US embassy cable - 05BRUSSELS3444

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 
.