ELEVENTH ANNUAL REPORT ON MONITORING THE APPLICATION OF COMMUNITY LAW (1993) /* COM/94/500FINAL */



Official Journal C 154 , 06/06/1994 P. 0001



ELEVENTH ANNUAL REPORT to the European Parliament on monitoring the application of Community law - 1993 - (94/C 154/01) COM(94) 500 final CONTENTS Page A. INTRODUCTION 6 B. AN AREA WITHOUT INTERNAL FRONTIERS 8 1. Introduction 8 2. Situation sector by sector 9 2.1. Removal of physical barriers 9 2.1.1. Customs union 9 2.1.2. Free movement of agricultural products 10 2.1.2.1. Import controls 10 2.1.2.2. Import bans 11 2.1.2.3. New policies 11 2.2. Removal of technical barriers 12 2.2.1. Free movement of goods 12 2.2.1.1. Articles 30 et seq. of the EC Treaty and application of the principle of mutual recognition 12 2.2.1.2. The preventive rules of Directive 83/189/EEC 14 2.2.1.3. Progress in implementing directives on the free movement of goods 14 2.2.2. The market for services 17 2.2.2.1. Audiovisual media 17 2.2.2.2. Intellectual and industrial property 17 2.2.2.3. Telecommunications 18 2.2.3. Free movement of capital 19 2.2.4. Freedom to provide financial services, direct taxation and company law 19 2.2.5. Public procurement 22 2.3. Removal of tax barriers 23 2.4. Free movement of persons and right of establishment 25 2.4.1. Ban on discrimination 25 2.4.2. Entry and residence 26 2.4.3. Trade union rights 27 Page 2.4.4. Access to employment in the public service 27 2.4.5. Recognition of qualifications 28 2.4.6. Independent commercial agents 30 2.5. Consumer policy and product safety 31 C. COMPETITION 32 D. EMPLOYMENT AND SOCIAL POLICY 33 1. Introduction 33 2. Situation in the various sectors 33 2.1. Equal treatment 33 2.2. Anti-cancer campaign 34 2.3. Social security for migrant workers 34 2.4. Working conditions 34 2.5. Health and safety at work 35 E. AGRICULTURE AND RURAL DEVELOPMENT 36 1. Introduction 36 2. Agricultural legislation 36 3. Agricultural directives 37 F. FISHERIES 41 1. Introduction 41 2. Situation in individual sectors 41 3. Compatibility with Community law of national legislation on the granting of flag rights 41 G. ENVIRONMENT 42 1. Introduction 42 2. The situation sector by sector 46 2.1. Waste 46 2.2. Water 47 2.3. Air 48 2.4. Noise 49 2.5. Nature protection 49 2.6. Chemicals 50 2.7. Radiation protection 50 Page H. TRANSPORT 52 1. Introduction 52 2. The situation sector by sector 52 2.1. Road transport 52 2.2. Combined transport 52 2.3. Inland waterways 52 2.4. Railways 53 2.5. Sea transport 53 2.6. Air transport 53 I. ENERGY 54 J. EXTERNAL RELATIONS 55 K. COMMUNITY STAFF 55 L. STATISTICAL MATTERS 56 M. BUDGETARY MATTERS 56 ANNEXES Annexe I: Suspected infringements 57 Annexe II: Established infringements 64 Annexe III: Infringements of the Treaties and regulations 71 Annexe IV: Report on the application of directives 87 Annexe V: Judgments of the Court of Justice not complied with at 31 December 1993 169 Annexe VI: Application of Community law by national courts 174 A. INTRODUCTION Each year the European Commission draws up a report on the monitoring of the application of Community law in response to requests from 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 meets requests from the European Council and the Council for information on specific fields. This report, the eleventh in the series, covers 1993, a year when the legislative programme for the internal market was almost complete and attention shifted towards scrutiny of how Community legislation is actually applied. The Commission's monitoring activities, both in the internal market and in other fields, helped to clear up a considerable number of infringements in the past year, as the figures testify. How did the Commission go about this task? First of all, by applying the infringement procedure laid down in Article 169 EC, but also by striving to increase awareness among the Member States and by steadily developing genuine cooperation at administrative level with the aim of ensuring that Community rules are more widely observed and that directives are effectively implemented. The infringement procedure As in previous years the Commission's action in 1993 was based, to a large extent, on complaints received from individuals and firms (see Table 1.1 in Annex I), although these were slightly down in number from 1 185 in 1992 to 1 040 in 1993. The success of the Commission's complaints procedure, which involves no expense or formalities, demonstrates the public's growing awareness of the Community's importance. As well as examining complaints, the Commission draws on every possible source of information to detect infringements. Apart from monitoring the transposal of directives, it also detects other cases by its own inquiries (247 in 1993), while a number of cases are brought to light by petitions (23) and Parliamentary questions (30). The Commission's action under Article 169 of the EC Treaty may be illustrated in figures. In 1993 it commenced 1209 infringement proceedings, sent 352 reasoned opinions and referred 44 cases to the Court of Justice. While the number of proceedings commenced in 1993 showed little change from 1992 (down from 1 216 to 1 209), the number of reasoned opinions rose by around a hundred from 248 to 352, the most notable increase being for failure to notify national implementing measures (up from 126 to 244). This sharp increase follows the rise in the number of Article 169 letters sent in 1992 (1 216) compared with 1991 (853), because of the large number of directives due for transposal in 1992 for which implementing measures were not notified on time. The number of cases referred to the Court fell by more than 30 % from 64 in 1992 to 44 in 1993. Moreover, one third of the Member States were not brought before the Court at all. These figures confirm the downward trend of recent years (97 referrals in 1989, 78 in 1990 and 65 in 1991) and highlight the effectiveness of action by the Commission, which succeeds in most cases in persuading Member States to observe Community law without having to go so far as a referral to the Court. This success is also reflected in the number of cases closed. During 1992 and 1993 the Commission was able to terminate 50 % of infringement proceedings commenced for failure to notify national implementing measures over the same period, as the Member States concerned had adopted the requisite measures. These initial findings suggest that the situation regarding the observance of Community law and the implementation of directives is relatively satisfactory, although the Commission is still concerned at persistent problems in certain fields. Towards greater respect for the rules of law The Commission has observed a sharp improvement in certain key areas of the Community's activities. As regards infringements of the Treaty provisions prohibiting barriers to the free movement of goods, in particular Article 30 et seq. (non-tariff barriers) and Article 95 (discrimination in internal taxation), there was a big increase in the number of infringement proceedings terminated and a fall in the number of reasoned opinions and referrals to the Court. There was also a sharp drop in the number of complaints concerning border controls on goods. This trend reflects the gradual acceptance of Community rules by the national authorities, helped by the machinery of administrative cooperation, in particular the procedures set up as part of the internal market and the so-called 'package meetings` held with individual Member States to discuss a set of infringement proceedings relating to a specific field (e.g. Article 30, agriculture, environment or indirect taxation). But these efforts must be kept up. In certain sectors, and to varying degrees in the different Member States, compliance with the rules in force has actually deteriorated. To give one example, the public procurement Directives, which have already been in force for several years, are not always properly applied in practice by the various awarding authorities. This is reflected in the very small number of cases which were terminated in 1993 and the increase in the number of reasoned opinions and referrals to the Court. The sector-by-sector analysis and the list of infringements of the Treaties, regulations and decisions set out in Annex III paint a fuller picture of the problems encountered by Member States in the various fields. Towards more effective implementation of directives Progress in implementing all directives in force at 31 December 1993 is summarized in the table below: >TABLE> On 31 December 1993 the Member States had, on average, notified more thean 90 % of the national measures necessary to implement the directives then in force. This figure shows a very slight drop from 31 December 1992, when the rate of measures notified was 91 %. However, it should be borne in mind that around sixty more directives came into force during the intervening twelve months. These overall figures disguise wide variations between individual fields and between Member States, as the sector-by-sector analysis and the list in Annex IV reveal. For example, during 1993 there was a sharp fall in the rate of transposal of agricultural and environmental directives. In agriculture the overall rate for all the Member States dropped by nearly 4 %, mainly because of the other tasks which had to be undertaken simultaneously - the reworking of legislation and reorganization of the relevant administrative departments. Moreover, Member States had very often put practical implementation before legislative reforms in order to meet the 1993 deadline. The delays in the environmental field were accounted for mainly by administrative problems relating to coordination. Nonetheless, the Commission, which is well aware of what is at stake here, is constantly striving to increase awareness and supports the Member States' efforts to clear the backlog. Meanwhile, there was a remarkable increase in the rate of transposal in other sectors, notably pharmaceuticals, motor vehicles, machine-tools and the like, telecommunications, public procurement, the mutual recognition of qualifications, consumer policy and product safety. As in past years the rate of transposal in the customs and indirect taxation fields was very high (100 % and 99 % respectively). The implementation of directives is an arduous task and it is only right that the Commission should offer its help to Member States. That is why for several years the Commission has held annual meetings with Member States who express an interest to review progress in transposing all directives for which national implementing measures have not yet been notified - whether or not transposal is already due. Future prospects The Conference on European Union sought to strengthen the Commission's hand in monitoring Community law by revising Article 171 of the EC Treaty. Under the revised Article, when a Member State is brought before the Court of Justice for failing to comply with an earlier judgment of the Court relating to an infringement proceeding, the Commission may propose that financial penalties be imposed on the State concerned. Though is now being given to how this new instrument should be implemented in practice. It must be said that, at present, there are often long delays before Court judgments are implemented (see Annex V). However, the Commission's tougher legal powers must not undermine its pursuit of cooperation and dialogue with national government departments, as this method very often leads to cases being settled at an early stage of proceedings. The Commission therefore intends to encourage the holding of 'package meetings` and, in view of the success of the meetings on directives, to increase their frequency and extend them to other Member States, according to specific needs. It also intends to lay greater emphasis, in its contacts with national authorities, on the quality of national implementing measures, i.e. compliance with the requirements of directives. This is an aspect which is sometimes neglected, especially in certain areas of the internal market where all the implementing measures have been adopted but have not yet produced their full effect as they fail to meet all the objectives of the relevant directive. Through this combination of tougher infringement procedures and sustained administrative cooperation, the Commission will continue to play an effective role as guardian of the Treaties. Structure of the Eleventh Report As far as possible, the Commission has tried to incorporate suggested improvements, in particular those put forward in European Parliament resolutions. However, as the report is intended to present an overall picture, it must remain concise and balanced in its treatment of the different fields. The report comprises: - a sector-by-sector analysis; - statistical tables, updated to 31 December 1993, on suspected infringements (Annex I) and established infringements (Annex II); - a list of infringements of the Treaties, regulations and decisions examined in 1993 (Annex III); - a report on the application by the Member States of directives in force at 31 December 1993 and the relevant infringement proceedings (Annex IV); - a list of Court judgments which have not yet been implemented (Annex V); - a summary of the application of Community law by the national courts (Annex VI). B. AN AREA WITHOUT INTERNAL FRONTIERS 1. INTRODUCTION Over the last few years Community policy has been profoundly marked by the completion of the internal market. This prime objective was originally set out in the Treaty of Rome and later defined in detail in Article 7a of the EC Treaty, which provided for the establishment by 31 December 1992 of an area without internal frontiers in which the four fundamental freedoms are guaranteed. Success in achieving this goal hinges mainly on the application of the relevant Community legislation. In 1985 the Commission adopted a legislative programme - the White Paper - which set out a series of measures covering different sectors of activity that were to form the basis of the internal market. Since then the programme has been the main driving force behind the single market project and served as a yardstick for measuring the progress achieved. Since the adoption of the legislative programme, the Commission has systematically and consistently monitored the incorporation into national law of the Community measures concerned. Despite practical problems in the Member States, the rate of transposal has been generally satisfactory. At the end of 1993 the Council had adopted nearly all of the 282 instruments set out in the programme. In all 263 of the measures adopted are already in force, of which only 222 require national implementing measures. The Member States have so far adopted 86 % of the national laws necessary to transpose the relevant Community instruments. Besides keeping a check on the number of national implementing measures, the Commission also monitors the quality of these measures, a decisive factor in the effective implementation of Community law. The acid test is whether the national legislation conforms to Community law. The Commission adopts a broad approach here, not only comparing texts but also taking into account the different national legal systems. As well as monitoring the application of Community law, the Commission must also provide a framework for managing its implementation and establish appropriate structures for achieving the targets that have been laid down. With this in mind it pursues various initiatives in cooperation with the Member States aimed at ensuring that Community legislation is implemented effectively and applied with consistency. The Commission pursues a policy of openness regarding the state of play in the legislative process and the implementation of Community legislation, publishing periodic reports on the application of Community law and entering all the available information on national implementing measures in databases. By undertaking the task of consolidating the body of Community legislation, the Commission hopes to render it more concise and transparent. This task is vital as Community law is constantly evolving. The Commission is also keen to step up its cooperation with the Member States. It intends to give top priority to cooperation with national government departments by establishing an 'administrative partnership`. Initiatives already taken in this field include: - Bilateral meetings with national government departments to discuss progress in the transposal of Community instruments and compliance with Article 30 of the Treaty of Rome, which prohibits all measures that may hinder intra-Community trade. In 1993 it held meetings of this kind with the Italian, spanish, Greek, French and German authorities. In general these occasions provide an opportunity to shed more light on specific problems and to clear the log-jam in the internal transposal process. They also help to avoid misunderstandings with the national departments concerned, in particular where the Commission has not been notified of implementing measures. As a result the Commission is often able to avoid or terminate infringement proceedings. - The establishment of certain specialized bodies. Now that the deadline for completion of the internal market has expired and the Community has made remarkable progress on all fronts, the Commission now faces the task of managing the new frontier-free area, while allowing for national diversities. It must see to it that the internal market actually works in practice. A special committee has been set up to deal with this new situation: the Advisory Committee for coordination in the Internal Market field (1) has been given the task of solving any problems that arise from the operation of the internal market and, where appropriate, the abolition of controls at internal borders. The Committee is also called on to help intensify and consolidate administrative cooperation to ensure that the single market functions smoothly. - The development of a programme of exchanges of national officials responsible for implementing legislation on the internal market. This programme, baptized the Karolus programme by a Commission decision (2), has its roots in the original White Paper on the internal market. It has been operational since the beginning of the year and is open to all civil servants in national and local government departments who are involved in implementing Community law. The areas covered by these exchanges are defined according to their specific characteristics and real needs. These initiatives have now taken on a new dimension, as part of the operation of the internal market, under the strategic programme on the internal market adopted in December. The programme draws its inspiration from a report by the study group chaired by Mr Peter Sutherland, which was asked to present the Commission with guidelines for action on the operation of the internal market after 1992. The strategic programme investigates ways of securing the credibility of the internal market and maximizing its economic benefits. 2. SITUATION SECTOR BY SECTOR 2.1. Removal of physical barriers 2.1.1. Customs Union 2.1.1.1. Commission action Two reasoned opinions were sent to Germany: in the first the German authorities were asked to comply with the minimum prices imposed by the international arrangement on the milk sector when issuing authorizations for inward processing and bringing products under this customs procedure; the second was aimed at the abolition of a provision in German customs law authorizing the customs authorities to conclude agreements with declarants on the simplification of formalities, in particular the determination of customs value, as Community legislation does not provide for such agreements. The second case has since been terminated as the rule in question has been abolished. Two reasoned opinions were sent to Portugal. The first concerned the unjustified refusal to grant authorization for inward processing to a oil-cake processing firm; the infringement proceedings have since been terminated, as the Protuguese authorities eventually agreed to grant authorization. The other reasoned opinion concerned the duty-free import of material which was not specifically for military purposes, in breach of Community legislation. Portugal is the ninth Member State to be sent a reasoned opinion for this kind of infringement. A reasoned opinion was also sent to Italy asking the authorities to amend a provision in Italian customs law which allows the recovery of customs duties at a flat rate when goods transported unter the national transit procedure are not presented on arrival. This rule is contrary to Community customs law and fails to guarantee that the Community's own resources ar properly collected and made available. >TABLE> 2.1.2. Free movement of agricultural products Establishing freedom of movement for agricultural products in a single market is one of the principles underpinning the operation of the common agricultural policy (CAP) and its common market organizations. The Court of Justice has repeatedly pointed out that Articles 30 and 34 of the EEC Treaty are still an integral part of the common market organizations, even though there has no longer been any need to write them into the Regulations since 1 January 1970. In 1993 the Commission once again kept a constant watch to make sure that barriers to trade in agricultural products in the Community were removed. It paid particular attention to controls at internal frontiers. 2.1.2.1. Import controls Before the abolition of internal borders, import controls were the most numerous and the most varied of all the obstacles to trade. Considerable progress has been made in many infringement proceedings as a result of the entry into force of legislation harmonizing veterinary and plant health rules for the completion of the internal market. These proceedings may be classified as follows: (a) Double checks and systematic checks such as those applied in Italy - to ensure compliance with national rules on the presence of histamine - to salted fish imported from Greece with a health certificate issued by the Member State of dispatch. This problem was solved by the entry into force of Directive 91/493/EEC laying down the health conditions for the production and the placing on the market of fishery products. In the context of this Directive it is expected that Italy will comply with the judgment of the Court of Justice in Case C-228/91, which condemned the systematic inspections carried out on consignments of fish imported from other Member States and Norway (3). (b) The requirement for prior import licences or permits applied in Spain to live sheep imported from other Member States, in Ireland to bovine and porcine semen to be used for artificial insemination purposes, and in Italy to any vegetable matter sensitive to fire blight. Infringement proceedings against Spain were terminated after it abolished individual permits for the import of live sheep. In its judgment of 17 November 1992 in Case C-235/91 (4), the Court of Justice found that in making the import of semen from domestic bovine and porcine animals subject to a licence and various other conditions, Ireland had failed to fulfil its obligations under Article 30 of the EC Treaty, Regulations (EEC) Nos 805/68 and 827/68, Directive 77/504/EEC and Decision 88/124/EEC. Ireland has since notified the Commission of draft measures to be adopted to comply with the Court's decision and incorporate the relevant directives into national law. As part of its efforts to implement Directive 77/93/EEC laying down new common rules in the plant health sector, the Italian authorities have abolished the requirement for prior import licences for vegetable matter sensitive to fire blight during the period in which such imports are not prohibited. However, the Commission has not withdrawn the case before the Court of Justice (Case C-249/92), as it would like to obtain a general ruling on this matter. (c) Over-complicated checking arrangements such as the ban placed by Italy on imports of grapefruit from other Member States through its land border posts. This practice was condemned by the Court of Justice, which found that Italy was failing to fulfil its obligations under Article 30 of the EC Treaty and Council Directive 77/93/EEC on protective measures against the introduction into the Member States of harmful organisms of plants or plant products (5). In this particular case, the ban on the entry of grapefruit through land border posts has now been lifted under the national legislation adopted to implement Directive 91/683/EEC, which establishes in the Community an area free from internal plant health restrictions. Infringement proceedings have therefore been terminated. 2.1.2.2. Import bans Import bans have been lifted as the Member States gradually implement harmonization directives. For example, the ban on the import of frozen minced meat from France into Spain has now been removed under the national rules adopted to implement Directive 88/657/EEC, which lays down the requirements for the production of, and trade in, minced meat, meat in pieces of less than 100 grams and meat preparations. However, in two cases the procedures laid down by the directives have not been followed and imports have been seriously restricted. The Commission's firm line in pursuing these cases reflects its determination to see that the operating rules of the internal market are enforced. Both cases concern unilateral measures adopted by the Portuguese authorities banning imports of live pigs and pigmeat, without taking into account the safeguard mechanisms for combating the spread of serious diseases laid down in Directives 90/425/EEC and 89/662/EEC. The first import ban was applied from 9 March 1991 to 1993 as a protection measure against a new pig disease. It was condemned by the Court of Justice (6). However, following an outbreak of African swine fever in November 1993, the Portuguese authorities again adopted unilateral import restrictions, without applying the prescribed safeguard mechanisms, by invoking Article 36 of the EC Treaty. 2.1.2.3. New policies While a number of disputes have been solved by the entry into force of directives, the development of new policies means that proceedings from previous years must now be looked at in a new light. This is the case for example in the implementation of the policy on the quality of agricultural products. Since the entry into force of Regulation (EEC) No 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, problems relating to designations of origin - for example the question of reserving certain denominations for cheeses produced exclusively in specific regions of Greece - must now be examined solely in the context of that Regulation. Accordingly, the Commission has terminated the case relating to cheeses which will now be considered under the procedure laid down in Article 17 of Regulation (EEC) No 2081/92. 2.2. Removal of technical barriers 2.2.1. Free movement of goods 2.2.1.1. Articles 30 et seq. of the EC Treaty and application of the principle of mutual recognition Article 30 of the EC Treaty prohibits quantitative restrictions on imports and all other measures having equivalent effect on trade between Member States, while a similar ban for exports is laid down in Article 34. However, under Article 36 these two provisions do not apply to national rules designed to safeguard certain specified general interests such as public policy, public security and the protection of the health and life of humans. Meanwhile, rules that are applied without distinction in law and in fact to national and imported products are contrary to Article 30 if they are not necessary to satisfy mandatory requirements such as the defence of consumers or the protection of the environment. Even where such rules are justifiable, they must be proportionate to the objective being pursued, i.e. they must cause less disruption to intra-Community trade than other possible ways of achieving the desired objective. In its judgment of 24 November 1993 in 'Keck and Mithouard`, the Court of Justice reaffirmed its view that rules laying down requirements to be met by goods such as those relating to their weight, presentation, labelling, size, composition, packaging, form and designation are contrary to Article 30, even if they are applied without distinction to all products, unless their application could be justified by an objective of public interest (7). However, it also held that the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements was not such as to hinder directly or indirectly, acutally or potentially, trade between Member States within the meaning of the 'Dassonville` judgment (8), provided that those provisions applied to all affected traders operating within the national territory and provided that they affected in the same manner, in law and in fact, the marketing of domestic products and those from other Member States. The Court reiterated this principle in the 'Hünermund` judgment of 15 December 1993 (9). It is still too early to say what the practical implications of these decisions will be. Barriers to trade are removed in practice by applying the principle of mutual recognition, as developed and defined by the Court of Justice in its interpretation of Article 30, which is commonly referred to by the name of the judgment which first laid down this novel principle - 'Cassis de Dijon` (10). According to this principle, any product lawfully produced or marketed in one Member State of the Community must enjoy access to all other Member States except where there are legitimate reasons - the 'mandatory requirements` referred to above. If each Member State accepts products which comply with other Member States' rules, standards or technical processes when these ensure a level of protection at least equivalent to that guaranteed by their own legislation, goods may circulate freely with due respect for the level of protection desired by each country on its own territory, pending harmonization by the Community in the field concerned. Acting on the basis of the Court's judgments, the Commission examines hundreds of complaints and cases detected on its initiative and commences infringement proceedings where appropriate. The Commission's departments strive to resolve these disputes quickly and amicably. To this end they hold regular 'package meetings` with national authorities to discuss a series of cases concerning the host State. In 1993 meetings of this kind were held with France, Italy, Spain, Greece and Germany, to the mutual satisfaction of both parties. This partnership also has an instructive side, as it encourages the various national authorities to take into account the fundamental principles of Community law, such as the free movement of goods, when drawing up rules. In practice this approach, which is based on cooperation and the avoidance of conflict, involves close scrutiny of draft technical rules notified by the Member States under the notification procedure established by Directive 83/189/EEC. At the end of this process the national authorities insert a mutual recognition clause in the final text. It is worth noting that a growing number of the rules notified by the Member States already contain such a clause. Pending formal amendment of national legislation that contravenes Article 30, the Member States often adopt temporary measures, such as circulars published in their official national gazette or public notices in the information bulletins of the authorities responsible for enforcing the measures in question, informing traders that the disputed national rules should be interpreted in such a way as to be compatible with the requirements of the principle of the free movement of goods and will be applied accordingly by the authorities. For example, Italy adopted a circular notifying traders that the requirement for a document accompanying goods (the 'bolla di accompagnamento dei beni viagganti`) applied only to internal transport and not to imports from Community countries. The Member States also publish notices in their official gazettes or in administrative bulletins to add to or amend national legislation to comply with Community law. For example, the French authorities published a notice to importers indicating that, under an amendment to the decree regulating steam-pressure appliances with detachable caps to recognize the equivalence of safety levels under French rules and under the technical standards or specifications of other Member States, the recognition procedure only needs to be applied once where the machines are of the same type (11). Sometimes the process of making national law comply with Community law requires action not only from the legislative and executive powers but also from organizations or associations to which the government has transferred its prerogatives in a particular field. For example the Commission was able to terminate proceedings against Germany concerning technical specifications applicable to certain types of machinery for the prevention of accidents ('Durchführungsanweisungen zu Unfallverhütungsvorschriften`) after a mutual recognition clause was inserted in the law on the safety of these products ('Gerätesicherheitsgesetz`) and a similar clause was published in the official bulletins of the various professional organizations ('Schriften der Berufsgenossenschaften`) which, under German law, are responsible for laying down technical specifications. Germany has amended its legislation on foodstuffs, introducing a provision which authorizes the import and marketing of these products when they are lawfully manufactured and/or marketed in another Member State. This provision applies even where the rules of the importing country relating to such foodstuffs differ from German rules, although the consumer must be given appropriate information on the differences insofar as this is necessary for his or her protection (12). According to the case law of the Court on exclusive rights and sales monopolies, the Commission may check the compatibility with Article 30 of national laws which reserve for certain vendors or categories of vendors the right to sell a specific product, and laws granting exclusive rights for the marketing of a particular product to a public undertaking or a private undertaking exercising its activities under State supervision (13). In such cases the monopoly may constitute a measure having equivalent effect to quantitative restrictions and is prohibited under Article 30, as it restricts sales and is therefore likely to affect the scope for marketing imported products. However, the existence of such a monopoly may be justified on one of the grounds laid down in Article 36 of the Treaty or, since in principle it is applied without distinction to national and imported products, by one of the mandatory requirements laid down by the Court in 'Cassis de Dijon`. Finally, it should be noted that the whole question may have to be reviewed in the light of lessons to be learned from the 'Keck and Mithouard` judgment of 24 November 1993 (14). With the completion of the internal market, all internal border controls in the Community were to have been abolished by 1 January 1993 in accordance with Article 7a of the EC Treaty, thereby facilitating the free movement of goods. All the Member States have have announced the abolition of border controls on goods and it must be said that there have hardly been any complaints in this field. 2.2.1.2. The preventive rules of Directive 83/189/EEC The notification procedure of Directive 83/189/EEC, as amended by Directive 88/182/EEC, is an essential tool for preventing barriers to trade from being raised and for sharing information. Member States are required to notify drafts of new technical regulations for vetting. The procedure does not cover technical regulations issued to implement directives. In 1993 the Commission received 385 drafts of national technical regulations for vetting. This represents an increase of 6 % from 1992. Of these 385 cases, 85 required a detailed opinion (15) with a view to securing compliance with the principle of mutual recognition and debarring the establishment of new barriers to trade. For their part, the Member States issued 58 opinions (16). In three cases (17) the Commission had to ask the Member State for a one-year postponement of the measure since harmonization directives were in the pipeline. On 27 November 1992 the Commission adopted a proposal to amend Directive 83/189/EEC with the aim of clarifying and extending the concept of technical rules and the procedural rules laid down for the Member States (18). Parliament delivered an opinion on this proposal at first reading on 24 May 1993 and the Commission put forward an amended proposal on 6 October 1993 (19). The Council adopted a common position on 12 November 1993. Since 1989 the Commission has enforced the notification system by systematically combing through the official publications of all the Member States. Whenever it discovers a breach of Directive 83/189/EEC, it commences infringement proceedings under Article 169 of the EEC Treaty. On 2 August 1993 the Court condemned for the first time an infringement of Directive 83/189/EEC, establishing clearly the binding nature of Articles 8 and 9 of the Directive, which lay down respectively the obligation to give prior notification of national technical rules and to postpone their adoption for a certain period (20). 2.2.1.3. Progress in implementing directives on the free movement of goods (a) Foodstuffs In 1993 the Commission examined 81 infringement cases, of which 75 concerned failure to notify. In 47 of these cases directives were incorporated into national law during the year and many proceedings were terminated. In all, the Member States were sent 48 Article 169 letters and 10 reasoned opinions for failure to notify national implementing measures by the prescribed deadlines. The other six infringement cases concerned directives which had been implemented but not properly applied. One of these cases was terminated in 1993. >TABLE> (b) Pharmaceuticals In the course of the year 109 infringement cases were examined, of which all but one concerned failure to notify national implementing measures. Article 169 letters were sent out in these 108 cases. Many of these proceedings have since been terminated after Member States notified the Commission of national implementing measures. In the remaining cases most of the Member States concerned have sent the Commission draft measures or indicated the progress made in transposal. It should be borne in mind that Member States were given an unusually tight deadline - around twelve months - for the incorporation into national law of relatively complicated technical texts. The information received by the Commission suggests that the rate of transposal should improve rapidly in the months ahead. >TABLE> (c) Chemiclas In 1993 the Commission examined 87 infringement cases for failure to notify national implementing measures. In 31 of these cases the Member States concerned transposed the relevant directives during the year after receiving an Article 169 letter or a reasoned opinion. As regards the remaining 56 cases, the Commission sent 11 reasoned opinions and 42 Article 169 letters and closed one case. The delay in transposal is sometimes caused by the problem of overlapping jurisdiction between different ministries and in other cases by the complexity of the legal instruments concerned. >TABLE> (d) Motor vehicles, tractors, motorcycles In general the progress made in transposing directives in this field is very satisfactory. The overall rate of transposal of all the implementing directives (including basic amending directives) is 98.5 %. Given the technical detail of the directives on motor vehicles, many Member States routinely refer in their national gazettes to the text published in the Official Journal. This practice facilitates and speeds up both the transposal process and the Commission's scrutiny to ensure conformity with Community law. Delays in transposal are more frequent in the other Member States, where a specific national law has to be adopted, as this involves more complicated administrative procedures. Even so, such delays rarely exceed a few months. In 1993 the Commission examined 61 cases for failure to notify, of which 52 were closed during the year after notification of national implementing measures. Two infringement proceedings were commenced in the course of the year, both of which have since been terminated. >TABLE> (e) Construction products Ten Member States have so far incorporated Directive 89/106/EEC on construction products into their national law. The remaining two, Belgium and Greece, have notified draft measures which are already at an advanced stage and there is a reasonable chance that the legislation in question will be adopted during the first half of 1994. (f) Mechanical engineering, personal protective equipment, measuring equipment, prepackaging, electronics and medical equipment A total of 86 directives are involved here, all of which are due for transposal. There was a sharp drop over the year in the number of cases of late transposal. At the end of 1993 the number of cases where directives had still not been transposed stood at 23, compared with 56 at the end of 1992. This reduction is due to a combination of factors: - most of the directives were due for transposal some time ago and have already entered into force, - few directives fell due for transposal in 1993; - the Member States have for the most part made up their delays in transposal. Nevertheless, the Commission did refer one case to the Court of Justice concerning Italy's failure to incorporate the 'lifts` Directive into national law. The Commission is now concentrating its efforts on assessing the quality of national implementing measures, in particular those relating to directives adopted under the 'new approach`, for which incorporation into national law has to be more conceptual than textual. The Commission has concluded from its study of national measures that, although the general principles of the 'new approach` have been observed, problems are likely to arise concerning the compatibility of national laws with the directives. There were few complaints or infringement proceedings in 1993 regarding the incorrect application of directives, notably because of the preventive effect of the procedure laid down in Directive 83/189/EEC (and the mutual exchange of information between the Commission, the Member States and professional organizations). >TABLE> 2.2.2. The market for services 2.2.2.1. Audiovisual media Directive 89/552/EEC (television without frontiers), in force since 3 October 1991, aims to secure free movement of television programmes and to encourage the production and distribution of European works so as to create a common broadcasting area. In 1992 infringement proceedings were brought against three member States (Denmark, Greece and Spain) for failure to notify national implementing measures; two of these cases were subsequently closed (against Greece in 1992 and against Denmark in 1993). Spain was sent a reasoned opinion in 1992. After scrutinizing the national implementing measures notified by the Member States, the Commission sent a reasoned opinion to the United Kingdom in 1993 for failure to comply with the Directive. It is expected that reasoned opinions will be sent to other Member States (in particular Belgium and France) in 1994. The Commission has commenced proceedings against Belgium for infringement of Directive 89/552/EEC and Article 59 of the EC Treaty by restricting the freedom to receive television broadcasts from other Member States in breach of the principle laid down in Article 2 of the Directive. This case has now been merged with the infringement proceedings concerning the failure of Belgian legislation to comply with the 'television without frontiers` Directive. 2.2.2.2. Intellectual and industrial property (a) Commission action Denmark, Greece, Spain, France and Italy have notified measures implementing Directive 89/104 on trade marks. Infringement proceedings have been commenced against the other Member States, where work on transposal is under way. Directive 91/250/EEC on the legal protection of computer programs has been in force since 1 January 1993. Only three Member States notified implementing measures by the prescribed deadline - Denmark, Italy and the United Kingdom - and the Commission sent Article 169 letters to the other nine Member States. In 1993 proceedings against Germany, Greece and Ireland were terminated after they notified the Commission of the requisite measures, while Spain also adopted implementing measures in the course of the year. Meanwhile, legislation is on the way in France, where positive developments are expected in 1994. Finally, all the Member States have notified implementing measures in respect of Directive 87/54/EEC on the legal protection of semiconductor products. The Commission is presently scrutinizing the texts sent by the Greek authorities to ensure that they comply with the Directive. >TABLE> 2.2.2.3. Telecommunikations (a) Commission action The Commission continued to scrutinize the national measures notified by the Member States for implementing the Directives which came into force last year. It also continued to monitor the application and implementation of the other legislative instruments in this sector, which were adopted as part of the internal market programme under the Single Act and under the guidelines set out in the 'Green Paper on the development of the common market for telecommunications services and equipment` (21). Most of the Member States have notified national measures to implement the three Directives on frequencies, i.e. Directive 87/372/EEC on the frequency bands to be reserved for the coordinated introduction of public pan-European cellular digital land-based mobile communications in the Community (GSM) (22), Directive 90/544/EEC on the frequency bands designated for the coordinated introduction of pan-European land-based public radio paging (Ermes) (23) and Directive 91/287/EEC on the frequency band to be designated for the coordinated introduction of digital European cordless telecommunications in the Community (DECT) (24). The Commission has yet to be notified of national implementing measures by Italy in respect of Directive 91/287/EEC and by Ireland in respect of Directives 90/544/EEC and 91/287/EEC, but both countries are in the process of drafting the relevant legislation. Meanwhile, the Commission is completing its scrutiny of the measures which have been notified to ensure that they comply with the Directives. In most cases the measures in question are satisfactory (those notified by Belgium, Denmark, Germany, Spain, France, Luxembourg, the Netherlands and the United Kingdom). Turning to open network provision, all the Member States have notified national implementing measures for the framework Directive 90/387/EEC on the establishment of the internal market in telecommunications services through the implementation of open network provision (25). After examining the texts concerned, the Commission found that they satisfied the requirements of Community law. However, the Commission is monitoring closely legislative developments in Greece, in cooperation with the Greek authorities. Work has just begun on incorporating Council Directive 92/44/EEC on the application of open network provision to leased lines, which is due to be implemented in stages (26). All the Member States except Greece have sent the Commission the information required under the provisions which entered into force on 1 January 1993 (Article 3 (2) on the publication of the technical information required by the Directive and Article 11 on notification of the name of the national regulatory authority). However, most of the Directive's provisions entered into force on 5 June 1993 and only six Member States (Belgium, France, Germany, United Kingdom, Denmark and the Netherlands) have so far notified the Commission of national implementing measures. The Commission is at present examining these measures to ensure that they comply with the Directive. The Commission is examining the implementation of the Decisions on telephone numbers. Five Member States (Denmark, Germany, Belgium, Luxembourg and United Kingdom) have adopted measures to implement Decision 91/396/EEC on the introduction of a single European emergency call number (27), while four others (the Netherlands, France, Ireland and Italy) have asked the Commission for a derogation under Article 3 (2) of the Decision. The Commission has granted a derogation to the Netherlands and is presently considering the other three requests for the deadline for implementation to be extended. The Commission is also surveying the progress made in implementing Decision 92/264/EEC on the introduction of a standard international access code in the Community (28). Seven Member States (Belgium, Germany, Greece, Luxembourg, Ireland, Italy and Portugal) have already transposed the Decision, while the Commission has granted an extension of the deadline to three others (France, Denmark and the United Kingdom) in accordance with Article 3 (2). Council Directive 91/263/EEC concerns the approximation of the laws of the Member States on telecommunications terminal equipment, including mutual recognition of their conformity (29). Member States were required to adopt the necessary measures for its transposal by 6 November 1992. Infringement proceedings were therefore commenced against all Member States which failed to notify the Commission of national implementing measures by that date. At present four Member States (Belgium, Greece, Ireland and Luxembourg) have still failed to fulfil this obligation. Meanwhile, the Commission has been scrutinizing the national rules that have been notified and has concluded that the measures adopted by Denmark, France, Italy, Portugal and the United Kingdom cover all of the directive. The practical measures adopted by Germany allow the provisions of the Directive to take effect, but do not amount to satisfactory transposal; further measures are expected soon. >TABLE> 2.2.3. Free movement of capital Under Directive 88/361/EEC of 24 June 1988 the transitional period for complete liberalization of capital was due to end on 31 December 1992. Ireland, Spain and Portugal removed the remaining restrictions by the prescribed deadline so that capital has circulated freely in the Community since 1 January 1993. The only, temporary, exception to this general liberalization concerns Greece, which was authorized by the Council to keep certain restrictions on short-term capital until 30 June 1994. Ireland, Spain and Portugal have already incorporated the provisions of the Directive into national law, while Greece has published a Presidential Decree specifying the transactions for which restrictions may be applied in accordance with Directive 92/122/EEC (30). During the year the Commission's departments continued to monitor the application of Community law on the movement of capital. In several cases national regulations and practices were considered incompatible with Community law and action was taken to remedy the situation. A number of cases that arose during the year or dated from previous years were resolved, as the Member States concerned complied with Community rules without the need for the Commission to go any further than sending an Article 169 letter. It is worth noting that, despite the currency crisis in the European Monetary System during this period, no Member State made use of the provisions in the Directive or the Treaty allowing for temporary protective measures in the event of major short-term capital movements putting at risk their exchange rate and monetary policies. 2.2.4. Freedom to provide financial services, direct taxation and company law In 1993 there was a sharp rise in the number of complaints - and in the number of infringement proceedings brought by the Commission - in relation to Article 59 of the EC Treaty. This Article, which the Court of Justice has held to be directly applicable, confers on consumers and traders who are legally established in their Member State or origin the basic and general right to provide and receive services across borders. Furthermore, the provisions of secondary Community legislation, i.e. directives governing specific services or particular problem areas, must at all events be interpreted and applied in such a way that they comply with and are consistent with the rules of the Treaty. As part of its efforts to make Community rules more transparent, the commission published an interpretative communication in 1993 on the free movement of services across frontiers with the aim of informing ordinary Europeans and national authorities about the case law of the Court of Justice in this field (31). The main barriers erected by the national authorities may be summed up as follows: - laws and regulations and/or administrative practices which discriminate on the basis of nationality; - measures which are applied without distinction but prove to be unduly or excessively restrictive; - the assimilation of rules applied to the provision of services to those relating to establishment. The 'establishment requirement` for the provision of services is at odds with the very idea of an internal market; its effect is to increase the burden on industry and discourage the provision of services across borders, as firms from other Member States are subject to different sets of national rules at the same tine, i.e. those of the Member State of origin and of the Member States where the services are performed. By way of illustration one can cite various 'atypical` areas which have not yet been harmonized and where community nationals have asked for Articles 59 to 66 to be observed and directly applied. The activities in question include, among others, car hire, the selling of time-shares, participation in public service contracts (below the threshold for the application of the relevant Community directives), tax consultancy, estate agencies, various commercial activities, cleaning and flooring services, aerial photography, services in ports and airports, road traffic consultancy, the hotel industry, temporary work, the transport of valuable goods and private employment agencies. 2.2.4.1. Financial services Now that the main Community measures for the completion of the internal market in financial services have been introduced, the Commission is monitoring the application of nearly all the measures planned in this field. Since the entry into force on 1 January 1993 of the second banking Directive (89/646), introducing a 'European passport` for banks established in a Member State, the Commission has stepped up its cooperation with the national supervisory authorities with a view to ensuring consistent and uniform application of the provisions contained in this main Directive and its 'satellites` - Directives 89/299 on own funds, 89/647 on a solvency ratio and 92/30 on supervision on a consolidated basis. To this end several meetings of the ad hoc working party on the interpretation and application of directives was held during 1993. The working party will be convened again soon. No comparable working parties have yet been established for insurance and marketable securities as the general introduction of a European 'passport` in these fields will not take place until 1994 and 1995 respectively. Turning to specific problems relating to application, Italy has failed to comply with the reasoned opinion sent by the Commission concerning Italian Law No 1/91 on financial intermediaries (32). The legislation in question has still not been amended as promised by the Italian authorities. On 14 July 1993 the Court gave judgment on the question of whether the activity performed by an 'approved commissioner`, who is responsible for carrying out certain inspections under the Belgian law on the monitoring of insurance firms, includes direct and specific participation in the exercise of official authority within the meaning of Article 55 of the EC Treaty, which would allow the Belgian authorities to reserve such a post for its own nationals (33). The Court held that the auxiliary and preparatory role delegated to the commissioner vis-à-vis the 'Office de Contrôle des Assurances` (OCA) cannot be considered as direct and specific participation since the final decision to suspend a decision by an insurance firm which would infringe the penal code rests with the OCA itself. As regards the commissioner's obligation to report on any infringements and facts which might jeopardize the firm's financial position, the Court noted that other bodies have similar obligations without their being regarded as coming under the exercise of official authority. This applies in particular to financial institutions, which are obliged to inform the authorities of any fact which might indicate money laundering. 2.2.4.2. Direct taxation In a judgment delivered on 28 January 1993, the Court allowed that a German dentist who had obtained his professional training in Germany but was residing in the Netherlands could be tasxed more heavily than another dentist residing in Germany as the matter in question was a purely internal German affair (34). The Court has not yet given judgment on the differences in taxes resulting from a professional activity in a Member State other than that of residence. The fact that non-residents are habitually subject to a heavier tax burden could undermine the free movement of individuals guaranteed by Articles 48 (migrant workers) and 52 (self-employed persons) of the EC Treaty. This question has now been referred to the Court in Case C-279/93 'Schumackers`, both as regards the principle itself and the issue of tax advantages in respect of a spouse. Furthermore, on 21 December 1993 the commission adopted a 'Recommendation on the taxation of certain items of income received by non-residents in a Member State other than that in which they are resident`, in which it urged Member States to provide for appropriate tax arrangements for non-residents, and in particular to grant them the same tax advantages as residents to take into account their family situation (35). The Commission has continued its efforts to eliminate discrimination in tax rules against non-resident firms providing financial services and individuals who exercise their right to freedom of movement, acting on the basis of the Court's judgment of 28 January 1992 against Belgium (36). The Court found that the tax law which limits the deductibility of sickness insurance contributions to Belgian firms is contrary to the free movement of workeres and the freedom to provide services and may be justified only by the need to preserve the cohesion of the applicable tax system. The legislation of other Member States is now likely to be called into question. However, the Commission hopes to reach common agreement on the adjustment of national tax systems to meet the requirements of the freedom to provide services, as laid down in the third Directive on life assurance (92/96/EEC). The Commission has terminated various cases arising from complaints concerning the wealth tax levied in Spain. Even though Spanish legislation discriminates between residents and non-residents in granting the former an allowance that is refused to the latter, the disadvantages arising from this discrimination are, in practice, negligible. Non-residents are compensated by the fact that they are exempt from the obligation to declare their entire wealth, a precondition for receiving the rebate in question. On 13 July 1993 the Court delivered judgment in response to a request for a preliminary ruling in a dispute between the Inland Revenue and the British branch of a German bank (37). Confirming the Commission's view of the scope of Articles 52 and 58 of the EC Treaty, the Court held that these Articles prevent the legislation of a Member State from granting repayment supplement on overpaid tax to companies which are resident for tax purposes in that State while refusing the supplement to companies resident for tax purposes in another Member State. The arbitration convention of 23 July 1990 (90/436/EEC) has still not entered into force, as four Member States (Greece, Ireland, the Netherlands and Portugal) have not yet deposited their instruments of ratification. 2.2.4.3. Company law The Commission has terminated the infringement proceedings brought against Greece - following a complaint from the shareholders of the Greek central bank - for failure to comply with Article 25 of the second company law Directive (77/91/EEC), which lays down that any increase in a firm's capital must be decided upon by the general meeting. The proceedings were commenced after Greece had increased the bank's capital by an administrative measure. Following contacts between the Commission and the Greek Government, Greece has amended the offending legislation with effect from 1994. In the meantime, the Greek authorities have given an undertaking to comply with Article 25, with respect to both banks and firms exercising other activities, and hence to ensure that no legislative or administrative measure is adopted forcing an increase in capital. The Commission is keeping a close eye on further developments. >TABLE> 2.2.5. Public procurement 2.2.5.1. Commission action The Commission continued to scrutinize national measures implementing directives, paying particular attention to the conformity of measures implementing Directives 90/531/EEC (excluded sectors), 92/13/EEC (remedies in the excluded sectors) and 92/50/EEC (services). For the first of these directivs, Greece, Spain and Portugal have been allowed longer periods for implementation than the other Member States (until 1 January 1996 in Spain and 1 January 1998 in Greece and Portugal). It must be acknowledged that most of the Member States have made a great effort to transpose Directive 90/531/EEC fully, without going too far beyond the time appointed for its entry into force. Special administrative arrangements were made in many cases to enable the Directive to come into operation on 1 January 1993 even where the requisite formal provisions were not in place. Nut neither Germany nor Italy notifiede the Commission of national implementing measures, and both accordingly received reasoned opinions. The situation regarding Directives 92/13/EEC and 92/50/EEC is far from satisfactory: very few Member States have notified their national implementing measures and there are no grounds for believing them to be imminent. The Commission has commenced infringement proceedings in the appropriate cases. The Commission has, of course, pursued its scruting of measures relating to earlier, pre-1993 directives (Directives 71/305/EEC - public works - as amended and 88/295/EEC - public supply contracts, also as amended). A case against Germany for incorrect transposal has been referred to the Court of Justice. The Commission's review of the practical application of these directives by awarding authorities in the Member States has been intensified, focusing this year on two points - the conditions for recourse to the expedited restricted procedure and compliance with the time allowed for publication of notices concerning operations whose value exceeds the directive thresholds. The Commission also continued its work of processing complaints and cases detected by its own investigations relating to infringements both of directives and of Treaty articles on public procurement. Since the beginning of 1993 it has had the opportunity to use the procedure of Article 8 of Directive 92/13/EEC, which extends to the formerly excluded sectors the remedies available under Article 3 of Directive 89/665/EEC (review procedures in the event of manifest breaches of basic directives). In many instances the Commission's action enabled cases to be settled in a manner compatible with Community law without formal contentious proceedings being necessary. Examples include the following cases: - modification of contract specifications while the procedure was under way, and inadequate time allowed for tenders. A French awarding authority changed its technical specifications in the course of a negotiating procedure launched after a tendering procedure had been declared to have yielded no result, but did not allow all the tenderers enough time to modify their tenders accordingly. Following Commission intervention, the specifications were reviewed and the procedure was reopened, all the earlier tenderers being invited to bid; - failure to publish a notice of invitation to tender. An Italian awarding authority rectified the omission and notified the Commission of a draft notice, which was then checked before being sent to the Official Journal of the European Communities. But there were cases where the infringement was not rectified at this preliminary stage, so that the Commission was obliged to commence or pursue the contentious procedure. By and large the infringements have been put right or are on the way to a solution. To give two examples: - failure to abide by specified award criteria. Two tenderers in Portugal were excluded from an EAGGF public supply contract on grounds not set out in the notice, and some of the grounds were discriminatory. After being put on notice to comply, the awarding authority agreed to cancel the procedure and issue a new invitation; this time the procedure was found to be in order; - confusion of selection criteria and award criteria in connection with several contracts in France for a surveillance operation. French awarding authorities responded to Commission intervention with measures to rectify matters, and the cases were closed after formal notice had been given; Certain contentious proceedings went to the final stages, and two particularly successful cases can be singled out: - in an action commenced in 1988, the Court of Justice ruled on 2 August that Italy was in breach of its obligations under Directive 71/305/EEC by constructing an avalanche barrier without placing a notice in the Official Journal of the European Communities (38). - in Case C-234/89, a dispute concerning the Storebælt bridge, the Court of Justice gave an important judgment on 22 June concerning negotiations in open and restricted procedures held to be incompatible with the public procurement directives. It held that the underlying principle of the directives is the principle of equal treatment for all tenderers (39). The Commission also pursued its work of reviewing projects and programmes financed by the Structural Funds and other Community financial instruments. >TABLE> 2.3. Removal of tax barriers 2.3.1. New legislation applicable from 1 January 1993 Since the beginning of 1993 the Commission, while showing great understanding for Member States which have difficulties in conceptual or practical terms in transposing the new tax directives, has been reminding some of them of their responsibilities under Community law wherever national implementing measures appear to constitute deliberate violations of them. In the specific area of indirect taxation, and particularly of VAT, where harmonization is nothing new, the extent to which the Member States apply the directives correctly depends very much on earlier situations and the way they conceived the implementation of rules flowing from the 6th Directive and Article 95 of the Treaty. Adaptation to the single market often, in fact, seems to consist of little more than rewriting the rules without changing practice; the quality of the result in Community terms suffers. 2.3.2. Application of Article 95 This year a set of proceedings commenced against Greece for infringement of Article 95 were terminated when VAT legislation was amended to remove differential tax treatment. They concerned seriously discriminatory taxation of imported coffee, excessive tax burdens on imported spirits (chiefly whisky, gin and rum) in comparison with the burden borne by domestic products such as ouzo and liqueurs, and tax on imported silver-plated cutlery at rates designed to protect domestic manufacturers. Following removal of discriminatory measures in response to the judgment given by the Court of Justice on 17 November 1992 (40), the Commission was able to terminate the proceedings commenced on the ground that the full rate of consumption tax was applied to imported cars using traditional technologies (i.e. without anti-pollution devices) whereas cars made in Greece were subject only to the reduced rate. But the proceeding relating to discriminatory taxation of second-hand cars imported from other Member States continues. The Netherlands came into line with the Commission's views on the practice of subjecting home-produced fortified wines to a lower rate of tax than similar wines made in other Member States, notably in Italy and Spain (Sherry); imported products are now taxed at the same rate as domestic products. Likewise Belgium responded to Commission action for the harmonization of excise duties by removing its discriminatory taxation on 'pétillant de raisin` imported from other Member States. Outstanding infringement proceedings against Belgium, Italy and Luxembourg in the matter of beer excise duties (tax treatment of seepage in the manufacturing process) were also terminated as those Member States have now correctly transposed the new Community rules (valid from 1 January 1993) on the structure and rates of excise duties on alcohol and alcoholic beverages. On 2 August the Court of Justice held that France had failed to comply with its obligations under Article 95 by maintaining and operating a scheme of VAT penalties in relation to imports from other Member States that was more severe than in the case of domestic offences. 2.3.3. Application of directives In monitoring the implementation of VAT directives, the Commission commenced proceedings in three new cases - Greece's scheme of taxation on passenger travel, cruises and package tours, and the French and German schemes whereby there was excess flatrate compensation for VAT in agriculture (forestry in particular). But the proceeding against Germany was terminated when it brought its flat-rate compensation rules into line with Directive 77/388/EEC. The proceeding against Germany's VAT rules for travel agencies was terminated when Germany took the requisite measures to comply with the judgment given against it by the Court of Justice on 27 October 1992. On 1 December the Court gave judgment confirming its earlier preliminary ruling to the effect that the Danish employer's contribution was incompatible with Article 33 of the 6th VAT Directive; the contribution has now been abolished. The Commission has been at considerable pains to monitor compliance with the Community rules governing tax-free allowances for travellers. Proceedings continued against Spain for its failure to notify the Commission of measures to give effect to Council Directive 83/182/EEC (tax exemptions on temporary importation of means of transport). And the Court of Justice gave judgment against Greece on 2 August for failure to comply with the directives on tax exemptions on temporary and permanent importation of means of transport. Proceedings against Italy in related matters were terminated when Directives 83/181/EEC and 83/183/EEC were at last transposed into Italian law; two judgments had already been given by the Court of Justice under Article 171 of the Treaty but had not been complied with. The Court gave judgment against Spain on 9 June 1992 for requiring presentation of a special invoice as a condition for tax exemption on exports to other Member States; Spain duly complied and the Commission terminated its proceeding. Regarding the directives on excise duties on manufactured tobacco, judgment was given against Italy on 28 April in an action brought by the Commission for maintenance of legislation that did not meet the requirement of Directive 72/464/EEC that the freedom of manufacturers and importers to determine maximum prices for tobacco imported into Italy be referred to expressly. Italy has since then changed its legislation as required. But no effect has been given to the judgment given against France in Case C-169/87 under Article 171. 2.3.4. Judgments given by the Court of Justice An important part of the Commission's work consists of enforcing compliance with the law stated by the Court of Justice in Article 177 cases. From 1986 to 1991, for instance, Spain did not comply with the rule in 'Schul` concerning double taxation of imported second-hand goods. Talks are in progress with Spain to secure a satisfactory solution. A similar case involving France has been terminated now that the complainant has obtained satisfaction following Commission intervention. The abolition of tax frontiers on 1 January 1993 effectively settled the cases under discussion with several Member States (Greece, Ireland, Italy, Portugal and Spain) who were not in compliance with the rule in 'Ledoux` (judgment given on 6 July 1988) concerning temporary tax exemptions given to residents using a vehicle supplied by their employer based in a neighbouring country. >TABLE> 2.4. Free movement of persons and right of establishment 2.4.1. Ban on discrimination The Commission took Spain to court for maintaining in force its rules discriminating against nationals of other Member States regarding museum admission charges (Case C-45/93). Infringement proceedings are in motion against several Member States for breaches of Regulation (EEC) No 1612/68 on the freedom of movement of workers. Of the five infringement proceedings in motion at the end of 1992 concerning equal access to employment on board ship (against Belgium, France, Greece, Italy and Spain), the two against Greece and Spain were terminated following changes to national legislation. In the case against Belgium, the Court of Justice gave judgment for the Commission. The Commission pursued several proceedings to secure equal access for all Community nationals to social benefits. In a case against Luxembourg (Case C-111/91) the Court of Justice gave judgment on 10 March, holding that the residence requirements imposed as a condition of eligibility for maternity benefits were contrary to Community law (Article 7 of Regulation (EEC) No 1612/68 and Article 18 of Regulation No 1408/71). The case against Belgium, concerning the national legislation withholding finance for university studies from students from other Member States who live in Belgium solely for the purposes of studying there unless they pay the supplementary admission fees, was taken to the Court of Justice (Case C-47/93) when Belgium failed to make the requisite changes to its law. In other cases in this area, the Commission addressed reasoned opinions to Belgium (study grants for a government-sponsored exchange scheme between Belgium, Luxembourg and the United States; and unemployment benefits for young first-time job seekers), Greece (formalities required of Community nationals wishing to teach foreign languages; tax exemptions for imports of cars by handicapped persons) and France (protection against the risk of job losses for expatriate workers). The last of these cases was terminated when the French authorities responded in a satisfactory manner. And a further proceeding against Greece (refusal to allow concessionary rail fares) was also terminated. In cases concerning equal treatment of Community workers in terms of tax advantages, and specifically on discriminatory aspects of national legislation governing the final payment of income tax by non-resident workers, the proceedings brought against Germany and Luxembourg under Regulation (EEC) No 1612/68, as interpreted by the Court of Justice in Case C-175/89 Biehl are continuing. The case against France was terminated. In another case against Germany, relating to discriminatory provisions whereby children and other family members living outside the country are disregarded for purposes of family benefits is still in motion. 2.4.2. Entry and residence 2.4.2.1. Commission action Since 1 January 1993, when the objective of full freedom of movement set by Article 7a of the EC Treaty (formerly Article 8a of the EEC Treaty) was to be attained, the Commission has been receiving complaints from individuals that they have still been required to produce evidence of identity when crossing the Community's internal borders. The Commission, having observed that in point of fact freedom of movement has not been fully attained, has stepped up it efforts to see that there is no further delay in reaching an objective that is so fundamental to Community integration. To that end it has taken a two-stage approach: - initially, while continuing to take political initiatives, it will keep up the pressure on the Member States to translate the progress announced for 1993 into reality; - then it will take stock of the action that has actually been taken and consider the need for further measures, without relaxing the political pressure. When it reaches this second stage, it will decide what action should be taken on the complaints it has received. France, Germany and the United Kingdom have still to transpose Directives 90/366/EEC (right of residence) and 19/365/EEC (right of residence for retired people). Reasoned opinions have been sent. The Member States' obligation to comply with Directive 90/366/EEC (right of residence for students) is unaffected by the judgment of the Court of Justice annulling it, since the Court declared that it should continue to have effect pending adoption of a new directive to replace it (41). But the Commission has not pursued the infringement proceedings against the Member States (Belgium, France, Germany and United Kingdom) that have not transposed it since it did not wish to put a question-mark over the Council's proceedings for enactment of the replacement Directive (93/96/EEC of 29 October 1993). There is still an abundant flow of letters and complaints concerning the issue of visas to nationals of non-member countries who are members of Community nationals' families. Under Community law the Member States are required to issue visas free of charge and to make all facilities available. Despite the Commission's reminders, the consular services of some Member States are still not complying fully but demanding various documents (certificates of employment and resources, information regarding purpose of stay, address during stay, etc.), imposing excessive qualifying periods and charging for visas. >TABLE> 2.4.3. Trade union rights On 4 July 1991 the Court of Justice held that Luxembourg legislation withholding voting rights in trade associations from Community workers was contrary to Community law (42). Luxembourg has changed its legislation accordingly. The Court of Justice has not yet given judgment in the action brought by the Commission against Luxembourg for withholding the right of Community workers to stand for election (Case C-118/92). 2.4.4. Access to employment in the public service On 25 July 1990 the Commission commenced Article 169 infringement proceedings against all the Member States who were in breach of Community law relating to the four priority areas of the public service (public education, civilian research, operational public health services and public bodies managing commercial services) (43). In 1992 it issued a series of reasoned opinions concerning education in Belgium, Germany, Greece, Italy, Luxembourg and Spain, civilian research in Greece, Italy, Luxembourg and Spain, public health services in Belgium, Germany, Greece, Italy, Luxembourg and Spain, and commercial services in Belgium (four cases), France (one case), Greece (four cases), Italy (five cases), Luxembourg (three cases) and Spain (three cases). An additional reasoned opinion was addressed to Italy in respect of access to employment in public bodies. Given the importance and complexity of these cases, the Commission took the exceptional step of allowing four months for action. It is clear at the present stage of proceedings that all the Member States support the Commission's approach. There are no fundamental objections to opening up public service employment to Community nationals but the implementation is a source of varying difficulty in each Member State. Some of the Member States continued making the necessary reforms in 1993: - Belgium: employment in education and public transport; - Spain: employment in maritime transport; - Italy: employment in orchestras in public theatres. Progress in certain Member States, notably Denmark, France and Portugal, was such that fifteen or so cases have been closed. But in some others (Belgium, Germany, Greece, and Italy) the legislative process is long and complex and more time will be needed. In Spain access to public service employment for Community nationals should now improve with the adoption of Law No 17/93 on 23 December 1993. The Commission has also had occasion to issue reasoned opinions regarding access to public-service employment outside the four priority areas, notably in France (welfare assistants in a département), Greece (cellist at the Athens Opera) and Italy (violinist), but the Italian proceeding was withdrawn when the legislation was changed. However, Italy received a new reasoned opinion regarding access to university assistant lecturer posts. 2.4.5. Recognition of qualifications The Commission received around forty complaints about restrictions contrary to Articles 52 to 59 of the EC Treaty and to the Directives on the mutual recognition of vocational qualifications. In some cases infringement proceedings were commenced; others were rejected as unfounded. The Court of Justice gave a number of important judgments on freedom of establishment and freedom to provide services. 2.4.5.1. Cases decided by the Court of Justice The Court gave a series of preliminary rulings interpreting Articles 52 to 59 of the EC Treaty and the Directives enacted under Articles 49, 57 and 66. Noteworthy among them were the following cases: - The preliminary ruling in Kraus concerning the use in one Member State of a university degree awarded in another Member State (44). The Court took its judgment in Knoors as a basis for holding that the fundamental freedom of movement would not be attained if Member States could withhold the benefit of Community law from those of their nationals who take advantage of the rights conferred by it to acquire a further degree and then wish to make use of it in their own country. The Court extended the argumentation applying to vocational qualifications to university degrees, proceeding from rights conferred by the Treaty itself. And it held that Articles 48 and 52 are applicable even where the degree is not a required qualification for a particular occupation but simply confers a competitive advantage on the labour market. In the very important judgment the Court went further still, applying the principle of proportionality to Article 52 in much the same way as it applies to free movement of goods (Article 30) and services (Article 59), holding specifically that Articles 48 and 52 preclude all national measures relating to the use made of a university degree acquired in another Member State which, even if they impose no nationality discrimination, might make it more difficult or less attractive for Community nationals, including nationals of the enacting Member State, to exercise the fundamental rights secured by the Treaty. Such measures might, however, be warranted on major grounds of the public interest, provided those grounds were borne out by objective considerations and the measure was in proportion to the objective to be attained. - As for infringements by the Member States of Articles 52 and 59, the case commenced against in 1992 regarding the status of tourist guides in Spain is worth singling out. Following the judgments given in actions brought by the Commission against France, Greece and Italy (45), proceedings were continued against Spain, where the legislation requires tourist guides to hold vocational qualifications acquired and recognized in Spain, even where they accompany closed groups of tourists for an entire journey from another Member State (Case C-375/92). The Advocate-General made his submissions on 15 December. The following are noteworthy among the Article 171 cases for failure to comply with earlier Court of Justice judgments: - The judgment given against Greece for a breach of Articles 48, 52 and 59 of the EEC Treaty in the form of a ban on nationals of other Member States setting up 'Frontistiria` and private music and dance schools, teaching at the pupil's home and from exercising managerial and teaching functions in schools (46). A further judgment was given against Greece on 30 January 1992 for failure to comply with that judgment (47). But despite the two judgments, Greece has still not rectified its legislation, a violation which the Commission regards as particularly serious. - The judgments given against France, Greece and Italy in the tourist guides cases on 26 February 1991, with which none of the three Member States has yet complied. - The judgment given in the double-surgery case (Case C-351/90 Commission v Luxembourg) is particularly interesting in that it follows on from two earlier cases, Klopp (48) and Commission v France (49). The Court of Justice held that Luxembourg was in breach of its obligations under Articles 48 and 52 by imposing a single-surgery rule for doctors, dentists and veterinary surgeons, without providing that practitioners established or employed in another Member State could establish a surgery or take up employment in Luxembourg while preserving their surgeries or employment in the other Member State. The rule was incompatible with the Treaty since it imposed restrictions and were liable to discriminate against practitioners established in other Member States or barriers to entry that were not warranted by considerations of general obligations required for the sound exercise of the relevant professions (50). 2.4.5.2. Commission action (a) Infringements of the Treaty A number of infringement proceedings relating to Articles 52 and 59 are now at the reasoned opinion stage. Noteworthy is the proceeding against France for reserving for holders of its own national qualifications the right to exercise the occupation of estate agent. A scheme for scrutinizing qualifications awarded in other countries has now been set up, but the legislation needed to put it into operation has not yet been notified. Meanwhile proceedings have been commenced against Belgium for double taxation of service providers as regards payments for fidelity stamps and social security contributions paid by employers established in other Community countries for their employees. (b) Notification of national measures implementing directives Some Member States have responded to infringement proceedings by taking the requisite measures. Examples are Belgium and Denmark (Directive amending the Directives on qualifications of doctors, nurses, midwives and veterinary surgeons; German unification Directive), Greece (architects) and Ireland (German unification Directive). But others have still to notify the Commission of national implementing measures. Proceedings are continuing against France and Italy for failure to transpose the German unification Directive (90/658/EEC). Greece has notified some measures to give effect to Directive 89/48/EEC (first general system), but as the Directive is transposed only in part the case was referred to the Court of Justice on 27 August (Case C-365/93). A similar case against the Netherlands was referred on 22 September (Case C-405/93). (c) Incorrect transposal and incorrect application of directives Discussions are in progress with several Member States regarding incorrect transposal or incorrect application of directives. Examples are Germany's transposal of Directive 89/48/EEC (first general system) as regards teachers and Spain's incomplete transposal of Directives 68/366/EEC (transitional measures for CITI classes 20 and 21) and 82/249/EEC (hairdressers) and incorrect application of Directive 77/453/EEC (coordination of nurses' training: the number of hours' theoretical and clinical training provided for national legislation is too low for the training to be treated as full-time). A case against Italy (Case C-40/93) was referred to the Court of Justice on 9 February for incorrect application of the dentists directive (dentistry practised by persons describing themselves as dentists contrary to the directive). In some other cases the Member States have done what was necessary to bring their legislation into line with Community law; Greece, for instance, has rectified its rules applicable to veterinary surgeons (removing the ban on double surgeries and the need for a prior licence) and pharmacists (duration of practical training). The Commission has pursued its scrutiny of national legislation that did not appear to transpose the Directives on pharmacists, dentists, doctors and architects correctly. In Italy, Directive 85/432/EEC on pharmacists was incompletely transposed. Belgium's national implementing measures were not in conformity as regards the training scheme, and the German rules maintained the ban on double surgeries. Other cases are in motion concerning access to the dental profession in Germany (requirements not allowed by the directive for entry in the social security where dentists have non-German qualification that are in conformity with the directive) and Spain (admission of dentists with qualifications obtained in Latin American countries at a level way below the directive's requirements). The Commission has referred to the Court of Justice a proceeding against Spain for failure to provide remuneration for doctors in the course of specialist training (Case C-277/93). Moreover, Spanish legislation does not provide a procedure for establishing the equivalence of non-Spanish qualifications for admission to specialist training as required by Directive 75/362/EEC. The Commission is pursuing its proceeding against Spanish legislation implementing the architects directive. It has been notified of draft measures to remove the provision confining the area in which holders of qualifications recognized in Spain to the country of origin, but is still investigating the restriction on the maximum period during which services may be provided in Spain. >TABLE> 2.4.6. Independent commercial agents Proceedings for failure to notify national measures implementing Directive 86/653/EEC relating to independent commercial agents are still in motion against Belgium and Luxembourg; the proceeding against Spain was terminated in 1992. Legislative work in hand in Belgium and Luxembourg looks set to yield the desired result. Ireland and the United Kingdom enjoy a derogation valid until 1 January 1994. 2.5. Consumer policy and product safety 2.5.1. Commission action Progress in transposing and applying consumer legislation continues to improve, reaching a 97 % success rate for the first time. The rate of year-on-year improvement is 3 %. There is cause for concern about the implementation of Directive 90/314/EEC relating to package tours; most Member States have not yet transposed it, though the deadline was the end of 1992. The situation is also unsatisfactory as regards Directive 90/88/EEC (second consumer credit directive), transposed in only a small majority of the Member States. Proceedings are continuing; the defaulting Member States have received reasoned opinions. Ireland and Spain have still to transpose the first consumer credit directive (the deadline was 1 January 1990), this directive is of particular importance to consumers and the Commission regards the failure as very serious. Reasoned opinions were sent to both Member States in 1992. The case against Spain is now before the Court of Justice (Case C-390/93). Belgium and France received reasoned opinions for incorrect transposal of the directive on contracts negotiated away from business premises. The Commission is receiving regular complaints about the application of Directive 84/450/EEC on misleading advertising; problems arise particularly in cross-border business and a detailed study has been launched. The infringement proceedings against Belgium concerning toy safety were terminated when Directive 88/378/EEC was properly transposed. The situation regarding the cosmetics directives also leaves to be desired. France has still not transposed Directive 76/768/EEC although the Court of Justice gave judgment against it in May (51); the case is similar to the Greek case in which the Court gave judgment in March 1992. The Commission is now scrutinizing the amended Greek legislation. Proceedings for incorrect transposal are still in motion against Portugal and Spain; reasoned opinions were sent in 1992. On 10 December Spain enacted measures to give effect to Directives 88/314/EEC (price labelling of non-food products) and 88/315/EEC (foodstuffs). >TABLE> C. COMPETITION 1. COMMISSION ACTION Directive 93/84/EEC of July 1993 amended Directive 80/723/EEC on the transparency of financial relations between the Member States and public undertakings. The 1980 Directive requires the Member States to notify the Commission, where it considers it necessary, of a wide range of information on transactions between governments and public enterprise that might constitute State aid, and in particular: - the setting-off of operating losses; - the provision of capital; - non-refundable grants, or loans on privileged terms; - the granting of financial advantages by forgoing profits or the recovery of sums due; - the forgoing of a normal return on public funds used; - compensation for financial burdens imposed by the public authorities. All the Member States had implemented it. The July 1993 amendment was designed to put the notifications on a regular, systematic footing to allow ex post on major manufacturing enterprises (with a turnover in excess of ECU 250 million). Spain is the only Member State that has sent implementing measures. They are now under scrutiny. The Commission continued working to enforce its telecommunications directives: - Directive 88/301/EEC of 16 May 1988 on competition in the market for telecommunications terminal equipment has been transposed in all the Member States. Belgium has introduced transitional measures to remove restrictions on free trade in telephone receiver sets. But difficulties remain with the physical distinction between public network connections and the terminals whose marketing is to be liberalized by the directive. The problem arises particularly with X-25 terminals and RNIS connection points; - Directive 90/388/EEC of 28 June 1990 on competition in the market for telecommunications services has been transposed by all the Member States except Greece and Italy. The Commission has continued its discussions with other Member States that began in 1992 on the conformity of measures taken to liberalize telephone services supplied to limited categories of users. By Article 3 of the Directive, Member States planning to impose technical specifications for the supply of data transmission services must notify the Commission of their drafts by 30 June 1992. Belgium, France and Spain have done so. The Commission approved the Belgian draft on 5 July 1993. Spain adopted its draft on 28 May without awaiting Commission approval. Its text reflects a number of remarks made by the Commission but could still create difficulties on individual points. Bilateral talks are in progress. On 20 July 1993 Italy presented its draft specifications, but they are of no effect as the services were liberalized by the direct effect of the directive in the Italian legal order from 1 January 1993. The Commission has remained vigilant as to the enforcement of Community law applicable to State monopolies. Early in 1994 it will address a Decision under Article 90 (3) to Denmark on the subject of ferry transport. The Danish Government refused to give access to the Rødby port facilities to a competitor of the state-owned company DSB, and refused to give it a licence to construct a new port. The twin refusals, for which there is no apparent technical justification, have the effect of erecting a barrier to entre by any competitor of DSB to the market for ferry services between Rødby in Denmark and Puttgarden in Germany. The Commission sees this as a breach of Articles 90 (1) and 86 of the EC Treaty and will ask the Danish Government to put an end to it. In response to another Article 90 proceeding, the Italian Government issued Decree-Laws enacting urgent measures in relation to port works to adjust its rules in line with Community law. The proceeding was commenced after the Court of Justice gave its preliminary ruling in Port of Genoa, holding that 'Article 90 (1) of the EEC Treaty, in conjunction with Articles 30, 48 and 86 of the Treaty, precludes rules of a Member State which confer on an undertaking established in that State the exclusive right to organize dock work and require it for that purpose to have recourse to a dock-work company formed exclusively of national workers` (52). But this was not incorporated in national forced to renew the measures notified by eight successive Decree-Laws, most recently in December 1993. Although the offending monopoly has been abolished, the measures adopted by an emergency procedure leave to be desired, notably in relation to the discretionary powers of port authorities in the matter of self-handling, uncertainties as to the technical criteria for authorizations, the priority given to staff of the former monopoly for recruitment purposes and the absence of detailed rules to govern concessions of port areas and terminals. The Commission is accordingly continuing to ask Italy to genuinely and definitively abolish the monopoly. The Commission has scrutinized the Portuguese and Spanish legislation to adjust their oil monopolies to the requirements of Articles 48 and 208 of the Act of Accession, and the infringement proceedings have now been terminated as a result. In 1993 the Commission did not refer to the Court of Justice the infringement proceedings relating to gas and electricity import and export monopolies as some Member States seemed to be envisaging changing their legislation and this held out hope for a settlement of the proceedings. But practical measures have not yet been enacted. >TABLE> D. EMPLOYMENT AND SOCIAL POLICY 1. INTRODUCTION On the basis of Articles 48 to 50, 100, 117 to 127 and 235 of the EC Treaty, the Community drew up several legal instruments with a view to the improvement and progressive harmonization of living and working conditions. The range of such social legislation has been greatly expanded in recent years. Following the adoption of the Community Charter of the Fundamental Social Right