Transcript Slide 1

The infringement
procedures – fines for noncompliance*
Dr. Günter Wilms LL.M.
Member of the European Commission’s Legal
Service
*The opinions expressed are personal and do not represent
the ones of the Commission
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I.
Introduction
• EU community of law
• System of legal protection of the essence (f.i.:
judgment of 3 September 2008, case C-402/05 P
und C-415/05 P. Kadi/Council and Commission,
para. 281)
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I.
Introduction
• Role of the Court of Justice:
– Ensure that the law is observed (Article 19 TEU)
• Article 17 TEU
→ the Commission “guardian of the Treaties”
Article 258 TFEU :
→
1st infringement procedure
Article 260 TFEU:
→
2nd infringement procedure, in case of non/bad
execution of a judgment
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II. Infringement Procedure, General
Pre-litigation phase:
-
Opening of the case (ex officio or following a complaint)
Pilot Phase
Letter of Formal Notice
Reasoned Opinion
Litigation phase:
• 1st Infringement: Art. 258 TFEU
• 2nd Infringement: Art. 260 TFEU
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II. Infringement Procedure, General:
Pre-litigation phase
• Framework: Art. 4(3) TEU: obligation of MS to
cooperate with the Commission
• Letter of Formal Notice
• Reasoned Opinion
– defines the subject-matter of the dispute
– fixes a time limit within which the MS must
comply (2 months)
• Sets the frame (time-wise and content-wise) for
the litigation phase
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II. Infringement Procedure, General
Litigation Phase:
• Written (application, defence, reply, rejoinder) and
oral (hearing)
If MS condemned:
• (Art. 260(1) TFEU, special expression of duty to
cooperate loyally Art. 4(3) TEU):
– MS must take the necessary measures to comply
with the judgement immediately
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Environment and taxation account for almost
half of the infringement proceedings
Direct taxation
132 cases = 13.2%
Indirect taxation
102 cases = 10.2%
Water protection and management
66 cases = 6.6%
Air transport
58 cases = 5.8%
Waste management
55 cases= 5.5%
Services
54 cases = 5.4%
Energy markets and networks
52 cases = 5.2%
Public procurement
48 cases = 4.8%
Justice (incl. Union citizenship and equal treatment)
44 cases = 4.4%
Health and consumers
41 cases = 4.1%
Social security schemes and free movement of workers
41 cases = 4.1%
Free movement of professionals
36 cases = 3.6%
Atmospheric pollution
34 cases = 3.4%
Working rights and conditions
31 cases = 3.1%
Inland transport
30 cases = 3.0%
Free movement of goods and market surveillance
30 cases = 3.0%
Environmental impact
28 cases = 2.8%
Information society and media
27 cases = 2.7%
Financial services
17 cases = 1.7%
Free movement of capital
15 cases = 1.5%
Maritime transport
10 cases = 1.0%
0
20
40
60
80
Number of pending cases
100
120
140
7
Number of infringement proceedings by Member States
EFTA
20
100
15
Number of pending cases
10
5
75
16
10
NO
IS
0
2
LI
50
.
EU average: 37 pending cases
25
101 81 79 75 71 54 50 46 44 43 35 35 31 24 24 22 22 21 21 21 18 17 17 14 13 12 10
0
BE EL IT ES FR PT DE UK PL NL IE SE AT BG HU RO SK CZ LU DK MT CY SI
FI LV EE LT
red = increase in the number of pending cases since November 2010 (in Scoreboard n°22)
dotted lines = decrease in the number of pending cases since November 2010 (in Scoreboard n°22)
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III. Second Infringement: Sanctions
• Sanctions for failure to comply with the first
judgment: the Art. 260 TFEU procedure
– Case law
– Calculation of lump sums and penalty
payments
• Changes introduced by the Treaty on the
Functioning of the European Union :
new Art. 260 (3) TFEU
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III. Second Infringement: Art. 260 (2) TFEU
Failure to comply
• Pre-litigation
– No reasoned opinion
– Commission shall specify the amount of the
lump sum or penalty payment
– Must be appropriate in the circumstances
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III. Second Infringement:
Art. 260(3) TFEU New
• Failure to notify measures transposing a directive
• Commission may propose penalty payment or
lump sum already in “first infringement”
• Court bound by the Commission’s proposal as a
ceiling
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III. Second Infringement: History
• Until 2002 the COM asked the Court only to impose
daily penalty payments
• Result: MS complied only at a late stage
• Purpose of financial sanctions was re-examined
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III. Second Infringement: Purpose
Objectives of two sanctions → complementary:
• Penalty payment (Persuasive function):
→ end an infringement ASAP after the 2nd
judgment
• Lump sum (Dissuasive function)
→ effects on public and private interests
caused by the failure to comply with the 1st
judgement
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III. Second Infringement: Precedents
• C-304/02 COM v France cumulative use:
- Breach of Community law
- has continued for a long period and
- is inclined to persist (par. 82)
- In the concrete case:
• Penalty payment of EUR 57.761.250 for each period
of 6 months
• Lump sum of EUR 20.000.000
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III. Second Infringement:
Lessons learned
• Practical consequences of C-304/02 COM v France:
- COM includes now, in general, in its applications
to the Court a specification of:
» both the penalty payment by day of delay
after the delivery of the judgement under Art.
260 TFEU
» and a lump sum penalising the continuation of
the infringement between the first judgement
and the one delivered under Art. 260 TFEU
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III. Second Infringement:
Communications by the Commission
• Purpose of the communications
– Legal certainty
– Proportionality and equal treatment
– Deterrent effect
→ encourage early compliance
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Calculation of sanctions
(SEC 2011/1024 of 01/09/2011; principles: SEC 2005/1658
of 09/12/2005)
•
Criteria:
1. Seriousness of the infringement
1. 2. Duration of the infringement
2. 3. Sanction deterrent for further infringements
3. Respect of proportionality principle (in particular)
• Sanction has to be appropriate in case of partial compliance
Progress made towards compliance must be taken into account
(several infringements
separate sanctions; reduction for progress made)
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Calculation of sanctions
(SEC 2011/1024 of 01/09/2011; principles: SEC 2005/1658
of 09/12/2005)
• Standard flat rates:
• for daily penalty payments:
• 630€/day
•
x coeff. for seriousness from 1 to 20
x coeff. for duration between 1 and 3
x factor ‘n’(→ GNP&votes in Council)
for lump sum:
• 208€/day
x coeff. for seriousness from 1 to 20
x factor ‘n’(→ GNP&votes in Council)
x number of days between 1st judgment and
compliance or 2nd judgment
• Minimum lump sum:
• Between 314.000€ (EST) and 11120.000€ (GER)
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NEW ART. 260(3) TFEU
• Raison d’être
• Stronger incentive to transpose directives within
deadlines
• Help EU citizens to enjoy the rights conferred by
these directives at an earlier stage
• Respect for the legislator
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Infringement proceeding for non-conformity as
percentage of Internal Market directives (as of
1 May 2011)
All statistics from: SEC(2011) 1128 final Internal Market Scoreboard n°23, 29.9.2011
2%
1%
0.3%
0.3%
0.5%
0.5%
0.5%
0.5%
0.5%
0.6%
0.7%
0.7%
0.8%
0.8%
0.8%
0.9%
0.9%
0.9%
1.0%
1.0%
1.0%
1.1%
1.2%
1.5%
1.6%
1.6%
CY
0.3%
0%
0.2%
0.1%
EU average: 0.8%
MT
FI
NL
RO
LV
LT
DK
EE
LU
BG
AT
IE
DE
HU
SI
SK
SE
CZ
ES
PT
UK
EL
FR
BE
IT
PL
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NEW ART. 260(3) TFEU
• Features of this instrument:
Already in first infringement lump sum and / or
penalty payment may be imposed
Court will not exceed the amount specified by the Com.
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NEW ART. 260(3) TFEU
• Communication on the Implementation of Art.
260(3) TFEU [O.J. C 12 of 15/01/2011 p. 1]
• Same principles as Art. 260(2) TFEU
• 2 possible cases:
– Total failure to notify transposition measures
– Partial notifications of these measures
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NEW ART. 260(3) TFEU
• Coefficient of duration:
– Starting point:
day following the expiry of the transposition period
• Proposal of the COM is not binding for the Court
• But: Court cannot go beyond
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Case
Parties
Substance
Sanction imposed
C-387/97
Com./Greece
Waste24
20.000 Euro per day
C-287/01
Com./Spain
Quality of bathing waters
624.150 Euro per cent for affected bathing waters
C-304/02
Com./France
Prohibition to catch small fish
57.761.250 Euro per 6 months of non-compliance and
20.000.000 Euro lump sum
C-177/04
Com./France
Non-transposition of product
safety directive
31.650 Euro per day of non-transposition
C-119/04
Com./Italy
Foreign language teachers
Condemned for non-compliance but no sanction
C-503/04
Com./Germany
Waste treatment
Braunschweig
Condemned for non-compliance but no sanction
C-70/06
Com./Portugal
Public procurement
19.392 Euro per day of non-compliance
C-121/07
Com./France
GMOs
10.000.000 Euro lump sum
C-369/07
Com./Greece
Subsidies fpr Olympic Airways
16.000 Euro per day of non-compliance and
2.000.000 Euro lump sum
C-457/07
Com./Portugal
Free circulation of construction
products
Rejected
C-568/07
Com./Greece
Optician-stores
1.000.000 Euro lump sum
C-109/08
Com./Greece
Gambling machines
31.536 Euro per day of non-compliance and
3.000.000 Euro lump sum
C-407/09
Com./Greece
Compensation of crime victims
3.000.000 Euro lump sum
C-469/09
Com./Italy
Recovery of illegal State aid
• Penalty payment 30.000.000 Euro per 6 months x %
of unlawful aid not recovered
 30.000.000 Euro lump sum
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30
EU average: 24.7 months
20
30.8
29.8
29.1
29.1
28.4
28.4
27.9
27.1
26.9
26.2
26.1
24.7
23.8
22.7
22.4
21.7
20.5
20.0
19.9
19.7
17.1
15.4
15.0
14.1
11.5
0
33.2
10
34.7
Duration since sending of letter
of formal notice (in months)
Average duration of infringement proceedings (from
one year to almost three years)
FI
10
CZ
16
DK
19
IE
24
DE
36
UK
42
PT
30
SE
28
NL
35
FR
58
HU
20
ES
57
PL
35
EL
63
BE
85
LT
10
IT
65
EE
11
MT
14
SK
21
BG
24
AT
18
SI
14
LV
13
RO
22
CY
15
LU
15
Number of cases per Member State
25
Cases from most Member States are still open more
than 12 months after the Court ruling
20
EU average= 17.4 months
15
10
21.1
20.6
18.2
17.3
16.2
16
15.9
14.6
14.2
14
14
12.1
10.4
9.8
9
6.1
4.1
0
22.4
5
24.2
Duration between judgement of the Court and closure
(in months)
25
FR
28
ES
41
IE
17
AT
18
PT
14
IT
52
EL
26
NL
13
LU
21
BE
18
SE
10
DE
28
UK
20
FI
12
DK
3
PL
6
LT
2
SK
1
MT
2
Number of cases
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CLOSING STATEMENT
• For it is only through a legally stable
environment, based on the rule of law,
democratic principles and fundamental rights,
that the confidence of citizens, of partners and
investors can be gained and upheld.
Commission President Barroso, Plenary debate of the EP
Strasbourg, 18th January 2012
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