16.3.6 The difficult delineation between preparatory acts and acts with independent legal effects

From the perspective of judicial protection, one may wonder whether contributions from national authorities in areas where the ECB has no own competences may be imputed to the ECB and, to the degree that this is not the case, whether such contributions are reviewable before a national court. In this regard, it is important to remember that if the errors attached to an (intermediate) act cannot be relied upon in an action against the final decision, then the intermediate act produces independent legal effects and must be subjectable to judicial review.1

Take, for instance, a situation in which the ECB withdraws a bank’s licence based on a report of a national authority which contends that the bank is guilty of large-scale breach of AML provisions.2 The NCA draft decision is, in accordance with the Berlusconi, not reviewable before a national court. Only the final decision from the ECB is reviewable before the EU courts. Could a bank in such situation rely on defects in that national report to challenge the legality of the ECB’s decision? In other words, how does this situation relate to the well-established notion that “the European Union Court has no jurisdiction to rule on the lawfulness of a measure adopted by a national authority”.3

To illustrate the potential problem, it is illuminating to consider how the Union courts approach the review of intermediate acts provided by an EU authority which provide essential contributions for the adoption of a final decision by another EU authority. In such situations, all acts which impact the decision-making chain are adopted within the EU legal order. In Artegodan the contested decision of the Commission withdrawing the market authorisation of a medicinal product was informed by a scientific assessment of an EU agency (the ‘CPMP’) recommending the withdrawal. 4 The CPMP’s assessment was all the more important as the Commission was not in a position to carry out the scientific position itself.

The EU Court considered that:

Accordingly, the Court found that it had to review the lawfulness of the CPMP’s scientific opinion.6 To this end, it checked the proper functioning of the CPMP, the internal consistency of the opinion, and the statement of reasons.7 Hence, the EU courts undertake an explicit review of the lawfulness of the intermediate act of another EU authority on which a final decision is based.8

Similarly, where the ECB bases a decision – for example, the withdrawal of a banking authorisation – on a national assessment alleging breaches of national money laundering legislation, that opinion, while not binding to the ECB, is nonetheless extremely important. Furthermore, akin to Artegodan, the ECB is not in a position to carry out an assessment itself. However, unlike Artegodan, the national assessment was concluded by an authority operating in a different jurisdiction and subject to a national set of rules. Hence, mirroring the Court’s conclusion in Artegodan, in the sense that it would review the lawfulness of the national report, leads to the issue that the EU judicature has no jurisdiction to rule on the lawfulness of a measure adopted by a national authority.

At the same time, the ‘spill-over’ effects of national acts – such as reports on tax evasion, money laundering, and mis-selling of financial products – into the prudential decision-making of the ECB may well lead to situations where the lawfulness of a national measure which informs a supervisory decision of the ECB is contested before the EU courts. Such situations have already occurred in the field of competition law. In Dalmine the Union Court held that the lawfulness of the transmission to the Commission by the Italian public prosecutor of examinations of several of Dalmine’s former directors obtained in application of national criminal law concerned a question governed by national law.9 The Union Court held that:

Similarly, in Kesko the EU Court found that it had no jurisdiction to decide whether a national authority was allowed, under national law, to issue a request to open an investigation into an infringement of competition rules.11 The Court only checked whether the Commission could rightly view the request as prima facie a request made by a Member State as required by the relevant EU law. Whether the request of the national authority was actually unlawful under Finnish law could therefore not affect the validity of the Commission’s decision, nor could it be considered by the Union Court.12

It follows that, from a broader perspective, the national input which informs the ECB’s decision and the available avenues to submit such input to judicial scrutiny differ. A distinction must be made between acts of the national authorities which constitute a stage of a procedure in which the ECB takes the final decision and acts of national authorities which, while connected to that procedure, produce separate legal effects.13 The former type of act (i.e. a decision to initiate a procedure, preparatory act, or non-binding proposal) is banned from judicial review before a national court. However, judicial recourse against the latter type of act (e.g. a national act suspecting a bank from transgressing national money laundering rules) should be sought before the national courts.

The distinction between the two types of national contributions, one falling within a singular EU procedure and the other falling outside, corresponds to the competences of the ECB. It seems that only where the ECB enjoys discretion to substitute the national intermediate act for its own reasoning can the national act be considered a stage of a procedure for adopting an EU act.

The matter is further complicated by the fact that the distinction between the two types of national input is not necessarily clear. For instance, a national draft decision to withdraw a banking licence may be based on a report by the national AML authority that the bank breaches AML requirements. As discussed, the prudential supervision rules explicitly require the supervisors to consider such elements. Visually the interactions between administrative authorities in combination with the separation of jurisdiction between national and EU courts may be summarised as follows: