Posts Tagged EU
US Iran sanctions renew the spotlight on the EU’s blocking regulation: A rare EU harmonised approach to enforcement and recognition from third States.
Ross Denton at Baker & McKenzie has a gem of a briefing on the EU’s ‘blocking Regulation’ and what it would mean in light of the US’ mooted sanctions on Iran. Steptoe had earlier also pondered the impact of the US withdrawal from the ‘Joint Comprehensive Plan of Action’ or JCPOA, on the Regulation.
Regulation 2271/96 provides essentially for protection against, and counteracts the effects of the extra-territorial application of the laws of third States. WTO lawyers will remember it mostly from the days of Helms-Burton. As Ross points out, the European Commission now have delegated power to populate the Annex to the list (which details the sanctions the Regulation acts against).
Potentially extra-territorial are in particular US ‘secondary’ sanctions: i.e. those against non-US individuals (or companies) for actions undertaken outside the US.
Of particular interest to readers of the blog – including researchers I would imagine, are Articles 4, 5 and 6, which I have copy-pasted in full below. They deal with recognition and enforcement, co-operation with foreign courts, and recovery of expenses. These Articles are a rare instance where the EU adopt a harmonised approach to recognition and enforcement of judgments originating ex-EU (awaiting the potential Hague Judgments project). [Update 22 May 11:30 AM. As Enio Piovezani comments below, the GDPR, too, includes a relevant rule: See Article 48: ‘Transfers or disclosures not authorised by Union law. Any judgment of a court or tribunal and any decision of an administrative authority of a third country requiring a controller or processor to transfer or disclose personal data may only be recognised or enforceable in any manner if based on an international agreement, such as a mutual legal assistance treaty, in force between the requesting third country and the Union or a Member State, without prejudice to other grounds for transfer pursuant to this Chapter.’]
As Ross points out, however, the proverbial US rock is harder than the equally proverbial EU stone, hence in practice many companies choose to abide by the US sanctions, anyways.
My fingers are itching to launch yet another interesting PhD topic on this issue…Takers?
No judgment of a court or tribunal and no decision of an administrative authority located outside the Community giving effect, directly or indirectly, to the laws specified in the Annex or to actions based thereon or resulting there from, shall be recognized or be enforceable in any manner.
No person referred to in Article 11 shall comply, whether directly or through a subsidiary or other intermediary person, actively or by deliberate omission, with any requirement or prohibition, including requests of foreign courts, based on or resulting, directly or indirectly, from the laws specified in the Annex or from actions based thereon or resulting therefrom.
Persons may be authorized, in accordance with the procedures provided in Articles 7 and 8, to comply fully or partially to the extent that non-compliance would seriously damage their interests or those of the Community. The criteria for the application of this provision shall be established in accordance with the procedure set out in Article 8. When there is sufficient evidence that non-compliance would cause serious damage to a natural or legal person, the Commission shall expeditiously submit to the committee referred to in Article 8 a draft of the appropriate measures to be taken under the terms of the Regulation.
Any person referred to in Article 11, who is engaging in an activity referred to in Article 1 shall be entitled to recover any damages, including legal costs, caused to that person by the application of the laws specified in the Annex or by actions based thereon or resulting therefrom.
Such recovery may be obtained from the natural or legal person or any other entity causing the damages or from any person acting on its behalf or intermediary.
The Brussels Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters shall apply to proceedings brought and judgments given under this Article. Recovery may be obtained on the basis of the provisions of Sections 2 to 6 of Title II of that Convention, as well as, in accordance with Article 57 (3) of that Convention, through judicial proceedings instituted in the Courts of any Member State where that person, entity, person acting on its behalf or intermediary holds assets.
Without prejudice to other means available and in accordance with applicable law, the recovery could take the form of seizure and sale of assets held by those persons, entities, persons acting on their behalf or intermediaries within the Community, including shares held in a legal person incorporated within the Community.
Our paper on the innovation principle, with Kathleen Garnett and Leonie Reins is just out in Law, Innovation and Technology. We discuss how industry has been pushing for the principle to be added as a regulatory driver. Not as a trojan horse: industry knocks politely but firmly at the EU door, it is then simply let in by the European Commission. We discuss the ramifications of such principle and the wider consequences for EU policy making.
(Handbook of) EU Environmental Law (with Dr Reins), 1st ed. 2017, Chapter 2.
Update 3 April 2018 Recently, the so-called “CLOUD Act” was passed by Congress and signed into law. This new law amends the Stored Communications Act to give it a potentially extraterritorial reach. Following this development, the U.S. Government has moved to have the Microsoft case dismissed as moot, and to have the Second Circuit’s decision vacated. [Technically, Congress has enacted, and the President has signed,
the Consolidated Appropriations Act, 2018, H.R. 1625, 115th Cong., 2d Sess. (2018). Division V of that Act is called the Clarifying Lawful Overseas Use of Data Act, or the CLOUD Act. TheCLOUD Act amends the Stored Communications Act, 18 U.S.C. 2701-2712, by adding 18 U.S.C. 2713, which now states:
A provider of electronic communication service or remote computing service shall
comply with the obligations of this chapter to preserve, backup, or disclose the contents
of a wire or electronic communication and any record or other information pertaining to a customer or subscriber within such provider’s possession, custody, or control, regardless of whether such communication, record, or other information is located within or outside of the United States.]
For background to the Microsoft Ireland case under the Stored Communications Act (SCA), see here. The issue is essentially whether the US Justice Department may force Microsoft to grant access to e-mails stored on Irish servers.
With a group of EU data protection and conflicts lawyers, we have filed an amicus curiae brief in the case at the United States Supreme Court last week, arguing that the Court should interpret the SCA to apply only to data stored within the United States, leaving to Congress the decision whether and under what circumstances to authorize the collection of data stored in other countries.
There is not much point in me rehashing the arguments here: happy reading.
This posting is really addressed to those with more of a full-time interest in competition law than yours truly. Particularly in the extraterritorial effect of same. In  EWHC 2420 (Ch) Emerald Supplies et al v British Airways defendants contend that as a matter of law there can be no claim for damages arising from the cartel at issue insofar as it affected freight charges between the EU and third countries on flights before 1 May 2004. That was the date on which air transport between the EU and third countries was brought within the regime implementing the EU competition rules set out in Regulation 1/2003.
Rose J after careful analysis sides with the defendants and rejects reference to the CJEU, citing acte clair (enough analysis of the CJEU on the same and related issues- I believe she is right). Happy reading.
I am in Wuhan 2 1/2 days this week, where I am pleased to be engaging in three of my favourites: a class on environmental law, at Wuhan University’s unparalleled Research Institute of Environmental Law; a session on best practices for PhD research at same; and a conference presentation on conflict of laws at the solidly A+++ ‘Global Forum’ of the Chinese Society of Private International Law and Wuhan University’s Institute of International Law.
Anyways, on my way I inter alia wrote following intro to a volume on Waste to Energy, edited by Harry Post. I thought would share.
The European Union purports to be moving towards a Circular Economy (CE). If recent experience in environmental and energy law is anything to go by, the rest of the world will look with interest to its progress. It is fashionable to say that in the CE ‘waste’ will no longer exist. This is however not relevant beyond semantics. What really matters is how the EU and others after or before it, create the economic and regulatory environment that enables the innovation which a CE requires.
Regulatory circles have ample sympathy for business implementing and bringing to market the many exciting ideas which engineers continue to develop. At the same time one must not be blind to the excess which unchecked engineering imagination does have on society, in all pillars of sustainable development: social, economic and environmental. We must not compromise on a robust regulatory framework which looks after what public health and environmental protection require: two Late Lessons from Early Warnings reports tell us that we would do so at our own peril. However we do have to question continuously whether our existing laws are best practice in reaching that desired outcome. It would be a particular affront if innovative products and services that truly may boost environmental protection, were not to be rolled-out because of anxiety over their legal status.
In an innovative environment, legal certainty is an important driver for success. Lack of clarity over the legal framework and /or the regulators’ implementation of same, leads industry either to seek out and concentrate development on those States with lax or flexible regulators only; or to stick to old and trusted products.
The European Union is particularly suited to providing that clarity. On the scientific front, by investing in research and development, especially at SME and specialised spin-offs level. On the regulatory front, it would do well to work out a regime which enables innovators to query enforcement agencies about the legality of a new product or service line without the fear of subsequently being disciplined for it.
This volume is a scholarly effort to assist with both strands of the exercise. It is to be much commended for that effort and I for one am sure both industry and legal scholars will find its content encouraging.
The CJEU held yesterday in Case C-296/16P Dextro Energy (text of judgment available in French and German only at the time of posting), an appeal against the General Court’s ruling in T-100/15. The General Court had declined to annul the European Commission Regulation which refused to authorise certain health claims made on foods, other than those referring to the reduction of disease risk and to children’s development and health. Dextro Energy had wanted to include health claims such as ‘glucose supports normal physical activity’ and ‘glucose contributes to normal muscle function’. The EC had refused: citing (in Regulation 1215/8)
‘Pursuant to Articles 6(1) and 13(1) of Regulation … No 1924/2006 health claims need to be based on generally accepted scientific evidence. Authorisation may also legitimately be withheld if health claims do not comply with other general and specific requirements of Regulation … No 1924/2006, even in the case of a favourable scientific assessment by [EFSA]. Health claims inconsistent with generally accepted nutrition and health principles should not be made. [EFSA] concluded that a cause and effect relationship has been established between the consumption of glucose and contribution to energy-yielding metabolism. However, the use of such a health claim would convey a conflicting and confusing message to consumers, because it would encourage consumption of sugars for which, on the basis of generally accepted scientific advance, national and international authorities inform the consumer that their intake should be reduced. Therefore, such a health claim does not comply with point (a) of the second paragraph of Article 3 of Regulation … No 1924/2006 which foresees that the use of claims should not be ambiguous or misleading. Furthermore, even if the concerned health claim was to be authorised only under specific conditions of use and/or accompanied by additional statements or warnings, it would not be sufficient to alleviate the confusion of the consumer, and consequently the claim should not be authorised.’
The General Court performed its standard review in the face of a wide discretionary room for manoeuvre for the EC, and decided the EC had not exceeded its authority in holding as it did – even in the face of more lenient EFSA recommendations. The Court of Justice has now entirely sided with the General Court. The Judgment is a good reminder of aforementioned standard test (no de novo or merits review; annulment in the event of manifest transgression of power or error in judgment only), and readers best refer to reading the judgment itself.
One consideration however, I should like to highlight: Dextro Energy had suggested the health claims needed to be assessed in light of the target group (determined in the product’s advertising), which, it was suggested, were physically active people for whom consumption of the glucose tablets in question is not harmless. The Court rejected this approach: the population as a whole, for whom the product is available, are the group which the EC justifiably seeks to protect. The manufacturer’s professed target group is not the relevant group to consider (do bear in mind that this is a product which is widely available and not restricted in any way at points of sale):
At 76-77: si les allégations de santé en cause étaient autorisées, elles s’adresseraient à la population en général, pouvant ainsi encourager la consommation de sucres par les personnes autres que les hommes et les femmes bien entraînés. Dans ces conditions, le Tribunal n’a pas commis d’erreur de droit lorsqu’il a rejeté, au point 57 de l’arrêt attaqué, l’argument de Dextro Energy, selon lequel c’était le groupe cible qui importait aux fins de l’appréciation des allégations de santé en cause.
It is too readily assumed by many that general Member States’ obligations under the EU’s environmental laws are context only, and not really legally binding. In my Handbook of EU Waste law however I report on a number of cases where the European Court of Justice has rebuked Member States for having failed to take measures to attain some of these general objectives. These cases relate to waste law, evidently, however in other cases the Court’s case-law extends this to EU environmental law generally.
One can now add C-153/16 EC v Slovenia to this list. Slovenia had attempted to address the continuation of waste tyres storage and processing at an abandoned quarry, in contravention of an expired environmental permit. The company dug in its heels, ia via prolonged litigation, with storage and processing continuing.
The Court of Justice found that Slovenia had infringed the general duty of care provisions, as well as enforcement obligations of the landfill Directive and the waste framework Directive. (On the related issues with respect to hazardous waste, the Court found the Commission’s infringement proceedings wanting).
Not all that glitters is gold, of course. The direct effect of these general duty of care provisions remains an issue, as does the absence, arguably, in EU law of a duty of care directly imposed upon waste holders and processors. For that, citisens need to pass via national law wich as current case shows, is not always up to scratch.