Opinion of Mr Advocate General Saggio delivered on 28 January 1999. - Commission of the European Communities v Grand Duchy of Luxemburg. - Failure of a Member State to fulfil its obligations - Transferable securities - Invetment services - Directive 93/22/EEC - Partial implementation. - Case C-417/97.



European Court reports 1999 Page I-03247



Opinion of the Advocate-General

Facts and procedure

1. By a document filed on 9 December 1997, the Commission of the European Communities brought an action against the Grand Duchy of Luxembourg under Article 169 of the EC Treaty. The Commission sought from the Court a declaration that, by failing to adopt within the prescribed period all the laws, regulations and administrative provisions, including sanctions, necessary to implement Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (1) (hereinafter `the Directive'), the Grand Duchy of Luxembourg had failed to fulfil its obligations under that directive and the EC Treaty.

2. Article 31 of the Directive provides that the Member States are to adopt, by no later than 1 July 1995, the provisions necessary for them to fulfil their obligations under the Directive, that the implementing provisions must, in turn, come into force by no later than 31 December 1995 and that the Member States are to inform the Commission thereof forthwith.

3. In its application, the Commission stated that it had not received notification from the Luxembourg Government of any national measures implementing the Directive and was not in possession of any information from other sources which would enable it to form the view that such measures had been brought into force. That being so, on 27 October 1995, the Commission sent the Grand Duchy of Luxembourg a letter putting it on notice to submit its observations.

4. In response, the Luxembourg authorities informed the Commission by letter of 8 January 1996 that the Chamber of Deputies had undertaken the review of a draft law to implement the Directive and that a second draft law having the same purpose would shortly be presented to the Chamber. On 19 August 1996 the Luxembourg Permanent Representative to the European Community informed the Commission that the second draft law had been presented to the Chamber. Subsequently, the Luxembourg authorities notified the Commission that Article 21 of the Directive (concerning information to investors) had been implemented by means of a Ministerial Regulation dated 27 December 1995. After this, the Luxembourg authorities did not notify the Commission of the implementation of any other provision of the Directive.

5. In light of those facts, on 24 February 1997 the Commission issued a reasoned opinion (2) in which it complained that the Grand Duchy of Luxembourg had failed to implement the Directive. By letter of 22 April 1997, the Luxembourg authorities put it to the Commission that, with regard to numerous aspects of the Directive, there was no need for any new provisions to be adopted to bring the Directive into line with national law: such provisions already existed in Luxembourg law. However, the Luxembourg authorities failed to provide any details concerning the content of those provisions.

On the basis of the position adopted by the Luxembourg authorities, the Commission formed the opinion that they had failed to transpose into national law the majority of the Directive's provisions, and in particular all those provisions to which no reference is made in the letter of 22 April 1997, and that the Grand Duchy of Luxembourg had therefore failed to fulfil its obligations under the Directive and under the relevant Treaty provisions.

The alleged failure to fulfil obligations

6. Under the third paragraph of Article 189 of the Treaty, a directive is binding upon the Member State to which it is addressed as to the result to be achieved. Under the first paragraph of Article 5 of the Treaty, the Member States are to take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of the Treaty or resulting from action taken by the Community institutions. As regards more specifically the transposition of Directive 93/22 into national law, the relevant obligation is expressly stated in Article 31 of that directive, which sets the time-limit for transposition at 1 July 1995 and requires the Member States to inform the Commission forthwith of the adoption of the necessary national measures.

7. In its defence filed on 13 March 1998, the Luxembourg Government expressly acknowledged that it had not yet implemented the Directive in full, and sought to justify this on the ground that there had been delays in the legislative procedure. Furthermore, at the session of 20 January 1998, the Chamber of Deputies had approved a draft law amending the Law of 5 April 1993 on the financial sector and Article 113 of the Business Code in partial implementation of the Directive. Lastly, it stated that a second draft law on the supervision of the markets had been presented to the Chamber of Deputies on 16 July 1996 and that the Chamber would adopt it very shortly. That being so, the Luxembourg Government expressed the view that the present proceedings would soon become pointless and, for that reason, asked that the Commission's application be dismissed.

8. I cannot accept the Luxembourg Government's point of view. The fact that at least some of the obligations laid down by the Directive have not been implemented in good time means that the Grand Duchy of Luxembourg has undoubtedly failed to fulfil its obligations under Article 189 of the Treaty and under the Directive itself. The fact that the Luxembourg Government anticipates that the legislative provisions designed to implement the Directive in full might be adopted during the course of these proceedings has no bearing on the outcome of the case. Indeed, the case-law of the Court (Joined Cases C-232/95 and C-233/95 Commission v Greece [1998] ECR I-3343, paragraph 38) shows that it is the expiry of the time-limit set in the reasoned opinion which is instrumental in determining whether a Member State has failed to fulfil its obligations, so that belated implementation, even if it occurs before an action is brought or during the proceedings, does not negate the legal interest in bringing those proceedings, unless the Commission discontinues them, which it has not done in the present case.

Costs

9. The Grand Duchy of Luxembourg has thus been unsuccessful in all its submissions. Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party's pleadings. Since the Commission has asked for costs against the Grand Duchy of Luxembourg, the latter must be ordered to pay the costs.

10. In the light of all the foregoing considerations, I suggest that the Court should:

(1) declare that, by failing to adopt all the laws, regulations and administrative provisions necessary to bring into force Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field, the Grand Duchy of Luxembourg has failed to fulfil its obligations thereunder;

(2) order the Grand Duchy of Luxembourg to pay the costs.

(1) - OJ 1993 L 141, p. 27.

(2) - Letter no SG (97) D/1378.