Provisional text
OPINION OF ADVOCATE GENERAL
RICHARD DE LA TOUR
delivered on 7 September 2023 (1)
Case C‑822/21
Republic of Latvia
v
Kingdom of Sweden
(Failure of a Member State to fulfil obligations – Directive 2014/49/EU – Deposit guarantee schemes – Non-transfer of contributions to the deposit guarantee fund – Effectiveness – Sincere cooperation between the Member States of the European Union)
I. Introduction
1. By the present action for failure to fulfil obligations, the Republic of Latvia complains that the Kingdom of Sweden has failed to fulfil its obligations under Article 14(3) of Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes. (2) More specifically, this action concerns the arrangements for collecting the contribution payable annually by certain banks to the deposit guarantee scheme (‘DGS’) established in the territory of a Member State, in the context of transfers of bank branches located in other Member States, which means, in accordance with Article 14(3), that the contributions paid to the DGS where the bank has its head office, in respect of those branches during the 12 months preceding the transfer, are transmitted to the relevant national DGSs following those transfers. The Republic of Latvia also complains that, by refusing to transfer the contributions, the Kingdom of Sweden has failed to fulfil its obligations under Article 4(3) TEU by adversely affecting the integration of the single market and in so doing undermining the principle of mutual trust (3) between Member States.
2. The Republic of Estonia, the Republic of Lithuania and the European Commission intervened in support of the Republic of Latvia. The bank’s head office was in fact in Sweden and the branches transferred were located in Estonia, Latvia and Lithuania.
3. In view of the small number of actions for failure to fulfil obligations between States, (4) this case will give the Court the opportunity to clarify the conditions for the admissibility of an action for failure to fulfil obligations based on Article 259 TFEU.
4. At the end of my reasoning, I shall propose that the Court should declare the action admissible, but should dismiss it on the merits, taking into account the fact that a purely teleological interpretation of a directive cannot form the basis of an action for failure to fulfil obligations where the clear provisions of that directive have been transposed literally and there is no evidence of a contrary, general and consistent practice.
II. Legal framework
A. Directive 2014/49
5. Recitals 3 and 37 and Article 6(1), Article 7(1), Article 10(1), (2), (6) and (8), Article 13(1) and Article 14(1) to (4) of Directive 2014/49 apply.
B. Swedish law
6. Paragraph 13 of the lag om insättningsgaranti (Law on deposit guarantees) (5) of 20 December 1995 provides that the guarantee authority is to decide annually on the amount of the contributions due and that those contributions are to be paid within one month of the date of that decision.
7. Under Paragraph 14 of that law, where a credit institution is transferred, in whole or in part, and becomes subject to another DGS, the contributions it paid during the 12 months preceding the transfer are to be transferred to the other DGS.
III. Background to the dispute and pre-litigation procedure
8. A European financial services group with its head office in Sweden (Nordea Bank AB) and paying contributions due under the deposit guarantee scheme to the Swedish DGS, including for its branches located in other Member States, restructured in 2017 and 2018.
9. On 1 October 2017, three branches (6) of that group operating respectively in Estonia, Latvia and Lithuania were transferred to another bank. The deposit guarantee authorities of those Member States in turn requested that the Swedish deposit guarantee authority transfer the contributions paid in respect of each transferred branch. By decision of 3 October 2017, that authority refused those requests on the ground that no contributions had been paid during the 12 months preceding 1 October 2017.
10. On 1 October 2018, Nordea Bank, the transferor of those branches, transferred its head office from Sweden to Finland. At the request of the Finnish deposit guarantee authority, the Swedish deposit guarantee authority transferred, on 4 October and 13 November 2018, the contributions paid by that financial services group during the 12 months preceding 1 October 2018.
11. In Sweden, the contributions to the DGS are due, for the period from January to December, within one month of the deposit guarantee authority’s decision setting the amount. (7) Thus, for 2016, that authority’s annual decision is dated 2 September 2016 and Nordea Bank paid its contribution on 30 September 2016. (8) For 2017, that authority adopted its decision on 14 September 2017 and the contributions were paid on 13 October 2017. (9) For 2018, that authority’s annual decision is dated 27 September 2018 and Nordea Bank paid its contributions on 28 September 2018. (10)
12. The Republic of Latvia and the Republic of Lithuania did not challenge the decision refusing to transfer the contributions to the Swedish DGS before the Swedish courts.
13. However, a challenge by the Republic of Estonia to the refusal decision was rejected by a confirmatory judgment of 15 May 2018 by the Kammarrätten i Stockholm (Administrative Court of Appeal, Stockholm, Sweden) on the ground that Swedish law correctly transposed EU law. In a judgment of 7 November 2018, the Högsta förvaltningsdomstolen (Supreme Administrative Court, Sweden) did not grant it leave to appeal against that confirmatory judgment and dismissed its request for a preliminary ruling, taking the view that the dispute did not concern an interpretation of EU law requiring a preliminary ruling from the Court of Justice.
14. In response to a letter sent to it by the Latvian deposit guarantee authority on 27 March 2019, the Commission acknowledges, in a letter dated 9 October 2020, that the indistinct language of Article 14(3) of Directive 2014/49 does not provide, in essence, for specific scenarios of action to be taken in cases where a national deposit guarantee authority has taken decisions such as extending the period for the payment of contributions, thus leaving the door open to different interpretations.
15. The Estonian, Latvian and Lithuanian deposit guarantee authorities initiated a mediation procedure with the Swedish deposit guarantee authority under the aegis of the European Banking Authority (EBA), which closed the case, in the absence of an agreement, in 2019.
16. In accordance with the second and third paragraphs of Article 259 TFEU, on 10 May 2021 the Republic of Latvia submitted to the Commission a request for a reasoned opinion (‘the initial complaint’). After having requested the observations of the Kingdom of Sweden and heard the parties, the Commission delivered a reasoned opinion on 30 July 2021 in which it found that the Kingdom of Sweden, by its refusal to transfer to the Latvian DGS the contributions paid by Nordea Bank in respect of its Latvian branch during the 12 months preceding the transfer, had failed to fulfil its obligations under Article 14(3) of Directive 2014/49, read in conjunction with Article 10(1) of that directive. By contrast, the Commission took the view that the alleged infringement by the Kingdom of Sweden of the principle of sincere cooperation established by Article 4(3) TEU was not established.
IV. Procedure before the Court
17. By application dated 30 December 2021, the Republic of Latvia brought an action against the Kingdom of Sweden for failure to fulfil obligations in which it claims that the Court should:
– hold that the Kingdom of Sweden has failed to fulfil its obligations under Article 14(3) of Directive 2014/49, in so far as, by refusing to transfer to the Latvian DGS the contributions paid by the Latvian branch of Nordea Bank calculated for the contribution period in accordance with that provision, the Kingdom of Sweden has acted contrary to the objective pursued by that directive and has not ensured the effectiveness of its provisions;
– hold that the Kingdom of Sweden has failed to fulfil its obligations under Article 4(3) TEU, in so far as, by refusing to transfer to the Latvian DGS the contributions paid by the Latvian branch of Nordea Bank calculated for the contribution period in accordance with Article 14(3) of Directive 2014/49, the Kingdom of Sweden has adversely affected the integration of the single market and in so doing undermined the mutual trust (11) between EU Member States, which is a pre-requisite for cross-border integration;
– order the Kingdom of Sweden, if the Court finds that it has failed to fulfil its obligations under Article 14(3) of Directive 2014/49 and Article 4(3) TEU, to put an end to the infringement by having the Swedish DGS transfer to the Latvian DGS the full amount of the contributions paid by the Latvian branch of Nordea Bank, calculated for the contribution period in accordance with Article 14(3) of Directive 2014/49;
– specify, if Article 14(3) of Directive 2014/49 is to be interpreted strictly, its compatibility with the objective of that directive and the obligation of the Swedish DGS to transfer to the Latvian DGS the contributions paid by the Latvian branch of Nordea Bank, and
– order the Kingdom of Sweden to pay the costs.
18. By decisions of 19, 25 and 30 May 2022, the Republic of Estonia, the Republic of Lithuania and the Commission respectively were granted leave to intervene in support of the form of order sought by the Republic of Latvia.
19. While the Republic of Lithuania supports all the forms of order sought in the application, the Republic of Estonia supports only the first and third heads of claim and the Commission only the first head of claim.
20. The Kingdom of Sweden contends that the Court should:
– dismiss the action;
– order the Republic of Latvia to pay the costs.
V. Summary of the arguments of the parties
A. Admissibility
21. As a preliminary point, the Kingdom of Sweden questions whether its interpretation of Article 14(3) of Directive 2014/49 may be called into question in an action for failure to fulfil obligations, since, first, the Republic of Latvia had the possibility of challenging the decision taken by the Swedish deposit guarantee authority before the Swedish national courts and, secondly, an action for failure to fulfil obligations is inadmissible if it is limited to seeking an interpretation of EU law. The Republic of Sweden adds, moreover, that what is at issue is a minimum harmonisation provision.
22. As regards the first complaint, relating to infringement of Article 14(3) of Directive 2014/49, the Kingdom of Sweden takes the view that the Republic of Latvia altered the scope of the dispute in the judicial stage of the action by not referring to Article 10 of that directive, which had been referred to at the hearing organised between those two Member States by the Commission on 1 July 2021.
23. The Kingdom of Sweden submits that the second complaint, alleging infringement of the principle of sincere cooperation based on Article 4(3) TEU, must be rejected since, during the administrative procedure, the Republic of Latvia relied on an infringement of the principle of equal treatment with regard to the treatment of the Republic of Finland, whose DGS was in the same situation as the Latvian DGS.
24. With regard to the Republic of Latvia’s request concerning the payment of contributions by the Swedish DGS to the Latvian DGS, the Kingdom of Sweden states that the purpose of an action for failure to fulfil obligations cannot be the payment of compensation.
25. The Republic of Latvia replies, first, that, even in the case of a minimum harmonisation provision, it is necessary to interpret Directive 2014/49 so as to ensure that its objective of improving and ensuring the stability of the banking system and the protection of depositors is achieved and, secondly, that an action for failure to fulfil obligations under Article 259 TFEU is not conditional on the exhaustion of domestic remedies.
26. As regards its first claim for a declaration of failure to fulfil obligations, the Republic of Latvia denies having changed the subject matter of the dispute, which has been neither extended nor altered as compared with its initial complaint based on Article 14(3) of Directive 2014/49; it takes the view that it is necessary to apply, by analogy, the case-law concerning actions for failure to fulfil obligations brought by the Commission, which does not require the statement of complaints set out in the operative part of the reasoned opinion and the form of order sought by the action to be exactly the same, provided that the subject matter of the proceedings, as defined in the reasoned opinion, has not been extended or altered.
27. As regards its third claim, the Republic of Latvia submits that the failure to fulfil obligations alleged against the Kingdom of Sweden must not only be established but must also cease and that that cessation can only take the form of the payment to the Latvian DGS of the contributions that were refused, which does not amount to compensation.
B. Infringement of Article 14(3) of Directive 2014/49
28. The Republic of Latvia does not dispute the fact that the Kingdom of Sweden has transposed the directive. It argues that Article 14(3) of Directive 2014/49 must not be interpreted formally and literally, as the Kingdom of Sweden has done, but in conjunction with Article 10(1) of that directive. It submits that the infringement is characterised by the failure to transfer the contributions collected in respect of the activities of the Latvian branch.
29. In its view, Article 14(3) of Directive 2014/49, which states that ‘if a credit institution ceases to be member of a DGS and joins another DGS, the contributions paid during the 12 months preceding the end of the membership … shall be transferred to the other DGS’, must be interpreted in the light of its context and the objectives pursued. It adds that recital 3 of that directive is clear in that regard since it states that that ‘directive constitutes an essential instrument for the achievement of the internal market from the point of view of both the freedom of establishment and the freedom to provide financial services in the field of credit institutions, while increasing the stability of the banking system and the protection of depositors’. It infers from this that, in the event of a change of DGS, the DGS of the host Member State must receive the contributions which have been calculated and claimed, in respect of the activities transferred, for a period of 12 months, irrespective of when they were actually paid. It states that the formalistic interpretation of that article by the Kingdom of Sweden renders Directive 2014/49 ineffective, particularly since that Member State allows a period of time to pay the contribution which exceeds the period of one year.
30. The Republic of Latvia adds that the logic of the mechanism put in place by Directive 2014/49 is that the contributions relating to the 12 months preceding the transfer of activity are to be transferred to the DGS of the host Member State since that Member State, on the date of the transfer, becomes responsible for paying the guarantee due to the depositors concerned by that activity. It states that a similar mechanism is implemented when the depositors of a branch must be reimbursed: this is done by the DGS of the host Member State, on the instructions of the DGS of the home Member State, which must provide the necessary financing, before the payment is made to depositors, and reimburse the costs incurred by the DGS of the host Member State.
31. The Commission supports the Republic of Latvia’s reasoning, stating that Article 10(1), which provides for a contribution to be made at least annually, must be read in conjunction with Article 14(3) of Directive 2014/49, since those two provisions are fundamentally linked in order to guarantee the objectives of that directive, in particular solidarity between credit institutions in the event of failure, referred to in recital 37 of that directive. (12) In its view, the contributions were regarded as consideration for the deposit guarantee for a certain period and must therefore be transferred when the burden of the guarantee is transferred to another DGS.
32. The Republic of Estonia and the Republic of Lithuania make the same claims as the Republic of Latvia since the Swedish DGS, for the same reasons, refused to transfer to their national DGSs, following the transfer of the branches located on their territories, the contributions collected in respect of the activities of those branches.
33. On the contrary, the Kingdom of Sweden submits that a teleological interpretation cannot be used to remedy a shortcoming in Article 14(3) of Directive 2014/49, which does not provide for an exhaustive solution in respect of the transfer of funds from one scheme to another. That article should be redrafted to take account of unforeseen situations, as suggested by the EBA and the European Forum of Deposit Insurers. (13) The Kingdom of Sweden also disputes, in particular because of the lack of proportion between the amount of deposits guaranteed by a credit institution and the minimum level of contributions, the scope given by the Commission to the consequences of a literal interpretation of that article in terms of serious effects for the completion of the internal market and the undermining of confidence in the DGS and cooperation between the Member States. Moreover, it considers that the issue of the link between the transfer of activities, and therefore of the risk to another Member State, and the transfer of contributions is not clearly regulated.
34. The Kingdom of Sweden considers that the wording of Article 10 of Directive 2014/49 is customary in EU law and does not require either a specific payment date or that the contribution collected at least annually relates to a specific contribution period (in particular in the case of disputes concerning the amount of the contribution).
35. The Kingdom of Sweden points to an inconsistency in the reasoning put forward, since, if the payment must be made while taking into account the contribution period (non-literal interpretation of Article 14(3) of Directive 2014/49), the date of the payment that is to be made at least annually is no longer of importance.
C. Infringement of Article 4(3) TEU
36. The Republic of Latvia states that the Court’s case-law derives from the principle of sincere cooperation, which is protected by Article 4(3) TEU, an obligation on the Member States, first, to take all the measures necessary to guarantee the application and effectiveness of EU law and to eliminate the unlawful consequences of a breach of that law and, secondly, to assist each other, in full mutual respect, in carrying out tasks which flow from the Treaties. It infers from this that the refusal of the Swedish DGS to transfer to the Latvian DGS the contributions which it received in respect of the Latvian branch is contrary to the principle of sincere cooperation and to the principle of equality since, in a comparable legal situation, the Swedish DGS agreed to transfer contributions to the Finnish DGS.
37. Conversely, the Kingdom of Sweden disputes the fact that a literal application of Article 14(3) of Directive 2014/49 may constitute infringement of the principle of sincere cooperation. It adds that, in the majority of cases of transfers of contributions, it is the date of actual payment that has been taken into account by the DGS of the home Member State. Furthermore, it states that it treated the Finnish DGS’s request differently because contributions had been paid during the 12 months preceding the transfer of the head office.
VI. Analysis
A. Admissibility
38. In the first place, as regards the subject matter of an action for failure to fulfil obligations, the Court’s settled case-law is clear on two points.
39. First, the Court recalls that the objective pursued by the procedure provided for in Article 259 TFEU is designed to obtain a declaration that the conduct of a Member State is in breach of EU law and to terminate that conduct. (14) It infers thereby that an action under that article concerning future possible infringements or which is limited to seeking an interpretation of EU law is inadmissible. (15)
40. Thus, contrary to what is stated by the Kingdom of Sweden, the Republic of Latvia’s action for failure to fulfil obligations concerning the conduct of that aforementioned Member State in relation to the payment of contributions from the Swedish DGS to the Latvian DGS is admissible since its purpose is to obtain a declaration concerning a past failure to fulfil obligations, and it is only for that reason that the latter Member State supports before the Court an interpretation of Directive 2014/49 as regards the manner in which the transfer of contributions must take place when deposit-related activities are transferred between two Member States. Moreover, that interpretation of the directive in question was adopted, at least in part, by the Commission in the reasoned opinion of 30 July 2021. Furthermore, it is not disputed that the Kingdom of Sweden has transposed Article 14(3) of that directive. Therefore, the first complaint in the Republic of Latvia’s application, in so far as it does not seek the Court’s interpretation of a directive but a declaration that there has been an infringement of a provision of a directive as interpreted by that Member State and by the Commission, appears to me to be admissible.
41. Secondly, the Court recalls that, in an action for failure to fulfil obligations, it cannot be asked to do anything other than to find that the failure to fulfil obligations alleged exists with a view to bringing that situation to an end; in particular, it cannot be asked to require a Member State to adopt a particular conduct in order to comply with EU law. (16)
42. However, the Republic of Latvia not only seeks a declaration that the alleged infringement has occurred, but also requests that the Court order the Kingdom of Sweden to transfer to the Latvian DGS the contributions paid in respect of the activities of the Latvian branch of Nordea Bank to the Swedish DGS, including, in the alternative, if the Court were to interpret Article 14(3) of Directive 2014/49 strictly. Consequently, the Republic of Latvia’s requests relating to the transfer of contributions between the Swedish DGS and the Latvian DGS must be declared inadmissible.
43. In the second place, as regards the question of the alteration of the scope of the dispute between the pre-litigation stage and the litigation stage of the action, it should be noted that, in a context characterised by the small number of actions for failure to fulfil obligations between States, (17) the question of the application by analogy of the Court’s case-law on actions for failure to fulfil obligations brought by the Commission on the basis of Article 258 TFEU has never arisen. The present case will enable the Court to clarify the situation.
44. The Court has held that, in an action for failure to fulfil obligations, the purpose of the pre-litigation procedure is to give the Member State concerned an opportunity, on the one hand, to comply with its obligations under EU law and, on the other, to avail itself of its right to defend itself against the objections formulated by the Commission. It follows that the subject matter of an action brought under Article 258 TFEU is circumscribed by the pre-litigation procedure provided for in that provision and cannot, consequently, be extended in the course of the litigation. (18)
45. The Court has inferred that the Commission’s reasoned opinion and the action must be based on the same grounds and pleas, with the result that the Court cannot examine a ground of complaint which was not formulated in the reasoned opinion, which for its part must contain a cogent and detailed exposition of the reasons which led the Commission to the conclusion that the Member State concerned had failed to fulfil one of its obligations under the Treaty. (19) However, that requirement cannot be stretched so far as to mean that in every case the statement of complaints set out in the operative part of the reasoned opinion and the form of order sought by the action must be exactly the same, provided that the subject matter of the proceedings, as defined in the reasoned opinion, has not been extended or altered. (20)
46. However, the fourth paragraph of Article 259 TFEU provides that the absence of a reasoned opinion from the Commission within three months of the Member State’s request does not deprive the latter State of the possibility of bringing the matter before the Court. In such a case, the reasoned opinion cannot serve to circumscribe the debate.
47. It seems to me that, since it follows from the second paragraph of Article 259 TFEU that the pre-litigation stage of an action for failure to fulfil obligations between States is mandatory, the first part of the aforementioned reasoning (21) could perfectly well be applied to this procedure. However, in order to define the scope of the dispute, account should be taken primarily of the Member State’s request and, if it has been given, of the reasoned opinion.
48. Thus, as regards the first alleged failure to fulfil obligations, contrary to what the Kingdom of Sweden claims, it was only by means of a reading in support of a teleological interpretation of Article 14(3) of Directive 2014/49 that Article 10(1) of that directive was discussed during the pre-litigation stage, on the initiative of the Republic of Latvia, as is clear from the Commission’s reasoned opinion. Moreover, it was not cited in the conclusion of the initial complaint or in the form of order sought in the Republic of Latvia’s application. Furthermore, the reference to Article 10 was made using similar wording in the application and in the initial complaint, without any allegation of an infringement of that article. Consequently, the first ground of inadmissibility must be rejected.
49. As regards the second failure to fulfil obligations relating to the infringement of the principle of sincere cooperation, contrary to the summary given of the Republic of Latvia’s requests made in the reasoned opinion, it is clear from the Republic of Latvia’s initial complaint that, to substantiate that objection, both the Kingdom of Sweden’s alleged misinterpretation of Article 14(3) of Directive 2014/49, disregarding the objectives of that directive, and the unequal treatment as between the Latvian DGS and the Finnish DGS were alleged. Thus, the Kingdom of Sweden was given the opportunity to put forward its arguments on those two points and the scope of the dispute was neither altered nor extended during the litigation stage. The second ground of inadmissibility must also be rejected.
50. As regards the failure to exhaust national remedies, the parties, including the Kingdom of Sweden in its rejoinder, agree that Article 259 TFEU does not impose such a condition. The third ground of inadmissibility must be rejected.
B. The complaint based on Article 14(3) of Directive 2014/49
51. It cannot be denied that the Kingdom of Sweden has transposed Article 14(3) of Directive 2014/49 into its national legislation in a literal manner by providing, in Paragraph 14 of the Law on deposit guarantees, that, in the event of the transfer of a credit institution with the result that that institution is subject to another DGS, the contributions paid during the 12 months preceding that transfer are to be transferred to that other DGS. The Kingdom of Sweden has applied that rule by taking into account the date on which the contributions were paid, as provided for in Article 14(3) of Directive 2014/49, which meant that there was no transfer of contributions to the Estonian, Latvian and Lithuanian DGSs because the contributions were paid on a date before or after the 12-month period preceding the transfer of the institution and that there was a double transfer to the Finnish DGS.
52. The Republic of Latvia, supported by the Commission and by the Republics of Estonia and Lithuania, submits principally that Article 14(3) of Directive 2014/49 should be read not literally but purely teleologically, relying, first, on a combined reading of that provision with Article 10 of that directive and, secondly, on the objectives of that directive set out in recitals 3 and 37, namely to achieve the completion of the internal market by increasing the stability of the banking system and the protection of depositors and by creating solidarity among all the credit institutions in a given financial market. The Republic of Latvia, the Republics of Estonia and Lithuania, and the Commission infer from this that the transfer of contributions must correspond to the transfer of liability between DGSs following the transfer of a credit institution.
53. First, a combined reading of Article 14(3) and the second subparagraph of Article 10(1) of Directive 2014/49 appears, prima facie, to permit the inference either that the payment of the contribution to the DGS must take place every year on a fixed date, or that that payment must relate to the contribution due in respect of the previous 12 months.
54. The payment of contributions on a fixed date requires the possibility of making transfers every day of the year, which is not necessarily possible.
55. As for considering, on the basis of that combined reading of Article 14(3) and the second subparagraph of Article 10(1) of Directive 2014/49, that the contribution to be transferred is that due in respect of the 12 months preceding the transfer of the credit institution, this amounts to applying illogical reasoning since, as the Kingdom of Sweden notes, if the amount due corresponds to a period (the previous 12 months), it is no longer necessary to indicate, as provided for in the second subparagraph of Article 10(1) of that directive, that the levy is to take place on an annual basis.
56. Moreover, the wording of the second subparagraph of Article 10(1) is similar, in essence, to that used for contributions to financing arrangements in the area of banking resolution (22) or to the Single Resolution Fund, (23) which provides for contributions to be raised ‘at least annually’, which leaves the Member States a margin of discretion to organise that collection. However, there is no provision in the field of banking resolution for the transfer of contributions in the event of a change in the financing arrangement.
57. Nevertheless, the one-month period allowed by Paragraph 13 of the Law on deposit guarantees to pay the required contribution does not appear to be contrary to the second subparagraph of Article 10(1) of Directive 2014/49, which does not lay down any obligation other than that of paying the contribution to the DGS at least annually. Moreover, Article 14(3) of that directive refers only to payments made ‘during the 12 months preceding the end of the membership’.
58. Indeed, faced with what appears to be a defect in the drafting of the original text of Directive 2014/49, the Commission has had the opportunity to clarify the wording of Article 14(3) thereof in its proposal for amending that directive, dated 18 April 2023, by stating that, in the event of a transfer between two DGSs of different Member States of a credit institution or part of its activities, the DGS of the home Member State is to transfer to the DGS of the host Member State the contributions due for the last 12 months preceding the change of DGS membership. (24)
59. Secondly, Article 10(2) of Directive 2014/49 states that the available financial means of a DGS must at least reach a target level of 0.8% of the amount of the covered deposits of its members. While, contrary to the Kingdom of Sweden’s argument, there is indeed a link between the amount of the contribution to the DGS and the amount of the covered deposits at the time when the contribution is set, (25) it must be held that that correlation ceases to apply as soon as (and for as long as) that target level is reached.
60. The second subparagraph of Article 10(2) of that directive provides that ‘where the financing capacity [of the DGS] falls short of [that] target level, the payment of contributions shall resume at least until the target level is reached again’.
61. Therefore, the arrival of a new credit institution within a DGS will automatically increase the total amount of guaranteed deposits and will be liable to result in a call for contributions within that DGS. If that credit institution comes from a DGS of another Member State, that arrival should be accompanied, where appropriate, by the transfer of the contribution it has paid to the DGS of the home Member State in the 12 months preceding its arrival and will not give rise to a new call for contributions, provided that the contribution transferred covers the proportion of new guaranteed deposits.
62. However, the arrival within a DGS of a Member State of a credit institution from a third country will not be accompanied by a transfer of contributions and the increase in the amount of the target level and the possible taking back or increase in contributions will be borne by all the credit institutions subject to that DGS.
63. Similarly, the transfer of a credit institution from a DGS of a Member State for which the target level has been reached and to which no contribution has been paid, by that institution, during the previous 12 months will not only not result in any transfer of contributions to the DGS of the host Member State, but may even, as mentioned in the previous point of this Opinion, lead to an increase in contributions to the DGS of the host Member State on account of the increase in the amount of guaranteed deposits and, therefore, the target level.
64. Thus, there are many situations in which the arrival of a credit institution within a DGS will not lead to a transfer of contributions to that DGS. It is therefore difficult to draw an argument from the consequences of the transfer of the credit institution in terms of liability for the transfer of contributions.
65. Thirdly, as regards the objectives of Directive 2014/49 recalled in recitals 3 and 37, they do not appear to me to justify a purely teleological reading of Article 14(3) of that directive.
66. Since, as mentioned above, there is no strict correlation between the transfer of liability and the transfer of contributions, it must also be inferred that the EU legislature accepted that discrepancy while seeking the stability of the banking system and the protection of depositors and establishing solidarity between credit institutions.
67. In any event, the stability of the banking system is sought, above all, by means of the deposit guarantee, which is intended to prevent massive withdrawals of sums deposited in banking institutions. Similarly, depositors are protected by the introduction of a coverage level of EUR 100 000 per depositor and per credit institution in the event of deposits being unavailable. (26) Moreover, the solidarity between all credit institutions referred to in recital 37 of Directive 2014/49 concerns credit institutions in a given financial market and not all EU credit institutions; in this respect, there is no inconsistency in making the other credit institutions belonging to a DGS bear the burden of any liability that may arise from a new credit institution joining the DGS without transferring contributions.
68. Therefore, it is difficult to conclude that, by providing that only contributions to the DGS paid in the 12 months preceding the transfer of the credit institution are to be transferred to the DGS of the host Member State, the Kingdom of Sweden has failed to fulfil its obligations under Article 14(3) of Directive 2014/49, even if that provision is read in conjunction with the second subparagraph of Article 10(1) of that directive.
69. As regards the one-month period following the deposit guarantee authority’s decision for paying the contribution, case-law exists which accepts that a practice which is, to some degree, of a consistent and general nature and which does not comply with the correct transposition of a directive can be made the object of an action for failure to fulfil obligations. (27)
70. In the present case, while the introduction of such a time limit does not appear to be contrary to Directive 2014/49, it is necessary to carry out an examination of whether there is a general and consistent practice on the part of the Swedish DGS which does not comply with that directive or its transposing law and which undermines the principle of transferring contributions provided for in Article 14(3) of that directive.
71. The contribution for 2016 was decided on 2 September 2016 and was paid on 30 September 2016, thus within the one-month period. As for the contribution for 2017, decided on 14 September 2017, it was paid on 13 October 2017. Lastly, the contribution for 2018 was decided on 27 September 2018 and paid the following day.
72. The second subparagraph of Article 14(4) of Directive 2014/49 states that ‘if a credit institution intends to transfer from one DGS to another in accordance with [that] Directive, it shall give at least six months’ notice of its intention to do so’.
73. Thus, by 1 April 2017 at the latest, Nordea Bank should have informed the Swedish DGS of its intention to divest its branches on 1 October 2017. Similarly, by 1 April 2018 at the latest, Nordea Bank should have informed the DGS of its intention to transfer its head office to Finland.
74. While it may seem surprising that the Swedish deposit guarantee authority changes the date of its decision setting the amount of contributions to the DGS each year over the three years examined, that is not sufficient to prove a general, consistent and deliberate practice aimed at preventing the transfer of contributions to another DGS.
75. If Nordea Bank knew, when setting the transfer of the branches for 1 October 2017, that the contribution for 2016 would not be transferred since it had been paid on 30 September 2016, that institution could not have been unaware, by paying its contribution for 2017 on 13 October 2017, thus after 30 September 2017, that that contribution would not be transferred to the DGSs of the host Member States of the transferred branches. Similarly, by setting the transfer of its head office for 1 October 2018 and paying its contribution for 2018 on the day after the decision setting the amount of the contribution, namely on 28 September 2018, Nordea Bank knew that its contributions for 2017 and 2018 would be paid to the Finnish DGS.
76. Consequently, not only has the general and consistent practice of the Swedish DGS not been proven, since a period of three years is not sufficient to establish such a practice and this did not automatically lead to a refusal to transfer contributions, but it is also the case that the absence of a transfer of contributions is the result of a choice made by Nordea Bank as to the date of payment of those contributions to the Swedish DGS.
77. In conclusion, it does not appear to me that the Kingdom of Sweden has failed to fulfil its obligations arising from a combined reading of Article 14(3) and the second subparagraph of Article 10(1) of Directive 2014/49 and, consequently, the first complaint must be rejected.
C. The complaint based on Article 4(3) TEU
78. By way of a reminder, according to the Court’s settled case-law, while it ‘follows from the principle of sincere cooperation laid down in Article 4(3) TEU that the Member States are obliged to take all the measures necessary to guarantee the application and effectiveness of EU law’, (28) ‘a failure to fulfil the general obligation of sincere cooperation following from Article 4(3) TEU may be found only in so far as it covers conduct distinct from that which constitutes the infringement of the specific obligations alleged against the Member State’. (29)
79. It is therefore necessary to examine the two grounds which form the basis of the Republic of Latvia’s request.
80. First, as regards the misinterpretation of Article 14(3) of Directive 2014/49 which disregards the objectives of that directive, that alleged failure to fulfil obligations relates in reality to the same conduct which forms the basis of the first complaint, since that refusal is directly linked to the interpretation of Article 14(3). As Advocate General Ćapeta has stated, the fact that a Member State has a different understanding of EU law than the Commission does not amount in itself to infringement of the principle of sincere cooperation on the part of that Member State. (30) The same applies where a Member State has a different understanding of EU law to another Member State. The complaint based on that ground is therefore unfounded.
81. Secondly, as regards inequality in the treatment accorded to the requests from the Estonian, Latvian and Lithuanian DGSs compared to the request from the Finnish DGS, it should be noted that that allegation is also based on the contested interpretation of Article 14(3) of Directive 2014/49.
82. In any event, inequality can be found only where identical situations are treated differently or different situations are treated identically.
83. In the present case, the situations of the Estonian, Latvian and Lithuanian DGSs, on the one hand, and the Finnish DGS, on the other, are different. During the 12 months preceding the change of DGS membership, thus between 1 October 2016 and 30 September 2017, no contributions were paid to the Swedish DGS in respect of the activities of the transferred branches, whereas contributions were paid to that DGS in the 12 months preceding the transfer of the head office to Finland and those contributions were transferred to the Finnish DGS. Therefore, failure to comply with the duty of sincere cooperation cannot be based on that ground.
84. The complaint based on failure to comply with the principle of sincere cooperation must be rejected.
VII. Conclusion
85. In the light of the foregoing considerations, I propose that the Court should:
(1) Dismiss the action;
(2) Order the Republic of Latvia to pay the costs;
(3) Order the Republic of Estonia, the Republic of Lithuania and the European Commission to bear their own costs.