Provisional text
OPINION OF ADVOCATE GENERAL
ĆAPETA
delivered on 6 June 2024 (1)
Joined Cases C‑256/23 and C‑290/23
European Chemicals Agency (ECHA)
v
Hallertauer Hopfenveredelungsges. m.b.H.,
joined parties:
Regierung von Niederbayern
(Request for a preliminary ruling from the Bayerisches Verwaltungsgericht Regensburg (Bavarian Administrative Court, Regensburg, Germany))
and
European Chemicals Agency (ECHA)
v
B. GmbH
(Request for a preliminary ruling from the Oberverwaltungsgericht des Landes Sachsen-Anhalt (Higher Administrative Court of the Land of Saxony-Anhalt, Germany))
(Reference for a preliminary ruling – Regulation (EC) No 1907/2006 (REACH) – Commission Regulation (EC) No 340/2008 – Fees and charges payable to the European Chemicals Agency (ECHA) – ECHA decision imposing an administrative charge – Enforcement – Article 299 TFEU)
I. Introduction
1. What happens if an EU agency takes a decision imposing charges on a private party and that party refuses to pay? Can the EU agency enforce its pecuniary claim based on that decision judicially and, if so, how?
2. Those are essentially the issues which arise from the questions referred by two German courts in the present cases.
II. Background to the present cases and the questions referred for a preliminary ruling
A. ECHA and the REACH framework on fees and charges
3. The present cases arise from disputes before two different German administrative courts in which the European Chemicals Agency (‘ECHA’) seeks to enforce its pecuniary claims against two different companies.
4. ECHA is one of over 30 decentralised agencies of the European Union that participate in the implementation of EU policies. It was established under the REACH Regulation, (2) which constitutes comprehensive legislation on the regulation of chemicals in the European Union. It is an independent entity responsible for ensuring the efficient management of certain administrative, technical and scientific aspects of that regulation. (3)
5. Pursuant to the provisions of the REACH Regulation, manufacturers and importers are required to submit registrations of chemical substances to ECHA. In doing so, they must pay the requisite fees, as specified in Commission Regulation 340/2008, which implements the REACH Regulation. (4)
6. According to that framework, there are reduced fees for micro, small or medium-sized enterprises (‘SMEs’), and ECHA carries out verifications of SME status to determine whether the conditions for entitlement to a fee reduction based on that status are satisfied.
7. When a person has wrongly claimed entitlement to a fee reduction for SMEs, ECHA takes a decision that the person is not eligible for such a reduction and charges that person the full fee, along with an administrative charge.
8. The relevant provision empowering ECHA to collect the remaining fees and administrative charges is Article 13(4) of Regulation 340/2008, (5) which states in relevant part:
‘Where a natural or legal person that claims to be entitled to a reduction or a fee waiver cannot demonstrate that it is entitled to such a reduction or waiver, the Agency shall levy the full fee or charge as well as an administrative charge.
Where a natural or legal person that has claimed to be entitled to a reduction has already paid a reduced fee or charge, but cannot demonstrate that it is entitled to such a reduction, the Agency shall levy the balance of the full fee or charge as well as an administrative charge.’
9. ECHA’s decision requesting payment of such an administrative charge is binding on the addressee, who can challenge it by an action for annulment before the EU Courts. (6) If the action is not brought in due time, the decision becomes final and the validity of the obligation to pay can no longer be challenged.
10. If the fees relating to the registration are not paid, ECHA will reject the registration. (7)
11. However, the EU legal framework is silent as to the consequences of non-payment of the administrative charge.
12. Apart from being financed through the EU general budget, ECHA is partly financed through such fees and charges. (8)
13. Neither the REACH Regulation nor Regulation 340/2008 contains provisions concerning the enforcement of ECHA’s decision under circumstances where the private party neither challenges the decision before the EU Courts nor pays the administrative charge. Thus, in such situations, ECHA has sought to enforce its pecuniary claim based on a final decision imposing an administrative charge before the national courts.
14. That is precisely what happened in the present cases. In the sections below, I will briefly set out the facts underlying both cases.
B. Case C‑256/23
15. Hallertauer Hopfenveredelungsges. m.b.H. (‘Hallertauer’) is a German company. In 2010, it submitted a registration for a chemical substance to ECHA and claimed entitlement to a fee reduction as a micro-enterprise.
16. In 2013, ECHA undertook a verification of Hallertauer’s SME status and requested that that company provide it with documentary evidence. (9) Hallertauer failed to do so. However, Hallertauer subsequently sent ECHA a declaration that it had wrongly declared its size as micro and that the correct size category was large.
17. Later in 2013, ECHA took a decision on the SME verification regarding Hallertauer. (10) In that decision, ECHA concluded that that company was not eligible for the SME fee reduction and that it owed the balance of the standard registration fee, as well as an administrative charge in the amount of EUR 9 950. That decision also provided information about the right to challenge it by an action for annulment before the EU Courts.
18. Hallertauer neither paid the administrative charge nor brought an action against that decision before the EU Courts. Thus, ECHA’s decision became final as to the obligation to pay.
19. In 2019, ECHA brought an action seeking that Hallertauer be ordered to pay the amount of the administrative charge before the Bayerisches Verwaltungsgericht Regensburg (Bavarian Administrative Court, Regensburg, Germany), which is the referring court.
20. The referring court asks whether such an action falls within the jurisdiction of the EU Courts under Article 94(1) of the REACH Regulation. The same court also wonders, in the alternative, whether ECHA’s decision comes within the scope of Article 299 TFEU. If so, the referring court wishes to know whether the reference to the rules of civil procedure in that provision should be construed broadly, thereby covering not only the procedure for implementation of the enforcement, but also the rules governing the competent enforcement body.
21. Under those circumstances, the Bayerisches Verwaltungsgericht Regensburg (Bavarian Administrative Court, Regensburg) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) Is Article 94(1) of [the REACH Regulation], according to which an action may be brought before the Court of Justice of the European Union against a decision of the agency, to be interpreted as meaning that the enforceability of decisions of the agency may also be the subject of an action?
(2) If the first question is to be answered in the negative: Is the first paragraph of Article 299 TFEU to be interpreted as meaning that it applies not only to acts adopted by the Council, the Commission or the European Central Bank, but also to decisions of [ECHA] imposing an administrative charge?
(3) If the second question is to be answered in the affirmative: Is the second paragraph of Article 299 TFEU to be interpreted as meaning that the reference to the Member State’s rules of civil procedure encompasses not only the rules of procedure but also the rules governing jurisdiction?’
C. Case C‑290/23
22. B. GmbH (‘B’) is a German company. In 2010, it submitted a registration for a chemical substance to ECHA and claimed entitlement to a fee reduction as a medium-sized enterprise.
23. In 2013, ECHA undertook a verification of B’s SME status and requested that that company provide it with documentary evidence. (11) B submitted documents in response to that request.
24. In 2014, ECHA sent B a request for additional documents. However, ECHA did not receive any reply to that request.
25. In 2016, ECHA took a decision on the SME verification regarding B. (12) In that decision, ECHA concluded that that company was not eligible for the SME fee reduction and that it owed the balance of the standard registration fee, as well as an administrative charge in the amount of EUR 17 437. That decision also contained information on the right to redress before the EU Courts.
26. B neither paid the administrative charge nor brought an action against that decision before the EU Courts. Thus, ECHA’s decision became final as to the obligation to pay.
27. In 2019, ECHA brought an action before the Verwaltungsgericht Halle (Administrative Court, Halle, Germany), requesting that B be ordered to pay the amount of the administrative charge. That court dismissed the action as inadmissible, finding that recourse to the administrative courts was not possible.
28. ECHA lodged an appeal against that judgment before the Oberverwaltungsgericht des Landes Sachsen-Anhalt (Higher Administrative Court of the Land of Saxony-Anhalt, Germany), which is the referring court.
29. The referring court considers that, unlike the court at first instance, ECHA can enforce its claim before the administrative courts because the matter at issue is a public law dispute. Nevertheless, the referring court wishes to know whether ECHA’s decision falls within the scope of Article 299 TFEU. The referring court also asks whether the third subparagraph of Article 13(4) of Regulation 340/2008, read in conjunction with the second subparagraph of Article 11(3) thereof, exhaustively regulates the consequences of non-payment of fees and charges and thus may be considered to preclude ECHA from bringing an action to enforce payment of the administrative charge before a court.
30. Under those circumstances, the Oberverwaltungsgericht des Landes Sachsen-Anhalt (Higher Administrative Court of the Land of Saxony-Anhalt) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) Must the first half-sentence of the first paragraph of Article 299 [TFEU] be interpreted as applying only to decisions taken by the Council, the Commission or the European Central Bank, or does it also apply to decisions of [ECHA] imposing an administrative charge under Article 13(4) of [Regulation 340/2008]?
(2) In the event that the decision of [ECHA] on the imposition of such an administrative charge is not enforceable:
Must the third subparagraph of Article 13(4) in conjunction with the second subparagraph of Article 11(3) of [Regulation 340/2008] be interpreted as meaning that an action for enforcement of payment of the administrative charge should be ruled out?’
III. Procedure before the Court
31. By decision of the President of the Court of Justice of 28 June 2023, Cases C‑256/23 and C‑290/23 were joined for the written and oral parts of the procedure and the decision closing the proceedings.
32. Written observations were submitted to the Court by ECHA, Hallertauer, the Greek and Polish Governments and the European Commission.
33. A hearing was held on 20 March 2024 at which ECHA, the Greek Government and the Commission presented oral argument.
IV. Analysis
34. The two referring courts in the present cases are unsure whether the enforcement of ECHA’s pecuniary claims falls within their jurisdiction. For that reason, they have referred several questions to the Court for a preliminary ruling.
35. As requested by the Court, my Opinion will only deal with the questions relating to the interpretation of Article 299 TFEU (the second question in Case C‑256/23 and the first question in Case C‑290/23).
36. Those questions ask, in essence, whether Article 299 TFEU applies to ECHA. (13)
37. My analysis is structured as follows. First, I will provide some preliminary observations on Article 299 TFEU (A). Second, I will set out the reasons why Article 299 TFEU should be interpreted as relating only to the three EU institutions expressly mentioned therein (B). Third, I will delve into the broader context of EU secondary law for the purposes of interpreting Article 299 TFEU (C). Lastly, I will say a few words about why my proposed interpretation of Article 299 TFEU does not impede the enforcement of ECHA’s pecuniary claims (D).
A. Situating Article 299 TFEU in the Treaty framework
38. Article 299 TFEU has been a part of the Treaty framework since the founding of the European Union over 70 years ago. (14) Despite its longevity, it seems to lead a ‘shadow existence’, as indicated by one commentator. (15) It has hardly appeared in the Court’s case-law and has merited little attention in the scholarly literature so far.
39. Article 299 TFEU states in full:
‘Acts of the Council, the Commission or the European Central Bank which impose a pecuniary obligation on persons other than States, shall be enforceable.
Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. The order for its enforcement shall be appended to the decision, without other formality than verification of the authenticity of the decision, by the national authority which the government of each Member State shall designate for this purpose and shall make known to the Commission and to the Court of Justice of the European Union.
When these formalities have been completed on application by the party concerned, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent authority.
Enforcement may be suspended only by a decision of the Court. However, the courts of the country concerned shall have jurisdiction over complaints that enforcement is being carried out in an irregular manner.’
40. Even though some doubts might arise when one reads the English version, (16) to my mind, Article 299 TFEU does not make the pecuniary claims that come within its scope enforceable, but rather that provision is concerned with how such claims are to be enforced. (17)
41. That understanding is much clearer if one consults other language versions of Article 299 TFEU. Thus, for instance, the French version uses the term ‘titre exécutoire’, while the Dutch version uses the term ‘executoriale titel’. (18) Those language versions imply direct enforceability in the sense of attributing executory force to such claims without any additional requirements.
42. In that respect, Article 299 TFEU merely makes the enforceability of the acts falling within its scope easier and more expedient by making them immediately enforceable, without the need for any additional recognition in the Member States. (19)
43. Similarly, in her Opinion in ADR Center v Commission, (20) Advocate General Kokott considered that ‘the spirit and purpose of that provision is solely to render acts which are adopted by the EU institutions pursuant to Article 288 TFEU and which impose a pecuniary obligation immediately enforceable. Accordingly, Article 299 TFEU is purely an aid to enforcement, which is perfectly justified in the light of the need for the responsibilities of the EU institutions to be exercised and the protection of the financial interests of the European Union.’
44. It follows that Article 299 TFEU should be understood as creating a special procedure whose purpose is to allow for the speedier and more effective enforcement of EU acts imposing financial obligations on private parties. (21)
45. That, however, does not explain why only three EU institutions (the Council of the European Union, the Commission and the ECB) are mentioned in Article 299 TFEU. I am nevertheless of the opinion that there are several reasons which militate in favour of interpreting that provision as being limited to the pecuniary claims of those three institutions.
B. Article 299 TFEU should be interpreted as relating only to the three institutions expressly mentioned therein
46. Pre-Lisbon, what is today Article 299 TFEU had referred to decisions of the Council and the Commission. (22)
47. Post-Lisbon, Article 299 TFEU mentions acts of the Council, the Commission and the ECB, (23) but the rest of that provision has remained the same.
48. The wording of Article 299 TFEU is pretty straightforward and the history of amendments of the FEU Treaty does not suggest that that provision should be given a broader reading.
49. As indicated by the Commission, the framers of the Treaties could have amended Article 299 TFEU to apply to other EU institutions, bodies, offices and agencies in the context of the Lisbon Treaty. Instead, that provision was amended by that Treaty only so as to add a reference to the ECB.
50. None of the other EU institutions, including the European Parliament, was added, nor was a reference to EU bodies, offices and agencies included. At the same time, other Treaty provisions were modified by the Lisbon Treaty to include such a reference to EU bodies, offices and agencies. (24)
51. The reason for this cannot be that the framers of the Treaties considered that other EU institutions, bodies, offices and agencies cannot have pecuniary claims against private parties. It is, for example, clear that the Parliament can have pecuniary claims against its (former) members or employees. Nevertheless, the Parliament is not mentioned in Article 299 TFEU. In a number of cases, the General Court has indeed considered that the Parliament does not fall within the scope of that provision. (25)
52. The Commission contended that, by Article 299 TFEU, the framers of the Treaties sought to limit immediate enforceability to acts of the EU institutions holding executive powers or powers typically associated with the imposition of financial obligations on individuals, along with judgments of the EU Courts under Article 280 TFEU.
53. However, nowadays, many EU bodies, offices and agencies have executive powers and can impose financial obligations on individuals, as demonstrated by the present cases. Therefore, the Commission’s explanation relying on executive powers does not seem to be that helpful.
54. The Commission additionally indicated that the immediately enforceable nature of acts of EU institutions on the territory of a Member State constitutes an interference with the exercise of public power. That line of argument might indeed explain the intention to limit the number of entities that can rely on such powers. Yet, that still does not explain the choice of the three institutions expressly mentioned in Article 299 TFEU, especially the Council, which rarely exercises executive powers or imposes pecuniary obligations on individuals. (26)
55. ECHA, Hallertauer, the Polish Government and the Commission defended the position that Article 299 TFEU is confined to the three institutions expressly mentioned therein. Only the Greek Government argued that Article 299 TFEU could be construed as applying to ECHA.
56. In that respect, the Greek Government submitted that Article 299 TFEU can be extended to the acts of other EU institutions, bodies, offices and agencies subject to three conditions: first, the entity carries out executive functions and adopts administrative acts pursuing public interest objectives; second, the pecuniary claims must contribute to those executive functions; and, third, legal protection is provided for the natural and legal persons concerned. In the view of that Member State, this position is consistent with the Court’s ‘Short Selling’ judgment (27) interpreting the Meroni case-law (28) and is further corroborated by the increase in EU bodies, offices and agencies post-Lisbon, the public interest objectives carried out by them and the appearance of provisions similar to Article 299 TFEU in EU secondary law, as illustrated by those relating to the European Union Intellectual Property Office (‘EUIPO’) and the Single Resolution Board (‘SRB’).
57. To my mind, the Meroni doctrine cannot be relied on to extend the wording of Article 299 TFEU. That doctrine was developed to address the limits to the delegation of discretionary powers in the European Union. (29) In the present cases, however, there is no dispute about the powers of ECHA to impose pecuniary obligations on private parties. Instead, the question is whether such a pecuniary claim, once it can no longer be challenged on the substance, can be directly enforceable in a Member State without having to engage a procedure for recognition by a court or another competent authority.
58. In short, the clear wording and history of Article 299 TFEU suggest that the reference to the three institutions in that provision is exhaustive. (30) Thus, ECHA cannot rely on that provision to enforce its pecuniary claims.
C. Broader legal context
59. My proposed interpretation, which limits Article 299 TFEU to the three institutions expressly mentioned therein, is corroborated by the broader legal context, to which I shall now turn.
60. The Commission considers that the limited scope of Article 299 TFEU is demonstrated by the fact that Article 100(2) of Financial Regulation 2018/1046 (31) exceptionally allows other EU institutions that cannot themselves adopt an enforceable decision under Article 299 TFEU to ask the Commission to do so on their behalf for certain claims. In its view, that provision would be useless if those other institutions came within the scope of Article 299 TFEU.
61. In that respect, I am inclined to agree with Advocate General Kokott who, in her Opinion in ADR Center v Commission, (32) found that Article 100(2) of Financial Regulation 2018/1046 is unclear. (33) Its first subparagraph indicates that ‘a Union institution’ may recover an amount from private parties by means of an enforceable decision within the meaning of Article 299 TFEU, whereas its second subparagraph provides that the Commission may, in exceptional circumstances, adopt such an enforceable decision for the benefit of ‘other Union institutions’ at their request with respect to claims arising in relation to staff or in relation to members or former members. The extensive definition of ‘institution’ in that regulation (34) seems to beg the question why the second subparagraph is needed if the first subparagraph covers those ‘other institutions’ in any event.
62. It seems reasonable, in my view, to read Article 100(2) of Financial Regulation 2018/1046 as meaning that such ‘other Union institutions’ are those which are not mentioned in Article 299 TFEU, given that the provisions of EU secondary law must be read in the light of EU primary law, and not the other way around. That understanding also seems to be suggested by institutional documents. (35)
63. Therefore, I agree with the Commission that an interpretation of Article 299 TFEU as covering all EU institutions, bodies, offices and agencies would have the result that the possibility for ‘other Union institutions’ in the second subparagraph of Article 100(2) of Financial Regulation 2018/1046 to rely on the Commission to adopt an enforceable decision pursuant to Article 299 TFEU would not make sense.
64. Accordingly, Article 100(2) of Financial Regulation 2018/1046 militates in favour of an interpretation of Article 299 TFEU that is limited to the three institutions expressly mentioned therein.
65. The same can be said for EU secondary law pertaining to other EU bodies, offices and agencies besides ECHA.
66. In particular, it appears that when it comes to the enforcement of fines and penalty payments imposed by certain EU bodies, offices and agencies, (36) there are sometimes provisions in the relevant EU legislation which are similar to Article 299 TFEU.
67. For example, as regards the SRB, Article 41(3) of Regulation 806/2014 (37) states:
‘Fines and periodic penalty payments imposed pursuant to Articles 38 and 39 shall be enforceable.
Enforcement shall be governed by the applicable procedural rules in force in the participating Member State in the territory of which it is carried out. The order for its enforcement shall be appended to the decision without any other formality than verification of the authenticity of the decision by the authority which the government of each participating Member State shall designate for that purpose and which it shall make known to the Board and to the Court of Justice.
When those formalities have been completed on application by the party concerned, the latter may proceed to enforcement in accordance with the national law, by bringing the matter directly before the competent body.
Enforcement may be suspended only by a decision of the Court of Justice. However, the courts of the participating Member State concerned shall have jurisdiction over complaints that enforcement is being carried out in an irregular manner.’ (38)
68. The fact that the EU legislature includes such provisions modelled after Article 299 TFEU in relation to certain EU bodies, offices and agencies suggests that their acts imposing pecuniary obligations on private parties do not fall within the scope of Article 299 TFEU, since, if they did, there would be no need to replicate such provisions in EU legislation.
69. In contrast, it appears that when it comes to the enforcement of fees and charges payable to certain EU bodies, offices and agencies, EU legislation generally does not contain provisions modelled after Article 299 TFEU. Instead, the relevant provisions seem to be geared towards taking the necessary legal steps to obtain payment and allowing the EU body, office or agency to cease certain activities in order to facilitate such payment.
70. For instance, as regards the European Medicines Agency, Article 10(3) of Regulation 297/95 (39) provides: ‘Where any fee payable under this Regulation remains unpaid at its due date and without prejudice to the Agency’s capacity to institute legal proceedings conferred on it by Article 71 of Regulation (EC) No 726/2004, the Executive Director may decide not to provide the requested services or to suspend all the services and procedures under way until the fee has been paid …’ (40)
71. What is the explanation for this difference in the treatment of the enforcement of fines and penalty payments, on the one hand, and that of fees and charges, on the other? It might be that fines and penalty payments are typically allocated to the EU general budget, (41) such that provisions replicating Article 299 TFEU could be regarded as a means of protecting the European Union’s financial interests, whereas fees and charges go directly to the EU bodies, offices and agencies concerned.
72. In any event, this approach taken in EU legislation seems to lend further support to an interpretation of Article 299 TFEU that is limited to the three institutions expressly mentioned therein.
D. ECHA can enforce its pecuniary claims
73. The fact that ECHA’s pecuniary claims do not fall within Article 299 TFEU does not mean that they are unenforceable. Enforcement must instead fall back on the usual procedures in the legal systems of the Member States.
74. Under the REACH Regulation, ECHA has legal personality and enjoys the most extensive legal capacity in the Member States. (42)
75. When EU law does not provide for the appropriate procedures, as it does not when it comes to the enforcement of ECHA’s pecuniary claims, it is for the Member States to do so.
76. In providing for adequate enforcement procedures, the Member States enjoy procedural autonomy, subject to compliance with the principles of equivalence and effectiveness. (43) In principle, by virtue of the principle of equivalence, they must enable ECHA to enforce its pecuniary claims in the same way as similar claims would be enforced in national law and cannot submit such claims to less favourable treatment than similar domestic claims. Additionally, in accordance with the principle of effectiveness, they cannot make it impossible or excessively difficult for ECHA to enforce its pecuniary claims.
77. It is, therefore, for the referring courts to establish what the equivalent situation under national law would be and to decide on that basis whether those courts or other type of courts have jurisdiction over ECHA’s pecuniary claims.
78. The fact that, as a matter of EU law, ECHA cannot remain without enforcement possibilities in the Member States is an additional reason why the wording of Article 299 TFEU does not need to be stretched so as to include ECHA. There is simply no justification for such a creative interpretation because the effective protection of ECHA’s rights is already guaranteed by the EU legal order.
V. Conclusion
79. In the light of all the foregoing considerations, I propose that the Court should answer the second question referred for a preliminary ruling by the Bayerisches Verwaltungsgericht Regensburg (Bavarian Administrative Court, Regensburg, Germany) and the first question referred for a preliminary ruling by the Oberverwaltungsgericht des Landes Sachsen-Anhalt (Higher Administrative Court of the Land of Saxony-Anhalt, Germany) as follows:
Article 299 TFEU
must be interpreted as applying only to acts of the Council of the European Union, the European Commission and the European Central Bank, and not to acts of the European Chemicals Agency imposing an administrative charge under Article 13(4) of Commission Regulation (EC) No 340/2008 of 16 April 2008 on the fees and charges payable to the European Chemicals Agency pursuant to Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH).