Enforcement EC Law

Enforcement Of EC Law – Articles 226-228

Required Reading (one or more of)

Steiner and Woods, Chapter 10

Fairhurst, J Chapter 7

Craig and de Burca, Chapter 12

Weatherill, Chapter 4

Supplementary Reading

Kent, Chapter 7

Kaczorowska, Chapter 13

Chalmers and Tomkins, Chapter 9

Foster, pp210-219

Douglas-Scott, Chapter 12

Hartley, Chapter 10

Shaw, Chapter 8

Rawlings, R Engaged Elites, Citizen Action and Institutional Attitudes in Commission Enforcement (2000) 6 European Law Journal 4.

Rawlings, R and C Harlow Accountability and Law Enforcement – the centralized EU infringement procedure (2006) 31(4) European Law Review pp.447-475

Theodossiou, M An Analysis of the recent Response of the Community to Non-Compliance with the Court of Justice Judgments: Art.228 (2003) 27 EL Rev 25

Wenneras, P A New Dawn for Commission Enforcement under Article 226 and 228 EC: General and Persistent (GAP) Infringements, Lump Sums, and Penalty Payments (2006) 43 CMLRev 31

Commission Communication Better Monitoring of the Application of Community Law COM(2002) 725

Commission Communication Application of Article 228 of the EC Treaty COM(2005) 1658

25th Annual Commission Report on Monitoring the Application of Community Law (2007) COM(2008) 777 final

Commission Communication A Europe of Results – Applying Community Law COM(2007) 502 final

This lecture looks at the procedure for infringement actions under articles 226-228 EC Treaty. First let us remind ourselves of the Commission’s essential function of guardian of the Treaties. This is set out in broad terms in the following article.

1. 1. 211 Ec Treaty

In order to ensure the proper functioning and development of the common market, the Commission shall:

– ensure that the provisions of this Treaty and the measures taken by the institutions pursuant thereto are applied;

– formulate recommendations or deliver opinions on matters dealt with in this Treaty, if it expressly so provides or if the Commission considers it necessary;…

Article 226 then provides that the Commission can take action against a Member State which has failed to fulfil an obligation under the Treaty, e.g. adopts or maintains legislation or rules which are contrary to Community law.

Art 226 EC

If the Commission considers that a Member state has failed to fulfil an obligation under the Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations.

If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court of Justice.

Douglas-Scott in Constitutional law of the European Union (2002) p.408 says:

“The procedure divides into an administrative and judicial stage, although the latter is rarely used. In the former stage the Commission will contact the Member state involved, giving it a chance to respond and try to resolve the matter, through various stages of formality, a process which may take some time. If this fails, the Commission may instigate the judicial stage, bringing the matter before the ECJ, which may give judgment against the member state. This process was strengthened by the Maastricht Treaty, which enabled the ECJ to impose pecuniary sanctions on member states which do not comply with its judgments.”

Introduction – Dual Vigilance

Community law can be enforced against national governments in two ways:

• through action taken by individuals under the doctrines of direct effect and state liability; and
• by direct proceedings against the member state concerned, provided for in the Treaty under Arts 226-228. Until Van Gend en Loos in 1963 it was thought that this was the only way in which Community law could be enforced against member states.

Only the Commission may bring an action under Art 226 (and that’s how you can always tell you have one of these actions, by the case name). Individuals cannot use these articles – they must either complain to the Commission or use the direct effect/state liability approach if possible. The Commission does not have an ‘investigation’ service but information will come to its attention from a number of sources, such as the press, EP questions or petitions or even from IT means such as databases and websites. It has, however, commented in its annual reports that complaints from citizens constitute a significant source of information about infringements and it welcomes this evidence of a more participatory Community. The issue of transparency and information for complainants in relation to the exercise of the Commission’s discretion under A.226 has been contentious. But it has also emphasized the fact that this procedure is not a means of redress for individuals but rather an ‘objective’ means for ensuring state compliance. A central issue thus is the possible tensions between the Commission and Member States.

“The primary objective of infringement proceedings is to encourage the Member States to comply voluntarily with Community law as quickly as possible.”

24th Annual Report, COM(2007) 398 final

Steiner puts forward three purposes for A.226 actions:

1. it seeks to ensure compliance by Member States with their obligations;
2. it provides a valuable non-contentious procedure for the resolution of disputes between the Commission and Member States over matters of Community law; and
3. they serve not only to bring particular breaches of EC law to light but also to clarify the law for the benefit of all Member States.

What Is The Member State?

Proceedings are brought against the ‘State’; this means they may be brought because of a failure on the part of any agency of that state, executive, legislative or judicial.

Executive

Actions of governments are obviously covered.

Legislature

Case 77/69 Commission v Belgium

This case involved a violation of Art 90 (old 95) concerning discriminatory taxes. The Belgian government tried to argue that it had tried to change its laws in order to comply with the Treaty but the attempt had failed because of the dissolution of Parliament (a force majeure defence – see below). Its attempt to pass responsibility to another organ of the state, i.e. the legislature, failed:

“…the liability of a Member state under Art [226] arises whatever the agency of the State whose action or inaction is the cause of the failure to fulfil its obligations, even in the case of a constitutionally independent institution.”

Courts

There have as yet been no actions based on a failure by a national court, although they have on occasion clearly acted in breach of their obligations. The Commission prefers to publicise national courts’ failures in its annual reports. Following one such report in which the Commission criticised both the Italian and French supreme courts, it noted with approval a ‘major reversal’ in the French court’s attitude to the application of EC law.

Case 30/77 R V Bouchereau

“It is obvious…that a Member State cannot be held to have failed to fulfil an obligation under the Treaty simply because one of its courts has reached a wrong decision. Judicial error, whether due to the misapprehension of facts or to misapprehension of the law, is not a breach of the Treaty. In the judicial sphere, Article [226] could only come into play in the event of a court of a Member State deliberately ignoring or disregarding Community law.” – Advocate-General Warner

Minister of the Interior v Cohn-Bendit [1980]

The French Conseil d’Etat (highest Administrative Court) refused to recognise the direct effect of a directive where there had already been an ECJ ruling on the question (in Van Duyn!) Later the Court changed its mind on the original decision (in the Nicolo case) so a standoff with the ECJ was avoided. He ECJ prefers to avoid direct confrontation with the national courts, probably because the effectiveness of Community law relies heavily on their co-operation.

C-224/01 Kobler v Austria [2003] 3 CMLR 28, [2004] 2 WLR 976 (see p.158 Steiner)

Remember the principle established by the ECJ in this case that national courts can, in theory, make rulings that are in violation of Community law and thus possibly engaging the liability of the State in national court actions for damages. Here the decision of the Austrian Administrative Supreme Court was not found to engage the liability of the State.

C-129/00 Commission v Italy [2003] ECR I-14637

Italy was found to be in breach of EC law by failing to amend an Italian legislative provision which the Italian Supreme Court erroneously interpreted and applied in a case before it. This tendency not to find national courts as being directly at fault was also seen in C-173/03 Traghetti del Mediterranes SpA (TDM) v Italy [2006] ECR I-5177.

Other Agencies

Infringement of Community law by autonomous provincial or regional authorities under federal systems of government can also give rise to Art 226 proceedings. And a private body whose activities are subject to government control may also engage the liability of a member state.

Case 103/88 Fratelli Costanzo v Comune di Milano [1989] ECR 1839 (local authorities)

Case 222/84 Johnston v RUC (regional police forces)

249/81 Commission v Ireland (‘Buy Irish’ Campaign)

Certain activities of the Irish Goods Council, a government-sponsored body given the responsibility of promoting Irish goods by, inter alia, advertising, principally on the basis of their Irish origin, were held contrary to Art 28. An Art 226 action was used because of the Irish government’s involvement. (A similar campaign by a private body, such as a supermarket, would have been OK.)

Types Of Infringement

This may be in respect of any binding obligation arising from Community law. Some examples:

• non-implementation of a directive into national law. Both complete failure to implement, as well as incorrect implementation. One of the most common types of infringements (e.g. Francovich);
• breaches of the provisions on free movement of goods (Arts 28-30). Again, a fertile source of actions; 249/81 Commission v Ireland (‘Buy Irish’ Campaign) see above

C-265/95 Commission v France (Farmers’ Blockades)

Lack of action by police forces. This case concerned long-standing protests and violent actions committed by French farmers against agricultural products from other member States, in particular strawberries from Spain, which were apparently seen as a great threat to the French strawberry market. These protests against lorry drivers and supermarkets stocking such goods were organised by a French farmers’ group. Although the French government could not be seen as being responsible for these acts, the fact that it had allowed the protests to continue without much action constituted an infringement of Community law.

“By failing to adopt appropriate measures to prevent farmers and others from violently obstructing the free movement of fruit and vegetables, the French Republic had failed to fulfil its obligations under Article [28] of the EC Treaty, in conjunction with Article [10].”

• • re-enactment of regulations which are directly applicable; Case 128/78 Commission v UK (Tachographs)

• • introducing or maintaining in force national laws or practices incompatible with EC law; Case 178/84 Commission v Germany (Beer Purity Laws) (Brasserie): banning the import of foreign beers which did not adhere to strict German Beer Purity laws (Reinheitsgebot), the effect being the protection of German beer producers.

C-246/89 Commission v UK (Merchant Shipping Rules) (Factortame)

The use of the MSA 88 to discriminate on the grounds of EU nationality in the setting up of fishing firms using the UK fishing quota.

How Much Discretion Does The Commission Have? Art 211 EC Treaty

In order to ensure the proper functioning and development of the common market, the Commission shall:

• • ensure that the provisions of this Treaty and the measures taken by the institutions pursuant thereto are applied;
  • formulate recommendations or deliver opinions on matters dealt with in this Treaty, if it expressly so provides or if the Commission considers it necessary;…

This article places a general duty on the Commission to ensure that the provisions of the Treaty and the measures taken by the institutions pursuant to it are applied. Art 226 para.2 implies that the Commission has a discretion as to whether or not to bring proceedings before the ECJ. It is not compulsory since there may be other ways of settling the issue amicably, or the matter may not be vitally important, or there may be a change in the law in the near future, etc. The Commission is, however, the ‘Guardian of the Treaty’ and it does have a duty to ensure that Community law is complied with. For both stages of the enforcement action the Commission has considerable discretion.

Case 48/65 Alfons Lütticke V Commission

This company had complained to the Commission that its own government (Germany) had breached EC law and asked for action under Art 226. The Commission refused because Germany had remedied the breach and it was decided that no further action was necessary. The company wanted the infringement to be established in law because it wanted to recover for losses suffered by it during that period. It could not use Art 230 to challenge the Commission’s refusal, since the Commission had discretion in the matter (nor could it use Art 232 failure to act, for the same reason). But it did finally succeed in obtaining a ruling under Art 234 via the German courts that the relevant Treaty Article (Art 90) was directly effective and could be applied in the company’s favour.

Case 7/71 Commission V France (Euratom Supply Agency)

This case, brought under the Euratom Treaty, emphasised that the Commission is free to choose the most appropriate means of bringing the infringement to an end. The Court said:

“…by reason of its nature and its purpose, this procedure involves a power on the part of the Commission to consider the most appropriate means and time limits for the purposes of putting an end to any contravention of the Treaty.”

Case 240/86 Commission V Greece (Cereal Imports)

This case illustrates the type of circumstance in which an action may be brought before the Court even though the member state has (finally) remedied the breach. So long as the time limit runs, the Commission cannot do anything, but after that time limit has expired it is no defence for the state to declare, when the case is heard before the ECJ that the breach has since been remedied. The court basically doesn’t like brinkmanship, but there are other reasons why sometimes a case should be continued:

• states like to take advantage of short term gain by breaching a rule then remedying the breach at the last minute. The Court doesn’t like this. In 7/61 Commission v Italy [1961] ECR 317 the Court pointed out that if a state stops its illegal activity just before judgment and there is consequently no finding that it is in breach, there is nothing to stop the state returning to that same illegal activity immediately afterwards;
• there may be a point of law at issue that still needs sorting out; and
• prior to Francovich, it was necessary to establish a state’s liability prior to possible damages actions by individuals. No longer necessary to have a separate Art 226 ruling in such cases but nice if you have.

However, if the member state has rectified the problem within the final time limit, the court will not let the Commission continue with the action, even if the Commission is afraid that a similar breach will happen again in the future.

Procedure

According to the 24th Annual Report for 2006:

“The total number of infringement proceedings initiated by the Commission fell slightly from 2653 in 2005 to 2518 in 2006. By 31 December 2006, 1642 cases out of the 2518 registered were still ongoing. There was also a slight decrease in the number of complaints registered, from 1154 in 2005 to 1049. Complaints accounted for 41.7% of the total infringements detected in 2006. The number of infringement proceedings initiated by the Commission on the basis of its own investigations rose from 433 in 2005 to 565 in 2006 (24%) for EU 25.” At p.3

Administrative Stage (Seeking To Achieve Compliance By Persuasion)

Following complaints from individuals, companies of EU institutions, there follows:

(a) A stage starting with an informal letter telling the state that it appears to be in breach of an obligation, rather in the nature of a wake-up call. Under Art 10 member states are required to co-operate with the Commission in all its investigations, and failure to do so may in itself give rise to Art 226 proceedings. See cases 33/90 Commission v Italy [1991] ECR I-5987, 65/91 Commission v Greece [1992] ECR I-5245, 272/86 Commission v Greece [1988] ECR 4875, 375/92 Commission v Spain [1994] ECR I-923.

(NB The Commission’s approach throughout this procedure is to deal with the problem amicably and by negotiation – it will only pursue a case to the bitter end if it is absolutely necessary.) The state responds, and around a third of breaches are put right without further action being necessary. In some books this is called the ‘informal’ stage.

(b) If the response from the state is not satisfactory to the Commission, it will then issue a letter of formal notice to the state that it is in breach of an obligation and inviting the state’s observations. The state must be informed of all the charges involved in the complaint – what it is alleged to have done wrong and which rule of Community law has allegedly been infringed – and given a chance to comment on them or comply, with a time limit. 1,552 such letters were issued in 2003. In Case 51/83 Commission v Italy [1984] ECR 2793, the Luxembourg Court established that the letter was actually a key procedural requirement under A.226 and therefore required to bring an action before the court. If the dispute does go to the ECJ, the Commission may not add further charges at that stage, even if they are simply re-occurrences of the original breach.

Case 31/69 Commission V Italy (Payment Of Export Rebates)

Italy had been notified of a series of breaches up to 1967 and the Commission tried to update the list when the case came to Court in 1969. They were refused permission since Italy had had no opportunity to comment on the extra counts even though they were materially the same as the earlier ones.

Case 293/85 Commission v Belgium [Re University Fees]

There is no minimum time limit but an excessively short time period might be struck down by the Court. A reasonable period must be allowed, although very short periods could be justified in circumstances of urgency or where the Member State was fully aware of the Commission’s views long before the procedure started. (Here eight days for the formal notice and 15 days for the reasoned opinion was not enough.)

E.g. A period of four months to respond to a reasoned opinion was adequate where a Member State had three years’ prior notice of the Commission’s view. And e.g. again, a period of 7 days for responding to a formal letter and 14 days for responding to a reasoned opinion were not too short, justified by the urgency of the complaint and the particular circumstances of the case.

(c) The member state submits its observations, and around another third of cases are settled then. If a settlement cannot be reached, the administrative phase will culminate in the issue of a reasoned opinion: this provides a final opportunity for the state to remedy the infringement before Court proceedings are started, and it also defines the subject matter of the dispute which the ECJ may be called upon to resolve. 533 reasoned opinions were delivered by the Commission in 2003.

NB Neither the reasoned opinion nor the letter of formal notice is a binding act capable of review by Art 230 judicial review proceedings (as held by the ECJ in Luttike, see below). The state involved can choose to fight the opinion at judicial level, but a third party, even if adversely affected by the opinion, has no equivalent right.

In the opinion the Commission must provide a full statement of the reasons behind its charge of failure to fulfil a Treaty obligation. It must also inform the member state’s government of the measures necessary to end the infringement, and also stipulate a time limit for compliance. (There is no time limit for the Commission to take action – it has complete discretion, see below). It therefore cannot be proceeded against for failure to act under Art 232.)

Case 31/69 Commission V Italy (Payment Of Export Rebates) See Above

In Case 7/61 Commission v Italy [1961] ECR 317 the Court pointed out that if a state stops its illegal activity just before judgment and there is consequently no finding that it is in breach, there is nothing to stop the state returning to that same illegal activity immediately afterwards

Case 48/65 Alfons Lütticke v Commission

This company had complained to the Commission that its own government (Germany) had breached EC law and asked for action under Art 226. The Commission refused because Germany had remedied the breach and it was decided that no further action was necessary. The company wanted the infringement to be established in law because it wanted to recover for losses suffered by it during that period. It could not use Art 230 to challenge the Commission’s refusal, since the Commission had discretion in the matter (nor could it use Art 232 failure to act, for the same reason). But it did finally succeed in obtaining a ruling under Art 234 via the German courts that the relevant Treaty Article (Art 90) was directly effective and could be applied in the company’s favour.

C-287/03 Commission v Belgium [2005] ECR I-3761

Here the pre-litigation stage lasted 3 years between the delivery of Belgium’s response to the reasoned opinion and the commencement of the court action under A.226. The state argued that the principles of legal certainty and legitimate expectations had been violated. The ECJ rejected this on the grounds that the Commission had been in constant communication with the State authorities and that the Commission’s conduct in that period had in no way affected the State’s rights of defence to the action.

The overall purpose of the administrative stage is to allow the member state either to comply with its obligation or put forward an effective defence to the Commission’s complaints.

The Judicial Stage

A Member State must comply with the reasoned opinion within the specified time limit. If it fails to comply with the action required by the Commission in its reasoned opinion by the expiration of the time limit, formal proceedings before the ECJ and instigated by the Commission may begin. The Court has full jurisdiction to determine whether the alleged infringement of Community law has taken place, and it looks at the entire case de novo. Interested member states may intervene in the proceedings, but individuals cannot. The number of cases referred to the ECJ in 2003 was 215.

Under Art 226 the Commission applies for a declaration that the member state has failed to fulfil a Treaty obligation, and the ECJ either grants the declaration or dismisses the application, having regard to the Commission’s reasoned opinion. The Court, however, has no power to actually order the member state to do or to refrain from doing something. But the member state is required to comply with the Court’s judgment under Art 228.

Defences – Tried And Failed

(A) Internal Difficulties

May be of a constitutional, institutional or administrative nature within a member state.

Case 77/69 Commission v Belgium

Parliament had been dissolved before the relevant measure could be passed.

Case 128/78 Commission v UK (Tachographs)

Threat of a national transport strike – internal difficulties are not the Community’s concern. Similarity here with international legal obligations.

C-56/90 Commission v UK (Bathing Beaches)

The UK argued that ‘local circumstances’ made the implementation of an EC directive relating to the quality of bathing beaches in the North West more difficult.

C-45/91 Commission v Greece (Waste Disposal)

Greece argued that opposition by the local population justified its failure to implement a directive on the safe disposal of toxic waste.

C-265/95 Commission v France (Farmers’ Blockades)

Similar to Tachographs. Court said could envisage a situation where possible consequences for public order would be beyond the capabilities of the authorities but the French government had failed to show that that was the situation.

(B) Force Majeure

In theory might work, but

Case 296/86 McNicholl v Ministry of Agriculture

In an Art 234 hearing the Court said:

“…whilst the concept of force majeure does not presuppose an absolute impossibility of performance, it nevertheless requires that non-performance of the act in question be due to circumstances beyond the control of persons pleading force majeure, that the circumstances be abnormal and unforeseeable and that the consequences could not have been avoided through the exercise of all due care.”

Case 101/84 Commission v Italy (Transport Statistics)

Italy tried to plead the reason that the date processing centre involved in the implementation of the directive had been bombed. The court said that although this might indeed amount to force majeure, the bomb had occurred four and half years ago and that “time will erode the validity of the excuse”. There is a duty to mitigate.

(C) Illegality

The member state might try and argue that the obligation which has been breached is actually illegal. By far the best defence, but this means that it is expected that the Member State challenge the EC provision by way of A.230 and judicial review rather than wait to be in breach.

226/87 Commission v Greece (Public Sector Insurance)

The Commission brought infringement proceedings against Greece based on a decision adopted under Art 90 EC (internal taxes). The Greek government argued that the original decision was illegal. The court said that they should have used the Art 230 judicial review procedure at the time to challenge the measure. They could not wait until the Art 226 action and then try to use that excuse as a defence.

(D) Reciprocity

“Other member states are also in breach – why pick on us?” This idea that the obligation to comply with Community law is a reciprocal one, and dependent on full compliance by other member states, has long been rejected by the ECJ.

232/78 Commission v France (Restrictions on Imports of Lamb)

It was irrelevant that Art 226 proceedings had not been instituted against another state in a similar breach.

90 & 91/63 Commission v Luxembourg and Belgium (Import of Powdered Milk Imports)

The member states argued that their alleged breach of Art 25 would have been legal but for the Commission’s failure to introduce certain measures which they were authorised to enact. Court said not applicable in the context of Community law. The Community was a new legal order; it was not limited to creating reciprocal obligations, as normal in international law. Community law governed not only the powers, rights and obligations of member states, but also the procedures necessary for finding and sanctioning all violations that might occur.

(E) Pre-Existing Law (For Non-Implemented Directives)

C-190/90 Commission v Netherlands (only if the pre-existing national legislation is considered an effective means of implementing the directive)

Interim Orders Art 243 EC

“The Court of Justice may in any cases before it prescribe any necessary interim measures.”

The availability of interim relief can be especially important, since member states sometimes adopt illegal measures (such as subsidies or import controls) expecting these measures to serve their purpose fairly quickly and hoping that by the time the Commission catches up with them, the illegal measures will no longer be necessary and can be given up without fuss. This is one of the reasons also why court proceedings may be continued even after the breach has been rectified.

Case 61/77R Commission v Ireland (fisheries conservation measures)

Demonstrates the speed of the relief available. The ECJ gave judgment only nine days after the Irish Government introduced the potentially illegal measures.

C-246/89R Commission v UK (Merchant Shipping Rules)(Factortame II)

The nationality provisions in the MSA 1988 were challenged by the Commission under Art 226, which also asked for an interim order suspending the provisions. The Court said:

1. there must be established a prima facie case in order for the measures applied for to be granted, and
2. that there are circumstances giving rise to urgency.

The Court found both existed in this case and therefore requested the suspension of the relevant part of the Act of Parliament.

C-195/90R Commission v Germany (German vehicles tax)

Clarified the context of (b) above. Such circumstances existed in challenging a national vehicle tax which would cause irreparable damage to transport companies.

Art 227 EC: Enforcement Action By One Member State Against Another

Basically the same as Art 226 but a member state brings the action instead. It is very rare as states usually prefer to complain to the Commission instead.

Case 141/78 France v UK (Fishing Net Mesh Sizes)

Commission supported – successful

C-388/95 Belgium v Spain (Rioja Wine)

Commission did not support but four other member states did – failed.

C-1/00 Commission v France (Beef Ban)

Interestingly, the UK’s threat to take an A.227 action against France’s m