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Document 62018CC0255
Opinion of Advocate General Campos Sánchez-Bordona delivered on 26 June 2019.#State Street Bank International GmbH v Banca d'Italia.#Request for a preliminary ruling from the Tribunale Amministrativo Regionale per il Lazio.#Reference for a preliminary ruling — Directive 2014/59/EU — Recovery and resolution of credit institutions — National financing arrangement — Resolution authority — National fund — Articles 103 and 104 — Obligation to contribute — Ex ante contributions and extraordinary ex post contributions — Calculation — Late transposition of the directive — Delegated Regulation (EU) 2015/63 — Articles 12 and 14 — Concept of ‘change of status’ — Impact on the obligation to contribute.#Case C-255/18.
Opinion of Advocate General Campos Sánchez-Bordona delivered on 26 June 2019.
State Street Bank International GmbH v Banca d'Italia.
Request for a preliminary ruling from the Tribunale Amministrativo Regionale per il Lazio.
Reference for a preliminary ruling — Directive 2014/59/EU — Recovery and resolution of credit institutions — National financing arrangement — Resolution authority — National fund — Articles 103 and 104 — Obligation to contribute — Ex ante contributions and extraordinary ex post contributions — Calculation — Late transposition of the directive — Delegated Regulation (EU) 2015/63 — Articles 12 and 14 — Concept of ‘change of status’ — Impact on the obligation to contribute.
Case C-255/18.
Opinion of Advocate General Campos Sánchez-Bordona delivered on 26 June 2019.
State Street Bank International GmbH v Banca d'Italia.
Request for a preliminary ruling from the Tribunale Amministrativo Regionale per il Lazio.
Reference for a preliminary ruling — Directive 2014/59/EU — Recovery and resolution of credit institutions — National financing arrangement — Resolution authority — National fund — Articles 103 and 104 — Obligation to contribute — Ex ante contributions and extraordinary ex post contributions — Calculation — Late transposition of the directive — Delegated Regulation (EU) 2015/63 — Articles 12 and 14 — Concept of ‘change of status’ — Impact on the obligation to contribute.
Case C-255/18.
ECLI identifier: ECLI:EU:C:2019:539
CAMPOS SÁNCHEZ-BORDONA
delivered on 26 June 2019 ( 1 )
Case C‑255/18
State Street Bank International GmbH
v
Banca d’Italia,
intervener:
Banco delle Tre Venezie SpA
(Request for a preliminary ruling
from the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy))
(Preliminary ruling — Directive 2014/59/EU — Recovery and resolution of credit institutions — Changes of status — Merger by incorporation of an institution into the parent company situated in another Member State — Delegated Regulation (EU) 2015/63 —Resolution financing arrangements — Ordinary contributions — Extraordinary contributions — Collection of contributions in 2015 — Transitional provisions —Application of Delegated Regulation 2015/63 despite the non-transposition of Directive 2014/59)
1. |
Credit institutions are required to contribute to the funding of national mechanisms created in all the Member States to cover the recovery and resolution costs of the financial sector. They also have to contribute to the Single Resolution Fund (‘SRF’), which is the equivalent mechanism at EU level. |
2. |
Directive 2014/59/EU ( 2 ) governs those compulsory contributions, which are a key feature of the operation of national schemes for the recovery and resolution of financial institutions and also of the Single [Resolution] Mechanism (‘SRM’), and differentiates between ordinary ex ante contributions and extraordinary ex post contributions. |
3. |
This reference for a preliminary ruling will enable the Court of Justice to rule for the first time on the rules applicable to the collection of both types of contribution. The reply will also make it possible to resolve the difficulties which contributions in the 2015 financial year have created in Italy, as a result of the delayed transposition of Directive 2014/59 and the entry into force of Delegated Regulation (EU) 2015/63. ( 3 ) |
I. Legal framework
A. EU law
1. Directive 2014/59
4. |
Pursuant to Article 100: ‘1. Member States shall establish one or more financing arrangements for the purpose of ensuring the effective application by the resolution authority of the resolution tools and powers. … 3. Member States shall ensure that the financing arrangements have adequate financial resources. 4. For the purpose of paragraph 3, financing arrangements shall in particular have the power to:
5. Save where permitted under paragraph 6, each Member State shall establish its national financing arrangements through a fund, the use of which may be triggered by its resolution authority for the purposes set out in Article 101(1). …’ |
5. |
Under Article 102: ‘1. Member States shall ensure that, by 31 December 2024, the available financial means of their financing arrangements reach at least 1% of the amount of covered deposits of all the institutions authorised in their territory. … 2. During the initial period of time referred to in paragraph 1, contributions to the financing arrangements raised in accordance with Article 103 shall be spread out in time as evenly as possible until the target level is reached, but with due account of the phase of the business cycle and the impact pro-cyclical contributions may have on the financial position of contributing institutions. …’ |
6. |
Article 103 (‘Ex ante contributions’) provides: ‘1. In order to reach the target level specified in Article 102, Member States shall ensure that contributions are raised at least annually from the institutions authorised in their territory including Union branches. 2. The contribution of each institution shall be pro rata to the amount of its liabilities (excluding own funds) less covered deposits, with respect to the aggregate liabilities (excluding own funds) less covered deposits of all the institutions authorised in the territory of the Member State. Those contributions shall be adjusted in proportion to the risk profile of institutions, in accordance with the criteria adopted under paragraph 7. …’ |
7. |
Article 104 (‘Extraordinary ex post contributions’), provides in paragraph 1: ‘Where the available financial means are not sufficient to cover the losses, costs or other expenses incurred by the use of the financing arrangements, Member States shall ensure that extraordinary ex post contributions are raised from the institutions authorised in their territory, in order to cover the additional amounts. Those extraordinary ex post contributions shall be allocated between institutions in accordance with the rules laid down in Article 103(2). Extraordinary ex post contributions shall not exceed three times the annual amount of contributions determined in accordance with Article 103.’ |
2. Delegated Regulation (EU) 2015/63
8. |
Article 4 (‘Determination of the annual contributions’) states: ‘1. The resolution authorities shall determine the annual contributions to be paid by each institution in proportion to its risk profile on the basis of information provided by the institution in accordance with Article 14 and by applying the methodology set out in this Section. 2. The resolution authority shall determine the annual contribution referred to in paragraph 1 on the basis of the annual target level of the resolution financing arrangement by taking into account the target level to be reached by 31 December 2024 in accordance with paragraph 1 of Article 102 of Directive 2014/59/EU and on the basis of the average amount of covered deposits in the previous year, calculated quarterly, of all the institutions authorised in its territory.’ |
9. |
Article 12 (‘New supervised institutions or change of status’) reads: ‘1. Where an institution is a newly supervised institution for only part of a contribution period, the partial contribution shall be determined by applying the methodology set out in Section 3 to the amount of its annual contribution calculated during the subsequent contribution period by reference to the number of full months of the contribution period for which the institution is supervised. 2. A change of status of an institution, including a small institution, during the contribution period shall not have an effect on the annual contribution to be paid in that particular year.’ |
10. |
Article 13(1) stipulates: ‘The resolution authority shall notify each institution referred to in Article 2 of its decision determining the annual contribution due by each institution at the latest by 1 May each year.’ |
11. |
Article 14(1) provides: ‘Institutions shall provide the resolution authority with the latest approved annual financial statements available before the 31st of December of the year preceding the contribution period, together with the opinion submitted by the statutory auditor or audit firm, in accordance with Article 32 of Directive 2013/34/EU …’ |
12. |
The transitional provisions of Delegated Regulation 2015/63 are laid down in Article 20, paragraphs 1, 2 and 3 of which stipulate: ‘1. … By way of derogation from Article 13(1), with regards to the contributions to be paid in 2015, the resolution authorities shall notify each institution of its decision determining the annual contribution to be paid by them at the latest by 30 November 2015. 2. By way of derogation from Article 13(4), and with regards to the contributions to be paid in 2015, the amount due under the decision referred to in Article 13(3) shall be paid by 31 December 2015. 3. By way of derogation from Article 14(4), and with regards to the information to be provided to the resolution authority in 2015, the information referred to in that paragraph shall be provided at the latest by the 1 September 2015.’ |
13. |
In accordance with the second paragraph of Article 21, this regulation ‘shall apply from 1 January 2015’. |
B. National law. Legislative Decree No 180 of 16 November 2015 implementing Directive 2014/59 ( 4 )
14. |
Directive 2014/59 was transposed into Italian law by Decreto legislativo n. 180/2015 (Legislative Decree No 180/2015), which entered into force on the date of its official publication, that is, 16 November 2015. |
15. |
Article 2(1) reads: ‘1. This Decree applies to the following institutions:
|
16. |
Article 3(1) provides: ‘Banca d’Italia shall exercise the duties and powers provided for in this Decree in its capacity as resolution authority in respect of the institutions referred to in Article 2, where those institutions have their registered office in Italy, unless indicated otherwise. In the cases provided for herein, its duties and powers shall be exercised in relation to Italian branches of banks established outside the Union.’ |
17. |
In accordance with Legislative Decree No 180/2015:
|
18. |
By decision of 22 September 2015, Banca d’Italia created the Unità di risoluzione e gestione della crisi (Resolution and Crisis Management Unit), ( 5 ) through which it performs its duties as a national resolution authority. By decision of 18 November 2015, ( 6 ) it set up the national bank resolution fund. |
II. Facts of the dispute and questions referred for a preliminary ruling
19. |
State Street Bank International GmbH (‘SSB International’) is a German credit institution which, until 5 July 2015, operated in Italy through an Italian bank called State Street Bank SpA (‘SSB Italia’). |
20. |
From 6 July 2015, after SSB International had merged with SSB Italia, it continued to operate in Italy under the right of establishment via a single branch, called State Street Bank International GmbH — Succursale Italia. |
21. |
On 22 November 2015, Banca d’Italia commenced a resolution procedure against four banks under its jurisdiction, ( 7 ) the cost of which came to nearly EUR 3.7 billion. |
22. |
To cover that cost, Banca d’Italia, in addition to setting the ordinary contributions for 2015 (approximately EUR 588 million), decided to levy extraordinary contributions. It set those contributions at the statutory limit, which is three times as much as ordinary contributions (EUR 1763 million). ( 8 ) |
23. |
By communication No 0445827/16 of 1 April 2015, entitled ‘Contribuzione 2015 al Fondo Nazionale di Risoluzione [(2015 Contribution to the National Resolution Fund)]’, Banca d’Italia requested from SSB International payment of EUR 5102425, of which EUR 1275606 corresponded to the ordinary contribution for 2015 and EUR 3826819 corresponded to the extraordinary contribution. |
24. |
SSB International applied to the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy) for cancellation of Banca d’Italia communication No 0445827/16 and other related measures. |
25. |
SSB International submits that Banca d’Italia was not competent to levy on it any contribution for 2015 because, on the date of issue of the disputed requests, SSB International came under the jurisdiction of the German resolution authority. Therefore, it was neither a ‘bank with its registered office in Italy’ nor an ‘Italian branch of a bank outside the European Union’, for the purposes of Articles 82 and 83 of Legislative Decree No 180/2015. |
26. |
SSB International further contends that the provisions of Legislative Decree No 180/2015, on which Banca d’Italia based its measures, did not enter into force until 16 November 2015. At that time, SSB Italia had already ceased to exist as a bank with a registered office in Italy and therefore fell outside the scope of the legislative decree. Moreover, the resolution fund itself was set up and the entire system referred to in Directive 2014/59 came into operation, in Italy, after SSB Italia had merged with its parent company (SSB International), and therefore after the applicant had definitively ceased to exist as an independent bank governed by national law in Italy. |
27. |
In the alternative, SSB International contends that Banca d’Italia could, at most, have asked it to pay only an ordinary contribution in proportion to the months in which SSB Italia carried out its business, but not the full annual contribution. ( 9 ) This follows from the application by analogy of Article 12(1) of Delegated Regulation 2015/63, so that an institution which is wound up during the year ceases to be subject to supervision by the national resolution authority and is only required to contribute for the period in which it existed. |
28. |
Banca d’Italia contests those arguments and maintains that it acted correctly. In its submission, on 1 January 2015, SSB Italia was part of the Italian banking system, which justified the request that it pay the applicable ordinary and extraordinary contributions. The subjective changes to that financial institution that occurred later are irrelevant. |
29. |
The German resolution authority could not actually take into account the acquisition of SSB Italia by SSB International, or the latter’s resulting increase in size, since the accounting impact of the merger became apparent only with the publication of its closing balance sheet for 2015, which was available only subsequently. Therefore, the risk of double taxation/contribution is ruled out. |
30. |
Banca d’Italia submits that, from a temporal point of view:
|
31. |
In the light of those conflicting arguments, the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio) has referred the following questions to the Court of Justice:
|
32. |
Written observations were lodged by SSB International, Banca d’Italia, the Commission, and the Italian and Spanish Governments. All those parties took part in the hearing held on 10 April 2019. |
III. Analysis of the questions referred for a preliminary ruling
A. Preliminary considerations concerning bank recovery and resolution mechanisms
33. |
Before I state my position on the questions referred for a preliminary ruling, I believe it is helpful to give a brief outline of how bank recovery and resolution mechanisms are financed. |
34. |
In response to the 2008 financial crisis, countries in the euro zone implemented a banking union by transferring powers to EU institutions in relation to prudential supervision and the recovery and resolution of financial institutions. That process of transferring powers was preceded by a harmonisation of legislation in respect of all the EU Member States (the so-called single rulebook). |
35. |
Although the single deposit guarantee scheme has yet to be created, the other two pillars of the banking union — the Single Supervisory Mechanism (‘SSM’) and the SRM — are already operational. Previously, harmonisation rules were adopted in respect of the European Union as a whole in relation to prudential supervision and bank resolution. |
36. |
As regards bank recovery and resolution, harmonisation was effected by Directive 2014/59, applicable from 1 January 2015. For countries in the euro zone, the adoption of Regulation (EU) No 806/2014 ( 10 ) enabled the implementation of the SRM from 1 January 2016, following the establishment of the SSM on 1 January 2015. |
37. |
Directive 2014/59 contains rules and procedures to ensure that the recovery and resolution costs of credit institutions are borne by the financial sector as a whole in order to avoid rescues being covered by national budgets. |
38. |
In many cases, the effectiveness of resolution tools may depend on the availability of short-term funding. Therefore, Directive 2014/59 provided (Article 99) for the creation of a European system consisting of: (i) national financing arrangements (Articles 100 to 105); (ii) borrowing between national financing arrangements (Article 106); and (iii) mutualisation of national financing arrangements in the case of a group resolution (Article 107). |
39. |
Each Member State has had to create its own national financing arrangements and provide these with financial resources, controlled by its resolution authority, which are to be used to ensure the effective application of the resolution tools. ( 11 ) |
40. |
National resolution funds are financed by three types of resources: ( 12 )
|
41. |
Article 102(1) of Directive 2014/59 predetermines the amount of ordinary contributions. Member States must ensure that, between the date of entry into force of that directive (1 January 2015) and 31 December 2024, ‘the available financial means of their financing arrangements reach at least 1% of the amount of covered deposits of all the institutions authorised in their territory’. ( 13 ) |
42. |
Ordinary contributions must be collected at least annually and must reflect the size of the financial institution and the risk level of its activities. ( 14 ) Delegated Regulation 2015/63 sets out in detail the elements and procedure for their calculation. |
43. |
Where the ordinary contributions are not sufficient to cover the cases referred to in Article 104(1) of Directive 2014/59, that provision allows Member States to collect extraordinary or ex post contributions from credit institutions situated on their territory. |
44. |
Extraordinary ex post contributions cannot exceed three times the annual amount of ordinary contributions. They are calculated and administered in a similar way to ordinary contributions. |
45. |
Directive 2014/59 and Delegated Regulation 2015/63 have applied to all the Member States of the Union since 1 January 2015. For the 19 countries in the euro zone which are part of the banking union (including Italy), activation of the SRM on 1 January 2016 was interwoven with those two provisions. |
46. |
With effect from 1 January 2016, the SRM Regulation:
|
47. |
The SRF is, therefore, the financing mechanism for the SRM. It is intended to gradually replace (over a period of eight years, from 2016 to 2024) the national funds, as regards the resolution of financial institutions subject to the SSM and the SRM. The national funds will continue to exist only in respect of less significant institutions of Member States which are part of the banking union. ( 15 ) |
48. |
Articles 67 to 79 of Regulation No 806/2014 govern the SRF in almost parallel terms to those laid down in Directive 2014/59 in relation to national resolution funds. That applies to the SRF’s revenue, ( 16 ) its financial means ( 17 ) and the method of calculating ordinary and extraordinary contributions. ( 18 ) |
49. |
The special feature of the SRF is the progressive mutualisation of its resources, provided for in Regulation No 806/2014 and implemented by means of an intergovernmental agreement between the EU Member States that are part of the banking union (‘Agreement on the transfer and mutualisation of contributions to the Single Resolution Fund’, done at Brussels on 21 May 2014). ( 19 ) |
50. |
The SRF is funded by the financial means which the national resolution funds collect. ( 20 ) Originally composed of ‘national compartments’, these are being progressively merged over a transitional phase of eight years. The mutualisation of the revenue contributed began with 40% in the first year and 20% in the second year, to be increased in equal amounts throughout the remaining six years until the national compartments cease to exist. |
51. |
Article 3(3) and (5) of the agreement of 21 May 2014 states that:
|
B. Effect of changes of status of credit institutions on their ordinary ex ante contributions to national resolution funds (first and second questions)
52. |
The referring court asks whether, under Article 12(2) of Delegated Regulation 2015/63, a business transaction, whereby a credit institution previously subject to supervision by a national resolution authority is acquired (merger by acquisition) by its parent company which has its registered office in another Member State, constitutes a ‘change of status’. |
53. |
The question makes sense in the light of the fact that, pursuant to that provision, ‘a change of status of an institution … during the contribution period shall not have an effect on the annual contribution to be paid in that particular year’. The focus of the debate is to determine whether, in circumstances such as those of this case, the institution is required to pay the contribution corresponding to that period in full or only a share (that is, pro rata in relation to the months when the institution was subject to supervision by the authority of the first Member State). |
54. |
SSB International submits that that concept must be interpreted strictly such that it does not encompass a merger by acquisition and is limited solely to changes of size of financial institutions. On the other hand, the Commission, Banca d’Italia, the Spanish Government and the Italian Government propose a broad interpretation, such that a ‘change of status’, as an autonomous concept of EU law, includes cross-border merger-by-acquisition operations. It therefore applies to the acquisition of SSB Italia by SSB International. |
55. |
I agree with the latter position. |
56. |
Article 12(2) of Delegated Regulation 2015/63 provides that the regulation must be applied uniformly in all the Member States. The concept of ‘change of status’ ( 22 ) of an institution contained in that provision must be interpreted as an autonomous concept of EU law, especially since the provision makes no reference to national law. |
57. |
Following the usual method of interpretation laid down in the Court’s case-law, ( 23 ) I shall apply the literal, systematic and purposive criteria of interpretation. |
1. Literal interpretation
58. |
From a literal point of view, there is a ‘change of status’ of a financial institution when that institution’s legal or factual situation is modified in a way that is liable, in principle, to alter the application of Directive 2014/59 and Delegated Regulation 2015/63. |
59. |
Naturally, such modifications include a change of size, which is implicitly referred to in the words ‘including a small institution’ used in the provision. However, that is just one form of change of status, not the only one. |
60. |
Directive 2014/59 and Delegated Regulation 2015/63 (particularly Article 10 thereof) lay down simplified and more favourable rules for calculating the ordinary contributions of small institutions. ( 24 ) Therefore, that does not support the conclusion that the only irrelevant changes of status, for the purposes of Article 12(2) of Delegated Regulation 2015/63, are those which concern changes in the size of financial institutions with the aim of benefiting from the more favourable contribution arrangements. |
61. |
Admittedly, Delegated Regulation 2015/63 (and Implementing Regulation 2015/81 for institutions subject to the SRM) aims to prevent changes to financial institutions which are intended to reduce their size artificially, that is, for the purpose of using the simplified rules for calculating ordinary contributions. |
62. |
The changes of status of financial institutions referred to in Article 12(2) of Delegated Regulation 2015/63 are not, from a literal perspective, confined to reductions in the size or scale of such institutions. From that textual perspective, the disputed term can also encompass other situations. |
63. |
A literal interpretation of Article 12(2) of Delegated Regulation 2015/63 also makes it possible to reject the reductionist argument put forward by SSB International, to the effect that changes of status concern only alterations to the corporate structure or size of a financial institution, provided that that institution remains on the territory of the Member State and, therefore, within the scope of the national resolution mechanism. |
64. |
That argument would result in the exclusion from the concept of changes of status of cross-border mergers by acquisition ( 25 ) when there is no reference to that in Article 12(2) of Delegated Regulation 2015/63. Moreover, as I shall explain below, it would conflict with the rationale of Directive 2014/59, which creates an interconnected European system of bank resolution financing arrangements. ( 26 ) |
2. Systematic interpretation
65. |
From a systematic point of view, it is undeniable that Regulation No 806/2014 establishes a Single Resolution Fund into which the national resolution funds of the countries involved in the banking union are gradually being integrated. In that context, it is not even possible to refer strictly to cross-border mergers by acquisition, for the amount of ordinary contributions is fixed by the SRB and those contributions are collected by the national funds for inclusion in the SRF. |
66. |
Thus, in the context of Directive 2014/59 and the other provisions in this area, the term ‘change of status’ covers cross-border mergers by acquisition, making these irrelevant for the purposes of calculating ordinary contributions. |
67. |
As the Commission argues, Article 12 of Delegated Regulation 2015/63:
|
3. Purposive interpretation
68. |
Article 12(2) of Delegated Regulation 2015/63 must be interpreted in a manner consistent with the two aims inherent in the creation of the national resolution funds: (a) the need for stability when calculating ordinary contributions; and (b) the progressive integration and centralisation of those funds. |
(a) Stability when calculating contributions
69. |
Article 102 and Article 103(1) of Directive 2014/59 and Article 4 of Delegated Regulation 2015/63 require the annual collection ( 27 ) of ordinary contributions, in order that the financial means of financing arrangements progressively reach (by 31 December 2024) at least 1% of the amount of covered deposits of all the institutions authorised in a Member State’s territory. |
70. |
In order to achieve that aim, the national resolution authority must specify the amounts of ordinary contributions based on the situation of financial institutions as at 1 January of each year that the contribution is levied. Therefore, Article 14(1) of Delegated Regulation 2015/63 requires those institutions to provide the resolution authority with the latest approved annual financial statements available before 31 December of the year preceding the contribution period, together with the opinion submitted by the statutory auditor or audit firm. ( 28 ) |
71. |
As can be seen, ordinary contributions are calculated on the basis of a ‘snapshot’ of financial institutions under the national authority’s jurisdiction on 1 January of each financial year, in accordance with the financial data available for those institutions. |
72. |
Stable calculation is essential in order to ensure that ordinary contributions can be increased progressively until they reach 1% of deposits in 2024. If resolution authorities were required to take into account changes occurring in the legal and financial position of institutions throughout the year, it would hardly be possible to reach the target level set by Directive 2014/59. |
73. |
That is why Article 12(2) of Delegated Regulation 2015/63 provides that, as a general rule, changes of status of institutions during the financial year are irrelevant for the purposes of calculating ordinary contributions. That rule confirms that, under Delegated Regulation 2015/63, it is not possible to recalculate annual ordinary contributions by reference to changes which institutions have undergone during that financial year, as the Commission rightly points out. |
(b) Progressive integration and centralisation of national resolution funds
74. |
Directive 2014/59 and the SRM Regulation have as their aim the progressive integration and centralisation of national resolution funds. An interpretation of the term ‘change of status’ which includes cross-border mergers by acquisition, making these irrelevant for the purpose of calculating ordinary contributions, is more consistent with that aim. |
75. |
In euro zone countries, the creation, in 2015, of national resolution funds (as a result of Directive 2014/59 and Delegated Regulation 2015/63) was combined with the establishment, in 2016, of the SRM and the SRF. ( 29 ) In that connection, the difference between national and cross-border mergers by acquisition is becoming meaningless for the purposes of the payment of ordinary contributions. |
76. |
The establishment of the SRM led to a single, centralised resolution system for significant financial institutions. That system is based on a single fund (the SRF, under the control of the SRB), although it still operates with national compartments which are being progressively mutualised until 2024. This means that SSB International’s argument regarding the strict separation of national resolution funds ( 30 ) can be rejected, since that argument cannot be defended even for the 2015 transitional year. |
77. |
Even if that strict separation were accepted, it would still be my view that, as regards the calculation of ordinary contributions, changes of status resulting from a cross-border merger by acquisition are irrelevant. Since Article 12(2) of Delegated Regulation 2015/63 applies to the authority of the country of the acquired institution (Italy in this case) and to the authority of the country of the parent institution (Germany), double imposition is not possible: SSB International would pay the 2015 annual contribution to the Italian resolution fund for SSB Italia, without increasing its contribution to the counterpart German fund in 2015 (as regards the assets and risk of its subsidiary, which it acquired on 5 July 2015). |
78. |
In cases where merger by acquisition occurs during a financial year, the acquiring institution must pay the full annual contribution to the national resolution fund of the State in which the acquired institution has its seat. As I stated above, when calculating that contribution it is necessary to take account of the situation as at 1 January of the contribution year, while later changes of status, including cross-border mergers by acquisition, are irrelevant. |
79. |
That general rule, laid down by Article 12(2) of Delegated Regulation 2015/63, is subject only to the exception laid down in Article 12(1): the payment of a time-proportionate partial contribution by newly created financial institutions. The specific solution for that situation cannot be applied to the extent that it undermines the general rule (that changes of status are irrelevant). |
80. |
Accordingly, the claim that the annual contribution should be reduced where a financial institution’s change of status is, for legal purposes, irrelevant cannot be accepted. The analogous application proposed by SSB International is, therefore, baseless. |
C. Effect of changes of status of credit institutions on their extraordinary contributions to national resolution funds (third question)
81. |
The referring court essentially asks whether extraordinary contributions are subject to the same rules as ordinary contributions in the case of a cross-border merger by acquisition. |
82. |
There are radical differences between the replies of the parties who have lodged observations:
|
83. |
In accordance with Article 104(1) of Directive 2014/59, extraordinary ex post contributions are to be collected by national resolution authorities ‘where the available financial means are not sufficient to cover the losses, costs or other expenses incurred by the use of the financing arrangements’. |
84. |
That provision also states that extraordinary contributions are to be allocated between institutions in accordance with the rules laid down in Article 103(2), provided that they do not exceed three times the annual amount of ordinary contributions. Furthermore, Article 103(4) to (8) is also applicable to extraordinary contributions, as provided for in Article 104(2) of Directive 2014/59. |
85. |
In my opinion, the references in Article 104 of Directive 2014/59 to the body of rules governing ordinary contributions do not mean that extraordinary contributions are an exact replica of these. Although the method of calculating extraordinary contributions is identical to that applicable to ordinary contributions, specified in detail by Delegated Regulation 2015/63, the ceiling or limit is different because extraordinary contributions can come to three times the amount of annual ordinary contributions. Article 104(3) also provides that payment of extraordinary contributions may be deferred in whole or in part, ( 31 ) an option not available for ordinary contributions. Even more importantly, the time and the rationale for the collection of the two types of contribution are also different. |
86. |
The resolution authorities use extraordinary contributions when they need to carry out operations which reduce the amount of the national fund and additional revenue is required to reach the annual target level of resources. Therefore, extraordinary contributions are unforeseeable; in other words, they cannot be planned for like ordinary contributions, which are collected in respect of the calendar year in which they are imposed, based on an institution’s situation as at 1 January. |
87. |
The amount of extraordinary contributions will depend, therefore, on the need for refinancing of the national resolution fund, in the light of the resources used in specific resolution operations. ( 32 ) By its very nature, the point at which those contributions must be levied is uncertain because it depends on the date of the resolution operations which give rise to the deficit in the fund. |
88. |
Given that extraordinary contributions are unforeseeable and are impossible to plan for, I believe that, as the Commission submits, these contributions can be levied only on institutions which are under the jurisdiction of the national resolution fund on the date on which the relevant decision is adopted. |
89. |
In principle, institutions that are active in the financial system of a State when extraordinary contributions are imposed are those which have generated the risk which has resulted in the need to levy the contributions (that is, the risk which gave rise to the resolution operations that have used up the fund’s resources). Institutions which left the jurisdiction of the resolution authority during the year when the extraordinary contributions were set generally have less of an effect on the risk generated by resolution operations. |
90. |
That interpretation is compatible with the wording of Article 12(2) of Delegated Regulation 2015/63, which refers only to neutralising the effect of changes of status in respect of ordinary contributions but does not mention extraordinary contributions. ( 33 ) Therefore, an institution which merges with its parent institution, established in another Member State, before the resolution authority requires payment of extraordinary contributions is not obliged to pay those contributions in the State in which it has ceased to exist. |
91. |
By the same token, the acquiring institution must pay the extraordinary contributions imposed by the resolution fund of its State of residence, with the assets of the acquired institution included in the calculation of those contributions, and it is not eligible for the time-proportionate payment provided for in Article 12(1) of Delegated Regulation 2015/63 for institutions entering the financial system of that State. That avoids manoeuvres aimed at avoiding payment of extraordinary contributions through changes of status. |
92. |
Accordingly, an institution’s change of status does affect the collection of extraordinary contributions, which must be based on the ‘snapshot’ of the banking sector at the time when those contributions are determined, and is levied on institutions under the jurisdiction of the resolution authority at that time. |
D. Application ratione temporis of ordinary contributions to national resolution funds (second part of the first question)
93. |
The referring court asks whether the interpretation of the term ‘change of status’ in Article 12(2) of Delegated Regulation 2015/63 should apply to a situation in which the merger and the resulting dissolution of the institution took place in 2015, at a time when Italy had not yet formally established either the national resolution authority or the national resolution fund and the contributions had not yet been calculated. |
94. |
The reply to that question necessitates an examination of the transitional rules laid down in Directive 2014/59 and Delegated Regulation 2015/63, regarding the establishment, calculation and collection of ordinary contributions in respect of the 2015 financial year. |
95. |
The positions also differ in relation to this matter:
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96. |
Article 130(1) of Directive 2014/59 provides that Member States are to adopt and publish by 31 December 2014 the laws, regulations and administrative provisions necessary to comply with the directive, and stipulates that Member States must apply those measures from 1 January 2015. |
97. |
There is no doubt that Italy was late transposing that directive into national law. The transposition measure (Legislative Decree No 180/2015) entered into force on 16 November 2015, while Banca d’Italia, in its capacity as the national resolution authority, did not set up the resolution fund until 18 November 2015, requesting payment of the ordinary and extraordinary contributions from financial institutions (including SSB International) on 23 and 26 November 2015 respectively. |
98. |
Delegated Regulation 2015/63 entered into force on 6 February 2015, although the second paragraph of Article 21 thereof provided that ‘it shall apply from 1 January 2015’. Accordingly, that regulation, which did not require transposition into Italian law, was in force when the merger by acquisition of SSB Italia occurred. |
99. |
The late adoption of Directive 2014/59 ( 34 ) and Delegated Regulation 2015/63 called for the inclusion in the latter of transitional provisions enabling the collection of ordinary contributions for the 2015 financial year. Those measures are laid down in Article 20(1) to (4) of Delegated Regulation 2015/63, from which it may be inferred, in relation to the facts of the dispute, that:
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100. |
Article 20 of Delegated Regulation 2015/63 contains no transitional or derogating provision concerning the calculation of ordinary contributions. In accordance with the Court’s criteria in relation to transitional law, ( 35 ) this means that that calculation had to be made in 2015 in line with the general procedure laid down by Directive 2014/59 and implemented by Delegated Regulation 2015/63. |
101. |
The reference date for the calculation of ordinary contributions is 1 January of the financial year in question, while any changes of an institution’s status in that year are irrelevant. |
102. |
Accordingly, under Delegated Regulation 2015/63, all institutions which were established in Italy on 1 January 2015 could be required to pay ordinary contributions in respect of 2015. The fact that an institution has ceased to exist as a result of a cross-border merger by acquisition is irrelevant in that connection. |
103. |
It must be borne in mind that ordinary contributions are annual in nature and the essential aspects of their collection are determined by Directive 2014/59, with effect from and including 2015. Delegated Regulation 2015/63 laid down the transitional provisions referred to above, which enabled the collection of contributions for 2015 at a later date. Although the Italian State was late transposing Directive 2014/59, it adopted the national implementing provision (Legislative Decree No 180/2015) in time to comply with the collection timetable provided for in Article 20 of Delegated Regulation 2015/63. |
104. |
Accordingly, I believe that this is not a case of retroactive application of Legislative Decree No 180/2015, as SSB has argued. Rather, this is a case of application of the transitional provisions for the purpose of collection of the 2015 annual contributions, laid down by Article 20 of Delegated Regulation 2015/63 pursuant to Directive 2014/59, which previously governed the essential aspects of such contributions. |
105. |
For that reason, I believe it is unnecessary to examine whether Delegated Regulation 2015/63 was applicable and had direct effect (also in Italy) from 1 January 2015. However, I shall deal with this point in case the Court should decide to examine it. |
106. |
SSB International argues that the delegated regulation could not have applied directly in a Member State when the directive which it implements had not yet been transposed into the national law of that State. Therefore, it was not possible to apply Delegated Regulation 2015/63 to SSB Italia because Directive 2014/59 was transposed into Italian law on 16 November 2015, a date on which SSB Italia no longer existed as it had been acquired by SSB International on 6 July 2015. |
107. |
I do not agree with that reasoning. It is true that, generally, the Court does not allow the inverse vertical direct effect of directives. ( 36 ) However, that rule must be qualified in a case like this, because Directive 2014/59, which is the basic provision, contains a delegation in Article 103(7) and (8), ( 37 ) pursuant to which the Commission adopted the delegated provision (Delegated Regulation 2015/63) in order to:
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108. |
In my view, Delegated Regulation 2015/63 does not exceed the limits of the power conferred by the enabling act ( 38 ) when it lays down the time limits for the normal procedure for collection of annual ordinary contributions. Nor does it exceed the limits of the power, vis-à-vis the basic legislation, when it lays down, in Article 20, the provisions applicable in 2015. As I noted above, the short transposition period for Directive 2014/59 and the delays in transposing that directive into national legal systems made those transitional provisions essential in order to enable the collection of ordinary contributions in 2015. |
109. |
Thus, Delegated Regulation 2015/63 was a directly applicable provision in Italian law from 1 January 2015 and was capable of producing legal effects by itself from that date, once it had entered into force. |
110. |
It would be illogical to make the effectiveness of Delegated Regulation 2015/63 (which I consider to be self-sufficient, meaning that it can be applied directly) conditional on the transposition into national law of Directive 2014/59. If that were the case, any Member State would be able to neutralise and delay the direct applicability of the delegated regulation merely by delaying transposition of the basic directive. As the Commission and Banca d’Italia observe, that delay would undermine the uniform application of the delegated regulation, which would apply in some Member States earlier than in others. |
111. |
The delay would also have a negative impact on the uniform funding of national resolution funds and, therefore, on the SRF. If Delegated Regulation 2015/63 had not been applicable in Italy from 1 January 2015, the Italian resolution fund would only have been able to collect a small proportion of the ordinary contributions for 2015 (the proportion for after 16 November 2015, the date of entry into force of the national transposition measure). Moreover, in those circumstances, the Italian resolution fund would not have contributed to the SRF in 2016 the share due from it based on the size of Italian financial institutions. |
112. |
Accordingly, the transitional provisions of Article 20 of Delegated Regulation 2015/63 enabled ex ante contributions for the 2015 financial year to be levied on a financial institution which was under the jurisdiction of the national resolution authority for part of that financial year but which ceased to be under that authority’s jurisdiction as a result of a cross-border merger by acquisition. The provisions of Delegated Regulation 2015/63 on ex ante contributions were directly applicable in Italy in 2015, regardless of the date on which Directive 2014/59 was transposed into national law. |
IV. Conclusion
113. |
In the light of the foregoing considerations, I propose that the Court of Justice should reply as follows to the Tribunale Amministrativo Regionale per il Lazio (Regional Administrative Court, Lazio, Italy): Article 12(2) of Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements, read in conjunction with that directive, must be interpreted as meaning that:
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( 1 ) Original language: Spanish.
( 2 ) Directive of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012 of the European Parliament and of the Council (OJ 2014 L 173, p. 190).
( 3 ) Commission Delegated Regulation of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (OJ 2015 L 11, p. 44).
( 4 ) Decreto legislativo 16 novembre 2015, n. 180. Attuazione della direttiva 2014/59/UE del Parlamento europeo e del Consiglio, del 15 maggio 2014, che istituisce un quadro di risanamento e risoluzione degli enti creditizi e delle imprese di investimento e che modifica la direttiva 82/891/CEE del Consiglio, e le direttive 2001/24/CE, 2002/47/CE, 2004/25/CE, 2005/56/CE, 2007/36/CE, 2011/35/UE, 2012/30/UE e 2013/36/UE e i regolamenti (UE), n. 1093/2010 e (UE) n. 648/2012, del Parlamento europeo e del Consiglio (GURI No 267 of 16 November 2015) (‘Legislative Decree No 180/2015’).
( 5 ) Delibera 436/2015 de la Banca d’Italia, 22 settembre 2015, Istituzione dell’Unità di Risoluzione e Gestione delle Crisi, available at https://www.bancaditalia.it/compiti/vigilanza/normativa/archivio norme/disposizioni/Provv_22_09_15_UGC.pdf.
( 6 ) Provvedimento n. 1226609/15, del 18 novembre 2015, istitutivo del Fondo Nazionale di Risoluzione, https://www.bancaditalia.it/compiti/risoluzione-gestione-crisi/provvedimenti-crisi/2015/provv-generali/RGC_FONDO_NAZIONALE_RISOLUZIONE_181115.pdf.
( 7 ) Banca della Marche SpA, Banca Popolare dell’Etruria e del Lazio s.c.p.a., Cassa di Risparmio della Provincia di Chieti SpA and Cassa di Risparmio di Ferrara SpA.
( 8 ) Banca d’Italia, Rendiconto del Fondo nazionale di risoluzione, anno 2015, p. 6, available at https://www.bancaditalia.it/pubblicazioni/rendiconto-fondo-nazionale-risoluzione/2016-rendiconto-fondo-nazionale-risoluzione/Rendiconto-dei-fondi-di-risoluzione.pdf.pdf.
( 9 ) In its submission, since SSB Italia was only subject to Italian supervision from 1 January 2015 to 30 June 2015, the most that could have been requested from it was half of the annual ordinary contribution fixed in the contested measures. It was not possible to levy the extraordinary contribution, which was established when SSB Italia was already outside the scope of Italian supervision and the Italian resolution system.
( 10 ) Regulation of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ 2014 L 225, p. 1).
( 11 ) Pursuant to Article 101(2) of Directive 2014/59, the financing arrangement ‘shall not be used directly to absorb the losses of an institution or an entity referred to in point (b), (c) or (d) of Article 1(1) or to recapitalise such an institution or an entity’.
( 12 ) Recitals 104 and 105 and Article 100 of Directive 2014/59.
( 13 ) During that period, ordinary contributions should be spread out in time as evenly as possible until the target level is reached, by taking into account the phase of the business cycle and the impact that pro-cyclical contributions may have on the financial position of contributing institutions.
( 14 ) The ordinary contribution consists of a fixed amount, determined on the basis of that institution’s liabilities (basic annual contribution), to which another amount is added, calculated on the basis of the institution’s risk profile (additional risk adjustment).
( 15 ) The SRF does not operate in respect of Member States which are outside the banking union. In those States, national resolution funds continue to operate pursuant to Directive 2014/59 and the rules on its implementation and application.
( 16 ) The SRF’s revenue consists of ordinary contributions, extraordinary contributions and alternative funding means.
( 17 ) In 2024, the financial means must reach at least 1% of the amount of covered deposits of all credit institutions authorised in all of the participating Member States.
( 18 ) Article 4 of Council Implementing Regulation (EU) 2015/81 of 19 December 2014 specifying uniform conditions of application of Regulation (EU) No 806/2014 of the European Parliament and of the Council with regard to ex ante contributions to the Single Resolution Fund (OJ 2015 L 15, p. 1) refers to Delegated Regulation 2015/63.
( 19 ) Text available at: http://register.consilium.europa.eu/doc/srv?l=EN&f=ST%208457%202014%20INIT.
( 20 ) The second paragraph of Article 77 of Regulation No 806/2014 provides that, during the eight-year transitional period, the SRB is to use the SRF ‘in accordance with principles founded on a division of the Fund into national compartments corresponding to each participating Member State, as well as on a progressive merger of the different funds raised at national level to be allocated to national compartments of the Fund, as laid down in the Agreement’.
( 21 ) According to data from the SRB, ordinary contributions in 2018 came to EUR 7.5 billion, as a result of which the SRF has already collected around EUR 24.9 billion of the approximately EUR 56.3 billion it aims to reach in 2024 (that amount is equivalent to 1% of the deposits of financial institutions which are part of the SRM). See https://srb.europa.eu/en/content/ex-ante-contributions-0.
( 22 ) The Spanish version of Article 12(2) of Delegated Regulation 2015/63 uses the term ‘cambio de condición’. Other language versions use ‘cambio de estatuto’: ‘changement de statut’ in French; ‘change of status’ in English; ‘cambiamento di status’ in Italian; ‘alteração do estatuto’ in Portuguese; and ‘Statusänderung’ in German. Although the term ‘cambio de estatuto’ would have been more accurate, in reality it is equivalent to the concept of ‘cambio de condición’, and therefore the language versions do not diverge significantly.
( 23 ) Judgments of 17 April 2018, Egenberger (C‑414/16, EU:C:2018:257, paragraph 44); of 10 December 2018, Wightman and Others (C‑621/18, EU:C:2018:999, paragraph 47); and of 26 February 2019, Rimšēvičs and ECB v Latvia (C‑202/18 and C‑238/18, EU:C:2019:139, paragraph 45).
( 24 ) Under Article 8(5) of Implementing Regulation 2015/81, institutions whose total assets are equal to, or less than, EUR 3000000000 can pay a simplified ordinary contribution in the form of a lump sum of EUR 50000 for the first EUR 300000000 of total liabilities, less own funds and covered deposits, while, in relation to total liabilities less own funds and covered deposits above that amount, they must contribute in accordance with the general rules in Articles 4 to 9 of Delegated Regulation 2015/63. Recital 18 to that regulation states that that simplified calculation of those institutions’ contributions ‘would also prevent possible short-term changes in the status that these institutions might undertake in order to qualify for the application of Article 10 of Delegated Regulation (EU) 2015/63’.
( 25 ) ‘Merger by acquisition’ is ‘the operation whereby one or more companies are wound up without going into liquidation and transfer to another all their assets and liabilities in exchange for the issue to the shareholders of the company or companies being acquired of shares in the acquiring company and a cash payment, if any, not exceeding 10% of the nominal value of the shares so issued or, where they have no nominal value, of their accounting par value’, according to Article 89(1) of Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (OJ 2017 L 169, p. 46).
( 26 ) Recital 113 to Directive 2014/59 states that ‘the setting up of financing arrangements establishing the European system of financing arrangements laid down in this Directive should ensure coordination of the use of funds available at national level for resolution’.
( 27 ) Article 3(6) of Delegated Regulation 2015/63 provides that a ‘contribution period’ is a calendar year.
( 28 ) That data must be provided at the latest by 31 January each year in respect of the year ended on 31 December of the preceding year, or of the applicable relevant financial year, pursuant to Article 14(4) of Delegated Regulation 2015/63. The resolution authority must notify each institution of its decision determining the annual contribution due at the latest by 1 May each year, in accordance with Article 13(1) of that regulation.
( 29 ) 2015 was a transitional year in which national resolution authorities allocated and collected annual contributions; in 2016, the determination of those contributions was the responsibility of the SRB, while collection remained in the hands of national authorities. National funds transferred contributions collected in 2015 to the SRF, and, since 2016, all annual contributions are transferred to the SRF so that they can be progressively mutualised.
( 30 ) In its submission, to require SSB International to pay the ordinary contribution to the Italian national fund as a result of operations carried out in Italy in 2015 by SSB Italia would have the effect of requiring it to take out ‘insurance coverage’ (i) in respect of a risk that the applicant is not involved in creating (since it is not part of the Italian system) and (ii) that could never be called upon, since SSB International could never benefit from the resolution measures financed by the Italian fund, as it is subject to the powers of the German resolution authority.
( 31 ) Article 104(4) of Directive 2014/59 empowers the Commission to adopt delegated acts to specify the circumstances and conditions of such deferral; to date, that delegation has not been implemented.
( 32 ) At point 22 of this Opinion, I give details of the figures for the resolution of four institutions, carried out on 22 November 2015 by Banca d’Italia.
( 33 ) In fact, Delegated Regulation 2015/63 applies only to ordinary contributions.
( 34 ) The short transposition period for that directive, which was officially published on 12 June 2014 and had to be transposed into national law by 31 December 2014, led to delays in its transposition, as occurred in Italy.
( 35 ) Transitional provisions must be interpreted strictly and cannot be applied by analogy because they derogate from the general provisions of an EU measure. See, inter alia, judgments of 7 December 2006, Eurodental (C‑240/05, EU:C:2006:763, paragraph 54), and of 12 June 2008, Commission v Portugal (C‑462/05, EU:C:2008:337, paragraph 54).
( 36 ) According to settled case-law, a Member State cannot enforce against individuals a provision of a directive which has not been transposed into its national law (judgments of 22 November 2017, Cussens and Others, C‑251/16, EU:C:2017:881, paragraph 49, and of 21 September 2017, DNB Banka, C‑326/15, EU:C:2017:719, paragraph 41). A directive cannot by itself create obligations for individuals and cannot, therefore, be relied upon per se as against individuals (judgments of 26 February 2019, N Luxembourg 1 and Others, C‑115/16, C‑118/16, C‑119/16 and C‑299/16, EU:C:2019:134, paragraph 114, and of 5 July 2007, Kofoed, C‑321/05, EU:C:2007:408, paragraph 42).
( 37 ) In Article 115 of Directive 2014/59, the Commission is granted powers to adopt delegated acts.
( 38 ) In the case of a delegated power for the purposes of Article 290 TFEU, the Court’s case-law stipulates that it is necessary to verify that the EU authorities have not exceeded the limits of the power conferred on them by the enabling act, bearing in mind that such a delegated power must in any event comply with the essential elements of the enabling act and come within the regulatory framework as defined by the basic legislative act (see judgments of 18 March 2014, Commission v Parliament and Council, C-427/12, EU:C:2014:170, paragraph 38, and of 17 March 2016, Parliament v Commission, C-286/14, EU:C:2016:183, paragraph 30).
The Court’s case-law requires that the definition of the power conferred is sufficiently precise, in that it must indicate clearly the limits of the power and must enable the Commission’s use of the power to be reviewed by reference to objective criteria fixed by the EU legislature (see judgments of 5 July 1988, Central-Import Münster v Hauptzollamt Münster, 291/86, EU:C:1988:361, paragraph 13; of 12 July 2005, Alliance for Natural Health and Others, C-154/04 and C-155/04, EU:C:2005:449, paragraph 90; and of 26 July 2017, Czech Republic v Commission, C-696/15 P, EU:C:2017:595, paragraph 49).