From Soft Law to Soft Law Through Hard Law: The Commission's Approach to the State Aid Assessment of Tax Rulings

The arbitration regime is a multidimensional system. Together with ‘hard laws’, ‘soft laws’ are also inalienable components of the arbitration regime. ‘Soft laws’ are non-state enacted texts, which aims at regulating procedural issues in international commercial arbitration. Although ‘soft laws’ are not legally binding, they are of some normativity. ‘Soft laws’ cover various arbitration topics, ranging from arbitration law harmonization, arbitration evidence, arbitration ethics and arbitration management skills to the latest arbitration developments. The functions of ‘soft laws’ are evidenced therefrom. The history of arbitration, global governance, and social interrelation all help to explain why ‘soft laws’ are created, developed and somewhat complied with. Facing the difficulties in modifying the 1995 Chinese Arbitration Law and the rapid developments of the Chinese arbitration market, it is time to shift minds from the ‘hard law approach’ to the ‘soft law approach’. China is suggested to establish more robust arbitration community, to participate more in ‘soft laws’ enactment, to enact its own ‘soft laws’ regime, to enhance the cooperation among ‘hard laws’ and ‘soft laws’, and to wisely take advantage of the functions of ‘soft laws’.

Directive 2014/95/EU of the European Parliament and of the Council (22 October 2014) amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups has not only attracted global attention on the significance of disclosure of CSR performance, but also raised an even broader corporate governance question: Is it now time to move on from a soft law approach to a hard law approach? In my opinion, both soft law and hard law are equally important. Neither type of law can guarantee the effectiveness of good corporate governance. Soft law will not be jettisoned even after some soft law rules have been transformed into hard law. That said, both soft law and hard law require comprehensive renovation, instead of minor patch-ups. Despite the particularities of corporate governance norms created by unique legal traditions and cultures in individual jurisdictions, globalisation requires further convergence, coordination or harmonisation of corporate governance norms in terms of both soft law and hard law.

This article draws attention to the Commission's use of soft law within the EU state aid regime and discusses how the application of informal policy instruments by the Commission has evolved since the early 1990s. It argues that developments over the past decade have led to a 'hardening' of the regulatory approach applied within the state aid regime, an evolution which seems to run against a more general EU trend towards soft law and the introduction of 'softer' forms of governance. Yet this policy development should not be read simply as a trend from hard law to soft law. Rather, the reconfiguration of policy instruments used in the state aid regime reflects the challenges facing, and the distinctive characteristics defining, this policy area. The article thus begins by introducing and defining soft law. It then provides an overview of the distinctive characteristics of the EU's state aid regime and of Commission rule-making on state aid matters. The article concludes by pointing to two legal 'events' that have altered the Commission's soft law approach and by analysing and drawing out some of the implications of these developments.

The climate governance models involved in international investment law are mainly divided into three types: the hard law approach, the soft law approach, and the approach that combines both hard and soft law. Each of these approaches offers solutions to different climate governance issues in international investment.This paper argues that the crux of the climate governance challenges in international investment lies in the conflict between the economic value of efficiency and the international public principle of efficiency. According to international practice, the reasons for the differences in climate governance models in international investment include the pluralism of legal interpretation, the fragmentation of treaties and other international documents, and the differences in the construction of legitimacy and legality.This paper believes that state actors can address the conflict between the legitimacy and legality of climate protection clauses in international investment by establishing a dual path of “hard law and soft law” through international cooperation.

European state aid control, a part of competition policy, typically follows the logic of negative integration. It constrains the potential for member states to distort competition by reducing their ability to subsidise industry. In addition, this paper argues, ambiguous Treaty rules and heterogeneous member state preferences have enabled the European Commission to act as a supranational entrepreneur, not only enforcing the prohibition of distortive state aid, but also developing its own vision of ‘good’ state aid policy. In order to prevent or to settle political conflict about individual decisions, the Commission has sought to establish more general criteria for the state aid that it still deems admissible. These criteria have been codified into a complex system of soft law and, more recently, hard state aid law. The Commission has thus created positive integration ‘from above’ and increasingly influences the objectives of national state aid policies.

Since the beginning of the financial crisis, various forms of public support have been employed to provide financial assistance to troubled banks. Any such operation involving public funds must comply with EU State aid rules in order to prevent competitive distortions between banks and Member States. This article begins by examining the interaction between State aid and the Bank Recovery and Resolution Directive (BRRD) and demonstrates the continuing importance of State aid approval both in and outside resolution. The article continues by focusing on burden-sharing as a requirement for State aid approval and examines the Commission's approach to burden-sharing in State aid cases to date. Against this background, the article continues by considering the CJEU's judgment in Case C–526/14 Kotnik and Others. The article comments on the CJEU's findings and assesses the potential future impact of the judgment. The main conclusions are that legal certainty provided by the CJEU is to be welcomed, that the judgment is unlikely to affect the Commission's established approach, and that the judgment could have an impact on future cases on public support to the banking sector.

This article investigates the stringency of the hard law continuum as well as the flexibility of the soft law in the development of CSR. The effectiveness of both the soft law and hard law in making CSR a mandatory part of global business has also been described in this study. Soft law being flexible has helped in many ways to make the CSR approach accessible to the consumer, shareholder and the stakeholders as well. However, the softness that this ideology of the soft law provides in some cases has posed itself to be a challenge in the path of developing CSR. Similarly, hard law and its strictness and biding factor is an effective way to make CSR a prominent factor to enhance various factors in business. The occupation of health and safety, sustaining natural resources that are being used in a business, effective corporate governance, upholding social responsibility and saving climate are part of the CSR activities. This study demonstrates various characteristics of the soft and hard law that has changed CSR and helped portray itself in the global business forum. It has also analysed the multiple issues both the soft and hard law possesses and the way mitigating which the CSR has developed its effectiveness and performance gradually.

Balancing Soft and Hard Law for Business and Human Rights

ASEAN countries need to be encouraged to make responsive, effective, efficient, non-discriminatory, and pro-competition regulations that are adjusted AEC Blueprint 2025. This means that each ASEAN country needs to harmonize regulations so that the rules that apply in each national territory do not conflict with each other and in line with AEC Blueprint 2025. There is no clear regulation system in force in ASEAN, nor is the legal harmonization mechanism and binding power of the AEC. Questions that should be asked, is the legal basis for the implementation of AEC Blueprint 2025 deliberately based on international agreements only (intergovernmental, soft law) and not upgraded to legal force (primacy principles, hard law)? The most important thing is that there is a shared awareness to build the ASEAN region's economy more productive, advanced and shared prosperity. The commitment is not enough just to use soft law approach, but must be followed by hard law approach (primacy principles). ASEAN leaders should hold talks and seek agreement to implement the principle of supranational (primacy principles) that the implementation of the AEC Blueprint 2025 be adhered to by all member states.

ASEAN countries need to be encouraged to make responsive, effective, efficient, non-discriminatory, and pro-competition regulations that are adjusted AEC Blueprint 2025. This means that each ASEAN country needs to harmonize regulations so that the rules that apply in each national territory do not conflict with each other and in line with AEC Blueprint 2025. There is no clear regulation system in force in ASEAN, nor is the legal harmonization mechanism and binding power of the AEC. Questions that should be asked, is the legal basis for the implementation of AEC Blueprint 2025 deliberately based on international agreements only (intergovernmental, soft law) and not upgraded to legal force (primacy principles, hard law)? The most important thing is that there is a shared awareness to build the ASEAN region's economy more productive, advanced and shared prosperity. The commitment is not enough just to use soft law approach, but must be followed by hard law approach (primacy principles). ASEAN leaders should hold talks and seek agreement to implement the principle of supranational (primacy principles) that the implementation of the AEC Blueprint 2025 be adhered to by all member states.

With the proliferation of European Union soft law instruments (Oana Andreea Ştefan, European Union Soft Law: New Developments Concerning the Divide Between Legally Binding Force and Legal Effects, 75(5) Modern L. Rev., 879, 879 (2012).) since the nineties, the legal bindingness of these measures has been the subject of several studies, (Most prominently, Gustaaf M. Borchardt & Karel C. Wellens, Soft Law in European Community Law 14(5) Eur. L. Rev. (1989); Linda Senden, Soft Law in European Community Law (Hart 2004); Linda Senden, Soft Law and Its Implications for Institutional Balance in the EC, 1(2) Utrecht L. Rev.(2005); Jürgen Schwarze, Soft Law im Recht der Europäischen Union,1 EuR (2011); Anne Peters, Soft Law as a New Mode of Governance, in The Dynamics of Change in EU Governance, 21–51 (Udo Diedrichs, Wulf Reiners & Wolfgang Wessels eds, Edward Elgar 2011); Oana Andreea Ştefan, Soft Law and the Enforcement of EU Law, in The Enforcement of EU Law and Values: Ensuring Member States’ Compliance (András Jakab & Dimitry Kochenov eds, Oxford University Press 2016).) indeed, various approaches (rationalist, constructivist, hybridity) (David M. Trubek, Patrick Cottrell & Mark Nance, ‘Soft Law’,‘Hard Law’, and European Integration: Toward a Theory of Hybridity, 02(05) Jean Monnet Working Paper (2005); Oana Andreea Ştefan, Hybridity Before the Court: A Hard Look at Soft Law in the EU Competition and State Aid Case Law, 37(1) Eur. L. Rev. 49–69 (2012).) have been deployed to define and delimit soft law from hard law, even arriving at a sophisticated taxonomy of soft and hard measures. (Fabien Terpan, Soft Law in the European Union – The Changing Nature of EU Law. Working Paper Nr. 7 Sciences Po Grenoble (Nov. 2013); Anne Peters, Typology, utility and Legitimacy of European Soft Law, in Die Herausforderung von Grenzen. Festschrift für Roland Bieber, 405–428 (Astrid Epiney, Marcel Haag & Andreas Heinemann eds., Nomos 2007); Peter Christian Müller Graf, Das Soft Law der Europäischen Organisationen: Einführung, in Das soft law der europäischen Organisationen, 146–154 (Julia Iliopoulos-Strangas & Jean-Francois Flauss eds., Nomos 2012).) While these inquiries are of fundamental importance to formulate an ontology of European soft law, national courts and authorities implementing and applying soft law are faced with the more practical problem of the bindingness of these measures in a given case. Member States are often at a loss for which measures they are expected to apply and may ʻunexpectedlyʼ find themselves bound by certain soft law measures. Since the jurisprudence of the Court of Justice of the European Union sheds some light on the legal obligations ensuing from the different types of European soft law, the present article is an attempt to categorize and determine the bindingness of such measures for national courts and authorities based on the relevant case-law of the Court.

This article examines the development of “soft law”, the comply or explain corporate governance regulation of the listed UK plc, over the decade from 2003, to revisions in October 2014. We will also consider the “hard law” of governance regulation, as it has developed through the codification of directors’ duties under the Companies Act 2006 (CA 2006). Our particular focus is on provisions in both soft and hard law that have sought to promote and enhance board effectiveness, and in particular, how that can be achieved through the work and function of the non-executive director. The article seeks to create a behavioural perspective which we hope complements the jurisprudential analysis of these provisions. The article highlights the behavioural and relational emphasis within these legislative and regulatory provisions, as a significant feature of the ongoing corporate governance reform agenda.

The action of a taxpayer when trusting in information concerning the content and interpretation of tax law obtained from tax authorities – between the constitutional principle of legalism and the principle of the protection of legitimate expectations

The paper analyses soft law as a mode of EU governance. European soft law can be qualified as a relatively ‘new’ mode, notably due to its dramatic proliferation and the increasing involvement of private actors. The concept of ‘soft law’ is viable on the premiss that normativity may be graduated (‘the continuum view’). Soft law deploys specific legal effects apart from outright legal bindingness, and not merely political or otherwise factual effects. The legal effects of European soft law flow from the Member States’ general duty to cooperate (Art. 4(2) TEU). The paper then traces the emergence of EU soft law and establishes a typology distinguishing between institutional soft law, member States’ European soft law, and private self- and co-regulation (including technical and financial standard-setting). Next, some factors explaining the emergence of soft law as a new mode of governance are sought, and some undeclared policy goals such as competence creep, and the alleviation of private actors’ lack of formal law-making capacity, are highlighted. The relation between European soft and hard law is analysed in terms of soft law’s ‘pre-law’, ‘law-plus’, and ‘para-law’ functions. Finally, European soft law is evaluated along the parameters of effectiveness and legitimacy; and its overall significance for the European integration process is assessed.

In Danske Slagtermestre v European Commission, the General Court annulled the Commission decision finding that no State Aid was involved in the 2013 Danish reform on wastewater treatment contributions. The Court addressed two key issues: the violation of the principle of good administration (impartiality) in State Aid investigations and, on substance, the interpretation of the 'Notion of Aid' in cases involving public infrastructures. While the latter is a more typical (and technical) 'State Aid issue', related to the still-blurred boundaries of the 'Notion of Aid', the focus on impartiality is rather unconventional. The Court emphasized the importance of an unbiased handling of State Aid cases, as impartiality ensures equality of treatment, 'which is at the heart of the EU'. However, this promising statement has not been followed by an explicit overruling of the existing case law, which only offers a limited protection for third-party rights in State Aid procedures. As for the notion of State Aid, the Court examined the measure under the 'market economy operator principle', which it deemed applicable in light of a recent extensive interpretation by the Court of Justice. The ruling contains contentious statements, confirming the persistence of legitimacy issues in State Aid control, which should not be underestimated given the growing political dissatisfaction with Article 107 TFEU.