EUROPEAN COMMISSION Brussels, 31.7.2020 COM(2020) 350 final REPORT FROM THE COMMISSION Monitoring the application of European Union law





2019 Annual Report {SWD(2020) 147 final}



Foreword I.A new boost for jobs, growth and investment Ensuring fair working conditions across the EU Enforcing environmental rules Enforcing agricultural rules Enforcing rules on maritime affairs and fisheries Enforcing rules on regional policy Fighting fraud against the EU budget II.A connected digital single market Improving connectivity Guaranteeing cybersecurity and trust in online transactions Better accessibility for people with disabilities III.A resilient Energy Union with a forward-looking climate change policy Implementing the Paris Agreement on climate change IV.A deeper and fairer internal market with a strengthened industrial base Ensuring undistorted competition Ensuring free movement of workers Ensuring free movement of goods Ensuring freedom of establishment and free movement of services

Improved information and assistance for citizens and businesses Enforcing the Capital Markets Union, financial services rules and free movement of capital Enforcing rules on taxation and customs Ensuring a high level of protection for consumers Ensuring a high level of protection of public health Enforcing rules on mobility and transport V.A deeper and fairer Economic and Monetary Union Enforcing Banking Union rules VI.An area of justice and fundamental rights based on mutual trust Upholding rule of law and fundamental rights Cross-border cooperation in criminal and civil justice Improving the protection of personal data Enforcing rules on security VII.Towards a new policy on migration Foreword The European Union is founded on the respect of the rule of law. It was no coincidence that the first President of the European Commission, Walter Hallstein, referred to the European Union as a Community of law (Rechtsgemeinschaft) – bound by rules that Member States agree upon as co-legislators and subscribe to implement in their national systems. As Guardian of the Treaties, it is the Commission’s task to ensure that these rules are upheld to the benefit of our citizens. Whether it concerns clean air, food safety or access to health care abroad, the cooperation of Member States is key to ensure that EU policies become a reality for people in their every day lives. This annual report provides an account of the Commission’s work to ensure the correct application, implementation and enforcement of EU law in 2019. The year 2019 marked the end of the Juncker Commission and, as of 1 December, the beginning of my team’s mandate. In many ways, 2019 has thus been a year of transition. A new team of Commissioners took up their duties, working under new Political Guidelines and steering new initiatives, such as the European Green Deal and the Digital Agenda. Throughout this transition, the foundations that keep our Union together have not changed. The correct application and enforcement of EU law, including the respect of fundamental rights and the rule of law remains a shared responsibility of Member States and EU institutions. Upholding EU law can never be a one-way street but is based on the sincere cooperation of our Member States – in the interest of the citizens whom we serve. Nurturing this special partnership, the Commission will continue to provide support and issue guidance to Member States to help them implement EU law. We will nevertheless remain vigilant and we will be ready to take determined legal action if EU law is breached. There can be no compromise when it comes to the application and enforcement of EU law to uphold citizens’ rights that derive from it.

President of the European Commission Ursula von der Leyen



I.A new boost for jobs, growth and investment The Commission’s first priority last year was to stimulate investment to create jobs and strengthen Europe’s competitiveness. However, creating the right regulatory environment to support businesses and job creation is undermined if Member States do not implement EU rules correctly and on time. Ensuring fair working conditions across the EU The European Pillar of Social Rights , proclaimed in November 2017 by the European Parliament, the Council and the European Commission, expresses the joint political commitment to a number of principles and rights that are essential for fair and well-functioning labour markets and welfare systems in 21st century Europe. One key element is fair working conditions, which includes the prevention of employment relationships that lead to precarious working conditions. In July 2019, the Commission took action against Italy , as it considered that public sector workers are not sufficiently protected against abusive successive fixed-term contracts and discrimination, as required under EU rules (Council Directive 1999/70/EC). During 2019, the Member States, the Commission and social partners continued their cooperation to make EU occupational safety and health legislation future-proof and to ensure proper compliance. A strong focus was on ensuring that Member States have in place binding occupational safety and health rules in their national legislation and that they communicate them to the Commission. The Commission also regularly updates the Interpretative Communication on the Working Time Directive in line with important developments in the case-law of the Court of Justice. Enforcing environmental rules In 2019, the Commission continued its legal action to combat air pollution, which remains a priority. The Commission also promoted implementation through discussions with the Member States on this important topic – a clean air dialogue was held in Italy in 2019. In 2019, the Commission took another three Member States to the Court of Justice over excessive levels of nitrogen dioxide (NO2) or sulfur dioxide (SO2) in the air ( Italy , Spain and Bulgaria ). The Court of Justice upheld the action brought by the Commission against France over nitrogen dioxide (NO2) pollution and, in another ruling , the Court provided an important interpretation of the Ambient Air Quality Directive - national courts have jurisdiction to review the choice of location of air quality measuring stations. The Commission organises events on circular economy in Member States that are at risk of not reaching the new waste recycling targets and other requirements of EU waste legislation. In 2019, such events were held in Athens , Lisbon and Budapest , and top experts offered recommendations on how best to implement the rules that were revised in 2018. The Commission referred Italy , Cyprus and Sweden to the Court of Justice in 2019 for failing to meet their obligations on urban waste water treatment. Under EU legislation, proper waste water collecting systems must be in place, and this water must be adequately treated. Member States must complete the Natura 2000 network of protected areas and put in place the necessary conservation measures for all sites. This is key for the conservation of protected habitats and species. In parallel, the Commission took action in 2019 to remedy structural flaws in national laws on nature protection and to stop illegal bird hunting. The Commission is also focused on ensuring that logging and forest management activities are carried out in compliance with nature protection requirements.

The Commission launched infringement procedures against 17 Member States in March , October and November to improve the implementation of the EU Environmental Impact Assessment Directive , which was updated in 2014 to reduce administrative burden and improve the level of environmental protection, while making public and private investment decisions more sound, predictable and sustainable. Enforcing agricultural rules The common agricultural policy (CAP) is built on a partnership between agriculture and society, and between the EU and its farmers. Its purpose is to support farmers and improve agricultural productivity, to ensure a stable supply of affordable food and to make sure that European Union farmers make a reasonable living. The CAP also addresses environmental challenges, including climate change. It aims at managing natural resources in a sustainable manner, maintaining rural areas and landscapes across the EU, and keeping the rural economy alive by promoting jobs in farming and related sectors. Geographical indications protect the name of specific products and promote their unique characteristics, which are linked to their geographical origin as well as traditional know-how and are a key part of maintaining high food quality and standards. In 2019, the Commission took action to address the incorrect implementation of EU rules on the protection of designations of origin and geographical indications. Denmark allowed Danish companies to produce and export white cheese to non-EU countries as ‘feta’, even though it does not comply with the product specification for this protected designation of origin. Bulgaria has maintained its own national register of geographical indications for agricultural products and foodstuffs since 2008, contrary to the exclusive character of the EU-wide registers for quality schemes. Enforcing rules on maritime affairs and fisheries The primary goal of the common fisheries policy (CFP) is to ensure that the fishing and aquaculture sectors are environmentally, economically and socially sustainable. The CFP therefore includes measures to restrict the fishing fleet capacity and to impose limits on catches and fishing activities. In this regard, all Member States have agreed to bring commercial fishing down to sustainable levels by 2020. In 2019, a particular focus was placed on verifying compliance with rules on by-catches of sensitive species such as whales, dolphins and other marine mammals. The Commission launched a series of informal dialogues on issues such as engine power verification systems and control of the EU fleet fishing outside EU waters. The success of the CFP requires the design and implementation of an effective and coherent system of control and enforcement. For this reason, the Commission’s enforcement strategy in 2019 continued to focus on fisheries conservation, control and enforcement by Member States. The Commission followed up on its infringement procedure against Denmark over its failure to enforce several important provisions of the EU Control Regulation . The most serious issues concern fisheries for industrial purposes. Proper controls are essential to make sure that catch registration documents are accurate, which is necessary to prevent overfishing. The CFP also offers specific tools for enforcement, such as control action plans and administrative inquiries. On the basis of verifications and audits carried out by the Commission, the Commission adopted and followed up on a variety of control action plans. Enforcing rules on regional policy The European Structural and Investment Funds support investments in key growth-generating policy areas across the EU. In 2019, the Commission continued to ensure that irregular expenditure is withdrawn from co-financing, either by suspending payments or by applying financial corrections in some cases. On 14 May 2019, the Commission adopted a Decision laying down the guidelines for determining financial corrections to be made to expenditure financed by the Union if public procurement rules are not followed. This Decision offers more legal certainty for all actors and a more proportionate approach in the complex area of public procurement, which remains a major source of irregularities and financial corrections for Cohesion Funds. Fighting fraud against the EU budget The means to combat crime affecting the EU budget have significantly improved with the adoption of the Directive on the protection of the EU’s financial interests . The Directive will also be the substantive base for the work of the European Public Prosecutor's Office . The Commission is working closely with the Member States to ensure that the Directive is implemented properly. On 19 September 2019 it opened infringement procedures against 14 Member States for late transposition. In two cases brought to the Court by the Commission against the United Kingdom and the Netherlands , the Court held that these countries had not complied with their duty of sincere cooperation under the Treaty as they had failed to compensate for the loss of own resources resulting from the wrongful issue of export certificates by the local authorities of their Overseas Countries and Territories (OCT). The Court concluded that the two Member States concerned are liable, vis-à-vis the European Union, for any error committed by the authorities of their OCTs that led to a shortfall of traditional own resources.