CELEX: 61995CC0057
Language: en
Date: 1997-01-16
Title: Opinion of Mr Advocate General Tesauro delivered on 16 January 1997. # French Republic v Commission of the European Communities. # Commission communication - Internal market - Pension funds. # Case C-57/95.

Important legal notice

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61995C0057

Opinion of Mr Advocate General Tesauro delivered on 16 January 1997.  -  French Republic v Commission of the European Communities.  -  Commission communication - Internal market - Pension funds.  -  Case C-57/95.  

European Court reports 1997 Page I-01627

Opinion of the Advocate-General

1. By this application the French Republic seeks the annulment under the first paragraph of Article 173 of the Treaty of a measure adopted by the Commission entitled `Communication on the freedom of management and investment of funds held by institutions for retirement provision' (1) (hereinafter `the Communication').Broadly - and it is as well to point this out straight away - the Communication is very similar to the Proposal for a Council Directive relating to the freedom of management and investment of funds held by institutions for retirement provision, (2) which the Commission submitted to the Council on 21 October 1991. (3)  The Commission withdrew that proposal in December 1994 owing to the persistent disagreement of a number of Member States with its content. (4)  More specifically, the Commission notified its decision to withdraw the proposal for a directive to the Member States by letter dated 21 December 1994, but omitted to mention that the Communication at issue had already been published in the C Series of the Official Journal on 17 December. 2. The Communication's opening section, `Introduction and general considerations', points, on the one hand, to the growing importance of pension funds as a source of investment capital for the economy of the European Union (paragraphs 1.1 and 1.2) and, on the other, to the requirement for such funds to be made subject to the rules on free movement in order that `individuals should be able to benefit from the lower risks and higher returns which may be available when pension fund managers are free to invest in the most efficient way throughout the Union on the basis of sound commercial and prudential principles' (paragraph 1.3). In that same section, the Commission states - after pointing out that the Communication comes in the wake of the withdrawal of the proposal for a directive - that the Communication constitutes a response to the need for urgent clarification of `its intentions both to the economic operators and the Member States concerning the interpretation of the Treaty's fundamental principles of freedom to provide services, freedom of establishment and free movement of capital with regard to pension funds' (paragraph 1.5).  With that in view, the Communication `sets out guidelines on the type of restrictions that may be imposed by Member States on prudential grounds where such restrictions could be regarded as consistent with Treaty principles.  It also sets out a number of prudential investment principles which should be followed by all institutions for retirement provision' (paragraph 1.8). 3. The second section of the Communication, `Specific interpretation', sets forth first a number of definitions designed to clarify what is to be understood by `institution for retirement provision', `retirement benefits', `participating undertaking', `participating body', `affiliated undertakings' and `associated undertakings'.  In particular, it is emphasized that the definitions of `institution for retirement provision' and `retirement benefits' are drawn so widely that they also cover statutory social security funds, although they are expressly excluded from the scope of application of the Communication (paragraph 2.1). Indeed, the Communication does not apply to statutory social security bodies listed in Annex 2 to Regulation (EEC) No 574/72 (5) or to certain types of activity carried out by financial institutions governed by Community directives which have already been adopted (6) (paragraph 2.2). 4. Paragraph 2.3 of the Communication, `Investment management and custody services', first states that pension institutions should have the freedom, in the case of both investment management and safekeeping and administration of the relevant assets, (7) to choose from amongst persons duly authorized to carry out such activities: external managers established in other Member States or credit institutions or investment undertakings established in other Member States (paragraphs 2.3.1 and 2.3.2).  It is further stated that the supervisory authority responsible for the pension institution should be able effectively to perform its supervisory duties; consequently, even where the institution itself is unable or unwilling to furnish information reasonably required of it or to take action in respect of assets outside the supervisor's immediate jurisdiction.  Accordingly, for the purposes of prudential supervision of the institution, Member States should ensure that all the providers of services concerned are contractually obliged to supply all necessary information to the authority responsible for the supervision of the institution (paragraph 2.3.3). It should be emphasized at this juncture that, with a view to the achievement of the objectives outlined in paragraph 2.3.3, it is deemed desirable that `each Member State should designate a single competent authority having the responsibility for cooperation with their counterpart in each other Member State' and that `the Commission shall send to Member States a list of those authorities designated ... which have been notified by the Member States' (paragraph 2.3.4). 5. Paragraph 2.4, `Freedom of investment of assets', starts by listing the principles with which institutions for retirement provision established in a Member State should comply in investing all assets held to cover future retirement benefit payments.  Those principles may be summarized as follows: (a) assets should be invested in the interests of scheme participants and beneficiaries, taking account of the requirements of security, quality, liquidity and profitability of the institution's portfolio as a whole;  (b) assets should be sufficiently diversified to avoid major accumulations of risk; (c) investment in participating, affiliated or associated undertakings should be restricted to a prudent level.  Any insolvency insurance or State guarantees may be taken into account in the application of those principles (paragraph 2.4.1). Paragraph 2.4.2 goes on to list the instances where Member States may exclude from the scope of paragraph 2.4.1 assets invested in a participating undertaking or an associated undertaking or undertakings.  In particular, it is worth pointing out that investments made before the adoption of the Communication may be excluded.  In any case, Member States are required to undertake periodically to examine matters excluded. 6. Again on the subject of freedom of investment of assets, paragraph 2.4.3 provides that `Member States shall not require institutions for retirement provision to invest in or to refrain from investing in particular categories of assets, nor to localize their assets in a particular Member State on other than duly justified prudential grounds'. Any restrictions imposed on prudential grounds must also be proportional to the objectives which they may legitimately pursue.  It is also provided with regard to the currency-matching rate that `as a first step, Member States shall in no case require institutions for retirement provision to hold more than 60% of their assets in matching currencies, after taking account of the effect of any currency hedging instruments held by the institution, since this cannot be generally justified on prudential grounds'. (8)  Paragraph 2.4.4 then states that `Member States shall not subject the investment decisions of an institution for retirement provision or its investment manager to any kind of prior approval or systematic notification requirements'. Lastly, the Communication sets forth the following `Final Remarks': `The Commission considers it to be important that institutions for retirement provision are able to benefit fully from the freedoms specified in the Treaty.  The Commission will ensure that any restrictions that apply in particular Member States will be fully justified on the prudential and other grounds upon which such restrictions have been applied and that they are proportional to their objectives' (section 3). 7. The French Government maintains that the Communication introduces new obligations, in particular as regards the currency-matching rate.  It should therefore be annulled for lack of competence on the part of the Commission, lack of legal basis and infringement of the principle of legal certainty. For its part, the Commission contends that the application should be declared inadmissible in that the contested measure - as is clear from examination of its content - introduces no new obligation over and above what is already laid down in the Treaty.  In other words, the Commission argues that the Communication merely provides an interpretation of the fundamental principles laid down by the Treaty with regard to freedom to provide services, freedom of establishment and the free movement of capital as far as the management and investment of pension funds are concerned. Admissibility 8. The objection of inadmissibility raised by the Commission is based on the claim that the Communication is a non-binding act and so cannot be challenged under the first paragraph of Article 173, which, as we know, empowers the Court to review the legality only of acts `other than recommendations and opinions', that is to say, only of binding acts.  Accordingly, an act described as a `communication', being in principle a non-binding act, should not be amenable to challenge before the Court. However, the Court's case-law is to the effect that the external form of an act is irrelevant for the purposes of determining whether it is amenable to judicial review; it is the effects and content of the act itself which have to be looked at. 9. More specifically with regard to the concept of acts which may be contested under the first paragraph of Article 173, the Court has held ever since the judgment in the AETR case (9) that an action for annulment must be available against `all measures adopted by the institutions, whatever their nature or form, which are intended to have legal effects'.  That approach has been subsequently confirmed in three cases, all brought by France for the annulment of atypical acts:  the `internal instructions' case, (10) the `code of conduct' case (11) and the `aid communication' case. (12)  The Court held those acts to be challengeable - in spite of their titles and the form they took - precisely because they introduced obligations which were new and hence intended to have legal effects vis-à-vis their addressees, yet the procedures laid down by the Treaty to that end had not been complied with in adopting them. 10. In this case, the Court is faced with an act described as a communication which does not indicate any legal basis, does not bear the signature of a Member of the Commission and has not been notified to the Member States. Nevertheless it was adopted by the Commission as a body and published in the C Series of the Official Journal. On top of that, the act is question is essentially identical to the proposal for a directive submitted by the Commission to the Council, which the Commission withdrew `because of a deadlock in the negotiations with Member States in the Council' (paragraph 1.4).  Although the Communication does not come into the category of typical acts, the manner of its drafting and publication, in particular the circumstances in which it was adopted, are such as at least to raise a suspicion that there was an intention to bind addressees, hence the Member States, and thereby operators in the sector. 11. Given this, and in line with the aforementioned case-law of the Court in this area, it will be essential to consider the content of the act in order to ascertain whether it contains new obligations which are binding on its addressees.  It follows that the question whether the objection of inadmissibility is well-founded will have to be considered together with the substantive issues raised by this dispute. Substance 12. As I have already mentioned, the French Republic, supported by the Kingdom of Spain, intervening, raises three pleas: lack of competence on the part of the Commission; infringement of Article 190 of the Treaty for want of legal basis, and infringement of the principle of legal certainty.  In addition, both the French and the Spanish Governments take issue with the validity of the contested act on the ground that it would purportedly create a difference in treatment between holders of pension funds and holders of life assurance policies. (13) As far as the question of the Commission's want of competence is concerned, the French Republic argues that the Communication is essentially a disguised directive, that is to say, a copy of the proposal for a directive based on Articles 57(2) and 66 of the Treaty.  Given that Article 57(2) - which lays down the procedure for adopting directives for the coordination of the provisions laid down by law, regulation or administrative action in Member States concerning the taking-up and pursuit of activities as self-employed persons - provides that the Council has to act unanimously after consulting the European Parliament or in accordance with the procedure referred to in Article 189b, it follows that the contested act should have been adopted by the Council, or by the Council and the Parliament, but certainly not by the Commission. 13. For its part, the Commission maintains that an analysis of the content of the Communication shows that it is no other than a mere interpretation of the fundamental principles of the Treaty relating to free movement in the sector of pension funds - or, at any event, that was the intention.  In support of that argument, the Commission further adds that, since the provisions on freedom to provide services, freedom of establishment and the free movement of capital have direct effect, the Communication, in common, moreover, with the proposal for a directive itself, can manifestly be no other than (simply) declaratory. In short, the Commission considers that the Communication does not embody new obligations for its addressees, since it merely expresses the obligations already incumbent on Member States by virtue of the relevant provisions of the Treaty.  It maintains that an examination of the content of the Communication therefore bears out the contention that it is an act which is not amenable to challenge under Article 173 of the Treaty and that hence the application must be declared inadmissible.  It is precisely for those reasons, moreover, that the Commission has not even considered the pleas put forward by the French Government as regards the substance. 14. In this regard, I shall say straight away that I agree with the Commission - albeit for different reasons - that in order to decide this case it is in fact sufficient to examine whether or not the Communication imposes new obligations.  In view of the Court's case-law on atypical acts, it is self-evident that, if the Communication imposes new obligations on its addresses, it should be annulled in any event, irrespective of the defects alleged in it. As will be recalled, whereas the `internal instructions' and the `code of conduct' were annulled on the ground that the Commission lacked the necessary competence, the judgment on the `aid communication' made it clear that an atypical act which introduces new obligations certainly may (or better must) be annulled even where it is vitiated by only formal defects, in particular in the interest of legal certainty.  In that judgment, the Court held that `Community legislation must be clear and its application foreseeable for all interested parties.  As a result of that requirement for legal certainty, the binding nature of any act intended to have legal effects must be conferred by a provision of Community law prescribing the legal form to be taken by the act, which must be expressly mentioned as its legal basis'. (14) 15. That ruling shows that in so far as a Community act, albeit atypical, introduces new obligations vis-à-vis its addressees and hence is intended to have legal effects, it must comply not only with the necessary procedures laid down for its adoption, but also with essential procedural requirements.  As a result, even where, as in the case of the aid communication, the Commission had the competence to adopt a legislative act and infringed no procedural provision, the act should be annulled in any event for infringement of essential procedural requirements, in order to guarantee legal certainty. In those circumstances, the question remains as to whether the absence of a minimum of essential requirements cannot be considered such as to cause the act in question to be incapable of having legal effects - regardless of the outcome of the actual scrutiny of its content - with the result that an action for its annulment should be declared inadmissible, precisely because any obligations arising under the act could not be relied upon against individuals and Member States.  The Court, which I suggested in my Opinion on the `internal instructions' case should answer this question first, (15) confirmed - albeit indirectly - that the formal criterion is completely irrelevant and that therefore the act must be categorized on the basis of its content. 16. Bearing in mind all of the foregoing, I shall now turn to consider whether the Communication merely makes explicit the obligations arising for the Member States under the relevant provisions of the Treaty or whether it lays down new obligations as compared with those provisions. Even before this, it is worth checking whether the provisions of the Communication are couched in imperative terms or whether they express the Commission's view on the subject by recommending Member States to adopt a particular course of conduct. In this connection, it must be held that the wording of the Communication is not unambiguous.  Whilst there are expressions which merely regard certain conduct on the part of Member States as `desirable', there are much stronger expressions, such as, for example, `Member States shall not require' or `Member States shall in no case'. 17. The impression gained is that the operation of camouflaging the proposal for directive as a communication has not - deliberately or through carelessness - been completely successful.  In particular, I do not consider that there can be any doubt that fixing the currency-matching rate (paragraph 2.4.3), which is one of the points of major disagreement between the parties, is formulated in obligatory and not precatory terms.  The same can be said of the cases which may be excluded from the scope of the Communication (paragraph 2.4.2) and of the prohibition on subjecting investment decisions to prior approval or systematic notification (paragraph 2.4.4). It goes without saying, however, that the wording of those paragraphs in binding terms is not decisive: on the contrary.  It would indeed be irrelevant if it were found that the Communication was merely declaratory.  This is the Commission's contention, namely that the fact that the provisions on freedom to provide services, freedom of establishment and the free movement of capital have direct effect mean that the obligations set out in the Communication derive directly from the Treaty, as a result of which the Communication itself, in common moreover with the proposal for a directive, does not add any new obligation for the Member States. 18. That argument seems simplistic to me, since it could at least be objected that all obligations arising under Community law derive from the Treaty.  The direct effect of the relevant provisions, which is certainly not at issue here, does in fact mean that the Member States may not impose unjustified restrictions on the freedoms in question.  It is only too obvious from this point of view that institutions for retirement provision may freely select their managers and/or the bodies entrusted with administering their investments or custody operations; it is also obvious that, if that were not to be the case, it would be the Court, if seised of the matter, which would have to decide whether the restrictions in question were justified or involved an infringement of the relevant provisions of the Treaty. This does not signify, however, that any coordination or harmonization measures intended even only to facilitate the exercise of the freedoms in question are no longer necessary (16) or that such measures may be adopted without complying with the procedures laid down to that end.  It is scarcely necessary to add that the adoption of harmonization measures is not without consequences:  where such measures have been adopted, Member States may no longer rely on the exceptions expressly laid down in the Treaty in this regard or on public interest grounds in order to justify any restrictions imposed, in this case, on the management and investment activities of institutions for retirement provision. 19. The imposition of certain prudential principles (paragraph 2.4.1) and, a fortiori, the fixing of the currency-matching rate at 60% undoubtedly constitute harmonization measures, albeit of a minimum nature, which, as such, necessitated the adoption of a legislative measure. Moreover, the Commission's defence in this regard is somewhat contradictory.  If, as it claims, the Communication and the proposal for a directive were merely declaratory, the obvious consequence would be that the Member States were bound to comply with the conduct indicated in them.  I cannot understand therefore why the Commission is at such pains to show that simply the language in which the Communication is couched is such as to rule out its being an obligatory act, and stresses that the extraordinary resemblance between the Communication and the proposal for a directive is attributable to reasons of consistency.  In actual fact, the Commission itself acknowledges that the Communication is anything but declaratory: it does so by pointing out that it is about to bring out a green paper on the subject on which the Member States will be asked to give their views and by stating that fixing the currency-matching rate at 60% is not derived from the Treaty, but constitutes its point of view, which is not necessarily the right one. 20. In brief, the Communication is undoubtedly not merely declaratory and cannot, to my mind, be described as merely an interpretative communication, as the Commission submits it is.  It is quite true that the Commission very frequently uses communications of different forms and content, so much so that some attempts have been made to classify the various types, (17) but it is also true that, as evidenced by that practice, interpretative communications are intended to apprise States and traders of the rights and obligations arising for them under Community law, in particular in the light of new case-law in a given sector. (18) I do not consider that that is the case here.  The Commission is not simply clarifying - although it claims to be doing so - what is the correct application of a number of fundamental principles of the Treaty in the pension fund sector, but has gone much further.  This is evidenced, for example, by the fact - even though it is regarded as desirable - that each Member State is to designate a single supervisory authority which should be notified to the Commission, which in turn is to send a list of such authorities to the Member States (paragraph 2.3.4).  This is also confirmed by the fixing of the currency-matching rate at 60% (paragraph 2.4.3) and again by the absolute prohibition on subjecting investment decisions of a retirement provision institution to any kind of prior approval (paragraph 2.4.4).  Lastly, the very fact that Member States may exclude from the scope of the Communication investments made before its adoption (paragraph 2.4.2) shows that the communication has and is intended to have legal effects. 21. Before I draw the only too obvious inferences from the conclusion which I have reached, I consider I should mention, very briefly, two further observations made by the Commission.  The Commission has submitted, first, that, unlike the atypical acts which the Court has annulled on earlier occasions, the contested act is not designed to supplement any other binding legal measure and is instead the outcome of an `abortive' legal act, (19) and, secondly, that the act was not notified to the Member States and is not officially addressed to them. As far as the first point is concerned, suffice it to say that it would be absurd even only to imagine that only `atypical' acts setting out rules of application or intended in some way to supplement other secondary legislation are amenable to annulment and not also `atypical' acts whose binding force stems directly from the Treaty.  As for the fact that the communication was not notified to the Member States, whilst it is true that the Court stressed the importance of this in its judgment on the `aid communication', (20) it is also true that it is clear from that case-law, as witness the judgment in the `internal instructions' case, that this is not a decisive factor. (21) 22. In view of the whole of the foregoing, it must be held that the Communication on pension funds constitutes an act intended to have legal effects in its own right.  In view of what I have stated, (22) this finding is enough to warrant the Communication's being annulled. Without its being necessary to dwell any further of the French Government's pleas, it is sufficient to observe that the Communication was not adopted in accordance with the procedure laid down in Articles 57(2) and 66 of the Treaty, on which the proposal for a directive, which was subsequently withdrawn, was based; in any event, it lacks the essential formal requirements for it to be clearly and unambiguously clear that it is a measure binding on its addressees. 23. In the light of the foregoing, I therefore propose that the Court should uphold the application and order the Commission to pay the costs. (1) - OJ 1994 C 360, p. 7. (2) - OJ 1991 C 312, p. 3. (3) - A second, amended, proposal was submitted to the Council on 26 May 1993 (OJ 1993 C 171, p. 13).  The first proposal was not, however, substantially amended thereby, since the second proposal merely makes it explicit, already in its title, that it relates solely to institutions providing supplementary (complementary) retirement provision and not to institutions providing statutory social security provision. (4) - In this regard, the Commission observed in the Communication itself that the decision to withdraw the proposal for a directive was taken because it refused `to make the text acceptable to a majority of Member States by inserting certain amendments which risk to completely change the sense of the Directive and thereby defeat its objectives, so that instead of removing barriers to provision of services and freedom of investment it would have instead legitimized such barriers' (paragraph 1.4). (5) - Council Regulation (EEC) No 574/72 of 21 March 1972 laying down the procedure for implementing Regulation (EEC) No 1408/71 on the application of social security schemes to employed persons, to self-employed persons and to members of their family moving within the Community (OJ, English Special Edition 1972(I), p. 149). (6) - This refers to the following Council directives: Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ 1985 L 375, p. 3); Directive 89/646/EEC of 15 December 1989 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions and amending Directive 77/780/EEC (OJ 1989 L 386, p. 1); Directive 92/49/EEC of 18 June 1992 on the coordination of laws, regulations and administrative provisions relating to direct insurance other than life insurance and amending Directives 73/239/EEC and 88/357/EEC (OJ 1992 L 228, p. 1); Directive 92/96/EEC of 10 November 1992 on the coordination of laws, regulations and administrative provisions relating to direct life assurance and amending Directives 79/267/EEC and 90/619/EEC (OJ 1992 L 360, p. 1), and Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (OJ 1993 L 141, p. 27). (7) - More specifically, as the Communication itself makes clear, the assets in question are those referred to in point 12 of the Annex to Directive 89/646/EEC or in point C.1 of the Annex to Directive 93/22/EEC. (8) - Emphasis added. (9) - 22/70 Commission v Council [1971] ECR 263, paragraph 42. (10) - C-366/88 France v Commission [1990] ECR I-3571, paragraph 8. (11) - C-303/90 France v Commission [1991] ECR I-5315, paragraph 8. (12) - C-325/91 France v Commission [1993] ECR I-3283, paragraph 9. (13) - Essentially because the currency-matching rate, which is fixed at 60% for pensions institutions, is set at 80% for the insurance sector. (14) - Case C-325/91 France v Commission, cited in footnote 12, paragraph 26; my emphasis. (15) - The need to answer that question was based on my conviction that, although it is true that the choice of a particular form cannot change the nature of an act, it is equally true that the absence of a number of formal requirements, in particular those formal requirements which enable an act to be recognized as binding, would have the result that, even where examination of the content of an act did not show that it was intended to have legal effects, it would in any event be incapable of being relied upon against third parties.  What essentially would be involved is a measure without legal effects vis-à-vis individuals and Member States, regardless as to whether the Commission was or was not empowered to adopt binding acts in the sector in question. (16) - In this case, it is hardly necessary to point to what the Court itself has held with regard to the direct effect of Article 52 of the Treaty, that is, that the directives in question `have however not lost all interest since they preserve an important scope in the field of measures intended to make easier the effective exercise of the right of freedom of establishment' (Case 2/74 Reyners [1974] ECR 631, paragraph 31). (17) - Apart from interpretative and information communications, the latter being intended in particular to provide an input into dialogue between institutions on subjects and topics on which it is envisaged adopting genuine legislative measures (see, for example, the communication on Community legislation on foodstuffs (COM (85) 603 fin.) of 8 November 1985), considerable importance attaches to `decisional' notices or communications concerning sectors in which the Commission has a discretion.  This is what happens in the sphere of competition: suffice it to mention the example of the Commission notice of 3 September 1986 on agreements of minor importance which do not fall under Article 85(1) of the Treaty establishing the European Economic Community (OJ 1986 C 231, p. 2) or even the Commission Notice concerning the assessment of cooperative joint ventures pursuant to Article 85 of the EEC Treaty (OJ 1993 C 43, p. 2).  This is likewise the case with State aid.  As far as that area is concerned, I would mention, for example, the Commission communication on the method for the application of Article 92(3)(a) and (c) to regional aid (OJ 1988 C 212, p. 2) and the Community framework on State aid to the motor vehicle industry (OJ 1989 C 123, p. 3).  As to the significance of such communications and notices, see Case 310/85 Deufil [1987] ECR 901, paragraph 22, where the Court held that the communication at issue constituted `guidelines setting out the course of conduct which the Commission intends to follow and which it asks the Member States to comply' and Case 325/95 France v Commission, cited in footnote 12, in which, by contrast, the Court annulled the aid communication on the ground that, instead of simply setting out guidelines, it created new obligations for the Member States and, as a result, for undertakings affected. (18) - See, for example, the communication from the Commission concerning the consequences of the judgment given by the Court of Justice on 20 February 1979 in Case 120/78 (`Cassis de Dijon') (OJ 1980 C 256, p. 2) and the Commission interpretative communication concerning the free movement of services across frontiers (OJ 1993 C 334, p. 3). (19) - In this connection, I would note, however, that the `internal instructions', albeit intended to supplement a piece of secondary legislation, were adopted at a time when a proposal for a regulation of fairly similar content was before the Council. (20) - However, in that case, in refuting the Commission's argument that the communication in issue was in reality a circular addressed to its own departments, the Court observed that it `refers expressly to the Member States and was, moreover, notified to them' (Case C-325/91 France v Commission, cited in footnote 12, paragraph 29). (21) - It is scarcely necessary to mention that whilst the internal instructions were not addressed to the Member States (at least not overtly), they were nevertheless notified to them. (22) - See sections 12, 14 and 15 of this Opinion.