I. The Charter’s Horizontal (Straight) Application

In the first three decades of European integration, the question of whether human rights requirements applied to the EU and erecting such requirements against the Member States was out of the question. The original text of the founding treaties contained no reference to the rule of law or human rights whatsoever, and the CJEU, in 1959, when first confronting the question in Stork,Footnote ²¹ quite logically refused to read such requirements into EU law. It ruled out the application of the constitutional principles of German law but provided no EU law surrogate. A decade later, however, the Court had a “Pauline moment.” In Stauder,Footnote ²² the CJEU held that EU law encompasses a set of general principles of law that are part of EU law, although not provided for explicitly, and fundamental rights were part of these. The CJEU sensed that the recognition of human rights (and the rule of law more generally) was, as a precondition of EU law’s supremacy, a constitutional necessity.Footnote ²³

Although the Court’s reasoning at the time was fundamentally styled after the Cour de cassation, which resulted in laconic, underexplained judgments,Footnote ²⁴ the Court was probably driven by two considerations.

First, it is a fundamental principle of political philosophy that no public power may exist without constitutional limits. Before the Enlightenment, it was accepted that public power was not limitless.Footnote ²⁵ Since then, it has generally been accepted that a limit is a citizen’s inalienable (fundamental) right.Footnote ²⁶ The idea of a social contract purports to define the hypothetical agreement that people would have concluded if they had been more conscious when creating the state. An important element of this theory is that citizens, in exchange for the benefits the state would provide, ceded their rights to the state, but some of these were so fundamental that they considered them inalienable and, hence, kept them. Member States have no unlimited public power; their power is confined by constitutionalism. Since Member States could not confer more power on the EU than they already had, they could only confer sovereign power within its concomitant limits. Under international law, a state may enter into a treaty that breaches its constitutional provisions and “may not invoke the provisions of its internal law as justification for its failure to perform.”Footnote ²⁷ Nonetheless, by signing the founding treaties, the Member States did not simply enter into a “contractual commitment” but conferred sovereign powers (parts of their sovereignty) on the EU and, accordingly, vested the EU with sovereign powers. The more polity-like (and less international organization-like) the EU is, the more compelling this argument is. The idea that citizens have inalienable rights is so obvious that it is inconceivable for the EU to have public power without being subject to constitutional requirements.

Second, the CJEU also had a clear, practical (strategic) reason to read constitutionalism into EU law (closely linked to the above philosophy). It would have been difficult, if not impossible, for national courts, including constitutional courts, to accept the transfer of sovereign prerogatives if the EU did not guarantee respect for human rights and the rule of law.Footnote ²⁸ In this sense, the supremacy of EU law was conditioned by the EU’s subjection to the requirement of constitutionalism. The CJEU could not expect national judiciaries to put up with losing their power to review EU actions based on their national constitution if it could not guarantee that EU law contained similar provisions. In 1969, when the judgment in Stauder was handed down, the supremacy of EU law was not a well-settled principle; it was merely emerging. The ruling in van Gend & Loos,Footnote ²⁹ the Marbury v. Madison Footnote ³⁰ of European integration, was handed down in 1963, but it did not clarify the hierarchy between EU law and national constitutions. It was only in 1970 that the CJEU pronounced the supremacy of EU law over national constitutions in Internationale Handelsgesellschaft,Footnote ³¹ one year after reading constitutionalism into EU law in Stauder. Theoretically and practically, it would have been impossible for the Court to put aside national constitutions if it had not introduced EU constitutionalism in the first place. It would have created a tyranny (public power without any constitutional limit), and national courts would not have accepted the doctrine. The term “constitutional traditions common to the Member States” implies that the CJEU promises to ensure that the EU’s actions meet national constitutional requirements, so there is no need for national courts to deal with this. The CJEU’s judgment in Internationale Handelsgesellschaft links supremacy issues over national constitutions and EU constitutionalism.Footnote ³²

The CJEU’s strategy was successful: the constitutional trade-off worked out.Footnote ³³ After the CJEU’s preliminary ruling in Internationale Handelsgesellschaft, the German administrative court also referred the question to the Bundesverfassungsgericht, which handed down its famous Solange I Footnote ³⁴ judgment. However, this was followed by Solange II Footnote ³⁵ , where the Bundesverfassungsgericht accepted the CJEU’s outstretched hand and held that as long as EU law provides for a sufficiently high level of human rights protection, the German Constitutional Court would refrain from reviewing EU legal acts under the Grundgesetz.Footnote ³⁶ This also implies that the purpose of this strand of EU constitutionalism was not to limit national actions in any sense but to ensure that EU actions remain within the confines of constitutionalism.

II. Extension to the Member States: Apparent Diagonal Application

It is a special trait of the EU that its “federal” institutional capacity does not even compare to its lawmaking powers. The EU’s convoluted constitutional architecture is a natural consequence of the EU’s idiosyncratic institutional structure and mirrors the fact that the EU is a legal giant but an institutional dwarf. The idea of “integration through law” implies that EU law is centralized, but its enforcement is not. The Member States conferred broad legislative powers on the EU but were quite hard-fisted when it came to financing institution-building.Footnote ³⁷ This resulted in an arrangement whereby the EU heavily relies on national authorities and courts to enforce EU law. In fact, Member States apply EU law more often than the EU itself. This is reinforced by the proliferation of legal harmonization through directives, which are not meant to be applied directly to flesh-and-blood cases but to create a framework for national measures.Footnote ³⁸ The EU rules on customs, VAT, and unfair commercial practices are predominantly applied by national authorities. Even in EU competition law, which is an emblematic field of EU law, national competition authorities carry the day in terms of the number of proceedings. Although the Commission investigates major cases, the majority of EU competition cases are handled by national competition authorities.Footnote ³⁹

The term “integration through law”Footnote ⁴⁰ is a euphemism for this asymmetric architecture. EU law succeeds because it is accepted as “the supreme law of the land” and is applied by national authorities and courts. This architecture is in stark contrast with most federal polities where the federal government has a prominent or predominant (though not exclusive) role in enforcing federal law.Footnote ⁴¹ In the US, the scope of the US Bill of Rights was extended diagonally by way of incorporation.Footnote ⁴² However, this was not the result of an administrative-institutional necessity but an effort to incorporate fundamental rights against the states. This is why the US Bill of Rights has never had apparent diagonal application but gradually acquired genuine diagonality.Footnote ⁴³

It follows from the above architecture that the Charter, even though set up by the Member States to limit the federal government and not the other way around, should have a “long-arm scope” and apply to the Member States when they act instead of the EU.Footnote ⁴⁴ For the CJEU, it took three decades to establish this prong of horizontal application. Thirty years after Stauder, in Wachauf,Footnote ⁴⁵ the CJEU held that the Member States have to respect the general principles of law when implementing EU law. The case featured a contradiction similar to Stauder. The German authorities were required to apply EU law, which, in their reading, breached fundamental rights under the Grundgesetz. Denying fundamental rights protection in this case was inconceivable. In the same vein, subjecting German authorities to the requirements of German constitutional law would have gone counter to the doctrine of supremacy since that would have subverted EU law to German constitutional law. The only possible way out was to immunize the national application of EU law from German constitutional requirements and to subject it to the corresponding EU requirements.

It appears that the CJEU could do neither more nor less. There was no legal basis for a broader scope and no normative warrant for it being narrower. Not extending the general principles of law would have undermined the supremacy of EU law in the same way as Stauder, but even more significantly. However, it is important that this rationale also limits the purview of the apparent diagonal application: this is warranted only to the extent that horizontal application is justified. This rationale gave rise to the “agency” theory: the reason why the general principles of law apply to the Member States is that, in certain cases, their actions are attributable to the EU itself and, as an emanation of the respondeat superior principle, agents cannot be allowed to transgress limits their principal cannot do.Footnote ⁴⁶

The above thinking features in the Charter were likewise meant to check EU institutions.Footnote ⁴⁷ Although its explanatory note mentions this term,Footnote ⁴⁸ Article 51 of the Charter makes no reference to the “scope” of EU law whatsoever and binds its application to the implementation of EU law. The various language versions differ slightly, but most refer to implementation in terms of application or enforcement of (and not mere coverage by) EU law.Footnote ⁴⁹

It should be noted that, notwithstanding the above conceptual distinctions, the apparent diagonal application may have significant spill-over effects, and this may make it an effective tool for EU institutions to enforce matters of human rights on Member States, even in cases where they pursue domestic policies. This phenomenon is an unexpected boomerang: the rule-of-law requirements that the Member States were initially set up to curb the EU are now applied by the EU to curb its Member States. The spill-over effects of the apparent diagonal application are highly significant. If it is impossible to split the matter between EU and national law, the Charter will embrace the whole matter, including elements of national law. This happened, for instance, in Åkerberg Fransson.Footnote ⁵⁰ Sweden established a general tax offense. The CJEU found the Charter applicable to the VAT strand of the tax offense as this came under the scope of EU law, and, as this could not be separated from the other strands, the Charter applied to tax offenses at large, including non-VAT violations. A similar logic can be perceived in relation to the independence of the judiciary (which has been addressed by the CJEU under Article 19 and not the Charter).Footnote ⁵¹ EU law requires Member State courts be independent when applying EU law, and it arguably erects no requirements against them when applying national law. Nonetheless, the EU law requirement spills over: the same courts apply both EU and national law, and splitting them along this line is impossible. As a corollary, the requirement of independence set out with respect to the application of EU law applies equally to national courts when applying national law. The result of the lockstep effect is that the requirement of judicial independence will, in effect, apply in general.

III. The Charter’s Intertextual Application

As explained above, the Charter may be applied not only by reason of implementation but also by reason of interpretation. A significant example is the ERT case law, where the CJEU read the general principles of law, including EU human rights, into the requirements Member States need to meet to rely on an exception to free movement. This strand of case law made it clear that EU fundamental rights do not apply by reason of implementation but by interpretation. In ERT, the CJEU did not refer to reliance on a derogation as implementation of EU law; it simply ruled that the exceptions to free movement “must be interpreted in the light of the general principles of law and in particular of fundamental rights.”Footnote ⁵² A long line of subsequent case law has endorsed this.Footnote ⁵³

This conceptualization was embroiled when the fundamental rights embedded in the general principles of law were converted into the Charter. Article 51 and the attached explanatory note create a triangular construction made up of “implementation,” “interpretation,” and “scope,” but Article 51 refers solely to “implementation.” As a result, neither scope nor interpretation has a textual link to the Charter; hence, the verbatim meaning embraces application in the sense of Wachauf but not ERT. However, the explanatory note refers to all three terms. It conflates the application by reason of implementation and the application by reason of interpretation under the overarching term of “scope” (“when they act in the scope of Union law.”) This can give rise to diverging interpretations. It may be argued that the drafters intended to extend the scope of the Charter by replacing implementation with scope, which, arguably, is supposed to have a broader meaning. The problem with this argument is that the language of Article 51 makes no reference to scope whatsoever, and the explanatory note makes it clear that the intention was nothing more and nothing less than converting the then-existing case law into Article 51. It may be argued that the language indicating a broader purview could not meet the Member States’ political approval; hence, this was hidden in the explanatory note. This, however, would indirectly confirm that the intention of the pouvoir constituent has a narrow meaning.

Although one may sense more principled considerations behind the text, it is submitted that the apparently conflicting terminology can be traced back to technical reasons. Very probably, there is a disappointingly simple explanation for why the text was drafted as it was. Namely, this was probably the easiest way to put the Court’s case law into codified language. At that time, no generally accepted collective noun could jointly refer to Wachauf and ERT, let alone terminological shorthand for the latter. Wachauf could be referred to as “implementation,” but referring to ERT as “interpretation” was not settled language. The drafters filled this gap by creating a collective term: “scope.” Nonetheless, for political reasons, Article 51 had to use conservative language. Putting a new term into the statutory text could have appeared suggestive of a departure from the case law, for which there was no political intent. At the same time, for linguistic reasons, a collective noun had to be coined that enabled a convenient shorthand reference to both Wachauf and ERT. Hence, Article 51 uses implementation, but the explanatory note clarifies this as pars pro toto. At the same time, the explanatory note uses scope to refer to both cases. This is probably the only way to explain the terminological triangle, taking into account the fact that the explanatory note leaves no ambiguity that constitutional intent put an equality sign between Article 51 and the then-existing case law. To argue that Article 51 extended the purview of EU human rights law is just as unreasonable as arguing that Article 51 invalidated ERT by referring solely to implementation.Footnote ⁵⁴

Not surprisingly, the first encounters with the inconsistently presented terminology caused confusion in judicial practice. In Pfleger,Footnote ⁵⁵ the CJEU used the three terms in a single paragraph.Footnote ⁵⁶ The Court reiterated the standard language of ERT, indicating an interpretive role “must be interpreted in the light of.”Footnote ⁵⁷ It held that when a Member State justifies a restriction to free movement, it acts under the scope of EU law and, therefore, must be regarded as “implementing Union law.”Footnote ⁵⁸ The ruling featured the Court’s effort to conceptualize the contradictory terminology of the Charter, and the explanatory note showed that implementation and interpretation were not conflated. In the same vein, the ruling in Berlington,Footnote ⁵⁹ adopted a year later, simply provides that reliance on an exception to free movement is governed by the Charter by reason of interpretation.Footnote ⁶⁰ However, the implementation usage prevailed, and the language of ERT was replaced with a language suggesting that this strand of application was also based on implementation.Footnote ⁶¹ Accordingly, “scope” means “implementation” and “interpretation,” but in the language of Article 51, “implementation” means both “implementation” and “interpretation.”

In reality, the Court had little choice. Article 51 refers to implementation, and the explanatory note indicates that Article 51 applies to both implementation and interpretation and refers to them as scope. This terminological inconsistency could not be overcome other than by using implementation in the broader sense to refer to implementation and interpretation in the narrower sense simultaneously. The Court has no power to replace the statutory language with a better phraseology. Nonetheless, referring to interpretation as a form of implementation within the meaning of Article 51 did not mean that the application of the Charter to the Member States was extended.

I. The General Doctrine

The CJEU has consistently refused to explicitly attribute genuine diagonal applicability to the Charter,Footnote ⁷⁸ no matter how striking the divergence from the Charter’s substantive provisions was,Footnote ⁷⁹ and held that, for the Charter to apply, there needs to be a genuine link to EU law.Footnote ⁸⁰ The Court expressed this through the requirement that the application of the Charter is conditioned on a “degree of connection,” which exists if EU law establishes a “specific obligation.” A weak and remote connection to EU law, manifested by some frivolously general requirement without any specific or detailed obligation, does not justify the application of the Charter. A contrary approach would overstretch the diagonal scope and make the Charter generally applicable since Member States could always be regarded as pursuing the aims listed in Article 3 TEU and turning the values listed in Article 2 TEU into reality. The CJEU rejected this absurd conception very early. In Currà v Germany,Footnote ⁸¹ a number of Italian nationals sued Germany in Italy for compensation for the harm suffered because of their deportation during World War II.Footnote ⁸² Germany referred to its sovereign immunity, and the plaintiffs argued that this was contrary to the elusive provisions included in Articles 3 TEU, 4(3) TEU, 6 TEU, and 340 TFEU, hence, the Charter applied.Footnote ⁸³ The Court found that the case did not come under the scope of EU law.Footnote ⁸⁴ In the same vein, in Sociedade Agrícola e Imobiliária,Footnote ⁸⁵ the Court made it clear that the Charter has no general application to the national rules on the grant of legal aid to legal persons, although legal aid may be relevant in cross-border litigation and in cases involving EU law.Footnote ⁸⁶

This vocabulary first appeared explicitly in Siragusa.Footnote ⁸⁷ The Italian authorities refused to grant Mr. Siragusa retrospective planning permission and ordered the site’s restoration to its former state. Mr. Siragusa argued that Italy violated his right to property under Article 17 of the Charter. The CJEU found the Charter inapplicable.

The Court held that the implementation of Union law “requires a certain degree of connection above and beyond the matters covered being closely related or one of those matters having an indirect impact on the other.”Footnote ⁸⁸ Such a degree of connection exists if “specific obligations” devolve upon the Member States.Footnote ⁸⁹ The Court reiterated the “purpose, nature and specificity” test already set out in the case law.Footnote ⁹⁰ Accordingly, in this analysis, the relevant factors include the purpose of the legislation (“whether that legislation is intended to implement a provision of EU law … and whether it pursues objectives other than those covered by EU law”), its “nature” (whatever this may mean) and “whether there are specific rules of EU law on the matter or capable of affecting it.”Footnote ⁹¹ The Court stressed that it is not sufficient if the national measure “is capable of indirectly affecting EU law.”Footnote ⁹² The ruling appears to equate the rationales of the horizontal and the apparent diagonal application: the Charter should be applied to Member States where non-application would “undermine the unity, primacy and effectiveness of EU law.”Footnote ⁹³ The Member States conferred power on the EU within its concomitant human rights confines. National courts cannot be expected to apply EU law without these limits. The Charter’s function is to obviate the risk posed to “the unity, primacy and effectiveness of EU law.” Absent such a danger, there is no warrant for the Charter’s application.

In Demarchi Gino,Footnote ⁹⁴ the Court applied the “purpose, nature and specificity” test to an issue indirectly related to an EU private international law instrument and found the Charter wholly inapplicable. The Italian court advanced, in its reference, that applying the Italian rules on compensation for excessively protracted legal proceedings came under the scope of EU law because it ensured “the proper working of the Union area of justice” and enhanced “the mutual recognition of judgments.”Footnote ⁹⁵ The Italian court also pointed out that the matter concerned bankruptcy proceedings subject to several EU law instruments, including Regulation 2015/848, which regulates their private international law aspects.Footnote ⁹⁶ In essence, the Court found the Charter inapplicable for two reasons. First, the applicable EU rules “impose[d] no specific obligations” as regards compensation for the excessive duration of insolvency proceedings.Footnote ⁹⁷ Second, the Italian law relied upon by the plaintiffs was “general in nature” and was not “intended to implement” EU law, even though it had an indirect impact on it, and “pursue[d] objectives other than those covered” by the EU law instruments adopted in the field of insolvency proceedings.Footnote ⁹⁸

A controversial element of the case law is the treatment of “transposing discretion,” where EU substantive law vests Member States with the discretion to choose between different regulatory options. The exercise of this discretion comes under the scope of the Charter. Nonetheless, despite the requirement of “specific obligation,” the CJEU has been quite radical in extending this notion to cases where national measures were adopted to attain some general targets while being subject merely to soft and unspecified requirements.

In Florescu,Footnote ⁹⁹ Romania adopted austerity measures to meet the targets of an EU financial assistance program. The measures to be adopted by Romania were not specified; EU law merely provided that the budgetary cuts should be made, among others, by reducing the public sector wage bill and reforming the key parameters of the pension system. To meet these targets, Romania adopted a number of measures, including a provision that restricted the combination of the net pension with income from activities carried out at public institutions. The plaintiffs were retired judges who had to either suspend their pensions or terminate their university teaching positions.

The CJEU found that the Charter covered the austerity measures. However, the only link to EU law was Romania’s commitment to cut expenses by reducing the public sector wage bill and reforming the pension system.Footnote ¹⁰⁰ Surprisingly, the Court disregarded the fact that the EU law framing of the national measures lacked any specificity and described these commitments as “leav[ing] Romania some discretion”;Footnote ¹⁰¹ hence, it found that Romania “adopt[ed] measures in the exercise of the discretion conferred upon it by an act of EU law.”Footnote ¹⁰² The Court concluded that the bare requirement to reduce the public sector wage bill and reform the pension system was, in itself, “sufficiently detailed and precise” to bring the above national measure under the Charter.Footnote ¹⁰³

This judgment is a good example of how the Court overstretches the diagonal scope and applies the Charter in matters where this is clearly not justified by the constitutional function of diagonality. In this case, it is evident that EU law did not displace the Romanian constitution; there was no constitutional vacuum to fill, and the plaintiffs’ human rights could be perfectly judged under the Romanian rules.

An extreme and arguably end-driven example of the Charter’s diagonal application was the odd ruling in Commission v. Hungary (Central European University).Footnote ¹⁰⁴ The case was presented as a trade dispute but was, in fact, about fundamental rights. In this case, Hungary imposed novel requirements on non-EU universities, the purpose of which was to expel the Central European University. This breached academic freedom. As the CEU was a US-registered higher education institution, the internal market rules did not apply. The CJEU established the Charter’s applicability through the General Agreement on Trade in Services (GATS). It held that the GATS was EU law, and the Charter applied as Hungarian law breached the GATS. This was the first case where the CJEU applied WTO law not just as a tool of interpretation but as purely internal EU law in at least one way. At the same time, in terms of standing, the Court limited this to infringement procedures launched by the Commission. Unfortunately, the Court was most laconic and provided a two-sentence explanation about why the GATS’s confined invocability entailed the Charter’s application:

The Court’s approach raised serious issues and gave rise to the suspicion that it was influenced by the end-driven motivation to protect academic freedom. First, it has been a central part of the Court’s jurisprudence that, for the Charter to apply, the mere application of an EU norm is not sufficient; there needs to be a “degree of connection,” and the EU norm needs to be “specific.” This requirement was hardly met here; the Court did not even claim that a “degree of connection” existed. Second, the rationale of the apparent diagonal application (supremacy of EU law, as well as uniformity and efficacy) did not warrant the application of the Charter, the relevant question being whether a Member State complies with the international obligations assumed by the EU. Third, the CJEU even tilted the balance of mutual treaty concessions to the unilateral detriment of the EU. By pronouncing the Charter applicable, the CJEU subjected Member States to extra burdens, which were neither provided for nor contemplated by WTO law and are, as a consequence, not borne by the other members of the WTO. Finally, as to the practical outcome of the case, the application of the Charter was redundant. Hungarian law had already been pronounced inapplicable by the application of the GATS. Still, the Court also applied the Charter and condemned the law by virtue of an additional legal basis.

II. EU Mechanisms Ancillary to National Law

EU law employs various procedures, recognition mechanisms and references that are ancillary to national procedures and rules, and, hence, has a split nature. While the national procedure or rule may not come under the scope of the Charter, the operation of the EU mechanism complies with the Charter only if the underlying national procedure or rule is Charter-compliant. In these cases, the CJEU did not apply the Charter to the underlying national procedure or rule but blocked the EU mechanism if the national procedure or rule did not comply with the Charter. EU law must not be complicit in any infringement of human rights; hence, ancillary EU law mechanisms are blocked by the underlying national procedure’s violation of the Charter, although the national procedure itself is not governed by it.

The above approach may lead to seemingly contradictory statements. In J. McB. v L. E.,Footnote ¹⁰⁵ the Court established that the Charter did not apply to the incriminated national provisions and then substantively reviewed them under the Charter. In essence, the referring Irish court invited the CJEU to apply the Charter to Irish substantive rules on child custody on account of the Brussels II Regulation’s reference to it. According to the Regulation, the removal of a child is wrongful if it is illegal “under the law of the Member State where the child was habitually resident immediately before the removal or retention.”Footnote ¹⁰⁶ Under Irish law, while the mother automatically acquires custody rights, such rights only devolve to the natural father by means of an agreement between the parents or a court judgment. The plaintiff argued that this breached the father’s fundamental rights under the Charter.

The CJEU found the Charter inapplicable to Irish child custody law and then assessed Irish child custody law on the basis of the Charter to judge the Brussels II Regulation’s reference. On the one hand, it stressed that the Charter did not apply to the Irish rules on custody but “should be taken into consideration solely for the purposes of interpreting [the Brussels II] Regulation …, and there should be no assessment of national law as such.”Footnote ¹⁰⁷ On the other hand, it held that the Regulation’s reference to national law, which makes the wrongfulness of the child’s removal “entirely dependent on the existence of rights of custody” under national law,Footnote ¹⁰⁸ comes under the Charter, and it reviewed Irish substantive law to judge the Regulation’s reference to it.Footnote ¹⁰⁹

In AB,Footnote ¹¹⁰ the Slovak court envisaged issuing a European arrest warrant in a criminal procedure launched against persons whose amnesty was revoked by the Slovak parliament.Footnote ¹¹¹ The retrial of the case raised fair trial and ne bis in idem (double jeopardy) issues, and it was questionable whether the Charter ruled out the issuance of a European arrest warrant in this case. It was clear that the underlying criminal procedure did not come under the scope of the Charter,Footnote ¹¹² while the issuance of the European arrest warrant did.Footnote ¹¹³ The question was whether the human rights issues concerning the underlying criminal procedure affected the issuance of the European arrest warrant.Footnote ¹¹⁴ The CJEU answered the question in the affirmative. As a result, the Charter does not apply to an underlying criminal procedure; nonetheless, if the procedure is non-compliant with the Charter, that does affect the issuance of a European arrest warrant.Footnote ¹¹⁵ The Charter does not prevent national procedures from violating human rights but prevents EU law from being complicit in the violation of human rights.

III. National Acts in “European Matters”

The Court has been quick to apply the Charter in fields where substantive law has been predominantly or exhaustively regulated by EU law.Footnote ¹¹⁶ These matters have a strong “thematic connection” recognized by the constitutional function of diagonality; hence, the existence of a specific obligation is not required.

In DEB,Footnote ¹¹⁷ the plaintiff applied for legal aid in order to bring an action to establish Germany’s liability for the delayed transposition of Directive 98/30/EC.Footnote ¹¹⁸ The CJEU pronounced the Charter applicable without any substantive analysis, suggesting that the Charter’s applicability was obvious.Footnote ¹¹⁹ The Court apparently conflated the Charter’s applicability and EU law’s effectiveness. It defined the reference as “the interpretation of the principle of effectiveness.” Still, it applied the Charter, although, as a general principle, Member States have procedural autonomy when applying EU law, and this autonomy is framed merely by the requirements of effectiveness and non-discrimination. A measure may be effective even if it is not Charter-compliant.

The ruling is in contrast with the CJEU’s judgments in cases involving legal aid and procedural fees in proceedings where EU rules were present but played no central role. In Sociedade Agrícola e Imobiliária,Footnote ¹²⁰ the Court made it clear that the Charter has no general application to the national requirements on legal aid.Footnote ¹²¹ In Torralbo Marcos,Footnote ¹²² the dispute concerned “certain fees connected with the administration of justice.”Footnote ¹²³ The CJEU found the Charter inapplicable as these general fees were “not intended to implement provisions of European Union law,” which did “not contain any specific rules in that area or any which are likely to affect that national legislation.”Footnote ¹²⁴ The Court found it insufficient to apply the Charter, where the plaintiff sought to obtain a declaration of insolvency so as to benefit from the guarantee scheme established by Directive 2008/94.Footnote ¹²⁵ Arguably, what distinguishes these matters, particularly Torralbo Marcos, from DEB is that liability for breach of EU law is a “European matter.”

In Delvigne,Footnote ¹²⁶ the debate emerged from Delvigne’s removal from the electoral roll because of an earlier conviction, preventing him from voting in the elections to the European Parliament.Footnote ¹²⁷ Although the electoral procedure is governed by national law,Footnote ¹²⁸ it is unquestionable that the substantive regulation of European parliamentary elections, including the right to vote, is a “European matter,” and national law plays a role by way of re-delegation.Footnote ¹²⁹ The CJEU found the Charter applicable.Footnote ¹³⁰

IV. Sanctions Imposed in the Course of Enforcing an Implemented Directive

The CJEU appears to treat the sanctions imposed while enforcing EU law as coming under EU law per se.Footnote ¹³¹ This special approach features the notion that these sanctions amount to implementation in a procedural sense, even if EU law establishes no meaningful requirement in this regard. This implies that if a Member State applies EU substantive law, the sanctions imposed will be governed by the Charter, even though the EU law requirements concerning the sanctions themselves are unspecified and frivolous. The Court had no scruples about applying the Charter, even if EU law merely required that national law provide for “appropriate” sanctions. Unfortunately, the Court failed to explain why sanctions should be treated differently from substantive provisions. The Court’s approach is especially questionable in light of the Member States’ procedural autonomy and goes against the very function of the Charter’s diagonal application.

Åkerberg Fransson Footnote ¹³² is the first major milestone in the Court’s Article 51 case law. The ruling conceived the implementation of EU law broadly and showcased the significance of the spill-over effects of the apparent diagonal application. After receiving tax fines, Mr. Fransson was prosecuted for tax fraud regarding income tax and VAT. He claimed this violated the principle of ne bis in idem. The question was whether general tax sanctions could be assessed on the basis of the Charter. The Court encountered an interesting dilemma. On the one hand, EU law has a meaningful role in VAT law, which is subject to various directives, and a small part of national VAT goes to the EU budget. On the other hand, tax law is essentially national and is overwhelmingly made up of national rules. Tax sanctions are mostly of general application; they apply to taxation at large and not to VAT specifically. Put another way, while, as a matter of theory, tax sanctions further compliance with both EU and national rules, as a matter of practice, they are part of a field that is overwhelmingly (though not exclusively) national. The CJEU held that the Charter applied. The sanctions were “connected in part to breaches” of VAT law,Footnote ¹³³ which, in turn, concerns the “financial interests of the European Union.”Footnote ¹³⁴ Although EU law did not set out any specific requirement, the CJEU considered national tax sanctions to qualify as the implementationFootnote ¹³⁵ of the general expectation to take all “measures appropriate for ensuring” the collection of VAT.Footnote ¹³⁶

If looking into the measures that, in the Court’s view, Sweden actually “implemented,” it can be seen that these were frivolously general. Article 325 TFEU requires Member States to “counter fraud and any other illegal activities affecting the financial interests of the Union” and establishes a concomitant EU legislative power. Article 2 of Directive 2006/112 defines the taxable transactions. Article 250(1) establishes the duty to submit a VAT return without prescribing any consequences or sanctions. Article 273 is an opt-up provision that merely acknowledges Member States’ pre-existing national power to “impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion.”Footnote ¹³⁷ Even if reading these provisions in conjunction with the principle of sincere cooperation embedded in Article 4(3) TEU, the most that can be extracted is a general requirement to provide for sanctions framed by the principles of effectiveness and non-discrimination.

In Berlioz,Footnote ¹³⁸ the plaintiff, a Luxembourgish company, was fined by the Luxembourgish tax authority for its refusal to respond to a request for information. The call was made at the request of the French tax authority. Still, the company argued that the Charter applied, as the fine was imposed in the implementation of Directive 2011/16/EU on administrative cooperation in the field of taxation. The Directive sets out obligations of cooperation and information in the field of taxation. It provides that when a national tax authority collects information upon the request of another Member State, it shall carry this out strictly in accordance with its national rules.Footnote ¹³⁹ In the same vein, the Directive contains no provision on the sanctions to be applied when collecting information for other Member States’ tax authorities, apart from the general duty to “take all necessary measures to ensure the smooth operation of the administrative cooperation arrangements.”Footnote ¹⁴⁰ Of course, this provision may be considered redundant, given that, due to the principle of effectiveness and loyalty, Member States are subject to such a general duty anyway.

The CJEU found that the administrative penalty qualified as implementation of EU law.Footnote ¹⁴¹ The lack of a “specific obligation” and the express provision that tax authorities are not expected to go in any sense beyond what national law allows did not impede the application of the Charter,Footnote ¹⁴² the same as the fact that national rules on fines were “not adopted in order to transpose [the] Directive.”Footnote ¹⁴³

V. Opt-Ups and Regulatory Authority

The CJEU’s jurisprudence on regulatory opt-ups features a remarkable U-turn. Initially, the Court treated opt-ups in minimum-harmonization directives as re-delegations of power, the exercise of which comes under the Charter. Recently, however, the Court apparently overruled this case law and conceived opt-ups as limitations on the scope of the EU legal act that recognizes Member States’ pre-existing regulatory power.

In N.S.,Footnote ¹⁴⁴ the question was whether a Member State’s discretion to take over an application for asylum instead of directing it to the Member State responsible under Regulation 343/2003 (Dublin II Regulation) was governed by the Charter. Article 3(2) of the Regulation allowed Member States to examine applications for asylum, even if they did not qualify as the Member State responsible under the Regulation. If they did so, they became the responsible Member State and subject to the pertinent obligations.

The Court held that a Member State’s Article 3(2) decision was framed by the Charter,Footnote ¹⁴⁵ so even though the Regulation itself did not limit this discretion, the Charter did. The Court based this conclusion on two arguments. First, it conceived Article 3(2) as not limiting the scope of the Directive but as conferring a discretionary power on the Member States (re-delegating the power conferred on the EU).Footnote ¹⁴⁶ Second, the Member State’s decision “[gave] rise to the specific consequences provided for by” the Directive, since this Member State became “the Member State responsible.”Footnote ¹⁴⁷ In the end, the Court held that the Charter prevented the transfer of an asylum seeker if there were “substantial grounds for believing that the asylum seeker would face a real risk of being subjected to inhuman or degrading treatment within the meaning of that provision.”Footnote ¹⁴⁸

The Court’s conceptualization of Article 3(2) as a re-delegation of power is quite odd and is difficult to reconcile with the constitutional function of diagonality. While the existence of an exception could be subject to the Charter, it is difficult to comprehend why a national act that is subject to no specific obligation (in fact, to no obligation at all) can be conceived as an implementation of EU law, or how it displaces national human rights in a way that calls for the application of the Charter. It is probably a more convincing explanation for the ruling. An opposite decision would have admitted the serious defects of the system and the fact that the EU cannot secure, in a field almost exhaustively regulated by EU law, that the Member State in charge will treat asylum seekers in compliance with the Charter. The Court shifted the duty of the responsible Member State to all the other Member States because it could not ensure that the former would fulfill this duty.

The ruling was similarly alarming if approached from the angle of the principle of conferral. The adoption of the Dublin II Regulation required unanimity in the Council.Footnote ¹⁴⁹ This implies that the Member States conferred this legislative power on the EU with a reservation of a veto right. They clearly allocated the pertinent duties when they unanimously adopted the Regulation. The Court’s ruling interfered with this constitutional contemplation by failing to reproduce the constitutional understanding faithfully.

In Alemo-Herron v Parkwood,Footnote ¹⁵⁰ the CJEU followed a similar approach. Article 3 of Directive 2001/23/ECFootnote ¹⁵¹ provides that if an undertaking is transferred, the transferee is bound by the transferor’s collective agreements effective at the time of the transfer. Nonetheless, Article 8 expressly recognizes Member States’ right to adopt measures more favorable to employees. The implementing UK legislation made use of this and went beyond Article 3 by subjecting the transferee to subsequent amendments. The plaintiff relied on UK law’s dynamic approach in respect of a sectoral collective agreement the transferee was not party to.

The CJEU held that, when adopting measures more favorable to employees, Member States implement EU law and found that the UK breached the transferee’s rights under the Charter. In other words, it was not the Directive but the Charter that prevented the UK from providing extra employee benefits; the Charter applied because the Directive applied. Technically, the CJEU applied the Charter by reading it into Article 3 of the Directive. According to the Court’s conceptualization, Article 3 was to be interpreted in light of the Charter,Footnote ¹⁵² and it was this re-construction of Article 3 that prevented the UK, despite the express authorization of Article 8, from adopting measures more beneficial to the employees.Footnote ¹⁵³

The Court’s ruling raises very serious constitutional questions. How can a recognized regulatory freedom that falls outside a directive's scope come under that very Directive? What can EU legislators do to avoid the staggering situation where the CJEU turns a rule of minimum harmonization into maximum harmonization? Probably the only way to reasonably conceptualize the CJEU’s approach is that, despite minimum harmonization, the Directive created the national power to legislate. In this conception, the Member State was, in fact, exercising this mandate when making use of the overhang between the regulatory floor established by the Directive and the regulatory ceiling desired by the local electorate. The ruling’s language confirms this when providing that the Directive “cannot be interpreted as entitling the Member States to take measures which….”Footnote ¹⁵⁴ Nonetheless, this line of reasoning cannot be reconciled with the fundamental constitutional principle of conferral,Footnote ¹⁵⁵ which is in stark contrast with the clear fact that, outside the Directive’s purview, Member States have a pre-existing and unimpaired right to act as they please. Article 3, which sets out some minimum standards for the protection of employees, neither entitles nor bans Member States from adopting other measures. Article 8 makes it clear that measures not envisaged by Article 3 simply fall out of the scope of the Directive and remain under the Member States’ regulatory competence.

Although the Court’s argument provides no reasonable explanation as to why the Court should have the authorization to strike a balance between two competing rights where a Member State acts outside the scope of the Directive, the conclusion was not necessarily indefensible. The Court’s major concern might have been that the Directive entailed the British legislation, and there was no clear indication that the British legislator really envisaged going beyond the standards of the Directive. Perhaps the Court sensed that the national law was adopted with a view to, and in the belief of, implementing the Directive, and this may justify the assertion that it has to be construed in conformity with the Directive itself, which, in turn, has to be interpreted in light of the Charter. In this conceptualization, Member States have the power to go beyond the standards of the Directive if they do this consciously. Nonetheless, suppose a Member State adopts a provision in the belief that it has to do that to implement the Directive, particularly if it is uncertain what the Directive requires. In that case, the source of the provision is the Directive. In such a case, using the wording of AG Cruz Villalón in Åkerberg Fransson, EU law has “a presence at the origin of the exercise of public authority”;Footnote ¹⁵⁶ hence, the application of the Charter is warranted. Be that as it may, unfortunately, the Court did not take this path and based its conclusion on the fact that the minimum harmonization clause amounts to a delegation of power in terms of authorization to legislate.

In Hernández,Footnote ¹⁵⁷ the CJEU examined the applicability of the Charter to a Spanish scheme that provided compensation for protracted employment proceedings. This entitled the employer to request remuneration, but the employee could claim it directly if the employer became insolvent. The scheme applied to unfair dismissals but not to dismissals that were invalid. It was argued that this distinction breached equality before the law under Article 20 of the Charter. The link to EU law was claimed to be Directive 2008/94/EC, which, through the creation of guarantee institutions, aims to ensure the payment of the employees’ outstanding claims in the event of bankruptcy. The Spanish scheme, which compensated for the protraction of judicial proceedings, and the Directive-based guarantee scheme, which helped the employees in case of bankruptcy, operated in parallel to one other. The plaintiffs received compensation from the guarantee fund under the implementing measures and claimed compensation under the above Spanish scheme, which covered a longer time span but did not apply to invalid dismissals.

The CJEU found the Charter inapplicable, as the Spanish compensation scheme was not intended to implement EU lawFootnote ¹⁵⁸ and did not come under the scope of the Directive.Footnote ¹⁵⁹ The Directive’s guarantee scheme provided protection against the employer’s insolvency and benefited the employees, while the Spanish compensation scheme compensated for the protraction of judicial proceedings and benefitted the employers.Footnote ¹⁶⁰ The Court noted that the applicability of the Charter does not hinge on the EU’s legislative competence but on the implementation of EU law.Footnote ¹⁶¹ Interestingly, in contradiction to the earlier case law, the ruling suggested that the Directive’s minimum harmonization clause placed the Spanish scheme outside the scope of the Directive.Footnote ¹⁶² The CJEU also noted that the applicability of the Charter is linked to the supremacy and effectiveness of EU law and is not justified in cases that pose no risk to these.Footnote ¹⁶³

In Spetsializiran nakazatelen sad,Footnote ¹⁶⁴ the CJEU was invited to judge a provision of Bulgarian criminal procedure. Bulgarian law made the judicial approval of a plea bargain in organized crime matters conditional on the consent of “the other persons accused on the basis of their membership of that criminal group.”Footnote ¹⁶⁵ Directive 2016/343 establishes some common minimum rules applicable to criminal proceedings, and the defendants argued that the above Bulgarian provision implemented these. Article 7 of the Directive sets out the right to remain silent and the right against self-incrimination, but Article 7(4) makes it clear that these do not prevent Member States from rewarding cooperative behavior and attaching benefits to the non-exercise of these rights. The defendants argued that Bulgaria made use of this regulatory authority when establishing the plea bargain rules.

The Court found the Charter inapplicable.Footnote ¹⁶⁶ Although coming under the scope of Article 7(4), the Bulgarian provisions’ “degree of connection” to EU law was weak.Footnote ¹⁶⁷ Article 7(4) allowed for but did not oblige Member States to make cooperation an extenuating circumstanceFootnote ¹⁶⁸ and was ambiguous.Footnote ¹⁶⁹ The judgment seems to contradict the Court’s earlier stance on EU provisions recognizing national regulatory authority. Article 7(4) was not a minimum harmonization clause but a substantive delimitation. Still, the Court refused to conceive it as a re-delegation and treated it as a recognition of the pre-existing sovereign powers that limited the purview of the obligations emerging from the Directive. The question was still open: did the judgment overrule the earlier case law or merely distinguish it? For instance, in Alemo-Herron v Parkwood, although going beyond the minimum harmonization, the measure at stake was part of the transposing legislation. The UK arguably adopted it in the belief of transposing EU law. On the other hand, the Bulgarian law was not adopted with the specific intention to implement Directive 2016/343.

This question of delimitation, however, seems to lose its relevance a couple of months later when, in TSN,Footnote ¹⁷⁰ the CJEU excluded opt-ups from the scope of the Charter. Here, the question was whether the Charter covered employee benefits that exceeded the regulatory baseline. Directive 2003/88 provides for paid annual leave of at least four weeksFootnote ¹⁷¹ and expressly authorizes Member States to adopt measures more favorable to employees.Footnote ¹⁷² Under the Finnish rules, employees were entitled to a longer term of paid annual leave, but the employer could refuse to transfer the overhang if the periods of the sick leave and the paid annual leave overlapped, while the four-week paid annual leave secured by the Directive could be carried over. The argument was that this exclusion of transferability breached the Charter.Footnote ^{173 ,} Footnote ¹⁷⁴

The CJEU found the Charter inapplicable.Footnote ¹⁷⁵ Its conclusion rested on two pillars. First, after reiterating the principle that the applicability of the Charter is not a thematic issue,Footnote ¹⁷⁶ it pointed out that, in the field of social policy, the EU had shared competence and Article 153 TFEU expressly limited the EU’s activities to “support[ing] and complement[ing] the activities” of the Member States.Footnote ¹⁷⁷ Second, in accordance with this constitutional authorization, the Directive provided for minimum harmonization.Footnote ¹⁷⁸ The Court distinguished this from transposing discretionFootnote ¹⁷⁹ and conceptualized the minimum harmonization clause not as a re-delegation of power but as a pre-existing legislative authority unimpaired by the Directive.Footnote ¹⁸⁰

The ruling seems to usher in a new approach to EU provisions recognizing national regulatory authority, such as minimum harmonization clauses. The question remains, however, if the CJEU had decided the same way, if the minimum harmonization had not been a constitutional limitation but merely a legislative choice, i.e., if the directive had been adopted in a field where the EU’s legislative competence is less limited.

VI. Over-Implementation: Applying the Charter by Reason of Abetting

At times, Member States may unintentionally over-implement EU law. A rule may be subject to divergent interpretation, especially if it needs to be interpreted in conjunction with the Charter, and a Member State may go beyond what EU law requires. These scenarios may feature opt-ups in a technical sense, but they can be distinguished. For example, the Member State does not consciously use the minimum harmonization clause but adopts the national measure in the erroneous belief that it is required to do so. The Court has applied the Charter in such scenarios. Inadvertent over-implementation may justify the application of the Charter for two reasons. First, the implementing provision has to be interpreted in conformity with the implemented rule. Second, the inadvertent over-implementation of the Framework Decision still needs to comply with the Charter, as EU law is the “abettor” of the rule, which was adopted in the belief that this is prescribed by EU law.

Arguably, Alemo-Herron v Parkwood may be conceptualized as a case of over-implementation and not as an opt-up (although this is not how the Court justified the application of the Charter).

In OM,Footnote ¹⁸¹ the dispute emerged from Bulgarian law’s provision for the confiscation of assets linked to a criminal offense. OM lawfully transported goods from Turkey to Germany but, without the knowledge of his employer (owner of the vehicle), used the vehicle to smuggle antique coins illegally. The coins were discovered, and the vehicle was confiscated.

The link to EU law was constituted by Framework Decision 2005/212.Footnote ¹⁸² Interestingly, however, the CJEU did not engage in any detailed analysis about the purpose and nature of the Bulgarian provisions; it simply demonstrated that the Framework Decision requires Member States, among others, to confiscate instrumentalities of criminal offenses punishable by deprivation of liberty for more than one year and the case came under its scope. It seems that the Court took it as granted that the Bulgarian rules on confiscation transposed the Framework Decision.Footnote ¹⁸³

The twist in the case was that the Framework Decision envisaged minimum harmonization, but Bulgarian law inadvertently went beyond that. Article 2(1) of the Framework Decision provides for the confiscation of the instrumentalities of criminal offenses punishable by deprivation of liberty for more than one year. Although the text of the provision is unqualified, suggesting that all instrumentalities have to be confiscated, the CJEU held that it has to be read in conjunction with Recital 3 and the right to property enshrined in Article 17 of the Charter and, as a result, it does not extend to the assets of parties acting in good faith.Footnote ¹⁸⁴ Bulgarian law exceeded this and provided for the confiscation of all assets linked to a criminal offense, irrespective of whether the third person acted in good faith. Technically, this element of the Bulgarian rule went beyond the scope of and, hence, was not excluded by the Framework Decision. Still, the Court held that Bulgarian law was prevented from going beyond the content of minimum harmonization. The ruling cogently explains why Article 2(1) of the Framework Decision attributed the meaning the Court attributes to it but fails to explain why this meaning should have a straight-jacketing effect on national law. After all, the Framework Decision contains no exhaustive regulation, and Member States have the right to provide for confiscation beyond the purview of the Framework Decision. Still, the Court simply stated what the Charter-compliant reading of Article 2(1) of the Framework Decision is before concluding, without any bridging, that it precluded Bulgarian law from confiscating the assets of bona fide third parties.

Arguably, the most reasonable conceptualization is that the Bulgarian rule was meant to implement the Framework Decision, even if it eventually over-implemented it.

VII. The Cumulative Application of EU and National Standards

An “either or” pattern can work only if there is a clear delimitation between the implementation of EU and national rules. The overly broad conception of the diagonal scope of the Charter as a side-effect leads to cumulative application. Article 53 of the Charter provides that it does not restrict or impair “human rights and fundamental freedoms as recognised, in their respective fields of application, … by the Member States’ constitutions.” Although this provision could be construed as referring to parallel systems given that it refers to national constitutions “in their respective fields of application,” the CJEU interpreted it as providing for cumulation in cases not closely determined by EU law.

In Melloni,Footnote ¹⁸⁵ the question of whether a Member State executing a European arrest warrant can, with reference to its constitution, make the surrender of a person convicted in absentia conditional upon the conviction being open to review by the issuing Member State.Footnote ¹⁸⁶ The CJEU laid down two important tenets. First, as a general rule, Article 53 of the Charter gives way to national constitutional standards higher than the European baseline. Second, although Member States may apply their higher standards when implementing EU law, they may not apply them to avoid or impair the application of EU law.Footnote ¹⁸⁷ Given that, in this case, EU law allowed little or even no interpretative “wiggle room,” the Member State was not viewed as applying higher standards to its implementation of EU law but as curtailing the scope of an EU law command.Footnote ¹⁸⁸ The higher level of rights protection had to bend before the EU’s interest in mutual recognition and cooperation in criminal matters. Put another way, the CJEU deprived the defendant of a higher level of rights protection under national law for the sake of the effectiveness of EU criminal enforcement.

The notion that EU and national human rights apply simultaneously showcases the inconsistency of the Court’s conception of diagonal application.

First, the Charter (and, earlier, the general principles of law) filled the constitutional vacuum left by the expulsion of national constitutions; hence, the cumulative application amounts to a conceptual contradiction. It inconsistently bifurcates the exclusionary effects of the Charter: in this conception, the Charter is horizontally exclusive but diagonally merely secures a baseline.Footnote ¹⁸⁹

Second, the above approach inevitably leads to a distinction between genuine “implementation,” which, as in Melloni, cannot be revised under the national constitution, and spurious “implementation,” which refers to national acts remotely linked to EU law and is subject to cumulative human rights requirements.Footnote ¹⁹⁰ Presumably, the tax sanctions applied in Åkerberg Fransson and Berlioz were only remotely linked to EU law, but both were subject to human rights regimes. The conception that cumulative application is ruled out if it gives room to eventually higher national standards that block the application of EU law is based on the idea of “displacement” and the principle that EU law has supremacy, even over national constitutions. In this case, the national constitution is put aside because it goes against the effectiveness of EU law; that is, it goes against EU law.Footnote ¹⁹¹

Third, the cumulative application leads to unsurmountable practical problems. A higher level of protection always comes at a price, whether it be another right or the public interest (or the democratic process). For instance, in Alemo-Herron v Parkwood, the freedom to conduct a business clashed with the employees’ social rights; by protecting the former, the CJEU downgraded the latter. The quest for a higher level of protection was incomprehensible in this case. In the same vein, in Melloni, the right to a fair trial and the right of defense vailed to the public interest in the effectiveness of criminal enforcement.