EBA欧洲银行-BoA-2019-D-05-28DecisionCreditreform-Rating-AG-vs-EBA29_final_19页_1mb

Summary of the Decision by the Board of Appeal of the European Supervisory Authorities (BoA-2019-D-05)

I. Core Content

The Board of Appeal of the European Supervisory Authorities (ESAs) rendered a decision on an appeal filed by Creditreform Rating AG against the European Banking Authority (EBA) concerning a draft implementing technical standard that downgraded the mapping of Creditreform's long-term corporate credit ratings ("BBB", "BB", "B") to credit quality steps (CQS) under the Capital Requirements Regulation (CRR). The appeal also included an application for suspension of the contested decision pending the Board's ruling.

II. Main Points of the Appeal

1. Background of the Contested Decision

• The EBA, as part of the Joint Committee of the ESAs, adopted a final report on 13 May 2019 proposing changes to the mapping of Creditreform's ratings.
• The changes would downgrade Creditreform's "BBB" to CQS4, "BB" to CQS5, and "B" to CQS6.
• The draft was submitted to the European Commission for approval on 21 May 2019.

2. Appellant's Contentions

• Lack of Transparency and Justification: The EBA did not provide detailed explanations for the proposed downgrade, and the mapping methodology was not clearly outlined.
• Discriminatory Treatment: The mapping process applied different methodologies to different agencies, which the appellant argues is discriminatory, especially towards smaller agencies like itself.
• Admissibility of Appeal: The appellant claims the decision is a "decision" under Article 60(1) of the ESAs Regulations and is therefore subject to review by the Board of Appeal.
• Suspension Request: The appellant seeks a suspension of the contested decision to prevent immediate and irreparable harm, citing financial losses and declining business due to the negative impact of the downgrade.
• Urgency and Proportionality: The appellant argues that the EBA's delay in addressing the appeal and the lack of urgency in processing the case justify the suspension.

3. Appellant's Legal Arguments

• The final report of the Joint Committee constitutes a "decision" under Article 60(1) of the ESAs Regulations.
• The appeal is admissible because the EBA's decision affected the appellant directly and individually.
• The EBA's reliance on CJEU case law regarding preparatory acts does not apply here, as the final report was publicly available.
• The Board of Appeal has an interest in reviewing the alleged unlawful and discriminatory act.

III. Respondent's Contentions

1. Inadmissibility of Appeal

• The EBA argues that the contested act is a preparatory act, not a final decision, and therefore not reviewable under Article 60(1) of the ESAs Regulations.
• The European Commission is the only competent authority to adopt the final implementing regulation, and the EBA's role was purely preparatory.
• The draft technical standard does not have legal effects that change the legal position of the appellant.

2. Suspension Application

• The EBA considers the suspension application inadmissible, as it seeks to suspend a preparatory act with no legal effects.
• The EBA also argues that the suspension would impede the Commission's implementing powers and is disproportionate.
• The EBA claims the appellant has not provided sufficient evidence of actual or imminent damage, and that the appeal was not brought with urgency.

IV. Board of Appeal's Decision

1. Admissibility of Appeal

• The Board of Appeal decided that the appeal is admissible.
• It noted that the final report of the Joint Committee constitutes a "decision" under Article 60(1) of the ESAs Regulations, as it was publicly available and had practical implications for the appellant.
• The Board emphasized that the two-step mapping process is necessary to ensure objectivity and prudential adequacy, and that the EBA's failure to consider qualitative factors adequately may have led to an unfair downgrade.

2. Suspension of the Decision

• The Board of Appeal granted the application for suspension.
• It found that the interests of the appellant in obtaining suspension outweigh those of the EBA and the public, given the potential for serious and irreparable harm.
• The Board emphasized that suspension is an interim measure, and that it does not prejudice the final decision on the merits of the case.

3. Case Management Directions

• The Board of Appeal confirmed the case management directions issued on 29 July 2019.
• EBA was given two weeks from that date to respond to the suspension application and the admissibility of the appeal.
• The appellant was given one week to reply to EBA's response.
• The Board also confirmed that further communications may be sent via email, with the Secretariat always copied.

V. Key Legal Considerations

• The Board of Appeal has the authority to suspend the application of a contested decision under Article 60(3) of the ESAs Regulations, even if it is a preparatory act, provided that it has legal effects.
• The CJEU case law on preparatory acts was not directly applicable, as the final report had public and practical consequences.
• The two-step mapping process was deemed essential for prudential and market balance, and the EBA's failure to properly consider qualitative factors may have led to an unlawful decision.

VI. Conclusion

• The appeal is admissible.
• The application for suspension is granted.
• The Board of Appeal will proceed to examine the merits of the appeal, ensuring that the proper legal framework is applied and that the rights of the appellant are protected.