Ana Filipa Ribeiro [master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder (ref. UMINHO/BIM/2026/33)]

On 1 July 2026, the transitional period provided for under the Markets in Crypto-Assets Regulation (MiCAR)[1] will expire across the European Union,[2] meaning that providers wishing to continue serving EU clients must either hold a MiCAR authorisation, benefit from another entitlement recognised under the Regulation,[3] or cease the provision of those services.[4] This date marks a decisive moment in the legal ordering of crypto-asset markets, since it is the point at which Regulation (EU) 2023/1114 becomes a concrete legal condition for access to the European market. More specifically, it is the moment at which national authorisation begins to operate as a Union-wide market-access decision with consequences for providers, competitors, users and host Member States across the internal market.

The legal significance of this transition lies in the regulatory architecture chosen by MiCAR. The Regulation seeks to overcome the previous fragmentation of national regimes by establishing uniform rules on authorisation, governance, conduct, prudential requirements, supervision and client protection.[5] Yet, it does so through a model in which authorisation is granted by national competent authorities,[6] while the effects of that authorisation may extend throughout the internal market by means of the European passport.[7] National administrative decisions, thus, acquire a Union-wide market-access function, insofar as an authorisation granted by one competent authority may determine the ability of a crypto-asset service provider to operate across several Member States.

That structure gives rise to a central tension in the legal ordering of EU crypto-asset markets. MiCAR presupposes that decentralised authorisation can coexist with integrated market access, provided that national supervisory practices remain sufficiently convergent.[8] The expiry of the transitional period places that assumption under practical scrutiny. If national authorities apply authorisation requirements with materially different levels of intensity, speed or interpretative strictness, operators subject to the same Regulation may enter the internal market under unequal supervisory conditions.[9] Hence, the concern extends beyond administrative coordination and reaches the conditions of competitive neutrality within the market framework that MiCAR is intended to create.

The transitional regime under Article 143(3) was designed to manage the passage from national fragmentation to European authorisation. Providers that had supplied crypto-asset services in accordance with applicable national law before 30 December 2024 could continue to do so until 1 July 2026, or until the granting or refusal of a MiCAR authorisation, whichever occurred first. That regime was conceived as temporary and instrumental, with the purpose of avoiding abrupt disruption to the market while affording providers and supervisory authorities the time necessary to adjust to the new legal framework.[10] Once it expires now, MiCAR will transition from transitional harmonisation instrument into a definitive gatekeeping regime.

The relevance of this transformation lies in the position occupied by crypto-asset service providers within the digital financial ecosystem. Far from operating at its margins, they perform a gatekeeping function by mediating access to custody, trading, exchange, execution, transfer and, in certain cases, the practical use of crypto-assets as instruments of payment, investment or participation in decentralised applications. Their role is, therefore, capable of shaping both the conditions under which users access digital assets and the competitive environment in which undertakings operate within a regulated space of financial innovation.[11]

Under Article 59, crypto-asset services may be provided within the Union only by authorised crypto-asset service providers or by certain financial entities entitled to provide such services under the Regulation. Article 63 sets out the authorisation procedure, while Article 65 enables the cross-border provision of services through passporting. Taken together, these provisions define the boundary between lawful participation in the European crypto-asset market and unauthorised activity, while they also make public authorisation a constitutive element of competition. Market access is now structured by a regulatory framework in which technological capacity, liquidity, reputation and commercial reach are assessed alongside the provider’s ability to obtain and preserve the legal status required for participation.

This has important consequences for understanding competition in crypto-asset markets. In regulated sectors, the competitive process begins at the level of market access, where entry conditions play a constitutive role in shaping the market structure in which undertakings operate.[12] Authorisation requirements, supervisory expectations, procedural timelines, prudential obligations and enforcement practices shape the competitive environment before any service is offered to users. A provider that obtains authorisation earlier, under a less burdensome supervisory approach, or with a broader practical interpretation of its permitted activities, may acquire a competitive advantage that derives from regulatory conditions rather than from merit, efficiency, or innovation.[13]

The European passport[14] intensifies this concern. As an essential instrument of the internal market, the European passport prevents the re-emergence of duplicative national authorisation procedures and gives practical effect to the freedom of establishment[15] and freedom to provide services,[16] allowing an authorised provider to conduct cross-border activity beyond its home Member State within a harmonised legal framework.[17] Nevertheless, when passporting rights are triggered by a national authorisation, the legitimacy of their cross-border effects depends on the reliability of the supervisory assessment carried out by the home Member State authority. If the authorisation granted in one Member State is perceived as insufficiently rigorous, the passport risks becoming a vehicle for regulatory arbitrage rather than an instrument of mutual trust.[18]

Administrative discretion and institutional variation are inherent in a decentralised supervisory system, although they become legally problematic where they affect the substantive conditions of market entry and the competitive position of providers across the internal market. Divergent supervisory practices may encourage providers to seek authorisation in jurisdictions perceived as faster, more predictable or less demanding, with a view to using that authorisation as a gateway to the entire Union. Such incentives are capable of undermining the level playing field between providers, placing pressure on authorities that apply stricter scrutiny and generating a form of competition between supervisory jurisdictions beneath the formal unity of the Regulation.

This risk is particularly acute in markets marked by speed, scale and network effects.[19] Given the capacity of crypto-asset service providers to rapidly consolidate market positions through user acquisition, liquidity concentration, brand recognition and integration with other digital services, an earlier authorisation (or one granted under more favourable administrative conditions) can generate effects beyond the provider’s immediate legal position by facilitating the accumulation of a first-mover advantage that later proves difficult to contest. If that advantage is grounded in better compliance, stronger governance or superior service quality, it belongs to the normal dynamics of lawful competition. If it is grounded in divergent supervisory practice, the competitive result becomes more problematic from the perspective of the internal market.

In this sense, the end of the transitional period reveals a deeper question of EU economic law. The internal market requires more than the formal harmonisation of legal rules, since its effective operation also depends on consistent administrative application, particularly where national decisions produce cross-border effects. The effectiveness of the MiCAR passport as an instrument of economic freedoms and market integration depends on sufficient convergence in authorisation practices, because divergences in supervisory assessment can allow practical asymmetries capable of affecting competition to persist beneath the formal appearance of harmonisation.

The link with economic freedoms is, therefore, twofold. For unauthorised providers, the expiry of the transitional period functions as a market-access restriction justified by legitimate objectives, including client protection, market integrity, financial stability and the orderly development of crypto-asset activity. The freedom to conduct a business under Article 16 of the Charter of Fundamental Rights of the European Union[20] does not confer an unconditional right to provide crypto-asset services, but any restriction on lawful economic activity must be framed by clear, foreseeable and proportionate rules enabling providers to identify the conditions for authorisation, understand the reasons for refusal and challenge adverse administrative decisions through effective procedures.[21]

For authorised providers, MiCAR operates as an enabling framework, granting the regulatory status through which cross-border activity becomes legally possible and participation in the internal market is secured. Yet, that status remains conditional.[22] Authorisation should be understood as a continuing public-law position, grounded in ongoing supervision and sustained by compliance with organisational, prudential and conduct obligations. The freedom to provide services is, thus, mediated by a regulatory relationship between the provider and the competent authority, where the credibility of that relationship determines whether passporting operates as a legitimate expression of economic freedom or as a channel through which divergent national practices are exported to the wider Union market.

The position of users adds a further constitutional dimension. The end of the transitional period may require non-authorised providers to wind down operations, cease serving EU clients, migrate users to authorised entities, or facilitate the transfer of crypto-assets to other providers or to self-hosted wallets. These processes affect more than contractual convenience, as they may interfere with access to assets, continuity of services, patrimonial interests and legal certainty. In crypto-asset markets, the dependence of the market architecture outlined above on private platforms means that regulatory changes can have immediate effects on the effective enjoyment of legally protected interests.[23]

Article 17 of the Charter[24] may be relevant where users face restrictions on access to crypto-assets or funds held through a platform. Even though the classification of crypto-assets may vary according to their legal and technical characteristics, the patrimonial interests attached to them cannot be ignored. Article 47 of the Charter[25] is also engaged where users need to contest account closures, transfer delays, blocked withdrawals or unclear migration arrangements, since effective judicial protection requires that affected persons be able to identify the responsible entity, understand the basis of the decision affecting them and access meaningful complaint or redress mechanisms. Article 38[26] further reinforces the public interest in ensuring a high level of consumer protection, particularly where users may have difficulty distinguishing between authorised EU entities, third-country entities and other companies operating under the same commercial brand.

The institutional role of European Securities and Markets Authority (ESMA) is consequently significant. A decentralised system of authorisation with European effects requires mechanisms capable of preventing fragmentation in practice. Guidance, peer scrutiny, supervisory coordination and common expectations are necessary to ensure that national authorities apply MiCAR in a manner compatible with the objectives of the Regulation. Accordingly, the central question lies in the capacity of the existing supervisory architecture to secure sufficient convergence across national authorities, so that the passport can operate on a credible basis while safeguarding users and preserving equal competitive conditions.[27]

Centralisation can strengthen uniformity in the supervision of large cross-border providers whose activities produce systemic or quasi-systemic effects in crypto-asset markets, while also raising questions of subsidiarity, administrative capacity and proximity to local market knowledge. Decentralisation, by contrast, preserves the role of national competent authorities and allows closer engagement with operators established within their jurisdiction. Nonetheless, it requires stronger coordination precisely because its decisions produce effects beyond national borders. The legal issue is, therefore, one of supervisory legitimacy, namely whether national decisions can be trusted as functionally equivalent within a Union-wide market.

The termination of the MiCAR’s transitional period, therefore, operates as a legal stress test for EU crypto-asset governance: (1) it tests whether harmonised regulation can produce an integrated market without allowing national differences in supervision to distort competition; (2) it tests whether the freedom to provide services can coexist with strict and credible authorisation standards; (3) it tests whether users’ fundamental rights and patrimonial interests can be protected during the withdrawal, migration or regularisation of providers;  (4) it tests whether private digital infrastructures, once brought within a public regulatory framework, can be subjected to constraints that make their power legally accountable.

The success of MiCAR will be measured by the Union’s ability to translate regulatory harmonisation into a genuinely contestable, rights-sensitive and effectively supervised internal market for crypto-asset services. Where supervisory convergence remains insufficient, the European passport risks facilitating cross-border activity while preserving asymmetries capable of affecting competition, economic freedoms and user protection. On the other hand, where convergence is effective, MiCAR can operate as more than a regulatory response to the risks of crypto-assets, becoming an instrument for the constitutional ordering of a European digital financial market open to economic activity, disciplined by public supervision and constrained by fundamental rights.

[1] Regulation (EU) 2023/1114 of 31 May 2023 on markets in crypto-assets and amending Regulations (EU) No 1093/2010 and (EU) No 1095/2010 and Directives 2013/36/EU and (EU) 2019/1937, CELEX:32023R1114.

[2] Regulation (EU) 2023/1114, Article 143(3). See European Securities and Markets Authority (ESMA), Statement on the End of Transitional Periods under MiCA, ESMA75-113276571-1679 (April 17, 2026), 1, accessed May 27, 2026, https://www.esma.europa.eu/sites/default/files/2026-04/ESMA75-113276571-1679_Statement_on_the_end_of_transitional_periods_under_MiCA.pdf.

[3] Regulation (EU) 2023/1114, Article 60.

[4] Regulation (EU) 2023/1114, Articles 59 to 63 and recital 76.

[5] Regulation (EU) 2023/1114, Recital 6 and 73.

[6] Regulation (EU) 2023/1114, Article 3(1)(35).

[7] Regulation (EU) 2023/1114, Articles 59(7) and 65.

[8] Article 63 provides for authorisation by the competent authority of the home Member State, while Articles 59(7) and 65 enable authorised crypto-asset service providers to provide services throughout the Union through the right of establishment or the freedom to provide services. On the need for supervisory convergence during the transitional phase and full application of MiCAR see ESMA, ESMA75-113276571-1679, 1-2, and ESMA, ESMA clarifies timeline for MiCA and encourages market participants and NCAs to start preparing for the transition, ESMA74-449133380-441 (October 17, 2023), 1, accessed May 27, 2026, https://www.esma.europa.eu/sites/default/files/2023-10/ESMA74-449133380-441_Statement_on_MiCA_Supervisory_Convergence.pdf.

[9] These concerns have also emerged in recent supervisory and policy debate, as reflected in Reuters’ reporting on statements by the President of the French AMF concerning unauthorised crypto-asset activity after the MiCAR deadline and the possibility of opposing passporting where France disagreed with another Member State’s licensing decision. See Elizabeth Howcroft, “Crypto companies without EU licences face prosecution, French regulator warns”, Reuters, 28 May 2026, accessed May 28, 2026, https://www.reuters.com/business/finance/crypto-companies-without-eu-licences-face-prosecution-french-regulator-warns-2026-05-28/.

[10] Regulation (EU) 2023/1114, recitals 113, 114 and 119.

[11] A more detailed analysis of the position occupied by crypto-asset service providers can be found in our previous article published on this blog, which forms part of the same broader research. See Ana Filipa Ribeiro, “Quasi-public powers in private crypto governance: a question of legitimacy”, The Official Blog of UNIO – Thinking and Debating Europe, April 11, 2026, accessed May 28, 2026 https://officialblogofunio.com/2026/04/11/quasi-public-powers-in-private-crypto-governance-a-question-of-legitimacy/

[12] See Organisation for Economic Co-operation and Development (OECD), “Competition Assessment Toolkit: Principles”, vol. I, version 4.0, Report, 2019, 9–13, accessed May 28, 2026, https://www.oecd.org/en/publications/competition-assessment-toolkit-principles-version-4-0-volume-i_5f9fa6ca-en.html, explaining that regulation may restrict competition by limiting the number or range of suppliers, including through licensing, permit or authorisation requirements.

[13] See ESMA, Fast-track Peer Review on a CASP Authorisation and Supervision in Malta, ESMA42-2004696504-8164 (July 10, 2025), 1-8, accessed May 28, 2026, https://www.esma.europa.eu/sites/default/files/2025-07/ESMA42-2004696504-8164_Fast-track_peer_review_on_a_CASP_authorisation_and_supervision_in_Malta.pdf. ESMA found that the Malta Financial Services Authority’s authorisation process only partially met supervisory expectations, while also noting adequate expertise and supervisory engagement. The example is used here to illustrate concerns regarding the timing, depth and quality of national authorisation processes under MiCAR, but not to question the legal validity of any specific authorisation. See also Elizabeth Howcroft, “EU regulator criticises Malta’s crypto licensing process”, Reuters, 10 July 2025, accessed May 28, 2026, https://www.reuters.com/legal/government/eu-regulator-criticises-maltas-crypto-licensing-process-2025-07-10/.

[14] See Marcin Szczepański, “Understanding equivalence and the single passport in financial services: third-country access to the single market”, European Parliamentary Research Service Briefing, PE 599.267 (February 2017), 3, https://www.europarl.europa.eu/RegData/etudes/BRIE/2017/599267/EPRS_BRI%282017%29599267_EN.pdf. The briefing explains that the freedom to provide financial services across the Union derives from the Treaties and secondary legislation, and that companies established in an EEA Member State have access to the single market for financial services under single passport rights, allowing them to establish branches or provide services across the EEA without further authorisation. On the corresponding mechanism under MiCAR, see Regulation (EU) 2023/1114, Articles 59(7) and 65.

[15] In the case of crypto-asset service providers and their authorisation, the freedom of establishment is directly engaged, understood as the right of natural or legal persons of one Member State to participate, on a stable and continuous basis, in the economic life of another Member State and to benefit from that participation, thereby contributing to economic and social interpenetration within the Union. See Judgment of the Court Reyners v. The Belgian State, 21 June 1974, case C-2/74, para. 21. See also article 49 of the Treaty on the Functioning of the European Union (TFEU).

[16] The freedom to provide services enables nationals of a Member State to provide and/or receive services in the territory of another Member State, while prohibiting any measures, irrespective of their source or form, which are liable to hinder the exercise of that freedom. See article 56 TFEU and also Luís Pinto Monteiro, “Liberdade de prestação de serviços”, in Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al. (Lisbon: Petrony, 2017), 235-237.

[17] This requirement is consistent with the logic of the internal market in which the removal of regulatory fragmentation and the facilitation of cross-border economic activity presuppose a degree of mutual reliance between national authorities and a harmonised framework capable of preventing the re-emergence of national barriers to market access. See articles 26, 49 and 56 TFEU. See also Pedro Madeira Froufe, “Mercado Interno”, in Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al. (Lisbon: Petrony, 2017), 254-256.

[18] Reuters reports the French AMF’s concern that crypto platforms were engaging in “regulatory shopping” across the Union, seeking a jurisdictional “weak link” capable of granting a licence subject to fewer requirements, and refers to France’s possible opposition to the passporting of licences granted by other Member States. See Mathieu Rosemain and Elizabeth Howcroft, “France threatens to block crypto licence “passporting” in EU regulatory fight”, Reuters, 15 September 2025, accessed May 30, 2026, https://www.reuters.com/sustainability/boards-policy-regulation/france-threatens-block-crypto-licence-passporting-eu-regulatory-fight-2025-09-15/.

[19] On concentration and liquidity in crypto trading, see ESMA, Crypto Assets: Market Structures and EU Relevance, TRV Risk Analysis (April 10, 2024), 4-12, accessed May 30, 2026, https://www.esma.europa.eu/sites/default/files/2024-04/ESMA50-524821-3153_risk_article_crypto_assets_market_structures_and_eu_relevance.pdf, noting that trading is highly concentrated, with the top ten exchanges processing around 90% of trades. On network effects in crypto-asset markets, see Konstantinos Stylianou et al., “Cryptocurrency competition and market concentration in the presence of network effects”, Ledger, vol. 6 (September 2021): 81-101, https://doi.org/10.5195/ledger.2021.226.

[20] For a more comprehensive discussion of this provision, see Pedro Madeira Froufe, “Article 16”, in The charter of fundamental rights of the European Union: A commentary, ed. Alessandra Silveira, et al. (Braga: JusGov/ UMinho Law School, 2024), 176-180.

[21] This follows from the general limitation clause laid down in Article 52(1) of the Charter, according to which any limitation on the exercise of Charter rights must be provided for by law, respect the essence of those rights and, subject to the principle of proportionality, be necessary and genuinely meet objectives of general interest recognised by the Union or the need to protect the rights and freedoms of others. See Alessandra Silveira, “Article 52”, in The charter of fundamental rights of the European Union: A commentary, 477-486.

[22] Regulation (EU) 2023/1114, articles 24, 64 and 68.

[23] See ESMA, ESMA75-113276571-1679, 1–3. ESMA expects unauthorised CASPs to implement orderly wind-down plans, including client offboarding and the transfer of crypto-assets to an authorised CASP or to a self-hosted wallet, without causing undue economic harm to clients. ESMA also warns consumers that MiCAR protections apply only to the specific authorised EU legal entity and that remaining with an unauthorised provider may entail less legal protection and a greater risk of losing access to assets.

[24] Luís Couto Gonçalves e Maria Miguel Carvalho, “Article 17”, in The charter of fundamental rights of the European Union: A commentary, 181-189.

[25] Maria José Rangel Mesquita, “Article 47”, in The charter of fundamental rights of the European Union: A commentary, 439-446. See also Joana Covelo de Abreu, “Princípio da tutela jurisdicional efetiva”, In Enciclopédia da União Europeia, ed. Ana Paula Brandão, et al., (Lisbon: Petrony, 2017), 329-332.

[26] Fernando de Gravato Morais, “Article 38”, in The charter of fundamental rights of the European Union: A commentary, 377-382.

[27] As already reflected in several footnotes throughout this text, ESMA has taken an active role in supporting the transition to the MiCAR authorisation regime by issuing supervisory guidance, setting common expectations and promoting convergence among national competent authorities. This institutional intervention confirms that the credibility of the passport depends not merely on formal harmonisation, but on the consistent administrative application of MiCAR across the Union.

Picture credit: by DS Stories on pexels.com.

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Helder Matos (master’s student in Human Rights at the School of Law of the University of Minho)

Introduction

In March 2024, the European Data Protection Supervisor (EDPS) revealed that the European Commission, the institution assuming the role of global vanguard in the matter of digital rights, violated the EU’s own data protection regulation due to its structural dependency on the Microsoft 365 ecosystem.[1]

Although the EDPS closed the case in July 2025 after the Commission updated its licensing agreements with Microsoft, this episode brings to the surface the underlying problem that this article proposes to address.[2]

Even as it received the green light to proceed with business-as-usual, the European Commission admitted its deep concerns regarding the crippling dependence on a non-European company for the digital platforms needed for normal day-to-day functioning.[3] The European Union (EU) does not control the technological infrastructure it runs on, as it is forced to negotiate the terms of its own data security with foreign corporations.

Furthermore, during April 2026, the announcement of Anthropic’s Claude Mythos model perfectly highlighted the sheer geopolitical danger this paradigm poses to European sovereignty. Presented as a technology so powerful that it had to be contained, Claude Mythos can supposedly discover zero-day flaws and take over any operating system, essentially acting as a digital master-key capable of unlocking any door. Anthropic restricted the model under an initiative called Project Glasswing, releasing it only to a highly vetted coalition of US tech giants (such as Amazon, Apple, Google, Microsoft, NVIDIA) to safeguard their own systems.[4]  Recognising the systemic threat, European institutions, most notably the banking industry, were immediately pressured to access the model so that they could protect their critical infrastructure.[5]

This caused Washington to take a few steps back. While the Pentagon had just labeled Anthropic a “supply chain risk” and Donald Trump publicly called its executives “left-wing nut jobs,” the power of Claude Mythos forced their hand causing the White House to recognise that this technology is, after all, too powerful for the US government to do without.[6]

Despite all of this, on April 21, 2026, it was revealed that a small group of unauthorised users from a private Discord channel had successfully breached and accessed the Mythos model, effectively breaching one of the most “ethically secure” AI labs in the world.[7]

The one-million-euro question is: if a company like Anthropic cannot secure its most dangerous offensive cyber-weapon from a handful of Discord users, how can the EU entrust its cybersecurity and digital sovereignty to the fragile, geographically biased criteria of Silicon Valley tech companies?

The democratisation of knowledge and the decentralisation of power – the original promises of the digital age – have long collapsed. In their place arose a digital infrastructure that has been challenging the classical categories of political and legal thought, bringing the EU to an inflection point of existential proportions.

The EU currently faces the transition from a paradigm focused on the rule of law to a techno-authoritarian ecosystem, where sovereignty is progressively alienated in favour of American military and corporate interests.

The farce of ethical AI and the geopolitics of algorithmic imperialism

Progress through uncritical technological innovation, frequently sustained by the marketing departments of Silicon Valley tech giants, is an illusion. To support this claim, let us consider the case between the AI company, Anthropic, and the Pentagon, in February 2026.[8]

Anthropic, self-proclaimed as the most “ethically aligned” in the sector and often shielding itself behind its proprietary Constitutional AI – which is an internal governance mechanism that aims to align AI models with a certain set of rules and morality[9] –, initially sought to distance itself from the competition by establishing “red lines” and high accountability standards. In order to stay true to this position, it stated that it could not, in good conscience, accede to the Pentagon’s demands, which explicitly required the removal of guardrails preventing the use of their AI models in offensive military operations and mass surveillance.

DoD’s Secretary Pete Hegseth immediately responded by classifying the corporation as an “unacceptable national security risk” and a “supply chain risk” (a label never before publicly applied to an American company), raising eyebrows across the board. On the exact same day, leveraging the power vacuum, OpenAI stepped up and signed a multimillion-dollar agreement with the Pentagon, accepting the removal of these ethical barriers. This case reveals that moral objections in the face of the current American administration have severe consequences, and that you need to be aligned to survive it.[10]

However, what seemed to be moral superiority and ethics above anything else, quickly proved to be geographically limited to US borders. In a February 2026 interview following the Pentagon’s blacklisting, Anthropic’s CEO, Dario Amodei, proudly declared that his company “has been the most lean forward of all the AI companies in working with the U.S. government and working with the U.S. military”, bragging about their ties with the intelligence community for cyber and combat operations. Amodei clarified that their ethical exception applies specifically to domestic mass surveillance, arguing that “no one wants to be spied on by the U.S. government” justifying his position as a defense of the Fourth Amendment.

Also, when asked about the morality behind AI weaponisation, Amodei stated that “we are patriotic Americans… everything we have done has been for the sake of this country, for the sake of supporting U.S. national security.”[11]

But what does this mean for European citizens? It means that, in this regard, fundamental rights against mass surveillance are reserved exclusively for American citizens, while the rest of the global population, including allies, are relegated to the category of raw behavioural data points and legitimate targets for extrajudicial and extraterritorial intelligence operations, validating Shoshana Zuboff’s thesis on surveillance capitalism,[12] clearly exposing the farce of “ethical AI” promoted by techno-solutionists. There is nothing ethical about omnipresent mass surveillance.

Militarization of AI and neo-reactionary thought

Moving beyond the safety-washing theatre characterised by Anthropic, the unapologetic reality of digital imperialism is best exemplified by Palantir Technologies. Palantir represents a logical consequence of Zuboff’s surveillance capitalism, as it transcends the mere extraction of consumer behavioural surplus for targeted advertising by redirecting that massive data apparatus toward state coercion, evidenced by its predictive policing experiments in New Orleans and its instrumental function in powering the logistical infrastructure for mass deportations under U.S. Immigration and Customs Enforcement (ICE).[13]

Founded in 2003 by Peter Thiel, Alex Karp, Stephen Cohen, Nathan Gettings, and Joe Lonsdale, and initially funded by the CIA’s venture capital arm, In-Q-Tel, Palantir derives its name from the enchanted seeing stones in Lord of the Rings that are used for long-distance communication and viewing past or distant events. Palantir established itself as a preferred defence contractor with Gotham and Foundry, platforms built to synthesise fragmented intelligence and commercial data and provide semantic analysis to inform executive action.[14] The subsequent integration of generative AI served as the catalyst that skyrocketed the company’s financial valuation to unprecedented heights in late 2025.

The company has positioned itself as the “U.S. government’s central operating system” as it has secured multiple state contracts across public entities such as the DOD, FBI, IRS, NSA, and CIA.[15] In 2025, in the beginning of Donald Trump’s second term, co-founder Joe Lonsdale was involved in the Department of Government Efficiency (DOGE), and Palantir’s CTO was officially appointed as a Lieutenant Colonel alongside Meta and OpenAI executives. The dividing line between corporation and State has effectively been dissolving.[16]

To understand Palantir is to understand the ideological worldview proclaimed by its founders, which emerges from neo-reactionary (NRx) thought. Peter Thiel’s philosophy is deeply intertwined with the accelerationist theories of figures like Nick Land, who believes that democratic deliberation is a fundamental obstacle to true technological optimisation.[17] Following this logic, the administrative state must be dismantled and replaced by algorithmic governance submitted to the sole interests of a techno-authoritarian elite. This kind of political thought perfectly aligns with Steve Bannon’s call for the “deconstruction of the administrative state”, thus creating a symbiotic relationship where techno-authoritarianism provides the digital infrastructure for political authoritarianism.[18]

This ideological worldview is explicitly presented to the world in the 22-point manifesto published by Palantir’s official X account on April 18, which is essentially a summary of The Technological Republic, a book by Alexander Karp, declaring, among other things, that: “the limits of soft power… have been exposed (…) hard power in this century will be built on software”; “the atomic age, is ending, and a new era of deterrence built on AI is set to begin”; “the defanging of Germany was an overcorrection for which Europe is now paying a heavy price (…) Japanese pacifism will, if maintained, also threaten to shift the balance of power in Asia” – conveniently opening massive new markets for its defence software; “some cultures have produced vital advances; others remain dysfunctional and regressive.”[19] This manifesto resonates with Marinetti’s Futurist Manifesto, published in 1909, which similarly glorified “war—the world’s only hygiene—militarism, patriotism,” and the destruction of pacifism.[20]

With the death of traditional market dynamics, the new ruling class relies on “cloud capital”, which describes the networked algorithmic machines that grant their owners unprecedented power to colonise the state. This doctrine glorifies brute force and operates with alarming supremacist undertones by praising apartheid-inspired narratives and seeking to subjugate the masses to the “divine algorithm”, viewing vulnerable populations as inferior beings needing to be managed or eliminated.

The materialisation of this ideology is already underway and the catastrophic consequences of accelerating military protocol with automated systems were exposed during the United States’ war on Iran. In the first 24 hours of the conflict, AI tools such as Palantir’s Project Maven, were used by the US to strike over 1,000 targets at a rate of 42 suggested targets per hour. On February 28, relying on outdated satellite imagery with mere seconds to execute, an American Tomahawk cruise missile struck an Iranian elementary school, killing around 150 students and teachers. The system worked exactly as intended. Days after the attack, the Department of Defense’s chief digital and artificial intelligence officer revealed that Palantir’s latest targeting workflow was as simple as “left click, right click, left click,” openly celebrating the elimination of several layers of human scrutiny.[21]

At this tactical speed, the concept of “meaningful human control” (MHC), a foundational requirement of International Humanitarian Law to ensure compliance with the Geneva Conventions’ principles of Distinction and Proportionality, becomes dead letter.[22] As AI ethicist Scott Robbins dissects, MHC is systematically annihilated by these architectures due to insurmountable psychological and epistemic limitations. Psychologically, humans simply cannot exercise moral judgment or regain situational awareness at the speed of algorithmic targeting. Epistemically, the opaque nature of machine learning means operators have no access to the considerations or statistical weights the algorithm utilises to reach its lethal outputs. When an algorithm selects 42 targets per hour based on a black-box rationale, the human operator is reduced to a mere biological rubber stamp for a machine whose logic they can neither access nor comprehend.[23]

European complicity

What does the rise of algorithmic imperialism and the digital colonisation of the State mean for the EU? The core of this crisis lies in the material reality of EU’s technological ecosystem as it is confronted with its near-absolute technological dependency. Because the EU does not own much of the physical or digital infrastructure it operates on, it remains deeply dependent on American technology for critical capabilities such as cloud and intelligence software. Consequently, the EU deals with a volatile geopolitical landscape where US foreign policy can shift abruptly. That’s a risk that must be actively mitigated.[24]

The EU’s legislative attempts to counter this situation are proving to be inherently insufficient. A prime example is the AI Act [Regulation (EU) 2024/1689]. While it was presented as the global gold standard for AI regulation, its structure contains a fatal blind spot as it exempts AI systems for national security and military purposes from its jurisdictional control.[25] This means that EU’s regulation on AI becomes entirely performative the moment military prerogatives are invoked.

When it comes to the broader civil sphere, the Digital Services Act (DSA) was theoretically designed to tackle the ideological degradation of the public sphere, a space now almost entirely colonised by American tech giants. However, this regulatory framework fails to grasp the ontological violence of what philosopher Byung-Chul Han describes as Infocracy, a regime where factual discourse is actively replaced by viral, polarised noise.[26] This was well articulated by Pope Leo XIV, who issued a public statement regarding how these systems inherently permeate our mentality and social environments:

“When simulation becomes the norm, it weakens the human capacity for discernment. As a result, our social bonds close in upon themselves, forming self-referential circuits that no longer expose us to reality. We thus come to live within bubbles, impermeable to one another. Feeling threatened by anyone who is different, we grow unaccustomed to encounter and dialogue. In this way, polarization, conflict, fear and violence spread. What is at stake is not merely the risk of error, but a transformation in our very relationship with truth.”[27]

Faced with technology that fundamentally alters the human relationship with truth, the DSA does not challenge the architecture creating these self-referential circuits. Instead, it outsources the mitigation of systemic risks to the exact same platforms whose financial success depends on the proliferation of that very risk by profiting from the destruction of truth.[28]

Furthermore, as the Court of Justice of the European Union (CJEU) ratified in the Schrems II judgment, international data transfer frameworks are functionally impotent as the United States’ CLOUD Act oblige US-based service providers to make data hosted in the EU available to US intelligence agencies anyway.[29]

The Chatcontrol proposal acts as the ultimate vector for techno-authoritarianism as it is aimed at the implementation of Client-Side Scanning (CSS) technologies directly onto citizens’ devices, intercepting private communications before the encryption process even begins. This would completely reverse the presumption of innocence and violate the principle of data minimisation.[30] Although the European Court of Human Rights (ECtHR) explicitly stipulated in Podchasov v. Russia that the deliberate weakening of encryption harms democratic society,[31] EU institutions insist on seeking mass surveillance legislation. Also, Neziha Akalin and Alberto Giaretta warn that the normalisation of Chatcontrol in mobile phones will inevitably pave the way to Robotcontrol in domestic “Internet of Things” (IoT) devices, dictating the absolute end of the sanctuary of the home.[32]

Simultaneously, the Digital Omnibus legislative package acts as a perfect Trojan horse by utilising the pretext of “administrative simplification” to boost AI competitiveness as it actively dilutes data protection rules. As noted by Douwe Korff, Digital Omnibus legalises the unrestricted extraction of European data under the generic pretext of the industry’s “legitimate interests” for commercial AI training, relegating fundamental human rights to mere bureaucratic obstacles.[33]

Observing this deliberate erosion of digital rights alongside the structural dependency on foreign tech giants, the reality of the European predicament becomes clear. To frame this crisis exclusively as a product of United States’ imperialism would be to indulge in a fallacy of European innocence, while the reality is that the EU has been an active accomplice in the construction of its own algorithmic cage.

The (avoidable) tragedy of the digital tenant

Because the EU operates under the principle of legal harmonisation, the structural vulnerabilities engineered in Brussels inevitably cascade into the domestic spheres of the Member States. Portugal serves as a prime case study of this top-down uncritical techno-solutionism, where national modernisation efforts collide head-on with the reality of infrastructural dependency.

The contemporary neoliberal consensus dictates that states should not worry about this dependency, asserting that technology is inherently neutral and that the market will self-regulate. The material reality, however, is diametrically opposed. Today, the critical services that keep Portuguese society functioning, such as schools, hospitals, the justice system, social security, and the public administration itself, depend entirely on data flows and computer systems hosted on infrastructures controlled by foreign Big Tech companies.

When the Portuguese government promotes modernisation policies such as the National Digital Strategy that establishes the goal of implementing digital twins to monitor urban life in order to transition cities to the status of Smart Cities,[34] it necessarily invites home the architecture of imperialist control. This dependency is tangible and carries stratospheric costs. Every year, the Portuguese State spends nearly 70% of its software licensing budget (between 150 and 200 million euros) on a single American company: Microsoft. It is public money exported in exchange for systemic dependency. Handing over the logistical and civil mapping of the country to foreign corporations results in a concentration of political and economic power outside any effective democratic control, effectively outsourcing the State’s capacity to govern itself. In this scenario of structural fragility, the State assumes the condition of a mere digital tenant.

The counter-offensive

While the current trajectory leans heavily toward algorithmic captivity, it is not an inescapable fate. Stephen Holmes and Cass Sunstein assert that “all rights are positive”, meaning that fundamental rights are hollow without the active institutional and financial investment of the State to protect them.[35] In this instance, the right to digital privacy cannot be secured merely by passing regulations as it demands that the State actively spend financial resources to build and maintain the physical infrastructure necessary to enforce it.

To shield the EU from this techno-authoritarian drift and break free from infrastructural dependency, our defence must operate both on legal and material levels:

Regarding the legal level, the defence lies in the judicial authority of the CJEU. In December 2025, the CJEU paved the way for the full justiciability of Article 2 of the Treaty on European Union (TEU) in the Commission v. Poland judgment (C-448/23).[36] By deciding that the values enshrined in Article 2 TEU, such as respect for human dignity, freedom, democracy, equality, the rule of law, and human rights, are not mere political guidelines but “legally binding and enforceable obligations,” the Court cemented the primacy of EU law against autocratic drift. This ruling grants civil society the concrete legal mechanism to systematically challenge and invalidate predatory surveillance legislation like Chatcontrol or the Digital Omnibus by invoking their constitutional incompatibility with European values.[37] However, the ruling of the law remains insufficient against American corporate giants if the EU does not build its own physical infrastructure.

Naturally, achieving technological sovereignty overnight is a logistical impossibility given that one cannot simply unplug from Microsoft or AWS tomorrow without paralysing business, civil administration and, consequently, everything else. Transitioning from these monopolistic fiefdoms to sovereign systems demands the imposition of the systemic interoperability proclaimed by Cory Doctorow to mitigate artificial switching costs and vendor lock-in.[38] By legally forcing closed American platforms to communicate seamlessly with third-party European systems, the EU can break open these so-called “walled gardens” and allow public administrations to safely migrate to sovereign clouds without risking operational collapse during the transition.

In a broader sense, to solve a crisis engineered by the neoliberal consensus, the EU cannot rely on the very ideological tools that built its cage. The defence on the material level requires a radical shift in Europe’s economic and industrial strategy. Escaping the trap of the digital tenant requires abandoning the dogmatic belief that the free market will organically resolve Europe’s infrastructural dependency. Here, the theoretical framework provided by Paul Cockshott and Allin Cottrell regarding cybernetic economic planning gives us some clues. Their thesis asserts that modern computational power allows for highly efficient, deliberate economic planning that overtakes the blind and often monopolistic forces of the free market.[39]

However, computational planning alone is insufficient without bold structural investment. This vision goes hand-in-hand with Mariana Mazzucato’s thesis on the “Entrepreneurial State”, which demonstrates that in order to achieve major technological breakthroughs, the State must act as a proactive risk-taker and market-creator.[40] Applied to the current European crisis of technological sovereignty, this means that the EU must stop waiting for a domestic equivalent to Silicon Valley to miraculously emerge through private venture capital. Instead, under this paradigm, the EU engages in deliberate, large-scale planning through the injection of massive public capital to purposefully engineer a native ecosystem of hardware and open-source software from the ground up.

To properly overcome this crisis, the EU must acknowledge its own complicity. By embedding military exemptions into crucial regulations, by entrusting the public sphere to monopolies, and actively pursuing mass surveillance with proposals like Chatcontrol and Digital Omnibus, the EU is facilitating its own captivity. Furthermore, by outsourcing the critical functions of civil administration to foreign Big Tech, Member States are progressively abandoning their autonomy, assuming the fragile condition of mere “digital tenants” renting their capacity to function.

The safeguarding of human dignity resides in rejecting the inevitability of this techno-authoritarian drift. Democracy will survive only if Law masters Technology, and not the other way around. In the 21st century, full emancipation demands the recognition that technological sovereignty is a non-negotiable condition of democracy itself.

As Shoshana Zuboff puts it, “How did they get away with it?”[41]

[1] European Data Protection Supervisor (EDPS), “European Commission’s use of Microsoft 365 infringes data protection law for EU institutions and bodies,” Press Release, March 11, 2024, https://www.edps.europa.eu/press-publications/press-news/press-releases/2024/european-commissions-use-microsoft-365-infringes-data-protection-law-eu-institutions-and-bodies_en.

[2] European Data Protection Supervisor (EDPS), “European Commission brings use of Microsoft 365 into compliance with data protection rules for EU institutions and bodies,” Press Release, July 28, 2025, https://www.edps.europa.eu/press-publications/press-news/press-releases/2025/european-commission-brings-use-microsoft-365-compliance-data-protection-rules-eu-institutions-and-bodies_en.

[3] Claudie Moreau, “EU’s privacy supervisor clears Commission’s use of Microsoft,” Euractiv, July 28, 2025, https://www.euractiv.com/news/eus-privacy-supervisor-clears-commissions-use-of-microsoft/.

[4] Anthropic, “Introducing Project Glasswing,” April 7, 2026, https://www.anthropic.com/glasswing.

[5] “The Guardian view on Anthropic’s Claude Mythos: when AI finds every flaw, who controls the Internet?,” The Guardian, April 23, 2026, https://www.theguardian.com/commentisfree/2026/apr/23/the-guardian-view-on-anthropics-claude-mythos-when-ai-finds-every-flaw-who-controls-the-internet.

[6]   Kali Hays and Lily Jamali, “White House and Anthropic Hold ‘Productive’ Meeting Amid Fears Over Mythos Model,” BBC News, April 2026, https://www.bbc.com/news/articles/cyv10e1d13po.

[7] Rachel Metz, “Anthropic’s Mythos model is being accessed by unauthorized users,” Bloomberg News, April 21, 2026, https://www.bloomberg.com/news/articles/2026-04-21/anthropic-s-mythos-model-is-being-accessed-by-unauthorized-users.

[8] Sanya Mansoor, “Anthropic’s AI model Claude gets popularity boost after US military feud,” The Guardian, March 2, 2026, https://www.theguardian.com/technology/2026/mar/02/claude-anthropic-ai-pentagon.

[9] Aman Priyanshu, Yash Maurya, and Zuofei Hong, “AI Governance and accountability: an analysis of Anthropic’s Claude,” arXiv preprint, arXiv:2407.01557v1 (May 2, 2024), https://arxiv.org/abs/2407.01557.

[10] Mansoor, “Anthropic’s AI model Claude gets popularity boost.”

[11] Dario Amodei, “Full transcript of our interview with Anthropic CEO Dario Amodei,” interview by Jo Ling Kent, CBS News, February 28, 2026, https://www.cbsnews.com/news/anthropic-ceo-dario-amodei-full-transcript/.

[12] Shoshana Zuboff, The age of surveillance capitalism: the fight for a human future at the new frontier of power (New York: PublicAffairs, 2019).

[13] Patrícia Alexandra Gonçalves Névoa, “Capitalismo de Vigilância: o Caso de Palantir Technologies Inc. em análise (2001-2023)”, (Master’s diss., University of Minho, 2024).

[14] Patrícia Alexandra Gonçalves Névoa, “Capitalismo de Vigilância: o Caso de Palantir…”.

[15] More Perfect Union, “I worked at Palantir: the tech company reshaping reality,” April 17, 2025, YouTube video, 10:41, https://www.youtube.com/watch?v=DZ95Gmvg_D4.

[16] Steven Levy, “What Lt. Col. Boz and Big Tech’s enlisted execs will do in the army,” Wired, June 20, 2025, https://www.wired.com/story/what-lt-col-boz-and-big-techs-enlisted-execs-will-do-in-the-army/.

[17] Andy Beckett, “Accelerationism: how a fringe philosophy predicted the future we live in,” The Guardian, May 11, 2017, https://www.theguardian.com/world/2017/may/11/accelerationism-how-a-fringe-philosophy-predicted-the-future-we-live-in.

[18] Philip Rucker and Robert Costa, “Bannon vows a daily fight for ‘deconstruction of the administrative state’,” The Washington Post, February 23, 2017, https://www.washingtonpost.com/politics/top-wh-strategist-vows-a-daily-fight-for-deconstruction-of-the-administrative-state/2017/02/23/03f6b8da-f9ea-11e6-bf01-d47f8cf9b643_story.html.

[19] Palantir Technologies (@PalantirTech), “The limits of soft power… have been exposed,” X (formerly Twitter), April 18, 2026, https://x.com/PalantirTech/status/2045574398573453312.

[20] Filippo Tommaso Marinetti, “The futurist manifesto,” Le Figaro, February 20, 1909.

[21] Sheera Frenkel, Paul Mozur, and Adam Satariano, “Mutually automated destruction: the escalating global A.I. arms race,” The New York Times, April 12, 2026, https://www.nytimes.com/2026/04/12/technology/china-russia-us-ai-weapons.html.

[22] International Committee of the Red Cross (ICRC), Autonomy, Artificial Intelligence and Robotics: Technical Aspects of Human Control (Geneva: ICRC, 2019).

[23] Scott Robbins, “The many meanings of meaningful human control,” AI and Ethics 4 (2024): 1377–1388, https://doi.org/10.1007/s43681-023-00320-6.

[24] Bruno Castro, “Europa: entre a passividade tecnológica e a soberania de defesa que tarda em chegar,” Líder, March 13, 2026, https://sapo.pt/artigo/europa-entre-a-passividade-tecnologica-e-a-soberania-de-defesa-que-tarda-em-chegar-69b3b62d3d53858f4452f4f4.

[25] European Union, Regulation (EU) 2024/1689 of the European Parliament and of the Council (AI Act), Official Journal of the European Union, July 12, 2024.

[26] Byung-Chul Han, Infocracy: digitalization and the crisis of democracy (Cambridge: Polity Press, 2022).

[27] Pope Leo XIV (@pontifex), “Artificial Intelligence systems increasingly shape and permeate our mentality…,” X (formerly Twitter), April 17, 2026, https://x.com/Pontifex/status/2045208457440059414.

[28] European Union, Regulation (EU) 2022/2065 (Digital Services Act), October 27, 2022.

[29] Judgment CJEU Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (Schrems II), 16 July 2020, case C-311/18, ECLI:EU:C:2020:559.

[30] Council of the European Union, Proposal for a Regulation laying down rules to prevent and combat child sexual abuse (Chatcontrol), Interinstitutional File 2022/0155 (COD), November 13, 2025.

[31] Judgment ECtHR Podchasov v. Russia, 13 February 2024, application no. 33696/19.

[32] Neziha Akalin and Alberto Giaretta, “From chat control to robot control: the backdoors left open for the sake of safety,” arXiv preprint, 2026.

[33] Douwe Korff, “Digital Omnibus: proposed changes to the definition of personal data in the EU GDPR analysed in the light of the SRB and earlier CJEU Judgments”, 2025, https://dx.doi.org/10.2139/ssrn.5891404; European Commission, Proposal for a Regulation (Digital Omnibus), COM(2025) 837 final, November 19, 2025.

[34] República Portuguesa, Estratégia Digital Nacional (2024), 76.

[35] Stephen Holmes and Cass R. Sunstein, The cost of rights: why liberty depends on taxes (New York: W. W. Norton & Company, 1999).

[36] Judgment CJEU European Commission v. Republic of Poland, 18 December 2025, case C-448/23, ECLI:EU:C:2025:975.

[37] Gonçalo Martins de Matos, “Glimpsing the tunnel exit: the justiciability of Article 2 TEU and the future of the European Union,” The Official Blog of UNIO, April 3, 2026, https://officialblogofunio.com/2026/04/03/glimpsing-the-tunnel-exit-the-justiciability-of-article-2-teu-and-the-future-of-the-european-union/.

[38] Cory Doctorow, The Internet con: how to seize the means of computation (London: Verso Books, 2023).

[39] W. Paul Cockshott and Allin F. Cottrell, Towards a new socialism (Nottingham: Spokesman, 1993).

[40] Mariana Mazzucato, The entrepreneurial state: debunking public vs. private sector myths (London: Anthem Press, 2014).

[41] Zuboff, The age of surveillance capitalism.

Picture credit: by Google DeepMind on pexels.com.

The post Europe’s universities face mounting financial and political challenges first appeared on LSE European Politics.

Catalin Gabriel Stanescu, Associate Professor of Private Law at the University of Southern Denmark. His research focuses on consumer law, digital regulation, financial vulnerability, and the political economy of private law.

Photo credit: David Dixon, via Wikimedia Commons

The DSA Observatory recently published a thoughtful post on the General Court’s judgment in Amazon v Commission, which rejected Amazon’s argument that it should not have been listed as a ‘very large online platform’ (VLOP) under the Digital Services Act (DSA), and, in doing so, critiqued a working paper of mine on ‘systemic risk’ under the Digital Services Act. For me, it was a valuable engagement. The judgment does influence how arguments about systemic risk under the DSA can be framed. However, it does not support the broader claim that a financial-law analogy about the definition of ‘systemic risk’ has been displaced. When read carefully, Amazon takes a narrower approach: it rejects one specific application of the financial analogy, while preserving a more structural comparison between financial supervision and the DSA’s systemic-risk regime.

My paper’s central claim was not that the DSA should be read as banking law in another guise. Nor was it that systemic risk under the DSA must be defined by interbank contagion or by the existence of a closed system of interconnected undertakings. What I proposed was that the DSA relocates into digital governance a supervisory rationality already familiar from EU financial law: a mode of regulation built around ex ante risk assessment, differentiated obligations for systemically significant actors, and a recalibrated proportionality analysis where institutions are acting under conditions of complexity, uncertainty, and potentially large-scale harm. That remains, in my view, the right level at which to compare the two regimes.    

The General Court’s judgment, however, establishes an important limitation. Amazon contended that marketplaces could not generate “systemic” risks because, unlike financial institutions, they do not form part of an interconnected system. In paragraph 69, the Court summarized Amazon’s submission that marketplaces are not interdependent, do not constitute a system, and therefore cannot give rise to systemic risks in the manner of financial institutions. The Court rejected this argument in paragraph 70. It held that the DSA is not concerned with systemic risks posed by marketplaces due to their participation in a “system” in that sense. Instead, the DSA aims to mitigate systemic risks to society as a whole, insofar as those risks may affect a significant portion of the European Union’s population. Consequently, the Court found that the independence of marketplaces from one another does not prevent them from generating some of the risks identified in Article 34(1) DSA (ie the risks which VLOPs are obliged to assess).

This is a significant point. Under the DSA, interconnectedness in the financial-law sense is not a necessary criterion for defining systemic risk. Instead, the Court places decisive emphasis on reach, scale, and disproportionate societal impact. This approach is evident not only from paragraph 70, but also from the Court’s reliance on recitals 75 and 76 DSA, which highlight the reach of very large online platforms, their role in facilitating public debate and economic transactions, and the potential for disproportionate impact once they reach a significant share of the Union’s population. The same reasoning appears later when the Court notes that marketplaces above the Article 33 DSA threshold for designating VLOPs may pose risks to society that differ in scale and impact from those posed by smaller platforms. On this point, the Observatory’s interpretation is correct: Amazon shifts the analysis away from a narrow contagion model.

What does not follow, however, is the stronger conclusion that the judgment rejects the relevance of financial systemic-risk thinking altogether. The Observatory interprets Amazon as attributing a more autonomous meaning to systemic risks under the DSA and as introducing a break with the reliance on financial systemic-risk regulation as a reference point. I believe this interpretation overstates the case. The Court rejected Amazon’s specific application of the analogy, but did not assert that the DSA lacks structural affinity with systemic-risk governance as developed in other areas of EU law.

This distinction is important because the DSA’s regime retains a recognizably systemic-risk structure.

First, the regime is actor-specific. In the present context, Articles 34 to 43 DSA apply only to platforms designated as VLOPs, while more broadly it also includes very large online search engines (VLOSEs). The Court accepts this differentiation as resting on the legislative judgement that platforms of such scale may generate risks with a disproportionate impact in the Union. In paragraphs 52 and 53, the Court summarizes the obligations imposed on VLOPs: risk assessment, potential adaptation of service design, independent audit, profiling-free recommender options, advertising repositories, data access for researchers, internal compliance functions, transparency reports, and supervisory fees. In paragraphs 63 to 65 and 77, the Court accepts the legislative premise that VLOPs may cause societal risks that differ in scope and impact from those caused by smaller platforms, and that marketplaces above the threshold may give rise to the risks listed in Article 34(1). This is not merely a semantic distinction regarding the meaning of what qualifies as “systemic.” It is a sorting mechanism that imposes heightened obligations on actors deemed systemically significant due to their scale. This feature is central to the financial-law genealogy discussed in my paper.

Second, the regime is preventive. The obligations upheld in Amazon are not limited to sanctioning completed infringements, but are intended to identify, assess, and mitigate risks before harm occurs. The Court’s summary of Articles 34 to 43 confirms this preventive orientation. This is why the financial-law comparison remains relevant at the level of supervisory logic. In both contexts, the law acts proactively rather than waiting for collapse or completed harm before intervening. My paper identified this preventive approach as a central element of systemic-risk governance in EU law, both in finance and under the DSA. Nothing in Amazon contradicts this analysis.

Third, and most importantly, Amazon strongly supports the argument that systemic-risk governance is accompanied by a relatively flexible form of proportionality review. The Court explicitly recognizes that Article 33(1), by subjecting VLOPs to Articles 34 to 43, interferes with the freedom to conduct a business under Article 16 of the Charter, as these obligations may entail significant costs, substantial organizational effects, and complex technical solutions. Nevertheless, the Court upholds this interference because the legislature possesses broad discretion when making political, economic, and social choices and undertaking complex assessments. In this context, only measures that are “manifestly inappropriate” can be deemed unlawful. The Court further emphasizes that the freedom to conduct a business is not absolute and must be balanced with the objective of ensuring a high level of consumer protection under Article 38 of the Charter. It concludes that the legislature did not commit a manifest error in treating marketplaces above the threshold as capable of generating the risks identified in Article 34(1), and that Article 33(1) DSA was not shown to be manifestly inappropriate for achieving the Regulation’s objectives.

This aspect of the judgment is at least as significant as paragraph 70. Even if one accepts that DSA systemic risk is not linked to interconnectedness in the financial sense, the Court’s reasoning still supports a model of anticipatory, differentiated, and intrusive supervision, constitutionally sustained through broad institutional discretion and limited judicial review. This is precisely the dimension of systemic-risk governance that my paper sought to highlight. EU financial-law jurisprudence exhibits the same pattern: preventive intervention, differentiated obligations for systemically significant actors, and a proportionality review tailored to technical complexity and predictive judgment. At this level, the comparison is not only valid but also illuminating.

The core disagreement with the Observatory is not whether Amazon alters the analytical landscape –it does – but rather concerns the appropriate level of abstraction for comparison. If the argument were that DSA systemic risk merely replicates bank-contagion logic, the judgment would be difficult to defend. However, that was not my position. My argument is that the DSA adopts a macroprudential style of governance: it identifies a subset of actors whose scale enables them to cause significant harm, subjects them to enhanced due diligence and supervision, and justifies these obligations through a preventive public-interest rationale. Amazon does not undermine this claim, it only refines it.

One further point should be noted. The judgment did not resolve all interpretive questions regarding Article 34 DSA. Specifically, it did not explicitly determine whether the list of risks to be assessed, set out in Article 34(1), is exhaustive. While the Observatory may reasonably infer from certain passages that this is the case, such an inference does not constitute a definitive holding. The repeated references to the risks “referred to in Article 34(1)(a) to (d)” are consistent with the narrower view that these were the risks relevant to the case at hand. On this issue, a cautious approach remains advisable.

In my view, the most accurate reading of Amazon is as follows. The judgment narrows the conceptual overlap between financial and digital systemic risk by rejecting interconnectedness as a necessary definitional criterion under the DSA. However, it reinforces the structural overlap at the level of governance. Under the DSA, systemic risk continues to justify a regime that is differentiated, preventive, supervisory, and constitutionally sustained through a broad margin of institutional discretion. Therefore, the financial analogy I proposed remains useful, provided it is applied at the appropriate level of abstraction. The DSA is not banking law for platforms, but it is law crafted in a distinctly macroprudential register.

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The post Europe’s concentric circles – the European Political Community and the value of flexible cooperation first appeared on LSE European Politics.

Vitória Menezes Sanhudo (master’s student in European Union Law at the School of Law of University of Minho)

The harmonisation of corporate sustainability disclosure criteria has become increasingly relevant as a guarantee of a level playing field among companies and for the efficiency of the Internal Market. In this context, Directive (EU) 2022/2464 (CSRD) amends previous provisions, aiming to promote a more standardised sustainability reporting obligation, using the double materiality principle (DMP). It is deemed as necessary to analyse the conceptual evolution of materiality, from its origin in accounting to double materiality (enshrined in the CSRD Directive), its enforcement in the Directive under consideration, to evaluate the benefits and challenges of this dual perspective from a theoretical approach and, subsequently, to assess it from a more practical viewpoint, taking into account conclusions that can already be drawn from its introduction in the CSRD Directive.

The research question is as follows: in what way does the evolution of materiality in sustainability reporting prove to be positive, particularly with the incorporation of the DMP in the CSRD?

The concept of materiality

For a complete understanding of the CSRD Directive and the DMP, firstly, it is crucial to establish the conceptual basis that underpins them: materiality as a legal principle. The concept of material information emerged in the field of accounting at the beginning of the 20^th century, and its importance and scope have expanded over the years. In the EU, the Accounting Directive[1] is the central instrument for corporate financial reporting. Generally, all definitions formulated imply that information is material when its omission or misrepresentation can influence the economic decisions of the users that this concept aims to inform and benefit. Naturally, the definition of materiality varies according to the objective pursued by the reporting.[2]

There are two essential perspectives regarding what is relevant for corporate sustainability: that which protects shareholders and that which protects stakeholders. The former is based on the idea that a company is only responsible to its investors and should report on matters that may affect them; the latter advocates that reporting should concern the external impact that the company has or may have on stakeholders, those who have an interest in it, can be affected by it, or affect it (a similar orientation can translate into the need to consider environmental or social issues, for example).[3] The first conception can be associated with the concept of financial materiality (outside-in), which, according to the European Financial Reporting Advisory Group (EFRAG), considers the risks and opportunities for investors that a sustainability matter may entail; the second refers to impact materiality, which EFRAG defines as the impact a company may have on society or the environment regarding a particular issue (inside-out). Thus, the way legal instruments define materiality reveals a preference for one of the aforementioned philosophies.^[4]

The DMP, which represents the central concept of this study, encompasses both perspectives above, aligning their respective objectives. It arises from the idea that sustainability reporting becomes richer and more reliable when both financial materiality and impact materiality are taken into account. In this vein, it is necessary to address the CSRD Directive – where it has been established in a clear and binding manner – and its background.

The CSRD Directive: background and enshrinement of the DMP

In the 1990s, as Environmental, Social, and Governance (ESG) matters began to gain prominence, several developments emerged that introduced sustainability reporting standards. Thus, corporate sustainability reports began to be produced, albeit voluntarily, under the auspices of the Global Reporting Initiative (GRI – 1997), the Sustainability Accounting Standards Board (SASB), the Climate Disclosure Standards Board (CDSB), the International Sustainability Standards Board (ISSB), among other initiatives. The concept of materiality, as already mentioned, varies among instruments. For example, GRI focuses on impact materiality (inside-out), while ISSB standards refer to financial materiality (outside-in).[5]

In the EU regulatory sphere, it is important to first address the Accounting Directive, which harmonised the financial statements of EU companies’ management reports and was amended in 2014 by Directive NFRD,[6] which implemented, for a group of public-interest entities (broadly, listed companies with more than 500 employees), the obligation to also disclose non-financial information. It can be understood that a legislative trend began here towards considering corporate sustainability issues. However – and this was the justification for the new CSRD Directive[7] in 2022 (which amended the NFRD Directive) – the obligation provided for in the NFRD Directive fell short of expectations, as it allowed companies considerable discretion, not imposing explicit rules and processes to guide sustainability reports.[8]

The NFRD Directive aimed to introduce a sustainability reporting obligation for companies, through Article 19a, which was added to the Accounting Directive. However, the wording of the article (“information to the extent necessary for an understanding of the undertaking’s development, performance, position and impact of its activity”) leaves room for doubt regarding the concept of “impact.” In 2019, the Commission issued (non-binding) guidelines[9] that clarified this concept, defining it as the impact on society and the environment. It can be said that the NFRD Directive introduced a new perspective on materiality, clarified and formally identified as double materiality in the Commission’s guidelines[10] (as it required companies to report on both financial materiality and impact materiality). However, it lacked densification and enforceability. Essentially, it stipulated that companies should include in their management report sufficient information to understand the financial effects (on the company) and impact effects (on the external environment) of the listed sustainability matters, without imposing a standardized process or rules. And having nothing to report regarding the matters, companies would simply have to explain why – comply or explain.[11][12]

In this regard, given the lack of improvement in the reports produced under this Directive between 2014 and 2019[13] – and in line with the objectives arising from the “Action Plan: Financing Sustainable Growth”[14] (2018, updated in 2021) and the Green Deal (2019),[15] namely achieving climate neutrality by 2050 and, specifically here, “ensuring that across the EU, investors, insurers, companies, cities and citizens are able to access data and create tools to integrate climate change into their risk management practices”[16] – the need for a more efficient approach to non-financial reporting began to affirm itself. In December 2020, the European Parliament, through a Resolution on sustainable corporate governance, welcomed the Commission’s commitment to revise the Accounting Directive and affirmed the need to create a more demanding regime that mandates the disclosure of both financial and non-financial information. It demonstrated the objective to extend the obligation to include a wider range of companies and introducing mandatory auditing.[17]

Thus, alongside a movement towards harmonizing reporting standards at the international and EU levels,[18] in April 2021, a proposal to amend the NFRD Directive emerged, resulting in the adoption of the CSRD Directive in December 2022.

CSRD Directive: legal basis, implementation, scope, and objectives

The legal basis of the CSRD Directive rests on Articles 50 and 114 of the TFEU, which safeguard respect for freedom of establishment in the EU and the approximation of Member States’ legislation concerning the establishment and functioning of the internal market, taking into account the objectives set out in Article 26 of the TFEU. The latter defines the European Union’s internal market as a borderless economic area, based on the free movement of goods, services, persons, and capital, which presupposes measures to ensure the efficient functioning of the internal market by eliminating disparities between national regimes that could harm companies’ competitiveness. It is within this framework that the CSRD Directive emerges, whose main purpose is to harmonize and standardize the disclosure of ESG information, enhancing the quality and comparability of reported data. Recital 16 of the CSRD Directive emphasizes that the fragmentation of national rules harms comparability, justifying Union intervention to create standardizing rules. In this way, the CSRD Directive acts directly on the functioning of the internal market, promoting a level playing field and reducing information asymmetries, ensuring that investors, consumers, and stakeholders can make more informed economic decisions.[19]

This Directive was adopted with the purpose of expanding the scope of the NFRD and making obligations standardized, comparable, and audited. Thus, it unequivocally enshrines the DMP with well-defined reporting standards. It clearly imposes that companies must report how sustainability matters affect the company, the risks and opportunities they create (outside-in), and the extent to which the company’s activity affects the environment and society (inside-out).[20] The main innovations of the CSRD compared to the NFRD are as follows: it broadens its scope (more companies), follows detailed standards in sustainability reporting that use the DMP to define what should be reported, and creates an obligation for external audit of reports to ensure their reliability and comparability.[21]

What should be reported is detailed in Article 19a, paragraphs 1 to 3, of the CSRD, which can be summarized as the impacts a company may have on the environment and society, the risks and opportunities that sustainability issues may entail for the company, and the policies and incentive schemes for sustainability that it practices. However, the reporting obligations are described in greater detail in the European Sustainability Reporting Standards (ESRS), published by EFRAG.[22] The ESRS consist of 12 standards: the first two, general in nature, establish basic principles and define topics to be addressed regardless of their materiality. The remaining standards cover various aspects within ESG, defining sub-criteria for each of these topics that must be addressed if they are material.[23]

Implementation of the DMP under the CSRD Directive

It is important to understand how this materiality assessment operates. As indicated by EFRAG in its guidelines on the implementation of the CSRD Directive, the ESRS do not mandate a specific method of assessment. Since a single process would not serve all types of companies or economic activities with different characteristics, it encourages corporations to create a method that suits them and ensures the sufficiency of the required reporting.[24] Nevertheless, it offers a four-step model for assessment: 1) understanding the context; 2) identification of actual and potential IROs (impacts, risks, and opportunities) related to sustainability issues; 3) assessment and determination of material IROs; and 4) reporting. Step 1) consists of outlining the scope in which the company operates, its products, strategy, value chain, stakeholder interests, and the legal and regulatory framework in which the company is situated. In step 2), after establishing the “context,” it becomes easier to define which issues and topics are relevant. The essential here is to identify all ESG-related issues that are relevant, even if they are not part of the ESRS topics. This clarifies the purpose of producing reliable and useful information and a certain devotion to the DMP, as any ESG issue considered material (impact or financial) in the company’s context must be reported. There is a responsibility, on the part of companies, to identify important issues that the established topics do not expressly address.[25] In step 3), the selected issues identified as IRO are evaluated in order to determine whether they are material or not. The DMP requires the classification of any issue as material if it demonstrates materiality at either level (financial materiality or impact materiality). To determine this materiality, companies must establish quantitative or qualitative thresholds. For example, a quantitative threshold would be to define an issue as material if it affects more than 5% of annual profit, and a qualitative one would be to consider an issue as material if it is identified by more than 20% of stakeholders as concerning.[26][27]

Strengths and challenges in the implementation of the DMP

Subsequently, it is necessary to evaluate the DMP within the scope of sustainability reporting. The purpose is to identify the advantages and challenges resulting from its clear and prescriptive enshrinement in the CSRD Directive.

One of the advantages is the fight against greenwashing[28] and information overload. Voluntary reports, as they did not impose rules as clear as the CSRD Directive (and even some definition already indicated in the NFRD Directive), ended up allowing too much strategically chosen information to be disclosed, which led to a lack of clarity in reporting and greenwashing, as companies only reported information convenient to their reputation. This ultimately sabotaged the central purpose of producing truly useful reports for stakeholder decision-making.[29] As predicted by some authors in 2014, the best way to avoid this practice would be to compromise with greater transparency regarding what is considered material and why.[30] It can be concluded that, already in the NFRD Directive, and later with better-defined criteria in the CSRD Directive on how to assess materiality and explain that assessment, there has been progress in combating greenwashing.[31]

The DMP also demonstrates its virtue by adapting to different circumstances. Materiality is, naturally, dynamic, and it aims to identify information that, in a given period, for a given company, is sufficiently important to be reported. However, these circumstances are subject to change, and therefore their materiality may not be evident at one moment but may emerge at another. Thus, if materiality is defined in a regulatory instrument in an outside-in perspective, it may mean that, for example, stakeholders’ opinions regarding an environmental impact are not considered relevant unless they represent a risk or opportunity for the company. In this vein, the DMP represents an advancement compared to single materiality (whether financial or impact materiality), as it ensures that information is deemed material whether it is more relevant to shareholders or to stakeholders. It thus keeps pace with circumstances, without ignoring relevant changes in the opinion and behaviour of interested parties or investors. In this way, the DMP embraces the very dynamic essence of materiality, covering it in both matters of inside-out and outside-in impact.[32]

Regarding the challenges in applying the DMP specifically within the CSRD Directive, two main ones can be identified. The first results from the ambiguity and complexity of implementing double materiality. Although attempts have been made to clarify the procedure, such as the EFRAG guidelines, analysed earlier, the materiality assessment process remains largely non-homogeneous due to the lack of definition of this concept. This is particularly true for impact materiality, which requires considering different stakeholders – such as employees, customers, ecosystems – leading to the analysis of sometimes conflicting perspectives on what is or is not relevant.[33] The ambiguity of the concept, combined with the freedom companies have in assessing materiality, results in heterogeneous assessment processes, which can undermine the comparability of reports. In this regard, an analysis of the EURO STOXX 50 companies concluded that 34% of companies explained their materiality assessment process vaguely or unclearly, which also contributes to lower trust in its content among the report’s users.[34] The complexity of this assessment is a problem, as it requires extensive data collection. This involves having an organizational structure that collects, analyzes, and draws conclusions from a large volume of data, which not all companies possess. Faced with this burden, companies tend to report the minimum required (sometimes not the most relevant or essential), thus subverting one of the Directive’s purposes, which is to encourage companies to use these assessments as a work tool on internal aspects and to define business strategies in line with the principle of sustainability. Thus, it ends up becoming a purely compliance-driven process, with no value creation or strategy defining focus, which is not ideal. To address these issues, it is proposed to implement robust criteria for impact assessment and sector-specific processes that take into account the company’s branch of industry.[35]

The second challenge, already evidenced in the previous one, is the lack of data, in general, and particularly concerning the value chain. The difficulty in obtaining it becomes more obvious with regard to the value chain, whether in inbound logistics (suppliers) or outbound logistics (distributors), due to their extensive nature. As a solution, collaborative programs among suppliers are suggested, as they can to greater transparency in the value chain, and a phased approach to data collection, focusing initially, for example, on suppliers whose countries are referenced in social and environmental risk databases.[36]

DMP: Overview

As mentioned, the DMP represented innovation in sustainability reporting, first introduced in the NFRD Directive but enshrined in the CSRD Directive. Although the latter has already become applicable for the financial year of 2024 to a group of large companies (wave one), which had to report in 2025, it is not yet possible to draw deep conclusions about the specific use of the DMP in this context. However, it is pertinent to address some amendments that were proposed within the scope of the Omnibus I Package (February 2025). In 2024, the European Council, relying on reports by Enrico Letta and Mario Draghi, called for a priority on regulatory simplification, reinforced by the Budapest Declaration, which advocated for a clearer and smarter regulatory framework and a substantial reduction in administrative and reporting burdens, especially for small and medium-sized enterprises (SMEs). The Omnibus Package includes modifications to various EU legislative instruments on sustainability, including the CSRD Directive. It has already produced effects as it postponed the reporting obligation for smaller companies and made the ESRS criteria more flexible for wave 1 companies, so as not to oblige them, in the coming years, to report forecasts regarding the financial impacts of certain environmental risks.[37]

Meanwhile, in December 2025, the European Council and Parliament reached a political agreement on further simplification in these matters, in order to relieve companies of the unbearable burden that sustainability instruments may cause and which have already been identified. The scope of the CSRD Directive is expected to be reduced, applying only to companies representing a very considerable economic weight.[38] The amendments introduce a value chain cap, which limits information requests to companies in the value chain with up to 1000 employees, provide for the simplification of the ESRS (with expected adoption in 2026), and eliminate sector-specific obligations. This is relevant to the understanding of the DMP’s role, because, despite the flaws already found in the CSRD Directive, namely the excessively broad scope (which ended up covering companies without the preparation and capacity needed to conduct such detailed reporting), the complexity of the ESRS requirements, among others, the DMP remains untouched. It may even turn out, with these changes, that some of the issues associated with the DMP, such as the lack of definition, the complexity of the assessment, and the excessive burden of unnecessary data, are mitigated or prove to be less harmful as a result of these adjustments. This is because companies with less capacity will no longer be obliged to report, and the simplified ESRS requirements may contribute to a simpler materiality assessment or, at least, allow companies to focus only on the most important criteria.

Overall, the prevailing opinion on the DMP seems to be that it represents an added value, despite the difficulties it may entail, as beyond compliance, it also represents a company’s reflection on itself, which can contribute, if done correctly, to defining business strategies and positioning the company in a way that is beneficial for economic growth alongside the sustainability objectives that the EU aims to pursue.[39] Materiality is increasingly understood as a strategic concept, and its dual approach helps to meet the current demands and interests of investors and customers who, ever more, take sustainability issues into account in their decision-making processes.[40] The fact that companies report these issues from both an outside-in and an inside-out perspective reinforces stakeholder confidence once it contributes to the company’s transparency and accountability regarding environmental and social issues, which increases credibility and strengthens long-term relationships with investors, consumers, and regulators, who increasingly have a real perception of what a specific company represents and defends.

This view is demonstrated by companies and organizations that have already expressed their opinion that the EU should maintain this provision. A news report published in August 2025 shows that over 300 companies, investors, and organizations have approached the European Commission asking for the DMP provision to be maintained within the scope of the Omnibus amendments, arguing that it is essential for high-quality sustainability data.[41] The CEO of GRI, Robin Hodess, supported this initiative, stating that double materiality strengthens the EU’s competitiveness and allows for comparable and useful reporting for investors and other stakeholders.

As indicated above, these concerns have been addressed and recognized in the Omnibus I proposal, which does not mention the abandonment of the DMP. In this vein, the merits of this principle can be considered significant, despite the issues that may still require attention in the future.

Conclusion

The analysis carried out shows that the DMP represents a significant evolution in sustainability reporting, as it guarantees relevance to both the financial perspective (outside-in) and the impact perspective (inside-out). Its enshrinement in the CSRD Directive has clarified and standardized reporting criteria, ensuring greater comparability and transparency of ESG information. Despite the clear advantages, some challenges persist, such as the ambiguity of the principle, the complexity of the assessment process, the amount of data required, particularly in the value chain, and the heterogeneity of approaches among companies, which can compromise the comparability of reports.

The assessment of the principle’s implementation, taking into account the recent and planned amendments of the Omnibus I Package, indicates that, despite some practical problems, double materiality continues to be an added value. Despite proposing simplified requirements for smaller companies and adapting the ESRS, among other criteria, the amendments lead, ultimately to the reflection on the merits of the DMP as it is maintained intact. This positive assessment of the DMP is also reinforced by the opinions of several companies in the EU and by experts in the field who have advised maintaining this Principle in the Directive.

The DMP proves essential for guiding more informed economic decisions and promoting corporate responsibility. Thus, it can be concluded that the evolution of the concept of materiality to the DMP, with the CSRD, represents a positive development, although its implementation needs to be polished.

[1] Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013.

[2] Måns Dunfjäll, “Materiality in transition: challenges and opportunities in corporate sustainability reporting under the CSRD,” European Journal of Risk Regulation 16, no. 3 (2025): 929, https://doi.org/10.1017/err.2025.10016.

[3] Dunfjäll, “Materiality in transition”, 932.

[4] Dunfjäll, “Materiality in transition”, 932-934.

[5] Christopher Nobes, “From no materiality to double materiality: a long-run conceptual analysis of corporate reporting regulation,” Accounting and Business Research 56, no. 1 (2026): 41–42. doi:10.1080/00014788.2025.2579303.

[6] Directive 2014/95/EU of the European Parliament and of the Council of 22 October 2014.

[7] Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022.

[8] Hélio Paiva Araújo, “Sustentabilidade e mercado financeiro na União Europeia: parâmetros e perspectivas de aplicação,” in Sustentabilidade, governança e integração regional em tempos de crise, ed. Jamile Bergamaschine Mata Diz et al. (Horizonte: Arraes Editora, 2020), 98–99.

[9] European Commission, Communication — Guidelines on Non-Financial Reporting: Supplement on Reporting Climate-Related Information, C/2019/4490, Official Journal of the European Union C 209 (June 20, 2019), accessed December 20, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52019XC0620(01).

[10] Małgorzata Macuda and Katarzyna Kobiela-Pionnier, “The double materiality principle and the sustainability reporting practices of Polish listed companies from the WIG30 Index,” The Theoretical Journal of Accounting 49, no. 2 (2025): 66, https://doi.org/10.5604/01.3001.0055.1487.

[11] Félix E. Mezzanotte, “Corporate sustainability reporting: double materiality, impacts, and legal risk.” Journal of Corporate Law Studies 23, no. 2 (2023): 638. doi:10.1080/14735970.2024.2319058.

[12] On the mentioned issues, see Mezzanotte, “Corporate Sustainability Reporting,” 636–38. Dunfjäll, “Materiality in Transition,” 934.

[13] Dunfjäll, “Materiality in Transition,” 934.

[14] Cf. European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Strategy for Financing the Transition to a Sustainable Economy, COM(2021) 390 final (Brussels, 2021), accessed December 20, 2025, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52021DC0390.

[15] Cf. recitals 1 and 2 of Directive (EU) 2022/2464 (CSRD).

[16] European Commission, Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of the Regions: The European Green Deal, COM(2019) 640 final (Brussels, 2019), 6, accessed December 20, 2025, https://eur-lex.europa.eu/legal-content/PT/ALL/?uri=CELEX:52019DC0640.

[17] Cf. recital 5 of Directive (EU) 2022/2464 (CSRD) and European Parliament, European Parliament Resolution of 17 December 2020 on the Implementation of the Return Directive (2019/2208(INI)), CELEX: 52020IP0362, December 17, 2020, accessed December 20, 2025.

[18] Cf. European Financial Reporting Advisory Group (EFRAG), Proposals for a Relevant and Dynamic EU Sustainability Reporting Standard-Setting: Final Report (2021), accessed December 20, 2025, https://finance.ec.europa.eu/document/download/23a44c64-c980-468c-ad15-ee2ea5e2e83f_en?filename=210308-report-efrag-sustainability-reporting-standard-setting_en.pdf.

[19] Tommaso Michieli, Corporate accountability for climate change in the EU: exploring the interaction and coherence of due diligence obligations (master’s thesis, University of Eastern Finland, 2025), 42–45, https://erepo.uef.fi/server/api/core/bitstreams/d7e10fd3-530f-41d5-9df3-62327d2ab5f8/content.

[20] Macuda e Kobiela-Pionnier, “The double materiality principle”, 64-65.

[21] Mezzanotte, “Corporate sustainability reporting”, 659.

[22] Dunfjäll. “Materiality in transition”, 935.

[23] Cf. PwC Portugal, “Diretiva de Reporte Corporativo de Sustentabilidade (CSRD),” accessed December 20, 2025, https://www.pwc.pt/pt/servicos/auditoria/servicos-sustentabilidade/reporting/csrd-diretiva-reporte-corporativo-sustentabilidade.html.

[24] Cf. EFRAG, EFRAG IG 1: Materiality Assessment Implementation Guidance (May 2024), accessed December 20, 2025, https://www.efrag.org/sites/default/files/sites/webpublishing/SiteAssets/IG%201%20Materiality%20Asse ssment_final.pdf, §§ 63–64.

[25] Cf. EFRAG. EFRAG IG 1, § 11.

[26] Dunfjäll. “Materiality in transition”, 938.

[27] Cf. EFRAG. EFRAG IG 1, pp. 19-25 e Dunfjäll. “Materiality in transition”, 935-938.

[28] Philip Förster, “The double materiality principle (Article 19a NFRD) as proposed by the Corporate Sustainability Reporting Directive: an effective concept to tackle green washing?” in European Yearbook of International Economic Law 2022, ed. Jelena Bäumler et al. (Heidelberg: Springer, 2022), 355, https://doi.org/10.1007/8165_2022_90.

[29] Josef Baumüller and Michaela-Maria Schaffhauser-Linzatti. “In search of materiality for nonfinancial information – reporting requirements of the Directive 2014/95/EU”, NachhaltigkeitsManagementForum 26 (2018): 102. doi:10.1007/s00550-018-0473-z.

[30] Robert G. Eccles and Michael P. Krzus, The integrated reporting movement: meaning, momentum, motives, and materiality (Hoboken: John Wiley & Sons, 2014).

[31] Förster, “The double materiality principle”, 355-357.

[32] Förster. “The double materiality principle”, 357-358.

[33] Dunfjäll. “Materiality in transition”, 938-939.

[34] Chiara Mio, Marisa Agostini e Francesco Scarpa. Sustainability reporting: conception, international approaches and double materiality in action (Cham: Palgrave Macmillan / Springer Nature, 2024), 140.

[35] Dunfjäll. “Materiality in transition”, 939-940.

[36] European Financial Reporting Advisory Group (EFRAG). State of Play as of Q2 2024: Implementation of European Sustainability Reporting Standards (ESRS) — Initial Observed Practices from Selected Companies. July 2024, accessed December 20, 2025, https://www.efrag.org/sites/default/files/media/document/2024-07/EFRAG_ESRS%20initial%20observed%20practices%20Q2%202024%20final%20version.pdf, 18.

[37] European Commission, “Corporate Sustainability Reporting,” Finance – European Commission, last modified December 9, 2025, accessed December 20, 2025, https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en.

[38] European Union companies with more than 1,000 employees and a net annual turnover exceeding €450 million, as well as non-European groups exceeding €450 million in turnover in the EU and having at least one subsidiary or branch in the Union with turnover exceeding €200 million.

[39] EVEA Conseil, “Double materiality under the CSRD: understand, assess, act,” EVEA Conseil (blog), July 25, 2025, accessed December 20, 2025, https://evea-conseil.com/en/news/article/csrd-double-materiality-analysis.

[40] Cornis van der Lugt, María Andérez, and Matt MacFarland, “The State of Double Materiality in Corporate Reporting,” S&P Global Sustainable1, February 12, 2025, accessed December 20, 2025, https://www.spglobal.com/sustainable1/en/insights/special-editorial/double-materiality-is-gaining-traction-in-corporate-reporting.

[41] Gavin Hinks, “EU faces calls to retain ‘double materiality’,” Board Agenda, August 5, 2025, accessed December 20, 2025, https://boardagenda.com/2025/08/05/eu-faces-calls-to-retain-double-materiality/.

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Renan Bendel Vaughan (master’s student in European Union Law at the School of Law of University of Minho and ENDE Research Grant Holder – UMINHO/BIM/2026/40)

Setting the scene: a political moment and a legal gap

The concept of hybrid threats has become one of the most frequently invoked analytical categories in contemporary European discourse in matters of security. Since its consolidation in the institutional vocabulary of the EU in sequence of the Joint Framework of 2016,[1] the expression migrated progressively from the strategic-military domain to the field of Union law, informing legislative instruments in matters of cybersecurity, critical infrastructures’ resilience and protection of the democratic institutions. However, its legal operability remains uncertain, given that the concept is invoked with increasing frequency in soft-law instruments and in policy frameworks, without this invocation being accompanied by a legal definition sufficiently precise to underpin the normative requirements placed upon it.

The Conclusions of the Council of the EU of 16 March 2026 on advancing the European Union’s capacity to counter hybrid threats constitutes the most recent institutional moment in this evolutive framework.[2] The Council of EU condemned the persistent hybrid threats of state and non-state actors aimed at compromising the security and stability of the Union and its Member States, specifically identifying the sabotage on critical infrastructures, the malicious cyber activities, the foreign information manipulation and interference (FIMI), the election interference, and instrumentalisation of migration. It called for the utmost implementation of the Directives NIS2 and CER, it highlighted the importance of the Cyber Blueprint as a mechanism of collective response and drew attention to the malicious use of emerging technologies, including AI and quantic technologies.

This text departs from the Conclusions of March 2026 to offer a conceptual framing legally sound to examine what hybrid threats are and why their precise definition is relevant to the Union’s constitutional law (which a political instrument tends not to provide). The central argument is that, in the absence of an operative legal definition, the Union response in the face of hybrid threats will remain structurally fragmented, constitutionally blind, politically ambiguous, and normatively insufficient.

The genealogy of a contested concept

The expression hybrid warfare emerges in the Anglo-American strategic-military scholarship to qualify the combination, by state and non-state actors, of conventional, unconventional, irregular, terrorist and criminal means in the same theatre of operations.[3] James Mattis and Frank Hoffman describe this combination as a “menu” of combat methods, from which the opponent chooses and creatively combines  conventional techniques, insurgency, terrorism and cyber operations, precisely to avoid Western dominance in conventional warfare.[4] The notion originally designated  a convergence of armed violence modes, which demanded of opposing forces an equally multidimensional preparedness.

Since 2014, with the Russian aggression against Ukraine, the concept has been progressively displaced from a strictly military sphere to a broader one, in which what is at stake is the combination of military and non-military, kinetic and non-kinetic instruments in pursuit of strategic objectives while maintaining ambiguity as to the threshold between peace and war. Bettina Renz demonstrates how the literature began to mobilise the concept not only to designate the intervention in Crimea and the Donbas, but also to qualify disinformation campaigns, electoral interference and energetic pressure.[5] Nonetheless, this semantic extension generated  criticism regarding the concept’s over-broad scope: in this regard, Damien Van Puyvelde warns that “in practice, any threat can be hybrid as long as it is not limited to a single form and dimension of warfare”, thereby rendering the concept devoid of analytical and legal value.[6]

To address this criticism, part of the international relations scholarship proposes distinguishing between hybrid warfare, in a stricter sense, which includes military components, and hybrid interference, a concept that encompasses, in particular, the coordinated use of non-military means, frequently covert, to exploit structural vulnerabilities of the liberal democracies. Mikael Wigell conceptualised hybrid interference as “the synchronized use of multiple non-military means of interference tailored to heighten divisions within target societies”, defining it as a wedge-driving strategy grounded in the combined use of clandestine diplomacy, geoeconomics and disinformation.[7] This approach has the advantage of situating the phenomenon at the strategic level, allowing one to understand that the central objective is not the military victory, but the erosion of internal cohesion and the capacity for a concerted response on the part of the target.

The Conclusions of the Council of the EU of 16 March 2026 clearly operate in this second register. By enumerating the FIMI, the electoral interference and the instrumentalisation of migration alongside the sabotage and cyber activities, the Council of the EU confirms that the Union is working with a broad, multipronged approach that encompasses the full spectrum of covert sub-threshold to near-kinetic attacks on critical infrastructures.[8] The legal consequence of this breadth is immediate: it means that no single legal instrument can cover the full range of hybrid threats, and that the Union’s response is structurally fragmented across internal market law, the Area of Freedom, Justice and Security (AFSJ), and the Common Foreign and Security Policy (CFSP) including the Common Security and Defence Policy (CSDP). Precisely for this reason, a legally operative definition is a prerequisite for regulatory effectiveness, and not just an academic exercise.

Towards a legally operative definition

The policy definition of hybrid threats produced by the European Centre of Excellence for Countering Hybrid Threats (Hybrid CoE) and the European Commission’s Joint Research Centre constitutes an indispensable analytical starting point. According to this conceptual framework, hybrid threats are understood as coordinated campaigns, conducted primarily by authoritarian states, which mobilise multiple instruments, cyber, informational, economic and legal, to exploit the systemic vulnerabilities of democratic societies, whilst remaining below the threshold of armed conflict.[9] This definition accurately captures the strategic logic of the phenomenon: the deliberate combination of distinct means aimed at eroding the target’s internal cohesion, without resorting to use of force in the classical sense.

However, this policy-oriented definition is insufficient for legal purposes. A concept that aims to function as legally operational must be capable of bearing the normative weight of specific legal consequences, ranging from State liability for failures in the protection of digital justice to the conditions under which cooperation mechanisms may be suspended or reconfigured, including the delimitation of the Union’s competences in relation to the Member States’ national security prerogatives. Aurel Sari accurately summarises the strategic dimension that a purely policy definition tends to neglect: “from a hybrid threat perspective, the law is best understood as an instrument and as a domain of strategic competition. State and non-state actors routinely employ law to pursue their strategic interests”.[10] If the law itself is simultaneously an instrument and a domain of strategic competition, then a definition of hybrid threats that does not incorporate this dimension is, by definition, legally incomplete.

For the purposes of this text, a legally oriented operational definition is proposed. Hybrid threats, in a legally relevant sense, are understood as the coordinated set of hostile activities, conducted predominantly by states or by actors sponsored by them, that combine primarily non-kinetic means, namely cyberattacks, clandestine digital surveillance operations, disinformation campaigns, and the strategic instrumentalisation of legal or economic instruments, with the objective of exploiting structural vulnerabilities of the democracies of the European Union, maintaining these activities, as a rule, below the threshold of use of force in the classical sense and of easy attribution, but with the potential to compromise fundamental rights, the Rule of law, and the preconditions of mutual trust between Member States.[11]

This delimitation is deliberately more restrictive than the broad political-strategic concept of “hybrid threats” used, for example, in the Commission’s communications, and in frameworks of the Hybrid CoE, this restrictiveness being not a limitation, but a methodological necessity. The determining criterion is not the nature of the instrument used, but rather the i) target, namely the structural vulnerabilities of the Union’s democracies, and the ii) effect, namely the erosion of the constitutional preconditions of the Union’s legal order. Purely military actions are excluded, and the economic or lawfare vectors are only relevant when functionally linked to the disruption of democratic institutions or the erosion of the Rule of law.[12] This choice is simultaneously methodological and juridical-political; restricting the concept to its analytical core is also a normative statement aimed at safeguarding the fundamental rights’ sphere and preventing the hyper-securitisation of the democratic space, a risk that Barry Buzan, Ole Wæver, and Jaap de Wilde identify as inherent to the performative act of designating a phenomenon as a security threat.[13]

The three families of conduct and the Union Law

The operational definition proposed in the section above carries immediate legal implications for considering how Union law relates to hybrid threats. To flesh out this argument, it is useful to distribute the conducts identified in the Conclusions of the Council of the EU of March 2026 into three analytical categories, corresponding to the main sources of hybrid pressure on the Union’s democratic systems.

The first family covers the cyberattacks and the sabotage of critical infrastructures. The Council Conclusions call for the full implementation of the Directives NIS2 and CER as a priority response to this vector.[14] At the legal level, these instruments operate in the register of the internal market (adopted based in Article 114 TFEU) and establish obligations of resilience and notification for essential and important entities. The constitutional problem that the Conclusions do not address arises when a cyberattack to critical infrastructures is attributed to a third State and produces effects equivalent to the use of force, the applicable legal framework shifts to the domains of CFSP, subject to the unanimity of the Council of the EU and excluded, in principle, of the CJEU jurisdiction by force of Article 275 TFEU. The Union thus finds itself facing a structural constitutional asymmetry: it responds technically through internal market instruments but is politically paralysed when the attribution of the threat requires a collective response in the domain of the CFSP.[15]

The second family encompasses the FIMI and the interference in electoral processes. The Council of the EU identifies this vector as a priority and reiterates its commitment to the reinforcement of the media literacy and to the fast-alert mechanisms.[16] At the legal level, the Union’s response to this vector is distributed between the Digital Services Act (DSA), which addresses disinformation only indirectly through the notion of systemic risks, and the CFSP regime of sanctions, that permits restrictive measures against actors responsible for disinformation campaigns but which remains dependent on national attribution assessments and of unanimity in the Council.[17] The existing regulatory framework is therefore reactive and fragmented: there is no legal basis in primary EU law that would allow for an integrated and preventive response to hybrid interference in the European democratic space as such.

The third family encompasses the strategic use of the law and economic instruments, which the literature designates as lawfare, and the instrumentalisation of migration as a pressure vector. What these actions have in common is that they exploit the Union’s  own regulatory and institutional structures as vehicles for destabilisation, using the instruments of Rule of law against the very Rule of law. Luigi Lonardo observes that “the EU seems, overall, legally well-equipped to counter the threats” in the sectoral field, but recognises that “a single piece of legislation is neither feasible nor, probably, desirable” to cover the hybrid phenomenon in its entirety.[18] This observation confirms the central argument of this text: that the Union’s response to hybrid threats is technically reasonable in the level of the sectoral instruments, but lacks a juridical-constitutional horizontal framing capable of articulating these instruments in a coherent logic of protection of the values of Article 2 TEU.

The institutional moment and what remains to be done by the law

The Conclusions of the Council of the EU of 16 March 2026 represent a significant political commitment. It condemned, identified vectors, called for the implementation of sectoral instruments and recognised the necessity in reinforcing the collective capacity of the Union to face hybrid threats. This commitment must not be underestimated; in a context of growing pressure on European democracies – consistently documented in the reports of the European Parliament and in the assessments of the Hybrid CoE, –, the political affirmation that the hybrid threats constitute a strategic priority of the Union has a value of its own.[19]

But a political commitment is not (and should not be) normatively sufficient. An analysis of these three conduct families reveals that the Union’s response to hybrid threats suffers from structural fragmentation that cannot be resolved by simply accumulating sectoral instruments: the asymmetry between the internal market framework and that of the CFSP, the reliance on national assessments of attribution, the requirement for unanimity in the Council of the EU for collective responses, and the absence of a horizontal legal basis in primary law for an integrated response to the hybrid phenomenon as such. As Sari warns, “navigating the legal threat landscape demands a strategic approach, one that recognizes the systematic nature of the threat, matches the level of effort expended by hostile powers and accepts the need to compete more effectively in the legal domain”.[20] The Union has its tools; what lacks is a juridical-constitutional framework that brings them together.

This gap has a precise constitutional dimension: Article 2 TEU enunciates the Rule of law, the democracy, and the fundamental rights as founding values of the Union. The hybrid threats, in their diversity of vectors and in their logic of sub-threshold erosion, precisely target these values: they do not confront them frontally but do undermine the conditions that make them possible. A Union that responds to these threats only at the sectoral level, without articulating this response with the constitutional framework of Article 2 TEU, runs the risk of protecting the infrastructure without protecting the values that the infrastructure serves. The institutional moment opened by the Conclusions of March 2026 is, therefore, also a moment for the law: the task of legal scholarship is to translate political commitment into constitutional clarity, and it is to this task that the present text seeks to contribute.

[1]  European Commission and High Representative of the Union for Foreign Affairs and Security Policy, Joint Communication to the European Parliament and the Council: joint framework on countering hybrid threats — A European Union response, JOIN(2016) 18 final, April 6, 2016, https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A52016JC0018.

[2] Council of the European Union, Council conclusions on advancing the EU’s capacity to counter hybrid threats, March 16, 2026, https://data.consilium.europa.eu/doc/document/ST-7349-2026-INIT/en/pdf.

[3] Frank G. Hoffman, Conflict in the 21st century: the rise of hybrid wars (Arlington, VA: Potomac Institute for Policy Studies, 2007), 14–28.

[4] James N. Mattis and Frank Hoffman, “Future warfare: the rise of hybrid wars,” Proceedings 131, no. 11 (2005), https://www.usni.org/magazines/proceedings/2005/november/future-warfare-rise-hybrid-wars.

[5] Bettina Renz, “Russia and hybrid warfare,” Contemporary Politics 22, no. 3 (2016): 283–300, https://doi.org/10.1080/13569775.2016.1201316.

[6] Damien Van Puyvelde, “Hybrid war — does it even exist?,” NATO Review, 2015.

[7] Mikael Wigell, “Hybrid interference as a wedge strategy: a theory of external interference in liberal democracy,” International Affairs 95, no. 2 (2019): 262–263.

[8] Council of the European Union, Council conclusions on advancing the EU’s Capacity to counter hybrid threats.

[9] P. Cullen, et al., The landscape of hybrid threats: a conceptual model (public version), ed. G. Giannopoulos,  H. Smith and M. Theocharidou, EUR 30585 EN (Luxembourg: Publications Office of the European Union, , 2021), 18–35, https://publications.jrc.ec.europa.eu/repository/handle/JRC123305.

[10] Aurel Sari, Hybrid threats and the law: building legal resilience, Hybrid CoE Research Report 3 (Helsinki: European Centre of Excellence for Countering Hybrid Threats, 2021), 7–8, https://www.hybridcoe.fi/wp-content/uploads/2021/10/20211104_Hybrid_CoE_Research_Report_3_Hybrid_threats_and_the_law_WEB.pdf.

[11] Sari, Hybrid threats and the law, 12–22; P. Cullen, et al., The landscape of hybrid threats, 18–35.

[12] P. Cullen, et al., The landscape of hybrid threats, 26–35; Sari, Hybrid Threats and the Law, 18–26.

[13] Luigi Lonardo, “EU law against hybrid threats: a first assessment,” European Papers 6, no. 2 (2021): 1092–1095, doi: 10.15166/2499-8249/514; Barry Buzan, Ole Wæver, and Jaap de Wilde, Security: a new framework for analysis (Boulder, CO: Lynne Rienner, 1998), 24.

[14] Council of the European Union, Council conclusions on advancing the EU’s capacity to counter hybrid threats, March 16, 2026.

[15] Aurel Sari, Hybrid threats and the law, 34–39; Lonardo, “EU law against hybrid threats,” 1086–1088.

[16] Council of the European Union, Council conclusions on advancing the EU’s capacity to counter hybrid threats.

[17] Council of the European Union, Decision (CFSP) 2019/797 of 17 May 2019 concerning restrictive measures against cyber-attacks threatening the Union or its Member States, OJ L 129I, May 17, 2019; Regulation (EU) 2019/796 of 17 May 2019 concerning restrictive measures against cyber-attacks threatening the Union or its Member States, OJ L 129I, May 17, 2019, https://eur-lex.europa.eu/eli/dec/2019/797/oj/eng.

[18] Lonardo, “EU law against hybrid threats,” 1093.

[19] European Commission, 2025 Rule of Law Report: Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2025) 900 final (Brussels: European Commission, 2025), https://commission.europa.eu/strategy-and-policy/policies/justice-and-fundamental-rights/upholding-rule-law/rule-law/annual-rule-law-cycle/2025-rule-law-report_en; European Centre of Excellence for Countering Hybrid Threats, Hybrid threats as a concept, https://www.hybridcoe.fi/hybrid-threats-as-a-phenomenon/.

[20] Sari, Hybrid threats and the law, 35.

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Ana Cardoso (PhD candidate & Master’s in European Union Law at the School of Law of University of Minho. FCT research scholarship holder – 2025.06747.BD.)

I.

On March 23, 2026 the European Commission took the final procedural step required for provisional application of the EU-Mercosur interim Trade Agreement (“iTA”), by notifying the Mercosur countries with a “note verbale”.[1] This means that as of May 1, 2026, the iTA has started being provisionally applied, despite the European Parliament’s decision to ask for the European Court of Justice’s (“CJEU”) opinion on whether the EU-Mercosur Free Trade Agreement (“EMTA”) is in conformity with the Treaties.[2]

This was possible because the EMTA is divided into two main documents: (i) the iTA covering trade liberalisation and (ii) a broader comprehensive Partnership Agreement; the first can take effect while the second faces the hurdles of full ratification.[3]

Given this somewhat unprecedented decision by the Commission – which ignores a long-standing gentleman’s agreement of institutional respect between the Commission and the Parliament – it is worth questioning if this provisional application might end up jeopardising the EU’s ambitious climate and environmental goals or if, on the other hand, the internal legal framework in this area is strong enough to prevent indirect backtracking.

The relevance of this question is two-fold: firstly, the provisional application of the iTA means that the relationship established by the EMTA between the EU and Mercosur countries will be temporarily circumscribed to commercial matters, and the more ambitious value-driven dispositions of the Partnership Agreement – which cover climate and environmental matters – are on stand-by pending the CJEU’s pronouncement, and subsequent process of ratification. Secondly, the geopolitical context in which we now live, has pushed the EU to take steps towards simplification and deregulation[4] in the name of competitiveness and growth, meaning protection can end up reduced, and environmental impacts not accounted for or safeguarded by the EU’s environmental legal framework, which, although ambitious, is currently in a state of transition.

II.

With the adoption of the European Green Deal (“EGD”) – built on the constitutional basis of the current Article 11 TFEU[5] –, the EU has positioned itself at the forefront of the inclusion of environmental concerns in all its action. From internal legislative initiatives to international agreements with third parties, ponderation must be given as to how a certain action is in accordance with the EU’s climate goals and environmental concerns and initiatives.[6] The European Climate Law (“ECL”)[7] entered into force in July 2021, functioning as a constitutionally required guiding law which defines the ambitious climate targets of the EU and ensures compliance.^[8]

That being said, successful implementation of the EGD has been dependent on three key regulations, which have now been significantly impaired by the Commission’s “simplification” efforts through the Omnibus Packages.[9] Those are: the Directive on corporate sustainability reporting (“CSRD”),[10] the EU Taxonomy Regulation,[11] and the Directive on corporate sustainability due diligence (“CSDDD”).[12] With the Omnibus I Regulation[13] minimum requirements have been broadened to allow companies increased freedom, which hopefully will mean more investment, innovation and growth. But, on the other hand, sustainability requirements seem to have been sidelined.[14] Thus, the argument that the stringent rules within the EU – coupled with the Chapter on Trade and Sustainable Development of the EMTA – could curve the dangers of the Agreement, as reasoned by the Commission[15] when it comes to environmental protection and sustainability safeguards,[16] can fall.

The top goods the EU imports from Mercosur are agricultural products, mineral products, and pulp and paper, with imports growing by over 50%, between 2014 and 2024, and expected to leap significantly from now on.[17] Additionally, Brazil has the second-largest rare earth reserves on the planet, with roughly 21 million tons, and is the source of more than 90% of global niobium output – essential to aerospace and advanced steel manufacturing.[18]

These products can have deep environmental and health impacts when it comes to their extraction. The philosopher Byung-Chul Han, writing on the need for a planetary consciousness, points out that it “is regrettable that the land is so brutally exploited today”. The fight for the control of rare earth elements (“REEs”) is an example of how society has “lost all sensitivity to the earth”, only thinking of “it as a source of resources that, at best, must be treated sustainably”.[19]

Still, the Commission maintains that the EMTA upholds the very stringent and non-negotiable standards on food safety, and human, animal and plant health. Any product sold in the EU – be it domestically produced or imported –, must comply with the EU’s Sanitary and Phytosanitary standards (“SPS”), which remain unchanged regardless of trade agreements concluded by the EU, such as the case of the EMTA.

It is reasoned that to enforce effective compliance with the SPS requirements and other EU market rules, the Union has a robust import system based on science, risk assessments, audits to third countries, border controls, and controls in the EU market, which has at its base the precautionary principle. Further, a reinforcement of measures was announced to strengthen controls on imported food, animal and plant products.[20]

Plus, on 18 July 2024, the Regulation (EU) 2024/1781 establishing a framework for the setting of ecodesign requirements for sustainable products (“ESPR”)[21] entered into force, aiming to significantly improve the circularity, energy performance and other environmental sustainability aspects of products placed on the EU market.[22]

The ESPR can cover virtually all physical products, only a few exemptions apply. However, these exemptions – food and feed, medicinal products (Article 1), and the non-address of defence and national security-related products of non-dual use [Article 5(5)] – can mean that a significantly large part of Mercosur imports are not covered by a regulation that aims to realise a large part of the EGD framework focused on the transition into a circular economy, a crucial step towards reducing the pressure on natural resources, halting biodiversity loss, achieving climate neutrality by 2050, and building a more resilient and competitive Europe. According to numbers presented by the European Commission, resource extraction and processing causes 90% of biodiversity loss.[23]

In its Chapter III, the ESPR, also establishes the Digital Product Passport (“DPP”), which is a digital identity card for products, components, and materials, which will store relevant information to support products’ sustainability, promote their circularity and strengthen legal compliance. The information included in the DPP will depend on the nature of the specific product, but can include the following: the product’s technical performance, its materials and their origins, repair activities, recycling capabilities, and lifecycle environmental impacts.[24] Still, this seemingly crucial instrument has some shortcomings which can impact its effective use: namely, when it comes to complex products, whose raw materials and components can be difficult to fully track, and the types of products excluded.

The issue of deforestation is inevitable when it comes to discussions of the EMTA. As of the end of this year, only deforestation-free products will be allowed to enter the EU market^[25] – including soya bean, beef, palm oil, wood, cocoa, coffee, and rubber – and this will cover imports from the Mercosur region, ensuring that products imported under this deal have not contributed to deforestation.[26]

However, as covered in a 2025 article in this publication,[27] the EMTA can create a potential increase in deforestation in the Amazon by 25%,^[28] with increased bilateral trade, in addition to the requirement for a deforestation-free supply chain, likely leading to a sizable “indirect deforestation” phenomenon in the Mercosur region. Meaning that agricultural land used for different markets can be displaced or exchanged. For example, soya bean production in Brazil destined for the EU must comply with deforestation-free requirements, while production areas for export to other third-party markets or for domestic consumption can be in recently deforested locations.[29]

Another issue has to do with what products are not covered by these anti-deforestation rules – such as the case of corn –, and that also fall through the cracks of other European sustainability and environmental regulations and directives, meaning they become a category above worry and outside the legal frameworks that aim to protect the climate and the environment, and ensure sustainability.

III.

As seen before, import controls should not be affected by the EMTA or by the provisional application of the iTA. As such they include: (i) audits and approval of the official control systems of the competent authorities of the third countries interested in exporting to the EU; (ii) control of documents, identity checks (commodities’ identification marks, stamps and other necessary product or package information) and physical checks (taking a sample of the product to look for pathogenic microorganisms or illegal contaminants; checks of the means of transport and fitness of the animals being transported) carried out at the EU borders by national authorities; (iii) meat imported into the EU must come from animals that were slaughtered or killed under animal welfare conditions equivalent to those of the EU; (iv) sampling of products already at sale in the EU market (originating in the EU or imported).[30]

But questions must be raised on several points. Firstly, how can the EU guarantee the proper approval of control systems when it so often relies on reports and documents of third countries, trusting in what potential partners are alleging without full “boots-on-the-ground” checking and oversight?[31]

Secondly, criticism has been levied against national border authorities when it comes to their capability to thoroughly check imports and ensure their compliance.[32] With a significant increase in imports from the Mercosur region, their abilities are further brought into question. Of course, this can be helped through the control and tracking mechanisms the Mercosur region is instituting in their jurisdiction, such as the Selo Verde in Brazil,[33] and the electronic traceability system for cattle, buffalo, and deer in Argentina.[34] But this does not work if real and effective reinforcement of measures to strengthen controls on imports are not fully realised.

Another question has to do with the DPP: is it effective when it comes to complex products, especially those which are produced with a variety of raw materials from different regions and varied modes of production?

If we take the example of the textile and footwear industry, the complexity and fragmentation of the textile supply chain, which encompasses numerous stakeholders, from raw material suppliers to manufacturers and retailers, makes collecting and verifying the data necessary for DPPs a potentially difficult task. Furthermore, many textile and footwear products are composed of a mixture of materials, each with its own environmental characteristics and lifecycle considerations. Ensuring accurate and comprehensive data for these complex products represents a major challenge for both companies and regulators.[35] To overcome this difficulty the EU created the Product Environmental Footprint method (“PEF”), which provides rules to quantify and communicate environmental impacts of products, focusing on reducing impacts throughout the supply chain;[36] still, many complex products are either excluded or still do not have PEF guidelines.

Additionally, how do we overcome the challenge that the DPP – basically the only tracking method in such a complex market that offers some degree of reliability by taking advantage of data technology –, does not cover food, animal feed, medicinal products, and products relating to national security? Will traditional oversight methods be sufficient to ensure that products imported from the Mercosur region are not creating deep environmental impacts for both blocs?

Green technology is seen as one of the best options for decarbonisation, however its production requires REEs, the extraction of which releases toxic chemicals into the environment, contaminating groundwater and even entire waterways. It also produces high amounts of toxic waste – for every ton of rare earth, 2,000 tons of toxic waste are produced –, with high risk of environmental and health hazards, damaging communities and contaminating surrounding areas.[37]

Can REEs be out of the scope of the DPP if argued their commercialisation is a matter of national security like the United States of America do? If so, how can the EU guarantee that the exploration of REEs imported into the EU market is sustainable and does not create an environmental “disaster” in the Mercosur region, specifically Brazil?

These issues are highly complex. Going back to Han, when writing on the commodification of values, he argued that they can serve as “things for individual consumption”, becoming commodities. “Values such as justice, humanity or sustainability are exploited for profit. (…) Moral values are consumed as marks of distinction. They are credited to the ego-account, appreciating the value of self. They increase our narcissistic self-respect. Through values we relate not to community but to our own egos.”[38]

The EU has a self-imposed obligation of not letting its values, namely those relating to climate and environmental protection be commodified; a sort of virtue signalling to the rest of the world which becomes a credit to its own collective ego as a “green” Europe, while letting its commercial interests and its desires to increase competitiveness and growth effectively jeopardise its long history of environmental protection and the objectives set forth by the EGD and the constitutional treaties.

[1] European Commission, “Daily News – EU-Mercosur Agreement to provisionally apply from 1 May 2026”, Brussels, March 23, 2026, accessed March 23, 2026, https://ec.europa.eu/commission/presscorner/detail/en/mex_26_681.

[2] European Parliament, “EU-Mercosur: MEPs demand a legal opinion on its conformity with the EU treaties”, Press Release, January 21, 2026, accessed March 23, 2026, https://www.europarl.europa.eu/news/en/press-room/20260116IPR32450/eu-mercosur-meps-demand-a-legal-opinion-on-its-conformity-with-the-eu-treaties.

[3] European Commission, “EU-Mercosur agreement”, accessed March 23, 2026, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement_en.

[4] There are different opinions when it comes to the classification of what the Commission is trying to do, if it is in fact a matter of “simplification” – as initially announced –, or if it is truly an exercise in “deregulation”. Simplification would imply carefully cataloguing and assessing current regulations, evaluating the rationale behind those deemed too restrictive, and then proceeding to a correcting alteration with due safeguarding. This does not seem to be the case, as the Omnibus packages seem to be generally lowering thresholds for oversight to allow companies to move more freely in the market and incentivise investment. See Phuc-Vinh Nguyen, “Green Deal: towards a massive regulatory pause?”, Institut Jacques Delors, February 12, 2025, accessed March 23, 2026, https://institutdelors.eu/en/publications/green-deal-towards-a-massive-regulatory-pause/.

[5] Article 11 of the TFEU prescribes the following: “Environmental protection requirements must be integrated into the definition and implementation of the Union’s policies and activities, in particular with a view to promoting sustainable development”.

[6] European Commission, “The European Green Deal – Striving to be the first climate-neutral continent”, accessed March 23, 2026, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en.

[7] European Commission, “European Climate Law”, accessed March 23, 2026, https://climate.ec.europa.eu/eu-action/european-climate-law_en.

[8] Christian Calliess, “The Future of the European Green Deal”, Verfassungsblog, September 12, 2024, accessed March 23, 2026, https://verfassungsblog.de/the-future-of-the-european-green-deal/.

[9] The Omnibus Packages are an ongoing series of legislative proposals which aim to reduce administrative burdens, to cut red tape, and to simplify sustainability reporting for businesses, by modifying key regulations like the CSRD, CSDDD, and Taxonomy Regulation, limiting the scope of companies required to report and delaying implementation deadlines. See European Commission, “Omnibus package”, April 1, 2026, accessed April 14, 2026, https://finance.ec.europa.eu/news/omnibus-package-2025-04-01_en.

[10] European Commission, “Corporate sustainability reporting”, December 9, 2025, accessed March 23, 2026, https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en#legislation.

[11] European Commission, “EU taxonomy for sustainable activities”, December 17, 2025, accessed March 23, 2026, https://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-taxonomy-sustainable-activities_en.

[12] European Commission, “Corporate sustainability due diligence”, accessed March 23, 2026, https://commission.europa.eu/business-economy-euro/doing-business-eu/sustainability-due-diligence-responsible-business/corporate-sustainability-due-diligence_en.

[13] European Commission, “Omnibus I”, February 26, 2025, accessed March 23, 2026, https://commission.europa.eu/publications/omnibus-i_en.

[14] Apostolos Thomadakis, “The EU’s sustainability rollback is a retreat disguised as simplification”, CEPS, February 27, 2025, accessed March 23, 2026, https://www.ceps.eu/the-eus-sustainability-rollback-is-a-retreat-disguised-as-simplification/.

[15] . James Harrison and Sophia Paulini, “Reinventing trade, environment and development interlinkages: lessons from the EU–Mercosur Association Agreement”, Journal of International Economic Law (2024): 5, accessed March 23, 2026, doi: 10.1093/jiel/jgae044.

[16] Ana Cardoso, “The European Union’s climate diplomacy – trade as a path towards climate neutrality”, UNIO – EU Law Journal, v. 11, no. 1 (June 2025): 4-20, doi: 10.21814/unio.11.1.6633.

[17] European Council, Council of the European Union, “EU-Mercosur trade: facts and figures”, February 17, 2026, accessed April 14, 2026, https://www.consilium.europa.eu/en/infographics/eu-mercosur-trade/.

[18] Fernanda Magnotta, “Can Brazil and the U.S. Reach a Deal on Rare Earths?”, Americas Quarterly, December 9, 2025, accessed April 14, 2026, https://www.americasquarterly.org/article/can-brazil-and-the-u-s-reach-a-deal-on-rare-earths/.

[19] Byung-Chul Han, In Praise of the Earth: A Journey into the Garden, E-Book (Cambridge: Polity Press, 2019), 19-20.

[20] European Commission, “Factsheet: EU-Mercosur partnership agreement – Respecting Europe’s health and safety standards”, accessed April 08, 2026, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement/factsheet-eu-mercosur-partnership-agreement-respecting-europes-health-and-safety-standards_en.

[21] Regulation (EU) 2024/1781 of the European Parliament and of the Council of 13 June 2024 establishing a framework for the setting of ecodesign requirements for sustainable products, amending Directive (EU) 2020/1828 and Regulation (EU) 2023/1542 and repealing Directive 2009/125/EC (Text with EEA relevance), accessed, April 08, 2026, ELI: http://data.europa.eu/eli/reg/2024/1781/2024-06-28.

[22] EUR-Lex, “Ecodesign requirements for sustainable products”, Summaries of EU Legislation, October 15, 2024,, accessed April 08, 2026, https://eur-lex.europa.eu/EN/legal-content/summary/ecodesign-requirements-for-sustainable-products.html.

[23] European Commission, “Circular Economy”, accessed April 08, 2026, https://environment.ec.europa.eu/strategy/circular-economy_en.

[24] European Commission, “Ecodesign for Sustainable Products Regulation”, accessed April 08, 2026, https://environment.ec.europa.eu/strategy/circular-economy/ecodesign-sustainable-products-regulation_en.

[25] See Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation and repealing Regulation (EU) No 995/2010.

[26] European Commission, “Factsheet: EU-Mercosur partnership agreement – Opening opportunities for European farmers”, accessed, April 14, 2026, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement/factsheet-eu-mercosur-partnership-agreement-opening-opportunities-european-farmers_en.

[27] Cardoso, “The European”, 18.

[28] Paola Nano, “EU-Mercosur Trade Deal: Concerns from the EU Slow Food Network”, Slow Food, December 04, 2024, accessed April 14, 2026, https://www.slowfood.com/blog-and-news/eu-mercosur-concerns-from-eu-slow-food-network/.

[29] Susan E.M. Cesar de Oliveira et al., “The European Union-Mercosur Free Trade Agreement as a tool for

environmentally sustainable land use governance”, Environmental Science and Policy, v. 161 (2024): 3, accessed January 24, 2025, doi: 10.1016/j.envsci.2024.103875.

[30] European Commission, “Factsheet: EU-Mercosur partnership agreement – Respecting Europe’s health and safety standards”, accessed April 08, 2026, https://policy.trade.ec.europa.eu/eu-trade-relationships-country-and-region/countries-and-regions/mercosur/eu-mercosur-agreement/factsheet-eu-mercosur-partnership-agreement-respecting-europes-health-and-safety-standards_en.

[31] EuroCommerce, “EuroCommerce Position on the Market Surveillance Regulation”, February 05, 2026, accessed April 14, 2026,  https://www.eurocommerce.eu/2026/02/eurocommerce-position-on-the-market-surveillance-regulation/.

[32] Carmen Martínez San Millán, “Finally, Mercosur!… Or not? The stumbling block with the chapter on trade and sustainable development”, EJIL:Talk! – Blog of the European Journal of International Law, February 06, 2026, accessed April 14, 2026, https://www.ejiltalk.org/finally-mercosur-or-not-the-stumbling-block-with-the-chapter-on-trade-and-sustainable-development/.

[33] See Decreto nº 12.063, de 17 de Junho de 2024 que Institui o Programa Selo Verde Brasil, Diário Oficial da União, June 18, 2024, ed. 115, section 1, 5, accessed April 08, 2026, https://pesquisa.in.gov.br/imprensa/jsp/visualiza/index.jsp?data=18/06/2024&jornal=515&pagina=5. Ministério do Desenvolvimento, Indústria, Comércio e Serviços, “Programa Selo Verde Brasil”, gov.br, October 23, 2023, accessed April 08, 2026, https://www.gov.br/participamaisbrasil/programa-selo-verde-brasil.

[34] Elagro, “Argentina will gradually implement electronic traceability from 2025”, Tridge, Actober 18, 2024, accessed April 14, 2026, https://www.tridge.com/news/argentina-will-gradually-implement-electroni-ttkiah.

[35] NITextile, “Passaporte Digital do Produto: Uma Ferramenta de Decisão”, NIT, n.d., accessed April 08, 2026, https://nitextile.pt/?p=1350.

[36] European Commission, “Product Environmental Footprint method – Understanding key concepts and how to implement them”, accessed April 08, 2026, https://green-forum.ec.europa.eu/green-business/environmental-footprint-methods/pef-method_en.

[37] Jaya Nayar, “Not So ‘Green’ Technology: The Complicated Legacy of Rare Earth Mining”, Harvard International Review, August 12, 2021, accessed April 14, 2026, https://hir.harvard.edu/not-so-green-technology-the-complicated-legacy-of-rare-earth-mining/.

[38] Byung-Chul Han, The Disappearance of Rituals: A Topology of the Present (Cambridge: Polity Press, 2020), 5.

Picture credit: by Yasemin Sessiz on pexels.com.

The post How occupations shape awareness and preferences about European funding first appeared on LSE European Politics.

The new digital networks and their AI management by design

(on the proposal for a Digital Networks Act – DNA)

Alexandre Veronese [Professor of University of Brasília, Key external member of Jean Monnet Centre of Excellence “Digital Citizenship and Technological Sustainability” (CitDig), University of Minho] and Alessandra Silveira (Editor of this blog, Coordinator of CitDig, University of Minho)

The Digital Networks Act (DNA) proposal has been adopted on 21 January 2026, aiming to create a simplified and more harmonised legal framework, because an advanced digital infrastructure is critical for enabling the adoption of Artificial Intelligence (AI), cloud, space and other innovative technologies. The idea behind the proposal is that a cutting-edge digital infrastructure is fundamental for Europe’s economy and society.[1] However, this leads us to think critically about what is or is not desirable about digital networks.

Some academic concepts suffer from social translation into catchphrases. Some become real slogans. Two are important for the Internet debate. The first is Jonathan Zittrain idea of a generative Internet.[2] The second is network neutrality. Both are very helpful to think about the Internet that we all want. On the other hand, technology is, to some extent, overtaking them in practice. The same is happening with the legal frameworks. The evolution of digital networks is currently corroding old ideas with new features. New digital networks aim to be faster and resilient. This is why AI is being incorporated into their design.

After all, for there to be near-real time communication, it is necessary to discriminate applications according to their functionality. No one would consider it reasonable for autonomous cars to have high latency and, therefore, generate accidents. The same goes for online surgeries and surgeries with robotic assistants. This leads to the management and slicing of Internet traffic through AI technologies – and implies that digital networks make exclusively automated decisions on a permanent basis. This text draws attention to the implications of this association between digital networks and AI technologies on the fundamental rights recognised by EU law.

Many authors try to establish some degree of fundamental rights’ protection by drawing on the concept of “by default”. One might consider the idea of data protection by default, legal protection by default, privacy by design, and so many others. The idea consists of an intelligent use of Lawrence Lessig’s “Code”, which encompasses not only software, but hardware as well.[3] For the author, the “Code” could embed some safeguards in new technologies. Ever since the concept of “Lex Informatica” by Joel Reidenberg,[4] legal literature has been relying on the promise that social and legal mechanisms can impose a desirable level of protection. Nonetheless, technology is proving more difficult to tame as developments arrive. A new wave of regulatory theories and tools are emerging to cope with those new issues. The most problematic to this day is AI.

One thing is certain: AI is already part of everyday life in other parts of the world.. Quantum computing is likely to be a turning point in the future. But issues relating to AI are the new challenge of the moment. Let us consider a preliminary observation on the concept. AI is a very broad term. It is an umbrella concept that includes a wide range of techniques: machine learning, deep learning, generative AI, natural language processing, neural networks, and many others. The variation and combination of techniques allow developers to produce programs and machines with very specific purposes. A deep learning process was responsible for the victory of a machine against a human in the “Go” contest. But the very same machine would require special treatment to win another kind of game. Generative AI may be useful to process large amounts of data and provide good answers.; the limitation is the dataset. If the data inputs are not reliable, the outputs will not be either. It is true that AI is smart for specific tasks and inept at others. It is also true that an AI system is only as good as the data it processes. The question is whether some AI systems could ever overcome such limitations. Right now, no solution to this problem is on the horizon, despite the huge amount of resources invested. However, given that AI offers a new perspective on digital networks, and shows us that the buzzwords are going down faster than we think, we must remain vigilant and creative regarding the legal framework to protect fundamental rights.

The new digital networks are going to use more AI to enhance their capabilities. The new 5G already uses AI applications to improve their quality. The full digitalisation of the networks is driving them to mesh themselves with cloud computing and highly capable processing. The data centres are not simple storage. They play an important role in the networks. One can see a circular trend on the move: better infrastructure for transportation (on-shore e off-shore fibre optics cables, satellites and microsatellites), better data centres with more processing power, and better applications to manage the systems. The goal is to reach a near real-time data processing. These technological improvements seem inevitable. The 6G is also being developed and it will only accelerate the circular trend.

The Jonathan Zittrain’s idea of a generative Internet is very interesting. One can say that he foresaw the necessity of a strong social and technical oversight. His book about the dire possibilities of the Internet’s future enlightens the importance of having technical standards for safeguarding rights. He indicates that a powerful technical community could turn the risks into social benefits. However, we are talking about giant enterprises that are under enormous pressure. On one hand, they must continue to grow and generate profits. On the other hand, they must adhere to compliance rules in many jurisdictions. This creates a race to the top in AI investments. If a big enterprise does not invest sufficiently in AI and new technological edges, it may lose the race. And what if it must choose to take on more risks to accelerate?  From this point of view, the idea that the technical community will prevent damage seems naïve. The most probable scenario is a situation where these technical personnel will enlist themselves to work for the big companies. They will collaborate in generating systems for the companies’ profits and not necessarily for the welfare of the global society. It is not possible to empathise with Jonathan Zittrain’s point of view. The real question is whether the dark future of the Internet will become reality or not. Generative AI is troublesome, despite being very useful. It does not create anything new in the human sense. It compiles data to provide outputs. Its technical ability of compilation evolves, but without more input, it may stop providing answers. The solution is quite simple: human knowledge needs to improve to provide more information. When a blog post is made available on the Open Internet, it becomes yet more input. That is exactly the reason why those big corporations are still paying people to create videos and to produce material, although some do it for free. When such flow dries up, the generation of output will crumble.

The second concept is the idea of network neutrality.[5] In its origin, it was a great concept, as its core idea was to block infrastructure companies from evaluating data traffic and deciding which one had priority. This traffic slice could ruin a new company and empower another. From the infrastructure companies’ point of view, prioritising certain data was necessary for two reasons. The first was traffic congestion. Many heavy users were allegedly drawing infrastructure resources and damaging other users. The second was the efficiency of data transportation. Without separating traffic and capacities, there would be a waste of a lot of bandwidth. This loss would benefit no one: neither the heavy user, nor the occasional one. At first, the United States Federal Communications Commission (FCC) approved rules in 2010 banning traffic discrimination. However, the FCC order came down in 2015. Those FCC decisions always went under long judicial battles, but the struggles were always around infrastructure providers against other companies. In 2024, the FCC reestablished the network neutrality only to view a very recent judicial decision strike it down in 2025 and set back the liberty of the infrastructure enterprises.[6] The question that remains open is whether this concept makes sense when the infrastructure changes to an AI control know as data slicing, which discriminates data traffic by default?

Concepts turn into slogans and policies and eventually fade away.  New ones must take their places. However, why do such concepts rise and fall? The answer is relatively simple: the technical features of the networks are always changing. AI is at the centre of those rearrangements nowadays. The new digital networks will use AI to perform tasks to empower the networks. This is their new design. AI will integrate themselves into the systems to organise traffic. A big company will not lose the opportunity to produce systems and maximise profits. On the same track, it will not struggle against a pattern that is designed to rule the future of the infrastructure. Data slicing is a key feature of the new digital networks, and it erodes the idea of neutrality. The real question is how we can regulate systems that will be so flexible. Their continuous automated decisions will imply a lot of externalities. Some are positive, in that they will enable us to have faster and better networks. The bad news is that some EU rules against automated decisions and discrimination could be overruled by the new digital networks. The worse news is that the users may not even know about this.

The big question we are faced with is how to reconcile the technological innovation of the digital networks themselves with the prohibition of subjection to exclusively automated individual decisions [see Article 22 General Data Protection Regulation (GDPR), Judgment CJEU SCHUFA, etc.).[7] When faced with the question “Are there restrictions on the use of automated decision-making?”, the official website of the European Commission provides the following answer: “Yes, individuals should not be subject to a decision that is based solely on automated processing (such as algorithms) and that is legally binding or which significantly affects them. A decision may be considered as producing legal effects when the individual’s legal rights or legal status are impacted (…). In addition, processing can significantly affect an individual if it influences their personal circumstances, their behaviour or their choices.”[8] 

However, as it has already been explained by computer engineers, in the processes of exploration and mining of large data sets via data mining and machine learning, any decision that does not require any human control to extract the outputs inferred by a learning agent is considered to be exclusively automated. This is why the GDPR requires that the effects on the legal sphere of the data subject be more than trivial, otherwise the learning algorithms would be left without the raw material to evolve – and technological development would be compromised.[9] To this extent, some computer engineers raise many doubts about the feasibility of the provisions of the GDPR on this matter, because the fuzzy logic that underlies AI systems would not allow the average person to understand the inference process. The processing operations within AI make use of analytical models whose approximate predictions externalise fuzzy arguments that accept different degrees of truth (almost, maybe, somewhat) and not just the distinction between truth and falsehood.[10]

In any case, when AI enters this equation, the prohibition of subjection to exclusively automated individual decisions requires additional caution. For example, any AI system falling within Annex III of the AI Act that profiles natural persons should always be classified as a high-risk system under Article 6 (3), in fine, of this Regulation – with all the requirements that this classification implies. In the same vein, Article 86 of the AI Act provides for the right to explanations about individual decisions taken based on the results of a high-risk AI-system under Annex III of the AI Act. Any natural or legal person whose fundamental rights are affected by a decision – taken by the deployer of an AI system and based on the results of that high-risk system – has the right to obtain clear and relevant explanations about (i) the main elements of that decision, and (ii) the role that the AI system played in the decision-making process.

In any event, we reiterate: Articles 6(3) and 86 of the AI Act are only applicable to AI systems referred to in Annex III to the AI Act. The question that arises is whether the systems used for traffic management in digital networks would be covered by these provisions. Perhaps as safety components of critical infrastructure (point 2 of Annex III to the AI Act), but even so, the doubt remains, as it is unclear whether traffic management can be tied to the safety of the AI system, except in limited cases such as if it is necessary to prevent overloads or system failures.

Since it appears that there is not a specific provision of the AI Act addressing the application of AI in the management of digital networks, the new regulation on digital networks would have to address this issue in a consistent manner, as well as the issue of differentiating personal data from non-personal data in the context of traffic management. In this context is important to ascertain whether the information used in traffic management qualifies as personal data – in which case, the application of Article 22 of the GDPR to such management would pose an additional problem.

The right to explanations in Article 86 of the AI Act undoubtedly represents a step forward compared with the indeterminate concepts of Article 22 GDPR regarding exclusively automated decisions – the interpretation of which, until the Judgment SCHUFA, remained secretive. And, strictly speaking, some dimensions remain so, because although the CJEU has recognised the prohibition of subjection to exclusively automated decisions, the application of this prohibition remains uncertain, considering the exceptions provided for in Article 22 (2) GDPR, as well as the difficulties in delimiting its scope.[11] The SCHUFA judgment was certainly an important step towards limiting the exploitation and monetisation of data inferred from the Internet user’s digital footprint – but the CJEU certainly knows that this is a battle of David versus Goliath with the outcome still open to question.[12] And now EU law will have to accommodate the interests not only of digital platforms but also those of digital networks themselves – and a whole new chapter is opening.

[1] European Commission, The Digital Networks Act,  https://digital-strategy.ec.europa.eu/en/policies/digital-networks-act.

[2] Jonathan L. Zittrain, “Law and technology. The end of the generative internet”, Communications of the ACM, 52(1)(2009): 18-20, https://doi.org/10.1145/1435417.1435426.

[3] Lawrence Lessig, Code: and other laws of cyberspace, version 2.0 (Penguin Books, 2006).

[4] Joel R. Reidenberg, ”Lex informatica: The formulation of information policy rules through technology”,  Texas Law Review 76 (1997-98), https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?article=1041&context=faculty_scholarship.

[5] Tim Wu, ”Network neutrality, broadband discrimination“, Journal on Telecommunication & High Technology Law 2 (2003), https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?article=2282&context=faculty_scholarship.

[6] Cecilia Kang, ”Net neutrality rules struck down by appeals court”, The New York Times, 2 January 2025, https://www.nytimes.com/2025/01/02/technology/net-neutrality-rules-fcc.html.

[7] Alessandra Silveira, “Finally, the ECJ is interpreting Article 22 GDPR (on individual decisions based solely on automated processing, including profiling)”, The Official Blog of UNIO – Thinking & Debating Europe, 10 April 2023, https://officialblogofunio.com/2023/04/10/finally-the-ecj-is-interpreting-article-22-gdpr-on-individual-decisions-based-solely-on-automated-processing-including-profiling/); “Automated individual decision-making and profiling [on case C-634/21—SCHUFA (Scoring)]”, UNIO – EU Law Journal, 8(2) (2023), https://doi.org/10.21814/unio.8.2.4842); “On inferred personal data and the difficulties of EU law in dealing with this matter”, Official Blog of UNIO – Thinking & Debating Europe, 19 March 2024, https://officialblogofunio.com/2024/03/19/editorial-of-march-2024/. 

[8] See European Commission, https://commission.europa.eu/law/law-topic/data-protection/rules-business-and-organisations/dealing-citizens/are-there-restrictions-use-automated-decision-making_en.

[9] Alessandra Silveira, “Finally, the ECJ is interpreting Article 22 GDPR (on individual decisions based solely on automated processing, including profiling)”.

[10] César Analide and Diogo Morgado Rebelo, “Inteligência artificial na era data-driven, a lógica fuzzy das aproximações soft computing e a proibição de sujeição a decisões tomadas exclusivamente com base na exploração e prospeção de dados pessoais”, Fórum de proteção de dados, Comissão Nacional de Proteção de Dados, No. 6 (2019), Lisbon.

[11] Proof of this is the misinterpretation that the European Commission continues to make of the rights resulting from Article 22 (3) GDPR – in disagreement with recital 71 GDPR (which expressly refers to “in any case”) and SCHUFA Judgment (recitals 65 and 66) –, as if the European and national legislator were not bound by those rights. The Commission’s official website states that “Except where such decision-making is based on a law, the individual must be at least informed of i) the logic involved in the decision-making process, ii) their right to obtain human intervention, iii) the potential consequences of the processing and iv) their right to contest the decision.” See European Commission, https://commission.europa.eu/law/law-topic/data-protection/rules-business-and-organisations/dealing-citizens/are-there-restrictions-use-automated-decision-making_en. 

[12] Alessandra Silveira, “On rebalancing powers in the digital ecosystem in recent CJEU case law (or on the battle between David and Goliath)”, Official Blog of UNIO – Thinking & Debating Europe, 31 October 2024,  https://officialblogofunio.com/2024/10/31/on-rebalancing-powers-in-the-digital-ecosystem-in-recent-cjeu-case-law-or-on-the-battle-between-david-and-goliath/.

Picture credit: by Brett Sayles on pexels.com.

The post How the AfD shapes German foreign policy debates first appeared on LSE European Politics.

Benedetta Lobina* and Esther Martínez**

* re:constitution fellow and lecturer at the UCD Sutherland School of Law

** Co-founder and director of RECLAIM, a human rights NGO that campaigned for Member States to join in the proceedings in this case against Hungary

Photo credit: Budapest Pride march 2025, photo by bannedpride via Wikimedia Commons

In what has been a momentous 10 days for Hungary, after the elections that ousted Orban as Prime Minister after 16 years, the Court of Justice of the European Union delivered its much-anticipated judgment in the Hungarian “anti-LGBT propaganda” case. This case is remarkable for a number of reasons: for the first time, the Court found a breach of Article 2 TEU as a stand-alone plea in law; it expanded upon the protection of LGBTQI+ rights under the scope of EU law; and it saw an unprecedented number of interventions in support of the Commission, namely from the European Parliament and 16 Member States. Additionally, the timing of the Court’s delivery makes this the first opportunity for the new Magyar government to turn a new leaf for the country, after pledging its commitment to Europe during the course of the electoral campaign. In this blogpost, we will break down the wider significance of this judgment, beyond the undoubtedly groundbreaking use of Article 2 (and related doctrinal debates), especially with regards to the implementation of LGBTQI+-related CJEU judgments in Hungary and in the rest of the EU, and as pertains to what it signals for future litigation efforts.

Background of the case

The case was triggered by Orban’s far-reaching reforms seeking to restrict access to LGBTQI+ content (see here for an accessible breakdown). According to the arguments presented by the Commission (which the Court found well-founded in their entirety), the laws infringed a wide range of EU instruments related to the provision of services and the internal market, several rights protected by the Charter (Articles 1, 7, 11, 21), and lastly but most crucially, Article 2 TEU. This was the first use of Article 2 TEU on its own merits, underscoring the gravity of the departure from EU values witnessed in Hungary.

In its ruling, the CJEU sitting as a full court agreed with the Commission on all the pleas in law, specifically finding for the first time an infringement of Article 2 TEU, based on the nature of the legislative provisions at issue as a coordinated series of discriminatory measures, amounting to a manifest and particularly serious curtailment of LGBTQI+ rights. Consequently, it found that the Hungarian law is “contrary to the very identity of the Union as a common legal order in a society in which pluralism prevails” (counterarguments based on national identity notwithstanding).

This approach seems to crystallise a test whereby the sheer scale and seriousness of violations of relevant EU law – for instance several rights of the Charter embodying Article 2 TEU values – is enough to demonstrate a departure from shared values and therefore lead to a breach of Article 2 as a whole (para 548). Moreover, in order to remain within the limits and scope of EU law, the CJEU underlined “only manifest and particularly serious breaches of one or more values common to the Member States may give rise to a finding [of Article 2 violations, which are] incompatible with the very identity of the Union as a common legal order of a society in which pluralism prevails.” This reasoning would suggest that systemic stigmatisation of the LGBTQI+ community in and of itself (i.e. without any link to other provisions of the acquis) would give rise to an Article 2 breach – although in practice, the offending behaviour at issue is more than likely to also infringe upon several directives or regulations (as it did in this case), which may or may not raise questions over the logical soundness of the Court’s argument (see here and here). As such, this judgment sets the stage for stronger and more systemic infringement proceedings in the future, which can use multiple severe violations to prove a pattern that ultimately triggers an Article 2 violation.  

What happens next?

Such an emphatic decision is bound to have consequences beyond the black letter of the law, both in Hungary – especially after a dramatic shift in its political landscape – and in the rest of the Union. After winning a super majority in Parliament on a pro-EU platform, newly elected Prime Minister Peter Magyar will have his first chance to prove his commitment to EU values and the EU legal order by swiftly implementing this judgment. After being sworn in (presumably in the next month), repealing the offending legislation should be high up on his priority list.  Considering that the legislation at issue was blatantly lifted from Putin’s autocratic playbook, there would be a great amount of symbolic significance in using this as one of the first olive branches extended to Hungary’s European partners.

Whether this is likely to happen, however, remains up to question. Magyar was conspicuously silent on LGBTQI+ rights during the campaign and did not mention the issue in his victory speech, beyond pledging to rule for all Hungarians. When directly asked, he remained vague by simply emphasising that the general right to freedom of assembly should be enjoyed by everyone. At the same time, there are significant incentives for compliance which inspire hope for a change of course in Hungary on this front (including not only the somewhat distant threat of financial penalties for non-implementation, but also horizontal enabling conditions that tie LGBTQI+ rights restoration to €700M worth of frozen EU cohesion funds). Nonetheless, the offending legislation is just the tip of the iceberg when it comes to the state of LGBTQI+ rights in the country.

In the present judgment, the Court was particularly vocal, in its finding of several violations of the Charter, in stressing that laws of this kind reinforce stigmatisation of sexual identity and orientation in the public sphere, leading to hateful behaviour and fostering social “invisibility” for the marginalised communities targeted, contrary to the value of human dignity. Additionally, it also reaffirmed, in light of its previous jurisprudence, that MS have “a positive obligation to ensure respect for everyone’s right to develop a sexual identity” (at 447). Conversely, and in line with the aforementioned reasoning as to what constitutes a freestanding breach of Article 2 TEU, the Court ruled that the Hungarian law violates said Article because it seriously and manifestly breaches LGBTQI+ rights, such as respect for human dignity, equality and respect for human rights, including the rights of persons belonging to minorities (at 556).

This is of huge importance, as it can serve as the basis to consider the broader body of anti-LGBTQI+ laws as contrary to EU law. Indeed, it is crucial to note that the case at hand is not comprehensive of all the restrictions imposed by the Orbán government on LGBTQI+ rights, and that efforts must therefore not be limited to repealing the legislation at issue. For instance, in 2018, the Fidesz government banned gender studies from state-accredited university programmes; in 2020 it banned legal gender recognition and adoptions for rainbow families. These measures, by the logic of the CJEU, fit within the pattern of persistent stigmatisation of non-cisgender and non-heterosexual persons, as well as breaching the principle of non-regression by lowering the protection of LGBTQI+ rights over time. Therefore, in order to truly comply with the spirit of the judgment, the new government should go further and repeal these discriminatory pieces of legislation as well.

Secondly, there is a long and growing list of landmark CJEU rulings that do not necessarily originate from Hungary, but are nonetheless not complied with by national authorities here, including judgments on freedom of movement and family life (Coman, V.M.A.; Cupriak-Trojan; Rzecznik Praw Obywatelskich), on legal recognition of transgender identity (Mirin; Deldits; Shipov), and on protection of human dignity for LGBTIQ+ people (Makeleio and Zougla). Without respect for these precedents, even after the repeal of the legislation at issue, the situation of LGBTQI+ people in Hungary would remain acutely precarious.

Thus, the Commission and Member States must insist on full implementation of all outstanding jurisprudence, in line with the principle of sincere cooperation, free movement, and the internal market. Generally speaking, the aforementioned line of jurisprudence – which remains mostly unimplemented also in the respective countries of origin – highlights that more is to be done to preserve not only equality, but also a harmonious legal order where all EU citizens can enjoy their EU-derived rights. This new judgment’s emphasis on human dignity sets a strong precedent, and should spur better monitoring and enforcement efforts across the Union.

Lastly, beyond Hungary, there are several member states that have emulated Orban’s so-called “LGBT propaganda” laws. Similar measures to the ones found foul of EU law in this judgment are in force in Bulgaria and Slovakia, and are currently being discussed in other MS, such as Portugal and Lithuania. This judgment should shift scrutiny in their direction, to make sure Hungary is not simply replaced by an exponentially larger number of Member States freely pursuing the same (unlawful) anti-LGBTQI+ agenda.

What to learn from this: a new standard we should be proud of and build on

This case marks a significant breakthrough in how the EU approaches violations of its founding values, and one that should serve as a template for future litigation. Firstly, this is a massive improvement from the initial line taken by the Commission at the dawn of backsliding in Hungary, moving closer to the idea of systemic infringement proceedings that clearly show a pattern of departure from the commitments at the very basis of the integration process. As argued by AG Capeta, it is important to frame these sort of violations, especially those that affect a marginalised group, as a violation of a value like human dignity, which “constitutes the actual Grundnorm (basic norm) of post-World War Two European constitutionalism against the horrors of totalitarianism which denied any value of the human person.”

Equally significant is the unprecedented show of solidarity from Member States and the European Parliament. A total of 16 MS intervened before the Court, together with the EU’s democratic body par excellence, which further underlines the widespread commitment to shared values and adds a layer of democratic legitimacy and accountability to the legal process. This is an effective way to bolster the Commission’s case, while also diffusing (bad faith) arguments as to EU priorities being dictated by a detached technocratic “Brussels elite”, instead proving that values matter to the vast majority of the Union

The combination of a strong response from the Member States, the EP and the CJEU should thus inspire confidence in the Commission to bring similarly framed cases on these salient issues in the future, especially in the face of the aforementioned Member States currently enforcing anti-LGBT propaganda laws. Taking Slovakia for example, it is clear that the regression of LGBTQI+ rights operated under Fico since 2023 can satisfy the test for manifest and serious curtailment of rights amounting to an Article 2 TEU infringement – as the reforms have included halting funding for comprehensive sex-ed initiatives, removing guidelines banning forced sterilisation for transgender persons, mandating parental consent for any teaching on sexuality, denying same-sex couples from legal recognition as parents, and entirely banning legal gender recognition for non-cisgender individuals. In this sense, the judgment at hand is timely and its impact should be felt beyond Budapest, at least by giving the Commission leverage to pursue cases against any government operating such deliberate curtailment of values.

As for Hungary, the first test will be whether the Magyar government will be willing to repeal the legislation which bans the Budapest Pride. This is a very time-sensitive issue, since unless the law is off the books by May 28^th, the organisers will not be able to obtain the necessary permits within the required 1-month window.

Ultimately, this judgment is to be welcomed as a seminal piece of EU jurisprudence, and one that expands both the justiciability of EU values, and the protection of LGBTQI+ rights. Moreover, it should be seen as the future of values-related litigation, promoting wider accountability and clearly demarking the Union’s commitment to democratic values in the face of aspiring autocrats. At a time in which fundamental values and specifically minority rights are under attack globally, this is a powerful signal. However, it is paramount that the momentum remains strong, lest yet another powerful values-related decision remains merely a paper tiger.

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The post Viktor Orbán’s defeat was not a victory over populism but a populist victory first appeared on LSE European Politics.

By Prof. Jean-Yves Carlier and Dr. Eleonora Frasca, 

Université catholique de Louvain (UCLouvain), members of Equipe droits et migrations (EDEM)

Photo credit: Luxofluxo, via Wikimedia commons

1.     The Fragmented Architecture of Accountability in EU Migration Control

The judgments of the Court of Justice of the European Union (CJEU) in Hamoudi v. Frontex (C-136/24 P) and WS and Others v. Frontex (C-679/23 P), together with the decision of inadmissibility in S.S. and Others v. Italy by the European Court of Human Rights (ECtHR), can be read as addressing a common structural problem from two different judicial perspectives: how responsibility for fundamental rights violations is allocated in a system of composite, and externalised border controls. Read together, the Luxembourg rulings on Frontex’s non-contractual liability and Strasbourg’s approach to extraterritorial jurisdiction reveal, on the one hand, a tightening of accountability within the EU legal order and, on the other, a persisting fragmentation of protection under the Convention system. Their juxtaposition reveals an emerging asymmetry between pushbacks and pullbacks and highlights the risk of a fragmented landscape of remedies in a field where operational powers are increasingly shared and strategically displaced.

The CJEU confirmed the centrality of access to the territory of the Union in contemporary EU migration policy by subjecting obstacles to external border crossings to strict judicial review. Overturning decisions by the General Court that absolved the Agency from any responsibility for its border operations (T-136/22 and T-600/21), the Court contends that Frontex may incur in non-contractual liability and must comply with fundamental rights obligations when exercising its powers in border control operations. The two rulings provide interpretative clarifications regarding the conditions for engaging Frontex’s non-contractual liability under Article 340(2) TFEU. Anchoring the Agency’s operational role firmly within the constitutional framework of fundamental rights, the Court redefined the division of responsibility between Frontex and Member States in joint operations (Hamoudi v. Frontex) and partially reshaped the concept of causation, clarifying the link between Frontex’s conduct and alleged pushbacks (WS and Others v. Frontex). In contrast, the Strasbourg Court did not approach joint state responsibility in externally coordinated maritime Search-and-Rescue (SAR) operations involving cooperation with Libya (S.S. and Others v. Italy).

The real challenge in the interpretation of EU migration and asylum law no longer lies in the technical refinement of positive norms. Rather, it stems from the operational choices through which the Union and its Member States implement migration control. In particular, maritime operations and cooperation with EU agencies as well as third countries’ national authorities generate complex legal questions precisely because border control activities are organised (and presented) as technical or operational, rather than as exercises of public authority with distinct legal consequences. Two structural features amplify this complexity. First, Frontex’s operational activities are embedded in a hybrid administrative framework that blurs the boundaries between Union and national competences. Second, joint operations disperse decision-making and execution across multiple actors, including third countries’ migration control authorities. In the context of pushbacks, this model of composite governance waters down the attribution of responsibility where illegal coercive practices occur. In the context of pullbacks, the expansion of controls at and beyond the Union’s external borders – through externalisation techniques – further complicates accountability.

2.     Asylum Seekers’ Vulnerability Requires an Adjustment of the Burden of Proof Regarding the Damage Suffered and Caused by Frontex’s Pushbacks

In the CJEU’s own words in Hamoudi v. Frontex, a pushback operation undermines the effectiveness of judicial protection for asylum seekers who have reached the territory of the Union and it “is characterised by the significant vulnerability of the persons subject to it and by the absence of the identification and personalised treatment of those persons by the authorities” (para 88). Following the Advocate General’s Opinion and on the very basis of the Frontex Regulation, the Court clarifies the division of responsibility between Frontex and the Member States: “while Frontex and the national authorities responsible for border management have a shared responsibility […], Frontex is fully responsible and accountable for any decision it takes and for any activity for which it is solely responsible under that regulation” (para 66).

For the time being, the CJEU has adopted a substantive approach to responsibility attribution, refusing to allow operational powers to serve as Frontex’s procedural shield. The Court recalls that Article 97(4) of the same Regulation “provides – like the second paragraph of Article 340 TFEU, to which it gives a concrete expression – that, in the case of non-contractual liability, Frontex is, in accordance with the general principles common to the laws of the Member States, to make good any damage caused by its departments or by its staff in the performance of their duties. Consequently, the case-law of the Court relating to that provision of the TFEU is relevant in the present case” (para 67). Next, and most importantly, after reiterating the obligation to compensate any damage, the Court acknowledges “the need to adapt the burden of proof” in respect of that damage, adapting it to the “specific circumstances” of operations conducted by Frontex, even when carried out jointly with a Member State (paras 86 et seq.).

Unequivocally, the judgment is rooted in the constitutional framework of Article 47 of the Charter, inviting the General Court, where necessary, to make use of the exceptional measures of inquiry permitted under its Rules of Procedure “in order to guarantee [effective judicial] protection […] which is fundamental in the European Union as a Union based on the rule of law” (paras 78 and 80–84). This means that Frontex can no longer rely on the complexity of its operational arrangements nor on the intermediation of Member States to escape effective judicial review of the activities for which it is “fully responsible” (para 66). The Agency cannot claim a “de facto immunity” that would hinder “all legal action by victims of a pushback operation against Frontex” (para 105). The “full respect” for the right to an effective remedy requires an “adjustment of the burden of proof,” which, in particular, must allow applicants to limit themselves to “present prima facie evidence that that operation, in which Frontex participated, occurred and that they were present during it” (para 106). In the present case, this may consist of the applicant’s testimony corroborated by a press article concerning the pushback.

The General Court ought to have granted the requests for measures of inquiry and hearings to actively seek the evidence held by Frontex, for example by ordering the Agency to produce documents in its possession. The Court notes that, on the one hand, Frontex is “likely to possess information that is relevant for the purpose of proving the existence of pushbacks” (para 96) and, on the other hand, that that failure to cooperate by Frontex “justif[ied] the General Court’s involvement” (para 148). The standard of proof must necessarily be relaxed, considering the informational asymmetry inherent in situations of pushbacks at the borders. Operational decisions adopted by Frontex must be traceable, and the Agency’s practices – long presented as purely technical – must be acknowledged in their full legal significance (on Frontex’s growing power not matching its fundamental rights responsibility, see G. Raimondo).

3.     On the Reasonableness of Asylum Seekers’ Choices in the Assessment of the Causal Link

The Court further develops the analysis of causation in light of the asylum seekers’ conduct in WS and Others v Frontex (Joint return operation). In its 2023 judgment, the General Court had taken into account numerous factual elements relating to the applicants’ conduct in order to dismiss their claim for damages. However, these elements concerned events subsequent to the refusal of entry into Greek territory and the return to Turkey, such as their departure from Turkey and their settlement in Iraq. According to the General Court, such decisions were autonomous choices, the risks and costs of which the applicants had knowingly assumed. They were, in a sense, rational choices comparable to those made by economic operators in other cases concerning the Union’s non-contractual liability. The General Court, therefore, concluded that the damage resulting from such choices could not be attributed to Frontex’s conduct, in the absence of a sufficiently direct causal link with the Agency’s actions.

At that time, we already believed that this line of reasoning was highly questionable (see our analysis in the Journal de droit européen). It characterised the subsequent conduct of the Syrian asylum seekers as “autonomous choices” and effectively neutralised the prior legal and factual constraints inherent in the asylum context. Access to the territory of the EU is not a strategic option. Without access to the territory, there can be no access to the asylum procedure. Where Frontex, through the actions of its agents – whether alone or in cooperation with those of a Member State –, unlawfully prevents access to the EU territory, those actions constitute a decisive cause of the damage consisting in the impossibility of accessing the refugee status determination procedure. Even if shared with the Member States, there is a responsibility of the Union that cannot be ignored.

Similarly, the CJEU censured the General Court’s flawed causal reasoning. The Court observed that, while an “entirely rational decision-making may be expected of economic operators experienced in the management of risks involved in the exercise of their usual activities […], such rational behaviour cannot be elevated to the rank of a criterion of general application, in particular when natural persons are concerned” (para 155). The applicants’ decision, “although not the only possible response, may be regarded as a reasonable response having regard to all the circumstances characterising that situation” (para 157, emphasis added). Such choices are not capable of breaking any sufficiently direct causal link between the conduct complained of and the alleged damage without first assessing in concreto their reasonableness “in the light of all the circumstances characterising the context in which they were made” (paras 161 and 197).

The Court thus clarifies the method for examining the causal link between alleged violations of fundamental rights committed by Frontex and the damage suffered by asylum seekers following their expulsion from Union territory. To that end, the Court provides a clear reconstruction of the obligations incumbent upon Frontex regarding the protection of fundamental rights, particularly in the context of joint return operations. These obligations include verifying the existence of “written and enforceable return decisions […] for all persons whom a Member State intends to include in such operations” (para 107), in order to ensure compliance with the principle of non-refoulement. Admittedly, the Court specifies that this obligation of verification does not automatically entail the existence of a causal link, the assessment of which “must be undertaken taking into account of all the relevant facts […] and the legal assessments required” (para 112).

Furthermore, given the joint nature of such operations, the fact that Frontex provides “technical and operational” support to Member States does not mean that any alleged violation of the asylum seekers’ fundamental rights would result exclusively from the Member State’s conduct (in this case, Greece), thereby excluding the possibility of engaging Frontex’s liability. In doing so, the Court requires a well-articulated reading of liability arising from the exercise – even in hybrid form – of the Union’s public authority, subject to full and effective judicial review.

The lesson is clear: litigation concerning Frontex cannot constitute exceptional litigation. The more autonomous capacities the Agency possesses, the more it might be held legally accountable for their exercise. Clearly defining the contours of responsibility thus becomes a central issue of the EU administrative and constitutional law. The Court’s judgment reflects a firmer recognition of Frontex’s own obligations regarding fundamental rights protection and a more open approach to causation in joint operations. It stands in clear opposition to the restrictive interpretations of the conditions for engaging the Agency’s non-contractual liability adopted by the General Court in 2023.

4.     On Allocation of Responsibilities for Fundamental Rights Violations and Competences? 

One can only endorse these two Frontex rulings, which hold the EU agency accountable for its actions. That is not to say that assessing their consequences will be straightforward. As the cases have been referred to the General Court following the annulment of its original decisions, the concrete analysis of causation, damage and compensation for the harm suffered remains open. However, it cannot be denied that the Court’s reasoning leads to a certain shared responsibility between the Member States and the EU agency. Could this division of responsibility result in joint and several liability (in solidum) of all the actors for the entirety of the damage? The question is not definitively settled. Advocate General Tamara Ćapeta devoted a fairly extensive analysis to this issue in her Opinion in WS and Others. Limiting herself on this point to examining causation, she nevertheless suggested that “in situations in which both Frontex and Member States share obligations in joint return operations, Frontex can be held liable for damage caused by the breach of such obligations, even if a Member State can be liable in parallel for the same damage” (para 93). Her reasoning drew on a possible analogy with the joint liability of another EU agency, Europol (Kočner v. Europol). In the case of Europol, it might be difficult a posteriori for a person harmed by an abusive alert to determine whether the source was the EU agency or a Member State. In contrast, with Frontex there would be, in a sense, a priori responsibility on the part of each actor – both the State and the Agency – each being fully required to prevent any serious violation of fundamental rights. Both scenarios could lead, in similar fashion, to joint and several liability.

However, the CJEU held that the plea alleging possible joint and several liability was inadmissible on the ground that it had not been raised before the General Court (WS and Others, paras 80–89). Consequently, at least in the cases at issue, it is highly likely that – not least because of the division of competences – separate findings of liability will be made corresponding to each actor’s share of responsibility. This latter scenario could generate complex litigation, leading to parallel proceedings before Luxembourg and Strasbourg. In his commentary on the two judgments, Johan Callewaert highlights their systemic significance for protection under the European Convention on Human Rights (ECHR). The complex cooperative frameworks of a hybrid administration (such as joint operations) create new situations from the ECHR perspective. Certain actions carried out on the territory and under the jurisdiction of Member States, but by EU agencies such as Frontex, result in fragmented Convention protection: “patchwork coverage”. Some actions would remain covered by the Convention when attributable to national authorities, whereas those attributable to EU bodies would escape it and fall instead within the jurisdiction of the EU courts, with the result that the ECtHR would no longer be able to hold a State liable for the entirety of the damage arising from a joint operation. In other words, while the 2025 Frontex case law shed some light – by reducing the grey areas regarding EU liability – it also cast a shadow, as any light does, in this case concerning the extent of damage that the ECtHR may attribute to the responsibility of States. The way out of this paradox would, of course, be the completion of the EU’s accession to the ECHR. Yet that prospect still appears remote.

5.     Non-Justiciability of Human Rights Violations Arising from the Coordination of Search-and-Rescue (SAR) Operations at Sea

While the evolving case law concerning Frontex has led the two European courts – Luxembourg and Strasbourg – to review, concurrently if not jointly, compliance with fundamental rights in pushback operations at the borders, for the time being, so-called pullback operations still escape review by the Strasbourg Court. Even if the ECtHR emphasised that “entering into bilateral agreements on migration with third States has the effect of placing extremely vulnerable individuals at serious risk of infringements of their fundamental rights” (S.S. and Others v. Italy, para 110), such arrangements do not automatically bring those individuals within the jurisdiction of a Contracting State for the purposes of the Convention, thereby limiting access to Strasbourg protection.

The inadmissibility decision delivered in S.S. and Others v. Italy reveals the limits of Convention responsibility in the face of the EU policy of delegating migration control, including maritime control, to third countries. The involvement of EU Member States in SAR operations in the Mediterranean cannot be understood without reference to the central role entrusted, for more than a decade, to the border coast guards of third countries such as Libya or Tunisia. In the absence of an integrated EU SAR programme, the Union and its Member States have progressively externalised the management of SAR obligations, while adopting an increasingly restrictive approach toward humanitarian operations conducted by non-governmental organisations (NGOs). This development has been accompanied by financial, material and operational support to third countries: provision of vessels, training, technical assistance and the establishment of a coordination centre (on this topic see E. Frasca). Although the strengthening of SAR capacities in these countries is officially carried out in the name of saving human lives, it is structurally linked to the objective of preventing irregular Mediterranean crossings into the EU territory.

By relocating such actions, externalisation also makes it possible to shield these practices from scrutiny under the obligations arising from the ECHR. Yet this strategy unfolds in a context marked by interceptions at sea that systematically expose migrants to serious violations of their fundamental rights, including treatment contrary to Articles 2 and 3 of the Convention. Like the cases concerning Frontex before the CJEU, S.S. and Others v. Italy raises the issue of the dilution and segmentation of the exercise of powers and, consequently, of responsibilities in the conduct of SAR operations at sea. The Strasbourg Court confirms that its jurisdiction over extraterritorial actions of Contracting States remains exceptional. To fall within its jurisdiction, such extraterritorial actions require the establishment, in the control exercised over individuals, of a direct link with the respondent State. In this way, a dissociation occurs between factual causation and legal attribution, creating a procedural obstacle that is practically insurmountable (on this topic, see C. Ryngaert). In the present case, the Court held that the financial, logistical and operational support provided by Italy to strengthen the capacities of the Libyan coast guard does not, absent effective control or direct operational direction, amount to sufficiently decisive influence to trigger jurisdiction within the meaning of Article 1 of the Convention. In doing so, it effectively casts a veil of ignorance over any responsibility of a Contracting State under the ECHR. Any notion of indirect, functional, or remote control is rejected, even where the risks faced by the persons “rescued” at sea – only to be returned to Libya and subjected to torture and inhuman treatment that has been widely documented – are fully known.

Conclusion: A Rebuttable Presumption Grounded in Prima Facie Evidence

Rulings on matters of access to the EU territory are likely to become more and more significant, signalling a new focus not only by Member States but also by national courts and, consequently, by the CJEU and the ECtHR, on the control of the Union’s external borders and their heir harmful consequences on asylum seekers. The ECtHR’s inadmissibility decision may be read as consistent, confirming the Court’s settled case law on extraterritorial situations (Banković, Al-Skeini, M.N. v. Belgium). It may also be read as a retreat from an evolutive interpretation of fundamental rights in light of today’s conditions. Indeed, a well-established case law recognises indirect responsibility or secondary accountability (par ricochet) in cases of extradition or refoulement, and this restrictive interpretation of jurisdiction refuses to adapt this case law to the reality and contemporary transformations of migration control. There is a middle ground between the frequently criticised slippery slope of judicial overreach whereby Courts are deemed overly protective and the equally problematic territorial lock that shields fundamental rights violations of a serious nature from scrutiny. The middle ground advocated here may appear modest: a rebuttable presumption grounded in prima facie evidence. However, it is precisely in such narrow interpretative openings that the protection of fundamental rights may evolve, by adapting interpretation to the context – a context marked, on the one hand, by situations of extreme vulnerability and, on the other hand, by elements such as bilateral agreements and conspicuous funding which make it possible to presume a genuine link between the contested acts and a Contracting State. Just as the Luxembourg Court has done with regard to Frontex, the Strasbourg Court would be well advised to accept that prima facie evidence gives rise to a rebuttable presumption (juris tantum) requiring the Contracting State to produce evidence capable of rebutting responsibility through facts and documents that would exonerate it. “There’s a crack in everything. That’s how the light gets in”, sang the poet Leonard Cohen. In the present context, we believe that European courts and judges must now more than ever try to maintain a balance. That crack is the space within existing doctrine, mindful of the rights of the individuals concerned, that allows Courts to remain faithful to their jurisdictional frameworks while adapting to new realities of migration control.

The post Bulgaria is the latest example of the perils of presidentialism first appeared on LSE European Politics.

Andreina De Leo*, Post-doctoral researcher, Maastricht University

* Funded by the European Union (ERC, SoftEn project, 101165167, PI: Lilian Tsourdi). Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or the European Research Council. Neither the European Union nor the granting authority can be held responsible for them.

Photo credit: Fred Romero, via Wikimedia commons

Introduction

On 23 April 2026, Advocate General Nicholas Emiliou delivered his Opinion in Sedrata, one of two pending preliminary references concerning the Italy–Albania Protocol. The Opinion marks a significant development in the ongoing proceedings before the Court of Justice of the European Union, addressing for the first time the question of whether asylum and return procedures may be conducted in a third country while remaining fully under the jurisdiction of a Member State.

While affirming that EU law continues to apply wherever a Member State exercises jurisdiction, and that the relocation of procedures outside EU territory does not, in itself, remove them from the scope of the acquis, the Opinion does not exclude, in principle, the possibility of delocalising asylum and return procedures to a third country, provided that all guarantees under EU law are fully respected.

This post examines the key elements of the Opinion and highlights the tensions that arise from its underlying logic.

EU Law Beyond Territory: Applicability and Conditional Compatibility in the AG Opinion

A central feature of the Opinion is its unequivocal rejection of a strictly territorial understanding of EU migration law. The AG finds that both the Return Directive and the Asylum Procedures Directive apply directly to the situations at issue, not merely by virtue of their incorporation into national law, but as a matter of EU law itself. In his view, the transfer of individuals to centers located in a third country cannot have the effect of rendering those directives inapplicable or of prejudicing the application of common standards, insofar as the procedures clearly fall within the material scope of EU law (see, in particular, paras. 34 and 48).

More broadly, the Opinion endorses a jurisdiction-based understanding of the scope of EU law, echoing principles familiar from international law. Where a Member State exercises authority over individuals, it remains bound to ensure compliance with all applicable EU rules, irrespective of the geographical location in which those activities are carried out. In this respect, the Opinion directly contradicts the position advanced by the European Commission during the hearing, which emphasized the territorial anchoring of the asylum acquis and denied its direct applicability outside the Union. Instead, the Advocate General affirms that EU law does not “switch off” when procedures are relocated beyond EU borders (para. 47).

Having established that EU law applies, the Opinion adopts a relatively concise approach to compatibility. As regards the Return Directive, the AG considers that nothing in its provisions expressly precludes the operation of detention facilities outside the territory of a Member State. In his view, the Directive regulates the grounds, duration, and conditions of detention, but remains silent on the geographical location of such facilities. From this silence, he infers that EU law does not, in principle, prohibit transfers to centers situated in a third country. The Opinion recognizes that such a scenario was likely not envisaged by the EU legislature. On this basis, and in the absence of explicit regulation, Member States retain a margin of discretion as to the organization of detention, including its possible extraterritorial dimension (paras 58-59, and 64).

At the same time, the Opinion draws a crucial conceptual distinction: the transfer to Albania cannot be qualified as a “return” or a “removal” within the meaning of the Directive. It neither brings the return procedure to an end nor constitutes the enforcement of a return decision. This clarification is significant, as it confirms that the Italy–Albania model is conceptually and legally distinct from the idea of “return hubs” currently discussed in the context of the proposed EU Return Regulation. In that framework, the transfer of a third-country national to a third State, other than the country of origin or habitual residence, would amount to the execution of a return decision directed towards that State, a possibility which is not permitted under the existing EU law. By contrast, the transfer to Albania is characterized as an intermediate step within an ongoing procedure: individuals remain fully under the authority and jurisdiction of the Member State, and the return decision is neither executed nor exhausted (paras 60-62).

A similar reasoning is adopted in relation to the Asylum Procedures Directive and the Reception ConditionsDirective. The AG considers that Article 9(1) of the Procedures Directive – which enshrines the right to remain on the territory of Member States pending the first instance asylum decision – does not, in principle, preclude the transfer of asylum seekers to a third country, provided that applicants are able to exercise their procedural rights effectively, including appearing before the competent authorities and benefiting from the guarantees laid down in EU law. While acknowledging that a literal reading might suggest that applicants must be brought back to the territory of the Member State once they lodge an application, the AG rejects such an interpretation when the provision is read in context and in light of its purpose. In his view, the notion of “remaining in the Member State” must be understood by reference to the definition in Article 2(p) of the Directive, which already includes border areas and transit zones, thus pointing towards a functional rather than strictly territorial understanding (paras 93-97).

On this basis, and supported by a functional and systemic reading, he argues that Member States cannot be regarded as precluded, as a matter of principle, from organizing asylum procedures in facilities located outside their territory, provided that those facilities fall under their jurisdiction and that EU guarantees are fully ensured in practice. The core objective of Article 9(1) is, in his view, to prevent removal before a final decision on the application has been taken and to safeguard the effectiveness of the right to seek asylum, rather than to guarantee physical presence on the territory of the Member State in all circumstances. In situations where those guarantees are maintained and no risk of refoulement arises, the relocation of procedures does not, in his view, undermine the Directive’s purpose. Accordingly, Emiliou concludes that Article 9(1) does not, in principle, preclude national legislation such as that at issue in the main proceedings (paras. 102–103).

The Functional Turn: “Magically turning non-EU territory into EU territory via some mystical legal alchemy” (Peers, here)

As argued elsewhere (see here, with Celoria, and here with Celoria and Ferri), I concur that EU law does not apply as a matter of voluntary choice, but follows from the fact that the procedures fall within its material scope, thereby ensuring the need to preserve the primacy and uniform interpretation of EU law, and to prevent unilateral circumvention of the acquis. Likewise, the transfer to Albania does not amount to a “return” or a “removal” within the meaning of the Return Directive, nor can it be assimilated to the concept of “return hubs”, as it does not constitute the enforcement of a return decision. It is also plausible that the silence of the EU legislature reflects the fact that such configurations were not contemplated at the time of adoption. However, beyond these points, the reasoning of the AG appears unconvincing, and is affected by internal inconsistencies.

The Opinion relies on a broad and functional interpretation of spatial concepts within EU law. The AG adopts an expansive reading of notions such as “territory,” “border,” and “transit zones,” suggesting that their meaning should be determined in light of function rather than physical location. This approach makes it possible to treat facilities located outside the Union as functionally equivalent to border or transit zones situated within Member State territory.

This is not entirely new: for instance, in the recent Danané (discussed, in this blog here), the Court, on the basis of an Opinion by the same AG, accepted that procedures traditionally associated with entry control may operate through a legal fiction of non-entry and be carried out in facilities located inland where national law designates them as “border” or “transit” settings. In that sense, the underlying logic of functional interpretation of geographical concepts is not unprecedented.

However, those cases remain anchored, in practice, within the geographical space of the Union, understood in a legally fragmented but still territorially contained manner. What is distinctive in the present context is the further conceptual step that is being contemplated: the extension of this legal fiction beyond the geographical borders of the Union itself. This marks a qualitative shift, as the “border” is no longer merely redefined within the territory of the Member State, but effectively displaced outside it.

This development raises significant concerns. By effectively allowing Member States to shape the spatial reach of EU procedures, it risks extending derogatory regimes beyond their traditionally circumscribed scope and weakening the safeguards attached to them. Moreover, the Opinion itself appears to expose tensions regarding the internal coherence and normative limits of this reasoning.

As mentioned, the interpretative ambiguity stemming from the absence of an explicit prohibition on relocating EU asylum and return procedures outside the Union is addressed through an expansive reading of “territory” and of “border” or “transit zones,” extending these concepts to extraterritorial settings. In other words, in the absence of a clear treaty or legislative definition clarifying that “territory” refers to the geographical territory of the Union rather than what a Member State unilaterally designates as such, the question arises as to whether Member States retain any discretion to determine the spatial scope of EU asylum law in this field.

EU institutions, including the Commission during the hearing, have consistently rejected such an approach, clarifying that asylum claims cannot be lodged or processed outside the Union, as this would require an extraterritorial application of EU law considered neither legally feasible nor politically acceptable. At most, Member States may transfer individuals to third countries in compliance with the principle of non-refoulement, but without retaining responsibility for the examination of asylum applications after disembarkation. The European Parliament’s Legal Service has adopted a similar position, recognizing that jurisdiction may, in certain circumstances, extend extraterritorially, while stressing that this does not transform such locations into EU territory for the purposes of asylum law. The institutional position thus converges on a key distinction: while jurisdiction may extend beyond borders in limited situations, the notion of “territory” under EU asylum law remains autonomous and confined to the geographical territory of the Union (for more info, see De Leo & Celoria, p. 604).

The AG introduces, however, a preliminary contextual remark noting that the agreement underlying the Italian legislation concerns Albania, a geographically close State to Italy, separated only by the Adriatic Sea, which is also an ECHR Contracting Party and an EU candidate country engaged in accession negotiations. These elements are treated as relevant factors in assessing the lawfulness of the scheme under EU law (paras 68-69). This is where a significant internal incoherence emerges.

If “territory” under EU asylum and migration law is not an autonomous legal concept, meaning that Member States are free to define its spatial reach at their discretion, then the assessment of compatibility with EU law in abstracto cannot, without contradiction, be made to depend on contextual variables such as geographical proximity or an ex ante assumption of compliance with fundamental rights. The attempt to anchor the analysis in Albania’s proximity and its presumed rights compliance therefore sits uneasily with the jurisdictional reading endorsed elsewhere in the Opinion. It effectively introduces an ad hoc relational criterion into what is otherwise presented as a non-autonomous legal concept under EU law, thereby blurring the distinction between a principled determination of the spatial scope of EU migration and asylum law and a pragmatic, case-by-case assessment of legality. Either the asylum and migration acquis is territorially bound to the Union’s geographical space, including only its legally constructed exceptions such as borders and transit zones, or it is not territorially constrained at all. In the latter scenario, the question would no longer concern abstract spatial limits but the concrete application of EU guarantees in individual cases, leaving national courts to assess compliance with EU law obligations without any role for EU law in further delimiting the spatial reach of “territory” itself.

The result is a conceptual inconsistency: what is framed as a question of legal scope, i.e. whether “territory” under EU law is autonomous or subject to Member State discretion, is made dependent on operative factors based on contextual and geopolitical considerations. These considerations, however, have no clear legal basis in determining the applicability of the acquis and end up suggesting, implicitly, a degree of autonomy in the concept of territory that the initial premise simultaneously denies.

This tension is further reinforced by the Advocate General’s acknowledgment that, while compatibility in abstracto may be preserved, the extraterritorial location of detention facilities inevitably generates practical and structural difficulties in ensuring full compliance with EU guarantees, thereby highlighting how relocation outside the Union introduces an inherent and additional layer of complexity in the effective protection of rights that would not arise within the territorial space of the Union.

More concretely, these difficulties are linked to structural factors such as geographical distance, the need to cross an international border to access the centers, and dependence on both third-country authorities and those operating within the centers for the enjoyment of key guarantees, including family visits and effective communication with legal counsel. The AG emphasizes that this does not, as such, imply a violation of EU law, but rather that Member States may be required to adopt specific organizational and logistical measures to ensure compliance with EU standards (para 80).

The limits of this reasoning become particularly visible in the AG’s own discussion of the requirement of “immediate” release under the Return Directive. In assessing the meaning of this guarantee, the Opinion accepts that the term “immediately” cannot be interpreted in an overly rigid or literal manner, but nevertheless acknowledges that national authorities must be able to organize, within a short timeframe, the practical modalities necessary to give effect to a judicial order ordering release, including transport by air or sea where required (para. 82). Even accepting this flexible interpretation, however, the Albanian model reveals the structural impossibility of equivalence introduced by extraterritorialisation. In a purely domestic setting, a finding that detention is unlawful triggers immediate release within the legal and physical space of the Member State, without any further material impediment to the restoration of liberty. By contrast, in the Albanian setting, even where a judicial authority orders release, the individual remains subject to continued physical constraint until the completion of a cross-border transfer back to Italy, thereby introducing an additional and legally significant phase of deprivation of liberty which is absent in a territorial context and stems solely from the extraterritorial location of the detention facility. This example illustrates, more broadly, that the issue is not confined to a single instance of unequal treatment. Rather, it reveals a pattern of structural frictions affecting a range of guarantees, i.e. access to legal assistance, the possibility of family visits, and the effectiveness of judicial protection, which, taken together, seriously undermine the claim of functional equivalence.

Seen in this light, the reasoning concerning the conditions for compatibility appears particularly unconvincing. The difficulty is not simply that individual guarantees may, in specific cases, be ineffectively implemented. It is that the extraterritorial design itself generates structural constraints that systematically hinder their effective exercise. These are not incidental or remediable deficiencies, but structural features of a system that operates outside the territorial and institutional framework in which the EU acquis was conceived. The issue, therefore, is not whether compliance can be demonstrated case by case, but whether a model that introduces additional layers of dependency, delay, and fragmentation can, as such, meet the standard of effectiveness and uniform applicability required by EU law, irrespective of any ad hoc organizational measures adopted by Member States. As such, this interpretation departs not only from a literal reading of the relevant provisions, but also from their teleological interpretation, which is precisely to ensure the effective and practical enjoyment of the rights they enshrine.

Furthermore, accepting the relocation of procedures outside the Union leaves unresolved a set of central issues concerning the Dublin system and mutual trust (a dimension addressed in detail in our previous analysis here), which the Opinion largely sidelines, merely noting that its applicability follows from that of the Asylum Procedures Directive and that its provisions must be interpreted coherently with it (para. 49). These questions therefore remain insufficiently developed in the reasoning, plausibly because they were not directly raised by the referring court, but are likely to be clarified in pending related proceedings (Joined cases C-706/25 Comeri and C-707/25 Sidilli), which more broadly concern whether the Protocol may adversely affect the proper functioning of internal EU rules, in potential breach of the Union’s exclusive competence in the light of the ERTA doctrine.

Conclusion

Overall, the Opinion of Advocate General Emiliou in Sedrata adopts an ambivalent approach to the legality of the de facto extraterritorial application of EU asylum and migration law.

On the one hand, it clearly affirms that EU law continues to apply wherever Member States exercise jurisdiction, thereby ruling out any attempt to circumvent obligations through geographical relocation. At the same time, it preserves the compatibility of the Protocol with EU law through a functional redefinition of the notion of “territory”. On the other hand, the delocalization of asylum and return procedures to third countries is accepted only under strict conditions: full compliance with EU standards, coupled with an uncertain reliance on contextual factors such as geographical proximity and an ex ante assumption of adequate fundamental rights protection based on formal international commitments. Yet the AG himself acknowledges that ensuring such compliance is significantly more demanding in an extraterritorial setting, while also leaving open a degree of Member State discretion in shaping the spatial understanding of “territory” and “border”.

Taken together, this gives rise to a structural tension and an internal incoherence that ultimately weakens the persuasiveness of the reasoning. From this perspective, coherence and effectiveness can in my view only be preserved by recognising that “territory”, for the purposes of EU asylum and return law, is an autonomous concept confined to the geographical territory of the Union, including its legally constructed exceptions such as border areas and transit zones. This implies, in practical terms, that both the examination of asylum applications under ordinary and accelerated border procedures and the detention phase under the Return Directive, prior to the enforcement of removal to the country of origin or to a third different country (should the proposed Return Regulation be adopted), must take place within the Union’s geographical space, irrespective of any unilateral qualification by Member States.

This view is grounded in the structural logic of the asylum and return acquis prior to removal, whose safeguards are designed to operate within the Union’s territorial framework. It is within this framework that supervision, enforceability, and effective protection are meant to be ensured. Accordingly, such guarantees cannot be transposed outside the Union through a functional extension of jurisdiction without altering their operation and effectiveness, even where formal complianc appears to be ensured.

Ultimately, it is now for the Court of Justice to decide whether this logic is to prevail, or should it be rewritten.

Inês Maria Ribeiro da Costa (master’s student in European Union Law at the School of Law of University of Minho)

1. Introduction

On the 23^rd and 24^th of April EU leaders are meeting in an informal summit to discuss “current political developments and issues of strategic importance for the European Union”,[1] namely on the activation of a mutual assistance clause in the Treaty on European Union (TEU)[2] in case of an armed attack.[3]

In 2026, the Union’s geopolitical survival is at the top of the agenda, a priority for which European competitiveness is proving to be a necessity, rather than just a market concern. So much so that Ursula von der Leyen, President of the European Commission, has been promoting the idea of a “two-speed” Europe, arguing that Member States that favour enhanced integration[4] – in a group of at least nine – should be able to move forward in a coordinated effort to strengthen the Internal Market.[5]

In 2025, this competitiveness was at the heart of a significant strategic restructuring, focusing on post-pandemic recovery and responding to technological pressure from the United States of America (US) and China. To preserve and strengthen Europe’s position relative to global actors, it became essential to take decisive measures.[6]

In this regard, the “Competitiveness Compass” emerged as the Commission’s first major initiative, based on the Draghi Report. This new plan addresses the need to reposition Europe in response to the erosion of its innovative capacity, increasing global competitive pressure, and the vulnerabilities revealed by growing external economic and technological dependencies.[7]

Nevertheless, one year after its publication, we find ourselves facing a new geopolitical scenario and on the brink of a new energy crisis in the European Union (EU). With the recent escalation of tensions between the US and Iran and the resulting closure of the Strait of Hormuz, we are witnessing a steady rise in fuel and gas prices, whose impact is beginning to be felt acutely in the EU.

The conflict in the Middle East in 2026 has tested the premise that the Union needs to reduce its external dependencies to avoid coercion. It is becoming clear that strategic autonomy is no longer a theoretical concept but a matter of survival. The current crisis in the Middle East has forced the EU to accelerate its transition from a focus on efficiency to a focus on resilience. The question at hand is quite clear: is the Compass a sufficiently robust strategic instrument to prevent external coercion, or are we facing a silent fragmentation of the Single Market?

2. The legacy of February 2025: expectations vs. outcomes

Published in January 2025, the “New Compass for Competitiveness” is not merely a policy paper, but an effective strategic plan that establishes competitiveness as one of the Union’s “overarching principles for action”.[8] Based on Draghi’s report, this initiative has a twofold objective: “to accelerate economic reforms” and “to improve the way the EU works together”, with speed and unity being essential to its success.[9]

In the context of EU law, the importance of this “New Compass” lies in how its reform pillars interact with the traditional framework of the Internal Market and Competition. The third criterion for change in the Compass is “reducing excessive dependencies and increasing security”,[10] an objective that reflects the reconfiguration of the concept of the Internal Market within the economic sphere. The Compass also aims to take the lead in strategic technology sectors – “such as AI, quantum and semiconductor technologies, advanced materials, biotechnologies, robotics, space, and connected and autonomous mobility”[11] – in order to consolidate European technological sovereignty.

To this extent, competition and Internal Market rules have been realigned to serve as instruments of autonomy, notably through the simplification and flexibilisation of State aid rules (Articles 107–109 TFEU) and the use of exception mechanisms, such as the “Temporary Crisis and Transition Framework,” established in the wake of Russia’s aggression against Ukraine, which has led to the implementation of State aid measures to support the economy.[12]

In the meantime, the European Commission is actively working to simplify the regulatory framework in order to support businesses and increase competitiveness, with the Internal Market serving as the main catalyst for growth.[13] A central element of this simplification is the Omnibus Package, which, together with this strategy, seeks to remove existing barriers so that businesses can fully enjoy the benefits of economies of scale,[14] representing “an important step forward in creating a more favourable business environment to help EU companies grow, innovate, and create jobs”.[15]

Nevertheless, one year after its implementation, its execution has proved to be uneven. On February 26, 2026, the Omnibus simplification package was finally published in the Official Journal of the EU.[16] While the Commission presents this package as a necessary step towards “significantly reducing the effort associated with sustainability reporting” – as a way of maintaining the transition to a sustainable economy without compromising ESG standards[17] – these proposals have sparked debate and remain a critical challenge.

In fact, the “simplification” rhetoric surrounding the Omnibus Package has been received with some scepticism. For many, this measure could undermine the regulatory standards established by the EU; consequently, the debate surrounding the package reveals a clear tension: the difficulty of balancing competitiveness with the preservation of fundamental social and environmental standards and values.

The key to making this ambition a reality lies in Enrico Letta’s proposal, the “Savings and Investment Union,” which still faces serious challenges. The potential fragmentation of national markets continues to prevent the EU from achieving the scale necessary to compete with the US “Inflation Reduction Act.” Without centralised European funding, “technological sovereignty” in sectors such as AI remains dependent on national budgets, which are often disparate.

Moreover, the urgency that Draghi demands often clashes with the Union’s complex governance structure. Internal political fragmentation prevents the “Compass” from being a fully effective plan. Although the “Compass” mentions strategic sectors such as biotechnology, the conflict in the Middle East has shown that leadership in AI, for example, is meaningless without energy security. Although initiatives such as “AI factories” are being implemented, their sustainability is at risk due to the high production costs caused by the crisis in the Strait of Hormuz.

The legacy of the Compass’s first year is, therefore, a “two-speed” Union, as mentioned earlier: one that is moving swiftly toward administrative deregulation (Omnibus) but remains stalled in the creation of a true common financial authority, leaving strategic autonomy dangerously exposed to external shocks such as the current conflict in the Middle East.

3. The conflict in the Middle East and the EU’s external dependencies

In 2026, the impact of the conflict in the Middle East validated the sense of urgency Draghi has been emphasising — the era of geopolitical stability is coming to an end — and this crisis is affecting the EU in terms of energy vulnerabilities, supply chains, and geopolitical coercion. Iran’s retaliation, following the US attacks on February 28, disrupted the supply of about 15 million barrels of oil per day, triggering, according to the International Energy Agency, “the largest supply disruption in the history of the oil market.”[18]

Thus, we observe that the EU is undergoing a period of structural reform in which the traditional model of integration — focused on the removal of barriers — has proven insufficient in the face of current political fragmentation. Given this unstable context in which we live, Letta proposes the institutionalisation of “the 5^th Freedom to enhance research, innovation, and education in the Single Market.”[19] This proposal is not purely theoretical and does not seek merely to stimulate growth, but strives to operationalise a cutting-edge industrial ecosystem that enables the Union to establish globally relevant entities, as well as a common digital infrastructure and European data spaces, such as the European Health Data Space, to enable technological leadership.[20] To make this ambition a reality, Letta incorporates the concept of a “Savings and Investment Union,” capable of mobilising European private capital for internal strategic projects, preventing its transfer to third-party markets.[21]^/[22]

In parallel, Mario Draghi, in the report “The future of European competitiveness,” adopts a sense of urgency by asserting that the EU faces an “existential challenge” due to the loss of its traditional sources of growth – cheap Russian energy and geopolitical stability[23] – arguing that European competitiveness currently requires a “war economy” approach in the industrial sphere, where security and energy are requirements for prosperity.

The urgent need to abandon fossil fuels, as outlined in the 2025 Roadmap, has become a matter of survival. As pointed out by Jorgensen – a representative of the European Commission – the effects of this conflict “will not be short-lived” and, even in the event of a ceasefire, there would still be consequences.[24] Therefore, the EU finds itself in a position where it is compelled to take emergency measures ranging from promoting telework and limiting speeds on highways to the urgent need to expand energy supply sources, with the debate on the potential of fusion energy gaining greater relevance for the first time – not merely in theory, but also in practice.[25]

In addition, the restrictions on shipping through the Strait of Hormuz put the Union’s “Resilience 2.0” to the test. The resulting disruption to trade exposed the fragility of import routes, requiring full coordination of industrial policies that Member States had, until now, been reluctant to fund. One thing has become clear: external dependence is no longer merely an economic risk but has become a direct obstacle to European production. And as such, as outlined in the “Compass,” exposure to external shocks makes the EU vulnerable to coercion, making strategic autonomy an essential requirement for our own democracy within the Union.

Nevertheless, this transformation process faces an internal challenge: crisis management. The European Commission has already issued a warning to European countries, stressing that Member States must avoid turning this “energy crisis into a budgetary crisis”.[26] The Commission argues that “the subsidies and price caps proposed by the 27 [Member States] must be limited in time and scope, in order to prevent a recurrence of the 2022 energy crisis”,[27] and cautioning that the response to external pressure must not result in the destabilisation of public finances – a risk that, if materialised, would fragment the European solidarity that the “Compass” itself seeks to preserve.

4. Critical analysis: where do we stand a year later?

The doctrinal debate over the “New Compass for Competitiveness” oscillates between Enrico Letta’s vision – which enshrines a “5^th freedom to enhance research, innovation and education in the Single Market”,[28] parallel to the four traditional freedoms – and that of Mario Draghi, who describes strategic autonomy as being most akin to a structural principle of the Internal Market. One year after its implementation, the fundamental question is whether this instrument is robust enough to prevent external coercion or whether we are witnessing a silent fragmentation of the Single Market.

The answer lies in the dual nature of this instrument. If strategic autonomy is perceived as merely a softening of competition rules, the risk of fragmentation increases and becomes a real possibility. The implementation of the “Temporary Crisis and Transition Framework” has enabled a renationalisation at the national level, where Member States with greater resources – Germany and France – may end up investing disproportionately, distorting the “level playing field.”[29]  Rather than giving the Union any strength, this dynamic merely fragments its core, creating a “two-speed” market where internal solidarity is sacrificed in the name of an industrial policy that only the wealthiest Member States can afford. As the European Parliament (EP) states, competitiveness cannot be pursued at the expense of social justice or the weakening of poorer Member States.[30]^/[31] European integration will collapse if the Union becomes strategically strong externally but fragments internally.

However, the “Compass” can truly be a robust instrument. To achieve this, it must cease to be perceived as a “fundamental freedom” and instead be established as an institutional freedom of action for the EU. The robustness of this instrument stems from active coordination among the 27 Member States. As suggested by Letta’s proposal for a State aid contribution mechanism, the EU will only be able to avoid fragmentation if it is capable of transitioning from a logic of national permissiveness to one of collective financing. The success of the future of European integration depends on a reform that combines both an external strategy and an internal approach based on solidarity. In other words, this means that the EU cannot continue to be merely an open market that passively follows the rules of globalisation, which implies ensuring that the “new freedom” prevents capital from fleeing abroad.[32]^/[33]

In this context, recent debates regarding a “two-speed” economic integration plan are particularly relevant. For the Union to overcome the paralysis caused by silent fragmentation, the “Compass” must serve as a regulatory framework for Member States willing to move toward greater cooperation. This vanguard could provide the necessary flexibility for deeper economic integration for those states ready to commit, ensuring that the EU maintains its capacity to act even when unanimity proves difficult to achieve. Ultimately, the future of integration depends on whether we view this “two-speed” model as a rules-based instrument for progress.[34]

5. Conclusion

The EU is at a constitutional and economic turning point. The rise of strategic autonomy and the proposal for a “New Compass for Competitiveness” represent a significant reconfiguration of the European integration project, not merely an adjustment to industrial policies.

Strategic autonomy should not be viewed as a limitation of the Internal Market, but rather as a necessary evolution toward an international order characterised by geopolitical competition. Strategic autonomy can, in fact, be conceived as a new “5^th freedom”, parallel to the four fundamental freedoms, however, it cannot take on a classical nature. It must be established as a structuring principle that prevents the fragmentation of the Union, enabling the transition from an EU based strictly on market rules to a Union of coordinated and collective political action. In this new structure, competitiveness must serve to protect prosperity across all Member States, ensuring fair competition and social cohesion. The future of European integration will thus depend on the EU’s ability to be strategically strong on an external front, while remaining legally united and fair within its internal space.

In sum, the “New Compass” is not, in and of itself, a robust enough tool to prevent external coercion. If the Union limits itself to passively following the logic of national flexibility, the result will be silent fragmentation, in which the EU becomes, in fact, strategically strong externally but politically ineffective internally. The robustness of the instrument thus depends on a fundamental parameter: autonomy can only serve as a safeguard if it is accompanied by solidarity mechanisms that ensure competitiveness does not lead to the weakening of smaller Member States. The future of integration and the European project depend not only on the ability to withstand external shocks, but also on the resilience and determination not to succumb to the weight of its own internal inconsistencies.

[1] Cyprus Presidency of the Council, Informal Meeting of Heads of State or Government (23-24 April 2026), https://cyprus-presidency.consilium.europa.eu/en/events/informal-meeting-of-heads-of-state-or-government/.

[2] See Article 42(7) TEU, which states the following: “If a Member State is the victim of armed aggression on its territory, the other Member States shall have towards it an obligation of aid and assistance by all the means in their power, in accordance with Article 51 of the United Nations Charter (…).”

[3] Jorge Liboreiro, “EU leaders meet in Cyprus to talk Ukraine, Hormuz, energy and mutual defence”, Euronews, 23 of April of 2026, EU leaders meet in Cyprus to talk Ukraine, Hormuz, energy and mutual defence | Euronews.

[4] See Articles 20 TEU and 326-334 of Treaty on Functioning of the European Union (TFEU).

[5] Maria Simon Arboleas et al., “EU leaders to decide on two-speed Europe economy plan in Cyprus,” Euractiv, April 17, 2026, https://www.euractiv.com/news/eu-leaders-to-decide-on-two-speed-europe-economy-plan-in-cyprus/.

[6] Mario Draghi, The future of European competitiveness: a competitiveness strategy for Europe, Part A (Luxembourg: Publications Office of the European Union, 2024), 5.

[7] Draghi, The future of European competitiveness, 11.

[8] European Commission, A Competitiveness Compass for the EU, Staff Working Document (Luxembourg: Publications Office of the European Union, January 2025), 1.

[9] PwC Portugal, “Bússola da Competitividade da UE: Um Roteiro para a Renovação Económica” [EU Competitiveness Compass: A Roadmap for Economic Renewal], April 10, 2025, https://www.pwc.pt/pt/temas-actuais/bussola-competitividade-ue-renovacao-economica.html.

[10] Eurocid, “Bússola para a Competitividade” [Compass for Competitiveness], Ministry of Foreign Affairs, https://eurocid.mne.gov.pt/bussola-para-competitividade.

[11]  Council of the EU and the European Council, “Competitiveness Compass”, https://www.consilium.europa.eu/en/policies/competitiveness-compass/.

[12] European Commission, “Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia,” Official Journal of the European Union C 101/3, March 17, 2023, 1.

[13] European Commission, “Bringing down barriers to the single market to create opportunities for all”, Directorate-General for Communication, May 21, 2025, https://commission.europa.eu/news-and-media/news/bringing-down-barriers-single-market-create-opportunities-all-2025-05-21_en.

[14] European Commission, “Bringing down barriers to the single market to create opportunities for all”.

[15] European Commission, “Comissão simplifica regras em matéria de sustentabilidade e de investimento na UE” [Commission simplifies rules on sustainability and investment in the EU], Representation in Portugal, February 27, 2025, https://portugal.representation.ec.europa.eu/news/comissao-simplifica-regras-em-materia-de-sustentabilidade-e-de-investimento-na-ue-disponibilizando-2025-02-27_pt.

[16] PwC Portugal, “Diretiva ‘Omnibus’: Alterações para Reforçar a Transparência e Combater o ‘Greenwashing’” [‘Omnibus’ Directive: Changes to strengthen transparency and combat ‘greenwashing’], March 3, 2026, https://www.pwc.pt/pt/temas-actuais/omnibus-alteracoes-sustentabilidade.html.

[17] PwC Portugal, “Diretiva ‘Omnibus’.”

[18] Alice Carnevali, “Could fusion energy save Europe from the energy crisis?”,Euronews, April 6, 2026, https://www.euronews.com/next/2026/04/06/could-fusion-energy-save-europe-from-the-energy-crisis.

[19] Enrico Letta, Much more than a market: speed, security, solidarity, Report, Document posted on behalf of

European Commission, April 2024, 17, https://european-research-area.ec.europa.eu/documents/letta-report-much-more-market-april-2024.

[20] Andrea Bolitho, “’Istart from a big, red alarm’ – Enrico Letta urges radical EU single market shake-up”, Euronews, June 11, 2024, https://www.euronews.com/business/2024/06/11/single-market-shake-up-a-fifth-freedom-for-the-eus-internal-trading-arrangements.

[21] Letta, Much more than a market, 28.

[22] “Relatório Letta: Um novo impulso para o Mercado Único e a Indústria Europeia” [Letta Report: A new impulse for the Single Market and European Industry], Zabala Innovation, https://www.zabala.pt/opiniao/relatorio-letta/.

[23] Draghi, The future of European competitiveness, 5.

[24] SIC Notícias, “Comissão Europeia diz que crise energética não será curta e sugere medidas” [European Commission says energy crisis will not be short-lived and suggests measures], April 1, 2026, https://sicnoticias.pt/mundo/europa/2026-04-01-video-comissao-europeia-diz-que-crise-energetica-nao-sera-curta-e-sugere-medidas-e18fd102.

[25] CNN Portugal, “Europa arrisca-se a ficar no centro da crise energética e Portugal tem sido muito lento a tomar medidas” [Europe risks finding itself at the centre of the energy crisis and Portugal has been very slow to take measures], March 27, 2026, https://cnnportugal.iol.pt/combustivel/estreito-de-ormuz/europa-arrisca-se-a-ficar-no-centro-da-crise-energetica-e-portugal-tem-sido-muito-lento-a-tomar-medidas/20260327/69c54aded34e28842c8235ba.

[26] Jornal de Negócios, “UE alerta capitais europeias para que não tornem crise energética numa crise orçamental” [EU warns European capitals not to turn energy crisis into a budgetary crisis], 2026, https://www.jornaldenegocios.pt/economia/europa/uniao-europeia/detalhe/ue-alerta-capitais-europeias-para-que-nao-tornem-crise-energetica-numa-crise-orcamental.

[27] Jornal de Negócios, “UE alerta capitais europeias”.

[28] Letta, Much more than a market, 19.

[29] Maria Garcia and John Smith, “The Letta and Draghi Reports in Europe’s Geopolitical Moment,” JCMS: Ideas on Europe, July 19, 2025, https://jcms.ideasoneurope.eu/2025/07/19/the-letta-and-draghi-reports-in-europes-geopolitical-moment/.

[30] European Parliament, Report on the institutional aspects of the Report on the future of European Competitiveness (Draghi Report) (2025/2013(INI)), Committee on Constitutional Affairs, Rapporteur: Brando Benifei, A10-0196/2025, 17 October 2025, 3 and 14, https://www.europarl.europa.eu/doceo/document/A-10-2025-0196_EN.pdf.

[31] European Economic and Social Committee (EESC), EESC opinion: Assessment of the Letta and Draghi reports on the functioning and competitiveness of the EU’s Single Market, February 26, 2025, 12, http://data.europa.eu/eli/C/2025/2004/oj.

[32] Letta, Much more than a market.

[33] Draghi, The future of European competitiveness.

[34] Maria Simon Arboleas et al., “EU leaders to decide”.

Picture credit: by Renan Rezende on pexels.com.

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Dr. Vasiliki Apatzidou, Associate Tutor at the University of London

Photo credit: Nicolas Economou, via Wikimedia Commons

Introduction

The Court’s judgment in the Danané case largely confirms the core argument made by Advocate General Emiliou in his Opinion: that the border procedure in EU asylum law (which provides for a fast-track assessment of asylum claims, with the implied legal fiction that the applicant has not entered the territory) is not exclusively attached to the physical border. In my earlier analysis of the Opinion, I argued that the Advocate General had moved towards a functional rather than pragmatic understanding of the ‘border’. According to him, procedures traditionally associated with entry control may not only take place in border facilities, but also in inland facilities if they are designated as such by national law. The Court of Justice has now broadly endorsed that logic by holding that EU law does not prohibit Member States from detaining asylum applicants during asylum border procedures in centres that are not geographically located at the border, and that such detention may continue in the same place after the expiry of the four-week period envisaged for the border procedure provided that a new legal basis for detention exists. In that sense, the original thesis still stands. However, the judgment also tries to contain the consequences of this argument through a focus on safeguards.

Summary of the Judgment

The joined cases arose from applications for international protection lodged at the Belgian border by third-country nationals who were refused entry and detained in the Caricole Transit Centre, a facility located inside Belgian territory but treated under national law as a place ‘at the border’ for the purposes of the border procedure. In Danané, the Court confirms that Article 43 of the recast asylum procedures Directive (APD), which sets out the current version of the border procedure, does not require border procedures to be implemented only in facilities physically located at the external border, since a border procedure may also be conducted in an inland detention centre that national law treats as a place ‘at the border’.

At the same time, once the four-week period in Article 43(2) recast APD expires, the case no longer remains within the border procedure and must continue under the regular procedure, even though the applicant may still be kept in the same facility if continued detention is separately justified under the detention grounds laid down in Directive 2013/33 (the reception conditions Directive, or RCD). The Court therefore accepts a dual classification of the same place of detention. However, this may happen only on condition that the applicant is informed of the change in legal status – it should be clear that he or she is now allowed to enter the territory – and that continued detention complies with the requirements of necessity, proportionality, individual assessment, and judicial review. It also makes clear that investigative steps already carried out during the border phase may still be relied on in the subsequent procedure, and that the examination of the application may be prioritized. Significantly, detention after the four-week limit cannot become automatic or systematic for all those who are channelled from the border to the regular procedure.

One Legal Fiction After Another

What makes Danané case especially important is that the Court relocates the decisive legal limit on the use of border procedures from geography to proper legal justification and safeguards. The judgment accepts that the same detention facility may first function as a place ‘at the border’ for the purposes of Article 43 recast APD and then, once the four-week period has expired, as a place ‘in the territory’, without any necessary change in the applicant’s physical surroundings. Instead, the Court tries to preserve a merely legal distinction between the two phases. Once the four-week period in Article 43 recast APD expires, the application no longer falls within the border procedure and his or her application will be examined under the other provisions of Directive 2013/32, while any continued detention may take place in the same facility, but must comply with the safeguards and requirements envisaged in Directive 2013/33. The Court also makes clear that detention cannot simply continue under the old border-procedure logic, that the applicant must be informed of the change in his or her legal situation, and that, where appropriate, the person must receive the document certifying their status as an asylum-seeker referred to in Article 6 of Directive 2013/33 or equivalent evidence, although in practice detained applicants often do not receive prompt documentation giving practical effect to this safeguard.

Yet the real problem is that this legal transition may leave the applicant’s position almost untouched in practice. If the same person remains in the same closed facility and under the same deprivation of liberty, the transition from border procedure to regular procedure risks becoming a legal fiction itself. That is where the judgment deserves a more critical reading. Formal entry into the territory may mean very little if it is not accompanied by adequate safeguards. The reception conditions Directive links applicant status to documentation, reception conditions, education for minors, and access to the labour market under the conditions laid down in the directive, yet the judgment says relatively little about how immediate and effective those rights must be in practice where the person remains detained. If an applicant still lacks prompt documentation, cannot effectively enjoy reception rights, and remains unable to exercise rights that normally follow from being an asylum seeker who has entered the territory and whose application is processed inside the territory under the regular procedure, then the shift from border to regular procedure serves primarily the asylum authorities, which in practice gain more time to decide while preserving continuity of control.

For that reason, continued detention after the expiry of the time limit foreseen in Article 43 recast APD must be treated with particular rigour. In this regard, it is very important that the Court itself turns from geography to safeguards, stressing that such detention must satisfy the ordinary standards of the recast RCD: necessity, proportionality, individual assessment, and one of the exhaustively listed grounds in Article 8 of the RCD, together with judicial review under its Article 9. If those requirements are not applied strictly, the transition endorsed in Danané risks turning the strict four-week time limit (extended to 12 weeks according to the Asylum Procedures Regulation, part of the EU Asylum Pact, which applies to asylum applications starting on 12 June) of the border procedure into a merely formal threshold.

This case matters beyond the Belgian transit centre and beyond the immediate interpretation of Article 43 recast APD. As my earlier analysis already suggested, the judgment fits a broader trajectory in EU asylum law in which the border is becoming less a fixed territorial line and more a shifting legal frontier that can be reproduced inside the territory. Read alongside the Pact texts, especially the Asylum Procedures Regulation, which more openly accommodates designated inland locations and expands the operational importance of border procedures, Danané looks less like an isolated ruling and more like a bridge toward a more internalised model of border procedures, in which procedures traditionally confined to the border and justified as exceptional may increasingly be reproduced inside the territory. For that very reason, safeguards become more important than ever, as the more flexible the geography of the border, the stricter the requirements governing detention, procedural guarantees, and the legal consequences of the expiry of time limits must be.

Conclusion

The deeper concern, then, is not merely that the Court has de-geographised the border. It is that, once the border is treated primarily as a legal status rather than a territorial threshold, ‘non-entry’ itself risks becoming a legal fiction capable of sustaining restrictive forms of asylum processing well inside national territory. The Court’s answer is that this is acceptable so long as the relevant guarantees, both in the asylum procedure and the detention safeguards, are preserved.

Whether that answer is convincing will depend entirely on practice. If detention after four weeks is truly exceptional and tightly reviewed, the distinction between border procedure and regular procedure may still make sense. But if applicants remain in materially unchanged detention while the determining authority simply acquires more time to decide, Danané will stand as a case of one legal fiction after another. Especially under the Pact, where screening and border procedures are further mainstreamed, the central question is whether safeguards are strong enough to prevent exception from becoming the ordinary mode of asylum governance.