Financial penalties under Article 228(2) EC: Excessive Complexity?

Common Market Law Review

Volumn 44, Issue 3, 2007, Pages 743-759

  Kilbey, Ian ^a  

^a DE MONTFORT UNIVERSITY   (United Kingdom)

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EID: 62249201376     PISSN: 01650750     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (55)

1. Commission Communication SEC(2005)1658.
2. See also "Financial Penalties for Member States who fail to comply with Judgments of the European Court of Justice: European Commission clarifies rules", MEMO/05/482 Brussels, 14 Dec. 2005.
3. Art. 228(1) EC.
4. C-387/97, [2000] ECR I-5047, at 5052, para 1.
5. Described as a "remark", dated 17 May 1991 and referenced CONF-UP 1811/91.
6. Described as a staff working paper, dated 22 March 1991 and referenced CONF-UP 1780/91. The contents of this document were reproduced in Supplement 2/91 of the Bulletin of the European Communities. It is this document that stated that the UK advanced the possibility of financial penalties, but this is an error.
7. Most of these five written submissions have been given a reference, but the ECJ's proposals, contained in a letter addressed to the President of the Committee of Permanent Representatives and written by Ole Due, then President of the Court, does not.
8. Referred to as a "note", dated 6 Feb. 1991 and referenced CONF-UP 1721/91.
9. Ibid. at para 5.
10. Supra note 6.
11. Supra note 7, at Annex A.
12. Described as a "non-paper", dated 13 June 1991 and referenced CONF-UP 1825/91. The author is pleased to record that all five documents were found, scanned and e-mailed to him within 24 hours of his request to the Commission.
13. "Memorandum on applying Article 171 [now 228] of the EC treaty." O.J. 1996, C 242/6-8.
14. This refinement has now taken place. See MEMO/05/482 and the discussion below.
15. "Method of Calculating the Penalty Payments provided for pursuant to Article 171 [now 228] of the EC Treaty", O.J. 1997, C 63/2-4. New guidelines were issued in 2005. See SEC(2005)1658 and see also MEMO/05/482 "Financial Penalties for Member States who fail to comply with Judgments of the European Court of Justice: European Commission clarifies rules."
16. See para 41 of A.G. Fennelly's Opinion in C-197/98, Commission v. Greece, [2000] ECR I-8609. This case was removed from the Register in October 2000, following the Commission's application to withdraw its case after Greece complied with the judgment of 23 March 1995.
17. Case C-387/97, Commission v. Greece, [2000] ECR I-5047;
18. Case C-278/01, Commission v. Spain, [2003] ECR I-14141;
19. Case C-304/02, Commission v. France, [2005] ECR I-6263;
20. Case C-177/04, Commission v. France, [2006] ECR I-2461;
21. Case C-119/04, Commission v. Italy, [2006] ECR I-6885. Additionally, an Advocate General's Opinion is available from a second case against Greece (Case C-197/98, supra note 15).
22. See para 89 of the judgment and paras. 87-98 of the Opinion.
23. See paras. 87 and 96
24. Supra note 16.
25. See the judgment at paras. 43-46, supra note 16.
26. Ibid. paras. 47-50.
27. See the press release "Bathing water: Commission drops threat of fine against Spain", Brussels, 19 Dec. 2005.
28. Case-304/02, supra note 16.
29. The four States that said yes were the Czech Republic, The Netherlands, Poland and Finland. Cyprus, Ireland and the UK abstained and the rest voted no.
30. This time Denmark, The Netherlands, Finland and the UK voted yes and Austria, Belgium, Cyprus, the Czech Republic, France, Germany, Greece, Hungary, Ireland, Italy, Poland Portugal and Spain said no. There were no abstentions. See para 15 of the Opinion delivered on 18 Nov. 2004.
31. See the press release "Commission: France has fully met Court fisheries obligations - no further financial penalty." Undated but probably 23 Nov. 2006
32. Case C-177/04, supra note 16.
33. Case C-52/00, [2002] ECR I-3817.
34. Information supplied to the author by a Commission official.
35. Case C-119/04, supra note 16, but see O.J. 2006, C 244/2.
36. Case C-212/99, [2001] ECR I-4923.
37. SEC(2005)1658 and MEMO/05/482.
38. Ibid. para 10.
39. This only takes effect from 1 Jan. 2007: see para 26 of the Communication.
40. Supra section 4.
41. See paras. 31 and 32 of A.G. Geelhoed's Opinion of 18 Nov. 2004.
42. See para 39 of A.G. Geelhoed's Opinion of 18 Nov. 2004 in Case C-304/02, supra note 16.
43. See para 84 of the judgment in Case C-304/02, supra note 16.
44. Para 84 of the judgment in Case C-304/02, supra note 16.
45. Wennerås, "A New Dawn for Commission Enforcement under Articles 226 and 228 EC", 43 CML Rev. (2006), 31.
46. One of the arguments advanced by Spain in the Art. 228 case was that it had not had the 10 year period to implement the directives granted to those Member States that were part of the EU when the directives were agreed. The Court's response was to point out that it had been up to Spain to negotiate an extension, as Portugal had done. The Court did not, however, remind Spain that the Commission did, in fact, allow Spain 10 years from the date of its accession before initiating the proceedings under Art. 226.
47. Borzsák argues that using GDP per capita would result in a fairer calculation of ability to pay. He also argues that the number of votes in Council that a Member State possesses is irrelevant as it has nothing to do with that State's ability to pay. See Borzsák, "Punishing Member States or influencing their behaviour or Iudex (non) calculate?" 13 Journal Economic Literature (2001), 235. Use of GDP per capita is also supported by Theodossiou who argues that this is accepted as a more accurate reflection of a country's wealth. See Theodossiou, "An analysis of the recent response of the Community to non-compliance with Court of Justice judgments: Article 228(2) EC", 27 EL Rev. (2002), 25.
48. During his research for this article, the author asked a Commission official how payments were collected. He was informed that the Commission sent a demand for payment once a month. This is how the payments were eventually claimed from Greece.
49. See para 43 of his Opinion in Case C-197/98, Commission v. Greece, supra note 15.
50. Ibid. at paras. 39-42
51. See the Commission's 1997 Memorandum on calculating penalty payments, para 3.2, cited supra note 9.
52. The Court may decide not to impose a financial penalty even when it finds the Member State in breach, as happened in the case against Italy.
53. Supra note 16.
54. Case C-177/04, supra note 16, para 71.
55. Case C-119/04, supra note 16.