CELEX: 62011CC0241
Language: en
Date: 2013-03-21
Title: Opinion of Mr Advocate General Jääskinen delivered on 21 March 2013. # European Commission v Czech Republic. # Failure of a Member State to fulfil obligations - Directive 2003/41/EC - Activity and supervision of institutions for occupational retirement provision - Partial failure to transpose within the prescribed period - Judgment of the Court establishing that a Member State has failed to fulfil its obligations - Failure to comply with the judgment - Article 260(2) TFEU - Financial penalties - Lump sum. # Case C-241/11.

OPINION OF ADVOCATE GENERAL
      
         Jääskinen
      
      delivered on 21 March 2013 (
            1
         )
      
         Case C-241/11
      
      
         European Commission
      
      
         v
      
      
         Czech Republic
      
      ‛Failure of a Member State to fulfil obligations — Failure to transpose Directive 2003/41/EC — Activities and supervision of institutions for occupational retirement provision — Failure to comply with the judgment of the Court in Case C-343/08 — Article 260 TFEU — Lump sum — Period for compliance with a judgment of the Court establishing a failure to fulfil obligations’
      
         I – Introduction
      
      
               1.
            
            
               By its action, the European Commission asks the Court to declare that, by failing to adopt the measures necessary to comply with the judgment of 14 January 2010 in Case C-343/08 Commission v Czech Republic (
                     2
                  ) relating to the partial failure to transpose Directive 2003/41/EC concerning institutions for occupational retirement provision, (
                     3
                  ) the Czech Republic failed to fulfil its obligations under Article 260(1) TFEU. The Commission also asks the Court to order the Czech Republic to pay a lump sum of EUR 3 364 395.20.
            
         
               2.
            
            
               The Court is therefore faced with the task of determining the penalty to be imposed, which is an important and common task under both national and European Union (‘EU’) law, particularly in the area of competition.
            
         
               3.
            
            
               The particular feature of this case lies in the fact that the infringement found in the Court’s judgment under Article 258 TFEU, namely the judgment in Commission v Czech Republic had very little practical impact in the Czech legal system, as there are no institutions for occupational retirement provision (‘IORPs’) established in that State.
            
         
               4.
            
            
               I recall that, in the area of pecuniary penalties as provided for in Article 260 TFEU, the Commission has published a series of communications (
                     4
                  ) with a view to standardising the practice for imposing such penalties, while contributing to the equal treatment of Member States. However, the Court is not bound by the proposals put forward by the Commission in those communications. (
                     5
                  )
            
         
               5.
            
            
               It follows, inter alia, from those communications that the Commission’s view is that all infringements of EU law, in particular the failure to comply with a judgment of the Court of Justice, are of a serious nature. However, to my mind that approach is marked by rhetoric, as it seems to exclude any examination of the proportionality of the penalty and any matching of the penalty to the individual circumstances of the case, notwithstanding the principles that are usually applied in penalty matters.
            
         
               6.
            
            
               It is true that, unlike national legal systems, which often classify infringements by reference to the penalties they attract, no such distinction is drawn under EU law. However, one aspect that national legal systems and EU law have in common is the account taken of the extent of the unlawfulness, understood as the infringement of a rule committed with a certain degree of intent or negligence. (
                     6
                  )
            
         
               7.
            
            
               Thus, in the system envisaged in Article 260 TFEU for the imposition of a lump sum, the nature of the infringement is determined first and foremost by its seriousness.
            
         
               8.
            
            
               Accordingly, in order to ensure that a balance is struck between the infringement and the proposed penalty, the Court could draw a distinction between infringements of EU law by differentiating between minor, ordinary and serious failures to fulfil obligations. Furthermore, since unlawfulness does not depend solely on the external conduct of the party responsible and the consequences of that party’s acts, but is also linked to the circumstances specific to that party, particularly the party’s intentions, the amount of the lump sum must take account of attenuating circumstances, such as sincere cooperation, and aggravating factors, such as the existence of previous infringements by the Member State in question.
            
         
               9.
            
            
               In the end, the weighting given to each of these elements forms part of the exercise of the Court’s unlimited jurisdiction in respect of the imposition of pecuniary penalties as provided for in Article 260 TFEU.
            
         
         II – The relevant EU rules
      
      
               10.
            
            
               On the entry into force of the Treaty of Lisbon, the applicable pre-litigation procedure under Article 260 TFEU in cases of failure to comply with a judgment of the Court was shortened, by elimination of the requirement for a reasoned opinion from the Commission. As follows from the wording of that article, the Commission is required only to send the Member State concerned a letter of formal notice before bringing the matter before the Court.
            
         
               11.
            
            
               The purpose of Directive 2003/41 – which the Czech Republic partially failed to transpose, resulting in a breach of its obligations – is to regulate the activities and supervision of IORPs. IORPs are establishments that aim to provide retirement benefits linked to an occupational activity, pursuant to an individual or collective agreement or contract between employers and their staff or organisations representing the latter. Directive 2003/41 seeks to introduce an internal market for occupational retirement provision on a European scale. In accordance with the principle of subsidiarity, Member States however still retain full responsibility for the organisation of their pension systems as well as for the allocation of roles between the three ‘pillars’ of the retirement system, so that they are responsible, in particular, in the context of the second pillar, for defining the role and functions of the different types of IORP.
            
         
               12.
            
            
               In order to achieve the stated objectives, Directive 2003/41 imposes various obligations on Member States concerning the IORPs located in their territories, especially the legal separation between sponsoring undertakings and IORPs (Article 8), compliance with conditions of operation (Article 9), the supervision of IORPs (Article 13) and the establishment of technical reserves (Articles 15 to 18). In addition, Article 20(1) of the directive provides that Member States are to allow undertakings located within their territories to sponsor IORPs authorised in other Member States and to allow IORPs authorised in their territories to accept sponsorship by undertakings located in other Member States. Articles 20(2) and (4) lay down the rules on supervision of the cross-border activities of IORPs.
            
         
               13.
            
            
               Under Article 22(1) of Directive 2003/41, the Member States were to adopt the provisions necessary in order to comply with that directive before 23 September 2005.
            
         
         III – The judgment in Case C-343/08 Commission v Czech Republic
         
      
      
               14.
            
            
               By its judgment in Commission v Czech Republic, the Court of Justice held that, by failing to adopt, within the period prescribed, the laws, regulations and administrative provisions necessary to comply with Articles 8, 9, 13, 15 to 18 and 20(2) to (4) of Directive 2003/41, the Czech Republic failed to fulfil its obligations under Article 22(1) of that directive.
            
         
               15.
            
            
               In response to the arguments advanced by the Czech Republic to the effect that the absence of IORPs in that Member State warranted not transposing the provisions of Directive 2003/41, the Court pointed out – in paragraphs 37 to 52 of its judgment – that, in accordance with the case-law, and in the absence of a geographical reason rendering the transposition of the provisions concerned redundant, it is important that, in the event that the Czech Republic decides to supplement its national retirement pension system with an occupational retirement provision scheme falling under the second pillar, all persons in that Member State, like everyone else in the European Union, should know what their rights and duties are.
            
         
               16.
            
            
               However, in paragraphs 53 to 62 of its judgment, the Court held that transposition of the provisions at issue in no way required the Czech Republic to alter its national retirement pension system. In particular, according to the Court, Directive 2003/41 cannot be interpreted as requiring a Member State which, by reason of the lack of a second pillar, prohibits the establishment of IORPs in its territory, to lift that prohibition.
            
         
         IV – The pre-litigation procedure, the action before the Court in Case C-241/11 and the developments that have taken place during these proceedings
      
      
               17.
            
            
               By letter dated 19 February 2010, the Commission invited the Czech Republic to notify it of the measures and precise timetable that the Czech Government intended to adopt in order to comply with the judgment in Commission v Czech Republic. In reply, the Czech Republic stated that the necessary measures would be adopted no later than June 2012. By letter dated 17 June 2010, the Minister for Finance of the Czech Republic informed the Commission that the decision on the method of transposition of Directive 2003/41 would be taken by the government resulting from the parliamentary elections on 28 and 29 May 2010. Subsequently, by letter dated 1 October 2010, the minister announced that a working document on the transposition of the directive would soon be submitted to the government.
            
         
               18.
            
            
               By letter dated 29 October 2010, the Commission sent the Czech Republic a letter of formal notice, calling upon it to submit its observations no later than two months from the date of receipt of that letter. At the request of the Czech Republic, the Commission agreed to extend that period to 28 January 2011.
            
         
               19.
            
            
               In response to the letter of formal notice, the Czech Republic indicated that it was preparing a draft law that would be submitted to the government during the first quarter of 2011 and to the parliament in April 2011, so that it would come into force during the third quarter of 2011.
            
         
               20.
            
            
               On 19 May 2011, the Commission brought the present action, in which it asks the Court:
               
                        —
                     
                     
                        to find that the Czech Republic has failed to adopt the measures necessary to comply with the judgment in Commission v Czech Republic;
                     
                  
                        —
                     
                     
                        to impose a penalty payment on the Czech Republic in the amount of EUR 22 364.16 for each day of delay in adopting the measures necessary to comply with that judgment from the date of delivery of the judgment in the present case until the date of adoption of the compliance measures; and
                     
                  
                        —
                     
                     
                        to impose also a lump sum on the Czech Republic in the amount of EUR 5 644.80 for each day of delay in adopting those measures from the date of delivery of the judgment at issue until the date of delivery of the judgment in the present case, or until the date of adoption of the compliance measures.
                     
                  
         
               21.
            
            
               On 2 September 2011, the Czech Republic notified the Commission of the publication and entry into force, on 31 August 2011, of Law No 260/2011 (
                     7
                  ) (‘Law No 260/11’), which, according to that Member State, ensures full compliance with the judgment in Commission v Czech Republic. After examining the content of Law No 260/11, the Commission, in its reply, considered that the Czech Republic had brought its legislation into line with the judgment. Consequently, the Commission withdrew its claim for a penalty payment. However, it has maintained its claim regarding payment of a lump sum.
            
         
         V – The action and the arguments of the parties
      
      A – The existence of a failure to fulfil obligations
      
      
               22.
            
            
               It should be observed from the outset that, as a result of the entry into force of the Treaty of Lisbon, the reference date for the purposes of determining whether there has been a failure to fulfil obligations under Article 260 TFEU is the date of expiry of the period prescribed in the letter of formal notice issued pursuant to the first subparagraph of Article 260(2). (
                     8
                  )
            
         
               23.
            
            
               Whilst the Czech Republic disputes not the actual existence of the failure to fulfil its obligations complained of, but only the seriousness of the infringement as resulting from the Commission’s interpretation, the fact remains that, when the period prescribed in the letter of formal notice from the Commission – which had been extended – expired, the Czech Republic had not adopted all the measures necessary in order to comply in full with the obligations flowing from the judgment in Commission v Czech Republic. Consequently, it must be found that the Czech Republic has infringed its obligation under Article 260(1) TFEU.
            
         B – The claim for a lump sum
      
      
               24.
            
            
               Since the measures necessary to comply with the judgment in Commission v Czech Republic have been adopted during the present proceedings, the claim for the imposition of a penalty payment has become devoid of purpose in accordance with the case-law. (
                     9
                  )
            
         
               25.
            
            
               By contrast, the Commission has maintained its claim for the imposition of a lump sum calculated in accordance with its 2005 communication, referred to above. It follows from that communication that the lump sum is the figure resulting from multiplying a daily amount by the number of days the infringement has persisted. The daily amount results from multiplying a standard flat rate (
                     10
                  ) by the coefficient for the seriousness of the infringement (on a scale of 1 to 20) and by an ‘n’ factor, which reflects the gross domestic product of the Member State and the number of votes it has in the Council of the European Union.
            
         
               26.
            
            
               The Commission draws attention to the obligation incumbent on all Member States to transpose Directive 2003/41 in full, even though, in the present case, the lack of transposition would not have had, in practical terms, any real impact, since there is no second pillar in the Czech retirement pension system. It notes that, by adopting Directive 2003/41, the EU legislature intended all Member States to establish the conditions necessary for the activities of IORPs in their respective territories. Furthermore, in the view of the Commission, both the relevant provisions of Directive 2003/41 and the content of the judgment in Commission v Czech Republic were clearly expressed and left no doubt as to how they should be implemented.
            
         
               27.
            
            
               As regards the details of the calculation of the lump sum, the Commission suggests using a coefficient for seriousness of 8, as the rules laid down in Directive 2003/41 are, in its view, essential for the provision of cross-border services by IORPs and, without their full transposition into domestic law, the conditions for the operation of an internal market for occupational retirement provision are not established. The Commission notes that the lack of transposition constitutes an infringement of the principle of legal certainty, the seriousness of which is exacerbated so far as concerns the provisions on prudential rules, and rules governing supervision, designed to guarantee a high degree of security for future pensioners.
            
         
               28.
            
            
               Moreover, in response to the argument advanced by the Czech Republic regarding the partial transposition of Directive 2003/41 within the prescribed period, the Commission maintains that this circumstance would not alter the situation in any way whatsoever. The partial transposition covers only IORPs providing cross-border services in the Czech Republic. Accordingly, the partial transposition has not made it possible to identify the operating conditions for IORPs subject to supervision by the Czech authorities or which prudential rules apply to those institutions.
            
         
               29.
            
            
               The Czech Republic, for its part, mainly disputes the seriousness of the continuation of the infringement that was established in the judgment in Commission v Czech Republic, which it claims is negligible or even inexistent. The Member State considers that it should not be required to pay a lump sum or that the amount thereof should be significantly reduced in light of the particular circumstances of the case.
            
         
               30.
            
            
               Firstly, the Czech Republic observes that the Commission’s assessment of the seriousness of the infringement is based on an incorrect premiss, in that it confuses the issue of seriousness with that of the infringement of EU law. Secondly, the Czech Republic recalls that, in order to evaluate the seriousness of an infringement, account must be taken of its effects on private and public interests, as well as the degree of urgency in having the Member State concerned comply with its obligations, the importance of the legal rule held to be infringed and the conduct of the Member State in question.
            
         
         VI – General assessment
      
      A – The nature of a lump sum
      
      
               31.
            
            
               It follows from the case-law, particularly in consequence of the judgment in Case C-304/02 Commission v France, (
                     11
                  ) that the two pecuniary penalties provided for in Article 260(2) TFEU do not serve the same function. While the imposition of a penalty payment seems suited to inducing a Member State to put an end, as soon as possible, to the breach complained of, the imposition of a lump sum is based more on an assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations. (
                     12
                  )
            
         
               32.
            
            
               The lump sum therefore constitutes a penalty within the strict meaning of the term. In contrast to penalty payments, which are essentially of a coercive nature, the function of lump sums is to punish past inaction by the Member State concerned.
            
         
               33.
            
            
               Thus, the Court has defined the boundaries of the lump sum penalty by emphasising its dissuasive nature and its role in preventing the future repetition of infringements. (
                     13
                  ) In the Commission’s view, the threat of such a penalty being imposed is likely, in particular, to encourage a Member State to comply with the original judgment establishing its failure to fulfil obligations as soon as possible and, in particular, before proceedings are initiated before the Court a second time. (
                     14
                  )
            
         
               34.
            
            
               In addition, the punitive nature of the lump sum penalty signifies that it has a retributive function which corresponds to the principle that all infringements must be followed by a proportionate penalty in order to restore the rule of law.
            
         
               35.
            
            
               Since an infringement is an act defying the established legal order, a penalty constitutes an appropriate response. In my opinion, however, the appropriateness of the response demands that the lump sum imposed be as low as possible in the case of infringements of a particularly minor nature.
            
         
               36.
            
            
               It has been held that it is for the Court, in the exercise of its discretion, to set the amount of the lump sum payment in a manner that is appropriate to the circumstances and proportionate both to the breach that has been established and the ability to pay of the Member State concerned. (
                     15
                  ) The decision whether to impose a lump sum payment must, in each individual case, depend on all of the relevant factors pertaining both to the particular nature of the infringement established and to the individual conduct of the Member State involved. (
                     16
                  )
            
         
               37.
            
            
               The nature of lump sum penalties as a deterrent was reinforced in particular by the judgment in Case C-121/07 Commission v France, where the Court decided to impose a lump sum payment even though the initial judgment had been complied with in full prior to conclusion of the procedure initiated on the basis of Article 260 TFEU (ex Article 228 EC). Consequently, while making it clear that the penalty is not automatic, the Court confirmed that it has discretion as to whether or not the imposition of a lump sum payment is necessary, having regard to the circumstances of the case at hand.
            
         B – The role of the Commission’s communications on the application of Article 260 TFEU
      
      
               38.
            
            
               It is undisputed that guidelines such as those contained in the Commission’s communications referred to above, concerning the implementation of Article 260 TFEU, contribute to ensuring that that institution’s actions are transparent, foreseeable and consistent with legal certainty. (
                     17
                  )
            
         
               39.
            
            
               In contrast to national legal systems where, more often than not, it is for the legislature, representatives of the prosecution authorities or, possibly, the appellate or supreme courts to lay down the rules or practices applicable to the level of penalties, it falls to the Commission to publish this reference tool within the field of application of Article 260 TFEU.
            
         
               40.
            
            
               Like Advocate General Ruiz Jarabo Colomer, I consider that, although the communications are not legislative texts stricto sensu, they are binding on the institution from which they emanate, at least in the sense that the institution in question may depart from them only if it states appropriate reasons for doing so, since otherwise it would be in breach of the principle of equal treatment. (
                     18
                  )
            
         
               41.
            
            
               I also note that in other branches of EU law, in particular competition law, in adopting such rules of conduct and announcing by publishing them that they will henceforth apply to the cases to which they relate, the Commission imposes a limit on the exercise of its discretion. (
                     19
                  ) Therefore, the Commission is bound by the communications that it issues, to the extent that they do not depart from the rules in the Treaty. (
                     20
                  )
            
         
               42.
            
            
               It should be noted that the Commission’s communications on the application of Article 260 TFEU are an indispensable tool for the Court enabling it to adopt a fair and coherent practice, and helping to make judicial decisions more foreseeable. The communications contribute to the development of a methodical and rigorous approach by the Court to the imposition of pecuniary penalties. The main purpose of the Commission’s suggestions is to allow the Court to proceed on the basis of a class of penalties which is commensurate with the nature of the infringement complained of. They therefore constitute both an indicative starting point for the Court for the overall assessment of the infringement complained of and a mechanism to ensure that the amount of the penalty does not become arbitrary or subjective, even though that amount will never be mathematically objective.
            
         
               43.
            
            
               However, it is to be pointed out that the Court can rely on the abovementioned communications only in so far as they provide an analytical framework and a methodological benchmark for the Court’s analysis. Consequently, in the exercise of its discretion, the Court is relieved, in particular, of the obligation to furnish details of the calculation of the lump sum payment imposed on the Member State concerned.
            
         
         VII – Methodology for the imposition of a lump sum
      
      A – Application of the seriousness criterion in the practice of the Commission
      
      
               44.
            
            
               In accordance with its 2005 communication, (
                     21
                  ) the Commission takes three criteria into account for the purposes of calculating the amount of the lump sum, namely the seriousness of the infringement, its duration and the ability of the Member State to pay. To my mind, the main difficulty with the application of those criteria lies in the risk of overlap, especially between the criteria of seriousness and duration. Despite being an objective parameter, the duration of the infringement may reasonably contribute to aggravating the seriousness of the failure to fulfil obligations that is complained of.
            
         
               45.
            
            
               In this connection, whilst I accept that the variety of infringements complained of is wide, I should nevertheless point out that the Commission’s use of the coefficient for seriousness for the purposes of imposing pecuniary penalties is characterised by a certain lack of consistency. (
                     22
                  )
            
         
               46.
            
            
               It is surprising to find that, as regards penalty payments, in one of the most complex cases heard to date, on the application of pecuniary penalties to a situation involving a generalised and structural infringement, the Commission proposed a coefficient for seriousness of 10. By contrast, in a later case relating to an infringement of a purely legislative nature, the coefficient was set at 11. (
                     23
                  ) In addition, in the only case in which the infringement could not be established for want of evidence, the Commission had proposed a coefficient for seriousness of 14. (
                     24
                  ) Lastly, the Commission has gone so far as to propose a coefficient of 1 in a case relating to a failure to transpose a directive. (
                     25
                  )
            
         
               47.
            
            
               More specifically, as regards claims for the imposition of a lump sum in cases involving a failure to transpose directives, the Commission has proposed coefficients of 11 (
                     26
                  ) and 12. (
                     27
                  ) In contrast, in cases involving a failure to recover State aid, which are characterised by a greater level of complexity, the proposed coefficient has varied between 5, (
                     28
                  ) 8 (
                     29
                  ) and 12. (
                     30
                  )
            
         
               48.
            
            
               By way of comparison, and for the record, I recall that in the present case the Commission assessed the seriousness of the infringement as warranting the application of a coefficient of 8 on a scale of 1 to 20.
            
         B – Analysis of the seriousness of the infringement for the purposes of imposing a lump sum
      
      
               49.
            
            
               First of all, I note that, unlike declaratory judgments delivered pursuant to Article 258 TFEU, which reflect an objective position under EU law, (
                     31
                  ) judgements delivered pursuant to Article 260(2) TFEU imposing pecuniary penalties contain a subjective element, as they involve an assessment of the culpability of the Member State. In addition, the second type of judgment creates rights and obligations when the Court decides to impose those penalties.
            
         
               50.
            
            
               In my opinion, the assessment of the seriousness of an infringement involving a failure to comply with a judgment of the Court encompasses, on the one hand, subjective factors, which, inter alia, relate to the culpability of the Member State and, on the other hand, determination of the degree of seriousness which is based on objective factors stemming from the scale of the infringement and its effects.
            
         1. The subjective dimension of the seriousness of the infringement
      
               51.
            
            
               From a subjective standpoint, the question that arises for the purposes of determining the amount of the lump sum is whether the Member State acted in good faith after delivery of the initial judgment establishing a failure to fulfil obligations. That situation is assessed in light of the measures adopted by the Member State to comply with the judgment delivered pursuant to Article 258 TFEU.
            
         
               52.
            
            
               The relevant parameters for analysis include an assessment of the diligence and the cooperation in good faith of the Member State. Thus, the Court might decide whether the non-compliance at issue is the result of intentional or simply negligent conduct and, if necessary, determine the extent of such negligence. I think it is fundamental that a Member State which has acted in good faith should not be ordered to pay the same lump sum amount as a Member State which has not displayed any good will at all.
            
         
               53.
            
            
               In the specific case of the conduct of the Czech Republic in this instance, it is apparent from the documents before the Court that it fully complied with the judgment in Commission v Czech Republic by adopting legislation to transpose Directive 2003/41 19 months after delivery of the judgment, or six months after the present action was brought.
            
         
               54.
            
            
               The Czech Republic cites the following reasons for its delay: its internal situation, that is, a change in government following the parliamentary elections; the debate on the reform of the national social security system; and economic instability linked to the global financial crisis.
            
         
               55.
            
            
               According to settled case-law, a Member State admittedly cannot plead provisions, practices or situations prevailing in its domestic legal order to justify the failure to observe obligations arising under EU law. (
                     32
                  )
            
         
               56.
            
            
               However, in light of the principle impossibilium nulla obligatio est, it is open to the Court – in its assessment of the seriousness of the infringement with a view to the possible imposition of pecuniary penalties – to take account of the actual difficulties which a Member State may experience during the process of complying with a judgment under Article 258 TFEU. (
                     33
                  ) In contrast to infringement proceedings pursuant to Article 258 TFEU, an approach based on strict liability cannot be applied in the context of proceedings under Article 260 TFEU.
            
         
               57.
            
            
               In its pleadings, the Czech Republic points out that it initiated the compliance process the month after the judgment was delivered and that, further, it fulfilled its duty to cooperate in good faith with the Commission by providing detailed replies to its requests at all times. Moreover, the Czech Republic argues that Directive 2003/41 had already been transposed in part within the prescribed period and, therefore, before delivery of the Court’s first judgment. (
                     34
                  ) In addition, the directive was transposed in full in the course of the present proceedings.
            
         
               58.
            
            
               It certainly seems to me that the Czech Republic did indeed cooperate in good faith with the Commission’s staff, in the context of the correspondence exchanged.
            
         
               59.
            
            
               Furthermore, it seems to me undeniable that partial or full transposition in the course of proceedings before the Court under Article 260 TFEU is a factor in favour of the Member State concerned. Indeed, the Court takes this aspect into account in its assessment of the seriousness of an infringement, but that does not release the Member State from liability for the consequences of its infringement in the form of payment of a lump sum. (
                     35
                  )
            
         
               60.
            
            
               None the less, I have identified an aggravating factor in the conduct of the Czech Republic, resulting from a degree of negligence and a lack of coherence in national procedures, which unduly delayed compliance with the Court’s judgment. As from the date of delivery of the judgment in Commission v Czech Republic, the extent of the legislative work to be carried out in order to comply with that judgment was clear. The degree of effort required for that purpose does not appear to be excessive, even in the political context of parliamentary elections.
            
         
               61.
            
            
               To conclude, I consider that in view of such conduct, which was seriously marked by negligence, the Court cannot avoid imposing payment of a lump sum on the Czech Republic.
            
         2. The objective dimension of the seriousness of the infringement
      
               62.
            
            
               The objective aspect of the seriousness parameter has been defined in the case-law of the Court mainly by reference to the nature of the infringement. The relevant factors in that respect include the length of time for which the breach of obligations has persisted since the judgment establishing it was delivered and the public and private interests in question. (
                     36
                  ) It is also striking that the Court frequently reduces the lump sum amount proposed by the Commission. (
                     37
                  )
            
         
               63.
            
            
               Whilst conceding that the duration and seriousness parameters overlap, I will focus this analysis on the objective aspect of the seriousness of the infringement complained of and address the issue of the passage of time at a later stage.
            
         
               64.
            
            
               As regards the impact of the non-transposition at issue on public and private interests, it should be recalled that Directive 2003/41 seeks to introduce an internal market for occupational retirement provision in which IORPs must have freedom to provide services and freedom of investment. (
                     38
                  )
            
         
               65.
            
            
               I would like to underline from the outset that the infringement which the Commission complains the Czech Republic has committed in the present case is, in my opinion, less serious than the Commission’s interpretation indicates. There are attenuating circumstances that I think ought to be applied to the benefit of the Czech Republic.
            
         
               66.
            
            
               Firstly, since, in accordance with the Court’s judgment, Directive 2003/41 does not require the Czech Republic to create a second pillar or lift the prohibition on the establishment of IORPs in its territory, the actual impact of the failure to transpose the provisions in question is virtually nil. Since the main aim of transposition would be to provide information to persons potentially concerned by the activities of IORPS, the lack of such transposition into Czech law – from which a second pillar of the national retirement pension system is absent – cannot be regarded as particularly serious. Consequently, the impact of the infringement complained of on public and private interests is very limited.
            
         
               67.
            
            
               Secondly, in the light of the specific situation prevailing in the Czech Republic, the very broad interpretation of Directive 2003/41 as put forward by the Commission in the initial action for failure to fulfil obligations was indeed liable to lead to confusion. (
                     39
                  ) Therefore, even if the Czech Republic had been especially diligent, it would not, in any event, have been in a position at any point in time during the initial infringement proceedings to adopt effective measures to bring an end to the infringement complained of.
            
         
               68.
            
            
               Even though the domestic measures that had to be adopted would not have had any specific application, that situation would, however, only have lasted until the national legislature had introduced a second pillar into the national retirement pension system. It should be noted that, in those circumstances, the legislature could have modified the legal framework thereby established within the limits resulting from Directive 2003/41.
            
         C – Analysis of the duration of the infringement for the purposes of imposing a lump sum
      
      
               69.
            
            
               The present proceedings draw attention to two aspects relating to the account to be taken of the passage of time. Firstly, they require an assessment to be conducted of the length of time required to comply with the judgment in Commission v Czech Republic. Secondly, they concern the issue of the speed with which the Commission initiated the procedure under Article 260 TFEU.
            
         
               70.
            
            
               As regards the first aspect, I think it is obvious that the duration of the infringement, in the context of compliance with a judgment of the Court, is a matter that is left entirely in the hands of the Member State concerned. That Member State can decide either to embark upon compliance with the judgment at the point in time it considers appropriate or, if there are residual doubts as to the extent of its obligations, it can apply to the Court for an interpretation of the judgment delivered under Article 258 TFEU, in accordance with Article 43 of the Statute of the Court of Justice of the European Union read in conjunction with Article 158 of its Rules of Procedure. (
                     40
                  )
            
         
               71.
            
            
               Accordingly, duration is a factor that contributes to aggravating the objective seriousness of an infringement consisting of failure to comply with a judgment of the Court, and can therefore be used as an indication in the analysis of the amount of the penalty, namely, in this case, the lump sum.
            
         
               72.
            
            
               In its pleadings, the Czech Republic states that it proceeded without delay to remedy the infringement established by the Court in its judgment. In addition, inasmuch as the sole aim of the transposition was to provide sufficient information to persons potentially concerned by any decision to establish the second pillar in the territory of the Czech Republic, that Member State downplays the urgency of the need to adopt measures to comply with the judgment in Commission v Czech Republic.
            
         
               73.
            
            
               The Commission, for its part, reiterates that compliance with a judgment establishing a failure to fulfil obligations must be completed as soon as possible. In the present case, Law No 260/11 was not adopted until 19 months after delivery of the judgment in Commission v Czech Republic. Furthermore, a period of 12 months elapsed between the date of delivery of that judgment and the date of expiry of the period prescribed in the letter of formal notice, sent in accordance with the procedure under Article 260 TFEU. The Commission states, finally, that five years and four months elapsed between that last date and the date set by Article 22(1) of Directive 2003/41 for transposition of the directive.
            
         
               74.
            
            
               In that regard, it should be remembered that the strict liability of a Member State on which actions pursuant to Article 258 TFEU are based cannot be applied in proceedings for the imposition of pecuniary penalties under Article 260 TFEU.
            
         
               75.
            
            
               It is true that the case-law requires the process of compliance to be initiated at once and to be completed as soon as possible, (
                     41
                  ) which means that the Member State concerned must take steps to comply with a judgment as swiftly as possible after its delivery. Nevertheless, there is no doubt that, depending on the particular political and administrative circumstances at national level and the degree of complexity of the infringement established in the judgment, full compliance therewith will be achieved only at a later date. The determination of the lump sum must therefore take such circumstances into account.
            
         
               76.
            
            
               Besides, the mere act of initiating the process of compliance obviously does not guarantee that such compliance will be effective and comprehensive, if the Member State sees no immediate interest in it. It is not inconceivable that a Member State might adopt a transitional measure and notify it to the Commission in order to delay its analysis of compliance with the judgment, without however intending to comply with the Court’s judgment in full. (
                     42
                  ) The need to deter Member States from engaging in such delaying tactics must also form part of the decision on the lump sum.
            
         
               77.
            
            
               In the present case, given the unambiguous nature of the infringement complained of, it seems to me that the 19-month period during which the breach of obligations persisted – dating from the delivery of the judgment in Commission v Czech Republic on 14 January 2010 – cannot be justified.
            
         
               78.
            
            
               As regards the second aspect, namely how quickly the Commission should initiate the procedure under Article 260 TFEU, it is apparent from the documents in the case that the Commission sent the first request for information on compliance with the judgment in Commission v Czech Republic one month after delivery of that judgment, and then sent the letter of formal notice nine months later. Almost one year elapsed between the date of the judgment and the expiry of the period prescribed in the letter of formal notice.
            
         
               79.
            
            
               It is interesting to note that, except in cases of very complex infringements, the Commission’s practice is characterised by a progressive shortening of the period granted to Member States between the date of delivery of the first judgment establishing an infringement and the expiry of the period that used to be prescribed in the reasoned opinion and is now set in the letter of formal notice. Thus, in the first cases brought on the basis of the former Article 228 EC, that period was two and a half years, (
                     43
                  ) four and a half years, (
                     44
                  ) or even nine years. (
                     45
                  ) In the most recent cases, the period varies between one and two years. (
                     46
                  )
            
         
               80.
            
            
               The grant of an over-generous period by the Commission is liable to have an impact on the calculation of the lump sum. The passage of time in both the pre-litigation procedure and proceedings before the Court contributes to increasing the lump sum amount, in particular where the first judgment has not been fully complied with on the date of delivery of the second judgment, under Article 260 TFEU. (
                     47
                  )
            
         
               81.
            
            
               Consequently, whilst conceding that the Commission sent the first letter relatively early, I consider that the period prescribed in the letter of formal notice, by virtue of which the Czech Republic had one year to comply with the Court’s judgment, is not unreasonable, in view of the scale of the legislative amendments necessary to bring the infringement complained of to an end. That period also fits within the Commission’s practice, described above.
            
         
               82.
            
            
               As a subsidiary point, I note that the Commission seems to state in its observations that the Court should also take account – for the purposes of imposing a fine under Article 260 TFEU – of the duration of the infringement from the expiry of the deadline for transposition of Directive 2003/41. That approach is, however, wrong. In any event, since the entry into force of the Treaty of Lisbon, such a calculation is a requirement in proceedings brought under Article 260(3) TFEU concerning failures to fulfil the obligation to notify implementing measures, during the first infringement action. (
                     48
                  )
            
         
               83.
            
            
               Finally, I consider that the amendment to Article 260 TFEU introduced by the Treaty of Lisbon, removing the reasoned opinion stage so as to shorten the pre-litigation stage of the procedure, militates in favour of a stricter approach as regards the period for Member States to comply with a judgment.
            
         
         VIII – The lump sum amount to be imposed in the present case
      
      
               84.
            
            
               In its application, the Commission calls on the Court to order the Czech Republic to pay a lump sum of EUR 3 364 395.20. That sum results from multiplying the daily amount of EUR 5 644.80 by the number of days the infringement persisted, that is to say, 594 days from the delivery of the judgment in Commission v Czech Republic on 14 January 2010 until 31 August 2011, when the provisions transposing Directive 2003/41 were adopted. The daily amount proposed by the Commission results from multiplying the standard flat rate of EUR 210 by the coefficient for seriousness of 8 and the ‘n’ factor for the Czech Republic, which is 3.36. (
                     49
                  )
            
         
               85.
            
            
               Before addressing the indicative calculation of the lump sum amount, I would like to recall that, in response to concerns raised by Member States, the Court has ruled in favour of taking account of a Member State’s ability to pay as it stands in the light of the latest economic data submitted for appraisal by the Court. (
                     50
                  ) Therefore, the Court takes account of recent trends in inflation and in the gross domestic product of the Member State in question at the time of the Court’s examination of the facts. (
                     51
                  )
            
         
               86.
            
            
               From a temporal standpoint, such an adjustment in the economic data – with the reference point being the time of the Court’s examination of the facts – is an expression of the principles referred to above according to which the fixing of the lump sum must be appropriate to the circumstances and proportionate both to the breach that has been established and to the ability to pay of the Member State concerned. (
                     52
                  )
            
         
               87.
            
            
               In the present case, since the parties to the proceedings have not updated the relevant economic data, reference should be made to the most recent Commission communication, of 2012, on the updating of data used to calculate pecuniary penalties. (
                     53
                  ) In particular, according to that communication, the minimum lump sum for the Czech Republic has increased and is currently set at EUR 1 768 000. In addition, the flat-rate amount for lump sum payments remains at EUR 210, but the special ‘n’ factor for the Czech Republic has been set at 3.34.
            
         
               88.
            
            
               As regards, finally, the calculation of the amount to be imposed in this case, I propose first of all that the Court use a lower coefficient for seriousness than that proposed by the Commission, namely 8.
            
         
               89.
            
            
               In the present case, having regard to, on the one hand, the negligent conduct of the Czech authorities and, on the other, the fact that the failure to comply with the judgment establishing a breach of obligations had almost no practical impact, a coefficient of 1 to 2 seems more appropriate.
            
         
               90.
            
            
               I note that a coefficient for seriousness of 1 was proposed by the Commission on one previous occasion, although in the context of an application for a penalty payment. The Court granted that request, which was considered to be an adequate reflection of the degree of seriousness of the infringement subsisting at the date of the Court’s examination of the facts, and imposed a penalty payment on the Member State concerned. (
                     54
                  )
            
         
               91.
            
            
               Thus, applying the updated data referred to above and a coefficient for seriousness of 1, the daily amount would be EUR 701.40, that is, EUR 210 multiplied by the ‘n’ factor of 3.34. Multiplied by the number of days the infringement persisted (594), the lump sum amount to be imposed would be EUR 416 631.60. By contrast, if a coefficient for seriousness of 2 were applied, the daily amount would be EUR 1 402.80 which, multiplied by the number of days the infringement persisted, would result in a lump sum of EUR 833 263.20.
            
         
               92.
            
            
               However, if the Court were to opt for such low coefficients, it would be faced with the problem that the lump sum thus proposed would be lower than the minimum amount of EUR 1 768 000 calculated by the Commission for the Czech Republic in its 2005 communication, as updated by the recent 2012 communication, referred to above.
            
         
               93.
            
            
               In the Commission’s view, if the sum calculated on the basis of a daily rate is less than the minimum lump sum, the latter amount should generally be imposed. According to the Commission, this fixed minimum base reflects the principle that any case of persistent non-compliance with a Court judgment by a Member State in itself represents an attack on the principle of legality in a Community governed by the rule of law, which calls for a real sanction; a fixed minimum such as this also avoids the proposal of purely symbolic amounts which would have no deterrent effect and could undermine, rather than strengthen, the authority of Court judgments. (
                     55
                  )
            
         
               94.
            
            
               I should point out that the proposal of a minimum lump sum as envisaged by the Commission results in the application of the lowest coefficients being excluded in the majority of cases, except where the duration of the infringement is very long. Furthermore, the strict principle of a minimum lump sum also seems to me to go beyond what is necessary in order to avoid the imposition of purely symbolic amounts, in the knowledge that, from a budgetary perspective, the unexpected forfeiture of an amount that could be regarded as ‘trifling’ has an undoubted deterrent effect for Member States.
            
         
               95.
            
            
               Since, as I have already stated, the Commission’s communication is nothing more than a benchmark analytical framework for the Court, the Court can conduct its fair assessment of the case, in the overall context of the infringement complained of, on the basis of a methodological approach, whilst applying the criteria laid down in the Commission communication.
            
         
               96.
            
            
               Consequently, in view of all of the factors in the present case, and in order to ensure that the dissuasive and punitive function of the lump sum penalty is upheld, I propose that the Court impose on the Czech Republic a lump sum of EUR 1 million.
            
         
         IX – Conclusion
      
      
               97.
            
            
               In the light of the foregoing considerations, I propose that the Court should:
               
                        —
                     
                     
                        declare that, by failing to adopt the measures necessary to comply with the judgment of 14 January 2010 in Case C-343/08 Commission v Czech Republic, the Czech Republic has failed to fulfil its obligations under Article 260 TFEU;
                     
                  
                        —
                     
                     
                        order the Czech Republic to pay to the European Commission, into the ‘European Union own resources’ account, a lump sum of EUR 1 million; and
                     
                  
                        —
                     
                     
                        order the Czech Republic to pay the costs.
                     
                  
         (
            1
         )	Original language: French.
      (
            2
         )	[2010] ECR I-275.
      (
            3
         )	Directive of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision (OJ 2003 L 235, p. 10).
      (
            4
         )	See, inter alia, the following: Memorandum on applying Article 171 of the EC Treaty (OJ 1996 C 242, p. 6); Method of calculating the penalty payment provided for pursuant to Article 171 of the EC Treaty (OJ 1997 C 63, p. 2); Communication SEC(2005) 1658 of 12 December 2005 entitled ‘Application of Article 228 of the EC Treaty’ (OJ 2007 C 126, p. 12), as updated by Communication SEC(2010) 923 of 20 July 2010 entitled ‘Application of Article 260 of the Treaty on the Functioning of the European Union. Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice in infringement proceedings’.
      (
            5
         )	Case C-387/97 Commission v Greece [2000] ECR I-5047, paragraphs 86 and 89.
      (
            6
         )	See, in the case of criminal law, Darbellay, J., Théorie générale de l’illicéité, p. 124.
      (
            7
         )	Laws of the Czech Republic, 31 August 2011, vol. 92.
      (
            8
         )	Case C-610/10 Commission v Spain [2012] ECR, paragraph 67; judgment of 19 December 2012 in Case C-279/11 Commission v Ireland, paragraph 19; and judgment of 19 December 2012 in Case C-374/11 Commission v Ireland, paragraph 19.
      (
            9
         )	Case C-121/07 Commission v France [2008] ECR I-9159, paragraphs 26 to 28.
      (
            10
         )	See Commission Communication C(2012) 6106 final entitled ‘Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice in infringement proceedings’, which sets the standard flat rate at EUR 210.
      (
            11
         )	[2005] ECR I-6263.
      (
            12
         )	Case C-304/02 Commission v France, paragraph 81.
      (
            13
         )	Case C-369/07 Commission v Greece [2009] ECR I-5703, paragraph 145; Case C-610/10 Commission v Spain, paragraph 142; and Case C-374/11 Commission v Ireland, paragraph 48.
      (
            14
         )	Case C-121/07 Commission v France, paragraph 33.
      (
            15
         )	Case C-369/07 Commission v Greece, paragraph 146, and Case C-610/10 Commission v Spain, paragraph 143.
      (
            16
         )	Case C-610/10 Commission v Spain, paragraph 141.
      (
            17
         )	Case C-70/06 Commission v Portugal [2008] ECR I-1, paragraph 34; Case C-369/07 Commission v Greece, paragraph 112; and Case C-610/10 Commission v Spain, paragraph 116.
      (
            18
         )	Opinion in Case C-387/97 Commission v Greece, points 12 and 100.
      (
            19
         )	Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others v Commission [2005] ECR I-5425, paragraphs 211 to 213.
      (
            20
         )	See, amongst many others, Case C-464/09 Holland Malt v Commission [2010] ECR I-12443, paragraph 47.
      (
            21
         )	Communication SEC(2005) 1658, referred to above.
      (
            22
         )	For an analysis of the use of the coefficient for seriousness, see, inter alia, Kilbey, I., ‘The interpretation of Article 260 TFEU (ex 228 EC)’, European Law Review, 2010, vol. 35, No 3, p. 370. For an analysis in the light of, inter alia, the importance of the rules of EU law, see van Rijn, T., ‘Non-exécution des arrêts de la Cour de justice par les États membres’, Cahier de droit européen, 2008, Nos 1 and 2, p. 105 et seq.
      (
            23
         )	Commission v Portugal.
      (
            24
         )	Case C-119/04 Commission v Italy [2006] ECR I-6885.
      (
            25
         )	Case C-177/04 Commission v France [2006] ECR I-2461.
      (
            26
         )	Case C-109/08 Commission v Greece [2009] ECR I-4657.
      (
            27
         )	Case C-407/09 Commission v Greece [2011] ECR I-2467.
      (
            28
         )	Case C-610/10 Commission v Spain.
      (
            29
         )	Case C-496/09 Commission v Italy [2011] ECR I-11483.
      (
            30
         )	Case C-369/07 Commission v Greece.
      (
            31
         )	Case C-39/10 Commission v Estonia [2012] ECR, paragraph 63.
      (
            32
         )	See, among many others, the recent judgment in Case C-374/11 Commission v Ireland, paragraph 39. Also see Case C-407/09 Commission v Greece.
      (
            33
         )	See, in this regard, Case C-374/11 Commission v Ireland, paragraph 40.
      (
            34
         )	The Czech Republic states that Directive 2003/41 had already been partially transposed before the Commission initiated the procedure under Article 260 TFEU, as regards the part relating to the possibility given to IORPs of providing their services in national territory in the form of cross-border supplies.
      (
            35
         )	Case C-121/07 Commission v France, paragraphs 60 and 84. For examples of cases in which the efforts of national authorities were taken into account, see Case C-407/09 Commission v Greece, paragraph 36, and Case C-374/11 Commission v Ireland, paragraphs 40 and 41.
      (
            36
         )	Case C-121/07 Commission v France, paragraph 64 and the case-law cited, and Case C-374/11 Commission v Ireland, paragraph 51.
      (
            37
         )	In Case C-121/07 Commission v France, the Court, in light of the adoption of measures to ensure compliance with the judgment without delay and of the observance of the principle of sincere cooperation, reduced the amount from almost EUR 43 million to EUR 10 million. In Case C-568/07 Commission v Greece [2009] ECR I-4505, the Court reduced the lump sum from EUR 5 million to EUR 1 million on the ground that the infringement had partially come to an end even before delivery of the first judgment establishing a failure to fulfil obligations. In Case C-369/07 Commission v Greece, the Court ordered the Member State to pay a lump sum of EUR 2 million in place of the proposed EUR 15 million. Likewise, in Case C-407/09 Commission v Greece, the lump sum was reduced by one third to EUR 3 million. In Case C-496/09 Commission v Italy, the Court ordered the Member State to pay a lump sum of EUR 30 million instead of the EUR 68 million requested by the Commission. In Case C-610/10 Commission v Spain, the Court, while pointing out that compliance with the judgment did not require any considerable effort, set the lump sum amount at EUR 20 million instead of the EUR 50 million called for by the Commission.
      (
            38
         )	Commission v Czech Republic, paragraphs 43 and 44. Also see the detail on that directive in points 11 to 13 of this Opinion.
      (
            39
         )	According to the Czech Republic, the Commission created uncertainty by asserting that Directive 2003/41 required the Czech Republic to lift the prohibition on the establishment of IORPs in its territory. It was only when the judgment was delivered in Commission v Czech Republic that the Court rejected that assertion, dispelling all doubts as to the implications of the directive.
      (
            40
         )	I note, however, that the Court has already held that the question of which measures are necessary to comply with a judgment establishing a failure to fulfil obligations under Article 258 TFEU does not form part of the subject matter of that judgment, with the result that such a question cannot form the subject matter of an application for interpretation. See, in this regard, Case C-503/04 Commission v Germany [2007] ECR I-6153, paragraph 15, and the Opinion of Advocate General Geelhoed in Case C-177/04 Commission v France, point 43.
      (
            41
         )	Case C-278/01 Commission v Spain [2003] ECR I-14141, paragraph 27.
      (
            42
         )	See Commission v Portugal.
      (
            43
         )	Case C-278/01 Commission v Spain.
      (
            44
         )	Case C-387/97 Commission v Greece.
      (
            45
         )	Case C-304/02 Commission v France.
      (
            46
         )	In Case C-119/04, the period was two years; in Case C-177/04, one and a half years; in Case C-503/04, one year and two months; in Case C-70/06, one year and eleven months; in Case C-121/07, one year and eight months; in Cases C-369/07 and C-457/07, one year and two months; and in Case C-109/08, only nine months. Lastly, in Case C-496/09, the period was four years.
      (
            47
         )	Account is to be taken of the lapse of time between the date of delivery of the first judgment establishing a failure to fulfil obligations under Article 258 TFEU and the date on which that judgment has been complied with in full or, failing this, the date of delivery of the judgment pursuant to Article 260 TFEU.
      (
            48
         )	Commission Communication SEC(2010) 1371 ‘Implementation of Article 260(3) of the Treaty’.
      (
            49
         )	In accordance with Communication SEC(2010) 923 amending Communication SEC(2005) 1658.
      (
            50
         )	Case C-279/11 Commission v Ireland, paragraphs 78 and 79. In that regard, the Court did not follow the Commission’s approach according to which the ‘n’ factor as calculated when the case was brought before the Court under Article 260 TFEU should be used.
      (
            51
         )	Case C-610/10 Commission v Spain, paragraph 131.
      (
            52
         )	Case C-568/07 Commission v Greece, paragraph 47 and the case-law referred to.
      (
            53
         )	Communication C(2012) 6106 final, referred to above.
      (
            54
         )	Case C-177/04 Commission v France. The Court imposed a penalty payment of EUR 31 650 for each day of delay in taking the measures necessary to comply fully with the first judgment, from delivery of the judgment under the former Article 228 EC until full compliance with the first judgment establishing a failure to fulfil obligations.
      (
            55
         )	Communication SEC(2005) 1658, referred to above.
    ---documentbreak--- 
      
         
            
               Opinion of the Advocate-General
               
            
            Opinion of the Advocate-General
            I – Introduction 
            1. By its action, the European Commission asks the Court to declare that, by failing to adopt the measures necessary to comply with the judgment of 14 January 2010 in Case C-343/08 Commission  v Czech Republic (2) relating to the partial failure to transpose Directive 2003/41/EC concerning institutions for occupational retirement provision, (3) the Czech Republic failed to fulfil its obligations under Article 260(1) TFEU. The Commission also asks the Court to order the Czech Republic to pay a lump sum of EUR 3 364 395.20.
            2. The Court is therefore faced with the task of determining the penalty to be imposed, which is an important and common task under both national and European Union (‘EU’) law, particularly in the area of competition.
            3. The particular feature of this case lies in the fact that the infringement found in the Court’s judgment under Article 258 TFEU, namely the judgment in Commission  v Czech Republic  had very little practical impact in the Czech legal system, as there are no institutions for occupational retirement provision (‘IORPs’) established in that State.
            4. I recall that, in the area of pecuniary penalties as provided for in Article 260 TFEU, the Commission has published a series of communications (4) with a view to standardising the practice for imposing such penalties, while contributing to the equal treatment of Member States. However, the Court is not bound by the proposals put forward by the Commission in those communications. (5)
            5. It follows, inter alia, from those communications that the Commission’s view is that all infringements of EU law, in particular the failure to comply with a judgment of the Court of Justice, are of a serious nature. However, to my mind that approach is marked by rhetoric, as it seems to exclude any examination of the proportionality of the penalty and any matching of the penalty to the individual circumstances of the case, notwithstanding the principles that are usually applied in penalty matters.
            6. It is true that, unlike national legal systems, which often classify infringements by reference to the penalties they attract, no such distinction is drawn under EU law. However, one aspect that national legal systems and EU law have in common is the account taken of the extent of the unlawfulness, understood as the infringement of a rule committed with a certain degree of intent or negligence. (6)
            7. Thus, in the system envisaged in Article 260 TFEU for the imposition of a lump sum, the nature of the infringement is determined first and foremost by its seriousness.
            8. Accordingly, in order to ensure that a balance is struck between the infringement and the proposed penalty, the Court could draw a distinction between infringements of EU law by differentiating between minor, ordinary and serious failures to fulfil obligations. Furthermore, since unlawfulness does not depend solely on the external conduct of the party responsible and the consequences of that party’s acts, but is also linked to the circumstances specific to that party, particularly the party’s intentions, the amount of the lump sum must take account of attenuating circumstances, such as sincere cooperation, and aggravating factors, such as the existence of previous infringements by the Member State in question.
            9. In the end, the weighting given to each of these elements forms part of the exercise of the Court’s unlimited jurisdiction in respect of the imposition of pecuniary penalties as provided for in Article 260 TFEU.
            II – The relevant EU rules 
            10. On the entry into force of the Treaty of Lisbon, the applicable pre-litigation procedure under Article 260 TFEU in cases of failure to comply with a judgment of the Court was shortened, by elimination of the requirement for a reasoned opinion from the Commission. As follows from the wording of that article, the Commission is required only to send the Member State concerned a letter of formal notice before bringing the matter before the Court.
            11. The purpose of Directive 2003/41 – which the Czech Republic partially failed to transpose, resulting in a breach of its obligations – is to regulate the activities and supervision of IORPs. IORPs are establishments that aim to provide retirement benefits linked to an occupational activity, pursuant to an individual or collective agreement or contract between employers and their staff or organisations representing the latter. Directive 2003/41 seeks to introduce an internal market for occupational retirement provision on a European scale. In accordance with the principle of subsidiarity, Member States however still retain full responsibility for the organisation of their pension systems as well as for the allocation of roles between the three ‘pillars’ of the retirement system, so that they are responsible, in particular, in the context of the second pillar, for defining the role and functions of the different types of IORP.
            12. In order to achieve the stated objectives, Directive 2003/41 imposes various obligations on Member States concerning the IORPs located in their territories, especially the legal separation between sponsoring undertakings and IORPs (Article 8), compliance with conditions of operation (Article 9), the supervision of IORPs (Article 13) and the establishment of technical reserves (Articles 15 to 18). In addition, Article 20(1) of the directive provides that Member States are to allow undertakings located within their territories to sponsor IORPs authorised in other Member States and to allow IORPs authorised in their territories to accept sponsorship by undertakings located in other Member States. Articles 20(2) and (4) lay down the rules on supervision of the cross-border activities of IORPs.
            13. Under Article 22(1) of Directive 2003/41, the Member States were to adopt the provisions necessary in order to comply with that directive before 23 September 2005.
            III – The judgment in Case C-343/08 Commission  v Czech Republic 
            14. By its judgment in Commission  v Czech Republic , the Court of Justice held that, by failing to adopt, within the period prescribed, the laws, regulations and administrative provisions necessary to comply with Articles 8, 9, 13, 15 to 18 and 20(2) to (4) of Directive 2003/41, the Czech Republic failed to fulfil its obligations under Article 22(1) of that directive.
            15. In response to the arguments advanced by the Czech Republic to the effect that the absence of IORPs in that Member State warranted not transposing the provisions of Directive 2003/41, the Court pointed out – in paragraphs 37 to 52 of its judgment – that, in accordance with the case-law, and in the absence of a geographical reason rendering the transposition of the provisions concerned redundant, it is important that, in the event that the Czech Republic decides to supplement its national retirement pension system with an occupational retirement provision scheme falling under the second pillar, all persons in that Member State, like everyone else in the European Union, should know what their rights and duties are.
            16. However, in paragraphs 53 to 62 of its judgment, the Court held that transposition of the provisions at issue in no way required the Czech Republic to alter its national retirement pension system. In particular, according to the Court, Directive 2003/41 cannot be interpreted as requiring a Member State which, by reason of the lack of a second pillar, prohibits the establishment of IORPs in its territory, to lift that prohibition.
            IV – The pre-litigation procedure, the action before the Court in Case C-241/11 and the developments that have taken place during these proceedings 
            17. By letter dated 19 February 2010, the Commission invited the Czech Republic to notify it of the measures and precise timetable that the Czech Government intended to adopt in order to comply with the judgment in Commission  v Czech Republic . In reply, the Czech Republic stated that the necessary measures would be adopted no later than June 2012. By letter dated 17 June 2010, the Minister for Finance of the Czech Republic informed the Commission that the decision on the method of transposition of Directive 2003/41 would be taken by the government resulting from the parliamentary elections on 28 and 29 May 2010. Subsequently, by letter dated 1 October 2010, the minister announced that a working document on the transposition of the directive would soon be submitted to the government.
            18. By letter dated 29 October 2010, the Commission sent the Czech Republic a letter of formal notice, calling upon it to submit its observations no later than two months from the date of receipt of that letter. At the request of the Czech Republic, the Commission agreed to extend that period to 28 January 2011.
            19. In response to the letter of formal notice, the Czech Republic indicated that it was preparing a draft law that would be submitted to the government during the first quarter of 2011 and to the parliament in April 2011, so that it would come into force during the third quarter of 2011.
            20. On 19 May 2011, the Commission brought the present action, in which it asks the Court:
            – to find that the Czech Republic has failed to adopt the measures necessary to comply with the judgment in Commission  v Czech Republic ;
            – to impose a penalty payment on the Czech Republic in the amount of EUR 22 364.16 for each day of delay in adopting the measures necessary to comply with that judgment from the date of delivery of the judgment in the present case until the date of adoption of the compliance measures; and
            – to impose also a lump sum on the Czech Republic in the amount of EUR 5 644.80 for each day of delay in adopting those measures from the date of delivery of the judgment at issue until the date of delivery of the judgment in the present case, or until the date of adoption of the compliance measures.
            21. On 2 September 2011, the Czech Republic notified the Commission of the publication and entry into force, on 31 August 2011, of Law No 260/2011 (7) (‘Law No 260/11’), which, according to that Member State, ensures full compliance with the judgment in Commission  v Czech Republic . After examining the content of Law No 260/11, the Commission, in its reply, considered that the Czech Republic had brought its legislation into line with the judgment. Consequently, the Commission withdrew its claim for a penalty payment. However, it has maintained its claim regarding payment of a lump sum.
            V – The action and the arguments of the parties 
            A – The existence of a failure to fulfil obligations 
            22. It should be observed from the outset that, as a result of the entry into force of the Treaty of Lisbon, the reference date for the purposes of determining whether there has been a failure to fulfil obligations under Article 260 TFEU is the date of expiry of the period prescribed in the letter of formal notice issued pursuant to the first subparagraph of Article 260(2). (8)
            23. Whilst the Czech Republic disputes not the actual existence of the failure to fulfil its obligations complained of, but only the seriousness of the infringement as resulting from the Commission’s interpretation, the fact remains that, when the period prescribed in the letter of formal notice from the Commission – which had been extended – expired, the Czech Republic had not adopted all the measures necessary in order to comply in full with the obligations flowing from the judgment in Commission  v Czech Republic . Consequently, it must be found that the Czech Republic has infringed its obligation under Article 260(1) TFEU.
            B – The claim for a lump sum 
            24. Since the measures necessary to comply with the judgment in Commission  v Czech Republic have been adopted during the present proceedings, the claim for the imposition of a penalty payment has become devoid of purpose in accordance with the case-law. (9)
            25. By contrast, the Commission has ma intained its claim for the imposition of a lump sum calculated in accordance with its 2005 communication, referred to above. It follows from that communication that the lump sum is the figure resulting from multiplying a daily amount by the number of days the infringement has persisted. The daily amount results from multiplying a standard flat rate (10) by the coefficient for the seriousness of the infringement (on a scale of 1 to 20) and by an ‘n’ factor, which reflects the gross domestic product of the Member State and the number of votes it has in the Council of the European Union.
            26. The Commission draws attention to the obligation incumbent on all Member States to transpose Directive 2003/41 in full, even though, in the present case, the lack of transposition would not have had, in practical terms, any real impact, since there is no second pillar in the Czech retirement pension system. It notes that, by adopting Directive 2003/41, the EU legislature intended all Member States to establish the conditions necessary for the activities of IORPs in their respective territories. Furthermore, in the view of the Commission, both the relevant provisions of Directive 2003/41 and the content of the judgment in Commission  v Czech Republic  were clearly expressed and left no doubt as to how they should be implemented.
            27. As regards the details of the calculation of the lump sum, the Commission suggests using a coefficient for seriousness of 8, as the rules laid down in Directive 2003/41 are, in its view, essential for the provision of cross-border services by IORPs and, without their full transposition into domestic law, the conditions for the operation of an internal market for occupational retirement provision are not established. The Commission notes that the lack of transposition constitutes an infringement of the principle of legal certainty, the seriousness of which is exacerbated so far as concerns the provisions on prudential rules, and rules governing supervision, designed to guarantee a high degree of security for future pensioners.
            28. Moreover, in response to the argument advanced by the Czech Republic regarding the partial transposition of Directive 2003/41 within the prescribed period, the Commission maintains that this circumstance would not alter the situation in any way whatsoever. The partial transposition covers only IORPs providing cross-border services in the Czech Republic. Accordingly, the partial transposition has not made it possible to identify the operating conditions for IORPs subject to supervision by the Czech authorities or which prudential rules apply to those institutions.
            29. The Czech Republic, for its part, mainly disputes the seriousness of the continuation of the infringement that was established in the judgment in Commission  v Czech Republic , which it claims is negligible or even inexistent. The Member State considers that it should not be required to pay a lump sum or that the amount thereof should be significantly reduced in light of the particular circumstances of the case.
            30. Firstly, the Czech Republic observes that the Commission’s assessment of the seriousness of the infringement is based on an incorrect premiss, in that it confuses the issue of seriousness with that of the infringement of EU law. Secondly, the Czech Republic recalls that, in order to evaluate the seriousness of an infringement, account must be taken of its effects on private and public interests, as well as the degree of urgency in having the Member State concerned comply with its obligations, the importance of the legal rule held to be infringed and the conduct of the Member State in question.
            VI – General assessment 
            A – The nature of a lump sum 
            31. It follows from the case-law, particularly in consequence of the judgment in Case C-304/02 Commission  v France , (11) that the two pecuniary penalties provided for in Article 260(2) TFEU do not serve the same function. While the imposition of a penalty payment seems suited to inducing a Member State to put an end, as soon as possible, to the breach complained of, the imposition of a lump sum is based more on an assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations. (12)
            32. The lump sum therefore constitutes a penalty within the strict meaning of the term. In contrast to penalty payments, which are essentially of a coercive nature, the function of lump sums is to punish past inaction by the Member State concerned.
            33. Thus, the Court has defined the boundaries of the lump sum penalty by emphasising its dissuasive nature and its role in preventing the future repetition of infringements. (13) In the Commission’s view, the threat of such a penalty being imposed is likely, in particular, to encourage a Member State to comply with the original judgment establishing its failure to fulfil obligations as soon as possible and, in particular, before proceedings are initiated before the Court a second time. (14)
            34. In addition, the punitive nature of the lump sum penalty signifies that it has a retributive function which corresponds to the principle that all infringements must be followed by a proportionate penalty in order to restore the rule of law.
            35. Since an infringement is an act defying the established legal order, a penalty constitutes an appropriate response. In my opinion, however, the appropriateness of the response demands that the lump sum imposed be as low as possible in the case of infringements of a particularly minor nature.
            36. It has been held that it is for the Court, in the exercise of its discretion, to set the amount of the lump sum payment in a manner that is appropriate to the circumstances and proportionate both to the breach that has been established and the ability to pay of the Member State concerned. (15) The decision whether to impose a lump sum payment must, in each individual case, depend on all of the relevant factors pertaining both to the particular nature of the infringement established and to the individual conduct of the Member State involved. (16)
            37. The nature of lump sum penalties as a deterrent was reinforced in particular by the judgment in Case C-121/07 Commission  v France , where the Court decided to impose a lump sum payment even though the initial judgment had been complied with in full prior to conclusion of the procedure initiated on the basis of Article 260 TFEU (ex Article 228 EC). Consequently, while making it clear that the penalty is not automatic, the Court confirmed that it has discretion as to whether or not the imposition of a lump sum payment is necessary, having regard to the circumstances of the case at hand.
            B – The role of the Commission’s communications on the application of Article 260 TFEU 
            38. It is undisputed that guidelines such as those contained in the Commission’s communications referred to above, concerning the implementation of Article 260 TFEU, contribute to ensuring that that institution’s actions are transparent, foreseeable and consistent with legal certainty. (17)
            39. In contrast to national legal systems where, more often than not, it is for the legislature, representatives of the prosecution authorities or, possibly, the appellate or supreme courts to lay down the rules or practices applicable to the level of penalties, it falls to the Commission to publish this reference tool within the field of application of Article 260 TFEU.
            40. Like Advocate General Ruiz Jarabo Colomer, I consider that, although the communications are not legislative texts stricto sensu , they are binding on the institution from which they emanate, at least in the sense that the institution in question may depart from them only if it states appropriate reasons for doing so, since otherwise it would be in breach of the principle of equal treatment. (18)
            41. I also note that in other branches of EU law, in particular competition law, in adopting such rules of conduct and announcing by publishing them that they will henceforth apply to the cases to which they relate, the Commission imposes a limit on the exercise of its discretion. (19) Therefore, the Commission is bound by the communications that it issues, to the extent that they do not depart from the rules in the Treaty. (20)
            42. It should be noted that the Commission’s communications on the application of Article 260 TFEU are an indispensable tool for the Court enabling it to adopt a fair and coherent practice, and helping to make judicial decisions more foreseeable. The communications contribute to the development of a methodical and rigorous approach by the Court to the imposition of pecuniary penalties. The main purpose of the Commission’s suggestions is to allow the Court to proceed on the basis of a class of penalties which is commensurate with the nature of the infringement complained of. They therefore constitute both an indicative starting point for the Court for the overall assessment of the infringement complained of and a mechanism to ensure that the amount of the penalty does not become arbitrary or subjective, even though that amount will never be mathematically objective.
            43. However, it is to be pointed out that the Court can rely on the abovementioned communications only in so far as they provide an analytical framework and a methodological benchmark for the Court’s analysis. Consequently, in the exercise of its discretion, the Court is relieved, in particular, of the obligation to furnish details of the calculation of the lump sum payment imposed on the Member State concerned.
            VII – Methodology for the imposition of a lump sum 
            A – Application of the seriousness criterion in the practice of the Commission 
            44. In accordance with its 2005 communication, (21) the Commission takes three criteria into account for the purposes of calculating the amount of the lump sum, namely the seriousness of the infringement, its duration and the ability of the Member State to pay. To my mind, the main difficulty with the application of those criteria lies in the risk of overlap, especially between the criteria of seriousness and duration. Despite being an objective parameter, the duration of the infringement may reasonably contribute to aggravating the seriousness of the failure to fulfil obligations that is complained of.
            45. In this connection, whilst I accept that the variety of infringements complained of is wide, I should nevertheless point out that the Commission’s use of the coefficient for seriousness for the purposes of imposing pecuniary penalties is characterised by a certain lack of consistency. (22)
            46. It is surprising to find that, as regards penalty payments, in one of the most complex cases heard to date, on the application of pecuniary penalties to a situation involving a generalised and structural infringement, the Commission proposed a coefficient for seriousness of 10. By contrast, in a later case relating to an infringement of a purely legislative nature, the coefficient was set at 11. (23) In addition, in the only case in which the infringement could not be established for want of evidence, the Commission had proposed a coefficient for seriousness of 14. (24) Lastly, the Commission has gone so far as to propose a coefficient of 1 in a case relating to a failure to transpose a directive. (25)
            47. More specifically, as regards claims for the imposition of a lump sum in cases involving a failure to transpose directives, the Commission has proposed coefficients of 11 (26) and 12. (27) In contrast, in cases involving a failure to recover State aid, which are characterised by a greater level of complexity, the proposed coefficient has varied between 5, (28) 8 (29) and 12. (30)
            48. By way of comparison, and for the record, I recall that in the present case the Commission assessed the seriousness of the infringement as warranting the application of a coefficient of 8 on a scale of 1 to 20.
            B – Analysis of the seriousness of the infringement for the purposes of imposing a lump sum 
            49. First of all, I note that, unlike declaratory judgments delivered pursuant to Article 258 TFEU, which reflect an objective position under EU law, (31) judgements delivered pursuant to Article 260(2) TFEU imposing pecuniary penalties contain a subjective element, as they involve an assessment of the culpability of the Member State. In addition, the second type of judgment creates rights and obligations when the Court decides to impose those penalties.
            50. In my opinion, the assessment of the seriousness of an infringement involving a failure to comply with a judgment of the Court encompasses, on the one hand, subjective factors, which, inter alia, relate to the culpability of the Member State and, on the other hand, determination of the degree of seriousness which is based on objective factors stemming from the scale of the infringement and its effects.
            1. The subjective dimension of the seriousness of the infringement
            51. From a subjective standpoint, the question that arises for the purposes of determining the amount of the lump sum is whether the Member State acted in good faith after delivery of the initial judgment establishing a failure to fulfil obligations. That situation is assessed in light of the measures adopted by the Member State to comply with the judgment delivered pursuant to Article 258 TFEU.
            52. The relevant parameters for analysis include an assessment of the diligence and the cooperation in good faith of the Member State. Thus, the Court might decide whether the non-compliance at issue is the result of intentional or simply negligent conduct and, if necessary, determine the extent of such negligence. I think it is fundamental that a Member State which has acted in good faith should not be ordered to pay the same lump sum amount as a Member State which has not displayed any good will at all.
            53. In the specific case of the conduct of the Czech Republic in this instance, it is apparent from the documents before the Court that it fully complied with the judgment in Commission  v Czech Republic  by adopting legislation to transpose Directive 2003/41 19 months after delivery of the judgment, or six months after the present action was brought.
            54. The Czech Republic cites the following reasons for its delay: its internal situation, that is, a change in government following the parliamentary elections; the debate on the reform of the national social security system; and economic instability linked to the global financial crisis.
            55. According to settled case-law, a Member State admittedly cannot plead provisions, practices or situations prevailing in its domestic legal order to justify the failure to observe obligations arising under EU law. (32)
            56. However, in light of the principle impossibilium nulla obligatio est , it is open to the Court – in its assessment of the seriousness of the infringement with a view to the possible imposition of pecuniary penalties – to take account of the actual difficulties which a Member State may experience during the process of complying with a judgment under Article 258 TFEU. (33) In contrast to infringement proceedings pursuant to Article 258 TFEU, an approach based on strict liability cannot be applied in the context of proceedings under Article 260 TFEU.
            57. In its pleadings, the Czech Republic points out that it initiated the compliance process the month after the judgment was delivered and that, further, it fulfilled its duty to cooperate in good faith with the Commission by providing detailed replies to its requests at all times. Moreover, the Czech Republic argues that Directive 2003/41 had already been transposed in part within the prescribed period and, therefore, before delivery of the Court’s first judgment. (34) In addition, the directive was transposed in full in the course of the present proceedings.
            58. It certainly seems to me that the Czech Republic did indeed cooperate in good faith with the Commission’s staff, in the context of the correspondence exchanged.
            59. Furthermore, it seems to me undeniable that partial or full transposition in the course of proceedings before the Court under Article 260 TFEU is a factor in favour of the Member State concerned. Indeed, the Court takes this aspect into account in its assessment of the seriousness of an infringement, but that does not release the Member State from liability for the consequences of its infringement in the form of payment of a lump sum. (35)
            60. None the less, I have identified an aggravating factor in the conduct of the Czech Republic, resulting from a degree of negligence and a lack of coherence in national procedures, which unduly delayed compliance with the Court’s judgment. As from the date of delivery of the judgment in Commission  v Czech Republic , the extent of the legislative work to be carried out in order to comply with that judgment was clear. The degree of effort required for that purpose does not appear to be excessive, even in the political context of parliamentary elections.
            61. To conclude, I consider that in view of such conduct, which was seriously marked by negligence, the Court cannot avoid imposing payment of a lump sum on the Czech Republic.
            2. The objective dimension of the seriousness of the infringement
            62. The objective aspect of the seriousness parameter has been defined in the case-law of the Court mainly by reference to the nature of the infringement. The relevant factors in that respect include the length of time for which the breach of obligations has persisted since the judgment establishing it was delivered and the public and private interests in question. (36) It is also striking that the Court frequently reduces the lump sum amount proposed by the Commission. (37)
            63. Whilst conceding that the duration and seriousness parameters overlap, I will focus this analysis on the objective aspect of the seriousness of the infringement complained of and address the issue of the passage of time at a later stage.
            64. As regards the impact of the non-transposition at issue on public and private interests, it should be recalled that Directive 2003/41 seeks to introduce an internal market for occupational retirement provision in which IORPs must have freedom to provide services and freedom of investment. (38)
            65. I would like to underline from the outset that the infringement which the Commission complains the Czech Republic has committed in the present case is, in my opinion, less serious than the Commission’s interpretation indicates. There are attenuating circumstances that I think ought to be applied to the benefit of the Czech Republic.
            66. Firstly, since, in accordance with the Court’s judgment, Directive 2003/41 does not require the Czech Republic to create a second pillar or lift the prohibition on the establishment of IORPs in its territory, the actual impact of the failure to transpose the provisions in question is virtually nil. Since the main aim of transposition would be to provide information to persons potentially concerned by the activities of IORPS, the lack of such transposition into Czech law – from which a second pillar of the national retirement pension system is absent – cannot be regarded as particularly serious. Consequently, the impact of the infringement complained of on public and private interests is very limited.
            67. Secondly, in the light of the specific situation prevailing in the Czech Republic, the very broad interpretation of Directive 2003/41 as put forward by the Commission in the initial action for failure to fulfil obligations was indeed liable to lead to confusion. (39) Therefore, even if the Czech Republic had been especially diligent, it would not, in any event, have been in a position at any point in time during the initial infringement proceedings to adopt effective measures to bring an end to the infringement complained of.
            68. Even though the domestic measures that had to be adopted would not have had any specific application, that situation would, however, only have lasted until the national legislature had introduced a second pillar into the national retirement pension system. It should be noted that, in those circumstances, the legislature could have modified the legal framework thereby established within the limits resulting from Directive 2003/41.
            C – Analysis of the duration of the infringement for the purposes of imposing a lump sum 
            69. The present proceedings draw attention to two aspects relating to the account to be taken of the passage of time. Firstly, they require an assessment to be conducted of the length of time required to comply with the judgment in Commission  v Czech Republic . Secondly, they concern the issue of the speed with which the Commission initiated the procedure under Article 260 TFEU.
            70. As regards the first aspect, I think it is obvious that the duration of the infringement, in the context of compliance with a judgment of the Court, is a matter that is left entirely in the hands of the Member State concerned. That Member State can decide either to embark upon compliance with the judgment at the point in time it considers appropriate or, if there are residual doubts as to the extent of its obligations, it can apply to the Court for an interpretation of the judgment delivered under Article 258 TFEU, in accordance with Article 43 of the Statute of the Court of Justice of the European Union read in conjunction with Article 158 of its Rules of Procedure. (40)
            71. Accordingly, duration is a factor that contributes to aggravating the objective seriousness of an infringement consisting of failure to comply with a judgment of the Court, and can therefore be used as an indication in the analysis of the amount of the penalty, namely, in this case, the lump sum.
            72. In its pleadings, the Czech Republic states that it proceeded without delay to remedy the infringement established by the Court in its judgment. In addition, inasmuch as the sole aim of the transposition was to provide sufficient information to persons potentially concerned by any decision to establish the second pillar in the territory of the Czech Republic, that Member State downplays the urgency of the need to adopt measures to comply with the judgment in Commission  v Czech Republic .
            73. The Commission, for its part, reiterates that compliance with a judgment establishing a failure to fulfil obligations must be completed as soon as possible. In the present case, Law No 260/11 was not adopted until 19 months after delivery of the judgment in Commission  v Czech Republic . Furthermore, a period of 12 months elapsed between the date of delivery of that judgment and the date of expiry of the period prescribed in the letter of formal notice, sent in accordance with the procedure under Article 260 TFEU. The Commission states, finally, that five years and four months elapsed between that last date and the date set by Article 22(1) of Directive 2003/41 for transposition of the directive.
            74. In that regard, it should be remembered that the strict liability of a Member State on which actions pursuant to Article 258 TFEU are based cannot be applied in proceedings for the imposition of pecuniary penalties under Article 260 TFEU.
            75. It is true that the case-law requires the process of compliance to be initiated at once and to be completed as soon as possible, (41) which means that the Member State concerned must take steps to comply with a judgment as swiftly as possible after its delivery. Nevertheless, there is no doubt that, depending on the particular political and administrative circumstances at national level and the degree of complexity of the infringement established in the judgment, full compliance therewith will be achieved only at a later date. The determination of the lump sum must therefore take such circumstances into account.
            76. Besides, the mere act of initiating the process of compliance obviously does not guarantee that such compliance will be effective and comprehensive, if the Member State sees no immediate interest in it. It is not inconceivable that a Member State might adopt a transitional measure and notify it to the Commission in order to delay its analysis of compliance with the judgment, without however intending to comply with the Court’s judgment in full. (42) The need to deter Member States from engaging in such delaying tactics must also form part of the decision on the lump sum.
            77. In the present case, given the unambiguous nature of the infringement complained of, it seems to me that the 19-month period during which the breach of obligations persisted – dating from the delivery of the judgment in Commission  v Czech Republic  on 14 January 2010 – cannot be justified.
            78. As regards the second aspect, namely how quickly the Commission should initiate the procedure under Article 260 TFEU, it is apparent from the documents in the case that the Commission sent the first request for information on compliance with the judgment in Commission  v Czech Republic  one month after delivery of that judgment, and then sent the letter of formal notice nine months later. Almost one year elapsed between the date of the judgment and the expiry of the period prescribed in the letter of formal notice.
            79. It is interesting to note that, except in cases of very complex infringements, the Commission’s practice is characterised by a progressive shortening of the period granted to Member States between the date of delivery of the first judgment establishing an infringement and the expiry of the period that used to be prescribed in the reasoned opinion and is now set in the letter of formal notice. Thus, in the first cases brought on the basis of the former Article 228 EC, that period was two and a half years, (43) four and a half years, (44) or even nine years. (45) In the most recent cases, the period varies between one and two years. (46)
            80. The grant of an over-generous period by the Commission is liable to have an impact on the calculation of the lump sum. The passage of time in both the pre-litigation procedure and proceedings before the Court contributes to increasing the lump sum amount, in particular where the first judgment has not been fully complied with on the date of delivery of the second judgment, under Article 260 TFEU. (47)
            81. Consequently, whilst conceding that the Commission sent the first letter relatively early, I consider that the period prescribed in the letter of formal notice, by virtue of which the Czech Republic had one year to comply with the Court’s judgment, is not unreasonable, in view of the scale of the legislative amendments necessary to bring the infringement complained of to an end. That period also fits within the Commission’s practice, described above.
            82. As a subsidiary point, I note that the Commission seems to state in its observations that the Court should also take account – for the purposes of imposing a fine under Article 260 TFEU – of the duration of the infringement from the expiry of the deadline for transposition of Directive 2003/41. That approach is, however, wrong. In any event, since the entry into force of the Treaty of Lisbon, such a calculation is a requirement in proceedings brought under Article 260(3) TFEU concerning failures to fulfil the obligation to notify implementing measures, during the first infringement action. (48)
            83. Finally, I consider that the amendment to Article 260 TFEU introduced by the Treaty of Lisbon, removing the reasoned opinion stage so as to shorten the pre-litigation stage of the procedure, militates in favour of a stricter approach as regards the period for Member States to comply with a judgment.
            VIII – The lump sum amount to be imposed in the present case 
            84. In its application, the Commission calls on the Court to order the Czech Republic to pay a lump sum of EUR 3 364 395.20. That sum results from multiplying the daily amount of EUR 5 644.80 by the number of days the infringement persisted, that is to say, 594 days from the delivery of the judgment in Commission  v Czech Republic  on 14 January 2010 until 31 August 2011, when the provisions transposing Directive 2003/41 were adopted. The daily amount proposed by the Commission results from multiplying the standard flat rate of EUR 210 by the coefficient for seriousness of 8 and the ‘n’ factor for the Czech Republic, which is 3.36. (49)
            85. Before addressing the indicative calculation of the lump sum amount, I would like to recall that, in response to concerns raised by Member States, the Court has ruled in favour of taking account of a Member State’s ability to pay as it stands in the light of the latest economic data submitted for appraisal by the Court. (50) Therefore, the Court takes account of recent trends in inflation and in the gross domestic product of the Member State in question at the time of the Court’s examination of the facts. (51)
            86. From a temporal standpoint, such an adjustment in the economic data – with the reference point being the time of the Court’s examination of the facts – is an expression of the principles referred to above according to which the fixing of the lump sum must be appropriate to the circumstances and proportionate both to the breach that has been established and to the ability to pay of the Member State concerned. (52)
            87. In the present case, since the parties to the proceedings have not updated the relevant economic data, reference should be made to the most recent Commission communication, of 2012, on the updating of data used to calculate pecuniary penalties. (53) In particular, according to that communication, the minimum lump sum for the Czech Republic has increased and is currently set at EUR 1 768 000. In addition, the flat-rate amount for lump sum payments remains at EUR 210, but the special ‘n’ factor for the Czech Republic has been set at 3.34.
            88. As regards, finally, the calculation of the amount to be imposed in this case, I propose first of all that the Court use a lower coefficient for seriousness than that proposed by the Commission, namely 8.
            89. In the present case, having regard to, on the one hand, the negligent conduct of the Czech authorities and, on the other, the fact that the failure to comply with the judgment establishing a breach of obligations had almost no practical impact, a coefficient of 1 to 2 seems more appropriate.
            90. I note that a coefficient for seriousness of 1 was proposed by the Commission on one previous occasion, although in the context of an application for a penalty payment. The Court granted that request, which was considered to be an adequate reflection of the degree of seriousness of the infringement subsisting at the date of the Court’s examination of the facts, and imposed a penalty payment on the Member State concerned. (54)
            91. Thus, applying the updated data referred to above and a coefficient for seriousness of 1, the daily amount would be EUR 701.40, that is, EUR 210 multiplied by the ‘n’ factor of 3.34. Multiplied by the number of days the infringement persisted (594), the lump sum amount to be imposed would be EUR 416 631.60. By contrast, if a coefficient for seriousness of 2 were applied, the daily amount would be EUR 1 402.80 which, multiplied by the number of days the infringement persisted, would result in a lump sum of EUR 833 263.20.
            92. However, if the Court were to opt for such low coefficients, it would be faced with the problem that the lump sum thus proposed would be lower than the minimum amount of EUR 1 768 000 calculated by the Commission for the Czech Republic in its 2005 communication, as updated by the recent 2012 communication, referred to above.
            93. In the Commission’s view, if the sum calculated on the basis of a daily rate is less than the minimum lump sum, the latter amount should generally be imposed. According to the Commission, this fixed minimum base reflects the principle that any case of persistent non-compliance with a Court judgment by a Member State in itself represents an attack on the principle of legality in a Community governed by the rule of law, which calls for a real sanction; a fixed minimum such as this also avoids the proposal of purely symbolic amounts which would have no deterrent effect and could undermine, rather than strengthen, the authority of Court judgments. (55)
            94. I should point out that the proposal of a minimum lump sum as envisaged by the Commission results in the application of the lowest coefficients being excluded in the majority of cases, except where the duration of the infringement is very long. Furthermore, the strict principle of a minimum lump sum also seems to me to go beyond what is necessary in order to avoid the imposition of purely symbolic amounts, in the knowledge that, from a budgetary perspective, the unexpected forfeiture of an amount that could be regarded as ‘trifling’ has an undoubted deterrent effect for Member States.
            95. Since, as I have already stated, the Commission’s communication is nothing more than a benchmark analytical framework for the Court, the Court can conduct its fair assessment of the case, in the overall context of the infringement complained of, on the basis of a methodological approach, whilst applying the criteria laid down in the Commission communication.
            96. Consequently, in view of all of the factors in the present case, and in order to ensure that the dissuasive and punitive function of the lump sum penalty is upheld, I propose that the Court impose on the Czech Republic a lump sum of EUR 1 million.
            IX – Conclusion 
            97. In the light of the foregoing considerations, I propose that the Court should:
            – declare that, by failing to adopt the measures necessary to comply with the judgment of 14 January 2010 in Case C-343/08 Commission  v Czech Republic , the Czech Republic has failed to fulfil its obligations under Article 260 TFEU;
            – order the Czech Republic to pay to the European Commission, into the ‘European Union own resources’ account, a lump sum of EUR 1 million; and
            – order the Czech Republic to pay the costs.
            (1) . 
            (2)   –	[2010] ECR I-275.
            (3)   –	Directive of the European Parliament and of the Council of 3 June 2003 on the activities and supervision of institutions for occupational retirement provision (OJ 2003 L 235, p. 10).
            (4)   –	See, inter alia, the following: Memorandum on applying Article 171 of the EC Treaty (OJ 1996 C 242, p. 6); Method of calculating the penalty payment provided for pursuant to Article 171 of the EC Treaty (OJ 1997 C 63, p. 2); Communication SEC(2005) 1658 of 12 December 2005 entitled ‘Application of Article 228 of the EC Treaty’ (OJ 2007 C 126, p. 12), as updated by Communication SEC(2010) 923 of 20 July 2010 entitled ‘Application of Article 260 of the Treaty on the Functioning of the European Union. Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice in infringement proceedings’.
            (5)   –	Case C-387/97 Commission  v Greece  [2000] ECR I-5047, paragraphs 86 and 89.
            (6)   –	See, in the case of criminal law, Darbellay, J., Théorie générale de l’illicéité , p. 124.
            (7)   –	Laws of the Czech Republic, 31 August 2011, vol. 92.
            (8) – Case C-610/10 Commission  v Spain  [2012] ECR, paragraph 67; judgment of 19 December 2012 in Case C-279/11 Commission  v Ireland , paragraph 19; and judgment of 19 December 2012 in Case C-374/11 Commission  v Ireland , paragraph 19.
            (9)   –	Case C-121/07 Commission  v France  [2008] ECR I-9159, paragraphs 26 to 28.
            (10)   –	See Commission Communication C(2012) 6106 final entitled ‘Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice in infringement proceedings’, which sets the standard flat rate at EUR 210.
            (11)   –	[2005] ECR I-6263.
            (12)   –	Case C-304/02 Commission  v France , paragraph 81.
            (13)   –	Case C-369/07 Commission  v Greece  [2009] ECR I-5703, paragraph 145; Case C-610/10 Commission  v Spain , paragraph 142; and Case C-374/11 Commission  v Ireland , paragraph 48.
            (14)   –	Case C-121/07 Commission  v France , paragraph 33.
            (15)   –	Case C-369/07 Commission  v Greece , paragraph 146, and Case C-610/10 Commission  v Spain , paragraph 143.
            (16)   –	Case C-610/10 Commission  v Spain , paragraph 141. 
            (17)   –	Case C-70/06 Commission  v Portugal  [2008] ECR I-1, paragraph 34; Case C-369/07 Commission  v Greece , paragraph 112; and Case C-610/10 Commission  v Spain , paragraph 116.
            (18)   –	Opinion in Case C-387/97 Commission  v Greece , points 12 and 100.
            (19)   –	Joined Cases C-189/02 P, C-202/02 P, C-205/02 P to C-208/02 P and C-213/02 P Dansk Rørindustri and Others  v Commission  [2005] ECR I-5425, paragraphs 211 to 213.
            (20)   –	See, amongst many others, Case C-464/09 Holland Malt  v Commission  [2010] ECR I-12443, paragraph 47.
            (21)   –	Communication SEC(2005) 1658, referred to above.
            (22)   –	For an analysis of the use of the coefficient for seriousness, see, inter alia, Kilbey, I., ‘The interpretation of Article 260 TFEU (ex 228 EC)’, European Law Review , 2010, vol. 35, No 3, p. 370. For an analysis in the light of, inter alia, the importance of the rules of EU law, see van Rijn, T., ‘Non-exécution des arrêts de la Cour de justice par les États membres’, Cahier de droit européen , 2008, Nos 1 and 2, p. 105 et seq.
            (23)   –	Commission  v Portugal .
            (24)   –	Case C-119/04 Commission  v Italy  [2006] ECR I-6885.
            (25)   –	Case C-177/04 Commission  v France  [2006] ECR I-2461.
            (26)   –	Case C-109/08 Commission  v Greece  [2009] ECR I-4657.
            (27)   –	Case C-407/09 Commission  v Greece  [2011] ECR I-2467. 
            (28)   –	Case C-610/10 Commission  v Spain .
            (29)   –	Case C-496/09 Commission  v Italy  [2011] ECR I-11483.
            (30)   –	Case C-369/07 Commission  v Greece .
            (31)   –	Case C-39/10 Commission  v Estonia  [2012] ECR, paragraph 63.
            (32)   –	See, among many others, the recent judgment in Case C-374/11 Commission  v Ireland , paragraph 39. Also see Case C-407/09 Commission  v Greece .
            (33)   –	See, in this regard, Case C-374/11 Commission  v Ireland , paragraph 40.
            (34)   –	The Czech Republic states that Directive 2003/41 had already been partially transposed before the Commission initiated the procedure under Article 260 TFEU, as regards the part relating to the possibility given to IORPs of providing their services in national territory in the form of cross-border supplies.
            (35)   –	Case C-121/07 Commission  v France , paragraphs 60 and 84. For examples of cases in which the efforts of national authorities were taken into account, see Case C-407/09 Commission  v Greece , paragraph 36, and Case C-374/11 Commission  v Ireland , paragraphs 40 and 41.
            (36) – Case C-121/07 Commission  v France , paragraph 64 and the case-law cited, and Case C-374/11 Commission  v Ireland , paragraph 51.
            (37)   –	In Case C-121/07 Commission  v France , the Court, in light of the adoption of measures to ensure compliance with the judgment without delay and of the observance of the principle of sincere cooperation, reduced the amount from almost EUR 43 million to EUR 10 million. In Case C-568/07 Commission  v Greece  [2009] ECR I-4505, the Court reduced the lump sum from EUR 5 million to EUR 1 million on the ground that the infringement had partially come to an end even before delivery of the first judgment establishing a failure to fulfil obligations. In Case C-369/07 Commission  v Greece , the Court ordered the Member State to pay a lump sum of EUR 2 million in place of the proposed EUR 15 million. Likewise, in Case C-407/09 Commission  v Greece , the lump sum was reduced by one third to EUR 3 million. In Case C-496/09 Commission  v Italy , the Court ordered the Member State to pay a lump sum of EUR 30 million instead of the EUR 68 million requested by the Commission. In Case C-610/10 Commission  v Spain , the Court, while pointing out that compliance with the judgment did not require any considerable effort, set the lump sum amount at EUR 20 million instead of the EUR 50 million called for by the Commission.
            (38)   –	Commission  v Czech Republic , paragraphs 43 and 44. Also see the detail on that directive in points 11 to 13 of this Opinion.
            (39)   –	According to the Czech Republic, the Commission created uncertainty by asserting that Directive 2003/41 required the Czech Republic to lift the prohibition on the establishment of IORPs in its territory. It was only when the judgment was delivered in Commission  v Czech Republic  that the Court rejected that assertion, dispelling all doubts as to the implications of the directive.
            (40)   –	I note, however, that the Court has already held that the question of which measures are necessary to comply with a judgment establishing a failure to fulfil obligations under Article 258 TFEU does not form part of the subject matter of that judgment, with the result that such a question cannot form the subject matter of an application for interpretation. See, in this regard, Case C-503/04 Commission  v Germany  [2007] ECR I-6153, paragraph 15, and the Opinion of Advocate General Geelhoed in Case C-177/04 Commission  v France , point 43.
            (41)   –	Case C-278/01 Commission  v Spain  [2003] ECR I-14141, paragraph 27.
            (42)   –	See Commission  v Portugal .
            (43)   –	Case C-278/01 Commission  v Spain .
            (44)   –	Case C-387/97 Commission  v Greece .
            (45)   –	Case C-304/02 Commission  v France .
            (46)   –	In Case C-119/04, the period was two years; in Case C-177/04, one and a half years; in Case C-503/04, one year and two months; in Case C-70/06, one year and eleven months; in Case C-121/07, one year and eight months; in Cases C-369/07 and C-457/07, one year and two months; and in Case C-109/08, only nine months. Lastly, in Case C-496/09, the period was four years.
            (47)   –	Account is to be taken of the lapse of time between the date of delivery of the first judgment establishing a failure to fulfil obligations under Article 258 TFEU and the date on which that judgment has been complied with in full or, failing this, the date of delivery of the judgment pursuant to Article 260 TFEU.
            (48)   –	Commission Communication SEC(2010) 1371 ‘Implementation of Article 260(3) of the Treaty’.
            (49)   –	In accordance with Communication SEC(2010) 923 amending Communication SEC(2005) 1658.
            (50)   –	Case C-279/11 Commission  v Ireland , paragraphs 78 and 79. In that regard, the Court did not follow the Commission’s approach according to which the ‘n’ factor as calculated when the case was brought before the Court under Article 260 TFEU should be used.
            (51)   –	Case C-610/10 Commission  v Spain , paragraph 131.
            (52) – Case C-568/07 Commission  v Greece , paragraph 47 and the case-law referred to.
            (53)   –	Communication C(2012) 6106 final, referred to above.
            (54)   –	Case C-177/04 Commission  v France . The Court imposed a penalty payment of EUR 31 650 for each day of delay in taking the measures necessary to comply fully with the first judgment, from delivery of the judgment under the former Article 228 EC until full compliance with the first judgment establishing a failure to fulfil obligations.
            (55)   –	Communication SEC(2005) 1658, referred to above.