EU Council Regulation 2016/1103 harmonises conflict-of-law rules concerning the law applicable to matrimonial property regimes for international married couples, provided that the marriage or change of marital regime took place on or after 29 January 2019.
The Regulation should provide certainty when couples administer their property in the event of separation or the death of a spouse. Similar to the European Succession Regulation, with a lack of case law and the freedom given to the national laws of Member States, the true effect of the Regulation is yet to be seen. Nevertheless, should a cross-border conflict arise, all parties involved should at least be able to consult the Regulation to identify the applicable law and jurisdiction of the governing Member State.
The Regulation implements enhanced cooperation in jurisdiction, applicable law and the recognition and enforcement of decisions and is the final piece of the jigsaw bringing together a series of regulations on divorce and separation, children’s wellbeing and successions and wills.
The scope of the Regulation
Although it only applies in 18 of the 28 current EU Member States, the rules on applicable law are universal in scope. This means that the law of any State, whether they are party to the Regulation or not, could be deemed applicable.
The Regulation concerns married couples who:
- live in the EU but do not have the nationality of the Member State in which they reside;
- live in the EU but have different nationalities; or
- do not live in or originate from the EU but have assets in an EU country.
However, should the matter involve the succession to the estate of a deceased spouse, then the provisions of the European Succession Regulation will apply instead.
Identifying the appropriate jurisdiction
The Regulation provides for two scenarios in which the jurisdiction of the appropriate Member State can be automatically identified: the death of a spouse and divorce.
Put simply, the Member State chosen under the European Succession Regulation in the event of the death of a spouse will have jurisdiction to rule on matrimonial property matters. Similarly, under Article 5 of the Regulation, where a married couple agree to start proceedings in a Member State to obtain a divorce under Brussels II bis, the Regulation on conflict of law issues in family law, then the courts of that State will have jurisdiction.
Where the parties fail to agree to a choice of law, this is then to be determined by the habitual residence of the spouses or, failing that, their common nationality at the time of application to the court. If the aforementioned solutions have been exhausted, the court of the Member State will have jurisdiction solely in relation to immoveable property located within its territory.
Identifying the applicable law
The law of a State that is a third party to the Regulation, such as the UK, can still be applied in the courts of other countries party to the Regulation, such as France, Spain and Italy.
Article 22 allows married or engaged couples to choose the law governing their matrimonial property regime. The Regulation limits the couples’ freedom by stating that they may only choose between:
- the law of the State in which at least one of the spouses or future spouses is habitually resident at the time of the agreement; or
- the law of a State of nationality of either spouse or future spouse at the time the agreement is concluded.
In the absence of any prior agreement on the applicable law, the Regulation provides certainty as the applicable law to the matrimonial regime shall be that of the State of the spouses’ first common habitual residence after the conclusion of the marriage.
Under the Regulation, the restriction of the habitual residence criteria to the spouses’ first habitual residence means that authorities will no longer have to apply different laws to the same regime when dividing assets at the end of the marriage. However, should the first habitual residence be unidentifiable, the spouses’ common nationality when marriage concludes is to be used as the basis for choosing the applicable law.
Should no common nationality exist between the spouses, the Regulation takes into account the potential for marriages involving spouses of different nationalities and provides that the law of the State with which the spouses jointly have the closest connection at the conclusion of the marriage is the applicable law.
With thanks to Emilie Bensmihen and Sally Dilks for their contributions in compiling this blog.
