# EUR-Lex - 52003DC0669 - EN

Avis juridique important

*|*

# 52003DC0669

**20th Annual report on monitoring the application of Community law (2002) /* COM/2003/0669 final */ **

*

*

20th ANNUAL REPORT ON MONITORING THE APPLICATION OF COMMUNITY LAW (2002)

TABLE OF CONTENTS

1. Foreword

2. Situation sector by sector

2.1. ECONOMIC AND FINANCIAL AFFAIRS

2.2. ENTERPRISE

2.2.1. Chemicals

2.2.2. Pharmaceutical products

2.2.3. Cosmetics

2.2.4. Capital goods

2.2.5. Motor vehicles, tractors and motorcycles

2.2.6. Pleasure vessels and cableway installations

2.2.7. Payment delays

2.2.8. Preventive rules provided for by Directive 98/34/EC

2.3. COMPETITION

2.3.1. Telecommunications

2.3.2. Air transport

2.3.3. State aid

2.4. EMPLOYMENT AND SOCIAL AFFAIRS

2.5. AGRICULTURE

2.6. ENERGY AND TRANSPORT

2.6.1. Internal market for electricity and natural gas

2.6.2. Energy efficiency

2.6.3. Road transport

2.6.4. Inland waterways

2.6.5. Safety in the transport of dangerous goods by road and rail

2.6.6. Rail transport

2.6.7. Air transport

2.6.8. Maritime transport

2.7. INFORMATION SOCIETY

2.8. ENVIRONMENT

2.8.1. Introduction

2.8.2. Freedom of access to information

2.8.3. Environmental impact assessment

2.8.4. Air

2.8.5. Water

2.8.6. Nature

2.8.7. Noise

2.8.8. Chemicals and biotechnology

2.8.9. Waste

2.8.10. Environment and industry

2.8.11. Radiation protection

2.9. FISHERIES

2.10. INTERNAL MARKET

2.10.1. Free movement of goods

2.10.2. Free movement of services and right of establishment

2.10.3. The business environment

2.10.4. Regulated professions (qualifications)

2.11. REGIONAL POLICY

2.11.1. Analysis of causes

2.11.2. Effects of infringement situations

2.12. TAXATION AND CUSTOMS UNION

2.12.1. Customs union

2.12.2. Direct taxation

2.12.3. Value added tax

2.12.4. Other indirect taxes

2.12.5. Mutual assistance

2.13. EDUCATION, AUDIOVISUAL MEDIA AND CULTURE

2.13.1. Education

2.13.2. Audiovisual (Directives 97/36/EC of 30 June 1997 and 89/552/EEC of 3 October 1989 (Television without frontiers)

2.14. HEALTH AND CONSUMER PROTECTION

2.14.1. Veterinary legislation

2.14.2. Plant health legislation

2.14.3. Seeds and seedlings legislation

2.14.4. Food legislation

2.14.5. Animal feedingstuffs legislation

2.14.6. Consumer protection

2.14.7. Public health

2.14.8. Notification of technical rules

2.15. JUSTICE AND HOME AFFAIRS

2.15.1. Application of the principle of the prohibition of nationality discrimination as regards the right of residence and traffic offences

2.15.2. Free movement of people

2.15.3. Right to vote at municipal elections

2.16. BUDGET

2.16.1. Developments in proceedings dating from earlier years

2.16.2. New proceedings

2.17. PERSONNEL AND ADMINISTRATION

2.18. ENLARGEMENT

2.19. COMMUNITY STATISTICS

ANNEXES I-VI

Each year the European Commission draws up a report on the monitoring of the application of Community law, in response to requests made by the European Parliament (resolution of 9 February 1983) and the Member States (point 2 of Declaration No 19 annexed to the Treaty signed at Maastricht on 7 February 1992). The report also responds to the requests expressed by the European Council or the Council in relation to specific sectors.

1. Foreword

For twenty years now, [1] in response to a resolution of the European Parliament, [2] the Commission has been reporting annually [3] on the activities undertaken in the exercise of its function as guardian of the Treaties. This periodic information has gradually been expanded with annexes dealing with the application of Community law by the national courts and the execution of judgments given by the Court of Justice, and more detailed statistics.

[1] The first report was for 1982 - COM(83) 181 final, 10.4.1984.

[2] Resolution of 9 February 1983.

[3] Annual reports are accessible on the Commission website at http://europa.eu.int/comm/ secretariat_general/sgb/droit_com/index_en.htm

infringements.

The annual reports on monitoring the application of Community law pursue a twofold objective:

- to allow the European Parliament to fully exercise its political role in relation to the discretionary powers conferred on the Commission by the Treaties;

- to provide the Member States, the general public and economic operators with a stock-taking exercise of the attainment of a Community based on the rule of law.

The interest for this regular publicity is reflected both in the frequent written and oral questions in the European Parliament and in the number of times that citizens contact the Commission, particularly by making complaints. To satisfy these needs between the publication dates of two reports, the Commission has set up a website [4] devoted to decisions on infringement proceedings and progress in notifying Community directives ("hitlist"). More specific data can also be found on the websites on the management of certain Community policies.

[4] http://europa.eu.int/comm/ secretariat_general/sgb/droit_com/index_en.htm

transpositions

The structure of this 20th annual report to the European Parliament on monitoring the application of Community law, like its predecessors, describes the salient features of activity in the main areas of Commission activity in the course of the year, and the foreword offers a few thoughts on the last twenty years' activity.

Main developments

Comparing the information given in twenty annual reports on monitoring the application of Community law could be a hazardous enterprise, in view of extensive changes in the Commission's internal structure, the evolution of common policies and the implementation of specific actions. The completion of the internal market, which celebrated its tenth anniversary in 2002, the development of the policy on health and consumer protection, and public interest, particularly in social and environmental questions, are so many factors to be considered before embarking on any analysis of the raw figures set out in the annual statistical graphs and tables.

But some of the basic data can be used not only to measure the importance of the Commission's activity but also to draw conclusions as to the measures underlying the trends observed.

Complaints

The aggregate volume of complaints addressed to the Commission each year by citizens wishing to contribute to the integration and smooth operation of their Community by denouncing conduct which they perceive as contrary to Community law, whether or not they are directly concerned, has been growing steadily. The average number of complaints registered each year virtually doubled between 1983-89 and 1990-98; the average rose from 536 to 1 047. In 1999-2002, the average number of complaints varied around 1346. This increase alone highlights the public interest in the sound operation of Community mechanisms, but a sector-by-sector analysis then makes it possible to identify the areas most concerned as European integration proceeds.

>REFERENCE TO A GRAPHIC>

>REFERENCE TO A GRAPHIC>

In general terms, however, the important point is that complaints are the chief source for detecting infringements. The Commission has accordingly reinforced the instruments and facilities both for registering complaints and for dealing with them more quickly. An electronic form is available on line, [5] and the Commission has given a number of commitments regarding relations with complainants [6] at the instigation of the European Ombudsman. When he receives a direct complaint, the Ombudsman routinely looks into the way in which the Commission investigated the alleged misconduct that is complained of.

[5] http://europa.eu.int/comm/ secretariat_general/sgb/lexcomm/index_en.htm

[6] Commission Communication to the European Parliament and the European Ombudsman on relations with the complainant in respect of infringements of Community law: COM(2002) 141 final.

Transposal of directives

Routine checks regarding failure to notify the Commission of national measures transposing directives within the time allowed are another major source of information on infringements. For some years now the first stage of the procedure of Article 226 (formal notice to act) has been launched on a much more automatic basis and at regular intervals.

The caseload here depends not only on the internal discipline which the Member States impose on themselves to act within time-limits that they themselves accepted in the Council but also on the rising number of directives in force. Regular "scoreboards" [7] or performance tables [8] can give different results as the years go by, either for a given Member State or for an average transposal rate, depending on all these variables. They are also a powerful incentive to improve the transposal rate.

[7] Internal market scoreboard - http://europa.eu.int/comm/internal_market/ en/update/score/index.htm, and environment scoreboard in The annual survey on the implementation and enforcement of Community environmental law - http://europa.eu.int/comm/environment/law/ as01.htm.

[8] Progress in transposing directives, see http://europa.eu.int/comm/ secretariat_general/sgb/droit_com/index_en.htm

transposal on Europa.

>REFERENCE TO A GRAPHIC>

>REFERENCE TO A GRAPHIC>

The graphic confirms this interdependence. At the end of 1982, 640 directives were in force with an average transposal rate of 89.58%. Twenty years later, 2240 directives were in force with an average transposal rate of 98.87%. It is true that some progress remains to be made, in particular for certain Member States, and the 98.5% target set at the Stockholm European Council suffices to demonstrate the importance attached to this aspect of Community law, but there is no escaping the fact that volume and complexity can constitute handicaps. The Commission has not been inactive in the face of this problem and has decided to provide more active support in overcoming technical transposal difficulties where national authorities ask for it.

Pattern of contentious procedures

Analysis of the statistics on the various stages of the infringement procedure (formal notice to act, reasoned opinion, referral to the Court of Justice) shows that over the twenty years each of them has evolved within a bracket range. The frequency of letters of formal notice to act depends on the volume of law applicable and the Commission's diligence in monitoring its application, but the frequency of reasoned opinions and referrals to the court evolve in parallel, being slightly out of step only on account of the different timings of the procedures. If the number of notices to act peaks in a given year, there will inevitably be a peak in the number of reasoned opinions the next year and in court referrals the year after that, as the chart below shows.

>REFERENCE TO A GRAPHIC>

The Commission has taken a number of measures, not only to shorten the time elapsing between the various stages of the procedure so as to put matters right more quickly, but also to boost preventive action, in particular by means of complementary or alternative methods to obtain rapid voluntary rectification of the situation. [9]

[9] White Paper on Governance, Operational conclusions: SEC(2003) 1344.

In the context of measures to boost preventive action, the SOLVIT network [10] deserves special attention, and in the longer term it might be found that developing its scope is an effective means of tackling conduct complained of by the general public through closer cooperation between national authorities and the exchange of good practice.

[10] http://europa.eu.int/comm/internal_market/ solvit/index_en.htm.

Execution of judgments given by the Court of Justice

As in the 2001 report, it is interesting to see how the Member States comply with judgments given by the Court of Justice and the action taken by the Commission in such cases under Article 228. There are frequent parliamentary questions on the subject, which is evidence of concern about it. Irrespective of the statistical analysis, the British beef controversy prompted the Commission to consider the possibility of proposing that the Court of Justice should order not only a periodic penalty payment but also a fine, to give Member States an incentive to comply with judgments holding them to be in default.

>TABLE POSITION>

Implementation of Governance White Paper

In 2002 the Commission completed its review following the Governance White Paper, [11] with particular reference to improved monitoring of the application of Community law. In its Communication of 20.12.2002, [12] the Commission outlines ways of meeting its governance objectives: closer preventive cooperation with the Member States coupled with better information for the public, and the search for complementary or alternative methods of help to remedy infringements outside the Article 226 procedure while boosting that procedure where it is necessary to apply it.

[11] Commission Communication - European Governance: Better lawmaking: COM(2002)275 fin, 6.6.2002.

[12] Commission communication: Better monitoring of the application of Community law: COM(2002) 725fin, 20.12.2002.

At the same time the Commission adopted a number of operational measures [13] to support this process, such as setting up a website on monitoring the application of Community law, multiplying contacts with the Member States and internal organisation measures and structural changes to improve the monitoring of legislative activity and the consistency of the preventive and remedial action taken. The European Parliament could be offered an initial review in the next annual report on monitoring the application of Community law.

[13] SEC (2002) 1344 final, 12.12.2002

The action to be developed here aims not only to meet the Commission's permanent concern to perform to the full its function as guardian of the Treaties but also to take up the challenge of the forthcoming enlargement and avoid a proportional increase in the number of cases to be handled while continuing to handle them quickly even if they do proliferate.

2. Situation sector by sector

2.1. ECONOMIC AND FINANCIAL AFFAIRS

Free movement of capital

Overall the free movement of capital works satisfactory both within the European Community and in relations with third countries. In 2002, the total number of infringements remained stable. But some of them are significant barriers to the sound operation of the single market.

For some years now the most serious infringements have involved investment restrictions flowing from special rights of control that the authorities of certain Member States claim. On 4 June 2002, the Court of Justice gave judgment in three cases concerning golden shares established at the time of privatisation of firms doing business in areas of general or strategic interest. [14] It confirmed that restrictions on direct investment in the relevant companies, including their management, were compatible with the Treaty only if they met very precise conditions avoiding, among other things, all forms of discretion and discrimination. These judgments again confirm the principles previously set out by the Commission in its Communication on certain legal aspects concerning intra-eu investment, [15] as did an earlier judgment given on 23 May 2000. [16]

[14] C-367/98 Commission v Portugal, C-483/99 Commission v France and C-503/99 Commission v Belgium.

[15] OJ C 220, 19.7.1997; 1997 General Report, point 210.

[16] Case C-58/99 [2000] ECR I-3811.

This valuable clarification of the law relating to investment restrictions should help to speed up the handling of similar cases that came up recently as regards restrictions on various activities commonly acknowledged to be services of general economic interest. As they are subject to an accelerating process of liberalisation in the Community, the objective of protecting the general interest must not be allowed to serve as a pretext for introducing restrictions that make the exercise of the fundamental freedoms conferred by the Treaty less and less attractive.

For some years restrictions on the acquisition of real property have been a regular source of infringements concerning the free movement of capital, affecting individual citizens particularly seriously. On 5 March 2002 the Court of Justice gave a set of judgments confirming the compatibility of a prior notification procedure for the acquisition of building plots. [17] But the prior authorisation procedure was held contrary to Community law. The fact that the Court had already ruled on similar questions once again illustrates the relatively fragmentary nature of the Community real property market and the limits on the exercise of the fundamental freedoms conferred by the Treaties on European economic operators. Beyond the immediate impact of these restrictions on the acquisition of real property, they can also affect the right of establishment of individuals and bodies corporate and, indirectly, freedom of movement of persons and freedom to provide services. A number of restrictions on the acquisition of real property in certain Member States are currently under scrutiny.

[17] Joined Cases C-515/99, C-519/99 to C-524/99 and C-526/99 to C-540/99.

2.2. ENTERPRISE

On 31 December 2002 there were more than 500 directives in force here. Complaints and infringements relating to these directives account for nearly 7.7 % of the total cases handled by the Commission in 2002. This means that the number of decisions dealt with by DG ENTR in 2002 was higher than in 2001.

The main reason for this is the shortfall in transposal regarding chemicals and cableway installations (funicular railways, cable cars).

Delays in transposal are partly due to the length of internal procedures and the complexity of the directives. The directives to be transposed are highly technical and sometimes involve several different government departments, which can lead to delays.

The number of cases of incorrect application or transposal are the same as in 2001. Most of them concerned capital goods and pharmaceuticals.

Infringement proceedings can often be avoided as a result of Directive 98/34/EC, which continues to play its role as the basic instrument for preventing barriers to trade and for mutual information. That directive lays down an information procedure requiring Member States to notify the Commission and the other Member States of their draft technical standards for products and their draft rules for information society services for scrutiny in relation to internal market rules prior to final adoption.

2.2.1. Chemicals

In the chemicals sector there was a major increase over 2001 in the number of cases of failure to transpose. Forty-four new infringement proceedings were commenced, 11 of them being terminated when national transposal measures were notified. The sharp increase in the number of non-transposal cases is related to the number of directives falling due for transposal in 2002, which was up on 2001 (four as against one) and does not therefore mean that there has been a reversal in the trend. As in 2001, the main reason for failure to transpose seems to lie in delays in national transposal procedures rather than other factors, though explosives (Directive 93/15/EEC) are an exception. One case is currently under scrutiny in the context of Article 228 proceedings following a judgment given by the Court of Justice in March 2000 [18] holding that France had failed to transpose Directive 93/15/EEC.

[18] Case C-327/98.

Regarding cases of incorrect transposal or application, no new infringement proceedings were commenced.

2.2.2. Pharmaceutical products

In 2002, the Commission commenced 16 proceedings for failure to notify measures transposing Directives 2000/37/EC and 2000/38/EC on pharmacovigilance of human and veterinary medicinal products. Most of them were terminated, the exceptions being the proceedings against Italy and Germany. The Commission decided to refer the case against Germany to the Court of Justice. In the case against Italy, it issued two reasoned opinions.

Problems remain with the application and interpretation of Directive 89/105/EC relating to the transparency of measures regulating the prices of medicinal products for human use and their inclusion in the scope of national health insurance systems. Some Member States do not comply with the Directive's requirements, particularly as regards the time allowed for the adoption and notification of a decision on the price of a medicine, the requirement that decisions be taken on the basis of objective, verifiable criteria, the provision of redress procedures against decisions and the conditions for constitution of positive list of medicines covered by the national health insurance system.

In proceedings against Member States for failure to comply with Directive 89/105/EEC, the Commission sent Greece an additional letter of formal notice for incorrect transposal. The Greek authorities' reply is now under scrutiny. In the proceedings against Austria for incorrect transposal of Directive 89/105/EEC, the Austrian authorities notified the Commission of measures adopted in response to the judgment given by the Court of Justice on 27 November 2001 (Case C-99/424), finding against Austria for incorrect transposal of the Directive. The Commission is evaluating the new measures for conformity.

Discussions are also in hand with other Member States on the application of the Directive.

Apart from the transparency Directive, there are two other major proceedings under way, against Belgium and Italy. They concern Directive 89/381/EEC concerning medicinal products derived from human blood in Belgium and the conditions for suspending authorisations to market medicines in Italy. In the former case, the Belgian authorities adopted an Order terminating the infringement in 2002, which is now under scrutiny. In the latter case, the Italian authorities' reply to the letter giving formal notice is under scrutiny.

The Commission terminated proceedings against Spain relating to radio-pharmaceutical medicines and proceedings against the Netherlands relating to the registration of homeopathic products.

2.2.3. Cosmetics

No directives fell due for transposal in 2002. Among existing directives, only Directives 97/18/EC and 2000/41/EC postponing the date after which animal tests are prohibited for ingredients or combinations of ingredients of cosmetic products continue to raise transposal problems, as three Member States have still to transpose them. But these infringement cases should be settled in 2003 following the adoption of the Parliament and Council Directive amending Directive 76/768/EEC for the seventh time.

The Commission received no new complaints here in 2002.

2.2.4. Capital goods

Generally speaking, most infringements relating to capital goods (pressure vessels; measuring equipment, medical devices; mechanical and electromechanical equipment) still running on 31 December 2002 concern incorrect application or transposal. Regarding pressure vessels, all the Member States have now transposed Directive 97/23/EC, including Germany, which had been referred to the Court of Justice in 2001. [19]

[19] Case C-2002/135.

Regarding measuring devices and Directive 1999/103/EEC (units of measurement), all the Member States have notified transposal measures, except France, which states that they are in the pipeline.

Regarding in vitro medical devices (Directive 98/79/EC), France is the only country that has not notified full transposal measures, and the infringement proceedings are due to continue.

Progress has been made in the transposal of Directives 2000/70/EC and 2001/104/EC amending Directive 93/42/EC as regards medical devices incorporating stable products derived from human blood or human plasma. The Commission terminated several infringement proceedings for failure to notify it of transposal measures. But France, Belgium, Italy, Austria and Portugal have still to transpose them.

The last outstanding infringement proceeding for failure to transpose the mechanical and electromechanical equipment directives was terminated. This concerned Greece's failure to transpose Directive 1999/5/EC on radio equipment and telecommunications terminal equipment and the mutual recognition of their conformity.

In 2002 progress was made with the cases concerning incorrect application or transposal of the directives on medical devices, gas appliances and pressure vessels, and some proceedings were terminated.

Italy, for instance, amended its legislation and came into line with Directive 90/396/EC on gas appliances. In other cases, procedures for amendment of national legislation in line with Community law have been announced.

The Commission was able to terminate four infringement proceedings for incorrect application or transposal of mechanical and electro-mechanical engineering directives through the strict application of the Article 226 procedure.

2.2.5. Motor vehicles, tractors and motorcycles

The rate of transposal of the directives governing the type-approval of motor vehicles, agricultural and forestry tractors and motorcycles was satisfactory. Only six directives were due for transposal in 2002, as against eleven in 2001.

Of these six directives, only three needed letters of formal notice - five of them - to countries that had not transposed them in the time allowed (two to Portugal, one each to Greece, Austria and Sweden).

But Directive 2002/78/CE on the approximation of the laws of the Member States relating to the braking devices of certain categories of motor vehicles and their trailers, which fell due on 30 December 2002, had by then been transposed only by Germany and Sweden.

More generally, the Commission has begun looking into the automatic transposal method used by certain Member States to transpose motor-vehicle directives. Certain infringement cases, particularly those concerning the Netherlands, are still outstanding pending clarification of the extent to which this method gives the general public and economic operators adequate publicity and certainty as to the law.

The complexity of the legislation and the constant evolution of technologies engenders problems of interpretation regarding the type-approval of vehicles, which calls for close and constant cooperation between the Commission and the type-approval authorities.

2.2.6. Pleasure vessels and cableway installations

In 2002, the Commission sent a reasoned opinion to Belgium for incorrect application of Directive 94/25/EC on pleasure vessels.

It also sent reasoned opinions to eight Member States (Germany, Greece, Italy, Ireland, Luxembourg, Netherlands, Austria and the United Kingdom) for failure to notify measures transposing Directive 2000/9/EC relating to cableway installations designed to carry persons.

2.2.7. Payment delays

The period for transposing Directive 2000/35/CE on combating late payment in commercial transactions expired in August 2002. Only eight Member States transposed in time. The Commission accordingly opened infringement proceedings against the other seven. It then received national measures from Italy, Austria and the Netherlands, leaving four Member States still in an infringement situation.

2.2.8. Preventive rules provided for by Directive 98/34/EC

Directive 98/34/EC (as amended by Directive 98/48/EC) lays down an information procedure enabling the Member States and the Commission to exercise prior checks against the internal market rules on draft technical standards relating to products and draft rules relating to information society services.

In 2002, the Commission was notified of 508 draft standards (30 of them relating to information society services). While the aggregate number is much the same as in 2001, the number on which the Commission had to issue a reasoned opinion stating that the proposed measure needed amending to remove potential unwarranted barriers to freedom of movement of goods or information society services was up slightly. Apart from the infringements of the EC Treaty, many of the Commission's reasoned opinions, as in previous years, warned the addressees that their drafts were liable to infringe Community directives on the free movement of goods or of information society services.

In ten or so cases the directive facilitated Community harmonisation procedures by precluding the adoption of national measures that would have frozen the position of certain Member States at a time when common solutions were being sought. Most cases concerned chemicals, agriculture and foodstuffs.

Where it observes an infringement of the directive, either through the adoption of legislation containing technical rules that have not been notified as required by the directive or through failure to comply with the status quo periods provided for by it, the Commission engages in dialogue with the Member States to have the situation remedied (for example through notification of a fresh draft and its subsequent adoption) or commences infringement proceedings. At the end of 2002, 18 infringement proceedings were under scrutiny. The small increase over 2001 is due to the growing number of infringements in information society services. The explanation is that it this a new complex area in which the Member States encounter difficulties with the proper application of the procedure. The instruments criticised concern electronic signatures, e-commerce and electronic communication.

To remedy the situation, briefing sessions on the operation of the notification procedure have been held for certain Member States, highlighting the information society services aspect.

In 2002, the Court of Justice gave an important judgment [20] according to which the exception allowed by Directive 83/189/EEC (as consolidated by Directive 98/34/EC), whereby a Member State does not need to notify draft rules that bring it into line with mandatory Community provisions adopting technical specifications (e.g. transposal of a directive), must be interpreted strictly.

[20] Case C-390/99 Canal Satellite (judgment given on 22.1.2002).

To improve dialogue with firms, a website detailing notified drafts has been opened at http://europa.eu.int/comm/enterprise/tris/ index_en.htm.

2.3. COMPETITION

In 2002, the Commission took decisions in 37 competition cases. [21] Twenty-six of them were terminated, but the Commission referred four to the Court of Justice. It is difficult to draw overall conclusions from these figures, but it is clear that the Member States have a general tendency to take the measures needed to come into line with Community competition law. Competition cases account for only a small proportion of suspected infringements of Community law currently under scrutiny at the Commission. Most of the complaints filed with the Commission turn out to be unfounded or undeserving of priority for lack of a Community dimension or can be rejected as having been handled properly by the relevant Member State when they were under scrutiny. Many infringement cases concerned the directives on competition in telecommunications or transparency in financial relations between the Member States and their public enterprises.

[21] This Report does not consider the Commission's scrutiny of suspected infringements of the Community rules on state aids on the basis of Article 88 of the EC Treaty.

2.3.1. Telecommunications

At the end of 2001, the Commission had received a complaint from the French association of multi-service network operators (AFORM), representing the majority of French cable operators. The complaint chiefly concerned alleged discrimination between cable operators in procedures for licensing the establishment and operation of telecommunications services and awarding and charging for rights of way over public land. The French legislation is alleged to be less favourable to cable operators than to other telecoms operators, which could be a serious handicap when cable operators attempt to load telephone and Internet access services on their networks. La Commission considers at this stage that the French rules do not appear to be compatible with Directive 95/51/EC, which abolished restrictions on the use of cable television networks, or the provisions of Directive 96/19/EC relating to rights of way. A letter giving formal notice to act was sent to the French authorities on 25 October 2002.

The Commission also opened an infringement procedure against Portugal concerning the application of the non-discriminatory principle to the allocation of rights of way in the context of Directive 1990/388/EEC.

2.3.2. Air transport

On 16 October 2002 the Commission terminated the infringement proceedings against Portugal for failure to comply with Commission Decision 1999/199/EC of 10 February 1999.

This decision, relating to the system of discounts on landing charges and the variations depending on the origin of the flight, operated at the Portuguese airports of Lisbon, Porto and Faro (Case IV/35.703 - Portuguese airports), established that the system was incompatible with Article 86(1), read with Article 82 (discriminatory pricing imposed by ANA-EP, public enterprise managing the relevant airports).

Portugal appealed to the Court of Justice of the European Communities on 4 May 1999. By judgment given on 29 March 2001 [22] the Court dismissed the appeal and the Portuguese authorities took measures (Decree-Act of 26 December 2001, implementation decree of 3 July 2002) bringing the landing charges at the Portuguese airports of Lisbon, Porto and Faro into line with the decision of 10 February 1999.

[22] Case C-163/99.

2.3.3. State aid

Several Member States have still not implemented amendments to the so-called Transparency Directive [23], according to which undertakings entrusted with public service missions have to keep separate accounts for their public missions on the one hand and competitive services on the other hand. Using public funds to distort competition breaches the key principle according to which companies that receive State funding for services of general interest cannot use these resources to subsidise activities open to competition. This is especially true for newly liberalised sectors where emerging competition is still vulnerable. As special or exclusive rights or the public funding may thus not unduly favour the public undertakings' competitive activities, financial transparency in the relations between the State and public service undertakings is indispensable. Member States had until the end of July 2001 to implement the Transparency Directive into their national laws. On 19 October 2001 the Commission sent a reminder to some Member States which had not implemented the Transparency Directive. On 26 June 2002 the Commission sent a reasoned opinion under Article 226 of the EC-Treaty to Finland, France, Ireland, Italy, Portugal and Sweden. As none of these Member States had transposed the Transparency Directive into national law, the Commission requested that they comply with their obligation to do so within two months. In those cases where the Member States have failed to inform the Commission of the provisions adopted to comply with the new requirements, the Commission, has brought the matter before the European Court of Justice. In a related development, the Commission opened new proceedings against Belgium and Luxembourg.

[23] Commission Directive of 26 July 2000 amending Directive 80/723/CEE on the transparency of financial relations between the Member States and public undertakings.

In the Maribel case the Court of Justice gave judgment against Belgium in July 2001 for failure to obtain reimbursement of aid given in the form of tax relief. The Commission considered that Belgium had not fully executed the Court's judgment and put it on formal notice in the procedure of Article 228(2) of the EC Treaty in April 2002, following this with a reasoned opinion in July 2002.

2.4. EMPLOYMENT AND SOCIAL AFFAIRS

This covers different aspects of social policy (free movement of workers, equal treatment for women and men, working conditions and health and safety at the workplace) and a variety of legal instruments (EC Treaty, regulations and many directives).

In cases concerning the free movement of workers, the Commission has to tackle problems of incorrect application of certain provisions of the EC Treaty and the Regulations that apply here, which it learns about through individual complaints from citizens, whereas in other areas (equal treatment for women and men, working conditions and health and safety at the workplace), the main problems concern incorrect transposal measures, or failure to notify such measures.

Free movement of people

In the field of the free movement of persons, problems remain owing to incorrect application of the relevant provisions of the Treaty (articles 39 and 42 EC) and Regulations Nos 1408/71 and 1612/68 [24]. A large number of proceedings already opened were continued. One example concerns the difficulty of obtaining recognition in the public service in several Member States of work experience acquired in another Member State. The cases against Belgium, France, Spain, Italy, Portugal, Austria and Ireland still continue despite the fact that some progress in achieving conformity with Community law has been made. The Commission also decided to refer the case against Belgium concerning a family benefit ("allocation d'interruption de carrière") to the Court of Justice, as the payment of this benefit is conditional upon a person residing in Belgium. In relation to a similar residence condition which needs to be fulfilled in order to qualify for the benefit in case of pre-retirement, a reasoned opinion was sent to Belgium.

[24] See in this respect also the recently adopted Communication from the Commission 'Free movement of workers - achieving the full benefits and potential', 11 December 2002, COM (2002) 694 final.

The proceedings against Italy for having failed to communicate national measures taken in order to comply effectively with the Court's ruling [25] condamning it for non-recognition of the acquired rights of former foreign-language assistants by certain Italian universities ('Lettori'), continue and the Commission decided to send a reasoned opinion under Article 228 of the Treaty.

[25] Judgment ECJ of 26 June 2001 in Case C-212/99.

On the other hand, infringement proceedings against France concerning the deduction of the "contribution sociale généralisée" and the "contribution pour le remboursement de la dette sociale" from the income of frontier workers which continued under Article 228 of the Treaty could be closed, following the adoption of the necessary measures to comply with the judgment delivered by the Court [26].

[26] Judgments of 15 February 2000 in Cases C-169/98 and C-34/98.

The deadline for notifying national measures transposing Directive 98/49/EC [27] was 25 January 2002, [28] and infringement proceedings were begun against Member States that had not notified them by then.

[27] Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community: OJ L 209, 25.7.1998, p. 46.

[28] For progress in transposal, see Annex IV, Part 2 of this report

Equal treatment of men and women

As regards cases of failure to notify national transposal measures, a reasoned opinion was sent to Greece for failure to transpose Directive 97/80/EC (burden of proof). But the proceedings against Greece for failure to transpose Directive 96/97/EC, [29] in which the Court of Justice had given judgment against Greece [30] and which were continuing under Article 228 of the Treaty, were terminated when Greece adopted the requisite measures.

[29] Council Directive 86/378/EEC on the implementation of the principle of equal treatment for men and women in occupational social security schemes.

[30] Case C-457/98 (judgment given on 14 December 2000).

A reasoned opinion was served on the Luxembourg Government for incorrect transposal of Directive 96/34/EC (parental leave), but the case against the United Kingdom was terminated on the adoption of measures transposing the Directive properly.

The proceedings concerning incorrect application of Directives 75/117 and 79/7 in Greece (failure to abolish, with retroactive effect, provisions of collective agreements subjecting the grant of family and marriage allowances to female workers to conditions not imposed on married male workers), [31] which were continuing under Article 228 of the Treaty, were terminated.

[31] Case C-187/98 (judgment given on 28 October 1999).

As regards Directive 76/207/EEC, the Commission decided to refer to the Court of Justice its case against Germany, where national legislation precludes part-time workers in the public sector from serving on committees representing staff. The Commission considers that in reality this has a greater effect on female workers and therefore constitutes indirect sex discrimination contrary to Directive 76/207/EEC, and in particular Articles 1 and 2. A reasoned opinion was served on the Austrian authorities as regards the prohibition on women working in high-pressure environments and atmospheres and in underground mines. The Commission regarded this as contrary to Article 3 of Directive 76/207/EEC.

Working conditions

As regards working time, the Article 228 proceedings against Italy for failure to notify measures to comply with the judgment given against it by the Court of Justice [32] for failure to notify national measures transposing Directive 93/104/CE [33] are still running. As Italy has still taken no measures to comply, the Commission has decided to bring fresh proceedings in the Court of Justice, [34] asking the Italy be ordered to pay a penalty payment of EUR238 950 per day of delay.

[32] Case C-386/98 (judgment given on 9.3.2000).

[33] Council Directive of 23 November 1993 concerning certain aspects of the organisation of working time: OJ L 307, 13.12.1993, p. 18.

[34] Case C-2003/057.

On 8 May 2002, following a reasoned opinion (on the ground that Directive 93/104/EC had been transposed in Denmark by collective agreements that did not apply to all workers), Denmark adopted legislation completing transposal. The proceedings for failure to cover certain workers in collective agreements transposing the Directive will be terminated shortly.

Following the adoption of the report on progress in transposing the directive, [35] the Commission also commenced proceedings in a number of other cases of incorrect national transposal measures.

[35] Commission report on progress in transposing Council Directive 93/104/EC of 23 November 1993 concerning certain aspects of the organisation of working time: OJ L 307, 13.12.1993, p. 18.

As regards the working time of seafarers, the time allowed for transposing Directive 1999/63/EC [36] expired on 30 June 2002. [37] Infringement proceedings have been commenced against Member States that had not notified national transposal measures in time.

[36] Council Directive 1999/63/EC of 21 June 1999 concerning the Agreement on the organisation of working time of seafarers concluded by the European Community Shipowners' Association (ECSA) and the Federation of Transport Workers' Unions in the European Union (FST) - Annex: European Agreement on the organisation of working time of seafarers: OJ L 167, 2.7.1999, p. 33.

[37] For progress in transposal, see Annex IV, Part 2 of this report

Problems remain with the non-conformity of measures transposing Directive 77/187 concerning the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses in Italy (where it does not apply in certain crisis situations such as a court-ordered preventive composition with creditors or a special administration procedure). The case is still ongoing in the Court of Justice. [38] The deadline for notifying national measures transposing Directive 98/50/EC [39] was 17 July 2001, [40] and infringement proceedings were begun against Member States that had not notified them by then. A reasoned opinion was sent to Portugal, and the case against Ireland was referred to the Court of Justice. [41]

[38] Case C-145/01 Commission v Italy.

[39] Council Directive 98/50/EC of 29 June 1998 amending Directive 77/187/EEC on the approximation of the laws of the Member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses: OJ L 201, 17.7.1998, p. 88.

[40] For progress in transposal, see Annex IV, Part 2 of this report .

[41] Case C-2003/075.

Turning to the fixed-term work directive, [42] a reasoned opinion was sent to the Netherlands for failure to notify national transposal measures in due time. Proceedings against Ireland for failure to transpose in good time continued, and it has been decided to refer to the Court of Justice.

[42] Directive 99/70/EC of 28 June 1999 concerning the framework agreement on fixed-term work concluded by ETUC, UNICE and CEEP: OJ L 175, 13.7.99, p. 43.

As regards Directive 98/59/EC on collective redundancies, [43] the infringement proceedings against Italy and Portugal for incorrect transposal are still in motion in the Court of Justice. [44] The same applies to the action against Germany [45] for incorrect transposal of the posting of workers directive, [46] where the Court will have the opportunity to rule on the interpretation of the concept of "minimum rates of pay".

[43] Council Directive 98/59/EC of 20 July 1998 on the approximation of the laws of the Member States relating to collective redundancies: OJ L 225, 12.8.1998, p. 16.

[44] Cases C-32/02 and C-55/02 respectively.

[45] Case C-341/02.

[46] Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 concerning the posting of workers in the framework of the provision of services: OJ L 18, 21.1.1997, p. 2.

Health and safety at work

Proceedings against Member States that have not yet notified measures transposing Directives 98/24/EC [47] and 2000/39/EC [48] for the protection of health and safety at the workplace continued, and the decision has been taken to refer France (Directive 98/24/EC) and France and Italy (Directive 2000/39/EC) to the Court of justice.

[47] Council Directive on the protection of the health and safety of workers from the risks related to chemical agents at work.

[48] Commission Directive establishing a first list of indicative occupational exposure limit values in implementation of Council Directive 98/24/EC on the protection of the health and safety of workers from the risks related to chemical agents at work.

Following the judgment given by the Court of Justice against Austria for failure to notify full measures transposing Directives 95/30 [49], 97/59 [50] and 97/65 [51] (risks of exposure to biological agents at work), Article 228 proceedings are in motion as regards the first two directives. But the proceedings concerning Directive 97/65 were terminated.

[49] Case C-473/99 (judgment given on 14.6.2001).

[50] Case C-110/00 (judgment given on 11.10.2001).

[51] Case C-111/00 (judgment given on 11.10. 2001).

Several infringement proceedings have been commenced or continued regarding problems of incorrect transposal of the framework Directive 89/391/EEC [52] and its specific directives. Reasoned opinions, for example, were sent to Austria, France and Spain regarding transposal of Directive 89/391/CEE. Proceedings are also still in motion against Ireland, Sweden and the United Kingdom, and the cases against the Netherlands and Luxembourg have reached the Court of Justice. [53] On 7 February 2002 judgment was given against Germany [54] for incorrect transposal of the obligation imposed by the directive for a health and safety risk evaluation to be available in documentary form at all times. Article 228 proceedings against Italy following the judgment given by the Court of Justice [55] are under examination.

[52] Council Directive on the introduction of measures to encourage improvements in the safety and health of workers at work.

[53] Cases C-441/01 and C-335/02 respectively.

[54] Case C-5/00.

[55] Case C-49/00 (judgment given on 15 November 2001).

Regarding the specific directives, Spain has been referred to the Court of Justice for incorrect transposal of Directive 89/655/EEC (work equipment), and judgment was given against Italy on 24 October 2002 [56] for incorrect transposal of Directive 90/270/EEC (display screen equipment).

[56] Case C-455/00.

2.5. AGRICULTURE

Monitoring the application of Community law in agriculture proceeds along two axes - removing barriers to the free movement of agricultural produce and ensuring that the more specific mechanisms of the agricultural regulations are applied effectively and correctly.

The general tendency for traditional barriers to the free movement of agricultural produce, such as routine import checks and demands for certification, to come down continued. The Member States sometimes took action to reserve the use of labels quality for national or regional produce, and the Commission had to intervene.

While it supports initiatives to promote the quality of agricultural produce and foodstuffs, which can help create new market outlets, improvements in farmers' incomes and wider choice for consumers, the Commission has always sought to ensure that quality labels are not reserved de jure or de facto for national or regional products where they have no specific quality features recognised as such.

This approach, the purpose of which is to avoid such labels generating arbitrary discrimination against producers and operators in other Member States and unwarranted barriers to the free movement of goods (cf. Case C-13/78 Eggers (12.10.1978) and Case C-321/94 Montagne (7.5.1997)), was recently upheld by the Court of Justice. In Case C-325/00 the Court gave judgment for the Commission in its action against the German CMA label. [57] The label, which states "Markenqualität aus deutschen Landen" (quality label for produce made in Germany), requires at least part of the process of producing agricultural produce and foodstuffs to have taken place in Germany. The Court held that "Such a scheme, set up in order to promote the distribution of agricultural and food products made in Germany and for which the advertising message underlines the German origin of the relevant products, may encourage consumers to buy the products with the CMA label to the exclusion of imported products" and gave judgment against Germany. In the same context, an action was brought in the Court on ten French regional labels; [58] Mr Advocate-General Mischo presented his conclusions on 5.12.2002, supporting the Commission. The Commission then decided to bring actions in the Court on two Italian regional quality labels [59] and two Belgian regional labels. [60]

[57] Judgment given on 5.11.2002 [2000] ECR 0000.

[58] In the case of France the infringement proceedings concern the following regional quality labels: "Normandie", "Nord-Pas-de-Calais", "Ardennes de France", "Limousin", "Languedoc-Roussillon", "Lorraine", "Savoie", "Franche-Comté", "Corse", "Midi-Pyrénées" and "Salaisons d'Auvergne".

[59] In Italy the infringement proceedings concerned the "Regione Siciliana-Marchio Qualità" and "Abruzzo Qualità" regional quality labels.

[60] In Belgium the infringement proceedings concerned the "Label de qualité wallon" and the Blanc bleu fermier" label.

Regarding the repeated acts of violence by individuals in France against fruit and vegetable imports from other Member States, in particular from Spain, and the authorities' failure to take measures to prevent such acts, it is worth recalling the judgment given by the Court of Justice on 9 November 1997 in Case C-265/95, [61] where it held that "by failing to adopt all necessary and proportionate measures in order to prevent the free movement of fruit and vegetables from being obstructed by actions by private individuals, the French Republic has failed to fulfil its obligations under Article 30 of the EC Treaty (now Article 28 EC), in conjunction with Article 5 of that Treaty (now Article 10), and under the common organisations of the markets in agricultural products." The fact that the marketing of fruit and vegetables from Spain has been untrammelled since that judgment was given suggests that the measures taken by the French Government to give effect to it have worked better than those taken in previous years. But in 2002 there was a campaign to threaten violence and force supermarkets in certain regions to give pride of place to French or regional fruit and vegetables.

[61] [1997] ECR I-6959 (judgment given on 9.11.1997).

In monitoring the application of specific common agricultural policy rules, the Commission has continued to pay regular attention to the application of instruments for controlling production, such as the milk quotas scheme, and the integrated management and control of Community assistance.

A case was brought in the Court of Justice as regards the delays in implementing the integrated management and control system for certain Community aid schemes under Regulation (EEC) No 3508/92 in Greece. [62] That regulation harmonises and rationalises management and control measures for Community aid schemes, particularly for arable farming and production of beef and veal, sheepmeat and goatmeat in order to boost efficiency and profitability, through a policy of prevention and enforcement regarding potential irregularities in EAGGF financial operations.

[62] Case C-2002/328.

Although there is an obligation to establish the practical measures for the integrated control system by 1 January 1997, the Greek authorities have not fully met the requirements of Article 2 of Regulation (EEC) No 3508/92, designed to ensure that payments by Community bodies are in accordance with the law and regulations applicable to them.

In addition to these proceedings, the Commission acted to enforce the rules protecting biological agriculture, to prevent charges being levied on amounts due from the Structural Funds and to enforce compliance with the third-country banana import rules.

It decided to refer to the Court of Justice a new set of Spanish rules allowing the word "Bio" to be used for products not produced by biological agriculture techniques within the meaning of Council Regulation (EEC) No 2092/1991 of 24 June 1991, as amended by Regulation (EC) No 1999/1804 on organic production of agricultural products and indications referring thereto on agricultural products and foodstuffs. It issued a reasoned opinion against the charging of an administrative levy by IFADAP, the Portuguese public body responsible for Community and national agriculture and fisheries support and assistance schemes, on amounts paid to recipients of assistance co-financed by the Structural Funds, contrary to Regulations (EEC) Nos 4253/88 and 2082/93. And it continued its infringement proceedings against France by issuing a reasoned opinion on the ground that France determined reference quantities for the issue of import licences for bananas that were well in excess of the quantities determined by Regulation (EC) No 896/2001.

Directive 98/34/EC requires the Member States and the EFTA countries to notify, prior to adoption, all draft rules containing technical standards that could raise barriers to intra-Community trade in agricultural produce, and once again 2002 saw a proliferation of drafts notified to the Commission. A total of 119 drafts notified by the Member States and the EFTA countries in agricultural matters under Article 28 of the EC Treaty and secondary legislation were examined in 2002.

2.6. ENERGY AND TRANSPORT

In 2002, 231 infringement cases were scrutinised, including 119 cases of failure to notify measures transposing directives and 112 cases of incorrect transposal of directives or incorrect application of Community law. The reason for this stability in the number of infringement cases despite the large number of cases closed during the report period (111, including 79 cases of failure to notify) is the faster transposal of transport directives, even though the Member States very often fail to abide by the transposal deadlines. 100 new infringement cases were opened (59 of them for failure to notify), and 28 complaints were examined during the same period. The Court of Justice gave 15 judgments for failure to fulfil obligations.

Energy

2.6.1. Internal market for electricity and natural gas

Parliament and Council Directive 96/92/EC of 19 December 1996 concerning common rules for the internal market in electricity has been transposed by all the Member States except Belgium, which has still to issue a number of implementation Orders, for which the Commission has referred it to the Court of Justice. [63]

[63] Case C-2002/126.

Parliament and Council Directive 98/30/EC concerning common rules for the internal market in natural gas was to be transposed by 10 August 2000. France has still not transposed it, and the Court of Justice gave judgment against it on 28 November 2002. [64] Germany has transposed only part of the directive, and the Commission has decided to refer the case to the Court of Justice.

[64] Case C-2001/259 Commission v France [2002] ECR I-11093 (judgment given on 28.11.2002).

2.6.2. Energy efficiency

Parliament and Council Directive 2000/55/EC of 18 September 2000 on energy efficiency requirements for ballasts for fluorescent lighting fell due for transposal on 20 November 2001 and has been transposed in all Member States except Germany, where transposal measures should be adopted in 2003.

Since no reports on the application of Council Directive 93/76/EEC of 13 September 1993 to limit carbon dioxide emissions by improving energy efficiency (SAVE) have been transmitted, infringement proceedings are in motion against Ireland and Luxembourg, and the Commission has decided to refer the latter Member State to the Court of Justice. [65]

[65] Case C-2002/461.

There have been delays in notifying measures transposing Commission Directive 2002/31/EC of 22 March 2002 implementing Council Directive 92/75/EEC with regard to energy labelling of household air-conditioners and Commission Directive 2002/40/EC of 8 May 2002 implementing Council Directive 92/75/EEC with regard to energy labelling of household electric ovens. When these two Directives fell due for transposal (31 December 2002), only one Member State had fulfilled its obligations.

Council Directive 98/93/EC of 14 December 1998 amending Directive 68/414/EEC imposing an obligation on Member States of the EEC to maintain minimum stocks of crude oil and/or petroleum products, due to be transposed by 31 December 1999, has been transposed by all the Member States. But proceedings are still in motion against Greece for incorrect application of the Directive, and a reasoned opinion was issued on 23 October 2002.

Transport

In 2002, eight new transport directives fell due for transposal. The rate of transposal of transport directives, which had risen sharply to 98% in May, has fallen back to its 2001 level of 94.7% as Member States were behind schedule in notifying measures for the three directives due to be transposed in December 2002. The number of complaints (23) was double the previous year's. But the number of infringement proceedings that the Commission decided to refer to the Court of Justice was down by over a half (11, as against 24 in 2001). The number of judgments given against Member States for failure to act was stable (14, as against 15 in 2001), the specific case of bilateral air navigation agreements with the United States accounting for eight of them.

2.6.3. Road transport

On 6 June 2002 judgment was given against Belgium for failure to transpose Council Directive 98/76/EC amending Directive 96/26/EC on admission to the occupation of road haulage operator and road passenger transport operator and mutual recognition of diplomas, certificates and other evidence of formal qualifications intended to facilitate for these operators the right to freedom of establishment in national and international transport. [66] The proceedings against France, Luxembourg and Sweden were terminated. The Belgian authorities notified the Commission of a Royal Decree of 7 May 2002 on the transport of goods by road, and proceedings will be terminated as soon as the Decree relating to passenger transport is notified.

[66] Case C-2001/274 Commission v Belgium [2000] ECR I-5151 (judgment given on 6.6.2002).

Ireland is the only Member State that has not yet transposed Directive 2001/9/EC of 12 February 2001 adapting to technical progress Council Directive 96/96/EC on the approximation of the laws of the Member States relating to roadworthiness tests for motor vehicles and their trailers. The Commission issued a reasoned opinion on 19 December 2002. Six Member States are behind schedule in transposing Parliament and Council Directive 2000/30/CE on the technical roadside inspection of the roadworthiness of commercial vehicles circulating in the Community, which was due for transposal on 9 August 2002.

Regarding driving licences, there is still serious concern about the proper transposal of Directive 91/439/CEE in certain Member State, in particular France, Spain and the Netherlands. The problems that recur in citizens' complaints cover national provisions relating to the minimum age for a vehicle category, renewal of licences for EU citizens no longer residing in the Member States of issue, the criteria for vehicles used for tests, the duration of the practical test, and minimum requirements in terms of aptitude.

2.6.4. Inland waterways

All the Commission's infringement proceedings against Finland for failure to transpose the inland waterways directives [67] have been terminated, as transposal measures have now been notified. France has complied with the judgment given by the Court of Justice on 20 September 2001 [68] by notifying the Decree of 29 August 2002 on the crewing and control of inland waterway vessels.

[67] Directive 96/50/EC; Directive 91/672/EEC; Directive 87/540/EEC; Directive 82/714/EEC; and Directive 76/135/EEC.

[68] Case C-2000/468 Commission v France [2001] ECR I-6337 (judgment given on 20.9.2001).

2.6.5. Safety in the transport of dangerous goods by road and rail

In recent years there were serious delays in the transposal of directives [69] relating to safety in the transport of dangerous goods by road and rail. Several proceedings were opened, and the Court has given judgment against Italy and Ireland. There was spectacular progress in 2002, since only one proceeding is still in motion, against Luxembourg, for failure to transpose Directive 2001/26/CE. [70] But the Commission has still not received all the national measures transposing Directives 2001/6/EC and 2001/7/EC, which were due for transposal by 31 December 2002. Council Directives 1999/36/EC of 29 April 1999 and 2001/2/CE on transportable pressure equipment were due for transposal on 1 July 2001, and on 19 December 2002 the Commission decided to refer its case against Ireland for failure to transpose to the Court of Justice.

[69] Directive 94/55/EC; Directive 95/50/EC; Directive 96/49/EC; Directive 96/86/EC; Directive 96/87/EC; Directive 99/47/EC; Directive 99/48/EC; and Directive 2001/26/EC.

[70] Reasoned opinion sent on 27.6..2002.

2.6.6. Rail transport

The situation regarding Directive 96/48/EC of 23 July 1996 on the interoperability of the trans-European high-speed rail system, the aim of which is to promote interconnection and interoperability of national high-speed rail systems at the various stages of design, construction and entry into service and also of operation and network access, was fully put right in 2002, since all the Member States have now notified the Commission of transposal measures, the Court of Justice having found against the United Kingdom on 30 May 2002. [71]

[71] Case C-2000/441 Commission v United Kingdom [2002] ECR I-4699 (judgment given on 30.5.2002).

2.6.7. Air transport

All the air transport directives have been transposed by the Member States, except that Ireland has still to transpose Directives 98/20/EC and 1999/28/EC limiting the use of certain types of civilian subsonic jet aircraft. On 15 October 2002 the Court of Justice gave judgment finding that Ireland had failed to fulfil its obligations in relation to these two directives. [72]

[72] Cases C-2001/327 and C-2001/328 Commission v Ireland [2002] ECR I-8817 (judgment given on 15.10.2002).

The Commission referred to the Court of Justice its cases against Germany and Italy concerning the application of Directive 96/67/EC on access to the groundhandling market at Community airports. The infringements noted in connection with airport taxes also continued. The imposition of varying rates of tax by Member States depending on passenger destinations (internal flights/intra-Community and/or international routes) is incompatible with the principle of freedom to provide services stipulated in the field of air transport by Regulation (EEC) No 2408/92 and with EU citizens' freedom of movement under Article 18 of the Treaty. Proceedings against the Netherlands and Portugal continue, but the case against Italy has been terminated.

On 5 November 2002 the Court of Justice gave judgment in the cases relating to the bilateral "open-skies" agreements between eight Member States (Belgium, Denmark, Germany, Finland, Luxembourg, Austria, Sweden and United Kingdom) and the United States. [73] It held that these agreements were not in conformity with Community law and violated the Community's exclusive powers of external action.

[73] Case C-1998/466 Commission v United Kingdom [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/467 Commission v Denmark [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/468 Commission v Sweden [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/469 Commission v Finland [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/471 Commission v Belgium [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/472 Commission v Luxembourg [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/475 Commission v Austria [2002] ECR I-0000 (judgment given on 5.11.2002).Case C-1998/476 Commission v Germany [2002] ECR I-0000 (judgment given on 5.11.2002).

2.6.8. Maritime transport

The Commission observes an improvement in the rate of transposal of maritime safety directives, as all those due for transposal on 30 June 2002 have been transposed in all the Member States. All the proceedings for failure to notify measures transposing the directives on a system of mandatory surveys for the safe operation of regular ro-ro ferry and high-speed passenger craft services, [74] port State control [75] and safety rules and standards for passenger ships [76] have accordingly been terminated.

[74] Directive 99/35/EC.

[75] Directive 99/97/EC.

[76] Directive 98/18/EC and Directive 98/41/EC.

Unfortunately the delays persist with regard to the four directives falling due in the second half of 2002. [77]

[77] Directive 2001/53/EC; Directive 99/95/EC; Directive 2002/25/EC; and Directive 2000/59/EC.

Regarding the application of Directive 95/21/EC (port State control), which harmonises the enforcement of international standards for ship safety, conditions for immobilisation and/or refusal to allow access to Community ports, the Commission decided to refer proceedings against France and Ireland to the Court of Justice [78] for incorrect application of the directive in the form of failure to comply with the obligation to inspect at least 25% of vessels flying foreign flags that land at their ports or navigate in waters under their jurisdiction.

[78] Cases C-2002/439 and C-2002/436.

Compliance with Community legislation on registration of ships and the grant of flag rights continues to pose difficulties in the Netherlands, where the conditions for entry of vessels in the shipping register and the grant of national flag rights remain discriminatory. Infringement proceedings are in motion in the Court of Justice. [79]

[79] Case C-2002/299.

Regarding the right of establishment, the Commission withdrew the action against Italy [80] for failure of its national legislation laying down the conditions in which shipping companies established in another Member State can enjoy the same treatment as Italian companies for admission to the Italian liner conference quota to comply with Articles 43 and 48 of the Treaty, following amendment of the Italian legislation as required by the Commission.

[80] Case C-2002/337.

As for the principle of freedom to provide services, secured by Regulation (EEC) No 4055/86 as regards cargo sharing agreements between Member States and third countries, the proceedings against Portugal were terminated following its denunciation of the Protocol with Yugoslavia, as were the proceedings concerning the agreements between Belgium and Zaïre, Côte d'Ivoire, Senegal and Mali. The proceedings concerning the cargo sharing agreements between Belgium and Togo and between Italy and China continued.

The Commission was also attentive to the application of Regulation (EEC) No 4055/86 as regards possible nationality discrimination between operators or types of transport used and the resultant potential barriers. Following amendments to national legislation, one of the infringement proceedings concerning discriminatory dock dues (which vary according to a vessel's port of destination, with lower amounts for transport between two ports in the same country than for international transport) was closed (Greece), and another on the same subject may also be on the way to settlement (Italy).

As regards maritime cabotage, proceedings have been taken against several Member States (Spain, Denmark, Portugal and Germany) for maintaining or adopting national regulations in contravention of Regulation (EEC) No 3577/92, which provides for maritime cabotage to be opened up to Community shipowners operating ships registered in and flying the flag of a Member State.

And the Commission opened infringement proceedings against Member States that signed a statement of principle with the United States in the context of the Container Security Initiative. These agreements provide for a pilot stage during which the proposed project will operate only in certain clearly identified ports in these Member States. This discretionary selection of a few ports raises a real problem of competitiveness between European ports. It could cause deflection of traffic towards the selected ports consequently engender serious forms of disequilibrium, incompatible with the common transport policy.

2.7. INFORMATION SOCIETY

Following liberalisation in 1998, competition in European telecommunications markets has driven growth and innovation and the widespread availability of services to the public.

As mentioned in the last report, the Lisbon European Council was a landmark for the converging European electronic communications sector. The Heads of State and of Government stamped their authority on the shift to a digital, knowledge-based economy for Europe, subsequently embodied in the eEurope Action Plan [81].

[81] For further information see: http://europa.eu.int/information_society/ eeurope/index_en.htm.

The Parliament and Council adopted in March 2002 the new package of sector specific regulation designed for more competitive markets and converging electronic communications technologies [82]. The new framework links the imposition of regulatory obligations to the absence of effective competition. The new regulatory environment will enable regulators to focus their powers to promote competition, protect the citizen and consolidate the single market, while taking account of the need for innovation and the long-term sustainability of the sector.

[82] These are Directive 2002/21/EC (Framework Directive); Directive 2002/20/EC (Authorisation Directive); Directive 2002/19/EC (Access Directive); and Directive 2002/22/EC (Universal Service Directive). Directive 2002/58/EC on privacy and electronic communications has been adopted in July 2002. The Radio Spectrum Decision (676/2002/EC) does not require transposition by Member States. See also: http://europa.eu.int/information_society/ topics/telecoms/regulatory/new_rf/index_en.htm.

The Commission believes as a general principle that a successful transition to the new framework depends on the full implementation of the current framework, including universal service and consumer protection measures.

As regards transposition of this framework, consisting of thirteen Directives, one Regulation and four Decisions, the Eighth Report on the Implementation of the Telecommunications Regulatory Package [83] states that after four and a half years of liberalisation of telecoms services, the regulation put in place at national level is very substantially compliant with the EU framework. Licensing and interconnection regimes have permitted large-scale market entry, complemented by carrier pre-selection and number portability; delivery times for leased lines have continued to fall; and progress has been made in developing appropriate costing methodologies for the enforcement of EU tariff principles. The work done in this regard represents a substantial achievement by national regulatory authorities.

[83] COM(2002) 695 of 3 December 2002, electronically available at http://europa.eu.int/information_society/ topics/telecoms/implementation/annual_report/8threport/index_en.htm .

In particular, all Member States have now effectively implemented the UMTS Decision [84], since 3G licences have been awarded in all Member States, assigning frequencies allocated to 3G in accordance with the relevant ERC Decisions [85], which in turn were adopted as a result of mandates given to the CEPT under the UMTS Decision [86].

[84] Decision 128/1999/EC of the European Parliament and of the Council of 14 December 1998 on the co-ordinated introduction of a third-generation mobile and wireless communications system (UMTS) in the Community (OJ L 17, 22.1.1999, p. 1).

[85] ERC Decisions ERC(97) 07 (UMTS frequency bands); ERC(00) 01 (extending UMTS bands); and ERC(99) 25 (harmonised use).

[86] A more detailed report on the implementation of the UMTS Decision in the Member States can be found in Annex 2 to the Eighth Implementation Report: http://europa.eu.int/information_society/ topics/telecoms/implementation/annual_report/8threport/finalreport/annex2.pdf. See also the Commission Communications on "The Introduction of Third Generation Mobile Communications in the European Union: State of Play and the Way Forward, COM(2001) 141 of 20 March 2001; and "Towards the full Roll-out of Third Generation Mobile Communications", COM(2002) 301 of 11 June 2002.

The largely positive balance is confirmed by reference to the infringement proceedings currently open, which indicate only two areas, cost accounting and universal directory services, where full compliance needs to be ensured in more than a few Member States. For the rest, the cases still pending represent clarification of points of relative detail.

Accordingly, a significant number of closures of cases (38) or withdrawal of Court proceedings (two) was decided in 2002 as a result of improvements in implementation in the Member States. The most notable relates to the implementation of Regulation 2887/2000 on unbundled access to the local loop [87] in eight Member States, following action taken by the Commission [88]. One case concerns the implementation of Decision 710/97 [89]. Fifteen closures concern incorrect application issues, including four complaints. Seven non-conformity cases were closed and one withdrawn after action was taken before the Court (C-70/02). With regard to non-communication cases, three proceedings, concerning Directive 95/47/EC (TV Signals) and Directive 97/66/EC (Data Protection in Telecommunications), were closed following notification of transposition measures in order to comply with the Court's judgment for failure of transposition (C-319/99, C-151/00 and C-254/00); one further proceeding concerning Directive 97/66/EC was withdrawn after action was taken before the Court (C-267/02). Finally, three non-communication cases were closed following notification of transposition measures for Directive 1999/93/EC (Electronic Signature) by Ireland, Italy and United Kingdom.

[87] OJ L 336, 30/12/2000, p. 4

[88] See IP/02/445.

[89] Decision No 710/97/EC of the European Parliament and of the Council of 24 March 1997 on a coordinated authorization approach in the field of satellite personal-communication services in the Community (S-PCS), OJ L 105, 23/04/1997, p. 4.

On the other hand, the Commission referred five cases to the Court in 2002. These concerned lack of transposition of Directive 97/66/EC in Luxembourg (two proceedings joined under C-211/02) and incomplete transposition of the same Directive in the Netherlands (C-350/02), failure to implement itemised billing in conformity with Directive 98/10/EC (Voice Telephony) in Austria (C-411/02) and failure to ensure the provision of local carrier pre-selection in compliance with Directive 98/61 (Numbering) in Germany (C-401/02).

During the reporting period, the Court gave further judgments in two cases concerning non-transposition of Directive 98/10/EC in France (C-286/01) and non-conformity of the national legislation with Directive 97/33/EC (Interconnection) in Belgium (C-221/01), the latter providing for substantive clarifications with regard to various provisions of this Directive. Due to the increasing importance of judgments in this sector, DG INFSO has recently updated the "Guide to the Case Law of the European Court of Justice in the field of Telecommunications" published on its website [90].

[90] http://europa.eu.int/information_society/ topics/telecoms/implementation/infringement/doc/guidecaselaw.pdf

At the end of 2002 there were 62 ongoing infringement proceedings. Twenty of these were complaints under examination at that time, which means an increase of 66% compared to last year; three proceedings concerned the lack of implementation of a Regulation. The number of proceedings for non-communication of transposition measures for a Directive halved, with seven cases pending, while the importance of non-conformity cases (11) and proceedings concerning incorrect application of transposition measures (21) still remains high, although the number of cases has also decreased significantly compared to last year (more than 33% each).

In five infringement proceedings (three for failure to notify, one for non-conformity, one for incorrect application), the Commission's decision to refer the case to the Court of Justice was still awaiting execution at the end of the reporting year, while a significant number of 14 cases (a more than 50% increase compared to 2001) has reached the reasoned opinion stage (10 of which for incorrect application and four for non-conformity); in 11 pending cases a letter of formal notice was sent in 2002.

The directives making up the main elements of the new regulatory framework for electronic communications networks and services are required to be transposed into national law not later than 24 July 2003. The new framework also provides that Member States shall apply those national transposition measures from 25 July 2003 [91], whereupon the Community instruments forming part of the existing regulatory framework which are to be superseded by those elements of the new framework will be repealed [92].

[91] See for example Article 28 Framework Directive. Member States have until 31 October 2003 to transpose the requirements of Directive 2002/58/EC on privacy and electronic communications into national law.

[92] See Article 26 Framework Directive.

As stated above, the Commission now regards it as a priority to encourage timely transition to the new framework. In addition to providing the legal predictability and regulatory flexibility necessary for continued investment in the sector, this will complement the eEurope objective of achieving competitive local access for internet services over broadband networks as cheaply as possible on a sustainable basis.

2.8. ENVIRONMENT

2.8.1. Introduction

The last five years have seen a growing difficulty in the timely and correct implementation as well as proper practical application of EC environmental legislation. This is reflected in the growing number of complaints received and infringement cases opened by the Commission every year. As in the earlier years, in 2002 the environment sector covered over one third of all infringement cases investigated by the Commission. The Commission brought 65 cases against Member States before the Court of Justice and issued 137 reasoned opinions on the basis of Article 226 of the EC Treaty.

The number of new complaints, which mainly refer to presumed instances of bad application of EC environmental law, remains at the high level experienced after 1996 when the Commission adopted the Communication "Implementing EC environmental law" [93]. In 2002, 555 new complaints alleging breach of Community environmental law were lodged with the Commission. A considerable number of these complaints give also rise to written questions and petitions in the European Parliament.

[93] COM(96)500 final, 22.10.1996.

The Article 228 procedure, which may lead to a pecuniary sanction, has continued to serve as a last resort to force Member States to comply with the judgments delivered by the European Court of Justice. The Commission annually issues several (17 in 2002) letters of formal notice and reasoned opinions (8 in 2002) under Article 228 to Member States. No new cases under Article 228 were brought to the Court during 2002. More details are given in Annex V to this report.

It is essential that the implementation of environmental legislation by Member States be improved. However, seeking improved implementation by taking Member States to the European Court of Justice is not the only, nor often the most efficient way to resolve the current problem. A substantial improvement will require efforts by the Commission to develop new working methods with Member States at all stages of the implementation life cycle. This is particularly relevant in the build up to enlargement to ensure that new Member States transpose and implement correctly the "acquis communautaire" within the agreed timeframes.

In line with the Communication on better monitoring of application of Community law [94], the Commission is already taking a number of practical steps to assist Member States in the implementation of EC environmental legislation:

[94] COM(2002)725 final, 13.12.2002.

1. The Commission strives to anticipate implementation problems when it is designing Community environmental legislation which has to be drafted in a way to make it "enforcement friendly". When the legislation has been adopted, the use of guidelines and interpretative texts agreed by the Commission and the Member States can be helpful. For example, the Commission publishes reference documents on best available techniques under Council Directive 96/61 on the integrated pollution and prevention control. These documents are prepared with active involvement of authorities, industries concerned and other stakeholders. Another example is the Water Framework Directive [95] 2000/60/EC, where the Commission in partnership with the Member States has started a support process for the implementation immediately after the adoption of the Directive. Such a common implementation strategy is one example on how good governance can work in practice.

[95] OJ L 327, 22.12.2000, p.1

2. In order to increase efficiency and enhance effectiveness of implementation of environmental legislation, there is a need to apply pro-active measures by bilateral contacts and meetings between the Commission and Member States. Several seminars were held in 2002 at some Member States where the Commission's views on the correct implementation of particularly complex environmental directives was explained to the competent authorities with a view to prevent, rather than correct, instances of bad application. This approach has been confirmed by the Commission in its above mentioned Communication on better monitoring of application of Community law.

3. Information exchange between implementing authorities is a key to improving implementation. The informal EU network for the Implementation of Environmental Law (IMPEL) consisting of the Commission and the Member States has been since its inception in 1992, a key instrument to discuss the stage of practical application of existing legislation. In order to improve the environmental standards of inspection, the Commission follows up closely the implementation of the Recommendation of the European Parliament and the Council on Minimum Criteria for Environmental Inspections (2001/331/EC).

In addition, the following measures are expected to give incentives to Member States to the better implementation of EC environmental legislation:

4. Programmes and projects can only be funded if they comply with Community policies and instruments including those for environment and sustainable development. In this way Structural Funds can be a lever for implementation of EC environmental legislation.

5. There is a need to improve transparency and awareness on the state of implementation of EC environmental legislation. The Third Annual Survey on the implementation and enforcement of Community environmental law [96] includes a Scoreboard, which details the implementation record of each Member State in each sector of the environment. The Commission has organised "Name, Shame and Fame" events during 2000-2002 to provide information on the implementation performance of Member States.

[96] Commission staff working paper, SEC(2002) 1041, 1.10.2002.

6. Effective reporting from Member States on implementation of environmental is key to monitoring the implementation process. The Commission is presently reviewing the current system of environmental reporting. One of the objectives is to ensure more coherent and effective reporting on implementation of environmental legislation.

7. The relatively high number of complaints received by the Commission reflects the non-existence and/or the relative lack of efficiency of complaint mechanisms in Member States. The Commission is preparing measures on the Community level concerning the possibility of creating cheaper and more efficient access to justice at Member State level in line with the Århus Convention [97], as well as the establishment of reliable national/regional complaint mechanisms and arbitration schemes to solve problems of practical application on the ground.

[97] UN/ECE Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters.

8. The Commission adopted a proposal for a Directive on environmental liability with regard to the prevention and remedying of environmental damage. The proposed Directive should contribute to the better implementation of EC environmental legislation, acting as a disincentive to pollution.

9. Non-observance of environmental law shows that the sanctions currently established by the Member States are not sufficient to achieve full compliance with Community law. The Commission has proposed a Directive that requires the Member States to provide for criminal sanctions because only this type of measure seems adequate and dissuasive enough to achieve proper implementation of environmental law [98].

[98] Amended proposal for a Directive of the European Parliament and of the Council on the Protection of the Environment through Criminal Law, OJ C 20 E, 28.1.2003, p.284. See also Council Framework Decision 2003/80/JHA of 27 January 2003 on the protection of the environment through criminal law OJ L 029 , 5.2.2003, p.55.

2.8.2. Freedom of access to information

As regards Directive 90/313/EEC on freedom of access to information on the environment, the Commission dealt with two non-conformity cases during 2002. The Commission continued court proceedings against France (Case C-233/00), since the French measures did not ensure formal, explicit and correct transposition of several aspects of the Directive, including the obligation to provide a formal explanation of refusal of access to the information. On the other hand, court proceedings against Austria (Case C-86/01) were withdrawn after that Member State had communicated the necessary transposition measures for the Land Styria.

Among the most common subjects of complaint brought to the Commission's notice relating to this Directive are: refusal by national authorities to provide the information requested, slowness of response, excessively broad interpretation by national government departments of the exceptions to the principle of disclosure, and unreasonably high charges. Directive 90/313/EEC contains a requirement for Member States to put in place national remedies against the improper rejection or ignoring of requests for access to information or an unsatisfactory response by the authorities to such requests. When the Commission receives complaints about such cases, it normally advises the aggrieved parties to use the national channels of appeal established to allow the Directive's aims to be achieved in practice.

On 16 and 18 November 2002, Parliament and Council adopted a new directive on public access to environmental information. This Directive will replace the Directive 90/313/EEC, correct the perceived shortcomings in its application in practice and bring it into line with developments in information and communications technology. It will in particular include information on genetically modified organisms as far as they are relevant for the contamination of the food chain. This issue was addressed in a preliminary reference to the Court of Justice where Advocate-General Tizzano has advised the Court that such information should not be considered environmental information under Directive 90/313/EEC (Opinion of 5 December 2002 in case C-316/01).

2.8.3. Environmental impact assessment

Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment, as amended by Directive 97/11/EC, is one of the prime legal instruments for general environmental matters. The Directive requires environmental issues to be taken into account in many decisions which have a general impact.

The deadline for transposition of Directive 97/11/EC which amends Directive 85/337/EEC was 14 March 1999. During 2002, the Court condemned the remaining three Member States who still have not brought into force, within the prescribed period, the legislation necessary to comply with Directive 97/11/EC (Case C-366/00 concerning Luxembourg, Case C-319/01 concerning Belgium and Case C-348/01 concerning France). The non-communication case against Greece (Case C-374/00) could be withdrawn from the Court after that Member State had communicated the necessary legislation.

Problems with the conformity of national measures with Directive 85/337/EEC have persisted. Most notably, the Commission decided to bring Ireland to the Court under Article 228 of the Treaty for not complying with the prior judgment as regards proper transposition of Article 4(2) relating to projects falling within points 1(d) and 2(a) of Annex II to Directive 85/337/EEC, and only partly transposing Article 2(3), (5) and (7) (Case C-392/96). The Court condemned Spain for failing to adopt legislation to comply with Articles 2(1) and 4(2), in conjunction with Annex II, of the Directive (Case C-474/99). An overview of the stage reached in other non-conformity cases is given in Annex IV, Part 3.

As already mentioned in previous Reports on Monitoring of the Application of Community Law, many complaints received by the Commission as well as oral and written questions tabled by the European Parliament and a large number of petitions presented to Parliament relate, at least incidentally, to alleged instances of incorrect application by Member States' authorities of Directive 85/337/EEC, in particular in cases concerning projects of the types listed in Annex II to the Directive (see Annex IV, Part 4). These complaints often require the examination of whether Member States have exceeded their margin of discretion in deciding whether or not such projects should be subject to an environmental impact assessment. As regards complaints about the quality of impact assessments and the lack of weight given to them, it is extremely difficult for the Commission to assess these cases. The basically formal nature of the Directive provides only a limited basis for contesting the merits of such assessments and the choice taken by the national authorities if they have complied with the procedure laid down by the Directive. Most of the cases brought to Commission's attention concerning incorrect application of this Directive revolve around points of fact where the most effective evaluation should rather be ensured at a decentralised level, particularly through the competent national administrative and judicial bodies.

Directive 2001/42/EC of the European Parliament and of the Council was adopted on 27 June 2001 [99]. Member States must bring into force the national rules necessary to comply with this Directive before 21 July 2004. Where Directive 85/337/EEC, which is a new "strategic environmental assessment" Directive of a procedural nature, applies to projects, the aim is to ensure that an environmental assessment is carried out for certain plans and programmes which are likely to have significant effects on the environment.

[99] OJ L 197, 21.7.2001, p. 30.

2.8.4. Air

Council Directive 96/62/EC on ambient air quality assessment and management forms the basis for a series of Community instruments to set new limit values for atmospheric pollutants, starting with those already covered by existing directives, lay down information and alert thresholds, harmonise air quality assessment methods and improve air quality management in order to protect human health and ecosystems.

Apart from its Article 3, the Directive had to be transposed by 19 July 2001. During 2002, the Commission was able to close all infringement procedures opened for non-communication of national implementing measures for those articles.

A relatively big amount legislation has been adopted in the air sector recently. Nine Directives [100] were to be transposed by Member States during 2001 and 2002. Infringement cases concerning non-communication of national implementing measures under these directives are listed in Annex IV, Part 2.

[100] Directive 1998/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC, Council Directive 1999/13/EC of 11 March 1999 on the limitation of emissions of volatile organic compounds due to the use of organic solvents in certain activities and installations, Council Directive 1999/30/EC of 22 April 1999 relating to limit values for sulphur dioxide, nitrogen dioxide and oxides of nitrogen, particulate matter and lead in ambient air, Council Directive 1999/32/EC of 26 April 1999 relating to a reduction in the sulphur content of certain liquid fuels and amending Directive 93/12/EEC, Directive 1999/94/EC of the European Parliament and of the Council of 13 December 1999 relating to the availability of consumer information on fuel economy and CO2 emissions in respect of the marketing of new passenger cars, Directive 2000/69/EC of the European Parliament and of the Council of 16 November 2000 relating to limit values for benzene and carbon monoxide in ambient air, Commission Directive 2001/63/EC of 17 August 2001 adapting to technical progress Directive 97/68/EC of the European Parliament and of the Council on the approximation of the laws of the Member States relating to measures against the emission of gaseous and particulate pollutants from internal combustion engines to be installed in non-road mobile machinery, Directive 2001/80/EC of the European Parliament and of the Council of 23 October 2001 on the limitation of emissions of certain pollutants into the air from large combustion plants, Directive 2001/81/EC of the European Parliament and of the Council of 23 October 2001 on national emission ceilings for certain atmospheric pollutants.

During 2002, the Commission also opened a number of horizontal infringement proceedings for failure to report information on progress made in controlling substances that damage the ozone layer [101].

[101] Regulation (EC) No 2037/2000 of the European Parliament and of the Council of 29 June 2000 on substances that deplete the ozone layer, OJ L 244 , 29.9.2000, p. 1.

Infringement action was taken due to problems of non-conformity in the air sector in a small number of cases (see Annex IV, Part 3).

2.8.5. Water

Monitoring implementation of Community legislation on water quality remains an important part of the Commission's work. This is due to the quantitative and qualitative importance of the responsibilities imposed on the Member States by Community law and by growing public concern about water quality.

In 2002, France replied to the letter of formal notice submitted on the basis of Article 228 of the EC Treaty for non-compliance with the judgment of 8 March 2001 (Case C-266/99). In that judgment, the Court of Justice declared that, by failing to take the necessary measures to ensure that the quality of surface water intended for the abstraction of drinking water conforms to the values laid down pursuant to Article 3 of Directive 75/440/EEC, France has failed to fulfil its obligations under Article 4 of that directive.

With regard to Directive 76/160/EEC concerning the quality of bathing water, monitoring of bathing areas is becoming increasingly common and water quality is improving. Despite this progress, however, proceedings concerning bad application are still under way against many Member States since implementation still falls far short of the Directive's requirements. An overview of the stage reached in infringement proceedings in these cases is given in Annex IV, Part 4. Most notably, by judgment of 19 March 2002, the Court condemned the Netherlands (Case C-268/00) for failing to fulfil its obligations as regards the quality of bathing water and the frequency of sampling thereof within the periods prescribed by the Directive. During 2002, the Commission also took several decisions under Article 228 for non-compliance with recent judgments of the Court concerning the bathing water quality (cases concerning Germany, Belgium and Sweden).

More information concerning the compliance with the parameters of water quality and sampling frequency of Directive 76/160/EEC is also provided by the annual reports on the quality of bathing water (see www.europa.eu.int/water/water-bathing/report).

The Commission has continued proceedings under Article 228 against a number Member States for not complying with earlier judgments of the Court over their bad application of Directive 76/464/EEC on dangerous substances discharged into the aquatic environment and of the directives setting levels for individual substances, particularly concerning adoption of programmes under Article 7 of the Directive. However, some cases could also be closed during 2002 since some Member States complied with the earlier judgments of the Court. An overview of the stage reached in on-going infringement proceedings is given in Annex IV, Part 4.

Further to the presentation of a guidance document on this issue in 2000, the Commission focused on supporting the implementation of the existing Directive 76/464/EEC and in particular Article 7 on the pollution reduction programmes and the transition to Directive 2000/60/EC of the European Parliament and of the Council establishing a framework for Community action in the field of water policy [102]. An implementation report [103] has been published which built on the guidance document and translated the establishment of pollution reduction programmes into the requirements and approaches of Directive 2000/60/EC. The report found that, first, the infringement procedures improved considerably the compliance with this legislation and thereby improved water quality and, second, the establishment of pollution reduction programmes under 76/464/EEC can be regarded as a building block for the implementation of the Water Framework Directive, in particular the programme of measures under Article 11.

[102] OJ L 327 , 22.12.2000, p.1.

[103] The report is available under: http://europa.eu.int/comm/environment/ water/water-dangersub/article7ofdirective77464eec.pdf

Concerning Directive 80/778/EEC relating to the quality of water intended for human consumption (drinking water), the Commission initiated and continued a small number of infringement cases relating to bad application of the Directive, particularly concerning poor quality of drinking water. By judgment of 14 November 2002, the Court condemned Ireland for failure, in its implementing legislation, to reflect the binding character of the requirements of Annex I to the Directive in relation to group water supplies, and for failure to ensure compliance with certain microbiological parameters of Annex I to the Directive (Case C-316/00). An overview of the stage of proceedings reached in these cases is given in Annex IV, Part 4.

Council Directive 98/83/EC of 3 November 1998 on the quality of water intended for human consumption, which will replace Directive 80/778/EEC from 2003 [104], was due to be transposed into national law by 25 December 2000. The Commission was able to close the most infringement cases for non-communication of implementing measures for this Directive, but in three cases (Belgium, Spain and the United Kingdom) the Commission has taken the decision to bring proceeding in the Court (see more closely Annex IV, Part 2).

[104] OJ L 330, 5.12.1998, p. 32.

The Community has two legislative instruments aimed specifically at combating pollution from phosphates and nitrates and the eutrophication they cause.

The first, Directive 91/271/EEC, concerns urban waste-water treatment. Member States are required to ensure that, from 1998, 2000 or 2005, depending on population size, all cities have waste-water collection and treatment systems. Since this Directive plays a fundamental role in the campaign for clean water and against eutrophication, the Commission is particularly eager to ensure that it is implemented on time. During 2002, action in several cases of bad application were taken due to insufficient designation of sensitive areas or non-compliance with the requirements for urban waste water treatment. The Commission also sent a letter of formal notice to several Member States for the lack of general implementation report and of information on sensitive areas. An overview of the stage of proceedings reached in these cases is given in Annex IV, Part 4.

The second anti-eutrophication measure is Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources. The Commission has continued to lay great stress on enforcing this Directive. During 2002, the Commission took action over bad application of the Directive by a number of Member States concerning lacking or insufficient designation of vulnerable zones as well as the failure to establish action programmes as required by the Directive. Two of these cases were decided by the Court in 2002 (Case C-258/00 against France and Case C-161/00 against Germany). Regrettably, in many cases, the Commission has had to open infringement procedures under Article 228 in order to make Member States to comply with judgments given earlier by the Court. Overview of the stage of proceedings in the above cases is given in Annex IV, Part 4.

Directive 2000/60/EC of the European Parliament and of the Council establishing a framework for Community action in the field of water policy [105] is due to be transposed by 22 December 2003. In May 2001, a Common Implementation Strategy [106] was agreed which involves all national, regional and local authorities of Member States, EEA countries, Accession Countries and various stakeholders and NGOs. The strategy includes a large number of joint activities including the development of guidance, the testing of implementation aspects in pilot river basins and the share of knowledge and information. So far, nine guidance documents and several technical reports have emerged from this process [107]. In addition, an extensive European implementation network has been established. The process will continue over the coming years.

[105] OJ L 327 , 22.12.2000, p.1.

[106] More information under http://europa.eu.int/comm/environment/ water/water-framework/implementation.html

[107] More information under http://forum.europa.eu.int/Members/irc/ env/wfd/library

2.8.6. Nature

The two main legal instruments aimed at protecting nature are Directive 79/409/EEC on the conservation of wild birds and Directive 92/43/EEC on the conservation of natural habitats and of wild fauna and flora.

Regarding the transposal of Directive 79/409/EEC, a small number conformity problems remain unresolved. In 2002, the Commission had to continue infringement actions against some Member States, notably concerning hunting periods and hunting practices not in line with the Directive.

The deadline for notifying the implementing measures for Directive 92/43/EEC expired in June 1994. In many cases the transposal is still insufficient, particularly concerning Article 6 on the protection of habitats in the special conservation sites which are to be set up, and Articles 12 to 16 on the protection of species. In its judgment of 5 December 2002, the Court held that by failing to adopt all the laws, regulations and administrative measures necessary to ensure the full and proper transposition of several Articles of the Directive, Belgium has failed to fulfil its obligations under the Directive (Case C-324/01).

As in the past, the main problems with the implementation of Directives 79/409/EEC and 92/43/EEC relate to its bad application, namely the insufficient classification of special protection areas (SPA) for birds and the insufficient selection of the proposed sites of Community importance (SCI) for habitats for inclusion in the Natura 2000 network, or to the protection of such sites.

Existing SPAs for birds in a number of Member States are still too few in number or cover too small an area. The Commission's strategy revolves around initiating general infringement proceedings, rather than infringement proceedings on a site-by-site basis. By its judgment of 26 November 2002, the Court declared that France has failed to comply with its obligations under Article 4(1) and (2) of Directive 79/409/EEC by not in sufficient measure classifying as special protection areas the territories most suitable for the conservation of the species of wild bird referred to in Annex I to the Directive, and of migratory species, and, in particular, by not classifying a sufficiently large area of the site Plaine des Maures as a special protection area (Case C-202/01). As regards SCI's, the Commission continued infringement proceedings against several Member States whose selection of sites is either not satisfactory or is under assessment subject to the results of biogeographical seminars. In a number of these cases, the Commission had to start infringement proceedings under Article 228 to make the Member States to comply with the earlier judgments of the Commission.

Problems remain concerning the special protection regime under Article 4(4) of Directive 79/409/EEC and Article 6(2) to (4) of Directive 92/43/EEC, e.g. wrongly applying or setting aside the special protection regime in relation to various projects affecting sites. In this respect, infringement actions against a number of Member States had to be taken in the course of 2002. Most notably, by its judgment of 13 June 2002, the Court found that Ireland has breached Article 3 of Directive 79/409/EEC and Article 6(2) of Directive 92/43/EEC by failing to take measures necessary to safeguard a sufficient diversity and area of habitats for the Red Grouse and by failing to take appropriate steps to avoid, in a certain special protection area (SPA), the deterioration of habitats of the species for which the SPA was designated (Case C-117/00). The case arose as a result of an investigation of complaints about the widespread vegetation loss and erosion caused by the overstocking of sheep on fragile upland habitats in the west of Ireland. This judgment is the first case in which the Court has condemned a Member State for the breach of Article 3 of Directive 79/409/EEC.

During 2002, the Commission continued setting conditions in Structural Funds plans and programmes and rural development programmes requiring Member States to submit outstanding lists for the setting up of the Natura 2000 network in accordance with their obligations under Directives 79/409/EEC and 92/43/EEC.

The Commission has maintained its strict policy with regard to the granting of Community funding for conservation of sites under the LIFE Regulation on sites being integrated or already integrated into the Natura 2000 network. Furthermore, it scrutinises requests for co-financing from the Cohesion Fund very thoroughly for compliance with environmental regulations. The same applies to various pre-accession funding mechanisms concerning the candidate countries.

Problems with the implementation of Directive 92/43/EEC may also arise with regard to the protection, not of designated or nominated sites, but of species. Article 12 of the Directive establishes a strict protection scheme for species under Annex IV (a), from which Member States can derogate only under the conditions laid down in Article 16(1) and (2).

In its judgment of 20 January 2002, the Court held that Greece has breached Article 12(1)(b) and (c) by failing to take, within the prescribed time-limit, the requisite measures to establish and implement an effective system of strict protection for the sea turtle Caretta caretta on Zakinthos so as to avoid any disturbance of the species during its breeding period and any activity which might bring about deterioration or destruction of its breeding sites (Case C-103/00). This is the first judgment of the European Court of Justice related to Article 12 of the Directive. It underlines the necessity to establish and implement an effective system of strict protection for species listed in Annex IV (a) and interprets the term 'deliberate'. A similar case against the United Kingdom for its failure to ensure the proper protection of the great crested newt (Triturus cristatus) is pending (Case C-434/01).

2.8.7. Noise

Directive 2000/14/EC of the European Parliament and of the Council on the approximation of laws of the Member States relating to noise emission in the environment by equipment for use outdoors [108] was due to be transposed in 3 July 2001. This directive repeals, from 3 January 2002, nine directives concerning different types of equipment. The Commission decided to bring into the Court three Member States who still had not yet adopted and notified their implementing measures, or had not done so for the whole of their territory. These Member States are Italy, Greece and the United Kingdom as far as Gibraltar is concerned.

[108] OJ L 162, 3.7.2000, p. 1.

2.8.8. Chemicals and biotechnology

Community legislation on chemicals and biotechnology covers various groups of directives relating to products or activities which have certain characteristics in common: they are technically complex, require frequent changes to adapt them to new knowledge, apply to both the scientific and industrial spheres and deal with risks for human health and environment.

One of the features of Council Directive 67/548/EEC on the approximation of the laws, regulations and administrative provisions relating to the classification, packaging and labelling of dangerous substances is the frequency with which it has to be amended to keep up with scientific and technical developments. Commission Directive 2001/59/EC adapting Directive 67/548/EEC to technical progress for the 28th time, had to be transposed by 31 July 2002. In this context, Member States are still frequently late in notifying their implementing measures. In such cases, the Commission rigorously commences proceedings for non-communication to make Member States meet their obligations.

Directive 98/8/EC of the European Parliament and of the Council of 16 February 1998 concerning the placing on the market of biocidal products [109] was due to be transposed by the Member States by no later than 14 May 2000. At the end of 2002, there were still few Member States who had not yet notified their implementing measures, as demonstrated by the non-communication proceedings listed under this Directive in Annex IV, Part 2.

[109] OJ L 123, 24.4.1998, p. 1.

Animal experiments are covered by Directive 86/609/EEC on the approximation of laws, regulations and administrative provisions of the Member States regarding the protection of animals used for experimental and other scientific purposes. Certain problems with the conformity of the Directive persist. The Commission issued a reasoned opinion under Article 228 to Ireland for not complying with the Court's judgment of 18 October 2001, to the effect that Ireland has failed to adopt all the measures necessary to ensure the correct implementation of Articles 2(d), 11 and 12 of the Directive as well as to provide for an adequate system of penalties for non-compliance with the requirements of the Directive (Case C-354/99). In its judgment of 12 September 2002, the Court found that France had not correctly transposed Articles 4, 7(3), 11, 12(2), 18(1) and (3) and 22(1) of the Directive (Case C-152/00). The Advocate-General proposed in his Opinion of 26 September 2002 that the Court declares that the Netherlands has not transposed Article 11 and 22(1) of the Directive (Case C-205/01). Infringement actions against Spain and Belgium for bad application of the Directive were continued.

A new Directive revising the original framework for regulating the release of GMOs in the Community [110] had to be transposed into national law by 17 October 2002. The original regulatory framework, which was established by the 1990 Directive [111], was established in response to concerns that the release of GMOs might lead to irreversible damage to the environment. A 1996 review identified several aspects of the original framework that needed clarification and improvement. As a result, Directive 90/220/EEC was revised and replaced by Directive 2001/18/EC. The revised Directive maintains the structure of the old directive, but improves the strictness and transparency of the provisions, notably creating a more effective and efficient authorisation procedure. Infringement cases for non-communication of transposal measures were opened against fourteen Member States who had failed to meet the deadline of 17 October 2002.

[110] Directive 2001/18/EC of the European Parliament and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms and repealing Council Directive 90/220/EEC.

[111] Council Directive 90/220/EEC of 23 April 1990 on the deliberate release into the environment of genetically modified organisms.

2.8.9. Waste

The Waste Framework Directive (Directive 75/442/EEC, as amended by Directive 91/156/EEC), requires that prior authorisation be obtained for waste-disposal and waste-recovery sites; in the case of waste-disposal, the authorisation must lay down conditions to contain the environmental impact. Member States still have problems in fully and correctly implementing its provisions into national law. An overview of the stage of proceedings reached in these cases is given in Annex IV, Part 3.

In 2002, the Commission took a number of infringement actions involving bad application of the Waste Framework Directive. Most of the implementation difficulties concern the application of the Waste Framework Directive to specific installations. This is at the root of the large number of complaints primarily concerned with local waste dumping problems (illegal landfills and/or uncontrolled treatment of waste, non-existent or insufficient environmental impact assessments, uncontrolled dumps, controversial siting of planned controlled tips, mismanagement of lawful tips, water pollution caused by directly discharged waste). The Commission uses individual cases to detect more general problems concerning incorrect application of Community law, such as the absence or inadequacy of waste management plans, based on the assumption that an illegal dump may provide evidence of an unsatisfied need for waste management.

Another category of bad application of the waste legislation are cases concerning inadequate waste planning. They cover a range of failings, relating variously to plans as required by Article 7 of the Waste Framework Directive, plans for management of dangerous waste as required by Article 6 of Directive 91/689/EEC, and special plans for packaging waste, as required by Article 14 of Directive 94/62/EC. During 2002, the Court condemned three Member States for having breached Article 7(1) of the Waste Framework Directive, Article 6(1) of Directive 91/689/EEC and Article 14 of Directive 94/62/EC for insufficient waste management plans [112]. The Commission is following-up these cases under Article 228 in order to ensure compliance with the Court judgments.

[112] Case C-292/99 concerning France, Case C-35/00 concerning the United Kingdom and Case C-466/99 concerning Italy.

The case-law on the definition of waste under the Waste Framework Directive was confirmed and further developed by the preliminary ruling given by the Court in 18 April 2002 (Case C-9/00 Palin Granit). The Court held that the holder of leftover stone resulting from stone quarrying which is stored for an indefinite length of time to await possible use discards or intends to discard that leftover stone, which is accordingly to be classified as waste within the meaning of the Directive. The place of storage of leftover stone, its composition and the fact, even if proven, that the stone does not pose any real risk to human health or the environment are not relevant criteria for determining whether the stone is to be regarded as waste.

Directive 1999/31/EC on the landfill of waste [113] clarifies the legal framework in which landfill sites are authorised in the Member States. This Directive was to be transposed by 16 July 2001. For landfills coming into operation after, as well as those existing on, this date, requirements have been tightened by this Directive. By the end of 2002, several Member States still had not adopted and communicated their transposal measures to the Commission and the Commission had to start court proceedings. Stage of the infringement proceedings for non-communication of these measures are listed in Annex IV, Part 2.

[113] OJ L 182, 16.7.1999, p. 1.

Regarding Directive 91/689/EEC on hazardous waste, Member States still had problems in transposing the national legislation correctly. An overview of the stage of proceedings reached in these cases is given in Annex IV, Part 3. As regards the application of the Directive, the Commission had commenced infringement proceedings in 1998 against a number of Member States which had failed to provide the Commission with particular information required in relation to establishments or undertakings carrying out disposal and/or recovery of hazardous waste. In its judgment of 13 June 2002, the Court found that Greece has failed to send to the Commission, within the prescribed period, all the information required under Article 8(3) of the Directive (Case C-33/01).

Directive 2000/53/EC of the European Parliament and of the Council of 18 September 2000 on end-of life vehicles had to transposed by Member States by 21 April 2002. By the end of 2002, the Commission had non-communication cases open against ten Member States who had not adopted and communicated their transposal measures to the Commission.

Regarding Directive 75/439/EEC on the disposal of waste oils, the Commission had opened in 2001 infringement proceedings against 11 Member States for the non-conformity and/or bad application of national legislation with several Articles of the Directive, particularly regarding the obligation to give priority to the processing of waste oils by regeneration, provided that technical, economic and organisational constraints so allowed. During 2002, the Commission continued infringement proceedings against France, Belgium, Ireland, the Netherlands, Finland, Denmark, and Sweden and decided to open court proceedings against Austria, Greece, the United Kingdom and Portugal.

With regard to the disposal of PCBs and PCTs, two particularly dangerous substances, Directive 96/59/EC stipulates that Member States shall draw up, within three years of its adoption, namely by 16 September 1999, plans for the decontamination and/or disposal of inventoried equipment and PCBs contained therein and outlines for the collection and subsequent disposal of certain equipment under Article 11 of the Directive, as well as inventories under Article 4(1) of the Directive. However, many Member States have still not communicated to the Commission the necessary measures. Thus, in 2002 the Court gave judgments against several Member States for the absence of the above information (Case C-174/01 concerning Luxembourg, Case C-46/01 concerning Italy, Case C-177/01 concerning France and Case C-47/01 concerning Spain). Other similar on-going cases of bad application are listed in Annex IV, Part 4.

As regards Directive 94/62/EC on packaging and packaging waste, two particular developments merit attention. The Commission continued the court action (Case C-463/01) against Germany concerning its packaging Ordinance (commonly referred to as the 'Töpfer' Ordinance), which promotes the re-use of packaging materials since the reuse quota as set up by the German Ordinance amounts to a barrier to trade and indirect discrimination of imported natural mineral waters to be filled at source. On the other hand, the Commission was able to withdraw the case opened earlier against Denmark (Case C-246/99) in relation to Denmark's so-called 'Can Ban', i.e. Danish legislation which bans the marketing of beer and carbonated drinks in metal cans and other types of non-reusable packaging. This was because Denmark repealed the legislation at issue.

2.8.10. Environment and industry

Directive 96/61/EC concerning integrated pollution prevention and control (IPPC), adopted on 24 September 1996, was due to be implemented by 30 October 1999. In the course of 2002, proceedings for non-communication of the transposition measures to the Commission still had to be continued against a few Member States. In 2002, the Court gave judgments against Spain, Greece and the United Kingdom for failure to adopt the laws, regulations and administrative measures necessary in order to comply with the Directive. Reasoned opinions were issued for Finland, Sweden and Austria for non-conformity of certain aspects of their national legislation with the Directive.

Directive 96/82/EC ("Seveso II"), replacing Directive 82/501/EEC from 3 February 2001 ("Seveso I"), was due to be transposed by no later than 3 February 1999. The notification of implementing measures by few Member States is still incomplete, particularly as regards Articles 11 and 12 of the Directive. Infringement cases concerning non-communication under this Directive are listed in Annex IV, Part 2.

2.8.11. Radiation protection

Council Directive 96/29/Euratom, laying down basic safety standards for the health protection of the general public and workers against the dangers of ionising radiation (OJ L 159, 29.6.1996, p. 1), and Council Directive 97/43/Euratom on health protection of individuals against dangers of ionising radiation in relation to medical exposure (OJ L 180, 9.7.1997, p. 22), were to be transposed by May 2000. In December 2002, a majority of Member States had adopted transposing measures for both Directives, while some provisions were still missing in the United Kingdom and Denmark (for Directive 96/29) and in France (for both Directives).

In 2002 the Commission received 5 submissions of national draft legislation under Article 33 of the Euratom Treaty (1 concerning Directive 92/3 on shipments of radioactive waste and 4 for transposing measures of the 2 Directives mentioned above). No formal recommendation was issued.

In accordance to Article 35 of the Euratom Treaty, the Commission carried out one verification in Portugal in order to check the facilities necessary for the continuous monitoring of the environmental level of radioactivity.

In 2002 the Commission received 9 submissions of general data relating to plans for the disposal of radioactive waste, under Article 37 of the Euratom Treaty, so that it could assess the data and determine whether the implementation of the plans was able to cause radioactive contamination of the water, soil or airspace of another Member State. The Commission issued 17 opinions.

The Commission dealt with a number of infringement procedures under Article 141 of the Euratom Treaty. It opened four new own initiative cases and received two complaints. It sent one reasoned opinion to the United Kingdom concerning the implementation of Directive 89/618, on the information of the population in case of radiological emergency. It decided to refer the UK to the Court because of the non-submission of data under Article 37 of the Treaty concerning the dismantling of the JASON research reactor. It also decided to refer Denmark to the Court because of the non-communication of all transposing measures for Directive 96/29.

In view of the progress made in the transposition of Directives 96/29 and 97/43, the Commission decided the closure of the procedures opened against the Netherlands and the withdrawal of the Court applications against Ireland and Portugal. This was also the case for Germany, in view of the adoption of new legislation concerning Directive 89/618.

2.9. FISHERIES

On 25 April the Court of Justice gave judgment against France for failure to fulfil fisheries inspection obligations as certain quotas for 1991, 1992, 1993, 1994, 1995 and 1996 were exceeded. [114]

[114] Joined cases C-418/00 and C-419/00 [2002] ECR I-03969.

On 14 November the Court of Justice gave judgment against the United Kingdom for failure to fulfil fisheries inspection obligations as certain quotas for 1985, 1986, 1988, 1990, 1991, 1992, 1993, 1994, 1995 and 1996 were exceeded. [115]

[115] Cases C-454/99 and C-140/00.

In proceedings for failure to fulfil fisheries inspection obligations as certain quotas for Denmark in 1997, France in 1997 and Sweden in 1997 were exceeded, the Commission served reasoned opinions on those Member States on 24 and 25 April and 18 October respectively. It decided to refer cases to the Court of Justice against Sweden on 24 July, Ireland on 11 September and Finland on 3 December for excesses in 1995 and 1996.

On 27 August it decided to bring Article 228 proceedings in the Court of Justice against France for inadequate enforcement of technical fish resource conservation measures.

2.10. INTERNAL MARKET

2.10.1. Free movement of goods

As in 2001, the volume of infringement proceedings concerning barriers to trade (Articles 28 et seq.) [116] was fairly stable in 2002. Most of these are technically complex and politically sensitive cases, particularly where the protection of health, the environment or the consumer are involved. Several factors helped to prevent the number of infringement proceedings from rising: the preventive action of Directive 98/34/CE [117] on the obligation to notify draft technical rules (frequent sources of barriers to trade in goods), the harmonisation of certain areas such as foodstuffs, construction, telecommunications and mechanical engineering, and a growing awareness by the national authorities of the principles governing the internal market.

[116] See website http://europa.eu.int/comm/internal_market/ en/goods/mutrec.htm.

[117] OJ L 204, 21.7.1998, p. 37.

The statistics also confirm the trend for problems raised in complaints or detected by other means to be solved before infringement proceedings begin (with the letter giving formal notice to act). Package meetings have once again shown their effectiveness in settling cases, even if a major organisational effort is involved in preparing for them and following them up. Regular one-off actions have been undertaken with the Member States to ensure that cases really are solved effectively.

The Commission also took stronger information and promotion measures concerning Decision 3052/95/EC, [118] which requires the Member States to notify the Commission of national measures that constitute exceptions from the principle of free movement of goods. It published an explanatory brochure for national administrative authorities and economic operators.

[118] OJ L 321, 30.12.1995, p. 1.

As for the scheme for a rapid response to serious barriers to trade in goods established by Regulation (EC) 2679/98 on the functioning of the internal market (the strawberries regulation), [119] the Article 3 early warning system was activated eleven times in 2002. Three of the requests for information concerned restrictions on rail traffic in the Channel Tunnel, which were settled in the course of the year.

[119] OJ L 337, 12.12.1998, p. 8.

Turning to product liability (Directive 85/374/EEC as amended [120]), the Court of Justice gave three judgments clarifying the scope of the directive on 25 April 2002; [121] judgment was given against France and Greece for incorrect transposal.

[120] OJ L 210, 7.8.1985, p. 29.

[121] Case C-52/00 Commission v France [2002] ECR I-03827; Case C-154/00 Commission v Greece [2002] ECR I-03879; and Case C-183/00 Preliminary ruling on Spanish legislation [2002] ECR I-03901. Greece has amended its legislation as required by the judgment.

2.10.2. Free movement of services and right of establishment

Turning to freedom to provide services and freedom of establishment for services enterprises, in accordance with its Strategy for the internal market in services, [122] the Commission continued to handle a very wide variety of complaints (security services, vehicle hire, services supplied by medical laboratories, inspection agencies, temporary employment agencies, engineering consultancies, patent agents, surveyors, tourism and leisure services, animal breeders etc.).

[122] COM (2002) 441 final, 30.7.2002

Regarding the posting of workers to third countries, the Commission referred its proceedings against Belgium, Germany, Luxembourg and Austria to the Court of Justice, considering that they had not given effect to the Vander Elst judgment. [123] The posting of workers to third countries in the context of the provision of services remains subject to conditions as regards entry, residence and employment considered contrary to Article 49 of the EC Treaty. The Court of Justice gave judgment in an important case concerning the organisation of fairs and exhibitions. [124] It held that a series of obligations were incompatible with the freedom to provide services (general authorisation scheme, establishment in the host country, exclusive activity obligation and specified legal status, not-for-profit status etc.) and freedom of establishment (presence of authorities on managing bodies of organising companies, power of intervention, even on a consultative basis, of bodies set up by competing operators etc.). The Court also gave judgment in cases concerning conditional access services (inadmissibility of the obligation for operators to seek prior authorisation in the host country, [125]) pay slips [126] and temporary work contracts (incompatibility of the obligation to lodge and pay a guarantee in the host country with Article 49 of the EC Treaty [127]). In the area of health services, a consultation process with the Member States on the implementation of the judgments given by the Court of Justice concerning the reimbursement of health-care expenditure incurred in another Member State has been launched. [128]

[123] Case C-43/93 [1994] ECR I-03803 (judgment given on 9.8.1994).

[124] Case C-439/99 [2002] ECR I-00305 (judgment given on 15.1.2002).

[125] Case C-390/99 [2002] ECR I-00607 (judgment given on 22.1.2002).

[126] Case C-79/01, not yet reported (judgment given on 20.11.2002).

[127] Case C-279/00 [2002] ECR I-01425 (judgment given on 7.2.2002).

[128] Cases C-120/95 [1998] ECR I-01831 and C-158/96 [1998] ECR I-01931 (judgments given on 28.4.1998); Cases C-157/99 [2001] ECR I-05473 and C-368/98 [2001] ECR I-05363 (judgments given on 12.7.2001).

Turning to commercial communication, the Commission decided to refer an action to the Court of Justice against Belgium concerning certain provisions of its Commercial Practices Act restricting the possibilities for using loyalty schemes. It also commenced proceedings against French rules prohibiting television advertising for certain lines of business (distribution, press, cinema, publishing).

In financial services, the Commission referred two insurance cases against Luxembourg and France concerning bonus/malus coefficients to the Court of Justice; [129] but it terminated the proceedings against Belgium and Finland as they had amended their bonus/malus rules in line with the interpretative communication on freedom to provide services and the general interest. In the case against Italy on the freezing of motor-vehicle third-party insurance premiums, the Advocate-General presented his conclusions in Case C-59/01 on 4 July 2002, confirming the Commission's attachment to the principle of pricing freedom laid down by the insurance directives. The Commission also pursued the infringement proceedings against France concerning mutual societies and asked the Court to impose a penalty payment of EUR242 650 per day. [130]

[129] Cases C-346/02 and C-347/02.

[130] Case C-261/02.

The process of transposing Directive 98/78/EC [131] (insurance groups) was completed when Greece notified measures adopted in response to the Court's judgment given in Case C-312/01 on 12 September 2002. The Commission was also able to close a number of other cases when the relevant national legislation was brought into line. Such was the case of the Finnish legislation whereby damage caused to passengers in a vehicle that was in an accident could be excluded from insurance cover if the driver was under the influence of alcohol. This legislation was held to be contrary to Article 2 of the second motor-vehicle insurance directive (84/5/EEC [132]), which allows an exclusion only in the few cases expressly it provides for, which does not include drunkenness of the driver, and has been amended.

[131] OJ L 330, 5.12.1998, p. 1.

[132] OJ L 8, 11.1.1984, p. 17.

In transferable securities, the Commission commenced an action in the Court of Justice against the United Kingdom on 20 December 2001 for failure to transpose Directive 97/9/EC [133] (investor compensation schemes) in Gibraltar.

[133] OJ L 84, 26.3.1997, p. 22.

Virtually all the infringements relating to investment funds (UCITS) that reached formal proceedings stages in 2002 or are under scrutiny concern tax matters. They are based on the study on tax barriers to the internal market in investment funds presented by the Fédération européenne des Fonds et des Sociétés d'investissement (FEFSI) in 2001 and on specific complaints from organisations representing the investment funds industry. Formal proceedings were opened or pursued against Austria and Germany. Investigations are in motion against a number of Member States, and administrative letters were sent in the autumn of 2002.

In 2002 the Commission sent the Member States a questionnaire on payment systems, asking for the measures they had taken to establish the penalties provided for by Article 7 of Regulation (EC) No 2560/2001 [134] on cross-border payments in euros.

[134] OJ L 344, 28.12.2001, p. 13.

Some of the proceedings in motion regarding the operational independence of postal services operators from national regulatory authorities were settled in 2002. Three proceedings remain, in which a solution is expected in 2003. In most complaints about the poor quality of the postal service, the Commission's practice is to remind complainants that there are national redress procedures which should be used in preference (all the Member States have established such procedures in accordance with the rules that apply here).

2.10.3. The business environment

In industrial property, reasoned opinions were served on nine Member States on 19 December 2002 for failure to notify national measures transposing Directive 98/44/CE (legal protection of biotechnological inventions). [135] In 2002 the Commission also published two reports provided for by the Directive - "An assessment of the implications for basic genetic engineering research of failure to publish, or late publication of, papers on subjects which could be patentable" [136] and "Development and implications of patent law in the field of biotechnology and genetic engineering". [137] It referred proceedings against seven Member States for failure to transpose Directive 98/71/EC (legal protection of designs) [138] to the Court of Justice.

[135] OJ L 213, 30.7.1998, p. 13.

[136] COM (2002) 2 final, 14.1.2002, as required under Article 16(b) of Directive 98/44/EC.

[137] COM (2002) 545 final, 7.10.2002, annual report as required under Article 16(c) of Directive 98/44/EC.

[138] OJ L 289, 28.10.1998, p. 28.

Only two Member States (Denmark and Greece) have notified measures to give effect to Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society. [139]

[139] OJ L 167, 22.6.2001, p. 10.

On 26 September 2002, the Advocate-General gave his opinion in SENA v NOS [140] concerning the interpretation of the concept of fair remuneration for the purposes of Article 8(2) of Directive 92/100/CEE (lending right). [141] Most of the infringement proceedings in motion concerned the incorrect application of certain provisions of the Directive: at the end of 2002 proceedings were referred to the Court of Justice in the cases against Belgium and the United Kingdom, and in the course of the year new complaints for incorrect application were made against Spain, France, Portugal and the United Kingdom. On 19 March 2002 the Court of Justice gave judgment declaring that, by not acceding in good time to the Bern Convention for the Protection of Literary and Artistic Works (Paris Act, 1971), Ireland had failed to fulfil its obligations under the EC Treaty. [142]

[140] Case C-245/00.

[141] OJ L 346, 27.11.1992, p. 61.

[142] Case C-13/00 [2002] ECR I-02943.

The Commission continued monitoring the application of Community law relating to public procurement via complaints and the analysis and monitoring of cases detected by its own investigations. To boost the essential role of complainants in detecting infringements, the Commission issued a Communication specifying the administrative measures provided for in their favour. [143]

[143] Commission Communication to the European Parliament and the European Ombudsman on relations with the complainant in respect of infringements of Community law: OJ C224, 10.10.2002.

The Commission has established a consultation and dialogue procedure (transposal package meetings) to help the Member States transpose Community public procurement legislation correctly. Even so, in 2002 the Commission had to examine a number of public procurement cases. The following are a few examples.

Following a complaint received from 40 non-governmental organisations relating to tied aid, i.e. the practice whereby Member States make the grant of aid to developing countries conditional on the purchase of goods, services or works originating from the donor country, the Commission launched an investigation into the aid tying practices of all Member States. Investigations remain open in six Member States.

The Commission decided to refer Germany to the Court of Justice in two cases where services were contracted without carrying out a proper tender procedure. In one case, the German authorities considered that a contracting authority that had itself won a tender for the treatment of waste, was not obliged to carry out a tender procedure in order to award a contract for transporting this waste. The German authorities argued that the contracting authority acted outside its own field of public responsibilities when contracting these services. The Commission considers however that a contracting authority in terms of European procurement law cannot select freely its subcontractors like a private body. In the other case, the German authorities admitted that a tender procedure should have been carried out when several waste disposal contracts were awarded. As the contracts are however still implemented, the Commission considers that European Community law continues to be violated. [144]

[144] See similar cases currently subject to a pending decision of the Court of Justice : Opinion of the AG of 28 November 2002, joint cases C-20/01 and C-28/01.

The Commission also decided to refer its case against Italy for incorrect transposal of the services Directive 92/50/CEE [145] to the Court of Justice. The "Karrer" Decree, as it is known, Decree 116/97 by the Italian Prime Minister, which lays down provisions for determining the economically most favourable bid for the award of certain public service contracts, specified award criteria including criteria that were to be taken into account when service-providers were being selected. Following the repeal of the Decree, the Commission decided to withdraw its proceedings on 24 April 2002.

[145] OJ L 209, 24.7.1992, p. 1.

In Austria, the application of the redress procedures Directive 89/665/CEE [146] is a major topic on the agenda for discussions at the authorities' annual package meeting on public procurement with the Commission. A trend that emerged in 2001 was confirmed in 2002: the Court of Justice received a growing number of requests for preliminary rulings on the interpretation of the directive (five questions from Austrian courts in 2002, bringing the total to eleven since 2001). But there has been no increase in the number of cases of incorrect application of the Directive in Austria referred to the Commission.

[146] OJ L 395, 30.12.1989, p. 33.

In its Hospital Ingenieure judgment, [147] the Court of Justice drew the Commission's attention to another instance of incorrect application of the redress procedures Directive in Austria: the awarding authority's decision to withdraw an invitation to tender for a public services contract must be subject to challenge and annulment, which is not the case in the Land Vienna.

[147] Case C-92/00 [2002] ECR I-05553 (judgment given on 18.6.2002).

In the data-protection area, Luxembourg notified measures transposing Directive 95/46/EC (protection of individuals with regard to the processing of personal data and on the free movement of such data) [148] on 21 August 2002, following a judgment given against it by the Court of Justice on 4 October 2001. [149]

[148] OJ L 281, 23.11.1995, p. 31.

[149] Case C-450/00 [2001] ECR I-07069.

Regarding company law and financial information the Commission received a complaint against the German Altbankengesetz (Old Banks Act) 1953. The complaint alleges that section 22(3) of the Act is incompatible with Articles 47 et seq. of Directive 78/660/EEC, [150] which requires all German companies limited by shares to publish annual accounting documents. The Commission also received three complaints concerning the application in Italy of Directive 84/253/EEC on the approval of persons responsible for carrying out the statutory audits of accounting documents. [151]

[150] OJ L 220, 14.8.1978, p. 11.

[151] OJ L 126, 12.5.1984, p. 20.

2.10.4. Regulated professions (qualifications)

The volume of complaints and infringements relating to qualifications and regulation professions remained broadly stable. In 2002 the Commission received around 20 complaints concerning restrictions in breach of Articles 43 and 49 of the EC Treaty and the directives on the mutual recognition of professional qualifications.

Noteworthy are the infringement proceedings against Greece regarding Directives 89/48/EEC [152] and 92/51/EEC [153] relating to the general system of recognition of qualifications. After the proceedings for failure to notify measures transposing Directive 89/48/EEC were terminated in October 2000, the Commission issued a reasoned opinion and decided to refer its case against Greece to the Court of Justice as regards the non-conformity of its legislation transposing the Directive (Presidential Decree No 165/2000 of 23 June 2000) and for incorrect application. A supplementary reasoned opinion was also issued for incorrect application of Directive 92/51/EEC. In both cases Greece was criticised for failing to recognise qualifications awarded to its own nationals in its own territory by establishments providing education and training on a franchise basis for other Member States.

[152] OJ L 19, 24.1.1989, p. 16.

[153] OJ L 209, 24.7.1992, p. 25.

The Commission also brought proceedings in the Court of Justice against Greek legislation imposing restrictive conditions on individuals and firms wishing to operate optical equipment shops, which the Commission considers to be contrary to Article 43 of the EC Treaty.

A case has been brought in the Court of Justice for a declaration that Directive 85/384 on the mutual recognition of formal qualifications in architecture is applied incorrectly by the Greek authorities.

2.11. REGIONAL POLICY

2.11.1. Analysis of causes

Regional policy is mainly governed by Regulations directly applicable in the Member States. These regulations (Regulations (EC) Nos 1164/94 (Cohesion Fund) and 1260/1999 (Structural Funds)) and the financial control regulations lay down strict rules. Infringements of regional policy instruments thus generally consist of incorrect application of regulations or irregularities relating to the protection of the financial interests of the European Communities (Article 1(2) of Council Regulation (EC, Euratom) No 2988/95).

But the irregularities also involve infringements of other Community provisions. The link between these regional policy measures and compliance with other Community instruments is also underscored by the express obligation for measures financed by the Cohesion or Structural Funds, the EIB or other financial instruments to comply with the provisions of the Treaties and legislation adopted under them and with Community policies (Article 8(1) of Regulation (EC) No 1164/94 and Article 12 of Regulation (EC) No 1260/1999).

2.11.2. Effects of infringement situations

The Commission can commence proceedings under Article 226 of the EC Treaty, in particular in the event of an infringement of the Structural Funds Regulations (cf. charging of levies by national bodies responsible for managing aid schemes co-financed by the Structural Funds, contrary to those Regulations, which require the full amount of assistance to be paid to the final beneficiaries). In irregularity cases, the Commission can open specific proceedings for the suspension, reduction or withdrawal of assistance from the relevant Fund in accordance with Article 24 of Regulation (EEC) No 4253/88 (as amended by Regulation (EEC) No 2082/93), and Articles 38(5) and 39 of Regulation (EC) No 1260/1999. Such proceedings were launched, for instance, where the recipient of a direct grant failed to comply with the conditions set out in the award letter and the recipient of a global grant who did not carry out the project to be assisted by the grant.

And the Commission can also commence proceedings for the suspension, reduction or withdrawal of assistance under Articles G and H of Annex II to Council Regulation No 1164/94 establishing the Cohesion Fund, as amended by Regulation No 1265/1999.

2.12. TAXATION AND CUSTOMS UNION

2.12.1. Customs union

In the customs area, where Community legislation is mostly in the form of Regulations, the Commission commenced proceedings against France, which, when giving a stay of execution of a customs decision in matters of a posteriori recovery of a customs debt, does not require the debtor to provide a guarantee as provided by Article 244 of the Community Customs Code. And stays are given too generously. France acknowledged the correctness of the Commission's position and announced that at the beginning of 2003 it would establish a national customs debt recovery procedure allowing Community rules to apply properly in all circumstances.

The Commission brought an action in the Court of Justice [154] in proceedings against Greece on the levy charged on imports of pharmaceuticals for the benefit of the National Medicines Organisation, as such a levy on importers constitutes a tax having equivalent effect to a customs duty contrary to Articles 23 and 25 of the Treaty. Proceedings against Greece concerning the levies on imports of frozen fish of Community origin were terminated when the authorities took action in line with the reasoned opinion.

[154] Case C2002/426.

2.12.2. Direct taxation

Commission activity here was particularly intense in 2002.

First, Germany was given notice to make its views known on the tax treatment of dividends from foreign investment funds, which appeared to be discriminatory within the meaning of Articles 49 and 56 of the EC Treaty. The full amount of dividends from foreign funds is taxable, whereas only half the dividends from German funds is taxable. The Commission is concerned that this treatment could make it more difficult for foreign funds to sell their products in Germany, especially as a recent Bill would seem to extend the same tax discrimination to capital gains.

Reasoned opinions were issued in the following specific cases:

- Belgium: national legislation relating to succession duties and registration charges is not in conformity with Articles 43 and 48 of the EC Treaty, as several forms of tax relief are given only to Belgian bodies, which runs counter to the freedom of establishment of bodies from other Member States;

- Spain: legislation relating to various tax provisions applicable to capital gains on shares sold on Spanish stock exchanges and those sold on markets in other Member States is not in conformity with Articles 49 and 56 of the EC Treaty;

- France: Refusal to allow partial deduction from income tax of child-care costs for parents residing in France but placing their children in a crèche in Belgium, contrary to Articles 39 and 49 of the EC Treaty;

- Italy: Introduction with retroactive effect of a tax incompatible with Directive 69/335/EC concerning indirect taxes on the raising of capital, and application of specific rules making it very difficult to exercise the right to reimbursement of the government concession tax declared illegal by the Court of Justice. [155]

[155] Cases C-1991/071 and C-1991/178 [1993] ECR I-01915.

Two earlier infringement proceedings were referred to the Court of Justice: the first concerns France and income from capitalisation contracts; [156] the second concerns Belgium and the tax on subscriptions to new shares in investment companies.[i].

[156] Case C-2002/333.

The infringement proceedings against Greece, which imposed not only the tax on raising of capital but also other special taxes on the capital of limited liability companies, were terminated after Greece came into line with the judgment given by the Court of Justice on 19.3.2002. [157]

[157] Case C-1998/426 [2002] ECR I-02793.

2.12.3. Value-added tax

As in previous years the Commission commenced several new proceedings for incorrect application of the Sixth VAT Directive (77/388/EEC) relating to the uniform basis of assessment:

- Belgium: at public sales of works of art, Belgium charges VAT on the droit de suite, which is a form of participation in the profit and received by artists or their heirs and successors upon successive resales of their works, contrary to Article 2 of the Directive;

- Spain: First, the Spanish legislation on VAT on grants and subsidies contains two provisions contrary to the Directive, namely that the prorata is applied to taxable persons who have only taxable operations, contrary to Article 17(5), and that it places a limit on the right to deduct that it contrary to Article 17(2). Second, on the basis of Article 16 of the Directive, Spain has exercised the option of establishing non-customs warehouses, the removal of goods from them being treated as equivalent to an import, which effectively creates two taxable events with the consequential obligation to make two separate declarations, one of them a customs declaration; but the Directive does not allow a taxable event to arise solely from the removal of goods from a customs warehouse;

- Greece: by refusing to allow exemption from VAT for the grant of credit by persons other than financial institutions, Greece is acting contrary to Article 13(B)(d)(1) of the Directive, which exempts credit as such and allows no distinction to be made depending whether the person giving the credit is a financial institution or another person, such as a seller of goods on credit;

- Italy: to give effect to the judgment of the Court of Justice of 3.9.2000, [158] the French authorities now charge VAT on tunnels between France and Italy. But Italy has maintained the exemption and is therefore still in an infringement situation.

[158] Case C-1997/358 [2000] ECR I-06301.

Two existing proceedings against Germany have been referred to the Court of Justice: the first concerns the non-taxation of subsidies for dried fodder [159] and the second concerns the application of reduced VAT rates to artists. [160] The Court also gave judgment against Germany on 20.6.2002 in the case concerning exemption for research activities. [161]

[159] Case C-2002/144.

[160] Case C-2002/109.

[161] Case C-2000/287 [2002] ECR I-05811.

A significant number of proceedings were terminated after Member States amended their legislation, particularly in response to the Court's judgments for the Commission:

- Spain: The reduced rate of VAT on motorway tolls was abolished as required by the Court's judgment of 18.1.2001; [162]

[162] Case C-1999/089 [2001] ECR I-00445.

- France: The French authorities have complied with the judgment given by the Court of Justice on 14.6.2001 [163] regarding the partial deductibility of diesel used as a fuel in vehicles not eligible for deduction;

[163] Case C-2000/040 [2001] ECR I-04539.

- Italy: The Italian authorities adopted a ministerial decree on the procedure for reimbursement by the issue of government bonds in response to the judgment given by the Court of Justice on 25.10.2001; [164]

[164] Case C-2000/078 [2001] ECR I-08195.

- Netherlands: The contested deduction for vehicle costs has been abolished in response to the judgment given by the Court of Justice on 8.11.2001; [165]

[165] Case C-1998/338 [2001] ECR I-08265.

- Portugal: The Portuguese authorities have come into line with the judgment given by the Court of Justice on 9.3.2001 [166] concerning the application of a reduced rate to certain products, including wines.

[166] Case C-1998/276 [2001] ECR I-01699.

Another proceeding was commenced against Italy for incorrect application of the eighth VAT Directive (79/1072/EEC) on arrangements for the refund of value added tax to taxable persons not established in the territory of the country. Reimbursements to taxable persons not established in the territory of the country are still made with considerable delay.

2.12.4. Other indirect taxes

The Commission served an additional letter of formal notice to act on the United Kingdom, which still applies to travellers returning from other Member States where they have bought alcoholic beverages and tobacco products for their personal use penalties that are such as to be incompatible with Directive 92/12/EC on the general arrangements for products subject to excise duty. +Under the same Directive, a reasoned opinion was served on Belgium for charging excise duties on manufactured tobacco products by means of tax marks on packaging and demanding payment of excise duties at the time when the marks are supplied. The Commission commenced Article 228 proceedings against France for failure to take the measures required by the judgment given by the Court of Justice of 27.2.2002 concerning tax differentials between light and dark tobacco, [167] held to be contrary to Directives 95/59/EC and 92/79/ECC, and to Article 90(1) of the EC Treaty.

[167] Case C-2000/302 [2002] ECR I-02055.

Regarding the taxation of motor vehicles, the Commission commenced proceedings for incorrect application of Directive 83/183/EEC against Denmark, which refuses to allow exemption from registration taxes to persons transferring their permanent residence into the country, even though the exemption is provided for by the Directive, and against Greece, which, where a person relocates from another Member State, applies taxes on vehicles of one fifth of the tax normally paid to register a vehicle in Greece instead of giving the exemption provided for by the Directive.

The Commission was able to terminate the proceedings against Portugal under Article 90 of the EC Treaty after Portugal established an alternative legal framework for taxing second-hand vehicles. It also terminated the tax aspect of the infringement proceedings against France concerning the tax on rendering at abattoirs, which was contrary to the same Article of the Treaty, the rest of the case being examined as a State aid issue.

2.12.5. Mutual assistance

The Commission asked the United Kingdom to apply in Gibraltar Directive 77/799/EEC, which requires the Member States to exchange all the information they need for the proper assessment to taxes on income and assets, value added tax and excise duties on mineral oils, tobacco and alcohol. The mutual assistance directive is applicable throughout Community territory, of which Gibraltar is part.

A reasoned opinion was served on France for failure to notify national measures implementing the directives, which in tax matters is proportionately less frequent than cases of incorrect application, and letters giving formal notice to act were served on other Member States regarding Directive 2001/44/EC of 15.6.2001 on mutual assistance for the recovery of claims.

2.13. EDUCATION, AUDIOVISUAL MEDIA AND CULTURE

2.13.1. Education

Under Articles 149 and 150 of the EC Treaty, each Member State is responsible for the content of its education and the organisation of its education system. But Member States are required by Article 12 of the EC Treaty to refrain from imposing any form of direct or indirect nationality discrimination as regards access to education and vocational training.

The Commission has observed that students and persons receiving training still encounter a variety of barriers to academic mobility. But the limited scope of Community law in this field, where there is no secondary legislation, means that barriers to mobility are not always directly contrary to the Treaty. They flow from administrative practices, slow procedures and so on rather than from outright nationality discrimination contrary to Article 12 of the EC Treaty. Barriers such as these are likely to discourage European students from exercising their right of free movement. The problem most commonly arises in connection with the recognition of qualifications. The recognition of qualifications for academic purposes is a matter within the Member States' jurisdiction; but the Member States are required by Article 12 of the EC Treaty to refrain from all forms of nationality discrimination. The Commission has observed that in some Member States the accreditation procedure is far too slow and that the relevant national authorities give greatly inadequate reasons for their decisions. Although recourse to national redress procedures is the only effective means of obtaining the amendment or annulment of decisions taken by national authorities, contacts have been established with some Member States to ascertain why accreditation procedures take such a disproportionately long time, as they generate barriers to mobility of students.

In 2002, the Commission decided to refer two infringement cases to the Court of Justice, one against Austria and one against Belgium, for imposing conditions for access on holders of qualifications awarded by other Member States that are different from those applied to their own nationals. Although Belgium has agreed to amend its legislation in line with Article 12, it has yet to notify the Commission of amended legislation.

2.13.2. Audiovisual (Directives 97/36/EC of 30 June 1997 and 89/552/EEC of 3 October 1989 (Television without frontiers)

2.13.2.1. Application of the Directives

The main objective is to create the conditions for the free movement of television programmes. In an overall assessment the Fourth Application Report [168] confirms that the Directive provides effective regulation for the European audiovisual sector and the validity of the common European approach to audiovisual matters. The overriding objectives of public interest that the Directive aims to safeguard are still valid and Member States have given themselves the means to achieve these objectives. Independent national regulatory authorities have been set up and most Member States have allocated additional staff and resources to effectively implement the Directive. The Court stated that Luxembourg [169] and Italy [170] had failed to fulfil their obligations under the Directive. In both Member State the provisions of the Directive have been duly implemented in the meantime.

[168] COM (2002) 778 final.

[169] Case C-119/00.

[170] Case C-207/00.

The Commission has been examining a complaint relating to the determination of the State of jurisdiction of a broadcaster in accordance with Article 2 of the Directive.The complainant, CLT-UFA SA, is a satellite broadcaster, licensed in Luxembourg, directing the services RTL 4 and 5 to the Dutch market. The Dutch Media Commission, by decision of 5 February 2002, upheld its previous decision of 20 November 1997. In this initial decision, it held that RTL/Veronica de Holland Media Group SA was the responsible broadcasting organisation for RTL 4 and RTL5, which therefore fell under the jurisdiction of the Dutch authorities. The Commission considers that, according to the criteria laid down in the Directive, RTL 4 and 5 fall under the jurisdiction of the Luxembourg authorities. The parties do not contest the fact that the channels are licensed in Luxembourg. This case will be closely followed to ensure that the interpretation given to the criteria is in line with the case law of the European Court of Justice.

Article 3a(1) of the Directive provides the Member States with a legal basis for taking national measures to protect a number of events regarded as being of major importance for society. By the end of 2002 measures in relation to Article 3a(1) of the Directive were in force in Italy, Germany, the United Kingdom and Austria. At the beginning of 2002, Denmark withdrew its measures [171]. In accordance with Article 3a(2) of the Directive, a consolidated list of the measures taken by Member States has been published once a year in the Official Journal of the European Communities. The last consolidated list was published in August 2002 [172]. Belgium submitted draft measures pursuant to Article 3a of the Directive on 5 September 2002. This proposal was not complete and the Belgian authorities were informed accordingly. The Irish authorities notified draft measures on 7 November 2002, which were discussed in the Contact Committee established pursuant to Article 23a of the Directive on 30 January 2003. One case - concerning the role of the Commission in relation to Article 3a of the Directive - is still pending before the European Court of First Instance [173].

[171] Published in OJ C Nr 45, 19.02.2002

[172] OJ C 189, 9.8.2002, p. 2

[173] Case T-33/01

The Commission adopted on 8 November 2002 the Fifth Communication to the Council and the European Parliament on the application of Articles 4 and 5 of the Directive [174]. This Communication shows the general trends observed both at Community level and in the individual Member States concerned. For the reference period (1999-2000), the national reports reflect generally satisfactory application by the European Union Member States of the provisions of Article 4 (European works) and Article 5 (European works created by independent producers) of the Directive.

[174] COM(2002)612 final http://europa.eu.int/comm/avpolicy/regul/ twf/art45/art45-intro_en.htm

The Directive also lays down rules on the quantity of advertising authorised. The Commission received several complaints about alleged failures to comply with the advertising and sponsorship rules in the Member States. Problems arose in particular with the practices of certain broadcasters in Greece, Spain, Italy and Portugal. The Commission is analysing the situation in these countries to find out whether the alleged excesses might constitute infringements by the relevant Member State. As a result the Commission decided to send a complementary reasoned opinion to Spain (26 April 2002).

By way of exception from the general rule of freedom to receive and retransmit, Article 2a(2) of the Directive allows the Member States, subject to a specific procedure, to take measures against broadcasters under the jurisdiction of another Member State who "manifestly, seriously and gravely" infringe Article 22. The aim is to protect minors against programmes "likely to impair [their] physical, mental or moral development" and to "ensure that broadcasts do not contain any incitement to hatred on grounds of race, sex, religion or nationality". The Commission considers that Article 2a(2) was satisfactorily applied during the report period. A new notification of intended measures was submitted to the Commission by the German authorities on 6th November 2001 and consultations according to Article 2a(2)d took place.

2.14. HEALTH AND CONSUMER PROTECTION

Policy on health and consumer protection is one of the Community responsibilities that directly affect the life of Europe's citizens.

The importance of this is reflected in the Commission's activities in enforcing Community law. Monitoring the application of Community health law is not confined to investigating complaints and commencing infringement proceedings but includes the preventive activities of the Food and Veterinary Office, whose inspection reports and dialogue with the Member States ensure that the Member States apply Community law uniformly and properly.

2.14.1. Veterinary legislation

Securing the highest level of food safety in the European Union is one of the Commission's top priorities. There is no doubt that a high level of food safety can be attained only by action at Community level. It would therefore be unacceptable for the operation of the internal market to be hampered by unilateral measures taken by the Member States.

Specific attention is merited in this respect by the Commission's infringement proceedings against France for its import ban on British beef in the context of the fight against bovine spongiform encephalopathy (BSE). As France did not take measures to give effect to the judgment given against it by the Court of Justice on 13.12.2001 in Case C-1/00, for refusing to lift the embargo on imports of British beef properly marked or labelled from 30 December 1999, the Commission commenced expedited Article 228 proceedings on 21.3.2002. The infringement was put right after the Commission applied to the Court to give judgment against France for failure to comply with the earlier judgment, with a periodic penalty payment in support. The Commission withdrew its action once the infringement was terminated.

The Commission served a reasoned opinion on France for adopting legislation prohibiting the marketing of sweetbreads, for having no official veterinarian presence in poultry abattoirs and for failure to comply with other aspects of Community legislation on fresh poultrymeat.

The Commission welcomed the adoption of measures in the United Kingdom to prohibit the use of hyperchlorinated water to disinfect poultry carcasses and thus terminate an infringement proceeding that had been running since 1997.

As regards barriers to trade in the context of veterinary controls, the Commission decided to refer to the Court of Justice the obligation to give the Swedish veterinary authorities prior notice of arrivals of consignments of fresh meat or products containing animal products from other Member States.

Three Directives were due for notification of national implementing measures in 2002: Directives 1999/74/EC (laying hens), 2000/75/EC (bluetongue) and 2001/89/EC (classical swine fever).

Council Directive 1999/74/EC of 19 July 1999 lays down new minimum standards for the protection of laying hens by laying down stronger common rules to fill in the gaps in earlier legislation that paid inadequate attention to animal well-being. It allows each Member State to establish more stringent requirements for its territory. It distinguishes minimum conditions for three categories of laying hen breeding systems: enriched cages with a minimum surface of 750 cm2 per hen; unenriched cages with a minimum surface of 550 cm2 per hen (to be abolished gradually by 2012); systems without cages with nests (at least one per seven hens), adequate perches and population density not exceeding nine hens per m2 of usable surface area.

The Commission served reasoned opinions on Austria, Belgium, Greece, Italy and Portugal for failure to fulfil their obligations under the Directive.

Concerning Council Directive 2000/75/EC of 20 November 2000 laying down specific provisions for the control and eradication of bluetongue, reasoned opinions were served on Greece, Italy and the United Kingdom.

Council Directive 2001/89/EC of 23 October 2001 on Community measures for the control of classical swine fever has been transposed by Belgium, Denmark, Spain, the Netherlands and Finland. Infringement proceedings have been commenced against the other Member States, which have not met their obligation to notify.

2.14.2. Plant-health legislation

Spain, Luxembourg and Sweden have notified national measures transposing all the directives due for transposal in 2002.

Germany and France are still behind schedule.

Austria has adopted the amendment to the regulation on maximum pesticide residues, transposing the directives on maximum pesticide residues, and the infringement proceedings have been terminated.

2.14.3. Seeds and seedlings legislation

Two directives were due for transposal in 2002.

Reasoned opinion for failure to notify measures transposing Directive 2001/64/EC (on the marketing of fodder plant seed and cereal seed) were served on Germany, Greece, Italy and the United Kingdom. Reasoned opinions for failure to notify measures transposing Directive 2002/8/EC (conditions for examining vegetable and agricultural varieties) were served on Belgium, Greece and Italy.

Germany has not yet caught up its delays in transposing Directives 98/56/EC, 99/66/EC and 99/68/EC (propagating material of ornamental plants).

2.14.4. Food legislation

The Commission terminated the infringement proceedings against Spain for imposing an obligation to specify the size-grading of table olives on the label. Spain issued a Royal Decree abolishing this requirement, which was contrary to Community legislation on the labelling of foodstuffs and its exhaustive list of compulsory items of information.

Denmark, Greece and Sweden have notified national measures transposing all the directives due for transposal in 2002.

There are relatively few problems with the Member States' notification of transposal measures in this area. Germany has the largest shortfall.

2.14.5. Animal feedingstuffs legislation

There were no significant developments this year in the notification of Member States' measures transposing directives. Four directives fell due for transposal in 2002: 2001/46/EC (official inspections in the field of animal nutrition); 2001/79/EC (additives); 2001/102/EC (undesirable substances and products in animal nutrition) and 2002/1/EC (animal feedingstuffs).

Greece is the country with the largest shortfall. In 2001 the Court of Justice gave judgment against Greece for failing to fulfil its obligation to transpose two feedingstuffs directives (95/69/EC and 98/51/EC). Greece has complied with the Court's judgment as regards Directive 95/69/EC. But it was sent an Article 228 reasoned opinion regarding Directive 98/51/EC on approving and registering certain establishments in the animal feed sector. And the Court gave judgment against Greece for failure to fulfil its obligation to transpose Directive 99/20/EC concerning additives in feedingstuffs. Greece has complied with this judgment.

2.14.6. Consumer protection

There has been a sharp improvement in the situation regarding incorrect transposal, and several cases have been terminated. An example is the proceedings against Portugal for incorrect transposal of Directive 94/47/EC (right to use immovable properties on a timeshare basis). The Portuguese legislation has been amended in line with all the Commission's objections, and the case was closed at the reasoned opinion stage. The Commission also brought proceedings against Italy in the Court of Justice regarding the same directive, but withdrew them when Italy agreed to act on all its objections.

The Court gave judgment in two cases concerning failure to implement Directive 93/13/EEC (unfair contract terms). In Case C-478/99 Commission v Sweden, the Court held that the indicative list of contract clauses capable of being regarded as unfair, annexed to Directive 93/13/EEC, could legitimately be included in the preparatory work for the Swedish Act transposing the Directive and did not necessarily have to be in the body of the Act itself. Two partly similar proceedings against Finland and Denmark were terminated accordingly.

In the second case, Case C-1999/372, the Court found against Italy for incomplete transposition of Article 7(3) of Directive 93/13/EEC. The Italian transposal legislation did not specify that action for an injunction against a professional association could concern not only the use of an unfair clause but also the recommendation that such clauses be used. The Court accordingly held that Italy had failed to fulfil its obligations under the Directive, even though the Italian courts generally interpret the concept of "use" in a broad sense including recommended unfair clauses.

The Directive on the sale of consumer goods and associated guarantees (1999/44/EC) fell due for transposal on 1 January 2002, and national measures should have been notified by then. The directive confers a common set of rights on consumers, valid wherever the goods are purchased in the European Union. The core right is that, if the goods do not conform to the purchase contract, the consumer has a right of redress against the seller for two years after delivery. The consumer can seek repair of the goods, their replacement, a reduction on a subsequent purchase or full reimbursement of the price paid. For six months after delivery, it is for the seller and not for the purchaser to show that the goods conform to the sales contract and are free of defects. The final seller, who is liable vis-à-vis the purchaser, may shift liability on to the manufacturer in cases defined by the Member States. The Member States are authorised to lay down rules of domestic law requiring consumers who wish to exercise their right of redress to inform the seller of all defects or lack of conformity within two months of detecting the problem. The directive also requires commercial guarantees given by producers and retailers alike to be in plain intelligible language. Where such guarantees are given, they must indicate that they go beyond the consumer's legal rights.

The Commission served reasoned opinions on Belgium, Spain, France, Ireland, Luxembourg, the Netherlands, Portugal and the United Kingdom for failure to fulfil the obligation to transpose Directive 1999/44/EC in the time allowed.

Regarding Directives 97/55/EC (misleading advertising) and 98/7/EC (consumer credit), Spain has complied with the two judgments given by the Court of Justice for failure to fulfil its transposal obligation.

2.14.7. Public health

Parliament and Council Directive 2001/37/EC of 5 June 2001 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco products fell due for transposal on 30 September 2002.

The Commission has started infringement proceedings against all the Member States except Belgium, Spain and Sweden for failure to notify it of national transposal measures.

2.14.8. Notification of technical rules

Parliament and Council Directive 98/34/EC of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations, as amended by Directive 98/48/EC, requires Member States and Members of the European Free Trade Association who have signed the Agreement on the European Economic Area plus Switzerland to give each other and the Commission prior notification of all draft rules containing technical standards or rules in order to avoid raising new barriers to trade in the internal market.

The 201 texts notified in 2002 (188 by Member States of the European Union and 13 by EFTA countries or Switzerland), sometimes by the urgent procedure (9), as regards health and consumer protection are evidence of the growing attention paid by national legislative bodies to these matters, particularly as regards foodstuffs. The Commission's review of these notifications yielded observations in nine cases, negative decisions in six and reasoned opinions in eleven cases where the instruments notified needed adjusting to match them with the requirements of Community law. The number of notifications by the Member States under the procedure of Directive 98/34/EC in the course of the year - 32 - shows that information services are also expanding rapidly.

2.15. JUSTICE AND HOME AFFAIRS

The salient features of the year as regards the free movement of persons and Union citizenship were four major judgments given by the Court of Justice, [175] the relative stability of the number of infringement proceedings and sharp rise in the number of Commission decisions referring infringement proceedings dating from earlier years to the Court of Justice.

[175] Case C-224/98 D'Hoop [2002] ECR I-6191 (11.7.2002), Case C-60/00 Carpenter [2002] ECR I-6279 (11.7.2002), Case C-459/99 MRAX v Belgium [2002] ECR I-6591 (25.7.2002), and Case C-413/99 Baumbast R (17.9.2002).

The Court's judgments for the first time confirm the direct effect of Article 18(1) of the EC Treaty and the principle of applying the right of residence of Union citizens and their family members irrespective of nationality, in the light of the fundamental right to protection of family life, the proportionality principle and Union citizenship. They also put clear limits on the possibilities for the Member States to withhold the right of entry and residence for a Union citizen's family members who are third-country nationals, in the event of the absence of travel documents or visas, illegal entry or presentation of an application for a residence card after the expiry of the visa.

2.15.1. Application of the principle of the prohibition of nationality discrimination as regards the right of residence and traffic offences

The Commission decided to take France to the Court of Justice for its legislation providing that from the time of the first renewal permanent residence cards were to be issued to nationals of other Member States engaging in gainful activity in France on the basis of reciprocity, which excludes nationals of other Member States which do not allow French citizens residing in their territory the same benefit.

The Commission also decided to bring an action in the Court of Justice against Spain concerning the disproportionate and discriminatory penalties for nationals of other Member States who neglect to apply for the issue or renewal of a residence card in Spain.

In an action brought by the Commission against Italy, the Court of Justice held that by maintaining differentiated and disproportionate treatment between offenders in section 207 of the Road Traffic Code, depending where the vehicle was registered, Italy had failed to fulfil its obligations under Article 12 of the EC Treaty. [176]

[176] Case C-224/00 Commission v Italy [2002] ECR I-2965 (judgment given on 19.3.2002).

2.15.2. Free movement of people

The Commission decided to refer to the Court of Justice infringement proceedings against Belgium in respect of the Belgian authorities' practice of accepting only resources available from the applicant's spouse or children when applying Directive 90/364 on the right of residence of economically inactive people, [177] whereas the Directive is silent on the source of resources, and the procedure for issuing an expulsion order to Member State nationals who have neglected to produce the documents required for the issuance of a residence card within the time allowed.

[177] OJ L 180, 13.7.1990, p. 26.

The Commission also decided to take Spain to the Court of Justice on account of the requirement by Spanish legislation that third-country nationals who are family members of a Union citizen wishing to settle with the Union citizen in Spain must first obtain a residence visa and present a series of documents. The Commission commenced two other infringement proceedings against Spain for refusing to issue visas for third-country nationals who are family members of a Union citizen on the basis of an alert entered in the Schengen Information System (SIS) by another Member States despite the absence of considerations of public order, public security or public health to justify the refusals.

On 5 December 2002, the Commission brought an action in the Court of Justice [178] for the failure by German legislation and administrative practice regarding expulsion orders against Union citizens on public order grounds to comply with Community law. [179] The Commission submits that Germany has failed to fulfil its obligations by not making it clear in its legislation that there can be no automatic causal link between a criminal conviction and expulsion of a Union decision, by issuing expulsion decisions against Union citizens that refer to deterrence considerations or display disproportion between the violation of family life and the preservation of public order, and by ordering immediate execution of expulsion decisions where there are no grounds of urgency.

[178] Case C-441/02.

[179] See Nineteenth Annual Report, point 2.15.4.

2.15.3. Right to vote at municipal elections

The Commission decided to terminate two infringement proceedings against France and Greece. These cases concerned the principle established by Council Directive 94/80/EC [180] that nationals of other Member States wishing to exercise their right to vote at municipal elections in their host country are subject only to the electoral disqualification rules of the country of residence and that national authorities are not entitled to demand a declaration from the beneficiaries of the directive that they have not been deprived of their voting rights in their country of origin.

[180] OJ L 368, 31.12.1994, p. 38.

2.16. BUDGET

Infringements in budget matters are most commonly found in traditional own resources, in particular customs duties, where the number of referrals to the Court of Justice has risen this year.

2.16.1. Developments in proceedings dating from earlier years

In its decision du 7 March 2002 in Case C-2000/10 against Italy (goods imported to San Marino), the Court did not determine the actual amounts of the rectification of traditional own resources to be paid. It called on the Commission and the Italian authorities to make full use of all the possibilities of dialogue and loyal cooperation.

The Commission referred a case against Germany to the Court [181] for late establishment of traditional own resources where transit documents are not cleared.

[181] Case

The case against France concerning reimbursement of VAT under the Protocol on the Privileges and Immunities of the European Communities was terminated.

2.16.2. New proceedings

Having referred a case against Denmark to the Court of Justice for a declaration that it was financially liable for an administrative error that caused a loss of own resources, the Commission decided to bring proceedings against Belgium and served reasoned opinions on the Netherlands and Portugal to establish the financial liability of their customs authorities for the loss of own resources when customs duties became time-barred.

The decision was also taken to refer to the Court the Belgian practice of unduly delaying the payment of customs own resources: where the person liable to duty is authorised to pay in instalments, Belgium makes own resources available only when it has received them in full.

2.17. PERSONNEL AND ADMINISTRATION

As regards the application of Community law to the staff of the Communities, the Commission ensures that the legislation of the Member States is adopted in compliance with Protocol on the Privileges and Immunities of the Communities and the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Communities.

No new infringement proceedings were commenced in 2002.

2.18. ENLARGEMENT

1. Contribution on CoJ cases (judgments of 27.9.2001 - no reference in the 2002 report)

(wording partly taken from the CoJ press release)

The European Communities have signed in the 1990s association agreements with all Central and Eastern Europe candidate countries for accession to the Union. The agreements are designed to provide an appropriate framework for the accession of those States to the European Union. In that regard, all of them contain sections dealing with the movement of workers, the right of establishment and services.

They contain, inter alia, provisions prohibiting discrimination on grounds of nationality against nationals of those States who are self-employed workers, or persons setting up and managing companies. Such nationals are entitled to treatment that is no less favourable than that accorded to companies and nationals of the Member States.

The three cases judged by the Court on 27.9.2001 involve proceedings between, on the one hand, Polish, Czech and Bulgarian nationals and, on the other, the United Kingdom authorities.

The Court of Justice first recalls the purpose served by the association agreements: to promote trade and harmonious economic relations so as to foster the development of prosperity in those States and facilitate their future accession.

The Court considers that the authorities of the Member States remain competent to apply, within the limits set by those agreements, their own national laws and regulations regarding entry, stay and establishment.

However, the Court takes the view that the principle of non-discrimination, from which nationals of Poland, the Czech Republic and Bulgaria must benefit who wish to pursue, within the territory of the Member States of the Union, economic activities as self-employed persons or to set up and manage undertakings which they effectively control, is directly applicable: the principle thus established is sufficiently operational and unconditional to be applied by national courts called to rule on the legal position of the individuals concerned.

The association agreements thus confer on those nationals a right of establishment, that is to say, a right to take up activities of an industrial or commercial character, activities of craftsmen, or activities of the professions, and to pursue them in a self-employed capacity.

The Court cites its case-law stating that the EC Treaty does indeed imply that rights of entry and residence are conferred, as corollaries of the right of establishment, on nationals of the Member States.

The Court takes the view, however, that rights of entry and residence are not absolute privileges granted to Polish, Czech and Bulgarian nationals, and that the exercise of those rights may be limited by the rules of the Member States. That said, those domestic immigration rules must not nullify or impair the benefits accruing to such nationals under the right of establishment provided for by the agreements.

The Court of Justice, called to rule on the compatibility of national immigration legislation with the requirements of the three association agreements concerned, has thus set out the following principles:

- a Member State cannot refuse entry or residence to a national of one of the States concerned, with a view to his establishment, on grounds of his nationality or his country of residence, or because a general limitation on immigration is provided for, not can it make the right to take up an activity as a self-employed person subject to economic considerations relating to the labour market;

- it is necessary to determine whether the activity contemplated in the host Member State by persons entitled under the provisions of the association agreements is indeed an activity pursued in a self-employed capacity and not an activity carried out in an employed capacity. Implementation of a national system of prior control as to the exact nature of the activity contemplated (an evaluation of adequate financial resources and reasonable chances of success carried out through detailed investigations) is thus compatible with the association agreements;

- in contrast, a Polish, Czech or Bulgarian national who makes false representations and circumvents the relevant controls by asserting that he wishes to enter a Member State for purposes of tourism, although in fact intending to take up an economic activity, places himself outside the sphere of protection recognised by the association agreements: a Member State may in that case reject his application and insist that he submit a new application in due and proper form by applying for an entry visa to the competent authorities in his State of origin or another State, provided that this does not prevent him from having his situation reviewed at a later date;

- the measures taken by the national authorities must not, however, adversely affect the very substance of the rights of entry, stay and establishment of those nationals, who also enjoy fundamental rights (such as the right to respect for family life and the right to respect for property) which follow from the European Convention for the Protection of Human Rights and Fundamental Freedoms.

2. Contribution on infringement cases

Against the background of the three Court decisions of 27.9.2001 on the direct applicability of certain provisions of the Europe Agreements with Central and Eastern Europe candidate countries, the Commission received an increasing number of complaints concerning alleged infringements of the Europe Agreements. These complaints concern mainly individual cases regarding the right of establishment as self-employed workers or persons setting up or managing companies and the relation to the practical application of national laws and regulations regarding entry, stay and establishment by authorities and courts in Austria, Germany, Sweden and Denmark. One other complaint by a Polish national concerning the non-issuing of working permits for Polish workers by the Dutch authorities has been closed as unfounded.

Although accession negotiations were concluded in December 2002 and accession of ten new Member States by 1 May 2004 is on its way, the Europe Agreements will remain in force until the day of accession.

2.19. COMMUNITY STATISTICS

In the statistical field, the application of Community legislation posed no particular problems, though eight infringement proceedings were commenced in 2002, six of them for failure to notify measures transposing a directive and one for incorrect application of Community law.

In agricultural statistics, six Member States (France, Luxembourg, Belgium, Spain, Sweden and Ireland) had not notified the Commission of national measures transposing Directive 2001/109/EC. [182] The Commission served letters of formal notice to act on these Member States. By and large the delays tend to be linked to the internal institutional and administrative structure of the Member States.

[182] Parliament and Council Directive 2001/109/EC of 19 December 2001 concerning the statistical surveys to be carried out by the Member States in order to determine the production potential of plantations of certain species of fruit trees: OJ L13, 16.1.2002, p. 21.

The Commission terminated infringement proceedings against France, Spain, Sweden and Ireland following the notification of national measures.

The internal administrative and legislative process is nearing completion in Luxembourg and Belgium.

Regarding statistics on transport of goods by road, the Commission commenced infringement proceedings against Greece for incorrect application of Council Regulation (EC) No 1172/98. [183] Despite the obligation provided for by that Regulation, Greece has provided no quarterly figures for 1999, 2000 and 2001.