Commission of the European Communities v Federal Republic of Germany.
Date: 1998-09-29
6 Article 6 of the First Directive provides inter alia:
`Member States shall provide for appropriate penalties in case of:
- failure to disclose the balance sheet and profit and loss account as required by Article 2(1)(f);
- ...'
33 It is important to remember, at the outset, that the functioning of the Commission is governed by the principle of collegiate responsibility (Case C-137/92 P Commission v BASF and Others [1994] ECR I-2555, paragraph 62).
35 Recourse to Article 169 provides one of the means by which the Commission ensures that the Member States give effect to the provisions of the Treaty and those adopted under the Treaty by the institutions (Case C-422/92 Commission v Germany [1995] ECR I-1097, paragraph 16). The decisions to issue a reasoned opinion and to commence proceedings before the Court thus come within the general scope of the supervisory task entrusted to the Commission under the first indent of Article 155 of the EC Treaty.
36 In issuing a reasoned opinion, the Commission formally sets out its position with regard to the legal position of the Member State concerned. Moreover, by formally stating the infringement of the Treaty with which the Member State concerned is charged, the reasoned opinion concludes the pre-litigation procedure provided for in Article 169 (Case 74/82 Commission v Ireland [1984] ECR 317, paragraph 13). The decision to issue a reasoned opinion cannot therefore be described as a measure of administration or management and may not be delegated.
37 The same is true of the decision to apply to the Court for a declaration of failure to fulfil obligations. In its role as guardian of the Treaty, the Commission is competent to decide whether it is appropriate to bring proceedings against a Member State for failure to fulfil its obligations (see, to that effect, Case C-431/92 Commission v Germany [1995] ECR I-2189, paragraph 22). Such a decision falls within the discretionary power of the institution (see, in particular, Case C-200/88 Commission v Greece [1990] ECR I-4299, paragraph 9) and cannot be described as a measure of administration or management.
39 According to settled case-law, the principle of collegiality is based on the equal participation of the Commissioners in the adoption of decisions, from which it follows in particular that decisions should be the subject of collective deliberation and that all the members of the college of Commissioners should bear collective responsibility at political level for all decisions adopted (Case 5/85 AKZO Chemie v Commission [1986] ECR 2585, paragraph 30; Joined Cases 46/87 and 227/88 Hoechst v Commission [1986] ECR 2859, and Case 137/92 P Commission v BASF and Others, cited above, paragraph 63).
40 The Court has also held that compliance with that principle is of concern to individuals affected by the legal consequences of a Commission decision (see, to that effect, Commission v BASF and Others, cited above, paragraph 64).
41 Nevertheless, the formal requirements for effective compliance with the principle of collegiality vary according to the nature and legal effects of the acts adopted by that institution.
42 Thus the Court has held that, with regard to decisions adopted for the purpose of ensuring observance of the competition rules, in which the Commission finds that there has been an infringement of those rules, issues directions to undertakings and imposes pecuniary penalties upon them, that the undertakings or associations of undertakings addressed by such decisions must be assured that the operative part and the statement of reasons were actually adopted by the college of Commissioners (see, to that effect, Commission v BASF and Others, cited above, paragraphs 65 to 67).
44 The issue of a reasoned opinion constitutes a preliminary procedure (Joined Cases 142/80 and 143/80 Essevi and Salengo [1981] ECR 1413, paragraph 15), which does not have any binding legal effect for the addressee of the reasoned opinion. It is merely a pre-litigation stage of a procedure which may lead to an action before the Court (Joined Cases 6/69 and 11/69 Commission v France [1969] ECR 523, paragraph 36). The purpose of that pre-litigation procedure provided for by Article 169 of the Treaty is to enable the Member State to comply of its own accord with the requirements of the Treaty or, if appropriate, to justify its position (Case C-157/94 Commission v Netherlands [1997] ECR I-5699, paragraph 60; Case C-158/94 Commission v Italy [1997] ECR I-5789, paragraph 56; and Case C-159/94 Commission v France [1997] ECR I-5815, paragraph 103).
45 If that attempt at settlement is unsuccessful, the function of the reasoned opinion is to define the subject-matter of the dispute. The Commission is not, however, empowered to determine conclusively, by reasoned opinions formulated pursuant to Article 169, the rights and duties of a Member State or to afford that State guarantees concerning the compatibility of a given line of conduct with the Treaty. According to the system embodied in Articles 169 to 171 of the Treaty, the rights and duties of Member States may be determined and their conduct appraised only by a judgment of the Court (see, to that effect, Essevi and Salengo, cited above, paragraphs 15 and 16).
46 The reasoned opinion therefore has legal effect only in relation to the commencement of proceedings before the Court (see Essevi and Salengo, cited above, paragraph 18) so that where a Member State does not comply with that opinion within the period allowed, the Commission has the right, but not the duty, to commence proceedings before the Court (see, to that effect, Case 247/87 Star Fruit v Commission [1989] ECR 291, paragraph 12).
47 The decision to commence proceedings before the Court, whilst it constitutes an indispensable step for the purpose of enabling the Court to give judgment on the alleged failure to fulfil obligations by way of a binding decision, nevertheless does not per se alter the legal position in question.
48 It follows from all the foregoing considerations that both the Commission's decision to issue a reasoned opinion and its decision to bring an action for a declaration of failure to fulfil obligations must be the subject of collective deliberation by the college of Commissioners. The information on which those decisions are based must therefore be available to the members of the college. It is not, however, necessary for the college itself formally to decide on the wording of the acts which give effect to those decisions and put them in final form.
49 In this case it is not disputed that the members of the college had available to them all the information they considered would assist them for the purposes of adopting the decision when the college decided, on 31 July 1991, to issue the reasoned opinion, and approved, on 13 December 1994, the proposal to bring the present action.
50 In those circumstances, it must be held that the Commission complied with the rules relating to the principle of collegiality when it issued the reasoned opinion with regard to the Federal Republic of Germany and brought the present action.
54 The preliminary point must be made that, although the reasoned opinion provided for in Article 169 of the Treaty must contain a coherent and detailed statement of the reasons which led the Commission to conclude that the State in question has failed to fulfil one of its obligations under the Treaty, the letter of formal notice cannot be subject to such strict requirements of precision, since it cannot, of necessity, contain anything more than an initial brief summary of the complaints. There is therefore nothing to prevent the Commission from setting out in detail in the reasoned opinion the complaints which it has already made more generally in the letter of formal notice (Case C-279/94 Commission v Italy [1997] ECR I-4743, paragraph 15).
55 It is true that the letter of formal notice from the Commission to the Member State and then the reasoned opinion issued by the Commission delimit the subject-matter of the dispute, so that it cannot thereafter be extended. The opportunity for the State concerned to be able to submit its observations, even if it chooses not to avail itself thereof, constitutes an essential guarantee intended by the Treaty, adherence to which is an essential formal requirement of the procedure under Article 169 (Case 124/81 Commission v United Kingdom [1983] ECR 203, paragraph 6). Consequently, the reasoned opinion and the proceedings brought by the Commission must be based on the same complaints as those set out in the letter of formal notice initiating the pre-litigation procedure.
56 However, that requirement cannot be carried so far as to mean that in every case the statement of complaints in the letter of formal notice, the operative part of the reasoned opinion and the form of order sought in the application must be exactly the same, provided that the subject-matter of the proceedings has not been extended or altered but simply limited (see, to that effect, Case C-279/94 Commission v Italy, cited above, paragraph 25).
66 In that connection, it is sufficient to note that the Court held in Case C-97/96 Daihatsu Deutschland [1997] ECR I-6843, at paragraphs 14 and 15, that the legislative lacuna left by the First Directive was filled by the Fourth Directive.  The Fourth Directive coordinated the national provisions concerning the presentation and content of annual accounts and reports, the valuation methods used therein and their publication in respect of companies limited by shares, including inter alia German limited liability companies.
67 In Daihatsu Deutschland, cited above, the Court ruled that Article 6 of the First Directive was to be interpreted as precluding the legislation of a Member State from restricting to members or creditors of the company, the central works council or the company's works council the right to apply for imposition of the penalty provided for by the law of that Member State in the event of failure by a company to fulfil the obligations regarding disclosure of annual accounts laid down by the First Directive.
68 Lastly, it must be pointed out that the lack of appropriate penalties cannot be justified by the fact that, because of the large numbers involved, application of such penalties to all companies that do not publish their accounts would create considerable difficulties for the German administrative authorities which would be disproportionate to the aim pursued by the Community legislature. The Court has consistently held that a Member State may not plead internal circumstances in order to justify a failure to comply with obligations and time-limits resulting from rules of Community law (see, in particular, Case C-374/89 Commission v Belgium [1991] ECR I-367, paragraph 10; Case C-45/91 Commission v Greece [1992] ECR I-2509, paragraph 21; and Joined Cases C-109/94, C-207/94 and C-225/94 Commission v Greece [1995] ECR I-1791, paragraph 11).