French Compensatory Levy and Succession Regulation: Closing of EC’s procedure

The European Commission (EC) has just closed the procedure in which it assessed complaints concerning incompatibility of French compensatory levy of Article 913(3) French Civil Code with the Succession Regulation.

French compensatory levy mechanism

In 2021, the French Civil Code was amended by adding the third paragraph to its Article 913. This provision reads as follows:

When the deceased or at least one of his children is, at the time of death, a national of a Member State of the European Union or usually resides there, and when the foreign law applicable to the succession allows for no reserve mechanism to protect the children, each child or his heirs or successors may make a compensatory levy against the existing property situated in France on the date of death, in order that such property be reintegrated into the reserve rights granted to them by French law, within the limit of those rights.

The above provision was subject to criticism as seemed not compatible with the Succession Regulation (see, for example, Georges Khairallah, ‘The New Right of Compensation under French International Succession Law. A Provision with an Uncertain Future’ (2022/2023) YPIL 397, from which the above translation of Article 913(3) is taken).

The concern was that in accordance with Article 23(2)(h) Succession Regulation, it is the law applicable to succession in general (lex successionis), which governs ‘the disposable part of the estate, the reserved shares and other restrictions on the disposal of property upon death’. Consequently, if foreign law is the lex successions, French law should not be applied and should not allow for compensatory levy on assets located in France.

Complains directed to the EC

Following the amendment, the EC has received numerous complaints alleging that Article 913(3) is not compatible with the Succession Regulation, in particular it violates the possibility of effectively choosing as lex successionis the national law of the testator. What (most probably) complainants had in mind was that a person of UK nationality having assets in France can choose English law as lex successionis pursuant to Article 22 Succession Regulation, but French compensatory levy of Article 913(3) French Civil Code will be applied anyway to enforce French reserved share mechanism. Hence, the EC informed in the letter of an opening of a procedure aimed at mitigating this breach.

French explanations and the pre-closure letter

Later, in the ‘pre-closure’ letter the EC presented an answer from French authorities. It explains the aim in adopting the mechanism of compensatory levy and its intended application. These explanations can be summarised as follows.

Article 35 Succession Regulation provides for the possibility of non-application the foreign lex successionis if it is ‘manifestly incompatible’ with public policy of the forum. Article 913(3) French Civil Code is intended to form part of French ordre public, which might trigger application of Article 35 Succession Regulation (and consequently, non-application of foreign lex successionis). In view of French authorities, Article 913(3) French Civil Code might come into play – through Article 35 Succession Regulation – under the condition that the foreign lex successionis ‘does not allow any reserve mechanism protective of children’. The French legislator purposefully used the broad expression ‘reserve mechanism protective of children’ (in French: mécanisme réservataire protecteur des enfants), instead of ‘hereditary reserve’ (in French: réserve héréditaire) so that the application of Article 913(3) French Civil Code is limited solely to such situations. As admitted, Article 913(3) is intended to ‘target mechanisms different from the French hereditary reserve’, but at the same time the right to compensation is limited ‘to cases where the foreign law does not allow any mechanism for the protection of children (emphasis in original)’.

To explain this idea, an example of family provisions of English law is given. These family provisions are perceived as ‘functional equivalent’ of the French ‘hereditary reserve’. Consequently, if English law constitutes lex successionis (as it was chosen by the testator in accordance with Article 22 Succession Regulation), the French authority should not apply Article 913(3), as English family provisions are indeed a ‘reserve mechanism protective of children’. To conclude, the objective of Article 913(3) French Civil Code is to enable Article 35 Succession Regulation ‘to be implemented’. It ‘excludes the right to compensation in the presence of an alternative reserve mechanism protective of children’ and consequently, ‘does not have the effect of imposing the hereditary reserve mechanism provided for by French law.’

Additionally, French authorities informed the EC that they would disseminate the above explanations among notaries and other professionals. EC intends to publish these explanations on the e-Justice Portal in the section concerning successions in France (see e-Justice Portal: Successions in France; so far these explanations are not yet available).

Closure of the procedure

On 28 July 2026, the EC published a closure letter following no ‘response from the complainants and no new evidence or arguments raised by the complainants following the publication of the pre-closure letter’. Hence, Article 913(3) French Civil Code will probably remain in force and try to coexist with the Succession Regulation as a mechanism, which provides for the solution (namely, use of mechanism of compensatory levy), once foreign lex successionis is declared in a given case as inapplicable in France on the basis of Article 35 Succession Regulation.