In conclusions returned on Wednesday 27 June in case C-219/17, Advocate General to the Court of Justice of the European Union (CJEU) Manuel Campos Sánchez-Bordona ruled that EU jurisdictions had exclusive competence to control the legality of acts of the European Central Bank (ECB) and preparatory acts adopted in authorisation procedures for the acquisition or increase in qualifying holdings in banks.
In the 1990s, Silvio Berlusconi, the former President of the Italian Council and major shareholder in the company Fininvest, held a stake, via that company, in the mixed financial holding company Mediolanum, itself the sole shareholder of Banca Mediolanum.
In 2014, the Italian authorities decided to apply the good-repute condition, already in place for banks, to mixed financial holding companies, whereupon Fininvest asked the Italian national bank, acting as national competent authority (NCA), for authorisation to own qualifying holdings in the company Mediolanum. This application was rejected on the grounds that Berlusconi had been sentenced for tax fraud in 2013 and therefore did not meet the good-repute condition. The Italian Council of State nonetheless overturned this decision in 2016 on the grounds of violation of the principle of non-retroactivity, as the holdings in question predated the entry into force of the new law.
In the meantime, Mediolanum acquired the company Mediolanum in 2015, making Fininvest the de facto owner of a qualifying holding in a bank. In light of ECB comments, the Italian national bank then, in 2016, opened an administrative procedure to authorise Fininvest's qualifying holding in the bank Mediolanum. By proposal of the Italian national bank, the ECB opposed this, as it doubted the good repute of the purchasers, Berlusconi and other managers of Fininvest having been found guilty of tax fraud.
Berlusconi and Fininvest then challenged the decision before the Italian Council of State, on the basis of its aforementioned 2016 judgement. The Council of State asked the CJEU for a preliminary ruling to determine whether the competence to control the legality of acts of opening, instruction and proposal adopted by an NCA in the framework of an authorisation procedure for the acquisition of a qualifying holding in a bank lies with the national jurisdiction or that of the EU.
In his conclusions, Campos Sánchez-Bordona observes first of all that the authorisation to acquire or increase qualifying holdings in financial establishments falls under the sole competence of the ECB and NCAs have only a preparatory role in the decisions, particularly as an NCA's proposal is not binding upon the ECB in its decision.
Jurisdictional control is over these decisions and the related preparatory acts should hence be exercised by the General Court of the European Union (EGC) or the CJEU. In fact, the national jurisdictions are not competent, according to the Advocate General, to exercise this control. He adds that this lack of competence also applies in the framework of a revocation action in which one of the parties invokes the violation or circumvention of a previous final decision of a jurisdiction. (Original version in French by Lucas Tripoteau)