Complaint with the European Commission against the Kingdom of Spain for failure to European Union Law
Complaint with the European Commission against the Kingdom of Spain for failure to European Union Law On May 30, 2013, Mr. Juan Ignacio Navas Marqués, holder of the law firm Navas & Cusí Abogados Asociados, S.C.P., personally filed a complaint before the European Commission against the Kingdom of Spain for failure to European Union Law (hereafter, “EU Law”) and, in particular, the Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC of the European Parliament and of the Council and repealing Council Directive 93/22/EEC –hereinafter, “MiFID Directive”- and the Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.
Regarding the breach of the MiFID Directive, the complaint expressly referred to bad practices by the most banks operating in Spain since, approximately, 2008. In this sense, the complaint highlighted the irregular and illegal commercialization –by banks and other credit institutions, like saving banks-Navas & Cusí emphasized the purpose and spirit of the abovementioned
Directive, which pretended –among other objectives- to promote transparency, fairness and investor protection. And, to that effect, article 19 of the Directive, which establishes clear duties of information and analysis of the client’s profile, was alleged.
In this sense, the Law Firm Navas & Cusí, after a thorough research based mainly on jurisprudence, concluded that the abovementioned obligations had been constantly infringed both by the financial institutions and the by the Comisión Nacional del Mercado de Valores (hereafter, “CNMV”), who had breached its obligations of control and supervision of the correct transposition and application of EU Law in the financial services sector.
In addition, it should be noted that Navas & Cusí based its claim of EU Law default on huge case law that verified the widespread infringement, by financial institutions in Spain, of their legal duties of information and analysis of the clients profile in the marketing of complex financial products.
Regarding the violation of the Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, the legal firm denounced that Spanish legislation –especially the foreclosure proceedings regulation- infringed the Directive and, in particular, the principle of effectiveness of consumer rights, in the light of key CJEU developments.
In this sense, Navas & Cusí considered that the Spanish legislation did not meet the requirements of the Directive and, in particular, it infringed the principle of effectiveness –which still not respected, as the CJEU has recently declared- not granting an effective protection to consumers and users.
As Navas & Cusí had anticipated in its complaint, the CJEU expressly said that the referred article reinforces the contractual disequilibrium, while previewing that the court order deciding the opposition to foreclosure can be appealed only in two cases: when the decision declares the dismissal of foreclosure and when it agrees not to apply the unfair clause alleged by the executed –usually a consumer. In any other case, according to the Spanish law, that decision cannot be appealed. In practice, this has the effect to prevent the executed to appeal the
decision rejecting its opposition to foreclosure, while in the event that the decision is unfavorable to the mortgage performer –usually credit institutions- it can be appealed.
Well then, considering the current circumstances, as well as the recent judgment of the CJEU, Navas & Cusi will submit a brief to the European Commission requesting the completion of the instruction and, if it considers that there has been a breach of EU Law –that has been verified, according to the recent judgment and to the complaint filed by Navas & Cusí- issues a avis motivé in which requires Spain to fulfill adequately the EU Law. In addition, the Law Firm will request the European Commission to initiate before the CJEU the infringement proceeding, in case Spain disregards the avis motivé and continues to violate the EU Law. Finally, and in order to protect effectively the consumer rights until the CJEU gives judgment, Navas & Cusí will formally ask the Commission to request the CJEU the adoption of the adequate interim measures.