1 By its application, the European Commission claims that the Court should: - declare that, by failing to take the necessary measures to comply with the judgment of 17 October 2018, Commission v United Kingdom (C‑503/17, ‘the judgment establishing the infringement, EU:C:2018:831), the United Kingdom of Great Britain and Northern Ireland has failed to fulfil its obligations under Article 260(1) TFEU, read in conjunction with Articles 127 and 131 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (OJ 2020 L 29, p. 7, ‘the Withdrawal Agreement’); - order the United Kingdom, pursuant to Article 260(2) TFEU, read in conjunction with Articles 127 and 131 of the Withdrawal Agreement, to pay to the Commission: - a daily penalty payment in the sum of EUR 268 878.50 per day’s delay in complying with the judgment establishing the infringement from the day on which judgment is delivered in the present proceedings until the day on which the judgment establishing the infringement has been fully complied with; - a lump sum, the amount of which is to be calculated by multiplying the daily amount of EUR 35 873.20 by the number of days that have elapsed between the date on which the judgment establishing the infringement was delivered and, either the date on which that State complies with that judgment, or, in the absence of compliance with that judgment before judgment is delivered in the present proceedings, the date on which that judgment is delivered, the minimum amount being fixed at EUR 8901000, and - order the United Kingdom to pay the costs.
2 The Withdrawal Agreement, approved on behalf of the European Union and the European Atomic Energy Community (EAEC) by Council Decision (EU) 2020/135 of 30 January 2020 (OJ 2020 L 29, p. 1) entered into force on 1 February 2020.
3 Article 86 of that agreement, entitled ‘Pending cases before the Court of Justice of the European Union’, provides in paragraphs 1 and 3: ‘1. The Court of Justice of the European Union shall continue to have jurisdiction in any proceedings brought by or against the United Kingdom before the end of the transition period. … … 3. For the purposes of this Chapter, proceedings shall be considered as having been brought before the Court of Justice of the European Union … at the moment at which the document initiating the proceedings has been registered by the registry of the Court of Justice …’
4 In accordance with Article 126 of that agreement, the transition period started on the date of entry into force of that agreement and ended on 31 December 2020.
5 Article 127 of the Withdrawal Agreement, entitled ‘Scope of the transition’, provides: ‘1. Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period. … 3. During the transition period, the Union law applicable pursuant to paragraph 1 shall produce in respect of and in the United Kingdom the same legal effects as those which it produces within the Union and its Member States, and shall be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union. … 6. Unless otherwise provided in this Agreement, during the transition period, any reference to Member States in the Union law applicable pursuant to paragraph 1, including as implemented and applied by Member States, shall be understood as including the United Kingdom. …’
6 Pursuant to Article 131 of that agreement, entitled ‘Supervision and Enforcement’: ‘During the transition period, the institutions, bodies, offices and agencies of the Union shall have the powers conferred upon them by Union law in relation to the United Kingdom and to natural and legal persons residing or established in the United Kingdom. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties. The first paragraph shall also apply during the transition period as regards the interpretation and application of this Agreement.’
7 The Protocol on Ireland/Northern Ireland annexed to the Withdrawal Agreement (‘the Protocol on Ireland and Northern Ireland’), includes Article 8, entitled ‘VAT and excise’, which provides in its first paragraph: ‘The provisions of Union law listed in Annex 3 to this Protocol concerning goods shall apply to and in the United Kingdom in respect of Northern Ireland.’
8 Article 12 of the Protocol on Ireland and Northern Ireland, entitled ‘Implementation, application, supervision and enforcement’, provides in paragraph 1: ‘Without prejudice to paragraph 4, the authorities of the United Kingdom shall be responsible for implementing and applying the provisions of Union law made applicable by this Protocol to and in the United Kingdom in respect of Northern Ireland.’
9 Annex 3 to that protocol refers, inter alia, to Council Directive 95/60/EC of 27 November 1995 on fiscal marking of gas oils and kerosene (OJ 1995 L 291, p. 46).
10 The first and third recitals of Directive 95/60 are worded as follows: ‘Whereas the Community measures envisaged by this Directive are not only necessary but also indispensable for the attainment of the objectives of the internal market; whereas these objectives cannot be achieved by Member States individually; … whereas this Directive conforms with the principle of subsidiarity; … Whereas the proper functioning of the internal market now requires that common rules be established for fiscal marking of gas oil and kerosene which have not borne duty at the full rate applicable to such mineral oils used as propellant’.
11 Article 1(1) of that directive provides: ‘Without prejudice to national provisions on fiscal marking, Member States shall apply a fiscal marker in accordance with the provisions of this Directive to: - all gas oil falling within CN code 27100069 which has been released for consumption … and has been exempt from, or subject to, excise duty at a rate other than that laid down in Article 5(1) of [Council] Directive 92/82/EEC [of 19 October 1992 on the approximation of the rates of excise duties on mineral oils (OJ 1992 L 316, p. 19), repealed and replaced by Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51)]; - …’
12 Under Article 3 of that directive: ‘Member States shall take the necessary steps to ensure that improper use of the marked products is avoided and, in particular, that the mineral oils in question cannot be used for combustion in the engine of a road-going motor vehicle or kept in its fuel tank unless such use is permitted in specific cases determined by the competent authorities of the Member States. Member States shall provide that the use of the mineral oils in question in the cases mentioned in the first subparagraph is to be considered as an offence under the national law of the Member State concerned. Each Member State shall take the measures required to give full effect to all the provisions of this Directive and shall, in particular, determine the penalties to be imposed in the event of failure to comply with the said measures; such penalties shall be commensurate with their purpose and shall have adequate deterrent effect.’
13 Article 14(1) of Directive 2003/96 provides that: ‘In addition to the general provisions set out in [Council] Directive 92/12/EEC [of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1)] on exempt uses of taxable products, and without prejudice to other Community provisions, Member States shall exempt the following from taxation under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse: … (c) energy products supplied for use as fuel for the purposes of navigation within Community waters (including fishing), other than private pleasure craft, and electricity produced on board a craft. …’
14 The Hydrocarbon Oil Duties Act 1979, which governs the tax of fuel, was amended in particular by the Finance Act 2012. Taking account of the date of the facts at issue, the present dispute is governed by that 1979 Act, as amended by that 2012 Act (‘the 1979 Act’).
15 Section 14E of the 1979 Act governs the taxation of fuel used for private pleasure craft. It provided: ‘Rebated heavy oil and bioblend: private pleasure craft (1) This section applies in respect of rebated heavy oil or bioblend. (2) The heavy oil or bioblend must not be used as fuel for propelling private pleasure craft. (3) If, on the supply by a person (“the supplier”) of a quantity of the heavy oil or bioblend to another person, the other person makes a relevant declaration to the supplier - (a) subsection (2) does not apply in relation to that heavy oil or bioblend, and (b) the supplier must pay, in accordance with regulations, the amount specified in subsection (4) to the Commissioners. … (7A) A relevant declaration must include an acknowledgement that nothing in this section or done under it (including the making of the declaration) affects any restriction or prohibition under the law of a Member State other than the United Kingdom on the use of the heavy oil or bioblend as fuel for propelling craft outside United Kingdom waters … …’
16 Section 14E of the 1979 Act was amended by Schedule 11 to the Finance Act 2020, which entered into force on 1 October 2021, in order, in essence, to prohibit the use, in Northern Ireland, of marked fuel for use in private pleasure craft for propulsion.
17 By the judgment establishing the infringement, the Court held that, by allowing the use of marked fuel for the purposes of propelling private pleasure craft, even where that fuel is not subject to any exemption from or reduction in excise duty, the United Kingdom has failed to fulfil its obligations under [Directive 95/60].’
18 After the judgment establishing the infringement was delivered, the Commission asked the United Kingdom, by a letter dated 22 October 2018, to inform it, within two months, of the measures that it proposed to take in order to comply with that judgment.
19 By a letter of 19 December 2018, the United Kingdom stated that it intended, in the course of 2019 and 2020, to amend its legislation, in particular the 1979 Act and the relevant secondary legislation, so as to prohibit the use of marked fuel in private pleasure craft for propulsion. In that letter, that State also stated that, having regard to the considerable practical implications of those amendments, a public consultation would be carried out.
20 Taking the view that the United Kingdom had not taken the necessary measures to comply with the judgment establishing the infringement, on 15 May 2020, pursuant to Article 260(2) TFEU, the Commission sent a letter of formal notice inviting the United Kingdom to submit its observations within four months of receipt of that letter, namely by 15 September 2020.
21 The United Kingdom replied to that letter of formal notice on 11 September 2020, setting out the difficulties in complying with the judgment establishing the infringement, in particular owing to the general election which took place in that State in December 2019. That State also stated that enabling legislation had been included in the Finance Act 2020 which was a necessary preliminary step for the adoption of the secondary legislation necessary to comply with that judgment. In addition, it stated that wider reforms had been proposed for the withdrawal of entitlement to use marked fuel in most sectors with effect from April 2022. In that regard, that State indicated that a consultation on those reforms would be completed on 1 October 2020 and that the decision concerning the time limit for withdrawal of entitlement to use marked fuel in private pleasure craft for propulsion would be taken after that consultation, together with the final decisions relating to wider reforms relating to that fuel.
22 It was in those circumstances that the Commission decided to bring the present action.
23 The transition period provided for in Article 126 of the Withdrawal Agreement ended on 31 December 2020 and, with effect from 1 January 2021, the provisions of Directive 95/60 ceased to apply in the United Kingdom with the exception, however, of Northern Ireland, where those provisions remained in force after that date pursuant to Article 8 of the Protocol on Ireland and Northern Ireland, read in conjunction with Annex 3 thereto.
24 On 21 May 2021, the United Kingdom sent a letter to the Commission informing it that the final legislation prohibiting, in Northern Ireland, the use of marked fuel subject to reduced rates of excise duty for propulsion of private pleasure craft would be adopted by the United Kingdom Parliament on 1 July 2021. In addition, the United Kingdom stated that, during the boating season, private fuel suppliers would be unable to build the additional fuel supply infrastructure to enable the supply of both diesel on which full excise duty has been paid to private pleasure craft and diesel subject to rebated excise duty to commercial boats, such that that prohibition would enter into force on 1 October 2021.
25 The United Kingdom therefore, on 21 May 2021, updated its guidance on excise duties applicable to fuel used for private pleasure craft, which thereafter, in point 2.3, stated as follows: ‘From 1 October 2021, private pleasure craft in Northern Ireland, with one fuel tank (for both propulsion and non-propulsion), cannot use [marked fuel] unless it was put into the fuel tank either in: Northern Ireland before 1 October 2021, [or] a jurisdiction where using [marked fuel] for propulsion of private pleasure craft is legal …’.
26 The secondary legislation at issue was adopted on 28 June 2021 and permitted the entry into force of the provisions of the Finance Act 2020 with the result that the use by users of private pleasure craft of marked fuel for propulsion has been prohibited in Northern Ireland since 1 October 2021.
27 By a letter of 11 February 2022, the Commission informed the Court that it partially withdrew its action as regards the daily penalty payment on the ground that that head of claim had become devoid of purpose with the entry into force, on 1 October 2021, of the provisions of the Finance Act 2020. Nevertheless, it maintained its application for the United Kingdom to be ordered to pay a fine in the sum of EUR 35 873.20 per day for the period from 17 October 2018 to 30 September 2021, namely from delivery of the judgment establishing the infringement until the date on which that State complied with that judgment.
28 The Commission submits that the United Kingdom has failed to take the necessary measures to comply with the judgment establishing the infringement. That State had a period of four months within which to submit its observations, with effect from receipt of the letter of formal notice, namely by 15 September 2020. It was clear from the response to that letter of formal notice that, despite the adoption of some preliminary legislative measures, the entitlement to use marked fuel in private pleasure craft for propulsion was not withdrawn until April 2022. In that regard, the Commission submits that a Member State cannot plead delays in the legislative process or difficulties in its domestic legal order to justify a failure to comply with a judgment of the Court in a timely manner.
29 The United Kingdom replies that it did not fail to fulfil its obligation to comply with the judgment establishing the infringement, and that the letter of formal notice and the present action by the Commission have been brought prematurely. It may be inferred the Court’s case-law, resulting from the judgments of 4 July 2000, Commission v Greece (C‑387/97, EU:C:2000:356, paragraph 82), and of 25 June 2013, Commission v Czech Republic (C‑241/11, EU:C:2013:423, paragraph 44), according to which compliance with a judgment establishing an infringement must be completed as soon as possible, that the Court must consider the practical challenges faced by the Member State concerned. It is clear from the judgment of 25 November 2003, Commission v Spain (C‑278/01, EU:C:2003:635, paragraph 30), that, in order to find a lack of compliance contrary to Article 260(2) TFEU, the Court must conclude that compliance with the judgment in question which established the infringement was possible sooner than it in fact occurred.
30 Against that background, it is incumbent upon the Commission to analyse the practical challenges that must be overcome by the Member State concerned in order to comply with a judgment establishing an infringement. That institution must demonstrate that, notwithstanding those challenges, it was reasonably possible for the Member State to achieve compliance within the time allowed by the letter of formal notice. Having regard to the huge complexity and scale involved in the task of complying with the judgment establishing the infringement, the period of 23 months between the date on which that judgment was pronounced and the deadline prescribed in that letter was clearly inadequate to allow the United Kingdom to comply with that judgment.
31 Furthermore, an approach based on strict liability does not apply in the context of proceedings under Article 260 TFEU. The Commission should have made an application, if at all, together with the action that it brought on the basis of Article 258 TFEU, for financial penalties to be imposed on the United Kingdom in accordance with Article 260(3) TFEU, which it did not do. Finally, the Commission has confused the practical difficulties confronting Member States, which the Court must take into account, with the internal legal or political difficulties of those States, which may not be taken into consideration.
32 In the present case, the United Kingdom asserts that it has been confronted with unique practical challenges in implementing Directive 95/60 and in complying with the judgment establishing the infringement, of which it informed the Commission. The challenges it had to confront related to: first, the United Kingdom’s particular geographic features as regards long coastlines and the large number of ports and harbours; second, the wide variety in the size of ports where vessels can refuel; third, the material constraints faced by smaller ports in providing both unmarked fuel and marked fuel; fourth, economic and safety concerns, including tax fraud, the risk of deterioration of diesel, the installation of temporary secondary tanks, the effect on tourist revenues and the use of marked fuel for purposes other than propulsion; and, fifth, the COVID-19 pandemic.
33 In its reply, the Commission observes, in the first place, that the United Kingdom does not dispute that, as at the date of 15 September 2020, it had not complied with the judgment establishing the infringement.
34 In the second place, that State’s submission that the Commission must show that it was reasonably possible for it to comply with that judgment before that date is not supported by the case-law.
35 In the third place, the settled case-law of the Court according to which a Member State cannot rely on practical difficulties to justify a failure to comply with Article 260(1) TFEU is not limited to political and legal difficulties. Furthermore, in submitting that the approach based on strict liability cannot be applied in the context of the procedure under Article 260 TFEU, the United Kingdom confuses the obligation incumbent upon it under Article 260(1) TFEU and the assessment of the seriousness of the infringement under Article 260(2) TFEU.
36 In any event, the facts relied on by the United Kingdom do not constitute practical difficulties capable of justifying the failure to comply with the judgment establishing the infringement. First, as regards the alleged legislative delays, the obligation for that State to carry out an assessment of commercial ports and marinas in order to determine the corrective measures necessary to comply with that judgment does not explain the reasons why, more than two and a half years after it was delivered, that State had not adopted the secondary legislation necessary to comply with that judgment. Secondly, as regards the alleged infrastructure-related difficulties, such as the existence of remote ports or very small ports in which there is insufficient space to provide both marked and unmarked fuel, the Commission considers that those possible difficulties appear to be the exception rather than the rule. In addition, other Member States have already overcome the same kinds of difficulties. Thirdly, as regards the COVID-19 pandemic, the Commission granted the United Kingdom an exceptional period of four months within which to reply to the letter of formal notice, whereas that period would normally be only two months. Moreover, the number of COVID-19 cases in that State was at one of its lowest levels in the summer of 2020.
37 In the fourth place, contrary to the United Kingdom’s submission, it was clear from its letter of 11 September 2020 that the entitlement to use marked fuel was not withdrawn in most sectors until April 2022. The divergence between the commitments made by that State to give effect in good time to the judgment establishing the infringement and the lack of tangible results within a foreseeable future led the Commission to commence the procedure provided for in Article 260(2) TFEU. It was only after it had brought an action on the basis of that provision that that State undertook to adopt the necessary secondary legislation.
38 In the fifth place, the United Kingdom is wrong to rely on Article 260(3) TFEU since the infringement procedure that led to the delivery of the judgment establishing the infringement concerned the incorrect implementation of a directive, and not a failure to notify transposition measures.
39 In its rejoinder, the United Kingdom replies, in the first place, that the Finance Act 2020 made it possible, from its entry into force on 1 October 2021, for it to comply with Directive 95/60.
40 In the second place, it submits that an infringement of Article 260(1) TFEU cannot result solely from the fact that it had not adopted the necessary measures before expiry of the time limit prescribed in the letter of formal notice, unless the Commission has the power, which is not conferred on it by that provision, to determine the deadline for compliance with a judgment of the Court establishing a failure to fulfil obligations. Furthermore, in the context of the exercise of its discretionary powers, that institution cannot, without breaching the principles of legal certainty and proportionality, seise the Court, pursuant to Article 260(2) TFEU, whenever it wishes and without considering whether compliance with the judgment of the Court was‘possible’. In addition, a breach of the principle of equal treatment should be acknowledged in that the time limits granted by the Commission to other Member States in order for them to comply with a judgment of the Court finding a failure to fulfil obligations have, in some cases, been considerably longer than that granted in the present case.
41 In the third and last place, the Commission distorted the United Kingdom’s contentions regarding the practical challenges in question and did not give adequate consideration to those difficulties. In addition, it seised the Court on the basis of an incorrect interpretation of the letter of 11 September 2020. That letter did not state, contrary to the Commission’s submission, that the prohibition on the use of marked fuel for private pleasure craft would apply only with effect from April 2022, but stated rather that amendments going beyond the requirements resulting from the judgment establishing the infringement would enter into force on that date.
42 Under Article 260(2) TFEU, if the Commission considers that the Member State concerned has not taken the necessary measures to comply with a judgment of the Court, it may bring the case before the Court after giving that State the opportunity to submit its observations, specifying the amount of the lump sum or penalty to be paid by that State which it considers appropriate in the circumstances.
43 It should also be recalled that, 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 20 January 2022, Commission v Greece (Recovery of State aid - Ferronickel), C‑51/20, EU:C:2022:36, paragraph 61 and the case-law cited).
44 Furthermore, it should be recalled that the infringement procedure is based on the objective finding that a Member State has failed to fulfil its obligations under the Treaty or secondary legislation (judgment of 12 November 2019, Commission v Ireland (Derrybrienwind farm), C‑261/18, EU:C:2019:955, paragraph 92).
45 In the present case, as stated in paragraph 20 of this judgment, the Commission sent a letter of formal notice on 15 May 2020 to the United Kingdom under the procedure provided for in Article 260(2) TFEU. Therefore, the reference date referred to in paragraph 43 of this judgment is the date on which the time limit laid down in that letter expired, namely 15 September 2020.
46 It is clear that, as at that date, the United Kingdom had not taken all the necessary measures in order to comply with the judgment establishing the infringement. Even though, on that date, the Finance Act 2020, which contained the legislative power necessary for that State to comply with that judgment, had been adopted, that act did not enter into force until 1 October 2021, such that, before that later date, the use of marked fuel in private pleasure craft for propulsion was allowed in the whole of that State.
47 That finding is unaffected by the United Kingdom’s arguments. As regards, in the first place, that State’s argument that the Commission must show that it was reasonably possible for it to comply with the judgment establishing the infringement before the date on which the time limit prescribed by the letter of formal notice expired, it suffices to observe that, even though it is incumbent on the Commission, in the course of proceedings under Article 260(2) TFEU, to provide the Court with the information necessary to determine the extent to which a Member State has complied with a judgment declaring it to be in breach of its obligations (judgment of 2 December 2014, Commission v Italy, C‑196/13, EU:C:2014:2407, paragraph 48 and the case-law cited), the Commission cannot be required to prove that it was possible to comply with a judgment finding an infringement as at the date of the expiry of the time limit prescribed by the letter of formal notice sent by that institution to the Member State concerned.
48 As regards, in the second place, the United Kingdom’s argument that the letter of formal notice and the present action were premature, in particular because it was impossible for it, owing to practical difficulties, to comply fully with the judgment establishing the infringement before expiry of the time limit prescribed by that letter, it should be recalled, first, that, even though 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 (judgment of 12 November 2019, Commission v Ireland (Derrybrienwind farm), C‑261/18, EU:C:2019:955, paragraph 123 and the case-law cited).
49 Secondly, contrary to the United Kingdom’s assertion, it cannot be inferred from the case-law that the Member State concerned may rely on practical difficulties in order to justify the failure to comply with a judgment of the Court. According to 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 (judgment of 12 November 2019, Commission v Ireland (Derrybrienwind farm), C‑261/18, EU:C:2019:955, paragraph 89 and the case-law cited).
50 As the Advocate General observed in points 18 and 20 of his Opinion, that case-law cannot be regarded as having covered only legal and political difficulties, such that practical obstacles could justify the failure to comply with a judgment of the Court finding a failure to fulfil obligations under Article 258 TFEU.
51 In those circumstances, in the present case, the failure to comply with the judgment establishing the infringement cannot be justified by internal or practical difficulties nor by the particular circumstances, invoked by the United Kingdom during the pre-litigation stage and in the present proceedings, related inter alia to legislative procedure, the general election, public consultations, geographic features, the variety in port sizes, difficulties in supplying both marked fuel and unmarked fuel, economic and safety concerns and the COVID-19 pandemic.
52 The United Kingdom’s argument that the Commission distorted its contentions regarding the practical challenges it had to confront when complying with that judgment and failed to give adequate consideration to those difficulties must also be rejected.
53 In the third place, as regards the United Kingdom’s argument that the time limit of four months prescribed by the Commission in its letter of formal notice for the submission of its observations concerning compliance with the judgment establishing the infringement was unreasonable and insufficient, it must be held that it follows from the case-law that the aims of the pre-litigation procedure, which are 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, require the Commission to allow Member States a reasonable period within which to reply to letters of formal notice and to comply with the relevant judgment finding a failure to fulfil obligations under Article 258 TFEU, or, where appropriate, to prepare their defence, and, in order to determine whether the period allowed is reasonable, all the circumstances of the case must be taken into account (see, by analogy, judgment of 16 July 2020, Commission v Romania (Anti-money laundering), C‑549/18, EU:C:2020:563, paragraph 70 and the case-law cited).
54 In the present case, it must be held that the time limit of four months prescribed by the Commission in its letter of formal notice was neither unreasonable nor insufficient, having regard in particular to the fact that, in total, 23 months had elapsed between the delivery of the judgment establishing the infringement and the expiry of that time limit.
55 In the fourth place, in so far as the United Kingdom submits that the present action is premature, it suffices to recall that, as guardian of the Treaties pursuant to the second sentence of Article 17(1) TEU, the Commission enjoys a discretion as to whether it is expedient to take action against a Member State and to choose the time at which it will bring an action for failure to fulfil obligations and that the considerations determining that choice cannot affect the admissibility of the action nor even be subject to judicial review by the Court (see, to that effect, judgments of 13 January 2021, Commission v Slovenia (MiFID II), C‑628/18, EU:C:2021:1, paragraphs 47 and 48, and of 8 March 2022, Commission v United Kingdom (Action to counter undervaluation fraud), C‑213/19, EU:C:2022:167, paragraph 203 and the case-law cited).
56 In view of that discretion, the United Kingdom’s argument that the Commission infringed the principle of equal treatment in so far as it granted other Member States considerably longer time limits than the one that it granted the United Kingdom for complying with the judgment establishing the infringement must also be rejected (see, to that effect, judgment of 13 January 2021, Commission v Slovenia (MiFID II), C‑628/18, EU:C:2021:1, paragraph 53).
57 In the fifth place, as regards the United Kingdom’s argument that the present action is based on an error of interpretation by that institution which distorted the meaning of the letter of 11 September 2020, even if that letter did not state, contrary to the Commission’s submission, that the prohibition on using marked fuel for private pleasure craft would not apply until April 2022, that fact is irrelevant for the purposes of assessing the merits of this action and cannot call into question the finding, in paragraph 46 of the present judgment, that, as at 15 September 2020, the United Kingdom had not taken all the necessary measures to comply with the judgment establishing the infringement.
58 In the sixth and last place, contrary to the United Kingdom’s submission, the Commission could not, at the time of the action that it brought in the case that gave rise to the judgment establishing the infringement, ask the Court, pursuant to Article 260(3) TFEU, to impose financial penalties on that State. That action was brought not on the ground that that Member State had failed to comply with its obligation to notify measures transposing Directive 95/60, but on the ground that it had incorrectly transposed that directive. It is not for the Court, in judicial proceedings brought under Article 260(3) TFEU, to examine whether a Member State has correctly transposed a directive (see, to that effect, judgment of 25 February 2021, Commission v Spain (Personal Data Directive - Criminal law), C‑658/19, EU:C:2021:138, paragraph 30 and the case-law cited).
59 Having regard to all of the foregoing considerations, it must be held that, by failing to take, by the date of expiry of the period prescribed in the letter of formal notice issued by the Commission, namely on 15 September 2020, all the measures necessary to comply with the judgment establishing the infringement, the United Kingdom has failed to fulfil its obligations under Article 260(1) TFEU.
60 The Commission considers that every instance of prolonged failure to comply with a ruling of the Court in itself seriously undermines the principle of legality and legal certainty and, therefore, with reference to point 10 et seq. of its Communication SEC(2005) 1658 of 12 December 2005, entitled ‘Application of Article [260 TFEU]’ (OJ 2007 C 126, p. 15; ‘the 2005 Communication’), it asks the Court to impose a lump sum penalty on the United Kingdom.
61 On the basis of the 2005 Communication and the communication entitled ‘Updating of data used to calculate lump sum and penalty payments to be proposed by the Commission to the Court of Justice of the European Union in infringement proceedings’ (OJ 2020 C 301, p. 1; ‘the 2020 Communication’), the Commission requests that that lump sum be calculated by multiplying the daily amount of EUR 35 873.20 by the number of days that elapsed between the date on which the judgment establishing the infringement was delivered and the date on which the United Kingdom complied with that judgment. That amount is arrived at by multiplying a uniform flat-rate amount by a coefficient for seriousness and an ‘n’ factor. The Commission states that the lump sum thus obtained should not be less than an amount of EUR 8901000.
62 In the first place, the Commission submits that it is clear from the 2020 Communication that the uniform flat-rate is fixed at EUR 1052 and that the ‘n’ factor, taken into account to ensure the deterrent effect of the penalty is, for the United Kingdom, 3.41.
63 In the second place, as regards the seriousness of the infringement, the Commission submits that the objective pursued by Directive 95/60 is to supplement Directive 2003/96 and to promote the completion and functioning of the internal market, by allowing easy and quick identification of gas oil not subject to taxation at the full rate. By failing to take the necessary measures to avoid improper use of marked products, that State has made it difficult or impossible for the authorities of other Member States, in particular those with waters neighbouring the United Kingdom, to determine whether a private pleasure craft which is supplied with marked fuel in United Kingdom ports and which later reaches the waters of those Member States transports fuel lawfully taxed at the full rate in the United Kingdom. In addition, the United Kingdom Government’s document of 15 July 2019, entitled ‘Implementation of the Court of Justice of the European Union (CJEU) judgment on diesel fuel used in private pleasure craft’, which launched a public consultation in that State, makes clear that a number of private pleasure craft were affected by the fact that that State had not taken those particular measures. Therefore, it is appropriate to apply a coefficient for seriousness of 10 out of 20.
64 The United Kingdom replies that, even if the Court concluded that the judgment establishing the infringement had not been complied with, no financial penalty should be imposed on it or, in the alternative, that penalty should be limited to a lump sum not exceeding EUR 250000.
65 As regards the degree of seriousness of the infringement and the Member State’s ability to pay, it is necessary, according to the settled case-law, to have regard to the effects on public and private interests of the failure to comply with the judgment establishing the infringement in question and to the urgency with which the Member State concerned must be induced to fulfil its obligations (see, to that effect, judgments of 12 July 2005, Commission v France, C‑304/02,EU:C:2005:444, paragraph 104; of 14 March 2006, Commission v France, C‑177/04, EU:C:2006:173, paragraph 62, and of 10 January 2008, Commission v Portugal, C‑70/06, EU:C:2008:3, paragraph 39).
66 As regards, in the first place, the seriousness of the failure to comply, that could only amount to a limited infringement of very modest seriousness, such that it would be appropriate to adopt an approach analogous to that taken by the Court in the judgment of 10 January 2008, Commission v Portugal (C‑70/06, EU:C:2008:3) and therefore to apply a factor for seriousness of no greater than 3.
67 First, the United Kingdom observes that the Commission’s application does not contain any analysis of the importance of the EU rule that was the object of the infringement at issue.
68 Secondly, the Commission should establish not only that there was a failure to comply with a judgment finding an infringement but also the effects of that failure on the internal market and on general and individual interests. According to the United Kingdom, infringements of Directive 95/60 have only extremely limited effects on those interests in the light of the comprehensive system that it has established to verify that the correct amount of taxation has been paid by private pleasure craft users. Accordingly, there is no loss of tax and no injury to the internal market. In addition, as regards the Commission’s reference to difficulties faced by other Member States in verifying that the tax has duly been paid in the United Kingdom, that State alleges, first, that such difficulties were not substantiated by any evidence and that the verification system that it had established could be used by the authorities of those other Member States.
69 Moreover, the non-compliance was minimal in so far as less than 0.2% of marked fuel was used in the United Kingdom for propulsion of private pleasure craft for the period from 2017 to 2019.
70 In that context, account should also be taken of the fact that, since the end of the transition period on 31 December 2020, the United Kingdom’s obligation to comply with the judgment establishing the infringement has applied only to Northern Ireland. The United Kingdom submits, in that regard, that the number of private pleasure craft in Northern Ireland is estimated to be 1500 and only 132 litres of marked fuel has been supplied to users of those craft in the period from 1 January and 22 March 2021.
71 Thirdly, it follows from the Court’s case-law that the difficulty of compliance is taken into account to determine the seriousness of the infringement. In addition, by carrying out a public consultation in 2019 and adopting the primary legislation at issue, the United Kingdom made significant progress after the delivery of the judgment establishing the infringement. Furthermore, it acted in good faith by regularly keeping the Commission informed of the steps taken. Account should also be taken of the fact that this is the first time an action has been brought against that State for failure to comply with a Court judgment.
72 As regards, in the second place, the duration of the infringement, the period of non-compliance does not start to run until the time when the Court considers that it was possible in practice to comply with the judgment establishing the infringement. It follows from the judgment of 28 November 2013, Commission v Luxembourg (C‑576/11, EU:C:2013:773), that account is to be taken of practical difficulties when assessing that duration.
73 In the third place, the United Kingdom states that the ‘n’ factor of 3.41, which was given in the 2020 Communication, is excessive.
74 First, the ability to pay can no longer be based on the gross domestic product (GDP) of the United Kingdom as a whole, as the obligations imposed by Directive 95/60 and Article 260 TFEU no longer apply to the United Kingdom after the end of the transition period except in respect of Northern Ireland. The economy of Northern Ireland represented about 2.28% of the United Kingdom’s economy for 2018, and thus the ‘n’ factor should be proportionately adjusted. In that regard, this case should be distinguished from the case which gave rise to the judgment of 11 December 2012, Commission v Spain (C‑610/10, EU:C:2012:781), in which the Court rejected the Kingdom of Spain’s argument that only the GDP of the Basque country should be taken into account since the breach of the EU rules concerned only that part of the Kingdom of Spain. In that case, the EU rules applied to that Member State as a whole, whereas, in the present case, Directive 95/60 no longer applies to the United Kingdom except in respect of Northern Ireland. In addition, to the extent that the Commission considered that the ‘n’ factor should be recalculated after the end of the transition period, it would be contradictory to continue to use the United Kingdom’s total GDP after that period.
75 Secondly, the fact that the United Kingdom no longer has a seat in the European Parliament should be taken into account.
76 Thirdly, the Court should take account of the most recent information regarding GDP. In that regard, the United Kingdom’s lawyer stated at the hearing that, as regards 2020, the GDP of that State was 2156073 million pounds sterling (GBP) (approximately EUR 2423426 million).
77 In its reply, the Commission observes that the Court could impose a higher penalty on the United Kingdom that the one it has proposed.
78 In the first place, as regards the seriousness of the infringement, the Commission recalls that the clarity of the obligation infringed plays an important role for the assessment the seriousness of the infringement. Likewise, the question is not whether the United Kingdom complied with the objective of Directive 2003/96, but rather whether it complied with the clear and indispensable obligation laid down in Directive 95/60 of removing the entitlement of private pleasure craft to use marked fuel. Furthermore, it is not for the Commission to show that the effects of the infringement have actually materialised.
79 Moreover, according to the Commission, the only important matter is that private pleasure craft have had access to the waters of several Member States with marked fuel, which the authorities of those States could legitimately assume had not been subjected to tax.
80 In addition, the United Kingdom had delayed the adoption of the relevant secondary legislation on two occasions. It was only after the present proceedings were commenced that that State advanced the adoption of that legislation. Finally, the Commission has taken into account the fact that these are the first proceedings to have been brought against this State for failure to comply with a judgment of the Court.
81 At the hearing, the Commission submitted that it was not appropriate to reduce the factor for seriousness owing to the reduced territorial scope of the infringement because that reduction was the result of the Withdrawal Agreement and not of measures adopted by the United Kingdom to comply with the judgment establishing the infringement.
82 In the second place, as regards the duration of the infringement, consideration should not be given to practical difficulties or to the fact that the United Kingdom has made efforts in good faith.
83 In the third place, as regards the ‘n’ factor, the Commission recalls, first, that the present proceedings were brought before the end of the transition period and that, pursuant to Articles 127 and 131 of the Withdrawal Agreement, the United Kingdom remained liable, as a whole, for the application and enforcement of EU law during that period.
84 Secondly, the number of seats held by a Member State in the Parliament is used as a proxy to determine the ‘n’ factor because it is a useful indicator of that Member State’s size, with the result that the fact that the United Kingdom no longer has any seats in the Parliament is irrelevant and is, moreover, a direct consequence of the Withdrawal Agreement that it signed. The Commission submits that, in any event, that State was represented in the Parliament at the time when the infringement was found in 2018.
85 Thirdly, as regards the United Kingdom’s allegation that the ‘n’ factor should be reduced on economic grounds, the Commission stated at the hearing that the figures presented by the United Kingdom concerning 2020 could not be regarded as reliable. Furthermore, according to the Commission’s communication entitled ‘Adjustment of the calculation for lump sum and penalty payments proposed by the Commission in infringement proceedings before the Court of Justice of the European Union, following the withdrawal of the United Kingdom’(OJ 2021 C 129, p. 1; ‘the 2021 Communication’), the ‘n’ factor should, henceforth, be fixed at 3.70 as regards infringements committed by that State, and the minimum lump sum should be fixed at EUR 8215000.
86 In its rejoinder, the United Kingdom states that it complied with Directive 95/60 as of 1 October 2021. The Commission cannot therefore seek an order of financial penalties, since it is clear from the judgment of 7 September 2016, Commission v Greece (C‑584/14, EU:C:2016:636, paragraph 70) that the purpose of those penalties is to encourage the prompt implementation of a judgment of the Court finding that there was a failure to fulfil obligations, where that failure persists.
87 In the first place, as regards the seriousness of the infringement, that State refutes the Commission’s argument that it is clear from the first recital of Directive 95/60 that the obligations arising under that directive must be regarded as important. As is clear from the judgment of 25 June 2013, Commission v Czech Republic (C‑241/11, EU:C:2013:423, paragraph 54), first, the indications given in a recital have little analytical value for the assessment of the importance of a rule relative to other EU rules and, second, numerous directives contain equivalent wording.
88 Furthermore, it is important that account is taken of the ultimate objective pursued by Directive 95/60 of implementing a harmonised system of the charging of excise duties on gas oil. The Commission also conflates the question of compliance with that directive with the issue of which factors are relevant in assessing the seriousness of a failure to comply.
89 In addition, the fact that marked fuel supplied to private pleasure craft users in the United Kingdom represented 0.2% of the marked fuel distributed in that State and that marked fuel supplied to those users in Northern Ireland amounted to 0.02% of the United Kingdom market in the months between June and August 2019 is of central relevance.
90 Likewise, the fact that the Commission referred only to unsubstantiated press clippings concerning the fines imposed, in a single Member State, on United Kingdom private pleasure craft users and that it has not provided any evidence of fines being imposed since May 2018 shows the limited impact of the non-compliance with Directive 95/60. It follows from the judgment of 10 September 2009, Commission v Portugal (C‑457/07, EU:C:2009:531, paragraph 98), that where, as in the present case, a Member State has produced detailed information showing that an infringement has limited or no effect, it is for the Commission to show the reasons why the Court should uphold its case. Finally, the Commission cannot rely on the original infringement in order to challenge its good faith.
91 In the second place, as regards the ‘n’ factor, account should be taken of the fact that EU law no longer applies to the United Kingdom, except in respect of Northern Ireland, which, as the United Kingdom stated at the hearing, represented 2.25% of the GDP of the United Kingdom in 2020. The Court should rely on the size of the economy of the territory to which EU law applies at the date on which the judgment is delivered in the present case.
92 At the hearing, the United Kingdom also submitted that, since its withdrawal from the European Union, it was in a different situation compared with the Member States, such that it was appropriate to treat it differently, in particular as regards the ‘n’ factor, and to reduce the amount of the lump sum.
93 As a preliminary point, it must be held that, although, on 1 October 2021, the United Kingdom brought to an end the infringement of its obligation fully to comply with the judgment establishing the infringement and therefore that, in the present case the infringement has not continued up until the examination of the facts by the Court, the Commission, as stated in paragraph 27 of this judgment, maintained its application for that State to be ordered to pay a lump sum.
94 It must be noted, in that regard, that an application by which the Commission seeks the imposition of a lump sum cannot be dismissed solely because it concerns a failure to fulfil obligations which, having persisted over time, came to an end by the time of the Court’s examination of the facts at issue (judgment of 13 January 2021, Commission v Slovenia (MiFID II), C‑628/18, EU:C:2021:1, paragraph 70).
95 At the outset, it should 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 appropriate, in particular, for preventing the recurrence of similar infringements of EU law (judgment of 20 January 2022, Commission v Greece (Recovery of State aid - Ferronickel), C‑51/20, EU:C:2022:36, paragraph 86 and the case-law cited).
96 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 established infringement and to the conduct of the Member State involved in the procedure initiated under Article 260 TFEU. In that regard, that provision confers a wide discretion upon the Court in deciding whether or not to impose such a penalty and determining, if necessary, its amount. In addition, 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. Relevant factors in that regard include the seriousness of the established infringement, its duration since the delivery of the judgment establishing the infringement and the Member State’s ability to pay (see, to that effect, judgment of 12 November 2019, Commission v Ireland (Derrybrien wind farm), C‑261/18, EU:C:2019:955, paragraphs 113 and 114 and the case-law cited).
97 In the first place, as regards the seriousness of the infringement, it should be recalled that the importance of the rule infringed for the establishment of the internal market which, as is clear from the judgment of 20 January 2022, Commission v Greece (Recovery of State aid - Ferronickel) (C‑51/20, EU:C:2022:36, paragraph 98), is one of the essential missions conferred on the European Union by virtue of Article 3(3) TEU.
98 In that regard, as stated in paragraphs 44 and 46 of the judgment establishing the infringement, first, under Article 1 of Directive 95/60, read in the light of its third recital, Member States are required to apply a fiscal marker as provided for by that directive, inter alia, to gas oil which is not taxed at the full rate and, second, the objective of that directive, which is to complement Directive 2003/96 and to promote the completion and functioning of the internal market by allowing easy and quick identification of gas oil not subject to taxation at the full rate, could not be achieved if Member States were permitted to authorise the use of fiscal marking also for gas oil intended for uses that are subject to taxation at the full rate.
99 Furthermore, the measures envisaged by Directive 95/60 are, according to its first recital, not only necessary but also indispensable for the attainment of the objectives of the internal market.
100 It is true that the United Kingdom submits that it established a comprehensive system making it possible to verify that the appropriate amount of tax had been paid by users of private pleasure craft and that that system could also be used by the authorities of the Member States, in later verifications, which, in any event, do not comprise the main objective of Directive 95/60.
101 However, it suffices to recall, in that respect, that, in paragraphs 52 and 53 of the judgment establishing the infringement, the Court held that the fiscal marking of gas oils that are exempt or subject to a reduced rate of duty, provided for in Directive 95/60 is designed precisely to facilitate checks that the appropriate excise duty has actually been paid in the Member State in which it is released for consumption by the tax authorities of another Member State and that it is irrelevant that there are other means of conducting checks, such as the production of a receipt proving payment of the additional excise duty, proposed by the United Kingdom.
102 It should also be borne in mind that the obligation to adopt national measures for the purposes of ensuring that a directive is transposed in full is a fundamental obligation incumbent on the Member States in order to ensure optimal effectiveness of EU law and that failure to fulfil that obligation must, therefore, be regarded as being serious (see, by analogy, judgment of 25 February 2021, Commission v Spain (Personal Data Directive - Criminal law), C‑658/19, EU:C:2021:138, paragraph 64 and the case-law cited).
103 In so far as the United Kingdom submits that the seriousness of the infringement is minimal because the marked fuel supplied to users of private pleasure craft in the United Kingdom represents 0.2% of the marked fuel distributed in that State, it must be noted, as the Commission observes, that the infringement in question is likely to penalise a considerable number of users of private pleasure craft and therefore adversely affect the public and private interests concerned. British citizens wishing to enter the waters of Member States neighbouring the United Kingdom as well as citizens of those neighbouring Member States wishing to enter United Kingdom waters and needing to refuel with marked fuel before returning to waters of those Member States risk facing difficulties during checks by the authorities of those Member States, including having fines imposed on them by those authorities.
104 In addition, the United Kingdom itself stated in its written observations that a prohibition on marked fuel for the propulsion of those boats had considerable practical effects, which would be wholly unfounded if the quantity of the marked fuel provided for that purpose was negligible. Besides, it is clear from the document of 15 July 2019, entitled ‘Implementation of the Court of Justice of the European Union (CJEU) judgment on diesel fuel used in private pleasure craft’, by which a public consultation was launched in the United Kingdom, that that State had a considerable number of private pleasure craft and that a large quantity of marked fuel was used for the propulsion of those boats.
105 As regards the possible mitigating circumstance relied on by the United Kingdom, first, in the light of paragraphs 49 to 51 of this judgment, that State’s argument that the present infringement is of only very modest seriousness because of the practical difficulties in question must be rejected. The Court has repeatedly stated when assessing the seriousness of an infringement that 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 (see, to that effect, judgments of 4 December 2014, Commission v Sweden, C‑243/13, EU:C:2014:2413, paragraph 53; of 13 July 2017, Commission v Spain, C‑388/16, EU:C:2017:548, paragraph 41; and of 25 July 2018, Commission v Spain, C‑205/17, EU:C:2018:606, paragraph 62).
106 Secondly, as regards the fact that the United Kingdom, during the pre-litigation procedure, regularly informed the Commission of the measures that it intended to take in order to comply with the judgment establishing the infringement, it should be recalled that the duty of sincere cooperation with the Commission, as laid down in Article 4(3) TEU, means that every Member State is under a duty to facilitate the Commission’s accomplishment of its task consisting, in accordance with Article 17 TEU, in ensuring, as guardian of the Treaties, the application of EU law under the control of the Court of Justice (judgment of 8 March 2022, Commission v United Kingdom (Action to counter undervaluationfraud), C‑213/19, EU:C:2022:167, paragraph 527).
107 Accordingly, only cooperation with the Commission characterised by steps showing an intention to comply within the shortest time possible with the judgment establishing the infringement in question delivered under Article 258 TFEU may be taken into account as a mitigating circumstance in the context of assessing the seriousness of the infringement.
108 In the present case, contrary to the United Kingdom’s statement to the Commission in its letter of 19 December 2018, it did not make, in 2019 and 2020, the necessary legislative amendments to comply with the judgment establishing the infringement. In addition, that State, in indicating, in its letter of 11 September 2020, that the decision concerning the time limit for withdrawal of entitlement to use marked fuel in private pleasure craft for propulsion would be taken only after a public consultation relating to the withdrawal of that entitlement for sectors additional to that for the propulsion of those boats, it acknowledged that compliance with that judgment could have been achieved more rapidly.
109 In those circumstances, the United Kingdom’s cooperation with the Commission during the pre-litigation procedure cannot be taken into account as a mitigating circumstance.
110 By contrast, thirdly, it is appropriate to take into account, as a mitigating circumstance, the fact that the United Kingdom took a certain number of measures, both before this action was lodged and while the proceedings were ongoing, to comply with the judgment establishing the infringement and, in particular, that it brought an end to the infringement in question with the entry into force on 1 October 2021 of the provisions of the Finance Act 2020 (see, by analogy, judgment of 31 March 2011, Commission v Greece, C‑407/09, EU:C:2011:196, paragraph 41).
111 Likewise, fourthly, while it is true that the size of the Member State concerned is not, in itself, relevant in the context of assessing the seriousness of the infringement, it is necessary however to take into account the fact that, since 1 January 2021, Directive 95/60 has no longer applied in the United Kingdom except in respect of Northern Ireland, with the result that the effect of the infringement is reduced from that date.
112 Finally, fifthly, the fact that the United Kingdom has never failed to comply with any judgment previously given by the Court under Article 258 TFEU should be taken into account as a mitigating circumstance (see judgment of 30 May 2013, Commission v Sweden, C‑270/11, EU:C:2013:339, paragraph 55).
113 In the second place, as regards the duration of the infringement, it suffices to recall that that is to be calculated by taking into account the period that has elapsed between, on the one hand, the date of delivery of the judgment establishing the infringement in question under Article 258 TFEU and, on the other hand, the time when the Court assessed the facts or the date on which the Member State concerned complied with that judgment if that occurs beforehand (see, to that effect, judgments of 31 March 2011, Commission v Greece, C‑407/09, EU:C:2011:196, paragraph 35, and of 12 November 2019, Commission v Ireland (Derrybrien wind farm), C‑261/18, EU:C:2019:955, paragraph 122).
114 In the present case, it must be observed that 1079 days and, therefore, almost three years, elapsed between the delivery of the judgment establishing the infringement and United Kingdom’s compliance with that judgment.
115 In the third place, as regards the ability to pay, it is clear from the case-law that the GDP of the Member State concerned is to be relied on as the predominant factor for the purpose of assessing its ability to pay and for the fixing of penalties that are sufficiently dissuasive and proportionate in order effectively to prevent a repeat of similar infringements of EU law in the future (see, to that effect, judgment of 20 January 2022, Commission v Greece (Recovery of State aid - Ferronickel), C‑51/20, EU:C:2022:36, paragraphs 116 and 130).
116 In that regard, the United Kingdom submits, first, that it is the GDP of Northern Ireland that should exclusively be relied on for the entire infringement period, whereas the Commission takes the view that the GDP of the United Kingdom as a whole should be taken into account for the whole of that period.
117 In this case, while, admittedly, in accordance with Article 127(1) of the Withdrawal Agreement, EU law applied to the United Kingdom as a whole for the transition period, namely until 31 December 2020, since 1 January 2021 the infringement in question has concerned only Northern Ireland.
118 However, it is stated in Article 12(1) of the Protocol on Ireland and Northern Ireland that it is the authorities of the United Kingdom, and not those of Northern Ireland, which are to be responsible for implementing and applying the provisions of Union law made applicable by that protocol to and in the United Kingdom in respect of Northern Ireland. Against that background, contrary to the United Kingdom’s submissions, the fact that it has not been a Member State since 1 February 2020 is irrelevant for the assessment of its ability to pay, with the result that it is not appropriate to apply treatment that is different from that applied to Member States in that respect.
119 Moreover, as is clear from the case-law set out in paragraph 115 of this judgment, the ability to pay is taken into account in order to fix penalties that are sufficiently dissuasive and proportionate, with the aim of effectively preventing the repetition of similar infringements of EU law in the future. A penalty imposed on the United Kingdom calculated, as regards the assessment of the ability to pay, taking into account only the GDP of Northern Ireland, as regards the continuation of the infringement after the end of the transition period, would not be sufficiently dissuasive and therefore would not make it possible to achieve that aim.
120 Furthermore, to the extent that, as is clear from paragraph 111 of this judgment, the fact that, since the end of the transition period, EU law no longer applies in the United Kingdom, except in respect of Northern Ireland, is a mitigating circumstance which plays a role in the context of assessing the seriousness of the infringement, there is no reason to take that factor into account once again as regards the United Kingdom’s ability to pay.
121 Having regard to the foregoing, it is appropriate to take into account the GDP of the United Kingdom as a whole for the entire period of the infringement for the purpose of determining the ability of that State to pay.
122 That analysis is unaffected by the other arguments put forward by the United Kingdom. While it is appropriate to take into account the recent trends in GDP, in accordance with the Court’s case-law, (judgment of 12 November 2019, Commission v Ireland (Derrybrien wind farm), C‑261/18, EU:C:2019:955, paragraph 124 and the case-law cited), it cannot be inferred from that case-law, contrary to the United Kingdom’s submissions, that the Court must only take into account the GDP of the territory to which EU law applies as at the date of the Court’s examination of the facts.
123 Furthermore, as regards, first, the Commission’s submission that, in accordance with the 2021 Communication, the ‘n’ factor should be fixed at 3.70, as regards infringements committed by the United Kingdom, and the minimum lump sum at EUR 8215000, and, second, that State’s submission that that institution’s line of argument regarding its ability to pay and that 2021 Communication are contradictory, it suffices to recall that guidelines such as those set out in those Commission communications are not binding on the Court but rather 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 (judgment of 20 January 2022, Commission v Greece (Recovery of State aid - Ferronickel), C‑51/20, EU:C:2022:36, paragraph 95 and the case-law cited).
124 Secondly, as regards the United Kingdom’s argument that the ‘n’ factor proposed by the Commission is based on the number of seats that a Member State has in the Parliament whereas the United Kingdom no longer holds any seat in that institution, the Court has already held that taking into account the institutional weight of the Member State concerned is not essential to ensuring sufficient deterrence and inducing that Member State to change its current or future conduct (judgment of 20 January 2022, Commission v Greece (Recovery of State aid - Ferronickel), C‑51/20, EU:C:2022:36, paragraph 115).
125 Thirdly, as stated in paragraph 122 of this judgment, it is apparent from the case-law of the Court that it is necessary to take account of recent trends in the GDP of the Member State concerned as at the time of the Court’s examination of the facts (judgment of 12 November 2019, Commission v Ireland (Derrybrien Wind Farm), C‑261/18, EU:C:2019:955, paragraph 124 and the case-law cited).
126 Having regard to all the foregoing, the Court considers that proper account of the circumstances of the present case will be taken by setting the amount of the lump sum which the United Kingdom will have to pay at EUR 32000000 for the period from 17 October 2018 to 30 September 2021.
127 The United Kingdom must therefore be ordered to pay to the Commission a lump sum of EUR 32000000.
128 Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission applied for costs and the United Kingdom’s failure to fulfil its obligations has been established, the latter must be ordered to pay the costs.