Abstract
This contribution offers a conceptual framework that allows a clear and transparent assessment of the legal/judicial accountability of acts adopted within the Single Supervisory Mechanism based on an evaluation of their legal effects. It shows that the Union courts are the relevant judicial forum to hold the European Central Bank to account for acts that have primary legal effects; that is, all acts or omissions that, directly or indirectly, are capable of determining rights or imposing obligations. Such acts can be challenged by way of direct actions under Articles 263 and 265 TFEU. Where the change in the legal position of a person is caused by at least two distinct acts, the former providing the basis for the adoption of the latter binding act without having itself primary legal effect, then the Union courts may review the former act only indirectly, such as via Articles 267 and 277 TFEU. The judicial accountability mechanisms within the Single Supervisory Mechanism mirror the allocation of competences between the national authorities and the European Central Bank within the Single Supervisory Mechanism by providing for a separate but integrated system of judicial review.
Keywords
1. Introduction
The oversight of central banks has always attracted the attention of scholarly literature. 1 Their widely accepted independent status rendered any attempt to design mechanisms of political and judicial control a difficult task. The case of the European Central Bank (ECB) illustrates that it is far from easy to strike an appropriate balance between the need to hold a public authority accountable for the exercise of its conferred powers and enforce its compliance with the rule of law, while guaranteeing the efficient and impartial exercise of its mandate, particularly where the latter has a constitutional basis. 2
In the absence of a uniformly accepted definition, the literature attributes diverse objectives and rationales to accountability, in the light of the theoretical underpinnings endorsed by the respective author. By reading accountability, in broad terms, as the exercise of ex post control over the power conferred on public authorities, part of the literature finds a conceptual link between accountability and legal liability. Ter Kuile, 3 for example, classifies accountability according to the forum to which a public authority accounts, namely ‘political’, ‘social’ and ‘judicial’. Under this lens, liability in law is seen as an expression or a type of accountability of public authorities, meaning the instance of being accountable to the judiciary. For the purposes of this paper, the terms legal/judicial liability and accountability should be read interchangeably.
It is clear from the provisions of the treaty that the drafters considered the guarantee of independence for the ECB should not go as far as granting legal impunity in the exercise of its mandate. The evolution of the ECB in terms of its conferred objectives and function has increasingly extended the accountability debate from monetary policy towards its involvement in the European Stability Mechanism 4 and lately in prudential supervision. 5 Yet there is still much uncertainty about important aspects that touch upon both the substance of judicial control and admissibility of legal actions. In particular, paramount questions pertaining to the justiciability of ECB acts have been left in the periphery. 6 In this article, we aim to redress this situation by examining the legal effects that trigger the various mechanisms of judicial control of ECB acts.
Providing more clarity on the legal effects of ECB acts is not only important for judicial protection and the rule of law but also for political accountability purposes. By understanding the legal consequences resulting from the allocation of power amongst the various national and Union actors, accountability can better target the exercise of such power and enhance the existing judicial protection mechanisms. Furthermore, it can benefit political and social participants in prioritizing their accountability targets and selecting the most appropriate accountability tools.
Reducing the conceptual obscurity of legal effects of acts adopted by Union institutions is essential for the Union’s legal order. It enhances legal certainty and improves the quality of legal enforcement and judicial protection. Moreover, it brings more transparency to the reasoning of Union courts and paves the way for developing the law in a more systematic and coherent manner. Equally, it contributes to a more optimal allocation of resources and regulatory efficiency. By being able to predict with more certainty what kind of legal effects an instrument may produce vis-à-vis the various affected parties, Union institutions become better equipped in selecting the most appropriate means in the exercise of their conferred powers. This, in turn, could reduce the circumstances giving rise to a mismatch between the actual effects of Union acts and the apparently intended effects of their authors.
The article will proceed as follows: after presenting a conceptual framework for ‘legal effects’ of Union acts more generally (Section 2), we apply this framework to determine the legal effects of acts adopted by the ECB in the field of bank supervision (Section 3). Bank supervision works well as a paradigmatic case study not only due to increasing litigation but also due to the multiplicity of institutional actors and legal instruments involved in this policy area.
2. Conceptual orientations
A. The need for conceptual clarity
Union courts determine the reviewability of acts of Union institutions on the basis of a substantive approach. The definition of a reviewable act was first recorded in the ERTA case, where the Court of Justice of the European Union (the Court; CJEU) held that an action for annulment is available against ‘all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects’. 7 In IBM, the Court explained that such legal effects occur, when the measure is ‘binding on, and capable of affecting the interests of the applicant by bringing about a distinct change in his legal position’. 8 The IBM definition of legal effects places emphasis on the substance of an act and not its form. 9 The scope of reviewable acts is therefore considerably wider than the formal instruments laid down in Article 288 TFEU. 10 The underlying concern of the Court is that an assessment purely based on the form of the act would allow the author of the act to avoid judicial review by choosing an atypical form for its actions. 11 Conversely though, not every formal act contains sufficiently binding content to be reviewable.
Despite a substantive test having been established for determining the legal effects of Union acts, there is still insufficient clarity about what triggers judicial control over the conduct of Union institutions. 12 This is so for more than one reason, which we can only briefly discuss here. First, the object of the substantive assessment, that is ‘legal effects’, remains relatively unclear. On the one hand, the case law is inconsistent about the kind of legal effects that can be regarded as capable of triggering a particular avenue for judicial review. 13 Union courts currently hold two main types of competences that enable them to review the validity of Union acts and omissions. In general terms, such review may be conducted directly via annulment actions (Articles 263(1) and 265 TFEU) and indirectly via preliminary rulings (Article 267 TFEU) and incidental review (Article 277 TFEU). Although it is clear that only Union acts with binding legal force will be reviewable directly, it is somewhat still unknown what legal effects a Union act must produce so that it can fall within the indirect reviewing competences of Union courts. On the other hand, neither Union courts nor legal scholarship have so far offered a comprehensive conceptual framework for analyzing legal effects in Union law. 14 Second, at the same time, the concept of legal effects has been perceived to have conceptual links with other basic notions of EU law, specifically direct concern, 15 individual concern, 16 direct effect 17 and indirect effect. 18 Such a multiple, yet fragmented, use of legal effects inevitably adds another layer of conceptual obscurity. As a result of the casuistic development of case law, 19 it has been difficult to predict with certainty when Union acts can be subject to judicial control and in which judicial forum. Conceptual clarity becomes therefore not only a matter of theoretical interest, but also of practical necessity.
B. Conceptual framework
Our conceptual framework for the legal effects of Union acts proceeds from the proposition that a person’s legal position and any legal relation between two persons consists of rights and obligations created within a legal system. 20 Any alteration of a person’s rights and obligations therefore constitutes a change in a person’s legal position. A public act can be said to produce legal effects if, in some way, it is regarded as capable of changing the legal position of a person. Depending on how a public act is linked to and brings about a change in the legal position of a person, we suggest that a distinction can be made between two types of legal effects: primary and secondary.
Primary legal effects encapsulate binding legal effects that arise either (i) directly or (ii) indirectly from an act, by imposing obligations or determining rights vis-à-vis a person. 21 On the one hand, binding legal effects arise directly, where it is the public act itself that brings about such a change in a person’s legal position. If we consider obligations in EU law, we see that direct legal effects can arise from a Commission act ordering a Member State to recover aid declared incompatible with the internal market. 22 Similarly, primary legal effects can come about directly through the determination of rights, meaning via the granting of a right, its modification or denial. 23 Primary legal effects can also arise indirectly, where an act triggers an obligation or determines a right enshrined in other rules or principles of the legal system. Acts or omissions capable of producing primary legal effects, directly or indirectly, are binding acts; as such, they can be subject to an action for annulment under Articles 263 and 265 TFEU respectively. Moreover, their validity can be reviewed by the Court of Justice in the context of preliminary ruling proceedings under Article 267 TFEU and incidentally pursuant to Article 277 TFEU. Finally, they are capable of giving rise to the Union’s non-contractual liability under Article 340 TFEU.
Legal effects can, however, also arise through what we call ‘secondary legal effects’. In contrast to primary legal effects, the relevant act does not itself change a person’s legal position either directly or indirectly. Rather, this act is determinative for the adoption or content of a subsequent act, which produces binding legal effects (primary legal effects) vis-a-vis another person. The legal connection between the two acts may take various forms. Typically, one act may require, authorize or permit the adoption of another act. In such a scenario, the first act is regarded as producing secondary legal effects vis-a-vis the person affected by the latter act. Secondary legal effects can be distinguished from indirect primary legal effects in that the former entail two acts, specifically, the adoption of a subsequent act with binding legal effects. By contrast, indirect primary legal effects require the existence of a single act that triggers the determination of rights or an obligation of a person, whose source is not the act itself but a different legal provision (hence they arise ‘indirectly’). We have seen that acts and omissions producing primary legal effects vis-a-vis a person can be reviewed directly by Union courts. By contrast, acts that have only secondary legal effects are not reviewable acts under Articles 263 and 265 TFEU. Their validity, however, can still be subject to indirect review under Articles 267 and 277 TFEU. Finally, acts with secondary legal effects may also trigger non-contractual liability under Article 340 TFEU.
Not all acts of Union institutions entail legal effects. Union acts or omissions that do not produce legal effects are not reviewable before Union courts either directly (Articles 263 and 265 TFEU) or indirectly (Articles 267 and 277 TFEU).
An act may simultaneously produce more than one kind of legal effect. EU Directives directly impose obligations on Member States, for whom it can therefore be said to produce primary legal effects, while at the same time they produce secondary legal effects for those affected by the national act implementing a Directive. In this case, the Directive is a reviewable act under Article 263 TFEU, as it produces binding (primary) legal effects for the Member States having to implement it. In contrast, a Union act can be addressed to a Member State (but does not impose an obligation for a general or specific action or determine any rights), which then subsequently adopts an act that imposes obligations on a private party. In this case, the Union act does not produce any primary legal effects at all, but ‘only’ produces secondary legal effects. In this case a direct action is excluded, but an indirect validity review pursuant to Article 267 is possible.
Our proposed taxonomy of legal effects defines the scope of the Union courts’ jurisdiction as follows: first, actions for annulment under Articles 263 and 265 TFEU are available only where an act or omission entails primary legal effects. In this case, the Union courts are the main forum to ensure the accountability of the act’s author. Second, the Union courts’ power to review acts and omissions of Union institutions indirectly pursuant to Articles 267 and 277 TFEU covers acts and omissions with primary legal effects and extends to the ones that produce secondary legal effects. Here, the Union courts are still the exclusive forum to hold the act’s author to account, but in case of a validity review via Article 267 TFEU, the court’s responsibility as judicial forum is only engaged if and to the extent of a reference from the national court.
3. The legal effects of ECB acts in the Single Supervisory Mechanism
The remaining part of this contribution is devoted to applying the conceptual framework set out in the previous section to determine the legal effects of selected types of Union acts adopted in the Single Supervisory Mechanism (SSM). Before proceeding, it is worth making a note pertaining to the attribution of power in this policy area. Broadly speaking, the SSM is an integrated institutional and regulatory network of Union and national authorities that carry out prudential supervision-related tasks. Because the SSM does not itself have legal personality, all acts adopted in this context are imputed either to the Union institutions involved or the participating National Competent Authorities (NCAs), depending on whether the relevant competences are placed at Union or national level. We focus our analysis primarily on the legal effects of selectively chosen acts adopted by the ECB.
It was mentioned above that Union courts have endorsed a substantive test for determining the reviewability of acts adopted by Union institutions. It follows that the assessment of the legal effects of any act must always entail a distinct exercise, the outcome of which would depend on the merits of each case. That said, it can be relatively easier to identify the possible legal effects of certain types of acts due to their normative function in a legal system. By contrast, other types of acts require a more elaborate analysis before any safe conclusion can be drawn. On this basis, our survey below unfolds by distinguishing between ‘straightforward’ and ‘hard’ cases of ECB acts in terms of the level of complexity surrounding the assessment of their legal effects.
A. Straightforward cases
There is no doubt that Regulations 24 adopted by the ECB, irrespective of whether they have specific addressees such as NCAs 25 or are of general application, 26 generally produce primary legal effects and therefore can be challenged directly before Union courts.
The same applies with respect to decisions 27 by which the ECB imposes obligations on or alters rights of other persons under primary and secondary EU law, 28 including decisions imposing sanctions for breach of its regulations. The ECB’s supervisory decisions are prime examples of this type of act. Like Regulations, supervisory decisions may be directed to national authorities, private entities or have general application. The exclusive competence of the ECB, under Articles 4(1) and 6(5) SSM Regulation, with respect to all credit institutions established in the Member States participating in the Banking Union, including the less significant ones, was recently affirmed by the General Court in the L-bank case. 29 The binding force of ECB decisions can easily be inferred from the right of affected persons to challenge the validity of ECB supervisory decisions before the Administrative Board of Review. 30 The Administrative Board of Review is competent to review the substance of such acts by expressing an opinion and remitting the case back to the Supervisory Board for the preparation of a new draft decision. The new decision that would be adopted by the Governing Council can be subject to an action for annulment under Article 263 TFEU before the General Court.
Alongside supervisory decisions, the ECB holds the power to impose ‘administrative measures’ and ‘administrative penalties’, when a violation of the applicable legal requirements by natural or legal persons has been established. 31 ‘Administrative penalties’ can be further divided 32 into: (i) ‘administrative pecuniary penalties’ that apply in the supervisory context with respect to violations by a natural or legal person of requirements under directly applicable Union law; 33 and (ii) ‘fines’ and ‘periodic penalty payments’ that apply as a result of a breach of ECB regulations or decisions. 34 Clearly, any measure falling under these categories would have binding legal effects vis-à-vis its addressee and therefore can be challenged independently before Union courts.
The SSM Regulation confers upon the ECB the power to issue instructions on special issues pertaining to the supervision of banks, which are addressed to the NCAs or private persons. 35 Such instructions appear in at least three kinds of situations. First, when the ECB issues specific supervisory instructions with regard to a significant supervisory entity. 36 Second, when the ECB issues general supervisory instructions typically but not exclusively with respect to less significant banks. 37 Third, where the ECB has a supervisory task but no relevant power. 38 There is little doubt of the mandatory nature of those instructions vis-a-vis the national authorities to which these are addressed, including NCAs of non-euro area Member States who participate in the Banking Union via the close cooperation framework. 39 The SSM Regulation expressly provides that the ECB can ‘require [NCAs], by way of instructions’ 40 to carry out certain tasks and that NCAs must ‘follow’ 41 and ‘act on’ 42 such instructions. 43
Where it provides the basis for the adoption of a national act with binding effects, an ECB instruction could be regarded to have primary legal effects vis-à-vis the NCA and secondary legal effects for the addressee of the national act. The margin of discretion that national authorities enjoy in complying with the ECB’s instruction would only play a role in assessing the standing of private parties. A person may be regarded to be directly concerned by the instruction of the ECB only where national authorities do not have autonomous decision-making powers with respect to the implementation of the ECB decision. 44 The level of discretion available to the national authority may depend inter alia on the degree of detail provided in the ECB instruction. 45 To the extent that the national authorities are regarded as having some discretionary decision-making powers, 46 the ECB instruction would be regarded as not being of direct concern to the final addressees, who therefore would likely not meet the standing requirements to bring a direct action against the ECB before Union courts. 47 In such cases, the validity of an ECB instruction could be contested only indirectly. The more common avenue would be to first bring an action before national courts and thereafter request the referral of a question on the legality of the ECB instruction to the Court of Justice for a preliminary ruling under Article 267 TFEU.
Finally, there is little doubt that opinions 48 and recommendations 49 adopted by the ECB would only produce secondary legal effects for the parties affected by a final decision with binding force, provided that such a final act would indeed be adopted. This conclusion is based on the assumption that the acts in question are genuine opinions and recommendations, in the sense that a substantive assessment would not indicate that their normative content is aimed to be complied with by the respective addressees. If such compliance is required, then a door may open for such acts to produce primary legal effects vis-a-vis their addressees and secondary legal effects for third parties.
B. ‘Hard’ cases
1. ECB instructions to national authorities involving application of national law
Pursuant to Article 4(3) SSM Regulation, the ECB can adopt acts in the form of instructions to the national authorities by applying national law. The partial harmonization in this policy area causes Union law to be complemented by national law. 50 In particular, Union law applies here in the form of directives, which inevitably provide Member States with a margin of discretion with respect to their implementation, including the specification of their content. In our view, to the extent that such ECB instructions must be followed by national authorities, they clearly produce primary legal effects for their addressees. Equally, they are likely to produce secondary legal effects for the persons affected by any subsequent national act adopted on the basis of the ECB instruction. The difficulty here is not whether the ECB instruction can produce legal effects, but in which judicial forum the action would have to be brought. Although such acts are to be considered reviewable, it would appear difficult for these ECB acts to be challenged via a direct annulment action by the persons affected by the final NCA decision. This is because NCAs would likely be left with some discretion on how to comply with the ECB instruction, which would therefore not be of direct concern to those persons. At the same time, it is doubtful that national courts have jurisdiction in such situations. 51 All the same, the fact that the ECB instruction is based on national law that has been adopted for the purpose of transposing an EU directive has been argued not to affect the Court’s jurisdiction to review the validity of such Union acts under Article 267 TFEU. 52 The wording of Article 267(1)(b) TFEU expressly confers on the Court of Justice the jurisdiction to give preliminary rulings on ‘the validity and interpretation of acts of the institutions, bodies, offices or agencies of the Union’.
2. Investigatory acts
The SSM Regulation confers on the ECB large investigatory powers vis-a-vis legal and natural persons, 53 including the power to carry out on-site inspections. 54 The initial trigger for commencing an investigation is held by the ECB, 55 if it suspects that a breach of relevant Union rules has occurred. 56 Thereafter, the case is referred to the investigation unit, which is an internal independent body empowered to carry out the investigations. 57 It is questionable whether acts or tasks carried out from the launch of the investigation and during the process leading to the adoption of an ECB final decision can be challenged independently before the Union courts. The ECB’s investigatory powers and applicable procedures mirror, to a significant extent, the ones that apply to the Commission in competition law infringement proceedings. Consequently, it can be argued that the principles governing the reviewability of acts adopted in the context of competition infringements could also apply mutatis mutandis with respect to investigations of violations under the SSM Regulation. The General Court has consistently held that ‘[o]nly measures immediately and irreversibly affecting the legal situation of the undertakings concerned would be of such a nature as to justify, before completion of the administrative procedure, the admissibility of an action for annulment’. 58 In practice, it is more likely for such measures to be regarded as preparatory in nature, forming part of a wider administrative procedure and as such, they can be contested only in connection with and after the final binding decision has been issued. 59 The legal effects produced by these intermediary measures are, however, not distinct and independent but are subsumed in the primary legal effects of the final decision.
Notwithstanding the above, there have been circumstances where the Court has accepted to review directly the validity of intermediary acts, although the rationale is not always very clear or consistent. The Court may be inclined to review such acts where an action against the final decision would not be sufficient to protect the applicant’s legal position 60 or the intermediary measure has some kind of immediate and independent legal effect, which is distinct from the final decision. 61 Applying the above principles to the tasks carried out in the field of prudential supervision, we suggest that decisions to hold a private oral hearing 62 or affecting the right of a party to access the case file would likely not be considered as entailing independent and immediate legal effects for the investigated parties. 63 By contrast, decisions imposing on-site inspections on the business premises of persons 64 or rejecting a request for protection of a specific document under legal professional privilege 65 would most probably be considered as definitive in nature and producing independent effects from the final decision; hence, they would be reviewable under Article 263 TFEU. The final decision by which the ECB establishes a breach and potentially imposes an administrative penalty on a supervised entity is adopted by the Governing Council. Such a decision would clearly be regarded as producing binding legal effects for the investigated person and can be subject to an annulment action under Article 263 TFEU. By contrast, any prior draft decision of the Supervisory Board that is forwarded to the Governing Council would only have secondary legal effects for the addressee of the final decision, as it would merely provide the basis for the potential adoption of a separate binding decision.
3. Guidance to national authorities and private actors
The adoption of guidelines by the ECB Governing Council is a key rulemaking tool for the effective implementation of its tasks. 66 Such guidelines often comprise the basis on which the Executive Board implements monetary policy 67 or gives the necessary instructions to NCBs. 68 With regards to their legal effects, a question arises whether there is any difference between ‘guidelines’ and ‘instructions’ 69 adopted by the ECB and addressed to national authorities. Article 14.3 ESCB Statute expressly provides that the NCBs, when acting within the ESCB, are under an obligation to ‘act in accordance with the guidelines and instructions of the ECB’. The same provision also confers on the ECB the power to take the necessary steps to ensure the NCBs’ compliance with its guidelines and instructions. More importantly, ECB guidelines often use mandatory language, 70 particularly in the field of monetary policy, which is similar to the one typically found in instructions. In the context of bank supervision, any non-euro area Member State wishing to participate in the Banking Union is obliged to notify that its national authorities ‘will abide by any guidelines or requests issued by the ECB’. 71 On this basis, there may be a case in favour of treating such guidelines in the same way as instructions with respect of their capacity to produce primary legal effects for their addressees. Having said that, the case in favour of ECB guidelines having binding force has its weaknesses. Unlike what occurs with respect to decisions and regulations, the current legal framework does not confer on the ECB the power to initiate infringement proceedings and impose sanctions for breach of its guidelines. Yet our conceptual framework implies that although the provision of sanctions for breach of an act would normally indicate the capacity of that act to produce binding legal effects, the opposite is not true. 72 Whether an act can produce legal effects, whether primary or secondary, ultimately stems from its ability to cause a change in the legal position of a person, a finding to be determined on the basis of a substantive test.
In light of the existence of various types of instruments used by the ECB to provide ‘guidance’, determining whether an instrument can be characterized as ‘guideline’ or ‘instruction’ is not always a simple exercise. In fact, it is possible to divide ECB guidance-related instruments into two broad categories. The first category entails formal instruments entitled ‘guidelines’, which are published in the Official Journal. 73 The second category consists of various types of documents available on the ECB’s website, by which the ECB provides guidance to national authorities and the private sector. We have identified four types of that second category of instruments. First, the ECB issues communications to the banking industry on special issues pertaining to its supervisory tasks. These often take the form of ‘public guidance’, 74 by which the ECB clarifies or further specifies the manner in which competences are to be exercised, or rules be interpreted and implemented. Such instruments do not contain an express statement clarifying their legal force; however, they do often state that the ‘ECB recommends that entities follow this Guidance’. 75 Second, there are instruments appearing in the form of ‘guides’. 76 These are addressed to the banking sector and provide details for compliance with their regulatory requirements. Some guides include an express statement with respect to their legal force, 77 whereas others are vague on whether there is an intention to produce legal effects. 78 Third, further obscurity arises from another series of documents, not only because they are silent regarding their legal force, but also due to their inherent features rendering their classification even more difficult. A prominent example of this type of instruments are letters that are forwarded by the ECB to private entities, such as letters of the Supervisory Board that are addressed to the management of credit institutions. The content of these letters varies widely from providing clarification on their legal requirements 79 to underlying the need to take specific steps in complying with the legal framework. 80 Finally, there are acts published in the form of ‘communications’, which outline details pertaining to the interpretation of Union rules. 81 A substantive assessment, where the language used is likely to play an important role, would determine whether such communication instruments express mere opinions 82 or impose an obligation for national authorities or private parties to apply a specific interpretation of Union rules.
In light of the variety of ECB instruments providing guidance, it is not clear whether the provisions in the SSM Regulation and SSM Framework Regulation making reference to ECB ‘guidelines’ should be interpreted narrowly as covering only the ‘guidelines’ formally published in the Official Journal or more broadly to include all the above types of ECB instruments involving guidance. The first option endorses a formalistic interpretation, whereas the second invites a substantive reading of the term ‘guidelines’. In our opinion, the case for a strict interpretation of the term ‘guidelines’ seems to be stronger. It was mentioned earlier that the legislator does not leave any doubt in respect of the binding effects of instruments described as guidelines under the SSM’s legal framework. If all types of guidance-related instruments were regarded a priori as capable of producing such legal effects, it would create a paradox. First, it would be unnecessary to apply a substantive test for determining the legal effects of any instrument the content of which involved the provision of guidance. Second, it would effectively prevent the ECB from adopting guidance-related instruments with no binding effects. Consequently, we take the view that only guidelines that are formally published in the Official Journal have a priori primary legal effects for the national authorities to which they are addressed. Furthermore, where guidelines impose limits to the ECB’s discretion, they are capable of producing primary legal effects for the ECB to the extent that they require from the ECB to put forward valid reasons to depart from them. 83 The legal effects of the non-formally published guidance documents would be determined on the basis of a substantive test. The language used by the ECB would be taken into account, particularly whether the wording implies an intention to impose mandatory requirements. Any decisions adopted at national level that are based on ECB instruments providing guidance would likely trigger the latter’s capacity to produce secondary legal effects for private parties; hence enabling the Court to review their validity pursuant to Article 267 TFEU.
4. Conclusion
The purpose of this article is to offer a conceptual framework that allows a clear and transparent assessment of the legal/judicial accountability of acts adopted by the ECB within the SSM based on an evaluation of their legal effects. Based on this framework, we have shown that the Union courts are the relevant judicial forum to hold the ECB to account for acts that have primary legal effects, which are all acts or omissions that, directly or indirectly, are capable of determining rights or imposing obligations. Such acts can be challenged by way of direct actions under Articles 263 and 265 TFEU. The main hurdle for private parties to access this forum lies, however, in the challenging standing criteria of Article 263(4) TFEU.
Where private parties do not meet the standing criteria in Articles 263(4) TFEU, or in case of an act that merely produces secondary legal effects (but not primary legal effects) only indirect judicial review via Articles 267 and 277 TFEU is available. Private parties, for example, are not directly concerned by a (binding) ECB instruction addressed to a national authority, which has discretion in its application. Mere secondary legal effects occur, for example, in case of an ECB guideline that, based on a substantive assessment, does not have any binding force, but is addressed to a national authority. In this case the national court will be the relevant forum for judicial accountability of the national authority’s act, with the Court of Justice providing an incidental forum for the review of the ECB’s guideline on a reference under Article 267 TFEU.
The judicial accountability mechanisms within the SSM therefore mirror the allocation of competences between the national authorities and the ECB within the SSM by providing for a separate but integrated system of judicial review. The conceptual framework proposed in this article is intended to help determine the relevant forum and ensure judicial protection guaranteed in Article 47 of the Charter of Fundamental Rights.
Footnotes
Acknowledgement
This article summarizes some of the findings contained in a report prepared by the authors in carrying out a projected funded by the ECB under the ECB Legal Research Programme 2017. We would like to thank the ECB for their generous support and the anonymous ECB officials for their comments on earlier versions of this work. Special thanks also to the editors of this special issue, as well as the participants of the CERiM Workshop on ‘The ECB’s accountability in a multilevel European order’, 29 May 2018, Brussels, for their useful feedback on some of the ideas presented in this article.
Funding
The authors have received financial support by the ECB under the ECB Legal Research Programme 2017 for carrying out part of the research of this article.