EUROPE – A number of lawyers have suggested that the alleged move by the French insurance and pension funds authority – the Autorité de Contrôle des Assurances et des Mutuelles (ACAM) – in "advising" the €10.2bn scheme UMR to abandon plans to launch a cross-border pension fund in Belgium could constitute a breach of the EU Treaty.
Speaking with IPE, An Van Damme, partner at law firm Claeys & Engels in Brussels, said the letter French authorities are understood to have sent to UMR could eventually backfire on them.
However, she added that any case against the ACAM would be determined by the way the letter had been formulated.
"If the French regulator has simply raised a number of issues of which UMR should be aware to operate cross-border, then I do not think there is a breach of EU law," she said.
"However, if the French regulator is openly opposed to a transfer, that would indeed constitute a breach of the EU Treaty and the IORP I Directive."
If the latter proves true, Hans Van Meerten, head of the international pension practice at law firm Clifford Chance in Amsterdam, argued that UMR could have a "strong" case against the French authorities.
He told IPE the regulator, being an organ of the French member state, has a duty to comply with EU law and more especially with the principle of loyal cooperation established within the European treaty.
"The principles are laid down in articles 49 and 56 of the treaty, which relate to the freedom of establishment and the freedom to provide services, respectively," he said.
"The treaty clearly stipulates that, in principle, these freedoms should not be hindered in any way."
In this event, UMR would have a number of options if it decided to take the case to court, Van Meerten said.
The French pension fund could file a complaint with a national court, with the European Commission or with the European Court of Justice.
"The first option would be quicker, whereas the latter would take more time and prove more difficult," he added.
Van Meerten conceded that the French regulator could justify the need to advise UMR to keep its activities within the country if the process of setting up a cross-border pension fund was in breach of French law.
Additionally, Van Meerten did not see any "immediate" breach of the first IORP Directive –implemented by the European Commission in 2003 with the aim of promoting cross-border pension activity in Europe.
"The IORP Directive stipulates that, once you have established an IORP, then you are free to operate all these schemes from different member states," he said.
"However, the IORP Directive does not deal with the transfer of the seat. So, in this particular case, we are not even at the stage where the scheme has already delocalised its activities to Belgium since regulators have prevented UMR Corem to even launch an IORP."
The European Insurance and Occupational Pensions Authority (EIOPA) declined to comment on the case, with a spokeswoman pointing out that the authority was "unable to intervene in the daily business of its members".
Several European representatives working within the Internal Market unit of the European Commission – who are currently working on a revised IORP Directive – did not return phone calls made by IPE.