Monday, 1 January 2024

The New EU Asylum Laws, part 2: the Reception Conditions Directive




Professor Steve Peers, Royal Holloway University of London

Photo credit: Rebecca Harms, via Wikimedia Commons

*sentences with an asterisk have been corrected or updated since the original publication of this post. Most recent update 18 June 2024. 

Just before Christmas, the European Parliament and the Council (the EU body consisting of Member States’ ministers) reached a deal on five key pieces of EU asylum legislation, concerning asylum procedures, the ‘Dublin’ system on responsibility for asylum applications, the ‘Eurodac’ database supporting the Dublin system, screening of migrants/asylum seekers, and derogations in the event of crises. I’ve looked at these agreements for new legislation on this blog, based on a forthcoming article.* These laws are a ‘package’ of new or revised EU asylum laws, which was formally adopted on 14 May 2024, and published in the EU Official Journal on 22 May 2024.* 

This is the second blog post in the series, on the revised reception conditions Directive.* For the first blog post, on the new qualification Regulation, see here.* Part 3 concerns the resettlement Regulation, part 4 concerns Eurodac, part 5 concerns the Screening Regulation, part 6 concerns the revised Dublin rules, part 7 concerns the asylum procedures Regulation, and part 8 concerns the crisis Regulation (plus general comments).* There’s also an earlier analysis of the revised reception conditions Directive on this blog, by Vasiliki Apatzidou.

The 2024 asylum package joins the Regulation revising the powers of the EU asylum agency, which was separated from the package and adopted already in 2021.* (Some of the description of the current Directive and its case law in this blog post is adapted from my asylum law chapter in the latest edition of EU Justice and Home Affairs Law).

The reception conditions Directive: background

There have been two previous ‘phases’ in development of the Common European Asylum System: a first phase of laws mainly adopted between 2003 and 2005, and a second phase of laws mainly adopted between 2011 and 2013. The 2024 package is in effect a third phase, although for some reason the EU avoids calling it that.*

One of the more controversial issues in the asylum debate is how asylum-seekers are treated before a decision is made on their asylum application, as regards issues like benefits, access to employment, housing and detention. In each phase of EU asylum law, the EU has addressed this issue by means of a law known as the reception conditions Directive. The first phase reception conditions Directive was adopted in 2003; the second phase Directive replaced it in 2013. The third phase includes a new version of the Directive.

There is CJEU case law on both the first phase Directive and the second phase Directive. It might be argued that the case law is still relevant to the new Directive, unless the relevant text has been amended.

The UK opted in to the first phase Directive, but not the second phase Directive; conversely Ireland opted out of the first phase Directive, but into the second phase Directive. Neither opted into the proposal for the 2024 Directive. Of course, the UK is no longer bound by EU law, but Ireland is still bound by the second phase Directive. Denmark opted out of both.

None of the measures in the package can be fully understood without the context of all the others – which I discuss over the course of this series of blog posts.* For instance, it is possible that the effect of the other measures in the package will be to reduce the numbers of people who would otherwise apply for refugee or subsidiary protection status in the EU, or whose applications will be considered on the merits (the asylum procedures law provides that some applications can or must be considered inadmissible). Any reduction in the numbers applying for asylum will reduce the numbers who are covered by the Directive; any increase in the number of applications found inadmissible will in principle curtail the length of time that asylum seekers are covered by it – only ‘in principle’, because the Directive will still apply in the event of an appeal, if the asylum seeker is still on the territory. 

Reception conditions for asylum seekers should more broadly be situated in the context of the asylum system as a whole. While benefits etc for asylum seekers are provided under the reception conditions Directive, the process of dealing with their applications for asylum as such is subject to the rules in the EU law on asylum procedures, while the substance of the claims (if they are admissible) is considered on the basis of the EU law on qualifications (on which, see part 1 of this series). As we shall see, the Dublin rules – ie which Member State is responsible for considering their application – is relevant to reception conditions too. If the application is successful, the parts of the qualification law rules dealing with benefits etc for refugees and people with subsidiary protection then apply (again, see part 1 of this series).

If the application fails at first instance, the asylum seeker can appeal – an issue subject to the procedures law, although as noted already, the reception conditions Directive applies during the appeal, if the asylum seeker is allowed to stay on the territory. Whether they are allowed to stay during the appeal is an issue dealt with under the procedures law (spoiler: in principle appeals have suspensive effect, although there are wide exceptions to that rule). If an appeal is successful (and quite a few are), the qualification rules apply. But if an appeal fails, then in principle the failed asylum seeker must be expelled on the basis of the rules in the Returns Directive. However, the Returns Directive leaves Member States with discretion to allow irregular migrants to stay; and the case law on that Directive requires Member States to let them stay if they would be expelled to an unsafe country. Also, EU asylum law, as noted in part 1 of this series, leaves Member States with discretion to grant a form of national protection to people who do not qualify for refugee or subsidiary protection status. People with such national status will largely fall outside the scope of any EU law, although the equal treatment provisions in the recently agreed amendment of the EU single permit Directive (discussed here) will apply to them, if they are allowed to work.

The legislative process leading to the agreed text of the revised reception conditions Directive started with the Commission proposal in 2016, as a response to the perceived refugee crisis. EU governments (the Council) and the European Parliament then adopted their negotiating positions, and jointly agreed a text in principle. Member States were reluctant to accept that text, but then agreed to it eventually in 2022. But this blog post will compare the 2024 Directive only to the current Directive, leaving aside the politics of the negotiations.

Basic issues

The first key issue is the type of law used, which is linked with the degree of harmonisation which the EU seeks in this field. Like the first and second phase laws, the 2024 reception conditions law is a Directive, which means that Member States are still bound to achieve the outcome required but have a choice of form and method.* But since the qualification and procedures laws will be turned into Regulations (binding in and of themselves, without national transposition), the 2024 law is the only Directive applicable in the field of asylum law, other than the temporary protection Directive.

As for the level of harmonisation, the 2024 reception conditions Directive still sets a form of minimum standards:* Member States can have higher standards, as long as those standards are compatible with the Directive. So there will still be both a floor and a ceiling. Again, the reception conditions Directive has become unique in the field of asylum law (besides the temporary protection Directive), as the equivalent provisions in the laws on qualifications and procedures have been dropped, in favour of full harmonisation in principle – although note that some provisions in the qualification and procedures Regulations are still only options for Member States.* Exactly what the ceiling means in terms of reception conditions may be open to debate, because there’s no CJEU case law on the issue (for the case law on the ceiling applicable to the outgoing qualification Directive, see part 1; there’s also case law on the equivalent provision of the returns Directive, which is not technically an asylum measure)

The 2024 Directive provides that Member States will have to implement it two years after its adoption - namely 12 June 2026.* Unlike the other measures in the 2024 package, there is no transitional clause, so it is not clear if the 2024 Directive will apply also to applications still pending on 12 June 2026, or only to applications made after it; the point could be relevant particularly to grounds for detention, sanctions for not complying with Dublin rules, or earlier access to employment.* 

Turning to the details of the Directive, there are nine main elements to the law: its scope, general provisions, detention, education, employment, benefits, reduction or withdrawal of benefits, special cases, and appeals and final provisions. This blog post mostly does not discuss the preamble, but keep in mind that the preamble adds some important detail to many of the points in the main text analysed here.

Scope

As with the second phase Directive, the 2024 Directive will apply to applicants both for refugee and subsidiary protection status, although Member States can choose to apply it to applicants for other types of status. (The first phase Directive only applied to applicants for refugee status). The Directive still does not apply to applications at consulates. Otherwise, as before, it will apply to those ‘who make an application for international protection on the territory, including at the external border, in the territorial sea or in the transit zones of the Member States, as long as they are allowed to remain on the territory as applicants, as well as to family members, if they are covered by such application for international protection according to national law.’

The 2024 Directive deleted an exception in the 2013 law, which excluded the Directive from applying where the temporary protection Directive (which has been applied in practice to those fleeing the invasion of Ukraine) applies.* So in principle this means that anyone covered by temporary protection who decides to apply for asylum in light of temporary protection expiring in March 2025 (as the law now stands) will be covered by the reception conditions Directive – if Member States a) apply this aspect of the 2024 Directive before the deadline to apply it in 2026; and b) opt to apply the temporary protection directive and reception conditions directive simultaneously (the temporary protection directive gives Member States the option not to allow this).

As with the new Qualification Regulation, ‘family member’ will be defined slightly more broadly, to include relationships formed outside the country of refuge, not just those formed inside the country or origin. It will also include adult dependent children. But it will still be necessary for the family members to be present on the territory in connection with the asylum application. A minor must be considered unmarried if the marriage would not have been allowed under the Member State’s national law, especially on grounds of age.

General provisions

Under the 2013 Directive, asylum seekers have to be informed within fifteen days of lodging their application of the rights and benefits to which they are entitled and the obligations placed upon them by Member States.* The 2024 Directive provides that they must be given information on the basis of a standard template, within three days of the application, or the deadline to register it under the asylum procedures law. There are expanded provisions on making this information understandable.

As for documentation, under the current law asylum seekers have to be given, within three days of their application, a document certifying their status or the legality of their presence on the territory (subject to certain exceptions), and Member States ‘may’ supply asylum seekers with a travel document ‘when serious humanitarian reasons arise that require their presence in another State’. Member States cannot ‘impose unnecessary or disproportionate documentation or other administrative requirements’ before granting rights under the Directive, solely because the beneficiaries are asylum applicants.

Under the 2024 Directive, the main rules on documentation will be set out instead in the procedures law. The ban on unnecessary etc documentation remains, including now non-discrimination based on nationality. Also, the rules on travel documents are tightened: Member States may ‘only’ supply them in the event of ‘serious humanitarian reasons or other imperative reasons’ that require asylum-seekers’ presence in another State, and the document’s validity must be ‘limited to the purpose and duration needed for the reason for which it is issued’.

A number of changes will be made to the rules on movement within a Member State. Under the 2013 Directive,* asylum seekers are entitled to freedom of movement within a Member State, or at least within an assigned area, but Member States can decide on asylum seekers’ residence on grounds of public order, public interest, or the necessity to decide on applications quickly. Member States can also require asylum seekers to reside in a certain place in order to obtain benefits.

Under the 2024 Directive, there are more detailed rules on Member States’ requiring applicants to stay in a particular region, to ensure fair distribution of applicants or efficient processing of applications. There are also revised provisions on limiting free movement to a specific place, linked to the receipt of benefits, on different grounds: ‘for reasons of public order or to effectively prevent the applicant from absconding, where there is a risk of absconding, in particular’ in Dublin cases.

Detention

As before (rules on detention were only added in the second phase Directive), asylum seekers cannot be detailed solely for applying for asylum, and detention must be ‘necessary’ based on an individual assessment. The 2024 Directive will add that they cannot be detailed based solely on their nationality. Another new provision concerns detainees (or would-be detainees) who are special cases, who might be released from detention, or have their detention adjusted, in light of their personal circumstances. It will also now be specified that detention cannot be punitive.

The definition of ‘detention’ – confinement in a particular place, involving the deprivation (not merely the limitation) of free movement within a territory – will not change, so presumably the CJEU case law still applies: detention includes transit zones where the asylum-seekers’ movements are controlled by guards, they live in a small container, and are surrounded by high fences and barbed wire (FMS judgment; C-808/18 Commission v Hungary); the prospect of leaving for a non-Member State does not alter the conclusion that asylum-seekers are detained, because leaving would end the possibility of applying for asylum in a Member State and would not work on its own terms (as there was no effective possibility of applying for asylum there).

The possible grounds for detention have expanded from six to seven.* However, since the list of grounds will remain exhaustive (‘only’) – leaving aside criminal law outside the scope of the Directive – it will still not be possible to detain asylum seekers purely because housing capacity has been exhausted (VL judgment), because of their inability to cover their needs (FMS judgment), or because they entered illegally (Case C-72/22 PPU) – although the latter point must be qualified in light of the ground to detain pursuant to a border procedure.

First, detention can be justified ‘in order to determine or verify [an asylum seeker’s] identity or nationality’. Second, it can be justified:

(b)

in order to determine those elements on which the application for international protection is based which could not be obtained in the absence of detention, in particular when there is a risk of absconding of the applicant (on the first two grounds for detention, see the K judgment)


The 2024 Directive now adds a definition of ‘risk of absconding’.* (Note also that previous case law requires Member States to set out details in national law, concerning a similarly worded definition).

The third ground for detention is the new one. It will be possible to detain asylum seekers ‘in order to ensure compliance with legal obligations imposed on the applicant through an individual decision [requiring residence in a specific place] in cases where the applicant has not complied with such obligations and there is still a risk of absconding of the applicant’. This is linked to the revised rules on requiring residence in a specific place, summarised above.

The fourth ground for detention is amended.* The current text refers to detention ‘in order to decide, in the context of a procedure, on the applicant’s right to enter the territory’. The new version will refer instead to deciding that issue ‘in accordance with’ the border procedures rules in the new asylum procedures Regulation (which will alter the border procedures rules as compared to the current procedures Directive). Part 7 discusses whether the revised rules on border procedure detention might alter the Court’s rulings against Hungarian transit zone detention under the current rules (FMS judgment; C-808/18 Commission v Hungary).*

Fifth, an asylum seeker can be detained when subject to a return procedure under the Returns Directive, if ‘the Member State concerned can substantiate on the basis of objective criteria, including that he or she already had the opportunity to access the procedure for international protection, that there are reasonable grounds to believe that he or she is making the application for international protection merely in order to delay or frustrate the enforcement of the return decision’. The Court of Justice has interpreted this ground narrowly (VL judgment; see also the JA ruling).

Sixth, detention can take place ‘when protection of national security or public order so requires’. The CJEU has already interpreted this provision under the current Directive, as discussed here and in Case C-72/22 PPU. Finally, asylum seekers can be detained on the basis of the specific rules in the Dublin Regulation (as replaced).

 

As before, Member States must lay down the grounds for detention in national law, along with the rules on alternatives to detention. There are still no time limits on detention of asylum seekers in general, although the case law on detention under the border procedure under the current asylum procedures law has set time limits, and for failed asylum seekers there are time limits to detention in the Returns Directive. There is already an obligation to give reasons for detention in writing; the new Directive adds a requirement to explain why coercive measures are not used instead.

The provision on judicial review of detention is amended to provide a deadline (fifteen days, or exceptionally 21 days),* with a useful remedy: release from detention after 21 days if there is no ruling. (The current rule on release if detention is unlawful will be retained) The rules on further judicial reviews will now include a requirement of regular automatic reviews of detention of unaccompanied minors. There is no reason to doubt that the Hungarian criminalisation of advice to asylum-seekers (see Case C-821/19) would still breach EU law.

Finally, the guarantees on detention for special cases now include a requirement to give timely support for those who need it, and not to detain at all those whose health would be put at ‘serious risk’.* There is stronger language requiring that detention of minors is exceptional,* and some specific tightening of the circumstances and conditions of their detention: never in prison accommodation (at present this ban only applies to unaccompanied minors, not minors in general) or other law enforcement locations, and only on grounds of safeguarding (for unaccompanied minors) or because their caregivers are detained (for other minors). There are new references to ‘family unity’ and to detention adapted to minors.

Education

The 2013 directive requires access to education ‘under similar conditions’ to nationals, and the new Directive adds a requirement for ‘the same access’ – concepts that are potentially in tension.* Education must be ‘integrated’ with that for national children, and be of the ‘same quality’. The waiting period for access to education must be cut from three months to two, with a possible first month not provided within the ‘mainstream’ school system; although it will still be possible to provide education outside the mainstream education system indefinitely, if mainstream education is ‘not possible’ due to the ‘specific situation’ of the minor.

Employment

The second phase Directive cut the waiting period for access to employment, after lodging an asylum claim, from 12 months to 9 months; the 2024 Directive now cuts this to 6 months.* As before, this is only triggered if there is no decision on the application yet, and if the delay is not the fault of the applicant. According to the CJEU’s interpretation of the current Directive, a delay is not the fault of the applicant if they appealed against a transfer decision, or did not apply for asylum in the first Member State of entry. But a delay is their fault if they failed to cooperate with the authorities, as defined by the asylum procedures law.

However, there is a new exception, denying access to employment if a Member State has triggered some of the fast-track provisions in the procedures Regulation, discussed in part 7.* (Remember also that the Directive sets minimum standards, so in principle Member States can grant labour market access earlier).

Another new exception, discussed further below, provides that access to employment is lost when the asylum seeker is notified that they must be transferred to another Member State under the Dublin rules. As with the new Dublin exception for benefits, this overturns CJEU case law on the point, and raises the question of the effect of an appeal against the transfer (which was also expressly addressed in the case law, as noted above).

There are more detailed provisions on possible job-market preference, and new rules on equal treatment – although these are also subject to exceptions. It will remain the case that labour market access will be retained during appeals, if the appeals have suspensive effect.

Benefits

As for State assistance, the 2024 Directive maintains (with minor rewording) the current basic rule that Member States must ensure ‘material reception conditions’ that ‘provide an adequate standard of living for applicants, which guarantees their subsistence and protects their physical and mental health’, although assistance can be reduced or eliminated for asylum seekers with means or who have been working. (On the adequacy of financial support under the first phase Directive, see the Saciri judgment) A new provision will state that Member States cannot ask for contributions to health care costs if the health care in question is provided for free to their citizens.

For housing, a new provision emphasises that it must guarantee an ‘adequate standard of living’.* The 2013 Directive rule that Member States must aim to prevent sexual violence or harassment in reception centres is expanded to refer to ensuring ‘as far as possible, the prevention of assault and violence, including violence committed with a sexual, gender, racist or religious motive’* – which would seem to cover also violence against asylum seekers or reception centres committed by extremist far right groups. Other new provisions state that ‘Member States shall provide separate sanitary facilities for female applicants and a safe place in accommodation centres for them and their minor children’, and give Member States an option to permit asylum seekers to do voluntary work outside reception centres.

As under the 2013 Directive, the 2024 Directive specifies that Member States should change reception centres where asylum-seekers are living only where necessary.* The case law on the 2013 Directive says that this does not prevent Member States moving asylum-seekers to a new reception centre when they are preparing to transfer the applicants to another Member State under the Dublin rules (see VW and EV), even if the asylum seekers have appealed against the transfer decision; as we shall see below, the 2024 Directive takes an even stricter approach to those covered by the Dublin rules.

Finally, the 2013 Directive allows a temporary exception from the housing rules where the asylum seeker is a special case or housing provision is temporarily exhausted, provided that ‘basic needs’ are still met. The 2024 rules amend this, adding also the scenario where ‘due to a disproportionate number of persons to be accommodated or a man-made or natural disaster, housing capacities normally available are temporarily unavailable’.* In place of a reference to ‘basic needs’, it is now specified that in such cases Member States ‘shall in any circumstances ensure access to health care…and a standard of living for all applicants in accordance with Union law, including the Charter of Fundamental Rights of the European Union, and international obligations’.* This wording now matches the minimum standards required when reception conditions are reduced or withdrawn, discussed further below. The CJEU has ruled that detention cannot be considered in this context as a form of alternative housing provision (VL judgment); there is nothing in the 2024 Directive to suggest that interpretation should be changed.

Health care provided to asylum seekers has to include as a minimum essential treatment of illness, emergency care, and mental health; the 2024 Directive adds a reference to ‘necessary sexual and reproductive health care which is essential to address a serious physical condition’.* It is expressly specified that health care must be provided even where benefits are otherwise withdrawn due to the applicant being subject to a Dublin transfer.*

Reduction or withdrawal of benefits

In the 2013 law,* Member States are allowed to reduce or (exceptionally) withdraw reception conditions where rules on reporting or residence have been breached, or if the applicant makes a repeat application as defined in the asylum procedures directive. They can also reduce conditions where ‘an asylum seeker has failed to demonstrate that the asylum claim was made as soon as reasonably practicable after arrival in that Member State’.  Furthermore, conditions can be withdrawn or reduced if the applicant concealed financial resources, and there can be ‘sanctions’ for ‘serious breaches’ of reception centre rules, or ‘seriously violent behaviour’.

The 2024 Directive provides that benefits can only be withdrawn for violent behaviour (as reworded).* But the daily expenses allowance, or other benefits, can also be reduced in the cases referred to in the 2013 law,* as well as failure to cooperate with the authorities or failure to comply with integration measures; although the prospect of punishment for late applications (which dates back to a UK demand during the negotiations of the first phase Directive) has been dropped.

Various procedural safeguards in the 2013 law are retained,* along with a substantive safeguard: Member States must always retain access to emergency health care and a ‘standard of living in accordance with Union law’ (referring to the EU Charter of Fundamental Rights and international law); this replaces the current minimum requirement of a ‘dignified standard of living’. As noted above, the same rule will apply when Member States temporarily apply an exception to normal benefits rules in special cases or due to overloaded reception capacity.

Interpreting the 2013 rules on withdrawal or reduction of benefits,* the CJEU has ruled that ‘sanctions’ for breaches of the rules of an accommodation centre can include reduction or withdrawal of benefits; but a complete withdrawal, making the asylum seeker homeless and giving him only a list of homelessness charities to contact, was a breach of the obligation to ensure a decent standard of living, in accordance with the EU Charter (Haqbin; see also the later TO judgment). The reworded minimum in the 2024 Directive, which adds a reference to the Charter in this context, appears to integrate this case law (although the case law post-dates the 2018 agreement on the text of the Directive), rather than overturn it. EU law requires as an absolute minimum, according to the case law, that the State refrain from imposing ‘extreme material poverty that does not allow that person to meet his or her most basic needs such as a place to live, food, clothing and personal hygiene, and that undermines his or her physical or mental health or puts that person in a state of degradation incompatible with human dignity’.

The biggest change in this area in the 2024 Directive is the overturning of the Court of Justice case law on the position of asylum seekers subject to a Dublin transfer (CIMADE and GISTI). In that case, the Court found that there were no express exceptions in the first phase Directive for Dublin cases, and that transfers might take months to take place or never happen at all. Member States were responsible for ensuring application of the Directive until a transfer was carried out, considering inter alia the right to dignity in the EU Charter of Fundamental Rights. Separately, as noted above, the CJEU has ruled that access to employment is not lost because the asylum seeker did not apply in the first Member State of entry, or is subject to the Dublin rules, or appeals against a Dublin transfer decision with suspensive effect.

In the 2024 Directive, a new clause specifies that access to benefits and employment is ended from the point at which the asylum seeker is notified of a transfer decision under the Dublin rules. However, this does not apply to healthcare, and is ‘without prejudice to the need to ensure a standard of living in accordance with Union law, including the Charter of Fundamental Rights of the European Union, and international obligations.’ As noted above, this test, which also applies to the ‘traditional’ grounds for withdrawing or reducing benefits, appears to be consistent with the case law on those traditional grounds, which rules out a complete removal of support for housing, food, clothing and hygiene.

Special cases

The list of special cases will be expanded to add mentions of LGBTI applicants, PTSD (as an example of mental illness), and victims of ‘gender-based violence’, ‘child or forced marriage, or violence committed with a sexual, gender, racist or religious motive’. There will be a new deadline of 30 days after the asylum claim to complete an assessment (or a separate deadline in the procedures law), and new rules on the obligations for those assessing asylum-seekers. As before, the assessment process is separate from the determination of whether some qualifies as a refugee or needs subsidiary protection.

For specific groups of special cases, as regards minors the 2024 Directive will add references to ‘the need for stability and continuity in care’ and the risk that the minor is ‘a victim of any form of violence or exploitation’, along with references to access to school materials and a safeguarding requirement for anyone working with minors. In the case of unaccompanied minors, there will be deadlines to appoint a representative, as well as a number of other changes to the rules, including the prospect of the minor complaining about the representative. (For a breach of the current version of the obligation to consider the vulnerability of unaccompanied minors, see again the Haqbin judgment – which is also a practical demonstration of the importance of having a representative to litigate in the interests of the unaccompanied minor).

Finally, the provision on victims of torture et al will add specific references to victims of trafficking in human beings, expand on the forms of violence concerned and the motivation for it (‘including sexual-, gender-, racist- or religious-motivated violence), and refer specifically to rehabilitation, counselling and translation needs.

Appeals and final provisions

The 2013 rules on appeals against decisions under the Directive, which include the legal aid aspects of judicial review, are amended to include an appeal against a decision to refuse legal aid because there is ‘no tangible prospect of success’.*

The final provisions are amended to require Member States to take account of the EU Asylum Agency’s guidelines for their monitoring and control systems, and to place those systems into the monitoring mechanism set out in the Regulation establishing the Agency.  There is also a new provision requiring Member States to set out contingency planning measures.

The provisions on staff and resources also refer now to the use of training materials developed by the Agency, as well as the tools on identifying special cases. Finally, the provisions on resources now refer specifically to ‘translators and interpreters’, ‘taking into account seasonal fluctuations’ in asylum numbers, and allocating resources for ‘local, regional, civil society or international organisations’ which play a role in applying the law in practice.

Comments

According to the Commission’s proposal, the main objectives of the new Directive are to deter movement between Member States, harmonise the law further, and increase self-reliance of asylum-seekers. The former two objectives are shared with the qualification Regulation, as discussed in part 1 of this series, and they are linked: it is often presumed that one reason for movement of asylum seekers between Member States is the differences in their asylum laws (although this assumption is also contested).

Will the Directive deter movement between Member States? For the reasons explained above, Member States cannot enforce the Dublin rules by means of a complete removal of support for food and housing; and since the level of support may be quite low already, the threat may be less effective than Member States hope: asylum seekers might not even hear such threats over the sounds of their rumbling tummies. But it is bound to have some effect – including the removal of access to the labour market, where it is being exercised – and some key questions are left unclear. Since the access cannot be withdrawn until a transfer decision is notified (in CIMADE and GISTI, the Court ruled that the grounds for removal of benefits in the Directive were exhaustive), it cannot be withdrawn at an earlier stage in the Dublin process, so arguably not purely because the applicant did not apply in the first Member State of entry, but only after that fact leads to a transfer decision being made. (It should be recalled that the Dublin rules, even in the 2024 version, are more complex than a simple allocation of responsibility for the asylum claim to the first State of entry in all cases).

What if the asylum seeker appeals the transfer decision, with suspensive effect? Here, the new Directive is silent, and the case law points in both directions: the access to employment case law says that such access remains in light of the appeal, while the benefits case law says that the asylum seeker can be transferred to different housing, in light of the planned transfer, despite an appeal. In my view, it can be inferred from the absence of a provision on the point, and the need to interpret exceptions narrowly in light of Charter rights (both the right to dignity and the right to effective remedies), that appeals against transfer decisions will suspend the removal of benefits and access to employment, as long as those appeals are suspensive as regards the transfer itself. But undoubtedly the counter-argument will be made that this would undermine the attempts to make the Dublin system work efficiently – or, put bluntly, the intention to starve asylum seekers out of resisting its application.

Surely if the appeal against transfer is successful, or the transfer is not carried out by the deadline, then access to benefits and employment must be restored, on any interpretation. All of this will depend in practice on how the revised Dublin system applies in practice, and in particular the wording of the revised rules on transfers and appeals against them (the Dublin rules on detention may be relevant too, as that remains a detention ground under the Directive).   

How much further harmonisation will result from the Directive? There is certainly a degree more harmonisation on a number of points, such as information and documentation, limits on movement, time limits for judicial review of detention, detention guarantees, the details of access to employment, the definition of reception conditions, and special cases. In some cases the harmonisation results from cross-references to other new EU asylum laws, so it is hard to assess the changes in isolation. And in any event, the assumption that harmonisation of standards is closely linked to movement between Member States is in any event contested, as noted above. As regards education, the shorter time limits and expanded use of mainstream education are undercut by the possibility of still providing education outside the mainstream. Finally, the changes to the law on family unity and detention conditions adapted to minors imply that neither US-style family separation nor UK-style painting over Disney murals would be allowed under EU law.

Finally, as for the self-reliance of asylum seekers, the earlier access to the employment market and the clarification of related equal treatment and labour market tests should in principle increase the numbers of asylum seekers able to support themselves via work. But the exceptions for accelerated procedures and the Dublin cut off raise the question of whether the labour market access given with one hand will be in practice taken away with the other. 

Saturday, 30 December 2023

The New EU Asylum Laws, part 1: the Qualification Regulation


 


Professor Steve Peers, Royal Holloway University of London*

Photo credit: Ggia, via Wikimedia Commons

*sentences with an asterisk have been corrected or updated since the original publication of this post. Most recently updated 18 June 2024.  

Just before Christmas, the European Parliament and the Council (the EU body consisting of Member States’ ministers) reached a deal on five key pieces of EU asylum legislation, concerning asylum procedures, the ‘Dublin’ system on responsibility for asylum applications, the ‘Eurodac’ database supporting the Dublin system, screening of migrants/asylum seekers, and derogations in the event of crises. I’ve looked at this new legislation in a series on this blog, based on a forthcoming article.* The other blog posts are: Part 2 (on reception conditions); Part 3 (on the resettlement Regulation); Part 4, (Eurodac); part 5 (on the screening Regulation); part 6 (on Dublin), part 7 (on the asylum procedures Regulation); and part 8 (on the crisis Regulation, plus general comments).* These laws are intended to be part of a ‘package’ of new or revised EU asylum laws. (Update: the European Parliament voted for the changes to EU asylum laws in April 2024, the Council formally adopted them on 14 May 2024, and they were published in the EU Official Journal on 22 May 2024)* 

The 2024 legislation joins the Regulation revising the powers of the EU asylum agency, which was separated from the package and adopted already in 2021.* 

The qualification Regulation: background

There have been two previous ‘phases’ in development of the Common European Asylum System: a first phase of laws mainly adopted between 2003 and 2005, and a second phase of laws mainly adopted between 2011 and 2013. The 2024 package is in effect a third phase,* although for some reason the EU avoids calling it that.

In each phase, the law on qualification is central: defining what is necessary to obtain refugee status or subsidiary protection status (ie protection other than as a refugee), and setting out what rights people have if they obtain either status. The first phase Qualification Directive was adopted in 2004; the ‘second phase’ Qualification Directive replaced it in 2011. (I analysed the negotiation of the latter Directive here; there’s also a lengthy analysis of it by Madeline Garlick and Violeta Moreno Lax in EU Immigration and Asylum Law: Text and Commentary, and see also my asylum chapter in the latest edition of EU Justice and Home Affairs Law). The third phase, adopted in 2024, now includes a qualification Regulation.*  

There is CJEU case law on both the first phase Directive and the second phase Directive. It might be argued that the case law is still relevant to the new Regulation, unless the relevant text has been amended; in some cases the Regulation (or the preamble to it) reflects some of that case law.

The UK and Ireland opted in to the first phase Directive, but not the second phase Directive or the proposal for the 2024 Regulation. Of course, the UK is no longer bound by EU law, but Ireland is still bound by the first phase Directive. Denmark opted out of both.

Of course, none of the measures in the package can be fully understood without the context of all the others – which I discuss over the course of this series of blog posts.* For instance, it is possible that the effect of the other measures in the package will be to reduce the numbers of people who would otherwise apply for refugee or subsidiary protection status in the EU, or whose applications will be considered on the merits (the asylum procedures law provides that some applications can or must be considered inadmissible). The qualification law is only relevant to those who get to that stage. And for those who do obtain refugee or subsidiary protection status, they can eventually obtain EU long-term resident status, which inter alia provides for a limited prospect of movement between Member States – and that law is in turn being renegotiated too, separately from the asylum package (my comments on that renegotiation here).

The legislative process leading to the 2024 qualification Regulation started with the Commission proposal in 2016,* as a response to the perceived refugee crisis, followed by EU governments agreeing their position on the proposal, which had to be negotiated with the European Parliament (its negotiating position was set out here). I compared the three institutions’ positions in a blog post here. But this blog post will compare the 2024 Regulation only to the 2011 Directive, although I have updated some of the discussion in my previous blog post where relevant.

Basic issues

The first key issue is the type of law used, which is linked with the degree of harmonisation which the EU seeks in this field. The first and second phase qualification laws were Directives, which mean that Member States were bound to achieve the outcome required but had a choice of form and method. The 2024 law is a Regulation,* which is binding in and of itself, without national transposition.

As for the level of harmonisation, the Directives set a form of minimum standards: Member States could have higher standards, as long as those standards were compatible with the Directives. So they set not only a floor, but also a ceiling: the CJEU judgments in B and D, M’Bodj (discussed here), Ahmedbekova and LW discussed the limits of the power to set higher standards. But this will soon be history: the 2024 Regulation removes the power to set higher standards even with a ceiling, providing instead for uniform standards in principle, although some national options will remain in the text.* (The same two basic changes were also made to the 2013 asylum procedures Directive).*

The new Regulation, reflecting that case law, notes that Member States are however free to retain or establish a separate status of humanitarian protection,* as long as there is no confusion with the (EU harmonised) notions of refugee or subsidiary protection status. People with such national status will largely fall outside the scope of any EU law, although the equal treatment provisions in the recent amendment of the EU single permit Directive (discussed here) will apply to them, and the resettlement Regulation applies aspects of the qualification Regulation to those admitted on a humanitarian basis under the EU resettlement law (see Part 3 of this series).*

In practice the shift toward harmonisation may lead to some lowering of standards overall, due to the absence of the possibility to have higher standards generally (even subject to a ceiling) and the removal of some options, to the extent that Member States are now obliged to (for instance) provide for an ‘internal flight alternative’ in their law,* and to require two criteria (not just one criterion) to be satisfied to apply the ‘particular social group’ ground of refugee protection. But the effect of such changes is qualified: for example, the requirement to apply the ‘internal flight alternative’ rule comes with additional safeguards attached to that rule, and Member States may have had less enthusiasm to apply higher standards for refugees, as compared to the options in EU law to have higher standards for (say) employment and environmental law.

The 2024 qualification Regulation provides that the previous Directive ceases to apply from 12 June 2026, while the new Regulation will apply from 1 July 2026.* There is no explanation of what happens between those two dates, and no transitional rule for applications pending, or status granted, before either of those dates.*  

The refugee parts of the Regulation (like the prior Directives) aim to implement the UN Refugee Convention (which the EU refers to as the ‘Geneva Convention’) in more detail, as regards both the definition of ‘refugee’ and the rights which refugees receive. The case law of the CJEU has often interpreted the Directive in light of the Convention, which seems likely to continue because the Regulation still makes many references to the Convention.

Turning to the details of the Regulation, there are five main elements to the law: common rules (applying to both refugee and subsidiary protection status); the definition of ‘refugee’; cessation, exclusion from and withdrawal of refugee status; the definition and cessation etc of subsidiary protection; and the content of status (ie the benefits people with status receive). This blog post mostly does not discuss the preamble, but keep in mind that the preamble adds some important detail to many of the points in the main text analysed here.

Common rules

Family members of refugees and people with subsidiary protection will be defined slightly more broadly. A ‘family member’ will now include relationships formed outside the country of refuge, not just those formed inside the country or origin. This means, for instance, that the spouse of a Syrian refugee who married him while in Turkey or Lebanon, and the children of that couple born in such countries, would now be defined as ‘family members’. It is still necessary for the family members to be present on the territory in connection with the asylum application, though (as confirmed by the recent CJEU judgment in Afrin – although note that in such cases, the separate EU law on family reunion applies for refugees). 'Family members' will now include dependent adult children.* A minor must be considered unmarried if the marriage would not have been allowed under the Member State’s national law, especially on grounds of age.

The Regulation ‘should’ apply to those covered by the planned new EU law on resettlement of refugees from non-EU countries (according to the preamble); the rules on assessment of asylum applications will expressly apply to them. (In fact, as discussed in Part 3 of this series, the resettlement Regulation will be clearer on this point).* As with the previous Directives – and unlike other EU asylum law measures – there is no provision on the territorial scope of the Regulation.

It will now be mandatory, not optional, for the main burden of proof to rest upon the applicant to show why the claim for refugee or subsidiary protection status is justified; and a new clause in the preamble will reflect the ECJ’s 2014 case law (discussed here) which limits the intrusiveness of Member States’ questioning of the credibility of LGBTI asylum-seekers.  The importance of the asylum seeker applying at the ‘earliest possible time’ will be de-emphasised.

As before, the Regulation will retain the possibility of becoming a refugee or needing subsidiary protection ‘sur place’ – ie because of events which took place after the asylum seeker left his or her country of origin, or due to activities of the applicant since leaving that country. But the exception to this rule will remain optional (‘may’): where the applicant has created the circumstances for use of this provision, Member States may refuse protection. This exception will be widened in two ways (extending it to include subsidiary protection claims, and applying it to initial applications, not just repeat applications), but also subject to a new safeguard (the circumstances created by the applicant must be for the for the ‘sole or main purpose of creating the necessary conditions for applying for international protection’). (For the position under the 2011 Directive, see the recent judgment in Case C-222/22).*

On the other hand, the option to refuse claims because the asylum seeker had an ‘internal flight alternative’ – ie he could have fled to a safe part of the country of origin, like a supposed ‘safe zone’ in Syria – will become mandatory. (The possibility of rejecting a claim because an asylum seeker would arguably have been safe in a different country is the subject of the asylum procedures Regulation). However, there are new safeguards: a strong presumption that the concept cannot apply where the source of persecution is the State; applying the main rules on qualification first; shifting the burden of proof to the authorities, and obliging them to consider contrary arguments submitted by the applicant; more on the personal circumstances of the applicant; a requirement to consider whether the applicant could meet their basic needs; and a specific protection for unaccompanied minors. There is also a new requirement to consider the country of origin information supplied by the EU Asylum Agency. Note that although the CJEU has not yet interpreted the rules on the ‘internal flight alternative’ as such, it has recently ruled that differences in interpretation of the rule between Member States are not a good enough reason to refuse to transfer an asylum seeker to another Member State under the Dublin rules. In that context, it is possible that the additional provisions in the Regulation will lead to a more harmonised interpretation of the rule between Member States.

As for the sources of persecution or protection, the Regulation will retain the current rules in the Directive, replacing a reference to considering whether EU acts define a country as providing effective protection from persecution with a reference to considering country of origin information, including from the EU asylum agency where available.

Definition of ‘refugee’

The Regulation retains the basic idea from the previous Directives – and the UN Refugee Convention – that a ‘refugee’ is someone persecuted because of their race, religion, political opinion, nationality or particular social group, elaborating upon each of these concepts. The definition of ‘persecution’ will not change, but there are some changes to the text on ‘particular social group’: adding a reference to how the group is perceived, dropping a reference to criminal law, and adding a reference to ‘gender expression’. Furthermore, there are some new elaborations of the concept in the preamble, including a reference to the possibility of persecution on grounds of disability. As noted above, all Member States will also now have to require that asylum-seekers show that they both perceive themselves as part of a distinct group and are perceived as different by the rest of society, due to the loss of the capacity to set higher standards. (In the meantime, the CJEU has ruled for the first time on the position of women as part of a particular social group, with a judgment in January on domestic violence – see earlier discussion here – and also a pending case on Afghan women, discussed here).*

More generally, a new clause will provide that asylum seekers cannot be expected to hide their identity or beliefs, confirming case law as regards sexuality and religion.

Exclusion, cessation and withdrawal of status

The 2011 Directive elaborates on the Refugee Convention on exclusion, but the Regulation elaborates further.* First, the preamble to the new Regulation enshrines the basic elements of CJEU case law on the special status of some Palestinians (case law starting with Bolbol and El Kott; note also the recent Advocate-General’s opinion relating specifically to Gaza).* Secondly, a new provision on exclusion on grounds of terrorism states that no proportionality test is required in such cases, confirming the judgment in B and D; the preamble also takes account of the judgment in Lounani on the exclusion of foreign fighters, discussed here). Finally, another new provision will require consideration of whether a minor would be considered criminally responsible for acts under the law of a Member State, when considering if a minor would be excluded on grounds of war crimes, terrorism et al.

On cessation – loss of refugee status because, inter alia, the situation has improved significantly in the country of origin – the Regulation will provide again that account must be taken of country of origin information supplied by the EU asylum agency, or other sources.

As for the withdrawal of refugee status, withdrawal will be mandatory in more cases, now including where ‘there are reasonable grounds for regarding him or her as a danger to the security of the Member State in which he or she is present’ and where ‘he or she, having been convicted by a final judgment of a particularly serious crime, constitutes a danger to the community of the Member State in which he or she is present’. Previously withdrawal of refugee status was only optional in some cases. The CJEU has recently interpreted the latter of the two newly mandatory exceptions (see the trilogy of judgments here, here and here). Also, the Court has more broadly ruled that even if refugee status is withdrawn, the person concerned remains a refugee, still benefiting from non-refoulement and the rights which the Refugee Convention sets out for refugees who are unlawfully resident.

Subsidiary protection

The core definition of subsidiary protection (a threat of serious harm deriving from the death penalty, torture or similar treatment, or facing a specified threat from armed conflict) will not be affected by the Regulation – although the preamble will entrench some of the relevant CJEU case law on how much violence against civilians, and what types of conflict, trigger the ‘armed conflict’ ground of subsidiary protection (Elgafaji and Diakité). The provision on cessation of subsidiary protection will refer to country of origin information, including from the EU Asylum Agency.

There will be some changes to the rules on exclusion from subsidiary protection (it will be necessary to show that there was a conviction for a ‘serious crime’, if committed after admission to the territory; the person concerned must be a danger to national security, not security generally); and the prospect of exclusion from subsidiary protection due to commission of less serious crimes will remain optional. As with refugee status, the rules on exclusion will now specify that no proportionality test is required, along with special provision for minors.

Rights of refugees and persons with subsidiary protection

The Regulation will change the provisions on the rights of those with refugee status or subsidiary protection in several ways. First, if a Member State has not issued a residence permit within 15 days, it must at least issue some provisional documentation so that access to rights is more effective. Secondly, the list of vulnerable people now includes parents of adult dependent children. Thirdly, there will be a common template for information to be given to people with refugee status or subsidiary protection, which will emphasise the limits on their movement to other Member States.

Fourthly, due to the abolition of the right for Member States to set higher standards where compatible with the qualification law, it will no longer be possible for them to give refugee or subsidiary protection status automatically to family members who do not qualify separately for refugee or subsidiary protection status in their own right (see Ahmedbekova). On the other hand, there is still an obligation to extend the same rights in the law to family members covered by it, even if they will not have refugee or subsidiary protection status as such. This will include having a residence permit with the same date of expiry as the person with refugee or subsidiary protection status, which is an improvement on the current Directive. But the Regulation precludes a residence permit being issued to a spouse or unmarried partner ‘where there are strong indications that the marriage or partnership was contracted for the sole purpose of enabling the person concerned to enter or reside in the Member State’.

Fifthly, there will be more harmonisation of the rules on residence permits, as regards fees, an explicit requirement to use the EU uniform format, an obligation to issue a permit within 90 days, and a requirement not to leave people with gaps between permits when they are renewed. The prospect for non-renewal of permits will now be linked to withdrawal of status (compare with the T judgment on the current law, discussed here).

Sixthly, there will be parallel harmonisation of the rules related to travel documents, which are issued by Member States to beneficiaries of international protection in place of passports, given that it would probably be unsafe for them to contact officials from their country of origin. (In the case of refugees, this supplements the rules already set out in the Refugee Convention). They will be valid for more than one year and will be expressly subject to the EU’s passport security rules.

Seventh, the provisions on movement within the territory will be redrafted to add the proviso that equal treatment with other non-EU citizens applies where they are ‘generally in the same circumstances’. This may be an attempt to confirm the case law in Alo and Osso (discussed here), which permits a link between limiting movements and the grant of benefits in some cases.

Eighth, there will be a new rule emphasising that refugees and people with subsidiary protection do not have the right to move between Member States – unless they are allowed to stay on the basis of national or other EU law, and subject to the right to make short-term visits under the Schengen rules. As noted already, the EU rules in question include a limited right to move between Member States under the EU long-term residence Directive, which is also being renegotiated. Any unauthorised movement between Member States can be punished by ‘resetting the clock’ on acquisition of long-term residence status under that law. However, Member States will have to fully count the time spent as an asylum-seeker when determining if a refugee or person with subsidiary protection has spent five years’ legal residence in order to qualify as an EU long-term resident under that Directive.

Ninth, the rules on integration will be amended by an obligation to ensure equal treatment as regards work-related matters, including taking account of experience in an occupation obtained outside the country of refuge. The rules on education will provide for equal treatment for adults (subject to an optional exception for loans and grants) and an express right to finish secondary school after the age of majority. Social assistance benefits can be linked to compulsory integration courses, and it will still be possible for Member States to limit beneficiaries of subsidiary protection to ‘core benefits’, which will now be listed in the main text instead of the preamble (adding housing benefits, which takes account of analogous case law). It will also now be explicit that Member States may make integration measures compulsory, subject to provisions on fees and accessibility. Finally, there will be new provisions on the guardians of unaccompanied minors.

Assessment

To what extent will the Regulation achieve the objectives which it sets out in its preamble?

To ensure harmonisation and more convergence in asylum decisions and as regards the content of international protection in order to reduce incentives to move within the […] Union, encourage beneficiaries of international protection to remain in the Member State that granted them protection and ensure an equality of treatment of beneficiaries of international protection

The assumption that harmonisation of refugee decisions deters movements within the EU is often questioned, but in any event the Regulation should in principle increase harmonisation of decision-making somewhat. This stems not only from converting a Directive into a Regulation and removing the qualified option to have higher standards, but also from removing some of the options in the main part of the law, and providing more details of how the common rules must be interpreted – for instance, as regards sur place applications, the internal protection alternative, and the definition of ‘particular social group’.* Note that in some cases this takes the form of integrating the case law into the main text or preamble, thereby making it more visible – and this blog post only mentions some of the new details which will be added to the preamble.

On discouraging movements between Member States, the sanction of restarting the clock on EU long-term residence status for those who move without authorisation, plus allowing easier access to that status for those who stay put, aims to provide a simultaneous carrot and stick. Awkwardly the Regulation does not provide for the situation, recognised by the case law (albeit subject to a very high threshold), when it is legitimate for a refugee or person with subsidiary protection to move to another Member State because the conditions in the Member State which extended them protection have deteriorated to the point where they breach the EU Charter of Fundamental Rights.

As for equality of treatment of those with international protection, the changes in the rules on the rights after obtaining refugee or subsidiary protection status appear liable to reduce differences between Member States – if that is the issue of equal treatment being referred to. On the other hand, some differences between refugees and people with subsidiary protection (as regards social assistance, and being covered or not by the family reunion Directive, which will be particularly relevant where family members are not already present) will remain.  

More fundamentally, as noted already this Regulation will form part of a broader package aiming at the same objectives; in particular the new Regulation on asylum procedures will in parallel harmonise the law on the procedural side, and changes to the law on reception conditions will also aim to discourage movements between Member States. And going beyond this, the bigger impact of the asylum package may come not from this Regulation, but from the new constraints planned on asylum seekers’ applications being considered on the merits in the first place – potentially leaving the EU law on qualification for refugee and subsidiary protection status, whatever its form or legal content, as a form of Potemkin village less frequently accessible in practice. Some of the other blog posts in this series will examine the extent to which the new asylum package could lead to this result.

 

Barnard & Peers: chapter 26

JHA5: chapter I:5


**Disclaimer: I was an independent adviser for a consultancy advising the European Commission on the implementation of and possible amendment of the current Directive.

 

Thursday, 28 December 2023

Online Formation of Companies in Lithuania in a Comparative Context: Implementation of the Digitalisation Directive and Beyond

 



Virginijus BitÄ—, Professor of Law at the Law School of Mykolas Romeris University

Ivan Romashchenko, Senior Researcher of the Legal Technology Centre at the Law School of Mykolas Romeris University

Photo credit: Elian, via Wikimedia Commons 

For many years, paper was the main format for the registration of companies. The Digitalisation Directive, adopted in 2019, obliged European Union (EU) Member States to provide founders with the option to form private companies digitally. Although for Lithuania, where online formation of legal entities had already existed even before 2019 and these regulatory developments did not bring about radical change, they nevertheless forced the national legislator to introduce the required amendments. The adopted amendments mostly took effect on 1 July 2022. Among others, the amendments provide for the recognition of identification tools, which means that electronic signatures issued in other EU Member States should be recognised. In addition, the State Enterprise Centre of Registers of the Republic of Lithuania has taken steps to change the registration portal’s interface, to have a guide in English and to simplify the process of registration by allowing foreigners to go without opening bank accounts in Lithuania as a prerequisite to incorporation.

In our research we aimed at studying the provisions of the Digitalisation Directive and the results of its implementation in Lithuania to suggest possible improvements in the online registration of companies. We have carried out a comparative study of both EU jurisdictions (Estonia, Latvia, Lithuania, and Poland) and one non-EU jurisdiction (Ukraine). In addition, a survey was carried out among representatives of large, middle-sized, and small law firms in Lithuania. Additionally, an interview was held with a representative of the State Enterprise Centre of Registers regarding the implementation of the Digitalisation Directive, their experience in registering companies online and future work perspectives. Respective authorities in other jurisdictions, including the Centre of Registers and Information Systems of the Republic of Estonia, the Register of Enterprises of the Republic of Latvia, and the Ministry of Justice of the Republic of Poland, were also approached for statistical information about online registration of limited liability companies.

One of the key provisions of the Digitalisation Directive, the obligation to ensure online formation of private companies, was fulfilled in Lithuania in 2009–2010. To compare, online formation of companies in Estonia has been available since 2007, in Latvia since 2010, and in Poland since 2012. In Ukraine the possibility to create limited liability companies online was officially announced in 2019. The statistical information has shown the increase of companies being established online in all the studied jurisdictions.

As a prerequisite for online formation of private companies in the jurisdictions in focus the template of the articles of association was approved. Estonia, Latvia, and Lithuania use a rather standard template which does not allow many different options of regulation. Meanwhile, in Poland and in Ukraine, templates are designed in a way that the founders may choose among various options. On the one hand, having optional clauses in the model articles of association provides more flexibility to founders—they may choose the clause which fits their needs. On the other hand, if the founders want more sophisticated articles of association, they can go to a notary. It may be argued that in a situation with many options of default provisions founders would be forced to hire lawyers to advise them how one option differs from the other and which is better to choose, entailing more legal expenses. The incorporation process risks becoming even more costly if, instead of default provisions with many options, the model articles of association contain empty fields that the founders would have to fill out. Based on the above, introducing more default provisions for a template of a limited liability company is not an ideal solution fitting all and should be studied more.

Another important aspect we outlined is how the founding documents are to be signed and how easily online registration of companies can be available to foreigners. In general, out of those countries, Estonia has the longest history of application of online registration of companies (since 2007). This jurisdiction has for some time clearly given a way to form companies online to foreigners residing in the EU. In other studied EU jurisdictions, qualified electronic signatures from foreign providers have gradually been recognised. In Poland, there is also one more way to sign the founding documents: through the creation of an ePUAP trusted profile, but this covers only persons having a PESEL number. Therefore, qualified electronic signatures are the main identification tool to form companies online.

In Lithuania several respondents opined in favour of broader usage of e-signatures during online formation of companies, namely the introduction of e-banking. There are some arguments to support said statement. Bank clients who have e-banking are always identified and always undergo a security check with the verification of identification documents. This is why there are grounds to recognise electronic banking as one of the identification tools for the purpose of company formation. Latvian and Ukrainian experience of using Bank ID as an identification tool proves that this instrument is user-friendly and convenient.

Despite a considerably high level of implementation of the Digitalisation Directive in Lithuania, there are still issues in online formation of companies in Lithuania which were reported by respondents. Some of the outlined issues have already been tackled or should be resolved by the implementation of the Digitalisation Directive, namely the recognition of identification means issued in other EU Member States to empower foreigners and the publishing of constituent documents in a language broadly understood by most cross-border users. At the same time, some steps urged by respondents exceed the requirements of the Digitalisation Directive. Those are both technical and legal measures. As for purely technical issues, many respondents pointed at the apparently excessive need to have several documents signed with e-signatures instead of signing one single file. The recognition of e-banking as an identification tool and more flexibility in the signing of a template of a constituent document for a limited liability company would make online formation of companies more accessible to a broader range of people. These suggestions essentially go beyond the effect of the Digitalisation Directive but are aimed at the improvement of the existing regulation of company formation.

 

For more information see: BitÄ—, V., Romashchenko, I. Online Formation of Companies in Lithuania in a Comparative Context: Implementation of the Digitalisation Directive and Beyond. Eur Bus Org Law Rev (2023). https://doi.org/10.1007/s40804-023-00282-6.

Friday, 22 December 2023

The son of a leading businessperson under the Russian sanctions framework before the CJEU: Ongoing relevance of the Tay-Za case law

 


 By Antje Kunst*

Photo credit: Alvegaspar, via Wikicommons media

Many challenges before the EU General Court of listings or re-listings of Russian oligarchs and their immediate family members have been unsuccessful in recent past. 

However, on 29 November 2023, a second de-listing application of Alexander Pumpyanskiy before the EU General Court was successful (Case T‑734/22 Pumpyanskiy v Council, ECLI:EU:T:2023:761 only available in French). This came after a first application was unsuccessful (Case T-291/22 Pumpyanskiy v Council, EU:T:2023:499 only available in French).

Alexander Pumpyanskiy is the son of Dmitry Pumpyanskiy, a Russian billionaire and founder of TMK, a leading producer of pipes for the oil and gas industry in Russia.  Sinara Group is a Russian investment company. Dimitry, the primary target of the designation criteria, and his wife have separate cases before the Court.

Introduction

The basis for Mr. Pumpyanskiy’s initial listing stemmed from his association with his father, Dmitry, through their roles in TMK and the Sinara Group. He was also said to provide support to and benefit from the government of Russia. In his first case the Court held that the positions in the two companies ‘undoubtedly gave him a power of influence and responsibilities within those undertakings’. His family relationship and business ties with his father were sufficient to show that he was associated with him.

Regarding his re-listings in Case T-734/22, after periodic reviews, the EU General Court found that the criterion of association was no longer fulfilled as the applicant had resigned from his positions within the Sinara group and TMK on 9 March 2022 following his initial listing. The only remaining connection to his father was his familial tie, which the Court deemed insufficient for an association in this particular context. Furthermore, the General Court ruled that his former roles were insufficient evidence to demonstrate ongoing ‘support for the government’. The Court only dismissed his request for damages

This ruling from the General Court within the context of Russian sanctions offers valuable insights into the Court's approach in how it will address future challenges of listings or re-listings by immediate family members of leading Russian businesspersons.  It also appears that the Prigozhina case, the case of the mother of the late Chef of the Wagner Group Yevgeni Prigozhin (Case T-212/22, Prigozhina v Council, EU:T:2023:104) continues to be important case law on which the Court will rely regarding applications of immediate family members of Russian oligarchs.

Ceasing of business relationship with primary target

In the case at hand the Court recalled that the applicant's name was initially listed on the grounds that he was related to his father, by reason of their family relationship and their business relationship, i.e., their respective activities within the TMK company and the Sinara group.

The General Court found that since the applicant had ceased his functions on 9 March 2022, i.e., six months before the adoption of the first maintenance measures, one year before the adoption of the second and one and a half years before the adoption of the third, such past functions, could not, by reason of the length of time, justify, on their own, the maintenance of the measures. The past functions alone were deemed insufficient to establish a link of association with his father within the meaning of the criterion (g). (para. 61 of the Judgment)

Mere family relationship insufficient

The General Court determined that, at the time of the applicant's re-listing, there was no evidence of ‘economic or capital ties’ or ‘common interests’ between the applicant and his father which are necessary for fulfilling the criterion of association. Relying on its case law of Tay Za v Council (C-376/10 P, ECLI:EU:C:2012:138) regarding associated family members the listing was effectively grounded solely on the family tie between him and his father which was considered insufficient.

Ongoing relevance of Tay Za case law

The Court accepted the Council’s argument that the sanctions framework was different in the present case than in the Tay Za case related to the regime of Myanmar, however it considered that notwithstanding that, the case-law of Tay Za could be applied mutatis mutandis, to the applicant's situation. (paras. 62 to 64 of the Judgment)

This underscores the ongoing relevance of the Tay Za case law, also within the context of Russian sanctions. It appears to enable sons and daughters who have been listed under the criterion associated with leading businesspersons operating in Russia to be successful with their challenges of their listings or re-listings when resigning from company positions in which the primary sanctioned individual is or was involved.

Without association no risk of circumvention established

The General Court found that the Council had not established a risk of circumvention making the exact same findings as in the Prigozhina case on the ground that there was no association. (see paras. 54, 68-71 of the Judgment)

The General Court like in Prigozhina accepted that there was a ‘non-negligible risk’ that individuals providing support to the government, e.g., leading businesspersons, might exert pressure on individuals associated with them, e.g., their family members, in order to circumvent the effect of the measures imposed on them. (see para. 105 of Prigozhina case) However in the case at hand association to a leading businessperson had not been established.

In the Syrian sanctions framework it was expressly provided for ‘leading businesspersons operating in Syria’ and ‘members of the Assad or Makhlouf families’ and ‘persons associated with them’. The familial connection with these families might be adequate to include individuals' names on the lists using the criterion of 'association with members of these families.' (para. 70 of the Judgment) In Pumpyanskiy's case, the relevant legal framework did not include 'members of certain families' among the listing criteria.

The importance of being up-to-date

As in other sanctions cases in which applicants succeeded with their de-listing applications, the Court made clear how important an up-to-date statement of reasons and up-to-date evidence is. In the court proceedings the Council relied, to justify the re-listings, on matters on which it did not rely when it adopted the contested measures. Regarding the Council’s claim that the applicant continued to be involved in TMK’s foreign subsidiaries after resigning from his company roles the Court ruled that this assertion was absent from the statement of reasons. Some evidence the Council provided post-dated the contested measures and was therefore dismissed. (see paras. 74 and 76, 77 of the Judgment). Other evidence was not regarded as sufficiently concrete and precise.

Material or financial support to the Government of Russia

The Court also found that the Council could not assume, merely because the applicant was chairman and a member of the board of directors of the Sinara group or a member of the board of directors of the TMK company when his name was initially entered on the lists at issue, that he could be classified as a natural person who provides material or financial support to the Government of Russia, even several months after leaving such functions. That would lead to the applicant's situation being frozen and to the periodic review exercise being deprived of any useful effect. (para. 85 of the Judgment)

In line with previous case law the General Court held that the ceasing of exercising functions within a structure did not in itself imply that former functions in companies were irrelevant, as past activities could influence behaviour. However, taken in isolation, a person's former functions could not justify the listing. If the Council intended to rely on past activities, it needed to provide serious and corroborating evidence in support of its view that the applicant maintained links with the companies in question on the date on which the contested measures were adopted. (para. 87 of the Judgment)

Conclusion

In this case the Council failed to convincingly prove that the applicant maintained ties with his father and the companies in question after stepping down from his roles in those companies at the time of his initial listing. In future similar cases, the Council might be able to furnish convincing up-to-date evidence and establish that the family member in question remained connected to the primary targeted individual by for example ‘common interests’.

This case shows that there must a complete cutting off of business ties with the primary targeted individual in order to be successful before the Court and in order not to risk a further listing by the Council on the basis of association.

The Court was correct in requiring an up-to-date statement of reasons and up-to-date evidence to support a continuous involvement of the applicant in TMK, e.g., in TMK’s foreign subsidiaries. The result might be though that the Council in Pumpyanskiy's case decides to update the statement of reasons and use the evidence which post-dated the contested measures in support of a new listing. This might be then the subject of further litigation before the General Court which is already swamped with sanctions cases.

The risk of circumvention might be considered by the Council as significant in many Russian sanctions cases. However, fact remains in the absence of a presumption of circumvention by immediate family members and the Council failing to provide convincing evidence which establishes association and a risk of circumvention, immediate family members of leading businesspersons will be successful before the Court.

What role the Council’s introduction of the new listing criterion of ‘immediate family member of leading Russian businesspersons operating in Russia’ can and will in the future play in all of this remains to be seen. On this point see my previous post: ‘The risk of circumvention of EU sanctions through the immediate family of leading businesspersons and the case law of the CJEU’.

 

*Antje Kunst is an international lawyer and a member of Pavocat Chambers advising and representing individuals in a wide range of matters in the field of the EU’s Common Foreign Security Policy (CFSP) and takes instructions from individuals for challenging EU and UN sanctions before the EU courts and international bodies.

Wednesday, 20 December 2023

Take this job and shove it: the revised EU law on non-EU migrant workers

 



Professor Steve Peers, Royal Holloway University of London

*Text updated Dec 22 2023, to add a link to the agreed text of the Directive, and April 12 2024, on its final adoption 

Photo credit: Lasse Fuss, via Wikimedia commons

Overshadowed somewhat by the agreement on asylum legislation, the EU Member States and the European Parliament have also this week agreed on an amendment to EU law on migrant non-EU workers, known as the ‘single permit Directive’. Unlike the asylum deal, which (subject to seeing the legal texts; I’ll comment more when they are available) seems at first sight to be a reduction in standards, the revised single permit Directive is a modest but useful improvement in standards applicable to migrant workers. [Update: the revised law was officially adopted in April 2024.]

Background

The current single permit law dates back to 2011. It does not regulate the numbers of migrants coming from non-EU countries to seek work in Member States (the Treaties state that only Member States can regulate that).  Nor does it regulate the substance of when non-EU labour migrants are admitted (ie issues such as shortage occupations, pay thresholds or other criteria for admission). Rather it regulates two issues: the procedural aspects of applying to be a migrant non-EU worker in the EU, and the equal treatment of such migrant workers. (Note that there are also EU laws on specific groups of migrant workers, which regulate the details of admission of non-EU workers in more detail: the Blue Card law on highly skilled workers; the seasonal workers Directive; and the intra-corporate transferees Directive. The EU law on admission of non-EU students and researchers is also relevant to academic staff and trainees). There is limited CJEU case law on the 2011 Directive: all of it concerns equal treatment in Italy. The UK, Ireland and Denmark opted out of the law – although it has nevertheless become applicable to UK citizens who seek to move to the EU as labour migrants post-Brexit.

Believing that the law needed updating to streamline the admissions process and strengthen equal treatment, the Commission proposed replacing it with a new version in April 2022. (See also the impact assessment on the new proposal, and the 2019 fitness check and report on implementation of the 2011 law) At the same time, the Commission proposed replacing the EU law on long-term resident non-EU citizens (see my comments on that proposal here and here, and on the Council’s position here). The latter proposal is taking longer to negotiate.

The European Parliament and the Council adopted their positions on the single permit proposal in spring of this year, and have now concluded their negotiations. Again Ireland and Denmark opted out, and the law will be relevant to Brits who move to the EU. The revised law (the ‘2024 Directive’) will likely be formally adopted in the spring of 2024, and Member States will have two years to adapt their law to comply with it. The following describes the current law, while explaining how the 2024 version will change it; it also indicates which Commission proposals for amendments were rejected.

Scope of the single permit law

In addition to non-EU citizens admitted for work, who are covered by both the procedural and equal treatment parts of the Directive, the equal treatment part of the Directive also applies to non-EU citizens who are admitted for other reasons, but who are allowed to work. However, several groups of non-EU citizens are excluded from its scope, usually because they are subject to more specific rules in other EU law: non-EU family members of EU citizens who have moved between Member States; citizens of countries which have a free movement treaty with the EU, and their families; workers who are posted to provide services (the Commission’s proposal to clarify whom this exception refers to was rejected); applicants or workers who are seasonal workers or intra-corporate transferees (the 2024 version will define these groups by reference to other EU law); au pairs (the Commission’s proposal to define them by reference to EU law was rejected); who have applied for or obtained temporary protection (adding a reference to EU law; on the position of those fleeing the invasion of Ukraine, see here; the European Parliament’s amendment to drop this exclusion failed); who have applied for or obtained refugee status or subsidiary protection on the basis of EU law; who are EU long-term residents as defined by EU law; who have applied for or been admitted as self-employed workers; whose expulsion is suspended (the European Parliament tried to drop this exclusion too); or who have applied for or been admitted as seafarers.

Member States may also disapply the procedural part of the Directive (but not the equal treatment part) to those who were admitted for less than six months (the European Parliament tried, but failed, to cut this to three months), or who were admitted to study; and the procedural part does not apply at all to those admitted on the basis of a visa.

The biggest change to the scope in the 2024 version is that the equal treatment part of the Directive will now apply to the beneficiaries of national protection (as distinct from EU-harmonised asylum law), if that national law allows them to work. Applicants for national protection are still fully excluded. This is a compromise between the Commission and European Parliament, which wanted to drop this exclusion for applicants for and those holding national protection status fully, and the Council, which wanted to retain it fully.

The single permit process

The 2011 law provides that a single permit is both a work permit and a residence permit, issued on the basis of a single application. Either an employer or employee applies for it (or both, if a Member State allows that). Applications must be made from outside the country, although Member States may allow applications for those who are legally present. The 2024 law will liberalise this, by always allowing in-country applications from non-EU citizens who are legally resident on the basis of a residence permit; Member States may allow in-country applications by those who are otherwise legally present. (The Commission and European Parliament wanted to require Member States to consider in-country applications from the latter group, but allowing in-country applications from holders of residence permits was as far as the Council was willing to go).

Member States must decide on single permit applications within 90 days, cut from four months under the current law at the behest of the European Parliament. Also, the 2024 law will streamline this further by requiring that this time limit also covers time to check the labour market (where national law provides for this). But the Commission’s more ambitious proposal (backed by the European Parliament) to streamline the process even more by applying this time limit also to the issue of a visa was rebuffed by the Council. So was the European Parliament’s attempt to cut the time limit to 45 days in certain cases. It will still remain possible to extend the deadline in exceptional cases.

The European Parliament’s attempt to introduce a minimum period of validity for single permits (two years for an indefinite contract, otherwise the duration of the contract) was not accepted by the Council, so this issue remains regulated by national law.

The current procedural rights to know the reasons for a rejection of an application or withdrawal of a single permit, and to challenge that decision in court, are retained. They are strengthened by adding requirements to consider the individual case and the principle of proportionality, at the European Parliament’s behest. The provisions on access to information will be expanded, including fees, legal redress and workers’ organisations – those additions again at the European Parliament’s behest. On application fees, it will now be specified that they must not be excessive; the European Parliament’s amendment to specify that an employer could not collect the fee from the worker (where the employer pays the fee) was accepted.

Employment rights

The current Directive provides for basic rights to live in the country and carry out employment once the single permit has been issued. The Commission sought to go further, and add two further rights of fundamental importance to the position of non-EU workers: the right to change employer and the protection of status in the event of unemployment. In both cases, the Council sought to offer much less improvement and the European Parliament sought to offer much more; and in both cases, the end result was a compromise.

Changing employer

Currently, this issue (like unemployment) is left to national law. Therefore it is not accurate to say that the 2011 directive requires workers to stick with their current employers; rather the Directive does not stand in the way of most Member States insisting upon such a requirement (for the details of which Member States require this, see the impact assessment).

The Commission proposed that workers could change employer, subject only to the option for Member States to require notification and a check of the labour market situation; this could be suspended for 30 days while Member States did checks. The Council position provided that Member States also could recheck the original conditions of admission, check a possible change of occupation, suspend the job move for 90 days (not 30) and require a minimum period with the first employer (but no more than a year), subject to an obligation to allow earlier employer changes in ‘exceptional’ cases. The European Parliament would have required notification but would only have allowed labour market checks in certain cases. The final text of the 2024 directive allows for notification and labour market checks, with a 45 day period to do checks (with an exceptional 15 day extension), and the possibility for Member States to require no more than six months with the same employer before attempting to change employer – subject to an obligation to let the worker change employer earlier if the employer has seriously breached the employment contract.

Unemployment

The Commission proposed that the worker could stay for three months of unemployment, and if they found a new job after they could stay for 30 days more while Member States did checks. The Council position cut that to two months over the entire validity of the permit. The European Parliament version provided for a nine month period, with a 12 month extension in the event of a ‘serious violation’ of the worker’s rights by an employer. The compromise in the final text of the 2024 directive is three months’ unemployment over the validity of the permit – rising to six months after two years holding a single permit, although for periods of unemployment above three months Member States can require the worker to have sufficient resources without recourse to social assistance. Moreover, if there are reasonable grounds to believe that a worker has suffered particularly exploitative working conditions, the unemployment period can be extended by four months.

Equal treatment

First of all, a reminder that as noted above, the equal treatment provisions of the Directive have a wider scope, applying also to those admitted for other reasons but allowed to work, and now to be extended also to those with a form of national protection.

There is a long list of equal treatment rights, but also a long list of exceptions. The Commission proposed that the possible derogation from equal treatment as regards housing be narrowed so that it applied only to public housing, and that those admitted on the basis of a visa have equal treatment as regards family benefits. The final text accepted the first of those amendments, subject to qualifying wording (and an explanation in the preamble, inter alia on the importance of workers having a choice not to have to take housing tied to the employer), but rejected the second (at the Council’s behest). There are also elaborations on the work-related equality rights.

Finally, in addition to some amendments to the obligations to provide information on the public, there are two wholly new provisions on bad employers: one on public sector monitoring and checks, and the other on workers’ rights of individual redress against them.  

Comments

It is obvious that the Member States in the Council were willing to accept a lot of the proposals from the Commission, as well as many of those from the European Parliament. The social democratic party in the Parliament has taken credit for insisting on these amendments, and indeed it should be congratulated if it had the main role, because the agreed law does improve the position of non-EU migrant workers. But we should not forget that as assiduously as they defended migrant workers’ rights, the social democrats (and liberals) were simultaneously reportedly throwing asylum seekers and refugees under the bus in the asylum negotiations.

To recap, the main changes to the current law are: rights to change employer and protection during unemployment; an extension of personal scope of the equal treatment rules (and their qualified extension to private housing); monitoring of, and facilitation of challenges against, bad employers; in-country applications for all holders of residence permits and a shorter deadline to decide on applications.

The main points rejected by the Council concerned visas: including the visa process within the deadline to decide on applications; and equal treatment in family benefits for visa holders. The main successes of the Parliament (besides defending Commission proposals, particularly as regards changes of employer and unemployment) are the shorter deadline to decide on applications, and an extra stay if victimised by a particularly vile employer.   

Indeed, one striking feature of the amendments is how much they aim to protect against bad employers – not only as regards that possible extra stay, but also as regards redress against them and greater monitoring of them. The provisions on private housing, and also obviously protection in the event of unemployment and the right to change employers, implicitly help to protect against exploitative employers too. A set of revisions on the law on migrant workers that mainly concerns how to protect them against predatory employers could be seen as a sign of late capitalism.

While all of the revised law formally concerns immigration, most of it is in effect about the relationship between workers and their employers: only the provisions on in-country applications and application deadlines are immigration law in the purest sense. Of course, any law on migrant workers can only be fully understood in context as an aspect of labour markets; the situation on the labour market will in turn be fundamental in practice for any migrant worker who contemplates changing employer, or who is looking for a new job during unemployment. And the key points left to national law (admission quotas, conditions of admissions) are also strongly affected by how labour markets operate in practice. Leaving these aspects of economic migration to national law mirrors the aspects of employment law as such which are left to national law by the EU, in order to take account of differences between Member States as regards the functioning of labour markets and traditions of employment regulation.