TWELFTH ANNUAL REPORT ON MONITORING THE APPLICATION OF COMMUNITY LAW (1994) /* COM/95/500 FINAL */



Official Journal C 254 , 29/09/1995 P. 0001



TWELFTH ANNUAL REPORT on monitoring the application of Community law - 1994 - (95/C 254/01) COM(95) 500 final CONTENTS Page INTRODUCTION AN AREA WITHOUT INTERNAL FRONTIERS 1. Introduction .......... 10 2. Situation sector by sector .......... 11 2.1. Removal of physical barriers .......... 11 2.1.1. Customs union .......... 11 2.1.1.1. Notification of national implementing measures in respect of directives applicable to the customs union .......... 11 2.1.2. Free movement of agricultural products .......... 11 2.1.2.1. Import controls .......... 11 2.1.2.2. Import bans .......... 12 2.2. Removal of technical barriers .......... 12 2.2.1. Free movement of goods .......... 12 2.2.1.1. Articles 30 et seq. of the EC Treaty .......... 12 2.2.1.2. The preventive rules of Directive 83/189/EEC .......... 15 2.2.2. Progress in implementing directives on the free movement of goods .......... 16 2.2.2.1. Foodstuffs .......... 16 2.2.2.2. Progress in implementing directives applicable to foodstuffs .......... 16 2.2.2.3. Pharmaceutical products .......... 16 2.2.2.4. Progress in implementing directives applicable to pharmaceutical products .......... 17 2.2.2.5. Chemicals .......... 17 2.2.2.6. Progress in implementing directives applicable to chemicals .......... 17 2.2.2.7. Motor vehicles, tractors and motorcycles .......... 17 2.2.2.8. Progress in implementing directives applicable to motor vehicles, tractors and motorcycles .......... 18 2.2.2.9. Construction products .......... 18 2.2.2.10. Mechanical engineering, personal protective equipment, prepackaging, measuring equipment, electronics and medical equipment .......... 18 2.2.2.11. Progress in implementing directives applicable to mechanical engineering, personal protective equipment, prepackaging, measuring equipment, electronics and medical equipment .......... 19 2.2.3. Services .......... 19 2.2.3.1. Audiovisual media .......... 19 2.2.3.2. Intellectual and industrial property .......... 19 2.2.3.3. Progress in implementing directives applicable to intellectual and industrial property .......... 20 2.2.3.4. Telecommunications .......... 20 2.2.3.5. Progress in implementing directives applicable to telecommunications .......... 21 2.2.3.6. Free movement of financial services .......... 22 2.2.3.7. Progress in implementing directives applicable to financial services .......... 22 2.2.3.8. Direct taxation .......... 22 2.2.3.9. Progress in implementing directives applicable to direct taxation .......... 23 2.2.3.10. Company law .......... 23 2.2.3.11. Progress in implementing directives applicable to company law .......... 23 2.2.4. Free movement of capital .......... 23 2.2.5. Public procurement .......... 24 2.2.5.1. Progress in implementing directives applicable to public procurement .......... 27 2.3. Removal of tax barriers .......... 27 2.3.1. Progress in implementing directives applicable to indirect taxation .......... 28 2.4. Free movement of persons and right of establishment .......... 28 2.4.1. Ending discrimination .......... 28 2.4.2. Entry and residence .......... 29 2.4.2.1. Progress in implementing directives applicable to right of residence .......... 29 2.4.3. Trade union rights .......... 29 2.4.4. Access to employment in the public service .......... 29 2.4.5. Social security of migrant workers .......... 30 2.4.6. Recognition of qualifications .......... 30 2.4.6.1. Progress in implementing directives applicable to recognition of qualifications .......... 32 2.4.7. Independent commercial agents .......... 32 2.5. Consumer policy and product safety .......... 33 2.5.1. Progress in implementing directives applicable to consumer policy and product safety 33 COMPETITION 1. Introduction .......... 34 2. Situation sector by sector .......... 34 2.1. Public enterprises .......... 34 2.2. Monopolies .......... 35 2.3. Progress in implementing directives applicable to competition .......... 35 EMPLOYMENT AND SOCIAL POLICY 1. Introduction .......... 35 2. Situation sector by sector .......... 36 2.1. Equal treatment of men and women .......... 36 2.2. Working conditions .......... 36 2.3. Health and safety at work .......... 37 2.4. Public health .......... 37 2.5. Progress in implementing directives applicable to employment and social policy .......... 37 AGRICULTURE 1. Introduction .......... 37 2. Situation sector by sector .......... 38 2.1. Markets .......... 38 2.2. Harmonization .......... 39 2.3. Notification of national measures implementing agricultural directives .......... 41 FISHERIES 1. Introduction .......... 42 2. Situation sector by sector .......... 42 2.1. Markets .......... 42 2.2. Resources .......... 42 2.3. Compatibility with Community law of national legislation on the granting of flag rights .......... 42 ENVIRONMENT 1. Introduction .......... 43 1.1. General situation .......... 43 1.2. Notification of national implementing measures .......... 43 1.3. Conformity of national implementing measures .......... 43 1.4. Incorrect application of directives .......... 44 1.5. Structural Funds and other sources of Community finance .......... 44 1.6. Freedom of access to information .......... 45 1.7. Environmental impact assessment .......... 45 1.8. Action needed .......... 46 2. Situation sector by sector .......... 47 2.1. Air .......... 47 2.2. Chemicals .......... 47 2.3. Water .......... 48 2.4. Noise .......... 49 2.5. Waste .......... 49 2.6. Nature .......... 49 2.7. Radiation protection .......... 50 2.8. Progress in implementing directives applicable to the environment .......... 51 TRANSPORT 1. Introduction .......... 51 2. Situation sector by sector .......... 52 2.1. Road transport .......... 52 2.2. Combined transport .......... 52 2.3. Inland waterways .......... 52 2.4. Rail transport .......... 52 2.5. Sea transport .......... 53 2.6. Air transport .......... 53 2.7. Progress in implementing directives applicable to transport .......... 53 ENERGY 1. Introduction .......... 53 2. Situation sector by sector .......... 53 2.1. Transparency of prices .......... 53 2.2. Internal market for electricity and natural gas .......... 54 2.3. Energy efficiency .......... 54 2.4. Coal .......... 54 2.5. Progress in implementing directives applicable to energy .......... 54 BUDGETARY MATTERS .......... 54 COMMUNITY STAFF .......... 55 STATISTICAL MATTERS .......... 55 ANNEXES Annex I: Suspected infringements 1990 to 1994 .......... 56 Annex II: Established infringements 1990 to 1994 .......... 63 Annex III: Infringements of Treaties, regulations and decisions .......... 70 Annex IV: Report on the application of directives .......... 84 Annex V: Judgments of the Court of Justice not yet implemented at 31 December 1994 .......... 160 Annex VI: Application of Community law by the national courts .......... 164 INTRODUCTION Each year the European Commission draws up a report on the monitoring of the application of Community law in response to requests from Parliament (Resolution of 9 February 1983) and the Member States (point 2 of declaration No 19 annexed to the Treaty signed at Maastricht on 7 February 1992). The report also meets requests from the European Council and the Council for information on specific fields. This report, the twelfth in the series, covers 1994. The Commission has done its best to go beyond the inevitably routine aspects of the exercise to bring out new points, ranging from the operation of the checking procedures to the assessment of results. Checking procedures The complaints the Commission receives are still the main source on which it depends for material in monitoring the application of Community law. The number of cases of suspected infringements detected following complaints remained stable in 1994, within the same brackets as over the last five years (see Table 1.1 in Annex I). The slight, 10 % increase on the previous year is of very little significance, as there was a dip in the numbers in 1993. The same table in Annex I shows that there was a fall in the number of suspected infringement cases examined following petitions to or questions in Parliament. That should not, however, be taken as a sign that these sources of information for detecting infringements should be regarded as less important than before. The figures cited are actually a reflection of the real situation, since parliamentary petitions and questions often confirm cases of suspected infringements which have already been identified. The number of cases detected in the course of routine checks remained roughly the same, with only a slight increase on 1993. To summarize the results of the Commission's work under Article 169 EC in 1994, it commenced 974 infringement proceedings (compared with 1209 in 1993), issued 546 reasoned opinions (compared with 352 in 1993) and referred 89 cases to the Court of Justice (compared with 44 in 1993). What lies behind these figures? Why did the number of proceedings commenced in 1994 drop? The answer can be found in Table 2.2 (Annex II), which shows that the fall relates almost entirely to the commencement of infringement proceedings for failure to notify national measures implementing directives. And since the Commission did not drop its guard, and the number of new directives which fell due for transposal in 1994 was comparable to the number for 1993, the explanation lies in improvements in the conduct of Member States as regards adopting transposal measures, as the breakdown of progress in transposing directives given below shows. And why was there a very considerable increase in the number of reasoned opinions? That, too, has to do with the failure to notify national implementing measures, leading almost to a doubling in the number of reasoned opinions issued. The Commission is quite clearly anxious to wind up a large number of proceedings commenced in the past and never brought to a satisfactory outcome, even though they concern directives the failure to transpose which is very damaging to the Community's interests. The same reasoning applies, with even greater force, to the substantial rise in the number of cases referred to the Court of Justice. This is certainly a break with the downward trend recorded for at least five years, but it must be seen in context: referring a case to the Court is the Commission's last resort, and the figure still represents less than 20 % of the reasoned opinions. It should be pointed out here that the Commission is seriously concerned at the persistent delays in giving effect to Court judgments. In July 1994 it informed the Member States that it was planning to make full use of Article 171 of the EC Treaty as amended by the Union Treaty, whereby the Court of Justice has jurisdiction to impose financial penalties on Member States that fail to give effect to its judgments. Since then, all letters of notice and reasoned opinions addressed to Member States that have not taken the measures required to comply with a judgment have stated that penalties may be on them in amounts to be recommended by the Commission when it refers the case to the Court. Alongside the formal stages in the procedure laid down by the Treaty, the Commission presses ahead with its policy of awareness-raising and regular contact with the authorities of the Member States. For this purpose it organizes bilateral meetings from time to time, known as 'package meetings`, at which a set of infringement cases are discussed. These are particularly devoted to internal market matters; non-contentious solutions are generally found to infringements. Meetings are also organized to consider all cases of failure by a Member State to transpose directives. By generating awareness among the national authorities and easing bilateral information exchanges, they make a valuable contribution to the transposal exercise. From the Commission's point of view, these meetings and contacts are just as important as the formal procedure. The responsibility for monitoring compliance with Community law does not lie with the Community institutions alone. The Commission is duty-bound to emphasize the important role played by the courts in the Member States. Annex VI outlines their contribution over the past year. The results: signs of growing respect for Community law Directly applicable rules A number of familiar problems still persist, but the Commission has been able to note continuing improvement in certain essential areas of Community activity in 1994. For example, there is a clear improvement as regards the free movement of goods, where the trend towards an increase in the number of cases closed and a reduction in the number of reasoned opinions and referrals to the Court of Justice in relation to cases involving non-tariff barriers (Articles 30 et seq.) has continued. Regarding public procurement, by contrast, the number of complaints about failure to comply with Community law rose sharply, the number of infringement proceedings being double that for the previous year, partly because of an expansion in the volume of Community legislation. One of the problem areas was VAT, where cases of failure to comply with Community law continued to proliferate despite the infringement proceedings that have been pending for years now. This is partly due to the complexities of the Member States' legislative procedures in tax matters. Fuller details of the various cases can be found in the sector-by-sector breakdown and the summary given in Annex II (summary of infringements of Treaties, regulations and decisions). Transposal of directives The table below gives a general picture of the progress achieved in implementing all the directives applicable on 31 December 1994 (1). As in 1993, in 1994 the number of directives to be implemented went up by approximately 60. >TABLE> As can be seen, on 31 December 1994 the Member States had, on average, notified 91,89 % of the national implementing measures required to give effect to all the directives to be implemented. This was a definite improvement over the situation on 31 December 1993. This is obviously a satisfactory result, but it conceals a great many disparities as regards both subject matter and the situation in each Member State. The breakdown by sector and the summary given in Annex IV make it possible to analyse these figures in greater detail. If we look at the three main sectors in which directives are transposed - the frontier-free area, agriculture and the environment - it can be seen, globally speaking, that whereas there was a clear average increase in the rate of transposal in the first two, there was some falling off where the environment was concerned. In the frontier-free area, the sharpest rise in the transposal rate was in the fields of financial services, direct taxation and company law, and with the intellectual and industrial property directives. The transposal rate is still high in customs and indirect taxation, where almost all the legislation has been transposed. In other areas, however, transposal levels fell, especially consumer protection and product safety (10,2 % down on 1993). In agriculture, the 5 % increase is certainly due to the fact that, after some basically practical measures had been taken (i.e. the introduction of new checks in the veterinary and plant health sectors), the Member States were able to put more effort into formally transposing the directives in 1994. Also, the legislative work started before 1994 was completed. The very slight reduction (1,1 %) in the transposal rate as regards the environment shows that the Member States are keeping up their efforts despite the difficulties they face as a result of administrative coordination problems in particular. Looking beyond its quantitative monitoring of national implementing measures, the Commission must emphasize the importance of their quality as tools for the effective application of Community law. It is stepping up its vigilance in this respect. The situation regarding the application of Community law has certainly improved considerably, but it is still becoming less and less acceptable. Why? The fact is that times have changed. In a frontier-free area, the effects of infringements of Community rules or late transposal of directives are felt much more strongly than they were in the past. Ordinary citizens, what is more, are calling for transparency: they cannot understand why there are aspects of the Community's policies which only work on paper. Our policies will have a practical impact on the Community's citizens only if they are properly implemented. If we want Europe's citizens to go on trusting our institutions, those policies must be applied strictly. Hence the importance the Commission attaches to its role as the guardian of Community law, as it has stated in its 1995 programme. Hence, too, its determination to do its utmost to ensure that Community law can be implemented more easily, by making it accessible and comprehensible. Witness its endeavours at simplifying, recasting and codifying Community law, as described in its report on the functioning of the Treaty on European Union (2). In pursuing its endeavours, the Commission is sure that it can count on the cooperation of Parliament and the Member States, to whom this report is addressed. Structure of the 12th report >START OF GRAPHIC> This report consists of: - a sector-by-sector breakdown; - statistical tables concerning suspected infringement cases (Annex I) and infringements detected (Annex II) as at 31 December 1994; - a summary of cases of infringements of the Treaties, regulations and decisions considered in 1994 (Annex III); - progress in the implementation by Member States of directives in force on 31 December 1994, with reference to relevant infringement cases (Annex IV); - a summary of judgments of the Court of Justice which have not been put into effect (Annex V); - a round-up of the application of Community law by national judiciaries (Annex VI).>END OF GRAPHIC> AN AREA WITHOUT INTERNAL FRONTIERS 1. INTRODUCTION In 1994 the internal market entered its second year. The objective set out in Article 7a of the Treaty, the establishment of an area without internal frontiers with free movement of goods, persons, services and capital, has largely been achieved. Nearly all legislation identified in the White Paper of 1985 has been adopted. However, even with this legal framework in place, continual effort is needed to ensure that the common legal framework is applied, widely understood, enforced and, where necessary, developed in a coherent way to meet new needs. This is why the Commission issued its Strategic Programme 'Making the Most of the Internal Market` at the end of 1993, setting priorities for the years ahead. The Strategic Programme identifies the legislative proposals from the original White Paper that still have to be adopted by the Council, including proposals in company law and direct taxation, as well as new proposals concerning free movement of people, and the need to introduce competition into regulated sectors such as energy, telecommunications and postal services. The Strategic Programme also addresses the new task of managing the Union market, i.e. making sure that Community legislation is properly and evenly enforced and regularly evaluated so that individuals and companies can reap the full benefits of the internal market. To this end, the Commission prepared a report for the Council meeting on 8 December 1994 that gives an indication of the state of play of national transposition of the White Paper measures and other legislation that is critical for the functioning of the internal market. This report covers 276 measures in force, of which 219 require national implementation measures. Because of developments in the internal market some of the White Paper measures had become obsolete and were abandoned or replaced by others more relevant. The Commission therefore modified the basis of the statistical calculation of the implementation of the White Paper measures. The December 1994 report, on this modified statistical basis, was the starting point of a process intended to ensure the quality of Member States' transposition of Community legislation. On average, Member States have so far adopted 89 % of the national measures required to implement internal market legislation. The performance of individual Member States ranges from substantially higher than the average figure (France 95,9 %, Denmark 95,9 %) to significantly below it (Germany 82,6 %, Greece 79 %). A large proportion of infringements are the result of failure to incorporate Community directives into national law within the time limits set. Procedural problems related to the national decision-making process or the technical complexity of the texts are often the reason for the delays. To remedy this situation the Commission carries out systematic examination of the application of the directives which have entered into force. It will continue to assess the national legislation notified to it, as far as its resources allow, and will vigorously pursue infringements both through consultation with Member States concerned and, when necessary, informal infringement proceedings. The Sutherland report and the Strategic Programme identified administrative cooperation as a key factor in the operation of the single market. The removal of barriers between Member States gives rise to a new situation in which Community law, and the way in which it is applied in other Member States, takes on greater importance for individuals and business in the Union. They need to feel confident that administration of the law is as reliable and effective as it is for their own national regulations. So it is essential that the authorities responsible for enforcing internal market measures maintain a high degree of cooperation and that they keep each other informed. Administrative cooperation is already working well in many areas (such as veterinary and plant health controls, pharmaceuticals, foodstuffs, customs and indirect taxation), but completion of the internal market requires a thorough study of the way it works in all areas. With this in mind, in 1993 the Commission initiated a programme to promote administrative cooperation. In February 1994 it sent the Council and Parliament a communication setting out a framework for this exercise. The Council, in response, adopted a resolution in June calling on the Commission to continue its programme of discussions with representatives of the Member States to identify needs in different areas and sectors. The resolution also called on the Member States to notify to the Commission contact points for mutual assistance on enforcement matters by the end of 1994. This subject has been regularly discussed in the Advisory Committee for Coordination in the Internal Market Field. The existing schemes for exchanges of officials between Member States, such as the Karolus programme and the Matthaeus programme for customs officials, are a way of helping national officials become accustomed to the procedures and ways of thinking of other Member States. They form part of the support measures provided by the Commission for administrative cooperation. These programmes will continue to be applied to help create confidence between the administrations of Member States. 2. SITUATION SECTOR BY SECTOR 2.1. Removal of physical barriers 2.1.1. Customs union No reasoned opinions on customs matters were sent to Member States in 1994. However, proceedings for failure to act were brought against Germany for failure to comply with the minimum prices laid down by the International Dairy Arrangement (GATT) when issuing inward processing authorizations. In a judgment delivered on 9 February 1994 in Case C-119/92 Commission v Italy [1994] ECR I-393, concerning the representation monopoly and tariffs of Italian customs forwarding agents, the Court found for the Commission on the first point, opining that Italian legislation did not give importers and exporters a genuine choice between direct representation reserved for authorized customs agents and indirect representation which should stay free of restrictions. The Court also held that employees representing their own firm should not be required to have the same qualifications as self-employed persons. On the other hand, the Court did not take the view that the mandatory tariffs imposed by customs agents constituted charges having equivalent effect to customs duties. In its judgment of 9 August 1994 on a number of references for preliminary rulings (Joined Cases C-363 and C-407 to 411/93 Lancry and Others [1994] ECR I-3957), the Court held that the dock dues levied on imports into French overseas departments constituted a tax equivalent to a customs duty, and were thus in breach of Article 9 of the Treaty, even if they were only imposed on goods from mainland France. 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 EC Treaty are still an integral part of the common market organizations, even though there has no longer been any need to write them into the regulations since 1 January 1970. In 1994 the Commission again kept a constant watch to make sure that barriers to trade in agricultural products in the Community were removed. It paid particular attention to the elimination of controls at internal frontiers. 2.1.2.1. Import controls Before the removal of internal borders, import controls were the most numerous and the most varied of all the obstacles to trade. Considerable progress has been made in many infringement proceedings as a result of the entry into force of legislation harmonizing veterinary and plant health rules for the completion of the internal market. These proceedings may be classified as follows: (a) Double checks and systematic checks As regards the transposal of Directive 91/493/EEC (health conditions for fishery products), Italy maintains that it has complied with the Court's judgment in Case C-228/91 [1993] ECR I-2701, which condemned the systematic inspections carried out on consignments of fish imported from other Member States and Norway. However, the Commission wishes to satisfy itself that adequate measures have in fact been taken. The Commission sent a reasoned opinion to Germany, which imposes requirements not provided for in Community legislation on imports of certain kinds of fresh pigmeat from Denmark and carries out systematic checks in breach of Directives 89/662/EEC and 91/497/EEC. (b) The requirement for prior import licences or permits This practice applies in Ireland to bovine and porcine semen to be used for artificial insemination purposes, and in Italy to any vegetable matter susceptible to fire blight. In its judgment in Case C-235/91 Commission v Ireland [1992] ECR I-5917, the Court of Justice held that by making imports of semen from domestic bovine and porcine animals subject to a licence and various other conditions, Ireland had failed to fulfil its obligations under Article 30 of the EC Treaty, Regulations (EEC) Nos 805/68 and 827/68 (common organization of the market in certain products listed in Annex II to the Treaty), Directive 77/504/EEC (pure-bred breeding bovines) and Decision 88/124/EEC (common organization of the market in beef and veal). The Irish authorities have since notified the Commission of Statutory Instrument No 297 of 20 September 1994, whereby Ireland complies with the Court's decision. To transpose and implement Directive 77/93/EEC laying down new common rules in the plant health sector, the Italian authorities had adopted a ministerial decree ending the requirement for prior import licences for plants susceptible to fire blight during the period in which there is no import ban. However, the Commission did not withdraw the case before the Court of Justice as it wanted to obtain a general ruling on the matter. The Court gave judgment on 20 September 1994 (Case C-249/92 [1994] ECR I-4311), holding that by requiring prior authorization for all imports of plants susceptible to fire blight (Erwinia amylovora), Italy had failed to fulfil its obligations under Article 11 of Directive 77/93/EEC and under Article 30 of the EEC Treaty in conjunction with Article 10 (1) of Regulation (EEC) No 234/68. 2.1.2.2. Import bans This year again, some import bans were lifted as Member States gradually implemented harmonization directives. Since November 1993 the Commission has been pursuing the case of Portugal's adoption of a unilateral measure banning the import of live pigs and pigmeat products, contrary to Directive 90/425/EEC. The Portuguese authorities have now responded by cancelling the import ban (see eleventh report - COM(94) 500 final, OJ No C 154, 6. 6. 1994, p. 11). 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 (3). The Commission seeks to ensure that the internal market rules are properly applied and therefore has to monitor Member States' compliance with these articles. It strives to remove technical barriers to trade and develop instruments which will prevent new barriers being raised. The removal by Member States of controls on goods at the Union's internal frontiers is a major step towards the completion of the internal market. The Commission's action in this field relies to a great extent on the case law of the Court of Justice; several of the Court's judgments in 1994 reinforced the principles on which the Commission's action is based. Commission action The Commission dealt with some 800 cases in 1994, 216 of which were not proceeded with; in only two cases was a decision taken to refer the matter to the Court of Justice. These figures illustrate the Commission's determination to resolve disputes quickly and amicably. A regular dialogue is maintained with national authorities by means of 'package meetings` held in the Member States. In 1994 such meetings, which are now standard practice, were organized with Germany, Spain, Italy, Greece and Portugal and, for the first time, with the Netherlands: clearly, the benefits of dialogue are well understood by all. There is an instructive side to this practice as well, since it accustoms national authorities to taking into account the fundamental principles of Community law, such as the principle of the free movement of goods, when enacting legislation. Three examples have been chosen from the foodstuffs, pharmaceuticals and motor vehicle sectors, these being the areas where national practices or rules are most frequently contrary to the Treaty, to illustrate the success of the 'package meetings`: - Under one Member State's rules, imports of pharmaceuticals were not only made subject to the authorization required for products manufactured in the Member State but were also required to obtain a special import licence. The national authorities were unable to justify this on public health grounds, acknowledged that the law was contrary to the rules of the Treaty and amended it accordingly. - One Member State had not authorized certain food additives, and so foodstuffs containing them had to go through a lengthy prior authorization procedure before they could be released for sale. Citing decisions by the Court of Justice, the Commission pointed out that this procedure was not lawful unless carried out in reasonable time. The law was amended to conform to the conditions laid down by the Court in respect of this type of procedure. - Following a package meeting held in a Member State, the national authorities amended some of the provisions of the highway code which were incompatible with Article 30 of the Treaty. The provisions in question required foreign vehicle manufacturers to provide a certificate of origin and laid down compulsory dimensions for caravans; the first requirement created an obstacle to the marketing of cars from other Member States, while the second barred the marketing of caravans with different dimensions that were lawfully manufactured or marketed in other Member States. In most cases, the Member State amends the legislation challenged and the matter is closed. However, since an official amendment may take some time to bring in, Member States frequently adopt interim measures, such as circulars published in their national official gazettes or public notices in the information bulletins of the relevant enforcement agencies, 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. For example, a Member State published a notice in its official gazette announcing that the extra tests which had had to be carried out on hunting ammunition were no longer necessary where they have already been carried out in the country of manufacture in accordance with European safety standards. Member States also publish notices in their official journals which in effect amplify or clarify national legislation to make it consistent with Community law. For example, one Member State published a notice referring to a ministerial decree on the manufacture, import and distribution of cement, explaining the simplified approval procedure that was to be followed by the trade, in accordance with the principle of mutual recognition. The cooperation routinely sought by the Commission from all Member States helps it to carry out its task consistently. As part of its approach, the Commission, with the help of Member States, carries out horizontal surveys of national rules in particular industries. Two were carried out in 1994, one dealing with the installation and marketing of parabolic television aerials, the other with the marketing of milk for babies. The Commission is also anxious to prevent the creation of new obstacles to the free movement of goods; it therefore encourages Member States to insert mutual recognition clauses in their national rules. Using reasoned opinions, the Commission requests national authorities to insert mutual recognition clauses in their draft technical rules under the notification procedure established by Directive 83/189/EEC. These clauses are of three types: - Clauses concerning the mutual recognition of national standards, rules and technical specifications. In the case of a draft rule laying down production characteristics for cement, for instance, the Commission asked a Member State to adopt a clause recognizing standards offering an equivalent level of protection from the point of view of safety. - Clauses concerning the mutual recognition of tests carried out and certificates issued by registered laboratories. The Commission requested the insertion of a mutual recognition clause in a draft rule on machines for measuring alcohol levels so that tests already carried out on this equipment in the Member State of origin were recognized. - Clauses concerning the recognition of laboratories and other bodies. For example, a draft rule restricting the issue of certificates of conformity to bodies authorized by the national quality institute was amended by the Member State to accord with the Commission's view that certificates issued by other independent and professionally competent bodies should also be recognized. Elimination of frontier controls on goods Since 1985 the Commission has taken the view that the completion of the internal market required the complete elimination of all internal frontier controls, setting 1 January 1993 as the deadline. The removal of controls on goods began in 1992, continued in 1993 and has now been completed. The Commission notes that in 1994 all Member States confirmed that all internal frontier controls on goods had been ended. Member States fall into one of three groups depending on the approach they adopted: - those which adopted a single legislative instrument eliminating controls (Greece and Italy); - those which adapted their legislation wherever necessary (Belgium, Denmark, Germany, Ireland, Luxembourg, Netherlands, Portugal and United Kingdom); - those which made the necessary legislative adjustments to remove controls at frontiers, while maintaining inside the country some controls on sensitive items such as arms, explosives, drugs, dual-purpose goods, works of art (France and Spain). Article 7a of the EC Treaty does set a precise objective, leaving no margin of discretion, but the fact that Member States have to remove controls at the Community's internal frontiers does not prevent them from carrying out controls elsewhere within the national territory provided these are justified (Article 36 of the Treaty) and non-discriminatory. However, such controls should not be carried out on a systematic basis and should not differ procedurally from the controls normally carried out in the country. The Commission, as guardian of the Treaty, will remain vigilant to ensure that there is no backpedalling. Business has an important role to play here. The successful removal of frontier controls, effected in close collaboration with Member States, is a further step towards bringing the people and countries of the Union ever closer together. Case law of the Court of Justice During 1994 the Court gave a number of decisions on the free movement of goods, further defining the principles governing the Commission's monitoring activity. The following judgments are especially noteworthy: - Sales description of a cosmetic product (4) The Court held that a national measure prohibiting the importation and marketing of a product classified and presented as a cosmetic on the ground that the product was called 'Clinique` was incompatible with Articles 30 and 36 of the Treaty and with Article 6 (2) of Directive 76/768/EEC on the approximation of the laws of the Member States relating to cosmetic products. The products in question were presented as cosmetic, not medicinal, products. The Court took the view that the prohibition was not needed to satisfy the requirements of consumer protection or public health. Moreover, the products were regularly marketed in other Member States under the name 'Clinique` without consumers being misled. - Certification procedure required for the marketing of radio transmitters/receivers (5) Following earlier decisions, the Court held that a certification procedure applied without distinction to all radio receivers, with the sole exception of equipment intended exclusively for receiving sound or television broadcasts, was incompatible with Article 30 of the Treaty and could be justified neither under Article 36 nor on grounds of imperative need. - Prohibition on certain kinds of Sunday trading (6) The Court took the view that this type of prohibition was not such as to prevent products from other Member States from gaining access to the market or to make access for these products more difficult than for domestic products. Article 30 of the Treaty did not therefore apply. The Court was here applying the conditions set out in paragraphs 16 and 17 of its Keck and Mithouard judgment ([1993] ECR I-6097). - Free movement of articles of precious metal - statutory hallmark (7) In accordance with its judgment in Robertson (8) the Court ruled that a Member State can prohibit the sale of imported articles of precious metal not bearing its own statutory hallmark only if they have not been hallmarked in the exporting Member State in a manner that conveys equivalent information and is intelligible to consumers. 2.2.1.2. The preventive rules of Directive 83/189/EEC The notification procedure of Directive 83/189/EEC, as amended by Directive 88/182/EEC, is an essential tool for preventing barriers to trade from being raised and for sharing information. Member States are required to notify drafts of new technical regulations for vetting. The procedure does not cover technical regulations issued to implement directives. Of the 389 drafts of technical regulations received for vetting by the Commission in 1994 (up from 385 in 1993), 79 required a detailed opinion (9) 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 69 opinions (10). In one case (11) the Commission had to ask the Member State for a one-year postponement of the measure since harmonization directives were in the pipeline. On 23 March 1994 the Council and Parliament adopted Directive 94/10/EEC amending for a second time Directive 83/189/EEC. The new Directive, which enters into force on 1 July 1995, clarifies and extends the scope of the principal Directive and gives further details of the Procedural rules to be applied by Member States and the Commission. In 1994 some 2 200 national laws were examined, of which about 30 % were technical rules that had not been notified under the Directive or which fell outside its scope. After careful study to see whether they should be notified under the Directive, 31 infringement proceedings in the industrial sector and 5 in the agricultural sector were commenced. In 1994, 4 cases were referred to the Court of Justice. 2.2.2. Progress in implementing directives on the free movement of goods 2.2.2.1. Foodstuffs In 1994 the Commission examined 97 infringement cases, of which 85 concerned failure to notify and 16 concerned failure to comply with directives already transposed. Many of the cases involving failure to notify were terminated, as transposal measures were notified in 62 of them last year. But 32 Article 169 letters and eight reasoned opinions were sent to Member States for failure to transpose within the appointed time. In many cases the Member States have already notified the Commission of draft national implementing measures. The 16 cases of non-conformity were examined in detail, and one reasoned opinion, two Article 169 letters and ten pre-litigation letters were sent. Half these cases concerned Directive 79/112/EEC (labelling of foodstuffs), which contains, among other things, an exhaustive list of indications that must be on labels. Certain Member States seek to impose other indications, allegedly to improve the consumer's information, for instance by highlighting specific ingredients or giving health warnings. The Directive requires such additional requirements, which can constitute a barrier to interstate trade, to be brought to the notice of the Commission and the other Member States. The decision can then be taken whether the national measures should be authorized or banned, possibly pending new Community measures in the same matter. But it has been found that Member States do not always abide by the procedure, preferring to take unilateral measures departing from the Directive. Many infringement cases relating to incorrect transposal (five in 1994) have been settled reasonably quickly at informal meetings between the Commission and the Member States. 2.2.2.2. >TABLE> 2.2.2.3. Pharmaceutical products In 1994 133 infringement cases were examined, of which 131 concerned failure to notify national implementing measures. Article 169 letters were sent out in these cases, and 48 reasoned opinions were addressed to Member States. The bulk of the outstanding cases were terminated in the course of the year following notification of Member States' implementing measures. The cases now in motion mainly concern the directives on veterinary and homeopathic medicines. Most Member States concerned have notified the Commission of draft measures or supplied preliminary information on progress in implementation. It would appear from information to hand that the situation will improve substantially in the coming months. 2.2.2.4. >TABLE> 2.2.2.5. Chemicals In 21 of the 72 infringement cases commenced for failure to notify national implementing measures in the course of the year, national transposal measures were subsequently taken. Reasoned opinions were issued in 13 of the 51 cases still in hand, and 18 Article 169 letters were sent. The delay in transposal is generally attributed by the Member States either to problems of overlapping jurisdiction between ministries or to the complexity of parliamentary procedures. 2.2.2.6. >TABLE> 2.2.2.7. Motor vehicles, tractors and motorcycles In general the rate of transposal of directives in this field is very satisfactory, being virtually complete. Given the detailed, technical nature of the motor vehicle directives, many Member States routinely refer in their national gazettes to the text published in the Official Journal, which in practice facilitates and speeds up the transposal process and Commission scrutiny for conformity with Community law. Delays in transposal are more common in the other Member States where specific national legislation has to be enacted. Even so, they rarely exceed a few months. In 1994 the Commission examined 22 cases of failure to notify, of which 16 were terminated in the course of the year after notification of national implementing measures. Regarding the quality of transposal measures, four infringement proceedings were pursued for incorrect transposal of directives, two of them in response to complaints received. There were two cases relating to the directives on pollution by emissions from diesel engines, and two on more specific technical points. Here again, then, the overall picture is reasonably bright. 2.2.2.8. >TABLE> 2.2.2.9. Construction products Eleven Member States have so far transposed Directive 89/106/EEC on construction products. Greece having come into line, Belgium alone has to complete the very slow move from one administrative stage of the transposal process to the next. 2.2.2.10. Mechanical engineering, personal protective equipment, prepackaging, measuring equipment, electronics and medical equipment A total of 90 directives are involved here, all due for transposal in 1994. Many of them are new approach directives, which confine themselves to setting fundamental safety standards and introduce machinery for authorizing the marketing and free movement of safe appliances in the Community. Since the Member States have detailed safety regulations, incorporation of the new approach into their systems is often a complex business. The Commission's study of the quality of transposal measures prompted a series of own-motion proceedings for suspected infringements, most of which are still at the pre-litigation (pre-169) stage. Its analyses have been very detailed; by and large, cases of incorrect transposal are not intentional but proceed from erroneous interpretations of the directives or from ambiguities in the drafting of the transposal measures, which can impact on certainty as to the law applicable to business transactions. But there are some more substantial cases. There are only a limited number of infringements and complaints regarding incorrect application, mainly because the directives are only gradually coming into operation (following transitional periods); moreover, the preventive role played by the Commission, through its ongoing contacts with the national authorities, has often made it possible to have controversial elements removed from their measures that would have constituted misapplication of the directives. 2.2.2.11. >TABLE> 2.2.3. Services 2.2.3.1. Audiovisual media Directive 89/552/EEC (television without frontiers) aims to secure the free movement of television programmes and to encourage the production and distribution of European works so as to create a common broadcasting area. Although it has been fully transposed by all the Member States (the deadline was October 1991), there are still a number of problems relating in particular to the criteria for conferring supervisory jurisdiction on the Member State of origin and for timing schedules and advertising. The Commission accordingly decided to continue with infringement proceedings commenced in earlier years. It sent reasoned opinions to Greece, Ireland, the Netherlands and Portugal for incorrect transposal of the directive. The Commission commenced proceedings in the Court of Justice against the United Kingdom (Case C-222/94) for failure to respect the criteria determining the jurisdiction of a Member State over a broadcasting company and for establishing a dual system for supervising broadcasters depending on the target audience. It has also commenced proceedings against Belgium (Case C-11/95) for requiring programmes from other Member States to be presented for authorization prior to cable transmission and against Italy for allowing additional advertising breaks in films. The proceeding against Italy is suspended following changes to the rules there. The Commission addressed a reasoned opinion to the United Kingdom for licensing broadcasting companies on terms not compatible with the provisions for promoting European works. 2.2.3.2. Intellectual and industrial property Regulation (EC) No 40/94 on the Community trade mark, which entered into force on 15 March, creates a new form of industrial property right in the Community. The trade mark will be valid for ten years and renewable; it will be issued by the Office for Harmonization in the Internal Market (Marks, Designs and Models) set up by the Regulation and headquartered in Alicante, Spain. Council Decisions of 16 and 27 June appointed the Office's President and Vice-Presidents. Work on measures implementing the Regulation will be pursued in 1995 so that the Office can become fully operational. The first applications for Community trade marks can be expected from 1 January 1996. The effect of the Community system will be that protection valid throughout the Community can be acquired in a single procedure. It will be backed up by a quasi-judicial body, the Office's Appeals Board, from which a further appeal will lie to the Court of Justice. Measures to combat counterfeiting will be boosted by the fact that the Member States are to designate a limited number of courts of first and second instance with exclusive jurisdiction to hear cases of infringement of Community trade marks. Parliament is examining, concurrently with the proposal for a Regulation on Community designs and models (COM(93) 342 final), the proposal for a Directive on the legal protection of designs and models at national level (COM(93) 344 final). The proposal is based on the consideration that national designs and models will coexist with their Community counterparts, as is the case of trade marks. The main points of divergent national legislations must accordingly be harmonized so as to secure a genuine single market and ensure that national legislation is compatible with the future Community system of protection. Designs and models are of growing importance for a wide range of goods. High-quality industrial aesthetics are a valuable advantage for Community firms competing with firms in low-cost non-member countries. Only half the Member States (Denmark, France, Greece, Italy, Spain and the United Kingdom) have notified the Commission of measures transposing Directive 89/104/EEC on trade marks. Copyright and neighbouring rights Directive 91/250/EEC (legal protection of computer programmes) was to be transposed before 1 January 1993. Only Denmark, Italy and the United Kingdom met the deadline. In 1993 four other Member States followed, and Belgium, France, the Netherlands and Portugal acted in 1994. Luxembourg is now the only Member State still in default. The Commission has decided to refer the case to the Court. Directive 92/100/EEC (lending right and certain rights akin to copyright) requires the Member States to give effect to its provisions by 1 July 1994. Belgium has adopted implementing measures, and the French authorities have informed the Commission that their national legislation and its implementing instruments are in accordance with Community law. The Commission will act appropriately where Member States do not discharge their obligations under the directive. The Commission pursued its infringement proceedings against Greece for incorrect transposal of Directive 87/54/EEC (legal protection of topographies of semiconductors). 2.2.3.3. >TABLE> 2.2.3.4. Telecommunications All the Member States have notified measures implementing the three directives on frequencies - Directives 87/372/EEC (GSM), 90/544/EEC (Ermes) et 91/287/EEC (DECT) - except that for Directive 90/544/EEC Ireland has notified the Commission only of a final draft instrument. The Commission has approved that draft. The outcome of the Commission's analysis of the measures laid before it is that most of them can be considered to be in conformity with Community law. Directive 90/387/EEC, the general directive on the principles of open network provision, has been transposed by all the Member States. The Commission continued examining national measures implementing the first specific ONP directive, Directive 92/44/EEC, on the application of open network provision to leased lines. This is one of the key instruments for the information society, on which Mr Bangemann reported. Ten Member States (Belgium, Denmark, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain and the United Kingdom) have notified the Commission of their transposal measures. The French notification is the only one fully in conformity with Community law. The others are currently under scrutiny. The Commission is referring to the Court of Justice those Member States that have not transposed the directive. Decision 91/396/EEC requires the Member States to introduce 112 as the standard emergency services number throughout the Community, but that means changing a number of technical facilities - a costly and complicated process - and implementation is proving difficult. So far five Member States (Belgium, Denmark, Germany, Luxembourg and the United Kingdom) have done the necessary, but four others (France, Ireland, Italy and the Netherlands) have asked the Commission for an exception as provided for by Article 3 (2) of the Decision. Greece, Portugal and Spain have yet to notify the Commission of their measures. Decision 92/264/EEC provides that the standard code for access to the international network in the Community is to be 00; seven Member States (Belgium, Germany, Greece, Ireland, Italy, Luxembourg and Portugal) have transposed it. The Commission, acting in accordance with Article 3 (2), gave three other Member States (France, Denmark and the United Kingdom) the extra time they had requested on grounds of technical and financial difficulties. Eight Member States have notified the Commission of national measures implementing the basic directive on telecommunications terminal equipment, Directive 91/263/EEC. Scrutiny revealed that five of them had actually implemented the entire Directive (Denmark, France, Italy, Portugal and the United Kingdom). The notifications from Germany, the Netherlands and Spain were incomplete. The proceedings commenced in 1993 against the four States that have not notified (Belgium, Greece, Ireland and Luxembourg) have now been referred to the Court of Justice. Council Directive 93/68/EEC amends the new approach directives, among them Directive 91/263/EEC, to standardize the symbols and rules for marking products in the Community. By 1 January 1995, when it was to be transposed in all Member States, implementing measures had been notified by France, Italy, the Netherlands and Portugal. The scope of Directive 91/263/EEC was extended by Directive 93/97/EEC (equipment of ground satellite tracking stations). The Member States are due to transpose this by 1 May 1995; their notifications are awaited. 2.2.3.5. >TABLE> 2.2.3.6. Free movement of financial services In 1994 the Commission received six complaints about infringements of provisions of the Treaty or directives, about the same number as in previous years. Three concerned negotiable securities, two concerned banking laws and one concerned insurance. The Commission also opened non-contentious talks with most of the Member States regarding a number of imperfections detected when national legislation was scrutinized for conformity with the Community directives. There are currently about fifteen such informal proceedings. The dialogue concerning the application of directives is also pursued in technical interpretation groups. The banking directives group (GTIAD) met four times, and the insurance group three times. There is no formally constituted group for negotiable securities. Three proceedings relating to financial services are currently pending in the Court of Justice: - Article 169 proceedings in Case C-101/94 against Italy in respect of Act No 1/91 (the SIM Act) on financial intermediaries (see 10th and 11th Reports). The written procedure is virtually completed, but there is little prospect of a judgment before the end of next year. - The preliminary ruling requested under Article 177 in an action between a Dutch firm and the Netherlands (Case C-389/93). The firm is attacking the ban on cold calling as a means of building up a clientele for commodity derivative brokerage services. The interest of this case lies in the fact that it concerns a line of business that is not widely practised and the restriction in question does not discriminate against exports of a service from the service provider's country of origin. Judgment is expected to be given in the second half of 1995. - There is a second request for a preliminary ruling in an action between private individuals and Luxembourg (Case C-484/93). It concerns the compatibility with Community law of the Luxembourg legislation whereby interest subsidies on building loans are available only if the loan is given by a credit establishment accredited in Luxembourg. 2.2.3.7. >TABLE> 2.2.3.8. Direct taxation The Commission terminated the infringement proceedings regarding the absence of tax relief for insurance premiums paid to foreign insurers; Germany has extended the relief provisions to insurers accredited in the EC and the EEA, and in Ireland the discrimination disappeared when all tax relief provisions were withdrawn. The Commission received numerous complaints against the new Italian legislation providing for local taxes on real estate. As the tax is not discriminatory and does not conflict with Community law in other respects, notably the rules securing the fundamental freedoms of the internal market, no action was called for on these complaints. In October 1994 the last instrument of ratification of the Convention of 23 July 1990 (elimination of double taxation in connection with the adjustment of profits of associated enterprises - OJ No L 225, 20. 8. 1990, p. 10) was deposited, so the Convention is now in force for the twelve 'old` Member States with effect from 1 January 1995. Its extension to the new Member States will require an additional convention, to be signed early in 1995 but entering into force only after ratification by all the Member States. 2.2.3.9. >TABLE> 2.2.3.10. Company law The Commission decided to commence an action against Germany in the Court of Justice for incorrect application of Directive 68/151/EEC (first company law directive). About 90 % of German private limited companies are refusing to publish their accounts by depositing them with the companies register as required by the directive and the German legislation transposing it. One of the reasons seems to be that there are inadequate penalties to enforce the law. The Commission actually decided to refer the matter to the Court in 1993, but delayed action following contacts with the German authorities to give them time to remedy the situation. But as the German Government seems unable to do so, the action will now go ahead. 2.2.3.11. >TABLE> 2.2.4. Free movement of capital Directive 88/361/EEC was transposed by all Member States within the deadlines set in the directive and in the derogations authorized by it. The Treaty on European Union introduced a new regime for capital movements and payments. With effect from 1 January 1994, Articles 73b to 73g in Chapter 4 (Capital and payments) of the EC Treaty replaced Articles 67 to 73 of the EEC Treaty. Freedom of capital and payments is now a right of direct applicability; secondary legislation is no longer necessary. Also, under the new regime the obligation for liberalization was extended, with limited exceptions, to non-member countries. Concerning Member States with a derogation, Greece lifted, with effect from 16 May 1994, all remaining restrictions on the movement of capital which it was authorized to maintain until 30 June 1994 by Council Directive 92/122/EEC of 21 December 1992. By the elimination of the residual restrictions in Greece, a regime of free movement of capital is in place throughout the Union. Indirect restrictions and other barriers to capital movements remain, however, in some areas. Such impediments can take the form of constraints on investment abroad by institutional investors not justified by prudential considerations, tax discrimination not compatible with Community law, rules concerning the issue of securities, the transfer of means of payments and other restrictions. The Commission has taken action in order to obtain the elimination of such impediments. 2.2.5. Public procurement Commission action The Commission focused on monitoring the transposal of directives, taking pains to pursue Member States which had failed to meet the general notification requirements and scrutinizing the national measures adopted to implement directives which came into force during the year (consolidated Directives 93/36/EEC (supplies) and 93/38/EEC (special sectors)) and older directives. Most Member States failed to meet the deadlines of 14 June and 1 July 1994 for the transposal of Directives 93/36/EEC and 93/38/EEC (in the latter case Greece, Portugal and Spain were allowed longer periods, as for Directive 90/531/EEC). There are also serious delays in the implementation of some older directives, in particular 92/50/EEC (services) and 92/13/EEC (procurement procedures in excluded sectors). Where national measures have been notified, numerous problems have been detected, sometimes involving questions of principle which could undermine the liberalization of public contracts awarded in the Member States concerned. The situation regarding Directive 92/50/EEC is nothing short of alarming: most Member States have failed to notify national implementing measures, and some of them have adopted measures which are extremely dubious. The Commission has therefore commenced infringement proceedings against several Member States for failure to comply. The Commission has, of course, pursued its scrutiny of measures relating to earlier directives (Directives 71/305/EEC (works), as amended, and 88/295/EEC (supplies), also as amended) and commenced an action against Germany in the Court of Justice for incorrect transposal. Commission action regarding practical application by the various awarding authorities in each Member State focused this year on contracts for pharmaceutical products. The Commission also continued its work of processing complaints and cases detected by its own investigations relating to suspected infringements of directives and Treaty articles on public procurement. These have doubled in number since last year, no doubt because the application of the directives is gradually being extended and the most recent texts have just entered into force. The Commission was able to settle a number of cases without having to let infringement proceedings run their full course. Procedures have been established for dialogue and consultation (in particular through 'package meetings`), whereby Member States are offered any legal and technical assistance they require and agreement can be sought on possible solutions to outstanding disputes which conform to Community law. A few of these cases deserve special mention: - A number of irregularities were detected in the award of a contract for major irrigation work in a Member State: the scope of the contract had been considerably reduced, there was a mandatory 'buy national` clause and a compensatory benefit clause, and the authorities had allowed a tender which did not meet the specifications to be improved. After the Commission intervened, the national authorities eventually stopped the procedure and cancelled the award. - In another case, concerning the construction of a bridge, the authorities in a certain Member State asked for security to be lodged in the form of either money, bonds issued by the Member State or securities quoted on the stock exchange of the country's capital or bank guarantees issued by institutions based in that state. The national authorities removed this clause from the contract before infringement proceedings were commenced. - In a tendering procedure for the supply of computer products, the state body concerned had eliminated the two best-placed bids, on the basis of criteria that were not laid down in the specifications or in the contract notice, even before bids were compared. The Commission also detected breaches of Articles 30 and 59 of the Treaty. The national authorities eventually cancelled the contract and launched a new tendering procedure. - One Member State applied to part of its territory a system of regional preferences, whereby 30 % of public supply and service contracts awarded by government authorities were reserved for local firms. In Du Pont de Nemours Italiana [1990] ECR I-889, the Court of Justice had found that arrangements of this kind were incompatible with Article 30. After the Commission intervened, the national authorities began to revise their legislation by repealing the disputed clauses, thereby ending the infringement of Community law. - The legislation of one Member State contained provisions aimed at simplifying the award of certain public contracts for the supply of vehicles by exempting home-manufactured vehicles from checks by certain national bodies. Since this practice was contrary to Article 30, the Commission asked the national authorities to amend their legislation, which they did, in particular by extending the application of the so-called 'shortened` procedure to all public contracts for the supply of vehicles, below a certain threshold, concluded with a Community firm. - In one Member State a local authority had published a contract notice for the supply of concrete sleepers which referred exclusively to standards used within the national railway company and specified that the only acceptable technical experience was that acquired in the supply of similar products, as certified by the national railway company. After discussions between the Commission and the national authorities, the awarding authority suspended the procedure and agreed to launch a fresh one, taking into account the Commission's comments. Four important cases decided by the Court of Justice are outlined below; others are still pending and judgment should be given soon. Case C-328/92 Commission v Spain (pharmaceutical products) [1994] ECR I-1569 The Court found that the basic social security legislation allowing the administrative authorities to award public contracts for the supply of pharmaceutical products to social security institutions by way of a single-tender procedure and the award of nearly all those supply contracts without publication of a contract notice constituted a breach of Directive 77/62/EEC. The Court referred back to its judgment in Case C-71/92 Commission v Spain, [1993] ECR I-5923, in which it had held that the only permissible exceptions to the application of Directive 77/62/EEC were those expressly and exhaustively mentioned there and that derogations from rules intended to ensure the effectiveness of rights conferred by the Treaty in the field of public supply contracts must be interpreted strictly. Furthermore, the burden of proving the existence of exceptional circumstances justifying a derogation lay on the person seeking to rely on those circumstances. Finally, the Court had consistently held that, in order to rely on the derogation provided by that provision, all the conditions it lays down must be satisfied cumulatively. Order of the President of the Court in Case C-87/94 Commission v Belgium (buses in Wallonia) [1994] ECR I-1395 The President of the Court dismissed an application for the suspension of a contract for the supply of buses. However, he did not call into question the substance of the Commission's objections and acknowledged that, in its capacity as guardian of the Treaties, the Commission may bring proceedings for the adoption of interim measures in order to stop the serious and irreparable damage to Community legislation on public procurement which may be caused by the implementation of a disputed contract. In the case in point the President found that the balance of interests tilted in favour of the Belgian authorities' argument regarding the dilapidated state of the bus fleet. The President felt that he must not exacerbate the dangers to the safety of the bus company's staff and passengers and other road-users by delaying the replacement of the present vehicles. The Court did not challenge the principle of preventive surveillance or suspensive action such as that proposed in this particular case. On the contrary, the decision implies that the Commission must not accept a fait accompli and should retain the possibility of invoking Article 186 of the Treaty and asking the Court to suspend performance of contracts awarded in breach of the Community rules on public procurement, even where they have already been concluded or are being performed. The Court's decision could be an effective warning to contracting authorities which infringe Community rules on public procurement in the belief that the Article 169 procedure generally has no practical effect when an infringement has already been committed. Moreover, firms excluded from public contracts as a result of violations of these rules will see that the Community is able to protect their fundamental right to equal treatment. Case C-389/92 Ballast Nedam Groep v Belgium (reference for a preliminary ruling) [1994] ECR I-1289 In this case the Member State concerned had refused to include on the list of recognized contractors firms which do not have the relevant equipment and staff themselves, but are linked to firms which do have these resources. The Court confirmed the view held by the Commission and expressed in the opinion of the Advocate-General that, under the works Directive, a holding company may be allowed to take part in a public tendering procedure without necessarily being a contractor or supplier of the goods in question. A holding company which does not itself carry out works may not be precluded from taking part in public works contracts on the ground that its subsidiaries which do carry out works are separate legal persons. But, if a tenderer does not himself have the resources to perform the contract, the awarding authority has the power to check that the tenderer does actually have access to the resources of these other companies, through his special links to them. Case C-272/91 Commission v Italy (Lottomatica) [1994] ECR I-1409 The Court gave judgment on a public tendering procedure for the computerization of the lottery organized by the Italian Finance Ministry. The nine-year contract was for the supply, installation, maintenance and operation of a computerized system for the lottery. No contract notice was published in the Official Journal, and the tendering procedure was reserved for firms and groupings in which the majority of capital was publicly owned. The contract was awarded to the Lottomatica consortium. By Orders made on 31 January and 12 June 1992, the President of the Court had enjoined Italy to suspend the legal effects of the awarding decree and performance of the contract with Lottomatica. Italy did not comply with these Orders until 27 May 1993. The Court then gave judgment in the Commission's favour, on the basis of Articles 52 and 59 EC and the Directive on public supply contracts. The Court held that the design and management of a computerized system were technical services covered by Articles 52 and 59 and rejected the arguments of the Italian Government that they were activities connected with the exercise of official authority under Article 55 of the Treaty. The Commission also pursued its work of reviewing projects and programmes financed by the Structural Funds and other Community financial instruments. Finally, it supported a number of training and information measures, including a seminar on 14 and 15 January 1994 on the liberalization of public contracts in the single market, to which it invited experienced practitioners, lawyers, public procurement officials, businessmen and representatives of trade organizations. The difficulty experienced by small and medium-sized firms in winning public contracts was a major concern at this seminar. It was pointed out that if small firms are to benefit from the liberalization of public procurement, those which do bid for contracts must have local partners, comprehensive assistance, quick access to accurate and reliable information and proper staff training. The Commission also arranged a joint European Union/SIGMA programme seminar for the countries of Central and Eastern Europe on public procurement as a factor in European integration. 2.2.5.1. >TABLE> 2.3. Removal of tax barriers Value-added tax The Commission sent nine reasoned opinions in 1994: - to Portugal, for maintaining an increased rate of VAT contrary to the Directive on rates, for refusing to grant exemption for services proposed by travel agents and performed entirely or partly in nonmember countries, and for requiring foreign taxpayers applying for VAT refunds to use a particular model tax return which differed from that prescribed in the eighth Directive; - to Spain, for limiting the application of exemptions for sports organizations according to the amount of membership fees they receive and for failing to apply the six-month time limit for refunds laid down in the eighth Directive. - to France, for unduly granting exemptions from VAT for the letting of furnished premises for residential use in the case of light, permanently installed housing for leisure purposes, which consisted of movable rather than immovable property, for limiting to FF 200 the exemption applicable to specimens and, finally, for refusing to grant a VAT deduction for means of transport (driving-school vehicles, helicopters) used by taxpayers in their occupational activities; - to Italy, for refusing to exempt the resale of all goods assigned to an exempted activity. Three proceedings were terminated after the Member States concerned adopted measures to comply with the sixth VAT Directive: - France adapted its system for determining flat-rate compensation to farmers, abolishing the increased rate applied to products marketed by cooperatives; - Spain complied with the Court's judgment in Case C-73/92 [1993] ECR I-5997 concerning VAT on advertising services, so that so-called 'promotional operations` are no longer excluded; - Denmark abolished the employer's contribution known as the 'Ambi`, even before the Court gave judgment in Cases C-200/90 and C-234/91 to the effect that it was incompatible with Article 33 of the sixth VAT Directive, which bans turnover taxes other than VAT; - the Commission referred to the Court of Justice a case against Greece for exempting certain transport operations that are taxable according to the sixth Directive and charging VAT on services supplied outside the EC by package tour operators. Also worthy of mention is the Court's preliminary ruling in Case C-16/93 Tolsma [1994] ECR I-743 in which it interpreted the sixth VAT Directive as prohibiting a Member State (Netherlands in the case in point) from levying VAT on persons who play music on the public highway and ask for money from passers-by in return. This activity does not come under the scope of VAT in that it does not constitute the provision of services against quantifiable remuneration. Excise duties - Articles 95 and 96 EC - tax-free allowances No proceedings were commenced in the field of excise duties or regarding national taxes in breach of Articles 95 and 96 of the Treaty. However, proceedings were terminated in three cases where national measures implementing the Directives on tax-free allowances had been brought into line. The actions in question were against: - Spain, for the Directive on the temporary import of means of transport, which was partially repealed on 1 January 1993 but is applied in Spain in practice; - Greece, for the Directive on the permanent import of personal property and the Directive on the temporary import of means of transport, following the judgment given by the Court in Case C-9/92 [1993] ECR I-4467. 2.3.1. >TABLE> 2.4. Free movement of persons and right of establishment 2.4.1. Ending discrimination Following an action brought by the Commission, the Court gave judgment on 15 March 1994 on the equal treatment of all Community citizens in admission charges to Spanish national museums (Case C-45/93 [1994] ECR I-911). The Court found that, by maintaining a discriminatory system of admission charges, Spain had failed to fulfil its obligations under Articles 7 and 59 of the EC Treaty. The Spanish Government responded by amending the legislation applicable to certain museums which come under the Ministry of Culture. However, fresh complaints suggest that the new provisions do not guarantee that the non-discrimination rule is applied to other publicly owned Spanish museums. A number of infringement proceedings are under way against various Member States concerning the application of Regulation (EEC) No 1612/68 on the free movement of workers. Of the five actions in progress at the end of 1992 concerning equal access to employment on board ship (against Belgium, France, Greece, Italy and Spain), those against Greece, Italy and Spain have been terminated following changes to national legislation. In the case against Belgium, the Court of Justice gave judgment for the Commission. The Commission has brought an action before the Court of Justice against Greece concerning the conditions imposed on nationals of other Member States wishing to teach a foreign language, with a view to ensuring equal access to this profession for all Community citizens. Finally, infringement proceedings are still in motion against Belgian legislation which discriminates against young job-seekers who have studied in another Member State, denying them the integration benefits which are a prior condition for access to certain jobs in Belgium. In another case concerning Belgian legislation, the Court of Justice gave judgment against Belgium on 4 May 1994 for withholding finance for university studies from students from other Member States who are in Belgium solely for the purpose of studying there, unless they pay the supplementary admission fees (Case C-47/93 [1994] ECR I-1593). The Commission has sent Belgium a reasoned opinion in another case concerning study grants for a government-sponsored exchange scheme between Belgium, Luxembourg and the United States. Turning to taxation, the Commission brought an action before the Court of Justice against Luxembourg concerning the final payment of income tax by non-resident workers. The Commission considers that Luxembourg legislation discriminates indirectly against nationals of other Member States contrary to the rule of equal treatment in remuneration, as interpreted by the Court of Justice in its judgment in Case C-175/88 [1990] ECR I-1779. The infringement proceeding against Germany concerning tax discrimination against Community workers whose families do not live on German territory (failure to apply the 'splitting` procedure) is at the reasoned opinion stage. 2.4.2. Entry and residence The Commission has shelved the complaints it received in 1993 about checks on individuals at internal borders after 31 December 1992 (see 11th Report), since the objective laid down in Article 7a can be attained only if the necessary support measures are introduced. The Commission has already put forward several proposals in this field - a proposal for a Council Decision establishing a Convention on checks on persons crossing the external borders of the Member States, a proposal for a Council Regulation determining the non-member countries whose nationals must have a visa when crossing the external borders of the Member States (OJ No C 11, 15. 1. 1994) and a proposal for a Council Regulation laying down a uniform format for visas (OJ No C 238, 26. 8. 1994). These proposals are still being discussed in the Council. The Commission has decided to commence infringement proceedings under Article 169 against nine Member States for incorrect transposal of one or more of the directives on right of residence - 90/365/EEC (employees and self-employed persons who have ceased their occupational activity), 93/36/EEC (students) and 90/364/EEC (persons not in active employment). 2.4.2.1. >TABLE> 2.4.3. Trade union rights On 4 July 1991 the Court of Justice ruled in Case C-213/90 [1991] ECR I-3507 that Luxembourg legislation withholding voting rights in trade associations from Community workers was contrary to Regulation (EEC) No 1612/68. Luxembourg has changed its legislation accordingly. The Commission had brought another action against Luxembourg concerning the right of Community workers to stand for election, the point not being covered by the 1991 judgment. On 18 May 1994 the Court confirmed that Luxembourg must recognize this right (Case C-118/92 [1994] ECR I-1891). 2.4.4. 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) (12). To this end it commenced Article 169 proceedings against all Member States which infringed Community law in these areas. Between 1991 and 1993 some Member States amended their legislation or regulations after receiving reasoned opinions, so that nationality is no longer a condition for many public-sector jobs in those countries. A number of cases have been closed as a result - two against Belgium, five against Denmark, eight against France, seven against Portugal, one against Spain and one against the United Kingdom. Some Member States continued to make the necessary reforms in 1994. Six infringement proceedings against Germany were terminated in June following the adoption (in December 1993) of the Tenth Public Service (Amendment) Act, which abolished the nationality requirement for employment as an official (Beamter). There have also been positive developments on the legislative front in Italy, where three laws have been adopted, and in Spain, which passed a law in December 1993 opening up the four priority areas to nationals from other Member States. However, the Spanish law provides for implementing measures to be adopted by the Government and the Autonomous Communities before it is effectively implemented. One infringement proceeding is under way concerning the employment of foreign-language assistants in Italian universities, after the Court held in Case C-33/88 [1989] ECR 1591 and in Cases C-259/91, C-331/91 and C-332/91 [1993] ECR I-4309 that the relevant Italian legislation discriminated against these workers. In Belgium, two Royal Decrees were adopted in September 1994 amending the rules governing state employees and the rules governing scientific staff at state science establishments. Finally, the Commission has brought six cases before the Court of Justice against Luxembourg, one against Belgium (distribution of water, gas and electricity), and eight against Greece. In other areas of public service, the Commission follows a case-by-case approach. However, its systematic efforts in the priority sectors have rubbed off here too - France and Germany, for example, have adopted laws (in July 1991 and December 1993 respectively) whose scope is not confined to the priority areas but, in theory, covers public service as a whole. 2.4.5. Social security of migrant workers No reasoned opinion has yet been sent for failure to apply Regulation (EEC) No 1408/71. However, the Commission is considering several complaints received in 1994. 2.4.6. Recognition of qualifications In 1994 the Commission received around forty complaints about restrictions contrary to Articles 52 and 59 of the Treaty and to the directives on the mutual recognition of vocational qualifications. In some cases infringement proceedings were commenced; others were rejected. Cases decided by the Court of Justice The Court of Justice gave a number of judgments on freedom of establishment and freedom to provide services, in the form of preliminary rulings interpreting Articles 52 and 59 of the Treaty and the directives enacted under Articles 49, 57 and 66. Noteworthy among them were the following cases: - The judgment in Case C-154/93 Tawil-Albertini [1994] ECR I-451, concerning the recognition of diplomas, certificates and other qualifications which do not testify to dental training acquired in one of the Community Member States. The Court held that Article 7 of Directive 78/686/EEC on the mutual recognition of diplomas, certificates and other evidence of the formal qualifications of dental practitioners, including measures to facilitate the effective exercise of the right of establishment and freedom to provide services, does not require Member States to recognize diplomas, certificates and other qualifications obtained in a non-member country and already recognized in another Member State. - The judgment in Case C-319/92 Haim [1994] ECR I-425, concerning the interpretation of Article 20 of Directive 78/686/EEC and Article 52 of the Treaty. The Court ruled that it is not permissible under Article 52 of the Treaty for the competent authorities of a Member State to refuse appointment as a dentist of a social security scheme to a national of another Member State who has none of the qualifications mentioned in Article 3 of Directive 78/686/EEC but has been authorized to practise, and has been practising, his profession both in the first and in another Member State, on the ground that he has not completed the preparatory training period required by the legislation of the first state, without examining whether and, if so, to what extent the experience already established by the person concerned corresponds to that required by the legislation. Following judgments in actions brought by the Commission against Italy (Case C-180/89), Greece (Case C-198/89) and France (Case C-154/89), the Court gave judgment against Spain on 22 March 1994 (Case C-375/92 [1994] ECR I-923) for its legislation requiring tourist guides to hold vocational qualifications acquired and recognized in Spain, even where they accompany closed groups of tourists for an entire journey from another Member State. Spain has not yet complied with this judgment. The Court also gave judgment against Spain for breach of Directives 75/362/EEC and 75/363/EEC in failing to provide remuneration for doctors undergoing specialist training. The following are noteworthy among the Article 171 cases for failure to comply with earlier Court of Justice judgments: - The judgments given against France, Greece and Italy in the tourist guide cases on 26 February 1991, with which France and Italy have still to comply. Greece has notified measures to comply, but a few minor problems have to still to be resolved. - The judgment given on 16 June 1992 in the double-surgery case (C-351/90 Commission v Luxembourg) is particularly interesting in that it follows on from two earlier cases, Klopp (Case C-107/83) and Commission v France (Case C-96/85). The Court of Justice held that Luxembourg was in breach of its obligations under Articles 48 and 52 by imposing a single-surgery rule for doctors, dentists and veterinary surgeons, without providing that practitioners established or employed in another Member State could establish a surgery or take up employment in Luxembourg while preserving their surgeries or employment in the other Member State. The rule was incompatible with the Treaty since it imposed restrictions that were liable to discriminate against practitioners established in other Member States or barriers to entry that were not warranted by considerations of general obligations required for the sound exercise of the relevant professions. Luxembourg has still not brought its legislation into line with Community law. - Proceedings were continued against Belgium for failure to comply with the judgment of 16 May 1991 concerning incorrect transposal of the same directive. - In the case concerning language schools in Greece (frontistiria), the Greek authorities have now amended their legislation after two judgments given against them by the Court (Cases C-147/86 and C-328/90). 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. The Commission is now examining the new legislation to check that Greece has indeed complied with the Court's judgments. National implementing measures On 26 July the Commission adopted Directive 94/38/EC, amending Annexes C and D to Directive 92/51/EEC (second general system for the recognition of professional education and training and supplementing Directive 89/48/EEC). Although the deadline for transposal was 1 October, no national implementing measures have been notified. As regards the other directives, some Member States have responded to infringement proceedings by taking the requisite measures. The Netherlands finally transposed Directive 89/48/EEC on a general system for the recognition of higher-education diplomas awarded on completion of at least three years' vocational training, after the Commission had referred the case to the Court of Justice. After commencing an action in the Court against Greece for failure to notify measures implementing Directive 89/48/EEC (Case C-365/93), the Commission brought a similar action against Belgium (Case C-316/94). In 1994 Belgium adopted a framework law to implement the Directive, which the Commission considers inadequate. Only Italy, Luxembourg and the Netherlands have fully transposed Directive 92/51/EEC. The Commission has commenced - or is about to commence - Article 169 proceedings against those countries which have failed to transpose it or have not notified national implementing measures. Incorrect transposal and incorrect application of directives The Commission has pursued proceedings against certain Member States for incorrect transposal or incorrect application. Cases worth singling out are the transposal of Directive 89/48/EEC as regards teachers in France and Germany and the incomplete transposal by Spain of Directives 68/366/EEC (transitional measures - ISIC Major Groups 20 and 21) and 82/489/EEC (hairdressers). On 29 June the Commission brought an action against Italy for incomplete transposal of Directive 85/432/EEC (pharmacists) (Case C-307/94). Proceedings are also in motion concerning access to the dental profession in Germany (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), while Spain is now in the process of bringing its legislation into line in response to proceedings for admitting dentists with qualifications obtained in Latin America at a level far below the directive's requirements. The Commission has pursued another proceeding against Spanish legislation implementing the architects directive. Draft measures to amend the offending legislation have now been notified, which will remove the provision confining the activities of architects holding qualifications recognized in Spain to their country of origin. However, restrictions still apply to the period during which services may be provided in Spain. In some other cases Member States have done what was necessary to bring their legislation into line with Community law. Germany, for instance, has responded to infringement proceedings by taking the necessary steps to comply with Directives 85/432/EEC and 85/433/EEC (pharmacy) and Article 52 of the Treaty as regards the possibility of opening a double surgery. 2.4.6.1. >TABLE> 2.4.7. Independent commercial agents Proceedings for failure to notify national implementing measures are still in motion against Belgium, the only Member State not to have transposed Directive 86/653/EEC on independent commercial agents. Ireland and the United Kingdom, both of which enjoyed a derogation until 1 January 1994, transposed the Directive more or less within the appointed time. 2.5. Consumer policy and product safety Progress in transposing and applying consumer legislation has slipped since last year. This is partly because several directives have been included which are not yet due for transposal, namely Directive 93/35/EEC amending for the sixth time Directive 76/768/EEC (cosmetic products), Directive 94/32/EC adapting the same Directive to technical progress for the seventeenth time and Directive 94/47/EC (protection of purchasers in respect of timeshare contracts). No Member State transposed these directives in 1994. However, even allowing for these, the rate of transposal has fallen since last year. Incorporation into national law of the cosmetics directives is generally unsatisfactory. Infringement proceedings are still in motion concerning the basic Directive 76/768/EEC. France has failed to amend its implementing legislation, although the Court of Justice gave judgment against it on 5 May 1993 (Case C-246/91). Other infringement proceedings against Portugal, concerning Directives 80/1335/EEC, 82/434/EEC, 85/514/EEC and 85/490/EEC, were terminated in 1994. Only eight Member States have notified measures to transpose Directive 93/47/EEC (Denmark, France, Germany, Italy, Luxembourg, Netherlands, Spain, United Kingdom), while only two (Denmark and the United Kingdom) sent implementing measures for Directive 93/73/EEC in 1994. The situation is relatively satisfactory in the textile sector, where only one infringement proceeding is in progress. However, the outlook is very different as regards the protection of consumers' economic interests. Only Belgium and the Netherlands have notified the Commission of national measures to implement the Directive on unfair terms. Given the importance of this directive for consumers, the failure to incorporate it into national law by the appointed time is particularly worrying. Three infringement proceedings are in motion for incorrect transposal of the Directive on contracts negotiated away from business premises, including cases against France and Belgium which have been under way since 1991 and 1992. There are problems with the consumer credit directives too. Infringement proceedings for failure to notify are in motion against Ireland and Spain as regards Directive 87/102/EEC, while three similar proceedings are under way concerning Directive 90/88/EEC. There have been considerable difficulties in the transposal of the package tours Directive: four infringement proceedings are in motion for failure to notify. The situation regarding the directives on the price-labelling of foodstuffs (Directives 79/581/EEC and 88/315/EEC) and non-food products (Directive 88/314/EEC) is rather different, as the present rules are in the process of being revised. Finally, turning to the health and safety of consumers, only five Member States (Belgium, Denmark, France, Netherlands, United Kingdom) have notified national measures implementing the Directive on general product safety; the Commission is pursuing infringement proceedings against the other Member States for failure to notify. 2.5.1. >TABLE> COMPETITION 1. INTRODUCTION The number of infringement proceedings against Member States in competition matters was as high as ever in 1994. The proceedings did not concern only the application of Commission directives adopted under Article 90 (3) and the examination of individual cases of measures contrary to Articles 37 et 90 (1) of the EC Treaty (national monopolies of a commercial character and public enterprises and enterprises enjoying special or exclusive rights). They concerned: (a) application of Council regulations relating to competition Council regulations relating to competition require the Member States to take the requisite measures before a certain date, after consulting the Commission, to assist Commission staff where an enterprise resists checks. In 1994 the Commission addressed reasoned opinions to Italy for failure to discharge its obligations in connection with Regulations (EEC) Nos 1017/68 (competition in inland transport), 4056/86 (competition in sea transport) and 3975/87 (competition in air transport). But the Italian authorities announced in mid-December that measures covering the four competition regulations were planned in the Community Act for 1994. (b) Article 85 EC in conjunction with Article 5 Article 85 of the EC Treaty, read with Article 5, has been interpreted by the Court of Justice as requiring Member States to refrain from introducing or maintaining in force measures that might have the effect of rendering the competition rules applicable to undertakings nugatory. In 1994 the Commission accordingly addressed a reasoned opinion to Italy, where Act No 1612 of 22 December 1960, still in force, confers on the National Federation of Customs Forwarding Agents the power to set mandatory scales of charges for services supplied by the trade. 2. SITUATION SECTOR BY SECTOR 2.1. Public enterprises (a) Directive 90/388/EEC on competition in markets for telecommunications services has been transposed by all the Member States except Greece and Italy. An action against Greece for failure to comply with Treaty obligations was commenced on 18 October (Case C-281/94). On 20 October the Greek Government enacted a new Telecommunications Act (No 2246/94). But implementing measures will still be needed for the Directive to be fully transposed into Greek law. Italy included the transposal of Directive 90/388/EEC in the 'Legge Comunitaria 1993` of 22 February 1994. But the decree-law and the conditions for licensing telecommunications services after liberalization, as provided for in the Act, were not issued within the year. A reasoned opinion will be addressed to Italy in 1995. (b) Ten Member States have transposed Directive 93/84/EEC amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings. The aim of the 1993 amendment was to permit ex post checks on major manufacturing firms (11th Report, 1993). The Commission's intention is to commence proceedings in the Court of Justice against the Member