Since entry into the European Union in 2004, CEE countries have gradually adapted to the applicability of European Union laws and the European Union’s system of transnational independent institutions – both of which directly or indirectly influence the business environment in individual member states. It is, however, the European Commission’s representation and promotion of the EU interests that can be a cause of concern for a number of businessmen and businesswomen.
Importance of Understanding Competences of the European Commission
The European Commission oversees and implements EU policies and is empowered to pursue investigations and issue decisions which may directly affect individuals and companies. Decisions of the European Commission in competition and state aid matters require particular attention because they form two major groups of rulings that often have severe negative impacts on the existence and operation of businesses from EU member states.
Immediate Enforcement of Decisions and Available Remedies with EU Courts
Proceedings before the European Commission are essentially administrative proceedings that result in formal decisions of the Commission. The greatest threat of these decisions is that they are immediately effective and enforceable.
The company concerned may challenge a decision of the European Commission and initiate a judicial review of its legality only by bringing an action before the Court of Justice of the European Union, namely before the General Court (having jurisdiction for such actions at first instance). Actions against European Commission decisions may only be justified on the following limited grounds:
- Lack of competence to issue such decision
- Infringement of an essential procedural requirement
- Infringement of the Treaty on Functioning of the European Union or Treaty on European Union or of any rule of law relating to their application
- Misuse of powers
It is important to pay attention to time limits when considering submitting an action against the Commission’s decision, because these actions must be brought within a limited period of two months. This time period is calculated either from the publication of the contested decision in the Official Journal of the European Union or from its notification to the plaintiff. In the absence of both publication and notification, the two-month period runs from the day on which it came to the knowledge of the plaintiff.
Unfortunately, bringing an action for annulment does not automatically suspend the operation and enforceability of the contested decision. However, if the immediate enforceability of the decision would cause serious and irreparable harm to the company concerned, an application for an interim measure seeking to suspend the operation and/or enforcement of the contested decision might be possible.
In case of a negative judgment of the General Court, the company concerned may file an appeal with the Court of Justice. The appeals are, however, limited to points of law only and do not have suspensory effect.
Limited Protection in Slovak Execution Proceedings
When making a decision in relation to both competition and state aid matters respectively, the European Commission generally imposes some form of monetary obligation on the addressee or, in the case of state aid, the beneficiary of the unlawful state aid. Given that these decisions are directly enforceable before national authorities, the affected companies may face immediate execution proceedings.
Within the Slovak Republic it is the Ministry of Foreign Affairs that confirms enforceability of decisions of the European Commission. However, when confirming enforceability, the Ministry only formally checks and verifies the authenticity of the decision – it does not review the content of such decision.
In 2011, the Slovak legislator introduced an amendment to the Execution Rules by which it excluded the availability of certain procedural tools for cases of recovery of unlawful state aid. Since this new regulation, the recipient of state aid is entirely precluded from requesting the suspension of execution of a Commission decision. Furthermore, the reasons that can be given as justification for the discontinuance of execution are limited in comparison with other execution titles.
As a result of the above, challenging enforcement of a decision of the European Commission might be a tricky task. Therefore, pay due attention when the European Commission initiates an investigation against your company and remember to raise all arguments in your support already at that stage, since it might be too late once the Commission issues a negative decision.