Opinion of the Advocate General — ECLI:EU:C:1998:62
Date: 1998-02-17
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Right of establishment
Procedure: Action for failure to fulfil obligations - successful
Origin: Germany

summary of the 
complaints ...'. See also Case C-289/94 Commission v Italy 
[1996] ECR I-4405. 
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OPINION OF MR COSMAS — CASE C-191/95 
IV — Validity of the action 
To complete the above, I will express my 
opinion regarding the validity of the action 
brought by the Commission, which is as fol­
lows: 
27. I should first like to point out that, in 
accordance with Community law, the neces­
sary protection of the interests '... of [com­
pany] members and others' 35 requires the 
publication of the statutes and the annual 
accounts of certain types of company; the 
adoption of the measures required to ensure 
such disclosure is entrusted to the Member 
States. In particular, under Article 3 of the 
First Directive all documents and particulars 
regarding companies subject to that disclo­
sure requirement must be published in a 
national gazette to be appointed for the pur­
pose by the Member State. In addition, Article 
6 of the same Directive states that: 'Member 
States shall provide for appropriate penalties 
in case of failure to disclose the balance sheet 
and profit and loss account as required by 
Article 2(1)(f) ...'. That part of the wording of 
Article 2 of the First Directive is as follows: 
'Member States shall take the measures 
required to ensure compulsory disclosure by 
companies of at least the following documents 
and particulars: ... The balance sheet and the 
profit and loss account for each financial year. 
The document containing the balance sheet 
shall give particulars of the persons who are 
required by law to certify it. However, in 
respect of the [types of company limited by 
shares] under German ... law referred to in 
Article 1, ... the compulsory application of 
this provision shall be postponed until the 
date of implementation of a Directive con­
cerning coordination of the contents of bal­
ance sheets and of profit and loss accounts ... 
The Council will adopt such a Directive 
within two years following the adoption of 
the present Directive ...'. Lastly, Article 47 of 
the Fourth Directive states that: 'The annual 
accounts, duly approved, and the annual 
report, together with the opinion submitted 
by the person responsible for auditing the 
accounts, shall be published as laid down by 
the laws of each Member State in accordance 
with Article 13 of Directive 68/151/EEC'. 
28. The Commission considers that Germany 
has failed to fulfil its obligation under the 
provisions cited above, in that it has not pro­
vided for appropriate penalties in case of 
failure to comply with the disclosure require­
ment. The provisions on the publication of 
the annual accounts of companies limited by 
shares in Germany are contained in Paragraph 
325 et seq. of the Handelsgesetzbuch (Com­
mercial Code, hereinafter 'HGB'). Under 
Paragraph 335 of the HGB, a penalty pay­
ment of up to DM 10 000 is fixed for the case 
where a company's annual accounts are not 
published; however, that penalty payment is 
not imposed automatically by the Registerger­
icht (Registration Court), but only if a member 
or a creditor of the company or its entire 
company-level or establishment-level works 
council so requests. The Commission con­
tends that that penalty is not at all effective 
and cannot be regarded as meeting the require­
ments of Community law; the overwhelming 35 — A requirement which is expressly recognised in Article 
54(3)(g) of the Treaty. 
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COMMISSION v GERMANY 
majority of the companies subject to the obli­
gation to disclose their annual accounts dis­
regard that obligation. 
29. In my opinion, the above submission by 
the Commission is well founded and all the 
arguments put forward by Germany to 
counter those claims must be rejected. 
30. In the first place, Germany's assertion 
that Article 6 of the First Directive does not 
require Member States, in the context of trans­
posing the Fourth Directive, to provide for 
appropriate penalties to enforce the disclo­
sure of annual accounts, is erroneous. The 
Fourth Directive is the one which is referred 
to in Article 2(l)(f) of the First Directive, the 
applicability of the obligation to publish the 
balance sheet and the profit and loss account 
for each financial year being made dependent 
on its entry into force. Consequently, once 
the legal provision '... concerning coordina­
tion of the contents of balance sheets and of 
profit and loss accounts ...' 36 was introduced, 
through the Fourth Directive, into the Com­
munity legal order, Article 2(l)(f) of the First 
Directive became fully binding. Accordingly, 
Member States are subject to the obligation 
to provide for appropriate penalties in case of 
failure to disclose the balance sheet and profit 
and loss account, as set out in Article 6 of the 
First Directive. 
31. Germany also maintains that the afore­
mentioned penalty provided for in Paragraph 
335 of the HGB is in keeping with the obli­
gation imposed by Community law, and in 
particular by Article 6 of the First Directive. 
To support that assertion, it develops the 
argument that the Community provisions 
concerned are not intended to protect every 
natural or legal person who is a third party in 
relation to a company limited by shares, but 
only its creditors, including its employees. 
Consequently, according to the defendant, it 
is right that the penalty payment provided for 
in Paragraph 335 of the HGB is not imposed 
automatically but only at the request of a 
member or a creditor of the company or of 
its company-level or establishment-level 
works council. 
32. In my opinion that assertion is erroneous. 
In the first place, Article 54(3)(g) of the Treaty, 
on which the First and Fourth Directives are 
based, makes a general reference to the '... 
protection of the interests of [company] mem­
bers and others' without making any distinc­
tion, in the case of 'others', between creditors 
and non-creditors. Hence, Others' also include 
third parties such as future creditors, business 
partners and everybody interested in acquiring 
shares. Secondly, in the preamble to the First 
Directive it is stated that '... the basic docu­
ments of the company should be disclosed in 
order that third parties may be able to ascer­
tain their contents and other information con­
cerning the company ...'. It is apparent from 
that wording that the purpose of the disclo­
sure requirement in question is the provision 
of information to persons who have insuffi­
cient knowledge of the company's situation 
and its plans, precisely in order to enable them 
to judge whether it is advisable to enter into 
any kind of legal relationship with it. More 
generally, both the First and the Fourth Direc-36 — Article 2(1X0 of the First Directive. 
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OPINION OF MR COSMAS — CASE C-191/95 
tives are intended to ensure the greatest pos­
sible transparency in the activities of compa­
nies and for that reason provide for the erga 
omnes disclosure of a range of information 
from which anybody can draw conclusions 
regarding their legal and financial situation. 
Consequently, it is against both the spirit and 
the letter of these provisions to restrict the 
circle of persons able to benefit from that 
transparency; it is precisely because it is impos­
sible to list them exhaustively — business and 
commercial activity exceeds the legislature's 
powers of imagination — that it was pre­
ferred to impose an erga omnes obligation, as 
the only way of ensuring comprehensive legal 
protection. To conclude, the restriction of the 
circle of persons able to claim, under German 
law, that a penalty payment should be imposed 
for non-disclosure of annual accounts is not 
consistent with the relevant Community pro­
visions. 
33. On the basis of the foregoing, I am of the 
opinion that the German legislation in force 
does not comply with the requirements of 
Article 6 of the First Directive and accord­
ingly it has not been properly transposed into 
national law. A penalty for which a necessary 
precondition of its imposition is an applica­
tion from one of a relatively small number of 
entided persons cannot be regarded as an 
'appropriate penalty' which, within the 
meaning of Article 6 of the First Directive, is 
intended to introduce an erga omnes obliga­
tion, particularly since those entided persons 
do not always have an interest in bringing 
such a legal action. Consequently, since in the 
majority of cases of non-observance of the 
disclosure of company information it is not 
possible in practice for the penalty procedure 
in question to be implemented, it cannot be 
regarded as complying with the requirement 
for appropriate penalties as set out in Article 
6 of the First Directive. In the light of the 
foregoing, I am of the opinion that Germany 
has failed to fulfil its obligations under that 
Community provision. Lasdy, such infringe­
ment cannot be justified or excused by the 
fact that the imposition of penalties on all 
companies which fail to disclose their annual 
accounts would, because they are so numerous, 
create special difficulties for the German 
authorities disproportionate, according to 
Germany's submission, to the Community 
legislature's intended purpose. The Court has 
consistently held that '... a Member State may 
not plead internal circumstances in order to 
justify a failure to comply with obligations 
and time-limits resulting from Community 
law ...'. 37 
34. To conclude, Germany has failed to fulfil 
its obligations under primary and secondary 
Community law; were it not for the obstacle 
of its inadmissibility, the Commission's claim 
would be well founded. 
37 — Case C-374/89 Commission v Belgium [1991] ECR I-367 
(paragraph 10), Case C-45/91 Commission v Greece [1992] 
ECR 1-2509 (paragraph 21) and Joined Cases C-109/94, 
C-207/94 and C-225/94 Commission v Greece [1995] ECR 
I-1791 (paragraph 11). 
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COMMISSION v GERMANY 
V — Conclusion 
35. In the light of the foregoing I propose that the Court: 
(1) dismiss the Commission's application; 
(2) order the applicant to pay the costs. 
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