Opinion of Advocate General Jääskinen delivered on 13 March 2014

1. Introduction

6. The Estonia-Latvia Programme 2007-2013 constitutes an ‘operational programme’ under Article 2(1) of Regulation No 1083/2006. Moreover, as a territorial cooperation project involving more than one Member State, it is also governed by Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund and repealing Regulation (EC) No 1783/1999.⁽⁵⁾

2. Legal framework

7. The operational programme was approved by Commission decision C (2007) 6603 final of 21 December 2007,⁽⁶⁾ and was drawn up with the objective of promoting European territorial cooperation. It receives Community aid from the European Regional Development Fund (the ‘ERDF’).

8. Basic management structure for European Regional Development fund programmes is provided for in Article 59(1) of Regulation No 1083/2006, which states that for each operational programme, the Member State shall designate a managing authority, a certifying authority, and an audit authority. However, Article 59(5) of Regulation No 1083/2006 provides that specific rules on management and control are laid down in Regulation No 1080/2006 for operational programmes falling within the European territorial cooperation objective.

9. Article 60 of Regulation No 1083/2006 sets out the functions of the managing authority which is to be responsible for managing and implementing the operational programme in accordance with the principle of sound financial management. Among other things, the managing authority is responsible for ensuring that operations are selected for funding in accordance with the criteria applicable to the operational programme and that they comply with applicable Community and national rules for the whole of their implementation period. The managing authority is to guide the work of the monitoring committee and provide it with the documents required to permit the quality of the implementation of the operational programme to be monitored in the light of its specific goals.

10. Article 63 of Regulation No 1083/2006, cited in the preliminary reference as the pertinent EU law provision, introduces the monitoring committee. Pursuant to it, each Member State is given a time limit to set up a monitoring committee for each operational programme, in agreement with the managing authority. A single monitoring committee may be set up for several operational programmes. Each monitoring committee is bound to draw up its rules of procedure within the institutional, legal and financial framework of the Member State concerned and adopt them in agreement with the managing authority in order to exercise its missions in accordance with the regulation.⁽⁷⁾

11. Under Article 70(1)(a) of Regulation No 1083/2006, the Member States shall be responsible for the management and control of operational programmes, and vested with specific tasks.

12. As to the special rules applicable to territorial cooperation programmes, Article 14 of Regulation No 1080/2006 states, inter alia, that Member States participating in an operational programme shall appoint a single managing authority, a single certifying authority and a single audit authority, the latter being situated in the Member State of the managing authority. The managing authority, after consultation with the Member States represented in the programme area, is to set up a joint technical secretariat. It is to assist the managing authority and the monitoring committee in carrying out their respective duties. Each Member State participating in the operational programme shall appoint representatives to sit in on the monitoring committee referred to in Article 63 of Regulation No 1083/2006.

13. Article 15(1) of Regulation No 1080/2006 states, inter alia, that the managing authority shall, subject to exceptions, perform the duties provided for in Article 60 of Regulation No 1083/2006.

14. Pursuant to Article 19(3) of Regulation No 1080/2006, in addition to the tasks referred to in Article 65 of Regulation No 1083/2006, the monitoring committee or a steering committee reporting to it shall be responsible for selecting operations.

15. In order to implement the Estonia-Latvia Programme 2007-2013 a separate management system was established in accordance with a common agreement struck between the two governments and the Ministry of the Interior of the Republic of Estonia. The management structure is mainly located in Estonia.

16. The Ministry of the Interior of the Republic of Estonia performs the task of the Managing Authority (see Chapter 7.2.1 of the Estonia-Latvia Programme 2007-2013), the Certifying Authority (see Chapter 7.3.1 of the Estonia-Latvia Programme 2007-2013) and the Audit Authority (see Chapter 7.4.1 of the Estonia-Latvia Programme 2007-2013). The Managing Authority set up a Joint Technical Secretariat (JTS) (Chapter 7.7 of the Estonia-Latvia Programme 2007-2013) which administers the operational programme.

17. In addition, a Monitoring Committee consisting of seven members from both Estonia and Latvia was also created. This occurred by virtue of the common agreement referred to in paragraph 15 above, Article 14(3) of Regulation No 1080/2006, Articles 63 and 64 of Regulation No 1083/2006, and Chapter 7.6.2 of the Estonia-Latvia Programme 2007-2013. It is a decision of this body that is challenged in the main litigation.

18. The Monitoring Committee adopted a Programme Manual containing guidelines on preparing aid applications as well as on implementing and monitoring the project, reporting on it and completing it. Chapter 7.6.3 of the Estonia-Latvia Programme 2007-2013 provides that the ‘Monitoring Committee shall draw up its Rules of Procedure and adopt them in agreement with the Managing Authority in order to exercise its missions in accordance with the General Regulation and the ERDF Regulation’.⁽⁸⁾

19. Chapter 6.6 of the Programme Manual provides: ‘The decisions of the MC [Monitoring Committee] are not appealable’.

20. Paragraph 1(3) of the 2007 to 2013 Estonian Structural Assistance Act (Perioodi 2007-2013 struktuuritoetuse seadus, StS 2007-2013) states that various sections of the Act apply to the grant and use of structural assistance based on the operational programmes of European territorial cooperation objective specified in Article 3(2)(c) of Regulation No 1083/2006. Pursuant to Paragraph 1(5) of the Estonian Structural Assistance Act, the provisions of the Law on administrative procedure (haldusmenetluse seaduse) apply to the proceedings prescribed in this Act, taking account of the specifications arising therefrom.⁽⁹⁾

1. Preliminary remarks

45. Firstly, it is important to specify the arm of Article 47 of the Charter that is at issue in these proceedings. Like Article 6(1) of European Convention on Human Rights (the ‘ECHR’), Article 47 of the Charter refers to a number of different rights that are essential to the administration of justice. These include the right to a fair and impartial hearing, which is to take place within a reasonable time, and the availability of effective remedies, to name only a few of its elements. The case file shows that the dispute to hand concerns an alleged infringement of the right of access to a court, since the Programme Manual imposes a blanket ban on the adjudication of the decision in issue.⁽²⁵⁾

46. By its first question, the Tartu Ringkonnakohus asks in essence whether the Monitoring Committee, in adopting its rules of procedure under Article 63(2) of Regulation No 1083/2006, and by excluding judicial review of its own decisions, has complied with Article 47 of the Charter. However, as noted above, the pertinent provision in disputes, like the case to hand, involving European territorial cooperation, is Article 19(3) of Regulation No 1080/2006 and not Article 63(2) of Regulation No 1083/2006.

47. As I have already mentioned, in essence this case turns on whether the ban imposed by Chapter 6.6 of the Programme Manual, and indeed Estonian law if the findings of the Tartu Halduskohus are correct, breach the right of access to a court. However, as will be explained below, this arm of Article 47 of the Charter equally binds Member State courts to respect the principles of effectiveness and equivalence, which are also pertinent. Under the former principle Member States are bound to ensure that the remedies and procedural rules available to enforce rights arising from EU law do not render them impossible in practice or excessively difficult to enforce. Under the latter, Member State remedies and procedural rules must not be less favourable than those attaching to analogous claims of a purely domestic nature.⁽²⁶⁾ In my opinion, the principles of effectiveness and equivalence need to be brought under the umbrella of Article 47 of the Charter.⁽²⁷⁾

48. The European Union is based on the rule of law, inasmuch as neither its Member States nor its institutions can avoid review of the question of whether the measures adopted by them are in conformity with the basic constitutional charter,⁽²⁸⁾ namely the EU the FEU Treaties and the Charter. In my opinion, and contrary to the concerns expressed by the representative of Latvia at the hearing on the consequences of allowing judicial review of cross-border measures, it would be inconceivable for implementation of an EU programme to escape all judicial control merely through involvement of more than one Member State.

49. That said, subject to the guidance suggested below, it is for the national referring court to decide whether the judicial review arrangements in issue comply with the right of access to a court, as protected by Article 47 of the Charter. As a matter of EU law, it is free to apply its own remedies and procedural rules, subject to the principles of effectiveness and equivalence. Given that the dispute entails implementation of EU law, the substantive grounds of review which the Member State court is bound to apply include general principles of law and fundamental rights, along with the grounds of review available under Member State administrative law.⁽²⁹⁾

50. Further, in my opinion EU law does not preclude the Member States from laying down more generous conditions for access to courts and judicial review than EU law, provided that it does not endanger the effective implementation of EU law. This applies both to the conditions for the grant of locus standi and the criteria for determining reviewable acts.⁽³⁰⁾

51. For a correct understanding of the role of the general principles of EU law and Article 47 of the Charter for the case to hand, it is important to distinguish between two issues; namely (i) whether there has been a legally binding rejection of the application by MTÜ Liivimaa Lihaveis for funding under the Estonia-Latvia Programme and (ii) at which stage of the administrative procedure this took place. In other words, what was the decisive step in this respect? It is the first issue where Article 47 of the Charter is directly relevant, whereas the second issue is a matter for national procedural autonomy as limited by the general EU law principles of effectiveness and equivalence, the latter being an expression of the more general principle of non-discrimination.

2. Article 47 of the Charter and the right of access to a court

52. It is important to bear in mind that, due to Article 6(1) TEU, the Charter forms part of the primary law of the European Union. That being so, all EU legislation, including Article 19(3) of Regulation No 1080/2006, must be interpreted in conformity with Charter rights.⁽³¹⁾

53. The Court has noted that the European Court of Human Rights considers, in determining whether there has been a breach of the right of access to a Court, ‘whether the limitations … had undermined the very core of that right, whether those limitations pursued a legitimate aim and whether there was a reasonable relationship of proportionality between the means employed and the legitimate aim sought to be achieved’.⁽³²⁾ Given the absolute nature of the alleged restriction on the right of access to a Court that is in issue in this case, weighty reasons indeed would be required before it could be justified.

54. It is beyond doubt that Estonia and Latvia are bound to comply with the right of access to a Court, as protected by Article 47 of the Charter, when they apply and implement the programme. Further, the Monitoring Committee itself is bound by this fundamental right. I recall that it is the Monitoring Committee that adopted the Programme Manual containing the impediment to access to a court.

55. I am deeply convinced that a clearly non-legislative body like the Monitoring Committee cannot have competence to exclude judicial review of its own decisions with an effect that binds the relevant national courts. It would not fulfil the criteria ‘provided for by law’ which is required of any limitation on exercise of the rights recognised by the Charter.⁽³³⁾ Therefore, if any exclusion of access to justice regarding the decisions of the Monitoring Committee can lawfully be provided in this case, it must be a consequence of a clearly prescribed Estonian law, not of the Programme Manual.

56. In consequence, Article 47 of the Charter underscores the principles of the established case law to the effect that decisions refusing EU funding made by national authorities exercising implementing powers are to be open to judicial review.⁽³⁴⁾

3. Article 47 of the Charter and the principles of effectiveness and equivalence

57. As I have already mentioned, the procedural and remedial autonomy of the national referring court is circumscribed by the principles of effectiveness and equivalence. As stated in paragraph 47, in my opinion these rules now fall under the umbrella of Article 47 of the Charter.

58. This is the background against which an assessment is to be made of whether the decision of the Monitoring Committee is a reviewable act in its own right, or only an internal procedural step before the final decision is taken by the Managing Authority. In the case of the latter alternative, account must also be taken of the fact that according to the Programme Manual (paragraph 6.7) the final step in the award of ERDF funding consists of the conclusion of a Subsidy Contract between the Managing Authority and the Lead Partner of the approved project. In other words, it is possible that the decision-making process does not lead to any administrative decision in the classical sense but to a private law or administrative law contract between the Managing Authority and the Lead Partner.

59. It may helpful to recall that at the EU level, in order to determine whether an administrative order brings about a distinct change in the applicant’s legal position, it is necessary to look at the actual substance of the act challenged,⁽³⁵⁾ rather than form,⁽³⁶⁾ and the relevant background legal relations.⁽³⁷⁾

60. Thus, acts which, although adopted in the course of a preparatory procedure, mark the culmination of a distinct stage in the main procedure and produce legal effects⁽³⁸⁾ attract the right to judicial review. It is useful to point out that the Court has ruled specifically on the legal effects of decisions taken by EU bodies precluding certain applicants from EU funding in the early stages of a multi-stage process. The Court has held that the drawing-up of lists can entail legal effects, in so far as it may result in the omission of certain undertakings from those lists and thus deprive them of participating in contracts.⁽³⁹⁾

61. Here I would add that, in modern administrative multistage decision-making, the outcome may not be an administrative decision but an administrative law or a private law contract between the authority and a private party. Such a contract may remain uncommunicated or even inaccessible to the failed applicants.⁽⁴⁰⁾ In other words, in such circumstances the decision that has objectively rejected the funding application may have been taken earlier than the conclusion of the contract. In my opinion, in such circumstances the applicant must be able to challenge that rejection before the courts unless a form of legal action is available against the negative funding decision other than administrative appeal.⁽⁴¹⁾

62. The order for reference does not contain an exposé of the relevant national provisions relating to administrative procedure and administrative courts procedure. Therefore it is not possible to ascertain which remedies and forms of action are available in corresponding purely national settings. However, as I have already stated, there must be a remedy available in the case of rejection of an application for funding, and this remedy must fulfil the conditions following from the principles of effectiveness and equivalence. Ultimately, the national legal order of the Member State is bound to provide ‘a free-standing action’ for an examination of whether national provisions are compatible with EU law, if all other legal remedies available under national law fail to guarantee effective judicial protection.⁽⁴²⁾

63. With regard to the principle of effectiveness, the Court has consistently held that, in order to determine whether a Member State rule renders EU law impossible in practice or excessively difficult to enforce, factors to be taken into account include the role of the provision in the procedure, its progress and its special features viewed as a whole and ‘the principles which lie at the basis of the national legal system concerned, such as the protection of the rights of the defence, the principal of legal certainty and the proper conduct of the proceedings’.⁽⁴³⁾ It follows that, in the appreciation of whether the decision of the Monitoring Committee is a reviewable act, the national court must consider if there are alternative remedies providing for effective legal protection, other than an administrative appeal.

64. With regard to the principle of equivalence, I am concerned by the fact that only funding under European territorial cooperation programmes seems to be excluded from judicial review in Estonia. This would appear to amount to a special and restrictive remedial regime that does not apply to analogous claims of a purely domestic (and in this case Estonian) nature. It is for the national court to decide, however, whether the principal of equivalence has been breached.⁽⁴⁴⁾

4. The scope of judicial review required under general principles of EU law

65. Finally, I close by making reference to the scope of judicial review available to candidates whose applications have been declined by the Monitoring Committee.

66. In my opinion, the funding decision contested by MTÜ Liivimaa Lihaveis is ultimately discretionary in nature in the sense that even those applicants who fulfil the legal criteria and conditions for funding do not have a subjective right to receive it. This is because there may be more applications fulfilling the criteria than funds available. Alternatively, none of the competing projects may necessarily be deemed to be worth funding, even if they meet the formal and technical eligibility criteria.

67. This means that even if the project of MTÜ Liivimaa Lihaveis fulfilled all of the criteria established pursuant to European territorial cooperation, funding may still be refused.

68. Further, in my opinion the Member State court must take into account the reality that the Monitoring Committee is bound by the same criteria as are applicable to EU institutions when they exercise a power of appraisal. In this context it has been held that, ‘respect for the rights guaranteed by the Community legal order in administrative procedures is of even more fundamental importance. Those guarantees include, in particular, the duty of the competent institution to examine carefully and impartially all the relevant aspects of the individual case, the right of the person concerned to make his views known and to have an adequately reasoned decision. Only in this way can the Court verify whether the factual and legal elements upon which the exercise of the power of appraisal depends were present.⁽⁴⁵⁾ These elements are, in my opinion, part of the duty of good administration, which is now reflected in Article 41 of the Charter.

69. However, this is the limit of the scope of judicial review that the Member State court is required by EU law to undertake.⁽⁴⁶⁾

70. I therefore propose that question (a) is answered to the effect that irrespective of the rules of a monitoring committee jointly set up by two Member States in the context of the European Regional Development Fund, such as the Programme Manual adopted by the Monitoring Committee for the Estonia-Latvia Programme 2007-2013, and according to which decisions of the committee are not appealable, the principle of effective judicial protection and Article 47 of the Charter require that an applicant whose application for funding in accordance with Regulations Nos 1080/2006 and 1083/2006 has been rejected must be able to challenge that rejection before a competent court or tribunal of the Member State responsible for the management of the programme. It is for the national court to decide which procedural provisions and principles of national law govern access to a court in this context, subject to the requirements stemming from the principles of equivalence and effective judicial protection.