a) ‘State v State’ Infringement Procedures
1. The infringement procedure is an important instrument at EU level enabling the effective enforcement of Union Law against the Member States.6 The action in this procedure can be brought by the Commission on behalf of the European Union,7 and also by one Member State against another Member State,8 therefore natural or legal persons cannot initiate procedures against Member States before the CJEU.9 The two types of action can be sued before the Court after the investigative procedure of the Commission.
2. The first type of procedure10 commences with an informal stage, when the Commission starts to investigate whether a Member State failed to fulfil its obligations arising from the EU law (EU Treaties, secondary legislation or international agreements made by the EU with third countries). The Member States concerned is obliged to cooperate with the Commission.
The informal stage – and the whole procedure – ends, if the Commission cannot reveal any violation. Otherwise the informal phase of the procedure is followed by the formal, administrative stage, which starts with a so called letter of formal notice formulated by the Director General responsible for the EU policy area concerned. The formal notice assumes a violation of obligation of the Member State. The Member States can defend its position explaining the background of the alleged breach of EU law. If the Commission does not accept the reasons and explanations made by the Member State can commence a formal pre-litigation procedure and lay down a so called ‘reasoned opinion.’ The reasoned opinion has a
6 See Várnay, Ernő – Papp, Mónika – Varju, Márton – Bartha, Ildikó: EU jog a tárgyalóteremben. A tagállamokkal szembeni kötelezettségszegési eljárások. Complex, Budapest, 2006.; Craig, Paul – de Burca, Grainne: EU Law. Text, Cases and Materials. 4th ed., Oxford, 2008.
7 Article 258 TFEU
8 Article 259 TFEU
9 It is because the EU law having direct effect (e.g. Council regulations) can be enforced by private persons directly before national courts, but on the other hand, the breach of obligations arising from EU law which has no direct effect (e.g. non-implementation of a Council directive) can substantiate the liability of a Member State under the Francovich doctrine, which is also enforceable at national level before the courts of the Member States.
10 Craig – de Burca, p. 443, Chalmers, Damian – Tomkins, Adam: European Union Public Law. Cambridge Univ. Press, Cambridge, 2007. p 349.
legally non-binding character, but is a prerequisite of a later action to be taken before the CJEU by the Commission. It sets out the legal background and reasons which demonstrates that the Member State has failed to fulfil its obligations. The reasoned opinion informs also the Member State on the measures considered necessary to cease the violation.
Depending on the reaction of the Member State, the Commission is entitled to exercise its discretion in deciding whether to take proceedings before the CJEU. It means that the Commission has the margin of discretion on whether it brings the matter before the Court of Justice of the European Union or not, if the State concerned does not comply with the opinion within the period laid down in the reasoned opinion. If the Commission decides to initiate the Court procedure, the focus of the Court’s examination is restricted to the scope of the reasoned opinion, in other words the Commission cannot put forward new concerns about violations allegedly made by the Member States which was not highlighted in the reasoned opinion earlier. If CJEU finds that a Member State has failed to fulfil an obligation arising from the founding Treaties, the State should be required to take the necessary measures to comply with the Court’s judgment.11 If a Member States do not take any measures in order to comply with its obligation, the Commission can step into the scene in the second judicial stage and after giving that Member State the opportunity to submit its observations, it may bring the case before the Court once again with the purpose of asking the Court to impose lump sum or penalty payment to be paid by the Member State concerned.12
3. The second type of action13 – as mentioned earlier – can be taken by a Member State against another Member States, if the former considers that the another has failed to fulfil an obligation under the founding Treaties. Also the ‘State v State’ infringement procedures can be commenced before the Commission. Thus the complaining Member States must bring the matter first to the Commission, which delivers a reasoned opinion after each of the States concerned has been given the opportunity to submit its own case and its observations on the other party’s case both orally and in writing. The Commission has three month to issue the reasoned opinion, and in the absence of such opinion, or in a case, when the Commission makes explicit that it does not intend to bring the matter any further, the complaining Member States has the right to turn to the Court directly.
It means that the right to action of a Member State in infringement procedure opens if the previous preconditions are met, namely the State lodged a complaint before the Commission against the other Member State that has failed to fulfil an obligation under the founding treaties; and the Commission does not deliver reasoned opinion, or explicitly does not want to pursue the case before the Court. Anyway, according to the jurisprudence of the Court, the delivering of a reasoned opinion, which is unacceptable by the complaining Member State, does not preclude that the Member State turns to CJEU directly.
11 See Article 260 TFEU
12 Article 260 Paragraph 3 TFEU establishes the exception of the cases which concerns the obligation of Members States to notify transposing measures intending to harmonise their legal order to the EU law. When the Commission brings a case before the Court on these grounds it may ask the Court to impose lump sum or penalty payment to be paid by the Member State concerned already in the first judicial stage.
13 Craig – de Burca, p. 451., Várnay – Papp – Varju – Bartha, p. 159.
Finally it is worth to mention, that the ‘State v State’ infringement procedure is bond with other Treaty provision in this regard which states that dispute resolution procedures other than the procedure before CJEU are not permissible.14 In other words, the CJEU has exclusive jurisdiction to hear the disputes between Member States concerning the interpretation or application of the founding Treaties, thus the ‘State v State’ infringement procedures pave the only way to solve direct disputes between Member States. From this point of view the ‘State v State’ infringement procedures would seem to be a ‘pacific field’ which serves to decide on solely technical-judicial questions regarding ambiguities of the founding treaties. But as the following examples and the Sólyom-case will show, there is risk to set up a political ‘buffer zone’ of the Member States, if it is not excluded that the Member States transplant their political conflicts into the context of the EU law and tries to bring it before the Court. The CJEU in these cases would decide on disputes which would be only hypothetically relevant from the perspective of the EU law.
b) Previous Case Law
1. As the introduction highlighted, in the history of the integration, only five actions were taken to the ECJ by a Member State directly against another EU Member in order to decide on the failure to fulfil obligations stemming from EU law. Among the five earlier cases only three disputes can be found, which were closed by judgment of the Court, the remaining two cases were solved between the Member States out of the ECJ procedure. The following section tries to give a brief summary of the previous cases and to highlight those main points which will be important in the light of the current Sólyom-case as well.
2. Disputes have not been brought before the Court: As mentioned above, two cases were initiated by a Member States against other, but later withdrawn and both instances were removed from the Court’s register. In these cases, information is available only regarding the main facts and the complaints of the Members State which has set off the case. In Case 58/77 Ireland v French Republic15 the action was brought before the Court of Justice of the European Communities on 10 May 1977 by Ireland, claiming that the Court should declare a French import measure unlawful. The measure in question concerned the imports of mutton and lamb coming from Ireland when the domestic price of mutton and lamb in France was lower than a given threshold price. Ireland argued that this measure constituted a quantitative restriction on imports or a measure having equivalent effect in terms of the EEC Treaty.
France applied this charge (referred to as 'reversements') on imports of mutton and lamb even before the accession of Ireland to the European Economic Communities, but France failed to apply the transitional provisions, did not reduce, but increased the import measure in question.
14 See the formulation of Article 344 TFEU: “Member States undertake not to submit a dispute concerning the interpretation or application of the Treaties to any method of settlement other than those provided for therein.”
15 The action was published in the Official Journal, see: Action brought on 10 May 1977 by Ireland against the French Republic (Case 58/77), OJ C 142 (16 June 1977) pp. 8–9.
In the other case, Spain initiated infringement procedure against UK on 4 September 1992 (C-349/92 Spain v United Kingdom),16 which was going on taxation on alcoholic beverages.
Spain pointed out that UK maintained a discriminative tax legislation in force regarding
‘Sherry’ products. The applicant argued that the protective and discriminative nature of the British tax measure was obvious, because the domestic products (British Sherry) fell within a more advantageous category with lower tax rate while import Sherry products were subject to a significantly higher tax burden. In other words, the higher tax rate hindered or made harder the importation of the similar product from other Member States to the UK. Spain suggested that UK breached the prohibition on protective and discriminatory internal taxation laid down in the EEC Treaty and also a provision of the Accession Treaty of UK was referred.
3. 141/78 French Republic v UK:17 In the ‘Sea fisheries’ or ‘Cap Caval’ case France attempted to challenge the fisheries conservation measures introduced unilaterally by the United Kingdom. The concerns of the dispute could be derived from UK Minister order prohibited the carrying, in a specified area of the Atlantic and Arctic Oceans, in any British or foreign fishing boat within British fishery limits of certain small mesh-nets, the minimum size of the mesh of which varied according to the waters concerned. The provision was done in an attempt to conserve fishing stocks, therefore the order authorized the carriage of small-mesh nets for taking certain unprotected species, including prawns; however, such authorization did not apply when the protected species represented more than 20% of the catch involved. In 1977 the French trawler ‘Cap Caval’ was boarded within British fishery limits whilst using small-mesh nets while fishing for prawns and later the master of the trawler was summoned before UK Court and sentenced to a fine of £150 and £50 costs. Following to that, France referred to the Commission the question whether the British order was in conformity with the Community law, then, in 1978 the Commission delivered a reasoned opinion in which it found that the UK was in breach of its obligations under the EEC Treaty. As the UK did not comply with that opinion the French Government brought the matter before the Court, and the French Government’s position was also supported by the Commission which intervened in the action. The Court referred to the relevancy of the case, noting the UK order in question, inasmuch as it was adopted in a field coming under the powers of the Community, was subject to all the relevant provisions of Community law. The EC powers in fishing matters were based particularly on Article 3 of the EEC Treaty that time, which covered all questions relating to the protection of the fishing grounds and the conservation of the biological resources of the sea both in the Community’s internal relations and in its relations with non-member States. Consequently the measures adopted in this matter by the Member States were subject to all the relevant provisions of Community law. Besides the Court stated that in adopting measures in the sphere of conservation of fishery resources the Members must have observed a specific regulation laying down a common structural policy for the fishing industry. Under this regulation all laws and administrative rules and regulations determining the rules applied by each Member State in respect of fishing in the maritime waters must have been notified to the other Member States and the Commission. Thus the institution of
16 Action brought on 4 September 1992 by the Kingdom of Spain against the United Kingdom (C-349/92), OJ C 256 (3 October 1992) p. 14.
17 141/78 French Republic v United Kingdom of Great Britain and Northern Ireland. ECR 1979 p. 2923.
measures of conservation by a Member State must have been first notified to the other Member States and to the Commission; a Member State proposing to bring such measures into force was required to seek the approval of the Commission, which must have been consulted at all stages of the procedure. As a result France challenged the UK legislation successfully.
4. C-388/95 Belgium v Spain:18 The ‘Rioja wines’ case was the second which ended up at the Court. Spain restricted the use of the product name ‘Rioja’ to wine which was bottled in approved cellars in the region of La Rioja in order to qualify for the controlled designation of origin. Belgium contested this Spanish provisions regarding it restrictions on exports.
Belgium brought the action to the Court after the Commission refused to pursue Spain for an alleged breach of EU law. The Court stated that national rules applicable to wines bearing a designation of origin which make the use of the name of the production region conditional upon bottling in that region constitute a measure having an effect equivalent to quantitative restrictions on exports within the meaning of the Treaty. It is because they have the effect of specifically restricting patterns of exports of wine eligible to bear the designation of origin and thereby of establishing a difference of treatment between trade within a Member State and its export trade. However, according to the Court’s judgement, the requirement of bottling in the region of production, whose aim was to preserve the considerable reputation of the wine bearing the designation of origin by strengthening control over its particular characteristics and its quality, was justified as a measure protecting the designation of origin which may be used by all the wine producers in that region and is of decisive importance to them, and it must have been regarded as being in conformity with EU law despite its restrictive effects on trade. The main reason of that was that it constituted a necessary and proportionate means of attaining the objective pursued in that there are no less restrictive alternative measures capable of attaining it. In this regard, ECJ observed that EU law shows a general tendency to enhance the quality of products through the use of designations of origin.
Such designations often enjoyed a high reputation amongst consumers and were an essential means for producers of attracting the habit of the consumers and this was particularly the case regarding quality wines. In other words, by ensuring that cellars in the region of La Rioja controlled bottling, the Spanish rules aimed to safeguard the quality and reputation of Rioja wine. In sum, although the Court considered the Spanish measure as a measure having an effect equivalent to quantitative restrictions on exports, it was found necessary and proportionate. It should be noted that the Commission neither issued a reasoned opinion nor did intervene in this case, only its refusal to bring the action to the Court was categorical.
18 C-388/95 Kingdom of Belgium v Kingdom of Spain. ECR 2000 p. I-3123. There was also a predecessor of this case, even though it was not decided in a ’State v State’ infringement procedure. The Delhaize-case (C-47/90) was originated in Belgium and related to the export of Rioja wine. In the Delhaize case following a request for a preliminary ruling from a Belgian court, the ECJ was asked to rule on Spanish provisions applicable to wine of designated origin which limited the quantity of wine that might be exported in bulk. The decision was that these rules did constitute measures having an equivalent effect to quantitative restrictions on exports, and the ECJ found it not a necessary and proportionate restriction.
5. C-145/04 Spain v UK:19 The antecedent of the case was a judgment of the European Court of Human Rights in Matthews v United Kingdom case, in which the ECHR concluded, it was a violation of Article 3 of Protocol No.1 to the European Convention on Human Rights that the UK failed to organise European Parliament elections in Gibraltar. The judgement resulted in passing the EP Representation Act in 2003 in UK, which gave the framework of the representation of voters in Gibraltar in the EP elections held after 2004. In fact, the Act established attached a new electoral region, attaching Gibraltar to electoral districts in Wales and England. Spain’s first objection concerning the UK legislation was just that, namely that UK Act added the territory of Gibraltar to existing electoral districts in the territory of UK.
Besides major concern of Spain was also that fact, that that the Representation Act extended the right to vote also to non-UK citizens, who were qualified as Commonwealth citizens.
From this perspective it could not be denied that the dispute between Spain and UK had a political nature which had its roots in a territorial claim over Gibraltar. The Commission decided to refuse issuing reasoned opinion and encouraged the parties to reconcile the conflict in amicable way. Then, UK brought the action to ECJ.
The Court pointed out that the definition of the persons entitled to vote and to stand as a candidate in elections to the European Parliament fell within the competence of the Member State in compliance with EC law. The Treaty provisions did not preclude the Member States from granting that right to vote and to stand as a candidate to certain persons who have close links to them, other than their own nationals or citizens of the Union resident in their territory.
The Court argued in this regard that the EC did not establish precisely who was to be entitled to the right to vote and to stand as a candidate for the European Parliament, e.g. the Treaty provisions concerning the citizenship of the Union was only confined to applying the principle of non-discrimination on grounds of nationality to the exercise of that right. The
The Court argued in this regard that the EC did not establish precisely who was to be entitled to the right to vote and to stand as a candidate for the European Parliament, e.g. the Treaty provisions concerning the citizenship of the Union was only confined to applying the principle of non-discrimination on grounds of nationality to the exercise of that right. The