Bye, bye ECJ, hello to EGC – change of jurisdiction at the EU courts
Brigitte Jakoby
by Brigitte Jakoby
So far, only the European Court of Justice (ECJ) has decided on the application and interpretation of European Union (EU) law at the EU level. This will now be transformed in areas such as value-added tax (VAT), customs, excise duties, and the tariff classification of goods in the combined nomenclature.
Background
In the EU, VAT, customs and excise tax law are harmonised areas of law. In order to ensure that EU law is applied uniformly in member states, to date the ECJ has exclusively decided on its interpretation, and the national courts of member states are bound by it. National courts can turn to the ECJ for a preliminary ruling if there are doubts about the validity or interpretation of EU law. If there are doubts, national courts of last instance are even obliged to refer to the ECJ. On the other hand, the plaintiff and defendant in a legal dispute only have the option of requesting a referral to the ECJ from the national court. Until now, it has been the sole competence of the ECJ to decide on such requests for preliminary rulings. In addition to the ECJ, there is also the European General Court (EGC) at the EU level. Until now this court has mainly dealt with actions for annulment, i.e. actions against legal acts of the EU institutions.
In future, the EGC will generally be responsible for preliminary ruling proceedings in areas such as the common VAT system, excise duties, the Customs Code, and the tariff classification of goods in the combined nomenclature. These areas of law were chosen for the reform primarily because they supposedly rarely raise fundamental issues that affect the unity or coherence of EU law. In addition, there is already extensive ECJ case law in this area that the EGC can rely on.
The reform should ultimately lead to a reduction in the workload of the ECJ so it can concentrate more on its tasks as the constitutional and supreme court of the EU. The transfer of jurisdiction applies to requests for preliminary rulings submitted by member-state national courts from 01 October 2024 onwards. Requests that cannot be allocated exclusively to these subject areas will remain with the ECJ. As before, the national courts will always submit requests to the ECJ first.
After a preliminary examination and hearing of the Vice-President and the First Advocate General, the President of the ECJ decides whether to refer the case to the EGC. If, on closer examination, the EGC determines that the question does fall within the jurisdiction of the ECJ, it must refer the case to the ECJ. The ECJ and the EGC have decided on further procedural innovations. In favour of greater transparency and openness, pleadings submitted by all parties to the preliminary ruling procedure are to be published on the ECJ website after the conclusion of the procedure. However, each party may object to the publication of its written submissions.
The ECJ and the EGC have also decided that the parties and their representatives will be able to participate by video conference in future. Furthermore, EU citizens and referring courts will be given the opportunity to follow public court hearings remotely. In addition, the video recordings will be available on the Court's website for up to one month after the hearing. However, parties to the proceedings may object to this.
The future will show in which preliminary ruling proceedings the ECJ will act, and which cases will be transferred to the EGC. In the areas which are now assigned to the EGC, questions with major implications for EU member states may arise. How this will be managed now is yet to be seen.
In 1987, Brigitte Jakoby started collaborating with her husband Eugen Jakoby, also a German chartered accountant and German certified tax advisor. Since 1996, she has been a senior partner at Jakoby Dr. Baumhof. Contact Brigitte.
GGI Member FirmJakoby Dr Baumhof – Wirtschaftsprüfer Steuerberater RechtsanwälteRothenburg o.d.T., Ebersberg, GermanyT: +49 98 619 40 50
Advisory, Auditing & Accounting, Corporate Finance, Law Firm Services, Tax
Jakoby Dr Baumhof – Wirtschaftsprüfer Steuerberater Rechtsanwälte is a medium-sized, interdisciplinary company located in the south of Germany, with offices in Rothenburg ob der Tauber, located in Northern Bavaria, and Ebersberg, near Munich.
