Joined Cases C‑202/18 and C‑238/18

Ilmārs Rimšēvičs
and
European Central Bank (ECB)

v

Republic of Latvia

Judgment of the Court (Grand Chamber), 26 February 2019

(European System of Central Banks — Action based on infringement of the second subparagraph of Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank — Decision of a national authority suspending the governor of the national central bank from office)

1. European Central Bank — European System of Central Banks — Relieving a governor of a national central bank from office — Jurisdiction of the Court to review the lawfulness of a decision to relieve from office taken by a national authority — Subject matter — Classification of the action as an action for annulment

   (Art. 263 TFEU and Art. 282(1) TFEU; Protocol No 4 annexed to the EU and FEU Treaties, Art. 14.2)

   (see paragraphs 30, 43, 48, 51, 52, 55, 67, 69, 70, 76)

2. European Central Bank — European System of Central Banks — Relieving a governor of a national central bank from office — Need for indications establishing serious misconduct on the part of the governor concerned — None — Annulment of the decision to relieve from office

   (Protocol No 4 annexed to the EU and FEU Treaties, Art. 14.2)

   (see paragraphs 91, 92, 96)

Résumé

The Court annuls the decision suspending the Governor of the Central Bank of Latvia from office

In the judgment Rimšēvičs and ECB v Latvia (C‑202/18 and C‑238/18), delivered on 26 February 2019, the Grand Chamber of the Court upheld two actions under the second subparagraph of Article 14.2 of the Protocol on the Statute of the European System of Central Banks and of the European Central Bank (‘the Statute of the ESCB and of the ECB’). Those actions, which were the first to be brought on that basis, had been brought by the ECB and Mr Rimšēvičs against the decision by which the latter, suspected of having sought and accepted a bribe in his capacity as Governor of the Central Bank of Latvia, was suspended from his duties as Governor of that bank by the Korupcijas novēršanas un apkarošanas birojs (Anti-Corruption Office, Latvia).

First of all, the Republic of Latvia raised the objection that the Court lacks jurisdiction to hear and determine the actions, arguing that the only decisions which may be the subject of such an action are those definitively severing the legal and institutional link between the governor of a national central bank and that bank. In that regard, the Court emphasised the objective of independence of the governors of the national central banks pursued by Article 14.2 of the Statute of the ESCB and of the ECB. If it were possible to decide, without grounds, to relieve the governors of the national central banks from office, their independence and, by extension, that of the ECB itself would be severely undermined. The temporary prohibition on a governor of a national central bank performing his or her duties is likely to constitute a means of putting pressure on that person. First, such a prohibition may be especially serious for the governor on whom it is imposed where it is not accompanied by a specific end date. Second, it is capable, owing to the fact that it is temporary, of providing a form of pressure that is all the more effective where it may be withdrawn at any time depending not only on developments in the investigation but also on the conduct of the governor concerned. Consequently, the Court declared that it has jurisdiction to hear and determine an action brought against a measure such as the temporary prohibition on performing the duties of governor of a national central bank.

Next, regarding the nature of the action provided for in the second subparagraph of Article 14.2 of the Statute of the ESCB and of the ECB, the Court classified it as an action for annulment of the decision to relieve a governor of a national central bank from office. In that regard, it noted, inter alia, that, like the action provided for in Article 263 TFEU, the action provided for in the second subparagraph of Article 14.2 of the Statute of the ESCB and of the ECB may be brought by an individual, in the present case by the Governor relieved from office, against a decision of which he or she is the addressee, and that each of those two actions must be brought within the same period, namely 2 months.

It is true that the second subparagraph of Article 14.2 of that statute derogates from the general distribution of powers between the national courts and the courts of the European Union as provided for by the Treaties and in particular by Article 263 TFEU, as an action under that article may concern only acts of EU law. However, that derogation can be explained by the particular institutional context of the ESCB within which it operates. The ESCB represents a novel legal construct in EU law which brings together national institutions, namely the national central banks, and an EU institution, namely the ECB, and causes them to cooperate closely with each other, and within which a different structure and a less marked distinction between the EU legal order and national legal orders prevails. Article 14.2 of the Statute of the ESCB and of the ECB reflects the logic of this highly integrated system which the authors of the Treaties envisaged for the ESCB and, in particular, of the dual professional role of the governor of a national central bank, who is certainly a national authority but who acts within the framework of the ESCB and sits, where he or she is the governor of a central bank of a Member State whose currency is the euro, on the main decision-making body of the ECB. It is because of this hybrid status and in order to guarantee the functional independence of the governors of the national central banks within the ESCB that, by way of exception, a decision taken by a national authority relieving one of those governors from office may be referred to the Court.

Lastly, regarding the substance of the case, the Court made it clear from the outset that it was not for it to take the place of the national courts having jurisdiction to give a ruling on the criminal responsibility of the governor involved, nor even to interfere with the preliminary criminal investigation being conducted in respect of that person. By contrast, it is for the Court, in the context of the powers conferred on it by the second subparagraph of Article 14.2 of the Statute of the ESCB and of the ECB, to verify that a temporary prohibition on the governor concerned performing his or her duties is taken only if there are sufficient indications that he or she has engaged in serious misconduct capable of justifying such a measure. In the present case, the Court found that, in the light of the evidence produced by the Republic of Latvia, the latter had not established that the relieving of Mr Rimšēvičs from office was based on such indications and, accordingly, annulled the decision at issue.