On 5 September 2024, the Court of Justice of the European Union (CJEU) delivered a significant judgment regarding the enforcement of fees under the REACH Regulation. The case involved two separate proceedings (European Chemicals Agency v Hallertauer Hopfenveredelungsges. m.b.H. and ECHA v B. GmbH), both of which revolved around disputes over fee reductions for small and medium-sized enterprises (SMEs).
Background
Under the REACH Regulation (Regulation (EC) No 1907/2006), companies that manufacture or import chemical substances in the EU must register these substances with the European Chemicals Agency (ECHA). SMEs are eligible for reduced fees when applying for registration, but they must provide evidence of their SME status. In these cases, Hallertauer Hopfenveredelungsges. m.b.H. and B. GmbH both failed to submit the required documentation within the specified deadlines.
ECHA subsequently demanded the full registration fee from the companies, along with an administrative charge, as the SMEs could not prove they were eligible for the reduction. The companies did not pay the demanded fees, prompting ECHA to take action to recover the funds.
Legal Questions
The cases raised several important legal questions:
- Jurisdiction of the EU Courts: Can ECHA bring an enforcement action before the EU courts to recover fees imposed by its decisions?
- Enforceability of ECHA's Decisions: Does Article 299 TFEU, which provides for the enforceability of EU acts imposing pecuniary obligations, apply to ECHA's decisions?
- Procedures for Fee Recovery: If ECHA cannot enforce its decisions under Article 299 TFEU, can it still pursue recovery of unpaid fees through national courts?
Court's Ruling
The CJEU provided key clarifications on these issues:
- No Jurisdiction for EU Courts in Fee Recovery: The Court ruled that ECHA cannot bring enforcement actions before the EU judicature to recover unpaid fees. According to the Court, ECHA’s decisions imposing fees on companies do not fall under the jurisdiction of the EU courts for enforcement purposes. Instead, such actions must be pursued through national courts.
- ECHA Decisions Not Enforceable Under Article 299 TFEU: The Court determined that ECHA’s decisions are not enforceable under Article 299 TFEU. This provision, which allows for the automatic enforcement of acts imposing pecuniary obligations by the Council, the Commission, or the European Central Bank (ECB), does not extend to EU agencies such as ECHA. As a result, ECHA must rely on national legal systems to recover outstanding fees.
- National Courts' Role in Fee Recovery: The CJEU confirmed that ECHA can bring an enforcement action before national courts to recover unpaid administrative fees and charges. The relevant provisions of Regulation (EC) No 340/2008, which governs fees payable to ECHA, do not preclude such enforcement actions. This means that companies that fail to pay the required fees or charges may still face legal action in their national jurisdictions.
Implications
This ruling underscores the importance for companies to ensure full compliance with the REACH Regulation, particularly in relation to the accurate declaration of SME status and timely submission of required documentation. Failure to do so may lead to substantial financial penalties, and despite the limitations on EU-level enforcement, ECHA retains the ability to recover unpaid fees through national courts.
For ECHA, the judgment clarifies its role in fee enforcement and the necessity to work with national legal systems to recover administrative charges when companies do not meet their obligations under the REACH Regulation.
This decision reaffirms the principle that EU agencies, such as ECHA, must operate within the procedural frameworks of member states when it comes to enforcement, ensuring that EU law is applied consistently across the Union.
