EUROPEAN COMMISSION Brussels, 23.7.2021 COM(2021) 432 final REPORT FROM THE COMMISSION Monitoring the application of European Union law





2020 Annual Report {SWD(2021) 212 final}



Foreword I.Implementing and enforcing EU law during a pandemic II.European Green Deal Clean Energy and implementing the Paris Agreement on Climate Change Sustainable transport Fisheries conservation and maritime spatial planning Sustainable agriculture Health and food safety III.A Europe fit for the digital age Technology that works for people Digital inclusion for a better EU society Strengthening cybersecurity and protection from cyber threats An open, democratic and sustainable digital society Digital transport systems Transparency of information about businesses IV.An economy that works for people Working conditions Health and safety at work Labour mobility

Social security coordination Free movement of goods Anti-money laundering and counter terrorist financing Retail payments Business governance and transparency Indirect taxation Direct taxation Competition Mobility and transport Internal energy market Energy security Implementing Euratom rules V.Promoting our European Way of Life Rule of law and fundamental rights Free movement of persons Equality and non-discrimination Racism and xenophobia, including illegal hate speech Consumer rights Enhancing protection of personal data Justice cooperation and individual guarantees in criminal law

Security New Pact on Migration and Asylum Foreword The report that you are about to read describes the Commission’s work to ensure the proper implementation and application of EU law throughout 2020, a year where Europe and the world were struck hard by the COVID-19 pandemic. As you will see, our efforts continued unabated, and we took action across the board, ranging from the protection of the environment, the free movement of goods and services to ensuring the protection of citizens’ rights. The pandemic also had an impact on our enforcement work: the Commission used its powers as guardian of the Treaties to curb the effects of the initial and natural instincts of self-protection that we see in our Member States. Our efforts were geared towards making sure that national measures were proportionate to the health risks, and that they had no lasting harm on the rights, freedoms and livelihoods of people and businesses across the Union. The cases described in the report are often not easy – they frequently bring about political and sensitive discussions in the Member States – but we are pursuing them because it is the right thing to do. Citizens’ rights across Member States must be protected at all times, wherever they live in the Union. This is also important for our future work: for example, the full and correct application of the environmental rules that already exist in our Union is key to the success of the European Green Deal, the very centrepiece of our post-pandemic recovery plan. And in times of crisis, we have to be extra vigilant that the fundamental rights and values that we share do not suddenly become negotiable, or seen as a luxury, to be put aside or restricted when the going gets tough. Our Union is built on common values and the rule of law. These values are in fact the very cornerstone of our Union and anchored in our Treaties and laws. Europeans are diverse, and this is something to be cherished, not stigmatised. It is our common rules and shared values that unite us. It is my deep conviction that cooperation between the Commission and the Member States is the best way to ensure that these rules and values are respected at all times. I am pleased to see that this works well most of the time: a timely and proper implementation of the agreed rules does have a powerful and positive impact on people’s lives. But, where implementation is lacking, this impact very much depends on the use of enforcement powers by the Commission. We might not agree on every aspect of a certain law, but we have to agree on respecting the law, the judgments of the independent courts that settle our disputes, and we must agree on the primacy of European law. Infringement procedures remain an option of last resort. If necessary, the Commission cannot and will not hesitate to use this option, to make sure that what is agreed in Brussels and enshrined in law actually finds its way into the lives of ordinary citizens, wherever they live in our Union. President of the European Commission Ursula von der Leyen



I.Implementing and enforcing EU law during a pandemic The European Commission works together with Member States to transpose, apply and implement EU law correctly and on time. The COVID-19 pandemic had a particular impact on this work. It put a serious strain on Member States’ administrations, particularly in the first part of the year, and clearly affected their capacity to implement EU law in full and on time. As a result, the Commission looked for ways to ease the burden on Member States in dealing with infringement procedures. But the Commission also made clear that it would be wrong to suspend its enforcement activity altogether. It has always stressed that the proper application of EU law is paramount, even in times of crisis. In this pandemic, for example, the proper functioning of the single market proved crucial for keeping key supply chains intact, providing shops with food and making sure health services received the medical supplies they needed. To help the Member States navigate through the COVID-19 pandemic, the Commission issued a number of dedicated guidance documents across the various policy areas, including EU emergency assistance in cross-border healthcare cooperation, health and safety at work, passenger rights, air safety or on a coordinated economic response to the outbreak. As part of the national responses to the pandemic, many Member States unilaterally introduced export restrictions on medicines, protective equipment and other COVID-19-relevant products, particularly between March and May. Subsequently, some also introduced other restrictions to support domestic producers, for example in the food sector. Such measures heavily disrupt supply chains and increase shortages of essential products. In the first half of 2020 in particular, there was a real risk of a domino effect among Member States who felt compelled to adopt similar protectionist measures. The Commission launched and further pursued an infringement case against Bulgaria for obliging retailers to offer distinct exposure and sale space for domestic food products, such as milk, fish, fresh meat and eggs, honey, fruits and vegetables, and to purchase 90% of milk and dairy products from domestic producers. In some cases, the Commission addressed restrictions imposed in reaction to the pandemic with urgent infringement procedures. And it had frequent meetings with Member States to exchange views on the harmful impact of such restrictions to the free movement of goods, for example in the context of the Single Market Enforcement Task Force . The task force, set up in April 2020, plays an essential facilitating role as a high-level forum where Commission services and Member States work together to assess the state of compliance of national law with single market rules, and where they discuss the most pressing single market barriers and cross-cutting enforcement issues. The Commission also contacted and persuaded Member States to avoid adopting, or to repeal, national laws restricting the free movement of COVID-relevant medicines and medical devices in the single market. Freedom of movement also gives citizens the ability to travel. Over the years, a series of legislative acts have been adopted to ensure a high level of protection for passenger rights in Europe for all modes of transport. Throughout the pandemic, the Commission has consistently made it clear that passenger rights remain valid and that national measures to support the travel industry should not affect these rights. After reminding Member States of the rights of travellers under the Package Travel Directive in the Recommendation of 13 May 2020 , the Commission opened infringement proceedings against 11 Member States who had deviated from the Directive. Most cases were closed because the national measures were amended or had expired. At the end of 2020, only the cases against Bulgaria , Croatia , Lithuania and Slovakia remained open. Similarly, under the Package Travel Directive , organisers of package travel are obliged to refund advance payments within 14 days, if trips are cancelled because of unavoidable and extraordinary circumstances. However, following the COVID-19 outbreak, many travellers did not receive refunds in accordance with the Directive, as several Member States adopted national rules that allowed package travel organisers to postpone reimbursement or to issue mandatory vouchers instead.



II.European Green Deal ‘I have been inspired by the passion, conviction and energy of the millions of our young people making their voice heard on our streets and in our hearts. It is our generational duty to deliver for them.’ President von der Leyen in the Political Guidelines Climate change and environmental degradation are an existential threat to Europe and the world. The European Green Deal is the Commission’s plan to make the EU's economy sustainable. We can do this by turning climate and environmental challenges into opportunities, and making the transition just and inclusive for all. Protecting biodiversity

III.A Europe fit for the digital age ‘I want Europe to strive for more by grasping the opportunities from the digital age within safe and ethical boundaries.’ President von der Leyen in the Political Guidelines The Commission is determined to make this decade Europe's ‘Digital Decade’. Europe must now strengthen its digital sovereignty and set standards, rather than following those of others – with a clear focus on data, technology, and infrastructure. Technology that works for people The implementation of the EU’s digital strategy focuses on making the development, deployment and uptake of digital technology work for people and business. The COVID-19 pandemic intensified the digital transformation of our society. A fair and competitive digital economy The independence of the national regulatory authorities is key to ensuring the effective and impartial application of EU rules on telecommunications. It underpins the regulators' authority and ensures the predictability of their decisions, creating a good investment environment in telecommunications markets. The Commission launched infringement proceedings against Poland for dismissing the head of the national regulatory authority for electronic communications in Poland. The Commission considered that shortening the overall length of an ongoing mandate or amending the appointment or dismissal conditions, with the view to an early termination, is likely to affect the regulator’s independence. EU law protects the head of the national regulatory authorities (or the members of the collegiate body fulfilling that function) from arbitrary dismissal. Cross-border access to goods and services online should be without any barriers or friction for European consumers, regardless of their location, residence, or nationality. The Geo-blocking Regulation prohibits any unjustified discrimination on the basis of nationality, place of residence or place of establishment of customers shopping online. In 2020, the Commission closed the infringement proceedings against Cyprus and Romania for not having communicated the measures applicable to infringements of the geo-blocking rules. At the end of 2020, only the cases against France and Spain remained open. Digital inclusion for a better EU society Visual, aural, physical or intellectual impairments can restrict the use of digital services. Equal access to digital public information and services has become even more critical since the start of the pandemic. The Web Accessibility Directive aims to make the websites and mobile applications of public sector bodies more accessible to everyone, in particular people with disabilities. In 2020, the Commission closed the seven remaining infringement cases for delays in transposing the Web Accessibility Directive. It continues to assess the conformity of national transposition measures and the correct application of the Directive. Strengthening cybersecurity and protection from cyber threats The Commission further pursued cases against Belgium , Hungary and Romania for not having identified or provided sufficient information on operators of essential services under the Directive on security of network and information systems. At the end of 2020, these procedures were still ongoing. The digital transformation of our society has expanded the threat landscape, bringing new challenges, which require adapted and innovative responses. The number of cyber-attacks continues to rise, with increasingly sophisticated attacks coming from a wide range of sources both inside and outside the EU. The Directive on security of network and information systems is the first wide-ranging piece of EU legislation on cybersecurity, providing for legal measures to help boost the overall level of cybersecurity in the EU. An open, democratic and sustainable digital society The Audiovisual Media Services Directive (AVMSD) was revised in 2018 to create a regulatory framework fit for the digital age, leading to a safer, fairer and more diverse audiovisual landscape. The deadline for transposing the revised AVMSD into national legislation expired on 19 September 2020. For the first time, the Directive extends certain audiovisual rules to video sharing platforms and audiovisual content shared on certain social media services. It also strengthens the promotion of cultural diversity, by introducing clear obligations for on-demand services to have at least a 30% share of European content in their catalogue and to ensure the prominence of this content. In July 2020, the Commission issued guidelines on video sharing platforms, which will help Member States apply the new rules.

The Commission has launched infringement procedures against 24 Member States for failure to transpose on time the revised AVMSD’s rules governing EU-wide coordination of all audiovisual media, both traditional TV broadcasts and on-demand services.



Digital transport systems The European Register of Road Transport Undertakings makes it possible to exchange information on road transport companies established in the EU and between Member States. It is an essential instrument for ensuring that EU transport legislation is properly enforced. The Commission decided to refer Cyprus , the Netherlands and Portugal to the Court of Justice for their failure to upgrade their registers of road transport companies and their connection to the revised European Register of Road Transport Undertakings. On the same issue, the Commission pursued further the infringement procedure against Hungary . Implementing a new and enhanced version of register requires Member States to adapt their systems at national level. The deadline for establishing an upgraded connection for national electronic registers expired in January 2019. In road transport, the European Electronic Tolling Service ensures tolling services across the entire EU road network are interoperable. It enables road users to easily pay tolls throughout the whole bloc with just a single subscription contract with a service provider and a single on-board unit. By limiting cash transactions at tolling stations, and eliminating cumbersome procedures for occasional users, the tolling service facilitates daily operations for road users, improves traffic flow and reduces congestion. The Commission decided to launch infringement procedures against Italy and Hungary for failing to grant European Electronic Tolling Service providers access to their national toll domains. On aviation safety, data link services are communications between aircraft and ground control that complement the voice communication traditionally used in air traffic control. They improve pilot-controller communication efficiency and increase air traffic control capacity. The Commission launched infringement procedures against 11 Member States for failing to provide and operate data link services for all operators of aircraft flying within their airspace. Transparency of information about businesses Member States have to link their national business registers with the system of interconnection of business registers (BRIS). BRIS facilitates cross-border trade and makes procedures less costly and time-consuming for companies. It enables individuals, businesses and entrepreneurs to obtain information on companies. The Commission opened infringement procedures against three Member States for having failed to connect their national business registers to BRIS.



IV.An economy that works for people ‘Our people and our business can only thrive if the economy works for them. This is what our social market economy is all about.’ President von der Leyen in the Political Guidelines The EU’s unique social market economy allows economies to grow and to reduce poverty and inequality. With Europe on a stable footing, the economy can fully respond to the needs of the EU’s citizens. Small and medium-sized enterprises are the backbone of the EU’s economy. Working conditions The Commission further pursued a case against Italy concerning less favourable treatment and the lack of protection against abusive successive fixed-term employment in the public sector. The goal was to protect workers such as teachers, healthcare workers, professionals in the arts, music and dance education, staff in some musical production foundations, academic personnel, public sector agricultural workers and voluntary staff in the national fire brigade. A key element of Europe’s social market economy is fair working conditions, which includes preventing employment relationships that lead to precarious working conditions.