Non-participating Member States Research Articles

The relations between the European Public Prosecutor’s Office and the Member States that do not participate in the enhanced cooperation

The first of June 2021 marked the start of the operational activities of the European Public Prosecutor’s Office (EPPO). Established by Regulation (EU) 2017/1939 (‘EPPO Regulation’), the EPPO is the European Union body competent to investigate, prosecute and bring to judgment the perpetrators of criminal offences affecting the Union’s financial interests. The EPPO was established by means of enhanced cooperation. At the time of writing, five Member States do not participate in the EPPO: Denmark, Ireland, Poland, Hungary and Sweden. The effective action against crimes affecting the Union budget requires however smooth cooperation between the EPPO and its counterparts not only in the Member States that participate in the enhanced cooperation, but also in the non-participating Member States. This contribution delves into such cooperation and the several issues it raises, first providing for some introductory remarks on the choice of some Member States not to join the enhanced cooperation on the EPPO. It then analyses the two main provisions of the EPPO Regulation concerning the EPPO’s relations with non-participating Member States, Article 99 and, most importantly, Article 105. Finally, this contribution shortly addresses the relevant role played by Eurojust in this context.

Failing or likely to fail: banking union cooperation tested since 2017

ABSTRACT The creation of the Banking Union (BU) has been a significant leap towards further integration in the euro area. BU cooperation is critical for efficient supervisory and resolution actions, even more so for cross-border banks that may face legal and institutional differentiation. Cooperation takes place within the two BU pillars – the Single Supervisory Mechanism and the Single Resolution Mechanism – and together with authorities of non-participating Member States and of third countries in a cross-border setting. The Article examines how the two mechanisms dealt with Failing or Likely to Fail (FOLTF) and resolution cases from 2017 until early 2022. FOLTF cases have tested existing cooperation frameworks and prompted new cooperation vehicles and mechanisms within the BU, in its immediate EU periphery and with third countries. Cooperation is a prerequisite of functioning mechanisms; it lays the foundations for further integration within the BU; and helps consolidating equivalence with third countries.

Financial Transactions Tax as an Integration Development Instrument in the EU

The adoption of a legal instrument relating to the harmonization of the ten Member States‟ laws on the financial transaction tax could be the first attempt in the EU history to establish an enhanced cooperation in the area of taxation. This project should be considered in the wider context of the financial sphere reform, which was caused by the global financial crisis. The draft Directive implementing enhanced cooperation in the area of the financial transaction tax has been discussed in the Council for 7 years but an accord has not been reached yet. The ambition of the European Commission to enlarge the scope of the financial transaction tax payers as much as possible is perceived by the non-participating Member States as an encroachment of their tax jurisdiction which contradicts the international customary law as well as The Treaty on the Functioning of the European Union. An examination of the reasons of unsuccessful negotiations may lead to a conclusion on drawbacks of the enhanced cooperation in taxation policy. It is not likely that this mechanism would be used in the future to tax a very mobile financial market where the tax base may be easily transferred to the non-tax states. Meanwhile the participation of the leading EU States in the project, a wide public support of the „Robin Hood Tax‟ and Brexit suggest that in the coming months financial transactions in ten Member States will be charged by the harmonized tax. However, the scope of the tax would be reduced in comparison with that in the initial draft of the European Commission.

Procedural safeguards in EPPO cross-border investigations

In this paper we will discuss the presence of procedural safeguards in the specific context of EPPO cross-border investigation between participating Member States, non-participating Member States and third countries. The various sources of the safeguards will be identified in the EPPO Regulation, other European Instruments and mutual legal assistance international conventions. We will then probe the extent of these procedural safeguards and their efficacy by reviewing the state of play of other instruments of judicial cooperation used in the area of freedom, security and justice.

The Regulation on Matrimonial Property and Its Operation in Succession Cases — Its Interaction with the Succession Regulation and Its Impact on Non-participating Member States

The Regulations on Matrimonial Property (No 2016/1103) and on the Property Consequences of Registered Partnerships (No 2016/1104) are new important pieces in the “puzzle” of European private international law. This article particularly focuses on the relationship between the Matrimonial Property Regulations and the Succession Regulation, two instruments which will often be applied in parallel because of the close connection between the two areas they govern. The author examines in particular the scope of those instruments as well as their interaction with respect to jurisdiction and applicable law. At the same time, an attempt is also made to assess the position of Poland and of those other Member States that are bound by the Succession Regulation, but not by the Matrimonial Property Regulation.

Enhanced cooperation in property matters in the EU and non-participating Member States

This article briefly presents the attitude towards same sex-marriages and registered partnerships of legislators in those EU Member States which have decided not to participate in the adoption of EU regulations concerning property matters for spouses and registered partners. It also provides an overview of these regulations in order to indicate which provisions have triggered such decisions. Finally, it points out some examples of clashes resulting from the different systems being applied in participating Member States and non-participating Member States.

The future judicial cooperation between the EPPO and non-participating Member States

The future judicial cooperation between the EPPO and non-participating Member States

Macro-Prudential Tasks in the Framework of the Single Supervisory Mechanism (SSM): An Analysis of Article 5 of the SSM Regulation

The aim of this paper is to provide an analysis of the macro-prudential tasks assigned to the ECB within the context of the ‘Single Supervisory Mechanism’ (SSM), which is a major building block of the European Banking Union. It is structured in two (2) sections. Section 1 provides a general overview of the specific supervisory tasks conferred upon the ECB in relation to credit institutions and other supervised entities incorporated in participating Member States, as well as those concerning branches in participating Member States by credit institutions incorporated in non-participating Member States. Section 2 outlines, in particular, the specific macro-prudential tasks conferred upon the ECB under the provisions laid down in Article 5 of the Council Regulation (EU) No 1024/2013, which constitutes the main legal source of the ‘Single Supervisory Mechanism’ (known as the ‘SSM Regulation’).

Taxing and Spending in the Eurozone: Legal and Political Challenges Related to the Adoption of the Financial Transaction Tax

The article examines the recent high-level policy proposals to establish a fiscal capacity for the euro zone and discusses the relationship between taxing and spending in the Economic and Monetary Union (EMU) by analysing the need and possibility to levy taxes at the supranational level to sustain this new fiscal capacity. To this end, the article focuses on the pending legislation for the introduction of a Financial Transaction Tax (FTT) and considers the legality of resorting to enhanced cooperation to adopt a FTT among a sub-group of euro zone countries. While the use of enhanced cooperation in the area of FTT has been the object of recent challenges, the article discards these concerns and argues that the adoption of an FTT through enhanced cooperation is consistent with the constitutional function of this instrument, complies with the principles of the internal market and does not affect the rights of non-participating Member States — so it is legal. However, the article suggests that the use of enhanced cooperation to enact an FTT meets several political challenges, precisely because of the connection between taxing and spending in the euro zone. Since only 11 Member States have agreed to levy an FTT, it appears difficult to appropriate the revenues of the FTT for the benefit of a common euro zone budget. In the end, the establishment of a fiscal capacity for the euro zone requires further institutional reforms in the architecture of the EMU aimed at ensuring a more effective and legitimate decision-making process in fiscal affairs.

Differentiated Integration and the Single Supervisory Mechanism: Which Way Forward for the European Banking Authority?

The establishment of the Single Supervisory Mechanism (SSM), as the first pillar of an EU Banking Union, represents a significant step towards greater integration in banking supervision. However, the scope of the SSM is limited to a group of Member States. Member States such as the UK have insisted that they will not be part of the SSM. These non-participating Member States (NoPS) will nevertheless interact closely with SSM members, notably within the European Banking Authority (EBA). In order to organise their interactions, the EU legislature amended EBA’s founding regulation. In particular, it introduced complex voting requirements. The aim of this paper is to reflect on these changes and to consider alternative arrangements for EBA.

Some Legal Issues with Implementing Commission Proposed Financial Transaction Tax in Estonia

There is little doubt that financial transaction tax has significant effect on markets and economy. However, legal implications thereof are just as important to understand. For one, it's highly debatable whether any action under enhanced cooperation can be regarded as a measure of harmonization. Then there's the question on the essence of the proposed tax. Can it be really regarded as an indirect tax to which Article 113 of the Treaty on the Functioning of the European Union (TFEU) refers? If the answer to the raised doubts is no, then TFEU hardly can be the legal basis for this tax. Not only is this then a new tax, but also it raises the question on what kind of legal agreement is this creating on the European Union (EU) level. Having regard to the wide effects of the tax, the impact on international law cannot be ignored as well. As there is well-established practice on the underlying freedoms of the EU, any motion with such effect cannot ignore that. In addition, it cannot be ignored that this tax will raise the question of liability for damage caused e.g., to non-participating Member States.