REPORT FROM THE COMMISSION Monitoring the application of European Union law 2017 Annual Report
Date: 2018-07-12
Institutions: European Commission, Secretariat-General
Subjects: EU Member State, EU energy policy, EU migration policy, Economic and Monetary Union, activity report, digital single market, fundamental rights, infringement procedure (EU), job creation, national implementing measure

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 12.7.2018 COM(2018) 540 final  REPORT FROM THE COMMISSION Monitoring the application of European Union law 2017 Annual Report {SWD(2018) 377 final} - {SWD(2018) 378 final} - {SWD(2018) 379 final}  
 
 
Monitoring the application of European Union law 
2017 Annual Report 

Foreword .......................................................................................................................................... 2 

Enforcement in priority policy areas ................................................................................................. 4 

1.  A new boost for jobs, growth and investment ......................................................................... 7 

2.  A connected Digital Single Market ........................................................................................ 13 

3.  A resilient Energy Union with a forward-looking climate change policy ................................ 16 

4.  A deeper and fairer internal market with a strengthened industrial base .............................. 19 

5.  A deeper and fairer Economic and Monetary Union ............................................................. 29 

6.  An area of justice and fundamental rights based on mutual trust ......................................... 31 

7. 

Towards a new policy on migration ....................................................................................... 35 

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Monitoring the application of European Union law 
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Foreword 

It was one of my great predecessors, Walter Hallstein, who said that the European Union was at its 
heart  a  Community  of  Law.  Those  words  drove  me  to  take  up  legal  studies  and  then  shaped  my 
career in politics. And in my eyes those words are as true today as they ever were. The law remains 
our best tool to fight for fairness, to defend our freedoms and to deliver for our citizens. 

This is why when I took up office in November 2014, I promised to take a more focused approach to 
policy and law-making from the start. We now strive to ensure that our policy proposals are based on 
evidence and public consultation. This way of working, the core of the Better Regulation agenda, aims 
to  ensure  that  every  measure  in  the  EU’s  rulebook  is  fit  for  purpose  and  as  easy  as  possible  to 
implement and apply. 

However,  any  rule,  no  matter  how  carefully  drafted  and  prepared,  is  only  as  effective  as  its 
implementation. This is why the Commission takes as much interest in ensuring that laws are properly 
applied as we do designing them in the first place. The key to effective implementation of EU law is 
the cooperation and communication between the Commission and the Member States. This is why I 
have always put dialogue first when it comes to enforcement issues. And it is why we will continue to 
support Member States in implementing EU law.  

At the same time, we need to take firm action against serious breaches of EU law. With that in mind, in 
2016  we  set  clear  priorities  in  our  work  on  infringement  cases  and  complaints.  Since  then,  our 
enforcement efforts focus on the most important breaches of EU law, where action at European level 
can bring real added value. Our role is on the one hand to assist Member States in implementing EU 
law  and  on  the  other  to  firmly  pursue serious  breaches  where  they  occur.  The  two  roles  go  hand  in 
hand. 

This  report  on  the  application  of  EU  law  in  2017  covers  the  first  year  of  this  new,  more  targeted 
approach. The first results show that the new approach is already bearing fruit.  

The free movement of workers is one of the EU’s biggest achievements, but Europeans do not always 
feel that it happens in a fair way. For this reason, we had put in place rules in 2014 entering into force 
in  2016  on  enforcement  of  the  posting  of  workers  directive  that  equip  national  authorities  with 
additional  tools  to  help  fight  abuse,  fraud  and  undeclared  work.  In  2017,  the  Commission  used  its 
enforcement  powers  to  ensure  that  Member  States  are  implementing  these  rules  properly  and 
effectively.  We  also  used  our  infringement  tools  in  the  area  of  consumer  protection.  This  makes  a 
tangible difference to people's lives, for example by ensuring that holidaymakers on package tours get 
their money back if their package tour operator goes bankrupt. 

Enforcement  is  also  making  a  difference  in  the  online  world.  An  increasing  number  of  citizens  are 
increasingly  concerned  about  the  protection  of  their  personal  data.  This  is  why  we  introduced  new 
rules that have now set a new global standard in protecting the privacy of citizens. Throughout 2017, 
we worked closely with the Member States to prepare the ground for the entry into application of these 
rules in May 2018. This illustrates the value we attach to supporting Member States in complying with 
EU law as early as possible. 

We took the same approach when it comes to rules that make us safer and protect taxpayers' money. 
This Commission has stepped up the fight against money laundering and terrorism financing to ensure 
that Member States work better together to stop cross-border crime of this nature. We supported this 
throughout 2017 by acting firmly to make sure that the new EU Anti-Money Laundering legislation is 
properly transposed into national legislation. 

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These examples show how laws can make a difference and how proper enforcement can make sure 
that  difference  is  felt  in  the  daily  lives of  Europeans.  This  is  what  it  means  to  be  in a  Community  of 
Law. 

European Commission President 

Jean-Claude Juncker 

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Enforcement is key for the proper implementation of EU policy  

The European Union can deliver on its policies only if the Member States apply and implement EU law 
correctly and without undue delay. The Commission uses a wide array of tools, including infringement 
procedures, to make sure that the objectives of EU policies are achieved on the ground. 

A more strategic approach to enforcement of EU rules 

In  its  Communication  EU  law:  Better  results  through  better  application,  the  Commission  has 
announced  a  new  approach  to  its  infringement  policy.  As  a  matter  of  priority,  the  Commission  will 
target problems where its enforcement action can make a real difference and provide real added value 
to individuals and businesses. 

For instance, the EU Single Market provides enormous opportunities for European businesses and a 
greater  choice  and  lower  prices  for  consumers.  It  enables  people  to  travel,  live,  work  and  study 
wherever they wish. But these benefits do not materialise if Member States do not apply or implement 
single market rules, or if the rules are undermined by other barriers. 

In  the  division  of  responsibilities  between  the  European  institutions,  the  European  Commission  has 
general  responsibility  to  initiate  the  legislative  process.  The  Council  and  the  European  Parliament 
decide on the Commission’s proposals. The Member States are responsible for the timely and correct 
application, implementation and  enforcement of EU law  in the national legal order. The Commission 
closes this circle: once its proposals are adopted as EU law, it monitors whether the Member States 
are applying this law correctly and takes action if they are not. 

Under  the  Inter-institutional  Agreement  on  Better  Law-Making,  the  three  institutions  have  agreed  to 
deliver to EU citizens open, clear and accessible EU legislation which can be effectively implemented. 
The Commission works in partnership with the Member States to ensure that this is the case. It does 
so  by  preparing  implementation  plans  to  assist  the  Member  States  in  implementing  EU  law.  When 
preparing  proposals  for  directives,  the  Commission  discusses  with  the  Member  States  whether 
‘explanatory  documents’  —  documents  explaining  how  they  have  transposed  a  given  directive  into 
their  law  —  are  needed.  This  dialogue  continues  throughout  the  legislative  procedures  and  the 
subsequent stages of transposition, implementation and application of EU law. 

In line with the commitments made in the communications on a  Single Market strategy and EU law: 
Better results through better application, the Commission organised compliance dialogue meetings in 
2017  with  three  Member  States:  Belgium,  Ireland  and  Italy.  The  discussions  focused  on  the 
compliance  and  transposition  deficits  identified  in  the  Internal  Market  Scoreboard,  ongoing 
infringement  procedures  and  new  developments  under  the  Single  Market  strategy.  The  dialogues 
proved  useful  for  gathering  country  knowledge  and  assessing  the  situation  of  the  Single  Market 
legislation in these Member States.  

Once  agreed,  Member  States  must  implement  and  apply  EU  legislation  effectively  and  on  time  to 
deliver its intended benefits to the public.  

The  Commission’s  new  enforcement  policy  underpins  the  achievement  of  EU  policy  objectives.  The 
Commission should  therefore  act  firmly  and  quickly when  infringements  obstruct  the  achievement  of 
EU policy objectives. 

In 2017, the Commission took swift action and launched infringement procedures against 16 Member 
States who failed to adopt measures to reduce the use of lightweight plastic carrier bags, as required 
by the Plastic Bags Directive. According to EU rules, Member States should achieve this objective by 
putting  a  price  on  lightweight  plastic  carrier  bags  and/or  by  ensuring  that  a  limited  number  of  these 
bags are used per person a year.  

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The Commission has set out clear priorities which will guide its actions in pursuing alleged breaches of 
EU law. In line with these priorities and its political commitment to be more strategic in enforcing EU 
law, the Commission closed cases when that appeared appropriate from a policy point of view. 

In 2017, the European Commission closed infringement procedures and complaints against a number 
of Member States in the area of gambling. 
The Commission does not consider it a priority to use its infringement powers to promote an EU Single 
Market in the area of online gambling services. 
The  Court  of  Justice  of  the  European  Union  has  repeatedly  recognised  Member  States’  rights  to 
restrict  gambling  services  where  necessary  to  protect  public  interest  objectives  such  as  protecting 
minors and combating gambling addiction and irregularities and fraud. 
The  Commission  acknowledges  the  broader  political  legitimacy  of  the  public  interest  objectives  that 
Member States are pursuing when regulating gambling services. 
The  Commission  will  continue  to  support  Member  States  in  their  efforts  to  modernise  their  national 
legal  frameworks  for  online  gambling  and  to  facilitate  cooperation  between  national  gambling 
regulators. At the same time, and in the light of the numerous judgments of the Court of Justice of the 
EU on national gambling legislation, the Commission considers that complaints in the gambling sector 
can be handled more efficiently by national courts than by the Commission. 

To ensure swifter compliance where it matters, the Commission has adjusted its policy on the use of 
the EU Pilot mechanism. Under this mechanism the Commission informally raises its concerns about 
possible  infringements  with  the  Member  States  before  launching  formal  proceedings.  EU  Pilot  is  no 
longer the default mechanism to engage in dialogue with Member States on alleged breaches of EU 
law. Instead, the Commission will normally launch infringement procedures without relying on EU Pilot. 
This  explains  the  considerable  decrease  in  the  number  of  new  EU  Pilot  procedures  that  the 
Commission launched in 2017. 

As  the  Commission  sets  a  high  priority  on  investigating  cases  where  Member  States  failed  to 
communicate their national measures transposing directives, it strengthened its sanctions regime for 
such cases. When such infringement cases are brought to the Court of Justice, the Commission will 
systematically  ask  the  Court  to  impose  a  lump  sum  as  well  as  a  periodic  penalty  payment.  The 
Commission  will  apply  this  policy  for  the  infringement  procedures  which  were  launched  after  the 
publication  of  the  Communication  EU  law:  Better  results  through  better  application  on  19 January 
2017. Given the  short period  of  time  that  has  elapsed since  then,  the Commission did not  refer  any 
case to the Court under the new sanctions regime in 2017. 

The Commission continues to place great value on help from members of the public, businesses and 
other stakeholders in detecting breaches of EU law. At the same time, it is equally important that the 
public understands the nature of the infringement process and sets its expectations accordingly. The 
primary  purpose  of  the  infringement procedure  is  to  ensure compliance with EU  law  by  the  Member 
State, and not to provide for individual redress or compensation. Certain categories of cases can often 
be satisfactorily dealt with by other, more appropriate mechanisms at EU and national level, such as 
SOLVIT, national courts and national ombudsmen. The Communication EU law: Better results through 
better  application  has  laid  the  groundwork  by  committing  to  strengthening  cooperation  with  the 
European  Network  of  Ombudsmen  in  order  to  promote  good  administration  in  the  application  of  EU 
law at national level. 

In 2017 the Commission built on this commitment. Together with the European Ombudsman and the 
European Network of Ombudsmen it organised a workshop to increase exchanges of information on 
both ongoing investigations of breaches of EU law and redress mechanisms available to members of 
the public. 

National parliaments play an essential role in implementing EU legislation in the national legal order. 
Therefore,  the  Commission  can  only  welcome  their  increased  interest  in  issues  related  to  the 

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implementation, application and effective enforcement of EU law. In addition to its regular exchanges 
with  national  parliaments  on  legislative  proposals,  the  Commission  enhanced  this  dialogue  by 
including specific enforcement-related issues. In 2017, the Commission used this opportunity to clarify 
its new enforcement policy in its exchanges with the German and Czech national parliaments. 

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1.  A new boost for jobs, growth and investment 
The  Juncker  Commission’s  first  priority  is  to  stimulate  investment  that  creates  jobs  and  to  strengthen 
Europe’s  competitiveness.  However,  efforts  to  create  the  right  regulatory  environment  to  support 
businesses and job creation are undermined if the Member States do not implement EU rules correctly 
and on time. 

Ensuring fair working conditions across EU 

The  free  movement  of  workers 
in the Single Market goes hand 
in  hand  with  ensuring  a  similar 
level  of  protection  at  work 
across  the  EU.  The  Working 
Time  Directive 
lays  down 
minimum  safety  and  health 
for  organising 
requirements 
time.  Long  working 
working 
hours  and 
rest 
insufficient 
(particularly  over  prolonged 
periods)  can  have  damaging 
effects on the health of workers 
rates  of 
(such  as  higher 
mistakes, 
and 
accidents 
increased  stress  and  fatigue, 

and short- and long-term health risks). 

In  April  2017  the  Commission  presented  an  ‘Interpretative  Communication’  on  the  Working  Time 
Directive  and  a  report  on  how  it  is  being  implemented.  These  instruments  aim  at  clarifying  the 
applicable  legislation.  In  doing  so,  the  aim  of  the  Communication  is  primarily  to  assist  national 
authorities, legal practitioners and social partners in interpreting the directive. 

The uneven application of the Working Time Directive across the Member States has left categories of 
workers without the protection it offers. In the public sector, armed forces, police and civil protection 
services such as prison staff and public service firefighters have not always reaped the benefits of the 
directive. As for the private sector, in some Member States domestic workers could not always benefit 
from their rights under the directive either. The right to paid annual leave — one of the directive’s core 
elements — has not always been integrated correctly into national law. 

After the Commission launched infringement procedures, France and Spain amended their legislation 
in 2017 to extend the benefits of the Working Time Directive to certain categories of members of their 
police forces.  

Over the past 20 years the Commission’s enforcement actions have addressed such shortcomings. In 
addition,  more  than  50  judgments  and  orders  of  the  Court  of  Justice  of  the  EU  have  interpreted  the 
provisions of the Working Time Directive. The impact of these interpretations is considerable: they are 
used by national courts in interpreting national law and thus imposed on employers. 

The  EU  legislation  on  occupational  safety  and  health  (OSH)  establishes  high  standards  of  worker 
protection against health and safety risks at work. It contributes to preventing work-related illness and 
accidents,  which  helps  to  improve  people’s  lives.  In  2017  the  Commission’s  enforcement  actions  in 
this area made Member States bring into force national legislation to ensure compliance with EU law, 
in particular with the Directive on occupational exposure to electromagnetic fields. 

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Enforcing environmental rules 

the  Commission 

In  2017, 
action 
implementation 
legislation. 

to  address 
of 

the 

took 
legal 
inadequate 
environmental 

The  Commission  referred  Poland  to  the  Court  of  Justice  of  the  EU  over  its  increased  logging  in  the 
Białowieża  Forest,  which  is  one  of  Europe’s  last remaining  primeval  forests and  a  protected  ‘Natura 
2000’ site. The site protects species and habitats that are dependent on old-growth forests, including 
the availability of dead wood. For some of these species, the Białowieża Forest is the most important 
and  the  last  remaining  site  in  Poland.  As  logging  operations  started  on  a  significant  scale  the 
Commission also asked the Court to impose interim measures ordering Poland to suspend the works 
immediately. The Court granted the Commission’s request and ordered Poland to immediately cease 
its active forest management operations in the Białowieża Forest, except in exceptional cases where 
they  are  strictly  necessary  to  ensure  public  safety.  The  Court  also  confirmed  for  the  first  time  that 
Poland could face financial penalties if it did not comply with the decision of the Court. 

Improving air quality remains a major challenge. Despite the obligation for Member States  to ensure 
good air quality for the public, air  quality has been a problem in many places for a number of years 
now. Every year, poor air quality causes more deaths than road traffic accidents. 

In  2017  a  total  of  30  infringement  procedures  over  excessive  levels  of  particulates  (PM10),  nitrogen 
dioxide (NO2) and sulphur dioxide (SO2) in the air were under way. These pollutants, mostly resulting 
from  human  activities  such  as  transport,  industry  and  domestic  heating,  can  cause  respiratory 
problems, lung cancer and premature death. In a landmark ruling against Bulgaria over exceedance of 
limits on pollution by particulates, the Court of Justice upheld the Commission’s enforcement actions. 
The  Commission  will  continue  to  pursue  the  infringement  procedures  over  air  quality  under  way 
against the other Member States. 

Member  States  also  need  to  have  adequate  systems  to  collect  and  treat  urban  waste  water  as 
untreated water poses risks to human health, inland waters and the marine environment. 

In 2017, the Court of Justice upheld the Commission’s arguments in cases brought against the United 
Kingdom and Greece over insufficient urban waste water treatment. 

The Commission actively pursued infringement actions in 2017 against the Member States which did 
not  implement  the  revised  Environmental  Impact  Assessment  Directive  in  their  national  legislation. 
This directive simplifies the rules for assessing the potential effects of projects on the environment. 

At the same time, the Commission worked closely with national authorities and other stakeholders to 
support  compliance  and  resolve  problems  at  an  early  stage.  Environmental  Implementation  Review 
country  reports  were  issued  in  February  2017  which  gave  the  first  ever  comprehensive  overview  of 
how Member States apply EU environmental policies and laws on the ground. On the basis of these 
reports,  the  Commission  started  country  dialogues  with  the  Member  States.  In  addition,  the 

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Commission  set  up  a  peer-to-peer  instrument  to  help  the  sharing  of  expertise  between  national, 
regional and local public authorities in charge of implementing EU environmental law and policy. 

Enforcing the agricultural rules 

to 

farming 

The  common  agricultural  policy  and 
the  enforcement  of  related  EU  rules 
provide  support  for  farm  income  and 
become  more 
for 
environment-friendly.  These  actions 
also  help  to  increase  the  sector’s 
resource 
competitiveness 
efficiency,  and  to  support  life  in  rural 
areas more generally. 

and 

In  2017  the  Commission’s  actions  to 
enforce  the  agricultural  rules  focused 
on monitoring how Member States are 
implementing 
reform  of  direct 
payments.  The  Commission  started 
bilateral  dialogues  with  the  Member  States  which  were  incorrectly  using  financial  aid  under  the 
Voluntary Coupled Support scheme to support types of farming or sectors facing other difficulties than 
the risk of abandonment or of decline of production. 

the 

The  difficulties  encountered  in  practice  showed  that  the  applicable  rules  needed  to  be  clarified.  The 
Commission  therefore  adopted  a  regulation  in  December  2017  which  adjusted  the  conditions  under 
which Member States may grant financial support to farmers through the Voluntary Coupled Support 
scheme. 

Through dialogue, the Commission persuaded the national authorities of a Member State to change a 
discriminatory provision which prevented people with disabilities from applying for financial support to 
modernise their agricultural holdings. 

Caseins, a substance found in milk, have a wide variety of uses in industry. They are used in many 
industries as a binding agent, are a major component of cheese and are used as a food additive. The 
EU labelling rules on caseins and caseinates facilitate the free movement of these products by food 
business operators. 

The Commission actively followed up on infringement procedures against Cyprus, Italy and the United 
Kingdom,  as  they  did  not  implement  the  marketing  standards  for  caseins  and  caseinates  in  their 
national legislation on time. 

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Enforcing the rules on maritime affairs and fisheries 

is  also  necessary 

To  help  Europe  make 
the 
transition  to  a  more  ‘circular’ 
economy  which  uses  natural 
resources  more  sustainably, 
fish 
be 
resources  must 
managed  in  a  sustainable  way. 
This 
to 
ensure  jobs  and  growth  in  the 
fisheries sector in the long term. 
The Commission’s  enforcement 
strategy 
therefore 
in  2017 
concentrated  on  the  areas  of 
and 
conservation 
fisheries 
to 
that  are  essential 
control 
building a circular economy. 

If  Member  States  do  not  take  immediate  and  effective  measures  to  prevent  illegal,  unreported  and 
unregulated fishing, this makes it harder for the EU to combat such practices around the globe. 

The  Commission  launched  infringement  procedures  against  Portugal  as  fishing  vessels  flying  the 
Portuguese  flag  and  operating  in  the  waters  under  the  responsibility  of  the  Northwest  Atlantic 
Fisheries  Organisation were repeatedly and  for a long time involved in fishing activities that violated 
this organisation’s conservation measures. 

The  national  systems  for  monitoring  fisheries  must  provide  for  dissuasive  sanctions  for  serious 
infringements of the rules of the EU common fisheries policy. The Commission took action to remedy 
systemic deficiencies that hamper the detection of illegal fishing activities, which harms sustainability. 

Under the common fisheries policy, EU fishing vessels have equal access to waters and resources in 
all EU waters. Member States must ensure that vessels flying the flag of other EU countries can freely 
access the waters under their jurisdiction to fish. 

The Commission took further action in the infringement procedure against Romania as the latter failed 
to grant fishing vessels from other Member States equal access to its waters. 

The  competition  for  space  in  our  waters  —  for  renewable  energy  equipment,  aquaculture  and  other 
uses — has made it necessary to manage our seas more coherently. Maritime spatial planning works 
across borders and sectors to make sure that all human activity at sea takes place in an efficient, safe 
and sustainable way. The Commission took steps in 2017 to ensure that the EU common framework 
for maritime spatial planning is implemented on time in the national legislation of the Member States. 

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Enforcing the rules on regional policy 

policy 

The  European  Structural  and 
Investment  Funds  support 
investments  in  key  growth-
generating 
areas 
across the EU. To make sure 
that  the  Funds  are  used  as 
effectively 
possible, 
as 
Member  States  must  comply 
with  certain  preconditions. 
The  Commission  verifies  that 
these are met. Investments in 
Member States must abide by 
the  same  EU 
laws  and 
standards that apply across a 
variety  of  sectors,  such  as  in 
environmental, 
the 

employment or research sectors. 

In  2017  the  Commission’s  action  focused  on  enforcing  the  preconditions  in  the  areas  of  public 
procurement,  State  aid,  comprehensive  plans  for  transport  investments,  and  in  the  water  and  waste 
sector. 

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Fighting fraud against the EU budget 

the  Commission 
In  2017 
continued 
follow  up  on 
to 
cases which resulted in a loss 
of income for the EU budget.  

This 

The  European  Anti-Fraud 
Office  (OLAF)  published  a 
report  concerning  a  major 
fraud 
case  of  customs 
in 
involves 
2017. 
international  organised  crime 
groups  scouting  ports  in  the 
EU  with  the  weakest  controls 
in  order  to  get  away  with 
falsely  declaring  low  values 
footwear 
for 
imported from China. Since both customs duties and value added tax are calculated on the basis of 
the  value  of  imported  goods  the  fraudsters  can  thus  benefit  illegally  from  the  lack  of  appropriate 
controls  by  paying  much  less  than  legally  due.  OLAF’s  investigation  revealed  that  the  single  most 
significant hub for this fraudulent traffic was located in the United Kingdom. As the goods were mainly 
destined  for  the  markets  of  other  Member  States,  including  France,  Spain,  Germany  and  Italy,  the 
revenues  related  to  the  value  added  tax  to  be  perceived  by  those  Member  States  were  significantly 
affected. In 2017 the Commission’s inspections confirmed the conclusions of OLAF’s investigation and 
the  ongoing  fraud  in  the  United  Kingdom  over  2011-2017.  The  Commission  again  requested  the 
United Kingdom authorities to finally implement effective remedial measures to prevent the import of 
heavily  undervalued  textiles  and  footwear  from  China.  These  measures  had  already  been 
implemented  by  other  Member  States  following  the  Commission’s  recommendations  to  all  Member 
States including the United Kingdom. The Commission took appropriate steps to protect the financial 
interests  of  the  Union  and  requested  the  United  Kingdom  to  take  the  necessary  measures  to  make 
available all amounts due to the EU budget. 

textiles  and 

The Commission referred the Netherlands and the United Kingdom to the Court of Justice for failing to 
pay  a  total  of  EUR  20  million  of customs  duties  lost by  the  EU budget  (less collection costs).  In  the 
case  of  both  Member  States  the  loss  of  traditional  own  resources  to  the  EU  budget  comes  from 
wrongly  issued  certificates  by  their  overseas  countries  and  territories.  In  the  case  of  the  United 
Kingdom, aluminium was imported from non-EU countries to an overseas territory (Anguilla) and then 
re-exported to the EU. The import wrongly benefited from an exemption from EU customs duties, as 
'EXP' certificates should not have been issued by Anguilla. As regards the Netherlands, imports of milk 
powder and rice from Curaçao in 1997-2000 and of groats and rice products from Aruba in 2002-2003 
were  wrongly  exempted  from  EU  customs  duties  when  imported  to  Europe,  as  'EUR.  1'  certificates 
should not have been issued by these territories. Curaçao and Aruba are both overseas countries of 
the  Netherlands.  If  a  Member  State  does  not  make  its  full  contribution  to  the  EU  budget,  the  other 
Member States must compensate for the shortfall. 

. 

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2.  A connected Digital Single Market 

The Digital Single Market strategy aims to remove online barriers that make people in the EU miss out 
on goods and services. 

Enforcing the ‘roam like at home’ principle 

Since 15 June 2017 the ‘roam 
like at home’ rules apply to all 
EU 
travellers.  This  means 
they  pay  the  same  price  for 
mobile  calls,  text  messages 
and 
visiting 
another  Member  State  as 
when 
their 
they  are 
Member State of residence. 

data  when 

in 

In  2017  the  Commission  closely  monitored  that  the  Member  States  were  applying  the  EU  Roaming 
Regulation  correctly.  The  monitoring  shows  broadly  successful  implementation  of  the  new  roaming 
rules and a considerable increase in travellers' roaming traffic since 15 June 2017.   

Guaranteeing trust in online transactions 

The  eSignature,  which  makes 
it  possible  to  sign  documents 
in  the  online  world  much  like 
one  signs  a  document  with  a 
pen  in  the  offline  world,  is 
already  a  reality  in  the  EU. 
However,  trust  services  other 
than 
are 
necessary  to  make  electronic 
in  cross-border 
transactions 
scenarios (as at national level) 
secure and legally valid.  

eSignature 

the 

In  2017  the  Commission  took  action  to  ensure  that  the  EU  Regulation  on  trust  services  is  correctly 
applied across the EU. It also acted to ensure that electronic signatures, electronic seals, time stamps, 
electronic delivery services and website authentication work across borders and have the same legal 
status across the EU as traditional paper-based processes. 

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Ensuring better internet connectivity 

The 
Cost 
Broadband 
Reduction Directive helps to 
reduce  the  cost  of  rolling 
out  high-speed  internet  by 
up  to  30 %,  which  means 
that  more  people  in  the  EU 
can get access to it. Proper 
the 
implementation 
Directive 
for 
completing  the  EU’s  Digital 
Single 
and 
increasing connectivity. 

is  essential 

Market 

of 

After  the  Commission  had  launched  infringement  procedures,  most  of  the  Member  States  had 
implemented  the  Broadband  Cost  Reduction  Directive  into  national  law.  Cases  against  Belgium  and 
Slovakia were still pending before the Court of Justice at the end of 2017. 

Ensuring protection of copyright and related rights 

The  Collective  Rights 
Directive 
Management 
improves  the  governance 
and 
of 
transparency 
management 
collective 
These 
organisations. 
organisations 
manage 
copyright and related rights 
on  behalf  of  right  holders, 
authors, 
such 
composers  or  performers, 
Europe. 
across 
They 
rights, 
licensing 
facilitate 
collection  and  distribution 
of 
they 
and 
promote 
the  diversity  of 
cultural  expression.  The 
Directive  contributes  as  well  to  wider  availability  and  choice  of  online  music  in  Europe,  including 
across national borders. 

royalties 

as 

The  Commission  took  further  steps  in  the  infringement  procedures  against  Bulgaria,  Spain, 
Luxembourg,  Poland  and  Romania  for  failing  to  implement  the  Collective  Rights  Management 
Directive on time. 

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The  application  of  copyright  rules  to  a  peer-to-peer  file-sharing  website  has  been  clarified  in  a 
judgment of the Court of Justice of the EU on Pirate Bay. The Pirate Bay allows users to share and 
upload, in segments ('torrents'), copyright-protected works stored on their computers. The rightholders 
have, as a general rule, not given their consent to the operators and users of this kind of website to 
share their works. The Court ruled that making available and managing an online platform for sharing 
works,  such  as  The  Pirate  Bay,  may  constitute  an  infringement  of  EU  copyright  rules.  Even  if  the 
copyright-protected works in question are placed online by the users of the online sharing platform and 
not by the platform itself, the operators of that platform play an essential role in making those works 
available to all the platform’s users. 

At the end of the year the Commission also adopted the Intellectual Property package. This provides 
guidance on the interpretation of the Enforcement of Intellectual Property Rights  Directive, making it 
easier for the Member States to implement the directive.  

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3.  A resilient Energy Union with a forward-looking climate change policy 

The European Energy Union means ensuring secure, affordable and clean energy for households and 
businesses by allowing the free flow of energy across national borders within the EU. It also stimulates 
the development of new technologies and renewed infrastructure in order to cut household bills, create 
jobs  and  boost  growth.  The  Energy  Union  will  lead  to  sustainable  energy  consumption  by  reducing 
greenhouse gas emissions, pollution and our dependence on fossil fuels. 

Leading the energy transition towards a safe, secure and sustainable energy sector with the 
consumer at its centre 

for 

the 

prices 

A  competitive  environment 
for 
energy suppliers leads to affordable 
energy 
homes, 
businesses  and  industries.  For  this 
reason, 
Commission’s 
enforcement  action  in  the  energy 
sector 
focused,  among 
other  things,  on  the  implementation 
the  Third  Energy  Package 
of 
TEN-E 
Directives 
Regulation. 

in  2017 

and 

the 

Proper  implementation  of  the  EU 
rules  in  the  energy  sector  is  key  to 
reducing energy consumption and to 
making  it  more  sustainable.  It  also 
to  reduce  carbon  dioxide 
helps 
emissions and dependence on fossil 
fuels,  while  ensuring  at  the  same 
time  that  the  provision  of  energy  is 
reliable,  in  particular  to  the  most 
The 
vulnerable 
Commission’s  enforcement  actions  concerning 
the  Energy 
the  Energy  Efficiency  Directive, 
Performance of Buildings Directive, the Renewable Energy Directive and the Security of Gas Supply 
Regulation were targeted to support these objectives. 

consumers. 

The  Energy  Efficiency  Directive  and  the  Energy  Performance  of  Buildings  Directive  impose  a  set  of 
rules for providing reliable information to consumers on their energy needs and consumption patterns. 
These  rules  were  enforced  in  2017  through  infringement  procedures  against  the  Czech  Republic, 
Greece, Spain, Latvia, Malta and the  Netherlands.  

The Commission undertook a number of enforcement measures to ensure that Member States have in 
place  a  national  framework  for  the  safe  and  responsible  management  of  spent  fuel  and  radioactive 
waste  and  to  improve  the  legal  framework  on  radioactive  substances  in  drinking  water.  The 
enforcement of safety requirements for offshore oil and gas operations was also a priority. 

To  this  end,  the  Commission  took  further  steps  in  the  infringement  actions  against  the  Czech 
Republic, Croatia, Italy, Austria and Portugal for failing to adopt national programmes for radioactive 
waste and spent fuel management compliant with EU standards. In addition, the Commission opened 
infringement procedures against  Belgium, Denmark, Luxembourg, Austria and Slovenia for failure to 
implement the amending Nuclear Safety Directive in their national legislation on time.  

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In 2016 and 2017, the Commission has stepped up its action in the energy sector through a number of 
legislative  proposals.  Two  of  these  proposals  (the  Energy  Labelling  Regulation  and  the  Security  of 
Gas Supply Regulation) were adopted by the European Parliament and Council in 2017. 

Implementing the Paris Agreement on climate change 

In  2015,  at  the  Paris  climate 
change  conference,  the  EU 
and  its  partners  built  a  broad 
coalition of high ambition that 
led  to  the  Paris  Agreement. 
The  Agreement  sets  out  a 
global  action  plan  to  put  the 
world  on  track  to  avoiding 
dangerous  climate  change. 
the  Paris 
To 
Agreement, 
the  European 
Commission  has  proposed 
an ambitious set of economy-
at 
wide 
reducing 
EU’s 
greenhouse  gas  emissions 
by  at  least  40 %  below  1990 
levels  by  2030.  To  achieve 
these  targets  it  is  important 

implement 

targets 

aimed 

the 

that existing climate legislation is fully implemented and strictly enforced. 

The Commission therefore closely monitored the application of the existing climate change legislation 
in 2017. 

As  only  five  Member  States  transposed  the  Directive  on  fuel  quality  into  national  laws  on  time,  the 
Commission  launched  infringement  procedures  against  each  of  the  remaining  Member  States.  The 
Directive  tackles  the  problem  of  greenhouse  gas  emissions  from  the  use  of  polluting  road  transport 
fuels by requiring suppliers to reduce the average emissions of such fuels. As the transport sector is 
one  of  the  EU’s  biggest  carbon  dioxide  emitters,  it  is  important  that  Member  States  transpose  the 
Directive within the given deadline. 

The  Commission  also  initiated  bilateral  dialogues  to  ensure  that  Member  States  comply  with  the 
Directive  on  the  geological  storage  of  carbon  dioxide.  Carbon  capture  and  geological  storage  is  a 
technique  for  trapping  carbon  dioxide  from  large  sources  such  as  power  plants,  compressing  it  and 
transporting  it  to  a  suitable  storage  site  where  it  is  injected  into  the  ground.  This  technology  has 
significant potential to help limit greenhouse gas emissions in Europe. 

The  Commission  took  similar  actions  to  ensure  that  Member  States  apply  the  Regulation  on 
fluorinated greenhouse gases. This aims to reduce emissions of man-made gases used in a range of 
industrial applications. These are very powerful greenhouse gases that can stay in the atmosphere for 
centuries. 

The  Commission  was  also  active  in  monitoring  Member  States’  compliance  with  the  Regulation 
creating  an  EU-wide  framework  for  the  monitoring,  reporting  and  verification  of  carbon  dioxide 
emissions from maritime transport. Reducing greenhouse gas emissions from shipping is an important 
step towards meeting the targets of the Paris Agreement. 

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Accelerating  the  deployment  of  infrastructure  for  alternative  fuels  is  essential  for  making  transport 
clean  and  competitive  across  Europe.  In  November  2017  the  Commission  adopted  a  Clean  Mobility 
Package  aimed  at  reinforcing  the  EU’s  global  leadership  in  clean  vehicles.  The  Directive  on  the 
deployment  of  alternative  fuels  infrastructure  aims  to  establish  a  common  framework  for  the  large-
scale  roll-out  of  infrastructure  for  alternative  fuels  across  Europe.  The  Directive  helps  to  reduce 
transport’s  dependence  on  oil,  limit  its  environmental  impact  and  strengthen  Europe’s  leadership  in 
combating  climate  change.  It  sets  out  minimum  requirements  for  building  the  alternative  fuels 
infrastructure, including recharging points for electric vehicles and refuelling points for natural gas and 
hydrogen vehicles. 

As  21  Member  States  failed  to  implement  the  Directive  on  the  deployment  of  alternative  fuels 
infrastructure on time, the Commission launched infringement procedures against each of them. 

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4.  A deeper and fairer internal market with a strengthened industrial base 

The  EU  Single  Market  remains  Europe’s  most  precious  asset  for  individuals  and  businesses.  It 
provides enormous opportunities for European businesses as well as greater choice and lower prices 
for consumers. It enables people to travel, live, work and study wherever they wish. But these benefits 
cannot be enjoyed when single market rules are not applied or implemented, or if they are undermined 
by other barriers. 

Ensuring undistorted competition 

Anyone  has  a  right  to  full 
compensation  for  the  harm 
them  by  an 
caused 
to 
infringement 
the  EU 
of 
antitrust  rules,  such  as  the 
operation of a cartel or abuse 
of  a  dominant  position  in  the 
market.  However,  in  practice 
particularly 
most 
victims, 
small 
and  medium-sized 
enterprises  and  consumers, 
rarely  obtain  compensation 
infringers.  Full 
from 
compensation  is  an  EU  right, 
but  exercising  it  is  governed 
by national rules. These often 
make it expensive and difficult to bring actions for antitrust damages. The Antitrust Damages Directive 
adopted in 2014 helps individuals and companies claim damages, for example by giving them easier 
access  to  evidence  to  prove  the  damage  suffered  and  by  granting  them  more  time  to  lodge  their 
claims before national courts. 

the 

In 2017, the Commission monitored the implementation of the directive in national legislation. 

In January 2017 the Commission launched infringement procedures against 21 Member  States over 
the  Antitrust  Damages  Directive.  Since  then,  most  of  them  have  taken  measures  to  implement  the 
directive  in  their  national  law.  By  the  end  of  2017,  only  Bulgaria,  Greece  and  Portugal  had  not  yet 
adopted the necessary measures. 

As  regards  the  public  enforcement  of  antitrust  rules,  in  December  2017  Greece  proposed  a  set  of 
remedies to the Commission which give third parties access to lignite-fired electricity generation. This 
seeks to address competition concerns identified by the Commission in a decision from 2008. 

Furthermore,  in  2017  the  Commission  continued  discussions  with  the  French  authorities  to  find 
suitable measures to address competition concerns which it had first raised in 2015. These relate to 
the fact that, by granting most of the country’s hydropower concessions to one company, France had 
maintained or strengthened that company’s dominance on the French electricity market in violation of 
EU competition rules. 

On  the  State  aid  front,  consistently  enforcing  its  decisions  against  State  aid  is  essential  to  the 
credibility of the Commission’s system of State aid control. 

The Commission filed a legal action against Greece for failing to implement a Commission decision of 
2008 requiring it to recover illegal State aid granted to Hellenic Shipyards. 

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Ensuring the free movement of workers 

time, 

EU  citizens  are  entitled  to 
work  in  whichever  Member 
State  they  choose.  At  the 
same 
the  rights  of 
workers who choose to work 
abroad  must  be  protected. 
the  Directive  on 
Under 
measures 
the 
facilitating 
exercise  of  rights  conferred 
on  workers  in  the  context  of 
freedom  of  movement 
for 
workers,  Member  States 
must  ensure  that  mobile  EU 
to 
workers  have  access 
effective  legal  protection  if 
their  rights  are  breached. 
Member  States  must  also  designate  one  or  more  bodies  to  promote  equal  treatment,  to  provide 
support and assistance to mobile EU workers and to promote active dialogue between social partners, 
non-governmental organisations and public authorities. 

In  2017  the  Commission  continued  infringement  actions  against  eight  Member  States  (Czech 
Republic,  Estonia,  Cyprus,  Lithuania,  Luxembourg,  Austria,  Portugal  and  Romania)  which  failed  to 
implement on time in their national legislation the obligations deriving from the Directive on measures 
facilitating  the  exercise  of  rights  conferred  on  workers  in  the  context  of  freedom  of  movement  for 
workers. As a result of this action all Member States took the necessary measures to implement the 
Directive before the end of 2017. 

Free movement is one of the biggest advantages of the Single Market, but it has to happen in a fair 
way.  To  avoid  social  dumping  in  the  provision  of  services,  the  Enforcement  Directive  on  Posting  of 
Workers  provides  national  authorities  with  the  tools  to  fight  abuse  and  fraud  and  to  improve  their 
administrative cooperation and the exchange of information. 

In 2017 the Commission used its enforcement powers to ensure that Member States are implementing 
the  Enforcement  Directive  on  Posting  of  Workers  in  their  national  legislation  without  delay.  It  took 
further  steps  in  the  infringement  procedures  launched  against  10  Member  States  (Czech  Republic, 
Cyprus, Spain, Croatia, Hungary, Luxembourg, Portugal, Romania, Slovenia and Sweden). As a result 
of this action all Member States took the required measures to implement the Directive before the end 
of 2017. 

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Ensuring the free movement of goods 

Under EU law national authorities are responsible for checking that a car type meets all EU standards 
before individual cars can be sold on the Single Market. When a car manufacturer breaches the legal 
requirements,  national  authorities  must  take  corrective  action  (such  as  ordering  a  recall)  and  must 
apply  effective,  dissuasive  and  proportionate  penalties  under  national  legislation.  The  Commission 
continued to monitor the enforcement of these rules by Member States in 2017. 

In  the  automobile  sector,  following  the  revelations  in  September  2015  that  Volkswagen  Group  used 
software  to  dodge  emissions  standards  for  certain  air  pollutants,  the  Commission  concluded  that 
several  Member  States  failed  to  establish  or  apply  penalty  systems  to  deter  car  manufacturers  from 
violating  car  emissions  legislation.  In  2017  the  Commission  took  further  steps  against  Germany, 
Greece, Spain, Luxembourg and United Kingdom for failure to fulfil their obligations under EU vehicle 
type-approval legislation. 
The  Commission  also  launched  an  infringement  procedure  against  Italy  for  failing  to  fulfil  its 
obligations under EU vehicle type-approval legislation with regard to Fiat Chrysler cars. 

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Ensuring the freedom of establishment 

The  Commission  closely  followed  the  changes  to  the  Higher  Education  Law  in  Hungary.  These 
changes added new requirements regarding: 

 

the  need  for  bilateral  agreements  between  Hungary  and  higher  education  institutions  from  non-
European Economic Area countries; and  

the need to provide higher education services also in the country of origin. 

 
The  Commission  launched  an  infringement  procedure  against  Hungary  as  these  amendments 
restricted EU and non-EU universities in their operations. 

Under  the  Professional  Qualifications  Directive,  EU  citizens  are  entitled  to  have  their  professional 
qualifications recognised in another Member State. 

The Commission’s intervention led the authorities in Ireland and Austria to recognise the professional 
qualifications of Croatian nurses. 

Following the Commission’s enforcement action, Poland removed the minimum tariffs between patent 
agents and their clients. The Commission referred Germany to the Court of Justice for imposing fixed 
tariffs on architects and engineers, which apply only to architects and engineers in Germany.  

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Improved information and assistance for citizens and businesses 

In  May  2017  the  Commission  adopted  a 
package of tools to improve the practical 
functioning  of  the  EU  Single  Market  for 
individuals and businesses. 

The  SOLVIT  Action  Plan  reinforces  the 
role  of  SOLVIT  as  a  practical  and 
informal means of redress where the EU 
rights  of  citizens  and  businesses  have 
been  breached  by  public  authorities  in  a 
cross-border situation. Under this plan, a 
complaint  submitted  to  the  Commission 
can be transferred to SOLVIT. 

time 

the  same 

the  Commission 
At 
adopted  an  ambitious  proposal  for  a 
Single  Digital  Gateway  that  answers  the 
demand  from  businesses,  members  of 
the  public  and  other  stakeholders  for 
better  access  to  the  Single  Market.  The 
Single  Digital  Gateway  will  give  users 
easy online access to information about EU rules and national rules, to procedures for complying with 
these rules, and to help and assistance at EU and national level. Cross-border users should be able to 
access  and  use  these  online  services  in  the same way  as  national  users.  The  Gateway will  support 
the  cross-border  application  of  the  ‘once  only’  principle  by  providing  a  mechanism  for  automated 
exchange of evidence across borders. The ‘once only’ principle aims to ensure that members of the 
public  and  businesses  are  requested  to  supply  the  same  information  only  once  to  a  public 
administration. 

The Single Digital Gateway responds to users’ needs in a digital world. It could help companies save 
more  than  EUR 11  billion  per  year,  and  EU  citizens  up  to  855 000  hours  of  their  time  annually.  The 
initiative also encourages Member States to adopt e-government strategies and to offer a modern and 
efficient public service. 

In 2017, in close cooperation with the Member States, the Commission launched the interconnection 
of business registers which will facilitate access to company information in the EU, both at home and 
across borders. 

Through  the  single  European  e-Justice  portal,  the  interconnection  of  business  registers  gives 
electronic  access  across  the  EU  to  information  about  companies  from  all  business  registers  in  the 
Member States. This system will now enable businesses, consumers, investors and authorities to find 
out  more  about  the  companies  they  are  dealing  with  or  that  they  want  to  do  business  with.  The 
ultimate aim is to increase confidence in the Single Market through transparency and through up-to-
date information on EU companies. 

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Enforcing the Capital Markets Union, financial services rules and the free movement of 
capital 

The Commission’s enforcement action in 2017 focused on ensuring that Member States implemented 
the directives which were adopted in the aftermath of the financial crisis. These aim to further open up 
the  EU  financial  services  markets,  strengthen  the  resilience  and  stability  of  the  financial  sector  and 
improve  investor  protection.  They  include  the  Accounting  and  Audit  Directives,  the  Mortgage  Credit 
Directive, the Payment Accounts Directive and the Directive on disclosure of non-financial information 
by certain large undertakings amending the Accounting Directive. 

Almost all Member States adopted measures by the end of 2017 to give effect to these directives in 
their national legislation. In many cases, these measures were adopted after the Commission opened 
infringement procedures. 

The Markets in Financial Instruments Directive is a cornerstone of the reforms that the EU put in place 
to  improve  investor  protection  following  the  financial  crisis.  The  new  rules  will  reinforce  the  single 
market,  making  it  possible  for  financial  instruments  to  be  traded  in  transparent,  well-supervised, 
competitive and stable markets across the whole of the European Economic Area. 

The Commission launched infringement cases against 19 Member States for late transposition of the 
Markets in Financial Instruments Directive into their national legislation. 

The  proper  implementation  of  the  Markets  in  Financial  Instruments  Directive  and  other  relevant 
directives (such as the Transparency Directive) is necessary for achieving the Capital Markets Union. 
The Capital Markets Union aims at improving access to finance, in particular for innovative companies, 
start-ups  and  small  and  medium-sized  enterprises.  It  also  seeks  to  make  capital  markets  more 
attractive for retail and institutional investors, and cross-border investment easier. 

The Commission monitored compliance with the principle of free movement of capital by the Member 
States. It referred Hungary to the Court of Justice for failure to comply with EU rules on the rights of 
cross-border  investors  in  agricultural  land.  Hungary  had  adopted  a  law  which  terminated  certain 
‘usufruct rights’ — contracts giving the right to use a property and to profit from it — held by investors 
in Hungary. This deprived both foreign and domestic investors of their acquired rights and of the value 
of their investments, without providing them with compensation. 

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Enforcing the rules on taxation and customs 

The  Commission’s  enforcement  strategy  in  the  area  of  customs 
focused  on  ensuring  that  Member  States  apply  the  Union  Customs 
Code  correctly  and  uniformly  and  on  detecting  charges  with 
equivalent effect to customs duties, even within the EU. 

After  the  Commission  opened  an  infringement  procedure,  the  Italian 
authorities  amended  their  rules  to  remove  a  restriction  of  direct 
customs  representation  that  was  contrary  to  the  Union  Customs 
Code. 

The  Commission  carried  out  an  enquiry  to  check  the  compatibility  of  national  rules  on  cash  control 
with EU legislation. 

As a result of the Commission’s intervention, Denmark amended the Single Administrative Document 
used for customs procedures, which did not comply with the requirements of EU customs legislation. 

In  the  area  of  indirect  taxation,  the  Commission  gave  priority  in  its  enforcement  efforts  to  pursuing 
infringements  that  restrict  the  Treaty  freedoms  and  have  a  strong  impact  on  the  functioning  of  the 
internal market. 

Under the Electronic Road Cargo Monitoring System, Hungary requested companies to report to the 
tax  administration  intra-EU  (and  certain  domestic)  shipments  carried  out  on  public  roads.  Such  a 
system  is  against  the  VAT  Directive  as  it  primarily  affects  cross-border  EU  transactions  and  puts  a 
heavy  burden  on  businesses  when  crossing  borders.  The  Commission  launched  an  infringement 
procedure against Hungary. 
The  Commission  took  action  against  Italy,  which  excludes  non-Italian  citizens  who  do  not  intend  to 
settle  in  Italy  from  benefiting  from  the  reduced  rate  applying  to  the  purchase  of  the  first  non-luxury 
home 

One  of  the  benefits  of  the  internal  market  is  that  individuals  and  businesses  have  the  freedom  to 
move,  operate  and  invest  across  national  borders.  But  because  direct  taxation  is  not  harmonised 
across  the  EU,  this  freedom  can  mean  that  some  taxpayers  manage  to  avoid  or  evade  tax  in  their 
country  of  residence.  Tax  authorities  in  the  EU  have  therefore  agreed  to  cooperate  more  closely  to 
ensure that taxes are paid and to fight tax fraud and tax evasion. This cooperation has been enshrined 
in  the  Directive  on  administrative  cooperation.  The  Directive  enables  Member  States,  in  an 
increasingly globalised environment, to ensure that all their taxpayers pay their fair share of taxes. It is 
the core transparency tool to combat the tax evasion practices brought to light by the LuxLeaks case 
and the Panama and Paradise Papers documents. 

The Commission's enforcement action in 2017 focused on ensuring that Member States implemented 
important amendments to that Directive. These amendments concern the exchange of information on 
tax  rulings  and  country-by-country  reporting.  By  the  end  of  2017,  almost  all  Member  States  had 
adopted the required measures. 

In  a  landmark  Grand  Chamber  judgment,  the  Court  of  Justice  held  that  the  courts  of  one  Member 
State may review the legality of requests for tax information sent by another Member State under the 
Directive  on  administrative  cooperation.  Such  a  review  is  however  limited  to  verifying  whether  the 
information  sought  is  not  manifestly  devoid  of  any  foreseeable  relevance  to  the  tax  investigation 
concerned. 

In 2017, the Commission closed infringement procedures against  Germany (over the inheritance tax 
rules  on  special  maintenance  allowances)  and  Greece  (regarding  the  inheritance  tax  treatment  of 
bequests to non-profit organisations and for primary residences) after they made amendments. 

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Ensuring a high level of protection for consumers 

that 
fit 

In  May  2017 
the  Commission 
finished  assessing  key  pieces  of 
EU  consumer  and  marketing  law. 
the 
it  concluded 
Overall, 
existing 
for 
rules  are  still 
purpose  if  enforced  and  applied 
properly. 
the 
Commission 
identified  several 
gaps.  For  this  reason,  and  in 
to  mass-harm  cases 
response 
such  as  the  2015  car  emissions 
scandal  or 
flight 
cancellations  in  2017  by  an  air 
company,  which  affect  hundreds 
of 
consumers 
across  the  EU,  the  Commission 
will  present  the  New  Deal  for 
in  2018.  This  will 
Consumers 
make  it  possible  for  consumers  to  have  their  interests  defended  collectively  through  representative 
organisations. This initiative will offer cheaper and more effective means to stop and remedy breaches 
that  harm  multiple  EU  consumers  simultaneously.  It  will  also  improve  public  enforcement  through 
more effective, proportionate and dissuasive penalties for breaches of EU consumer law. 

thousands  of 

Nevertheless, 

the  massive 

The  Commission  closed  an  infringement  procedure  against  Italy  over  package  travel  as  the  country 
has now brought its rules  into line with the 1990 Package Travel Directive. The EU legislation requires 
organisers  of  package  tours  to  have  insolvency  protection,  guaranteeing  that  consumers  receive  a 
refund  and  are  brought  back  home  if  the  travel  organiser  goes  bankrupt.  After  the  tour  organiser 
Todomondo  went  bankrupt  in  2009,  the  Italian  National  Guarantee  Fund  received  more  than  4 000 
reimbursement  claims  totalling  almost  EUR  7  million.  However,  there  was  not  enough  money  in  the 
Fund  to  cover  them.  After  the  Commission  opened  the  infringement  procedure,  Italy  replaced  the 
underfunded National Guarantee Fund with a duty for tour operators and travel agencies to take out 
insurance or to provide a bank guarantee for all payments they receive from travellers. Italy has also 
made arrangements for the reimbursement for all travellers who had lost money through insolvencies 
in the past. In 2015 a new Package Travel Directive was adopted which extends the protection beyond 
traditional  travel  packages,  while  maintaining  a high  level  of  insolvency  protection  for  travellers. The 
new  Directive  needs  to  be  implemented  by  Member  States  by  January  2018  and  will  become 
applicable  from  July  2018.  The  Commission  will  check  that  national  laws  comply  with  the  new 
Directive. 

Despite far-reaching safety rules, there are still too many unsafe and illicit products on the market that 
can  cause  major  risks  for  consumers.  In  2017  the  Commission  adopted  the  Goods  Package,  which 
will help to improve enforcement of the EU’s harmonised rules on product safety. 

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Ensuring a high level of protection of public health 

On  public  health,  the  Commission  monitored  whether  Member  States  effectively  introduced  the 
provisions  of  the  Tobacco  Products  Directive  into  their  national  law.  This  Directive  aims  to  reduce 
tobacco use, particularly by discouraging young people from taking up smoking, and ensuring that all 
members  of  the  public  are  fully  aware  of  tobacco’s  harmful  effects.  The  benefits  of  falling  smoking 
rates  are  clear:  people  are  healthier,  rates  of  chronic  diseases  and  premature  deaths  related  to 
tobacco  are  dropping  significantly,  and  there  are  economic  savings.  A  reduction  in  tobacco 
consumption of just 2 % translates into annual healthcare savings of approximately EUR 506 million 
across the EU. 

In 2017 the Commission closed infringement procedures against Belgium, Denmark, Greece, Cyprus, 
Lithuania,  Poland,  Romania  and  Slovenia  as  these Member  States  took  measures  to  implement  the 
Tobacco Products Directive into their national law in due time.  

The  right  of  patients  to  access  safe  and  high-quality  healthcare  in  other  EU  countries  remains  a 
priority  for  the  Commission.  In  2017  the  Commission  closely  monitored  the  implementation  of  the 
Cross-border Healthcare Directive. 

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Enforcing the rules on mobility and transport 

the 

The  Commission  worked  in 
2017 to ensure a fair balance 
interests  of 
between 
road 
social  protection  of 
transport 
fair 
workers, 
competition  and  the  freedom 
to  provide  transport  services 
across borders. 

The Commission proposed a 
clarification  of  how  posting 
conditions  apply 
road 
transport,  as  well  as  of 
enforcement 
effective 
measures. 

to 

In  2017,  the  Commission  requested  Greece  to  fully  apply  EU  rules  on  the  rights  of  passengers 
travelling by sea. The Greek national legislation prevented passengers to fully benefit from the rights 
granted  by  the  European  Union  legislation  when  their  maritime  passenger  service  is  cancelled  or 
delayed. As a result of the action brought by the Commission, the Greek authorities fully enshrined in 
national law the rights of passengers to assistance, re-routing or reimbursement in case of cancelled 
or delayed departure.. 

Road transport is the most widely used means of travel in the EU and a primary cause of accidents. 
Technical defects cause  many  accidents:  more  than five people die on Europe’s roads  every day in 
accidents linked to technical failure. Vehicle checks are therefore fundamental to road safety 

In 2014 the EU adopted new rules to toughen up the testing regime and widen its scope. The 
roadworthiness package aims to prevent more than 36 000 accidents a year linked to technical failure 
by: 

 

improving  the  quality  of  vehicle  tests  (through  common  minimum  standards  for  equipment, 
training of inspectors and assessment of deficiencies); 

  extending checks on cargo securing during roadside inspections of goods vehicles; 
  making electronic safety components (such as ABS, ESC and airbags) subject to mandatory 

testing; 
clamping down on mileage fraud through registered mileage readings. 

 

As  24  Member  States  failed  to  implement  the  roadworthiness  package  on  time,  the  Commission 
opened infringement proceedings against them.  

In  the  railway  sector,  the  Court  of  Justice  confirmed  that  Member  States  have  to  ensure  that  the 
accounts of railway undertakings are kept in a way that allows for the monitoring of the prohibition to 
transfer  public  funds  earmarked  for  the  management  of  infrastructure  to  transport  services.  Member 
States  are  not  obliged  to keep  separate  accounts  for  each public  service  contract.  The Commission 
will actively follow up on the implementation of the judgment. 

In an important judgment, the Court of Justice clarified that the intermediation service provided by the 
electronic  platform  Uber,  the  purpose  of  which  is  to connect,  by  means  of  a  smartphone  application 
and for remuneration, non-professional drivers using their own vehicle with persons who wish to make 
urban  journeys,  must  be  classified  as  a  "service  in  the  field  of  transport".  Consequently,  it  is  for 
Member States to regulate the conditions under which intermediation services such as UBER are to 
be provided in conformity with the general rules of the Treaty of the Functioning of the EU. 

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5.  A deeper and fairer Economic and Monetary Union 

A  ‘deeper  and  fairer  Economic  and  Monetary  Union’  is  a  fundamental  part  of  the  Commission’s 
response to the economic and financial crisis. This policy aims at strengthening the EU economy in a 
way that creates more jobs and improves people’s living standards.  

Enforcing the Economic and Monetary Union rules 

The  Economic  and  Monetary  Union  is  at  the  core  of  the  EU’s  integration  process.  Achieving  an 
Economic  and  Monetary  Union  is  not  an  end  in  itself  but  a  means  to  provide  stability  and  stronger, 
more  sustainable  and  inclusive  growth  across  the  euro  area  and  the  EU  as  a  whole  in  order  to 
improve everyone’s lives. 

In  response  to  the  financial  and  economic  crisis  of  2008,  a  number  of  legal  acts  were  adopted  (the 
2011 ‘Six-Pack’ and the 2013 ‘Two Pack’) to reinforce the EU’s economic governance framework. In 
2017 the Commission paid particular attention to the transposition of the Directive on requirements for 
budgetary frameworks of the Member States. 

Moreover,  the  euro  can  only  be  a  strong  and  trustworthy  currency  in  the  eyes  of  the  public  and 
businesses if it is adequately protected against counterfeiting. The Commission checked in 2017 how 
Member  States  were  implementing  the  directive  on  the  protection  of  the  euro  and  other  currencies 
against counterfeiting by criminal law. 

The  Commission  launched  infringement  procedures  against  Bulgaria,  Croatia,  Luxembourg  and 
Slovenia  for  failing  to  implement  the  Directive  on  the  protection  of  the  euro  and  other  currencies 
against counterfeiting in their national legislation on time. 

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Enforcing the Banking Union rules 

With  respect  to  the  Banking  Union,  the  Commission  continued  to  check  the  implementation  of  the 
Capital Requirements Directive IV, the Deposit Guarantee Schemes Directive and the Bank Recovery 
and  Resolution  Directive.  These  EU  instruments  aim  to  ensure  that  banks  are  stronger  and  better 
supervised, and that problems can be resolved more easily without using taxpayers' money. 

A  strong  Economic  and  Monetary  Union  and  Banking  Union  also  requires  Member  States  to  be 
vigilant in maintaining and respecting the independent and autonomous functioning of central banks. 
This  independence  allows  them  to  contribute  to  and  carry  out  the  numerous  tasks  that  EU  law  has 
given  them  in  the  field  of  monetary  policy  and  banking  supervision.  The  Commission  therefore 
continues to pay attention to this issue. 

In a pre-criminal investigation, the Slovenian authorities seized information, including ECB documents, 
from  the  Bank  of  Slovenia.  In  2017  the  Commission  opened  an  infringement  procedure  against 
Slovenia over the incident, alleging violation by the public authorities of Protocol No 7 on the Privileges 
and Immunities of the EU. The importance of the case lies in the potential impact of seizures in central 
banks on their independence and autonomy in monetary policy and banking supervision. This needs 
to be balanced against the duty of loyal cooperation between central banks and public authorities in 
criminal investigations. 

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6.  An area of justice and fundamental rights based on mutual trust 

In  the  area  of  justice,  the  Commission  ensures  that  the  rule  of  law  and  the  Charter  of  Fundamental 
Rights are respected. It also ensures the respect of specific rights, such as the right of free movement, 
data  protection,  gender  equality,  non-discrimination,  victims’  rights  and  the  right  to  a  fair  trial  in 
criminal proceedings. These topics are high on the Commission’s agenda as they affect people’s lives. 

Under the European Semester exercise, the Commission continued to encourage Member States to 
the 
improve 
independence, quality and efficiency of their national justice systems. 

their  enforcement  capacities.  This  particularly  concerns 

the  effectiveness  of 

Upholding the rule of law and fundamental rights 

the  Commission 
In  2017 
pursued  its  efforts  to  promote 
and  uphold  the  respect  of  the 
rule  of  law  across  the  EU.  In 
particular, 
the  Commission 
continued its dialogue with the 
Polish  authorities  under  the 
Rule of Law framework. 

The 
acted 
Commission 
decisively  when  political  and 
in 
legislative  developments 
some 
States 
Member 
threatened  the  EU’s  common 
foundations. 

The  Commission  launched  an  infringement  procedure  against  Poland  for  breaches  of  EU  law  in  the 
Polish Law on the Ordinary Courts Organisation. 
The  Commission’s  key  legal  concern  about  this  law  relates  to  gender  discrimination  due  to  the 
introduction of different retirement ages for female judges (60 years) and male judges (65 years). This 
is  contrary  to  Article 157  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)  and  the 
Directive on gender equality in employment. 
The Commission also raised concerns that the independence of Polish courts will be undermined by 
the  fact  that  the  Minister  of  Justice  has  been  given  discretionary  power  to  prolong  the  mandate  of 
judges who have reached retirement age. 

The  Commission  launched  an  infringement  procedure  against  Hungary  over  Hungarian  laws  which 
impose  new  registration,  reporting  and  transparency  obligations  on  foreign-funded  civil  society 
organisations. The procedure concerns the compatibility of the laws with the EU Treaty provisions on 
the  free  movement  of  capital,  as  well  as  with  the  right  to  freedom  of  association  and  the  rights  to 
protection of private life and personal data enshrined in the EU Charter of Fundamental Rights.  

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Improving data protection 

Throughout  2017  the  Commission  supported  the  Member  States  in  preparing  to  apply  the  General 
Data Protection Regulation from May 2018. The Regulation will introduce a single set of EU rules on 
data protection, reinforce the trust and security of individuals and establish uniform rules for business. 
The consistent application of these rules is essential. 

The  Commission  also  helped  Member  States  to  prepare  for  transposing  the  Directive  for  police  and 
criminal  justice  authorities  concerning  processing  and  free  movement  of  personal  data  for  the 
purposes  of  the  prevention,  investigation,  detection  or  prosecution  of  criminal  offences  or  the 
execution  of  criminal  penalties.  This  Directive  will  ensure  that  the  data  of  victims,  witnesses  and 
suspects of crimes are duly protected in the context of a criminal investigation or a law enforcement 
action. At the same time, more harmonised laws will also facilitate cross-border cooperation by police 
or prosecutors in combating crime and terrorism. 

In January 2017 the Commission adopted a Communication on international data flows. This sets out 
the Commission’s policy for facilitating the growing international data transfers in the areas of trade 
and law enforcement, while ensuring a high level of data protection. 

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Combating discrimination 

The  Commission  closely  monitored  the  application  of  the  Racial  Equality  Directive,  in  particular 
regarding the access of the Roma community to education and housing. This Directive is a key piece 
of EU legislation for combating discrimination on the grounds of racial or ethnic origin and giving effect 
to the principle of equal treatment. 

In 2017 the Court of Justice of the EU took a further step in clarifying the EU rules applicable to non-
discrimination  at  work.  In  two  cases  concerning  women  who  were  dismissed  by  their  employers  for 
wearing  Islamic  headscarves  at  work  (Achbita  and  Bougnaoui),  the  Court  struck  a  delicate  balance 
between  the  freedom  of  religion,  the  freedom  to  conduct  a  business  and  the  principle  of  non-
discrimination. 

The Court ruled that companies may ban employees from wearing visible religious symbols at work as 
part of a general policy of a company barring all religious  and political symbols. A policy of political, 
philosophical and religious neutrality may constitute a legitimate objective that justifies a difference of 
treatment,  provided  that  the  means  of  achieving  that  aim  are  appropriate  and  necessary.  The  Court 
further  clarified  that  customers  cannot  simply  demand  that  workers  remove  headscarves  if  the 
company has no policy barring religious symbols. 

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Enforcing the rules in the area of security 

Union. 

In  2017  enforcement  work 
continued  in  the  context  of  the 
European  Agenda  on  Security 
the 
and 
the  development  of 
Security 
The 
implementation  of  the  EU  rules 
in  this  area  is  key  to  ensuring  a 
high  level  of  security  throughout 
the  EU.  The  regular  progress 
reports  on  the  Security  Union 
refer to ongoing efforts to ensure 
the 
correct 
implementation of the rules. 

and 

full 

In  2017  the  Commission  followed  up  on  the  infringement  procedures  launched  in  2016  on  police 
cooperation instruments belonging to the former ‘third pillar’. It prioritised the enforcement of the Prüm 
Framework  (an  information-exchange  tool  that  can  offer  automated  comparison  of  DNA  profiles, 
fingerprint  data  and  vehicle  registration  data)  and  the  ‘Swedish  initiative’  (which  enables  law 
enforcement  authorities  to  share  information  and  intelligence  effectively  when  conducting  criminal 
investigations or criminal intelligence operations). The Commission did this by taking further steps in 
the infringement procedures opened against Greece, Ireland, Croatia, Italy and Luxembourg. 

The Commission regularly reports to the European Parliament, the European Council and the Council 
of the EU on progress towards creating an effective and genuine Security Union. This includes the use 
of its enforcement tools in contributing towards consolidating the Security Union. 

The  directives  on  the  European  Investigation  Order  in  criminal  matters  and  the  Fourth  Anti-Money 
Laundering Directive are essential tools for effective cooperation in combating cross-border crime and 
terrorism. These directives contribute to the goals of the security agenda. 

The  Fourth  Anti-Money  Laundering  Directive  strengthens  the  existing  rules  and  makes  the  fight 
against money laundering and terrorism financing more effective and more transparent. 

In  2017,  the  Commission  opened  infringement  procedures  against  18  Member  States  for  failing  to 
implement  the  Fourth  Anti-Money  Laundering  Directive  in  their  national  legislation  on  time.  In 
December 2017  the Commission  took  further  steps  in  the  infringement  procedures  against  Bulgaria, 
Greece, Cyprus, Luxembourg, Malta, Netherlands, Poland and Romania as they had not notified any 
transposition measures and their draft laws were still in the national legislative process.  

The  European  Investigation  Order  simplifies  the  work  of  judicial  authorities  when  they  request 
evidence  located  in  another  EU  country.  For  example,  if  French  judicial  authorities  are  tracking 
suspected terrorists hiding in Germany, they can ask the German authorities to interrogate witnesses 
or  to  conduct  house  searches  on  their  behalf.  This new  tool will simplify  and speed  up  cross-border 
criminal investigations and prosecutions. 

In  2017,  the  Commission  opened  infringement  procedures  against  14  Member  States  for  failing  to 
implement the European Investigation Order Directive in their national legislation on time. 

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7.  Towards a new policy on migration 

The Commission’s migration policy seeks to equip the EU with the tools to better manage migration in 
the medium and long term. It covers irregular migration, borders, asylum and legal migration. 

In 2017 the Commission intensified work on delivering the European Agenda on Migration in order to 
tackle the immediate challenges of the ongoing migration and refugee crisis. The Commission focused 
on the implementation of the temporary emergency relocation scheme established in 2015 to alleviate 
the  pressure  on  Italy  and  Greece.  The  regular  reports  on  relocation  and  resettlement  reminded  all 
Member States of their legal obligations under the Council Decisions on relocation. The reports called 
on those Member States that had not yet relocated, or pledged to relocate, migrants from Greece and 
Italy to do so immediately. 

The Council Decisions on relocation required Member States to pledge available places for relocation 
every 3 months to ensure a swift and orderly relocation procedure. Whereas all other Member States 
had  relocated  and  pledged,  Hungary  had  not  taken  any  action  at  all  since  the  relocation  scheme 
started and Poland had not relocated anyone and had not pledged since December 2015. The Czech 
Republic had not relocated anyone since August 2016 and not made any new pledges for over a year. 
Given  the  persistent  failure  of  the  Czech  Republic,  Hungary  and  Poland  to  comply  with  their 
obligations  under  the  Council  Decisions  on  relocation,  the  Commission  initiated  infringement 
procedures against these three Member States. 

The  Commission  continued  to  monitor  the  implementation  of  EU  migration  and  asylum  law,  in 
particular  the  Asylum  Procedures  Directive,  the  Reception  Conditions  Directive  and  the  Return 
Directive. 

The Asylum Procedures Directive establishes rules on the process of claiming asylum. These include 
how to apply, how the application will be examined, what help the asylum seeker will be given, how to 
appeal and how to deal with repeated applications. 

The Reception Conditions Directive aims to guarantee a dignified standard of living for asylum seekers 
in the EU and to ensure that their  human rights  are respected. It ensures that asylum seekers have 
access to housing, food, clothing, healthcare, education for minors and access to employment under 
certain conditions. 

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The  Return  Directive  establishes  common  standards  and  procedures  for  EU  countries,  under  which 
non-EU  nationals  staying  illegally  may  be  removed  from  their  territories.  It  lays  down  provisions  for 
terminating  illegal  stays  and  for  detaining  non-EU  nationals  with  the  aim  of  removing  them,  and 
provides procedural safeguards. 

The  Commission  responded  to  concerns  about  amendments  to  Hungary’s  asylum  and  migration 
legislation  introduced  in  March  2017.  The  concerns  relate  to  the  amendments’  compliance  with  EU 
migration  and  asylum  law,  in  particular  the  Asylum  Procedures  Directive,  the  Reception  Conditions 
Directive  and  the  Return  Directive  and  several  provisions  of  the  Charter  of  Fundamental  Rights. 
Following a series of exchanges with the Hungarian authorities at both political and technical level, the 
Commission took further steps in the infringement procedure against Hungary. 

The  Commission  continued  to  monitor  the  correct  implementation  of  the  Eurodac  Regulation,  which 
requires  Member  States  to  take  the  fingerprints  of  irregular  migrants  and  asylum  applicants.  The 
effective  implementation  of  the  Eurodac  Regulation  is  essential  for  the  functioning  of  the  Dublin 
Regulation  and  of  the  EU  relocation  schemes  for  determining  which  EU  country  is  responsible  for 
examining an asylum application. 

In 2017 the Commission took further steps in the infringement procedure against Croatia for failing to 
correctly  fingerprint  asylum  seekers  and  irregular  migrants  apprehended  after  crossing  an  external 
border, and for failing to transmit these data to the central Eurodac database. 

In  the  field  of  legal  migration,  it  is  a  political  priority  to  improve  the  EU’s  ability  to  attract  and  retain 
highly  skilled  workers.  This  is  necessary  to  make  the  EU’s  economy  more  competitive  and  to  cope 
with demographic challenges. It is therefore important to ensure the EU directives on legal migration 
are  implemented  fully  and  correctly.  They  establish  common  conditions  for  the  admission  and 
residence of non-EU nationals. 

In  2017  the  Commission  launched  infringement  procedures  against  17  Member  States  for  failure  to 
notify national measures implementing the Directive on the conditions of entry and residence of third-
country  nationals  in  the  framework  of  an  intra-corporate  transfer.  Such  non-EU  citizens  are  often 
highly qualified individuals. 

The  Commission also  continued  to  monitor  the  implementation of  the  other  Directives  and  launched 
infringement  procedures  concerning,  in  particular,  the  disproportionate  fees  that  Member  States 
charge for issuing residence permits to non-EU nationals. 

In 2017 the Commission closed infringement procedures against Bulgaria and Italy as they amended 
their national legislation to lower fees for issuing residence permits to third-country nationals 

36