European Commission v Kingdom of Spain.
Date: 2021-02-25
According to the Court’s settled case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing in that Member State at the end of the period laid down in the reasoned opinion, the Court being unable to take account of any subsequent changes (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 23; of 16 July 2020, Commission v Romania (Anti-money laundering),  C‑549/18, EU:C:2020:563, paragraph 19; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 30).
In addition, the Court has repeatedly held that if a directive expressly requires Member States to ensure that the necessary measures transposing the directive include a reference to it or that such reference is made when those measures are officially published, it is, in any event, necessary for Member States to adopt a specific measure transposing the directive in question (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 20, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 31).
In the present case, since the Commission sent the reasoned opinion to the Kingdom of Spain on 25 January 2019, the two-month period within which it was required to comply with its obligations expired on 25 March 2019. It is therefore necessary to assess whether or not the alleged failure to fulfil obligations exists in the light of the state of the domestic legislation in force on that date (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 21, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 32).
As regards the arguments put forward by the Kingdom of Spain seeking to justify non-compliance with the transposition deadline in question and based, primarily, on the interim nature of the Spanish Government during the relevant period, it is sufficient to recall that, according to the Court’s settled case-law, a Member State cannot plead provisions, practices or situations prevailing in its domestic legal order to justify failure to observe obligations arising under EU law such as failure to transpose a directive within the period prescribed (judgment of 4 October 2018, Commission v Spain, C‑599/17, not published, EU:C:2018:813, paragraph 23).
As regards the scope of Article 260(3) TFEU, the Court has held that that provision had to be interpreted in a manner which, on the one hand, allows prerogatives held by the Commission for the purposes of ensuring the effective application of EU law and protecting the rights of the defence and the procedural position enjoyed by the Member States under Article 258 TFEU, read in conjunction with Article 260(2) TFEU, to be guaranteed, and, on the other, puts the Court in a position of being able to exercise its judicial function of determining, in a single set of proceedings, whether the Member State in question has fulfilled its obligations to notify the measures transposing the directive in question and, where relevant, assess the seriousness of the declared failure and impose the financial penalty which it considers to be the most suited to the circumstances of the case (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 58; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 45; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 55).
In that context, the Court has interpreted the expression ‘obligation to notify measures transposing a directive’ in Article 260(3) TFEU as referring to the obligation of the Member States to provide sufficiently clear and precise information on the measures transposing a directive. In order to satisfy the obligation of legal certainty and to ensure the transposition of the provisions of that directive in full throughout their territory, the Member States are required to state, for each provision of the directive, the national provision or provisions ensuring its transposition. Once notified, and having also received a correlation table where relevant, it is for the Commission to establish, for the purposes of seeking a financial penalty to be imposed on the Member State in question provided for in Article 260(3) TFEU, whether certain transposition measures are clearly lacking or do not cover all the territory of the Member State in question, bearing in mind that it is not for the Court, in judicial proceedings brought under Article 260(3) TFEU, to examine whether the national measures notified to the Commission ensure a correct transposition of the provisions of the directive in question (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 59; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 46; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 56).
As regards whether, as the Republic of Poland has argued, the Commission must state reasons, on a case-by-case basis, for its decision to request a financial penalty under Article 260(3) TFEU or whether it may take such a decision without stating reasons, in all cases falling with the scope of that provision, it must be borne in mind that the Court has held that, as guardian of the Treaties pursuant to the second sentence of Article 17(1) TEU, the Commission enjoys a discretion to take such a decision (judgment of 13 January 2021, Commission v Slovenia (MiFID II), C‑628/18, EU:C:2021:1, paragraph 47). It is also settled case-law that the conditions for the application of Article 260(3) TFEU may not be more restrictive than those governing the implementation of Article 258 TFEU (see, to that effect, judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 49, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 59). In addition, it must be noted that under Article 260(3) TFEU the Court alone has the power to impose a financial penalty on a Member State. Where the Court takes such a decision at the end of inter partes proceedings, it must state reasons. Consequently, the Commission’s failure to state reasons for its decision to request the Court to apply Article 260(3) TFEU does not affect the procedural guarantees of the Member State in question (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 50, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 60).
Furthermore, the fact that the Commission is not required to state reasons on a case-by-case basis for its decision to seek the imposition of a financial penalty under Article 260(3) TFEU does not relieve it of the obligation to state reasons for the nature and the amount of the financial penalty sought, taking into account in that regard the guidelines which it has adopted, such as those in the Commission’s communications which, although not binding on the Court, contribute to ensuring that the action brought by the Commission is transparent, foreseeable and consistent with legal certainty (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 51, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 61).
That requirement to state reasons for the nature and the amount of the financial penalty sought is all the more important since, unlike the provisions of Article 260(2) TFEU, Article 260(3) TFEU provides that, in the context of proceedings brought under that provision, the Court has only a limited power to assess, since, where it finds that there is an infringement, the Commission’s proposals are binding on it as to the nature of the financial penalty which the Court may impose and the maximum amount of the penalty which it may set (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 52, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 62).
It is apparent from Article 260(3) TFEU that it is for the Commission to specify ‘the amount of the lump sum or penalty payment to be paid’ by the Member State concerned, but that the Court may only impose the payment of a financial penalty ‘not exceeding the amount specified’ by the Commission. The authors of TFEU thus established a direct correlation between the penalty sought by the Commission and the penalty that may be imposed by the Court under Article 260(3) TFEU (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 53, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 63).
As regards the Kingdom of Spain’s argument that, in the present case, the pre-litigation procedure was initiated by a letter of formal notice the deadline for reply of which expired less than one month before the dissolution of the national parliament and the start of the electoral process, it should be noted, first, that the letter of formal notice was sent after the expiry of the transposition deadline laid down in Directive 2016/680 and that it is up to Member States to implement the procedure for adopting the measures necessary to ensure the transposition of a directive without waiting for the Commission to issue a letter of formal notice. According to the Court’s settled case-law, in order for a letter of formal notice to be issued, in accordance with the first paragraph of Article 258 TFEU, a prior failure by the Member State concerned to fulfil an obligation owed by it must be capable of being legitimately alleged by the Commission (judgment of 5 December 2019, Commission v Spain (Waste management plans), C‑642/18, EU:C:2019:1051 paragraph 17 and the case-law cited).
Second, in any event, the considerations which led the Commission to bring proceedings against the Kingdom of Spain, on the date of its choosing, cannot prejudice the applicability of Article 260(3) TFEU or the admissibility of the action brought under that provision (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 55, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 65).
As a preliminary point, it should be noted that, first, the failure of a Member State to fulfil its obligation to notify  measures transposing a directive, whether by providing no information at all, partial information or by providing insufficiently clear and precise information, may of itself justify recourse to the procedure under Article 258 TFEU in order to establish the failure to fulfil the obligation (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 51; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 64; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 74).
Second, the objective pursued by the introduction of the system set out in Article 260(3) TFEU is not only to induce Member States to put an end as soon as possible to a  breach of obligations which, in the absence of such a measure, would tend to persist, but also to simplify and speed up the procedure for imposing financial penalties for failures to comply with the obligation to notify a national measure transposing a directive adopted through a legislative procedure, it being specified that, prior to the introduction of such a system, it might be years before a financial penalty was imposed on Member States which had failed to comply in a timely manner with an earlier judgment of the Court and failed to respect their obligations to transpose a directive (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 52; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 64; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 74).
In that regard, it is apparent from the Court’s case-law that the application of each of those measures depends on their respective ability to meet the objective pursued according to the circumstances of the case. While the imposition of a penalty payment seems particularly suited to inducing a Member State to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist, the imposition of a lump sum is based more on assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period  (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 66, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 76).
As regards, in the first place, the appropriateness of imposing a penalty payment in the present case, it should be recalled that, according to the Court’s case-law, the imposition of such a penalty payment is, in principle, justified only if the failure continues up to the time of the Court’s examination of the facts (judgment of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 60).
The Court held that that case-law, relating to Article 260(2) TFEU, must be applied by analogy to Article 260(3) TFEU, in so far as the penalty payments under both provisions seek to achieve the same objective, namely inducing a Member State to put an end as soon as possible to a breach of obligations which, in the absence of such a measure, would tend to persist (judgment of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 61).
It is also apparent from the Court’s case-law that the assessment of the facts by the Court must be considered as being made at the date of conclusion of the proceedings (see, inter alia, judgment of 13 January 2021, Commission v Slovenia (MiFID II), C‑628/18, EU:C:2021:1, paragraph 81 and the case-law cited).
It should be recalled that, in exercising its discretion in the matter, it is for the Court to set the penalty payment so that it is, first, appropriate to the circumstances and proportionate to the infringement established and the ability to pay of the Member State concerned and, second, does not exceed, in accordance with the second subparagraph of Article 260(3) TFEU, the amount indicated by the Commission (judgment of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 83).
In the assessment which it is for the Court to carry out for the purposes of determining the amount of a penalty payment, the criteria which must be taken into consideration in order to ensure its coercive effect so that EU law is applied uniformly and effectively are, in principle, the duration and seriousness of the infringement and the ability to pay of the Member State in question. In applying those criteria, the Court must have regard, in particular, to the effects of the failure to fulfil its obligations on the public and private interests in question and to how urgent it is for the Member State concerned to be induced to fulfil its obligations (judgment of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 84).
As regards the seriousness of the infringement, it must be borne in mind that the obligation to adopt national measures for the purposes of ensuring that a directive is transposed in full and the obligation to notify those measures to the Commission are fundamental obligations incumbent on the Member States in order to ensure optimal effectiveness of EU law and that failure to fulfil those obligations must, therefore, be regarded as definitely serious (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 85; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 73; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 82).
As regards the duration of the infringement, it must be assessed by reference to the date on which the Court assesses the facts, not the date on which proceedings are brought before it by the Commission (judgment of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 87).
As regards, in the second place, whether or not the payment of a lump sum should be imposed in the present case, it must be borne in mind that, in each case, it is for the Court to determine, in the light of the circumstances of the case before it and according to the degree of persuasion and deterrence which appears to it to be required, the financial penalties that are appropriate, in particular, for preventing the recurrence of similar infringements of EU law (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 78; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 68, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 78).
In the present case, it must be found that, notwithstanding the fact that the Kingdom of Spain cooperated with the Commission services throughout the pre-litigation procedure and kept them informed of the reasons which prevented it from ensuring the transposition of Directive 2016/680 into national law, all the legal and factual circumstances culminating in the breach of obligations established – namely, the fact that, no measure necessary for the transposition Directive 2016/680 had been notified at the expiry of the period laid down in the reasoned opinion or even at the date on which the present action was brought – indicate that if the future repetition of similar infringements of EU law is to be effectively prevented, a dissuasive measure must be adopted, such as a lump sum payment (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 69, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 79).
That assessment is not called into question by the argument set out in paragraph 36 above. First, as observed in that paragraph, it is for the Commission, in particular, to assess whether or not proceedings should be brought against a Member State and to choose the time at which it initiates the infringement proceedings against that Member State. Second, it is not claimed that the time limits for replying which were set in the letter of formal notice and in the reasoned opinion were particularly short or unreasonable and were such as to call into question the aims of the pre-litigation procedure, namely to give the Member State concerned an opportunity to comply with its obligations under EU law and to avail itself of its right to defend itself against the objections formulated by the Commission (judgment of 19 September 2017, Commission v Ireland (Registration tax), C‑552/15, EU:C:2017:698, paragraph 28 and the case-law cited),  Moreover, as is clear from the facts set out in paragraphs 5 and 6 of this judgment, the Kingdom of Spain was fully aware that it had failed to fulfil its obligations under Article 63 of Directive 2016/680, at least as from 7 May 2018.
Nor is that assessment called into question by the argument based on the institutional situation of the Kingdom of Spain between 27 April 2016, date of adoption of Directive 2016/680, and 6 May 2018, date of expiry of the transposition deadline laid down in that directive, characterised by repeated dissolutions of the national parliament, the interim nature of the government and the holding of new elections. The Court held, in a situation similar to that at issue in the main proceedings, that such circumstances cannot be relied on to justify failure to observe obligations arising under EU law (see, to that effect, judgment of 13 July 2017, Commission v Spain, C‑388/16, not published, EU:C:2017:548, paragraph 41).
As regards the calculation of the lump sum which it is appropriate to impose in the present case, it must be borne in mind that, in exercising its discretion in the matter, as delimited by the Commission’s proposals, it is for the Court to fix the amount of the lump sum which may be imposed on a Member State pursuant to Article 260(3) TFEU, in an amount appropriate to the circumstances and proportionate to the failure to fulfil obligations. Relevant considerations in that respect include factors such as the seriousness of the failure to fulfil obligations, the length of time for which the failure has persisted and the relevant Member State’s ability to pay (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 72, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 81).
As regards, first, the seriousness of the infringement, it must be borne in mind that the obligation to adopt national measures for the purposes of ensuring that a directive is transposed in full and the obligation to notify those measures to the Commission are fundamental obligations incumbent on the Member States in order to ensure optimal effectiveness of EU law and that failure to fulfil those obligations must, therefore, be regarded as undoubtedly serious (judgments of 8 July 2019, Commission v Belgium (Article 260(3) TFEU – High-speed networks), C‑543/17, EU:C:2019:573, paragraph 85; of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 73; and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 82).
The arguments put forward by the Kingdom of Spain to explain the delay in transposing Directive 2016/680, namely the fact that the government was able to deal with, over a long period of time, only day-to-day business is not such as to affect the seriousness of the infringement at issue since, according to settled case-law, a Member State cannot rely on practices or circumstances existing in its internal legal order to justify its failure to comply with the obligations and time limits laid down by EU directives, nor therefore the late or incomplete implementation of directives (judgment of 13 July 2017, Commission v Spain, not published, EU:C:2017:548, paragraph 41).
In that regard, it should be added that, contrary to the Kingdom of Spain’s submission, special institutional circumstances such as those characterising the present failure cannot be regarded as mitigating circumstances within the meaning of the Court’s case-law (see, to that effect, judgment of 30 May 2013, Commission v Sweden, C‑270/11, EU:C:2013:339, paragraphs 54 and 55).
As regards, second, the duration of the infringement, it must be recalled that that duration must, in principle, be assessed by reference to the date on which the Court assesses the facts and not the date on which proceedings are brought before it by the Commission. That assessment of the facts must be considered as being made at the date of conclusion of the proceedings (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 77, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 86).
As regards the beginning of the period which must be taken into account in order to fix the amount of the lump sum to be imposed pursuant to Article 260(3) TFEU, the Court held that, unlike the daily penalty payment, the relevant date for evaluating the duration of the infringement at issue is not the date of expiry of the period prescribed in the reasoned opinion, but the date of expiry of the transposition deadline laid down in the directive in question (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 79, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 90).
Third, as regards the ability to pay of the Member State concerned, it is apparent from the Court’s case-law that it is necessary to take account of recent trends in that Member State’s GDP at the time of the Court’s examination of the facts (judgments of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 85, and of 16 July 2020, Commission v Ireland (Anti-money laundering), C‑550/18, EU:C:2020:564, paragraph 97).