JUDGMENT OF THE GENERAL COURT (Third Chamber)
28 February 2024 (*)
(Economic and monetary policy – Prudential supervision of credit institutions – Second subparagraph of Article 9(1) of Regulation (EU) No 1024/2013 – Application by the ECB of absorption interest pursuant to Austrian law where Article 395 of Regulation (EU) No 575/2013 has been infringed and following a decision imposing an administrative pecuniary penalty under Article 18 of Regulation No 1024/2013 – Proportionality)
In Cases T‑647/21 and T‑99/22,
Sber Vermögensverwaltungs AG, formerly Sberbank Europe AG, established in Vienna (Austria), represented by M. Fellner, lawyer,
applicant,
v
European Central Bank (ECB), represented by K. Lackhoff, J. Poscia and M. Ioannidis, acting as Agents,
defendant,
supported by
Republic of Austria, represented by J. Schmoll, F. Koppensteiner and A. Posch, acting as Agents,
intervener,
THE GENERAL COURT (Third Chamber),
composed of F. Schalin, President, I. Nõmm (Rapporteur) and G. Steinfatt, Judges,
Registrar: V. Di Bucci,
– having regard to the written part of the procedure,
– having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,
gives the following
Judgment
1 By its actions under Article 263 TFEU, the applicant, Sber Vermögensverwaltungs AG, seeks to have set aside, respectively, decisions ECB-SSM-2021-ATSBE-7 of 2 August 2021 and ECB-SSM-2021-ATSBE-12 of 21 December 2021 of the European Central Bank (ECB). Those two decisions were taken pursuant to Article 4(1)(d) and (3) and Article 9(1) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the ECB concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63), read in conjunction with Article 395(1) 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, and corrigenda OJ 2013 L 208, p. 68, and OJ 2013 L 321, p. 6), and point 2 of Paragraph 97(1) of the Bundesgesetz über das Bankwesen (Bankwesengesetz) (Law on the banking sector) of 30 July 1993 (BGBl. 532/1993), as amended by the Bundesgesetz, mit dem das Bankwesengesetz, das Börsegesetz 2018, das Finalitätsgesetz, das Finanzmarkt-Geldwäsche-Gesetz, das Sanierungs- und Abwicklungsgesetz, das Wertpapieraufsichtsgesetz 2018 und das Zentrale Gegenparteien-Vollzugsgesetz geändert werden (Federal Law amending the Law on banking activities, the Law on stock exchanges 2018, the Law on settlement finality, the Law on money-laundering on financial markets, the Law on recovery and resolution, the Law on the securities supervision 2018 and the Law on the enforcement of central counterparties) of 28 May 2021 (BGBl. I, 98/2021 (‘the BWG’).
Background to the dispute
2 The applicant is an Austrian credit institution subject to direct prudential supervision by the ECB.
3 On 1 October 2015, the applicant informed the ECB and the Finanzmarktaufsichtsbehörde (Financial Markets Supervisory Authority, Austria) (‘the FMA’) that its exposures to a credit institution had exceeded the limit to large exposures laid down in Article 395(1) of Regulation No 575/2013 during 2015. It stated that it had put an end to its having exceeded those limits.
4 On 15 February 2019, the ECB decided to impose on the applicant an administrative pecuniary penalty under Article 18(1) of Regulation No 1024/2013 in the amount of EUR 630 000 in respect of an infringement of Article 395(1) of Regulation No 575/2013 on account of the limits to large exposures established by that latter provision having been exceeded on an individual and on a consolidated basis. In order to determine the amount of that penalty, it made a distinction between the infringement committed on a consolidated basis (which could, in accordance with the calculation carried out, give rise to a penalty in an amount of EUR 520 000) and the infringement committed on an individual basis (which could, in accordance with the calculation carried out, give rise to a penalty in an amount of EUR 330 000). In so far as the two breaches arose from the same facts, the ECB found that the cumulative imposition of those two amounts would not be proportionate and, consequently, set the amount of that penalty at EUR 630 000.
5 On 17 February 2021, the ECB informed the applicant that it intended to levy on it absorption interest on the amounts concerned by those limits having been exceeded pursuant to point 2 of Paragraph 97(1) of the BWG and sent it a draft decision to that effect.
6 On 3 March 2021, the applicant submitted its comments on that draft decision.
7 On 29 June 2021, the ECB gave the applicant the opportunity to comment on a revised version of the draft decision, following the amendment made to Article 97(1) of the BWG on 28 May 2021.
8 On 6 July 2021, the applicant submitted its comments on the revised version of the draft decision.
9 On 2 August 2021, the ECB adopted decision ECB-SSM-2021-ATSBE-7 (‘the decision of 2 August 2021’), which imposed absorption interest on it in respect of the limits having been exceeded between February and June 2015, in the amount of EUR 2 120 926.08.
10 First, the ECB stated that the applicant had informed it, and the FMA, that one of its exposures had exceeded the threshold of 25% of its eligible capital laid down in Article 395(1) of Regulation No 575/2013.
11 Second, the ECB stated that the applicant had exceeded that threshold, (i) on an individual basis, for 59 working days during the period from 5 February to 29 June 2015 and (ii) on a consolidated basis, for 53 working days during the period from 10 February to 29 June 2015. It noted that those limits had been exceeded over the course of four calendar months.
12 Third, the ECB inferred that, on the basis of Article 4(1)(d) and (3) and the second subparagraph of Article 9(1) of Regulation No 1024/2013, it was appropriate to levy absorption interest on the applicant pursuant to point 2 of Paragraph 97(1) of the BWG in respect of the infringement of Article 395(1) of Regulation No 575/2013 both on an individual basis, in the amount of EUR 1 105 359.95, and on a consolidated basis, in the amount of EUR 2 120 926.08.
13 On 30 August 2021, the applicant requested that the decision of 2 August 2021 be reviewed pursuant to Article 24(1), (5) and (6) of Regulation No 1024/2013, read in conjunction with Article 7 of the ECB decision of 14 April 2014 concerning the establishment of an Administrative Board of Review and its Operating Rules (OJ 2014 L 175, p. 47).
14 On 12 October 2021, the applicant brought the action in Case T‑647/21 seeking to have set aside the decision of 2 August 2021.
15 On 25 October 2021, the Administrative Board of Review (‘the ABoR’) gave an opinion in which it found that the decision of 2 August 2021 (i) lacked sufficient reasoning regarding the application of the principle of proportionality, the application of Article 70 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L. 176, p. 338) and the application of Paragraph 99e of the BWG; (ii) failed to comply with the principle that action must be taken within a reasonable time; and (iii) lacked sufficient reasoning as to the ECB’s choice to levy absorption interest in respect of the limits of large exposures having been exceeded both at individual and consolidated level.
16 On 21 December 2021, the ECB adopted a new decision, namely decision ECB-SSM-2021-ATSBE-12 (‘the decision of 21 December 2021’), paragraph 3.1 of which states that it ‘replaces and amends the [decision of 2 August 2021]’ and, paragraph 3.3 of which states that it ‘takes effect as of the day of the notification of the [decision of 2 August 2021]’.
17 The ECB maintained the same amount of absorption interest as it had imposed in the decision of 2 August 2021.
18 In the light of the ABoR’s opinion, first, the ECB added that, in situations where an institution breaches its obligations under Article 395 of Regulation No 575/2013, the levying of absorption interest under point 2 of Paragraph 97(1) of the BWG fell within the exercise of a non-discretionary power by the competent authority, leaving it no discretion. The matters referred to in Paragraph 99e of the BWG with regard to ‘punitive penalties’ are therefore irrelevant. Second, the ECB highlighted the fact that it followed from the case-law of the Austrian courts that, where limits were exceeded on both an individual and a consolidated basis, absorption interest had to be imposed in respect of each of those bases. Third, the ECB considered that, contrary to the findings of the ABoR, there had been no failure to comply with the obligation to act within a reasonable time in dealing with administrative procedures in the light of the circumstances of the case and it observed that the ABoR itself had found that the duration of the procedure had not affected the exercise of the applicant’s rights of defence.
Forms of order sought
19 In Case T‑647/21, the applicant claims that the Court should:
– annul the decision of 2 August 2021;
– order the ECB to pay the costs.
20 The ECB and the Republic of Austria contend that the Court should:
– dismiss the application;
– order the applicant to pay the costs.
21 In addition, on 28 January 2022 the ECB submitted an application for a declaration that there is no need to adjudicate in that case, a decision upon which was reserved for the final judgment on 31 May 2022.
22 In Case T‑99/22, the applicant claims that the Court should:
– annul the decision of 21 December 2021;
– order the ECB to pay the costs.
23 The ECB and the Republic of Austria contend that the Court should:
– reject the application;
– order the applicant to pay the costs.
Law
24 After hearing the views of the parties in that regard, the Court has decided to join the present cases for the purposes of the judgment, in accordance with Article 68 of its Rules of Procedure.
The action in Case T‑99/22
25 The arguments put forward by the applicant in support of the application to have set aside the decision of 21 December 2021 can, in essence, be divided into seven pleas in law, alleging: (i) breach of the principle ne bis in idem found in Article 50 of the Charter of Fundamental Rights of the European Union (‘the Charter’) and in Article 4 of Protocol No 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms, signed in Rome on 4 November 1950 (‘the ECHR’), (ii) a challenge to the definitive nature of the ECB’s decision of 15 February 2019 contrary to the rules of Austrian law, (iii) infringement of Article 49 of the Charter and Article 7 of the ECHR and Article 18(1) of Regulation No 1024/2013, (iv) infringement of point 2 of Paragraph 97(1) of the BWG, (v) breach of the principle of proportionality and of Article 70 of Directive 2013/36, (vi) breach of the ECB’s obligation to act within a reasonable time and (vii) misuse of powers.
The first plea: breach of the principle ne bis in idem
26 The applicant submits that levying absorption interest under point 2 of Paragraph 97(1) of the BWG constitutes a breach of the principle ne bis in idem laid down in Article 50 of the Charter and Article 4 of Protocol No 7 to the ECHR, since the ECB has already imposed on it an administrative pecuniary penalty of EUR 630 000 in respect of identical facts. The applicant submits that that principle also applies to administrative penalties capable of being criminal in nature and considers that that classification applies to absorption interest, in so far as it goes beyond a deprivation of the economic advantage obtained from the infringement of Article 395 of Regulation No 575/2013. In addition, in the judgment of 7 August 2018, VTB Bank (Austria) (C‑52/17, EU:C:2018:648), the Court of Justice did not express a view on whether or not absorption interest is criminal in nature.
27 The ECB, supported by the Republic of Austria, submits that the present plea must be rejected.
28 The principle ne bis in idem is a fundamental principle of EU law (judgment of 15 October 2002, Limburgse Vinyl Maatschappij and Others v Commission, C‑238/99 P, C‑244/99 P, C‑245/99 P, C‑247/99 P, C‑250/99 P to C‑252/99 P and C‑254/99 P, EU:C:2002:582, paragraph 59), which is now enshrined in Article 50 of the Charter.
29 Article 50 of the Charter contains a right corresponding to that provided for in Article 4 of Protocol No 7 to the ECHR. In that regard, it must be pointed out that, in so far as the Charter contains rights which correspond to rights guaranteed by the ECHR, Article 52(3) of the Charter provides that their meaning and scope are the same as those laid down by the ECHR. It is therefore necessary to take account of Article 4 of Protocol No 7 to the ECHR for the purpose of interpreting Article 50 of the Charter, without prejudice to the autonomy of EU law and of the Court of Justice of the European Union (see, to that effect, judgment of 20 March 2018, Menci, C‑524/15, EU:C:2018:197, paragraphs 23 and 60).
30 Article 50 of the Charter provides that ‘no one shall be liable to be tried or punished again in criminal proceedings for an offence for which he or she has already been finally acquitted or convicted within the Union in accordance with the law’. Therefore, the principle ne bis in idem prohibits a duplication both of proceedings and of penalties of a criminal nature for the purposes of that article for the same acts and against the same person (see judgment of 20 March 2018, Menci, C‑524/15, EU:C:2018:197, paragraph 25 and the case-law cited).
31 It follows from the case-law of the Court of Justice that three criteria are relevant. The first criterion is the legal classification of the offence under national law, the second is the intrinsic nature of the offence, and the third is the degree of severity of the penalty which the person concerned is liable to incur (see, to that effect, judgments of 5 June 2012, Bonda, C‑489/10, EU:C:2012:319, paragraph 37, and of 20 March 2018, Menci, C‑524/15, EU:C:2018:197, paragraph 26). In that regard, it should be stated that the application of Article 50 of the Charter is not limited to proceedings and penalties which are classified as ‘criminal’ by national law, but extends regardless of such a classification to proceedings and penalties which must be considered to have a criminal nature on the basis of the two other criteria (see, to that effect, judgment of 20 March 2018, Menci, C‑524/15, EU:C:2018:197, paragraph 30).
32 In the present case, it should be recalled that, under Article 395(1) of Regulation No 575/2013, in the version applicable during the period at issue, ‘an institution shall not incur an exposure, after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403 [of that regulation], to a client or group of connected clients the value of which exceeds 25% of its eligible capital’ and, ‘where that client is an institution or where a group of connected clients includes one or more institutions, that value shall not exceed 25% of the institution’s eligible capital or EUR 150 million, whichever [is] the higher, provided that the sum of exposure values, after taking into account the effect of the credit risk mitigation in accordance with Articles 399 to 403 [of that regulation], to all connected clients that are not institutions does not exceed 25% of the institution’s eligible capital’.
33 In addition, point 2 of Paragraph 97(1) of the BWG provides that ‘the [FMA] shall levy interest on credit institutions, responsible undertakings within the meaning of Paragraph 30(6) [of the present law] and the central body in the case of a network of credit institutions in accordance with Paragraph 30a in the following amounts: … 2% of the excess over the large exposure limit laid down in Article 395(1) of Regulation No 575/2013, calculated annually, for 30 days, save in the event of a permissible excess in respect of the limit in accordance with Article 395(5) of [that regulation], supervisory measures as provided for in Paragraph 70(2) [of the present law] or the over-indebtedness of the credit institution’.
34 In the first place, it should be recalled that, on 15 February 2019, by a decision which has become final, the applicant had imposed upon it an administrative pecuniary penalty of EUR 630 000 pursuant to Article 18(1) of Regulation No 1024/2013 as punishment in respect of an infringement consisting of exceeding the limits to large exposures laid down in Article 395(1) of Regulation No 575/2013. It is not disputed by the ECB that the absorption interest which it imposed in the decision of 21 December 2021 was imposed in connection with the same facts.
35 In the second place, it must be pointed out that administrative pecuniary penalties imposed under Article 18(1) of Regulation No 1024/2013 fall within the scope of Article 50 of the Charter.
36 In that regard, it may be observed that the administrative pecuniary penalties imposed under Article 18(1) of Regulation No 1024/2013 are clearly modelled on the fines which the European Commission may impose pursuant to Article 23(2) of Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles [101 and 102 TFEU] (OJ 2003 L 1, p. 1) and are of an equivalent nature and severity. Those penalties have the same deterrent purpose, as is expressly made clear in Article 18(3) of Regulation No 1024/2013, which states that the ‘penalties applied shall be effective, proportionate and dissuasive’, and the same severity as regards the amount, which may reach 10% of the total annual turnover of the credit institution concerned. It results from settled case-law that the principle ne bis in idem must be observed in proceedings for the imposition of fines under competition law (see judgment of 14 February 2012, Toshiba Corporation and Others, C‑17/10, EU:C:2012:72, paragraph 94 and the case-law cited). That classification must therefore be applied by analogy to those penalties.
37 In the third place, and in consequence, it is necessary to ascertain whether the absorption interest levied pursuant to point 2 of Paragraph 97(1) of the BWG also falls within the scope of Article 50 of the Charter.
38 In that regard, it is apparent from the case-law of the Verfassungsgerichtshof (Constitutional Court, Austria) and of the Verwaltungsgerichtshof (Supreme Administrative Court, Austria), set out by the Republic of Austria in its statement in intervention, that absorption interest is classified as a non-punitive prudential measure.
39 More specifically, the Verwaltungsgerichtshof (Supreme Administrative Court) held in a decision of 22 February 1999, as regards the first relevant criterion, namely the legal classification of the offence under domestic law, that it followed from the scheme of the BWG that the Austrian legislature had not classified Paragraph 97 of that law as a criminal provision. As regards the second and third criteria, namely the intrinsic nature of the offence and the degree of severity of the penalty, it held that ‘neither the purpose and nature of the penalty, nor the nature or extent of its severity … [bring] the present matter into the realm of criminal law’. In that regard, it noted that absorption interest was applied ‘without any examination of fault’ and that it was intended to ‘ensure a functioning banking system with sufficient protection for creditors by safeguarding the liquidity of credit institutions and limiting the risks involved in lending’ by providing, where limits applicable to large investments are exceeded, for a contribution ‘which is in proportion to the excess over the limits and intended to absorb the economic advantage improperly gained from exceeding the limit’.
40 It must therefore be inferred from the case-law of the Austrian courts that the application of absorption interest under point 2 of Paragraph 97(1) of the BWG does not fall within the scope of Article 50 of the Charter.
41 The conclusion is borne out by the judgment of 7 August 2018, VTB Bank (Austria) (C‑52/17, EU:C:2018:648, paragraphs 40 to 42). While holding that the absorption interest levied pursuant to an earlier version of Paragraph 97 of the BWG fell within the scope of Article 65 of Directive 2013/36, which relates to ‘administrative penalties and other administrative measures’, the Court of Justice favoured classification as an ‘administrative measure’ rather than as an ‘administrative penalty’, referring to its case-law developed when analysing financial correction measures implemented by Member States to protect the financial interests of the European Union, classifying the obligation to give back an advantage improperly received by means of an irregularity as an ‘administrative measure’.
42 In the light of the foregoing, it must be concluded that the imposition of absorption interest by the ECB under point 2 of Paragraph 97(1) of the BWG in respect of conduct which has already been the subject of an administrative pecuniary penalty pursuant to Article 18 of Regulation No 1024/2013 is not contrary to the principle ne bis in idem.
43 The first plea in law must, therefore, be rejected.
The second plea: breach of the principle of proportionality and of Article 70 of Directive 2013/36
44 The appellant maintains that levying absorption interest on it is contrary to the principle of proportionality as well as Article 70 of Directive 2013/36. First, it recalls that the ECB is required to comply with the principle of proportionality when adopting a penalty or an administrative measure. Second, it submits that the ECB is required to apply Paragraph 99e of the BWG in the light of Article 70 of that directive, which it transposes. It follows that Paragraph 99e of the BWG applies not only to administrative penalties but also to other administrative measures. Third, the applicant submits that, in the light of the criteria laid down in the latter provision, where there is a minor offence of minimal duration which did not result in an advantage for the applicant being created and in the light of its cooperation, the ECB ought to have imposed on it absorption interest in a much lower amount, or no interest.
45 In addition, the applicant complains that the ECB failed to examine whether it was proportional to levy absorption interest on both a consolidated basis and on an individual basis. It notes, in that regard, that the administrative pecuniary penalty had been set at EUR 630 000 rather than EUR 840 000 in order to take account of the fact that the same conduct resulted in the limits having been exceeded on an individual basis and on a consolidated basis. It complains that the ECB did not take an equivalent approach in the decision of 21 December 2021 or provide an adequate statement of reasons in that regard.
46 The ECB contends, in the first place, that point 2 of Paragraph 97(1) of the BWG leaves it no margin of discretion to assess the proportionality of the measure on the basis of the criteria set out in Paragraph 99e of the BWG.
47 In the second place, the ECB submits that Paragraph 97(1) of the BWG is a specific instrument, which functions irrespective of subjective criteria such as responsibility for breaching the limits applicable to large exposures, for the purpose of ensuring compliance with those limits with a high degree of effectiveness in respect of which the Austrian courts have no constitutional concerns as regards its proportionality.
48 In the third place, the ECB points out that its interpretation of point 2 of Paragraph 97(1) of the BWG is consistent with the case-law of the Austrian courts. It follows, first, that it applies automatically, second, that the classification of ‘generalised absorption of advantages unlawfully received or achievable’ was adopted in respect of it and, third, that it was therefore neither required nor permitted to apply Paragraph 99e of the BWG transposing Article 70 of Directive 2016/36 when implementing point 2 of Paragraph 97(1) of the BWG.
49 In the fourth place, the ECB maintains that, even if the Court were to find that proportionality considerations ought to have been taken into account when applying point 2 of Paragraph 97(1) of the BWG, the fact remains that the criteria set out in Paragraph 99e of the BWG and Article 70 of Directive 2013/36 are not relevant.
50 First, Paragraph 99e of the BWG governs only the amount of fines and cannot relate to the amount of absorption interest.
51 Second, the parameters set out in Paragraph 99e of the BWG and Article 70 of Directive 2013/36 are applicable to determining the type of decision only to the extent appropriate, that is to say, in so far as they are appropriate for attaining the legitimate objectives pursued. On the one hand, those parameters relating to the gravity and duration of the infringement, the amount of profits gained or the losses avoided, the losses for third parties or the level of cooperation with the competent authority are not appropriate for attaining the legitimate objectives of point 2 of Paragraph 97(1) of the BWG. On the other hand, the criterion of the intent behind the commission of the breach, found solely in Article 70 of that directive, is also not appropriate.
52 The Republic of Austria submits that the criteria laid down in Paragraph 99e of the BWG are not relevant in concreto to the adoption of a prudential administrative measure, since those criteria rather relate to penalties. Only the criterion of financial capacity can be taken into account, since it also appears in point 2 of Paragraph 97(1) of the BWG, which precludes absorption interest being levied where the credit institution is over-indebted. It adds that levying absorption interest in respect of both the individual and consolidated levels having been exceeded is consistent with the case-law and is proportionate.
53 Under the last sentence of Article 65(1) of Directive 2013/36, ‘administrative penalties and other administrative measures shall be effective, proportionate and dissuasive’.
54 Article 70 of Directive 2013/36, entitled ‘Effective application of penalties and exercise of powers to impose penalties by competent authorities’ states:
‘Member States shall ensure that when determining the type of administrative penalties or other administrative measures and the level of administrative pecuniary penalties, the competent authorities shall take into account all relevant circumstances, including, where appropriate:
(a) the gravity and the duration of the breach;
(b) the degree of responsibility of the natural or legal person responsible for the breach;
(c) the financial strength of the natural or legal person responsible for the breach, as indicated, for example, by the total turnover of a legal person or the annual income of a natural person;
(d) the importance of profits gained or losses avoided by the natural or legal person responsible for the breach, in so far as they can be determined;
(e) the losses for third parties caused by the breach, in so far as they can be determined;
(f) the level of cooperation of the natural or legal person responsible for the breach with the competent authority;
(g) previous breaches by the natural or legal person responsible for the breach;
(h) any potential systemic consequences of the breach.’
55 In the decision of 21 December 2021, the ECB expressly stated that ‘[Paragraph] 97(1) of the BWG does not confer on the competent authority any discretion to decide whether or not to impose absorption interest’ and ‘does not confer either any discretion to consider specific circumstances in determining the level of interest to be imposed’. It based that conclusion on the position of the Verwaltungsgerichtshof (Supreme Administrative Court), from which it is apparent that the legislation takes into account only ‘the shortfall or exceedance of the limits’ [Verwaltungsgerichtshof (Supreme Administrative Court), judgment No 95/17/0139 of 15 May 2000], that ‘the reasons why a conduct [different from that] required by the legislature has …been followed are irrelevant’ (Verwaltungsgerichtshof (Supreme Administrative Court), judgment No 97/17/0413 of 26 April 1999) and that the competent authority is ‘barred from considering the degree of unlawfulness of the breach’ (Verwaltungsgerichtshof (Supreme Administrative Court), judgment No 95/17/0139 of 15 May 2000).
56 Consequently, the ECB did not examine whether it was proportionate to levy absorption interest in the light of the circumstances of the case, since it found that it was prevented from doing so on account of the Austrian courts’ interpretation of point 2 of Paragraph 97(1) of the BWG.
57 The present plea therefore involves ascertaining whether the ECB correctly interpreted point 2 of Paragraph 97(1) of the BWG when it found that it had no margin of discretion as to the implementation of that provision once its conditions were satisfied.
58 In the first place, in so far as the interpretation of a provision of national law is at issue, it should be recalled that, in principle, the scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts (see, to that effect, judgment of 16 September 2015, Commission v Slovakia (C‑433/13, EU:C:2015:602, paragraph 81 and the case-law cited).
59 Consequently, where the Court is called upon to review the substance of the ECB’s application of national law transposing a directive, the interpretation of national courts is sufficient to establish the scope of that national law where it results in a finding that it is compatible with the directive which it transposes. In such a situation, criticisms seeking to call into question the substance of the interpretation by those courts are liable to be rejected at the outset (see, to that effect, judgment of 24 April 2018, Caisse régionale de crédit agricole mutuel Alpes Provence and Others v ECB (T‑133/16 to T‑136/16, EU:T:2018:219, paragraphs 84 to 92).
60 The situation is different, however, where the interpretation of the national courts does not make it possible to ensure the compatibility of national law with a directive.
61 In such a situation, compliance with the principle of the primacy of EU law means that the General Court must, as must a national court, where necessary, interpret national law so far as possible in the light of the wording and the purpose of the directive transposed in order to achieve the result sought by the directive (see, to that effect, judgment of 24 January 2012, Dominguez, C‑282/10, EU:C:2012:33, paragraph 24).
62 While the obligation to refer to EU law when interpreting and applying the relevant rules of domestic law is limited by general principles of law and cannot serve as the basis for an interpretation of national law contra legem, the requirement to interpret national law in conformity with EU law entails the obligation for national courts to change established case-law, where necessary, if it is based on an interpretation of national law which is incompatible with the objectives of a directive (see, to that effect, judgment of 19 April 2016, DI, C‑441/14, EU:C:2016:278, paragraphs 32 and 33 and the case-law cited).
63 Where it is unable to interpret national law in compliance with the requirements of EU law, the General Court, like the national court which is called upon to apply provisions of EU law, is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any national legislation, even if adopted subsequently, which is contrary to a provision of EU law with direct effect (see, to that effect, judgment of 24 June 2019, Popławski, C‑573/17, EU:C:2019:530, paragraphs 58 and 61).
64 In the second place, it must be stated that Article 70 of Directive 2013/36, read in conjunction with Article 4(1), Article 65(1) and recital 37 of that directive, must be understood as meaning that it is for the FMA and, in consequence, the ECB, to determine the type of administrative measure by taking into account all the circumstances, which necessarily implies that they have margin of discretion and precludes them from being in a situation of a non-discretionary competence.
65 First, that is apparent from the literal and contextual interpretation of Article 70(1) of Directive 2013/36.
66 Initially, it should be stated that, while the title of Article 70 of Directive 2013/36 refers only to ‘penalties’, it is apparent from the wording of that article that that provision also deals with the determination of ‘other administrative measures’. Consequently, the emphasis on the Member States’ obligation to ensure that the competent authorities take into account all the circumstances – a non-exhaustive list of which is provided – also applies to them.
67 Next, it follows from Article 4(1) of Directive 2013/36 that the ‘competent authorities’ referred to in Article 70 of Directive 2013/36 are those which ‘carry out the functions and duties provided for in this Directive’, namely, as regards Austria, the FMA and, as regards the implementation of the second subparagraph of Article 9(1) of Regulation No 1024/2013, the ECB.
68 Finally, it should be noted that Article 65(1) and Article 70 are found in the same section of Directive 2013/36, concerning ‘supervisory powers, powers to impose penalties and right of appeal’, with the result that the concept of ‘administrative measures’ in those two provisions must be regarded as having the same meaning. Consequently, since it is apparent from the judgment of 7 August 2018, VTB Bank (Austria) (C‑52/17, EU:C:2018:648), that absorption interest constitutes an administrative measure within the meaning of Article 65(1) of Directive 2013/36, its application is governed by Article 70 of that directive.
69 Second, that conclusion is borne out by a teleological interpretation of Article 70 of Directive 2013/36, since recital 37 thereof demonstrates the legislature’s intention that Member States should ensure ‘that the competent authorities take into account all relevant circumstances’.
70 Third, it must be stated that the ECB’s obligation to take account of all the circumstances implies that it must examine the particular circumstances of the case when it adopts an administrative measure.
71 Fourth, it follows that an interpretation of point 2 of Paragraph 97(1) of the BWG which places the ECB in a situation of non-discretionary competence would prevent it from taking into account all the relevant circumstances and would have the effect that that provision would be incompatible with Article 70 of Directive 2013/36.
72 It is true that it is apparent from the wording of point 2 of Paragraph 97(1) of the BWG that the automatic nature of the levying of absorption interest is attenuated by the fact that that provision itself takes into account two situations in which an infringement of Article 395(1) of Regulation No 575/2013 will not lead to absorption interest being levied. That is so where the credit institution, first, is the subject of an administrative decision by the competent authority requiring it to take certain measures because of the risk that it will be unable to meet its obligations to its creditors or for the purposes of ensuring the stability of the financial system, pursuant to Paragraph 70(2) of the BWG, or, second, is in a position of over-indebtedness.
73 However, it should be noted that the Austrian legislature’s emphasis on two situations in which an infringement of Article 395(1) of Regulation No 575/2013 will not lead to absorption interest being levied cannot be equivalent to the competent authority taking account of ‘all the [relevant] circumstances’, as laid down in Article 70 of Directive 2013/36.
74 Similarly, the fact that the absorption interest levied under point 2 of Paragraph 97(1) of the BWG is classified as an ‘administrative measure’ rather than an ‘administrative penalty’ within the meaning of Article 65(1) of Directive 2013/36 does not make the automatic nature of their being levied compatible with Article 70 of that directive.
75 While it is true that, due to that difference in nature, the obligation of the competent authority to take account of all the circumstances cannot necessarily be as intense as when an administrative measure, such as the levying of absorption interest or an administrative penalty or, a fortiori, an administrative pecuniary penalty, is involved, the fact remains that the scope of Article 70 of Directive 2013/36 is not limited to administrative penalties, but also includes administrative measures.
76 In the third place, it should be stated that point 2 of Paragraph 97(1) of the BWG may be interpreted in the light of Article 70 of Directive 2013/36 as implying a margin of discretion on the part of the ECB allowing it, where appropriate, not to levy absorption interest if it believes that the circumstances entail making a decision to that effect.
77 First, the wording of point 2 of Paragraph 97(1) of the BWG does not expressly rule out the possibility that the FMA may, where appropriate, have a margin of discretion as to whether it is appropriate to apply it.
78 Second, section XXII of the BWG also contains Paragraph 99e, which reproduces the content of Article 70 of Directive 2013/36, from which it follows that, when determining the type of penalty or measure to be adopted in response to infringements of Regulation No 575/2013, the FMA must, to the extent appropriate, take into account the same circumstances as set out in Article 70 of Directive 2013/36, which also involves a list which is presented as non-exhaustive. Consequently, the reference to ‘measures’ in that article can perfectly well be understood as including the levying of absorption interest referred to in point 2 of Paragraph 97(1) of the BWG.
79 Third, the recognition of a margin of discretion on the part of the ECB when implementing point 2 of Paragraph 97(1) of the BWG does not adversely affect the applicant, with the result that it cannot be limited by compliance with general principles of law as provided for in the case-law cited in paragraph 62 above.
80 In the fourth place and in consequence, in so far as the ECB adopted the decision of 21 December 2021, holding that absorption interest was levied automatically, it relied on a premiss which is legally incorrect, which vitiated its examination of the proportionality of the application of point 2 of Paragraph 97(1) of the BWG, since it resulted in it failing to examine the circumstances of the case.
81 The present plea must therefore be upheld and, accordingly, the decision of 21 December 2021 must be annulled, there being no need to examine the applicant’s other pleas.
The action in Case T‑647/21
82 The ECB maintains that the action brought against the decision of 2 August 2021 has become devoid of purpose since it was replaced by the decision of 21 December 2021, which took effect on the date when the decision of 2 August 2021 was notified. It follows that the subject matter of the action has ceased to exist and that a decision on the substance would procure no advantage for the applicant.
83 According to settled case-law, the withdrawal – or, in certain circumstances, the repeal of ‑ the contested act by the defendant institution divests the action for annulment of its purpose, since it leads, for the applicant, to the desired outcome and gives him or her full satisfaction. However, that applicant may retain an interest in seeking annulment of an act repealed in the course of proceedings if the annulment of that act may in itself have legal consequences (see order of 6 July 2011, SIR v Council, T‑142/11, not published, EU:T:2011:333, paragraphs 18 and 21, and the case-law cited).
84 Accordingly, as regards a measure repealed in the course of proceedings, a situation in which such an interest is retained exists where the measure which repealed it is itself the subject of an action for annulment, with the result that the first measure may become applicable once more following any annulment of the second measure (see order of 20 October 2011, United Phosphorus v Commission, T‑95/09, not published, EU:T:2011:610, paragraph 21 and the case-law cited, and judgment of 13 December 2017, Crédit mutuel Arkéa v ECB, T‑712/15, EU:T:2017:900, paragraph 43 and the case-law cited). It is clear that, for similar reasons, an applicant should be regarded as having an interest in obtaining the annulment of an act which has been withdrawn, where the act withdrawing it is the subject of an action for annulment.
85 Nevertheless, it has been held that the defendant institution requesting a declaration that there is no need to adjudicate, submitting that the contested act has been withdrawn can be akin to an acknowledgement, which is implicit but also certain, that it no longer forms part of the EU legal order, which means that it will no longer be able to rely on it even if the act withdrawing it is set aside (see, to that effect, order of 17 September 1997, Antillean Rice Mills v Commission, T‑26/97, EU:T:1997:131, paragraph 14).
86 In addition, it should be stated that the present case is characterised by a very high degree of similarity both in the content of the decisions of 2 August 2021 and of 21 December 2021 and in the pleas raised by the applicant in its two applications. As is apparent from paragraphs 17 and 18 above, the ECB followed the same reasoning in the decision of 21 December 2021 as it had set out in its decision of 2 August 2021, while supplementing it in the light of the ABoR’s opinion. That is reflected in the fact that the applicant put forward similar arguments in both actions. Such particular conditions mean that the decision of 2 August 2021 is vitiated by the same illegality as that found in paragraphs 44 to 81 above, which strengthens the argument that it would be impossible for the ECB to rely on it, following the annulment of the decision of 21 December 2021 (see, to that effect and by analogy, judgment of 7 September 2023, Versobank v ECB, C‑803/21 P, not published, EU:C:2023:630, paragraphs 167 to 169).
87 Consequently, in the light of the circumstances of the present case, it must be held that the annulment of the decision of 21 December 2021 cannot make the decision of 2 August 2021 applicable once more, with the result that there is no need to adjudicate on the action in Case T‑647/21.
Costs
88 Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the ECB has been unsuccessful in Case T‑99/22, it must be ordered to bear its own costs and to pay those incurred by the applicant, in accordance with the form of order sought by the applicant.
89 Under Article 137 of the Rules of Procedure, where a case does not proceed to judgment, the costs are to be in the discretion of the Court. As regards Case T‑647/21, the Court considers that, in view of the circumstances of the present case, the ECB must be ordered to bear its own costs and to pay those incurred by the applicant in that case, in accordance with the form of order sought by the applicant.
90 Under Article 138(1) of the Rules of Procedure, Member States which intervene in the proceedings are to bear their own costs. Therefore, the Republic of Austria must bear its own costs as regards both Case T‑99/22 and Case T‑647/21.
On those grounds,
THE GENERAL COURT (Third Chamber)
hereby:
1. Joins Cases T‑647/21 and T‑99/22 for the purposes of the judgment;
2. Declares that there is no longer any need to adjudicate on the action in Case T‑647/21;
3. Annuls, in Case T‑99/22, decision ECB-SSM-2021-ATSBE-12 of 21 December 2021 of the European Central Bank (ECB);
4. Orders the ECB to bear its own costs and to pay those incurred by Sber Vermögensverwaltungs AG;
5. Orders the Republic of Austria to bear its own costs.
Delivered in open court in Luxembourg on 28 February 2024.
V. Di Bucci | | M. van der Woude |