European Union: International Law

A Belgian Constitutional Court has referred critical questions to the Court of Justice of the European Union regarding the validity of the Undertaxed Profits Rule (UTPR) under the EU Pillar Two Directive.

The European Court of Justice has ruled on whether a foreign tax credit mechanism can neutralise discriminatory withholding tax treatment for US Regulated Investment Companies receiving dividends from Spanish listed companies. The Spanish Supreme Court must now determine if theoretical neutralisation at shareholder level can ever be achieved in practice, given the exceptionally high evidentiary bar set by the CJEU.

EU-domstolen har prövat om en tillåten ändring kan ske av ett upphandlat kontrakt efter att leverantörens prestationer har fullgjorts och faktura har utställts, men denna ännu inte har betalats av den upphandlande myndigheten. Frågan handlar om huruvida en sådan ändring kan anses ha skett under kontraktets löptid.

The European Union's Carbon Border Adjustment Mechanism is undergoing critical legislative refinement as the Commission, Council, and Parliament have each established distinct positions on extending CBAM to downstream goods and strengthening anti-circumvention measures. With trilogue negotiations now underway and the first political trilogue scheduled for October 2026, significant divergences remain between the institutions on scope, exemptions, and enforcement mechanisms that will shape the final framework

The European Union has enacted its most sweeping customs reform since 1968, fundamentally reshaping how businesses import and export goods across EU borders. The new Union Customs Code introduces stricter compliance requirements, shifts liability to importers and exporters, and establishes a centralized EU Customs Data Hub that will eventually become mandatory for all economic operators.

The European Commission has proposed significant reforms to the EU enlargement process, introducing new safeguards, gradual integration mechanisms, and qualified majority voting to facilitate the accession of Montenegro, Albania, Moldova, and Ukraine. These reforms aim to balance the strategic imperative of expansion with concerns about institutional capacity, economic convergence, and decision-making efficiency in an enlarged union.

A Lithuanian court has overturned a substantial fine imposed on Dage Capital for alleged violations of EU sanctions against Belarus, involving luxury car sales and banking relationships. The case raises questions about enforcement boundaries and compliance obligations when dealing with sanctioned jurisdictions through third-party intermediaries. This decision could have implications for how companies structure transactions involving sanctioned territories.

The Berlin Public Prosecutor's Office has launched an investigation into potential violations of EU sanctions against Russia in connection with the now-closed 'Russia House' cultural center in Berlin. Authorities are examining whether tenants or occupants of the facility may have breached the Foreign Trade and Payments Act through sanctions-related offenses.

Dutch authorities have arrested two individuals and raided a company suspected of circumventing sanctions by providing prohibited IT services and exporting high-tech goods to Russia. The investigation reveals connections between a Dutch company and Russian entities, including sanctioned banks and military equipment manufacturers, with goods allegedly routed through third countries to support Russia's defense industry.