BG v Varhovna kasatsionna prokuratura.

• Jurisdiction: European Union
• ECLI: ECLI:EU:C:2023:877
• Date: 16 November 2023
• Docket Number: C-427/22
• Celex Number: 62022CJ0427
• Court: Court of Justice (European Union)

Provisional text

JUDGMENT OF THE COURT (Sixth Chamber)

16 November 2023 (*)

(Reference for a preliminary ruling – Economic and monetary policy – Prudential requirements for credit institutions – Regulation (EU) No 575/2013 – Points 1 and 42 of Article 4(1) – Definitions – Concepts of ‘credit institution’ and ‘authorisation’ – Grant of loans without approval)

In Case C‑427/22,

REQUEST for a preliminary ruling under Article 267 TFEU from the Varhoven kasatsionen sad (Supreme Court of Cassation, Bulgaria), made by decision of 21 June 2022, received at the Court on 28 June 2022, in the criminal proceedings against

BG,

other party:

Varhovna kasatsionna prokuratura,

THE COURT (Sixth Chamber),

composed of T. Von Danwitz, President of the Chamber, P.G. Xuereb and A. Kumin (Rapporteur), Judges,

Advocate General: A. Rantos,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

– the European Commission, by A. Nijenhuis, D. Triantafyllou and I. Zaloguin, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This request for a preliminary ruling concerns the interpretation of points 1 and 42 of Article 4(1) of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ 2013 L 176, p. 1).

2 The request has been made in criminal proceedings brought against BG, who has been found guilty of granting loans to two natural persons without having the approval necessary to do so.

Legal context

European Union law

Regulation No 575/2013

3 Under recital 5 of Regulation No 575/2013:

‘Together, this Regulation and Directive 2013/36/EU [of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ 2013 L 176, p. 338)] should form the legal framework governing the access to the activity, the supervisory framework and the prudential rules for credit institutions and investment firms (referred to collectively as “institutions”). This Regulation should therefore be read together with that Directive.’

4 Article 1 of that regulation, entitled ‘Scope’, provides, in the first subparagraph thereof:

‘This Regulation lays down uniform rules concerning general prudential requirements that institutions supervised under Directive 2013/36/EU shall comply with in relation to the following items:

(a) own funds requirements relating to entirely quantifiable, uniform and standardised elements of credit risk, market risk, operational risk and settlement risk;

(b) requirements limiting large exposures;

(c) after the delegated act referred to in Article 460 has entered into force, liquidity requirements relating to entirely quantifiable, uniform and standardised elements of liquidity risk;

(d) reporting requirements related to points (a), (b) and (c) and to leverage;

(e) public disclosure requirements.’

5 Article 4 of that regulation, entitled ‘Definitions’, provides, in paragraph 1 thereof:

‘For the purposes of this Regulation, the following definitions shall apply:

(1) “credit institution” means an undertaking the business of which is to take deposits or other repayable funds from the public and to grant credits for its own account;

…

(3) “institution” means a credit institution or an investment firm;

…

(26) “financial institution” means an undertaking other than an institution, the principal activity of which is to acquire holdings or to pursue one or more of the activities listed in points 2 to 12 and point 15 of Annex I to Directive 2013/36/EU, …

…

(42) “authorisation” means an instrument issued in any form by the authorities by which the right to carry out the business is granted;

…’

6 Point 1 of Article 4(1) of Regulation No 575/2013, as amended by Regulation (EU) 2019/2033 of the European Parliament and of the Council of 27 November 2019 (OJ 2019 L 314, p. 1) (‘the amended Regulation No 575/2013’), states:

‘For the purposes of this Regulation, the following definitions shall apply:

(1) “credit institution” means an undertaking the business of which consists of any of the following:

(a) to take deposits or other repayable funds from the public and to grant credits for its own account;

(b) to carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU of the European Parliament and of the Council [of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ 2014 L 173 p. 349)], where one of the following applies, but the undertaking is not a commodity and emission allowance dealer, a collective investment undertaking or an insurance undertaking:

(i) the total value of the consolidated assets of the undertaking is equal to or exceeds EUR 30 billion;

(ii) the total value of the assets of the undertaking is less than EUR 30 billion, and the undertaking is part of a group in which the total value of the consolidated assets of all undertakings in that group that individually have total assets of less than EUR 30 billion and that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU is equal to or exceeds EUR 30 billion; or

(iii) the total value of the assets of the undertaking is less than EUR 30 billion, and the undertaking is part of a group in which the total value of the consolidated assets of all undertakings in the group that carry out any of the activities referred to in points (3) and (6) of Section A of Annex I to Directive 2014/65/EU is equal to or exceeds EUR 30 billion, where the consolidating supervisor, in consultation with the supervisory college, so decides in order to address potential risks of circumvention and potential risks for the financial stability of the [European] Union;

for the purposes of points (b)(ii) and (b)(iii), where the undertaking is part of a third‐country group, the total assets of each branch of the third‐country group authorised in the [European] Union shall be included in the combined total value of the assets of all undertakings in the group’.

7 Under point 1 of Article 62 of Regulation 2019/2033, the title of Regulation No 575/2013 has been replaced by the following text:

‘Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012’.

Directive 2013/36

8 Under recitals 2 and 42 of Directive 2013/36:

‘(2) This Directive should, inter alia, contain the provisions governing the authorisation of the business, the acquisition of qualifying holdings, the exercise of the freedom of establishment and of the freedom to provide services, the powers of supervisory authorities of home and host Member States in this regard and the provisions governing the initial capital and the supervisory review of credit institutions and investment firms. … This Directive should … be read together with Regulation [No 575/2013] and should, together with that Regulation, form the legal framework governing banking activities, the supervisory framework and the prudential rules for credit institutions and investment firms.

…

(42) This Directive should be without prejudice to any provisions in the law of Member States relating to criminal penalties.’

9 Article 1 of that directive is worded as follows:

‘This Directive lays down rules concerning:

(a) access to the activity of credit institutions and investment firms (collectively referred to as “institutions”);

…’

10 Article 3 of that directive, entitled ‘Definitions’, provides, in paragraph 1 thereof:

‘For the purposes of this Directive, the following definitions shall apply:

(1) “credit institution” means credit institution as defined in point (1) of Article 4(1) of Regulation [No 575/2013];

…

(22) “financial institution” means financial institution as defined in point (26) of Article 4(1) of Regulation [No 575/2013];

…

(38) “authorisation” means authorisation as defined in point (42) of Article 4(1) of Regulation [No 575/2013];

…’

11 Entitled ‘General requirements for access to the activity of credit institutions’, Chapter 1 of Title III of Directive 2013/36 contains, inter alia, Articles 8 and 9 thereof.

12 Article 8 of that directive, entitled ‘Authorisation’, provides, in paragraph 1 thereof:

‘Member States shall require credit institutions to obtain authorisation before commencing their activities. …’

13 Article 9 of that directive, entitled ‘Prohibition against persons or undertakings other than credit institutions from carrying out the business of taking deposits or other repayable funds from the public’, states, in paragraph 1 thereof:

‘Member States shall prohibit persons or undertakings that are not credit institutions from carrying out the business of taking deposits or other repayable funds from the public.’

14 Directive 2013/36 contains a Title V, entitled ‘Provisions concerning the freedom of establishment and the freedom to provide services’, Chapter 1 of which, entitled ‘General Principles’, includes, inter alia, Article 34 of that directive.

15 Article 34, entitled ‘Financial institutions’, provides, in paragraph 1 thereof:

‘Member States shall provide that the activities listed in Annex I may be carried out within their territories, in accordance with Article 35, Article 36(1), (2) and (3), Article 39(1) and (2) and Articles 40 to 46, either by establishing a branch or by providing services, by any financial institution from another Member State, whether a subsidiary of a credit institution or the jointly owned subsidiary of two or more credit...