Date of first meeting: Wednesday, 07 August 2024

Date of second meeting: Monday, 07 October 2024

Online (Webex) (first meeting) and at the Ombudsman’s premises (second meeting)

Present

On 7 August 2024

European Commission

Three representatives from DG Budget

Three representatives from the Secretariat-General

European Ombudsman

Jennifer King - Legal Expert

Paulien Van de Velde-Van Rumst - Inquiries Officer

Alice Bernard - Inquiries Officer

Valentina Stoeva - Inquiries Officer

Anežka Hlinovská - Inquiries Trainee

On 7 October 2024

European Commission

Four representatives from DG Budget

Two representatives from the Secretariat-General

European Ombudsman

Tanja Ehnert - Inquiries Coordinator

Paulien Van de Velde-Van Rumst - Inquiries Officer

Alice Bernard - Inquiries Officer

Kilian Frey - Inquiries Trainee

Background

The complaint is about: first, the refusal by the European Commission to give full public access to documents referred to in the Commission’s proposal for a Council Implementing Decision on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary (based on the Conditionality Regulation[1]); second, the fact that the Commission sent the complainant an initial reply although they had already submitted a confirmatory application.

Purpose of the meetings

The purpose of the meeting was for the Ombudsman inquiry team to obtain further clarifications on the redactions in the requested documents and to afford an opportunity for the Commission to address the second element of the complaint.

A second meeting was scheduled to take place on 7 October 2024, given that not all relevant representatives of the Commission could attend the first meeting that took place on 7 August.

Introduction and procedural information

The Ombudsman inquiry team introduced themselves, thanked the Commission representatives for meeting with them and set out the purpose of the meeting. They outlined the legal framework that applies to meetings held by the Ombudsman, in particular, that the Ombudsman would not disclose any information identified by the Commission as confidential, neither to the complainant nor to any other person outside the Ombudsman’s Office, without the Commission’s prior consent.^[2]

The inquiry team explained that they would draw up a draft report on the meeting to be sent to the Commission to ensure that the contents were factually accurate and complete. The meeting report would then be finalised, included in the file and provided to the complainant. No confidential information would be included in the report or otherwise provided to the complainant or any third party.

Information exchanged 

During the two meetings, the Commission representatives provided the Ombudsman inquiry team with further clarifications as regards its application of the exceptions for the protection of court proceedings (1) and a decision-making process (2). The Commission representatives also elaborated on their assessment of the possible existence of an overriding public interest in disclosure (3). Replies which include confidential information have been included in a confidential annex to this meeting report.

1. Application of the exception for the protection of court proceedings (Article 4(2), second indent Regulation 1049/2001)

As the Commission did not indicate in its initial reply which of the exceptions relied upon applies to which redacted part of the documents, the Ombudsman inquiry team asked the Commission to explain which exception applies to which part of the redacted documents. The Commission representatives explained that the exception for the protection of court proceedings applies only to the redactions that concern six court cases brought by public interest trusts affected by Article 2(2) of the Council Implementing Decision.[3]

The Ombudsman inquiry team asked how exactly these court proceedings would be undermined by the disclosure of the redacted information. The Commission representatives stated that the redacted parts correspond to the Commission’s assessment of public interest trusts as sent to Hungary and the replies from Hungary to the Commission’s questions. The Commission representatives specified that disclosing these parts would reveal the evolution, in chronological order, of the Commission’s line of reasoning regarding public interest trusts from the beginning of the procedure to the adoption of its Proposal under the Conditionality Regulation. According to the Commission representatives, the Commission should have the possibility to explain this reasoning as part of its defence in the ongoing court proceedings. If the redacted parts were released, the Commission’s way of building a case and its ability to defend itself would thus be hampered as they contain the Commission’s detailed reasoning which is not publicly known.

The Commission representatives further noted that the Council Implementing Decision is addressed to Hungary, whereas the applicants for annulment of the said Decision are universities/higher education institutions maintained by Hungarian public interest trusts. If the Commission disclosed the redacted parts, it would put those education institutions on an equal footing with Member States (whereas under the Conditionality Regulation the procedure that leads to the proposal of measures is a bilateral dialogue with the Member state concerned), in this case Hungary, which would in turn put them in a more advantageous position for the court proceedings. The situation would be different if Hungary decided to disclose the redacted information, which was addressed to it.

The Commission representatives recognised that the explanation given in the Commission’s reply to the public access request was succinct.

2. Application of the exception for the protection of an institution’s internal decision-making process (Article 4(3) Regulation 1049/2001)

The Commission representatives stated that further redactions relating to deficiencies in public procurement, risks of conflict of interest, cooperation with OLAF, and anti-corruption investigations and prosecution are all covered by the exception in Article 4(3) of Regulation 1049/2001, which is the protection of an internal decision-making process. The Commission representatives stated that this exception also applies to the remaining redactions, not falling under one of the aforementioned categories, and they provided confidential explanations in relation to these specific redactions.

The Commission representatives said that the notification letter to Hungary raised questions about several, but circumscribed, aspects that could possibly qualify as relevant under the general regime of conditionality, some of which were in the end not part of the Proposal. Regarding these aspects, the Commission representatives stated that the Commission reserves its right to monitor or investigate them in the future. Therefore, the Commission considered that redacting the parts covering these aspects was necessary to safeguard the possibility to investigate and decide on these issues in the future. The Commission representatives said that information on issues that had formed the basis for the Proposal had been disclosed[4].

Furthermore, considering that the present case is the first one in which the Conditionality Regulation has been applied, the Commission representatives stated that the Commission does not want to disclose its strategy in dealing with such cases. Disclosing the documents at issue would reveal what information the Commission considers relevant and what it might be looking for in the future. The Commission would like to avoid such a situation as it is still developing its practice.

The Ombudsman inquiry team asked the Commission representatives to clarify how the disclosure of this information would concretely hamper its ongoing internal decision-making. The Commission representatives indicated, first, that the redacted parts consist of information that is the subject of a bilateral dialogue with the Member State at issue and that these exchanges are ongoing.

Second, the Commission representatives explained that disclosure of this information would show what the Commission considers as relevant elements for the scope of the Conditionality Regulation and hinder its decision-making process. In this regard, the Commission representatives reiterated that the Commission does not want to disclose its strategy at this stage, nor the investigative technique it uses. If the Commission disclosed what specific sectors and managing authorities the Commission is concerned about for the future, certain actors in these sectors, or in such managing authorities, might start to act differently and, for example, change their ways of working to conceal certain issues or behaviours. The Commission representatives provided the Ombudsman inquiry team with a concrete example in this context that is contained in a confidential annex to this meeting report.

In reply to a question from the Ombudsman inquiry team about the exact ongoing decision-making procedure at issue, the Commission representatives noted that, for example, the redactions related to framework agreements are relevant for the entire current programming period of the Multiannual Financial Framework (MFF - 2021-2027). The Commission representatives stated that the monitoring of the issues covered in the Proposal is therefore still ongoing.  

Furthermore, the Commission representatives stated that, in the Commission’s view, the procedure under the Conditionality Regulation is not closed. More specifically, the Commission considers that the decision-making phase does not end with the Council Implementing Decision, because, in so far as the measures adopted are still in place, the Commission continues its monitoring and the exchanges with Hungary. In addition, as provided by the Conditionality Regulation, one year after the adoption of such a decision, the Commission assesses the state-of-play and following that assessment, it issues a new proposal for a Council decision, if it considers that the measures should be adapted or lifted.[5] The Commission adopted its reassessment in December 2023, in absence of a written notification from Hungary to require the measures to be adapted or lifted. The Commission concluded that the measures had to remain in place. Thus, the fact that the measures under the Council Implementing Decision are still in place means that the decision-making is still ongoing. In addition, for issues that were not covered by the Council Implementing Decision, the Commission representatives added that the Commission could reopen the procedure in the future as regards these aspects.

The Ombudsman inquiry team then asked to what extent the redacted parts are still relevant for the Commission’s new yearly assessment under the Conditionality Regulation or for the situation in which it would decide to reopen the procedure on certain issues. More specifically, the Ombudsman inquiry team asked whether the Commission would still need the redacted information for its new assessments.

The Commission representatives replied that, in the Commission’s view, some issues remain open. Moreover, it might happen that some of the issues that the Commission had been concerned about - but which had not yet been sufficiently substantiated to be included in the Council Implementing Decision - become more problematic again. In such a scenario, it may be that the redacted information would be used as a continuation of the original assessment rather than re-starting the procedure in its entirety. Given that this is the first time the Conditionality Regulation is applied, this and the concrete procedural aspects remain to be seen.   

Regarding the Commission’s application of the exception to protect its ongoing decision-making, the Ombudsman inquiry team further asked the Commission representatives to explain more concretely how disclosing the redacted information would put external pressure on the Commission which would hamper its decision-making. The Commission representatives stated that disclosure would significantly increase the pressure on decision-makers and provided more detailed explanations in this regard, which are contained in the confidential annex to this meeting report. In addition, referring to a recent report of the European Court of Auditors[6], the Commission representatives noted that it only has limited human resources to apply the Conditionality Regulation and replying to all additional requests for information, which may be triggered by further disclosure, would divert resources from the actual application of the Regulation.  

In reply to a question of the Ombudsman inquiry team on whether removing the redactions would actually increase the pressure on the Commission’s decision-making, considering already existing speculation in public discourse (based on, for instance, the Commission’s rule of law reports), the Commission representatives said that the Commission cannot take into account such speculation when it takes its decisions, and the pressure would anyway increase.

The Ombudsman inquiry team noted that some of the Commission’s considerations, mainly in relation to safeguarding its exchanges with Hungary, appear to be related to the exception for the protection of investigations and audit,[7] rather than the exception for the protection of ongoing decision-making.

The Commission representatives stated that its decision-making depends on the underlying investigation, thus all these elements are part of the ongoing decision-making. There is the main decision-making process leading to the Commission proposal, based on which the Council takes an implementing decision. Nevertheless, there are also issues highlighted in the procedure, on which the Commission had a preliminary assessment or reserved the right to proceed further. The Commission representatives explained that the decision-making phase does not end with the Council Implementing Decision (CID). Even after the CID, the Commission made an assessment in the Hungarian case (on its own motion in the absence of a notification from Hungary) and then adopted a reassessment, by decision. Insofar as the Council measures are still in place, the Commission continues to assess the situation in Hungary (who is obliged to report every three months on its implementation progress). The fact that the measures are still in place shows that there is still a continuum in the decision-making process.

Finally, the Commission representatives acknowledged that the reasoning in the reply to the access request did not contain these detailed explanations.

3. Assessment of the existence of an overriding public interest and procedural element of the complaint

The Ombudsman inquiry team noted that the complainant had taken issue with the fact that the Commission regarded its reply of 22 March 2024 as an ‘initial reply’. They added that the Commission’s practice of cancelling confirmatory applications impacted, in the case at hand, the assessment of the existence of an overriding public interest (OPI). More specifically, the Ombudsman inquiry team noted that in the Commission’s reply of 22 March 2024, the Commission explained that it was unable to identify any overriding public interest in disclosure and that the applicant did not refer to any such considerations. In its additional views on this case, sent ahead of this meeting to the Ombudsman’s Office, the Commission had restated the requirement of Regulation 1049/2001 to take account of OPI considerations but referred solely on the fact that “the applicant has failed to refer to any such overriding public interest in [their] application”. Given the delay in adopting the Commission’s reply, at the time of submitting a request for review (a confirmatory application) the complainant was not aware that the Commission would rely only on relative exceptions to justify non-disclosure nor of their obligation to establish an OPI. The Ombudsman inquiry team therefore asked whether the Commission could elaborate on its assessment of the existence of a possible OPI in disclosure of the redacted parts and address this procedural aspect of the complaint.

In the meeting, the Commission representatives referred to the Commission’s reply in which it had stated that the applicant had not brought any arguments related to the potential existence of an OPI in the initial application. The Commission representatives clarified that although it had not been reiterated in the additional views, the Commission also proactively examined whether there was such an OPI and did not find one.

The Commission representatives explained that - similar to state aid or infringement proceedings - the first stage of the procedure under the Conditionality Regulation consists of a bilateral discussion between the Member State and the Commission. There is a duty of sincere cooperation and the Commission must preserve the trust of the Member State concerned and the confidentiality of the process. Furthermore, given that issues discussed under the Conditionality Regulation concern EU funding, disclosure of the content of these discussions could have an impact on the financial markets and the interests of all taxpayers. More specifically, if the Commission would disclose potential issues in a Member State’s conduct, this could have serious financial repercussions for the Member State (e.g. lower credit rating), regardless of whether those issues are included in a proposal for a Council Implementing Decision under the Conditionality Regulation. Against this background, the Commission did not see an OPI in disclosure.

Furthermore, the Commission representatives noted that from a procedural point of view, based on the applicable EU case law, the institution is required to check if there is an OPI, even if the applicant did not raise one. In the Commission’s view, such an assessment has taken place in this case. Nevertheless, according to the case law, the burden of proof falls on an applicant for access to documents, who must bring those arguments to the attention of the institution. This is not limited to any particular stage, i.e. initial or confirmatory. Therefore, an applicant does not need to anticipate which exceptions and arguments would be brought by the institution and the complainant had the opportunity to bring forward the arguments on the OPI in the initial request.

The Commission representatives stated that, regarding the procedure, DG Budget provided the initial reply to the complainant after the complainant had submitted a confirmatory application and the Secretariat-General of the Commission then decided to close the confirmatory application on that basis. The Commission had invited the complainant to submit a new confirmatory application if they wished to do so thereby preserving the two-stage process provided under Regulation 1049/2001 and allowing for the possibility to present their observations on the reply.

Conclusion of the meeting

The Ombudsman inquiry team asked the Commission for marked copies of the redactions in the documents at issue in order to facilitate the inquiry, which the Commission provided after the first meeting.

The inquiry team thanked the Commission representatives for their time and for the explanations provided, and the meeting ended.

Brussels, 12 November 2024

Jennifer King                                                                                  Paulien Van de Velde-Van Rumst

Legal Expert                                                                                  Inquiries Officer

 

[1] Regulation 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget: https://eur-lex.europa.eu/eli/reg/2020/2092/oj.

[2] Article 4.8 of the European Ombudsman’s Implementing Provisions.

[3] case T-115/23 Debreceni Egyetem; case T-132/23, Óbudai Egyetem v Council and Commission; case T-133/23 Állatorvostudományi Egyetem v Council and Commission; case T-138/23 Semmelweis Egyetem v Council; case T-139/23 Miskolci Egyetem v Council and Commission; case T-140/23 Dunaújvárosi Egyetem v Council and Commission.

[4] Unless related to the ongoing court cases referred to above. See Commission proposal for the Council Implementing Decision with its Explanatory Memorandum (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022PC0485) and the adopted Council Implementing Decision (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32022D2506).

[5] Article 7(2) of Regulation 2020/2092.

^[6] See https://www.eca.europa.eu/ECAPublications/SR-2024-03/SR-2024-03_EN.pdf.

[7] Article 4(2) third indent of Regulation 1049/2001.