Case C-209/13, UK v. Council

Court dismisses action brought by the United Kingdom against the decision authorising eleven Member States to establish enhanced cooperation to  set up a financial transaction tax

>> The United Kingdom asked the Court of Justice to annul Council Decision 2013/52/EU of 22 January 2013, which authorized  eleven Member States to use the enhanced cooperation procedure to set up a financial transaction tax (‚FTT’).


That decision was adopted when it was clear that an FTT could not obtain unanimous support within the Council in the foreseeable future.

While recognising that its action, brought as a precautionary measure, could be considered to be premature, the United Kingdom relied on two pleas in law in support of its action. The first plea concerned a claimed infringement of Article 327 TFEU and of customary international law in so far as the contested decision authorized the adoption of an FTT which produced extraterritorial effects. The second plea, relied on in the alternative, related to a claimed infringement of Article 332 TFEU in that that decision authorized the adoption of an FTT which would impose costs on Member States which were not participating in the enhanced cooperation.


The Court first of all, with regard to the matter of admissibility,  recalled that, under Article 120(c) of the Rules of Procedure and the case-law relating thereto, an application initiating proceedings must state the subject-matter of the dispute and a summary of the pleas in law on which the application was based. That statement must be sufficiently clear and precise to enable the defendant to prepare his defence and the Court to rule on the application. It was therefore necessary for the essential points of law and of fact on which a case was based to be indicated coherently and intelligibly in the application itself and for the heads of claim to be set out unambiguously so that the Court did not rule ultra petita or fail to rule on a claim (Case C‑360/11 Commission v Spain and Case C‑545/10 Commission v Czech Republic). 

The Court held that in this case, the content of the application satisfied those requirements of clarity and precision. It enabled the Council and the Member States intervening in its support to prepare their arguments in relation to the pleas relied on by the United Kingdom and it put the Court in a position to carry out its review of the contested decision.

The Court added that in the context of an action for the annulment of a Council decision which, like the contested decision, had  as its subject-matter the authorisation of enhanced cooperation on the basis of Article 329 TFEU, the Court’s review was related to the issue of whether that decision was valid as such in the light of, inter alia, the provisions, contained in Article 20 TEU and in Articles 326 TFEU to 334 TFEU, which defined the substantive and procedural conditions relating to the granting of such authorisation. The Court held that that review should not be confused with the review which might be undertaken, in the context of a subsequent action for annulment, of a measure adopted for the purposes of the implementation of the authorised enhanced cooperation.

The Court pointed out that the objective of the contested decision was to authorise 11 Member States to establish enhanced cooperation between themselves in the area of the establishment of a common system of FTT with due regard to the relevant provisions of the Treaties. The principles of taxation challenged by the United Kingdom were, according to the Court, not in any way constituent elements of that decision. First, ‘the counterparty principle’ corresponded to an element in the 2011 proposal mentioned in recital 6 of that decision. Second, the ‘issuance principle’ first appeared in the 2013 proposal.


As regards the action’s second plea in law,  the Court held that the contested decision contained no provision related to the issue of expenditure linked to the implementation of the enhanced cooperation authorised by that decision. Further, and irrespective of whether the concept of ‘expenditure resulting from implementation of enhanced cooperation’, within the meaning of Article 332 TFEU, did or did not cover the costs of mutual assistance and administrative cooperation referred to by the United Kingdom in its second plea, was is obvious that the question of the possible effects of the future FTT on the administrative costs of the non-participating Member States could not be examined for as long as the principles of taxation in respect of that tax had not been definitively established as part of the implementation of the enhanced cooperation authorised by the contested decision. The Court added that those effects were dependent on the adoption of ‘the counterparty principle’ and the ‘issuance principle’, which were however, as mentioned, not constituent elements of the contested decision. 


Text of judgment