The CJEU judgments in C-117/20 bpost and C-151/20 Nordzucker: Fundamental rights as a vehicle for hybrid enforcement mechanisms?

In its recent judgments in bpost and Nordzucker, the CJEU held – in essence – that to prevent a violation of the ne bis in idem guarantee in Article 50 of the Charter of Fundamental Rights of the European Union, public authorities need to cooperate and coordinate their punitive enforcement actions, also when they are active in different policy areas or in other jurisdictions. According to Michiel Luchtman, the paradoxical result seems to be that to prevent one fundamental right from being violated, it is necessary to accept (sometimes intrusive) interferences with other rights. Has the Court now entered a slippery slope, eliminating fundamental rights barriers, to promote the effective enforcement of EU law? And if so, at the expense of what?


Hybrid enforcement arrangements are hot. Present day enforcement strategies build on the assumption that tackling commonly shared problems, such as the integrity of the financial markets, the protection of the environment, the fight against trafficking or the fight against organized crime, requires the sharing of available data and the coordination of enforcement efforts by different policy areas or in different jurisdictions. Human trafficking, for instance, is difficult to combat without the combined expertise and tools of numerous public and private actors at local, national and even European levels.

Yet, at the same time, it is often said that those efforts should not come at the expense of fundamental rights, including, but not limited to the need to protect personal data. Indeed, the bigger the pressure to share information obtained in one policy area for enforcement purposes in another area, the bigger the need for robust fundamental right standards to avoid abuses and to promote transparency and accountability, one would assume.

The paradox of bpost and Nordzucker       

It is in light of the foregoing that two recent judgments by the Grand Chamber of the European Court of Justice on the ne bis in idem principle caught my attention, as they do not square easily with that assumption. The ne bis in idem principle prohibits a person from being prosecuted or punished repeatedly on the basis of the same facts. In short, and subject to the conditions which I will discuss below, the Court held that to prevent a violation of the ne bis in idem guarantee in Art. 50 of the Charter of Fundamental Rights of the European Union (CFR), public authorities need to cooperate and coordinate their punitive enforcement actions, also when they are active in different, though related policy areas or in other jurisdictions.

The paradoxical result seems to be that to prevent one fundamental right from being violated, it is necessary to accept (sometimes intrusive) interferences with other rights. Has the court now entered a slippery slope, eliminating fundamental rights barriers, to promote the effective enforcement of EU law? And if so, at the expense of what? In this blogpost, I aim to offer a first analysis.

The Court judgments of 22 March 2022 in bpost and Nordzucker are new milestones for enforcement integration in the EU. Bpost concerned the imposition of a punitive fine by the Belgian postal regulator (whose decision was later annulled by a Belgian court) and the subsequent punitive procedure (prolonged after said annulment decision became final) by the Belgian competition authority. Both procedures concerned the application of the rebate system applied by bpost from 2010 onwards.

Nordzucker deals with alleged infringements of German, Austrian and EU competition law and the related procedures by the German and Austrian competition authorities. The territorial scope of the completed German procedure was unclear, because it was partly based on a telephone conversation during which representatives of both undertakings discussed the Austrian sugar market. Consequently, it was also unclear whether the subsequent procedure by the Austrian competition authority violated the ne bis in idem principle, as the object of investigation could have been the same.

Towards a unified approach to the ne bis in idem principle…

What both judgments make clear is that from now on, ‘the scope of the protection conferred by [art. 50 CFR] cannot, unless otherwise provided by EU law, vary from one field of EU law to another’ (para 39 bpost; para 34 Nordzucker). All areas of EU law now follow the same assessment frame in which it is necessary to establish, first and foremost, whether the facts of the case in the concluded first punitive procedure and those in the subsequent procedure are in fact ‘a set of concrete circumstances stemming from events which are, in essence, the same, in that they involve the same perpetrator and are inextricably linked together in time and space’ (para 37 bpost).

Nordzucker has made clear that this standard is now also to be applied in transnational competition law cases. Bpost clarifies that it also applies beyond combinations of criminal and administrative enforcement mechanisms within a single policy area, as in Menci and, very recently, Direction départementale des finances publiques de la Haute-Savoie (taxes), Garlsson Real Estate and Di Puma and Zecca (market abuse). Bpost, after all,relates to two different, but related areas of EU policy: on the one hand, competition law and, on the other, the postal sector where sectoral rules aim to stimulate competition, among other goals.

Thus construed, ne bis in idem now literally transcends the borders of national jurisdictions and of policy areas. It is because of this broad interpretation of the ‘idem’ that the focus inevitably shifts towards the limitation scheme of Art. 52 CFR. To prevent an interference with the principle from becoming a violation, the conditions of Art. 52 CFR must be met. In bpost the Court held (at para 49) that public authorities can only ‘legitimately choose complementary legal responses to certain conduct that is harmful to society [emphasis added]’, if the relevantprocedures form ‘a coherent whole so as to address different aspects of the social problem involved [and] provided that the accumulated legal responses do not represent an excessive burden for the individual concerned.’

In doing so, the court explicitly deviates from its Advocate-General in bpost, who had opined (in paras 107-109) that it follows from the essence of the ne bis in idem guarantee that the law itself prevents, ex ante, a second set of procedures. Instead of a broad factual ‘idem’, he suggested to make ‘the examination of the protected legal interests, and thus of the objective pursued, part of the consideration of idem’, provided that, like in transnational criminal law,  ‘[t]he definition of protected legal interest (…) may not copy national labels and national legal specificities’ (para 139).  Yet according to the court, it does not contravene the essence of the right that the competent authority, in casu the authority that started the second set of punitive procedures, demonstrates, ex post, why the second set of procedures was strictly necessary (paras 52-53).

In the ECJ’s view, national courts also have a role to play in this regard. Paragraphs 51 and following of bpost neatly sum up their responsibilities: ‘it is necessary to assess whether there are clear and precise rules making it possible to predict which acts or omissions are liable to be subject to a duplication of proceedings and penalties, and also to predict that there will be coordination between the different authorities.’ Moreover, it must be assessed ‘whether the two sets of proceedings have been conducted in a manner that is sufficiently coordinated and within a proximate timeframe and whether any penalty that may have been imposed in the proceedings that were first in time was taken into account in the assessment of the second penalty, meaning that the resulting burden, for the persons concerned, of such duplication is limited to what is strictly necessary and the overall penalties imposed correspond to the seriousness of the offences committed.’

…and its ramifications for law enforcement

The big question is how far the implications of the judgment go. Some have already pointed to its implications for the Digital Markets Act. I would submit that its implications go even further and apply to all policy areas within the scope of EU law. Since Åkerberg Fransson, we know that this scope is broad and also covers situations wherein the EU does not prescribe in detail the specifics of national enforcement regimes. The impact of the cases may even cover situations in which one punitive procedure is within the scope of EU law, whereas another – direct taxes, for instance – is not.

In all those cases, a lack of coordination in an area covered by EU law is likely to have repercussions for all authorities that are concerned with that -same- conduct and that may wish to commence punitive procedures. The court’s judgments imply that it will apply the ne bis in idem principle to any cumulated set of punitive procedures, regardless of the policy area or mix of policy areas in play, as long as those responses cover the same material facts.

Those cumulated responses then require justification, in terms of substance and sufficiently strong temporal connections. If not, a violation of the ne bis in idem guarantee is imminent. Of course, the facts of the cases really need to be identical and not merely similar (bpost, para 36), in terms of their substance, temporal and territorial scope. The legal qualification of those facts is however not important for the application of the scope of the guarantee. The aforementioned, rather vague concept of ‘legal responses to certain conduct, harmful to society’ (bpost, para 49) does not define which enforcement mechanisms fall within or outside the scope of the ne bis in idem guarantee.

A first conclusion is therefore that the ne bis in idem principle is not only responsive to a larger trend in law enforcement – that towards integrated or hybrid enforcement models –, but is also actively promoting it.

The consequences of this may be shown in, for instance, the financial sector. Efforts are undertaken in the Netherlands by several governmental bodies (and private actors) to protect the integrity of the financial markets by sharing information between FIU’s, financial regulators, the prosecution service, the police and tax services. It is certainly thinkable that certain types of action, conducted within a specific timeframe, by a certain financial undertaking, would attract the interest of different authorities from a variety of related, yet different perspectives. Their follow-up efforts would then be, so I assume, within the scope of the guarantee, calling for an even greater degree of coordination between the authorities. The latter would be necessary, after all, to ensure a coherent whole in order to address different aspects of the social problem involved and ensure that the accumulated legal responses do not represent an excessive burden for the individual concerned.

The same may go for investigations into, say, forced seasonal labour, invoking the interest of, again, the prosecution service, labour inspections, migration and tax authorities. In both examples, and there are many more, we can see an overlap between (sometimes even highly harmonized) areas of EU law and areas outside the EU’s competences (taxes). Where those authorities are not already cooperating, bpost is likely to stimulate this tremendously.

But what about other fundamental rights concerned?

The implications of the two judgments cannot be overlooked. One interpretation is that the court’s new approach offers the individual more protection against enforcement overreach than before, despite the emphasis on the sharing of information (personal data) and coordination. A lack of mutual exchange of information and of coordination will lead to a violation of the ne bis in idem principle, whereas previously – at least that was the assumption – nothing would have protected the individual from being punished multiple times for the same conduct under different policy areas, without any assessment of the overall proportionality of the joint punitive responses.

However, it remains to be seen whether developments will really go in this ‘legal protection-friendly’ direction. Much will depend on how the authorities and national courts will discharge the duties placed upon them by the ECJ and on how strict the Court’s scrutiny of their work will be. Presumably, the latter will offer national authorities a significant degree of leeway in areas where enforcement regimes have not been subject to detailed EU harmonization.

Will courts then simply check whether there has been a – any type of – exchange of information, regardless of its content, and assume coordination has taken place if that has been the case? Will an occasional reference to a previously-imposed punitive sanction suffice for the conclusion that a previous sanction has indeed been taken into account? How will courts assess the temporal connections between the two procedures? And finally, what is the yardstick for assessing the overall proportionality of the response if the aforementioned ‘legal response to aharm to society’ (e.g. to protect the integrity of the financial markets or to combat human trafficking) itself has not been defined by law – or rather, where such definitions remain fragmentary?

I am not so confident that existing laws offer courts and others much to work with. In fact, legal practice even points to the opposite. In light of the specifics and autonomy of legal disciplines, courts are often reluctant to look beyond the specific case file that is submitted to them and to include the interactions with other procedures in their assessment. Not all criminal courts, for instance, tend to be concerned with what happened in parallel, related administrative procedures. They may conveniently refer individuals to the authorities responsible for those procedures for legal redress, while still using the exchanged information in the criminal procedure. The question is also to what extent courts are capable of making these assessments on a case-by-case basis, even if those cases are the expression of larger enforcement policies. Many questions of political accountability are therefore also on the agenda.

The opposite of a ‘legal protection-friendly’ reading may therefore be truer; paying lip service to the criteria of the ECJ – a formal check on the exchange of information and coordination of procedures and sanctions – is likely to deteriorate the position of individuals significantly and could lead to precisely the opposite of what the court advocates. Particularly now that the ne bis idem principle strongly promotes the exchange of information and coordination of procedures, it almost invites authorities to neatly carve up their investigations to avoid overlap in substance and time. The punitive whole may then easily end up being greater than the sum of its parts.

Outlook

The relevance of the ECJ’s most recent judgments on ne bis in idem cannot be overlooked easily. At the same time, they raise many new questions that relate to the larger trend in which the boundaries between legal disciplines and areas of EU law are crossed. Fundamental rights regimes increasingly encourage these intersections, as is also demonstrated by these two judgments, but also need rethinking in light of the hybrid mechanisms for law enforcement that they have helped to create.

To avoid the paradox that one fundamental right – ne bis in idem – leads to infringements of other fundamental rights – including the right to privacy and the protection of personal data, but also defence rights in punitive proceedings and the right to effective judicial protection – there seems to be a growing need for new institutions and arrangements for legal protection and accountability which recognize what is becoming a legal reality: that law enforcement authorities are increasingly sharing the burden and consequently the responsibility for commonly-defined societal problems. As was noted by Advocate General Bobek in his opinion to the two judgments, this is a daunting task for the composite legal order of the EU and its Member States. It is also one which urgently needs an answer by the European and national legislatures.

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Michiel Luchtman

About Michiel Luchtman

Michiel Luchtman is professor at the Willem Pompe Institute for Criminal Law and Criminology and the Utrecht Centre for Regulation and Enforcement in Europe (RENFORCE). He is also the director of Graduate Studies and member of the board of Utrecht Law School. His research and teaching focus on the consequences of Europeanisation for criminal justice and law enforcement in general; on criminal law and fundamental rights; on economic criminal law, as well as criminal tax law. Luchtman also (co-)supervises several PhD projects on these issues. Luchtman is the Dutch contact point of ECLAN, the EU criminal law academic network, and a member of the European Commission’s Expert Group on Criminal Policy.