Limits to EU powers : a case study of EU regulatory criminal law / Jacob Öberg

Limits to EU Powers A Case Study of EU Regulatory Criminal Law Jacob Oberg OXFORD “HART: OREGON PUBUSHING AND PORTLAND, 2017 Hart Publishing Ap imprint of Bloomsbury Publishing Plc Hart Publishing Ltd Bloomsbury Publishing Ple Kemp House 50 Bedford Square Chawley Park London Cumnor Hill WCIB3DP UK Oxford OX2 9PH UK wwwhartpub.co.uk www.bloomsbury.com Published in North America (US and Canada} by Hart Publishing c/o international Specialized Book Services 920 NE 58th Avenue, Suite 300 Portland, OR 97213-3786 USA www.isbs.com HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published 2017 @ Jacob Oberg 2017 facob Oberg has asserted his right under the Copyright, Designs and Patents Act 1988 to be identified as Author of this work, All rights reserved No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers, While every care has been taken to ensure the racy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers, All UK Government legislation and other public sector information used in the work is Crown Copyright © Ail House of Lords and House of Commons information used in the work is Parliamentary Copyright © This information is reused under the terms of the Open Government Licence v3.0 ‘( http://www nationalarchives.gov.uk/doc/open-government-licence/version/3) except where otherwise stated All Eur-lex material used in the work is @ European Union, http://eur-lex.europa.eu/, 1998-2017, British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library ISBN: HB: 978-1-50990-335-1 €ePDF: 978-1-50990-336-8 Pub: 978-1-50990-337-5 Library of Congress Cataloging-in-Publication Data Names: Oberg, Jacob, author ‘Title: Limits to EU powers : a case stady of EU regulatory criminal law/ Jacob Oberg Description: Oxford (UK] ; Portland, Oregon : Hart Publishing, 2017 | Series: Hart studies in European criminal law; volume 4 | Includes bibliographical references and index | Description based on print version record and CIP data provided by publisher; resource not viewed Identifiers: LCCN 2017008370 (print) | LCCN 2017012711 (ebook) | ISBN 9781509903375 {Epub} | ISBN 9781509903351 (hardback : alk paper) Subjects: LCSH: Competent authority—European Union countcies, | Criminal jurisdiction—Evropean Union couptties, | Subsidiarity—European Union counties | Criminal law—-European Union countries | Criminal law—European Union countries-Cases { Criminal justice, Administration of—~European Union countries, Classification: LCC KJES086 (ebook) | LCC KJE5086 034 2017 (print) | DDC 345.24/0122—-dc23 LC record available at hitps://lccn.loc.gov/2017008370 Typeset by Compuscript Ltd, Shannon Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall ‘To find out mare about our authors and books visit www hartpublishing.cauk Here you will find extracts, author information, details of forthcoming events and the option to sign up for our newsletters, FOREWORD The emergence of EU competence to legislate in the field of criminal law has been contested and fraught with constitutional complexity The perceived adverse impact that EU competence in the field would have on state sovereignty and maintaining the diversity of national criminal justice systems has resulted in incre- mental steps towards supranational EU criminal law in a lengthy process begin- ning in modest constitutional developments in a three pillar Union structure in Maastricht and Amsterdam and ending up with the supranational breakthrough in the Lisbon Treaty In this process, the role of the Court of Justice in delimiting EU competence in criminal matters has been instrumental, especially in periods where constitutional progress in the field appeared to be stagnating A key example in this context has been the Court’s seminal ruling asserting first pillar EC criminal law competence in the field of environmental crime in an era when it was clear that the supranationalisation of criminal law via the entry into force of the Consti- tutional Treaty would not happen This move towards supranational criminal law has been criticised in a number of quarters across Europe, including, notably, aca- demics with expertise not in EU law, but in domestic criminal law Their critique has focused on the perceived corrosive influences of EU criminal law on domestic criminal justice systems and their coherence, as well as on the perceived democratic and legitimacy deficit of EU criminal law However, the credibility of these lines of criticism is undermined by the fact that in many cases such critiques are based on limited knowledge and understanding of how EU law operates, Fundamentally underlying this critique is an approach equating the European Union with the state, and demanding the European Union to transplant—if not copy—criminal law principles which operate in a national context This approach however disre- gards the fact that the European Union is not a state, and that EU criminal law has developed not to replace national criminal justice systems, but to influence and interact with them in a system of multi-level criminal justice governance The book by Jacob Oberg is also a critique of the expansion of EU powers in the field of criminal law, in particular powers to define criminal offences and adopt criminal sanctions However, Oberg’s analysis is not just another superfi- cial critique of EU action in the field, rather, it takes the debate many steps fur- ther by offering a critique of EU power from the perspective of European Union law, and not of national law Recognising the changes brought about by the entry into force of the Lisbon Treaty, Oberg focuses primarily on the exercise, rather than on the existence of EU competence to criminalise and analyses in particu- >, jar the Union's ‘functional criminalisation’ powers under Article 83(2) TFEU vi Foreword Oberg accepts that his book proceeds from a narrow understanding of EU regula- tory criminal law and examines the exercise of EU competence to criminalise on the basis of the key EU constitutional principles of conferral, proportionality and subsidiarity, focusing also on the possibilities to controi EU powers via judicial review at EU level The author examines in depth three key strands of post-Lisbon criminalisation in the fields of market abuse, money laundering and fraud against the EU budget, as well as controversial proposals to establish a European Public Prosecutor's Office He claims that on a number of occasions proposals for EU measures have been based on inadequate reasoning and unproven assumptions, and calls for further use of criminological evidence to back up proposals for EU legislation He proposes a procedural standard of legality which requires the EU legislator to show that it has adequately reasoned its decisions and has taken into account relevant evidence and puts forward subsidiarity and conferral (but not proportionality) as the key tests for this approach In this manner, Oberg puts forward a theoretically informed, sophisticated test which can make a significant academic and policy contribution to the ongoing discussion on the exercise of EU competence in the field of criminal law Stemming from an in depth understand- ing of and focus on constitutional principles of EU law, the book is a valuable con- tribution in reframing the competence debate from analyses projecting upon the EU unrealistic expectations from national criminal justice systems to an analysis that views possibilities of EU action within the constitutional framework provided by EU law, While some readers will no doubt disagree with the outcome of Oberg’s analysis, which may be seen as restricting unduly EU powers to act in this field, the book constitutes invaluable and essential reading for academics, policy makers, practitioners and students interested in all aspects of EU criminal law, and in the evolution of EU constitutional law more broadly | am delighted to host this book in the Hart Studies in European Criminal Law series Valsamis Mitsilegas 18 April 2017 ACKNOWLEDGEMENTS This book is a substantially revised and updated version of the PhD dissertation 1 defended at the Law Department of the European University Institute in Florence in September 2014 The four years (2010-14) I spent in Villa Schifanoia provided the inspiring surroundings in which to think about the intricate inter- section between EU Criminal Law and EU Constitutional Law whilst my home in Stockholm and work-place in Orebro provided the calm environment in which I could patiently write and edit this book There are many persons who have been involved in this project As this is a rewritten version of my doctoral thesis I wish to give special thanks to Professor Giorgio Monti and Professor Loic Azoulai (now Sciences Po) at the European University Institute Giorgio was a very dedi- cated supervisor who carefully read my work and provided notes and comments on almost every page, both in terms of structure and substance Giorgio has also, both during my doctoral studies and after their completion, helped me with vari- ous other important tasks, including writing articles, project applications, research assistant work and providing recommendation letters for jobs and grants Giorgio has not only tried to teach me how to do research, but more importantly what it takes to become a scholar Loic was invaluable in his role as a second reader throughout my time at the EUL With regard to the substance of my thesis, he also partly worked as a co-supervisor by providing comprehensive comments on chapters, introductions and the general thesis structure He has also assisted me in several ways in my academic career: by patiently helping me publish a working paper at the EUI, by securing places in conferences and workshops, by reading through research projects, and by writing recommendation letters | was particu- larly impressed by Loic’s friendly manner and his capacity to engage in discussion with me as an individual and not only as a researcher Secondly, I would like to thank Professor Valsamis Mitsilegas who was an exter- nal examiner at my PhD defence and subsequently helped convince me to turn the thesis into a book Valsamis has provided very helpful feedback on my thesis and the monograph The outcome of the new chapters on national parliaments and legal basis as well as the new case studies on money laundering, the EPPO and the directive on fraud against the Union’s financial interests sprung initially from Valsamis’ ideas on how the book should be structured I have also attended sev- eral seminars and conferences together with Valsamis, where he has provided very valuable input on other projects and conference presentations Valsamis’ open- minded approach to younger researchers has been particularly welcome | am also indebted to Anne Weyembergh and Katalin Ligeti, the other series editors, who, vill Acknowledgements in addition to Valsamis, have supported this book project Sinead Moloney and her team at Hart Publishing: Emily Braggins, Tom Adams, John Hort and Emma Swinden have had an important role in turning this thesis into a book by giving me the time and necessary editorial and linguistic support to complete this pro- ject All involved made the production of the book a very smooth process Tam glad to acknowledge that some of the chapters are based on my previous publications: sections of Chapter 1 and Chapter 4 were published as ‘Do we really need criminal sanctions for the enforcement of EU law’ 5 (2014) New Journal of European Criminal Law 370-387, while parts of Chapter 6 was published recently as ‘Subsidiarity as a Limit to the Exercise of EU Competences’ 35 (2016) Yearbook of European Law (advance access) pp 1-30 Furthermore, a substantially revised version of Chapter 3 is currently being published as ‘The Rise of the Procedural Paradigm—Judicial Review of EU Legislation in Vertical Competence Disputes’ 13 (2017) European Constitutional Law Review, I would furthermore like to thank all those who helped me during my doctoral studies and after that by reviewing my work, providing feedback on presenta- tions and helping me generally in the pursuit of my academic career In relation to my work specifically on Article 83(2) TFEU, legal basis and the Union’s crimi- nal law competence, endless discussions with Samuli Miettinen, Petter Asp and Ester-Herlin Karnell have helped in developing the arguments in Chapters 4 and 5, Tam also indebted to Renaud Colson, Stewart Field, Tom Poole, Panos Koutrakos, Takis Tridimas, Leonard Besselink, Damian Chalmers, Maria Kaiafa-Gbandi, Carl-Fredrik Bergstrém, Maria Bergstrom, Sakari Melander, Hans Micklitz, Dennis Patterson, Giovanni Sartor, Thomas Elholm, Raimo Lahti, Kimmo Nuotio, Kasia Granat, Stephen Coutts, Anna Wetter, Antonina Bakardjieva- Engelbrekt, Ragna Aarli, Per-Ole Triskman, UIf Bernitz, Martin Trybus, Jannemieke Ouwerkerk, Marianne Wade, Annika Suominen, Joakim Nergelius, Josef Zila, Scott Crosby, Theodore Konstadinides, Xavier Groussout, Anders Faliman and Ann-Mari Roos I am intellectually indebted to Ittai Bar-Siman-Tov, Koen Lenaerts and Ernest A Young for their work on procedural review and fed- eralism For linguistic support I would like particularly to acknowledge the great contributions of Nicki Hargreaves, Nathan Hooper, Stephen Coutts and Christian Ayerst, and Vicki Hillyard in correcting my work Stephen Coutts corrected my PhD thesis and the new errors in the monograph were all meticulously removed by Vicki Hillyard,who did a wonderful job of editing this title I am also very indebted to my close family; Monica, Géran, Johann, Oscar, Stina who has stood by me since I embarked on my academic path seven years ago Finally, and most importantly, I would like to acknowledge the outstanding contribution of my wife Marja-Liisa and my new-born son August to this pro- ject, Marja-Liisa’s moral, emotional and heart-warming support was fundamental for the completion of the book Her most important contribution to this pro- ject is that she gently and clearly reminded me of the fact that I am not only a researcher but also a person and a partner to someone else Having said that, she also gave me the requisite time and support for writing this book, including Acknowledgements ix assuming responsibility for our common tasks which I admittedly neglected dur- ing large phases of this project While we have an academic life in common, the most important thing is that we share a life and (now) a family My son August was born in April 2016 and the journey with him so far has been indescribably reward- ing! I completed this book whilst being halftime on parental leave with him, which clearly shaped the experience He helped me to remind me of the fact that aca- demic life is not everything, as he never let me sit for more than one second at the computer while he was present I believe his presence and gradual development into a little person undoubtedly helped me in completing this book by making my life more intriguing and meaningful, thus providing me with the necessary moti- vation to close this part of my life I would like to end these acknowledgements by dedicating this book to Marja-Liisa and August Without them, I would not have the motivation to engage in academic scholarship Jacob Oberg Stockholm 31 March 2017 CONTENTS Foreword Acknowledgements ‘Table of Cases Table of Legislation i Introduction 1 The Question of EU Competence after Lisbon U1 The Problems of the Existing Limits to EU Competences I Main Arguments of the Book IV Case Study EU Regulatory Criminal Law V Chapter Synopsis Part I: A Framework for Legality Review 2 Principles Limiting the Exercise of EU Competences cece 19 I Introduction II The System of Competence Monitoring Ill Principle of Conferral A Theory and Judicial Review B Can the Principle of Conferral Act as a Check on the Exercise of EU Competences? IV Principle of Proportionality A Theory and Judicial Review B Evaluation: Is Proportionality a Principle that can be used to Challenge EU Measures before the Court V Principle of Subsidiarity A Theory and Judicial Review B Evaluation: Is Subsidiarity a Ground Apt to Challenge the Exercise of EU Competences before the Court? VI Conclusions 3;'- ludicial Competence Review of EU LegisÌatOT1 ceeeseeeenierieerei 45 Í ÍntrOđUCHOH e1 HH n1 HH H1 101 re 45 Il The Link between Institutional and Conceptual Factors in Determining Intensity of Judicial ReVIEW is 46 IIL The Case for Strict Procedural Review k.e e.e.g.uvư.ec 49 xii Contents IV The Court of Justice’s Track Record on Procedural Review A Vodafone: Article 114 TFEU and Proportionality B Afton Chemical: Procedural Proportionality C Germany v Parliament and Council: Procedural SubsiiáTTDY cá Hc H HHh Tư reo 59 V, Setting the Framework for a General Standard of Review and Test for Legality of EU Legislation A Spain v Council: Providing the Fruits for an Appropriate Standard for Judiclal ÑeVIÊW ke H2 Hee 61 B Analysis: Why Does Spain v Council Provide a Good Source for a General Standard of Review and Test for LegalityŸ S.H t.ư n g g2.ó.-kg 62 C Spain v Council Expresses a General Standard of Review D, Standard for Review and Test for Legality E Rationale and Issues with the Test E The Relationship of the Proposed Test to the EU Courts’ Current Approach wcscccucsseseesnessersetecsrearaessneenees 69 VI, CôncÌU$ÏOT6 cuc Hà HH nà HT re 71 Part I: Limits to EU Powers 4 Limits to the Union’s Criminal Law Competence I Introduction IL Limits to the Exercise of the Union’s Criminal Law Competence Prior to the Lisbon Treaty cesessecseseerereserens 77 A Account of the Environmental Crimes and the Ship-Source Pollution JudgmenIt ca 77 B Do the Environmental Crimes and Ship-Source Pollution Judgments Express a General Criminal Law Competence? 79 C Was the Environmental Crimes Directive Validly Adopted under Article 192 TFEU? sesscseecssesnueccesssnseneteneens 80 1 Scope and COIEDE c1 eeeree 80 ii, Are Criminal Laws Essential to Enforce EU Environmental Policy? TIL Limits to the Exercise of Express Union Criminal Law Competence after Lisbon Treaty (Article 83(2) TEEU) 85 A Substantive Limitations on the Exercise of Union Competence under Article 83(2) TEEU i Effective Implementation of a Union Policy ii, The ‘Essentiality’ Condition iii, Does the Market Abuse Crimes Directive Conform to the “Essentiality’ Requirement in Article 83(2) TFEU? a, The Scope of the Directive b Are Criminal Laws Effective and Indispensable for