ΔΕΝ ΟΦΕΙΛΟΥΝ ΟΙ ΛΑΟΙ ΤΑ ΧΡΕΗ ΤΩΝ ΤΡΑΠΕΖΩΝ

Δικαστική απόφαση-σταθμός: Δεν θα πληρώσουν οι λαοί τις τράπεζες.

Του Ερίκ Τουσέν

Με ικανοποίηση χαιρετίζουμε την απόφαση του δικαστηρίου της ΕΖΕΣ (Ευρωπαϊκή Ζώνη Ελεύθερων Συναλλαγών), η οποία απορρίπτει όλες τις καταγγελίες που κατατέθηκαν από τις Κάτω Χώρες και το Ηνωμένο Βασίλειο κατά της Ισλανδίας στην υπόθεση «Icesave» | 1 |, σημειώνει σε άρθρο του ο Ερίκ Τουσέν, της οργάνωσης CADTM, (Επιτροπή για την κατάργηση του χρέους του Τρίτου Κόσμου)

Η απόφαση καθιστά σαφές ότι δεν είναι ευθύνη της χώρας στην οποία μια τραπεζική εταιρεία έχει την έδρα της να καλύπτει τα έξοδα των εγγυήσεων του τραπεζικού της συστήματος, καθώς και ότι ο μηχανισμός του δίχτυ ασφαλείας πρέπει να χρηματοδοτείται από τις ίδιες τις τράπεζες.

Αυτό επιβεβαιώνει εμμέσως ότι η διαδικασία της κανονικής εκκαθάρισης, όπως αυτή εφαρμόστηκε στη περίπτωση της «Landsbanki» (μητρική της Icesave) είναι τελείως ορθή, όταν μια τράπεζα, ακόμα και χαρακτηρισμένη ως «TBTF» (too big to fail, πολύ μεγάλη για να πέσει ), έχει περισσότερα χρέη από τα περιουσιακά στοιχεία της.

Όμοια πρέπει να είναι η περίπτωση των περισσότερων μεγάλων ευρωπαϊκών τραπεζών, αν τα τοξικά στοιχεία ενεργητικού στους ισολογισμούς τους καταγράφονταν στην πραγματική τους αξία.

Είναι το αντίθετο από αυτό που έχει καθιερωθεί, από το 2007 και την αρχή των επαναλαμβανόμενων χρηματοπιστωτικών κρίσεων, για να σωθούν οι μεγαλομέτοχοι των τραπεζών με τις πλάτες της κοινότητας.

Οι κυβερνήσεις των βιομηχανικών χωρών έδωσαν την εγγύηση τους προς τις τράπεζες στο χείλος της χρεοκοπίας των χωρών τους, χωρίς αιτιολόγηση, χρησιμοποιώντας δημόσια κονδύλια για τη διευκόλυνση των ταμειακών ροών των τραπεζών.

Την ίδια στιγμή, οι κυβερνώντες άρχισαν να σφυρηλατήσουν την ιδέα ότι το φταίξιμο άνηκε στο πληθυσμό. Αυτή η εκστρατεία είχε και έχει ως στόχο να πείσει τους πολίτες ότι πρέπει να αποδέχονται τις μειώσεις στους μισθούς τους, την υποβάθμιση της κοινωνικής κάλυψης, την αύξηση της ανασφάλειας και την επιδείνωση των συνθηκών εργασίας.

Οι λαοί δεν ευθύνονται και δεν συμφωνούν με τα μέτρα λιτότητας που τους επιβάλλονται.

Η απόφαση αυτή αποδεικνύει τη νομιμότητα της γνώμης των λαών και ως εκ τούτου αποδείχνει τον μη νομιμοποιημένο χαρακτήρα αυτών των μέτρων λιτότητας.

Το ευρωπαϊκό τραπεζικό σύστημα εξακολουθεί να κρατά την αναπνοή του, περιμένοντας την ημέρα που τα τοξικά στοιχεία του ενεργητικού του θα ωριμάσουν και δεν θα μπορεί πλέον να κρυφτούν.

Τότε, θα ζητηθεί (ή μάλλον διαταχθεί) από τον πληθυσμό να το διασώσει και πάλι.

Οι κυβερνήσεις, μέσω των δομών που έχουν εφαρμοστεί έκτοτε, θα αναζητήσουν από τις χρηματοπιστωτικές αγορές να δανειστούν τα ίδια τα δικά τους χρήματά και να τα δώσουν πίσω στις τράπεζες που κατέχουν τα τοξικά στοιχεία ενεργητικού.

Με την απόφαση της ΕΖΕΣ, γνωρίζουμε τώρα ότι δεν είναι οι λαοί (Ελληνικός, Ιρλανδικός, Πορτογαλικός ή άλλοι) που πρέπει να πληρώσουν και ότι η προθυμία των κυβερνήσεων να πράξουν με τον τρόπο που πράττουν αποδείχνει τη συνενοχή τους με τις τράπεζες.

Οι οικονομικές κρίσεις θα συνεχιστούν, εκτός εάν οι τράπεζες απαλλοτριωθούν χωρίς αποζημίωση, κοινωνικοποιηθούν με λαϊκό και δημοκρατικό έλεγχο και τίθενται στην υπηρεσία των αναγκών του πληθυσμού παρά των χρηματοπιστωτικών αγορών.

Είναι επίσης απαραίτητο να εντοπιστούν μέσω του λογιστικού ελέγχου του δημόσιου χρέους όλα τα παράνομα η μη-νομημοποιμένα χρέη, συμπεριλαμβανομένων εκείνων που προέρχονται από την διάσωση των τραπεζών, για να ακυρωθούν.

| 1 |.η απόφαση του δικαστηρίου της ΕΖΕΣ, 28.01.2013

Επιτροπή για την κατάργηση του χρέους του Τρίτου Κόσμου

Πηγή: http://tvxs.gr/news/egrapsan-eipan/dikastiki-apofasi-stathmos-den-tha-plirosoyn-oi-laoi-tis-trapezes-toy-erik-toyse

Η ΑΠΟΦΑΣΗ ΤΟΥ ΔΙΚΑΣΤΗΡΙΟΥ ΤΗΣ ΕΖΕΣ, 28.01.2013

JUDGMENT OF THE COURT

28 January 2013

(Directive 94/19/EC on deposit-guarantee schemes – Obligation of result –

Emanation of the State – Discrimination)

In Case E-16/11,

EFTA Surveillance Authority, represented by Xavier Lewis, Director, and

Gjermund Mathisen, Officer, Department of Legal & Executive Affairs, acting as

Agents,

applicant,

supported by the

European Commission, represented by its Agents Enrico Traversa, Albert

Nijenhuis and Karl-Philipp Wojcik,

intervener,

v

Iceland, represented by Kristján Andri Stefánsson, Agent, Tim Ward QC, Lead

counsel, Jóhannes Karl Sveinsson, Co-counsel,

defendant,

APPLICATION for a declaration that by failing to ensure payment of the

minimum amount of compensation to Icesave depositors in the Netherlands and

in the United Kingdom provided for in Article 7(1) of the Act referred to at point

19a of Annex IX to the Agreement on the European Economic Area (Directive

94/19/EC of the European Parliament and of the Council of 30 May 1994 on

deposit-guarantee schemes) within the time limits laid down in Article 10 of the

Act, Iceland has failed to comply with the obligations resulting from that Act, in

particular its Articles 3, 4, 7 and 10, and/or Article 4 of the Agreement on the

European Economic Area.

– 2 –

THE COURT,

composed of: Carl Baudenbacher, President and Judge Rapporteur, Páll Hreinsson,

and Ola Mestad (ad hoc), Judges,

Registrar: Gunnar Selvik,

- having regard to the written pleadings of the parties and the intervener and

the written observations of the Principality of Liechtenstein, represented by

Dr Andrea Entner-Koch, Director of the EEA Coordination Unit, and by

Frederique Lambrecht, Legal Officer at the EEA Coordination Unit, acting

as Agents;

- the Kingdom of the Netherlands, represented by Corinna Wissels, Mielle

Bulterman and Charlotte Schillemans, Head and members of the European

Law Division of the Legal Affairs Department of the Ministry of Foreign

Affairs, acting as Agents;

- the Kingdom of Norway, represented by Kaja Moe Winther, Senior Adviser,

Ministry of Foreign Affairs, and Torje Sunde, advokat, Office of the

Attorney General (Civil Affairs), acting as Agents;

- the United Kingdom of Great Britain and Northern Ireland, represented by

Heather Walker of the Treasury Solicitor’s Department, acting as Agent, and

Mark Hoskins QC,

having regard to the Report for the Hearing,

having heard oral argument of the applicant, represented by its Agents Xavier

Lewis and Gjermund Mathisen; the defendant, represented by its Agent Kristján

Andri Stefánsson, Lead counsel Tim Ward QC, and Co-counsel and Supreme

Court Attorney Jóhannes Karl Sveinsson, assisted by Professor Miguel Poiares

Maduro, State Attorney General Einar Karl Hallvarðsson, Supreme Court

Attorney Reimar Pétursson, Dóra Guðmundsdóttir, Kristín Haraldsdóttir and

Þóra M. Hjaltested, advisers; the intervener, represented by its Agents Enrico

Traversa and Albert Nijenhuis; Liechtenstein, represented by its Agent Dr Andrea

Entner-Koch; the Netherlands, represented by its Agents Corinna Wissels and

Charlotte Schillemans, and Gerald Enting, Ministry of Finance, and Sander

Timmerman, Netherlands Central Bank; Norway, represented by its Agents Kaja

Moe Winther, Senior Adviser, and Kristin Nordland Hansen, Higher Executive

Officer, Ministry of Foreign Affairs; the United Kingdom, represented by its

Agent Heather Walker, and Mark Hoskins QC; at the hearing on 18 September

2012,

gives the following

– 3 –

Judgment

I Legal context

EEA law

1 Article 4 EEA provides:

Within the scope of application of this Agreement, and without prejudice to any

special provisions contained therein, any discrimination on grounds of

nationality shall be prohibited.

2 The Act referred to at point 19a of Annex IX to the EEA Agreement (Directive

94/19/EC of the European Parliament and of the Council of 30 May 1994 on

deposit-guarantee schemes, OJ 1994 L 135, p. 5), as amended, provides for

minimum harmonised rules as regards deposit-guarantee schemes.

3 Recital 1 in the preamble to Directive 94/19 reads:

Whereas, in accordance with the objectives of the Treaty, the harmonious

development of the activities of credit institutions throughout the Community

should be promoted through the elimination of all restrictions on the right of

establishment and the freedom to provide services, while increasing the stability

of the banking system and protection for savers;

4 Recital 2 in the preamble to Directive 94/19 reads:

Whereas, when restrictions on the activities of credit institutions are eliminated,

consideration should be given to the situation which might arise if deposits in a

credit institution that has branches in other Member States become unavailable;

whereas it is indispensable to ensure a harmonized minimum level of deposit

protection wherever deposits are located in the Community; whereas such

deposit protection is as essential as the prudential rules for the completion of the

single banking market;

5 Recital 3 in the preamble to Directive 94/19 reads:

Whereas in the event of the closure of an insolvent credit institution the

depositors at any branches situated in a Member State other than that in which

the credit institution has its head office must be protected by the same guarantee

scheme as the institution's other depositors;

6 Recital 4 in the preamble to Directive 94/19 reads:

Whereas the cost to credit institutions of participating in a guarantee scheme

bears no relation to the cost that would result from a massive withdrawal of

bank deposits not only from a credit institution in difficulties but also from

– 4 –

healthy institutions following a loss of depositor confidence in the soundness of

the banking system;

7 Recital 7 in the preamble to Directive 94/19 reads:

Whereas a branch no longer requires authorization in any host Member State,

because the single authorization is valid throughout the Community, and its

solvency will be monitored by the competent authorities of its home Member

State; whereas that situation justifies covering all the branches of the same

credit institution set up in the Community by means of a single guarantee

scheme; whereas that scheme can only be that which exists for that category of

institution in the State in which that institution's head office is situated, in

particular because of the link which exists between the supervision of a branch’s

solvency and its membership of a deposit-guarantee scheme;

8 Recital 16 in the preamble to Directive 94/19 reads:

Whereas, on the one hand, the minimum guarantee level prescribed in this

Directive should not leave too great a proportion of deposits without protection

in the interest both of consumer protection and of the stability of the financial

system; whereas, on the other hand, it would not be appropriate to impose

throughout the Community a level of protection which might in certain cases

have the effect of encouraging the unsound management of credit institutions;

whereas the cost of funding schemes should be taken into account; whereas it

would appear reasonable to set the harmonized minimum guarantee level at

ECU 20 000; whereas limited transitional arrangements might be necessary to

enable schemes to comply with that figure;

9 Recital 23 in the preamble to Directive 94/10 reads:

Whereas it is not indispensable, in this Directive, to harmonize the methods of

financing schemes guaranteeing deposits or credit institutions themselves, given,

on the one hand, that the cost of financing such schemes must be borne, in

principle, by credit institutions themselves and, on the other hand, that the

financing capacity of such schemes must be in proportion to their liabilities;

whereas this must not, however, jeopardize the stability of the banking system of

the Member State concerned;

10 Recital 24 in the preamble to Directive 94/19 reads:

Whereas this Directive may not result in the Member States’ or their competent

authorities’ being made liable in respect of depositors if they have ensured that

one or more schemes guaranteeing deposits or credit institutions themselves and

ensuring the compensation or protection of depositors under the conditions

prescribed in this Directive have been introduced and officially recognized;

11 Recital 25 in the preamble to Directive 94/19 reads:

Whereas deposit protection is an essential element in the completion of the

internal market and an indispensable supplement to the system of supervision of

– 5 –

credit institutions on account of the solidarity it creates amongst all the

institutions in a given financial market in the event of the failure of any of them,

12 Article 1 of Directive 94/19 reads:

1. “deposit” shall mean any credit balance which results from funds left in an

account or from temporary situations deriving from normal banking

transactions and which a credit institution must repay under the legal and

contractual conditions applicable, and any debt evidenced by a certificate issued

by a credit institution.

...

3. “unavailable deposit” shall mean a deposit that is due and payable but has

not been paid by a credit institution under the legal and contractual conditions

applicable thereto, where either:

(i) the relevant competent authorities have determined that in their view the

credit institution concerned appears to be unable for the time being, for reasons

which are directly related to its financial circumstances, to repay the deposit

and to have no current prospect of being able to do so.

The competent authorities shall make that determination as soon as possible and

at the latest 21 days after first becoming satisfied that a credit institution has

failed to repay deposits which are due and payable;

(ii) a judicial authority has made a ruling for reasons which are directly related

to the credit institution's financial circumstances which has the effect of

suspending depositors' ability to make claims against it, should that occur

before the aforementioned determination has been made;

4. “credit institution” shall mean an undertaking the business of which is to

receive deposits or other repayable funds from the public and to grant credits

for its own account;

5. “branch” shall mean a place of business which forms a legally dependent

part of a credit institution and which conducts directly all or some of the

operations inherent in the business of credit institutions; any number of

branches set up in the same Member State by a credit institution which has its

head office in another Member State shall be regarded as a single branch.

13 Article 3 of Directive 94/19 reads:

1. Each Member State shall ensure that within its territory one or more depositguarantee

schemes are introduced and officially recognized. ...

14 Article 4 of Directive 94/19 reads:

1. Deposit-guarantee schemes introduced and officially recognized in a Member

State in accordance with Article 3(1) shall cover the depositors at branches set

up by credit institutions in other Member States. ...

– 6 –

15 Article 7 of Directive 94/19 reads:

1. Deposit-guarantee schemes shall stipulate that the aggregate deposits of each

depositor must be covered up to ECU 20 000 in the event of deposits’ being

unavailable.

...

6. Member States shall ensure that the depositor’s rights to compensation may

be the subject of an action by the depositor against the deposit-guarantee

scheme.

16 Article 8 of Directive 94/19 reads:

1. The limits referred to in Article 7(1), (3) and (4) shall apply to the aggregate

deposits placed with the same credit institution irrespective of the number of

deposits, the currency and the location within the Community.

...

17 Article 9 of Directive 94/19 reads:

1. Member States shall ensure that credit institutions make available to actual

and intending depositors the information necessary for the identification of the

deposit-guarantee scheme of which the institution and its branches are members

within the Community or any alternative arrangement provided for in Article

3(1), second subparagraph, or Article 3(4). The depositors shall be informed of

the provisions of the deposit-guarantee scheme or any alternative arrangement

applicable, including the amount and scope of the cover offered by the

guarantee scheme. That information shall be made available in a readily

comprehensible manner.

Information shall also be given on request on the conditions for compensation

and the formalities which must be completed to obtain compensation.

2. The information provided for in paragraph 1 shall be made available in the

manner prescribed by national law in the official language or languages of the

Member State in which the branch is established.

3. Member States shall establish rules limiting the use in advertising of the

information referred to in paragraph 1 in order to prevent such use from

affecting the stability of the banking system or depositor confidence. In

particular, Member States may restrict such advertising to a factual reference to

the scheme to which a credit institution belongs.

18 Article 10 of Directive 94/19 reads:

1. Deposit-guarantee schemes shall be in a position to pay duly verified claims

by depositors in respect of unavailable deposits within three months of the date

on which the competent authorities make the determination described in Article

1(3)(i) or the judicial authority makes the ruling described in Article 1(3)(ii).

– 7 –

2. In wholly exceptional circumstances and in special cases a guarantee scheme

may apply to the competent authorities for an extension of the time limit. No

such extension shall exceed three months. The competent authorities may, at the

request of the guarantee scheme, grant no more than two further extensions,

neither of which shall exceed three months.

...

National law

19 Directive 94/19 was implemented into Icelandic law by Act No 98/1999 on a

Deposit Guarantee and Investor Compensation Scheme (lög um

innstæðutryggingar og tryggingakerfi fyrir fjárfesta).

20 Article 1 of Act No 98/1999 reads:

The objective of this Act is to guarantee a minimum level of protection to

depositors in commercial banks and savings banks, and to customers of

companies engaging in securities trading pursuant to law, in the event of

difficulties of a given company in meeting its obligations to its customers

according to the provisions of this Act.

21 Article 2 of Act No 98/1999 reads:

Guarantees under this Act are entrusted to a special institute named the

Depositors’ and Investors’ Guarantee Fund, hereinafter referred to as the

“Fund”. The Fund is a private foundation operating in two independent

departments, the Deposit Department and the Securities Department, with

separate finances and accounting, cf. however the provisions of Article 12.

22 Article 3 of Act No 98/1999 reads:

Commercial banks, savings banks, companies providing investment services,

and other parties engaging in securities trading pursuant to law and established

in Iceland shall be members of the Fund. The same shall apply to any branches

of such parties within the European Economic Area within the States parties to

the EFTA Convention or in the Faroe Islands. Such parties, hereinafter referred

to as Member Companies, shall not be liable for any commitments entered into

by the Fund beyond their statutory contributions to the Fund, cf. the provisions

of Articles 6 and 7. The Financial Supervisory Authority shall maintain a record

of Member Companies.

23 Article 6 of Act No 98/1999 reads:

The total assets of the Deposit Department of the Fund shall amount to a

minimum of 1% of the average amount of guaranteed deposits in commercial

banks and savings banks during the preceding year.

…

– 8 –

24 Article 9 of Act No 98/1999 reads:

If, in the opinion of the Financial Supervisory Authority, a Member Company is

unable to render payment of the amount of deposits, securities or cash upon a

customer’s demand for refunding or return thereof in accordance with

applicable terms, the Fund shall pay to the customer of the Member Company

the amount of his deposit from the Deposit Department and the value of his

securities and cash in connection with securities trading from the Securities

Department. The obligation of the Fund to render payment also takes effect if

the estate of a Member Company is subjected to bankruptcy proceedings in

accordance with the Act on Commercial Banks and Savings Banks and the Act

on Securities Trading.

The opinion of the Financial Supervisory Authority shall have been made

available no later than three weeks after the Authority first obtains confirmation

that the relevant Member Company has not rendered payment to its customer or

accounted for his securities in accordance with its obligations. …

Further specifications regarding payments from the Fund shall be included in a

Government Regulation.

25 Article 10 of Act No 98/1999 reads:

In the event that the assets of either department of the Fund are insufficient to

pay the total amount of guaranteed deposits, securities and cash in the Member

Companies concerned, payments from each Department [i.e. the Fund’s

deposits department and the Fund’s securities department] shall be divided

among the claimants as follows: each claim up to ISK 1.7 million shall be paid

in full, and any amount in excess of that shall be paid in equal proportions

depending on the extent of each Department’s assets. This amount shall be

linked to the EUR exchange rate of 5 January 1999. No further claims can be

made against the Fund at a later stage even if losses suffered by the claimants

have not been compensated in full. Should the total assets of the Fund prove

insufficient, the Board of Directors may, if it sees compelling reasons to do so,

take out a loan in order to compensate losses suffered by claimants.

In the event that payment is effected from the Fund, the claims made on the

relevant Member Company or bankruptcy estate will be taken over by the Fund.

II Facts

26 On 1 January 2000, Iceland implemented Directive 94/19 (hereinafter “the

Directive”) through the enactment of Act No 98/1999 on a Deposit Guarantee

and Investor Compensation Scheme. Act No 98/1999 set up the Depositors’ and

Investors’ Guarantee Fund which started operating on the same day.

27 In October 2006, Landsbanki Íslands hf (hereinafter “Landsbanki”) launched a

branch in the United Kingdom which provided online savings accounts under the

brand name “Icesave”. A similar Icesave online deposit branch was launched in

the Netherlands which began accepting deposits in Amsterdam on 29 May 2008.

– 9 –

The Icesave accounts drew in substantial deposits both from private and public

investors.

28 As a part of a worldwide financial crisis, there was a run on Icesave accounts in

the United Kingdom from February to April 2008.

29 In accordance with the division of responsibility laid down under the Directive,

deposits at the British and Netherlands branches of Landsbanki were under the

responsibility of Iceland’s Depositors’ and Investors’ Guarantee Fund

(hereinafter “TIF”), which offered a minimum guarantee of ISK 1 700 000 per

depositor pursuant to Article 10 of Act No 98/1999. Iceland did not make use of

the option provided for in Article 7(2) of the Directive to exclude certain

categories of depositors from the guarantee scheme.

30 From May 2008, Landsbanki opted to take part in the Netherlands depositguarantee

scheme to supplement its home scheme. At that time, the minimum

amount guaranteed under the Netherlands scheme was EUR 40 000 per depositor

which was later raised to EUR 100 000 per depositor. Similarly, the Landsbanki

branch in the United Kingdom joined the UK deposit-guarantee scheme for

additional coverage. Deposits at the British branch of Landsbanki in excess of the

minimum amount guaranteed by the Icelandic TIF were later guaranteed by the

UK scheme to a maximum of GBP 50 000 for each retail depositor.

31 On 3 October 2008, the UK’s Financial Supervisory Authority issued a

Supervisory Notice which required Landsbanki to take certain actions with

regard to its London branch. The practical effect was to freeze the assets of the

Landsbanki branch.

32 On 6 October 2008, Landsbanki’s Icesave websites in the Netherlands and in the

United Kingdom ceased to work and depositors at those branches lost access to

their deposits.

33 On the same day, Althingi, the Icelandic Parliament, adopted Emergency Act No

125/2008. The Emergency Act provided for the creation of new banks and the

granting of priority status in the bankruptcy to depositors with claims upon the

TIF.

34 On 7 October 2008, Landsbanki collapsed and the Icelandic Financial

Supervisory Authority (“Fjármálaeftirlitið”, hereinafter “FME”) assumed the

powers of the meeting of Landsbanki’s shareholders and immediately suspended

the bank’s board of directors. The FME appointed a winding-up committee

which, with immediate effect, assumed the full authority of the board.

35 On the same day, the Netherlands Central Bank submitted a petition to the

District Court of Amsterdam asking for a ruling that certain emergency

regulations of Netherlands law applied.

– 10 –

36 Between 6 and 9 October 2008, the Icelandic Minister of Finance established

new banks under the Emergency Act.

37 On 8 October 2008, the UK Government took action under its Anti-Terrorism,

Crime and Security Act of 2001 to formally freeze the assets of Landsbanki, and

initially also funds relating to Landsbanki owned, held or controlled by the FME

and the Central Bank of Iceland (hereinafter “CBI”) in the UK.

38 Between 9 and 22 October 2008, domestic deposits in Landsbanki were

transferred to the new bank “New Landsbanki” which was established by the

Icelandic Government. The transfer was based on a decision of the FME of 9

October 2008 that exercised its powers under the Emergency Act to achieve a

restructuring of the Icelandic banks.

39 On 13 October 2008, at the request of the Netherlands Central Bank, the District

Court of Amsterdam declared certain emergency regulations of Netherlands law

applicable and appointed administrators to handle the affairs of the branch,

including all assets and dealings with customers of the branch.

40 On 27 October 2008 and thereafter, the FME made statements that triggered an

obligation for the TIF to make payments in accordance with Article 9 of Act No

98/1999 on a Deposit Guarantee and Investor Compensation Scheme to

customers of Landsbanki’s branches in the UK and the Netherlands. The original

three-month time limit for payments was extended in accordance with Article

10(2) of the Directive to 23 October 2009.

41 On 19 November 2008, the IMF approved a two-year Stand-By Arrangement of

USD 2.1 billion to Iceland. Under the Arrangement, USD 827 million was made

available immediately, with eight further instalments of USD 155 million to

follow. An important feature of the IMF Arrangement was the requirement to

introduce stringent capital controls to prevent further devaluation of the Icelandic

króna. The IMF Arrangement was based upon certain projections as to the

balance of payments and sustainability of debt.

42 In late 2008, compensation to depositors was paid under the Netherlands and

British deposit-guarantee schemes. All retail account holders in the United

Kingdom received (or in a very small number of cases, declined) compensation

payments from the UK Government, to the full value of their deposits. In the

Netherlands, the Netherlands Government paid all private and wholesale account

holders to a maximum of EUR 100 000 per depositor.

43 On 28 November 2008, temporary capital account restrictions were imposed to

prevent further depreciation of the Icelandic króna, as an important part of the

economic programme Iceland followed during its cooperation with the IMF. The

capital controls restricted, in general, all transnational foreign currency

movements except those for the purchase of goods and services. A very limited

range of other transactions, including those related to emigration, were also

exempted from the controls.

– 11 –

44 On the same day, the Icelandic Government presented the EFTA Standing

Committee and the EEA Joint Committee with notifications of protective

measures under Article 43 EEA. Neither committee reacted unfavourably to the

protective measures.

45 In December 2008, the Icelandic Parliament established a Special Investigation

Commission (hereinafter “SIC”) to investigate and analyse the processes leading

to the collapse of the three main banks in Iceland. The report was delivered on 12

April 2010.

46 By March 2009, 93% of the commercial banking sector in Iceland had failed.

The FME estimates that since October 2008 in total banks representing 99% of

the Icelandic banking market became subject to either winding up or financial

restructuring.

47 On 1 April 2009, the EFTA Standing Committee and the EEA Joint Committee

were notified of developments regarding the protective measures.

48 On 9 June 2009, the freezing order in the UK was lifted.

49 On 4 October 2009, the TIF published a notice in the Icelandic Legal Gazette

calling for claims to be submitted within two months. The Netherlands and UK

Governments submitted claims, as did a small number of other depositors,

including four institutional investors. Later the TIF wrote to all institutional

investors to inform them that it was beginning to pay compensation under Act No

98/1999, and seeking an assignment of any claim against the banks themselves.

50 On 23 October 2009, the final deadline for payments expired.

51 In the autumn of 2009, controls on capital inflows in Iceland were removed.

Other capital controls remained in place. Meanwhile, a strategy for gradual

capital account liberalisation was introduced. These controls were in force when

the facts relevant to these proceedings took place.

52 On 30 October 2009, 16 June 2010, and 1 July 2010, the EFTA Standing

Committee and the EEA Joint Committee were further notified of amendments to

the protective measures. None of these notifications resulted in any criticism

from the committees.

53 In March 2010, the District Court of Amsterdam lifted the restrictions on the

Netherlands branch of Landsbanki.

54 On 14 December 2011, in Case E-3/11 Sigmarsson [2011] EFTA Ct. Rep. 432,

the Court held that “a national measure which prevents inbound transfer into

Iceland of Icelandic krónur purchased on the offshore market is compatible with

Article 43(2) and (4) of the EEA Agreement in circumstances such as those in the

case before the referring court”. Paragraph 50 of that judgment states that “[t]he

substantive conditions laid down in Article 43(2) and (4) EEA call for a complex

assessment of various macroeconomic factors. EFTA States must therefore enjoy

– 12 –

a wide margin of discretion, both in determining whether the conditions are

fulfilled, and the choice of measures taken, as those measures in many cases

concern fundamental choices of economic policy.”

III Pre-litigation procedure and procedure before the Court

55 On 26 May 2010, ESA issued a letter of formal notice to Iceland alleging a

failure to ensure that Icesave depositors in the Netherlands and the United

Kingdom received payment of the minimum amount of compensation provided

for in Article 7(1) of the Directive, as amended, within the time limits laid down

in Article 10 of the Directive, in breach of the obligations resulting from the

Directive and/or Article 4 EEA.

56 Iceland was requested to submit its observations within two months of the receipt

of that letter. At the request of the Icelandic Government, ESA granted

extensions to that deadline, first until 8 September 2010, then until 7 December

2010 and finally until 2 May 2011.

57 On 2 May 2011, the Icelandic Government replied to the letter of formal notice.

In its reply, the Icelandic Government maintained that it was not in breach of its

obligations under the Directive or Article 4 EEA.

58 On 10 June 2011, unconvinced by Iceland’s reply to the letter of formal notice,

ESA delivered its reasoned opinion to Iceland.

59 On 30 September 2011, Iceland replied to the reasoned opinion.

60 On 13 December 2011, Iceland submitted an additional letter which contained

further information on the winding up of the Landsbanki estate including

summaries of recent Icelandic Supreme Court judgments concerning the

reordering of the priority of creditors in that winding up.

61 By application lodged at the Court on 15 December 2011, ESA brought an action

under the second paragraph of Article 31 of the Agreement between the EFTA

States on the Establishment of a Surveillance Authority and a Court of Justice

(hereinafter “SCA”) seeking a declaration that by failing to ensure payment of

the minimum amount of compensation to Icesave depositors in the Netherlands

and the United Kingdom provided for in Article 7(1) of the Act referred to at

point 19a of Annex IX to the Agreement on the European Economic Area within

the time limits laid down in Article 10 of the Act, Iceland had failed to comply

with the obligations resulting from that Act, in particular its Articles 3, 4, 7 and

10 and/or Article 4 EEA and ordering the defendant to bear the costs of the

proceedings.

62 On 3 February 2012, Iceland requested an extension of the period in which to

submit its defence. That request was granted by the President on 6 February

2012, setting a time limit for the submission of the defence of 8 March 2012.

– 13 –

63 In its defence, lodged at the Court on 8 March 2012, Iceland contends that the

Court should dismiss the application and seeks an order that ESA pay its costs.

64 On 28 March 2012, the European Commission requested leave to intervene in

support of ESA.

65 On 10 April 2012, ESA submitted its reply to the defence.

66 On 23 April 2012, following observations submitted by the parties, the European

Commission was granted leave to intervene by Order of the President.

67 On 7 May 2012, the Samstaða þjóðar (National Unity Coalition), an association

registered in Iceland, sought leave to intervene pursuant to Article 36 of Protocol

5 to the SCA on the Statute of the EFTA Court in support of the form of order

sought by Iceland.

68 On 9 May 2012, the Government of the United Kingdom submitted written

observations.

69 On 11 May 2012, Iceland submitted its rejoinder. On the same date, the

Government of Liechtenstein submitted written observations.

70 On 15 May 2012, the Government of the Netherlands and the Government of

Norway submitted written observations. Further, Iceland submitted an urgent

request to receive the written observations. This request was granted by the

Registrar on 16 May 2012.

71 On 23 May 2012, the European Commission submitted its statement in

intervention.

72 On 15 June 2012, the application for leave to intervene by Samstaða þjóðar was

dismissed as manifestly inadmissible by Order of the President.

73 On 20 June 2012, Iceland submitted its reply to the statement in intervention by

the European Commission.

74 Reference is made to the Report for the Hearing for a fuller account of the facts,

the procedure, the pleas and arguments of the parties, which are mentioned or

discussed hereinafter only in so far as is necessary for the reasoning of the Court.

– 14 –

IV The action

First plea: Obligation of result

Arguments of the parties and of the intervener

The applicant

75 The applicant’s first plea is that, in failing to ensure payment of compensation to

Icesave depositors holding deposits in Landsbanki’s branches in the UK and the

Netherlands within the time limits laid down in the Directive, the defendant has

breached its obligations under Articles 3, 4, 7 and 10 of the Directive.

76 ESA submits that the Directive imposes an obligation of result on EEA States to

ensure that a deposit-guarantee scheme is set up capable of guaranteeing that, in

the event of deposits being unavailable, the aggregate deposits of each depositor

are covered in all circumstances to the amount laid down in Article 7(1) of the

Directive. Further, the obligation of result requires States to ensure that duly

verified claims by depositors are paid within the deadline laid down in Article 10

of the Directive.

77 The applicant contends that Iceland has not fulfilled all its obligations simply by

transposing the Directive into national law and setting up and recognising a

deposit-guarantee scheme without any regard to whether the compensation of

depositors is, in fact, ensured under the conditions prescribed in the Directive.

78 According to ESA, this interpretation of the Directive is in line with the case law

of the Court of Justice of the European Union (hereinafter “ECJ”). In ESA’s

view, it follows from Case C-222/02 Paul and Others [2004] ECR I-9425,

paragraphs 26, 27 and 30, that the ECJ considers Articles 7 and 10 of the

Directive to require a clear and precise result to be achieved.

79 The applicant argues further that it is for the national authorities to determine

how to achieve the result aimed at by a directive, in the manner which they deem

most appropriate. In the present case, if all else fails, in order to discharge its

duties under the Directive, the EEA State itself may be held responsible for the

compensation of depositors to the amount provided for in Article 7 of the

Directive.

80 In this regard, ESA notes that in the Impact Assessment of 12 July 2010 (see

Commission Staff Working Document - Impact Assessment of 12 July 2010,

SEC(2010) 834/2; hereinafter “Impact Assessment”), the Commission services

set out various means of funding a deposit-guarantee fund, including ex ante

contributions, ex post contributions, State loans and direct state interventions.

However, the Directive itself does not specify how deposit-guarantee funds

should be financed.

81 Moreover, ESA argues that exceptional circumstances, such as a financial crisis

of the magnitude experienced in Iceland, cannot alter the obligation to

– 15 –

compensate depositors in accordance with Article 7(1) of the Directive. By

contrast, Article 10(2) of the Directive expressly mentions “exceptional

circumstances” as allowing for certain extensions of the deadline for payment of

compensation. Thus, in ESA’s view, the effect of “exceptional circumstances” is

limited to justifying certain payment delays.

82 ESA submits further that the TIF is an emanation of the Icelandic State within

the meaning of the EEA Agreement and, consequently, any default of that

institution is directly attributable to the State both in law and in fact.

83 In the applicant’s view, the doctrine of force majeure does not apply in the

present case and, in any event, does not release Iceland from its obligations under

the Directive.

84 The applicant accepts that a State injection of capital to refinance a depositguarantee

scheme may constitute State aid within the meaning of Article 61

EEA. In its view, however, this would appear to be compatible with the State aid

rules. The applicant observes further that the Icelandic authorities never

approached it to discuss the compatibility of any form of State intervention in

this case. Furthermore, it contends that the State aid rules did not constrain the

defendant from transferring national deposits to New Landsbanki.

The intervener

85 The Commission emphasises that the Directive is binding upon the EEA States

and not on bodies that are created by the Member States in order to comply with

their obligations under the directives concerned.

86 In this case, the Directive imposes obligations of result on the EEA States on the

basis of the wording of Articles 3, 4, 7 and 10 of the Directive.

87 The intervener asserts that, following the introduction of a scheme, obligations of

result include the obligation to ensure that the deposit-guarantee scheme is

capable of ensuring the repayment of the covered deposits. In the event of a bank

collapse, depositors are covered to a maximum of EUR 20 000. In the view of the

intervener, if a deposit-guarantee scheme does not have sufficient funding, the

Member State concerned must be regarded as having infringed the Directive.

88 In its view, any other interpretation would render the provision ineffective to

ensure the objective of the Directive, that is, to provide a guarantee to depositors

when deposits become unavailable, as depositors would not be able to rely on

deposit-guarantee schemes. Such an interpretation would also fail to achieve the

purpose of ensuring last resort protection.

89 The intervener shares the applicant’s assessment, namely, that this interpretation

is in line with the case law of the ECJ. In the intervener’s view, an obligation of

result can be clearly inferred from Paul and Others (cited above).

– 16 –

90 The intervener emphasises that EEA States are free to decide how depositguarantee

schemes are funded in order to pay compensation in accordance with

the Directive. In its view, a State could determine, for example, that the

remaining banks, as well as newly created banks, be required to contribute to the

refinancing of the scheme to the extent necessary for ensuring the repayment of

depositors, or that the schemes take out long-term loans at market rates.

91 Such options would reflect the objective expressed in recital 23 in the preamble

to the Directive, namely, that the costs of the schemes must, in principle, be

borne by credit institutions.

92 According to the intervener, the possibility cannot be excluded, however, that an

EEA State has no other choice than to resort to State funding. It reiterates that

this is a matter which is within the discretion of the EEA State itself.

93 The intervener asserts that no provision of the Directive allows EEA States to

disregard its rules in exceptional circumstances, such as a financial crisis. In its

view, the Directive was devised precisely to deal with the exceptional occurrence

of a bank failure, including circumstances in which supervision has not proved

sufficient to save a bank. The European legislature did not include any additional

derogation over and above what is provided for in Article 10(2) of the Directive.

94 Moreover, the intervener considers that, also on the basis of case law, the

defendant’s force majeure plea must be rejected.

95 Finally, the Commission submits that the present case concerns the obligation of

an EEA State under the Directive to ensure the compensation prescribed by the

Directive. Any State liability vis-à-vis individual depositors for not having

ensured the compensation prescribed by the Directive is a different issue. Such

liability would have to be established by a national court.

The defendant

96 The defendant submits that the Directive imposes no obligation of result on an

EEA State to use its own resources in order to guarantee the pay-out of a depositguarantee

scheme in the event that “all else fails”. The obligations incumbent

upon the State are limited to ensuring the proper establishment, recognition and a

certain supervision of a deposit-guarantee scheme.

97 Moreover, the defendant argues that no provision of the Directive suggests that

any form of State guarantee or State funding is required under the Directive, in

particular where a guarantee scheme is unable to pay compensation. It places an

obligation upon the State to set up and to supervise a deposit-guarantee scheme,

but there is no suggestion whatsoever that it must pay compensation.

98 Recitals 4, 23 and 25 in the preamble to the Directive make clear that the funding

for deposit-guarantee schemes will come from the banks. However, the

– 17 –

applicant’s case converts the Directive from a measure funded by the banks into

a measure that imposes huge potential liabilities on the State.

99 Article 7(6) of the Directive is the only operative provision that deals with the

scenario that a deposit-guarantee scheme might be unable to pay duly qualified

claims. However, the solution contemplated by this provision in the case of nonpayment

is an action against the scheme and not the EEA State.

100 The sole purpose of recital 24 in the preamble to the Directive is to exclude State

liability if the compensation of depositors is ensured, as confirmed by the ECJ’s

judgment in Paul and Others and in particular by the German version of said

recital.

101 With regard to the applicant’s claim that it is undisputed between the parties that

the TIF could not cope with the almost total failure of Iceland’s banks, in the

defendant’s view, this does not show any failure on its part to implement the

Directive properly. It contends – and claims to find particular support for its

argument in the Impact Assessment – that no deposit-guarantee scheme could

have coped with such a wide-scale banking failure.

102 The defendant submits that, if the obligation of result imposed by the Directive

were that the State must ensure the payment of compensation, in whatever

circumstances, then, if all else fails, the State would have to step in. That would

be the case no matter how many hypothetical choices a State has. The logic of the

applicant’s argument – so the defendant contends – is that the State is left with no

choice at all whether to use its resources to fund a deposit-guarantee scheme – at

least where all else fails.

103 The defendant contends that any attempt to underwrite a deposit-guarantee

scheme using the resources of the State creates its own problems. These include

huge costs for the State, moral hazard on the part of the banks, and a linkage

between the liabilities of the banks and the financial exposure of the State. That

kind of link can have very serious consequences. A severe financial crisis easily

turns to a possible sovereign default.

104 In the defendant’s view, where widespread banking failure takes place, other

policy tools are required. In that regard, it notes that the Commission is

considering a package of reforms to banking supervision in Europe that aims to

strengthen the measures available. State aid rules, in particular, would allow the

applicant to ensure that any injection of State funds into the banking system is no

more extensive than it needs to be, and that the single market is not detrimentally

affected.

105 The defendant observes that the interpretation of the Directive advanced by the

applicant is based on the goal of consumer protection. However, in its view,

consumer protection measures must always strike a balance between costs and

benefits. For this very reason, EEA law aims at a high level of consumer

protection, but not the highest possible. If the applicant’s approach were to

– 18 –

prevail, this could create serious risks and burdens for the EEA States, beyond

their contemplation when the Directive was adopted. Ultimately, that could be to

the detriment of consumers themselves.

106 The defendant contends that whether or not the TIF is an emanation of the State

is of no relevance for the present case.

107 The defendant infers from the Impact Assessment that an injection of State

resources into the banking system of the kind at issue in the present case amounts

to State aid. Consequently, were an EEA State under an obligation to make

payments of that kind as an automatic result of the Directive if “all else fails”, the

State guarantee would fall outside the scope of State aid supervision.

108 In this connection, the defendant notes that the Commission in its proposal for

the original Directive and its 2010 Impact Assessment recognised that public

sector funding would be subject to State aid rules and that there would be no

obligation to provide such. Moreover, it contends that there is obviously scope

for serious distortions of competition if a State bails out a deposit-guarantee

scheme – in effect subsidising its banks. In its view, State aid rules are there to

ensure that this kind of activity is regulated by the applicant.

109 In the alternative, the defendant submits that, even if the Directive were to

impose strict obligations upon the State to fund the guarantee scheme in the event

of its collapse, it was prevented from doing so by force majeure.

Other participants submitting written observations

Liechtenstein

110 Liechtenstein interprets the wording of the proposal for a Council Directive on

deposit-guarantee schemes to indicate that the Directive was intended to deal

with the failure of individual banks; not with the collapse of an entire banking

system. Liechtenstein contends that it was not envisaged that a general and

automatic State responsibility covering the costs of the failure of the whole

banking system would arise from the Directive.

The Netherlands

111 The Netherlands argues that the obligation to comply with the result sought by

the Directive follows both from the general obligations under EEA law and the

obligation of the State in relation to a directive. The Netherlands considers that

the defence of force majeure is not available to Iceland as it can only rely on

derogations provided by the Directive itself. But even if the Directive were to

allow for a force majeure defence, in the view of the Netherlands, Iceland cannot

rely on such as it failed to notify ESA of its difficulties and did not suggest

appropriate solutions. Furthermore, the Netherlands argues that financial

difficulties cannot be accepted as justification under EEA law, as to allow

– 19 –

financial difficulties as a defence would unjustly weaken the effectiveness of the

Directive.

112 In the view of the Netherlands, Iceland failed in any event to prove a force

majeure defence on the merits as it submitted evidence which is largely general

in nature and based on assertion rather than proof. Moreover, Iceland also failed

to prove that there was an “absolute impossibility” of establishing any form of

deposit-guarantee scheme that would have been capable of ensuring the result

sought by the Directive.

Norway

113 Norway argues that a general and automatic State responsibility for

compensation of depositors as a last resort would impose an extensive financial

burden on EEA States. Without a clear and precise wording in the Directive, the

existence of such an obligation cannot be assumed. An obligation of such kind on

the part of the EEA States does not follow from the preamble to the Directive or

the preparatory works. Moreover, recital 24 in the preamble to the Directive

appears to exclude automatic State responsibility.

The United Kingdom

114 The United Kingdom interprets the Directive as imposing an obligation on EEA

States to ensure that the relevant deposit-guarantee schemes should pay a

prescribed compensation to each eligible investor within the applicable time limit

in the event of unavailability of deposits within the meaning of the Directive.

115 The United Kingdom asserts that arguments related to force majeure should be

dismissed as an EEA State may only rely on derogations provided in the

Directive itself. Were force majeure available as a defence, the defendant would

have to inform the applicant of its difficulties and suggest appropriate solutions.

116 The United Kingdom also argues that the defendant failed to prove its defence on

the merits in that it failed to show that it would have been absolutely impossible

for it to establish any form of deposit-guarantee scheme under the Directive. The

United Kingdom submits further that the evidence offered by the defendant in

support of its case was largely general in nature and based on assertions rather

than evidence.

Findings of the Court

Introductory remarks

117 For the purposes of the first plea, it has to be assessed whether in a systemic

crisis of the magnitude experienced in Iceland the Directive itself envisages that

the defendant should have ensured payment to depositors in the Icesave branches

in the Netherlands and the United Kingdom in accordance with Articles 3, 4, 7

and 10 of the Directive. Moreover, it must also be assessed whether the

defendant has infringed the alleged obligation of result.

– 20 –

118 The Court recalls at the outset that a failure to fulfil obligations can be found

only if there is, upon expiry of the period laid down in the reasoned opinion, a

situation contrary to EEA law which is objectively attributable to the EEA State

concerned (see, for example, Case E-8/11 ESA v Iceland [2011] EFTA Ct. Rep.

467, paragraph 34).

119 Consequently, the nature of the result to be achieved is determined by the

substantive provisions of the individual directive in question.

120 As the first plea concerns the question whether the alleged obligation of result

follows directly from the Directive, it must be kept in mind that, as set out in

Article 7 EEA, one of the principal characteristics of directives is precisely that

they are intended to achieve a specific result whilst leaving it to the EEA States

and their national authorities how to achieve this objective. In any case, there is a

general obligation on the EEA States to ensure that the provisions of a directive

are fully effective.

121 European legislative practice shows that there may be great differences in the

types of obligations which directives impose upon EEA States and therefore in

the results which must be achieved. Some directives require legislative measures

to be adopted at national level and compliance with those measures to be the

subject of judicial or administrative review. Other directives lay down that the

EEA States are to take the necessary measures to ensure that certain objectives

formulated in general and unquantifiable terms are attained, whilst leaving them

some discretion as to the nature of the measures to be taken. Yet other directives

require the EEA States to obtain very precise and specific results after a certain

period (compare Case C-60/01 Commission v France [2002] ECR I-5679,

paragraphs 26 to 28, and case law and examples cited).

122 It is recalled in this respect that, pursuant to Article 1 of Protocol 1 to the EEA

Agreement, preambles of the acts referred to in the Annexes are not adapted for

the purposes of the Agreement. They are relevant to the extent necessary for the

proper interpretation and application, within the framework of the EEA

Agreement, of the provisions contained in such acts (see, for example, Case

E-14/11 DB Schenker v ESA, judgment of 21 December 2012, not yet reported,

paragraph 125).

123 Moreover, it should be added that the question whether an EEA State is obliged

to provide for compensation for loss and damage caused to individuals as a result

of breaches of obligations under the EEA Agreement for which that State can be

held responsible (see, for example, Case E-9/97 Sveinbjörnsdóttir [1998] EFTA

Ct. Rep. 95, paragraphs 62 and 63, and Case E-2/12 HOB-vín III, judgment of 11

December 2012, not yet reported, paragraph 117 et seq.) lies outside the scope of

the present proceedings.

– 21 –

The Directive

124 At the outset, the Court notes that as a result of the crisis, the regulatory

framework of the financial system has been subject to revision and amendment in

order to enhance financial stability. As regards the Directive, those amendments

dealt, inter alia, with the improvement of depositor protection and the

maintenance of depositors’ confidence in the financial safety net (see Directive

2009/14/EC of the European Parliament and of the Council of 11 March 2009

amending Directive 94/19/EC on deposit-guarantee schemes as regards the

coverage level and the pay-out delay, OJ 2009 L 68, p. 3). However, the

judgment in the present case must be based on the Directive as it stood at the

relevant time. Then, it did not encompass those amendments and the improved

protection of depositors. Those revisions are not yet part of the EEA Agreement.

125 The aim pursued by the Directive is, on the one hand, the freedom of

establishment and freedom to provide services in the banking sector, and the

stability of the banking system and protection for savers, on the other (compare

the Opinion of Advocate General Léger in Case C-233/94 Germany v Parliament

and Council [1997] ECR I-2405, point 35).

126 This dual objective is expressed in the first recital of the Directive which states

that the harmonious development of the activities of credit institutions

throughout the Community should be promoted through the elimination of all

restrictions on the right of establishment and the freedom to provide services,

while increasing the stability of the banking system and protection for savers. In

this regard, the effect of the machinery established by the Directive is to prevent

the EEA States from invoking depositor protection in order to impede the

activities of credit institutions authorised in other EEA States (see, for

comparison, Germany v Parliament and Council, cited above, paragraph 19).

127 In this regard, it must be recalled that recent European regulatory policies in the

relevant field are based on the principles of mutual recognition and a “single

passport” mechanism which allows financial services operators lawfully

established in one EEA State to establish and/or provide their services in other

EEA States without further authorisation requirements (see, for example, recitals

6 and 7 in the preamble to the Directive).

128 In light of the express reference made to the system of single authorisation, the

Directive has to be considered as constituting one piece of a regulatory

framework for banks and other financial institutions (see, mutatis mutandis, Case

E-17/11 Aresbank, judgment of 22 November 2012, not yet reported, paragraphs

86 to 95).

129 Soundly regulated and safe financial institutions are of decisive importance for

financial stability in the EEA. Therefore, the European strategy aims at

establishing a common regulatory framework ensuring prudential oversight and

consumer protection throughout the European internal market.

– 22 –

130 It follows from Article 3(1) of the Directive that an EEA State is under an

obligation to ensure that within its territory one or more deposit-guarantee

schemes are introduced and officially recognised.

131 The system introduced by Article 3(1) of the Directive is not one of absolute

constraint. It leaves the EEA States free to introduce and recognise several

deposit-guarantee schemes within their territory, thereby allowing the credit

institutions to choose the model that will best suit them. The Commission’s

proposal for the Directive expressly states that “[a]fter receiving the assurance

that the financing arrangements were sufficiently sound to pay off all depositors

covered, including those at branches in another Member State, it was not

considered necessary to harmonize rules which are closely linked with the

management of the schemes in question” (Commission proposal for a Council

Directive on deposit-guarantee schemes, COM(92) 188 final, p. 8).

132 Pursuant to Article 3(2) to (5) of the Directive, the competent national authorities

that have issued authorisations to credit institutions are – in cooperation with the

deposit-guarantee scheme – obliged to ensure that the credit institutions comply

with their obligations as members of a scheme. Where appropriate, under the

conditions specified in Article 3(5) of the Directive, they must adopt a decision

revoking the authorisation of the institution in question.

133 As the ECJ held in Paul and Others, the purpose of those provisions is to

guarantee to depositors that the credit institution in which they make their

deposits belongs to a deposit-guarantee scheme and fulfils its obligations. This

shall ensure protection of their right to compensation in the event that their

deposits are unavailable, in accordance with the rules laid down in the Directive

and more specifically in Article 7 thereof. However, Article 3(2) to (5) of the

Directive relate only to the introduction and proper functioning of the depositguarantee

scheme as provided for by the Directive (Paul and Others, cited above,

paragraphs 28 to 29).

134 The Directive does not exhaustively regulate the unavailability of deposits under

EEA law, but simply requires EEA States to provide for a harmonised minimum

level of deposit protection (compare the Opinion of Advocate General Stix-Hackl

in Paul and Others, cited above, point 117). It is therefore clear that national

authorities have considerable discretion in how they organise the schemes.

135 In view of the above, pursuant to Article 3 of the Directive, EEA States have to

introduce and officially recognise a deposit-guarantee scheme. Moreover, they

have to fulfil certain supervisory tasks in order to ensure the proper functioning

of the deposit-guarantee scheme. However, it is not envisaged in that provision

that EEA States have to ensure the payment of aggregate deposits in all

circumstances.

136 Article 7(1) of the Directive specifies the minimum coverage for aggregate

deposits that must be provided in the event of deposits being unavailable

– 23 –

(compare Paul and Others, cited above, paragraph 27). It provides for minimum

harmonisation as regards the level of coverage for individual deposits.

137 It follows from the words “[d]eposit-guarantee schemes shall stipulate...” that an

obligation is imposed on EEA States to ensure that national rules are adopted or

maintained which require a coverage level of at least EUR 20 000.

138 With the adoption of Directive 2009/14, the wording of Article 7(1) of the

Directive has been replaced. The new version states that “Member States shall

ensure that the coverage for the aggregate deposits of each depositor shall be at

least EUR 50 000 in the event of deposits being unavailable”. Moreover, a new

paragraph 1(a) has been introduced in Article 7 which lays down that Member

States shall ensure by 31 December 2010 that the coverage for the aggregate

deposits of each depositor shall be set at EUR 100 000 in the event of deposits

being unavailable.

139 It appears that under the new version of the provision EEA States are obliged to

ensure a certain level of coverage. Whether this obligation is limited to a banking

crisis of a certain size would require further assessment. However, that question

can be left open here since, as mentioned above (see paragraph 124), Directive

2009/14 is not applicable in the present case.

140 At any rate, the rewording of Article 7 of the Directive shows that the European

legislature considered substantial change necessary to extend the responsibility of

the EEA States beyond the establishment of an effective framework.

141 This supports the view that the obligation on the EEA States under the version of

the provision applicable in the case at hand is limited to ensuring that national

rules which require a coverage level of at least EUR 20 000 are maintained or

adopted.

142 Pursuant to Article 7(6) of the Directive, EEA States have to ensure that the

depositor’s right to compensation may be the subject of an action by the

depositor against the guarantee schemes. The scope of this provision

encompasses the scenario that a deposit-guarantee scheme might be unable to

pay duly qualified claims.

143 However, the obligation on the EEA States is limited to the maintenance or

adoption of rules that provide for an effective right to file an action against the

guarantee scheme particularly in the case of non-payment (compare Paul and

Others, cited above, paragraph 27).

144 Consequently, it must be held that Article 7 of the Directive does not lay down

an obligation on the State and its authorities to ensure compensation if a depositguarantee

scheme is unable to cope with its obligations in the event of a systemic

crisis.

– 24 –

145 Article 10 of the Directive establishes time limits for the payments of guarantee

schemes to depositors. This follows from the exceptions provided for in Article

10(3) and (5) which refer expressly to “the time limit laid down in paragraphs (1)

and (2)”.

146 However, the mandatory language of the English version of Article 10(1) of the

Directive, i.e. “[d]eposit-guarantee schemes shall be in a position to pay ... within

three months of the date on which the competent authorities ...”, establishes

merely a procedural obligation, as it refers only to the binding nature of the threemonth

period prescribed therein.

147 The importance of timely payments by the guarantee scheme is further

emphasised in Article 10(2) of the Directive. Under this provision, a guarantee

scheme may apply to the competent authorities for an extension of the time limit

set out in Article 10(1) of the Directive only in wholly “exceptional

circumstances” and in “special cases”. The Directive does not contain a

definition of those terms.

148 Accordingly, pursuant to Article 10(2) of the Directive, EEA States and their

competent authorities are under an obligation to supervise and ensure that

deposit-guarantee schemes are, as a rule, not released from the short deadline

established in Article 10(1) of the Directive, which forms the general rule.

However, an obligation on the State and its national authorities to ensure

compensation if a deposit-guarantee scheme is unable to cope with its obligations

under exceptional circumstances such as in a systemic crisis cannot be derived

from that provision.

149 In view of the above, the Court finds that the obligation on EEA States under

Article 10 of the Directive is limited to provide for a mandatory and effective

procedural framework with respect to time limits.

150 Furthermore, reference should be had to Articles 1(3) and 9(3) and recitals 3, 10

and 25 in the preamble to the Directive. However, these provisions show that the

Directive deals – at least primarily – with a failure of individual banks and not

with a systemic crisis.

151 Even as regards the important objective to avoid bank runs, the wording of recital

4 in the preamble to the Directive is limited to a failure of a single credit

institution that may lead to massive withdrawals also from healthy institutions.

152 It must be noted in this respect that in the 2010 Impact Assessment the

Commission services stated in relation to a possible harmonised approach to a

target level for deposit-guarantee funds that the “choice of a target level for the

funds may be related to the capability of deposit-guarantee schemes to handle a

bank failure of a specific size based on bank recapitalisation by Member States

during the financial crisis…” (Impact Assessment, section 7.8, p. 53). The

biggest failure envisaged by the Commission’s services is a failure of a large

member bank accounting for 7.25% of eligible deposits.

– 25 –

153 Not even this Impact Assessment, made in the light of the financial crisis of

2007/2008 which included the failure of the Icelandic banks, contemplated the

extension of the funding of deposit-guarantee schemes to cover a systemic bank

failure of the magnitude experienced in Iceland. The Impact Assessment

concluded: “Setting a target level for DGS [sc. deposit-guarantee scheme] funds

would ensure that schemes are credible and capable to deal with medium sized

bank failures. The most cost-efficient target level would be 1.96% (or simply

2%) of eligible deposits (to be achieved within 10 years) because it would

increase DGS funds to cope with a medium-sized bank failure; and despite quite

substantial increase in contributions, it would, on average, only moderately affect

bank profits at EU level (with a stronger impact in some Member States) and

lead to very limited costs for depositors. ... It would ensure a sound financing of

the DGS but avoid unwanted side-effects if contributions were too high.” (Impact

Assessment, section 7.8, p. 58)

154 Moreover, the mechanism and level of funding of the schemes have not been

harmonised. The Directive does not contain any substantive provision that deals

with those organisational matters.

155 Recital 23 in the preamble states that it is not indispensable, in the Directive, to

harmonise the methods of financing schemes guaranteeing deposits or credit

institutions themselves. According to the same recital, this follows from the fact,

inter alia, that the financing capacity of such schemes must be in proportion to its

liabilities. The Directive contains no definition of what is considered to be

proportionate funding.

156 It is clear from recital 23 in the preamble to the Directive as well as from recitals

4 and 25 that the cost of financing such guarantee schemes must be borne, in

principle, by credit institutions and not the EEA States.

157 Recital 23 in the preamble to the Directive aims to strike a balance between the

cost of funding a deposit-guarantee scheme, the stability of the national banking

system and consumer protection. The objective is that the banking system should

function in the interests of consumers and the economy as a whole.

158 However, the provision of private funding to enable the guarantee scheme to

cover deposits in a systemic crisis up to the maximum coverage level would

clearly undermine the objective laid down in recital 23, that is, not to jeopardise

the stability of the banking system itself. Accordingly, the cost of the guarantee

schemes must not be too onerous for the member credit institutions.

159 The payment obligation thus lies with the deposit-guarantee fund, and the

guarantee funds are to be financed entirely by the credit institutions. In

circumstances where the fund cannot meet depositors’ claims in the event of a

default by a member of the scheme, it is for the remaining credit institutions to

make up the difference. In other words, the bankruptcy of a financial institution

is covered – as in classic insurance systems – by the rest of the institutions active

in the market.

– 26 –

160 How to proceed in a case where the guarantee scheme is unable to cope with its

payment obligations remains largely unanswered by the Directive. The only

operative provision that deals with non-payment is Article 7(6) of the Directive,

according to which depositors must have the possibility to bring an action against

the relevant scheme. However, an obligation on the State or a possible action

against the State in those circumstances is not envisaged in the Directive’s

provisions.

161 This does not mean that depositors will necessarily remain unprotected in such a

case. Depositors may fall within the remit of other parts of the safety net. They

may benefit from other provisions of EEA law regarding financial services, as

well as the activities of supervisors, central banks, and governments. However,

the question in the present case is whether EEA States are legally responsible

under the Directive in case of such an enormous event.

162 Reference should be had to the second subparagraph of Article 3(1) of the

Directive. Pursuant to that rule, a credit institution may be exempted by an EEA

State from its obligation to be a member of a deposit-guarantee scheme where it

belongs to a system that ensures, in particular, its liquidity and solvency and it is

thereby guaranteed that depositors receive protection at least equivalent to that

provided by the guarantee scheme.

163 That possibility to exempt a credit institution from the obligation to belong to a

deposit-guarantee scheme requires, in addition, that the alternative system fulfils

certain conditions. The third of these requires the system not “to consist of a

guarantee granted to a credit institution by a Member State itself or by any of its

local or regional authorities”. The aim of this provision is to minimise the

potential to distort competition, inherent in the very nature of guarantees of that

kind.

164 Were an EEA State legally obliged to ensure the compensation of depositors

where a recognised deposit-guarantee scheme is unable to cope with its payment

obligations, the negative effect on competition would be comparable.

Consequently, it is likely that, had the European legislature sought to adopt a

different approach as regards the funding of deposit-guarantee schemes, this

would have been expressly stated in the Directive.

165 It is recalled in this regard that the Commission’s 1992 proposal for the Directive

recognised that any public sector funding would be subject to State aid rules and,

moreover, that there would be no obligation to provide such. The proposal states

in this respect: “The question of whether the public sector would be able to

provide assistance for guarantee schemes in emergency situations of exceptional

gravity and when the schemes’ resources have been exhausted has been raised in

order to enable them to respect their commitments to depositors. It did not seem

appropriate, in the proposal for a Directive, to prohibit such assistance, which

could prove necessary in practice, although it is not desirable as a general rule

and could not be allowed to contravene the rules of the Treaty concerning State

– 27 –

aid.” (Commission proposal for a Council Directive on deposit-guarantee

schemes, COM(92) 188 final, p. 8)

166 Moreover, in its 2010 Impact Assessment, the Commission noted: “DGS [sc.

deposit-guarantee schemes] are financed by banks and the Commission intends

to maintain this requirement. That means that the budget of Member States is not

directly concerned by the DGS Directive. The recent crisis has shown that in a

systemic crisis, DGS may reach their limits. However, even if in such cases

governments stepped in under strict obedience of state aid rules, this would not

be triggered under a legal obligation in the DGS Directive and ‘viability for

Member States’ is therefore not subject of this impact assessment.” (Impact

Assessment, section 3.2, pp. 8-9.)

167 An additional aspect to which regard must be had is mentioned in recital 16 in

the preamble to the Directive. There, the European legislature states that it would

not be appropriate to impose a level of protection “which might in certain cases

have the effect of encouraging the unsound management of credit institutions”.

This points to the concept of moral hazard. In economic literature the lesson of

moral hazard has been described with the words that “less is more”. Professor

Joseph E. Stiglitz has formulated in this respect: “[T]he more and better

insurance that is provided against some contingency, the less incentive

individuals have to avoid the insured event, because the less they bear the full

consequences of their actions”. (“Risk, Incentives and Insurance: The Pure

Theory of Moral Hazard”, The Geneva Papers on Risk and Insurance, 8 (No 26,

January 1983), 4, at p. 6.)

168 It is recalled that, in a crisis of a magnitude such as the one experienced in

Iceland, an EEA State would have very limited options to ensure compensation

to depositors that is, first, it could provide a State guarantee for a loan taken out

by the scheme itself, or, second, it could directly fund the scheme or its

depositors. Thus, moral hazard would also occur in the case of State funding,

serving to immunise a deposit-guarantee scheme from the costs which have, in

principle, to be borne by its members.

169 The alleged obligation of result would further run counter to the aims mentioned

in recitals 2 and 3 in the preamble to the Directive, according to which consumer

protection is to be achieved by means of the introduction of a minimum level of

deposit protection and the guarantee that foreign and domestic deposits are

protected by the same guarantee scheme irrespective of where a credit institution

has its head office.

170 Accordingly, consumer protection under the Directive does not entail full

protection (compare, as regards the coverage level, Germany v Parliament and

Council, cited above, paragraph 48), since increasing consumer protection may

reach a point where the costs outweigh the benefits.

171 Finally, the question arises whether recital 24 in the preamble to the Directive

can be said to support the alleged obligation of result. That recital states that the

– 28 –

liability of EEA States and their competent authorities is excluded if they ensure

the compensation or protection of depositors under the conditions prescribed in

the Directive. The Court notes that this recital may be necessary to allow for a

proper delineation of the scope of the principle of State liability.

172 As the applicant set out in its argument, recital 24 in the preamble to the

Directive states that liability of a State and its competent authorities in respect of

depositors is precluded “if they have ensured that one or more schemes

guaranteeing deposits or credit institutions themselves and ensuring the

compensation or protection of depositors under the conditions prescribed in this

Directive have been introduced and officially recognized.”

173 However, “the conditions prescribed in this Directive” are not further defined. As

has been stated above, the funding obligation imposed on the members of a

guarantee scheme is limited under the Directive and must not be too onerous in

order not to jeopardize the stability of the banking system.

174 The result to be achieved by the EEA States themselves follows from their above

mentioned general obligation, that is, to ensure that the provisions of the

Directive are fully effective, i.e. that the specific obligations are given practical

effect.

175 However, in light of the present assessment of the Directive, the result to be

achieved is limited, particularly having regard to the fact that the Directive aims

at minimum harmonisation in relation to the level of coverage and does not

provide for any harmonisation as regards the level and mechanisms of funding.

176 Accordingly, the reservation set out in recital 24 in the preamble to the Directive

aims expressly to preclude an excessive shifting to the State of the costs arising

from a major banking failure. (See, by way of illustration, Michel Tison, “Do not

attack the watchdog! Banking supervisor’s liability after Peter Paul”, Working

Paper Series, Financial Law Institute, Universiteit Gent 2005, p. 25, including

footnote 81).

177 Consequently, recital 24 in the preamble to the Directive does not support the

existence of the alleged obligation of result.

178 In view of the above, the Court holds that the Directive does not envisage that the

defendant itself must ensure payments to depositors in the Icesave branches in

the Netherlands and the United Kingdom, in accordance with Articles 7 and 10

of the Directive, in a systemic crisis of the magnitude experienced in Iceland.

179 In any event, as the defendant correctly argued, the alleged obligation of result

also cannot be derived from the ECJ’s ruling in Paul and Others. The case at

hand must be distinguished from that earlier case on the facts. Paul and Others

dealt mainly with the alleged liability of the German authorities resulting from

negligence in the conduct of banking supervision, and the question whether the

supervisory obligation imposed on national authorities under Article 3(2) to (5)

– 29 –

of the Directive precluded a limitation of State liability under national law in

relation to such supervision. Furthermore, in Paul and Others, the national court

had already held the State concerned to be liable under the principle of State

liability to the amount provided for in Article 7(1) of the Directive.

180 Finally, a comparison with other secondary law also does not confirm the

existence of the alleged obligation of result. It is recalled in this regard that the

content of the result to be achieved is determined by the substantive provisions of

the individual directive. In any event, the ECJ’s ruling in Blödel-Pawlik (Case

C-134/11, judgment of 16 February 2012, not yet reported) does not support the

applicant’s plea. This case concerned the obligations of a travel organiser and its

insurer. According to the ECJ, the obligation of result imposed on the State by

Directive 90/314 was to ensure that a travel organiser is liable to the consumer

for proper performance of the contract. However, the ECJ did not hold that there

is an obligation on the State itself to pay compensation if a travel organiser is

unable to meet its obligations.

Emanation of the State

181 The applicant and the intervener have argued that the TIF, a private foundation

under Icelandic law, is an emanation of the State.

182 However, the case at hand concerns whether there is an obligation of result

placed upon the State under the Directive, in the manner described in ESA’s

application.

183 Hence, the question is of no significance for the assessment of the first plea.

184 For the sake of good order, the Court simply adds that, in any event, the applicant

has adduced insufficient evidence to support its claim that the TIF is directly or

indirectly operated by public authorities, i.e. under the control of the Icelandic

State (see, for comparison, Case C-356/05 Farrell [2007] ECR I-3067, paragraph

41).

Conclusion

185 In light of all of the above, the first plea is dismissed.

Second and third pleas: Discrimination contrary to the Directive and/or Article 4

EEA

Arguments of the parties

The applicant and the intervener

186 The applicant and the intervener submit that, even if, contrary to their argument,

the provisions of Directive 94/19 are interpreted as not imposing an obligation of

result, the defendant is in breach of Articles 4(1) and 7(1) of the Directive and/or

Article 4 EEA by having failed to ensure compensation to Icesave depositors in

– 30 –

the Netherlands and the United Kingdom as set out in the Directive. In their

view, the depositors in Iceland received full protection whereas the depositors in

the Netherlands and the United Kingdom were left without any or any

comparable protection.

187 The applicant and the intervener contend that the Icesave customers in branches

in Iceland and their counterparts in branches in other EEA States were, in their

capacity as deposit holders in Icelandic banks, in a comparable situation as

regards the protection granted to them by the Directive under Article 4 thereof

read in light of recital 3 in the preamble to the Directive.

188 The applicant and the intervener state that, when adopting emergency measures

in response to the banking crisis in October 2008, the Icelandic Government

made a distinction between domestic deposits and deposits in foreign branches.

The domestic deposits were moved to new banks and were covered in full.

Meanwhile, foreign depositors did not even enjoy the minimum guarantee laid

down in the Directive.

189 Thus, in the view of the applicant and the intervener, the defendant has indirectly

discriminated against foreign depositors on the basis of nationality, which is

prohibited by the Directive read in the light of Article 4 EEA or by Article 4

EEA itself.

190 In addition, the applicant specifies that the present case does not concern whether

the defendant was in breach of the prohibition on discrimination for not moving

over the entirety of deposits of foreign Icesave depositors into New Landsbanki,

as it did for domestic Landsbanki depositors. The breach is said to lie in the

failure of the Icelandic Government to ensure that Icesave depositors in the

Netherlands and the United Kingdom received payment of the minimum amount

of compensation provided for in the Directive within the time limits prescribed,

something it did for domestic depositors. The applicant adds that compensation

of domestic and foreign depositors above and beyond that minimum amount has

not been and is not at issue in the context of the present proceedings.

191 Moreover, the applicant and the intervener submit that the defendant cannot

advance any viable justification for the discriminatory measures taken against the

foreign deposits in the circumstances of the case.

The defendant

192 The defendant argues that the discrimination pleas are entirely misconceived and

highly contrived. It observes that the applicant seeks a declaration that, in failing

to ensure payment of the EUR 20 000 per depositor required under the Directive,

the defendant breached EEA law. However, in the defendant’s view, this

obligation cannot be derived from the principle of non-discrimination.

193 In the defendant’s view, the second plea is plainly unsustainable since it would

create an obligation upon an EEA State to ensure minimum compensation under

– 31 –

the Directive in circumstances in which the partially harmonised regime created

by the Directive does not require such.

194 In the circumstances of a bank failure, the defendant submits, it is legitimate for

EEA States to intervene to rescue banks, or branches which are necessary to the

functioning of the banking system, but there is no obligation to do so.

195 In the defendant’s view, what is regarded as discrimination in the present case are

in reality the different consequences that have flowed as a result of the fact that

the domestic branches of Landsbanki were essential to the rescue of the Icelandic

financial system. Although the Directive is a consumer protection measure, it

does not address in any way the regulation of bank insolvency and restructuring –

they are entirely beyond its scope.

196 Moreover, as regards a breach of Article 4 EEA alone, the third plea, the

defendant submits that such a claim has not been made out. The applicant has

simply asserted that Article 4 EEA is applicable without seeking to demonstrate

that the legal conditions for its application are satisfied.

197 The defendant contends further that, in claiming that it was discriminatory not to

provide the minimum compensation afforded by the Directive to the overseas

depositors given that the domestic depositors were “covered” by virtue of a

transfer of their deposits to the new banks, the applicant is arguing, in effect, for

different treatment. Such a line of argument as a basis for a discrimination claim

is, in the defendant’s view, incoherent.

198 On the other hand, the defendant notes that it is not part of the applicant’s case

that the transfer of domestic deposits effected as part of the bank restructuring

should have been extended to overseas depositors. The applicant has never

questioned the fact that it was not possible to extend this rescue to the overseas

branches. Thus, in the defendant’s view, the applicant does not argue that the two

groups should have been treated equally.

199 In any event, the defendant submits, it is unclear whether the transfer of domestic

deposits to the new bank led to a better position of the depositors holding such

accounts. These account holders were subject to strict capital controls, and were

unable to convert their (severely depreciating) Icelandic krónur into any other

currency. By contrast, the priority claimants in the Landsbanki winding up now

stand to be fully reimbursed in a fully convertible currency.

200 Moreover, as regards the second plea, the defendant argues that there has been no

discrimination whatsoever in the manner in which the deposit-guarantee fund

itself has operated. The two groups compared by ESA, depositors with domestic

branches and depositors with foreign branches of Landsbanki, have been treated

equally. None has received any payments under the guarantee scheme.

201 In addition, the deposits held with domestic branches never became unavailable

within the meaning of Article 1(3) of the Directive. In any event, Iceland

– 32 –

continues, any difference in treatment between the two groups would be

objectively justified. Although pure economic aims cannot constitute a sufficient

justification, clear public interest objectives may constitute a legitimate aim even

where that public interest has economic ends.

Other participants submitting written observations

202 The governments which submitted written observations have not addressed the

issue of discrimination.

Findings of the Court

203 By its second and third pleas, the applicant contends that by covering deposits in

Iceland at least to the level prescribed by the Directive, and within the time limits

provided therein, and, at the same time, not providing foreign depositors with at

least that same minimum guarantee, the defendant has infringed the Directive

read in light of Article 4 EEA or has indirectly discriminated on the basis of

nationality which is prohibited by Article 4 EEA.

Discrimination contrary to the Directive read in light of Article 4 EEA

204 Article 4 EEA provides as a general principle that, within the scope of

application of the EEA Agreement, and without prejudice to any special

provisions contained therein, any discrimination on grounds of nationality shall

be prohibited.

205 Article 4 EEA applies independently only to situations governed by EEA law for

which the EEA Agreement lays down no specific rules prohibiting discrimination

(see Case E-1/00 Íslandsbanki-FBA [2000-2001] EFTA Ct. Rep. 8, paragraphs

35 and 36, and case law cited).

206 Pursuant to Article 4(1) of the Directive, deposit-guarantee schemes introduced

and officially recognised in an EEA State in accordance with Article 3(1) of the

Directive shall cover depositors at branches set up by credit institutions in other

EEA States.

207 Recital 3 in the preamble to the Directive states that in the event of the closure of

an insolvent credit institution the depositors at any branches situated in a

Contracting Party other than that in which the credit institution has its head office

must be protected by the same guarantee scheme as the institution’s other

depositors.

208 It follows from Article 4 of the Directive read in light of recital 3 in the preamble

that depositors at any branches established by credit institutions in other EEA

States shall belong to the guarantee scheme introduced and officially recognised

in the home EEA State.

– 33 –

209 Moreover, the treatment of foreign and domestic depositors by the depositguarantee

scheme must be equal as regards payment of minimum compensation

under the Directive in the event of the closure of an insolvent credit institution.

210 Thus, the principle of non-discrimination requires that there is no difference in

the treatment of depositors by the guarantee scheme itself and the way it uses its

funds. Thus, to that extent, discrimination under the Directive is prohibited.

211 In the case at hand, it is undisputed that Landsbanki collapsed on 7 October

2008. Domestic deposits were transferred to New Landsbanki which was

established by the Icelandic Government between 9 and 22 October 2008. The

transfer was based on an FME decision of 9 October 2008.

212 The TIF was not involved in the transfer of the deposits. The transfer was part of

the restructuring of the Icelandic banks that was achieved by a series of measures

under the Icelandic Emergency Act.

213 On 27 October 2008, that is, within the 21 days prescribed in Article 1(3) of the

Directive, the FME made a statement that triggered an obligation for the TIF to

make payments as regards foreign deposits in branches of Landsbanki.

214 Moreover, domestic deposits did not become unavailable within the meaning of

Article 1(3) of the Directive. The transfer of domestic deposits to New

Landsbanki was made before the FME made its declaration triggering the

application of the Directive. Accordingly, depositor protection under the

Directive never applied to depositors in Icelandic branches of Landsbanki.

215 As has been stated above, the principle of non-discrimination inherent in the

Directive requires that there should be no difference in the way a depositguarantee

scheme treats depositors, and the way it pays out its funds.

216 In the present case, difference in treatment of this kind was not possible.

Consequently, the transfer of domestic deposits – whether it leads in general to

unequal treatment or not – does not fall within the scope of the nondiscrimination

principle as set out in the Directive.

Conclusion

217 The second plea has to be dismissed.

Discrimination contrary to Article 4 EEA

218 As regards the third plea, it is settled case-law that the principle of nondiscrimination

which has its basis in Article 4 EEA requires that comparable

situations must not be treated differently and that different situations must not be

treated in the same way. Discriminatory treatment may be justified only if it is

based on objective considerations independent of the nationality of the persons

concerned and is proportionate to the objective being legitimately pursued (see,

– 34 –

inter alia, Case E-15/11 Arcade Drilling, judgment of 3 October 2012, not yet

reported, paragraph 60, and case law cited).

219 At the time of the transfer, Icesave customers in the branches in the UK and in

the Netherlands, and their counterparts in Iceland found themselves in their

capacity as deposit holders in an insolvent Icelandic bank in a comparable

situation.

220 As regards the further assessment of the third plea, it must be recalled that the

application seeks only one declaration, namely, that, by failing to ensure payment

of the minimum amount of compensation to Icesave depositors in the

Netherlands and in the United Kingdom provided for in Article 7(1) of the

Directive within the time limits laid down in Article 10 of the Directive, the

defendant has infringed its obligations under EEA law. This application is based

on three pleas: (i) an infringement of the alleged obligation of result under the

Directive itself, (ii) an infringement of the Directive and Article 4 EEA and (iii)

an infringement of Article 4 EEA alone.

221 The applicant has limited the scope of its application by stating that “the present

case does not concern whether Iceland was in breach of the prohibition of

discrimination for not moving over the entirety of deposits of foreign Icesave

depositors into ‘new Landsbanki’, as it did for domestic Landsbanki depositors.

The breach is constituted by the failure of the Icelandic Government to ensure

that Icesave depositors in the Netherlands and the United Kingdom receive

payment of the minimum amount of compensation provided for in the Directive

within the time limits laid down in the Directive, like it did for the domestic

depositors. The compensation of domestic and foreign depositors above and

beyond that minimum amount has not and is not being discussed in the context of

the present proceedings.”

222 Moreover, in its application, ESA underlines “that this does not prejudge its view

as to whether the discrimination relating to the compensation of depositors above

and beyond the level foreseen by the Directive is justifiable”.

223 Thus, having regard to the applicant’s self-limitation, the Court is bound to

assess whether the defendant was under a specific obligation to ensure that

payments were made to Icesave depositors in the Netherlands and the UK.

224 The Court has already held that the Directive, even read in light of Article 4

EEA, imposes no obligation on the defendant to ensure that payments are made

in accordance with the requirements of the Directive to Icesave depositors in the

Netherlands and the UK.

225 Thus, such an obligation of result could only be deemed to exist if it were to

follow directly from Article 4 EEA itself. Were this the case, the transfer of

domestic deposits to New Landsbanki would have led to an obligation to ensure

the payment of minimum compensation, as specifically provided for in the

Directive.

– 35 –

226 This, however, is not required under the principle of non-discrimination. Article

4 EEA requires that comparable situations must not be treated differently. A

specific obligation upon the defendant that, in any event, would not establish

equal treatment between domestic depositors and those depositors in

Landsbanki’s branches in other EEA States cannot be derived from that

principle. Consequently, this plea cannot succeed on the basis of Article 4 EEA.

227 For the sake of completeness, the Court adds that even if the third plea had been

formulated differently, one would have to bear in mind that the EEA States enjoy

a wide margin of discretion in making fundamental choices of economic policy

in the specific event of a systemic crisis provided that certain circumstances are

duly proven. This would have to be taken into consideration as a possible ground

for justification. In the earlier case of Sigmarsson, the applicant itself underlined

this point (see Sigmarsson, cited above, paragraphs 42 and 50).

Conclusion

228 In view of the above, also the third plea has to be dismissed.

229 Accordingly, the Court holds that, by failing to ensure payment of the minimum

amount of compensation to Icesave depositors in the Netherlands and in the

United Kingdom provided for in Article 7(1) of the Act referred to at point 19a of

Annex IX to the Agreement on the European Economic Area (Directive

94/19/EC of the European Parliament and of the Council of 30 May 1994 on

deposit-guarantee schemes) within the time limits laid down in Article 10 of the

Act, Iceland has not failed to comply with the obligations resulting from that Act,

in particular Articles 3, 4, 7 and 10 thereof, and/or Article 4 of the Agreement on

the European Economic Area.

V Costs

230 Under Article 66(2) of the Rules of Procedure, the unsuccessful party is to be

ordered to pay the costs if they have been applied for in the successful party’s

pleadings. The defendant has asked that the applicant be ordered to pay the costs.

Since the latter has been unsuccessful, it must be ordered to pay the costs. The

costs incurred by those who have submitted observations are not recoverable.

231 In accordance with Article 66(4) of the Rules of Procedure, the European

Commission, which has intervened in the proceedings, is to bear its own costs.

232 The costs incurred by the Liechtenstein, Netherlands, Norwegian and United

Kingdom Governments, which have submitted observations to the Court, are not

recoverable.

– 36 –

On those grounds,

THE COURT

hereby:

1. Dismisses the application.

2. Orders the EFTA Surveillance Authority to pay its own costs

and the costs incurred by Iceland.

3. Orders the European Commission to bear its own costs.

Carl Baudenbacher Páll Hreinsson Ola Mestad

Delivered in open court in Luxembourg on 28 January 2013

Thomas Christian Poulsen Carl Baudenbacher

Acting Registrar President