The Court proceedings
53. In the Court proceedings the Parliament sought
the annulment both of the Commission Adequacy Decision and of
the Council Decision authorising the signature of the Agreement.[29]
The grounds advanced for annulment of the Adequacy Decision were
that it was ultra vires, in breach of the fundamental principles
of the Directive, in breach of fundamental rights and in breach
of the principle of proportionality. The EDPS intervened on behalf
of the Parliament, and the United Kingdom on behalf of the Commission
and the Council.
54. In his Opinion of 22 November 2005 Advocate-General
Léger advised that the Adequacy Decision was unlawful,
since the Directive on which it was based was an EC (first pillar)
instrument, and therefore inappropriate for dealing with third
pillar matters.[30] Making
PNR data available to CBP constituted "personal-data processing
operations which concern public security and relate to State activities
in areas of criminal law. Those processing operations are, therefore,
excluded from the material scope of Directive 95/46."[31]
The Advocate-General also took the view that the legal base for
the Council Decision (Article 95 TEC) was defective, the object
of the Agreement being the prevention of terrorism and other serious
crime, and the relationship with the single market being only
"incidental". If the Court agreed with him, this was
enough to conclude the case. Since however it was open to the
Court to disagree with him on this issue, he went on to consider
the substantive complaint about the data protection issues, and
found that the Undertakings were adequate, as was the procedure
leading to the conclusion of the Agreement.
55. In its judgment of 30 May 2006[32]
the Court agreed with the Advocate-General on the issue of legality,
holding that activities under Title VI of the Treaty on European
Union, such as activities in the fields of public security, State
security and the activities of the State in areas of criminal
law, fell outside the scope of the Directive. The Court also agreed
that Article 95 did not provide an adequate legal base for the
Council Decision. It accordingly annulled both Decisions, and
concluded that it was unnecessary to consider the Parliament's
other arguments. Given the consequences of its judgment, the Court
preserved the effect of the Adequacy Decision until 30 September
2006 to allow time for the first pillar Agreement to be denounced
and a third pillar Agreement to be negotiated.
56. The result of the Parliament's challenge
on legality was therefore that:
- it rendered consideration of the
substantive issues unnecessary, so that the Parliament obtained
no ruling on the one matter on which it wanted a ruling;
- it struck down the 2004 Agreement which, though
in its view inadequate, was better than nothing;
- by moving the matter from the first pillar to
the third pillar, it ensured that the Parliament would have no
formal say in the negotiation of any subsequent agreement.
29 
