IMPLICATIONS OF ECJ RULING FOR FIRST PILLAR

UNCLAS SECTION 01 OF 02 BRUSSELS 003444

SIPDIS

DEPARTMENT FOR INL/PC AND EUR/ERA

E.O. 12958: N/A
TAGS: KCRM KJUS SNAR ENIV EUN USEU BRUSSELS
SUBJECT: IMPLICATIONS OF ECJ RULING FOR FIRST PILLAR
COMPETENCIES


1. Summary. On September 12 the European Court of Justice
(ECJ) in Luxembourg annulled the European Council's Framework
Decision on the protection of the environment through
criminal offenses (dated January 2003) because the decision
was adopted outside the Community legislative framework. The
most important implication of the ECJ ruling is that for
issues where the Community has a legal basis to decide on
policy, the Commission also has the competence to provide for
the enforcement of this policy through criminal sanctions.
This opens the door to the possibility of further sanctions
regimes in regulatory areas where there is EC Treaty
competence, such as single market, environmental protection,
data retention, data protection, IPR, monetary matters,
corporate governance, etc. Such an extension could have
significant potential impact on bilateral enforcement
agreements between the U.S. and individual EU Member States.
End summary

The ECJ Ruling on Environment Protection
--------------


2. On September 12 the European Court of Justice (ECJ) in
Luxembourg annulled the European Council's Framework Decision
on the protection of the environment through criminal
offenses (dated January 2003) because the decision was
adopted outside the Community legislative framework. The
Commission had put forward in 2001 a proposal for a Directive
on the protection of the environment through criminal law,
claiming that the draft legislation was within the scope of
its "first pillar" competence as provided for in the EC
Treaty (the original European Community Treaty of 1957). The
Council did not adopt the Commission proposal due to lack of
majority support because of the issue of Member State
sovereignty over criminal sanctions. Instead, the Council
opted for a Framework Decision under the "third pillar" of
the EC Treaty based on the provision on cooperation in
judicial and criminal matters. The Commission challenged the
Council decision before the ECJ, supported by the European
Parliament. The central argument used by the Commission in
taking this action against the Framework Decision was that
requiring Member States to use criminal sanctions for
violations of EC environmental law must be based on the law
and decision-making procedures (the so-called Community
method) of the EC Treaty (the so-called Community method) and
not on the third pillar of the European Union Treaty (the
Maastricht Treaty of 1993).

Interpreting the Ruling
--------------


3. The ECJ decided that the protection of the environment
constitutes one of the essential objectives of the Community
and that environmental protection requirements must be
integrated into the definition and implementation of the
Community's policies and activities. As a general rule,
neither criminal law nor the rules of criminal procedure fall
within the Community's competence. However, the ECJ ruled
that this does not prevent the Commission and the European
Parliament from taking measures that relate to the criminal
law of the Member States when it considers criminal sanctions
to be necessary in order to ensure that the environmental
protection rules it lays down are fully implemented.

Implications of the Ruling
--------------


4. Under the EC Treaty of 1957, the Commission has the sole
right of initiative and the Parliament has its full rights as
a co-legislator and the Council decides by qualified
majority. Under the EU Treaty, on the other hand, the
Council acts unanimously on the proposal of a Member State or
the Commission, with only a marginal role for the European
Parliament. Significantly, there is no infringement
procedure available for acts adopted under the EU Treaty so
the Commission has no power to force Member States to
implement properly or fully. The most important implication
of the ECJ ruling is that for issues where the Community has
a legal basis to decide on policy, the Commission also has
the competence to provide for the enforcement of this policy
through criminal sanctions.

Comment
--------------


5. The ECJ ruling has most immediate interest to the USG on
the issue of data retention. At its informal meeting in the
U.K. on September 8, the EU 25 ministers of Justice and Home
Affairs decided to adopt a Framework Decision on data
retention which would oblige telecommunications operators to
record telephone and internet communications. The Commission
is preparing its own data retention proposal to be adopted by
the end of December. The question will be whether data
retention is seen as principally a telecommuncations
competence (a first pillar community competence) or a law
enforcement competence (third pillar Member State and Council
competence). On its face the Framework Decision is expected
to be more acceptable to law enforcement interests and the
Commission proposal more friendly to private sector concerns.
According to the legal department of DG Justice, Freedom and
Security (formerly JHA),the ruling will have no legal impact
on the data retention issue. Commission sources tell us that
a compromise text may be reached, thus avoiding a Commission
challenge and another ECJ ruling. Data retention aside, what
is most important about the ECJ ruling on environmental
protection is its endorsement of the Commission and
Parliament's competence to enforce its Directives through
criminal sanctions. This opens the door to the possibility
of further sanctions regimes in regulatory areas where there
is EC Treaty competence, such as single market, environmental
protection, data protection, IPR, monetary matters, corporate
governance, etc. Conceivably, this would go beyond merely
strictly harmonization of regimes throughout the Member
States. It could extend to different procedural aspects of
criminal law to give effect to the imposition of criminal
sanctions mandated by any Commission Directive. Such an
extension could have significant potential impact on
bilateral enforcement agreements between the U.S. and
individual EU Member States. This development needs to be
closely watched.

McKinley
.