[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 17.7.2007

SEC(2007) 975

COMMISSION STAFF WORKING DOCUMENT

Annex to the 24th ANNUAL REPORT FROM THE COMMISSION ON MONITORING THE APPLICATION OF COMMUNITY LAW (2006) SITUATION IN THE DIFFERENT SECTORS [COM(2007) 398 final][SEC(2007) 976]

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

TABLE OF CONTENTS

1. INTRODUCTION – STATISTICS 6

1.1. Transposition of directives 6

1.2. Cases referred to the Court of Justice under Article 228 of the Treatyestablishing the European Community – Developments in 2006 – Table 8

1.3. Implementation of the Commission communication on better monitoring of the application of Community law (COM(2002)725) by sector 13

1.4. Infringement proceedings arising from petitions presented to the European Parliament 26

2. SITUATION IN THE DIFFERENT SECTORS 29

2.1. Enterprise and Industry 29

2.1.1. Automotive industry 30

2.1.2. Pharmaceutical products 30

2.1.3. Cosmetic products 32

2.1.4. Medical devices 32

2.1.5. Chemical products 32

2.1.6. Payment delays 33

2.1.7. Defective products 34

2.1.8. Cultural goods 34

2.1.9. Mechanical and electromechanical equipment 34

2.1.10. Cableway installations 35

2.1.11. Pressure equipment, gas appliances, legal metrology 35

2.1.12. Construction products 35

2.1.13. Preventive rules provided for by Directive 98/34/EC 35

2.1.14. Non-harmonised areas (Articles 28 to 30 of the EC Treaty) 37

2.2. Competition 39

2.2.1. Transparency Directive and other state aid cases 40

2.2.2. Digital Broadcasting 40

2.2.3. Electronic communications 40

2.3. Employment, Social Affairs and Equal Opportunities 41

2.3.1 Free movement of workers and coordination of social security schemes 41

2.3.2 Labour law 43

2.3.3 Health and safety at work 44

2.3.4 Anti-discrimination (article 13 EC) 46

2.3.5 Equality for women and men 46

2.4. Agriculture and Rural Development 47

2.5. Energy and Transport 48

2.5.1. Energy 49

2.5.1.1. Internal market for electricity and natural gas 49

2.5.1.2. Hydrocarbons 50

2.5.1.3. Electricity produced from renewable energy sources 50

2.5.1.4. Biofuels 51

2.5.1.5. Energy efficiency 51

2.5.1.6. Euratom Treaty 52

2.5.2. Transport 53

2.5.2.1. Road transport 53

2.5.2.2. Railway transport 53

2.5.2.3. Road safety 54

2.5.2.4. Transport of dangerous goods 55

2.5.2.5. Air transport 55

2.5.2.6. Maritime transport 58

2.6. Environment 59

2.6.1. Non-conformity Cases 59

2.6.1.1. Environmental Impact Assessment Directive 59

2.6.2. Systemic Problems of Bad Implementation 61

2.6.2.1. Illegal Landfills 61

2.6.2.2. Urban Waste-Water Treatment, Nitrates and Drinking Water 62

2.6.3. Secondary Obligations 63

2.6.3.1. Nature Designation 63

2.6.3.2. Climate Change 64

2.6.3.3. Bathing Water 66

2.6.4. Other cases 66

2.6.4.1. Infrastructure Projects 66

2.6.4.2. Illegal bird hunting 67

2.7. Information Society and Media 69

2.7.1. Electronic communications 69

2.7.2. Audiovisual and Media 73

2.7.3. Public Sector Information 75

2.7.4. Electronic signature 76

2.8. Fisheries and Maritime Affairs 76

2.9. Internal Market and Services 78

2.9.1. Freedom to provide services and freedom of establishment 78

2.9.2. Free movement of capital (application of Articles 56 et seq.) 82

2.9.3. The business environment 83

2.9.4. Regulated professions (qualifications) 85

2.10. Regional Policy 86

2.11. Taxation and Customs Union 87

2.12. Education and Culture 88

2.13. Health and Consumer Protection 90

2.14. Justice, Freedom and Security 93

2.14.1. Transposition of directives on asylum and immigration 93

2.14.2. Citizenship 95

2.14.3. Free movement of persons 95

2.14.4. Visas 97

2.14.5. Judicial cooperation in civil matters 97

2.14.6. Protection of Personal Data 97

2.15. Enlargement 98

2.16. Eurostat 98

2.17. Personnel and Administration 98

2.18. Budget 99

2.19. Legal service 100

1. INTRODUCTION – STATISTICS

1.1. Transposition of directives

The percentages of the tables hereunder reflect the effort of communication made by Member States notifying national execution measures for the transposition of all adopted directives (NEMs) to the Commission.

The following table shows a general overview of directives whose deadline for implementation had passed by 31st December 2006 and for which measures of implementation had been notified by Member States:

[pic]

So as to facilitate comparison, here are the abovementioned data presented in column format:

[pic]

The percentages reflect the effort of communication of Member States notifying NEMs to the Commission. These tables include all communications officially received by the Secretariat general. They equally include all directives (repealed and in force) covered for control purposes by the "INFRINGEMENTS"[1] database. Due to the regular update of this database these data are bound to change at every release. Data on official communication of NEMs is published every two months (six times a year) for information purposes on EUROPA[2] webpage of the Commission. Data shown reflect the last update for 2006.

As from 2007, and coinciding with the enlargement of the European union to Bulgaria and Romania on 01/01/2007, the Commission will add to these tables, data on effort of communication of Member States notifying NEMs specifically for directives in force.

It is worth noticing that as from March 2006, and thanks to the addition of the last outstanding Member State, France, all 25 Member States, as well as Romania and Bulgaria, are communicating NEMs voluntarily through the "Electronic Notification application" developed by the Secretariat general of the Commission since 2004 in electronic format; thus contributing to improve notification of national measures for the transposition of directives as requested by the "Communication of the Commission on better monitoring Community law"[3].

1.2. Cases referred to the Court of Justice under Article 228 of the Treaty establishing the European Community – Developments in 2006 – Table

New cases tried in 2006 are in bold.

C = Closed D = withdrawn Blank = before the Court

Cases referred to the Court of Justice under art.228 EC (situation on 31/12/2006) |

MS | Infringement number | Infringement title | Date of Court judgment Art. 226 | Proposed Penalty | Proposed Lump sum | Date of Commission decision | Case number under Art. 228 | Date of Court judgment Art. 228 | State of play |

(€ / day) | (€ / day) |

BE | 1990/0291 | Oiseaux sauvages | 8/07/1987 | 7.750 | 10/12/1997 | C |

1989/0457 | Financement des étudiants (nationalité) | 3/05/1994 | 43.400 | 22/12/1999 | C |

2000/0038 | Non communication des mesures de transposition de la Directive 98/76/CE | 6/06/2002 | 31.000 | 16/12/2003 | C |

DE | 1987/0372 | Eaux superficielles | 17/10/1991 | 158.400 | 29/01/1997 | C-122/97 | D |

1986/0222 | Oiseaux sauvages | 3/07/1990 | 26.400 | 29/01/1997 | C-121/97 | D |

1986/0121 | Eaux souterraines | 28/02/1991 | 264.000 | 29/01/1997 | C |

1990/4710 | Directive impact | 22/10/1998 | 237.600 | 21/12/2000 | C-41/01 | D |

1997/4540 | Marché de services - Enlèvement d'ordures de la ville de Brauschweig | 10/04/2003 | 126.720 | 13/10/2004 | C-503/04 |

1998/4905 | Marchés publics de services - Abwasser bockhorn | 10/04/2003 | 31.680 | 13/10/2004 | C-503/04 |

ES | 1989/0418 | Dir. 76/160/CE – Quality of bathing water | 12/02/1998 | 45.600 | 23/05/2001 | C-278/01 | 25/11/2003 | C |

1996/2104 | TRANSP. DE LA DIRECT. PORTANT COORDIN. DES PROCED. DE PASS. DES MARCHES PUBLICS DE FOURNITURES | 13/01/2005 | 97.482 | 14.770 | 12/12/2006 |

1996/2105 | TRANSP. DE LA DIRECT. PORT. COORDIN. DES PROCED. DE PASS. DES MARCHES PUBLICS DE TRAVAUX | 13/01/2005 | 97.482 | 14.770 | 12/12/2006 |

EL | 1989/0165 | Ecoles privées (nationalité) | 15/03/1988 | 61.500 | 10/12/1997 | C |

1991/0668 | Diplômes enseignement supérieur | 23/03/1995 | 41.000 | 10/12/1997 | C-197/98 | D |

1993/0711 | Marchés publics de services | 2/05/1996 | 39.975 | 24/06/1998 | C |

1989/0138 | Décharge de Kouroupitos | 7/04/1992 | 24.600 | 26/06/1997 | C |

arrêt 04/07/2000 = | C-387/97 | 4/07/2000 |

20000 |

1991/0583 | Accès aux emplois publics | 2/07/1996 | 57.400 | 1/07/1999 | C |

2005/2202 | Récuperation des aides illégales | 12/05/2005 | 53.611 | 10.512 | 18/10/2006 |

1997/4319 | NON RECONNAISSANCE D'UN DIPLOME D'ARCHITECTE | 9/09/2004 | 42.573,60 | 5.256 | 12/12/2006 |

FR | 1984/0445 | Pêche – mauvais contrôle du respect des mesures techniques de conservation | 11/06/1991 | 316.500 | 20/12/2001 | C-304/02 | 12/07/2005 | C |

1989/0146 | Produits défectueux | 13/01/1993 | 158.250 | 31/03/1998 | C |

1984/0121 | Oiseaux sauvages | 27/04/1988 | 105.500 | 24/06/1998 | C-373/98 | D |

1990/2109 | Travail de nuit des femmes | 13/03/1997 | 142.425 | 21/04/1999 | C-224/99 | D |

1992/2248 | GMO's - DIR 90/219, contained use of genetically modified micro-organisms, non conformity | 27/11/2003 | 168.800 | 12/12/2005 | C-79/06 | D |

1995/2046 | Transposition non conforme des troisièmes directives assurances (mutuelle) | 16/12/1999 | 242.650 | 22/05/2002 | C-261/02 | D |

1999/2247 | Non respect des décisions communautraires relatives au boeuf britannique | 13/12/2001 | 158.250 | 18/07/2002 | C -274/02 | D |

1998/2245 | Responsabilité des produits défectueux | 25/04/2002 | 137.150 | 16/12/2003 |

astreinte modifiée 13.715 | 12/04/2005 | C-177/04 | 14/03/2006 | C |

1993/2067 | EMPLOI DE SUBSTANCES D'ADDITION DANS LA FABRICATION D'ALIMENTS DESTINES A UNE ALIMENTAT. PARTICUL. | 5/02/2004 | 353.646 | 39.294 | 12/10/2006 |

2002/0586 | GMOs - DISSÉMINATION VOLONTAIRE D'OGM | 15/07/2004 | 366.744 | 43.660 | 12/12/2006 |

IT | 1990/0240 | Protection radiologique | 9/06/1993 | 159.300 | 29/01/1997 | C |

1988/0239 | Plan de gestion des déchets | 13/12/1991 | 123.900 | 29/01/1997 | C |

1993/0786 | Eaux urbaines résiduaires | 12/12/1996 | 185.850 | 2/12/1998 | C |

1996/0997 | Sécurité maritime ; prévention de la pollution et conditions de vie et de travail à bord des navires | 11/11/1999 | 88.500 | 21/12/2000 | C |

1996/2208 | Discrimination des lecteurs de langue étrangère | 26/06/2001 | 309.750 | 3/02/2004 | C-119/04 | 18/07/2006 |

1997/0095 | Aménagement du temps de travail | 9/03/2000 | 289.950 | 17/12/2002 | C-57/03 | D |

1998/2055 | Entraves à la prestation de services d'agents en brevets étrangers | 13/02/2003 | 172.575 | 14/12/2004 | C |

1998/4802 | WASTE - DIR 75/442, 91/156, WASTE, HAZARDOUS WASTE, DECHARGE A MANFREDONIA | 25/11/2004 | 85.708,80 | 11.904 | 12/12/2006 |

1999/4797 | WASTE - DIR 75/442 AND 91/156, WASTE, DISCHARGE IN RODANO | 9/09/2004 | 192.844,80 | 23.808 | 12/12/2006 |

IE | 1989/0425 | Impact – Dir 85/337 Art. 4(2) et 7 | 21/09/1999 | astreinte modifiée 2,880 | 1/09/2005 | C-294/03 | D |

1997/2047 | Non ratification de l'acte de Paris (1971) de la convention de Berne | 19/03/2002 | 3.600 | 16/12/2003 | C-165/04 | D |

LU | 1991/0222 | Accès aux emplois publics | 2/07/1996 | 14.000 | 2/12/1998 | C |

1995/0142 | Assistance médicale à bord des navires | 29/10/1998 | 6.000 | 22/12/1999 | C |

1997/0107 | Enquêtes sur les accidents et incidents dans l’aviation civile | 16/12/1999 | 9.000 | 20/12/2001 | C-121/02 | D |

1997/4533 | Obligation de résidence pour les agents en brevet | 6/03/2003 | 9.100 | 14/12/2004 | C -136/05 | D |

2001/2126 | Mise sur le marché et contrôle des explosifs à usage civil | 2/10/2003 | 9.000 | 12/10/2005 | C-416/05 | D |

1995/2138 | TRANSPOSITION DE LA DIRECTIVE 89/391/CEE | 22/05/2003 | 12/10/2005 | C |

2003/0460 | MODIFIANT LA DIRECTIVE 91/440/CEE DU CONSEIL RELATIVE AU DÉVELOPPEMENT DE CHEMINS DE FER COMMUNAUTAI | 30/09/2004 | 9.000 | 12/10/2005 | C-219/06 | D |

2003/0461 | MODIFIANT LA DIRECTIVE 95/18/CE DU CONSEIL CONCERNANT LES LICENCES DES ENTREPRISES FERROVIAIRES | 30/09/2004 | 9.000 | 12/10/2005 | C-219/06 | D |

PT | 1994/2236 | Mauvaise transposition de la Directive 89/665/CEE | 14/10/2004 | 21.450 | 12/10/2005 | C-70/06 |

UK | 1986/0214 | Qualité des eaux de baignade (Blackpool & Southport) | 14/07/1993 | 106.800 | 21/12/2000 | C-85/01 | D |

Following the adoption, in December 2005, of the Commission Communication on the application of Article 228 of the EC Treaty (SEC(2005)1658), on the possibility of imposing financial sanctions on Member States which have failed to implement a judgment establishing an infringement, the column signalling "lump sum payments" has been added to the table above.

Further to the adoption of the Commission re-cast Communication SEC(2005)1658 of 12 December 2005 on the application of Article 228 of the EC Treaty, a more frequent review of infringement cases with continued failure to comply with the Court's judgment is now taking place. A certain upward trend in referring cases to the Court on the basis of Article 228 could be observed towards the end of 2006. In total, the Commission decided in 10 cases on a second referral and proposed periodic penalty and lump sum payments.

Two Court applications were withdrawn after the Member State had notified the relevant national implementation measures of the first railway package, provided in the transitional rule set out in the Communication.

Two cases brought before the Court concern violations of the waste directive by allowing illegal landfills, two cases on insufficient transposition of the public procurement directives on supplies and public works, one case for the non-compliance of a Court judgment ordering the recovery of unlawful state aid, one case on failing to ensure proper recognition of foreign architects' diploma, one case on allowing certain chemical substances in food and one case for non transposition of Directive 2001/18/EC on the deliberate release into the environment of GMOs in violation of the relevant directive.

1.3. Implementation of the Commission communication on better monitoring of the application of Community law (COM(2002)725) by sector

Enterprise and Industry. In the internal market for goods, the Commission is making use of a battery of instruments to ensure the effective implementation of the Community law. In accordance with the Communication on better monitoring of the application of Community law, the Commission selects the instrument to use according to the seriousness of the problem.

In 2006, the Commission used infringement proceedings pursuant to Articles 226 and 228 EC where necessary. Priority was given to the non-communication of national measures transposing directives, failures to implement the Court’s judgments (Article 228 EC) and complaints denouncing structural problems in MS.

In the non-harmonised area (Articles 28-30 EC), complaints continued to be the most important source of information for monitoring the application of Community law. The Commission dealt with each complaint with a view to finding a solution in the shortest possible time (one year in accordance with the Communication on relationship with the Complainants) before resorting to formal infringement proceedings. Thus, the SOLVIT problem-solving network and the “Article 28-30 EC” package meetings were used to deal with cases of misapplication of Community law. Cases with an important social impact were often the subject of political intervention.

Package meetings were organised in 2006 with Hungary and the Czech Republic. 10 cases were discussed, 7 were solved or are in the process of being solved. Each Package meeting was an opportunity to remind Member States of the current situation on transposition and the communication of national measures.

In the harmonised area, the Commission attached much importance to helping Member States to implement existing legislation better and so prevent infringements. The Commission continued to offer advice and assistance to Member States in implementing directives. Implementation issues were on the agenda of meetings of experts groups, Committees and informal networks, for instance in the cosmetic and chemical sectors. Furthermore, package meetings, bilateral contacts, workshops and seminars were used to insist on the importance of good implementation.

In the pharmaceutical sector, the Commission continued to provide assistance with the “Review 2001” legislative package, in preparation for its transposition and implementation by the Member States. In this context, the Commission met the Member States on several occasions (e.g. the Pharmaceutical Committee met in April and December 2006, the Committee for Veterinary Medicinal Products in March 2006 and the “ Notice to applicants” group met six times in 2006 and examined different chapters of the guidelines for notices to applicants, interpreting the requirements of the legislation as regards requests for marketing authorisation).

Furthermore, the Commission worked intensively with Member States to ensure the coherent implementation of Community rules on clinical trials[4]. This cooperation was most visible in the ‘ Ad hoc group for the development of implementing guidelines for Directive 2001/20/EC relating to good clinical practice in the conduct of clinical trials on medicinal products for human use’ , which is composed of representatives of the Member States and the European Medicines Agency and chaired by the Commission (DG Enterprise and Industry). The tasks of the group are to develop the common implementing guidance necessary for uniform implementation of the legislation in the Member States.

The Commission also took part in various forums, such as those organised by the European Medicines Agency or the Member States, to present guidelines for the transposition and implementation of legislation. The most important meeting was the regular meeting of the heads of the national medicines agencies.

Another example of interpretation and guidance documents was the Guide to the Application of Directive 2000/9/EC relating to cableway installations designed to carry persons. This guide was prepared in close cooperation with national authorities. In addition, the Commission chaired two Standing Committee meetings dealing with issues relating to the application of this directive

In the chemical sector, the Commission arranged a study of the transposition of Directive 1999/45/EC on the classification and labelling of dangerous preparations. In 2006 the study focused on the Czech Republic, Finland, Hungary, Italy, and Slovakia. It will help identify implementation problems in these Member States.

In 2006, the Standards and Technical Regulations Committee of Directive 98/34/EC on draft technical rules met three times. Seminars on the notification procedure were organized in the Czech Republic, Hungary, Sweden and the Slovak Republic. At the seminar in Bratislava in December, Bulgaria and Romania were invited to participate. The involvement of these two countries in the 98/34/EC procedure was based on bilateral agreements establishing a simplified procedure.

Finally, the Commission made an effort to review the “Community acquis” in the framework of the Commission simplification strategy. This is aimed at improving the quality of EU legislation and ensuring that new legislative proposals impose the minimum economic burden consistent with achieving their objective.

Employment, Social affairs and equal opportunities. Through the combined use of existing expert groups in the different areas, cooperation at a more technical level, bilateral meetings and contacts, ad hoc missions, sectoral package meetings, participation in training, information and transparency campaigns (such as the 'TRESS' network), as well as continuing the pre-accession monitoring contacts, a number of potential non conformity problems could also be tackled efficiently or effectively solved.

In this context also, the Administrative Commission on Social Security for Migrant Workers, a network of intergovernmental experts and representatives established under Regulation 1408/71, has proven to be a very useful and successful network both by effectively trying to solve existing individual and general problems and by intervening in the upstream, fact-finding phase, thus preventing and pre-empting problems. Furthermore, it regularly addresses a considerable number of questions and issues concerning the interpretation of the existing Community legislation applicable and presumed wrong application, as well as the technical implications and possible solutions for administrative, more technical problems in relation to the existing legal framework.

In the agricultural and rural, development sector , the Commission makes use of a wide range of instruments and initiatives aimed at promoting better implementation and at identifying and addressing potential problems as early as possible. In this regard, 322 meetings of 27 management and regulatory committees offered the possibility to discuss the difficulties in the implementation of the rules of the CAP with the representatives of the Member States concerned and to remind them of their duty to comply with Community law. Moreover, in 2006 the services of DG Agriculture were assisted by a number of advisory, permanent and temporary groups of experts. These contacts helped to clarify facts and rule out misunderstandings. Such preventive practices proved to be highly effective and will continue to be applied in order to avoid infringements in the future.

In addition, to prevent divergent interpretations of the Community rules, in 2006 the Commission adopted 2 interpretative notes on specific provisions in the field of agriculture.

DG Agriculture keeps complainants informed systematically of the progress of the infringement procedure which concerns them. However, if an infringement procedure can not be initiated as a result of a complaint, the complainant is informed and, if appropriate, is advised to use the legal remedies available at national level.

Particular attention has been paid to the treatment of repetitive infringements and instances of non-compliance with the Court judgments. This resulted in proceedings against Luxembourg for non-communication of annual state aid reports in the agricultural sector and against France for maintaining trade barriers against shallots.

In the field of prevention the Commission continues to be active. Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations requires Member States and Members of the European Free Trade Association who have signed the Agreement on the European Economic Area plus Switzerland to give each other and the Commission prior notification of all draft rules containing technical standards or rules in order to avoid raising new barriers to trade in the internal market. In this context, in 2006 the Commission examined 122 notifications relating to the agricultural sector.

The examination of these draft texts in the above area led the Commission to issue one detailed opinion and three comments calling for the notifications to be brought into line with Community law.

In the transport and energy sector , with a view to implementing its 2002 Communication on better monitoring of the application of Community law, the Commission endeavoured to improve its prevention of infringements by reminding Member States of the deadlines for transposing directives (2006 saw a marked improvement in transposition rates in Transport Directives).

In the field of nuclear energy, the submission of draft texts on the basis of Article 33 of the Euratom Treaty has emerged as the instrument of choice, allowing appropriate recommendations or remarks to be made, depending on the circumstances, before the finalisation of the national procedure for the adoption of transposition measures, so that any instances of non-conformity can be identified even before the texts are adopted. During 2006 most notifications related to national provisions on controls of high activity sealed radioactive sources.

Cooperation with the Member States has been strengthened as a result of the exchange of information and best practice at meetings of committees and networks of experts in the fields of both transport and energy. Through the combined use of existing expert groups in the different areas, cooperation at a more technical level, bilateral meetings and contacts as well as in one occasion a "Package meeting", a number of potential non conformity problems could also be tackled efficiently or effectively solved.

Similarly, the systematic inclusion of an item on the transposition of directives and infringements in the briefings given to the Members of the Commission in preparation for high-level meetings with their opposite numbers in the Member States has helped to consolidate this cooperation.

Conformity checks with Community law of implementing measures have also been stepped up and have led to a large number of letters of formal notice and reasoned opinions sent out in non-compliance cases.

In addition, to improve compliance with Community law regular use has been made of the information contained in the reports on inspections carried out in the Member States, and, more especially, in nuclear safety, aviation security and maritime safety.

Finally, information on monitoring the application of Community law has been made available to the public on DG Transport and Energy’s Europa website in the form of press releases and data collection on on-going infringement procedures.

Environment. Despite being a very powerful tool to address implementation problems, infringement proceedings pursuant to Articles 226 and 228 of the Treaty are not the only way to improve Member States’ compliance with EC environmental law. In order to ensure an effective implementation, the Commission is making use of a wide range of non-legal instruments and initiatives aimed at promoting better implementation and at identifying and addressing potential problems as early as possible. This is in line with the 2002 Communication of the Commission on better monitoring of the application of Community law[5].

These non-legal instruments include the production of interpretation and guidance documents for many pieces of legislation. The guidance document on the Council Directive 91/271/EEC of 21 May 1991 concerning urban waste-water treatment was subject to discussions with the Member States and subsequently adopted in a meeting in December 2006. A guidance document on Clarification of the application of article 2(3) of the EIA Directive[6] was also published in 2006 on the Commission's EIA/SEA homepage[7].

Better implementation is also promoted through contacts with Member States in expert groups and committees to discuss implementation issues. In 2006, eleven package meetings were organised between the Commission and Member States; in addition, numerous ad-hoc meetings, workshops and seminars with the participation of national, regional and local authorities took place with a common aim of improving better implementation. The Commission also gave technical advice to Member States prior to transposition of some directives in order to address implementation problems at an early stage. The cooperation on the implementation of the Directive on the Environmental liability[8], where an informal network of national liability experts was set up, may serve as an example here.

Information exchange between implementing authorities through the establishment of informal implementation networks is also a tool for improving implementation. Since its inception in 1992, the informal EU network for the Implementation of Environmental Law (IMPEL) , consisting of European regulators and inspectors concerned with the implementation and enforcement of environmental law, has been a key instrument in discussing the practical application and enforcement of existing legislation. In accordance with the Sixth Environmental Action Programme, the core of IMPEL's activities concerns the exchange of information and experience on implementation and enforcement of existing EU environmental legislation and the development of common views on the coherence and practicality of this legislation.

In 2006 the third IMPEL Conference was organised, where 200 participants discussed the aspects and tasks of the implementation and enforcement of environmental law. It was clear that IMPEL fulfils an important role. The European Commission invited the network to build on its current activities on permitting, inspections and in the field of waste shipment, by feeding back experience on practicability and enforceability to policy makers. In particular, the European Commission invited IMPEL to contribute to the review of the Recommendation on Minimum Criteria for Environmental Inspections and to continue its work on the review on the Integrated Pollution Prevention and Control Directive. At the Plenary meeting in December 2006 IMPEL adopted its Multi Annual Work Programme 2007-2010.

Green Enforce Network is a new voluntary informal European Union network of practitioners focused on the implementation of EU provisions in the field of nature and forestry. The Network has been established as an informal forum where representatives can share information and experience, discuss problems and offer each other practical advice. The Network’s main objective is to create the necessary impetus in the European Union to make progress on ensuring a more effective application of environmental legislation. It promotes the exchange of information and experience and the development of environmental legislation, with special emphasis on Community environmental acquis . It provides the competent authorities (such as environmental inspectors and enforcement officers) with a framework within which to exchange ideas and encourages the development of enforcement structures and best practices and aims to support better co-operation between “nature” and “forestry” part of inspections. The creation of this Network builds on the idea that the implementation in the field of nature and forestry has not achieved the same level of harmonisation in the EU Member States as environmental inspection in the other fields. Two workshops were held in 2006 with participants from sixteen EU Member States and one candidate country which formulated a basis for the development of activities of GreenEnforce Network for the next period.

Created in 2003, the European Forum of Judges for the Environment aims to promote the implementation and enforcement of national, European and international environmental law. The objectives of the Forum are to share experience on judicial training and on environmental case law and to contribute to the better implementation and enforcement of international, European and national environmental law. In 2006, the Forum of Judges held its conference on the implementation of Natura 2000 in the Member States.

The Commission has also launched a comprehensive strategy on better regulation aiming at simplifying and improving existing regulation, to better design new regulation and to reinforce the respect and the effectiveness of the rules, all this in line with the proportionality principle. In that context, it is to be noted that, in 2006, the Commission proposed a Directive to protect surface water from pollution[9] which will set limits on concentrations of 41 pesticides, heavy metals and other dangerous substances. The proposal provides for significant simplification by repealing five Directives and removing certain reporting requirements.

In 2006, the Commission started or continued reviewing legislation such as the WEEE[10], RoHS[11] and IPPC[12] Directives, as part on the Simplification Rolling Programme[13]. It also started detailed reviews to improve the EMAS (EU eco-management and auditing system)[14] and Eco-label schemes[15]. Part of the programme, updated and expanded in November 2006[16], is the proposal for revision of the Waste Framework Directive[17] to modernise and simplify waste legislation. The adoption of the Commission's proposal would lead to the merging of three existing Directives and the repeal of a fourth one.

Information Society and Media has put great efforts from the very beginning to avoid the need for recourse to formal infringement proceedings.

In the field of electronic communications , the Commission services have continued to provide general guidance on transposition requirements via the Communications Committee (COCOM) and the Radio Spectrum Committee (RSC), and by making use of intensive bilateral contacts with the relevant national authorities. Following discussion in COCOM, measures on the harmonised application of the regulatory framework for electronic communications were adopted, namely a new List of standards[18] and a Decision requiring Member States to reserve the six-digit number range starting with the digits 116 for services of social value in Europe[19]. Market reviews by the national regulatory authorities and dispute settlement mechanisms for consumers at national level played a major role to consolidate the single market and to prevent formal infringement proceedings. In addition, DG INFSO continued to monitor the general state of implementation of the regulatory framework, in close contact with the national authorities and other stakeholders, when preparing for the Commission’s sector specific annual Implementation Report addressed to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions[20].

Concerning the Television without Frontiers Directive , the Commission adopted two important reports in 2006: the Fifth report on the application of the Television without Frontiers directive[21] and the Seventh communication on the application of Articles 4 and 5 of the Television without Frontiers Directive[22]. Apart from this reporting exercise, the Commission convened the Contact Committee - set up under Article 23a of the Television without Frontiers Directive - in order to hold meetings where issues of interpretation or application of certain rules could be discussed with Member States. An ad hoc group of representatives of Member States’ regulatory authorities meets on average twice a year, also with a view to ensuring consistent application of the provisions of the Directive and good cooperation between regulatory authorities. In March 2006, the Member of the Commission responsible for audiovisual policy, Mrs Reding, held a meeting of the chairmen of these authorities in Brussels.

Regarding the Directive on Public Sector Information (PSI) , the Commission organises and chairs the PSI Group, where experts from Member States meet regularly, in order to provide assistance regarding transposition and implementation issues and to facilitate the exchange of good practices. Secondly, the Commission provides expert assistance to Member States through bilateral contacts and contributes to awareness raising activities by participating in seminars and workshops organised in Member States. Thirdly, the Commission concluded in 2006 a baseline study on exploitation of PSI – Measuring European Public Sector Information Resources (MEPSIR). Finally, the Commission undertakes stimulation and communication actions (e.g. the Commission’s PSI website contains the transposition status of each Member State, as well as examples of good practices and links to national portals), networking across Europe and co-funds an awareness network for promoting PSI reuse (ePSIplus) through the eContentplus Programme.

Fisheries and maritime affairs. In the field of improving cooperation between the Commission and the Member States in the field of prevention (point 2.1. of the Communication), the Directorate-General for Fisheries analyses, on a regular basis, the technical rules of the fishing sector, within the framework of the application of Directive 98/34/EC (notification of technical regulations in the context of the internal market).

In the field of providing more information on Community law (point 2.3. of the Communication), in order to increase transparency in the way Member States fulfil their obligations under Community law, they are invited to inform the Commission, on an annual basis, of the measures adopted in order to pursue infringements. In this context, the Commission published, on 14 July , a Communication to the Council and the European Parliament on the reports from Member States on behaviours which seriously infringed the rules of the Common Fisheries Policy in 2004[23].

Also, aiming at information on the application of Community law by Member States, the Commission publishes on a regular basis a "Scoreboard"[24] in which is described the situation in all Member States. This scoreboard contains all information relating to Community rules, namely concerning serious infringements and the proceedings (cases initiated by the Commission and judgments of the Court of Justice of the European Communities).

Regarding the effective use of the available instruments in accordance with the seriousness of the infringements (point 3.1. of the Communication), and more specifically the infringements that undermine the smooth functioning of the Community legal system (littera (b) of this point), the Commission proceeded to a very strict follow-up of the infringement procedures owing to deficiencies verified in the national systems of control of fishing activities (Portugal, Spain, Sweden, United Kingdom).

The Commission also made the follow-up in a case of non compliance with a judgment of the Court[25] which led, on the basis of Article 228 EC, to the payment by the Member State concerned of a penalty of EUR 57.761.250.

Finally, regarding complaints and their importance for monitoring the application of Community law (point 3.2. of the Communication), the Commission decided to close a complaint relating to Greek legislation prohibiting, from October till January, the fishing, marketing and selling, throughout Greek territory, of swordfish caught in international waters as well as the landing in Greek ports of swordfish designed to be sold in foreign markets.

Internal Market and Services. Directorate general internal market attaches great importance to the permanent dialogue and cooperation with Member States. Its objective is to ensure complete and timely transposition of Directives under its responsibility. Services of Directorate general internal market provide technical assistance and daily guidance to national authorities charged with the transposition. Specific meetings are organised with all Member States both at informal ad hoc level and in the context of existing Committees. These meetings are intended to identify difficulties experienced by national authorities in the preparation of transposition measures and tackle them as soon as possible. In 2006 they took place in a number of sectors: regulated professions, insurance, banking, securities, accounting, auditing. Directorate general internal market also continues to organise package transposition meetings. In 2006 Directorate general internal market visited Greece, Portugal and Italy. The discussions with national authorities allowed to address several problems of general or specific nature before the deadline for transposition expired. They also served to constantly draw the attention of Member States on the need to start their transposition works early and highlight the advantages of a good planning and coordination. Directorate general internal market supported a more intensive use of complementary mechanisms, in particular of SOLVIT. During 2006 SOLVIT treated 467 dossiers and found a solution in 80 % of the cases. These positive results show the efficiency of this network and the benefits for citizens and business as they obtain a concrete answer to their difficulties in a very short time.

Regional Policy. On the question of improving cooperation between the Commission and the Member States in the field of prevention (point 2.1. of the Communication), the partnership between the Commission and the national authorities responsible for implementing structural assistance allows an exchange of views on any problems associated with the application of Community law.

In addition, in the case of major projects financed by the ERDF and individual Cohesion Fund projects the Commission has greater scope for intervening in a preventive capacity since it examines the various aspects of the project prior to adoption and can therefore identify the risks of infringement of Community law more easily than in the case of current ERDF operations.

Finally, it should be mentioned that in the context of the management of the Funds transparency plays a role, albeit indirectly, in preventing infringements of Community law. For this reason, DG Regional policy encourages initiatives in this area.

Under the heading of providing more information on Community law (point 2.3. of the Communication), the public information provided by DG Regional Policy is concerned with the various aspects of the implementation of Community legislation relating to the Structural Funds and the Cohesion Fund. It does not provide information relating specifically to compliance with Community law.

As regards the effective use of the available instruments in accordance with the seriousness of the infringements (point 3.1. of the Communication), the infringements of Community law uncovered in connection with the Funds are serious, since they may have grave implications for the Community budget.

For reasons which are explained below in the following paragraph, the number of infringements affecting the actual legislation relating to the Funds is small. However, when an infringement of Community law does occur, the “financial correction” procedure, i.e. the procedure which can lead to the suspension, reduction or termination of aid, is often a more appropriate measure than the initiation of an infringement procedure. Moreover, as the implementation of regional policy is based on the partnership principle, the provisions on financial correction require the Member States to take action themselves in the first instance to rectify any infringement, while at the same time notifying the Commission. This approach has two advantages, it not only allows the Member States to avoid losing Community aid but it creates a culture of respect for Community law within the national authorities.

Complaints and their importance for monitoring the application of Community law (point 3.2. of the Communication). There are very few complaints, and hence infringements, relating to the management of the Funds and this is due to the fact that the legislation is based on the principle of subsidiarity. The most common complaint is that the complainant’s proposal has not been chosen by the managing authority during the project selection process. However, provided that the selection is made in accordance with the programming documents the Commission is not competent to examine the complaint, since the selection has been carried out according to national law. It is unlikely that the Commission can take any action on such complaints within the framework of the Article 226 EC procedure.

This being said, the Commission has had to examine cases where the project chosen did allegedly not correspond to the programming documents.

On the other hand, a large number of complaints and infringements concern the compatibility of projects cofinanced by the Fund with Community legislation on the environment and public procurement. Such cases are examined in the light of the relevant provisions in force (i.e. the environment directives or the “public procurement” directives, depending on the case). However, as conformity with Community legislation is a condition of payment of assistance from the Funds, the Commission must take appropriate financial measures. Thus, an infringement of Community law on the environment, for example, which relates to a project cofinanced by the ERDF or the Cohesion Fund can lead to the suspension, reduction or termination of the aid, provided that there is a direct link between the infringement and the project.

Taxation and Customs Union. Considering the unanimity requirement in Council, harmonisation of legislation in the area of direct taxation is not very developed and the main source of conflict remains infringements of the freedoms provided for in the Treaty.

Although the legislation has already evolved towards a more harmonised system within the area of indirect taxation, the rule of unanimity also constitutes an obstacle to go forward towards harmonisation and therefore, the best instrument to provide a correct application of Community law, remains mainly the use of an infringement-procedure.

The increasing case law of the European Court of justice, also triggered by an increasing number of requests for preliminary rulings by national tribunals, has given further guidance for an enhanced control of infringement cases and a large number of ex officio cases have been initiated.

The increase of human resources in Directorate general taxation and customs union and a clear definition of political action are important applications of the 2002 Communication.

As regards value added networks for problem solving, the SOLVIT system has proven useful to conclude conflicts arising from factual disputes whereas this system seems less efficient when it comes to bring together different legal appreciations and for solving national internal problems.

Education and culture. Directorate general Education and culture launches infringement procedures following the reception of complaints of EU citizens. When complaints concern individual cases, Directorate general Education and culture recommends to the citizens the use of the SOLVIT network. The complainants are kept informed systematically regarding the different stages of the infringement procedure. In the case of politically sensitive files, Directorate general Education and culture organises meetings with the national authorities to discuss and clarify the position of the Commission and assist the Member States in their efforts to comply with the requirements of EU law. Directorate general Education and culture pursues all cases of infringements of the principle of equality of treatment and free movement in the area of access to education, given that they concern the application fundamental principle of the Treaty.

In the field of health and consumer protection, the Commission started the examination of the transposition measures of a number of directives, particularly in the area of consumer protection.

Ensuring compliance with Community provisions on food safety remains one of the Commission’s priorities. To this end, the Food and Veterinary Office (FVO) conducts inspection visits in all the Member States to ensure that Community legislation is being properly implemented and that the Member States are organising official inspections in an efficient manner. The FVO makes recommendations to the competent authority of the country concerned asking it to rectify any irregularities found in the course of the inspections. It asks the competent authority to present it with an action plan showing how it intends to remedy these irregularities. By cooperating closely with the Member States the FVO is successfully achieving a high degree of food safety. If the Commission finds that insufficient progress is being made on implementing the action plan it initiates infringement procedures.

In a number of fields, particularly those dealing with plant protection products, blood products and tobacco products, informal working parties and pilot projects have been set up to discuss the application of the legislation concerned or to encourage administrative cooperation in order to reduce the workload of the national authorities involved.

In the field of prevention, too, the Commission continues to be active. Directive 98/34/EC of the European Parliament and of the Council of 22 June 1998 laying down a procedure for the provision of information in the field of technical standards and regulations requires Member States and Members of the European Free Trade Association who have signed the Agreement on the European Economic Area plus Switzerland to give each other and the Commission prior notification of all draft rules containing technical standards or rules in order to avoid raising new barriers to trade in the internal market. In this context, in 2006 the Commission examined 135 notifications from Member States relating to draft regulations affecting public health or consumer protection.

For the same purpose the Commission has set up the Better Training for Safer Food programme. This program aims to keep national control staff up to date with new Community rules and to guarantee that national controls are carried out in a more uniform and objective manner in all Member States. In the framework of this programme, which has been implemented for the first time in 2006, the Commission organised 34 training events and sustained 7 training missions attended by 1400 participants.

In the field of justice, freedom and security , six contact committees meetings between the Commission services and Member States experts were convened during 2006 in order to offer assistance to Member States in the process of transposition and application of Directives in the field of asylum and immigration as well as to efficiently monitor their application. Furthermore, following a call for tender, a contract with view of conducting a study examining both legal and practical implementation of these Directives at the national level was awarded.

Another meeting was held with Member States concerning progress achieved in the transposition of Directive 2004/38/EC on free movement of EU citizens and their family members. The Commission finalised a "Guide on how to make the best out of Directive 2004/38/EC", which explains the provisions of this Directive to citizens in a simple and accessible manner. The online publication of this guide will help reduce complaints to the Commission advising citizens to make use of the problem solving network SOLVIT before lodging a complaint before the Commission and also to seek redress before the competent national authorities.

In the field of protection of personal data, the Commission will continue to monitor the implementation of the Directive 95/46/EC, work with Member States' authorities to further reduce national divergences and study the need for sector-specific legislation to apply data protection principles to new technologies and to satisfy public security needs. A Communication on the follow-up of the Work Programme for a better implementation of the Data Protection Directive has been recently adopted. This Communication examines the work carried out since the publication of the First Report on the implementation of the Directive, assesses the present situation and outlines the prospects for the future.

Eurostat. In the statistics area, in line with the Commission Communication on better monitoring of the application of Community law, Eurostat has continued to promote dialogue and cooperation with the Member States in order to ensure the respect of the statistical legislation.

" The rigorous monitoring of the application of the Community law " was a priority included in Eurostat's 2006 Annual Management Plan related to the objectives of ensuring the coherent and systematic monitoring of compliance with statistical legislation, helping to develop the European Statistical System and improving the quality of products and services.

In fact, the objective of having statistics of quality is both an operational and a legal requirement insofar as Community statistics production must respect the principles set out in Article 285 of the EC Treaty and in Regulation (EC) No 322/97[26], and in the various sectoral legislative instruments. Eurostat has also pursued its policy based on a comprehensive and coherent strategy to ensure follow-up and effective control of the application of statistical legislation.

This policy, which implies a twice-yearly review of compliance at the level of the Directors’ meeting, has led to clear improvements. The administrative letters sent in the pre-infringement phase have indeed had a positive effect and in fact only one formal infringement case is currently open. The encouraging results show how useful and effective this strategy is.

Eurostat’s collaboration with the Member States – each acting in their respective institutional roles - remains a source of added value in Eurostat’s daily work and is the preferred means for speeding up voluntary compliance with Community law.

Along these lines, better information is also promoted through cooperation with Member States at different levels in Statistical Committees and expert Working Groups discussing compliance issues of sectoral statistical legislation.

In addition, technical advice, information exchange between statistical authorities and Eurostat's services through the establishment of informal contacts were also a tool for improving the correct application of legislation and for avoiding non compliance situations at an earlier stage.

This compliance monitoring policy in place in Eurostat is based on a comprehensive and coherent strategy built around the following principles:

a realistic approach to legislative policy[27] : the new legislative proposals are properly negotiated with national experts at all levels and in line with the Commission's objectives of better legislation, simplification and reduction of the burden on respondents as referred to in the Communication s of 14 November 2006 on "a strategic review of Better Regulation in the European Union"[28] and on "reduction of the response burden, simplification and priority-setting in the field of Community statistics"[29].

a strategy for monitoring consistent, transparent and systematic compliance : the selected instruments include: identifying in advance and in a timely manner the potential sources of error and the practices which can influence the quality of data, maintaining a permanent dialogue at operational level with data suppliers, and establishing appropriate quality control measures by field.

the message will continue to be passed on to Member States at the level of Working Parties, Committees, and especially the Statistical Programme Committee, that legislation adopted is legislation applied.

Eurostat will continue this "structured dialogue" with the national authorities with a view to preventing infringement proceedings and ensuring correct application of the statistical legislation.

Budget. The principle of sound financial management is applied (as expressed in article 73 of the Financial Regulation applicable to the general budget of the European Communities). This means in practice that infringements are evaluated under the aspects of their gravity and their impact on the budget and treated correspondingly. In 2006, in a view of preventing possible operational problems, DG BUDG organised seminars for Bulgarian and Romanian officials on the procedure applicable to making available of own resources. Moreover, DG BUDG detected errors in Regulation No 2028/2004 and the corrigenda could finally be published in 2006 – this would secure correct and uniform application of EC own resources law in all Member States. Legal actions were only taken if preliminary correspondence and/or discussions with Member States in the Advisory Committee for Own Resources (four meetings in 2006) did not solve the controversy.

1.4. Infringement proceedings arising from petitions presented to the European Parliament

Enterprise and industry. In the area of the internal market for goods, the Commission received five new petitions in 2006 related to possible breaches of Community law. Moreover, the Commission continued to deal with other petitions presented in preceding years

The topics raised by these petitions were an alleged defective transposition of Directive 2000/35/EC on combating late payment in commercial transactions by Spain; Greece's ban on the use of electronic games in Internet cafés; obstacles for registration of a second- hand car in Slovakia, restrictions on the import of antiques to Poland and some obstacles related to the importation of alcohol in the Czech Republic. Consequently, the matters related to the application of articles 28-30 EC on the free movement of goods. This underlines the past experience that a high percentage of petitions is related to the application of Articles 28-30 EC.

In three of the petitions, the facts denounced by the petitioner were already under examination by the Commission's services in the framework of an infringement proceeding.

Environment. Petitions to the European Parliament continue to represent a valuable source of information for the Commission in detecting violations of Community law. This is of particular importance since the Commission does not have any “inspection” powers in order to check the situation concerning practical implementation of EC law on the ground in the sector of the environment.

At the end of 2006, the number of open petitions in the environment sector was 161 (environment is the leading sector). About one third of those petitions revealed a potential breach of community law. Petitions concern varied issues such as spring hunting of birds in Malta, the construction of a port in Granadilla (Tenerife), the quality of water in the Thames after heavy rainfalls, a plan for construction of mobile barriers in the Venice Lagoon etc.

Facts brought to the attention of the Commission through petitions allow it to verify compliance “on the ground”. After examination of those facts and, in most cases, after checking with the authorities concerned, the Commission verifies whether the Member States have correctly applied EC Law. Sometimes, the Commission's intervention helps to resolve potential infringements before they occur. However, some of these petitions lead to the opening of an infringement procedure.

This “preventive role”, in terms of the Commission's handling of petitions, provides fruitful results and helps to ensure better implementation on the ground. However, in the field of the environment it is particularly important that the petitioners provide a clear identification of potential breaches of community law, with supporting data, in order to facilitate the handling of files.

In many cases a citizen simultaneously lodges a petition with Parliament and a complaint with the Commission concerning the same grievance leading to a parallel treatment. The treatment of complaints and parliamentary procedures linked to implementation results for DG ENV in a significant workload, in terms of communications to the European Parliament and correspondence with the national authorities and with complainants to obtain information, as well as for their assessment (from a legal and technical point of view) in order to decide whether to open an infringement procedure or close the file.

Information Society and Media . In the area of electronic communications, the Commission's monitoring of the implementation of the Single European Emergency Number 112 had been the subject of a petition to the European Parliament[30], launched on behalf of the “European Emergency Number Association (EENA)” in 2005. On 13 September 2006, the EP Petitions Committee decided to close the file, following the explanations given by the Commission, but invited both the Council and the Commission to take actions in order to increase awareness of 112.

Internal Market. Directorate general internal market answered in 2006 to more than 120 requests of the European Parliament falling within its competence. Approximately a quarter of these requests are linked to infringement procedures. Two fields always occupy an important place. The field of the recognition of diplomas saw a certain development, with the application of the professional recognition rules by a Member State which applied the academic recognition rules to the qualified professionals. In addition, in the field of the public procurement, the question of the urban laws in the region of Valencia continues raising important questions. An infringement procedure was initiated in this area concerning the public procurement exclusively. Numerous questions raised which fall within the competence of the authorities and of the national courts exclusively. Lastly, a number of cases started to be submitted to SOLVIT by the Commission, in order to find a rapid solution to individual cases.

Regional Policy. In the area of regional policy, only 2 petitions handled by DG REGIO were related to infringement proceedings in progress. They both concern management of Community funds and one of the two also concern compliance with environmental legislation.

Taxation and Customs Union. Having regard to the different procedural aspects and the distinct roles of the Institutions, the petitions linked to infringement procedures have been dealt with in a fully distinct manner. In the area of taxation and customs, a very small number of complainants have lodged a petition procedure to the European Parliament in parallel with their complaint to the Commission.

In the area of EC customs legislation, those petitions concern the different problems citizens had to face when crossing the frontiers at the external borders of the Community. Within the area of indirect taxation, the issue on taxation of cars in all its aspects is a permanent returning phenomenon. The encountered problems related to the refund of VAT is also a repetitive issue.

Education and Culture. The petition of a European citizen (jointly with a complaint coming from another European citizen) gave place to the opening of an infringement procedure; it is the case “Portugal - Sum required for the recognition of foreign diplomas”, which is currently at the stage of the reasoned opinion.

Health and Consumer Protection. In the area of Health and Consumer Protection, the complaint 2004/4263 linked to a petition concerning some establishments treating animal by-products in Spain has been closed. In addition a petition to the European Parliament linked to infringement proceeding 2006/2214 relating the issue of the compulsory re-registration, in France, of horses already registered in another Member State will also be closed.

Justice, Freedom and Security. One petition to the European Parliament has been submitted concerning the petitioner's request for the Commission to investigate the alleged failures of the Law Society of Ireland, the Solicitor's Disciplinary Tribunal and the Data Protection Commissioner to comply with or enforce the data protection Directive. The Commission concluded that the facts presented by the petitioner do not justify further action by the Commission.

2. SITUATION IN THE DIFFERENT SECTORS

2.1. Enterprise and Industry

In the field of internal market for goods, the Commission (DG Enterprise and industry) deals with an increasing number of Directives (more than 500), Regulations (around 200) and Decisions (around 150). It is essential that this legislation, which is fundamental to the efficient working of the internal market, is properly transposed into national law. Accordingly, the Commission continued to try to improve the quality of EU legislation to be transposed and to coordinate efforts in the Member States with a view to achieving correct implementation.

Concerning the monitoring of the application of Community law, the Commission gave priority to guaranteeing the efficiency of the internal market, notably by encouraging the rapid transposition of legislation, by monitoring of national technical regulations and by managing complaints with a view to ensuring that infringements are rectified as soon as possible. In 2006, priority was given to removing obstacles caused by the non transposition of Directives and to tackling structural problems in MS by bringing about changes in laws or practices.

As regards the transposition of directives, 186 infringement procedures for non-communication were launched, mainly in relation to the automotive, pharmaceutical and cosmetic sectors. 234 infringement proceedings were closed in 2006.

Concerning the other cases (non-conformity, incorrect application and contraventions of Articles 28-30 EC), complaints made by citizens and economic operators continued to be the most important source of information for monitoring the application of Community law.

In accordance with its obligations, the Commission tried find a solution to each complaint made in the shortest possible time. However, due to deadlines and available resources, the Commission had often to deal with the complaints in order of their date of registration.

More than 50% of the complaints registered in 2006 alleged contravention by the Member States of Articles 28-30 EC on the free movements of goods. The others related to non-conformity of national transposition measures with directives (16) and to incorrect application (20). In 2006, 105 complaint cases were closed after the Member States removed the obstacle in question.

Cooperation with the Member States was improved in the early stages of investigations in order to try to solve the alleged problem without launching article 226 EC proceedings. The Commission often sent administrative letters to the Member States asking for clarification and information. In general, the Member States cooperated with the Commission and respected the deadlines set.

Moreover, the Commission uses other instruments (e.g. the SOLVIT network, package meetings, political intervention) to dealt with complaints alleging incorrect application of Community law

2.1.1. Automotive industry

In this sector, the Commission monitored in particular the transposition of directives whose deadlines for transposition were due in 2006.

The directives in the automotive sector contain a multitude of detailed technical specifications for different vehicle systems and components and they are frequently modified to adapt them to technical progress. They are highly prescriptive and confer minimal discretion on the Member States. Accordingly many Member States implemented them in national law by reference or simply by repeating the text of the directive in national law .

During the year, 113 infringement proceedings were launched. All stemmed from non-communication of measures transposing EC Directives into national legislation. Of these, 81 cases were closed after national implementation measures were notified by the Member States. Almost 70% were closed after the letter of formal notice stage while reasoned opinions had to be issued before the remaining 30% could be closed.

It is interesting to note that the split between the EU-15 and the EU-10 Member States was 59 and 54 cases respectively.

At the end of 2006, 100 proceedings for non-communication of directives were closed and only one case against Greece for non-communication of transposition measures of Directive 2004/104/EC was referred to the European Court of Justice.

2.1.2. Pharmaceutical products

The Commission decided to bring actions before the Court of Justice against the Czech Republic, Spain, France, Ireland and the Netherlands for failure to notify measures implementing Directive 2004/24/EC amending, as regards herbal medicinal products, Directive 2001/83/EC. 14 procedures for non-communication of transposition measures for that Directive were closed after the Commission received the relevant transposition measures.

In relation to Directive 2004/27/EC amending Directive 2001/83/EC on the Community code relating to medicinal products for human use, the Commission decided to bring actions before the Court of Justice against the Czech Republic, Spain, Ireland and the Netherlands for non-communication of national measures. 13 procedures for non-communication of transposition measures were closed in 2006 after the Commission received the relevant transposition measures.

In the case of Directive 2004/28/EC amending Directive 2001/82/EC on the Community code relating to veterinary medicinal products, the Commission brought actions before the Court of Justice against the Czech Republic, France and Portugal for non-communication of transposition measures. 17 procedures for non-communication of transposition measures for that Directive were closed in 2006.

In relation to Directive 2005/28/EC laying down principles and detailed guidelines for good clinical practice as regards investigational medicinal products for human use, as well as the requirements for authorisation of the manufacturing or importation of such products, 24 infringement proceedings were opened in 2006 for non communication . The Commission brought actions before the Court of Justice against the Czech Republic, Italy and Portugal. 15 procedures for non-communication were closed in 2006.

For Directive 2003/94/EC laying down the principles and guidelines of good manufacturing practice in respect of medicinal products for human use and investigational medicinal products for human use, infringement proceedings for non-communication against France and The Netherlands were closed after having been referred to the Court of Justice.

In 2006, the Commission continued to use preventive techniques in securing the implementation of the legislative package “Review 2001” which includes Regulation (EC) No 726/2004 and Directives 2004/27/EC, 2004/28/EC and 2004/24/EC and reviews in depth the regulatory framework applicable to pharmaceutical products.

The work of the following working parties mainly concerned interpreting “Review 2001” in preparation for its transposition and implementation by the Member States:

- the Pharmaceutical Committee in its meetings of April and December 2006,

- the Committee for Veterinary Medicinal Products in its meeting of March 2006, and

- the “Notice to applicants” group, which met six times in 2006 and examined different chapters of the guidelines for notices to applicants by interpreting the requirements of the legislation as regards requests for marketing authorisation.

Furthermore, the Commission worked intensively with Member States in the course of 2006 to ensure coherent implementation of the Community rules on clinical trials as set out in Directive 2001/20/EC, complemented by Commission Directives 2003/94/EC and 2005/28/EC. Co-operation was mainly channelled into the ‘ Ad hoc group for the development of implementing guidelines for Directive 2001/20/EC relating to good clinical practice in the conduct of clinical trials on medicinal products for human use. ’

This ‘Ad hoc group’ is composed of representatives of the Member States’ Competent Authorities and the European Medicines Agency and is chaired by the Commission (DG Enterprise and Industry). The task of the group is to develop the common implementing guidance necessary for uniform implementation of the legislation in the Member States.

The Commission also took part in various forums, such as those organised by the European Medicines Agency or the Member States, to present guidelines for the transposition and implementation of legislation. The most important meeting was the regular meeting of the heads of the medicines agencies.

Concerning the prices and reimbursement of medicinal products, the Commission pursued its efforts to ensure the correct implementation of Directive 89/105/EEC relating to the transparency of pharmaceutical pricing and reimbursement measures adopted by the Member States.

Several complaints were received from economic operators and compliance with the procedural requirements of the directive was investigated. The Commission sent reasoned opinions to four Member States which, in the Commission's view, had not complied ( non-conformity ) with the transparency rules of the directive (Austria, Czech Republic, Italy and Spain). The article 228 EC proceedings against Finland for non-compliance with the Court’s decision of 12 June 2003(C-2000/229) were closed.

The Transparency Committee convened in November 2006 to discuss the application and interpretation of the directive.

2.1.3. Cosmetic products

Pursuant to Directive 76/768/CE, the Commission adopted two Directives designed to adapt the Cosmetics Directive to technical progress, two recommendations (one concerning the efficacy of sunscreen products and the claims made relating thereto and one establishing guidelines on the use of claims referring to the absence of tests on animals pursuant to Council Directive 76/768/EEC) and one decision amending a previous decision establishing an inventory and a common nomenclature of ingredients employed in cosmetic products.

11 infringement proceedings were opened in 2006 against Member States for failure to notify national measures implementing two Directives, 4 relating to Directive 2005/52 adapting Annex III to technical progress and 7 relating to Directive 2005/80 adapting Annexes II and III to technical progress. Except for one case concerning Greece for non-communication of Directive 2005/80/EC, those proceedings were all closed within the same year.

Because some MS transpose directives on cosmetics products “by reference” (where the text of the directive is not reproduced in the national law), the Commission informed the Member States at the December meeting of the standing committee on cosmetic products about the requirements for using this technique.

2.1.4. Medical devices

In 2006, three cases for non-communication of national measures transposing medical devices directives were closed by the Commission. Two were against Latvia, for failure to transpose Directive 2003/12/EC on the reclassification of breast implants and Directive 2003/32/EC introducing detailed specifications as regards the requirements laid down in Council Directive 93/42/EEC with respect to medical devices manufactured utilising tissues of animal origin. The third case was against Estonia for failure to transpose Directive 84/539/EEC on the approximation of the laws of the Member States relating to electro-medical equipment used in human or veterinary medicine.

In addition, several complaints received in 2006, alleging breach of Directive 93/42/EEC on medical devices were declared unfounded after analysis by the competent service.

2.1.5. Chemical products

Directive 2005/59/EC[31] on Toluene and Trichlorobenzene, Directive 2005/69/EC[32] on Polycyclic Aromatic Hydrocarbons in extender oils and tyres and Directive 2005/84/EC[33] on phthalates in toys and in childcare articles had to be transposed in 2006.

The Commission launched infringement procedures for non-communication of national measures transposing Directive 2005/84/EC against France, Ireland, Italy, Luxembourg, The Netherlands, Austria, Portugal, Slovenia, Sweden and United Kingdom. By the end of 2006, 8 of those Member States had communicated the national measures. The deadlines for transposition of the other directives passed in December 2006. Luxembourg, Austria, Slovenia and Finland had not communicated the relevant measures by the end of 2006.

The efforts of the competent services were targeted at Regulation EC No 2003/2003 on Fertilisers and Regulation EC No 648/2004 on Detergents, which came into force in 2005. Member States were reminded of their obligations to communicate the measures that they had adopted for the implementation of these regulations. Following this exercise, the Commission launched infringement procedures for non- communication of national measures concerning

- control measures and sanctions required by Regulation EC No 2003/2003 against Italy, The Netherlands, the Czech Republic, Slovenia, and Luxembourg; and

- the designation of a competent authority and sanctions required by Regulation EC No 648/2004 against Denmark, France, Italy, Luxembourg, Slovenia and Sweden.

By the end of 2006 only Luxembourg and France, The Netherlands and Italy had still not communicated the measures needed for the proper implementation of these Regulations.

The Commission continued to check the conformity of national measures transposing Directives 2004/10/EC and Directive 2004/9/EC on Good Laboratory Practice (GLP). In this context, the Commission sent letters to four Member States concerning the setting up of an authority for the verification of GLP. At the end of the year, 2 Member States had made progress toward setting up an authority.

In 2005, the Commission contracted out a study concerning the transposition of Directive 1999/45/EC on the classification and labelling of dangerous preparations. In 2006 the study focused on the following Member States: the Czech Republic, Finland, Hungary, Italy, and Slovakia. In the majority of cases no important problems were found. However, this study will be an opportunity for the Commission to contact Member States with a view to resolving problems brought to light by the study.

Working group meetings for the various legislation are organised on a regular basis. At these meetings the competent authorities of Member States discuss problems in the implementation of the directives and regulations. As a result possible incorrect implementation of directives and regulations can be avoided.

2.1.6. Payment delays

Late payment and long payment periods impede the development, competitiveness and profitability of SMEs, and even endanger their survival, so tackling these problems is a priority for the European Commission.

In 2006, the Court of Justice stated in its judgement of 26/10/2006 (C-2005/302, Commission/ Italy) that the Directive does not harmonise all the rules relating to late payments in commercial transactions since it governs only certain specific rules intended to combat such delays, namely, rules on interest for late payments (Article 3), retention of title (Article 4) and procedures for recovery of unchallenged claims (Article 5). Therefore, the rest of the rules which appear in the Directive were still governed exclusively by the national legal orders of the Member States.

During 2006, the Commission dealt with two complaints for non-conformity of national measures transposing Directive 2000/35/EC. Letters asking for further information were sent to the Member States concerned.

Two proceedings for non-conformity were still pending before the Court of Justice: one against Spain (C-2006/380), the other against Italy (C- 2005/302).

2.1.7. Defective products

During the first quarter of 2006, the Court of Justice gave three judgments (C-402/03, C-127/04 and C-177/04, regarding Denmark, United Kingdom and France) effectively putting to an end the long standing debate on the harmonizing effects of Directive 85/374/EEC on product liability and also giving some interpretation of the concept of ‘putting a product into circulation’. The Court of Justice held that a product must be considered as having been put into circulation, within the meaning of Article 11 of the Directive, when it leaves the production process operated by the producer and enters a marketing process in the form in which it is offered to the public to be used or consumed.

At the end of the year, case C-327/05, Commission v. Denmark, on the non-conformity of Danish legislation with Directive 85/374/EEC was still pending before the Court.

In accordance with Article 21 of the Directive, on 14 September 2006 the Commission published the third report on the application of the Directive[34]. The overall conclusions were that the Directive works satisfactorily and that there is no need for amendment at present.

2.1.8. Cultural goods

The Commission followed the monitoring of the application of Directive 93/7/EEC on the return of cultural objects unlawfully removed from the territory of a Member State and closed the infringement procedure for non- communication against Poland.

In 2006, the lead service assessed the national measures transposing Directive 93/7/EEC as modified by Directives 1996/100/EC and 2001/38/CE which had been communicated by Romania and Bulgaria.

2.1.9. Mechanical and electromechanical equipment

The Commission brought Ireland, Greece and Italy before the Court for non communication of the national measures transposing Directive 2004/26/EC amending Directive 97/68/EC on the approximation of the laws of the Member States relating to measures against the emissions of gaseous and particulate pollutants from internal combustion engines to be installed in non-road mobile machinery. The Commission also brought Ireland and Greece before the court for non communication of the national measures transposing Directive 2002/88/EC, also amending Directive 97/68/EC.

Infringement procedures for non communication against Latvia, Malta, Portugal, Slovenia, Slovakia, Sweden and the United Kingdom were closed, following notification of national implementing measures.

Discussions with France about the infringement proceedings for incorrect transposition of Directive 98/37/EC on machinery continued. The problem relates to obstacles to the free movement of industrial dry-cleaning machinery.

A workshop on the transposition of Directive 2005/32/EC establishing a framework for the setting of eco-design requirements for energy-using products and amending Council Directive 92/42/EEC and Directives 96/57/EC and 2000/55/EC was organized in 2006. This Directive must be transposed by 11/8/2007.

2.1.10. Cableway installations

An Application Guide to Directive 2000/9 on cableway, prepared in close cooperation with national authorities, was published. In addition during 2006, the Commission paid special attention to the risks of incorrect application and organised two Standing Committee meetings on the deficient application of the directive detected in some Member States. Bilateral contact with these Member States will be strengthened.

2.1.11. Pressure equipment, gas appliances, legal metrology

Reasoned opinions were sent to Sweden and Italy for incorrect implementation of Directive 97/23/EC on pressure equipment. The Commission also dealt with complaints relating to additional requirements for pressure equipment and some obstacles to the putting into service of gas appliances.

In the sector of measuring instruments, the Commission sent reasoned opinions for non- communication of Directive 2004/22/EC to Germany, Greece, Italy, Luxembourg, Austria, Poland and Portugal. Proceedings launched against Belgium, Denmark, Spain, France, Cyprus, Latvia, Hungary, Malta, The Netherlands, Slovenia, Sweden and United Kingdom were closed without the need to issue reasoned opinions

2.1.12. Construction products

Reasoned opinions were sent to Spain and the United Kingdom for incorrect implementation of Directive 89/106/EEC on construction products. The Commission also dealt with cases on additional requirements for the use of some construction products in some Member States.

2.1.13. Preventive rules provided for by Directive 98/34/EC[35]

Directive 98/34/EC (as amended by Directive 98/48/EC) lays down an information procedure enabling the Member States and the Commission to exercise prior checks on draft technical regulations relating to products and draft rules relating to information society services.

In 2006, the Commission received in total 723 notifications, 678 from the Member States and 36 from the EFTA countries. Turkey considerably stepped up its participation in the simplified procedure and sent 19 notifications pursuant to the rules implementing the final phase of the Customs Union between the EC and Turkey. The new Member States also played an active part in the process, notifying 131 draft texts.

723 notified drafts in 2006 |

Germany: | 77 | Denmark: | 24 | Portugal: | 7 |

Netherlands: | 71 | Czech Republic: | 21 | Malta: | 7 |

Spain: | 70 | Italy: | 20 | Ireland: | 6 |

United Kingdom: | 59 | Finland: | 18 | Greece: | 5 |

France: | 57 | Hungary: | 15 | Luxembourg: | 2 |

Sweden: | 50 | Slovenia: | 11 | Latvia: | 2 |

Poland: | 48 | Lithuania: | 10 | Cyprus: | 1 |

Austria: | 42 | Slovakia: | 9 | EFTA: | 36 |

Belgium | 28 | Estonia: | 8 | Turkey: | 19 |

The sectors with most notifications were construction products, food and agricultural products, machinery, telecommunication and transport. Particularly sensitive were notifications in the gaming industry sector, concerning the ban on certain chemical substances (e.g. Deca-BDE, mercury), regarding animal welfare (e.g. housings for fur animals, ban on seal products), the establishment of environmental zones as well as measures regarding the coexistence of GMOs with conventional and organic crops.

Construction: | 106 | Information Society services: | 34 |

Food products and agriculture: | 101 | Pharmaceutical products: | 22 |

Machinery: | 89 | Domestic appliances and leisure: | 19 |

Telecommunications: | 88 | Chemicals: | 17 |

Transport: | 85 | Health, medical devices: | 14 |

Energy, minerals, wood: | 54 | GMOs: | 11 |

Environment, packaging: | 52 | Various: | 31 |

During 2006, a large number of notifications concerned national measures transposing Community directives which also contained provisions which are not harmonised (e.g. packaging waste, legal metrology, energy efficiency, food supplements, radio spectrum). This allowed the Commission services to verify ex ante whether a Community act would be correctly transposed and to begin a productive dialogue within a non-contentious framework.

The Commission issued 59 detailed opinions and 172 observations in response to drafts notified in 2006, while the Member States issued 46 detailed opinions and 201 observations. The Commission also blocked the adoption of 1 notified text for 12 months because it concerned a field covered by a proposal for harmonisation at Community level.

The Member States have already replied to a very large number of detailed opinions and comments, proving that a real dialogue has been established between the Commission and the Member States as well as among the Member States. Several replies received were satisfactory which means that the creation of new obstacles in various sectors was prevented (e.g. electronic commerce, laser pointers, measurement instruments, veterinary requirements of milk and eggs, bottling of wine, pressure equipment, GMO co-existence measures etc.).

The Commission did not only examine the compatibility of the notified texts with Community law but also formulated comments, when necessary, regarding their quality in terms of clarity, accessibility, effectiveness and avoidance of unnecessary burdens for economic operators. Directive 98/34/EC thus also continued to contribute to the implementation of the ‘better regulation’ strategy[36].

At the end of 2006, 9 complaints for incorrect application were under scrutiny, while 7 were closed after the Member States concerned remedied their failures to fulfil their obligations.

Transparency is one of the key objectives of the notification procedure. On the TRIS-website[37] where all notified texts are publicly available, around 123,000 searches were carried out. The number of interested parties who have subscribed to a mailing list in order to be alerted to new notifications has increased to 1769. In many cases, professional organisations and individual enterprises, including several SMEs, submitted comments on notified texts and thus helped the Commission formulate its position.

Economic operators drew the attention of the Commission to several cases of Member States’ failure to notify in accordance with Directive 98/34/EC, particularly in the gaming industry sector (gaming machines, internet betting). Discussions were held with the Member States concerned to remedy the procedural error. In one case, however, concerning a law on online gaming, infringement proceedings were opened.

The information procedure is facilitating an open dialogue among the Member States, and between them and the Commission. In 2006, the Standards and Technical Regulations Committee met three times and four Member States (Czech Republic, Hungary, Sweden and Slovak Republic) organized seminars on the functioning of the notification procedure with the participation of their national administrations, the Commission services and, at the seminar in Bratislava, Bulgaria and Romania. The involvement of these two new Member States in the 98/34 procedure has been prepared through steady dialogue and the signature of bilateral agreements establishing a simplified procedure and should therefore take place smoothly.

2.1.14. Non-harmonised areas (Articles 28 to 30 of the EC Treaty)

In 2006 the Commission continued handling complaints and infringements cases in various non-harmonised fields of goods, ranging from the registration of second-hand cars to the parallel importation of medicinal products and pesticides. By the end of the year, 78 active cases had been closed and some 95 complaints and infringement proceedings were ongoing.

In contrast with 2005, the volume of new complaints registered declined in 2006. The amount of closures in 2006 was higher than in 2005. The number of open infringement proceedings on alleged breaches of Articles 28-30 EC has therefore decreased.

This development seems to be mainly due to successful negotiations with Member States in a number of cases. Some cases were closed because no infringement of EC law was established or because the apparent restriction to free movement of goods was considered justified for reasons of general interest, such as the protection of public health, environment or public policy. In addition, referrals of incorrect application cases to the SOLVIT problem-solving network, Member States’ obligation under Directive 98/34/EC to notify to the Commission draft technical rules, as well as ‘package meetings’ organised with Member States to discuss a ‘package’ of cases contributed to the practical resolution of trade barrier problems.

Some problems required co-ordinated action against more than one Member State. For instance, obstacles to the importation of gaming machines where the Commission pursued infringement proceedings against Sweden and Greece as well as investigating a case against Italy. To facilitate the authorisation procedure for parallel imports of medicinal products and plant protection products, the Commission brought infringement proceedings against Austria, Denmark, France, Hungary, Italy, Poland, Portugal, Spain and the United Kingdom. Obstacles to the registration of imported second-hand motor vehicles in Austria, Czech Republic, Finland, Luxembourg, Netherlands, Poland, Slovakia and Spain also attracted the Commission’s attention.

Following the issue of reasoned opinions, Member States amended their legislation in a number of cases, including the following:

- On the parallel importation of plant protection products, three infringement cases against the United Kingdom were closed after changes were made to the Guidance Document issued by the national competent authority.

- On licensing procedures for the supply of approved waste bags in Brussels, an infringement case against Belgium was closed after the procedure was made more accessible to companies interested in selling these products.

- In Hungary a general prohibition on the registration of imported vehicles manufactured prior to 1996 was removed.

Examples of infringement proceedings resulting in referrals to the Court of Justice were:

- France, for requiring that a parallel imported plant protection product and a reference product have a common origin in the context of granting a simplified import authorisation[38];

- Spain, for legislation imposing the compliance with the provisions and procedures of nationals tests to solar collectors manufactured in another Member State in order to grant public subsidies[39];

- Spain, over systematically withdrawing from the Spanish market plant-based products legally manufactured or marketed as food supplements in other Member States[40]; and

- Portugal, for prohibiting the affixing of coloured films on the windows of motor vehicles[41].

In addition, some judgments of the Court of Justice in infringement proceedings further clarified the scope of Articles 28 to 30 of the EC Treaty:

- In judgment C-82/2005, the Court clarified that treating the process of final baking or reheating of bake-off products in the same way as the complete production of bread and making it subject to the conditions of relevant national laws on bakeries breaches Article 28 of the EC Treaty[42].

- In judgment C-65/05 the Court held that a total ban on the installation and operation of all electrical, electromechanical and electronic games, including all computer games, on all public and private premises apart from casinos is disproportionate and violates the general principles of free movement of goods, freedom of establishment and freedom to provide services[43].

The Commission also reminded certain Member States of their obligation to comply with the Court’s jurisprudence.

- A reasoned opinion under Article 228 EC was sent to Portugal to ensure compliance with the judgment in C-432/03 that Portugal had failed to comply with Article 28 of the EC Treaty by not accepting approval certificates issued by other Member States concerning polyethylene pipes[44].

- Following a reasoned opinion under Article 228 EC, France amended its legislation concerning personal imports, not effected by personal transport, of certain medicinal products to comply with the judgment in C-212/03[45].

- Germany modified its approach towards parallel imports of plant protection products by establishing a new authorisation procedure for such imports. In doing so, the German authorities also took the Court’s judgment in case C-114/04 into account[46].

During 2006, the Commission also continued to screen the national legislation of the accession and candidate countries in the non-harmonised field of the free movement of goods.

2.2. Competition

In competition policy, the priorities in 2006 were monitoring the transposal of the Directive on competition in the markets for electronic communications and the transparency Directive (both of which are based on Article 86 EC). As regards individual cases, the Commission handled several complaints relating to Article 86 combined with Article 82 EC, complaints relating to Article 31 and investigated infringements of Article 21 of the Merger Regulation.

2.2.1. Transparency Directive and other state aid cases

As regards the transposition of the Transparency Directive, in 2006 Austria was referred to Court for failure to fully implement Directive 2000/52/EC and a reasoned opinion was sent to Poland for its failure to notify the implementing measures of Commission Directive 80/723/EEC as amended.

On 18 October 2004 the Commission sent a letter of formal notice under Article 228(2) EC to Spain for failing to comply with a judgment[47] confirming the Commission’s recovery decision[48] regarding aid granted to publicly-owned shipyards. Since then, there have been significant developments in the case. On 1 April 2005 IZAR entered into liquidation. In November 2006, three of the four yards were transferred through an open and transparent procedure. In the light of the measures adopted by Spain, further action under Article 228(2) EC was suspended and the liquidation of the pending yard is being monitored closely so as to ensure the correct implementation of the recovery decision.

On 12 December 2006 the Commission sent a letter of formal notice to Italy for failing to comply with a judgment of the ECJ[49] condemning Italy for the non execution of the Commission's recovery decision[50]. The Commission considered that Italy had not taken the necessary measures to recover the incompatible aid, and moreover it had not been informed of the measures adopted nor of the amounts recovered. The reply to the letter of formal notice is due by February 2007.

2.2.2. Digital Broadcasting

In the area of digital broadcasting, following a complaint by the Italian consumer association Altroconsumo , the Commission is currently investigating whether the Italian legislation regulating digital switchover could introduce restrictions on broadcasters and grant competitive advantages to existing analogue operators, contrary to the Competition Directive.

2.2.3. Electronic communications

The Directives relating to competition policy are based on Article 86(3) EC. In the field of electronic communications, the Competition Directive[51] of 2002 lays down the fundamental obligations arising from the Treaty which Member States must comply with as regards sectoral law. Under its obligation to ensure compliance with Community law, the Commission pursued in 2006 the proceedings opened against Member States that had not yet transposed or inadequately transposed the Directive, or that did not implement it correctly.

Following the judgments delivered on 14 April and 16 June 2006 against Greece and Luxembourg for failing to transpose the Competition Directive, a complementary letter of formal notice and a reasoned opinion were addressed to Greece[52] and a complementary reasoned opinion was addressed to Luxembourg[53] with a view to referring them to the Court of Justice a second time (under Article 228 CE).

The Commission also decided to refer Sweden[54] and Hungary[55] to the Court of Justice (under Article 226 CE). Under the Directive on competition in the markets for electronic communications networks and services (Directive 2002/77/EC), Sweden was obliged to abolish all exclusive rights for broadcasting transmission services by July 2003 at the latest. Despite this obligation a state-owned company benefits from exclusive rights for providing access control services in the Swedish market for digital terrestrial broadcasting transmission services. Under the same Directive Hungary had to abolish all restrictions for providing broadcasting transmission services by 1 May 2004. However, Hungary has not yet abolished the Media Act provisions limiting the rights of cable operators to provide broadcasting transmission services.

2.3. Employment, Social Affairs and Equal Opportunities

In the field of free movement of workers, the Commission deals with problems linked to an incorrect application of the relevant provisions of the EC Treaty and of regulations existing in that area. These problems are brought to the attention of the Commission through individual complaints from citizens, petitions and written Parliamentary questions. The Commission also verifies application of the preliminary rulings of the Court in this field. In other areas of activity, such as labour law, health and safety at the workplace, anti-discrimination and equal treatment the Commission mostly deals with problems related to the non-conformity and non-communication of national measures transposing the directives applicable.

2.3.1 Free movement of workers and coordination of social security schemes

In the area of free movement of persons and coordination of social security schemes, problems remain due to an incorrect application of the relevant Articles of the EC Treaty (Articles 39 and 42) and of