New Legal Suit and the Ensuing Judgment

In February 2022, the Commission brought a new action against Hungary before the CJEU for failure to comply with the above-mentioned judgment, seeking the imposition of financial sanctions (lump sum and periodic penalty payment) in application of TFEU Article 260(2).

In its submission to the CJEU, the Commission applied its internal guidanceFootnote ¹⁰ to propose a minimum amount of lump sum of €1.044.000 and a penalty payment of nearly €16.400 per day of delay from the date of delivery of the new judgment until the date Hungary complies with the 2020 ruling. Amounts were calculated by using a coefficient of seriousness of 13 on a scale of 1–20 and a coefficient for duration of 1 on a scale of 1–3, combined with Hungary’s ability to pay. The Commission argued that the infringed EU rules were of particular importance, including those that are essential to ensure the effective application of the 1951 Refugee ConventionFootnote ¹¹ within the remit of the EU legal order and various rights enshrined in the Charter of Fundamental Rights of the EUFootnote ¹² (Charter), such as the right to asylum, the principle of non-refoulement, and the right to an effective judicial remedy. It also claimed that non-compliance by Hungary with the 2020 judgment had significantly impacted both the public interest (i.e., the persistent non-compliance with the EU asylum acquis Footnote ¹³ sets bad precedent for other member states and undermines the Common European Asylum System), and the individual interests of the third-country nationals concerned. Further aggravating circumstances included “repeated infringements of EU migration and asylum law, manifest disregard of the principle of primacy of EU law and the explicit refusal to comply with [the CJEU] judgment” (para. 90).

In the Judgment, the CJEU found, siding with the Commission on the above claims, that Hungary has not taken the measures necessary to comply with its 2020 ruling on several accounts, hence breaching TFEU Article 260(1). Points of persisting non-compliance with EU law concerned: (1) the lack of effective, easy and rapid access to the asylum procedure; (2) the non-respect of the right of asylum applicants to remain in Hungary pending a final court decision on the appeal of their rejected claim; and (3) the non-respect of the principle of non-refoulement and various procedural safeguards when removing unlawfully staying non-EU nationals. Hungary’s claim of not actually removing rejected asylum applicants before the appealed decision becomes final was rejected, since “mere administrative practices, which by their nature are alterable at will by the authorities and are not given the appropriate publicity” (para. 81) do not constitute the proper fulfillment of EU obligations.

As a next step, the CJEU determined the financial sanctions against Hungary for its failure to implement the 2020 ruling—going much beyond what the Commission had requested. The CJEU first recalled that the rationale of TFEU Article 260(2) procedure is “inducing a defaulting Member State to comply with a judgment establishing a failure to fulfil obligations [and] a lump sum and a penalty payment, are both intended to achieve that objective” (para. 96).Footnote ¹⁴ The CJEU—possessing full discretion on the matterFootnote ¹⁵ —ordered a record lump sum payment of €200 million (over 191 times what the Commission had originally sought) and a record-equaling penalty payment of €1 million per day of delay until the 2020 ruling is complied with (over 61 times what the Commission had proposed). This sizable periodic penalty payment was divided—somewhat arbitrarily as for the amounts—between penalties for non-compliance with various provisions of the EU asylum acquis (€900,000 per day) and violations of several provisions of the EU return acquis (€100,000 per day).

Multiple reasons linked to the seriousness and the duration of the infringements, taking into account Hungary’s ability to pay, justified the unprecedently high sum of the pecuniary sanctions.

As regards seriousness, by the above breaches of EU law, Hungary has been deliberately evading the application of the common EU asylum policy as a whole and a number of rules relating to the return of non-EU nationals in an irregular situation. The great importance of the fundamental rights interfered with—enshrined in the Charter, the 1951 Refugee Convention and the European Convention on Human RightsFootnote ¹⁶ —played a central role in the CJEU’s assessment of seriousness. Moreover, failing to comply with a judgment “relating to a general and persistent practice” makes infringements even more serious (para. 112). The CJEU added that Hungary’s deliberate evasion of the application of the EU’s common asylum and return policy forms an “unprecedented and exceptionally serious infringement of EU law, which represents a significant threat to the unity of EU law and to the principle of equality of the Member States [under] Article 4(2) TEU” (para. 107). This finding has deeper and more cross-cutting, structural underpinnings: “unilaterally upsetting the balance between the advantages and obligations arising from its membership of the [EU], [Hungary] calls into question observance of the principle of equality of the Member States before EU law. That failure in the duty of solidarity accepted by the Member States by the fact of their accession to the [EU] strikes at the very root of the EU legal order” (para. 117).

The CJEU went on to pronounce that the above-described conduct, representing an extremely serious threat to the unity of EU law, has an extraordinarily serious impact both on private interests, particularly the interests of asylum applicants, and on the public interest. In particular, Hungary’s failure to fulfill its obligations under the EU asylum and return acquis has the effect of transferring to the other member states its responsibility. It includes financial responsibility for ensuring: (1) the reception of asylum applicants; (2) the examination of their applications; and (3) the return of non-EU nationals who do not have the right to stay in the Union. All this seriously undermines the principle of solidarity—one of the fundamental values the EU is founded on pursuant to TEU Article 2—and fair sharing of responsibility between the member states that governs, more specifically as per TFEU Article 80, the common EU asylum and immigration policies.

The Judgment also regarded the recurrent breaches of EU asylum law by Hungary—epitomized by other CJEU rulings condemning the non-application of intra-EU relocation of asylum applicants,Footnote ¹⁷ the criminalization of assistance to asylum applicants,Footnote ¹⁸ and the Hungarian “embassy procedure” to apply for asylum and the lack of access to the territoryFootnote ¹⁹ —as aggravating circumstances. The same goes for Hungary having disregarded the foundational EU principle of sincere cooperation (TEU Article 4(3)) by enacting new legislation extending the applicability of the initially non-compliant national law (on which the CJEU already ruled in 2023).Footnote ²⁰

As for the duration of the infringements, Hungary’s lack of efforts to implement the 2020 judgment over three and a half years was an additional factor underpinning the huge fine, given that “the process of compliance must be initiated at once and completed as soon as possible” (para. 130).Footnote ²¹ The Judgment stressed that the prolonged failure to comply with a CJEU ruling heavily undercuts the principles of legality and res judicata in a Union based on the rule of law.

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Dedicated procedures enforcing compliance with judgments of international judicial bodies are still rare in international law. To take two examples, first, in case of non-compliance with a decision of the International Court of Justice, “the other party may have recourse to the [United Nations] Security Council, which may, if it deems necessary, make recommendations or decide upon measures to be taken to give effect to the judgment.”Footnote ²² Second, within the Council of Europe, it is the Committee of Ministers that is in charge of the execution of the judgments of the European Court of Human Rights—which procedure, lacking legally binding outcome, does not have sharp teeth either: at last the Committee of Ministers can consider various “measures to be taken.”Footnote ²³ It is thus apparent that pecuniary sanctions ordered by the same international (regional) court whose original ruling was not implemented remains quite unique.

The scheme of the “lump sum” and “penalty payment” as financial sanctions under TFEU Article 260(2), directed against non-compliant member states, has also been considered by the International Law Commission when working on state responsibility. It was, however, rejected due to lack of embeddedness of this concept in general international law.Footnote ²⁴ Still, imposing such financial sanctions by the CJEU on stubbornly non-performing member states has been established judicial practice in the Union over the past two decades.Footnote ²⁵ The amounts of such “lump sum” and “penalty payment” can be, as a measure of last resort, deducted from the EU budget allocations to the member state.

Turning to the concrete case, it is without a doubt that the underlying 2020 judgment, finding serious infringements of the EU asylum and return acquis by Hungary, has been sufficiently important to merit a Grand Chamber adjudication. The subsequent Judgment, albeit delivered by a five-member chamber, was no less important. The CJEU took Hungary’s persistent—and even provocative—failure to comply with EU law and a previous ruling confirming these EU law breaches as seriously as this omission warranted, which translated into the record scale of the pecuniary sanctions.Footnote ²⁶ The Judgment, which is the first CJEU ruling pursuant to TFEU Article 260(2) in the field of asylum and returns, is of great importance on several accounts, also from the perspective of international law.

A peculiarity of the case is that the breaches of (at first sight) technical provisions of the EU asylum and return acquis cascaded, by their nature and combination, into the obstructing of the entire EU common asylum policy—with even farther-reaching consequences (see paras. 105–13). This constituted, on a more abstract level, a significant threat to the unity of EU law, by seriously undermining the principle of solidarity between member states (TEU Article 2) as well as disrespecting the principle of sincere cooperation (TEU Article 4(3)) and the equality of member states (TEU Article 4(2)). The reasoning of the Judgment thus showcases a carefully crafted fil d’or leading from more technical breaches of EU law that are “symptomatic of wider violations of more fundamental EU norms,”Footnote ²⁷ including certain Charter rights, to findings of constitutional character, tied with various facets of the core EU value of rule of law (TEU Article 2). All these violations of EU norms of higher order can be conceived as “second-instance non-compliance” with Union law. They stem from the accumulated gravity of breaches of more technical rules of EU law in the concrete policy field at hand (asylum and return), adding to the latter another (higher) layer of breach.

Beyond the specifics of the case, the CJEU expressed clear understanding of the broader and highly detrimental implications of Hungary’s misconduct, as the ruling’s remarkably strong constitutional language undeniably demonstrates. When reading the Judgment, one feels like falling into an “all-star gala” of key EU constitutional law concepts, such as sincere cooperation, equality of member states, primacy of EU law, rule of law, good faith, and solidarity, popping up line after line. All of them have been mobilized to underpin the CJEU’s grave concerns about the wider effects of Hungary’s non-compliance on the functioning of the entire EU legal order, hitting the “very root” of that corpus juris (para. 117). What stands out prominently is the CJEU’s willingness to play big when ultimately guarding the basic tenets and the integrity of the EU legal system, and to flex its muscles, conveying thus a firm message with an exclamation mark, when imposing unprecedentedly high financial sanctions in a rule of law case. Legal scholars have already lamented on how to make more successful the rule of law litigation in the EU and to use the most adequate EU rules on which to base such proceedings.Footnote ²⁸ By putting on display a series of core constitutional principles of EU law (see above) in a dispute concerning a specific (technical) policy area, the Judgment brings more tangible ammunition by formulating a strong, rule of law relevant constitutional language that can be transplanted into other contexts, too. Here goes then a judicial blueprint for other EU rule of law backsliding litigators to follow.

In a “like father, like son” manner, some of the basic EU law concepts relied on by the CJEU have their corresponding notions or doctrines in international law. The foundational law of treaties principle of pacta sunt servanda (codified in Articles 26–27 of the 1969 Vienna Convention on the Law of Treaties),Footnote ²⁹ for instance, surfaces in the Judgment at several points. It is when the CJEU reminds Hungary that a “Member State cannot plead practical, administrative or financial difficulties or difficulties of a domestic nature to justify failure to observe obligations arising under EU law” (para. 74); and more specifically when rejecting Hungary’s attempt to stall compliance by turning to its Constitutional Court to rule (see paras. 121–22). In this regard, the Judgment reasserted the primacy of EU law, even vis-à-vis domestic constitutional law, which has been recently challenged by certain national apex courts.Footnote ³⁰ The same applies to the general principle of good faith, inherent to pacta sunt servanda and an essential component to guide states’ actions in their international legal relations.Footnote ³¹ The CJEU recurrently employed a key EU law manifestation of it: the principle of sincere cooperation (TEU Article 4(3)). Likewise, the lack of good faith in Hungary’s course of action expressly features at one point underpinning the seriousness of the infringements of EU law (see para. 132). Similarly, more on the side of sectorial substantive norms at issue, the CJEU continued to defend the essence of the universal human right to seek asylum, including asylum seekers’ access to territory at EU external borders, by underlying the significance of the 1951 Refugee Convention “which constitutes the cornerstone of the international legal regime for the protection of refugees” (para. 108).Footnote ³² Therefore, when existential threats to the unity of EU law need to be addressed and the CJEU mobilizes a wide range of EU structural principles and doctrines of constitutional importance, the international law backbone of many of those becomes more visible. No matter how much autonomy EU law claims, it is still firmly rooted in international law. The EU legal system keeps on operating, in one way or another, in the legal space set out by the latter; and ultimate arguments to protect its unity and integrity at least draw inspiration from the key premises and principles of the international legal order.

Finally, from a more practical perspective, the question arises: how can the Commission ensure that Hungary actually pays this enormous fine ordered by the CJEU? Members of the Hungarian government, including the prime minister, bluntly rejected to pay even a penny from the lump sum and the penalty payment—and the latter has been still accumulating, as no EU-compliant legislative measure has been enacted yet, accompanied by aligned administrative practice, since the delivery of the Judgment. Given that the country subsequently missed two payment deadlines (the first in late August and the second mid-September 2024), the Commission triggered the “offsetting procedure”Footnote ³³ to deduct the €200 million lump sum from Hungary’s allocated share of the EU budget, looking into various financial envelopes expected to be disbursed to the country. In a similar vein, the Commission sent Hungary the first notice to pay the first batch of the penalty payment (the accumulated sum of three months—€93 million) in the beginning of November 2024.Footnote ³⁴ Due to the government’s extreme reluctance, the actual enforcement of the penalties remains to be seen. Likewise, assessing their effectiveness on actually remedying the situation of persistent breaches of EU law and forcing Hungary to align its laws and practice with its duties assumed under the EU Treaties is a story for another day. The CJEU, on its part, has done its utmost for sure, in the spirit of taking extreme measures (i.e., unprecedentedly high financial sanctions) in extreme situations. By doing so it equally served the purpose of sending a clear message with an exclamation mark to other member states reluctant to implement the EU asylum acquis.Footnote ³⁵ Openly flouting the EU common rules on migration and asylum can cost an awful lot of money for a rogue member of the bloc, hence they should think twice before engaging in such extremely deconstructive action.