REPORT with recommendations to the Commission on succession and wills

16.10.2006 - (2005/2148(INI))

Committee on Legal Affairs
Rapporteur: Giuseppe Gargani
(Initiative – Rule 39 of the Rules of Procedure)

Procedure : 2005/2148(INL)
Document stages in plenary
Document selected :  
A6-0359/2006

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

with recommendations to the Commission on succession and wills

(2005/2148(INI))

The European Parliament,

–   having regard to the Green Paper on succession and wills presented by the Commission on 1 March 2005 (COM(200)0065) and the annex thereto (SEC(2005)0270),

–   having regard to the opinion of the Economic and Social Committee of 26 October 2005[1],

–   having regard to Article 192, second paragraph, of the EC Treaty,

–   having regard to Rules 39 and 45 of its Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs (A6‑0359/2006),

A. whereas, according to the report drawn up in 2002 by the Deutsches Notarininstitut at the Commission’s request, between 50 000 and 100 000 transnational successions are opened every year in the European Union,

B.  whereas this estimate will obviously have to be revised upwards in the light of the recent accession of ten new Member States to the European Union and its forthcoming further enlargement,

C. whereas at present there are important differences between the Member States’ systems of private international law and their respective substantive law on succession and wills,

D. whereas these differences, in so far as they are capable of making it difficult and expensive for heirs to take possession of the estate, could create obstacles to the exercise of the freedom of movement and the freedom of establishment referred to in Articles 39 and 43 of the EC Treaty and the enjoyment of the right to own property, which is a general principle of Community law[2],

E.  whereas it would be advisable to draw up a Community legal instrument relating to private international law on successions and wills, as already called for in the 1998 Vienna action plan[3], the programme of measures for implementation of the principle of mutual recognition of decisions in civil and commercial matters[4], adopted by the Council and Commission in 2000, the Hague Programme of 4 November 2004 for strengthening freedom, security and justice in the European Union, and the Council and Commission Action Plan implementing the Hague Programme on strengthening freedom, security and justice in the European Union[5],

F.  whereas the adoption of legislative initiatives dealing with succession and wills would appear to be consistent with the objectives of Community law, which prohibits discrimination on the basis of nationality and aims to foster the social integration of all individuals whose principal residence and centre of interests is situated in one of the Member States, regardless of their nationality,

G. whereas, while the harmonisation of the Member States’ substantive law on succession and wills falls outside the scope of the European Community’s competence, the Community is competent, under Article 65(b) of the EC Treaty, to adopt measures ‘promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws and of jurisdiction’,

H. whereas, pursuant to the second indent of Article 67(5) of the EC Treaty, any Community act dealing with succession and wills should be adopted in accordance with the procedure referred to in Article 251 of the EC Treaty,

I.   whereas, when dealing with the subject of succession and wills, it is essential to uphold certain fundamental tenets of public policy which impose limits on testamentary freedom for the benefit of a testator's family or other dependants,

1.  Calls on the Commission, during 2007, to submit a legislative proposal to Parliament under Articles 65(b) and 67(5), second indent, of the EC Treaty in order to deal with succession and wills; calls for that proposal to be drawn up in the light of interinstitutional discussion and in keeping with the detailed recommendations set out at annex;

2.  Calls on the Commission, in the context of the current deliberations on the Civil Justice Funding Programme 2007-2013, to launch a call for proposals for an information campaign regarding cross-border wills and succession matters, targeted at legal practitioners in the field;

3.  Calls on the Commission to identify as a priority, within the Civil Justice Funding Programme for 2007-2013, the establishment of a network of civil practitioners to develop mutual confidence and understanding between professionals in this field, share information and develop best practice;

4.  Notes that the recommendations set out at annex accord with the subsidiarity principle and citizens' fundamental rights;  

5.  Considers that the requested proposal has no financial implications for the Community budget;

6. Instructs its President to forward this resolution to the Council and the Commission, and to the parliaments and governments of the Member States.

  • [1]  OJ C 28, 3.2.2006, p. 1.
  • [2]  Case C-268/96, Generics (UK) and others, [1998] ECR I-7967, point 79, and the case law referred to therein.
  • [3]  OJ C 19, 23.1.1999, p. 1.
  • [4]  OJ C 12, 15.1.2001, p. 1.
  • [5]  OJ C 198, 12.8.2005, p. 1.

ANNEX TO THE MOTION FOR A RESOLUTION:DETAILED RECOMMENDATIONS REGARDING THE SUBSTANCE OF THE REQUESTED PROPOSAL

Recommendation 1 (on the form and minimum content of the instrument to be adopted)

The European Parliament considers that the legislative act to be adopted should aim to regulate succession exhaustively in private international law and at the same time:

-  harmonise the rules concerning jurisdiction, the applicable law (the ‘conflict rules’) and the recognition and enforcement of judgments and public instruments issued abroad, except for the material substantive law and procedural law of the Member States;

-  introduce a 'European Certificate of Inheritance'.

Recommendation 2 (on the criteria for establishing jurisdiction and the objective connecting factor)

The European Parliament considers that the legislative act to be adopted should in principle ensure that 'forum' and 'ius' coincide, thus making it less difficult to apply foreign law.

For those reasons, the European Parliament is inclined to prefer the habitual place of residence of the deceased at the time of his death as the criterion for establishing both principal jurisdiction and the connecting factor.

Recommendation 3 (on the freedom of choice to be accorded to individuals)

The European Parliament considers that the legislative act to be adopted should allow a degree of freedom of choice, in particular by permitting:

- the parties concerned to choose, subject to certain conditions, the competent court, along the lines laid down in Articles 23 and 24 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters[1],

- the testator to choose which law should govern the succession, the law of the country of which he is a national or the law of the country of his habitual residence at the time the choice is made; this choice should be indicated in a statement taking the form of a testamentary clause;

Recommendation 4 (on the law applicable to the form of wills)

The European Parliament is of the opinion that the legislative act to be adopted should lay down specific rules concerning the law applicable to the form of testamentary clauses – which clauses are to be regarded as valid if they are considered as such by the law of the State in which the testator drew them up, or by the law of the State in which the testator had his habitual residence at the time when he drew up the will or died, or by the law of one of the States of which the testator was a national at the time when he drew up the will or died;

Recommendation 5 (on the law applicable to agreements as to future successions)

The European Parliament considers that the legislative act to be adopted should lay down specific rules concerning the law applicable to agreements as to future successions, which should be regulated:

(a) in the case of one individual’s succession, by the law of the State in which that person has his habitual residence at the time the agreement is concluded;

(b) in the case of several persons’ succession, by the laws of each of the States in which each of those persons has his habitual residence at the time the agreement is concluded.

For agreements as to future successions the legislative act to be adopted should also allow some scope for freedom of choice, permitting the parties to agree, by means of an explicit statement, that the agreement as to future successions is to be made subject to the law of the State in which the person or one of the persons involved has his habitual residence at the time when the agreement is concluded or of which he is a national at that time;

Recommendation 6 (on general issues regarding the applicable law)

The European Parliament considers that the legislative act to be adopted should also deal with general issues regarding the applicable law.

In particular, the European Parliament considers that:

- the law specified in the legislative act to be adopted should be competent to cover, regardless of the nature and location of the estate, the whole succession, from the beginning of the procedure to the transmission of the inheritance to the persons entitled;

- the future instrument should be erga omnes, that is to say, applicable even if the designated law is the law of a third country;

- for the purpose of coordinating the Community system of conflict rules governing succession with those of third countries, the prospective regulation should lay down specific rules concerning renvoi, establishing that, where the law applicable to the succession is the law of a third country and that country’s conflict rules designate the law of a Member State or the law of another third country which, according to the system of international private law, could also apply its own law to the case in question, the law of that other Member State or, if appropriate, of that other third country, should apply;

- the legislative act to be adopted should specify the ways and means by which the authorities required to apply a foreign law are to ascertain its content, as well as the remedies in the event of failure to ascertain that content;

- the legislative act to be adopted should make the settlement of a preliminary issue subject to the law designated by the relevant conflict rules of the law applicable to the succession, making it clear that the solution will be valid only as regards the proceedings in which the preliminary issue arises;

- the legislative act to be adopted should specify that application of a provision of the applicable law may be ruled out if such application would produce an effect manifestly contrary to the public policy of the forum.

- the future legislative act should specify that where a State has two or more systems of law or sets of rules concerning succession and wills applicable in different territorial units, each territorial unit is to be considered as a country for the purposes of identifying the law applicable to the succession. Furthermore, the future legislative act should specify, with regard to such a State, that:

(a) any reference to habitual residence in that State is to be construed as a reference to habitual residence in a territorial unit;

(b) any reference to nationality is to be construed as a reference to the territorial unit designated by the law of that State. In the absence of such rules, the reference shall be construed as a reference to the legal system with which the person in question had the closest connection;

Recommendation 7 (on the European certificate of inheritance)

The European Parliament considers that the prospective instrument must aim to simplify the procedures to be followed by heirs and legatees in order to gain possession of the property comprising the estate, particularly by:

- providing for rules of private international law to ensure effective coordination between legal systems with regard to the administration, liquidation and transmission of estates, as well as identification of heirs, with provisions stating: that these aspects of succession, subject to exceptions due to the nature or location of certain assets, are to be regulated by the law applicable to the succession; that if that law provides for the intervention of an authority indicated by the law itself, or appointed pursuant to it, that authority’s powers shall be recognised in all the Member States; that, if the law applicable to the succession is the law of a Member State, the powers of such authorities are to extend, unless otherwise specified by the testator, to the whole estate, wherever it may be situated, even if, according to the law applicable to the succession, those powers are confined to movable property; that the measures relating to the activity of those authorities prescribed by the law applicable to the succession may be requested from the courts of the Member State the law of which is applicable to the succession or on the territory of which the deceased person had his habitual residence at the time of his death, or on the territory of which the property comprised in the estate is located;

- introducing a ‘European certificate of inheritance’ indicating, with binding effect and unless and until proven otherwise, the law applicable to the succession, the beneficiaries of the estate, the persons responsible for administering the estate and their powers and the property comprising the estate, to be issued by an authority empowered to issue or authenticate official documents under the relevant national legislation,

The certificate, which is to specify the law applicable to the succession, shall be drawn up in accordance with a standard model to be laid down in the future legal instrument and shall constitute appropriate title on the basis of which the acquisition of the property inherited may be entered in a public register of the Member State in which the property is located, without prejudice to compliance with the rules of that Member State on the functioning of such registers and the effects resulting from the information contained therein.

Furthermore, the future legal instrument should ensure protection for third parties acting in good faith who, for valuable consideration, have entered into a contract with the person who appears to be entitled to dispose of the property comprised in the estate on the basis of the certificate, thereby safeguarding the acquisition thereof, unless that person knows that the details given in the certificate are inaccurate or the competent authority has taken steps to revoke or amend the certificate;

Recommendation 8 (on the 'lex loci rei sitae' and the 'reserved portion' principle)

The European Parliament considers that the future legal instrument should:

- ensure the coordination of the law applicable to the succession with the law of the place in which the property is situated, so as to make the latter applicable in particular as regards the procedures for acquiring the property comprised in the estate and any other tangible entitlements thereto, accepting or refusing the succession and the relevant formalities concerning publicity;

- ensure that the law applicable to the succession does not affect the application of any provision of the State where certain immovable property, enterprises or other special categories of assets are located and whose rules institute a particular inheritance regime in respect of such assets on account of economic, family or social considerations;

- ensure that the ability to choose the law applicable does not contravene the fundamental principles of reserving a proportion of the estate for the deceased person’s closest relatives laid down by the law objectively applicable to the succession;

Recommendation 9 (on trusts)

The European Parliament points out that the rules on property ownership come under the competence of the Member States, pursuant to Article 295 of the Treaty, and therefore requests that the legislative act to be adopted should not apply to trusts. However, that instrument should specify that when a trust is created as a result of death, the fact that the law specified by the instrument in question applies to the succession does not prevent another law from being applicable to management of the trust and that, by the same token, the fact that the law governing the trust applies to it should not prevent the law governing the succession by virtue of the future legislative act from being applicable to it.

Recommendation 10 (on 'exequatur')

The European Parliament suggests to the Commission that the legislative act to be adopted should, with regard to the recognition and enforcement of decisions, reproduce the system established by Regulation (EC) No 44/2001, which requires ‘exequatur’ only in the event of a ruling made by the courts in one Member State having to be enforced on the basis of enforcement proceedings in another Member State;

However, if a decision is to be entered in public registers, provision should be made, in view of the widely differing rules in the various Member States, for that decision to be accompanied by a ‘certificate of conformity’ with public policy and the imperatives of the Member State addressed, issued - in accordance with a standard form - by a local judicial authority;

Recommendation 11 (on public instruments)

The European Parliament considers that it is appropriate to regulate similar effects for public instruments relating to succession, which, in particular, should be recognised in all the Member States, by means of proof of the facts and of declarations by issuing authorities that the instruments were drawn up in their presence, where the law of the Member State of origin so provides;

In accordance with the provisions of Article 57 of Council Regulation (EC) 44/2001 of 22 December 2000, the document must meet all the requirements of authenticity laid down in the Member State of origin, and will not be recognised if its recognition would produce an effect manifestly contrary to public policy in the Member State addressed.

Furthermore, when a public instrument is to be entered in public registers it should be specified, as stated in the case of judicial decisions, that the document has to be accompanied by a ‘certificate of conformity’ with public policy and the imperatives of the Member State addressed, issued - in accordance with a standard form - by the authority competent to draw up the instrument in that country.

Recommendation 12 (on the European network of registers of wills)

The European Parliament hopes that, eventually, a European network of national registers of wills will be set up by linking up existing national registers, to simplify the task of finding and ascertaining the content of a deceased person’s will.

  • [1]  OJ L 12, 16.1.2001, p. 1.

EXPLANATORY STATEMENT

I.         Background

According to the Study of comparative law on conflict of jurisdiction and conflict of law rules relating to wills and succession drawn up in 2002 by the Deutsches Notarinstitut at the request of the Commission, every year between 50 000 and 100 000 transnational successions arise in the European Union, and obviously that estimate should be revised upwards in view of the recent accession of ten new Member States to the Union and its forthcoming further enlargement.

The potential advantage of a Community instrument relating to succession is due not only to that statistic, but also – and above all – to the need to remove the difficulties faced by heirs seeking to take possession of their inheritance. These difficulties are due to the significant differences at present between private international law systems and the Member States’ substantive law, which create obstacles to the exercise of freedom of movement and the enjoyment of the right to own property. We should not forget that the latter is a general principle of law (Court of Justice, Case C-368/96, Generics (UK) and others, [1998] ECR I‑7967, point 79, and the case law cited therein) and is also included among the fundamental rights enshrined in the Nice Charter.

Obviously, the most effective way of resolving problems of this kind would be to harmonise the substantive law on succession; however, this objective would be extremely difficult to attain and, moreover, falls outside the competence of the Community.

Article 65(2)(b) of the EC Treaty, however, recognises that the European Community is competent to adopt measures ‘promoting the compatibility of the rules applicable in the Member States concerning the conflict of laws and of jurisdiction’.

II.       Position of the rapporteur

It is possible to lay down two general guidelines which the Community legislature should follow in relation to succession and wills:

(a) firstly, the future instrument should establish simple and clear rules on private international law which take account of the special features and traditions of the principal types of legal systems in the Member States in order to ensure effective coordination between the national legal systems jointly involved in any given transnational succession;

(b) secondly, new and reliable Community instruments must be drawn up for the purpose of further simplifying the situation.

From the first point of view, the future Community act must begin by harmonising the criteria for awarding jurisdiction with regard to succession.

The criteria in question should of course include the habitual residence of the deceased at the time of his death, which has the advantage of conferring jurisdiction to settle any disputes that may arise on the courts of the State in which the deceased lived and in whose territory, as a general rule, most of the estate is situated and the heirs reside.

To prevent the new rules from being excessively rigid and expensive to implement, the criterion of habitual residence could be supplemented by an alternative criterion, that of the place of residence of the defendant.

Let us consider, for example, the hypothetical case of a German citizen who, on retirement, moves from Germany to the south of Spain (where he spends the last decade of his life) and dies there, leaving two sons residing in Germany and an estate comprising property in Germany. In a case of this kind, if the jurisdiction were determined solely on the basis of the deceased person’s habitual place of residence at the time of death, the heirs – supposing they were in dispute over the will – would be obliged to bring the proceedings in question before the Spanish courts.

Harmonising the rules on jurisdiction is not sufficient to simplify the rules on transnational succession and avoid the phenomenon of ‘forum shopping’.

That objective can only be achieved if all the authorities competent to intervene in relation to a given succession, although belonging to different Member States, apply the same substantive law provisions. This can happen only if, at the same time, measures are taken to harmonise the rules on conflict, in other words the rules which establish which law applies in a given case.

Sufficient consensus has been reached at international level on the need to make a single legal system responsible for regulating all aspects of the succession, from the time it is opened to the transmission of the estate, regardless of the nature and location of the properties of which it is comprised.

Your rapporteur considers that the law in question should be the law of the country which was the habitual residence of the deceased at the time of his death; this would ensure that, in many instances, the court with jurisdiction and the applicable law would coincide, which would help to ensure that any disputes concerning the succession were rapidly and effectively resolved.

In addition to that criterion, however, it would be appropriate to allow the testator to choose which body of law should govern the succession, the law of the country of which he is a national or the law of his habitual residence at the time the choice is made.

But the future instrument should also seek to ensure the effective application of the law applicable to the succession and coordinate the requirements of that law with the provisions of the law of the place where the property is situated.

On the first point, we should highlight the fact that the laws of some Member States (for example English and Austrian law) make an individual (the executor) designated by the law itself, or by a public authority, responsible for administering and/or transmitting the estate . At present, such executors encounter problems when attempting to exercise their specific powers in Member States other than those whose law is applicable to the succession.

The future Community instrument should explicitly provide that the powers of these persons (executors) should be recognised in all the Member States and apply to all the property involved in the succession, whatever its nature and wherever it is located.

On the second point, the future instrument will have to take account of the lex loci rei sitae (‘law of the place where the property is situated’) which generally governs the transfer of title to property.

In order to avoid unnecessary duplication of effort, the instrument to be adopted should make it clear that, for the purpose of acquiring and enjoying inherited property situated in a State other than that whose law applies to the succession, it is necessary to follow the rules of the law of the place where the property is situated only if that law requires further formalities or actions in addition to those required by the law applying to the succession.

For example, the administration and transfer of a given source of income will be regulated by the lex loci rei sitae if that law requires the intervention of its national authorities, since those authorities, or the persons designated by them, must apply the lex successionis for the purpose of determining the rights of those involved in the succession.

Moreover, if the law applicable to the succession is French national law, which uses the system of saisine (whereby heirs assume that status automatically as soon as the succession is opened, and can take possession of the property), but part of the estate is situated in Italy, it will be necessary to comply with the provisions of Italian law, according to which, in contrast to French law, heirs only assume that status on acceptance of inheritance.

The lex loci rei sitae plays a particularly influential role where the estate includes property entered in a public register (in other words, in most cases, immovable property).

One aspect of the inclusion in public registers of information concerning the property is the fact that the only acts which may be entered in those registers are those specified by the law of the State under whose authority the register is kept, and the content of those acts must meet the requirements of the law in question.

In general there is no reason to depart, for the purpose of recognition and enforcement of decisions and public acts, from the principles governing existing Community law, which, as we have seen, requires exequatur only if the acts in question form the basis of enforcement proceedings in another Member State (see Articles 38 et seq. and 57 et seq. of Regulation (EC) No 44/2001).

However, given that judicial decisions and public acts relating to succession are more likely than those relating to other matters to be concerned with property entered in public registers, and given the need to ensure consistency in the acts that may be entered therein, it is probably appropriate to make the entry of any such act in a register dependent on prior checking by an authority of the State of destination.

This checking mechanism could take the form of the issuing of a certificate, the content of which would be laid down in the prospective legislative act, whereby the public authority confirmed the compliance of the decision or act with the essential provisions of the law of the State of destination.

With regard to the second of the two guidelines referred to above, it should be stressed that if European citizens could have access to a standardised document which had binding force in all the Member States and identified the law applicable to the succession, the property concerned and the heirs and executors, those heirs and executors could exercise their rights in all Member States even more simply, safely and effectively.

It is, therefore, strongly to be recommended that the future instrument should establish a ‘European certificate of inheritance’ containing the information described above, which should be issued by a public authority empowered to issue or authenticate official documents.

The situation would be further simplified if this certificate could be regarded as sufficient title for the acquisition of the property to be entered in a public register, and in particular covered the purchase of property forming part of the estate by third parties who had acquired it in good faith from the person who appeared to be the heir or the person authorised to dispose of the estate on the basis of the certificate.

To conclude, this is obviously a complex and many-sided issue. However, in the interest of Europe’s citizens, your rapporteur considers that it is timely to embark on a reform which should, if possible, take account of the points mentioned here and provide all concerned with a clear and effective set of rules.

PROCEDURE

Title

Succession and wills

Procedure number

2005/2148(INI)

Committee responsible
  Date authorisation announced in plenary

JURI

Date authorisation announced in plenary (Rule 45)

8.9.2005

Date authorisation announced in plenary (Rule 39)

8.9.2005

Committee(s) asked for opinion(s)
  Date announced in plenary

LIBE

8.9.2005

 

 

 

 

Not delivering opinion(s)
  Date of decision

LIBE
13.10.2005

 

 

 

 

Enhanced cooperation

        Date announced in plenary

 

 

 

 

 

Rapporteur(s)
  Date appointed

Giuseppe Gargani
20.6.2005

 

Previous rapporteur(s)

 

 

Discussed in committee

14.9.2005

21.11.2005

30.1.2006

3.10.2006

 

Date adopted

3.10.2006

Result of final vote

+ :
– :
0 :

15
7
0

Members present for the final vote

Maria Berger, Rosa Díez González, Bert Doorn, Monica Frassoni, Giuseppe Gargani, Piia-Noora Kauppi, Klaus-Heiner Lehne, Katalin Lévai, Antonio López-Istúriz White, Hans-Peter Mayer, Achille Occhetto, Aloyzas Sakalas, Francesco Enrico Speroni, Andrzej Jan Szejna, Diana Wallis, Rainer Wieland, Nicola Zingaretti, Jaroslav Zvěřina, Tadeusz Zwiefka

Substitute(s) present for the final vote

Jean-Paul Gauzès, Luis de Grandes Pascual, Kurt Lechner, Toine Manders, Marie Panayotopoulos-Cassiotou

Substitute(s) under Rule 178(2) present for the final vote

Maria Badia I Cutchet

Date tabled

16.10.2006

 

Comments

(available in one language only)

...