13 Member
States' application of EU law in 2012
| (35447)
15357/13
COM(13) 726
+ ADDs 1-2
| Commission Report: 30th Annual Report on monitoring the application of EU Law (2012)
Commission Staff Working Document
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| Legal base
| —
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| Document originated
| 22 October 2013
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| Deposited in Parliament
| 31 October 2013
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| Department
| Foreign and Commonwealth Office
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| Basis of consideration
| EM of 13 November 2013
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| Previous Committee Report
| None; but see (34581) 18034/12: HC 83-vi (2013-14), chapter 10 (19 June 2013)
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| Discussion in Council
| None foreseen
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| Committee's assessment
| Legally important
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| Committee's decision
| Cleared
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Background
13.1 The Commission, as "guardian
of Treaties," is responsible for ensuring that EU law is
correctly implemented and applied by the Member States. Each year
it publishes a report on how well the Member States comply with
the EU law — this document is its report for 2012.
13.2 The Commission relies on information
from citizens, businesses, NGOs and other stakeholders, as well
as its own tools, in assessing whether Member States have correctly
applied and implemented EU law. In 2012 the Commission updated
its Communication on handling relations with the complainant in
respect of the application of Union law which aims to improve
the way in which it processes complaints by citizens, businesses,
NGOs and other organisations.
13.3 Articles 258 and 260 TFEU
gives the Commission power to commence infringement proceedings
against Member States for breaching their obligations under EU
law. It can now also specify financial penalties when referring
a late transposition infringement to the Court without having
to wait for a first judgment under Article 258 TFEU, which powers
it used for the first time in 2011 and continued to do so in 2012.
The document
13.4 At the end of 2012 the Commission
had 61 open infringements proceedings against the UK. This is
the eighth-highest number of ongoing cases amongst the EU-27,
the same position as in 2011; but the number has dropped from
76 in 2011. The UK's performance, alongside Germany, was the best
in its reference group (Member States with equal or close to equal
voting weights in the Council; in this case: the UK, Germany,
Spain, Poland, Italy and France).
13.5 Reducing late transposition
remains a Commission priority. Unlike in previous years there
were fewer Directives to transpose in 2012, 56 in contrast to
131 in 2011 and 111 in 2010. The Commission launched 447 late
transposition procedures in 2012, compared to 1,185 procedures
in 2011 and 855 in 2010. In all 418 late transposition cases were
open at the end of 2012, representing a 45% fall from the end
of 2011. In 2012 the Commission managed to close 792 cases.
13.6 The UK had 24 late transposition
cases open at the end of 2012, the third highest in the EU-27.
The four policy areas in which the most late transposition infringements
were launched in 2012 were transport (115), health and consumers
(108), environment (63) and internal market and services (53).
13.7 Twelve Member States were
involved in 35 decisions under the Commission's new powers to
specify financial penalties when referring a late transposition
infringement to the Court: Poland, Slovenia, the Netherlands,
Finland, Belgium, Cyprus, Germany, Bulgaria, Slovakia, Luxembourg,
Portugal and Hungary.
13.8 In 2012 the Commission received
3,141 new complaints and processed 2,859 complaints, of which
621 led to the Commission opening bilateral discussions with the
Member State concerned. At the end of 2012 there were still 2,516
complaints open. This is an increase from 2011 when there were
2,234 complaints open. Italy, Spain and France received the most
complaints. Environment, justice and internal market & services
were the policy areas receiving the most complaints.
13.9 The Commission also undertook
791 investigations in cases where it had concerns about potential
infringements of EU law. Of these, France, Spain and Italy had
the most cases. Environment, internal market and services and
transport were the three policy areas with the most potential
infringements.
13.10 The EU Pilot is a Commission
initiative aimed at quickly and efficiently resolving problems
relating to the application of EU law. All EU Member States have
now signed up to the EU Pilot following the joining of Luxembourg
and Malta in 2012.
13.11 In 2012 there were 1,405
new EU Pilot files opened and 1,175 files processed. At the end
of 2012, 1,326 files remain open, this is an increase from 2011
which had 1,096 files open. Of the 1,175 files processed in 2012
the Commission closed 803 files because the Member State had provided
a satisfactory response — a slight decrease from the resolution
rate in 2011. Of the 1,326 open files at the end of 2012, most
were addressed to Italy, Spain and Greece. Environment, internal
market and services and justice and fundamental rights were the
dossiers with the most complaints. 334 EU Pilot files were closed
in 2012 by the Commission launching infringement procedures under
Article 258 TFEU.
13.12 At the end of 2012, 1,343
infringement cases were open. The number of open infringement
cases has been falling year-on-year; in 2011 it was 1,775 cases
and in 2010 it was 2,100 cases.
13.13 In 2012, 1,062 infringement
cases were closed. The policy areas with the most infringements
were Environment, Transport, Taxation and Internal Market and
Services. The Commission closed 661 infringements after sending
the letter of formal notice, 359 cases were solved after reasoned
opinions were sent to the Member State and 42 infringements were
closed (or withdrawn from the Court) after the Commission decided
to refer the case to the Court.
13.14 In 2012 the Court delivered
46 judgments under Article 258 of which 42 were in favour of the
Commission. There were still 128 infringement procedures and 418
late transposition cases open at the end of 2012.
13.15 The Commission brought six
cases against the UK before the Court in 2012 (only two in 2011).
Four of these concerned taxation, more specifically: (i) UK legislation
making it excessively difficult for undertakings to benefit from
cross-border loss relief (against the "Marks & Spencer"
Court ruling); (ii) UK taxation of assets transferred abroad;
(iii) discriminatory attribution of capital gains to members of
non-resident undertakings; and (iv) UK legislation making it excessively
difficult for taxpayers to exercise their right to be paid back
taxes that had been levied in breach of EU rules. Another referral
concerned the UK's refusal to compensate for duties that its customs
authorities failed to collect in the past and that should have
been paid into the EU budget. The UK was also referred to the
Court for not offering maximum interconnection capacity in its
gas market. Within the UK's reference group, there were 12 referrals
against Poland, seven against Germany, four against France, three
against Italy and one against Spain.
13.16 Policy developments in 2012
include the Commission's launch of its Regulatory Fitness and
Performance Programme (REFIT) strengthening its Smart Regulation
tools and governance. In addition the Commission also adopted
a Communication on the governance of the Single Market aimed at
strengthening the application of EU law by identifying new targets.
The Government's view
13.17 In an Explanatory Memorandum
dated 13 November 2013, the Minister for Europe (Mr David Lidington)
says that the information from the 30th Annual Report on the UK
allows for some simple comparisons with the number of infringements
in other Member States. It shows that larger Member States have
higher numbers of infringement proceedings. The UK has fewer open
infringements than any of the other Member States in the reference
group of comparable big Member States. Like the UK, Germany had
61 open infringement cases, whereas France had 63, Poland 82,
Spain 91, and Italy 99.
13.18 In contrast, the figures
for late transposition of various Directives in 2012 in the UK
exceeded that of most of the other Member States in its reference
group, apart from Italy. The Commission opened 24 such procedures
against the UK, 16 against Spain, 18 against Poland, 11 against
Germany, 14 against France and 36 against Italy. However, this
is far lower than the 57 procedures opened against the UK in 2011.
13.19 With the exception of Sweden
and the Netherlands who have improved on transposition the ranking
of Member States in relation to transposition and infringements
has remained largely unchanged.
13.20 The policy areas where the
UK was most frequently subject to infringement procedures were
Transport, Taxation and the Environment. The Commission brought
six Court cases against the UK during 2012, as described above.
No decisions were taken by the Commission to refer the UK to the
Court under Article 260(2) TFEU for failure to comply with a previous
judgment of the Court.
13.21 Most infringement cases against
the UK in 2012 were brought as a result of failure to notify the
Commission of transposition within the relevant timeline. Information
from Whitehall Departments also identified the following reasons
in respect to those cases which did not relate to late notification:
· some
were cases where there was legal ambiguity in the Directive and
the Commission took a different approach from the UK as to the
intended legal effect of the directive;
· some
cases related to the Commission having a different interpretation
from the UK on the applicability of certain principles of EU law;
· in
some cases the UK had erred in its application of EU law and the
infraction was an opportunity for the UK to remedy its mistake.
In general, these infractions related to a complicated and technical
area of EU law and these issues have now been remedied and closed;
· some
cases related to the Commission misunderstanding how the UK's
legislation achieved the result required by a directive. These
cases have provided an opportunity for the UK to clarify the position
with the Commission; and
· other
cases arose as a result of delays in amending legislation which
was incomplete.
13.22 Nearly all of the non-notification
cases for 2012 have now either been closed by the Commission or
are pending closure, as the UK has now fully transposed.
13.23 Complaints made by businesses
and citizens writing to the Commission on measures or practices
in the Member States which they consider incompatible with the
EU rules remains an important means of detecting infringements
of EU law. The Commission received 197 complaints against the
UK in 2012, which was the fifth-highest result amongst the EU-27.
As in 2011 most of the alleged irregularities were in relation
to the free movement of persons, the internal market and the environment.
There were 67 EU Pilot cases at the end of 2012, the third highest
caseload in the EU-27. The UK kept its average response time within
the ten-week target.
13.24 The Minister says he is encouraged
that the numbers of infringements and late transposition cases,
including those of the UK, have fallen in 2012 from 2011, and
that the Government supports the Commission in its efforts to
ensure the timely and consistent transposition of EU law
across all Member States, which is crucial to the proper functioning
of the Single Market.
13.25 While the UK must of course
fully implement EU law obligations, it is important, the Minister
says, to ensure that the Government takes a robust approach in
order to ensure that it does not impose unnecessary regulatory
burdens by going beyond what EU law requires. Furthermore, as
Directives allow Member States discretion as to how they transpose
there will also be times when it is appropriate and right for
the Government to defend the approach it takes to transposition
even where the European Commission disagrees with how it has implemented
a Directive.
13.26 Although it was too early
to assess the results of the Government's infraction strategy
for the Commission's report for 2011, the decrease in the number
of cases for 2012 can be partly attributed to the robust approach
taken by the Government in the implementation of its infractions
strategy. This year the Government has taken a proactive approach
to collecting data on infraction cases across Whitehall Departments
to assist in obtaining maximum benefit from the Government's infractions
strategy.
13.27 However the Government will
continue to keep its infractions strategy under review to ensure
that the UK's performance is improved.
13.28 Finally, the Minister confirms
that no financial implications arise from this report. There will
be, however, financial implications for the UK in relation to
any fine imposed by the ECJ in proceedings for failure to transpose
a Directive into UK law. It is important for the UK to take note
of the conclusions of the report and ensure that the risk of financial
sanctions is minimised by avoiding unnecessary infringements where
possible and appropriate, especially those in relation to late
transposition cases where the Commission can use accelerated fines
procedures under Article 260(3) TFEU.
Conclusion
13.29 We thank the Minister
for the helpful analysis his Explanatory Memorandum contains.
We are pleased to see the degree with which the Commission's annual
report is now being scrutinised across Whitehall, as part of the
Government's "infraction strategy".
13.30 We welcome the fact that
the number of infraction cases against the UK has decreased, from
76 in 2011 to 61 in 2012, and that its performance together with
Germany was the best among the six largest Member States. Equally,
we welcome the significant decrease in late transposition cases
against the UK, from 57 in 2011 to 24 in 2012. We note, however,
that the Commission brought six cases against the UK before the
Court in 2012, compared with two in 2011.
13.31 We continue strongly to
support the Government's "robust" approach to its implementation
obligations outlined at paragraph 13.25 above, considering the
reduction wherever possible of burdensome EU regulation to be
a priority.
13.32 We report the Commission's
report and the Government's response to the House for the useful
information they contain, but have no questions to ask so clear
the report from scrutiny.
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