Gold-plating of EU Law in the Czech Republic Revisited

The issue of the gold-plating of EU law in the Czech Republic was first comprehensively analysed in scholarly literature almost 10 years ago.

Richard Král, Harald Scheu et al., Zbytečně zatěžující transpozice – neodůvodněný gold-plating směrnic EU v České republice [Unnecessarily Overburdening Transposition – Unjustified Gold-plating of EU Directives in the Czech Republic] (Univerzita Karlova v Praze 2014) 100. See also Richard Král, ‘On the gold-plating in the Czech transposition context’ (2015) TLQ 4/2015 300–307.

The article first updates the concept and typology of gold-plating of EU law in the light of corresponding developments in national and EU legislative practice, as well as in the light of relevant academic literature.

Secondly, the article aims to provide an updated view of the use of gold-plating in the Czech Republic. The current gold-plating situation in this Member State is thus compared with that of 10 years ago. This comparative analysis reveals rather positive changes in the area of the gold-plating of EU law in Czech legislative practice that took place in the last 10 years. Still, the article proposes some further refinements in this area.

While, in the past, gold-plating of EU law occurred almost exclusively in the context of national transposition of EU directives, today, as will be elaborated in the second part of this article, it also occurs quite often in the context of national normative implementation of EU regulations.

For the distinction between transposition of EU directives and national normative implementation of EU regulations see Richard Král, ‘National normative implementation of EC Regulations: An exceptional or rather common matter?’ (2008) 2/2008 European Law Review 243–256.

Therefore, any up-to-date comprehensive definition of gold-plating of EU law should reflect this development and should encompass not only non-minimalistic national transposition of EU directives but also non-minimalistic national normative implementation of other EU legal acts, most notably EU regulations. Gold-plating of EU law should thus be understood as any national transposition of EU directives and any national normative implementation of any other EU legal acts which exceeds the minimum (regulatory) requirements of the transposed or implemented EU act and which remains within EU legality, i.e., which remains allowed under EU law.

For further clarification of such definition see Karin Atthoff and Mia Wallgren, Clarifying Gold-plating – Better Implementation of EU Legislation, (The Swedish Better Regulation Council / Board of Swedish Industry and Commerce for Better Regulation, 2012). For more on concept of gold-plating and its development in EU see also Eduardo Magrani, Nevin Alija, Felipe Andrade, ‘Gold-plating in the transposition of EU Law’ 2/2021 e-Publica 45–68.

Gold-plating of EU law typically occurs in four different situations. The first gold-plating situation occurs when a Member State exercises an option to deviate (derogate) from the (minimum) requirements or rules of the EU act concerned in a more stringent, wider or more burdensome direction. This option is provided or recognised either by the deviation clauses contained in the Treaty on the Functioning of the EU

See, e.g., The Treaty on the Functioning of the European Union (TFEU) art 82(2), 83(2), 114(4–9), 153(4), 168(4), 169(4) and 193.

The second gold-plating situation occurs when a Member State does not exercise an option to deviate (derogate) from the requirements or rules of an EU act in a softer, narrower or less burdensome direction. This option stems from specific softening, deviation-enabling clauses contained in some directives and regulations.

See, e.g., Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC (General Data Protection Regulation) [2016] OJ L 119, art 8 para 2.

The third typical situation of gold-plating occurs when a Member State does not opt, in a situation where the EU act concerned provides Member States with a wide margin of discretion or with several possible alternatives of regulating a given issue, for the regulatory option which is the least stringent or burdensome for the persons concerned.

See, e.g., Article 16(5) of Directive 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law. The provision gives Member states several regulatory options regarding the means of disclosure of certain company documents and particulars.

The fourth situation of gold-plating, which can sometimes partly overlap with the first one, arises when a Member State autonomously – that is, not on the basis of authorisation from the EU, but on the basis of its retained powers

See also below the distinction between power-recognising and power-granting deviation/derogation clauses.

When it comes to an updated further categorisation or typology of the gold-plating of EU law, it is advisable for the current national legislative gold-plating practice to work with or distinguish especially between the following several types or categories of non-minimalistic implementation of EU law.

Firstly, a distinction should be made between gold-plating that leads to regulatory burdening and gold-plating that leads to regulatory easing. In the vast majority of cases, gold-plating leads not to regulatory easing but to higher than necessary regulatory burdening, that is, to the imposition of burdens that are not strictly necessary in the light of the minimum requirements of the implemented EU act in question. Such burdens can include, for instance, additional compliance costs or additional licensing and reporting costs.

For a further specification of the burdens, see Lorenzo Squintani, Beyond Minimum Harmonisation: Gold-Plating and Green-Plating of European Environmental Law (Cambridge University Press 2019) 22–25.

There are three main potential repercussions. The first and the most immediate one is the imposition of higher burdens than those strictly required by EU law on the businesses and individuals concerned. The second one is that such additional burdens can put the businesses concerned at a competitive disadvantage to businesses from those Member States which have avoided regulatory-burdening gold-plating. The third possible repercussion of regulatory-burdening gold-plating is the reverse discrimination of home persons, who end up bearing additional regulatory burdens compared to minimally burdened persons from those other Member States which have avoided such gold-plating. This discrimination chiefly happens when the applicability of more stringent national implementation measures in the Member State that gold-plated EU law is limited to domestic persons, products or services.

The applicability of more stringent national implementation measures in Member state that gold-plated EU law is limited to domestic persons, products or services either when the EU act concerned contains the so-called ‘market access clause’ (see, e.g., Directive 2001/37/EC of the European Parliament and of the Council of 5 June 2001 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products [2001] OJ L 194, art 13(1)) or when the unlimited applicability of such implementation measures can be substantiated neither by reasons provided in Articles 36, 45 and 52 of the TFEU nor by rule-of-law reasons derived from the case law of the Court of Justice of the European Union (Case C-120/78, Rewe v Bundesmonopolverwaltung für Branntwein (‘Cassis de Dijon’), [1979] EU:C:1979:42, para. 8).

Regulatory-easing gold-plating of EU law is not as common as the regulatory-burdening variety. It can arise, for example, in the case of ‘overshooting’ implementation of EU acts when the application of rules of a directive or regulation is extended to some legal situations fully outside the scope of EU law and when those legal situations were previously governed by national rules that were more burdensome than the rules of the EU acts that replaced them. Regulatory-easing gold-plating is not accompanied by the regulatory repercussions that are characteristic of regulatory-burdening gold-plating. Nevertheless, regulatory-easing gold-plating should not be done automatically. It should be preceded by an analysis aimed at ascertaining whether deregulation caused by such gold-plating will result in undermining the protection of national public interest grounds that are protected by the existing (more burdensome) national regulation.

Secondly, it makes sense for the current national legislative gold-plating practice to work with and distinguish between justified as opposed to unjustified gold-plating.

Given that regulatory-burdening gold-plating usually involves regulatory repercussions and that regulatory-easing gold-plating may undermine the protection of those national public interest grounds that are protected by the existing (more burdensome) national regulation, both types of gold-plating should be avoided unless reasonably justified.

Regulatory-burdening gold-plating can be considered justified if its regulatory repercussions are outweighed or offset by relevant national public interest grounds, that is, grounds worth advancing or protecting even at the cost of the regulatory repercussions of a given instance of gold-plating. Such grounds can, for example, be increased consumer protection,

For example, it was on these grounds that the Czech Republic gold-plated Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts [1993] OJ L95/29, by laying down in the national transposition measure that not only a contractual term which has not been individually negotiated (as minimally required by the Directive), but also a contractual term which has been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. See § 1813 of the Czech Civil Code.

Regulatory-easing gold-plating, on the other hand, can be considered justified if it results in deregulation which does not undermine the protection of those national public interest grounds that are protected by the existing (more burdensome) national regulation.

Thirdly, it makes sense for the current national legislative gold-plating practice to work with and distinguish between blind or inadvertent gold-plating as opposed to deliberate gold-plating.

Mainly (but not only) due to the possible regulatory repercussions described above, non-minimalistic implementation of EU law should never be blind or inadvertent. It should always result from a deliberate choice, a choice based on a qualified gold-plating analysis and subsequent deliberate political legislative decision. A qualified analysis necessarily entails a proper identification of all gold-plating options provided or recognised by the EU act concerned. Furthermore, it requires a proper determination of whether the possible exercise of identified gold-plating options would lead to regulatory-burdening or -easing gold-plating. While in the former case, a qualified analysis also entails a proper identification and consideration of possible regulatory repercussions of the gold-plating concerned, as well as a proper identification and consideration of the relevant national public interest grounds capable of justifying or offsetting such regulatory repercussions, in the latter case, it also necessarily entails a proper identification and consideration of the national public interest grounds that could be undermined by the deregulation concerned.

For more on how qualified gold-plating analysis should look like and what factors should be especially considered in the analysis, see Král R., above n. 22.

Fourthly, it makes sense for the current national legislative gold-plating practice to work with and distinguish between gold-plating that falls within the scope of the EU Charter of Fundamental Rights (‘the EU Charter’) as opposed to gold-plating which does not.

The issue whether and to what extent national legislative measures that gold-plate EU law fall within the scope of the EU Charter was until recently quite blurred.

See two rather contradictory cases on this issue. Case C-426/11 Alemo-Herron and Others v Parkwood Leisure Ltd [2013] EU:C:2013:521 and Case C-198/13 Víctor Manuel Julian Hernández and Others v Reino de España and Others [2014] EU:C:2014:2055.

It follows from the Court’s judgment in this case that national gold-plating toppings to the rules or to the scope of application of the implemented EU act concerned do not automatically constitute implementation of EU law within the meaning of Article 51(1) of the EU Charter, and therefore, they cannot automatically fall within the scope of the EU Charter.

This judgment implies that a conceptual distinction must be made between power-granting deviation/derogation clauses in the EU acts and power-recognising ones. A typical example of the latter is the general deviation clause in EU directives based on the minimum harmonisation approach, that is, the clause that provides that the Member States may deviate (of course only in the ‘upwards’ direction) from, in principle, all the rules of the directive concerned.

See, e.g., the example mentioned above at n.5.

While the power-granting deviation/derogation clauses authorise the Member States to exercise a certain legislative option (discretion) when implementing the EU act, the power-recognising ones acknowledge – in a purely declaratory fashion – the powers that the Member States have retained when implementing the given EU act. While the exercise of the former clause represents the exercise of a discretion/option provided to the Member States by the EU act, the exercise of the latter clause represents the exercise of a power retained by the Member States. Consequently, whilst national gold-plating toppings covered by a power-granting derogation clause are fully within the scope of the implemented EU act and of the Charter because they still constitute implementation of EU law within the meaning of Article 51(1) of the EU Charter, national gold-plating toppings that constitute the exercise of a power retained by the Member States are outside the scope of the given EU act and of the Charter because they no longer constitute implementation of EU law within the meaning of Article 51(1) of EU Charter.

For a more detailed analysis of the TSN and AKT case see Richard Král, Petr Mádr, ‘On the (in)applicability of the EU Charter of Fundamental Rights to national measures exceeding the requirements of minimum harmonisation Directives’ 1/2021 European Law Review 81–91. See also Maxime Tecqmenne, ‘Minimum harmonisation and fundamental rights: a test-case for the identification of the scope of EU law in situations involving national discretion?’ 3/2020 European Constitutional Law Review 493–512.

When one compares the current gold-plating situation in the Czech Republic with the one a decade ago, three main changes can be pinpointed in the area of gold-plating of EU law in Czech legislative practice.

The first main change is almost a total eradication in Czech legislative practice of cases of inadvertent (blind) gold-plating as well as gold-plating lacking any justification whatsoever. In the past, such cases were not rare. This can be evidenced by the already mentioned gold-plating study from 2014, which revealed 12 cases of blind and/or unjustified gold-plating.

See Richard Král, Harald Scheu et al., n.1 above.

This second main change is the adoption of specific gold-plating governmental legislative methodological guidelines or instructions. They are titled ‘Methodological aid for the prevention of unnecessary regulatory burdens when implementing EU law’,

‘Metodická pomůcka pro prevenci nadbytečné regulatorní zátěže při implementaci práva EU’.

The methodological aid can be praised for laying down the three important methodological gold-plating principles. The first one is the principle of minimalistic implementation of EU law. According to this principle, minimalistic implementation of EU law should be the rule, and non-minimalistic implementation of EU law should be an exception to this rule. The second one is the principle that all cases of the gold-plating of EU law must be justified in the explanatory report to the Czech act based on the non-minimalistic implementation of EU acts. The third principle is that all cases of the gold-plating of EU law in the Czech Republic must be subject to the Czech RIA procedure. The gold-plating methodological aid also provides useful concrete examples of various types of softening as well as tightening or widening deviation/derogation clauses in EU acts. This of course helps those in charge of implementing EU acts in Czechia to properly identify and interpret those clauses in the implementation process and thus to avoid cases of inadvertent gold-plating.

Thus, overall, the methodological aid contributed to almost a total elimination of cases of inadvertent gold-plating as well as gold-plating lacking any justification whatsoever. The methodological aid also contributed to treating the gold-plating of EU law in Czech legislative practice as something which should be exceptional, deliberate and properly justified. There appear to be only two principal aspects of the methodological aid that could be criticised. First, that the aid is only a soft-law instrument. Secondly, that the aid is rather silent on how the proper justification of gold-plating should look.

For some suggestions on how the proper justification of gold-plating should look and on what it should be based, see Král R., above n. 22.

The third main change in the gold-plating of EU law in Czech legislative practice is its widening to EU regulations as well. While in the past non-minimalistic implementation of EU law in Czechia occurred almost exclusively in the context of national transposition of EU directives, today, it occurs quite often also in the context of national normative implementation of EU regulations.

This is largely explainable by a clearly recognizable trend of substituting EU directives with EU regulations.

See Filip Křepelka, ‘Transformations of Directives into Regulations: Towards a More Uniform Administrative Law?’ 4/2021 European Public Law 781–806.

A very good example of a regulation that replaced an EU directive and provides a multitude of gold-plating options is the GDPR Regulation.

Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (GDPR). [2016] OJ L119/1.

Revisiting the issue of the gold-plating of EU law in Czechia has revealed predominantly positive developments in this area. The approach of Czech legislative practice towards the gold-plating of EU law is nowadays guided by the soft-law methodological guidelines for the prevention of unnecessary regulatory burdens when implementing EU law. These guidelines, which were adopted in 2016, stipulate that gold-plating of EU law in Czechia should always be a justified exception to the principle of minimalistic implementation of EU law and must be subject to the Czech RIA procedure. Despite their debatable soft-law character, these guidelines have contributed to an almost total eradication of inadvertent gold-plating and a consolidation of deliberate justified gold-plating of EU law in Czech legislative practice. Nevertheless, the justification of concrete cases of non-minimalistic implementation of EU law in Czechia could still sometimes be more thorough. For this purpose, the guidelines ought to be amended to provide elaborate functional guidance on how the proper justification of gold-plating should look.