Documents considered by the Committee on 8 May 2019 Contents

2Rule of law in the EU

Committee’s assessment

Legally and politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Justice Committee, the Foreign Affairs Committee and the Joint Committee on Human Rights

Document details

Proposed Council Decisions pursuant to Article 7(1) TEU on the determination of a clear risk of a serious breach of (a) Union values in the case of Hungary and (b) the Rule of Law in the case of Poland; (c) Commission Communication- Further strengthening the Rule of Law within the Union State of play and possible next steps

Legal base

(a) and (b) Article 7(1) TEU; majority (four fifths); EP consent; (b)—


Ministry of Justice AND Foreign and Commonwealth Office

Document Numbers

(a) (40077), 12266/18 + ADD 1; (b) (39401), 16007/17, COM(17) 835; (c) (40503), 8312/19, COM(19) 163

Summary and Committee’s conclusions

2.1The Rule of Law is one of the EU’s founding values as well as a common constitutional tradition in Member States. At an EU level, it is enshrined in Article 2 TEU.5 The Communication (document (c)) explains that “the rule of law includes amongst others, principles such as legality, implying a transparent, accountable, democratic pluralistic process for enacting laws, legal certainty, prohibiting the arbitrary exercise of executive power, effective judicial protection by independent and impartial courts, effective judicial review, including respect for fundamental rights, separation powers and equality before the law”.6

2.2The Communication also considers the EU’s current mechanisms for resolving Rule of Law breaches including Article 7 TEU and the Commission’s 2014 Rule of Law Framework.7 It is helpfully summarised in this Commission Press Release. The Framework enables a dialogue with Member States with the aim of preventing a systemic threat to the Rule of Law which would require an Article 7 TEU intervention. The Framework, to date, has only been used once and unsuccessfully to start a dialogue with Poland in January 2016. This led to the Commission initiating the Article 7 TEU procedure against Poland in December 2017 in relation to concerns about judicial independence (see document (b)). That process was subsequently initiated by the EP against Hungary in September 2018 (see document (a)) due to numerous concerns relating to the constitution, electoral system, courts, freedom of expression and association, and minority rights.

2.3Our previous Reports (as listed at the end of this Report chapter) on documents (a) and (b) and the Article 7 processes concerning Poland and Hungary set out the background to and developments to those documents. This chapter focuses on the Communication (document (c)).

2.4Before turning to the Communication, we draw to the attention of the House that we have under separate scrutiny a proposed Regulation on the Rule of Law and the EU budget.8 As we explained in our Report on that document, this proposes that where the Commission believes that there is a threat to the rule of law in an EU country which poses a risk to the “sound financial management or the protection of the financial interests of the Union”, it would be able to suspend or even terminate an agreement for EU funding where a ‘government entity’ in the Member State in question is the recipient. Risks to the EU budget could, for example, relate to fraudulent use of EU money; improper public procurement exercises; or a lack of effective and independent judicial oversight of the government entities that manage EU budgetary allocations. We understand that negotiations of that proposal may have partly been delayed by an Opinion9 of the Council Legal Service questioning its legality (a redacted version is only available publicly).

2.5The Communication considers:

2.6Also in discussion between Member States is a new Rule of Law Mechanism which has been proposed by the German and Belgium Foreign Ministries as an intergovernmental, voluntary approach to reflecting on rule of law standards across the EU.10

2.7Member States are invited to consider future avenues of promotion, prevention, and common response to improve the current process. There will be a meeting in June 2019 where these issues will be addressed further where is it always possible that legislative proposals could be brought forward.

2.8In his Explanatory Memorandum of 18 April, the Parliamentary Under-Secretary of State at the Ministry of Justice (Edward Argar MP) reiterates and adds to the previous position of the Government, taking into account any new considerations highlighted in the Communication. He says:

2.9Turning to the intergovernmental Rule of Law Mechanism, the Minister tells us that the aim is to promote and strengthen the respect for the Rule of Law through discussions among peers. As a voluntary mechanism, it would run parallel to existing EU Rule of Law mechanisms. However, current timescales and processes are unclear. The initiative was discussed at the General Affairs Council of 19 March 2019. While the UK supports the mechanism in principle, the Minister says that it would not be appropriate for the UK to participate in discussions at this time. This is because of uncertainty over the dates for the UK’s exit from the EU and the application of the mechanism.

2.10Further developments in the Article 7(1) process against Poland and Hungary are addressed in the Supplementary section of the Government’s Explanatory Memorandum and summarised at paragraph 16 below.

Our Conclusions

2.11We thank the Minister for his Explanatory Memorandum on the Commission Communication and his supplementary updates on the state of play in the Article 7 TEU process relating to Poland and Hungary (documents (a) and (b)). We ask him to continue to keep us informed of further developments. We would be particularly interested to learn whether the Government has intervened or is considering intervention in any of the ongoing proceedings in the CJEU against Poland11 and Hungary.12

2.12We note that the Government continues to maintain its neutral approach to the Article 7 TEU process against Poland and Hungary in its all Explanatory Memoranda on that process and now the Commission Communication. This seems to draw from a belief that each Member State’s respect for the Rule of Law is a primarily matter of national sovereignty. We also note the preference amongst other Member State for intergovernmental dialogue on Rule of Law issues.

2.13But non-compliance with the Rule of Law lies firmly within the EU’s supranational remit based on both Article 2 and 7 TEU. Likewise, for the Court of Justice, certainly so far as effective judicial protection and independence are concerned.13 The Court’s jurisdiction over these matters seems clear: national courts act as EU courts, for example when enforcing EU rights directly in direct effect or state liability cases or when both requesting and apply CJEU rulings as part of the preliminary reference process. Every ruling from the CJEU becomes part of the EU acquis which the UK and other Member States must follow. In the face of the reluctance of the Council to take action against non-compliant Member States as seen in the Article 7 processes and the proposed Regulation on the Rule of Law and EU budget,14 we would ask the Minister whether:

2.14The Government is clear that it is not participating in discussions concerning the proposed intergovernmental initiative mentioned in the Communication. This, it explains, it is due to uncertainty over the UK’s exit day and the date of application of a new mechanism. We ask the Minister to confirm whether this abstinence is a direct example of the UK acting as indicated Recital 10 of the second European Council Decision of 11 April to extend the Article 50 process. In other words, although the UK retains it full membership rights during the extension, it is expected to exercise them in accordance with the principle of sincere cooperation given that it is a “withdrawing Member State”. This strikes us as a potentially important and serious area of discretion for the Government. We therefore request that as on this dossier, the Government is clear about when it is holding back from exercising its full membership rights under the EU Treaties because it judges it to be inappropriate to do so as an exiting Member State. To hold the Government to account for such discretionary self-denial of exercise of Treaty rights falls squarely within the remit of this Committee. We also note that such an approach would put the Government in contradiction with the standard paragraph in all of its Explanatory Memoranda, which states that “Until exit negotiations are concluded, the UK remains a full member of the EU and all the rights and obligations of EU membership remain in force. During this period, the Government will also continue to negotiate, implement and apply EU legislation”.

2.15Pending the Minister’s response, we will keep the documents under scrutiny but draw them to the attention of the Justice Committee, the Foreign Affairs Committee and the Joint Committee on Human Rights.

Update on the Article 7 TEU processes relating to Poland and Hungary

2.16The Government summarises developments in the Article 7 TEU processes against Poland and Hungary as follows:

Full details of the documents

(a) Proposed for a Council Decision determining pursuant to Article 7 of the Treaty on the European Union, the existence of a clear risk of a serious breach by Hungary of the values on which the Union is founded: (40077), 12266/18 + ADD 1; (b) Proposal for a Council Decision on the determination of a clear risk of a serious breach by the Republic of Poland of the rule of law: (39401), 16007/17, COM(17) 835; (c) Communication from the Commission to the European Parliament, the European Council and the Council—Further strengthening the Rule of Law within the Union State of play and possible next steps: (40503), 8312/19, COM(19) 163.

Previous Committee Reports

(a) and (b): Fortieth Report HC 301–xxxix (2017–19), chapter 5 (17 October 2018); (b) Fourteenth Report HC 301–xiv (2017–19), chapter 5 (21 February 2018); Also see: (35878), 7632/14: Thirty-fifth Report HC 71–xxxiii (2016–17), chapter 13 (15 March 2017); Thirty-ninth Report HC 219–xxxvii (2014–15), chapter 3 (24 March 2015); Thirty-sixth Report HC 219–xxxv (2014–15), chapter 1 (11 March 2015); Forty-eighth Report HC 83–xliii (2013–14), chapter 1 (7 May 2014).

5 Article 2 TEU provides that “The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail”.

6 This is compatible with the widely accepted view in the UK of the Rule of Law as encapsulated by Lord Bingham in his book on the Rule of Law. See for example this lecture by him, setting out his eight principles of the Rule of Law.

7 See the previous Committee’s Reports on the Framework: (35878), 7632/14: Thirty-fifth Report, HC 71–xxxiii (2016–17), chapter 13 (15 March 2017); Thirty-ninth Report HC 219–xxxvii (2014–15), chapter 3 (24 March 2015); Thirty-sixth Report HC 219–xxxv (2014–15), chapter 1 (11 March 2015); Forty-eighth Report HC 83–xliii (2013–14), chapter 1 (7 May 2014).

8 Proposal for a Regulation of the European Parliament and of the Council on the protection of the Union’s budget in case of generalised deficiencies as regards the rule of law in the Member States: (39685), 8356/18, COM(18) 324.

9 Commented on by the Verfassungsblog of 12 November 2018 which appears to have had access to the Opinion. See “Never Missing an Opportunity to Miss an Opportunity: The Council Legal Service Opinion on the Commission’s EU budget-related rule of law mechanism “by Kim Lane Scheppele, Laurent Pech, R. Daniel Kelemen.

10 Described in this article in EURACTIV OF 19 March 2019.

11 There are two sets of infringement proceedings against Poland on which the CJEU has yet to fully adjudicate. Commission v Poland C619/18 (concerning the Polish Supreme Court) and Commission v Poland C192/18 (concerning the Polish Ordinary Courts). The CJEU issued interim measures concerning the lowering of the retirement age for judges in the former case and the AG has issued an opinion. The hearing on the latter case took place on 8 April 2018. The Commission also announced on 3 April the commencement of new infringement proceedings concerning the new Polish disciplinary regime for judges.

12 There have been several infringements proceedings and, in some cases, CJEU rulings against Hungary which arguably engage Rule of Law issues. For example, in relation to early retirement for the judiciary (C286/12), the Higher Education law and restrictions on academic freedom (C66/18), restrictions on civil organisations receiving foreign grants (C78/18) and effective judicial remedies and asylum (see Commission Press Release July 2018).

13 For an assessment of recent developments in the CJEU concerning judicial independence and “effective judicial protection”, see EU Law Analysis, 15 April 2019, “Does Poland infringe the principle of effective judicial protection”, Femke Gremmelprez, Ghent European Law Institute. This includes consideration of the 2018 CJEU judgment in the Associação Sindical dos Juízes Portugueses case (C64/16)/.

14 Proposal for a Regulation of the European Parliament and of the Council on the protection of the Union’s budget in case of generalised deficiencies as regards the rule of law in the Member States: (39685), 8356/18, COM(18) 324.

15 Case C-619/18, European Commission v Republic of Poland.

16 He found that the law breaches the principle of the irremovability of judges (security of tenure) and judicial independence under the second subparagraph of Article 19(1) TEU and Article 47 of the Charter of Fundamental Rights (right to an effective remedy and fair trial).

Published: 14 May 2019