23rd Annual Report from the Commission on monitoring the application of community law (2005) {SEC(2006) 999} {SEC(2006) 1005}
Date: 2006-07-24
Institutions: European Commission
Subjects: EU control, activity report, application of EU law, national implementing measure

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 24.7.2006 
COM(2006) 416 final 

23rd ANNUAL REPORT FROM THE COMMISSION 

ON MONITORING THE APPLICATION OF COMMUNITY LAW 
(2005) 

{SEC(2006) 999} 
{SEC(2006) 1005} 

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23rd ANNUAL REPORT FROM THE COMMISSION 

ON MONITORING THE APPLICATION OF COMMUNITY LAW 
(2005) 

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. 

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1.1 

Introduction 

In exercising its exclusive function as guardian of the Treaties, the Commission ensures and 
monitors the uniform application of Community law by the Member States pursuant to Article 
211 of the EC Treaty. Article 226 EC provides that the Commission can take action against a 
Member  State  for  adopting  or  maintaining  legislation  or  rules  which  are  contrary  to 
Community law. 

The White Paper on European Governance1 published by the Commission in 2001 emphasises 
that the primary responsibility for applying Community law lies with national administrations 
and  courts  in  the  Member  States.  The  primary  objective  of  infringement  proceedings  is  to 
encourage  the  Member  States  to  comply  voluntarily  with  Community  law  as  quickly  as 
possible.  Furthermore,  the  Commission  has  aimed  to  boost  cooperation  with  the  Member 
States by means of complementary or alternative methods to resolve problems.  

The undertaking of monitoring the application of Community law is vital in terms of the rule 
of law generally, but it also helps to make the principle of a Community based on the rule of 
law a tangible reality for Europe’s citizens and economic operators. The numerous complaints 
received  from  citizens  of  the  Member  States  constitute  a  vital  means  of  detecting 
infringements of Community law.  

The  23rd  annual  report,  including  the  staff  papers  annexed  to  it  -  contributions  from  the 
Commission’s  departments  (SEC(2006)  1005)  and  statistical  annexes  (SEC(2006)  999)  - 
gives an account of the Commission's activities in connection with monitoring the application 
of Community law in 2005. 

1.2. Enlargement of the Union and notification of measures for transposal of directives 

2005  saw  preparations  for  the  enlargement  of  the  Union  to  include  Bulgaria  and  Romania. 
The  integrated  system  for  electronic  notification  of  national  measures  for  transposal  of 
directives in the 25 Member States was adapted to enable Bulgaria and Romania to meet their 
pre-notification  obligations  for  the  directives  included  in  the  “acquis  communautaire”.  Both 
countries notified the first measures at the end of 2005. 

In  2005  the  Netherlands  and  Sweden  joined  the  electronic  notification  system,  while 
preparations were at an advanced stage in France, the last Member State to join the system. 

As a result of the progress made in notifying national transposal measures, in January 2005 an 
average of 97.69% of measures had been notified by the 25 Member States. This average rose 
to 98.12% in March, 98.69% in May, 98.78% in July, 98.88% in September and 98.92% in 
November2.  

1.3 Infringement proceedings 

The total number of infringement proceedings initiated by the Commission fell from 2993 in 
2004 to 2653 in 2005. By 31 December 2005, 1697 cases out of the 2653 registered were still 
ongoing.  There  was  a  slight  increase  in  the  number  of  complaints  registered  by  the 

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European Governance – a White Paper (COM (2001)428). 
See 
the  details  for  each  Member  State  on 
http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_fr.htm#transpositions 

the  Secretariat-General’s  EUROPA  website: 

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Commission with respect to 2004, from 1146 to 1154. In overall terms, complaints accounted 
for  around  43.5%  of  the  total  infringements  detected  in  2005.  The  number  of  infringement 
proceedings initiated by the Commission on the basis of its own investigations rose from 328 
in 2004 to 433 in 2005 for EU 25. 

For EU 25, the number of proceedings for failure to notify transposal measures decreased by 
29%  with  respect  to  the  previous  year,  from  1519  to  1079  cases.  This  decrease  is  partly 
explained by the fact that the 2004 figures related not only to the regular monitoring of failure 
by EU 15 to transpose directives due for transposal but also to the monitoring of failure by the 
ten new Member States to notify in respect of the whole pre-accession acquis. 

The  average  time  taken  to  process  all  the  infringements  in  the  period  1999-2002,  from 
registration of the case within the specified time limit to the sending of the letter of referral to 
the Court of Justice under Article 226 of the EC Treaty is 24 months. The average time taken 
to  process  cases  originating  in  well-founded  complaints  and  those  detected  by  the 
Commission’s own investigations was 35 months. For infringements originating in failure to 
notify national measures to transpose directives, the average time was 15 months. 

1.4  Implementation  of  the  Commission  communication  “Better  monitoring  of  the 
application of Community law” COM(2002)725 

The  Commission  implemented  this  Communication  specifically  by  accelerating  the  analysis 
and  processing  of  infringements  and  by  more  rigorous  compliance  with  the  code  of  good 
administrative  conduct  in  its  dealings  with  complainants.  The  Commission  combined  the 
basic principle of equal treatment for the Member States with a wide range of non-legislative 
measures in order to anticipate possible implementation problems. In this context, we would 
emphasise  the  implementation  of  preventive  mechanisms  to  facilitate  the  transposition  of 
“difficult”  directives;  systems  for  notifying  drafts  of  new  rules;  participation  in  forums  to 
present  guidelines  for  transposal;  reinforced  multilateral  contacts  such  as  transposition 
“package meetings”, conferences, seminars and workshops; the setting up of “implementation 
networks”  and  bilateral  consultation  mechanisms  to  create  a  “structured  dialogue”;  and 
enhanced communication with the public, in particular through the Europa website. There was 
a considerable increase in the use of SOLVIT to resolve problems and complaints. Inspections 
continued  to  play  an  important  role  in  the  area  of  food,  air  and  maritime  safety  and  the 
safeguarding  of  nuclear  materials,  as  well  as  in  the  field  of  the  monitoring  of  the  level  of 
environmental radioactivity. 

1.5 Infringements relating to petitions presented to the European Parliament 

Petitions  to  Parliament  represent  a  valuable  source  of  information  for  detecting  breaches  of 
Community law. The statistics show that between one quarter and one third of the petitions 
are linked, or give rise, to infringement proceedings. Certain matters, such as registration of 
cars  or  town  planning  laws  in  Spain,  have  been  the  subject  of  several  petitions,  as  well  as 
several complaints. 
 In many cases the petitions are presented at the same time as a complaint to the Commission. 
The  number  of  petitions  presented  varies  considerably  depending  on  the  field  in  question, 
ranging from 10 for the area of enterprise and industry to 179 for the area of environmental 
protection.  The  highest  number  of  petitions  relate  to  the  area  of  the  environment  and  the 
single market. 

In  the  area  of  environmental  protection,  a  large  number  of  the  petitions  linked  to  active 
infringement  proceedings  concerned  the  question  of  the  completion  of  an  environmental 

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impact  assessment.  These  sometimes  concerned  motorway,  electricity  high  tension  lines  or 
airport construction, sometimes linked to special nature or wildlife conservation areas. In the 
field of wildlife, other petitions concerned protection of wild birds from hunting in some new 
Member  States,  as  well  as  protection  of  wolves  and  turtles.  A  full  range  of  water  quality 
standard issues were also covered by petitions, often identifying particular issues specific to 
local conditions. 

In core areas of the Internal Market, a significant number and wide range of issues were also 
raised  by  petitions.  As  is  regularly  the  case,  individual  issues  of  recognition  of  professional 
qualifications  accounted  for  a  significant  number  of  petitions  mostly  linked  to  late 
transposition  of  directives.  The  financial  services  sector  also  accounted  for  a  significant 
volume of petitions largely concerning shareholders’ rights, banking and insurance. Even if a 
significant  number  of  petitions  do  not  give  rise  to  issues  falling  within  the  scope  of 
Community  law,  the  procedure  allows  for  explanations  to  be  provided  to  those  concerned. 
Individual, high profile cases such as “Lloyds” and “Equitable Life Assurance Society” have 
also  been  covered  as  well  as  problems  with  crossborder  payments  in  euros.  Services  more 
generally  constitute  another  significant  area  of  petitions,  including  recurrent  issues  on  the 
installation of satellite dishes. Finally, a range of issues, including some public procurement 
issues  have  arisen  in  petitions  concerning  urban  development  laws  in  Valencia  in  Spain, 
which were the subject of a report by the Parliamentary Petitions Committee of 13 December 
2005. 

This  information  confirms  the  volume,  variety  and  importance  of  the  issues  raised  and  also 
the detailed nature of the work required of the Commission in order to examine, explain and 
deal  with  the  different  questions  both  in  terms  of  its  own  authority  to  bring  infringement 
proceedings and the need to keep complainants and the Petitions Committee informed. 

1.6 Main developments in each of the areas of Commission activity 

The following are the main developments by area of activity. 

In  agriculture,  monitoring  the  application  of  Community  law  concentrated  on  two  main 
objectives: removing barriers to the free movement of agricultural produce and ensuring that 
the  more  specific  mechanisms  of  the  agricultural  regulations  are  applied  effectively  and 
correctly. 

The trend towards removing the traditional barriers to free movement of agricultural produce 
was reinforced. 

In  monitoring  the  application  of  the  specific  rules  of  the  common  agricultural  policy,  the 
Commission  paid  particular  attention  to  ensuring  that  the  protection  of  certain  geographical 
denominations  in  the  Community  as  part  of  the  quality  policy  with  respect  to  agricultural 
produce is not undermined by attitudes or interpretations that are contrary to Community law, as 
in the case of Germany with respect to “Parmigiano Reggiano”. 

The Commission also reminded Member States of their obligation to send annual reports on all 
existing state aid arrangements in agriculture. 

The Commission was notified of national measures transposing agricultural directives as a result 
of its monitoring activities. 

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In education and culture, the Commission is aware of the outstanding difficulties regarding 
the  recognition  of  qualifications.  Harmonising  the  recognition  of  academic  qualifications 
through  legislation  is  ruled  out;  harmonisation  must  be  achieved  by  encouraging  policy 
cooperation and the approximation of systems. In addition, the national authorities must avoid 
any direct or indirect discrimination on the grounds of nationality. 

The  Commission  dealt  with  cases  relating  to  the  cost  and  duration  of  procedures  for 
recognition of academic qualifications. The charging of overly high costs for recognition of 
qualifications  obtained  in  other  Member  States  can  create  barriers  to  the  free  movement  of 
students between countries and to their access to education. With regard to the conditions for 
access  to  education,  Community  legislation  guarantees  equal  treatment  of  national  students 
and students from other Member States as regards access to education (Articles 12, 159 and 
150 of ECT). In a previous year the Commission initiated an infringement proceeding against 
Austria concerning access by Community citizens to Austrian universities, which was referred 
to the Court in 2004. Austria adopted measures to comply with the Court judgment, which are 
being analysed by the Commission.  

The Commission continues to receive numerous letters from members of the public regarding 
students’  entitlement  to  maintenance  grants,  loans,  and  other  matters  following  the  Bidar 
judgment (C209/03).  

In  employment,  the  monitoring  of  the  application  of  Community  law  as  regards  the  free 
movement of workers focuses in particular on incorrect application of the EC Treaty and the 
related  regulations  brought  to  the  Commission’s  notice  by  individual  complaints.  In  other 
areas (working conditions, health and safety at the workplace and equal treatment for women 
and  men),  the  main  problems  giving  rise  to  infringement  proceedings  concern  incorrect 
transposal measures or failure to notify measures.  

With regard to non-discrimination under Article 13 EC, the Court of Justice handed down its 
first judgments against the Member States in question for failure to notify transposal measures 
for Directives 2000/43 and/or 2000/78, due for transposal by 2003. These proceedings were 
therefore  pursued  in  accordance  with  Article  228  EC.  In  addition,  following  in-depth 
examination  of  the  measures  to  transpose  Directive  2000/43,  non-conformity  proceedings 
were initiated against a considerable number of EU 15 Member States.  

Another  priority  was  monitoring  the  application  of  the  Community  acquis  by  the  new 
Member States. The periodic and systematic monitoring process was extended beyond 1 May 
2004.  

In addition, a detailed examination was made of the national measures taken by the various 
EU  15  Member  States  to  implement  the  transitional  provisions  annexed  to  the  2003  Act  of 
Accession. Infringement proceedings were brought where appropriate. 

By 31 December 2005 the enterprise and industry department (single market for products) 
was responsible for 504 directives and for application of Article 28 EC. The 333 infringement 
proceedings initiated in 2005 in relation to this legislation (194 relating to directives and 141 
to Article 28 EC) accounted for 9.4% of the total proceedings brought by the Commission in 
2005.  This  represents  an  increase  in  the  number  of  proceedings  handled  by  the  Enterprises 
and Industry DG over 2004 and 2003 (249 and 218 active procedures, respectively).  

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As regards directives, as in previous years the largest number of active proceedings were for 
failure to notify national transposal measures (129, 101 of which were initiated in 2005).The 
areas  most  affected  were  the  pharmaceutical  and  automotive  industries.  Fifteen  new  non-
conformity cases and ten cases of flawed application were initiated in 2005, compared with 
six and three cases, respectively, in 2004 and 53 and ten cases in 2003. 

As  in  previous  years,  Directive  98/34/EC  laying  down  the  procedure  for  the  provision  of 
advance information on national draft technical regulations on products played an important 
role in preventing barriers to the operation of the single market and in facilitating exchanges 
of information with and among Member States. The number of notifications increased by over 
30%  in  2005,  largely  owing  to  enlargement  (the  new  Member  States  accounted  for  almost 
one-third of the notifications received). 

In  the  area  of  the  environment,  in  2005,  timely  and  correct  implementation  of  EU  law 
remained an important priority for the Commission. Improving the effective handling of open 
infringement  cases  continued  to  be  a  priority  However,  this  is  still  the  Commission 
department with the highest number of open cases in the Commission. In 2005 it accounted 
for  about  one  quarter  of  the  total  number  of  open  cases  concerning  non-compliance  with 
Community law3. 

The  reduction  in  the  number  of  open  cases  is  mainly  due  to  a  more  rational  handling  of 
complaints  and  infringements.  Priority  is  given  to  tackling  structural  problems  in  Member 
States through the practice of grouping together cases concerning the same subject matter and 
launching  horizontal  cases  addressing  systemic  problems  of  flawed  implementation. 
Furthermore,  as  a  result  of  pro-active  follow-up  through  package  meetings  and  bilateral 
contacts with Member States, a number of open cases have been settled. The decrease in the 
number  of  cases  will  allow  the  Commission  services  to  focus  on  faulty  transposition  of 
directives,  non-compliance  with  fundamental  secondary  obligations  under  Community 
environmental legislation and systemic problems of flawed implementation.  

In order to assist in the handling of complaints and infringements, implementation task forces 
were set up in 2005 in the Environment Directorate-general. The work of these task forces has 
resulted  in  the  identification  of  a  comprehensive  set  of  pro-active  measures  to  foster  the 
implementation of nature, air, waste, water, and impact assessment legislation, which are the 
five areas with the highest number of open cases. These jointly account for around 90% of the 
total number of complaints and infringement cases in the environmental field. 

In competition policy, the priorities in 2005 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. 

In the area of the information society, the 2002 Directive on electronic communications has 
three broad objectives in the context of the Lisbon strategy - to create a stable and predictable 
regulatory  environment,  to  encourage  innovation  and  to  stimulate  new  investment  in 
communications networks and services. As all but one Member State (Greece) had completed 
transposition,  the  focus  was  on  monitoring  correct  implementation.  The  Commission 

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At  the  end  of  2005  the  total  number  of  open  cases  was  3562  for  the  whole  Commission.  The 
environment sector as a percentage of the total number of cases decreased from 27% in 2004 to 22.4% 
in 2005. 

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examined in particular the major concerns expressed in the annex to the 2004 Implementation 
Report4. Infringement proceedings concentrated, as a priority, on the transitional regime, the 
independence  and  the  full  range  of  powers  of  the  NRA,  delays  in  reviewing  the  relevant 
markets, the designation of a universal service provider, as well as consumer issues such as 
number  portability,  directory  services,  the  single  European  emergency  number  (112)  and 
protection against spam.  

The main objective of the “Television without Frontiers” directive is to create the conditions 
for the free movement of television broadcasts within the Union. The Commission has hired 
an  independent  adviser,  by  a  public  tender  procedure,  to  monitor  implementation  by  the 
Member States of the rules laid down by this directive on TV advertising.  

The Directive on the re-use of public sector information (PSI) pursues three main objectives: 
to  facilitate  the  creation  of  Community-wide  services  based  on  PSI,  to  enhance  effective 
cross-border re-use of PSI for added-value services, and to limit distortions of competition in 
the  Community  market.  As  a  priority,  infringement  procedures  were  launched  against  those 
Member States that had not notified national transposal measures in time. 

In  the  area  of  justice,  freedom  and  security,  in  2005  the  deadlines  for  transposal  by  the 
Member States of two major Directives5 granting substantial rights to third-country nationals 
expired.  Transposal  of  a  further  two  similarly  important  Directives  will  be  due  in  2006 
(Directives  2003/1096  and  2004/837).  For  this  reason,  in  2005  the  priority  in  the  field  of 
immigration and asylum was to offer assistance to Member States in the process of transposal 
and applying these acts. Another important issue arising from the Hague programme was to 
efficiently  monitor  the  application  of  these  acts  in  the  Member  States.  Furthermore,  an 
external  study  was  launched  on  the  monitoring  of  both  application  and  transposition  of 
Directive 2003/9/EC by Member States.  

In  the  internal  market,  in  2005  the  Commission’s  objective  was  to  reinforce  the  political 
importance of the action taken by it to implement Community law.  

As  part  of  the  action  taken  on  the  Recommendation  of  12  July  2004  on  good  practices 
concerning  transposition8,  following  a  letter  of  3 May  2005  addressed  by  Commissioner 
McCreevy to all the Member States, the Internal Market DG was able to gather information 
on how this Recommendation had been applied nationally. This investigation revealed that a 
considerable number of the recommendations issued by the Commission had been translated 
into concrete measures. 

As regards the monitoring of transposal, in 2005 the Internal Market DG examined most of 
the 1300 national transposal measures notified by the new Member States covering the acquis 
in  force  as  of  1 May  2004.  This  substantial  work  gave  rise  to  259  new  infringement 
proceedings, only 85 of which are still open. 

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SEC(2004) 1535 of 2.12.2004. 
Directives 2003/9 and 2003/86, see above. 
Council Directive 2003/109/EC of 25 November 2003 concerning the status of third-country nationals 
who are long-term residents, OJ L 16, 23.1.2004, p. 44. 
Council Directive 2004/83/EC of 29 April 2004 on minimum standards for the qualification and status 
of  third  country  nationals  or  stateless  persons  as  refugees  or  as  persons  who  otherwise  need 
international protection and the content of the protection granted, OJ L 304, 30.9.2004, p. 12. 
SEC (2004) 918 final, 12.7.2004. 

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In 2005 the Internal Market DG also launched a debate on the best way of improving the legal 
and economic impact of the infringement proceedings brought by it. This debate is based on 
the first national measures taken since 2003 to implement the 2002 Communication.  

In  health  and  consumer  protection,  the  Commission  monitors  the  implementation  of 
Community legislation through various actions that take into account the specific features of 
the different areas.  

The  integrated  approach  to  food  safety  aims  to  assure  a  high  level  of  food  safety,  health, 
animal  welfare  and  plant  health  within  the  European  Union  through  coherent  farm-to-table 
measures  and  adequate  monitoring,  while  ensuring  the  effective  functioning  of  the  internal 
market.  

The  Food  and  Veterinary  Office  (FVO)  plays  an  important  role  in  monitoring  the  correct 
implementation  of  these  provisions.  It  conducts  inspections  in  the  Member  States  and  third 
countries  which  export  to  the  EU.  It  draws  up  an  annual  inspection  programme,  identifying 
the  priority  areas  and  countries  for  inspection.  The  programme  is  reviewed  at  mid-term  to 
ensure that it is updated and relevant. The inspectors’ conclusions and recommendations are 
included in their inspection reports.  

Consumer protection is one of the Community actions aimed at improving the quality of life 
of  European  citizens.  The  implementation  of  Community  policy  in  this  area  includes 
developing  Community  legislation  that  defends  consumer  interests,  health  and  safety  in  the 
single  market.  Another  aim  of  Community  action  is  to  set  up  redress  procedures  enabling 
Community consumers to assert their rights without the need for legal proceedings.  

Health is an essential priority for the Commission, which therefore strives to improve public 
health in the EU, prevent human illness and diseases and obviate sources of danger to human 
health.  Most  of  the  directives  concerning  this  area  were  due  for  transposal  in  2005.  The 
actions taken by the Commission focused on monitoring the adoption of transposal measures. 

In  energy  and  transport,  622  infringement  cases  were  processed,  247  for  failure  to  notify 
transposal measures and 375 for incorrect transposal of directives or incorrect application of 
Community law. There was an increase in the number of infringements, with 314 new cases 
opened.  The  Court  ruled  on  12  infringement  proceedings.  Transposal  of  the  “energy” 
directives rose to 97.6%. In the transport area, delays in transposing directives were made up 
for more slowly, and the percentage of “transport” directive transposed is only 96%.  

The ratio of cases of failure to notify to other types of infringement (non-conformity, incorrect 
application) was reversed. In December 2005 failures to notify accounted for only 29%, while 
there was a rise of over 100% in numbers of letters of formal notice and of reasoned opinions 
in non-conformity cases. 

In the energy area, the Commission decided to refer six Member States to the Court for failure 
to  transpose  into  their  national  legislations  one  or  both  of  the  two  2003  directives  on  the 
internal electricity and gas market. These two Directives are fundamental to the opening up of 
the electricity and gas markets in the EU.  

The Commission also stepped up its pursuit of infringements relating to the Euratom Treaty 
by actions concerning not only radiation protection but also other obligations linked to nuclear 
safeguards, external relations and the role of the Euratom Supply Agency. 

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In the transport area, the Commission continued to examine transposition of the first railway 
package and the correct application of the Eurovignette directive on road pricing.  

In  air  travel,  the  Commission  referred  five  Member  States  to  the  Court  for  failure  to  notify 
measures  transposing  the  2002  Directive  aimed  at  phasing  out  the  noisiest  aircraft  at  EU 
airports.  The  Commission  also  decided  to  refer  to  the  Court  the  four  Member  States  which 
had  not  yet  established  a  system  of  efficient,  proportionate  and  dissuasive  sanctions  for 
airlines  which  infringe  the  rules  or  ensured  that  they  were  correctly  applied  in  accordance 
with  the  regulation  offering  air  passengers  reinforced  protection  in  the  event  of  denied 
boarding and of cancellation or long delay of flights. 

Lastly,  in  maritime  safety,  the  Commission  continued  to  take  action  against  Member  States 
which  fail  to  comply  with  Community  legislation  on  port  State  control  and  on  improved 
availability and use of port reception facilities for ship-generated waste und cargo residues. 

In fisheries, sustainable management of live maritime resources is desirable in the long term 
both socially and economically. 

As regards application of the rules on conservation of resources, particular attention was paid 
to compliance with the rules on monitoring of the implementation of technical conservation 
measures  (minimum  size  of  species);  the  exceeding  of  quantitative  catch  restrictions;  the 
notification of certain data on catch and fishing activity; and the use of pelagic driftnets.  
The Commission  is committed to setting up  the Community Fisheries Control Agency9, the 
objective  of  which  is  to  make  the  application  of  the  regulations  more  effective  by 
coordinating Community and national control and monitoring of fishing activities. 

In taxation and customs, in 2005 numerous new demands of citizens and civil society were 
registered  and  analysed.  Some  new  infringement  cases  were  also  detected  through  the 
Commission’s own investigations. 

In general there have been major changes in the core business of monitoring the application of 
Community  law  in  the  area  of  taxation,  in  which  there  has  been  a  more  pro-active 
infringement policy particularly as regards new Member States. In spite of the transposition of 
the  existing  secondary  Community  law,  there  is  still  a  significant  number  of  potential 
infringements in domestic legislation. 

The rapidly developing ECJ case-law in direct taxation has also focused priorities on coherent 
follow  up  and  implementation  of  judgments  in  the  different  Member  States.  Monitoring 
compatibility  with  the  EC  Treaty  of  Member  State  legislation  with  regard  to  dividend 
payments has also been a key activity. 

The screening of the legislation of the new Member States in 2005 resulted in a considerable 
number  of  infringement  cases  for  failure  to  notify  national  implementing  legislation  or 
incorrect  application  of  Community  law  on  indirect  taxation  (VAT  and  car  taxation).  The 
legislation transposing recent directives was also screened.  

In  the  budgetary  area,  in  general  the  Commission  has  to  follow  up  all  cases  where 
infringements  of  EC  legislation  resulted  in  incorrect  or  late  payment  of  own  resources  and 
other revenues.  

9 

Council Regulation (EC ) No 768/2005 of 26 April 2005 – OJ L 128, 21.5.2005, p. 1. 

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In  the  area  of  Community  statistics,  monitoring  the  application  of  Community  statistical 
law  was  a  key  priority  in  the  year.  The  Commission  made  efforts  to  improve  collaboration 
and  communication  with  the  Member  States  in  order  to  ensure  correct  application  of  the 
statistical  acquis.  Most  of  the  cases  still  under  way  in  2004  (10  of  the  13  infringement 
proceedings) were closed. 

The infringement proceeding initiated against Greece for failure to comply with the obligation 
to  transmit  statistics  on  deficits  to  the  Commission  in  accordance  with  Regulations  (EC) 
Nos 3605/9310 and 2223/9611 and the infringement of Article 10 of the EC Treaty and Article 
3 of the Protocol on the excessive deficit procedure is continuing. The Commission is making 
efforts to ensure that the Greek authorities have taken the necessary measures to prevent any 
recurrence of the infringement. The proceeding initiated against Greece for flawed application 
of Regulation (EC) No 1165/98 concerning short-term statistics is also under way. Most of the 
missing data to which the infringement proceeding relates have been sent. The Commission 
therefore considers that Greece is in the process of complying with the regulation in question. 

In the area of social statistics, the proceeding initiated against Belgium for failure to submit 
data  on  the  level  and  breakdown  of  labour  costs  in  accordance  with  Regulation  (EC)  No 
530/199912 was closed when the missing statistics were transmitted. 

In  the  area  of  agricultural  statistics,  the  case  against  Greece  was  closed  after  the  Greek 
authorities submitted the presidential decree transposing Directive 2001/107/CE13. 

Following  enlargement,  the  eight  infringement  proceedings  initiated  by  the  Commission 
against  five  new  Member  States  for  failure  to  notify  their  national  transposition  measures 
were also closed. In the area of statistics on transport of goods by road, the Court of Justice, in 
its  judgment  of  21  July  200514,  recognised  the  infringement  by  Greece  relating  to incorrect 
application of Council Regulation (EC) No 1172/9815. 

The key priority of DG Trade in the area of application of Community law is to monitor the 
Member States’ respect for Community powers in trade matters. These exclusive powers are 
firmly established in certain sectors of common trade policy, particularly trade in goods, but 
the continual development of common trade policy and its gradual expansion into new sectors 
can  on  occasion  lead  to  problems  with  the  Member  States.  However,  the  ongoing  dialogue 
and close cooperation between the Council and the Commission make it possible to prevent 
individual  actions  by  Member  States  in  the  areas  of  exclusive  competence  and  enable 
common positions to be developed in all the areas. 

Regional policy, like the other structural policies, is aimed at reinforcing the economic and 
social cohesion policy by correcting regional imbalances. This policy, which is implemented 
by  aid  from  the  ERDF  or  individual  cohesion  fund  projects,  covers  diverse  actions  ranging 

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14 
15 

Council Regulation (EC) No 3605/93 of 22 November 1993 on the application of the Protocol on the 
excessive deficit procedure annexed to the Treaty establishing the European Community. 
Council Regulation (EC) No 2223/96 of 25 June 1996 on the European system of national and regional 
accounts in the Community. 
Council Regulation (EC) No 530/1999 of 9 March 1999 concerning structural statistics on earnings and 
on labour costs. 
Directive 2003/107/EC of the European Parliament and of the Council of 5 December 2003 amending 
Council Directive 96/16/EC on statistical surveys of milk and milk products. 
Judgment of 21 July 2004, Case C-130/04, Commission v Greece. 
Council Regulation (EC) No 1172/98 of 25 May 1998 on statistical returns in respect of the carriage of 
goods by road – OJ L163, 6.6.1998, p. 1. 

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from  co-financing  of  traditional  infrastructures  to  digital  infrastructures  and  including  co-
financing of aid to enterprises, innovative projects and environmental projects. 

This aid is based on the principle of partnership, i.e. close collaboration by the Commission 
with  the  national  authorities,  taking  into  account  both  the  powers  of  the  partner  and  the 
principle of subsidiarity. 

The  main  objective  is  to  ensure  that  the  national  authorities  manage  the  structural  funds  in 
accordance with Community law and the rules of sound financial management.  

There was a significant decrease in infringement proceedings relating to enlargement in 2005 
following  the  accession  of  10  new  Member  States  in  the  previous  year.  The  Commission 
continued to pursue a case concerning incorrect application of the association agreement with 
Turkey by a Member State resulting in discrimination against Turkish workers who wished to 
extend their residence permit. 

The  more  detailed  supplementary  information  on  the  different  areas  is  contained  in  the 
Commission  staff  paper  in  the  Annex.  It  is  planned  to  adopt  an  analysis  of  the  outlook  as 
regards the monitoring of the application of Community law in the second half of the year. 

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