding own funds) less covered deposits, with respect to the aggregate liabilities (excluding own funds) less covered deposits, of all of the institutions authorised in the territories of all of the participating Member States.
2. Each year, the Board shall, after consulting the ECB or the national competent authority and in close cooperation with the national resolution authorities, calculate the individual contributions to ensure that the contributions due by all of the institutions authorised in the territories of all of the participating Member States shall not exceed 12.5% of the target level.
…’
(b) Implementing Regulation (EU) 2015/81 (6)
9. Article 4 (‘Calculation of the annual contributions’) stipulates:
‘For each contribution period, the Board shall calculate the annual contribution due from each institution, on the basis of the annual target level of the Fund, after consulting the ECB or the national competent authorities and in close cooperation with the national resolution authorities. The annual target level shall be established with reference to the target level of the Fund referred to in Articles 69(1) and 70 of Regulation (EU) No 806/2014 and in accordance with the methodology set out in Delegated Regulation (EU) 2015/63.’
10. In accordance with Article 5:
‘1. The Board shall communicate to the relevant national resolution authorities its decisions on calculation of annual contributions of the institutions authorised in their respective territories.
2. After receiving the communication referred to in paragraph 1, each national resolution authority shall notify each institution authorised in its Member State of the Board’s decision on calculation of the annual contribution due from that institution.’
B. National law: Legislative Decree No 180/2015 (7)
11. Directive 2014/59 was transposed into Italian law by Legislative Decree No 180/2015 of 16 November 2015.
12. I refer again to the Opinion in State Street Bank International with regard to the wording of Article 2(1), Article 3(1), Article 78, Article 81(1) and (2), and Article 83 of that Legislative Decree.
II. Main proceedings and questions referred for a preliminary ruling
13. Iccrea Banca SpA Istituto Centrale del Credito Cooperativo (‘Iccrea Banca’) is a ‘second-level’ bank, since it heads a network of credit institutions, known in Italy as ‘cooperative credit banks’ (‘CCBs’). (8)
14. Iccrea Banca’s corporate purpose is to ‘make the activities of cooperative credit banks more comprehensive, focused and effective, by supporting them and enhancing their operations through the provision of credit facilities, technical intermediation services and financial assistance in various forms’.
15. In successive decisions, (9) Banca d’Italia requested from Iccrea Banca the payment of ordinary, extraordinary and additional contributions to the Italian NRF for the years 2015 and 2016, in addition to the contributions to the SRF for 2016.
16. Iccrea Banca brought an action before the referring court for annulment of the Banca d’Italia decisions, contesting the methods of calculating the contributions levied. (10)
17. In Iccrea Banca’s submission:
– Banca d’Italia should have regarded its liabilities vis-à-vis the CCBs as intragroup liabilities and, in any event, those liabilities should have received similar treatment to promotional loans.
– When calculating the contributions, Banca d’Italia failed to take into account the particular features of the integrated system linking the applicant and the CCBs.
– Banca d’Italia completely ignored Iccrea Banca’s supporting role in the CCB system and the existence of a ‘de facto group’, whose liabilities should have fallen within the scope of the exceptions under Delegated Regulation 2015/63. In any event, in accordance with the principles of proportionality, non-discrimination and equal treatment, those liabilities should not have been subject to double counting (and a double contribution).
– In short, the amount of contributions which the applicant owed to the NRF and the SRF should have been much lower than that levied.
18. Banca d’Italia alleges, as a preliminary point, that the referring court does not have jurisdiction to rule on Iccrea Banca’s claims relating to the 2016 contributions to the SRF. It puts forward other procedural objections (11) and, as regards the substance, submits that:
– There is not sufficient genuine control or dominant influence in the relationship between Iccrea Banca and the CCBs for the purposes of the criterion laid down in Article 5(1)(a) of Delegated Regulation 2015/63.
– It is impossible to ascribe any legal significance to purely factual matters, such as the ‘business mission’ which Iccrea Banca pursues through contractual relations with the CCBs. Nor is it sufficient that Iccrea Banca perform the function of a ‘services’ bank within the CCB system.
– This means that it is impossible to grant special treatment to the liabilities of CCBs.
19. Against that background, the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy) has referred the following questions to the Court of Justice for a preliminary ruling:
‘Does Article 5(1), in particular subparagraphs (a) and (f), of Delegated Regulation 2015/63, interpreted in the light of the principles referred to in that regulation, in Directive 2014/59, Regulation No 806/2014 and Article 120 of the Treaty on the Functioning of the European Union, the fundamental rules of equal treatment, non-discrimination and proportionality laid down in Article 21 of the Charter of Fundamental Rights of the European Union, and the prohibition on levying double contributions, preclude, for the purpose of calculating the contributions referred to in Article 103(2) of Directive 2014/59, the application of the regime laid down for intragroup liabilities also in the case of a “de facto” group or, in any event, in the case of interconnectedness between an institution and other banks forming part of the same system? Alternatively, in the light of the abovementioned principles, may the preferential treatment reserved for liabilities arising in respect of promotional loans in Article 5 of Delegated Regulation 2015/63 also be applied, by analogy, to the liabilities of a “second-level” bank vis-à-vis other banks in the (cooperative credit) system, or should that characteristic of an institution, in fact operating as a central bank within an interconnected and integrated group of small banks, including in its relations with the European Central Bank and the financial markets, give rise, under existing rules, to some form of adjustment to the financial data submitted by the national resolution authority to the relevant Community bodies and to the determination of the contributions payable by the institution to the resolution fund in respect of its actual liabilities and risk profile?’
20. Written observations were lodged by Iccrea Banca, Banca d’Italia, the Italian and Spanish Governments, and the European Commission. All those parties took part in the hearing, held on 30 April 2019, together with the SRB, which the Court invited to take part in accordance with the second paragraph of Article 24 of the Statute of the Court of Justice of the European Union.
III. Analysis of the questions referred for a preliminary ruling
A. Preliminary considerations regarding contributions to the NRFs and the SRF
21. In the Opinion in State Street Bank International (points 33 to 51), I gave a broad outline of the funding of bank recovery and resolution mechanisms, which was harmonised by Directive 2014/59. There is no need to reproduce that outline and I merely refer to it here for a better understanding of that new legislative situation.
B. Admissibility of the questions
22. The decisions against which Iccrea Banca brought its action for annulment (12) require, first, the payment of contributions for 2015 and 2016 to the Italian NRF and, second, the payment of contributions for 2016 to the SRF.
23. Banca d’Italia argued in the main proceedings that the referring court does not have jurisdiction to rule on the two decisions relating to contributions to the SRF for 2016 because, in fact, the content of those decisions was approved by the SRB.
24. However, the referring court considers that it does have jurisdiction to review the legality of those decisions. The referring court states that ‘Banca d’Italia does not merely act as an intermediary between the Single Resolution Board (“the SRB”) and credit institutions, nor do its measures simply amount to communicating the content of a decision taken by the SRB; on the contrary, it performs an active and decisive role both in the determination of the contribution and in the collection of the amounts themselves, by issuing a single measure that has a binding effect on credit institutions’. (13)
25. The Commission also contends that the referring court lacks jurisdiction to rule on the lawfulness of those two decisions of the SRB, submitting that the questions referred for a preliminary ruling are inadmissible as far as those decisions are concerned.
26. The pleas raised by Banca d’Italia and the Commission were supported at the hearing by the Spanish and Italian Governments (the latter only partially and subject to certain qualifications), and I believe, for the reasons I shall set out below, that those pleas should be upheld. At all events, they must be examined closely because, unless I am mistaken, they raise for the first time the difficult issue of judicial review of the SRB’s decisions regarding contributions to the SRF.
27. I have no doubts concerning the referring court’s jurisdiction to rule on the legality of the five Banca d’Italia decisions relating to ordinary, extraordinary and additional contributions to the NRF (14) for the 2015 and 2016 financial years. Those are specific decisions of Banca d’Italia which do not involve the SRB and are linked to the financing of the Italian NRF. The contributions concerned are used, essentially, for the resolution of less significant credit institutions which are not part of the SSM (Single Supervisory Mechanism) or the SRM, but which fall within the scope of Directive 2014/59 and Delegated Regulation 2015/63.
28. The questions referred for a preliminary ruling are, therefore, admissible as far as those five decisions of Banca d’Italia on contributions to the NRF are concerned. The referring court may rule on their legality, as regards the substance, based on the answer it receives from the Court of Justice. (15)
29. On the other hand, the question must be ruled partially inadmissible as regards the two decisions of Banca d’Italia notifying Iccrea Banca of the amount of its ordinary contribution to the SRF in 2016. The referring court cannot rule on the lawfulness of those decisions because they were adopted by the SRB.
30. The referring court asks about the interpretation of Article 5 of Delegated Regulation 2015/63, without calling into question its validity or, it appears, that of the SRB decisions on contributions to the SRF for 2016. Instead, the referring court focuses on Banca d’Italia’s decisions implementing the earlier decisions of the SRB. However, if the referring court were ultimately to find that the methods of calculating the contributions of cooperative credit institutions to the SRF for 2016 are incorrect, it would in fact be denying the lawfulness of the SRB decisions, which Banca d’Italia would be unable to apply to Iccrea Banca. Accordingly, the matter in contention in the main proceedings (or, more correctly, in part of those proceedings) is the legality of those two decisions of the SRB.
31. That being so, it seems clear to me that a national court is not entitled to rule on the validity of the SRB’s decisions, the lawfulness of which the Court of Justice has exclusive jurisdiction to review. There are two arguments in support of that assertion: first, the logic of the judgment in Berlusconi and Fininvest should be applied to the SRB’s decisions; (16) second, the TWD Textilwerke Deggendorf case-law is applicable. (17)
1. Centralised judicial review of decisions of the SRB
32. In Berlusconi and Fininvest, the Court was required to give a ruling on the judicial review of decisions adopted in a composite administrative procedure for authorisation to acquire or increase a qualifying holding in a credit institution, in the context of the SRM. The Court essentially held that Article 263 TFEU precludes national courts from reviewing the legality of decisions to initiate procedures, preparatory acts or non-binding proposals adopted by competent national authorities in that procedure.
33. That declaration was, in turn, based on two propositions:
– Where the acts of the national authorities constitute a stage of a procedure in which an EU institution exercises, alone, the final decision-making power without being bound by the preparatory acts or the proposals of the national authorities, those acts are EU acts. (18)
– Where EU law lays down that an EU institution is to have an exclusive decision-making power, it falls to the EU Courts, by virtue of their exclusive jurisdiction to review the legality of EU acts on the basis of Article 263 TFEU, to rule on the legality of the final decision adopted by the EU institution at issue. Only the EU Courts have jurisdiction to examine, in order to ensure effective judicial protection of the persons concerned, any defects vitiating the preparatory acts or the proposals of the national authorities that would be such as to affect the validity of that final decision. (19)
34. As I observed in my Opinion in that case, (20) in composite administrative procedures in which national authorities and EU authorities are involved, the exercise of the final decision-making power is the crucial factor for determining whether the EU Courts or the national courts must conduct a judicial review. If the decision-making power is held by an EU body, it will fall to the EU courts to carry out a judicial review, in accordance with Article 263 TFEU.
35. Ordinary contributions to the SRF are determined through a composite administrative procedure in which the national resolution authorities are involved, (21) but the final decision falls to the SRB.
36. Although the judgment in Berlusconi and Fininvest was given in relation to a composite administrative procedure which differed from that relating to the determination of contributions to the SRF, it can be applied to this case. This means that only the EU Courts may conduct a judicial review of the SRB’s decision, as I shall endeavour to explain below.
37. By Decision SRB/ES/SRF/2016/06 of 15 April 2016, the SRB, pursuant to Article 54(1)(b) and Article 70(2) of the SRM Regulation, determined the annual amount of the ex ante contribution to the SRF for the 2016 financial year in respect of each credit institution — including Iccrea Banca — liable to pay that contribution. Due to a calculation error, those contributions were amended by SRB Decision SRB/ES/SRF/2016/13 of 20 May 2016, which corrected the ex ante contributions to the SRF for 2016. (22)
38. Both decisions were adopted under Article 70(2) of the SRM Regulation and Article 4 of Implementing Regulation 2015/81. In accordance with those provisions, for each contribution period, the SRB is to calculate the annual contribution due from each institution, on the basis of the annual target level of the Fund, after consulting the ECB or the national competent authorities and in close cooperation with the NRAs. (23)
39. Article 6 of Implementing Regulation 2015/81 provides that the SRB must set out the data formats and representations to be used by the institutions to report the information required for the purpose of calculating the annual contributions in order to enhance the comparability of the reported information and the effectiveness of processing that information. The SRB has gradually implemented that competence to organise data collection by the NRAs. (24)
40. In that preparatory stage, the NRAs, following the SRB’s directions, merely collect and transfer the data of credit institutions to the SRB, using the formats and representations mentioned above. The ‘close cooperation’ of the NRAs, to which Article 70(2) of the SRM Regulation refers, is confined to that activity.
41. The NRAs do not carry out any preparatory data analysis or processing work (this was confirmed by Banca d’Italia at the hearing), nor do they refer any proposed decisions to the SRB. (25) The NRAs’ work consists merely of operational support.
42. Using the relevant data for the institutions subject to the SSM and the SRM, the SRB determines the ex ante contributions to the SRF payable by each of them. Only the SRB can adopt that decision, because, under a single resolution fund with a European target level, the annual individual contributions of institutions authorised in the territories of all of the participating Member States is dependent on those of all of the institutions subject to the SRM. (26)
43. Accordingly, the NRAs cannot calculate annual contributions to the SRF, a decision which can only be drawn up centrally. The overall annual rate of contribution to the SRF must be determined by the SRB as the sole EU agency which has access to the overall aggregated data, including the deposits of all institutions, and to information enabling a calculation of their risk factor. Therefore, the SRB, and the SRB alone, has all the details necessary for calculating the ordinary contributions to the SRF, a task it performs every year. (27)
44. Furthermore, the SRB adopts its decision on ordinary contributions to the SRF in executive, rather than plenary, session, and therefore the representatives of the NRAs do not even participate in it. (28)
45. Once the SRB has set the amount of the annual contribution from each institution, it must, in accordance with Article 5 of Implementing Regulation 2015/81, communicate to the competent NRAs the decisions setting the annual contributions from institutions authorised in their respective territories. The final, purely instrumental, link in that chain is that the NRAs must notify each institution under their jurisdiction ‘of the Board’s decision on calculation of the annual contribution due from that institution’.
46. The SRB does not notify each credit institution directly of the amount of its annual contribution to the SRF. It is, I repeat, the NRAs which are responsible for that notification, but Article 5 of Implementing Regulation 2015/81 states that it is the ‘Board’s decision’ which is notified.
47. That notification procedure cannot be relied on to prevent the SRB’s decision from being treated as exactly what it is: a genuine ‘decision’ within the meaning of the third paragraph of Article 288 TFEU, since it specifies in nominal terms the amount to be paid by each credit institution as an annual contribution to the SRF.
48. Banca d’Italia’s role as NRA vis-à-vis Iccrea Banca, in connection with the SRB’s decisions SRB/ES/SRF/2016/06 and SRB/ES/SRF/2016/13, was simply to notify those decisions, the contents of which are neither determined nor controlled by Banca d’Italia. The NRAs do not have competence to amend the amount of ordinary contributions to the SRF, a power that is reserved to the SRB, and they do not have at their disposal the data necessary to make such changes. (29)
49. I do not agree with the position which the SRB defended (somewhat ambiguously) at the hearing and has maintained before the General Court, (30) to the effect that its decisions on annual contributions to the SRF are addressed to the NRAs and do not have any legal effect on credit institutions. The SRB argues, in effect, that its 2016 decisions were addressed to the NRAs and that the latter adopted national administrative acts notifying the amount of each institution’s annual contribution to the SRF, the latter being the only acts which could be contested before the national courts.
50. The SRB insisted at the hearing that it had shared competence with the NRAs to take decisions on the annual contributions to the SRF. In its submission, this involves a composite administrative procedure in which the NRAs carry out the final collection of those contributions. (31) Since the judgment in Berlusconi and Fininvest lent support to a single judicial review in those procedures, the SRB submitted that, in the interests of greater judicial protection and effective legal certainty, it was appropriate that any judicial review should be performed by the national courts.
51. I am not persuaded by the SRB’s argument, which is completely the opposite of that advanced by the Commission and has contributed to the creation of uncertainty regarding the features of decisions setting the annual contributions to the SRF and the possibilities for a judicial review of those decisions. The actions for annulment pending before the General Court and the practices of the NRAs bring that complex picture, which requires urgent clarification, (32) into sharp relief.
52. The reasons I have set out above lead me to believe that, in this composite administrative procedure, sole decision-making power rests with the SRB. Since the decision concerned was adopted by an EU body, in accordance with Article 86(2) of the SRM Regulation, Member States and the Union institutions, as well as any natural or legal person, may institute proceedings before the Court of Justice against decisions of the SRB, in accordance with Article 263 TFEU. (33)
53. Contrary to Iccrea Banca’s argument, that assertion cannot be called into question by the reference in recital 120 of the SRM Regulation to the actions of national judicial authorities.
54. That recital refers to the review by national courts of the decisions of NRAs in areas in which the SRM Regulation grants them decision-making power. That occurs in relation to acts issued by NRAs in relation to ordinary contributions to NRFs, which less significant credit institutions, which are not part of the SSM or the SRM, are required to pay annually.
55. Therefore, taking the logic of the judgment in Berlusconi and Fininvest into account as a source of inspiration, I believe that it falls exclusively to the Court of Justice to review the legality of decisions of the SRB and the actions of the NRAs which cooperate in that composite administrative procedure.
2. Application of the TWD Textilwerke Deggendorf case-law
56. In accordance with the TWD Textilwerke Deggendorf case-law, which was recently confirmed by the judgment in Georgsmarienhütte and Others, (34) a natural or legal person with unquestionable legal standing to bring an action for annulment against a decision of an EU body loses the right to call into question the validity of that decision before the national courts if he has allowed the 2-month period to lapse without bringing an action for annulment before the General Court. This protects legal certainty and gives the action for annulment priority over a reference for a preliminary ruling on the issue of validity, as the appropriate procedural route for reviewing the legality of decisions of EU bodies.
57. In the dispute relating to ordinary contributions to the SRF for 2016, Iccrea Banca brought an action for annulment before the General Court on 28 July 2017 against SRB Decision SRB/ES/SRF/2016/06 of 15 April 2016, but it did not contest SRB Decision SRB/ES/SRF/2016/13 of 20 May 2016, which corrected the ex ante contributions to the SRF for 2016.
58. The General Court held that that action was inadmissible because it was brought outside the time limit set in the sixth paragraph of Article 263 TFEU. (35)
59. Iccrea Banca’s legal standing to bring that action for annulment (within the time limit) seems to me to be unquestionable, as that institution is referred to by name in the annex to the decision, which also records the amount it was required to pay as an ordinary contribution to the SRF in 2016; (36) this makes it clear that Iccrea Banca was individually and directly affected.
60. Accordingly, application of the TWD Textilwerke Deggendorf case-law leads to the conclusion that Iccrea Banca has lost the right to call into question, before the national courts in proceedings instituted against the notification of those decisions by the NRA, the validity of the SRB’s decisions on ordinary contributions to the SRF in 2016. (37)
61. I am also unable to identify a national measure implementing the SRB decisions which Iccrea Banca could challenge before the national courts and which would enable it, indirectly, to call into question the validity of the SRB decisions through a reference for a preliminary ruling on the issue of validity. (38) The notifications of the two SRB decisions on contributions to the SRF for 2016 cannot be regarded as challengeable acts of Banca d’Italia. The legality of the notified act is called into question in the main proceedings, but not the existence of any defects in the notifications themselves.
62. The above is confirmed by the Foto-Frost case-law, (39) which precludes a national court from declaring invalid an act of an EU body and adopting any kind of decision which is contrary to that act or which precludes its application. (40) Accordingly, the national court cannot declare invalid the SRB’s decisions on contributions to the SRF for 2016 or adopt any other measure which would impede or alter the application of those decisions.
63. In short, the questions referred for a preliminary ruling are inadmissible as regards the decisions of the SRB on contributions to the SRF for 2016, which were notified to Iccrea Banca by Banca d’Italia, and the question should be answered only in relation to the decisions on contributions to the Italian NRF.
C. Analysis of the substance: ordinary contributions to bank resolution funds from cooperative credit institutions
64. The referring court asks whether, for the purpose of calculating ordinary contributions to an NRF, the liabilities of a ‘second-level’ bank vis-à-vis other banks in a CCB system come within the exceptions in Article 5(1), in particular subparagraphs (a) and (f), of Delegated Regulation 2015/63.
65. In accordance with that provision, contributions are to be calculated by excluding intragroup liabilities arising from transactions entered into by an institution with an institution which is part of the same group (subparagraph (a)) and liabilities the amount of which is matched by the promotional loans of the institution concerned (subparagraph (f)). In an interconnected CCB system, like that of Iccrea Banca, the answer will depend on how relations within that system are organised.
66. The general rule (Article 103(2) of Directive 2014/59) is that ‘the contribution of each institution shall be pro rata to the amount of its liabilities (excluding own funds) less covered deposits, with respect to the aggregate liabilities (excluding own funds) less covered deposits of all the institutions authorised in the territory of the Member State’. The provision goes on to state that ‘those contributions shall be adjusted in proportion to the risk profile of institutions, in accordance with the criteria adopted under paragraph 7’.
67. Accordingly, the key factor for determining the amount of a credit institution’s ordinary contribution to the NRF is its liabilities. The amount of those liabilities is used to calculate the contribution, because an institution’s total liabilities reflect the risk which that institution poses to the NRF. The amount of the ordinary contribution is, in principle, the result of applying a percentage to the figure for each credit institution’s liabilities, quantifying in that way the basis for the charge.
68. That general (arithmetical) rule is corrected, under Article 103(2), in fine, of Directive 2014/59, by an additional technical factor: the risk profile of the institution.
69. Article 103(7) of that directive empowered the Commission to ‘adopt delegated acts in accordance with Article 115 in order to specify the notion of adjusting contributions in proportion to the risk profile of institutions’. The Commission was entitled to take into account, inter alia, other factors, (41) ‘the risk exposure of the institution, including the importance of its trading activities, its off-balance sheet exposures and its degree of leverage’.
70. The Commission exercised that power by adopting Delegated Regulation 2015/63, which governs the method of calculating the contributions of credit institutions to NRFs and adjusting those contributions to the risk profile of institutions. Article 4 reiterates that annual contributions are to be calculated by NRAs on the basis of a credit institution’s liabilities, adjusted in line with its risk profile, and based on:
– the annual target level of the NRF, which must reach 1% of deposits by 2024; and
– the average amount of covered deposits in the previous year, calculated quarterly, of all the institutions authorised in the NRA’s territory.
71. Article 5 of Delegated Regulation 2015/63 refers to the ‘risk adjustment of the basic annual contribution’ and provides, in paragraph 1, that the contributions referred to in Article 103(2) of Directive 2014/59 are to be calculated by excluding several types of liability. Of those liabilities, two types are relevant to this case: intragroup liabilities and liabilities linked to promotional loans.
72. The referring court asks whether, in the case of de facto banking groups, like that of Iccrea Banca, liabilities between the central bank and the associated CCBs can be treated as intragroup liabilities. If not, the referring court further asks whether it is possible to apply to those liabilities by analogy the exception provided for in respect of liabilities linked to promotional loans.
73. Iccrea Banca submits that the liabilities of the central bank of a cooperative credit system vis-à-vis its CCBs are intragroup liabilities or, failing that, must be treated in the same way as liabilities related to promotional loans. Banca d’Italia, the Commission and the Spanish and Italian Governments put forward the opposite argument, with which I agree because, in my view, it is the argument which best reflects the wording and the aim of Article 5(1) of Delegated Regulation 2015/63.
1. The internal liabilities of a cooperative credit system are not intragroup liabilities
74. In accordance with Article 5(1)(a) of Delegated Regulation 2015/63, it is possible to exclude from the liabilities used to calculate the ordinary contribution ‘intragroup liabilities arising from transactions entered into by an institution with an institution which is part of the same group, provided that all the following conditions are met:
(i) each institution is established in the Union;
(ii) each institution is included in the same consolidated supervision in accordance with Articles 6 to 17 of [Regulation No 575/2013] on a full basis and is subject to an appropriate centralised risk evaluation, measurement and control procedures; and
(iii) there is no current or foreseen material practical or legal impediment to the prompt repayment of the liability when due’.
75. Therefore, the exclusion of intragroup liabilities applies only to transactions between institutions in the same banking group.
76. Article 3 of Delegated Regulation 2015/63 refers, for the purposes of its application, to the definitions in Directive 2014/59. Article 2(1)(26) defines group as ‘a parent undertaking and its subsidiaries’, while reference is made in Article 2(1)(5) and (6) to the definitions of subsidiary and parent undertaking in Article 4 of Regulation No 575/2013. The latter refers, in turn, to Directive 83/349/EEC, (42) which was repealed by Directive 2013/34, (43) Article 2(9) and (10) of which defines both parent undertaking (‘an undertaking which controls one or more subsidiary undertakings’) and subsidiary undertaking (‘an undertaking controlled by a parent undertaking, including any subsidiary undertaking of an ultimate parent undertaking’).
77. It may be inferred from those cross-references that a banking group exists where the parent undertaking controls the subsidiary institutions. De jure control means, inter alia, the majority of the voting rights; the right to appoint and remove the majority of the members of the other undertaking’s administrative, management or supervisory body; and the exercise of a dominant influence over the subsidiary undertaking pursuant to a contract entered into with that undertaking or to a provision in its memorandum or articles of association. The group must have consolidated financial statements and a consolidated management report for the group, an obligation which is also imposed where the parent undertaking has de facto control over its subsidiaries. (44)
78. There is no suggestion in the order for reference that, on the dates relevant for our purposes, Iccrea Banca exercised direct or de facto control over the CCBs with which it was linked. (45) The considerations below are based on that premiss. In any event, it is for the referring court to assess the facts and the relationships between the different institutions.
79. The functions which Iccrea Banca performs in relation to the CCBs with which it is linked are not evidence of control by the former over the latter which could be likened to the control of a parent company over its subsidiaries.
80. According to the order for reference, (46) Iccrea Banca acts as a mere technical and financial ‘linchpin’ between CCBs and the Italian and foreign credit systems. It provides cross-border services to CCBs such as electronic payment, securities settlement and safe-keeping and other financial services, acting as a financial centre for the cooperative credit system and managing liquidity. (47)
81. However, Banca d’Italia refutes Iccrea Banca’s assertion that, without its intermediation, the CCBs would not be able to gain individual access to the ECB’s targeted long-term refinancing operations (TLTRO).
82. Moreover, the cumulative conditions which Article 5(1) lays down for exclusion of intragroup liabilities from the calculation of ordinary contributions to an NRF includes the requirement that the institution must be included in the same consolidated supervision in accordance with Articles 6 to 17 of Regulation No 575/2013 on a full basis and is subject to appropriate centralised risk evaluation, measurement and control procedures.
83. It follows from the information provided to the Court (and confirmed at the hearing) that Iccrea Banca and the CCBs with which it cooperates are not subject to consolidated supervision as a single banking group under the SSM. Nor do they benefit from an exemption from individual supervision under Article 7(1) of Regulation No 575/2013.
84. In accordance with that provision, competent authorities may waive the application of individual supervision to any subsidiary of an institution, where both the subsidiary and the institution are subject to authorisation and supervision by the Member State concerned, and the subsidiary is included in the supervision on a consolidated basis of the institution which is the parent undertaking, and strict conditions are satisfied (48) in order to ensure that own funds are distributed adequately between the parent undertaking and the subsidiary.
2. The internal liabilities of a cooperative credit system cannot be considered to be the same as liabilities linked to promotional loans
85. Under Article 5(1)(f) of Delegated Regulation 2015/63, ‘in case of institutions operating promotional loans, the liabilities of the intermediary institution towards the originating or another promotional bank or another intermediary institution and the liabilities of the original promotional bank towards its funding parties in so far as the amount of these liabilities is matched by the promotional loans of that institution’ are to be excluded from the liabilities used to calculate the ordinary contribution.
86. Iccrea Banca does not come within that exception subjectively or objectively, because:
– It is not a promotional bank. (49)
– It does not grant promotional loans, for the purposes of Article 3(28) of Delegated Regulation 2015/63, on a non-competitive, not-for-profit basis.
– It is a credit institution controlled by private shareholders and not by the State or by an Italian administrative authority.
– Its objectives are not those of any public authority.
87. The loans and transfers which Iccrea Banca carries out in favour of the CCBs to which it is linked (and third parties) do not, therefore, involve an element of development or promotion of the objectives of a public authority and are not backed by such an authority.
88. In those circumstances, application of the exception laid down in Article 5(1)(f) of Delegated Regulation 2015/63 would favour Iccrea Banca over other private banks and would distort competition.
89. In addition, as the Italian Government states, Iccrea Banca’s involvement in the ECB’s TLTRO operations has nothing to do with promotional loans: the ECB offers that financing at market interest rates and through competitive auctions.
3. Strict interpretation of the exceptions in Article 5(1) of Delegated Regulation 2015/63
90. It follows from the above that Iccrea Banca’s liabilities vis-à-vis the CCBs with which it is linked do not qualify for the exceptions laid down in Article 5(1) of Delegated Regulation 2015/63 concerning the calculation of ordinary contributions to NRFs.
91. The referring court and Iccrea Banca propose that a broad or analogous interpretation of those exceptions, or even the creation of a new exception through case-law, is possible, such that the internal liabilities of the central institution of a cooperative credit system vis-à-vis the institutions which form that system are not counted for the purpose of calculating ordinary contributions.
92. That proposal should not be accepted.
93. Like all exceptions, those in Article 5(1) of Delegated Regulation 2015/63 must be interpreted strictly to avoid undermining the prevailing general rule.
94. The exception of intragroup liabilities reflects the interconnectedness of the group entities and avoids double counting intragroup exposures. That exception is subject to compliance with strict conditions, (50) which prevents liabilities from being excluded from the basis of calculation if there are no guarantees that intragroup lending exposures would be covered where the financial health of the group deteriorates. (51)
95. In the case of groups of cooperative credit institutions, like Iccrea Banca and the CCBs linked to it, the EU legislature took the view that there are no guarantees that intragroup lending exposures would be covered where the financial health of the group deteriorates. Therefore, it decided not to exclude those liabilities from the liabilities used to calculate ordinary contributions, which meant they were not included in the list in Article 5(1) of Delegated Regulation 2015/63.
96. Naturally, the Court of Justice cannot alter that decision of the EU legislature unless its validity has been challenged, a matter which neither the referring court nor the parties to these proceedings have raised.
IV. Conclusion
97. In the light of the foregoing considerations, I propose that the Court of Justice should give the following reply to the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy):
(1) The questions referred for a preliminary ruling are inadmissible as regards the decisions of the Single Resolution Board relating to contributions to the Single Resolution Fund in 2016, which were notified by Banca d’Italia to Iccrea Banca SpA Istituto Centrale del Credito Cooperativo. Those decisions can be challenged only before the Court of Justice and the national courts do not have jurisdiction to annul them.
(2) As regards the decisions of Banca d’Italia relating to contributions to the national resolution fund, the exceptions laid down in Article 5(1), in particular subparagraphs (a) and (f), of Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements are not applicable to the internal liabilities of a cooperative credit bank system of the kind examined in these proceedings. Those liabilities must be taken into account for the purpose of calculating ordinary contributions to the national resolution fund.