European Commission v Portuguese Republic.
Date: 2016-06-22
36


Concerning infringement proceedings under Article 260(2) TFEU, the reference date which must be used for assessing whether there has been a failure to fulfil obligations is that of the expiry of the period prescribed in the letter of formal notice issued under that provision (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 29 and the case-law cited).
41


Regarding the Portuguese Republic’s argument based on the difficulties which that Member State has had in complying with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292), it should be borne in mind that a Member State may not plead provisions, practices or circumstances existing in its internal legal system in order to justify a failure to comply with obligations resulting from EU law, with the result that such an argument cannot succeed (see, to that effect, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 35 and the case-law cited).
61


According to settled case-law, the imposition of a penalty payment is, in principle, justified only in so far as the failure to comply with an earlier judgment of the Court continues up to the time of the Court’s examination of the facts (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 47 and the case-law cited).
66


Nevertheless, it cannot be ruled out a priori that, on the date of delivery of the present judgment, full compliance with the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) will have taken place. Accordingly, the penalty payment must be imposed only if the failure to fulfil obligations persists on the date of delivery of the present judgment (see, by analogy, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 50 and the case-law cited).
67


It is apparent from the settled case-law of the Court that the penalty payment must be decided upon according to the degree of persuasion needed in order for the Member State which has failed to comply with a judgment establishing a breach of obligations to alter its conduct and bring to an end the infringement established (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 51 and the case-law cited).
68


In exercising its discretion in the matter, it is for the Court to set the penalty payment so that it is both appropriate to the circumstances and proportionate to the infringement established and the ability to pay of the Member State concerned (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 52 and the case-law cited).
69


The Commission’s proposals concerning the penalty payment cannot bind the Court and constitute merely a useful point of reference. Similarly, guidelines such as those set out in the communications of the Commission are not binding on the Court but contribute to ensuring that the Commission’s own actions are transparent, foreseeable and consistent with legal certainty when that institution makes proposals to the Court. In proceedings under Article 260(2) TFEU relating to a failure to fulfil obligations on the part of a Member State that has persisted notwithstanding the fact that that same failure to fulfil obligations has already been established in a first judgment delivered under Article 226 EC or Article 258 TFEU, the Court must remain free to set the penalty payment to be imposed in an amount and in a form that the Court considers appropriate for the purposes of inducing that Member State to bring to an end its failure to comply with the obligations arising under that first judgment of the Court (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 53 and the case-law cited).
70


For the purposes of determining the amount of a penalty payment, the basic criteria which must be taken into consideration in order to ensure that that payment has coercive effect and that EU law is applied uniformly and effectively are, in principle, the seriousness of the infringement, its duration and the ability to pay of the Member State concerned. In applying those criteria, regard must be had, in particular, to the effects on public and private interests of the failure to comply and to how urgent it is for the Member State concerned to be induced to fulfil its obligations (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 54 and the case-law cited).
71


In the first place, concerning the seriousness of the infringement, it should be borne in mind that Directive 91/271 is intended to protect the environment. A lack or shortage of urban waste water treatment plants is likely to harm the environment and must be regarded as particularly serious (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 55 and the case-law cited).
74


It is also necessary to cite as an aggravating circumstance the fact that the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) will not be fully complied with, according to the statements of the Portuguese Republic, until 2019, which is equivalent to a delay of almost 20 years, in so far as the obligation to ensure that the secondary treatment of the urban waste water of the agglomeration of Matosinhos complied with EU law should have been fulfilled on 31 December 2000 at the latest. As it is, since the Portuguese Republic maintains that it will not be in a position to comply with all of its obligations under that directive until almost 20 years after that second date, the Court cannot but confirm the particularly lengthy character of an infringement which, in the light of the objective mentioned above, is also a matter of indisputable gravity (see, by analogy, judgment of 19 December 2012 in Commission v Ireland, C‑374/11, EU:C:2012:827, paragraph 38).
76


In the second place, regarding the duration of the infringement, that duration must 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. In the present case, the duration of the infringement — over seven years from the date of delivery of the judgment of 7 May 2009 in Commission v Portugal (C‑530/07, EU:C:2009:292) — is considerable.
77


Although Article 260(1) TFEU does not specify the period within which a judgment must be complied with, it follows from settled case-law that the importance of immediate and uniform application of EU law means that the process of compliance must be initiated at once and completed as soon as possible (see judgment of 17 September 2015 in Commission v Italy, C‑367/14, EU:C:2015:611, paragraph 95 and the case-law cited).
78


In the third place, concerning the ability to pay of the Member State concerned, it is apparent from the case-law of the Court that it is necessary to take account of recent trends in a Member State’s gross domestic product (GDP) at the time of the Court’s examination of the facts (see, to that effect, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 60). In that regard, account should be taken of the Portuguese Republic’s assertions that its GDP decreased by 7.4% between 2009 and 2013.
91


As a preliminary point, it should be borne in mind that the Court is empowered, in exercising the discretion conferred on it in such matters, to impose a penalty payment and a lump sum payment cumulatively (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 72).
92


The imposition of a lump sum payment and the fixing of that sum must depend in each individual case on all the relevant factors relating both to the characteristics of the failure to fulfil obligations established and to the conduct of the Member State involved in the procedure initiated under Article 260 TFEU. That provision confers a wide discretion on the Court in deciding whether to impose such a penalty and, if it decides to do so, in determining the amount thereof (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 73).
93


In the present case, all of the factual and legal elements which have led to the establishment of the infringement under consideration, in particular, the fact that other judgments, namely the judgments delivered on 8 May 2008 in Commission v Portugal (C‑233/07, EU:C:2008:271), 8 September 2011 in Commission v Portugal (C‑220/10, EU:C:2011:558) and 28 January 2016 in Commission v Portugal (C‑398/14, EU:C:2016:61), establishing the failure of the Portuguese Republic to fulfil its obligations concerning the treatment of urban waste water, indicate that effective prevention of future repetition of similar infringements of EU law may require the adoption of a dissuasive measure, such as an order to make a lump sum payment (see, by analogy, judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 74).
94


In those circumstances, it is for the Court, in the exercise of its discretion, to fix the lump sum in an amount appropriate to the circumstances and proportionate to the infringement (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 75).
95


Relevant considerations in this respect include factors such as the seriousness of the infringement and the length of time for which the infringement has persisted since the delivery of the judgment establishing it (judgment of 15 October 2015 in Commission v Greece, C‑167/14, EU:C:2015:684, paragraph 76).
99


Lastly, as the Commission has argued, regard must be had to the large number of judgments, referred to in paragraph 93 above, which have established failures by the Portuguese Republic to fulfil its obligations in relation to the treatment of urban waste water. Repetition of unlawful conduct by a Member State is all the more unacceptable where it takes place in a sector in which the effects on human health and the environment are particularly significant. In that regard, as the Advocate General observed in point 89 of her Opinion, where a Member State repeatedly engages in unlawful conduct in a specific sector, this may be an indication that effective prevention of future repetition of similar infringements of EU law may require the adoption of a dissuasive measure, such as a lump sum payment (see, to that effect, judgment of 19 December 2012 in Commission v Ireland, C‑279/11, EU:C:2012:834, paragraph 70).