24th annual Report from the Commission on monitoring the application of community law (2006) [SEC(2007) 975] [SEC(2007) 976]
Date: 2007-07-17
Institutions: European Commission
Subjects: EU control, activity report, application of EU law, national implementing measure

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.7.2007 
COM(2007) 398 final 

24th ANNUAL REPORT FROM THE COMMISSION 

ON MONITORING THE APPLICATION OF COMMUNITY LAW 
(2006) 

[SEC(2007) 975] 
[SEC(2007) 976] 

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24th ANNUAL REPORT FROM THE COMMISSION 

ON MONITORING THE APPLICATION OF COMMUNITY LAW 
(2006) 

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. 

INTRODUCTION 

In exercising its 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 which has failed to fulfil an obligation under the Treaty, for example adopts or 
maintains 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 improve cooperation with the Member 
States by means of complementary or alternative methods to resolve problems.  

The  24th  annual  report,  including  the  staff  papers  annexed  to  it  -  contributions  from  the 
Commission’s departments (SEC(2007) 975) and statistical annexes (SEC(2007) 976) - gives 
an  account  of  the  Commission's  activities  in  connection  with  monitoring  the  application  of 
Community law in 2006.  

2. 

ENLARGEMENT  OF  THE  UNION  AND  NOTIFICATION  OF  MEASURES  FOR 
TRANSPOSITION OF DIRECTIVES 

2006 saw the final preparations for the enlargement of the Union to Bulgaria and Romania. 
Both countries used the integrated system for electronic notification of national measures for 
transposition  of  directives  to  meet  their  pre-notification  obligations  regarding  the  “acquis 
communautaire”.  

At  present,  all  27  Member  States  voluntarily  notify  national  measures  for  transposition  of 
directives through the Electronic Notification database. 

In  terms  of  notification  of  national  transposition  measures,  in  January  2006  an  average  of 
98.93% directives had received notifications by the 25 Member States. This average rose to 
99.06% end 20062.  

3. 

INFRINGEMENT PROCEEDINGS 

The total number of infringement proceedings initiated by the Commission fell slightly from 
2653 in 2005 to 2518 in 2006. By 31 December 2006, 1642 cases out of the 2518 registered 
were still ongoing. There was also a slight decrease in the number of complaints registered, 
from  1154  in  2005  to  1049.  Complaints  accounted  for  41.7%  of  the  total  infringements 
detected  in  2006.  The  number  of  infringement  proceedings  initiated  by  the  Commission  on 
the basis of its own investigations rose from 433 in 2005 to 565 in 2006 (24%) for EU 25.  

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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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For EU 25, the number of proceedings for failure to notify transposition measures decreased 
by 16% with respect to 2005, from 1079 to 904 cases. This is partly explained by two factors, 
(1) a reduction in the number of directives with a deadline for the year from 123 in 2005 to 
108, and (2) improvement in timely notifications by Member States. 

The  average  time  taken  to  process  all  the  infringements  in  the  period  1999-2005,  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 was 20.5 months compared with 24 
months  for  the  period  1999-2002.  The  average  time  taken  to  process  cases  originating  in 
complaints  and  those  detected  by  the  Commission’s  own  investigations  was  28  months 
compared with 35 months for the period 1999-2002. For infringements originating in failure 
to notify national measures to transpose directives, the average time was around 14.5 months 
compared with 15 months for the period 1999-2002.  

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. A second referral to the Court was decided in ten cases, 
with two later withdrawn upon receipt of the required transposition measures.  

4. 

IMPLEMENTATION  OF  THE COMMISSION  COMMUNICATION “BETTER  MONITORING 
OF THE APPLICATION OF COMMUNITY LAW” COM(2002)725 

The  Commission  has  continued  to  implement  this  Communication,  pursuing  further 
acceleration of the analysis and processing of infringements and full compliance with the code 
of  good  administrative  conduct  in  its  dealings  with  complainants.  The  Commission  has 
followed-up  on  potential  infringements  in  Member  States,  continuing  to  focus  on  the 
accelerated  pursuit  of  late  transposition  of  directives  and  paying  particular  attention  to 
enforcement  of  Court  decisions.  The  combined use  of  expert  groups,  bilateral  meetings  and 
contacts,  sectoral  package  meetings,  participation  in  training  events,  information  and 
transparency  campaigns,  as  well  as  continuing  the  pre-accession  monitoring  contacts  have 
continued to take place. At the same time, the Commission has followed its policy review in 
this area, taking account of the resolution of Parliament on the 21st and 22nd reports, adopted 
in May 2006 in the Better Regulation package. The main areas of this review were identified 
in  the  Commission's  'Strategic  Review  of  Better  Regulation  in  the  European  Union'  in 
November 20063 which also announced a new communication in 2007. This communication 
will confirm the Commission's evaluation of the current position and set out its policy for the 
future. 

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. In many cases petitions are presented at the same time as a complaint to the 

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COM(2006)689. 

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Commission and the facts denounced by the petitioner are already under examination by the 
Commission's services in the framework of an infringement proceeding. 

The highest number of petitions relate to the area of the environment and the single market. 

In the sector of the environment, petitions are of particular importance since the Commission 
does not have any “inspection” powers in order to check practical implementation of EC law 
on the ground. 

Regarding the internal market, two specific areas continued to occupy a particularly important 
place  in  terms  of  petitions.  The  recognition  of  diplomas  saw  a  further  confirmation  of  the 
application of the rules on professional, rather than academic, recognition rules for qualified 
professionals. In the field of public procurement, the question of urban laws in the region of 
Valencia continued to raise important questions. 

Fewer  petitions  were  received  in  other  sectors  such  as  problems  faced  by  citizens  at  EU 
external borders and VAT refunds. 

6. 

MAIN DEVELOPMENTS IN EACH OF THE AREAS OF COMMISSION ACTIVITY 

The following are the main developments by area of activity. 

In agriculture, two main objectives were pursued: removing barriers to the free movement of 
agricultural produce and ensuring that the agricultural regulations are applied effectively and 
correctly.  Action  was  taken  to  remove  traditional  barriers  to  free  movement  of  agricultural 
produce. 

The Commission also reminded Member States of their obligation to send annual reports, on 
all existing state aid arrangements in agriculture and action was taken to ensure compliance 
with the Court's judgment in this matter.  

In  competition  policy,  the  priorities  in  2006  were  monitoring  the  transposition  of  the 
Directive on competition in the markets for electronic communications and the transparency 
Directive. The Commission examined a number of suspected infringements relating to Article 
86 combined with Article 82 EC, as well as Article 31, and investigated the failure to comply 
with a Commission decision under Article 21 of the Merger Regulation. 

In  education  and  culture,  many  obstacles  still  exist  which  impede  students  from  moving 
freely within the EU. Due to limited EU competence, these obstacles to mobility often do not 
constitute  infringements  of  Community  law.  In  the  field  of  academic  recognition  of 
qualifications, the EU can only intervene in cases of discrimination on grounds of nationality. 
In many cases, the obstacles are of an administrative nature, such as the length or the cost of 
recognition procedures. These cases are closely followed because of their impact on the free 
movement  of  students.  In  2006,  two  infringement  procedures  were  launched.  In  the  first, 
following  the  reasoned  opinion,  the  Member  State  concerned  (Greece)  has  amended  its 
legislation. In the second, concerning Portugal, a reasoned opinion was sent early 2007.  

In the field of access to education, where the principle of non-discrimination  on grounds of 
nationality  applies,  2006  revealed  another  difficulty  stemming  from  differences  in  the 
organisation  of  the  education  systems  in  Member  States.  In  Austria  and  Belgium  the 
application of the principle of equal treatment led to important increases in the numbers of EU 

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students in higher education systems, as these Member States apply a policy of free access to 
higher  education  for  their  nationals,  whereas  neighbouring  Member  States  (Germany  and 
France) apply strict numerus clausus in certain study fields. This led the former countries to 
adopt  discriminatory  quota  systems  for  the  enrolment  of  non-nationals  in  their  universities. 
This  differential  treatment  could  be  accepted  only  if  based  on  objective  considerations 
independent  of  the  nationality  of  the  persons  concerned  and  proportionate  to  the  legitimate 
aim of the national provisions and this has not been demonstrated so far. These cases are of 
legal and political importance for ensuring freedom of movement and equality of treatment in 
higher education.  

In  employment,  infringements  cover  the  panoply  of  the  priority criteria  set  out  in  the  2002 
Communication.  

On  the  one  hand,  a  number  of  cases  concern  the  presumed  wrong  application  of  Treaty 
articles and/or secondary legislation rules (i.e. provisions in regulations) in the area of social 
security and the free movement of workers. On the other hand, infringements in the area of 
labour law, health and safety at the work place, as well as in the area of non-discrimination 
(directives ex Article 13 EC, for which the deadline of transposition expired in 2003), mostly 
concern a lack of communication of the necessary national transposition measures or incorrect 
transposition. Infringements in the area of equal treatment between men and women mainly 
deal  with  non  conformity  issues  (usually  originating  in  individual  complaints,  written 
questions  or  petitions).  In  all  areas  concerned,  systematic  follow-up  has  been  ensured,  as 
necessary,  in  cases  where  a  Member  State  has  failed  to  comply  with  a  judgment  of  the 
European Court of Justice. 

In  respect  of  the  use  by  the  'EU-15'  and  'EU-25'  Member  States  of  the  safeguard  clauses 
provided for in the transitional provisions of the Accession Treaties for the free movement of 
migrant  workers,  and  related  similar  issues,  the  relevant  national  legislation  has  been 
examined.  

In enterprise and industry the main objective is to guarantee the internal market for goods. 

As well as enforcing existing legislation by means of infringement proceedings under Article 
226 and 228 EC, the Commission continued to reinforce preventive action through Directive 
98/34/EC, by providing interpretation and guidance for many pieces of draft legislation. Other 
new action was taken to enhance co-operation with Member States in transposing directives.  

In  conducting  infringement  proceedings,  priority  was  given  to  cases  concerning  non-
communication of national measures transposing directives, failures to implement the Court’s 
judgments  (Article  228  EC)  and  complaints  denouncing  structural  problems  in  Member 
States. The Commission opened 186 infringement proceedings for non-communication and 4 
proceedings for non-compliance with the Court’s decisions.  

In 'EU-25', the implementation of rules relating to the internal market for goods has improved 
according to the volume of complaints. Partly as a result of proactive action (contacts with the 
Member  States,  package  meetings,  the  SOLVIT  network,  committees,  etc.)  a  total  of  339 
cases  were  settled  in  2006.  In  only  8  cases  did  the  Commission  need  to  bring  the  Member 
State  before  the  Court  of  Justice.  However,  the  number  of  complaints  relating  to  the 
implementation of directives increased by comparison to 2005. 

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In  the  area  of  environment,  in  2006,  the  correct  implementation  of  EU  environmental  law 
remained  an  important  priority  for  the  Commission.  The  environment  sector  accounted  for 
about  one  fifth  of  the  total  number  of  open  cases  concerning  non-compliance  with 
Community  law  under  investigation  by  the  Commission  and  remains  the  sector  with  the 
highest  number  of  open  cases.  A  positive  message  is  that,  after  the  accession  of  10  new 
Member States in 2004, the number of open cases did not grow disproportionately. 

In  the  handling  of  complaints  and  infringements,  a  certain  priority  was  given  to  cases 
concerning bad transposition of environmental directives, as well as to cases relating to lack 
of  compliance  with  fundamental  secondary  obligations  under  Community  environmental 
legislation, systemic problems of bad implementation and major infrastructure projects. Bad 
transposition  cases  represent  now  a  sizeable  portion  of  open  cases  (17,81  %)  and 
infringements (22,61%). The highest number of open cases was in the sector of nature (250 
cases), followed by waste (119 cases), water (103), impact assessment (98) and air (89), with 
26 cases from the remaining sectors. 

In the fisheries sector, the sustainable management of maritime living resources aims at social 
and economic long-term interests. 

Within the application of the rules of conservation of resources, particular attention was paid 
to the upholding of the standards relating to the functioning of the national systems of control; 
to the control of the application of technical conservation measures; to the communication of 
data on catches and fishing effort; to fleet capacity; and to the use of driftnets. 

The Commission continued work on setting up the Community Fisheries Control Agency. 

In  the  area  of  Information  Society  and  Media,  the  focus  of  enforcement  concerning  the 
regulatory framework for electronic communication has now shifted from transposition issues 
to ensuring full compliance and effective application in all 25 Member States, in particular, 
the  examination  of  the  major  concerns  expressed  in  the  annex  to  the  2005  Implementation 
Report.  New  proceedings  accordingly  focused  on  the  non-availability  of  caller  location 
information to emergency authorities for calls to 112 made from fixed and/or mobile phones, 
the  failure  to  ensure  timely  completion  of  the  market  reviews  and  national  must-carry 
provisions. Other issues addressed concerned the independence and the powers of the NRA, 
the  right  of  appeal  against  decisions  of  the  NRA,  rights  of  way,  the  lack  of  a  Reference 
unbundling  offer,  cost  accounting,  number  portability  and  universal  service  financing.  To 
increase  transparency  for  all  stakeholders,  the  Commission  has  continued  to  issue  press 
releases at each stage of the proceedings that have been opened.  

Concerning  media  policy,  the  main  development  concerns  the  revision  of  the  Television 
without  Frontiers  Directive  with  the  amending  proposal  now  in  discussion  in  Council  and 
Parliament. The Directive 2003/98 on the re-use of public sector information (PSI Directive) 
seeks  to  facilitate  the  creation  of  Community  wide  services  based  on  PSI,  to  enhance  an 
effective  cross-border  re-use  of  PSI  for  added-value  services,  and  to  limit  distortions  of 
competition  on  the  Community  market.  The  Commission  has  been  closely  monitoring  the 
transposition  process  and  providing  technical  assistance  in  order  to  enhance  re-use  and  to 
facilitate the exchange of good practices in Member States. 

A report was adopted on the application of the Directive on electronic signatures which was 
not the subject of any infringement proceedings. 

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Legal service: in the case of the Sellafield nuclear fuel reprocessing plant, the Court based its 
judgment partly on Article 292 of the EC Treaty; this was the first time that article had been 
invoked  and  applied.  The  Court  said  that  it  had exclusive  jurisdiction  to  decide  any  dispute 
regarding  the  interpretation  and  application  of  Community  law,  and  held  that  Ireland  had 
failed  to  fulfil  its  obligations  when  it  brought  a  dispute  between  itself  and  the  United 
Kingdom  on  questions  that  were  essentially  questions  of  Community  law  before  an  arbitral 
tribunal provided for in the Law of the Sea Convention. 

In  the  area  of  justice,  freedom  and  security,  the  deadlines  for  implementation  of  two 
important  Directives  granting  rights  to  third-country  nationals  in  the  field  of  asylum  and 
immigration  expired  in  2006  (Directives  2003/109  and  2004/83).  Similarly,  a  key  Directive 
2004/38,  which  consolidates  and  updates  the  free  movement  rights  of  the  EU  citizens  and 
their family members, was also due for implementation in 2006. The Commission adopted a 
report  on  the  application  of  Directives  93/96,  90/364,  90/365  on  the  right  of  residence  for 
students, economically inactive and retired Union citizens. 

Another important issue arising from the Hague Programme was the adoption of the first ever 
drafted  Scoreboard  Plus.  In  addition  to  the  monitoring  of  the  adoption  process,  for  the  first 
time, as part of such exercise for Justice, Freedom and Security policies, this communication 
examines national implementation of these policies. 

In  the  internal  market,  in  2006,  the  Commission  intensified  its  activity  in  the  area  of  the 
application of Community law. The objective was to further develop our enforcement policy 
and  turn  it  into  a  policy  instrument  for  the  promotion  of  the  overall  policy  priorities  of  the 
Directorate General. Actions have been focussed in the following areas: 

Follow-up  to  the  2002  Communication  -  An  active  policy  of  application  of  the  principles 
enshrined  in  the  Communication  was  maintained.  It  organised  package  meetings  and 
transposition  workshops  in different sectors. These  initiatives  ensured a preventive dialogue 
with  Member  States  and  contributed  to  better  prepare  national  transposition  measures. 
Directorate  General  Internal  Market  also  strengthened  its  promotion  of  SOLVIT  as  a 
complementary problem solving mechanism. 

Follow-up  to  the  Recommendation  of  12  July  2004  on  the  good  practices  concerning 
transposition  -  Information  on  the  implementation  of  this  recommendation  continued  to  be 
exchanged with Member States. The inquiry confirmed that several of the recommendations 
formulated  by  the  Commission  were  taken  on  board  and  reflected  in  concrete  national 
initiatives. The Internal Market Scoreboard of July 20064 analysed the results and concluded 
that  the  recommendation  played  a  fundamental  role  in  the  reduction  of  the  transposition 
deficit in most Member States. 

"Prioritisation" of infringement proceedings - A reflection was started on how to improve the 
efficiency and effectiveness of  infringement proceedings  with  reference  to  market  and  legal 
criteria. The proceedings need to become more effective (involving hierarchy, accelerating the 
treatment, choosing the most appropriate approach for each single problem detected) in order 
to  deliver  more  tangible  results  for  citizens  and  business.  The  reflection  resulted  in  the 
development  and  implementation  of  a  better  strategy  in  the  treatment  of  complaints  and 
infringements.  This  new  approach  introduced  a  benchmarking  system  in  order  to  seek 

4 

See http://europa.eu.int/comm/internal_market/score/index_en.htm. 

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solutions more rapidly for important files. It also takes better into account the impact of the 
identified problems on the key objectives of internal market policy. Priority treatment is also 
given  to  those  problems  undermining  the  exercise  of  fundamental  freedoms  or  the  good 
functioning of secondary legislation. 

Freedom of establishment and free movement of services: the mains relevant sectors of action 
as in previous years were the posting of workers, the mobility of patients and reimbursement 
of  medical  costs,  the  establishment  of  pharmacies,  gambling,  authorisation  of  vehicle 
inspection organisations, setting up of shops, certification services, private security services. 

Regional  policy:  aid,  from  the  European  Regional  Development  Fund  to  programmes  or 
individual  Cohesion  Fund  projects,  is  based  on  the  principle  of  partnership;  i.e.  close 
collaboration  between  the  Commission  and  the  national  (and  regional)  authorities,  the  latter 
being legally responsible for the correctness of projects financed by the Funds, particularly by 
ensuring compliance with Community policies such as environment or internal market (public 
procurement Directive) and with the principles of sound financial management. 

In health and consumer protection the timely and correct implementation of EU health and 
consumer law remained a priority. 

The  inspections  carried  out  by  the  Food  and  Veterinary  Office  are  the  basis  of  a  close 
cooperation with Member States in order to achieve a high level of food safety, animal health, 
animal  welfare  and  plant  health.  The  Commission  did  not  hesitate  to  act  against  Member 
States  which  delay  the  implementation  of  action  plans  aimed  to  address  deficiencies,  which 
take inadequate action or in which major threats for human or animal health have been found. 

The  Commission  has  also  swiftly  taken  measures  in  the  field  of  legislation  concerning  the 
marketing of tobacco products.  

In  the  consumer  policy  area,  the  Commission  started  a  thorough  examination  of  the 
transposition  of  several  directives  with  the  purpose  to  achieve  a  uniform  application  of  a 
Community  legislation  that  adequately  defends  consumer  interests,  health  and  safety  in  the 
single market.  

The  number  of  cases  initiated  on  the  Commission's  own  initiative  increased  considerably 
during 2006. 

In  2006,  in  the  area  of  taxation  and  customs,  the  situation  was  as  follows.  In  the  area  of 
taxation, despite the good figures for notification of the transposition of directives and a more 
pro-active infringement policy regarding the control of the application of Community law, an 
important number of potential infringements still exists in domestic legislation.  

The  European  Court  of  Justice  case-law  in  direct  taxation  has  again  developed,  with  the 
increased  need  for  follow-up  by  the  Commission.  The  focus  has  been  on  cross-border 
dividend payments, in particular on withholding taxes on outbound dividends in cases, where 
dividends paid to residents are not taxed (discrimination and obstacle to investment). 

Regarding indirect taxation, the pro-active infringement policy resulted in the setting up of a 
plan within the framework of car taxation in order to detect and start if necessary infringement 
procedures  against  the  Member  States.  In  addition,  some  infringement  procedures  were 
launched as regards the application of reduced VAT rates, tax treatment of postal services and 

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action was also taken against the Member States that impose minimum retail selling prices on 
cigarettes. 

In energy and transport, the ratio of cases of failure to notify to other types of infringement 
(non-conformity, incorrect application) decreased to 35% of cases. This specific trend can be 
explained  by  the  efforts  made  in  checking  the  compliance  of  national  measures  transposing 
directives, which led to a large number of letters of formal notice (91) and reasoned opinions 
(53) sent out in non-compliance cases. 

In the energy area, the correct application of the two 2003 directives on the internal electricity 
and gas market which are fundamental to the opening up of the electricity and gas markets in 
the EU was examined. 

The  Commission  also  stepped  up  efforts  against  failures  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. 

In  the  transport  area,  the  correct  application  of  the  directive  on  road  pricing  and  the 
transposition  of  the  second  railway  package  directives  was  examined.  In  air  travel,  the 
Commission decided to refer one Member State to the Court for the failure to respect the EU 
legislation on the establishment of a national supervisory authority in the context of the single 
European sky. In maritime safety, action continued to be taken against Member States which 
failed  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. 

Member States which had not transposed the directives on working time in road transport and 
reporting of safety-related occurrences in air transport were referred to the Court of Justice. 

In  the  personnel  and  administration  field,  the  only  two  infringement  proceedings  opened 
against  Member  States  were  closed.  They  concerned  the  application  of  the  Staff  Regulations 
and  in  particular  the  possibility  for  staff  to  obtain  the  transfer  of  acquired  retirement  pension 
rights to the Community scheme. 

In the budgetary area, the Commission has followed up all cases where infringements of EC 
legislation result in incorrect or late payment of own resources and other receipts, taking legal 
action where preliminary correspondence or discussions in the Advisory Committee for Own 
Resources could not solve the problem.  

In the area of Community statistics, in 2006, the application of Community legislation can 
be considered satisfactory and no new infringement cases were opened. 

In  the  area  of  Enlargement,  a  case  concerning  the  incorrect  application  of  the  association 
agreement with Turkey was referred to the Court for discrimination against Turkish workers 
wishing to extend their residence permits. 

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