Dr. Agne Limante
Research Fellow, Law Institute of Lithuania
This case comment will provide a short analysis of the T&L Sugars case, a decision presented by a Grand Chamber of the CJEU on 28 April, 2015, that clarified the concept of ‘implementing measures’ under Article 263(4) TFEU. It will also look at the preceding Telefónica case which is important for the formation of a fuller understanding of the said concept.
It has been widely agreed upon that challenging EU legal acts is not an easy task. In a majority of cases, applications for annulment submitted to the European Union Court of Justice (the “CJEU” or the “Court”) by private applicants are rejected due to the lack of standing. This is mainly because of the strict standing rules provided in the Treaties and the Court’s restrictive interpretation of them, which leave applicants without hope of recourse.
Article 263(4) of the Treaty on the Functioning of the European Union (“TFEU”) allows any natural or legal person to institute proceedings only “against an act addressed to that person or which is of direct and individual concern to them, and against a regulatory act which is of direct concern to them and does not entail implementing measures.” Such permission to challenge regulatory acts that were of direct concern to private applicants but did not entail implementing measures (leaving individual concern aside), was introduced by the Treaty of Lisbon, but what classified as ‘regulatory acts’ or ‘implementing measures’ were left unclear.
In 2013, the CJEU explained in the Inuit case that, for the purposes of Article 263(4) TFEU, a ‘regulatory act’ covers all acts of general application apart from legislative acts. The relaxed standing rules in respect of regulatory acts were intended to enhance the principle of judicial protection. As the Court elaborated in its case law,[1] where a regulatory act directly affects the legal situation of a natural or legal person without requiring implementing measures, that person would be denied effective judicial protection if he did not have a direct legal remedy before the European Union judicature for the purpose of challenging the legality of the regulatory act. In the absence of implementing measures, natural or legal persons, although directly concerned by the act in question, would be able to obtain a judicial review of that act only after having infringed its provisions, by pleading that those provisions are unlawful in proceedings initiated against them before the national courts.
However, the duty to prove individual concern is only abandoned in cases where there are no implementing measures. In the absence of case law early on, speculations were made as to the kind of implementing measures that could prevent the possibility of an annulment action under relaxed standing rules; it was argued that not all implementing measures should count in the context of Article 263(4) TFEU. Unfortunately, subsequent CJEU case law on the concept of ‘implementing acts’ was strict.
The Telefónica case
Telefónica v. Commission (C-274/12 P),[2] resolved on December, 2013, shed light on the meaning of ‘implementing acts.’ The case concerned a decision of the Commission, addressed to Spain, that declared an aid scheme partially incompatible with the common market. The Commission required Spain to recover the aid which it declared incompatible and as a result, Telefónica SA, a company that had benefited from some of the aid, sought the annulment of the Commission’s decision.
The CJEU pointed that the question whether a regulatory act entails implementing measures should be assessed by reference to the position of the person pleading the right to bring the proceedings. Thus, it was irrelevant that the act in question entailed implementing measures with regard to other persons. The Court also noted that in order to determine whether the measure challenged entailed implementing measures, reference should be made exclusively to the subject matter of the action; further, where an applicant seeks only partial annulment of an act (as in this case), it is only the implementing measures which that part entails that must be taken into consideration under Article 263(4).
However, even after its promising attempt to explain ‘implementing acts,’ the Court rejected Telefónica SA’s application. Firstly, the Court noted that the contested decision was addressed solely to Spain, and was therefore not binding on other persons. Secondly, the contested part of the decision was concerned exclusively with declaring the aid scheme incompatible with the common market, and it did not define the specific consequences which that declaration had for each taxpayer. Therefore, the Court concluded that the measures for giving effect to the decision as to incompatibility—including in particular the rejection of an application for grant of the tax advantage at issue, which Telefónica would also be able to contest before the national courts—were implementing measures in respect of the contested decision.
The T&L Sugars case
More recently, on 28 April, 2015, a further clarification as to ‘implementing measures’ was presented by a Grand Chamber of the CJEU in the T&L Sugars case (C-456/13 P). Again, a restrictive approach was taken.
The facts of the case are as follows. The applicants, T & L Sugars and Sidul Açúcares, were a group of EU cane sugar refiners. In light of the sugar shortage and resulting increases in sugar prices in the EU in 2011, the Commission sought to increase the supply of sugar on the EU market. It adopted several regulations containing detailed emergency measures for the release of out-of-quota sugar and isoglucose in the EU and introduced an import tariff quota for sugar. The applicants, who were negatively affected by regulations, alleged that those regulations were discriminatory and incapable of eliminating the import deficit and brought an action for annulment in the General Court.
In order to challenge the regulations by proving only direct concern (it was fairly obvious that they would have failed in proving they are individually concerned by the contested regulations), T & L Sugars and Sidul Açúcares had to establish that those were regulatory regulations and entailed no implementing measures. To prove that, they stressed that every detail of the contested regulations was determined by the Commission and Member States merely functioned as ‘mail boxes.’ The applicants argued that a measure adopted by a Member State under a European Union regulation, when it is automatic or merely ancillary, should not constitute a decision ‘implementing’ that regulation. They claimed that only EU acts that give some measure of discretion to Member States as to their implementation would “entail implementing measures.”
The General Court dismissed the action as inadmissible and the case reached the Court of Justice. There, Advocate General (AG) Cruz Villalón’s opinion found in favor of the applicants—he considered that the contested measures were regulatory acts that did not entail implementing measures within the meaning of Article 263(4) TFEU.
The CJEU, however, disagreed with AG Villalón and upheld the General Court’s decision.[3] The Court found that the challenged regulations produced their legal effects vis-à-vis the appellants only through the intermediary of acts taken by the national authorities following the submission of applications for certificates. The decisions of national authorities with regards to granting or denying such certificates in full or in part therefore constituted implementing measures within the meaning of Article 263(4) TFEU. The Court highlighted that such a conclusion was not called into question by the allegedly mechanical nature of the measures taken at the national level.
The Court also noted that where responsibility for the implementation of EU acts lies with the institutions, bodies, offices or agencies of the European Union, natural or legal persons are entitled to bring a direct action before the European Union judicature against the implementing acts under the conditions stated in the fourth paragraph of Article 263 TFEU, and to plead in support of that action, pursuant to Article 277 TFEU, the illegality of the basic act at issue. Where that implementation is a matter for the Member States, applicants may instead plead the invalidity of the basic act at issue before the national courts and tribunals, and cause the latter to request a preliminary ruling from the Court of Justice, pursuant to Article 267 TFEU.
Summing up the cases
Several conclusions can be made from the cases discussed above:
- ‘implementing acts’ are not limited to implementing measures by the European institutions or bodies, but also include those adopted by the Member States;
- while it is irrelevant that the act in question entails implementing measures with regard to other persons, if the implementing measures (that would change the applicant’s position) will be adopted towards the applicant, such an EU act is considered to entail implementing measures;
- requirement for any implementing measure, even if automatic or merely ancillary, is enough to exclude admissibility under the third limb of Article 263(4).
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[1] Telefónica SA v. Comm’n, Case C‑274/12 P, EU:C:2013:852, ¶ 27.
[2] Id. See also Stichting Woonpunt & Others v. Comm’n, Case C-132/12 P, EU:C:2014:100.
[3] Contrary to the General Court, the CJEU only analyzed the situation with regard to two regulations as the other two did not affect the legal situation of the applicants. Since the appellants did not have the status of sugar producers and their legal situation was not directly affected by those regulations, those regulations were not of direct concern to them within the meaning of the final limb of Article 263(4) TFEU.
[4] T & L Sugars and Sidul Açúcares v. Comm’n, Case C-456/13 P, EU:C:2015:284, ¶ 31.
