Judgment of the General Court Fourth Chamber, Extended Composition, 7 December 2022, PNB Banka v ECB, T-275/19

• Date: 07 December 2022
• Year: 2022

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that at issue in the main proceedings meets the essential aim of safeguarding public health and is

therefore compatible with Directive 2001/83.

V. ECONOMIC AND MONETARY POLICY: PRUDENTIAL SUPERVISION OF

CREDIT INSTITUTIONS

Judgment of the General Court (Fourth Chamber, Extended Composition), 7 December

2022, PNB Banka v ECB, T-275/19

Link to the full text of the judgment

Economic and monetary policy – Prudential supervision of credit institutions – Powers of the ECB –

Investigatory powers – On-site inspections – Article 12 of Regulation (EU) No 1024/2013 – Decision of the

ECB to conduct an inspection at the premises of a less significant credit institution – Action for annulment

– Challengeable act – Admissibility – Competence of the ECB – Obligation to state reasons – Elements

capable of justifying an inspection – Article 106 of the Rules of Procedure – Request for a hearing without

a statement of reasons

The applicant, PNB Banka AS, is a credit institution incorporated under Latvian law which, before 1

March 2019, was considered to be a ‘less significant’

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credit institution and was therefore subject to

direct prudential supervision by the Finanšu un kapitāla tirgus komisija (Financial and Capital Market

Commission, Latvia; ‘the FCMC’). In 2017, it was classified as a ‘less significant institution in crisis’,

which entailed it being subject to specific supervision by a crisis management group composed of the

FCMC and the European Central Bank (ECB). On 21 December 2018, the FCMC requested the ECB to

take over the direct prudential supervision of the applicant. On the basis of a draft decision approved

by the ECB’s Supervisory Board, in the absence of any objection by the ECB’s Governing Council, the

decision to carry out an on-site inspection at the applicant’s premises was deemed adopted by the

Governing Council on 21 January 2019 (‘the contested decision’).

Hearing an action for annulment of that decision, the General Court rules on a number of issues

which have not previously been addressed. It confirms, first of all, its power to rule on an action

without an oral part of the procedure where a request for a hearing lacks a statement of reasons. It

then examines whether a decision by the ECB to conduct an on-site inspection is challengeable. It also

analyses pleas relating to the formal legality of the contested decision (competence of the ECB and

the applicant’s right to be heard). Lastly, it considers substantive issues relating to, first, the

relationship between off-site and on-site checks and, second, the ECB’s competence itself to conduct

an investigation into acts of corruption. The Court dismisses the action in its entirety.

Findings of the Court

First, the Court holds that it follows from the applicable procedural rules that, if no request for a

hearing is made, or if a request for a hearing is made without a statement of reasons, the Court may

decide to rule on the action without an oral part of the procedure if it considers that it has sufficient

information available to it from the material in the case file. Thus, in the present case, the Court,

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Under Article 6(4) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank

concerning policies relating to the prudential supervision of credit institutions (OJ 2013 L 287, p. 63; ‘the SSM Regulation’).