delivered on 15 April 2021 (1)

Case C‑911/19

(Request for a preliminary ruling from the Conseil d’État (Council of State, France))

(Reference for a preliminary ruling – Banking law – Guidelines on product oversight and governance arrangements for retail banking products issued by the European Banking Authority – Soft law – Non-binding EU measures producing legal effects – Implementation by the Member States – Judicial review – Relationship between Articles 263 and 267 TFEU – Lack of power of the European Banking Authority)

1.As a line from Game of Thrones has it, ‘what is dead may never die’. Thus, perhaps with the exception of White Walkers, what is dead also cannot be killed. However, can something that has never been alive (or rather never came into existence as a binding EU-law act) be annulled (or rather declared invalid) by the Court of Justice on a preliminary ruling? Alternatively, can the Court provide (binding) interpretation of a non-binding EU measure?

2.In 2017, the European Banking Authority (‘the EBA’) issued Guidelines on product oversight and governance arrangements for retail banking products. (2) Thereafter, the French Autorité de contrôle prudentiel et de résolution (Authority for Prudential Supervision and Resolution) (‘the ACPR’) announced in a notice that it complied with those guidelines, thus making them applicable to all financial institutions under its supervision. The Fédération bancaire française (French Banking Federation; ‘FBF’) has sought the annulment of that notice before the referring court, claiming that the EBA did not have the power to adopt those guidelines.

3.The present case has several layers. On the one hand, there is the issue of whether, by adopting the contested guidelines, the EBA went beyond the scope of its powers under Regulation No 1093/2010. (3) As complex as it may be to navigate through the thick web of rather technical secondary legislation, this is in fact the easier question.

4.The much more complicated questions emerge only later: what consequence should such a finding of the lack of competences with regard to a non-binding (or soft-law) measure entail within the preliminary-rulings procedure? Is the Court able to declare a non-binding measure invalid? In systemic terms, can there be a complete disconnect between Article 263 TFEU proceedings and Article 267 TFEU proceedings with regard to non-binding measures? How can the Court’s judgments in Grimaldi, (4) Foto-Frost (5) and Belgium v Commission (6) be reconciled in so far as genuine soft-law instruments are concerned? Can non-binding EU measures be subject to the Court’s review under Article 267 TFEU, as follows from Grimaldi, while their (direct) judicial review under Article 263 TFEU is not possible, as most recently confirmed in Belgium v Commission?

5.Lastly, but rather importantly, all those issues are raised in the specific context in which national law allows for what appears to be, in contrast to the EU level, a much more open access to a direct judicial review of soft-law measures, including national acts ‘implementing’ non-binding EU-law acts. As such, this gives rise to the question of whether national courts also have a duty to refer, in view of Foto-Frost, questions regarding the validity of non-binding EU measures. Or could such a national court simply annul the national implementing measure on its own, since what is (genuinely) not binding can certainly be freely disregarded?

II. Legal framework

6.Article 1 of Regulation No 1093/2010 establishes a European Banking Authority. In the version applicable at the time of the adoption of the contested guidelines, it set out the scope of action of the EBA as follows:

‘2. The [EBA] shall act within the powers conferred by this Regulation and within the scope of Directive 2002/87/EC, [ (7)] Directive 2009/110/EC, [ (8)] Regulation (EU) No 575/2013 of the European Parliament and of the Council, [ (9)] Directive 2013/36/EU of the European Parliament and of the Council, [ (10)] Directive 2014/49/EU of the European Parliament and of the Council, [ (11)] Regulation (EU) 2015/847 of the European Parliament and the Council, [ (12)] Directive (EU) 2015/2366 of the European Parliament and of the Council [ (13)] and, to the extent that those acts apply to credit and financial institutions and the competent authorities that supervise them, within the relevant parts of Directive 2002/65/EC [ (14)] and Directive (EU) 2015/849 of the European Parliament and of the Council, [ (15)] including all directives, regulations, and decisions based on those acts, and of any further legally binding Union act which confers tasks on the [EBA]. The [EBA] shall also act in accordance with Council Regulation (EU) No 1024/2013. [ (16)]’

…

(a) improving the functioning of the internal market, including, in particular, a sound, effective and consistent level of regulation and supervision;

(b) ensuring the integrity, transparency, efficiency and orderly functioning of financial markets;

(c) strengthening international supervisory coordination;

(d) preventing regulatory arbitrage and promoting equal conditions of competition;

(e) ensuring the taking of credit and other risks are appropriately regulated and supervised; and

(f) enhancing customer protection.

For those purposes, the [EBA] shall contribute to ensuring the consistent, efficient and effective application of the acts referred to in paragraph 2, foster supervisory convergence, provide opinions to the European Parliament, the Council, and the Commission and undertake economic analyses of the markets to promote the achievement of the [EBA’s] objective.’

(a) to contribute to the establishment of high-quality common regulatory and supervisory standards and practices, in particular by providing opinions to the Union institutions and by developing guidelines, recommendations, draft regulatory and implementing technical standards, and other measures which shall be based on the legislative acts referred to in Article 1(2);

…

(b) to contribute to the consistent application of legally binding Union acts, in particular by contributing to a common supervisory culture, ensuring consistent, efficient and effective application of the acts referred to in Article 1(2), preventing regulatory arbitrage, mediating and settling disagreements between competent authorities, ensuring effective and consistent supervision of financial institutions, ensuring a coherent functioning of colleges of supervisors and taking actions, inter alia, in emergency situations;

…

…

(c) issue guidelines and recommendations, as laid down in Article 16;

…’

8. Article 9 of Regulation No 1093/2010, entitled ‘Tasks related to consumer protection and financial activities’, reads as follows:

(a) collecting, analysing and reporting on consumer trends;

(b) reviewing and coordinating financial literacy and education initiatives by the competent authorities;

(c) developing training standards for the industry; and

(d) contributing to the development of common disclosure rules.

…’

Within 2 months of the issuance of a guideline or recommendation, each competent authority shall confirm whether it complies or intends to comply with that guideline or recommendation. In the event that a competent authority does not comply or does not intend to comply, it shall inform the [EBA], stating its reasons.

The [EBA] shall publish the fact that a competent authority does not comply or does not intend to comply with that guideline or recommendation. The [EBA] may also decide, on a case-by-case basis, to publish the reasons provided by the competent authority for not complying with that guideline or recommendation. The competent authority shall receive advanced notice of such publication.

If required by that guideline or recommendation, financial institutions shall report, in a clear and detailed way, whether they comply with that guideline or recommendation.

…’

10.According to section 1, point 1 of the EBA’s Guidelines on product oversight and governance arrangements for retail banking products, ‘this document contains guidelines issued pursuant to Article 16 of Regulation (EU) No 1093/2010. In accordance with Article 16(3) of Regulation (EU) No 1093/2010, competent authorities and financial institutions must make every effort to comply with the guidelines’.

11.Point 2 of the EBA’s Guidelines states:

‘Guidelines set the EBA view of appropriate supervisory practices within the European System of Financial Supervision or of how Union law should be applied in a particular area. Competent authorities as defined in Article 4(2) of Regulation (EU) No 1093/2010 to whom guidelines apply should comply by incorporating them into their practices as appropriate (e.g. by amending their legal framework or their supervisory processes), including where guidelines are directed primarily at institutions.’

12.Point 3 of the guidelines, under the heading ‘Reporting requirements’, reads as follows:

‘Pursuant to Article 16(3) of Regulation (EU) No 1093/2010, competent authorities must notify the EBA as to whether they comply or intend to comply with these guidelines, or otherwise with reasons for non-compliance, by 23.05.2016. In the absence of any notification by this deadline, competent authorities will be considered by the EBA to be non-compliant. …’

13.Point 5 opens section 2 of the EBA’s guidelines by defining their subject matter:

‘These Guidelines deal with the establishment of product oversight and governance arrangements for both, manufacturers and distributors as an integral part of the general organisational requirements linked to internal control systems of firms. They refer to internal processes, functions and strategies aimed at designing products, bringing them to the market, and reviewing them over their life cycle. They establish procedures relevant for ensuring the interests, objectives and characteristics of the target market are met. However, these Guidelines do not deal with the suitability of products for individual consumers.’

14.Point 6 of the guidelines sets out their scope of application:

‘These Guidelines apply to manufacturers and distributors of products offered and sold to consumers and specify product oversight and governance arrangements in relation to:

–Article 74(1) of Directive 2013/36/EU (“Capital Requirements Directive IV, (CRD IV)”), Article 10(4) of Directive 2007/64/EC (the “Payment Services Directive, (PSD)”), and Article 3(1) of Directive 2009/110/EC (the “E-Money Directive, (EMD)”) in conjunction with Article 10(4) of the PSD; and

–Article 7(1) of Directive 2014/17/EU (the “Directive on credit agreements for consumers relating to residential immovable property, or Mortgage Credit Directive, (MCD)”).’

15.Point 7 of the guidelines reads as follows:

‘Competent authorities may wish to consider applying these Guidelines to other entities in their jurisdictions that do not fall within the scope of the legislative acts referred to above but for which the competent authorities have supervisory responsibilities. In particular, competent authorities may wish to consider applying these Guidelines to intermediaries other than credit intermediaries under the MCD, such as consumer credit intermediaries.’

16.Point 8 of the guidelines states:

‘Competent authorities may wish to consider extending the same protections set out in these Guidelines in relation to persons other than consumers such as micro-enterprises and small and medium-sized enterprises (SMEs).’

17.According to point 11 of the guidelines:

‘These Guidelines are addressed to competent authorities as defined in Article 4(2) of Regulation (EU) No 1093/2010 and to financial institutions as defined in Article 4(1) of Regulation (EU) No 1093/2010 (the “EBA Regulation”).’

18.Point 16, entitled ‘Date of application’, brings an end to the ‘introductory’ sections 1 to 3. That point states that ‘these Guidelines apply from 3 January 2017’.

19.The actual guidelines are contained in the two following sections: section 4 on ‘product oversight and governance arrangements for manufacturers’ and section 5 on ‘product oversight and governance arrangements for distributors’. The two sections combined contain 12 guidelines, most of them subdivided into further rules.

20.The Notice of the Authority for Prudential Supervision and Resolution from 8 September 2017, entitled ‘Implementation of the European Banking Authority’s guidelines on arrangements for governance and oversight of retail banking products (EBA/GL/2015/18)’, reads as follows:

‘The Authority for Prudential Supervision and Resolution (ACPR) has declared that it complies with the European Banking Authority’s guidelines on arrangements for governance and oversight of retail banking products (EBA/GL/2015/18) which are annexed to the present notice.

Those guidelines are applicable to credit institutions, payment institutions and to electronic money institutions under the supervision of the ACPR, which must make every effort to comply with them and, pursuant to paragraph 14 of the guidelines, to ensure that their distributors comply with them, in accordance with Article 16 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing the European Banking Authority.’

III. Facts, national proceedings and the questions referred

21.On 22 March 2016, relying on Article 16 of Regulation No 1093/2010, the EBA adopted Guidelines on product oversight and governance arrangements for retail banking products. The guidelines are addressed to competent national authorities and to financial institutions.

22.On 8 September 2017, the ACPR, as the competent French supervisory authority in that matter, published a notice on its website. In that notice, the ACPR declared that it complied with those guidelines. It also stated that the guidelines were applicable to the credit institutions, payment institutions and electronic money institutions under its supervision, which were to make every effort to comply with them and to ensure that their distributors also comply with them.

23.On 8 November 2017, FBF lodged before the Conseil d’État (Council of State, France), the referring court, an application seeking the annulment of the ACPR notice. FBF claims that the EBA’s guidelines, which were made applicable by the notice, are invalid due to the EBA’s lack of competence to issue such guidelines.

24.The referring court harbours doubts as to the admissibility and the merits of the plea that the contested guidelines are invalid.

25.The referring court is of the view that the admissibility of such a plea of invalidity for the purpose of a request for a preliminary ruling depends on whether the contested guidelines may be subject to an action for annulment under Article 263 TFEU and whether a professional federation such as FBF could bring such action.

26.As to the merits of that plea, the referring court observes that the EBA’s guidelines invoke several EU legislative acts but that none of them, apart from Directive 2014/17, make any express provision concerning the governance of retail banking products, which is the area covered by the guidelines. Furthermore, none of those legislative acts contain any provision empowering the EBA to issue guidelines on the governance of retail banking products. However, it follows from Regulation No 1093/2010 that the EBA shall contribute to ensuring that the taking of credit and other risks are appropriately regulated and supervised, and shall contribute to enhancing customer protection. Such objectives are precisely those that the governance of retail banking products helps to achieve.

It is within this factual and legal context that the Conseil d’État (Council of State) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) May an action be brought under Article 263 [TFEU] for annulment of guidelines issued by a European supervisory authority? If so, is it open to a professional federation to challenge, by means of an action for annulment, the validity of guidelines intended for the members whose interests it protects but which are not of direct or individual concern to it?

(2) In the event of a negative answer to either of the questions raised in paragraph 1, may guidelines issued by a European supervisory authority be the subject of a reference for a preliminary ruling under Article 267 [TFEU]? If so, is it open to a professional federation to challenge, by means of a plea of invalidity, guidelines intended for the members whose interests it protects and which are not of direct or individual concern to it?

(3) In the event that it is open to the Fédération bancaire française to challenge, by means of a plea of invalidity, the Guidelines adopted by the European Banking Authority on 22 March 2016, did that Authority, in issuing those guidelines, exceed the powers conferred on it under Regulation No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority)?’

28.Written observations have been submitted by FBF, the ACPR, the French and Polish Governments, as well as the European Commission. With the exception of the Polish Government, all those parties also presented oral argument at the hearing which took place on 20 October 2020.

29.This Opinion is structured as follows. I shall start with introductory remarks on the referring court’s questions and the (non‑)binding nature of the contested guidelines (A). I shall then address the questions raised by the referring court in reverse order, beginning with Question 3 to determine whether the contested guidelines were indeed adopted by the EBA within the scope of the latter’s powers (B). Having concluded that the EBA has in fact exceeded its competence, I shall then turn to Questions 1 and 2 and several other elements relating to the general relationship between Articles 263 and 267 TFEU as far as non-binding EU measures are concerned (C).

30.From a certain perspective, this case is rather simple. If the questions referred were viewed in isolation from the case at hand, and were answered in the order in which they were put, then the answers would not be that difficult.

31.Question 1 is inadmissible. The present case was submitted as a request for a preliminary ruling under Article 267 TFEU. Within that procedural context, it is an entirely hypothetical exercise to ask whether the same action may possibly be brought as an action for annulment under Article 263 TFEU. In a similar vein, to enquire as to whether or not a professional federation is able to challenge the contested guidelines in those proceedings in not relevant for settling the case before the referring court.

32.Question 2 is also straightforward. While that question is admissible, the answer can easily be inferred from the existing case-law. Since the judgment in Grimaldi, the Court has consistently insisted that Article 267 TFEU confers on the Court jurisdiction to give a preliminary ruling on both the validity and the interpretation of all acts of the institutions of the Union ‘without exception’. (19) Non-binding EU measures can thus clearly form the object of a request for a preliminary ruling on validity. (20)

33.Furthermore, the sub-question common to both Questions 1 and 2, relating to the standing of professional associations, is not relevant in the context of the preliminary-rulings procedure. It is solely for the national court to decide whether to refer a case to the Court pursuant to Article 267 TFEU. (21) According to the Court, any party may, in proceedings before the national courts, plead the invalidity of an act of the Union and ask that court, which has no jurisdiction itself to declare the act invalid, to submit that question to the Court by means of a reference for a preliminary ruling. (22)

34.However, for the rest, EU law does not regulate the issue of establishing who ought to be the party before the national court. If the national law allows for such pleas to be raised, it will again form part of the exclusive competence of the national court to decide whether or not it finds it necessary (or is under an obligation) to refer the matter to the Court. Thus, the issue of whether FBF has standing to raise a plea of invalidity before the national court against an EU measure is a matter for national law.

35.Thus, by answering the questions in the order that they were raised and by dealing with the first two questions in an abstract manner, detached from the facts of the present case, one may easily and immediately arrive at Question 3 and consider that the issue of the EBA’s power to adopt the contested guidelines is the only real question in the case at hand.

36.Nevertheless, I do not think that such a shortcut is appropriate. It is in fact while seeking to answer Question 3, and to draw the consequences thereof, that one fully understands the scope of Questions 1 and 2, if the latter ones are not approached abstractly, but instead in the specific context of the present case.

37.Moreover, it is clear that reading the three questions in such a simplified way would not do justice to the referring court. In fact, it is clear from the order for reference, in particular when read together with the elucidating Opinion of the rapporteur public of the Conseil d’État (Council of State) in that case, (23) that the referring court is aware of the relevant case-law of this Court on the matter. It emerges from those documents that the referring court actually wonders where exactly that case-law may lead it in a specific case such as the one before it.

38.It is in this context that the referring court questions, in particular, the relationship between Articles 263 and 267 TFEU as far as soft law is concerned, particularly in circumstances where the national court provides for judicial review of non-binding national measures, while the Court does not allow, within actions for annulment, for review of non-binding EU measures. That issue lies at the heart of the question concerning the parallels (or the absence thereof) between the two types of proceedings, especially as far as the position of professional associations in both types of proceedings is concerned. To that issue then connects another one, also identified by the referring court in its order for reference, relating to the fact that under the preliminary-rulings procedure, both the national and European levels of review become intertwined: are national courts under an obligation, pursuant to the judgment in Foto-Frost, to refer questions to the Court on the validity of a non-binding EU measure when reviewing a national measure which made that EU measure applicable at the national level to individual addressees?