OPINION OF ADVOCATE GENERAL

GEELHOED

delivered on 18 November 2004 ( )

Case C-304/02

Commission of the European Communities

v

French Republic

(Failure by a Member State to fulfil its obligations, Article 228 EC – Failure to comply with the judgment of the Court of 11 June 1991 in Case C-64/88 – Failure to ensure compliance with technical conservation measures relating to the minimum size of fish, in particular hake – Failure to record infringements which the national authorities could have found to exist and to charge offenders – Penalty payment)





I – Introduction

1. In my first Opinion in this case, which I presented on 29 April 2004, I concluded, as to the substance, that the French Republic had failed to fulfil its obligations under Article 228(1) EC by not having adopted the necessary measures to comply with the Court’s judgment of 11 June 1991 in Case C‑64/88, Commission v France, ( ) either at the end of the time-limit set by the Commission in its supplementary reasoned opinion of 6 June 2000 or at the moment of my assessment. In view of the serious character of this infringement of its Treaty obligations, I suggested to the Court that it should order the French Republic to pay to the Commission a lump sum of EUR 115 522 500 in respect of the first period of infringement and a six-monthly penalty payment of EUR 57 761 250 in respect of the period following the Court’s judgment in the present proceedings. In doing so, I departed from the Commission’s request to the Court to order the FrenchRepublic to pay a penalty payment of EUR 316 500 for each day of further delay in complying with the Court’s judgment of 11 June 1991.

2. As these suggestions raised new questions concerning the interpretation to be given to Article 228 EC which had not been discussed between the parties during the proceedings, the Court, by Order of 16 June 2004, decided to reopen the oral procedure to enable them to express their views on the following question:

‘Where the Court, in proceedings under Article 228(2) EC, has found that a Member State has failed to take measures necessary to comply with an earlier judgment and the Commission has requested the Court to impose a penalty payment, may the Court, instead,

– order that Member State to pay a lump sum?

– or, even, if necessary, order that Member State to pay both a lump sum and a penalty payment?’

3. In accordance with Article 24, second paragraph, of the Statute of the Court of Justice, the Member States other than the FrenchRepublic were invited to express their views on these questions. Besides the French Government and the Commission, oral submissions were presented by the Belgian, Czech, Danish, German, Greek, Spanish, Irish, Italian, Cyprus, Hungarian, Netherlands, Austrian, Polish, Portuguese, Finnish and United Kingdom Governments.

II – Preliminary observations

4. The questions put by the Court focus on two new aspects regarding the interpretation and application of Article 228 EC. As these questions cannot be answered in isolation from the general context and function of this Treaty provision, I will first devote a number of general preliminary observations to this subject.

5. It must first be emphasised that in the structure of Article 228 EC, the central point of reference is the obligation for Member States to take the necessary measures to comply with a judgment by the Court under Article 226 EC finding that that MemberState has failed to fulfil its obligations under the Treaty. These measures must be taken promptly and must be adequate in order to remedy the situation of illegality established by the Court. This may be regarded as a specific application of the general obligation of loyal cooperation under Article 10 EC.

6. Where a MemberState does not comply with this primary obligation of Article 228(1) EC, the second paragraph of this Treaty provision empowers the Commission to open infringement proceedings in respect of non-compliance with the Court’s judgment under Article 226 EC. If the MemberState, after the pre-litigation procedure, according to the Commission, has still not remedied the situation, it may bring the matter before the Court and indicate which financial sanction would be an appropriate response to the MemberState’s failure to comply with the Court’s initial judgment. The Court then, where it finds that the Commission’s action must be upheld, may impose a financial sanction as provided for in Article 228(2) EC.

7. The rationale for imposing such a financial sanction lies firstly in the fact that the MemberState concerned has disregarded a judgment of the Court. This is particularly serious in a Community based on the the rule of law and equality of all Member States in respect of their rights and obligations under the Treaty. Non-compliance with a judgment finding that a MemberState has infringed its Treaty obligations strikes at the heart of the legal order of the Community and seriously threatens the credibility of the Community legal order. As all disputes in respect of compliance with Treaty obligations are settled within the framework of the procedures provided by the Treaty, the rulings of the Court are the central instrument in the Community legal order for determining finally what the scope of these obligations is. If it were possible for Member States to determine whether, when or under which conditions they would comply with a Court judgment under Article 226 EC, the authority of these judgments would be wholly undermined. In effect, they would be in a position to determine unilaterally the scope of their obligations under the Treaty.

8. A second justification for imposing a financial sanction in such circumstances is that, by not complying with a Court judgment finding an infringement of Treaty obligations, the MemberState concerned permits an illegal situation to persist with damaging consequences for the functioning of the Community system. Clearly, if a MemberState does not fulfil its Community obligations where others do, this affects the uniform application of the Community measure involved, reduces its effectiveness and undermines the attainment of the result it seeks to achieve. It also distorts the conditions under which market participants in various parts of the Community operate and disturbs the balance of rights and obligations of the Member States under the Treaty. The Community legal order is based on the presumption, expressed in Article 10 EC, of the Member States complying loyally with their Treaty obligations in a spirit of solidarity. Where a MemberState arrogates to itself a privileged position in respect of the fulfilment of its Treaty obligations, this affects the mutual trust which must exist between the Member States and which is an essential precondition for the effective implementation of Community policies. This is particularly the case where these policies impose restrictions on economic activity with a view to attaining objectives which are necessary in the general interest.

9. It is in my view important to bear this dual rationale in mind in interpreting and applying Article 228(2) EC.

10. The function of the financial sanctions provided for by Article 228(2) EC must also be seen in the light of these two underlying reasons. These sanctions aim to secure compliance with Court judgments in a twofold manner. Firstly, by creating the possibility of a sanction being imposed where a Court judgment is not respected by a MemberState, it is meant to make it economically unattractive to persist with an infringement following a judgment under Article 226 EC. In this sense it has a general, preventive effect. Secondly, where a Member State, nevertheless, has not taken the necessary steps to comply with the first judgment establishing an infringement and the Commission has brought an action to establish this fact, it is meant to create the possibility of bringing sufficient pressure to bear on the Member State as to enforce compliance in that particular case. In this sense it has a specific, persuasive effect.

11. In addition, it must be realised that these sanctions are instruments which by their nature are particular to the Community legal order and cannot simply be compared to sanction mechanisms existing in the legal systems of the Member States, be they criminal, administrative or civil. They differ both in respect of the circumstances in which they are imposed and the way in which they operate. Thus, the non-compliance with a Court judgment by a MemberState cannot be compared with the offences which are the subject of sanction mechanisms at the national level. Moreover, the effects of the sanction on a MemberState are realised through mechanisms of internal political accountability within the MemberState concerned. The procedure of Article 228 EC, in other words, must be regarded as – to quote Advocate General Ruiz-Jarabo Colomer – a ‘special judicial procedure for the enforcement of judgments’. ( )

12. Finally, it is of the utmost importance for the functioning of the European Union and the realisation of its objectives, that the Member States comply faithfully with their Treaty obligations and, if it is found by the Court in a judgment under Article 226 EC that they have not, that they rectify situations incompatible with the Treaty as soon as possible. Article 228 EC provides a mechanism to ensure that Community obligations are ultimately complied with and must be applied in such a way that it is indeed effective. The need for strict enforcement of Community obligations would appear to be even greater in a European Union which is characterised by growing diversity and heterogeneity. In this situation there is an increased danger of divergence as a result of differences in the implementation, application and enforcement of Community obligations within the Member States. In order to curtail this it is necessary that Article 228(2) EC be interpreted and applied in such a way as to provide an effective deterrent to infringement by the Member States of the obligations flowing from the Treaty provisions.

III – The Court’s questions

13. At the outset, I would like to observe that, having raised this issue in my previous Opinion, my answer to the two questions posed by the Court has, in fact, already been given. However, the observations submitted by the Commission, the French Government and the intervening Governments and, indeed, the serious reservations expressed by the majority of intervening Member States provide a useful basis for developing and refining my analysis. In my discussion, I will focus on the main arguments advanced by the French Government and the Commission in particular. Where most of the intervening parties, with certain exceptions, by and large advanced similar arguments in support of a negative or a positive answer to both branches of the question put by the Court, I will incorporate these in my summary of the main contentions by the French Government and the Commission, without necessarily indicating in all cases to which party the particular argument may be ascribed. Before turning to that discussion, however, and with a view to providing the overall picture, I would note the general direction of the responses given by the various intervening parties, to the extent that they dealt with either issue, under the caveat that each MemberState presented its views with various degrees of conditionality:

– The first branch of the question is answered positively by the Commission and the Czech, Hungarian, Polish and Finnish Governments and negatively by the French, Belgian, Danish, German, Greek, Spanish, Italian, Netherlands, Portuguese and Austrian Government.

– A positive response to the second branch of the question is supported by the Commission and the Danish, Netherlands, Finnish and United Kingdom Governments. The French, Belgian, Czech, German, Greek, Spanish, Irish, Italian, Cyprus, Hungarian, Austrian, Polish and Portuguese Governments propose a negative answer to the second branch of the question.

A – Can the Court impose a lump sum where the Commission has requested that a penalty payment be imposed?

14. The Commission states that the Court is entirely free to determine both the amount and the nature of the pecuniary sanction it deems appropriate to impose in the circumstances of the case. The Finnish Government observes that it may also be in the interest of the MemberState concerned that the Court has jurisdiction to impose a sanction other than that suggested by the Commission. However, here, too, it is necessary first to hear the MemberState involved.

15. The French Government, together with the governments named above in paragraph 13, first indent, assert that the Court cannot impose a penalty which has not been proposed by the Commission in its request. Although recognising that the Court has held that the Commission’s suggestions in respect of the pecuniary sanction to be imposed merely constitute a useful point of reference, these governments argue that, in exercising its discretion under Article 228(2) EC, the Court must respect the rights of the defence, the principle of equal treatment of MemberStates and legal certainty.

16. The rights of the defence entail that if the Court is considering departing significantly from the Commission’s suggestions, the MemberState concerned should be given the opportunity to be heard on the matter. The French Government points out that, in this case, it is only at the occasion of the reopening of the oral procedure that it has been given the opportunity to state its views on the possibility of a lump sum being imposed where the Commission had suggested a penalty payment and that, even then, it is restricted to stating its views on the principle, not on the application in the present proceedings. It points out that infringement proceedings also consist of a written phase and that, in the present situation, it obviously has not been able to respond at that stage to a suggestion which was not made by the Commission. Various intervening governments state that the Court cannot go ultra petita and that there is no reason to depart from basic principles of procedure, that the applicant’s request delimits the scope of the conflict, that the award may not go beyond the request and that the proceedings are adversarial in nature.

17. The French Government observes that the Court in Commission vGreece( ) pointed out that the guidelines adopted by the Commission on applying Article 171(2) of the EC Treaty ( ) (now Article 228(2) EC) are designed to ensure equal treatment between the Member States. They are to help to ensure that the Commission acts in a manner which is transparent, foreseeable and consistent with legal certainty and are designed to achieve proportionality in the amounts of the penalty payments to be proposed by it. ( ) If the Court were to follow the course suggested by me this would amount to a difference in treatment with the two other Member States which to date have been subject to a pecuniary sanction under Article 228(2) EC. ( ) If the persistence of an infringement is the reason for imposing a lump sum, this sanction would have to be imposed in almost all cases of non-compliance with a judgment finding an infringement under Article 226 EC as it is the very condition for introducing proceedings under Article 228(2) EC.

18. Thirdly, the French Government states that departing from the Commission’s suggestions in the manner proposed would infringe legal certainty. Sanctions to be imposed in a situation such as that which is at issue in these proceedings should be sufficiently predictable. To this it is added, by inter alia the Belgian Government, that the Court cannot impose a lump sum of its own motion in the absence of guidelines on the application of this instrument and the calculation of the amount.

19. The German Government, supported by the Greek Government, asserts that the decision to opt for a lump sum rather than a penalty payment is a choice of a political nature and that the Court is neither entitled nor equipped to make such a choice. For the Court to take such a decision would go against the principle of the separation of powers. Article III-362(3) of the draft Treaty establishing a Constitution for Europe( ) (hereinafter: ‘Constitutional Treaty’) confirms that the Court is only competent to review the amount proposed by the Commission in a downward direction.

20. Other Member States take the view that although the Court is not formally bound by a proposal of the Commission, in exercising its discretion under Article 228(2) EC it must respect the rights of the defence as well as the principles of proportionality, foreseeability and legal certainty.

21. The question whether the Court may impose a lump sum payment on a MemberState which has failed to comply with a first judgment under Article 226 EC essentially relates to the status and the nature of the suggestions the Commission makes in its request under Article 228(2) EC. Are these suggestions binding on the Court or is the Court at liberty to deviate from them, and, if so, under which conditions? Another way of putting it is: does the Court enjoy full and unfettered jurisdiction under this provision?

22. It has already been established in the case-law that the suggestions made by the Commission on the financial penalty to be imposed cannot bind the Court. ( ) This the Court bases on the clear wording of the third paragraph of Article 228(2) EC which states that the Court, if it ‘finds that the Member State concerned has not complied with its judgment ... may impose a lump sum or a penalty payment on it.’ The fact that the Commission’s suggestion only has indicative status and therefore is not binding on the Court also flows from the wording of the second paragraph of Article 228(2) EC which states that the Commission shall ‘specify’ the amount of the lump sum or penalty payment which it considers appropriate in the circumstances. It is also worth noting that a term such as ‘request’, which would reflect a more formal status of the Commission’s proposal, was not used in this Treaty provision.

23. Further support for this reading of Article 228(2) EC may be found in the structure of this provision which does not establish any link between the second and third paragraphs. The latter does not contain any reference to the suggestions made by the Commission and, in particular, does not lay down explicitly that the Court’s decision on the pecuniary sanction should be based on these suggestions. The absence of such a link, together with the contrast in the description of the functions of the Commission and the Court in applying this provision, in which the Commission ‘specifies’ and the Court ‘imposes’, clearly demonstrates that the Court has jurisdiction to determine whether a sanction ought to be imposed, what type of sanction that should be and the amount of that sanction.

24. There are also functional reasons for accepting that the Court enjoys unlimited jurisdiction as regards the penalties which may be imposed under Article 228(2) EC. What is at issue in proceedings under Article 228(2) EC is that a Member State has not complied with a Court judgment finding that that Member State has failed to comply with certain Community law obligations. Although it is up to the Commission in its role of guardian of the Treaty to monitor compliance with such a judgment and, if necessary, following the pre-litigation procedure, to take the decision to introduce a second round of proceedings, it is the Court which is best placed to assess to what extent the situation pertaining in the Member State concerned does or does not comply with its first judgment under Article 226 EC and to assess the seriousness of a continued infringement having regard to all interests involved. Quite obviously, the necessity of imposing a pecuniary sanction and which type of sanction would be most appropriate in the circumstances can only be determined in the light of the findings of the Court in its judgment under Article 228(2) EC. This decision cannot depend on the views of the Commission in this regard.

25. The contention made by the German Government that the choice as to the type of sanction to be imposed is political and, therefore, cannot by its nature be made by the Court must be rejected. The scope of the Court’s jurisdiction under Article 228(2) EC has been defined in the Treaty and, as I have just explained, this includes the power to determine the appropriate response to a continued infringement. The exercise of this power does not depend on any consideration of a political nature, but is wholly within the realm of the judicial function. Article 228(2) EC clearly distinguishes between the pre-litigation phase, in which the Commission can make its assessments in respect of the substance of a case and the sanctions it deems appropriate, and the contentious, judicial phase, in which the Court may exercise the powers granted to it by the Treaty at its discretion.

26. In view of the foregoing observations, I do not believe that the Court would be going ultra petita if it were to depart significantly from the suggestions made by the Commission in respect of the sanction to be imposed. It must be realised that proceedings under Article 228(2) EC are of a sui generis character which do not have a parallel in the national legal systems and cannot be compared with civil law proceedings. The subject is the non-compliance by a MemberState with a judgment of the Court under Article 226 EC establishing that that MemberState has infringed certain Community law obligations. This implies that an illegal situation has persisted for a longer period of time, undermining the full and uniform application of the Community measure involved to the detriment of the general Community interest and the interests of the other MemberStates and their citizens. It is this dimension of the subject of proceedings under Article 228(2) EC which provides the rationale for the full jurisdiction of the Court and which differentiates these proceedings from proceedings of a, for example, civil law character.

27. Reference was made further to Article III‑362 Constitutional Treaty, which is the parallel provision to Article 228 EC. Although the latter has been included unamended in the draft Treaty establishing a Constitution for Europe, a new third paragraph has been added to this Article. This provision enables the Commission in Article III-360 Constitutional Treaty (Article 226 EC) proceedings concerning the failure to notify measures transposing a European framework law to specify the amount of a lump sum or penalty payment which it deems appropriate in the circumstances. The Court is empowered to impose such a lump sum or penalty payment ‘not exceeding the amount specified by the Commission’. On the one hand it is asserted that this limitation of the Court’s jurisdiction confirms that the Court may not depart from the suggestions of the Commission in Article 228(2) EC cases. On the other hand, it is argued that the fact that this same limitation was not introduced in Article III-362(2) Constitutional Treaty (Article 228(2) EC) confirms that the Court’s jurisdiction under Article 228(2) EC is indeed unrestricted. It would appear to me that, to the extent that an argument can be derived from this development, the latter is the more convincing. If it had been the intention to restrict the Court’s jurisdiction under Article III-362(2) Constitutional Treaty, the obvious course would have been to add the same proviso which was included in Article III-362(3) Constitutional Treaty.

28. Having established that the Court does enjoy full jurisdiction as regards all aspects of pecuniary sanctions to be imposed under Article 228(2) EC, the question next arises whether the Court in exercising that jurisdiction must observe certain restrictions. In this respect reference is made by the FrenchRepublic and various intervening Governments to the rights of the defence, the principle of equal treatment of MemberStates and legal certainty. I will first discuss the latter two and then consider the role of the rights of the defence.

29. It is submitted by a number of governments that the principle of equal treatment applies in respect of the application of the instruments provided for in Article 228(2) EC. The guidelines drawn up by the Commission in its memorandum of 1996 were, in part, designed to achieve this purpose in respect of the calculation of the pecuniary sanctions, as was recognised by the Court in Commission vGreece. ( ) They contend that if the FrenchRepublic were to be confronted with a pecuniary sanction of a different type and volume than that of the two cases which have been decided to date, this would infringe the principle of equal treatment.

30. It is well established that the principle of equal treatment of the Member States is a fundamental principle of Community law. According to this principle, in the absence of an objective justification, comparable situations must not be treated differently and different situations must not be treated in the same way. Though not subscribing unconditionally to the logic of the second branch of this principle, it is clearly necessary to ensure that infringements of Community law obligations which are comparable in terms of seriousness and damage to the common interest are treated similarly for the purposes of imposing pecuniary sanctions. This applies to both the type of sanction and the relative amounts to be paid. In a case such as the present one it is important to point out that the nature of the infringement is not comparable to those which were the subject of the first two judgments of the Court under Article 228(2) EC. As I explained in my first Opinion in this case, the need for strict enforcement of the conservation measures in the field of the common fisheries policy is vital to attaining the objectives of that policy in the longer term. ( ) The failure of the FrenchRepublic to monitor and enforce the Community fisheries provisions for a great many years cannot be compared with the infringement of the environment directives in the other cases just mentioned. Not only did this failure undermine the conservation objectives of the Community measures involved, this also necessarily affected the interests of the other MemberStates and their fishermen. This external effect distinguishes this case from the other two cases decided by the Court to date. Imposing sanctions of a different type in this case is, therefore, justified by the different character and consequences of the infringement. Such a response, indeed, is the result of observing the principle of equal treatment as it takes account of the relevant differences between the underlying factual situations.

31. A further submission is that departing from the suggestions made by the Commission in respect of the pecuniary sanction to be imposed in the manner proposed in my first Opinion in this case would contravene the principle of legal certainty. According to this principle sanctions and the conditions under which they may be imposed must be foreseeable. This is not the case in the absence of guidelines for the calculation of lump sum payments, such as those contained in the Commission’s memorandum of 1996.

32. It is important again to refer to the structure and the wording of Article 228(2) EC which provides for the possibility of the Court imposing a lump sum or penalty payment, where it finds that a MemberState has not complied with an earlier judgment under Article 226 EC. The exercise of this power which has been conferred upon the Court by the EC Treaty is not made conditional upon guidelines being adopted in respect of, for example, situations in which both types of sanction may be applied or how they are to be calculated. The fact that the Commission has drawn up such guidelines in respect of one type of pecuniary sanction in particular makes it clear to the Member States how it intends to exercise its power under this provision. The Court, however, remains free to impose the pecuniary sanction it deems appropriate in the light of the circumstances of each particular case. In other words, whenever proceedings are brought by the Commission against a MemberState under this provision, it is foreseeable that the sanctions provided for may be imposed by the Court.

33. Given the fact that the Court enjoys full jurisdiction under this provision, as it has already made clear in its case-law by stressing that it is not bound by the suggestions made by the Commission, it is also, in principle, foreseeable that any of the sanctions available to the Court may be imposed. To this it may be added, as was observed by the Commission, that in formal notices and reasoned opinions sent to Member States which have failed to comply with an earlier judgment, the Commission points out that the MemberState concerned may be liable to paying a financial sanction without specifying which type of sanction that may be. This was also done in the first reasoned opinion of 17 April 1996 in the present case.

34. Moreover, all this applies in a situation in which the illegality of a situation has already been established by the Court and the Commission has brought the persistence of this situation to the attention of the MemberState, providing the MemberState concerned with further opportunities to remedy it. It is difficult to conceive what in such circumstances would move a MemberState to invoking the principle of legal certainty. For these various reasons, a MemberState in my view cannot invoke the principle of legal certainty to avert the imposition of a pecuniary sanction which has not been suggested by the Commission in its request.

35. The following question is whether the Court is obliged to hear the MemberState – and the Commission – where it is considering imposing a more severe sanction than that suggested by the Commission. The procedure under Article 228(2) EC already provides for the necessary procedural guarantees enabling the defendant MemberState to respond fully to both the substance of the request lodged by the Commission and the propriety of the pecuniary sanction which it suggests. At that stage of the proceedings the primary issue concerns the question whether the infringement found earlier by the Court persists, thereby constituting a basis for imposing a pecuniary sanction of a given type and amount. Although the power to impose such a sanction lies wholly with the Court, as I have already emphasised, before taking this decision, it is essential that the Court be informed of the views of both parties on the effects of such a sanction in achieving its objectives. As the information provided at that stage of the proceedings is based on the suggestions of the Commission, it cannot take account of the effects of sanctions which differ significantly from them. I therefore indeed consider it wholly appropriate that, before imposing a sanction which departs significantly from the possibilities on which parties were able to exchange views, parties be given the opportunity to respond adequately to alternatives which have been raised at a later stage of the proceedings.

36. In a case such as the present one, the oral hearing could be reopened in accordance with Article 61 of the Rules of Procedure in order to enable parties to express their views on the pecuniary sanction envisaged by the Court. This could also be preceded by written information on this matter, which may be requested by the Court under Articles 60 and 45(2)(b) of the Rules of Procedure. However, in possible future cases in which this issue arises before the oral hearing, it would be preferable to hear parties on this matter at that occasion. In the present proceedings the oral procedure was reopened. Parties were requested to give their opinion on the possibility of the Court imposing a different sanction than that suggested by the Commission as such. They were not, however, asked to comment on the appropriateness of the pecuniary sanctions suggested by me in the circumstances of this case. I will return to this matter in discussing the consequences of my conclusions for the present case.

37. My answer to the first question is therefore that the Court has full jurisdiction under Article 228(2) EC to impose a lump sum penalty where the Commission has suggested imposing a penalty payment. If it is contemplating imposing a more severe sanction than that suggested by the Commission the rights of the defence require that parties be heard on the sanction envisaged by it.

B – Can the Court impose both a lump sum and a penalty payment?

38. The Commission, following a teleological approach in answering this question, argues that the two different types of sanction apply to different periods of time and that there is no question of an accumulation of sanctions. Where the lump sum payment is imposed in respect of past conduct of a Member State and is intended to have a dissuasive effect, the penalty payment is aimed at influencing the future conduct of a Member State and therefore to incite compliance. The objective of Article 228 EC could not be achieved if the combination of both sanctions were not possible. Such a combination must not be regarded as a dual sanction, but as two aspects of a single pecuniary sanction. From the linguistic perspective, the Commission does not consider that the use of the word ‘or’ in Article 228(2) EC must be interpreted as meaning that the lump sum and penalty payment may only be imposed as alternative sanctions. The Commission does consider that if the factor duration is taken into account in calculating the amount of a lump sum, it may not be used in calculating the amount of a penalty payment which is imposed simultaneously. Similar arguments were advanced by the Member States, which were in favour of giving a positive answer to the second question.

39. The French Government, supported by various Member States mentioned in paragraph 13 above, points out that the objective of Article 228(2) EC is to incite compliance and not to punish Member States. Both the lump sum and the penalty payment must be applied in accordance with this objective. It refers to the fact that the Commission in its Memorandum of 1996 emphasised this objective and that the penalty payment is the most appropriate instrument to achieve this. Indeed, in its practice up till now the Commission has only indicated that penalty payments be imposed for this purpose. The French Government states that imposing both types of sanction in respect of one infringement implies taking account of the factor duration twice. It objects to this. Although recognising that this point is not necessarily decisive, it asserts that the use of the word ‘or’ in Article 228(2) EC clearly indicates that the sanctions provided for may only be imposed alternatively. It is also pointed out that imposing a lump sum and penalty payment in combination would be contrary to the principle of proportionality.

40. What must be decisive in considering whether Article 228(2) EC permits the imposition of a combination of a lump sum and a penalty payment is the objective and rationale of this provision. As I pointed out in paragraphs 7 and 8 above, there are two aspects to any non-compliance with a Court judgment under Article 226 EC. On the one hand, it implies disrespect of the Community legal order. On the other hand, it implies the condoning of the continued existence of a situation which the Court has found to be incompatible with Community law and of the detrimental effects on Community policy which are inherent to that situation. These two aspects must be taken into consideration in determining how Article 228(2) EC should be interpreted and applied. Although it is wholly obvious that Article 228(2) EC is intended to ensure that a Member State ultimately complies with a judgment of the Court to which it has not responded adequately, looking at this provision from the broader perspective of what lies behind the non-compliance with a Court judgment, its objective extends to ensuring the fulfilment of Community obligations by a Member State in a more general sense. This means that the instruments provided for by this provision may also be applied with a dissuasive purpose or, in other words, with the objective of preventing infringements of Community law obligations by the MemberState concerned.

41. By their nature the lump sum and the penalty payment serve different purposes. Although both constitute a response to the failure by a MemberState to fulfil its Treaty obligations, the former has a dissuasive effect, whereas the latter has a persuasive effect. I am not convinced by the argument that the lump sum is oriented towards the past and the penalty payment towards the future. Both penalties are aimed at influencing the conduct of the MemberState in the future, but in different ways.

42. An important difference between the two types of sanction is that the lump sum is an unconditional penalty, whereas the penalty payment is conditional in character. As I indicated in my first Opinion in this case, ( ) a MemberState may succeed in complying with the obligations it previously neglected within the time-limits set by the Court. In that case, the end result would be that there would be no Community response to an infringement which may have lasted for many years. Pursuing the Article 228(2) EC procedure will have resulted in ultimate compliance by the MemberState, yet the objective of dissuasion of possible future infringements would not be achieved. Given the fact that Article 228(2) EC must be interpreted in such a way that it serves both a persuasive and a dissuasive purpose, it is clear that in order to effectively achieve these aims, the combined application of a lump sum and a penalty payment, must, in principle, be available to the Court.

43. The French Government and various other intervening Governments object that the instruments provided by Article 228(2) EC are not intended to be applied in a punitive manner. To my mind, it is beside the point whether or not the imposition of a pecuniary sanction should be qualified as a punitive measure. The procedure provided for in this provision cannot be likened to enforcement mechanisms which exist at the national level. It serves its own purpose within the context of the Community legal order and is designed to ensure effectively that the requirements of that legal order are respected by the Member States. That is what is essential.

44. With a view to demonstrating that Article 228(2) EC may not be applied in a way which penalises past conduct on the part of the Member States, the French Government points out that if a Member State complies with the judgment given under Article 226 EC before the time-limit set by the Commission in its reasoned opinion, no action can be taken against that Member State under Article 228(2) EC. This may indeed be the procedural consequence of this situation, yet it cannot justify a restrictive interpretation of this Treaty provision, the core objective of which is to ensure effective compliance by the Member States with their Treaty obligations. As I set out above, it can be derived from the very nature of the infringements which Article 228(2) EC is designed to combat, that measures of both a persuasive and dissuasive character can be imposed on the basis of this provision. The fact that a MemberState has averted the imposition of a pecuniary sanction by finally complying with its obligations during the pre-litigation procedure may on the contrary be deemed to be the effect of an anticipated sanction confirming the dissuasive effect of that sanction.

45. One of the most important arguments advanced against the possibility of a lump sum and penalty payment being imposed simultaneously is based on the wording of Article 228(2) EC which empowers the Court to impose a lump sum ‘or’ a penalty payment, where it finds that a Member State has not complied with its earlier judgment under Article 226 EC. The question is, therefore, whether the word ‘or’ must be understood as being exclusive or inclusive. Firstly, I would point out that Article 228(2) EC should be interpreted in such a way as to ensure that it constitutes an effective instrument for enforcing Community obligations in cases where Member States have persistently disregarded these obligations. As I explained above, in certain situations, imposing either a lump sum or a penalty payment may not prove to be an adequate response to a continued infringement of Community law, so that a combination of these instruments is required. This interpretation is based on the objectives and the function of Article 228(2) EC. To accept that the word ‘or’ in this provision must be understood in an exclusive manner would go against this objective and affect the effectiveness of Article 228(2) EC. It is also quite unnecessary to interpret it in this way, given the fact that it is linguistically possible to regard it as being inclusive. Indeed, various provisions of the EC Treaty, such as Articles 5, 48 and 81 EC, use it in this sense. Although, in general, depending on the context in which it is used, the word ‘or’ may have either an exclusive or inclusive meaning, it is clear that, in the light of the objectives of Article 228(2) EC described above, it can only be understood in its inclusive sense in the context of that provision.

46. A number of Member States observe that the imposition of a combined penalty would infringe the principle of proportionality. I agree that where the Court considers applying this instrument, it must do so in a way which is proportionate to the situation in hand. It cannot, however, be accepted a fortiori that the combination is inherently disproportionate. This depends wholly on the circumstances of the case in hand. These circumstances may be such that not imposing a sanction composed of a lump sum and a penalty payment would be an inadequate response and therefore be disproportionate in a reversed sense.

47. A further objection relates to the fact that in calculating the amounts of the lump sum and the penalty payment, the duration of the infringement is taken into account twice. This would amount to the imposition of a double sanction for an infringement of Community obligations for the same period of time. I do not share this view. Each sanction has its own purpose and must be calculated in such a way as to fulfil its function. The lump sum constitutes a response to the persistence of an infringement against Treaty obligations during a defined period of time. As this sanction is intended to act as a deterrent, it must be set at such a level as to dissuade a MemberState from committing further breaches of Community law. The same applies to the penalty payment in respect of its function to incite a MemberState to compliance. Using duration of the infringement as a factor for calculating the level of either sanction does not imply that a double sanction is being imposed for the infringement during the same period. It is but one of the factors which is taken into account in determining the suitable level of persuasion.

48. My answer to the second question is therefore that Article 228(2) EC does not preclude the Court from imposing both a lump sum and a penalty payment on a Member State where it finds that that Member State has failed to comply with a judgment under Article 226 EC and considers that the circumstances of the case justify the imposition of such a combined penalty.

IV – Consequences for the present case

49. In my Opinion of 29 April 2004 I established that the FrenchRepublic had indeed failed to comply with the Court’s judgment of 11 June 1991. Given the particularly serious nature of the infringement of its obligations to monitor and enforce Community provisions on minimum fish size for almost two decades, I concluded that this justified the imposition of a lump sum for the period running from the entry into force of the Treaty on European Union (‘the Maastricht Treaty’) to the end of the period set for complying with the Commission’s reasoned opinion of 6 June 2000. ( ) In my proposal for calculating this sum I proposed adopting a lenient approach, as this was the first time such a proposal had been made, the Commission had not suggested such a penalty and no practice exists to provide guidance. ( )

50. As such, I see no reason to revise this analysis as to the substance or to the consequences to be attached to the breach by the FrenchRepublic of its Treaty obligations. However, as I concluded in my answer to the first question, where the Court in a case before it is considering to impose a more severe sanction than that suggested by the Commission, it should hear the parties on such a sanction. As the parties in the present proceedings have not had the opportunity to express their views on the sanction which I proposed in my first Opinion, the most appropriate course would now seem to be to invite them to do so in a further hearing. In the alternative the Court might consider, if it were to adopt my approach in principle, imposing a lump sum of a symbolic nature. There are no grounds, on the other hand, for reconsidering penalty payment which I proposed.

V – Conclusion

51. I therefore conclude that the answers to the questions put by the Court should be as follows:

– The Court has full jurisdiction under Article 228(2) EC to impose a lump sum penalty where the Commission has suggested imposing a penalty payment. If it is contemplating imposing a more severe sanction than that suggested by the Commission the rights of the defence require that parties be heard on the sanction envisaged by it.

– Article 228(2) EC does not preclude the Court from imposing both a lump sum and a penalty payment on a MemberState where it finds that that MemberState has failed to comply with a judgment under Article 226 EC and considers that the circumstances of the case justify the imposition of such a combined penalty.