European whistle-blowers policy, Andreasen v 27 EU Member States, 28827/11

The Catalan language is lower

No doubt, Marta ANDREASEN is the most famous whistle-blower in Europe. On 01/01/2002 she became the first EU Chief Accountant with a diploma of an accountant. When she started her functions, very soon she noticed that there was a risk of fraud possibly amounting to € 5 billion. She refused to sign EU financial documents, and in fact for this reason she was fired.

The theoretic problem for EU States was that the national law of all those 27 countries forbade dismissing whistleblowers. However the European law did not. Thus she was dismissed in a manner that was impossible under national law of those 27 States.

It was impossible to sue the European Union, so she sued 27 individual States before the European Court of Human Rights, and I represented her. We lost the case in Strasbourg.

The European Court of Human Rights states that we failed to prove that the EU General Court had not been an equivalent human rights defense mechanism to national human rights mechanisms (§ 70).

This is abuse of deduction. In fact, under national law it is possible to attack dismissal as such, to go in-depth of the facts grounding the dismissal. The situation is absolutely different before the EU General Court. First, there is no such thing as a prohibition on dismissal of whistle-blowers. Second, the EU Courts in Luxembourg do not review the facts grounding the dismissal, and their competence is limited to procedural issues.

Thus, there is no efficient whistleblowers defense mechanism in Luxembourg, and the European Court of Human rights refused to look at the problem closer.

After such a response from the Strasbourg Court, there is a possibility of appeal to United Nations.

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CATALÀ

Sens dubte, Marta Andreasen és la delatora més famosa d’Europa. L’1 de gener del 2002 es va convertir en la primera Cap de Comptabilitat de la UE amb el diploma de comptable. Quan va començar les seves funcions, molt aviat va adonar-se que hi havia un gran risc de frau, possiblement fins a 5 bilions d’euros. Ella va negar-se a signar els documents financers de la UE i per aquesta raó va ser acomiadada.

El problema teòric que tenien els Estats de la UE és que la legislació nacional de tots els 27 països prohibia el acomiadaments dels delators. Per contra, la legislació europea no ho feia. D’aquesta manera, sota la legislació nacional dels 27 Estats, si hi hagués un delator, seria impossible d’acomiadar-lo. Aquesta és una norma que ve de les Nacions Unides.

Era impossible atacar la Unió Europea davant el Tribunal Europeu dels Drets Humans. Per la qual cosa va atacar els 27 Estats individuals de la UE davant el Tribunal d’Estrasburg, i jo la representava. Hem perdut el cas.

El Tribunal Europeu dels Drets Humans va declarar fa 5 dies que no vam demostrar que el Tribunal General de la UE no era un mecanisme de defensa dels drets humans equivalent als mecanismes nacionals dels drets humans (§ 70).

Aquest és l'abús de la deducció. De fet, segons el dret nacional és possible atacar l'acomiadament com a tal, per anar al fons dels fets i dels motius de l'acomiadament. La situació és absolutament diferent davant del Tribunal General de la UE. En primer lloc, no hi ha tal cosa com la prohibició d'acomiadament dels delator. En segon lloc, els tribunals de la UE a Luxemburg no revisen els fets i els motius de l'acomiadament, i la seva competència es limita a qüestions de procediment.

Per tant, no existeix un mecanisme eficient de defensa dels delators a Luxemburg, i el Tribunal Europeu dels Drets Humans va negar-se a mirar el problema de prop.

Després d'aquesta resposta del Tribunal d'Estrasburg, hi ha la possibilitat d'apel·lar davant les Nacions Unides.

Suing State for damage by its supreme court before its administrative courts as an exhaustion condition, NML Capital Ltd v France, 23242/12

In 2000 Argentine issued bonds to be paid in 2020 and 2030, but the Republic became bankrupt already in 2001. Argentine signed a Fiscal Agency Agreement providing that it renounced its sovereign immunity as a State, and that in a case of its default at least 25 % of the total amount of debt were immediately payable. Under the Fiscal Agency Agreement the judicial competence was transferred to the United States District Court for the Southern District of New York.

Deptee company NML Capital from Caiman Islands obtained an order from the latter New York obliging Argentina to refund and compensate $ 284 184 632.30 (§ 7). After this, NML Capital addressed the French Courts in order to arrest the funds of Argentina’s diplomatic missions in Paris.

The French Cassation Court agreed with the validity of the New York judgment, however refused to order arrest of Argentina’s funds in France due to sovereign immunity.

It is quite natural to think that after the Cassation Court you have exhausted all internal remedies, and NML Capital attacked it before the European Court of Human Rights. However on 13/01/2015 the Strasbourg judges decided that NML Capital had to attack the French Republic before the French administrative courts for “breach of equality in terms of public burdens” (“rupture de l'égalité devant les charges publiques”, § 19).

“Breach of equality in terms of public burdens” is a procedure absolutely similar to the Köbler procedure of the EU Court of Justice. It is interesting to note that the European Court of Human Rights already several times interpreted that the Köbler procedure is not a requirement within any obligatory meaning of Strasbourg procedures.

After Strasbourg, there is an appeal open to the UN Human Rights Committee. This UN jurisdiction does not accept complaints from legal persons. It is interesting to know that many UN States do not recognize Caiman Islands companies as legal persons. Could NML Capital act as a natural person then?

“Death words” of the plaintiff killing his tax case, Cañada Mora v Spain, 2070/2011

Spanish wine producer José Antonio Cañada Mora was attacked by tax authorities imposing on him a tax debt of € 481 154 for periods from 1992 to 1996 (§ 2.1). There were chances to avoid loosing the money, since the debts for 1992 and 1993 had expired pursuant to the legal statute of limitations, and a substantial part of evidence, i.e. copies not supported by originals, filed by tax authorities had been declared inadmissible (§ 2.2).

On 14/03/2005 Cañada Mora filed an application for amparo (legal protection) before the Spanish Constitutional Court, however his case was still pending before the lower Supreme Court. On 01/04/2005 the Supreme Court dismissed the cassation, since its value taken separately for each quarter was less than € 150 258 (§ 2.8).

On 25/04/2005 Cañada Mora second time applied for amparo before the Constitutional Court, and the application contained the words that he “reiterate[d] the application for amparo that was lodged on 14/03/2005” (§ 2.9).

These words became death words. The Constitutional Court merged the second application with the first one, took into consideration the date of 14/03/2005, and on that ground declared it inadmissible (proceedings still pending before a lower court, § 2.10).

The European Court of Human Rights supported the Spanish judges (§ 2.11), and Cañada Mora appealed before the UN Human Rights Committee.

The UN Committee answered that it does not follow from the death words that the purpose of Cañada Mora was to submit a second request for amparo separate from 14/03/2005 (§ 4.3).

Happy New Year! 2015 - my blog is back.

After a year brеак and being amused that my blog reached several thousand visitors per day, I restart posting. Among the most wonderful things of 2014 I'd mention:

1. I won the case of impeached President of Rolandas PAKSAS of Lithuania before the United Nations on 25/03/2014.
2. I got the title of full professor of law for life in Moscow and in Almaty.
3. I learned that there are three kinds of responses from the UN Human Rights Committee during the first stage of litigation:

• your complaint is dismissed and please forget own address;
• your complaint is dismissed and these are reasons (take a chance to explain it once again if you believe you are right);
• please provide additional information (and then wait for at least 6 months);
• we communicate your case to the respondent Government.

Oh, year - my blog will be in three languages: English, Lithuanian and Russian - discovering new markets, guys.

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LIETUVIŠKAI
Po metų pertraukos, grįžtu prie blogo ir pradedu jį daryti su vertimu į lietuvių kalbą tam, kad Lietuvoje tam tikriems žmonėms būtų blogiau. Tarp žymiausių pasiekimų pernai išskirčiau:

1. Laimėjau Prezidento R. Pakso bylą Jungtinių Tautų Žmogaus teisių komitete. Tą dalį, kurią atmetė Strasbūras – priėmė JTO.
2. Iki gyvos galvos tris kartus gavau teisės profesoriaus vardą Maskvoje ir Almatoje.
3. Atradau, kad būna keturi JTO atsakymai per pirmą bylos etapą:

• Jūsų skundas atmetamas ir pamirškite mūsų adresą;
• Jūsų skundas atmetamas ir štai kodėl (jeigu mes padarėme akivaizdžią klaidą – paaiškink, bet labai trumpai ir aiškiai);
• pateikite papildomą informaciją (o po to laukite mažiausia 6 mėnesius);
• persiunčiame Jūsų skundą Lietuvos Vyriausybei.

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ПО-РУССКИ
После годового перерыва возобновляю блог. Так как появились русскоязычные клиенты, буду делать посты и по-русски. Среди достижений 2014 я бы выделил:

1. Выиграл дело отстраненного в результате импичмента Президента Литвы Роландаса ПАКСАСА против Литвы в ООН.
2. До конца жизни трижды получил звание профессора права в Москве и Алматы.
3. Узнал и сразу проклассифицировал, что бывают следующие варианты ответа из ООН на вашу жалобу:

• ваша жалоба отклонена и забудьте наш адрес;
• ваша жалоба отклонена и, вот, причины (попробуй еще, если мы сделали очевидную ошибку, но коротко и ясно);
• пришлите дополнительную информацию;
• шлем вашу жалобу вашему правительству.

В Комитет по правам человека ООН мы можем обжаловать решения Верховных Судов России, Литвы, Казахстана, Киргизии, Белорусии и других стран.

EU Court of Justice crashes "Asian despotism" of the EU General Court, Strack, C-579/12 RX-II

When the EU General Court hears the case on appeal from the EU Civil Service Tribunal, sometimes the First Advocate General may propose to the Court of Justice of the EU to review the judgment of the EU General Court. This may happen if the General Court judgment “adversely affects the unity and consistency of EU law”. It is interesting to take a look how the latter concept functions in the case Strack, C-579/12 RX-II, won by applicant on 19/09/2013.

Mr. Guido Strack had the right to 38.5 days of annual leave in 2004 that he was unable to take due to illness, and he wanted to transfer those days to 2005, but the EU institutions established that 12 days only might be taken from one year to another (Article 4 of Annex V to the Staff Regulations, § 10). He won at the Civil Service Tribunal, but the EU General Court set aside the first instance judgment.

According to Schultz-Hoff, C-350/06, §§ 22, 23, 25, 41, 45, 50 and 61, Article 7 of Directive 2003/88 implies that in such cases the leave days shall be transferred to the next year (§§ 15, 31), but the EU General Court held that EU directives are not binding on the EU itself – EU directives are binding on Member States only (§ 19, and § 40 of judgment Strack, T-268/11 P).

Voltaire (1694 – 1778) was calling such an attitude “Asian despotism”. The CJEU held that the measure of transferring the leave days “contributes directly to the improvement of health and safety protection for workers” within the meaning of Article 153 TFEU (§ 44). Taking away those days also breaches the principle of the social law of the EU affirmed by Article 31(2) of the EU Charter of Fundamental Rights (§ 46).

On review, the Court of Justice considered that the Directive 2003/88 should be considered as an “integral part of the Staff Regulations as minimum requirements … and without prejudice to the more favourable provisions” (§ 51).

However, the CJEU did not give EU directives a direct binding force on EU itself. According to the CJEU the Directive 2003/88 is binding on the European Commission as far as it “refers to" the Treaty and to the Charter only. Thus, it is difficult to say whether this kind of Asian despotism will not be continued in other cases (§ 52).

What becomes clear from the Strack, C-579/12 RX-II, case is that, at the level of legal strategy, it is good to use a lot the concept of “adverse effect to the unity and consistency of EU law” in all your writings to the EU General Court. You will not be allowed to submit any paper to the First Advocate General. Thus, the only away to attract his attention is to repeat this mantra before the EU General Court. There are indeed hundreds of cases that breach the Charter to the same extent as it was done in case Strack, but the support of the First Advocate General is a lottery.

ECtHR re-establishes Khodorkovskiy’s wealth, 11082/06

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Mikhail Khodorkovskiy, former Yukos head and current prisoner, achieved a huge victory in Strasbourg. The biggest Russian oil company was convicted in tax and business fraud.

It was liquidated leaving $ 9.2 billion of unsatisfied liabilities (§ 18). Together with Platon Lebeder, former Yukos director, he was ordered to pay the State all remaining tax liabilities of Yukos (§ 227), since they were de facto organisers and beneficiaries of the tax evation scheme (§ 319). The Russian Courts held that there is a subsidiary liability of managers if the corporate taxpayer had no assets (§ 875). Russians considered that owners used the limited liability company as a façade for fraudulent action, and therefore piercing of the corporate veil was an appropriate solution for defending the rights of its creditors, including the State (§ 877).

However the Strasbourg judges considered that, as a matter of principle, the Russian law did not provide for the recovery of unpaid company taxes from the managers guilty of tax evasion (§ 875). Such a practice was not “adequately accessible and sufficiently precise” (§ 876) or “clear” (§ 877).

If unpaid taxes are claimed as “damages”, the ECtHR analyses national expressis verbis law, Article 1068 of the Russian Civil Code must apply, which provides that damage caused by an employee of the company while performing his official duty must be compensated by that company (§ 879).

Article 56 of the Russian Civil Code previews personal liability of owners and managers in cases when they caused insolvency of their company. The Strasbourg judges replied that this Article was not applied in the Khodorkovskiy case, since (§ 880):

1)      The claim of the tax authorities was granted while the corporate taxpayer still existed.

2)    Article 56 provides subsidiary liability of owners and managers, while Khodorkovskiy and Lebedev were ordered to recover the amounts on the solidary basis with the company.

3)      Article 56 was not mentioned in Russian judgments.

In addition, in internal case I and K, 11/01/2001, the Russian Supreme Court interpreted the law as not allowing for the shifting of liability for unpaid company taxes from the company to its executives (§§ 449 & 882).

CJEU transfers patentability competence to the EU level, Daiichi Sankyo, C-414/11

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Despite the resistance of Greece, Germany, France, Italy, Netherlands, Portugal, Finland, Sweden, and the UK, on 18/07/2013 the Grand Chamber of the Court of Justice of the European Union interpreted that after the entry into force of the Lisbon Treaty the patentability field is not any more within the primary competence of the Member States.

In 1994 the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPs Agreement) was signed jointly by the European Community and the Member States on the basis of Article 113(1) EC (“[t]he common commercial policy shall be based on uniform principles, particularly in regard to changes in tariff rates, the conclusion of tariff and trade agreements, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade”). It was generally believed that the action was taken in the field of shared competence keeping primary competence with the Member States.

The latter Article became Article 207(1) TFEU providing: “[t]he common commercial policy shall be based on uniform principles, particularly with regard to changes in tariff rates, the conclusion of tariff and trade agreements relating to trade in goods and services, and the commercial aspects of intellectual property, foreign direct investment, the achievement of uniformity in measures of liberalisation, export policy and measures to protect trade…”

Thus, the concept of “commercial aspects of intellectual property” is now expressly mentioned in the very text of primary law (§ 47).

The respective Governments argued that the TRIPs Agreement’s patentability rules concern international trade only indirectly, and do not therefore fall within the field of the common commercial policy (§ 44). In other words, those rules do not relate to the details, as regards customs or otherwise, of operations of international trade as such (§ 53).

Nevertheless, the Grand Chamber considered that the TRIPs Agreement is an integral part of the WTO system, and therefore has a specific link with international trade (§ 53). In particular, the respective WTO law authorizes the cross-suspension of concessions between that agreement and the other principal multilateral agreements of which the WTO Agreement consists (§ 54).

Moreover, the concept of “commercial aspects of intellectual property” corresponds almost literally to the very title of the TRIPs Agreement (§ 55).

The Governments produced the argument that Part II of the TRIPs Agreement, concerning the availability, scope, and use of intellectual property rights, which includes patentability, fall within the field of the internal market, and not of common commercial policy (§ 56). The Grand Chamber replied that as it follows from its preamble, the primary objective of the TRIPs Agreement is to strengthen and harmonise the protection of intellectual property on a worldwide scale, and Part II contributes to attaining that objective by setting out rules to be applied by every WTO member (§ 58).

Slight reduction in compensation of damages for inhuman treatment of prisoners, Yepishin v Russia, 591/07

 

The European Court of Human Rights slightly reduced the amount of compensation of damages for inhuman treatment of prisoners in case Yepishin v Russia, 591/07. Previously, it was used to calculate the damages as € 6 000 for the first year of imprisonment in inhuman conditions, and € 3 500 for each next year.

This time the imprecise spirit of “equitable satisfaction” told that over 5 years in inhuman conditions shall cost € 19 000 only (§ 83).

In this particular case, the inhuman conditions meant a personal space narrower than 2 m² (§ 63),  

However, what I like about this case is the conclusion of the ECtHR that infrequent and short periods of raising personal space to over 4 m² do not alleviate the prisoner’s situation (§ 65).

ECJ: Imposing administrative and criminal sanctions does not breach the ne bis in idem principle, Fransson, C 617/10

Mr. Åkerberg Fransson was accused by Swedish prosecution of non payment of about 83 000 € of taxes (income tax, VAT, social security and employer’s part deductions, § 12). He was subjected to tax penalty (administrative one), and then criminal proceedings started. Tax evasion may lead to 2 years of imprisonment. Mr. Fransson insists that he has already got an administrative sanction, and therefore the criminal one would breach the principle that none may be subjected to a double sanction for the same crime (Article 50 of the EU Charter of Fundamental Rights).

The ECJ Grand Chamber replies that in principle there is no double punishment in imposing both administrative and criminal sanctions, however the sanctions must pass a test in order not to be considered as punishing twice (§§ 34-35):

1. Classification of the offence under national law;
2. The very nature of the offence;
3. The nature and degree of severity of the penalty.

This test gives a slight chance to avoid a sanction in certain cases.