Explanatory Memorandum to COM(2009)154 - Jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession and the creation of a European Certificate of Succession - Main contents
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| dossier | COM(2009)154 - Jurisdiction, applicable law, recognition and enforcement of decisions and authentic instruments in matters of succession ... |
|---|---|
| source | COM(2009)154  |
| date | 14-10-2009 |
Contents
- 1.1. General background
- 1.2. Grounds for and objectives of the proposal
- 3. Legal aspects of the proposal
- 3.1. Legal basis
- 3.2. Subsidiarity principle
- 3.3. Proportionality principle and choice of instrument
- 4. Comments on the Articles
- 4.1. Chapter I: Scope of application and definitions
- Article 2
- 4.2. Chapter II: Jurisdiction
- Article 5
- Article 6
- Article 9
- 4.3. Chapter III: Applicable law
- The connecting factor: the law of the last habitual residence of the deceased
- Article 17
- Article 18
- Article 21
- Article 22
- Article 27
- 4.4. Chapter IV: Recognition and enforcement
- 4.5. Chapter V: Authentic instruments
- 4.6. Chapter VI: European Certificate of Succession
Article 61 of the Treaty establishing the European Community (hereinafter the “Treaty”) sets out the objective of progressively establishing a common area of freedom, security and justice, in particular by adopting measures in the field of judicial cooperation in civil matters. Article 65 explicitly mentions measures “improving and simplifying the recognition and enforcement of decisions in civil and commercial matters, including decisions in extrajudicial cases” and “promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws and of jurisdiction”. The numerous instruments which have already been adopted on this basis, in particular Regulation (EC) No 44/2001 i, exclude succession from their scope.
The adoption of a European instrument in the area of successions was already one of the priorities of the 1998 Vienna Action Plan i. The Hague Programme i calls for the presentation of an instrument covering all the issues involved: applicable law, jurisdiction and recognition, administrative measures (certificates of inheritance, registration of wills). In accordance with the conclusions of the impact assessment, the question of the registration of wills will be dealt with as part of a future Community initiative.
The significance of cross-border successions within the European Union has been highlighted in the impact assessment attached to the proposal. The diversity of both the rules under substantive law and the rules of international jurisdiction or of applicable law, the multitude of authorities to which international succession matters can be referred and the fragmentation of successions which can result from these divergent rules are obstacles to the free movement of persons in the Union. Today, such persons are therefore faced with considerable difficulties in asserting their rights with regard to an international succession. These divergent rules also prevent the full exercise of private property law, which, in accordance with the settled case law of the Court of Justice, forms an integral part of the fundamental rights which the Court ensures are respected i. The objective of this proposal is to enable people living in the European Union to organise their succession in advance and effectively to guarantee the rights of heirs and/or legatees and of other persons linked to the deceased, as well as creditors of the succession.
2. Result of the consultations – impact assessment
Before this proposal was drawn up, a wide-ranging consultation exercise took place within the Member States, the other institutions and the public. The Commission was sent a “Study on international successions in the European Union”, which had been drawn up by the German Institute of Notaries in November 2002 i. Its Green Paper on successions and wills i, which was published on 1 March 2005, elicited 60 or so replies and was followed by a public hearing on 30 November 2006 i. A group of experts known as “PRM III/IV”, set up by the Commission on 1 March 2006 i met on seven occasions between 2006 and 2008, and the Commission organised a meeting of national experts on 30 June 2008. The contributions received confirm the need for a Community instrument in this area and support the adoption of a proposal covering, among other things, questions concerning applicable law, jurisdiction, recognition and enforcement of decisions and the creation of a European Certificate of Succession i. The adoption of such an instrument has received the support of the European Parliament i and the European Economic and Social Committee i. The Commission has carried out an impact assessment which is attached to the proposal.
Article 67 i of the Treaty stipulates that the Council may take the measures provided for in Article 65 using the co-decision procedure laid down in Article 251 of the Treaty, except with regard to “aspects relating to family law”.
It should first be emphasized that the vast majority of Member States, with the exception of the Nordic countries, classify the law of succession as a matter distinct from family law on account of the fact that it mainly covers property. Even at the level of substantive law, there are significant differences between the two matters. The main aim of the law of succession is to define the rules for passing on the inheritance and for regulating the transfer of the inheritance itself. Unlike inheritance law, the objective of family law is to govern above all the legal relationships linked to marriage and partnerships, filiation and the civil status of persons. Its basic social function is to protect family ties. Moreover, in contrast to family law, where the wishes of individuals play a very minor role and the vast majority of ties are governed by public policy, the law of succession remains a matter where the wishes of the entitled party play an important role.
There is therefore sufficient autonomy within these two branches of civil law for these matters to be treated separately from each other. Furthermore, as this is an exception, Article 67 i, second indent, of the Treaty must continue to be interpreted and applied strictly by the institutions. The exception is therefore not applicable to this Regulation as far as succession is concerned.
The Community institutions have a certain margin of discretion in determining whether a measure is necessary for the proper functioning of the internal market. The objective of this proposal is to eliminate all the obstacles to the free movement of persons arising out of the differences between the rules of the Member States governing international successions.
The objectives of the proposal can be met only by way of common rules governing international successions which must be identical in order to guarantee legal certainty and predictability for citizens. Unilateral action by Member States would therefore run counter to this objective. There is a Hague Convention concerning the law relating to successions ( “the Convention”) which has never entered into force i. The Hague Convention of 5 October 1961 on the conflicts of laws relating to the form of testamentary dispositions has been ratified by 16 Member States. It would be desirable for the other Member States to ratify the Convention in the interests of the Community.
All the consultations and studies have illustrated the amplitude of the problems with which this proposal deals.
The proposal does not go beyond what is strictly necessary to achieve its objectives. It does not harmonize either the law of succession or the property law of Member States. Nor does it affect the way in which inheritances are taxed by Member States. Consequently, international successions could continue to give rise to inconsistencies between national tax systems and they may lead to double taxation or discrimination. The Commission intends to present a communication addressing these issues in the course of 2010.
The need for legal certainty and predictability calls for clear and uniform rules and imposes the form of a regulation. The objectives would be compromised if the Member States had some discretion with regard to implementing the rules.
Article 1
The concept of “succession” must be interpreted in an autonomous manner and encompasses all the elements of a succession, in particular its handover, administration and liquidation.
The exclusion of rights and properties created or transferred other than by means of succession to the estates of deceased persons covers not only the forms of joint property [joint tenancy] known under common law, but also all forms of gifts under civil law.
The exception envisaged for trusts is not an obstacle to the application to succession of the law governing it on the basis of this Regulation.
Paragraph (j) stipulates that the Regulation applies to the acquisition of a right in rem relating to inherited property, but not to the content of such a right. The Regulation does not affect the 'numerus clausus' of property law in the Member States, the classification of property and rights, and the determination of the prerogatives of the holder of such rights. As a consequence, it is not, in principle, valid to establish a right in rem without knowing the law of the place in which the property is located. The law on succession cannot lead to the introduction in the State in which the property is located of a property law clause, or the stripping of such clause, without the knowledge of the State. For example, usufruct cannot be introduced in a State which does not recognise it. However, this exception does not apply to the transfer of a right in rem recognised by the Member State in which the inherited property is located.
The publication of property rights, in particular the functioning of the land register and the effects of an entry or failure to make an entry in this register, is also excluded.
Courts: More often than not, successions are settled out of court. The concept of courts used in this Regulation is used in its broadest sense and includes other authorities where they exercise a function falling within the jurisdiction of the courts, in particular by means of delegation, including notaries and court clerks.
Article 4
The rules of legal jurisdiction relating to succession vary considerably between the Member States. This leads to positive conflicts, where the courts in several States declare themselves to be competent, or negative conflicts, where no court declares itself to be competent. In order to avoid these difficulties for citizens, a uniform rule is required. The competence of the Member State where the deceased had their last habitual residence is the most widespread method used in the Member States and frequently coincides with the location of the deceased’s property. These courts will be competent to rule on all elements of the succession, irrespective of whether adversarial or non-adversarial proceedings are involved.
Referral to a more appropriate court should not be automatic where the deceased has chosen the law of another Member State. The competent court should take into account, among other things, the interests of the deceased, the heirs, legatees and creditors, and their habitual residence. This rule would in particular allow a balanced solution to be found where the deceased had lived for a short while in a Member State other than that of their nationality and where their family has remained in their Member State of origin.
Where the deceased had their residence in a third State, this rule guarantees access to justice for Community heirs and creditors where the location has close links with a Member State on account of the presence of property.
The close links between the succession rules and the substantive rules require exceptional jurisdiction on the part of the courts in the Member State in which the property is located where the law of that Member State requires the intervention of its courts. However, this jurisdiction is strictly limited to the aspects of substantive law relating to the transmission of the property.
Article 16
A single scheme
The disadvantages of the so-called system of scission, in which succession to movable assets is subject to the law of residence of the deceased and succession to the estate is subject to the law of the State in which the property is located, were highlighted in the consultations. The system creates several bodies of assets, each one subject to a different law which determines differently heirs and their respective shares, and the division and liquidation of the succession. The choice to create a single scheme by means of a regulation allows the succession to be subjected to a single law, thereby avoiding these disadvantages. A single scheme also enables a testator to plan the division of their property between their heirs in a fair manner, irrespective of the location of this property.
The Regulation retains this law, instead of the law of nationality, as it coincides with the centre of interest of the deceased and often with the place where most of their property is located. Such a connection is more favourable to integration into the Member State of habitual residence and avoids any discrimination regarding persons who are resident there without possessing the relevant nationality. Habitual residence has also been retained in the conflict-of-law rules of several Member States and in all modern legal instruments, in particular in the Convention.
All the legal systems of the Member States have mechanisms intended to guarantee support for the relatives of the deceased, including primarily the mechanisms concerning the reserved portion of an estate. However, testators who are nationals of Member States in which inter vivos gifts are considered irrevocable may confirm the validity of such acts by opting for their national law as that applying to their successions. A key objective of the Regulation is to ensure that these mechanisms are respected. By allowing the testator a choice of law, a compromise needed to be found between the benefits of such a choice, e.g. legal certainty and a greater ability to plan their succession, and the protection of the legitimate interests of the relatives of the deceased, in particular the surviving spouse and children. For this reason, the Regulation allows the testator only to choose the law governing their nationality, and this must be assessed in conjunction with the general rule leading to the application of the law of residence. This choice enables the testator who has benefited from the freedom of movement offered within the Union but who is keen to preserve close links with their country of origin to maintain these cultural links by means of their succession. This solution has also been advocated by the European Parliament.
Exclusion of other choices: The Regulation has removed the possibility of choosing as the law applicable to succession the law applicable to matrimonial property scheme of the testator. Such a provision would have allowed multiple choices where, for the matrimonial property schemes, the spouses benefit from greater flexibility in their choice of applicable law. This would have run counter to the above objectives.
It is vital to provide for rules governing the law applicable to the agreements as to succession and joint wills used in certain States, e.g. in order to organise the transfer of a company and for couples to allow the surviving spouse to benefit from joint property.
The aim of this Article is to take into account the specific features of common law legal systems, such as the English legal system, where the heirs do not directly acquire the rights of the deceased upon the latter's death but where the succession is managed by an administrator appointed and supervised by the judge.
On account of their economic, family or social purpose, some buildings, enterprises or other categories of property are subject to a special succession regime in the Member State in which they are located, and this should be respected. Such a special scheme exists, for example, for family farms. This exception requires strict interpretation in order to remain compatible with the general objective of this Regulation. In particular, it does not apply to the system of scission or to the reserved portion of an estate.
Recourse to public policy must occur in exceptional circumstances only. Differences between the laws relating to the protection of the legitimate interests of the relatives of the deceased must not be used to justify its use, as this would be incompatible with the objective of ensuring the application of a single law to all of the succession property.
The provisions contained in this Chapter are based on the corresponding rules contained in Regulation (EC) No 44/2001. Provision is made for the recognition of all the decisions and legal transactions in order to give substance in succession matters to the principle of mutual recognition, which is based on the principle of mutual trust. The grounds for non-recognition have therefore been kept to the necessary minimum.
In view of the practical importance of authentic instruments in succession matters, this Regulation should ensure their recognition in order to allow their free movement. This recognition means that they will enjoy the same full and complete evidentiary effect in respect of the contents of the recorded instruments and the facts contained therein as that of national authentic instruments or on the same basis as in their country of origin, a presumption of authenticity, and an enforceable nature within the limits set by this Regulation.
In order to enable international successions to be settled rapidly, this Regulation introduces a European Certificate of Succession. To facilitate its circulation in the Union, a uniform model certificate should be adopted and an authority appointed which would have the international competence to issue it. Consistency with the rules of substantive jurisdiction requires that the authority should be the same court as has jurisdiction to settle the succession.
This certificate does not replace existing certificates in certain Member States. In the Member State of the competent authority, the capacity of heir and the powers of an administrator or executor of the succession must therefore be proven according to the domestic procedure.