Case T‑411/22
Dexia
v
Single Resolution Board (SRB)
Judgment of the General Court (Eighth Chamber, Extended Composition) of 10 April 2024
(Economic and monetary union – Banking union – Single Resolution Mechanism of credit institutions and certain investment firms (SRM) – Single Resolution Fund (SRF) – Decision of the Single Resolution Board (SRB) on the calculation of the ex ante contributions for the 2022 contribution period – Article 70(2) of Regulation (EU) No 806/2014 – Error of law – Limitation of the temporal effects of the judgment)
1. Economic and monetary policy – Economic policy – Single Resolution Mechanism of credit institutions and certain investment firms – Ex ante contributions to the Single Resolution Fund (SRF) – Annual cap of the cumulative amount of individual contributions to the SRF determined to be 12.5% of the final target level – Scope – Application during the initial period
(European Parliament and Council Regulation No 806/2014, Art. 70(2), first and fourth subparas)
(see paragraphs 30, 38)
2. Economic and monetary policy – Economic policy – Single Resolution Mechanism of credit institutions and certain investment firms – Ex ante contributions to the Single Resolution Fund (SRF) – Annual cap of the cumulative amount of individual contributions to the SRF determined to be 12.5% of the final target level – Scope – Cap not to be exceeded by the Single Resolution Board (SRB) – Criteria for assessment – Dynamic approach to the final target level
(European Parliament and Council Regulation No 806/2014, Arts 69(1) and 70(2), first and fourth subparas)
(see paragraphs 41, 45-48)
Résumé
Hearing an action for annulment – which it upholds – the General Court annuls the decision of the Single Resolution Board (SRB) concerning the determination of the ex ante contributions of credit institutions and certain investment firms for 2022 to the Single Resolution Fund (SRF). (1) For the first time, it rules on the rule laid down in the first and fourth subparagraphs of Article 70(2) of Regulation No 806/2014, (2) according to which the ex ante contributions due from all of the institutions authorised in the territories of all of the participating Member States are not to exceed 12.5% of the final target level of the SRF (‘the 12.5% cap’).
Dexia, the applicant, was a credit institution established in France. On 11 April 2022, by the contested decision, the SRB determined, in accordance with Article 70(2) of Regulation No 806/2014, the 2022 ex ante contributions to the SRF of credit institutions and certain investment firms, including the applicant. The latter seeks the annulment of the contested decision in so far as that decision concerns it.
Findings of the Court
As a preliminary point, the Court points out that Article 69(1) of Regulation No 806/2014 provides that, by the end of the initial period of eight years from 1 January 2016 (‘the initial period’), the available financial means of the SRF must reach the final target level, which corresponds to at least 1% of the amount of covered deposits of all of the institutions authorised in the territories of all of the participating Member States (‘the institutions concerned’). Under Article 69(2) of Regulation No 806/2014, during the initial period, the ex ante contributions must be spread out in time as evenly as possible until the final target level is reached, but with due account being taken of the phase of the business cycle and the impact that pro-cyclical contributions may have on the financial position of institutions. Furthermore, in accordance with the first and fourth subparagraphs of Article 70(2) of Regulation No 806/2014, each year the SRB is to calculate the individual contributions to ensure that the contributions due by all of the institutions concerned do not exceed 12.5% of the final target level of the SRF.
In the first place, as regards the temporal application of the requirement to apply a 12.5% cap, the Court recalls that that requirement is intended to apply during the initial period. As is clear from the provisions of Regulation No 806/2014, each year the SRB must comply with the requirement to apply a 12.5% cap without in any way limiting its application in time to the period following the initial period. (3) Similarly, no other provision of that regulation states that the requirement to apply a 12.5% cap is not to apply during the initial period or that the SRB may derogate from it during that period. That interpretation is confirmed by the origin of that regulation, from which it is apparent that, in the Commission’s proposal for a regulation, (4) the initial period for the establishment of the SRF was spread over 10 years. Subsequently, the Parliament and the Council agreed to shorten that period to eight years and at the same time decided to increase that cap to 12.5%. It follows that the EU legislature established a link between the number of years in the initial period and the percentage of the cap. Therefore, the 12.5% cap is to apply during the initial period.
In the second place, as regards the substance of the requirement to apply a 12.5% cap, the Court recalls that the SRB is required to ensure that the contributions due by all of the institutions concerned do not exceed 12.5% of the final target level. (5) In that regard, the legislation at issue (6) is based on a dynamic approach to the final target level, in the sense that that level must be determined with regard to the covered deposits at the end of the initial period. It is in the light of that final target level that the requirement to apply a 12.5% cap applies.
That said, in so far as the calculation of ex ante contributions is an annual exercise based on the definition of a final target level that must be reached at the end of the initial period, then an annual target level to be apportioned between the institutions, it is for the SRB, in respect of each contribution period, to make as precise an estimate as possible of the final target level in the light of the data available at the time of that estimate (‘the forecast final target level’). It is the forecast final target level that is decisive for the application of the 12.5% cap.
Consequently, when the SRB calculates the ex ante contributions during a given contribution period, it must ensure that the amount of the ex ante contributions due by all of the institutions concerned does not exceed 12.5% of the forecast final target level.
The Court finds that that conclusion is not called into question by the argument of the SRB that the requirement to apply a 12.5% cap should either be disregarded or be interpreted flexibly. First, it states that the meaning of the relevant provisions is absolutely plain from its very wording. (7) Second, the provisions that provide, inter alia, that ex ante contributions must be spread out in time as evenly as possible until the final target level is reached (8) do not allow the 12.5% cap to be interpreted as meaning that it is not binding or is merely indicative.
In the last place, the Court examines whether, in the contested decision, the SRB complied with the requirement to apply a 12.5% cap. In that regard, it is apparent, first of all, that the forecast final target level was estimated at EUR 79 987 450 580. Thus, the SRB was required to ensure that the total amount of the ex ante contributions did not exceed the amount of EUR 9 998 431 322.50. As is apparent from the contested decision, the SRB determined the annual target level for the 2022 contribution period to be EUR 14 253 573 821.46, an amount which was reduced to EUR 13 675 366 302.18 after certain deductions.
Consequently, the Court finds that the contested decision determined the amount of the ex ante contributions due by all of the institutions concerned at an amount which exceeded the cap of 12.5% of the forecast final target level and that the SRB infringed the first and fourth subparagraphs of Article 70(2) of Regulation No 806/2014. It holds that that error in law alone is such as to justify the annulment of the contested decision in so far as it concerns the applicant.
Nevertheless, in the light of the circumstances of the present case, the Court maintains the effects of the contested decision in so far as it concerns the applicant until the SRB has taken the necessary measures resulting from that annulment, which must occur within a reasonable period that cannot exceed six months from the day on which the present judgment becomes final.