C-57/95

2. The Communication's opening section, 'Introduction and general considerations', points, on the one hand, to the growing Broadly — and it is as well to point this out importance of pension funds as a source of straight away — the Communication is very investment capital for the economy of the similar to the Proposal for a Council Direc­ European Union (paragraphs 1.1 and 1.2) tive relating to the freedom of management and, on the other, to the requirement for and investment of funds held by institutions such funds to be made subject to the rules on for retirement provision, 2 which the Com­ free movement in order that 'individuals mission submitted to the Council on 21 should be able to benefit from the lower October 1991. 3 The Commission withdrew risks and higher returns which may be avail­ that proposal in December 1994 owing to able when pension fund managers are free to the persistent disagreement of a number of invest in the most efficient way throughout Member States with its content. 4 More spe­ the Union on the basis of sound commercial cifically, the Commission notified its and prudential principles' (paragraph 1.3). decision to withdraw the proposal for a directive to the Member States by letter

with regard to pension funds' (paragraph nity directives which have already been 1.5). With that in view, the Communication adopted 6 (paragraph 2.2). 'sets out guidelines on the type of restric- tions that may be imposed by Member States on prudential grounds where such restric- tions could be regarded as consistent with Treaty principles. It also sets out a number of prudential investment principles which should be followed by all institutions for 4. Paragraph 2.3 of the Communication, retirement provision' (paragraph 1.8). 'Investment management and custody ser- vices', first states that pension institutions should have the freedom, in the case of both investment management and safekeeping and administration of the relevant assets, 7 to choose from amongst persons duly autho- rized to carry out such activities: external 3. The second section of the Communi- managers established in other Member States cation, 'Specific interpretation', sets forth or credit institutions or investment under- first a number of definitions designed to takings established in other Member States clarify what is to be understood by 'institu- (paragraphs 2.3.1 and 2.3.2). It is further tion for retirement provision', 'retirement stated that the supervisory authority respon- benefits', 'participating undertaking', 'par- sible for the pension institution should be ticipating body', 'affiliated undertakings' and able effectively to perform its supervisory 'associated undertakings'. In particular, it is duties; consequently, even where the institu- emphasized that the definitions of 'institu- tion itself is unable or unwilling to furnish tion for retirement provision' and 'retire- information reasonably required of it or to ment benefits' are drawn so widely that they also cover statutory social security funds, take action in respect of assets outside the although they are expressly excluded from supervisor's immediate jurisdiction. Accord- the scope of application of the Communi- ingly, for the purposes of prudential supervi- cation (paragraph 2.1). sion of the institution, Member States should ensure that all the providers of services con-

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cerned are contractually obliged to supply all account in the application of those principles necessary information to the authority (paragraph 2.4.1). responsible for the supervision of the institu­ tion (paragraph 2.3.3).

Paragraph 2.4.2 goes on to list the instances It should be emphasized at this juncture that, where Member States may exclude from the with a view to the achievement of the objec­ scope of paragraph 2.4.1 assets invested in a tives outlined in paragraph 2.3.3, it is deemed participating undertaking or an associated desirable that 'each Member State should undertaking or undertakings. In particular, it designate a single competent authority hav­ is worth pointing out that investments made ing the responsibility for cooperation with before the adoption of the Communication their counterpart in each other Member may be excluded. In any case, Member States State' and that 'the Commission shall send to are required to undertake periodically to Member States a list of those authorities des­ examine matters excluded. ignated ... which have been notified by the Member States' (paragraph 2.3.4).

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grounds'. 8 Paragraph 2.4.4 then states that introduces no new obligation over and above 'Member States shall not subject the invest- what is already laid down in the Treaty. In ment decisions of an institution for retire- other words, the Commission argues that the ment provision or its investment manager to Communication merely provides an inter- any kind of prior approval or systematic pretation of the fundamental principles laid notification requirements'. down by the Treaty with regard to freedom to provide services, freedom of establishment and the free movement of capital as far as the management and investment of pension funds are concerned.

Lastly, the Communication sets forth the following 'Final Remarks': 'The Commission considers it to be important that institutions for retirement provision are able to benefit fully from the freedoms specified in the Treaty. The Commission will ensure that any restrictions that apply in particular Member Admissibility States will be fully justified on the prudential and other grounds upon which such restric- tions have been applied and that they are proportional to their objectives' (section 3).

8. The objection of inadmissibility raised by the Commission is based on the claim that the Communication is a non-binding act and 7. The French Government maintains that so cannot be challenged under the first para- the Communication introduces new obliga- graph of Article 173, which, as we know, tions, in particular as regards the currency- empowers the Court to review the legality matching rate. It should therefore be only of acts 'other than recommendations annulled for lack of competence on the part and opinions', that is to say, only of binding of the Commission, lack of legal basis and acts. Accordingly, an act described as a 'com- infringement of the principle of legal cer- munication', being in principle a non- tainty. binding act, should not be amenable to chal- lenge before the Court.

9. More specifically with regard to the con­ O n top of that, the act is question is essen- cept of acts which may be contested under tially identical to the proposal for a directive the first paragraph of Article 173, the Court submitted by the Commission to the Coun- has held ever since the judgment in the cil, which the Commission withdrew 9 AETR case that an action for annulment 'because of a deadlock in the negotiations must be available against 'all measures with Member States in the Council' (para- adopted by the institutions, whatever their graph 1.4). Although the Communication nature or form, which are intended to have does not come into the category of typical legal effects'. That approach has been subse­ acts, the manner of its drafting and publica- quently confirmed in three cases, all brought tion, in particular the circumstances in which by France for the annulment of atypical acts: it was adopted, are such as at least to raise a 1 the 'internal instructions' case, 0the 'code of suspicion that there was an intention to bind 1 conduct' case 1and the 'aid communication' addressees, hence the Member States, and 1 case. 2The Court held those acts to be chal­ thereby operators in the sector. lengeable — in spite of their titles and the form they took — precisely because they introduced obligations which were new and hence intended to have legal effects vis-à-vis their addressees, yet the procedures laid down by the Treaty to that end had not been 11. Given this, and in line with the afore- complied with in adopting them. mentioned case-law of the Court in this area, it will be essential to consider the content of the act in order to ascertain whether it con- tains new obligations which are binding on its addressees. It follows that the question whether the objection of inadmissibility is well-founded will have to be considered together with the substantive issues raised by this dispute.

As far as the question of the Commission's want of competence is concerned, the French Republic argues that the Communication is essentially a disguised directive, that is to say, a copy of the proposal for a directive based on Articles 57(2) and 66 of the Treaty. Given In short, the Commission considers that the that Article 57(2) — which lays down the Communication does not embody new obli- procedure for adopting directives for the gations for its addressees, since it merely coordination of the provisions laid down by expresses the obligations already incumbent law, regulation or administrative action in on Member States by virtue of the relevant Member States concerning the taking-up and provisions of the Treaty. It maintains that an pursuit of activities as self-employed persons examination of the content of the Communi- — provides that the Council has to act cation therefore bears out the contention unanimously after consulting the European that it is an act which is not amenable to Parliament or in accordance with the pro- challenge under Article 173 of the Treaty and cedure referred to in Article 189b, it follows that hence the application must be declared that the contested act should have been inadmissible. It is precisely for those reasons, adopted by the Council, or by the Council moreover, that the Commission has not and the Parliament, but certainly not by the even considered the pleas put forward by Commission. the French Government as regards the substance.

13. For its part, the Commission maintains that an analysis of the content of the Com- munication shows that it is no other than a 14. In this regard, I shall say straight away mere interpretation of the fundamental prin- that I agree with the Commission — albeit ciples of the Treaty relating to free move- for different reasons — that in order to decide this case it is in fact sufficient to examine whether or not the Communication imposes new obligations. In view of the 13 — Essentially because the currency-matching rate, which is Court's case-law on atypical acts, it is self- fixed at 60% for pensions institutions, is set at 80% for the insurance sector. evident that, if the Communication imposes

As will be recalled, whereas the 'internal instructions' and the 'code of conduct' were annulled on the ground that the Commission lacked the necessary competence, the judg­ ment on the 'aid communication' made it clear that an atypical act which introduces new obligations certainly may (or better must) be annulled even where it is vitiated by only formal defects, in particular in the interest of legal certainty. In that judgment, In those circumstances, the question remains the Court held that 'Community legislation as to whether the absence of a minimum of must be clear and its application foreseeable essential requirements cannot be considered for all interested parties. As a result of that such as to cause the act in question to be requirement for legal certainty, the binding incapable of having legal effects — regardless nature of any act intended to have legal of the outcome of the actual scrutiny of its effects must be conferred by a provision of content — with the result that an action for Community law prescribing the legal form to its annulment should be declared inadmis- be taken by the act, which must be expressly sible, precisely because any obligations aris- mentioned as its legal basis'. 14 ing under the act could not be relied upon against individuals and Member States. The Court, which I suggested in my Opinion on the 'internal instructions' case should answer this question first, 15 confirmed — albeit indirectly — that the formal criterion is completely irrelevant and that therefore the act must be categorized on the basis of its 15. That ruling shows that in so far as a content. Community act, albeit atypical, introduces new obligations vis-à-vis its addressees and hence is intended to have legal effects, it must comply not only with the necessary 15 — The need to answer that question was based on my convic­ tion that, although it is true that the choice of a particular procedures laid down for its adoption, but form cannot change the nature of an act, it is equally true that the absence of a number of formal requirements, in also with essential procedural requirements. particular those formal requirements which enable an act to As a result, even where, as in the case of the be recognized as binding, would have the result that, even where examination of the content of an act did not show that it was intended to have legal effects, it would in any event be incapable of being relied upon against third par­ ties. What essentially would be involved is a measure with­ out legal effects vis-à-vis individuals and Member States, 14 — Case C-325/91 France ν Commission, cited in footnote 12, regardless as to whether the Commission was or was not paragraph 26; my emphasis. empowered to adopt binding acts in the sector in question.

18. That argument seems simplistic to me, since it could at least be objected that all 17. The impression gained is that the opera- obligations arising under Community law tion of camouflaging the proposal for direc- derive from the Treaty. The direct effect of tive as a communication has not — deliber- the relevant provisions, which is certainly ately or through carelessness — been not at issue here, does in fact mean that the completely successful. In particular, I do not Member States may not impose unjustified consider that there can be any doubt that fix- ' restrictions on the freedoms in question. It is ing the currency-matching rate (paragraph only too obvious from this point of view 2.4.3), which is one of the points of major that institutions for retirement provision disagreement between the parties, is formu- may freely select their managers and/or the lated in obligatory and not precatory terms. bodies entrusted with administering their The same can be said of the cases which may investments or custody operations; it is also

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obvious that, if that were not to be the case, measures, albeit of a minimum nature, it would be the Court, if seised of the matter, which, as such, necessitated the adoption of a which would have to decide whether the legislative measure. restrictions in question were justified or involved an infringement of the relevant pro­ visions of the Treaty.

19. The imposition of certain prudential principles (paragraph 2.4.1) and, a fortiori, the fixing of the currency-matching rate at 60% undoubtedly constitute harmonization

20. In brief, the Communication is undoubt­ edly not merely declaratory and cannot, to 16 — In this case, it is hardly necessary to point to what the my mind, be described as merely an interpre­ Court itself has held with regard to the direct effect of Article 52 of the Treaty, that is, that the directives in ques­ tative communication, as the Commission tion 'have however not lost all interest since they preserve an important scope in the field of measures intended to submits it is. It is quite true that the Com­ make easier the effective exercise of the right of freedom of establishment' (Case 2/74 Reyners [1974] ECR 631, para­ mission very frequently uses communica­ graph 31). tions of different forms and content, so

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17 — Apart from interpretative and information communications, the latter being intended in particular to provide an input into dialogue between institutions on subjects and topics on which it is envisaged adopting genuine legislative measures (see, for example, the communication on Community legis­ lation on foodstuffs (COM (85) 603 fin.) of 8 November 1985), considerable importance attaches to 'decisional' notices or communications concerning sectors in which the Commission has a discretion. This is what happens in the sphere of competition: suffice it to mention the example of the Commission notice of 3 September 1986 on agreements of minor importance which do not fall under Article 85(1) of the Treaty establishing the European Economic Commu­ 21. Before I draw the only too obvious nity (OJ 1986 C 231, p. 2) or even the Commission Notice concerning the assessment of cooperative joint ventures inferences from the conclusion which I have pursuant to Article 85 of the EEC Treaty (OJ 1993 C 43, reached, I consider I should mention, very p. 2). This is likewise the case with State aid. As far as that area is concerned, I would mention, for example, the Com­ briefly, two further observations made by mission communication on the method for the application of Article 92(3)(a) and (c) to regional aid (OJ 1988 C 212, the Commission. The Commission has sub­ p. 2) and the Community framework on State aid to the motor vehicle industry (OJ 1989 C 123, p. 3). As to the sig­ mitted, first, that, unlike the atypical acts nificance of such communications and notices, see Case which the Court has annulled on earlier 310/85 Deufil [1987] ECR 901, paragraph 22, where the Court held that the communication at issue constituted occasions, the contested act is not designed 'guidelines setting out the course of conduct which the Commission intends to follow and which it asks the Mem­ to supplement any other binding legal meas­ ber States to comply' and Case 325/95 France ν Commis­ ure and is instead the outcome of an 'abor­ sion, cited in footnote 12, in which, by contrast, the Court annulled the aid communication on the ground that, instead tive' legal act, 19 and, secondly, that the of simply setting out guidelines, it created new obligations for the Member States and, as a result, for undertakings affected.

act was not notified to the Member States 22. In view of the whole of the foregoing, it and is not officially addressed to them. must be held that the Communication on pension funds constitutes an act intended to have legal effects in its own right. In view of 22 what I have stated, this finding is enough to warrant the Communication's being annulled. As far as the first point is concerned, suffice it to say that it would be absurd even only to imagine that only 'atypical' acts setting out rules of application or intended in some way to supplement other secondary legislation Without its being necessary to dwell any fur­ are amenable to annulment and not also ther of the French Government's pleas, it is 'atypical' acts whose binding force stems sufficient to observe that the Communi­ directly from the Treaty. As for the fact that cation was not adopted in accordance with the communication was not notified to the the procedure laid down in Articles 57(2) Member States, whilst it is true that the and 66 of the Treaty, on which the proposal Court stressed the importance of this in its for a directive, which was subsequendy judgment on the 'aid communication', 2 0 it is withdrawn, was based; in any event, it lacks also true that it is clear from that case-law, as the essential formal requirements for it to be witness the judgment in the 'internal instruc­ clearly and unambiguously clear that it is a tions' case, that this is not a decisive factor. 2 1 measure binding on its addressees.

23. I n t h e light of t h e foregoing, I therefore p r o p o s e t h a t the C o u r t s h o u l d u p h o l d the application and o r d e r the C o m m i s s i o n t o p a y t h e costs.