In its judgement of 8 July 2019 in case C-543/17, Commission v. Belgium, the Court of Justice applied article 260 (3) of the Treaty on the Functioning of the European Union (TFEU) for the first time. This article allows the Court to impose financial penalties to Member States if they fail to notify national measures transposing a directive. A decision of this nature can only be reached if the Commission has previously delivered a reasoned opinion on the matter, pursuant to article 258 TFEU, and has brought the matter to the Court of Justice.
In this case, the Commission considered that Belgium had not transposed Directive 2014/61/EU of the Parliament and the Council of 15 May 2014 on measures to reduce the cost of deploying high-speed electronic communications networks (the Directive), and had therefore (logically) failed to notify the national measures transposing the Directive.
During the administrative procedure and while the proceedings were ongoing in front of the Court of Justice, Belgium transposed a large part of the Directive. However, the transposition of some provisions by the Brussels-Capital Region was still pending at the time of the hearing. The Court thus considered that, at the time of the expiry of the administrative proceedings, Belgium had not adopted the relevant transposing legislation. Consequently, Belgium had failed to fulfill its obligation under Article 13 of the Directive. The Commission therefore rightly invoked article 258 TFEU.
The Court then turned to the application of Article 260 (3) TFEU and ruled that if the Commission considers that the Member State has failed to fulfill its obligation to notify the transposing measures, the Court can find that there is an infringement and order this Member State to pay an appropriate penalty.
Belgium and other Member States were arguing, however, that Article 260 (3) could only be invoked if the Member State had not communicated any internal provision transposing a directive. According to them, if a directive was even partly transposed, the Commission should not be allowed to initiate proceedings on the basis of this provision.
The Court did not follow this reasoning. It stated that the ratio legis of the communication to the Commission of the internal provisions transposing directives is to ensure the Commission is in possession of the right information to assess whether the Member State is fully compliant with a directive, pursuant to the principle of loyal cooperation. The introduction of this Article in the Lisbon Treaty also served the objective of simplifying and speeding up the procedure for the imposition of financial penalties in respect of the obligation to notify a national measure transposing a directive. Member States are therefore under the obligation to point clearly and precisely to the exact national provisions transposing a directive (if necessary, by communicating a table of correspondence).
Article 260 (3) should however not be considered as allowing the Court to order Member States to pay a penalty if the transposition of the directive is incorrect: this requires the Commission to initiate a different infringement proceeding, pursuant to article 260 (1) and 260 (2) TFEU.
In the case at hand, it was uncontested that Belgium had not transposed the Directive on the day of the evaluation of the infringement and had not communicated to the Commission some of the national measures necessary to transpose it. Therefore, the Court ruled that Article 260 (3) could be applied to this case.
With regard to the amount of the financial penalty, the Court underlines that it has to be appropriate, and take into account the remaining infringement on the day of the analysis by the Court. Effectivity of Union law also has to be preserved and the penalty must therefore have a coercive effect. The Court therefore considers that a EUR 5.000 penalty payment is appropriate.
In the future, it will therefore be for the Commission to find when to initiate proceedings under article 260 (1) or article 260 (3) TFEU.
Please contact Pierre de Bandt or Jeroen Dewispelaere for further information on this case and/or for general advice on telecommunications law.