62023CJ0154
JUDGMENT OF THE COURT (Sixth Chamber)
6 March 2025 (
*1
)
(Failure of a Member State to fulfil obligations – Article 258 TFEU – Protection of persons who report breaches of Union law – Directive (EU) 2019/1937 – Article 26(1) and (3) – Failure to transpose and communicate transposition measures – Article 260(3) TFEU – Application for the imposition of a lump sum and a daily penalty payment – Criteria for establishing the amount of the penalties – Automatic application of a coefficient for seriousness)
In Case C‑154/23,
ACTION for failure to fulfil obligations under Article 258 and Article 260(3) TFEU, brought on 14 March 2023,
European Commission, represented by J. Baquero Cruz and L. Maran, acting as Agents,
applicant,
v
Republic of Estonia, represented by N. Grünberg and M. Kriisa, acting as Agents,
defendant,
THE COURT (Sixth Chamber),
composed of T. von Danwitz, Vice-President of the Court, acting as President of the Sixth Chamber, A. Kumin and I. Ziemele (Rapporteur), Judges,
Advocate General: N. Emiliou,
Registrar: A. Calot Escobar,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1
By its action, the European Commission claims that the Court should:
–
declare that, by failing to adopt all the laws, regulations and administrative provisions necessary to comply with Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ 2019 L 305, p. 17), and by failing to communicate those provisions to the Commission, the Republic of Estonia has failed to fulfil its obligations under Article 26(1) and (3) of that directive;
–
order the Republic of Estonia to pay the Commission a lump sum corresponding to the higher of the following two amounts:
–
a daily flat-rate amount of EUR 600 multiplied by the number of days between the day after the expiry of the deadline for transposition of Directive 2019/1937 fixed therein and the day on which the infringement has been brought to an end or, failing regularisation, the day on which the judgment in the present case is delivered;
–
a minimum flat-rate amount of EUR 168000;
–
in the event that the failure to fulfil obligations established in the first indent continues until the date of delivery of the judgment in the present case, order the Republic of Estonia to pay to the Commission a penalty payment of EUR 2340 per day of delay from the date of delivery of that judgment and until the date on which the Republic of Estonia fulfils its obligations under Directive 2019/1937;
–
order the Republic of Estonia to pay the costs.
Legal context
Directive 2019/1937
2
Recitals 1 and 4 of Directive 2019/1937 state:
‘(1)
… potential whistleblowers are often discouraged from reporting their concerns or suspicions for fear of retaliation. In this context, the importance of providing balanced and effective whistleblower protection is increasingly acknowledged at both [European] Union and international level.
…
(4)
Whistleblower protection currently provided in the Union is fragmented across Member States and uneven across policy areas. The consequences of breaches of Union law with a cross-border dimension reported by whistleblowers illustrate how insufficient protection in one Member State negatively impacts the functioning of Union policies not only in that Member State, but also in other Member States and in the Union as a whole.’
3
Under Article 1 of that directive:
‘The purpose of this Directive is to enhance the enforcement of Union law and policies in specific areas by laying down common minimum standards providing for a high level of protection of persons reporting breaches of Union law.’
4
Article 26 of the said directive provides:
‘1.   Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 17 December 2021.
…
3.   When Member States adopt the provisions referred to in paragraphs 1 and 2, those provisions shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made. They shall forthwith communicate to the Commission the text of those provisions.’
The 2023 Communication
5
Communication 2023/C 2/01 from the Commission, entitled ‘Financial sanctions in infringement proceedings’ (OJ 2023 C 2, p. 1; ‘the 2023 Communication’), devotes points 3 and 4 thereof to the ‘penalty payment’ and the ‘lump sum payment’, respectively.
6
Point 3.2 of the 2023 Communication, which concerns the application of the coefficient for seriousness when calculating the daily penalty payment, provides:
‘An infringement concerning a … failure to notify measures transposing a directive adopted under a legislative procedure is always considered serious. To adapt the amount of the penalty to the specific circumstances of the case, the Commission determines the coefficient for seriousness on the basis of two parameters: the importance of the Union rules breached or not transposed and the effects of the infringement on general and particular interests.
…’
7
Point 3.2.2 of that communication states:
‘For actions brought under Article 260(3) TFEU, the Commission systematically applies a coefficient for seriousness of 10 in case of a complete failure to notify transposition measures. In a Union based on the respect of the rule of law, all legislative directives are to be considered of equal importance and require complete transposition by the Member States within the deadlines that they set.
In the case of a partial failure to notify transposition measures, the importance of the transposition gap is to be considered when setting the coefficient for seriousness which is lower than 10. In addition, the effects of the infringement on the general and particular interests may be taken into account …’
8
Under point 3.3 of the said communication, entitled ‘Application of the coefficient for duration’:
‘…
The coefficient for duration is expressed as a multiplier of between 1 and 3. It is calculated at a rate of [0.10] per month from the date of the first judgment or from the day following the expiry of the deadline for transposition of the directive in question.
…’
9
Point 3.4 of the same communication, entitled ‘Member State’s capacity to pay’, provides:
‘…
The level of sanction required to serve as a deterrent will vary according to Member States’ capacity to pay. This deterrent effect is reflected in the n factor. It is defined as a weighted geometric average of the gross domestic product (GDP) of the Member State concerned compared to the average of the Member States’ GDPs, with a weight of two, and of the population of the Member State concerned, compared to the average of Member States’ populations, with a weight of one. This represents the capacity to pay of the Member State concerned in relation to the other Member States’ capacity to pay:
…
The Commission has decided to revise its method for calculating the n factor, which now predominantly relies on Member States’ GDP and secondarily on their population as a demographic criterion allowing a reasonable deviation between the various Member States to be maintained. Taking into account Member States’ population for one third of the calculation of the n factor reduces to a reasonable degree the variation of Member States’ n factors, as compared to a calculation based solely on Member States’ GDP. It also adds an element of stability in the calculation of the n factor, since population is unlikely to vary significantly on an annual basis. In contrast, a Member State’s GDP might experience higher annual fluctuations, in particular in periods of economic crisis. At the same time, since the Member State’s GDP still accounts for two thirds of the calculation, it remains the predominant factor for the purposes of assessing its capacity to pay.
…’
10
Point 4.2 of the 2023 Communication sets out the calculation method for the lump sum as follows:
‘The lump sum is calculated in a manner broadly similar to the method for calculating the penalty payment, that is:
–
multiplying a flat-rate amount by a coefficient for seriousness,
–
multiplying the result by the n factor,
–
multiplying the result by the number of days the infringement persists …
…’
11
Point 4.2.1 of that communication provides:
‘To calculate the lump sum, the daily amount is to be multiplied by the number of days the infringement persists. The latter is defined as follows:
…
–
for actions brought under Article 260(3) TFEU, this is the number of days between the day after the expiry of the deadline for transposition set out in the directive at issue and the date the infringement comes to an end, or, failing compliance, the date of the delivery of the judgment under Article 260 TFEU.
…’
12
According to point 4.2.2 of the said communication:
‘For the calculation of the lump sum, the Commission applies the same coefficient for seriousness and the same fixed n factor as for the calculation of the penalty payment …
The flat-rate amount for the lump sum is lower than for penalty payments. …
The flat-rate amount applicable for the lump sum is set out in point 2 of … Annex I.
…’
13
Annex I to the 2023 Communication, entitled ‘Data used for determining financial sanctions proposed to the Court’, provides, in point 1 thereof, that the flat-rate amount for the penalty payment mentioned in point 3 of that communication is fixed at EUR 3000 per day, in point 2 thereof, that the flat-rate amount for the lump sum payment mentioned in point 4.2.2 of that communication is fixed at EUR 1000 per day, that is one third of the flat-rate for penalty payments, and, in point 3 thereof, that the ‘n’ factor for the Republic of Estonia is set at 0.06. In point 5 of that Annex I, it is stated that the minimum lump sum fixed for the Republic of Estonia amounts to EUR 168000.
The pre-litigation procedure and the procedure before the Court
14
On 27 January 2022, the Commission sent a letter of formal notice to the Republic of Estonia, criticising it for having failed to communicate to it the laws, regulations or administrative provisions necessary to comply with Directive 2019/1937, the transposition deadline of which had expired on 17 December 2021. In its reply of 28 March 2022, the Republic of Estonia, acknowledging the complaints made against it, stated that the draft law transposing that directive had been submitted to the Estonian Parliament for review and that the transposing law was due to enter into force on 1 June 2022.
15
With no subsequent communication relating to the transposition of Directive 2019/1937 having been sent, the Commission, on 15 July 2022, addressed a reasoned opinion to the Republic of Estonia, calling on it to comply with its obligations under that directive within a period of two months of receipt of that opinion.
16
In its reply to that opinion of 13 September 2022, the Republic of Estonia, which did not dispute the failure to fulfil obligations alleged against it, explained the state of progress of the legislative process for the adoption of the law transposing Directive 2019/1937.
17
Taking the view that that Member State had still not complied with its obligations, the Commission decided, on 14 March 2023, to bring the present action before the Court.
18
By decision of the President of the Court of 4 January 2024, the proceedings were stayed pending delivery of the judgment in Case C‑147/23. Following the delivery of the judgment of 25 April 2024, Commission v Poland (Whistleblowers directive) (C‑147/23, EU:C:2024:346), the proceedings in the present case were resumed by decision of the President of the Court of the same day.
The action
Failure to fulfil obligations under Article 258 TFEU
Arguments of the parties
19
The Commission points out that, in accordance with the third paragraph of Article 288 TFEU, Member States are required to adopt the provisions necessary to transpose directives into their national legal system, within the periods laid down in those directives, and to communicate those provisions to it immediately.
20
That institution explains that the question whether a Member State has failed to fulfil those obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the reasoned opinion which the Commission addressed to that Member State.
21
In the case at hand, the Republic of Estonia had not adopted the laws, regulations and administrative provisions necessary to transpose Directive 2019/1937 or inform the Commission of their adoption before the expiry of the period laid down in the reasoned opinion of 15 July 2022.
22
In its defence, the Republic of Estonia acknowledges the alleged failure to fulfil obligations and states that, as a result of the parliamentary elections of 5 March 2023, the review of the draft law transposing Directive 2019/1937 was postponed until June 2023. That Member State also states that existing national legislation contains certain provisions enabling, in specific areas, whistleblowers to be protected, but that those cannot be described as provisions transposing that directive.
23
In its reply, the Commission recalls that, according to settled case-law, provisions, practices or situations falling within the scope of national law cannot justify a delay in the transposition of a directive.
Findings of the Court
24
Under Article 26(1) of Directive 2019/1937, Member States were to bring into force, by 17 December 2021, the laws, regulations and administrative provisions necessary to comply with that directive. In addition, Article 26(3) of that directive stipulates that, when Member States adopt those measures, they are to contain a reference to that directive or be accompanied by such a reference at the time of their official publication. Moreover, pursuant to that Article 26(3), it fell to the Member States to communicate to the Commission the text of the said national provisions.
25
In accordance with settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the reasoned opinion, the Court being unable to take account of any subsequent changes (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 28 and the case-law cited).
26
The Court has moreover repeatedly held that if a directive expressly requires Member States to ensure that the necessary measures transposing the directive include a reference to it or that such reference is made when those measures are officially published, it is, in any event, necessary for Member States to adopt a specific measure transposing the directive in question (judgment of 14 March 2024, Commission v Latvia (European Electronic Communications Code), C‑454/22, EU:C:2024:235, paragraph 33 and the case-law cited).
27
In the case at hand, after having found that the Republic of Estonia had not communicated to it the provisions necessary to transpose Directive 2019/1937, the Commission sent that Member State, on 15 July 2022, a reasoned opinion, calling on it to comply with the obligations referred to therein within a period of two months of receipt of the opinion.
28
However, as is apparent from the defence and the rejoinder lodged by the Republic of Estonia in the present proceedings, on the expiry of that period, that Member State had not adopted the laws, regulations and administrative provisions necessary to comply with Directive 2019/1937 and, therefore, nor had it communicated those provisions to the Commission.
29
The Republic of Estonia, which does not dispute the failure to fulfil obligations alleged against it, states that the delay in transposing and, consequently, in notifying the transposition measures is attributable, inter alia, to the parliamentary elections of 5 March 2023.
30
In that regard, it should be recalled that, according to the Court’s settled case-law, a Member State cannot plead provisions, practices or situations prevailing in its domestic legal order to justify failure to observe obligations arising under EU law such as failure to transpose a directive within the period prescribed (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 33 and the case-law cited).
31
In addition, as is apparent from the very wording of Article 26(1) of Directive 2019/1937, the EU legislature took the view that a two-year transposition deadline was sufficient to enable the Member States to comply with their obligations.
32
It must therefore be held that, by having failed, on the expiry of the period prescribed in the reasoned opinion of 15 July 2022, to adopt the laws, regulations and administrative provisions necessary to comply with Directive 2019/1937 and, therefore, by having failed to communicate them to the Commission, the Republic of Estonia has failed to fulfil its obligations under Article 26(1) and (3) of that directive.
The applications submitted under Article 260(3) TFEU
Arguments of the parties
33
Taking the view that the failure to fulfil obligations alleged against the Republic of Estonia persisted on the date on which the Commission brought the present action before the Court, the Commission proposes, on the basis of Article 260(3) TFEU, to have imposed on that Member State a lump sum and a daily penalty payment.
34
With a view to fixing the amounts of those financial penalties, the Commission relies on the general principles referred to in point 2 of the 2023 Communication and on the method of calculation set out in points 3 and 4 of that communication. In particular, that institution states that those amounts must be determined on the basis of the following fundamental criteria: the seriousness of the infringement, its duration and the need to ensure that the penalty has a deterrent effect in order to prevent repeat infringements.
35
With regard, in the first place, to the seriousness of the infringement, the Commission points out that the applicable coefficient under the 2023 Communication is between a minimum of 1 and a maximum of 20. That institution explains that, in accordance with point 3.2.2 of that communication, it systematically applies a coefficient for seriousness of 10 in the case of a complete failure to notify the provisions enabling a directive to be transposed, as any failure to transpose a directive or to notify those provisions is of the same degree of seriousness, regardless of the nature of the provisions of the directive concerned.
36
In the second place, as regards the duration of the infringement, the Commission explains that, pursuant to point 3.3 of the 2023 Communication, the coefficient for duration is expressed as a multiplier of between 1 and 3 and calculated at a rate of 0.10 per month from the day following the expiry of the deadline for transposition of the directive in question until the Commission decides to refer the matter to the Court. Since, in the present case, that period is 13 months, the coefficient for duration to be applied is 1.3.
37
As for, in the third place, the criterion relating to the need to ensure that the penalty has a deterrent effect taking into consideration the capacity of the Member State concerned to pay, the Commission states that that criterion is expressed by the ‘n’ factor set for each Member State in point 3 of Annex I to the 2023 Communication. It is calculated on the basis of the ratio between the GDP of the State concerned and the national average GDP of the European Union multiplied by the ratio between the population of that State and the national average population of the European Union. The first ratio is assigned a two-thirds weighting, whereas the second is assigned a one-third weighting. Pursuant to that point 3, the ‘n’ factor of the Republic of Estonia is 0.06.
38
Therefore, first, with regard to the calculation of the amount of the lump sum, the Commission proposes, pursuant to point 4.2 of the 2023 Communication, that a coefficient for seriousness of 10 be used and the ‘n’ factor of 0.06 applied. The product of those two elements should be multiplied by the flat-rate amount of the lump sum fixed in point 2 of Annex I to that communication, that is to say, EUR 1000, which amounts to a sum of EUR 600, to be multiplied by the number of days that the infringement has persisted, in accordance with point 4.2.1 of the said communication. The Commission states that the payment of that lump sum must be imposed provided that it is greater than EUR 168000, the amount of the minimum lump sum fixed for the Republic of Estonia in point 5 of Annex I to the 2023 Communication.
39
Second, with regard to the setting of the amount of the penalty payment, the Commission proposes multiplying the flat-rate amount of the penalty payment fixed in point 1 of Annex I to the 2023 Communication, which stands at EUR 3000 per day, by the coefficient for seriousness of 10, the coefficient for duration of 1.3 and the ‘n’ factor of 0.06. This results in a penalty payment of EUR 2340 per day.
40
Last, the Commission proposes that the date of the delivery of the forthcoming judgment in the present case be regarded as the date on which the payment obligation takes effect.
41
In its defence, the Republic of Estonia states that the Commission’s proposals relating to the amounts of financial penalties go beyond what is necessary to ensure that those penalties are effective and dissuasive.
42
As regards the amount of the lump sum, that Member State considers that the sum proposed by the Commission does not take account of the actual effects of the infringement on public and private interests.
43
On the one hand, the systematic application of a coefficient for seriousness of 10 does not allow the Commission to take account of existing legislation on the protection of whistleblowers. Thus, Article 3 of the töölepingu seadus (Law on Employment Contracts) (RT I, 7 March 2023) and Article 13 of the avaliku teenistuse seadus (Law on the Civil Service) (RT I, 7 March 2023) provide for the general prohibition of retaliation against whistleblowers, as is required by Article 19 of Directive 2019/1937. In addition, the protection of reporting persons is ensured by Article 6(2) of the korruptsioonivastane seadus (Anti-corruption Law) (RT I, 13 April 2021), Articles 49, 51, 52 and 521 of the rahapesu ja terrorismi tõkestamise seadus (Law on combatting money laundering and terrorism) (RT I, 10 February 2023), Articles 502 and 503 of the finantsinspektsiooni seadus (Financial Supervisory Authority Law) (RT I, 30 November 2022) and Articles 2011, 2012 and 23749 of the väärtpaberituru seadus (Securities Market Law) (RT I, 17 March 2023). In addition, several public authorities have set up internal reporting channels.
44
On the other hand, that Member State points to the numerous efforts that it has made to transpose Directive 2019/1937 and explains that the duration of the review of the draft law transposing that directive was longer than initially envisaged owing to the holding of the parliamentary elections on 5 March 2023.
45
Last, the Republic of Estonia claims that, in view of the extremely low number of cases of non-transposition which has always characterised it, the prevention of the repetition of infringing conduct does not justify the amount requested by the Commission.
46
It follows that, in order to achieve the objective of persuasion and deterrence, the application of a coefficient for seriousness equal to or lower than 5 would be sufficient.
47
For the same reasons, the amount of the penalty payment proposed by the Commission should also be reduced.
48
In its reply, the Commission states that the coefficient for seriousness of 10 that it has proposed is moderate and corresponds to the level provided for in point 3.2.2 of the 2023 Communication.
49
It considers that the various provisions of national law referred to by the Republic of Estonia in its defence cannot be taken into account for the purposes of determining that coefficient, since they are not relevant to determining the state of transposition of Directive 2019/1937 into national law.
50
Those national provisions, after all, were not notified to the Commission. Moreover, they do not contain any reference to that directive and do not therefore constitute a specific transposition measure.
51
In so doing, those national provisions do not meet the requirements of clarity and precision required by the case-law in order to guarantee legal certainty for the beneficiaries of the rights recognised by Directive 2019/1937 and the full application of its provisions.
52
Accordingly, the Commission confirms the amounts of the financial penalties that it has proposed in its application.
53
In its rejoinder, the Republic of Estonia states, first, that the national provisions to which it refers in its defence show that the negative effects on public and private interests of the failure to fulfil obligations alleged against it should be put into perspective. Therefore, the amounts of the proposed financial penalties should be adapted to the circumstances and proportionate to the infringement committed. Second, determining the level of persuasion and deterrence of those penalties requires taking into account the particular circumstances of each case.
54
In that regard, the Commission cannot justify the automatic application of a coefficient for seriousness by the need to guarantee equal treatment between the Member States. On the contrary, that principle requires a differentiated assessment according to the normative content of each directive and the specific situation of each Member State.
55
In the case at hand, the Republic of Estonia already has sectoral legislation corresponding, to a certain extent, to the protection regime prescribed by Directive 2019/1937. That Member State refers, in that regard, to recital 4 of that directive, according to which the directive is intended to fill the gaps which may result from a fragmented and uneven level of protection.
56
In addition, the limited number of infringements committed by that Member State justifies a reduction in those amounts, since the risk of repeated infringement is limited.
57
Consequently, the Republic of Estonia requests, first, that the amount of the lump sum be determined by multiplying a daily amount of EUR 300 by the number of days between the day after the expiry of the deadline for transposition and the day on which the infringement has been brought to an end or, failing regularisation, the day on which the judgment in the present case is delivered. Second, it requests that the amount of the penalty payment be set at EUR 1170 per day of delay from the date of delivery of the judgment in the present case until the date of full transposition of Directive 2019/1937.
Findings of the Court
– Application of Article 260(3) TFEU
58
The first subparagraph of Article 260(3) TFEU provides that when the Commission brings a case before the Court pursuant to Article 258 TFEU on the ground that the Member State concerned has failed to fulfil its obligation to notify provisions necessary to transpose a directive adopted under a legislative procedure, it may, when it deems appropriate, specify the amount of the lump sum or penalty payment to be paid by the Member State concerned which it considers appropriate in the circumstances. In accordance with the second subparagraph of Article 260(3) TFEU, if the Court finds that there is an infringement it may impose a lump sum or penalty payment on the Member State concerned not exceeding the amount specified by the Commission. The payment obligation is to take effect on the date set by the Court in its judgment.
59
Since, as is apparent from paragraph 32 above, it is established that, on the expiry of the period laid down in the reasoned opinion of 15 July 2022, the Republic of Estonia had neither adopted nor, therefore, communicated to the Commission the laws, regulations and administrative provisions necessary to transpose the provisions of Directive 2019/1937 into its domestic law, the failure thus established falls within the scope of Article 260(3) TFEU.
60
Furthermore, it should be recalled that the objective pursued by the system set out in Article 260(3) TFEU is not only to induce Member States to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist, but also to simplify and speed up the procedure for imposing financial penalties for failures to comply with the obligation to notify national provisions transposing a directive adopted through a legislative procedure (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 57 and the case-law cited).
61
In order to achieve that objective, Article 260(3) TFEU provides for the imposition of two types of financial penalty: a lump sum and a daily penalty payment.
62
While the imposition of a daily penalty payment seems particularly suited to inducing a Member State to put an end as soon as possible to a breach of obligations, the imposition of a lump sum is based more on assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 59 and the case-law cited).
63
In that regard, the Commission states reasons for the nature and amount of the financial penalty sought, taking into account the guidelines which it has adopted, such as those in its communications which, although not binding on the Court, contribute to ensuring that the action brought by the Commission is transparent, foreseeable and consistent with legal certainty (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 60 and the case-law cited).
64
In the present case, the Commission relied on the 2023 Communication to justify its application seeking that the Republic of Estonia be ordered to pay a lump sum and a daily penalty payment, as well as to fix the amounts thereof.
65
As regards whether it is appropriate for such financial penalties to be imposed, in each case, it is for the Court to determine, in the light of the circumstances of the case before it and according to the degree of persuasion and deterrence which appears to it to be required, the financial penalties that are appropriate, in particular, for preventing the recurrence of similar infringements of EU law (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 62 and the case-law cited).
66
First, as regards the imposition of a lump sum, notwithstanding the fact that the Republic of Estonia kept the Commission services informed of the progress of the procedure for transposition into national law of the provisions of Directive 2019/1937, all the legal and factual elements surrounding the breach of obligations established are an indication that if the future repetition of similar infringements of EU law is to be effectively prevented, a dissuasive measure must be adopted, such as the imposition of a lump sum. The Republic of Estonia had not adopted any provision enabling that directive to be transposed by the expiry of the period laid down in Article 26(1) of Directive 2019/1937. Moreover, none of those provisions was notified to the Commission by the expiry of the period laid down in the reasoned opinion of 15 July 2022, or even by the date of the Court’s examination of the facts.
67
Second, as regards the imposition of a penalty payment, such a penalty is necessary, in principle, only if the failure to fulfil obligations that that penalty payment seeks to penalise continues up to the time of the Court’s examination of the facts, which must be considered as being made at the date of conclusion of the proceedings. It must be pointed out that in a case, such as the present case, in which no hearing has been held, the date to be taken into account in that regard is that of the close of the written part of the procedure (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 64).
68
It follows that, in order to determine whether, in the present case, the imposition of a penalty payment may be envisaged, it is necessary to examine whether the failure stated in paragraph 32 above persisted until the date of the close of the written part of the procedure, which was on 14 August 2023.
69
It is not disputed in the present case that, on that date, the Republic of Estonia had neither adopted nor, therefore, communicated the laws, regulations and administrative provisions necessary for the transposition of Directive 2019/1937 into its domestic law. Accordingly, it must be held that that Member State persisted in its failure to fulfil obligations up to the time of the Court’s examination of the facts.
70
In those circumstances, the imposition of a daily penalty payment on the Republic of Estonia, as sought by the Commission, is an appropriate financial means by which to ensure that that Member State puts a prompt end to the failure established and complies with its obligations under Directive 2019/1937. However, since it cannot be ruled out that, on the date of delivery of the judgment in the present case, that directive is transposed in full, it would be appropriate to impose a penalty payment only in so far as the failure to fulfil obligations persists at the date of delivery of that judgment (see, to that effect, judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 66).
– Amount of the financial penalties
71
As regards the calculation of the amount of the penalties required by the Commission, it should be recalled that, under Article 260(3) TFEU, the Court alone has the power to impose a financial penalty on a Member State. However, in the context of proceedings brought on the basis of that provision, the Court has only a limited power to assess, since, where it finds that there is a failure to fulfil obligations, the Commission’s proposals are binding on it as to the nature of the financial penalty which the Court may impose and the maximum amount of the penalty which it may set (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 67 and the case-law cited).
72
In exercising its discretion in the matter, as delimited by the Commission’s proposals, it is for the Court to fix the amount of the financial penalties imposed on a Member State pursuant to Article 260(3) TFEU, in an amount appropriate to the circumstances and proportionate to the failure to fulfil obligations. Relevant considerations in that respect include factors such as the seriousness of the failure to fulfil obligations, the length of time for which the failure has persisted and the relevant Member State’s ability to pay (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 68 and the case-law cited).
73
It should likewise be remembered that, in the context of that discretion, guidelines such as communications from the Commission are not binding on the Court but rather contribute to ensuring that the Commission’s own actions are transparent, foreseeable and consistent with legal certainty when that institution makes proposals to the Court (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 69 and the case-law cited).
74
In the present case, the Commission relied on the 2023 Communication in order to determine the amount of the financial penalties required.
75
In the first place, as regards the seriousness of the failure to fulfil obligations established, it follows from point 3.2 of the 2023 Communication that, according to the Commission, the failure to notify the provisions transposing a directive adopted under a legislative procedure is always considered to be serious. Accordingly, that failure justifies the automatic application of a coefficient for seriousness of 10.
76
The Republic of Estonia contests the level of that coefficient and the automatic nature of its application in this case.
77
In that regard, it should be borne in mind that the obligation to adopt provisions for the purposes of ensuring that a directive is transposed in full and the obligation to notify them to the Commission are fundamental obligations incumbent on the Member States in order to ensure optimal effectiveness of EU law and that failure to fulfil those obligations must, therefore, be regarded as definitely serious (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 72 and the case-law cited).
78
In the present case, it must be observed that Directive 2019/1937 is a crucial instrument of EU law in that it lays down, pursuant to Article 1 thereof, read in conjunction with recital 1 thereof, common minimum standards providing for a high level of balanced and effective protection of persons reporting breaches of EU law in areas in which such breaches are likely to be particularly harmful to the general interest. By establishing a system for the protection of persons reporting breaches of EU law in a work-related context, that directive contributes to preventing harm to the public interest, in particularly sensitive areas, such as public procurement, the prevention of money laundering and terrorist financing, and the protection of the environment or of the financial interests of the European Union. Thus, the provisions of the directive provide for the obligation, for entities in both the public and private sectors, to establish internal reporting channels and procedures for receiving reports and their follow-up, whilst safeguarding the rights of the persons reporting breaches of EU law and the conditions under which those persons can qualify for the protection laid down therein (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 73).
79
The non-transposition of the provisions of Directive 2019/1937 within the period prescribed necessarily undermines EU law and its uniform and effective application, since breaches of EU law are unlikely to be reported if the persons with knowledge of such breaches are not protected against any retaliation (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 74).
80
That said, the amount of the financial penalties imposed on a Member State pursuant to Article 260(3) TFEU must be appropriate to the circumstances and proportionate to the failure to fulfil obligations (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 75), as has been recalled in paragraph 72 above.
81
It is for that reason that the Court has held that the automatic application of the same coefficient for seriousness in all cases in which a directive is not fully transposed and, therefore, the measures transposing that directive are not communicated necessarily precludes the amount of the financial penalties from being tailored to the circumstances characterising the failure to fulfil obligations and proportionate penalties from being imposed (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 76).
82
In that regard, the Court has specified that, by presuming that a failure to comply with the obligation to notify the transposition measures for a directive must be regarded as being of the same degree of seriousness regardless of the directive concerned, the Commission is unable to tailor the financial penalties according to the consequences of the failure to comply with that obligation on private and public interests, as is provided for in point 3.2.2 of the 2023 Communication (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 77).
83
In the case at hand, the Republic of Estonia has claimed, in its defence, that its legislation already included certain provisions, set out in paragraph 43 above, aimed at protecting persons who report breaches of EU law, which it argues comply with the requirements of Directive 2019/1937.
84
Thus, Article 3 of the Law on employment contracts and Article 13 of the Law on the Civil Service provide for the general prohibition of retaliation against whistleblowers, as is required by Article 19 of Directive 2019/1937. In addition, the protection of reporting persons is ensured by Article 6(2) of the Anti-corruption Law, Articles 49, 51, 52 and 521 of the Law on combatting money laundering and terrorism, Articles 502 and 503 of the Financial Supervisory Authority Law and Articles 2011, 2012 and 23749 of the Securities Market Law. In addition, several public authorities have set up internal reporting channels.
85
In those circumstances, it must be found that it has not been established that the consequences of the failure established in the present case for private and public interests were as negative as in the case of a complete failure to transpose Directive 2019/1937. In so far as the Commission claims that that national legislation should not be taken into account when assessing the level of the coefficient for seriousness used, since it was not notified to it, it is sufficient to find that the failure to notify the said legislation cannot, in itself, affect the consequences which that legislation actually has on those interests (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 92).
86
The fact remains that the Republic of Estonia itself acknowledges, in its defence, that the rules protecting persons who report breaches of EU law are scattered throughout the Estonian legal order and, contrary to the requirement laid down in Article 26(3) of Directive 2019/1937, do not make explicit reference to the protection of such persons.
87
The lack of clear and specific rules concerning the protection of persons who report breaches of EU law, as provided for in Directive 2019/1937, is a barrier to the effective protection of those persons and can, therefore, call into question the uniform and effective application of EU law in the areas covered by that directive (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 94).
88
As has been recalled in paragraph 78 above, by establishing a high level of protection of persons reporting breaches of EU law in a work-related context, that directive contributes to preventing harm to the public interest, in particularly sensitive areas, such as public procurement, the prevention of money laundering and terrorist financing, and the protection of the environment or of the financial interests of the European Union (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 95).
89
That being so, as has been stated in paragraph 79 above, without effective protection, persons with knowledge of a breach of EU law in such areas may be discouraged from reporting them where, by so doing, they may open themselves to retaliation (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 96).
90
Accordingly, in the light of the objective set out in Article 1 of Directive 2019/1937, read in conjunction with recital 1 thereof, the failure to adopt the laws, regulations and administrative provisions necessary to transpose the directive fully and precisely is particularly serious (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 97).
91
It should also be noted that the fact that the Republic of Estonia is for the first time the subject of infringement proceedings under Article 260(3) TFEU cannot be taken into account in determining the amount of the lump sum to be imposed on it. The past conduct of a Member State has no bearing on the consequences of the non-transposition of the directive in question on private and public interests.
92
In the second place, when assessing the duration of the infringement, it must be recalled, on the one hand, that, as regards the beginning of the period which must be taken into account in order to fix the amount of the lump sum, the relevant date for evaluating the duration of the infringement at issue is not the date of expiry of the period laid down in the Commission’s reasoned opinion, but the date of expiry of the transposition deadline laid down in the directive in question, namely 17 December 2021 (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 80 and the case-law cited).
93
On the other hand, as regards the setting of a penalty payment, the duration of the infringement must be assessed by reference to the date on which the Court assesses the facts and not the date on which proceedings are brought before it by the Commission (judgment of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 87).
94
It is established, however, that the Republic of Estonia had not, on the expiry of the transposition deadline laid down in Article 26(1) of Directive 2019/1937, that is to say, on 17 December 2021, adopted the laws, regulations and administrative provisions necessary to transpose that directive and, therefore, had likewise failed to communicate them to the Commission, contrary to what Article 26(3) of the said directive provides. It follows that the failure to fulfil obligations at issue, which did not end on the date of the Court’s examination of the facts, has continued for three years.
95
In the third place, as regards the ability to pay of the Republic of Estonia, it is clear from the case-law of the Court that, without prejudice to the possibility for the Commission to propose financial penalties which are based on multiple criteria, with a view, in particular, to allowing a reasonable gap between the various Member States to be maintained, it is necessary to rely on the GDP of that State as the predominant factor for the purpose of assessing its ability to pay and for the fixing of penalties that are sufficiently dissuasive and proportionate in order effectively to prevent a repeat of similar infringements of EU law in the future (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 81 and the case-law cited).
96
In that regard, the Court has repeatedly held that it was necessary to take account of recent trends in the Member States’ GDP at the time of the Court’s examination of the facts (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 82 and the case-law cited).
97
Here, the ‘n’ factor, which represents the capacity to pay of the Member State concerned as compared with the capacity to pay of the other Member States and is applied by the Commission in accordance with points 3.4 and 4.2 of the 2023 Communication, is defined as a weighted geometric average of the GDP of the Member State concerned, compared to the average of the Member States’ GDPs, accounting for two thirds of the calculation of the ‘n’ factor, and of the population of the Member State concerned, compared to the average of Member States’ populations, accounting for one third of the calculation of the ‘n’ factor, as is apparent from the equation set out in paragraph 9 above. The Commission justifies that method of calculating the ‘n’ factor both by reference to the objective of maintaining a reasonable gap between the ‘n’ factors of the Member States, as compared to a calculation based solely on Member States’ GDPs, and the objective of ensuring a degree of stability in the calculation of the ‘n’ factor, since population is unlikely to vary significantly on an annual basis (judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraph 83 and the case-law cited).
98
However, the Court has held that, when determining the capacity to pay of the Member State concerned, a demographic criterion cannot be taken into account in accordance with the detailed rules laid down in points 3.4 and 4.2 of the 2023 Communication as part of the method of calculating the ‘n’ factor (see, to that effect, judgment of 25 April 2024, Commission v Poland (Whistleblowers directive), C‑147/23, EU:C:2024:346, paragraphs 84 to 86).
99
Accordingly, in accordance with the case-law recalled in paragraph 95 of the present judgment and in the absence of a relevant criterion put forward by the Commission to ensure stability of calculation and to maintain a reasonable gap between the ‘n’ factors of the Member States, it is by taking into account the average GDP of the Republic of Estonia over the last three years that the amount of the financial penalties should be fixed.
100
In the light of the foregoing and having regard to the discretion conferred on the Court by Article 260(3) TFEU, which provides that the Court cannot, in respect of the financial penalties the payment of which it imposes, fix an amount exceeding that specified by the Commission, the view must be taken, first, that, in order effectively to prevent the repeat of infringements similar to that resulting from the infringement of Article 26(1) and (3) of Directive 2019/1937 and undermining the optimal effectiveness of EU law in the future, a lump sum must be imposed, the amount of which must be fixed at EUR 500000 and, second, that, should the failure to fulfil obligations established in paragraph 32 above persist on the date of delivery of the present judgment, an order that the Republic of Estonia pay to the Commission, from that date until such time that Member State has put an end to that failure to fulfil obligations, a daily penalty payment in the amount of EUR 1500.
Costs
101
Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Republic of Estonia has been unsuccessful, the latter must be ordered to bear its own costs and to pay those incurred by the Commission.
On those grounds, the Court (Sixth Chamber) hereby:
1.
Declares that, by having failed, on the expiry of the period laid down in the reasoned opinion of the European Commission of 15 July 2022, to adopt the laws, regulations and administrative provisions necessary to comply with Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law and, therefore, by having failed to communicate them to the Commission, the Republic of Estonia has failed to fulfil its obligations under Article 26(1) and (3) of that directive;
2.
Declares that, by having failed to adopt, by the date of the examination of the facts by the Court of Justice, the measures necessary to transpose into its domestic law the provisions of Directive 2019/1937 and, therefore, by having failed to communicate those measures to the European Commission, the Republic of Estonia persisted in its failure to fulfil its obligations;
3.
Orders the Republic of Estonia to pay to the European Commission:
–
a lump sum in the amount of EUR 500000;
–
should the failure to fulfil obligations established in point 1 of the operative part persist at the date of delivery of the present judgment, as from that date and until that Member State has put an end to that failure, a daily penalty payment in the amount of EUR 1500;
4.
Orders the Republic of Estonia to bear its own costs and to pay those incurred by the European Commission.
[Signatures]
(
*1
)	Language of the case: Estonian.