FOURTEENTH ANNUAL REPORT on monitoring the application of Community law - 1996 - (97/C 332/01) COM(97) 299 final

CONTENTS

Page

INTRODUCTION .......... 8

AREA WITHOUT INTERNAL FRONTIERS

1. Introduction .......... 19

2. Situation sector by sector .......... 20

2.1. Removal of physical barriers .......... 20

2.1.1. Customs .......... 20

2.1.1.1. Progress in implementing directives applicable to the customs field .......... 21

2.1.2. Free movement of agricultural products .......... 21

2.2. Removal of technical barriers .......... 21

2.2.1. Free movement of goods .......... 21

2.2.1.1. Articles 30 et seq. of the EC Treaty .......... 21

2.2.1.2. The preventive rules of Directive 83/189/EEC .......... 23

2.2.2. Progress in implementing directives on the free movement of goods .......... 24

2.2.2.1. Foodstuffs .......... 24

2.2.2.2. Progress in implementing directives applicable to foodstuffs .......... 25

2.2.2.3. Pharmaceutical products .......... 25

2.2.2.4. Progress in implementing directives applicable to pharmaceutical products .......... 25

2.2.2.5. Chemicals .......... 26

2.2.2.6. Progress in implementing directives applicable to chemicals .......... 26

2.2.2.7. Motor vehicles, tractors and motorcycles .......... 26

2.2.2.8. Progress in implementing directives applicable to motor vehicles, tractors and motorcycles .......... 26

2.2.2.9. Construction products .......... 27

2.2.2.10. Mechanical engineering, electronics, personal protection equipment, gas equipment, pressure equipment, pre-packaging, measuring equipment, medical devices and pleasure craft .......... 27

2.2.2.11. Progress in implementing directives applicable to mechanical engineering, electronics, personal protection equipment, gas equipment, pressure equipment, pre-packaging, measuring equipment, medical devices and pleasure craft .......... 27

2.2.2.12. Liability for defective products .......... 28

2.2.3. Free movement of persons, right of establishment and voting rights .......... 28

2.2.3.1. Ending discrimination .......... 28

2.2.3.2. Entry and residence .......... 29

2.2.3.3. Progress in implementing directives applicable to right of residence .......... 29

2.2.3.4. Right to vote and stand in elections .......... 30

2.2.3.5. Access to employment in the public service .......... 30

2.2.3.6. Social security of migrant workers .......... 30

2.2.3.7. Recognition of qualifications .......... 31

2.2.3.8. Progress in implementing directives applicable to recognition of qualifications .......... 32

2.2.3.9. Independent commercial agents .......... 32

2.2.4. Freedom to provide services .......... 32

2.2.4.1. Broadcasting .......... 32

2.2.4.2. Telecommunications .......... 33

2.2.4.3. Progress in implementing directives applicable to telecommunications .......... 34

2.2.4.4. Financial services .......... 35

2.2.4.5. Progress in implementing directives applicable to financial services .......... 37

2.2.5. Free movement of capital .......... 37

2.2.6. Company law .......... 38

2.2.6.1. Progress in implementing directives applicable to company law .......... 38

2.2.7. Intellectual and industrial property .......... 38

2.2.7.1. Progress in implementing directives applicable to intellectual and industrial property .......... 40

2.2.8. Public procurement .......... 40

2.2.8.1. Progress in implementing directives applicable to public procurement .......... 41

2.3. Removal of tax barriers .......... 41

2.3.1. Direct taxation .......... 41

2.3.1.1. Progress in implementing directives applicable to direct taxation .......... 43

2.3.2. Indirect taxation .......... 43

2.3.2.1. Progress in implementing directives applicable to indirect taxation .......... 45

CONSUMER PROTECTION AND PRODUCT SAFETY

1. Introduction .......... 46

2. Situation sector by sector .......... 46

2.1. Cosmetics .......... 46

2.2. Textiles .......... 46

2.3. Safety and health .......... 46

2.4. Protection of economic interests .......... 46

2.5. Progress in implementing directives applicable to consumer protection and product safety .......... 47

COMPETITION

1. Introduction .......... 47

2. Situation sector by sector .......... 47

2.1. Public enterprises .......... 47

2.2. Monopolies .......... 49

2.3. Progress in implementing directives applicable to competition .......... 49

EMPLOYMENT AND SOCIAL POLICY

1. Introduction .......... 49

2. Situation sector by sector .......... 49

2.1. Equal treatment of men and women .......... 49

2.2. Working conditions .......... 49

2.3. Health and safety at work .......... 50

2.4. Public health .......... 50

2.5. Progress in implementing directives applicable to employment and social policy .......... 50

AGRICULTURE

1. Introduction .......... 51

2. Situation sector by sector .......... 51

2.1. Markets .......... 51

2.2. Harmonization .......... 52

2.3. Progress in implementing directives applicable to agriculture .......... 54

FISHERIES

1. Introduction .......... 54

2. Situation sector by sector .......... 55

2.1. Markets .......... 55

2.2. Resources .......... 55

2.3. Compatibility with Community law of national legislation on the grant of flag rights to fishing vessels .......... 55

ENVIRONMENT

1. Introduction .......... 55

1.1. General situation .......... 55

1.2. Notification of national implementing measures .......... 56

1.3. Conformity of national implementing measures .......... 56

1.4. Incorrect application of directives .......... 57

1.5. Freedom of access to information .......... 58

1.6. Environmental impact assessment .......... 58

1.7. Action needed .......... 59

2. Situation sector by sector .......... 60

2.1. Air .......... 60

2.2. Chemicals .......... 60

2.3. Water .......... 61

2.4. Noise .......... 62

2.5. Waste .......... 62

2.6. Nature .......... 63

2.7. Radiation protection .......... 64

2.8. Progress in implementing directives applicable to the environment .......... 65

TRANSPORT

1. Introduction .......... 65

2. Situation sector by sector .......... 66

2.1. Road transport .......... 66

2.2. Combined transport .......... 66

2.3. Inland waterways .......... 66

2.4. Rail transport .......... 66

2.5. Sea transport .......... 67

2.6. Air transport .......... 68

2.7. Summertime .......... 68

2.8. Progress in implementing directives applicable to transport .......... 68

ENERGY

1. Introduction .......... 68

2. Situation sector by sector .......... 69

2.1. Transparency of prices .......... 69

2.2. Internal market for electricity and natural gas .......... 69

2.3. Energy efficiency .......... 69

2.4. Oil and gas .......... 69

2.5. Progress in implementing directives applicable to energy .......... 69

STRUCTURAL FUNDS AND COMMUNITY LAW .......... 70

BUDGETARY MATTERS .......... 71

COMMUNITY STAFF .......... 71

STATISTICAL MATTERS .......... 71

ANNEXES

Annex I: Suspected infringements .......... 72

Annex II: Established infringements .......... 79

Annex III: Infringements of treaties and regulations .......... 87

Annex IV: Report on the application of directives .......... 100

Annex V: Judgments of the Court of Justice not yet implemented .......... 193

Annex VI: Application of Community law by national courts .......... 198

INTRODUCTION

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

As Parliament declared in its 1983 resolution, 'the uniform, complete and simultaneous application of Community law in all Member States is a fundamental prerequisite for the existence of a Community governed by the rule of law` (1) That is the measure of the importance of the Commission's function of guardian of the Treaties, conferred on it by Article 155 of the EC Treaty. The Commission has a specific means of giving effect to its responsibility in this respect - the infringement procedure laid down by Article 169 of the Treaty.

1996 was a good year for the application of Article 169, as can be seen from the statistics (fall in number of complaints) and the measures taken by the Commission to improve the operation and effectiveness of the infringement procedure.

The Commission adopted a series of measures to improve its working methods and make the management of procedures quicker, simpler and more transparent. The measures taken by it and applying to all its departments were supported by more specific measures regarding the internal market (communication on the impact and effectiveness of the internal market (2)) and the environment (communication concerning the implementation of Community environment law (3)).

These improvements have already produced an impact on the statistics for the past year, particularly as regards the number of decisions notified to the Member States.

Analysis of the results reveals four major trends:

- the number of decisions serving Article 169 letters or reasoned opinions on Member States is up quite sharply,

- the number of complaints is down by 15 %. This pattern - already observed in the thirteenth report - follows on from a relatively stable period as regards the number of complaints. The thirteenth report offered a number of explanations. The scale of the decline in 1996 is such that the matter must be raised again this year,

- the number of cases terminated remains high,

- there has been sustained activity in the form of package meetings on directives.

The statistics on progress in implementing directives merit special attention. There was a slight improvement in the rate of notification of national implementing measures in 1996.

The Commission is not only endeavouring to improve its working methods. It is also determined to make full use of all the rights conferred on it by the Treaties. For instance, it adopted a memorandum concerning the implementation of the second subparagraph of Article 171 (2) of the EC Treaty (4) and a method of calculating the penalty payments provided for by that Article (5), which it applied in January 1997, the first time the new provisions introduced at Maastricht were applied in practice.

It was also at pains to ease the task of the European Ombudsman, following his first investigation into the Commission's management of infringement proceedings, in strict compliance with the two sides' respective jurisdictions.

This introduction will consider five points in turn:

I. Measures to improve the infringements procedure

II. Statistical trends in 1996

III. Progress in implementing directives in 1996

IV. The implementation of the second subparagraph of Article 171 (2) of the EC Treaty

V. Inital investigations by the European Ombudsman into infringement proceedings

I. MEASURES TO IMPROVE THE INFRINGEMENT PROCEDURE

The object of the infringement procedure laid down by the EC Treaty is to cause Member States to rectify infringement situations before coming to the litigation stage proper. The action in the Court of Justice is preceded by at least two pre-litigation stages (the 'Article 169 letter` and the reasoned opinion), each of which necessitates a Commission decision. This multi-stage procedure obviates the need for a Court action in more than 80 % of cases (6), but it is by definition time-consuming.

While the Commission must seek to have the situation rectified, it cannot do so at any price. It cannot accept excessively long reply periods, or absence of a reply, or the dilatory replies sometimes received from Member States, and must do what it can to reduce the time taken to scrutinize a case.

The Commission's concern to streamline the infringement procedure has already prompted a series of improvements to working methods, most recently in 1993. Lengthening timespans, cumbersome and sometimes inappropriate internal procedures, a degree of confidentiality that is perceived as excessive and repeated requests from Parliament for greater speed and transparency (7) militated in favour of improvements on three fronts:

- quicker processing of cases (A),

- simplification of internal procedural rules (B), and

- transparency of Commission decisions in infringement cases (C).

A. Quicker processing of cases

The Commission, as invited by Parliament's resolution on the 12th report (8), adopted a number of measures, of which three are especially noteworthy: priorities in the processing of complaints (i), stricter adherence to time-limits for opening and terminating proceedings (ii) and quicker preparation of reasoned opinions (iii).

(i) In the Article 169 procedure, all complaints are registered and passed on for departmental scrutiny irrespective of the seriousness of the alleged facts or infringements of Community law and whether or not they are of 'Community interest`. The Commission has nonetheless established certain priorities for the processing of complaints, as certain alleged infringements can be dealt with outside the Article 169 procedure, for instance by a direct approach to the Member States' authorities. The priorities are as follows:

- infringements which cause the greatest harm for the Community legal order, i.e. failure to transpose directives and failure of national measures to comply with Community law in general,

- horizontal cases of incorrect application, particularly those detected from a series of specific complaints by individuals,

- infringements that seriously violate the interests that the relevant legislation is supposed to protect,

- infringements in relation to Community co-financing.

This is not to say, of course, that non-priority cases are actually neglected.

(ii) To speed up the processing of infringement cases, the Commission has insisted on adherence to internal procedural deadlines. The rule is that in any suspected infringement case the decision to commence proceedings (Article 169 letter) or to terminate them must be taken within the year following registration of the complaint or the own-motion detection. Obviously this will be tricky where negotiations are in progress with the Member State attacked or where that Member State has announced measures. Even if the Commission accepts exceptions from the time-limit where it is clear that the Member State will be rectifying the situation, it has nonetheless opted for strict rules, as the credibility of its action depends very much on the speed with which it acts.

This being so, the decision to send an Article 169 letter can be taken all the sooner; it is not the outcome of negotiations with the Member State but rather a valuable stage in the negotiations. What the letter does in fact, according to Article 169, is to call on the Member State to 'present its observations`. It therefore seems important to give the letter its full function; the Member State is not condemned but simply given the opportunity to explain its action. With it, the Commission pursues two objectives: strict compliance with the principle of the adversary procedure and assistance to the Member State in rectifying the situation before taking the case to the Court of Justice. The Commission is thus restoring the genuine function of the Article 169 letter, which is to facilitate veritable dialogue with the Member State in full respect for its rights, and to do so at the earliest possible opportunity.

(iii) The Commission has taken the measures needed to ensure that from 1997 onwards the text of the reasoned opinion will be ready before the decision to issue it is taken. The Member State will then be apprised of it in advance, whereas hitherto there was an interval of sometimes several months between the decision to issue the reasoned opinion and its actual issuance.

B. Simplification of procedural rules

Simplifying the procedural rules for processing infringement cases entails lightening the general burden of work at departmental level and the work of preparing the full cm's discussions while keeping pace with the volume of cases to be handled. For instance, there is greater use of the simplified termination procedure for suspected infringements, where cases are closed without going through the full set of stages usually applicable. Cases are closed by the simplified procedure after the Legal Service has approved and the proposal has been referred to the full Commission. It is possible only in cases where either the complaint is clearly unfounded or the requisite evidence is lacking or the complainant does not follow the case up.

C. Greater transparency in Commission decisions

The Commission reviewed the rules governing the publicity surrounding its infringement decisions in the light of the general evolution of attitudes to transparency, its own determination to make its action more visible and repeated requests from Parliament (9).

Publicity is now the general rule for decisions to issue reasoned opinions and referrals to the Court of Justice; a press release will always be put out, unless the Commission decides otherwise, without awaiting the actual issuance or referral. A copy will be sent to the Member State before publication.

Before 1996, Commission press releases concerning infringement decisions were the exception rather than the rule. The new policy has already borne fruit, as there were 32 press releases on internal market matters alone in 1996. There were a further 19 concerning the environment, two concerning transport and one in a social case. Many of these press releases covered several cases. A good number were cited in both the international and the national or regional press. Termination decisions were often also announced in press releases.

There has been no change in relation to Article 169 letters; the principle of confidentiality always applies here, though not in cases based on Article 171 or proceedings for failure to notify national measures implementing directives. Otherwise, an express Commission decision is needed to authorize a press release. Article 169 letters never contain the Commission's final decision, being designed to help the Member State rectify the situation.

The Commission's actual decisions, of course, remain confidential.

II. STATISTICAL TRENDS IN 1996

Analysis of the infringement proceedings statistics for 1996 yields a bright result; among other things, the number of complaints is down.

There are four major trends:

- declining number of complaints, cases to which attention is drawn by MEPs and cases detected by the Commission's own investigations (A),

- continued high frequency of cases terminated (B),

- sharp increase in the number of Article 169 letters and reasoned opinions sent by the Commission to Member States (C),

- sustained activity regarding package meetings and missions on directives (D)

A. Declining number of complaints, cases to which attention is drawn by MEPs and cases deteycted by the Commission's own investigations

The number of complaints fell by 14 %, from 955 in 1995 to 819 in 1996. The downward trend began in 1995 (with a 19,8 % fall from the 1994 figure of 1 145).

The number of cases detected by the Commission's own investigations fell by 13 %, from 297 to 257. This is a reversal of the past trend.

The total of 1 076 (819 new complaints + 257 new cases detected in 1996) reflects a contrasting set of realities. The number of complaints and cases is up sharply in Austria (+ 15,5 %), Finland (+ 17,8 %) and the United Kingdom (+ 82 %) (10). It is down, sometimes sharply, in Italy (- 1,4 %), Sweden (- 3,8 %), Denmark (- 8,4 %), Germany (- 9,4 %), Belgium (- 28,8 %), Portugal (- 30,8 %), France (- 31,5 %) (11), Spain (- 32,7 %) (12), Ireland (- 34 %), Luxembourg (- 36 %), the Netherlands (- 41,6 %) and Greece (- 41,7 %).

Review of the figures sector by sector reveals a sharp fall in the number of complaints and cases detected in relation to the environment (down by 27 % from 265 to 207 - more than a quarter in Spain) and a moderate rise in the internal market (up 5,3 % from 483 to 512). The decline is continuing in customs and indirect taxation (44 as against 62, a drop of 29 %) and agriculture (136 as against 159, a drop of 15,5 %). In transport, the decline reverses the downward trend of recent years: after a sharp increase in 1995 (from 48 to 82), the number of complaints and cases detected fell to 53 (- 35,5 %).

These figures are not easy to interpret. In the 13th report, the Commission put forward a number of hypotheses.

- The falling number of complaints

There are a variety of reasons for the decline in the number of new infringements reported. A number of positive signs are worth highlighting:

- there appears to be an objective improvement in the enforcement of Community law by the Member States, as can be seen from the simultaneous fall in both complaints and cases detected,

- there also appears to be an improvement in the enforcement of Community law by the Member States, through the national courts. The fact that in 1991 the Court of Justice acknowledged that individuals might have redress possibilities in actions based on Community law (action for damages against a Member State not complying with Community law) may have contributed to the phenomenon,

- the Commission is notified only of infringements that are genuinely within its jurisdiction,

- after the 31 December 1992 watershed, the pattern of Union legislative activity shifted: the main single market instruments were in place, and the Community moved on to a period devoted to consolidation and management of the acquis. The recent years' relative decline in the volume of new legislation has undoubtedly reduced the number of national implementing measures to be checked for conformity and a concomitant drop in the opportunities for infringements,

- there is a possible technical explanation: before asking the Secretariat-General to register an incoming letter as a complaint, some departments first exchange correspondence with the original writer to ensure that the matter really is one for a complaint to be handled by the Article 169 procedure. In many cases, for instances, the original is not explicit enough. This more rigorous approach to processing complaints may have had an impact on the total number of complaints registered.

Certain negative phenomena may also help to explain the drop in the number of new cases:

- potential complainants are losing interest in the infringement procedure as being too slow and unlikely to modify their legal position: the limited effects of the procedure (confined to a declaratory judgment by the Court of Justice with no possibility of an order to pay damages such as an ordinary court might make) may well be having a dissuasive effect,

- knowledge of Community law is perhaps difficult to come by, and the ordinary citizen is not familiar, or not familiar enough, with it. The slight increase in the frequency of questions put to the Court of Justice for preliminary ruling bears this out,

- Parliament's resolution on the 13th report echoes this phenomenon: '[Parliament] expresses its concern at the lack of public enthusiasm for the European integration process and takes the view that this phenomenon might be due both to a lack of appropriate information and to the adoption of acts which sometimes have no bearing on public concerns` (13),

- as regards the environment, the decline in the number of complaints does not necessarily reflect an improvement in environmental performance (14).

This is not the place for unverifiable conjectures or hypothetical scenarios. What is certain is that the Commission wishes to construct a people's Europe whose doors are always open to complainants.

Yet the Commission is perceived as capable of solving every individual situation - a kind of Community Supercourt, as it were - whereas in fact the object of the Article 169 procedure is to induce a Member State to come back into line with Community law. The citizen is not party to a procedure which cannot in any case change his personal situation, but he plays a valuable detection and information role. It should not be forgotten that the citizen can rely on Community law in the national courts and have rights conferred by Community law secured by them. Annex VI takes stock of what the national courts have done in this respect.

There is thus a gap between what the Commission can do and what the citizen expects of it. The decline in the number of infringements brought to the Commission's notice may well be due to public opinion's misunderstanding of its function.

To remedy this situation, the Commission should make its role in infringement proceedings clearer. The forthcoming publication in the Official Journal of a new complaint form will be a step in this direction, as it will provide an opportunity to describe the various redress procedures available to individuals - the possibility of action in the national courts and the Community infringement procedure. On the latter point, the Commission will show what it is doing to speed up the complaints procedure and make it more transparent while making the Article 171 penalties provisions more dissuasive.

Moreover, proposals for financial penalties in Article 171 proceedings should have a dissuasive impact on Member States, boost the efficacy of infringement proceedings and thus offer the citizen an incentive to come to the Commission more often, knowing that doing so will serve a useful purpose. Even if that is not the primary object of the procedure, at least it will help ensure that many specific cases can be settled.

- The declining number of cases reported by MEPs

The number of cases directly recorded as a result of parliamentary questions is also down (20 in 1996 as against 34 in 1995). Five of them concern public procurement and four concern barriers to free movement of goods. New cases were also registered as a result of petitions in 1996. They included the conditions for access to French universities and the enrolment fees charged by the General Medical Council (15). As the Commission pointed out in the 13th report, the figures need interpreting with care: in addition to these figures, MEPs report infringements situations which the Commission may already have detected itself or on which it may have received a complaint.

- The declining number of cases detected by the Commission's own investigations

The declining number of cases detected by the Commission's own investigations is explained in part by the fact that departments take advantage of direct contacts with Member States to press for rectification of an infringement situation quite outside the official procedure. They then seek to obtain notification, for instance, of a technical standard, and they commence infringement proceedings only if there is a repeated refusal and the dispute with the Member State persists.

The Commission's wish to scrutinize infringements within a reasonable period of time and consequently to give cases already in motion priority over new cases is a further part explanation.

B. Continued high frequency of cases terminated

Parliament's resolution on the 13th report asks the Commission to be transparent as to the reasons for its decisions to take no action (16).

The number of cases terminated fell by 14 % from 2 043 in 1995 to 1 771 in 1996.

The reasons vary from case to case.

The number of confirmed infringement cases closed (cases in which the Article 169 letter had already been sent to the Member State) was 1 344 in 1995. In 1996 it was 877, down by 34 %. This is generally seen as evidence that the Member State has rectified an infringement that the Commission regarded as proven, though it also includes cases where the Member State has convinced the Commission that it was in the right. In 1996 it was more difficult to induce the Member States to rectify situations than in earlier years. This borne out by the slight rise in the number of referrals to the Court of Justice (93 referrals as against 72 in 1995).

The cases terminated regarding established infringements must be distinguished from the 874 cases terminated concerning suspected infringements, complaints or cases detected. The sharp rise in the number of suspected infringement cases terminated is without a doubt the result of strict application of the one-year time-limit separating registration of the case and the initial decision on the substance; many such cases were terminated simply because the Commission was unable to establish the infringement within the year.

C. Sharp increase in the number of Article 169 letters and reasoned opinions sent by the Commission to Member States

In 1996, the Commission notified 1 587 decisions issuing Article 169 letters or reasoned opinions and made 93 new referrals to the Court of Justice, a historic record.

Reasoned opinions account for the lion's share of the increase.

In 1996, the Commission issued 435 reasoned opinions, 224 % up on the 1995 figure of 194. Measures taken in 1996 to speed up the procedures are beginning to bear fruit. The delays observed in earlier years have been partly made up, and there is a significant fall in the number of reasoned opinions awaiting notification ('reasoned opinions for execution without time-limit`).

The number of Article 169 letters sent in 1996 was up slightly, by 9 % (from 1 044 to 1 142). This is probably due to new Commission instructions to departments to propose sending the letter more quickly, as soon as they have adequate evidence to ground a presumption, while preserving its status as a request for observations.

The number of new referrals to the Court of Justice rose from 72 in 1995 to 93 in 1996.

These decisions - Article 169 letters, reasoned opinions and referrals - mostly concern cases of failure to notify national measures transposing directives, as can be seen from table 2.2. Point III specifically concerns progress in transposing directives in 1996.

D. Sustained activity regarding package meetings and missions on directives

In its opinion on the 13th report, Parliament's Committee on Petitions made a number of observations on package meetings (17): the Commission therefore believes it must report on activities in 1996.

(i) Package meetings are devoted mainly - but not exclusively - to the internal market and the environment. There were package meetings on barriers to free movement of goods with eight Member States - the Netherlands, Austria, Germany, Spain, France, Greece, the United Kingdom and Portugal. Out of the 172 infringement situations discussed with the Member States, a solution was found in 73, i.e. 42 %.

(ii) Depending on actual needs, the Commission organizes several meetings on directives in the Member States each year. Their main purpose is to consider, with the authorities of the Member State, the progress made in notifying national measures implementing directives in all areas where they have been adopted and look into any points where notional provisions may not be in conformity with Community law.

Of the various meetings of this type organized in 1996, those in the three new Member States are particularly noteworthy. They were especially fruitful, as the national authorities were extremely cooperative. They contributed greatly to the considerable improvement in the rate of transposal of directives in those countries.

III. PROGRESS IN IMPLEMENTING DIRECTIVES IN 1996

A. Notification of transposal measures

The number of infringement proceedings commenced in 1996 for failure to transpose was considerably higher than in 1995 (1097 as against 799).

The table below gives an overall picture of the rate of notification of national measures implementing all the directives applicable on 31 December 1996. The number of new directives coming into force this year was lower than in the previous year. Once again, the effects of a Community that is now legislating less intensively, for the reasons already mentioned (18), are being felt.

>TABLE>

On 31 December 1996, the Member States had on average notified 92,8 % of the national measures needed to implement the Community directives applicable. This is higher than the figure for 1995 (90,7 %). But the performance of individual Member States is variable.

Attention is drawn to the spectacular improvement in the notification rate for Finland, up from 70,5 % to 80,93 %, and for Sweden, which, only two years after accession, his risen from sixth to fifth place in the ranking.

As the thirteenth report already observed, these high rates conceal contrasting realities.

There is no denying that, in certain areas, even for directives adopted many years ago, the rate of notification of national implementing measures is improving only very slowly. The public procurement directives are a particular example (19). In some cases the rates have even fallen on account of failure to transpose some of the more recent directives (20).

Elsewhere, there has been substantial improvement. The comparison, for instance, between progress in implementing the directives applicable to recognition of qualifications in 1995 and 1996 is particularly eloquent (21).

There are many areas, consumer policy among them, where the majority of Member States tend to adopt implementing measures only after the prescribed date (22).

B. Conformity of transposal measures

The quality of transposal is, of course, as important as the fact of transposal.

The efficacy of package meetings in removing cases of non-conformity in many areas is worth highlighting (23). It would, incidentally, be much easier to scrutinize national measures for conformity if the Member States routinely supplied the Commission with tables of concordance between corresponding Community and national provisions (24).

C. Application of transposal measures

The main cases of incorrect application by the Member States of national measures that are in conformity with Community law are considered in the sector-by-sector chapters below. But one area where problems abound is the application of the directives relating to recognition of vocational qualifications and restrictions contrary to Articles 52 and 59 of the EC Treaty. The Commission received 30 or so complaints in 1996 (25).

IV. IMPLEMENTATION OF SECOND SUBPARAGRAPH OF ARTICLE 171(2) OF THE EC TREATY

The second and third subparagraphs of Article 171 (2) of the EC Treaty (Commission actions in the Court of Justice against Member States violating Community law) read:

'If the Member State concerned fails to take the necessary measures to comply with the Court's judgment within the time-limit laid down by the Commission, the latter may bring the case before the Court of Justice. In so doing it shall specify the amount of the to be paid by the Member State concerned which it considers appropriate in the circumstances.

If the Court of Justice finds that the Member State concerned has not complied with its judgment it may impose a lump sum or penalty payment on it.`

There are many areas where the Commission, subject to review by the Court, has the power to order financial penalties. It enjoys a power of proposal which the authors of the Treaty did not see fit to spell out. The only provision is that the penalty must be 'appropriate in the circumstances`.

It follows that the Commission could not act on the new Treaty provision without first setting out the lines it would follow and without giving the Member States fully transparent information as to the criteria and methods of calculation it would apply when proposing penalties to be imposed on Member States for infringements of the infringement procedure.

Parliament has regularly called on the Commission to act under Article 171 and propose that the Court of Justice impose penalties (26).

The Commission proceeded in two stages. It began by adopting a memorandum on applying Article 171 of the EC Treaty (27), which was followed by a method of calculation (28) for penalties to be proposed to the Court of Justice under the Article. The points made below are in response to a request from Parliament's rapporteur on the thirteenth report (29); their purpose is to outline the two documents, to which the reader is referred.

A. The memorandum of 6 July 1996

The Commission memorandum set out to 'publicly state the criteria it means to apply in asking the Court to impose monetary penalties`, bearing in mind that these criteria would be gradually refined after being applied in individual cases.

The Commission has a discretionary power to act in the Court of Justice for infringement of Article 171. Where it exercises that power, it must state its view on the penalties question, even if it is able to give good grounds for not proposing them.

The amount must be determined with an eye to the actual purpose of the penalty, which is to 'ensure that Community law is effectively enforced` (30) and to 'secure compliance as rapidly as possible` (31). That is the reasoning behind the Commission's preference for periodic penalties as the most appropriate instrument for achieving it. A periodic penalty is payable by a Member State per day of delay; time runs from the date on which the Court's judgment is served on it until the date when it puts a final end to the infringement.

The daily penalty must be calculated on the basis of three fundamental criteria (32):

- the seriousness of the infringement,

- its duration,

- the need to ensure that the penalty itself is a deterrent to further infringements.

The infringement is by definition always of the same nature. It is failure to comply with a judgment given by the Court of Justice. That is always of a certain seriousness (33). But the amount of the penalty must reflect not only the fact of non-compliance but also the seriousness of the infringement for which the original judgment was given. This is to be measured by two parameters - the importance of the Community rules which have been infringed and the effects of the infringement on general and particular interests (34).

The need to ensure that penalties are really effective means they must be set at a deterrent level; purely symbolic penalties are out of the question.

B. The calculation method of 8 January 1997

Proceeding from the principles set out in the memorandum, the Commission adopted a calculation method applicable uniformly to all its departments, to serve as a basis for proposals to be made in a foreseeable and transparent fashion. Although the method was formally adopted only on 8 January 1997 (35), it is inseparable from the memorandum and should be considered with it.

Penalties would be calculated on the basis of a uniform flat-rate amount of ECU 500 per day of delay to penalize the violation of the principle of legality and the sole jurisdiction of the Court which applies in all Article 171 cases.

The flat-rate amount will be multiplied by two coefficients reflecting the seriousness of the infringement and its duration. The first will be on a scale from 1 to 20; the second will be on a scale from 1 to 3.

To achieve deterrence, the result will be multiplied by a 'factor n` reflecting the ability of the Member State to pay (based on GDP) and the number of votes it can cast in the Council. This factor ranges from 1 for Luxembourg to 26,4 for Germany.

The proposal for a penalty payment payable by a Member State committing an infringement considered by the Commission to be at the top of the scale of seriousness and duration would thus range from ECU 30 000 for Luxembourg to ECU 791 293 for Germany.

Given the principles of certainty and non-retroactivity in the law, it is clear that penalties may be imposed only in respect of periods of non-compliance subsequent to the entry into force of the Treaty on European Union, that is to say 1 November 1993 (36). And given the time required for the pre-litigation procedure (Article 171 letter, reasoned opinion), cases have only recently become ripe for financial penalty proposals.

The Commission, then, has a reliable, fair and transparent method which it used to decide on penalty proposals in several cases concerning two Member States on 29 January 1997 (37). Some of these cases are being settled or have been settled without the Court of Justice having to give judgment or even being asked to do so.

Annex V identifies all the Article 171 proceedings in motion. Ten of them are at reasoned opinion stage; five are at the referral stage. Future applications to the Court in these cases will contain observations regarding penalty proposals.

V. INITIAL INVESTIGATIONS BY THE EUROPEAN OMBUDSMAN INTO INFRINGEMENT PROCEEDINGS

In 1996 the Ombudsman conducted initial investigations into infringement proceedings.

The institution of Ombudsman, set up by Parliament decision on 12 July 1995 (38), is now at the operational phase. His first task is to 'deal with specific instances of maladministration. He must provide an effective means of redress for citizens who are denied their legal rights or who do not receive proper administrative treatment by Community institutions or bodies` (39).

The Commission has every intention of facilitating his work cooperating with this new Community entity. Following scrutiny of an environment case, the Ombudsman concluded that the Commission could not be accused of maladministration. He raised the question whether the complainant ought to be consulted as soon as the lead department envisages terminating a case and before the termination is formally taken. He criticized the Commission for having announced its decision by a press release before the complainants had been apprised of it. The Commission has now changed its practice accordingly.

1996 was thus a fertile year for monitoring the application of Community law.

The Commission's previous annual reports stressed the need to speed up procedures, to secure greater transparency in its action and to enforce Court judgments more thoroughly.

The initiatives taken by the Commission in 1996 show what effect has been given in practice to concern with attaining the objectives that have been set.

There is admittedly still room for improvement.

Two points need making by way of conclusion.

To improve the application of Community law, the Commission depends for its efficiency on permanent far-reaching cooperation from the Member States, especially at the pre-litigation stages of the infringement procedure but also in other respects so that recourse to the full Article 169 procedure can be avoided (40). For several years now the Commission, as requested by the Council,has been anxious to promote intensive administrative collaboration with the Member States (41). The progress described above in the application of Community law is the outcome. But more could be done. Certain infringement proceedings have revealed that the Member States do all give the Commission all the cooperation they should under Article 5 of the EC Treaty. And the decline in the rate of notification of national transposal measures in some Member States gives cause for concern.

Vigilance by the Commission will not suffice on its own to ensure that all Member States fully comply with Community law. The importance for the infringement procedure of individuals who are vigilant as regards the rights conferred by Community law is well enough known. And the vigilance of Members of the European Parliament, who enjoy a close privileged relationship with the European people, is also a valuable aid to enforcement.

Lastly, a few points about the structure of this report. As in previous years, there is a sector-by- sector analysis of the application of Community law. For the first time, there is a specific chapter devoted to the Structural Funds, as it was felt useful to highlight the powers available to and used by the Commission in the management of the Structural Funds: it can reduce, suspend or even withdraw support where Community law is violated. The efficacy of this means of bringing pressure to bear on the Member States and its relationship with the Article 169 procedure warranted new developments. The Annexes follow the same pattern as in previous years so as to facilitate statistical comparisons.

Structure of the 13th report

>START OF GRAPHIC>

This report consists of:

- a sector-by-sector analysis,

- statistical tables updated to 31 December 1996 concerning suspected infringements (Annex I) and established infringements (Annex II),

- a list of established infringements of the treaties, regulations and directives investigated in 1996 (Annex III),

- report on the application by Member States of directives in force on 31 December 1996, indicating infringement proceedings (Annex IV),

- a list of judgments of the Court of Justice not yet implemented (Annex V),

- a survey of the application of Community law by national courts (Annex VI).>END OF GRAPHIC>

AREA WITHOUT INTERNAL FRONTIERS

1. INTRODUCTION

The completion of the single market remains one of the European Union's main objectives and plays a crucial role in economic growth and job creation. It has required the adoption and implementation of national legislation - much of it very detailed - to remove physical, technical and tax barriers in a variety of sectors. The project has now largely been completed and extended to the new Member States which joined the European Union at the beginning of 1995. However, gaps still remain in vital areas such as taxation and company law. Furthermore, existing legislation is sometimes applied unevenly or with too much red tape.

On 26 November the Commission presented a communication to Parliament and the Council on the impact and effectiveness of the single market, in which it reported on progress made so far and outlined the challenges for the future (42). The message is simple. The single market must be consolidated and developed. Its smooth operation is a fundamental precondition for the next stage in the integration of the European Union - the establishment of economic and monetary union (EMU). If this process of consolidation is to succeed, a number of measures will have to be taken at national and Community level and certain priorities will have to be observed.

The top priority is the application of existing legislation, i.e. the incorporation of the directives establishing the single market into the national law of every Member State. This project received a boost at the Florence European Council on 21 and 22 June 1996, which once again stressed the single market's contribution to economic growth and employment and urged Member States to speed up the process of transposing internal market directives, particularly on public procurement and financial services.

However, establishing the single market amounts to more than simply adopting the national measures needed to implement existing directives. National authorities must also ensure that the directives are applied in practice and that the basic principles of Community law are observed, and they must cooperate with the Commission and the other Member States to achieve this goal.

In 1993 the Commission presented a reference document - a strategic programme for completing, managing and developing the single market (43) - which argued that administrative cooperation was also a vital factor in the smooth operation of the internal market. In its resolution of 16 June 1994 on developing administrative cooperation in the enforcement of Community legislation on the internal market, the Council asked the Commission to step up cooperation with the relevant authorities in the Member States. In 1996 the Commission took stock of the situation in a report on cooperation between administrations for the enforcement of internal market law, which it laid before the Council and Parliament (44).

Still on the subject of administrative cooperation, it is worth mentioning the Karolus exchange programme for officials from the Member States (45), which is aimed in particular at harmonizing the interpretation and application of Community law, especially in the internal market field. All the Member States have already taken part in the programme, either sending or receiving officials from national government departments. By 10 October 1996 a total of 377 exchanges had taken place. A similar programme, Matthaeus, was launched in 1991 for officials working in the customs field.

As guardian of the Treaty, the Commission keeps a constant eye on the transposal and effective application of internal market legislation at national level. For each Council meeting on the internal market, it presents a report on the state of play regarding the incorporation into national law of the measures set out in the 1995 White Paper on the internal market and other legislation of particular relevance to the smooth operation of the internal market. Of the 275 White Paper measures in force at 31 December 1996, 219 required national implementing measures, 93,8 % of which had been notified by the Member States.

Despite this rather high percentage, there are still serious delays in certain key sectors, such as public procurement, financial services and intellectual and industrial property. These delays are often caused by problems in the national decision-making process or the technical complexity of Community texts, which sometimes leads Member States to adopt national measures implementing only part of a directive.

The Commission also takes a keen interest in the quality of implementing measures, since the incomplete or incorrect transposal of Community legislation can lead to unequal treatment between Member States and raise de facto barriers to free movement which the single market is actually meant to eliminate.

Another priority is to put the finishing touches to the legislative framework of the single market by incorporating the main proposals set out in the White Paper and organizing the liberalization of certain sectors not covered by that programme. For example, Community legislation on company law is incomplete, with the result that European firms are faced with barriers to their mobility. It is now vital that the Member States reach agreement on a statute for a European company. On the indirect taxation front, the only way to resolve the existing problems is by adopting a definitive system. The free movement of persons will not become a reality until essential security measures are in place. Finally, completion of the single market also requires the liberalization of sectors such as gas and electricity, which are still the province of national monopolies. Moreover, the single market will have to be adapted to new technological challenges, such as the creation of an information society and the introduction of trans-European networks through the adoption of an appropriate regulatory framework.

But completing the legislative framework is not enough. The establishment of a genuine frontier-free area also requires an effort to simplify legislation. To this end the Commission has launched the SLIM pilot project to explore how the constraints and formalities imposed on businesses by the complexity of legislation can be reduced by simplifying laws and administrative procedures (46). To date the exercise has concentrated on four sectors (Intrastat, construction products, mutual recognition of diplomas and ornamental plants). A progress report was laid before the Council on 26 November 1996.

The establishment of the single market has created its own dynamic. New problems arise which require new solutions. Managing and improving the single market is a real challenge for the Commission. In its communication of 26 November on the impact and effectiveness of the single market, the Commission identified a series of practical measures to be taken at national and Community level to ensure that the single market can play a full part in the pursuit of the Union's current priorities.

2. SITUATION SECTOR BY SECTOR

2.1. Removal of physical barriers

2.1.1. Customs

The Commission decided to commence infringement proceedings against Italy on the grounds that national measures on the refund of taxes collected in breach of Community law are incompatible with the principles laid down by the Court of Justice. The Italian system for collecting these taxes diverges from the general rules laid down in the Civil Code: while the authorities may rely on mere presumptions to prove undue enrichment, the taxpayer must provide evidence that the tax was not passed on to a third party - which is much more difficult. Moreover, the three-year time-limit (compared with the normal limitation period of ten years) considerably reduces the scope for firms to obtain a refund of undue payments.

The Italian system is therefore contrary to the case-law of the Court, according to which the procedures laid down by national rules may not be any less favourable than those for similar internal claims, and may not render it virtually impossible or excessively difficult to secure repayment of taxes collected in breach of Community law (47).

Another proceeding in motion concerns Italy's failure to comply with the Community transit rules. The Italian authorities make it a requirement that an external Community transit document (T1) must be issued for Community goods which are being exported to an EFTA country with an approved movement certificate (EUR1) - and should in principle come under the internal procedure (T2) - and for Italian steel products on which specific export refunds are payable. Use of the external transit procedure is not justified in either case. The external procedure applies to Community goods only in a limited number of cases where Community measures are involved in the export operation.

The Commission has terminated the proceedings against Belgium regarding dues collected for the benefit of the Fonds pour la Santé et la Production des Animaux (animal health and production fund), as the Belgian authorities have abolished the scheme in question (48).

2.1.1.1. >TABLE>

2.1.2. Free movement of agricultural products

Freedom of movement for agricultural products in a single market is one of the principles underpinning the operation of the common agricultural policy and its common market organizations.

The Court of Justice has repeatedly pointed out that Articles 30 and 34 of the 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.

The Commission kept a constant watch to make sure that barriers to trade in agricultural products in the Community were swiftly removed.

In 1996 there was a further drop in the number of new cases involving 'classic` barriers to the free movement of agricultural products, such as systematic import checks or certification requirements.

An action against Germany is still before the Court of Justice regarding certain types of fresh pigmeat imported from Denmark (49).

The Commission decided to send a reasoned opinion concerning the requirement imposed by the regional authorities in Galicia that imported cupped oysters be accompanied by an animal health certificate. Under Directive 91/67/EEC, combined with Decision 93/55/EEC, there should no longer be any need to ask an administrative authority to issue an animal health certificate for the marketing of animals and aquaculture products.

The Commission sent another reasoned opinion to Spain regarding the requirement imposed by the authorities in the Valencia region that only the Spanish language be used in the labelling of apples from other Member States. Both Article 30 of the Treaty and Regulation (EEC) No 1035/72 on the common organization of the market preclude national rules imposing the exclusive use of a specific language for the labelling of food products at the wholesale stage (i.e. where only professional traders are involved and not Spanish consumers).

Finally, the Commission decided to send a reasoned opinion to Ireland for restricting trade in breeding sheep from other Member States by imposing unilateral health requirements over and above those provided for in Community legislation, without taking account of the prescribed procedure.

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

Articles 30 et seq. of the EC Treaty prohibit quantitative restrictions on imports and exports, and all other measures having equivalent effect (50).

As guardian of the Treaty, the Commission seeks to ensure that the internal market rules are properly applied by the Member States. It strives to remove technical barriers to trade and develop instruments which will prevent new barriers being raised. To achieve this, it draws on the case law of the Court of Justice. In 1996 the Court once again gave a number of judgments setting out guiding principles for the Commission's action.

Commission action

During the first three quarters of 1996, the Commission dealt with some 684 cases of complaints and suspected or established infringements. It shelved 194 cases and referred only one to the Court of Justice.

In many cases progress was made as a result of meetings with the national authorities. This year the Commission departments responsible for the application of Articles 30 et seq. of the Treaty met the authorities from eight Member States (Italy, Germany, Austria, the Netherlands, Greece, the United Kingdom and, for the first time, Finland and Sweden). These 'package meetings` serve as an opportunity not only to discuss current complaints and infringement proceedings but also to raise awareness among national authorities of the Community rules which they bear primary responsibility for enforcing.

The following examples illustrate the success of these meetings:

- the French authorities have adopted an interpretative circular on the 'Toubon` Law, spelling out ways of applying it in a 'reasonable` fashion and taking up some of the points raised by the Commission in its interpretative communication on the use of languages in the marketing of foodstuffs (51),

- the Danish authorities have adopted a circular on automobile parts, recognizing the certificates of conformity for tyres and wheels issued by other Union or EFTA Member States.

Cases are generally closed once the Member State has amended the legislation challenged to comply with the Treaty. However, pending an official amendment, which often takes some time, Member States frequently adopt interim measures, such as circulars or notices published in their national official gazettes informing interested parties that the legislation in question is to be interpreted in such a way as to be compatible with the principle of free movement of goods and will be applied accordingly by the authorities.

To gain a better insight into the situation on the ground in the different Member States and to develop a more consistent approach to their job, the Commission departments responsible for the application of Articles 30 et seq. of the Treaty carry out horizontal surveys, which allow them to take stock of national regulations in a particular field. These surveys, conducted with the assistance of national government departments, also serve to foster cooperation between Commission departments and the national authorities, which is vital if Community law is to be properly applied. This year a survey (to be completed by the end of the year) was launched into the national definitions used to distinguish two similar pharmaceutical products.

The Commission also takes action to prevent new barriers being erected to the free movement of goods by encouraging Member States to insert mutual recognition clauses in their national legislation (52).

For example, the Dutch authorities have inserted a mutual recognition clause in their legislation on the labelling of soft drinks which takes on board the principle that additional information is required only where there is a real risk of confusion for the consumer.

The Court's main judgments

Judgments by the Court shed light on the application of Community law by setting out its main principles. The following judgments are worthy of mention:

- Brasserie du Pêcheur (53)

The Court confirmed the principle that Member States must make good any damage caused to individuals by infringements of Community law attributable to them, where the fault lies with the national legislature. It held that the injured party has the right to reparation where three conditions are met: the rule of law infringed must confer rights on them, the infringement must be sufficiently serious and there must be a causal link between the infringement and the damage sustained.

- Hedley Lomas; scope of Article 36 of the Treaty

The Court held that Community law precludes a Member State from invoking Article 36 of the Treaty to justify a limitation of exports of goods to another Member State on the sole ground that, according to the first State, the second State is not complying with the requirements of a Community harmonizing directive pursuing the objective which Article 36 is intended to protect. The Court also recalled the conditions governing the liability of Member States in accordance with its judgment in Brasserie du Pêcheur.

- Ban on the exercise of certain commercial activities on Sundays and holidays (54)

The Court held that national rules imposing general restrictions on the marketing - and hence import - of a product cannot on that ground alone be regarded as limiting the market access of such imported products to a greater extent than that of similar national products. Referring to its judgment in Keck and Mithouard, it held that the fact that legislation may restrict the volume of sales generally, and hence the sale of products from other Member States, is not sufficient to characterize such legislation as a measure having an effect equivalent to a quantitative import restriction.

- Authorization to market biocides (55)

National legislation prohibiting the marketing of a biocidal product containing dangerous substances, without prior authorization, is justified under Article 36 of the Treaty, even if the product in question has already been authorized for sale in another Member State. However, the authorities responsible are not entitled to require technical or chemical analyses or laboratory tests unnecessarily, where such analyses or tests have already been carried out in the other Member State and the results are available to those authorities.

- Discrimination against parallel imports of vehicles (56)

The Court ruled that Article 30 precludes national legislation concerning model-year dates for motor vehicles which causes the administrative authorities and traders to consider that, where two motor vehicles of the same model are sold on the same date, the one imported through parallel channels cannot be granted the same model-year date as the one sold through the official network of dealers.

- Repackaging of pharmaceuticals (Joined Cases C-427/93, C-429/93 and C-436/93 - judgment given on 11 July 1996 - and Joined Cases C-71/94, C-72/94 and C-73/94, and Case C-232/94)

The Court specified the terms on which a parallel importer may repackage pharmaceutical products without the trademark-holder being able to rely on his rights to oppose it. The judgment is a valuable clarification of the doctrine of the exhaustion of trademark rights.

- Exhaustion of patent rights in relation to goods not patentable in the Member State of origin (Cases C-267/95 and C-268/95, judgment given on 5 December 1996)

The Court of Justice spelled out the application of its rulings on the exhaustion of patent rights in relation to imports from a Member State where the product is not patentable: the patent holder may not impose such imports unless he can prove that he was under compulsion to market the product in the Member State of origin.

2.2.1.2. The preventive rules of Directive 83/189/EEC

The notification procedure of Directive 83/189/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 before they are finally adopted. The procedure does not cover technical regulations issued to implement directives.

The Commission received 523 drafts of technical regulations (57), which were scrutinized by the relevant departments. This figure compares with 389 in 1994 (58) and 439 in 1995 - clear evidence that, despite the completion of the internal market at the end of 1992, Member States are still adopting large numbers of technical regulations which could undermine the single market and the integrity of the benefits it has brought to all sectors of the economy.

Of the 523 drafts received, 104 required a detailed Commission opinion (59) recommending changes to the measure to eliminate infringements of secondary Community legislation or to debar the establishment of new barriers to trade. For their part, the Member States issued 134 opinions (60). In five cases (61) the Commission had to ask the Member State for a one-year postponement of the measures as it intends to propose harmonization measures, and in another five cases (62) the measures will have to be postponed for a year because of an overlap with a draft directive or regulation already before the Council.

On 26 June the Commission adopted a report on the operation of Directive 83/189/EEC in 1992, 1993 and 1994, which describes developments and progress in the field of technical rules and standards. The report is divided into three parts: the procedure for standards, including an analysis of its operation during the years in question together with statistics (short and medium-term improvements under the Directive are also analysed); the notification procedure for technical rules, including a detailed analysis of the various problems and questions raised by its application; and, finally, the sharing of information on technical rules with the EFTA countries.

Since 1989 the Commission has been monitoring compliance with the notification requirement by routinely scrutinizing the official gazettes of all the Member States. When it discovers a breach of Directive 83/189/EEC, it may commence infringement proceedings under Article 169 of the EC Treaty. Compliance by Member States with their notification duties will have to be reinforced following the Court's judgment in CIA Security International (63) since a technical rule not brought to third parties' attention may not be relied on against him; this is the situation called for by the Commission ever since its Communication 86/C 245/05 (64).

During the first nine months of 1996, some 2 200 national laws were examined, of which about 40% were technical rules which had not been notified under the Directive or fell outside its scope. After careful study to see whether these rules should be notified under the Directive, the Commission commenced 80 infringement proceedings.

2.2.2. Progress in implementing Directives on the free movement of goods

2.2.2.1. Foodstuffs

47 infringement proceedings for failure to notify national implementing measures within the time allowed were terminated. Of the remaining cases, 31 are at the Article 169 letter stage and 12 have reached the reasoned opinion stage.

Four infringement proceedings have been initiated for incorrect application of national texts adopted to transpose Community legislation in this sector.

A further 10 or so complaints were lodged. Quite a few of these cases were settled following correspondence between the Commission's departments and the national authorities concerned.

A number of infringement proceedings were initiated for incorrect application of Directive 79/112/EEC on the labelling of foodstuffs, as in the following example:

Directive 79/112/EEC lays down an exhaustive list of information which must be indicated on the labels of foodstuffs (sales description, list of ingredients, net quantity, etc.). However, a Member State may deem it necessary to impose new labelling indications, which are not laid down by the Directive, in order to provide better information for consumers. Since a unilateral obligation of this kind may constitute a barrier to trade between the Member States, Directive 79/112/EEC provides that the Member State must notify the Commission and the other Member States of its proposed measure. The Commission then scrutinizes the draft and may oppose its adoption. During the year, two Member States were in breach of Community law for failing to follow the notification procedure laid down in the Directive.

2.2.2.2. >TABLE>

2.2.2.3. Pharmaceutical products

There has been a considerable increase in notification of national implementation measures. Measures implementing the Directives concerning the rational use of medicinal products (92/25/EEC, 92/26/EEC, 92/27/EEC, 92/28/EEC) have been notified by all Member States. The situation regarding the implementation of the homeopathy Directives (92/73/EEC and 92/74/EEC) and the Directives establishing the new system of mutual recognition of marketing authorizations (93/39/EEC and 93/40/EEC) has significantly improved, but at least three Member States have still not notified their implementation measures. Infringement proceedings have been started in all these cases and are being closely followed by the Commission.

There are also some general problems concerning the interpretation and application of the pharmaceutical directives by Member States. These cases concern mainly the different interpretations given by Member States to the concept of 'medicinal product` (sometimes resulting in barriers to the free movement of goods) and complaints concerning the alleged non-respect of mandatory time-limits or other procedural requirements by national authorities. The Commission is carefully considering these problems and complaints, but for the time being no legislative activities are planned. It has to be stressed, however, that a draft consolidation of the pharmaceutical legislation (both human and veterinary) is already very advanced; consolidation will increase the clarity of the legislation and ultimately the effectiveness of its implementation.

2.2.2.4. >TABLE>

2.2.2.5. Chemicals

There are no particular problems in the application of Directives in this sector. Some Member States, including Belgium, Denmark, Germany, Spain, France and Italy, which had fallen behind in transposing the measures in force, were able to catch up in the course of the year.

A number of new proceedings have begun, particularly in connection with Directive 95/8/EC on fertilizers (see Annex IV).

Requests for derogations under Article 100a (4) of the EC Treaty continue to be a significant feature in the harmonization of restrictions on the use of dangerous substances. Five requests for derogations are currently under examination by the competent Commission departments.

2.2.2.6. >TABLE>

2.2.2.7. Motor vehicles, tractors and motorcycles

1996 was a pivotal year for this sector, since the Community type-approval procedure became mandatory for vehicles of category M1 on 1 January 1996. The separate directives became binding as a result.

The transposal of directives, so vital against a background of total harmonization, is going smoothly thanks to the experience acquired by the competent national authorities.

Given the detailed, technical nature of the motor vehicle provisions, many Member States routinely refer in their national legislation to the text published in the Official Journal, which in practice facilitates and speeds up the transposal process and scrutiny for conformity with Community law. There are delays, but they rarely exceed a few months and generally arise because the deadline for transposing the directive comes soon after the date of adoption.

Four infringement proceedings were begun for failure to notify national measures in respect of the nine directives which came into force in the course of the year.

2.2.2.8. >TABLE>

2.2.2.9. Construction products

The Commission commenced an action in the Court of Justice against Belgium, the only Member State not to have notified national measures implementing Directive 89/106/EEC.

There are also particular problems in Austria due to its federal structure (the Länder have the power to incorporate Community rules into their own legislation, but not all of them have done so).

The Commission now uses the mechanism laid down in the Directive to follow up complaints on barriers to trade and check that the practices in question are consistent with Community law. In the past, such cases were examined only in the light of Articles 30 to 36 of the Treaty.

2.2.2.10. Mechanical engineering, electronics, personal protection equipment, gas equipment, pressure equipment, pre-packaging, measuring equipment, medical devices and pleasure craft

All 97 directives in this field had reached their transposal deadlines by 31 December 1996.

Member States achieved a satisfactory rate of transposal, considering the complexity of the directives in this field (which mostly follow the 'new approach`). Even where transposal of a directive is incomplete, there are no barriers to the free movement of products that are contrary to the Directives. Delays in transposal are mostly due to domestic reasons in the Member States (more than one Minister responsible, cumbersome legislative process, etc.).

Incorrect application of directives deprives Community harmonization exercises of much of their anticipated benefit. The end of the transitional period for certain Directives has highlighted a number of problems with the interpretation of these texts. In addition to formal measures (initiation of infringement proceedings), the Commission has also taken informal action (meetings of Groups of experts, interpretative notes, etc.) which has helped to resolve a number of doubtful, if not actually contentious cases.

2.2.2.11. >TABLE>

2.2.2.12. Liability for defective products

Directive 85/374/EEC concerning liability for defective products has been transposed by all Member States except France. Following France's failure to act on the 1993 ruling by the Court of Justice which found it to be at fault, the Commission continued with the infringement procedure under Article 171 of the Treaty. France was sent a reasoned opinion in 1995.

The Commission also brought an action in the Court of Justice against the United Kingdom in 1995 (Case C-300/95). The Commission contests the UK's transposal of the clause exempting producers from liability as provided for in Article 7 (e) of the Directive (development risk).

2.2.3. Free movement of persons, right of establishment and voting rights

2.2.3.1. Ending discrimination

Infringement proceedings are under way against a number of Member States concerning the application of Regulation (EEC) No 1612/68 on the free movement of workers.

The infringement proceedings brought against Greece under Article 171 of the Treaty, relating to the implementation of the Court of Justice's judgment in Case C-123/94 (65) are continuing. This case is concerned with the conditions imposed on nationals of the other Member States wishing to teach a foreign language.

The Court has given its judgment in the case against Belgium for legislation which discriminates against young job-seekers who have studied in another Member State by denying them integration benefits (66). The Court found in the Commission's favour.

The infringement proceedings brought against Belgium under Article 171 for failing to comply with the Court of Justice's judgment in case C-47/93 (67) are also under way. These relate to the withholding of finance for university studies from students from other Member States who are in Belgium solely for the purpose of studying there.

The case of Greece's nationality discrimination in acknowledging the eligibility of large families for certain allowances and failure to reckon services performed in the public administration of other Member States for the purpose of granting seniority and grading of workers in Greek public services on the sole ground that the services were not performed for a Greek administration has been referred to the Court of Justice. Also, following amendments to Greek legislation, the Commission has dropped the infringement proceedings on conditions for access to the profession of medical specialist.

As a decree was issued by the French government bringing legislation into line with Community law, the infringement proceeding against France concerning nationality discrimination for the granting of teacher training allowances have been dropped.

The Commission also sent Germany a reasoned opinion concerning the protection of personal data on migrant workers.

The infringement proceedings against the United Kingdom for failing to accord social security benefits to a Community worker in the form of reductions in university entrance fees and study grants for his spouse and against France for discrimination against early-retired frontier workers are under way.

In the tax field, the Commission is monitoring Luxembourg's compliance with the Court of Justice judgment in case C-151/94 concerning the final payment of income tax by non-resident workers (68).

The infringement proceedings against Belgium concerning the granting of certain social security benefits are still pending (69).

Finally, infringement proceedings were brought against the Netherlands in two cases, one concerning the withholding of supplementary pension insurance from unemployed Belgian frontier workers after termination of the employment relationship and during the period unemployment benefit is received, and the other relating to the Dutch legislation modifying the cost of permanent residence documents for Community nationals, which is higher than that of identity cards for nationals.

2.2.3.2. Entry and residence

As regards the infringement proceedings brought for failure to transpose correctly into national law the three Directives on right of residence - 90/365/EEC (employees and self-employed persons who have ceased their occupational activity), 90/364/EEC (persons not in active employment) and 93/96/EC (students) - reasoned opinions were decided on or sent to various Member States in the course of the year. These proceedings relate mainly to implementing measures on the declaration of financial means by students (Spain, France, Ireland, Italy), financial means requirements for retired persons and persons not in active employment (France, Italy), sickness insurance requirements and their control (France, Italy) and the mechanism for checking the residence permit of retired persons and persons not in active employment after two years.

As well as actions for the incorrect transposal of directives, the Commission also brought infringement proceedings for incorrect application of Community law. A reasoned opinion was sent to Greece on the cost of residence permits for members of EU citizens' families who are nationals of non-member countries. The Commission also decided to send four reasoned opinions to France on the supporting documents required from EU citizens when applying for residence permits, the expulsion of a Belgian national and the issuing of visas to nationals of non-member countries who are members of EU citizens' families (failure to comply with the obligation to facilitate the granting of such visas and failure to provide a reason for refusals of visas). Finally, the Commission decided to send a reasoned opinion to Italy concerning the requirement of a residence permit for study visits of less than three months.

Moreover, on the basis of complaints and requests from EU citizens, the Commission has observed that there are many cases in which clear provisions of Community law are incorrectly applied. For example, the six-month period which is needed to issue a residence permit when checks relating to health or public order are required is the time imposed by several national governments in normal circumstances. Others have excessive requirements as to the supporting documents to be presented when applying for a residence permit - it is not a correct application of Community law to require self-employed workers to carry bundles of documents to prove their status (proof of inclusion on the commercial register, VAT number, bank statements, commercial lease, tax returns etc.). Nor is it in line with Community law to systematically require persons applying for a residence permit to produce, besides their identity card or passport, a record of civil status - translated, moreover, into the language of the host country.

All of these examples help to explain the feeling among many citizens of not really belonging to the Union. To rectify such cases, the Commission naturally approaches the Member States concerned on the individual issues, and brings infringement proceedings in cases where flawed administrative practices are identified - which unfortunately is a very slow process. For this reason, the Commission has also decided to take action on another level - information. The 'Citizens First` initiative, which aims to disseminate Community law on the free movement of persons and its practical application in the Member States, should ensure that, in the medium term, greater overall compliance with Community law is achieved.

2.2.3.3. >TABLE>

2.2.3.4. Right to vote and stand in elections

Under Directive 93/109/EC, Union citizens residing in a Member State of which they are not nationals were able to vote and stand in elections to the European Parliament in June 1994. A report is being drawn up on the application of the Directive during these elections.

The first elections to the European Parliament in the three new Member States were held in Sweden, Austria and Finland on 17 September 1995, 13 October 1996 and 20 October 1996 respectively.

Following the entry into force of Directive 94/80/EC on 1 January 1996, Union citizens residing in a Member State of which they are not nationals were able to take part in municipal elections in Germany (Bavaria, Lower Saxony), Luxembourg, Italy, Finland and the United Kingdom.

2.2.3.5. Access to employment in the public service

For a number of years the Commission has been conducting a systematic campaign to open up four priority areas of the public service to workers from other Union countries (state education, civilian research, operational public health services and public bodies responsible for administering commercial services) (70). This sectoral initiative, which goes further than the previous case-by-case approach to the application of Article 48 (4) of the Treaty, has led to the commencement of several infringement proceedings.

Most of these proceedings have been dropped following legislative amendments in the Member States. However, the Commission has decided to continue with three of the cases before the Court, against Belgium, Greece and Luxembourg. In its judgments of 2 July 1996 (71), the Court ruled that these three Member States had failed in their obligations by generally limiting access to employment in the public service to their own nationals (72). The Commission will ensure that these Member States amend their legislation to comply with the Court's rulings as soon as possible.

These judgments show that the Court of Justice sanctions the Commission's 'sectoral` approach. However, it should be noted that the Commission's systematic efforts in the priority sectors have rubbed off in other sectors - France and Germany, for example, have enacted legislation (in July 1991 and December 1993 respectively) whose scope is not confined to the priority areas but, in theory, covers the public service as a whole.

The important thing now is to ensure that non- discriminatory access to all public service posts not covered by Article 48 (4), whether or not they belong to a priority sector, becomes the norm in all the Member States, so that discrimination on the grounds of nationality for public service posts is completely eliminated in the European Union.

2.2.3.6. Social security of migrant workers

The Commission brought an action against Greece following several complaints concerning the status of members of large families. It contended that by denying salaried or unsalaried Community workers and their families the status of large families on the grounds of their nationality, either by legislation or administrative practices, Greece was failing to discharge its obligations under Community law (Articles 48 and 52 of the Treaty, Article 7 of Regulation (EEC) No 1612/68, Article 7 of Regulation (EEC) No 1251/70, Article 7 of Directive 75/34/EEC and Article 3 of Regulation (EEC) No 1408/71).

A reasoned opinion was sent to Belgium for obliging firms in the construction industry to make advance payments in respect of their social security contributions in order to obtain social identity cards for their workers and authorization to commence work on a site, without taking account of Community provisions on the posting of workers.

With regard to the dissolution of the Social Insurance Fund in Gibraltar, the United Kingdom informed the Commission - in response to its reasoned opinion - that new legislation which conforms to Community law would be introduced before the end of 1996. Meanwhile, payments were restarted on 1 October, backdated to 1 January 1994, the date on which the Fund was dissolved.

2.2.3.7. Recognition of qualifications

Cases decided by the Court of Justice

The following are noteworthy among the Article 171 cases for failure to comply with earlier Court of Justice judgments:

- infringement proceedings brought against Belgium for failing to comply with the judgment given on 16 May 1991 (Case C-167/90) concerning the incorrect transposal of Directives 85/432/EEC and 85/433/EEC (pharmacists),

- infringement proceedings in the case concerning private schools in Greece (frontistiria); In Case C-147/86, the Court condemned Greece for a breach of Articles 48, 52 and 59 of the Treaty in the form of a ban on nationals of other Member States setting up frontistiria and private music and dance schools. Following Case C-328/90 (73), in which Greece was condemned for a second time, the Greek authorities amended their legislation. However, the infringement proceedings on this newly-adopted legislation are still open,

- the infringement proceedings concerning the freedom of tourist guides to provide services against Italy and France (74) are pending. Italy has notified the Commission of the adoption of new legislation. The Commission is currently examining whether this legislation complies with the Court's judgment.

Two other cases stand out:

- following the judgment given against Spain in Case C-375/92 concerning the freedom of tourist guides to provide services, some of the autonomous communities have adopted new decrees on the exercise of that profession. Following remarks made by the Commission, Spain has notified new legislation which is being scrutinized by the appropriate Commission departments,

- following Greece's notification of measures to bring its legislation into line with the Court's judgment on the freedom of tourist guides to provide services (75), the Commission requested some amendments to the legislation in question. These have been incorporated in a bill which is about to be adopted.

National implementing measures

The two cases concerning the failure to notify measures transposing Directive 89/48/EEC (first general system) by Belgium and Greece (Cases C-365/93 and C-216/94) (76), on which the Court of Justice has given its judgment, are continuing. A letter of notice has been sent to them under Article 171 of the Treaty.

Regarding Directive 92/51/EEC on a second general system for the recognition of professional education and training, which supplements Directive 89/48/EEC, infringement proceedings have also been commenced against Greece and Belgium. Portugal, Ireland, Germany and the United Kingdom have recently notified implementing measures or are about to do so.

With regard to Directive 94/38/EC amending Directive 92/51/EEC with respect to the level of certain qualifications, proceedings are also under way against several Member States.

Incorrect transposal and incorrect application of directives

The Commission received around 30 complaints concerning restrictions in breach of Articles 52 and 59 of the EEC Treaty and directives on the mutual recognition of professional qualifications. Some of these complaints gave rise to infringement proceedings, while others were shelved.

The Commission pursued a number of proceedings already in motion against Member States for incorrect transposal or incorrect application of directives. For example:

- a case concerning the transposal of Directive 89/48/EEC with regard to the teaching profession in Germany,

- a proceeding against Germany concerning access to the dental profession (requirements not allowed by the dentist directives for admission to the social security register of dentists who hold non-German qualifications which conform to the directives),

- a case against Spain for admitting dentists with qualifications obtained in Latin America at a level far below the Directive's requirements. Spain is currently taking steps to bring its legislation into line with Community law,

- a proceeding against the Spanish legislation implementing the architects directives, which lays down restrictions on the maximum period during which services may be provided in Spain,

- new infringement cases, including one against Italy for failing to observe the procedural guarantees laid down in the Directive and one against France for failing to apply the rule in the Heylens-Vlassopoulou case on hairdressers holding Belgian qualifications.

2.2.3.8. >TABLE>

2.2.3.9. Independent commercial agents

Directive 86/653/EEC on independent commercial agents has been transposed in all the Member States. However, the Commission has decided to send a reasoned opinion to Ireland for incorrect transposal of the directive.

2.2.4. Freedom to provide services

2.2.4.1. Broadcasting

All the Member States have notified national measures to implement Directive 89/552/EEC (television without frontiers).

Only the two problems of substance with Belgium and the United Kingdom that were the subject of two judgments by the Court of Justice (77) still remain. These two major cases primarily concern the main Directive's central provision, Article 2 (freedom of reception and retransmission, applicable law). The Court first stated, upholding the Commission's arguments, that a system of prior authorization for television broadcasts emanating from another Member State was in breach of the principle of freedom of reception and retransmission of television broadcasts laid down by the Directive. In its second judgment, the Court ruled that both the failure to respect the hierarchy of criteria determining a Member State's jurisdiction and the introduction of a double control on broadcasting services depending on the target audience were in breach of the Directive.

The Commission regrets that the effectiveness of the application of provisions on advertising and sponsorship varies between Member States. It will keep a close eye on this problem.

The Commission also felt the need to step up monitoring of the application by the Member States of Article 22 of the Directive on the protection of minors, given the rising number of pornography channels.

2.2.4.2. Telecommunications

In its resolution of 21 November 1996 on new policy priorities regarding the information society (78), the Council recognized that liberalization of telecommunications markets by 1 January 1998 would stimulate the private and public investment necessary for development of the information society in Europe. It stressed the importance of an appropriate and consistent legal framework for the information society at European level.

To prepare the ground for liberalization of the telecommunications markets in 1998, the Commission adopted two Directives, one on mobile and personal communications (96/2/EC) (79) and the other governing the implementation of full competition in telecommunications markets (96/19/EC) (80). To round out the new regulatory framework, the Council and Parliament have continued to work towards the adoption of new directives on harmonized conditions for providing telecommunications services in the EU (81).

Most Member States have drawn up new legislation to comply with the requirements of new directives that have already been adopted or are in the process of being adopted. Basic legislation has been rounded out with a series of implementing instruments. The Commission helped those Member States that notified their draft national legislation by providing detailed comments on them. Given the increased volume of instruments that have been or are being adopted, such assistance is bound to increase over the next two years in order to achieve effective liberalization of telecommunications throughout the EU.

The Commission has also examined the national measures implementing the directives and decisions currently in force notified by the Member States.

All the Member States have notified national measures implementing the three Directives on frequencies - Directives 87/372/EEC (GSM), 90/544/EEC (Ermes) and 91/287/EEC (DECT). The Commission is currently preparing a report on the application of these three Directives. This report will be submitted to the Council and Parliament during the first half of 1997.

Framework Directive 90/387/EEC prescribing the principles to be applied to the implementation of open network provision (ONP) has been transposed by all the Member States.

All Member States except Luxembourg have notified national measures transposing the first specific ONP Directive (92/44/EEC). The Commission has scrutinized the national measures notified and considers that Austria, Belgium, Greece, Finland, the Netherlands and Portugal have failed to transpose the Directive in full. The measures notified by Italy raise various problems in terms of consistency with Community law.

The Commission had introduced infringement proceedings against Luxembourg with respect to this Directive. The Court of Justice (82) having confirmed that Luxembourg had failed to fulfil its obligations under Directive 92/44/EEC, a new proceeding was initiated under Article 171 of the Treaty.

The Commission is preparing that report on the implementation of the Directive required by Article 14. The report will be laid before the Council and Parliament in the first half of 1997.

The Commission has proposed a Directive amending Directives 90/387/EEC and 92/44/EEC to adapt them to the new competitive environment (83).

Only six Member States (Germany, Austria, Belgium, Finland, Sweden and Portugal) have notified national measures transposing Directive 95/62/EC on the application of open network provision (ONP) to voice telephony.

The basic Directive on the harmonization of telecommunications terminal equipment (Directive 91/263/EEC) is a framework instrument providing for the adoption of a range of common technical rules for its implementation. The Commission has adopted 14 Decisions relating to this Directive (94/11/EC and 94/12/EC relating to the GSM, 94/470/EC on ONP 2 048 kbit/s digital unstructured leased lines, 94/471/EC and 94/472/EC for DECT, 94/796/EC and 94/797/EC for ISDN, 94/821/EC on ONP 64 kbit/s digital unstructured leased lines, 95/526/EC on ISDN telephony, 95/290/EC on Ermes, 95/525/EC on DECT-public access, 96/71/EC on X.25 interfaces, 96/629/EC and 96/630/EC GSM-Phase II).

12 Member States (Germany, Austria, Denmark, Spain, Finland, France, Greece, Italy, the Netherlands, Portugal, the United Kingdom and Sweden) have notified national measures transposing Directive 91/263/EEC. Examination has shown that the notifications from Austria and the Netherlands are incomplete.

The Court of Justice also found that, by failing to adopt transposal measures, Belgium (84), Luxembourg (85) and Ireland (86) had failed to fulfil their obligations under Directive 91/263/EEC. The Commission has brought National transposal measures notified by the Member States with regard to the two Directives amending Directive 91/263/EEC have also been subject to scrutiny.

This process involves measures notified by 11 Member States (Germany, Denmark, Spain, Finland, France, Greece, Italy, the Netherlands, Portugal, the United Kingdom and Sweden) transposing Directive 93/68/EEC on marking.

Directive 93/97/EEC extends the scope of Directive 91/263/EEC to the equipment of ground satellite tracking stations. Nine Member States (Germany, Denmark, Spain, Finland, France, the Netherlands, Portugal, the United Kingdom and Sweden) have notified the Commission of national measures transposing the new Directive. Infringement proceedings are under way against Member States who have not notified transposal measures.

Nine Member States (Germany, Austria, Belgium, Denmark, Finland, Ireland, Luxembourg, the United Kingdom and Sweden) have adopted measures required under Decision 91/396/EEC on the introduction of '112` as the standard emergency services number throughout the Union. France, Italy and the Netherlands have asked the Commission for a derogation under Article 3 (2) of the Decision.

12 Member States (Germany, Belgium, Denmark, Finland, France, Greece, Luxembourg, Ireland, Italy, the Netherlands, Portugal and the United Kingdom) have already introduced '00` as the standard code for access to the international network in the Community, in accordance with Decision 92/264/EEC. Austria and Sweden have announced their intention to introduce the '00` code in December 1997 and December 1998 respectively. Spain is the only Member State that has still supplied no information on implementation of the Decision.

None of the Member States has notified national measures transposing Directive 95/47/EC on the use of standards for the transmission of television signals. The Commission has therefore commenced infringement proceedings.

2.2.4.3. >TABLE>

2.2.4.4. Financial Services

Dialogue with the national authorities

As a means of consolidating administrative cooperation and resolving problems quickly, the Commission maintained regular contacts with the national authorities through institutional committees (Banking Advisory Committee, Insurance Committee, UCITS - Undertakings for Collective Investment in Transferable Securities - Contact Committee), ad hoc interpretation groups (the banking directives group, the insurance group and the capital adequacy directive group, etc.) and high-level working parties (HLSSC - High-Level Security Supervisors Committee - for negotiable securities).

Complaints and infringements

In the insurance field, the Commission commenced infringement proceedings in eight new cases for breaches of Articles 52 and 59 of the Treaty and directives. All cases were detected by the Commission itself. Two of the proceedings opened in 1995 were shelved, one because it was unfounded and the other because the Member State concerned complied with Community law. The banking sector saw a decrease in the number of proceedings compared with last year. The Commission shelved two complaints without taking further action, one brought this year and one in 1995.

Many infringement