Infringement proceedings are an essencial tool to ensure that EU law be respected and implemented effectively. The decision to initiate a procedure lies exclusively with the Commission: it may respond to complaints from private individuals either by exercising a discretionary power, or following a parliamentary question, or upon own initiative.
Pre-litigation (Article 258 of the TFEU)
Whereby the European Commission (EC) deems that a Member State (MS) has failed to fulfill an obligation under EU law, the EC may undertake to send “a formal letter of notice”, granting a two-month term to the MS to submit its observations. The infringement found may either lie in failing to implement EU rules or in adopting a national provision or an administrative practice that is inconsistent therewith.
Infringement procedures may be initiated against a Member State as such, irrespective of whether the infringer is a constitutional body, a court/jurisdiction, a territorial entity or a private entity controlled by the State. If the Member State fails to reply to the letter of formal notice within the specified time limit or provides the Commission with unsatisfactory replies, the Commission may issue a reasoned opinion crystallising in fact and in law the infringement notified and warning the State to bring it to an end within a specified period.
Whereby the Member State fails to comply with the reasoned opinion, the Commission may bring a proceeding for failure to fulfil obligations before the Court of Justice of the European Communities against the State concerned.
This concludes the "pre-litigation" phase and begins the legal proceeding, aimed at obtaining a formal judgement from the Court of Justice on the Member State's failure to comply with one of the obligations imposed by the Union.
Litigation (Article 260 of the TFEU)
If the Court of Justice finds that a Member State (MS) has failed to fulfil an obligation under the TFEU, the MS is required to undertake the necessary measures to comply with the judgment and bring the infringement to an end.
If the Commission deems the State has not complied with the Court's judgment, the Commission may commence an ad-hoc procedure pursuant to Article 260 TFEU. At this stage, the EC notifies the Member State of a further autonomous failure to comply with the judgment that ascertained the infringement of EU law (e.g. amendment, repeal or introduction of a legal provision; transposition of a directive; change in administrative practice).
As in ordinary infringement proceedings, the procedure under Article 260 consists of a pre-litigation phase and a litigation phase.
With the entry into force of the Lisbon Treaty on 1 December 2009, the legislation on infringement proceedings underwent major changes. In cases of misapplication of EU law, one of the new innovations lies in the speeding up of infringement proceedings under Article 260(2) TFEU compared to Article 228(2) and (3) TEC. Indeed, whereby a Member State does not comply with a judgment establishing its failure to fulfil obligations under Article 258 TFEU and does not provide comprehensive justification in response to the "formal letter of notice", the Commission may refer it to the Court of Justice and request for payment of a penalty without having to initiate a new "pre-litigation" phase.
Penalties
The financial penalties imposed may consist of a lump sum and/or a penalty payment, commensurately with the seriousness and persistence of the breach identified. The figures indicated by the Commission for Italy, up to the recent change to the calculation method, amounted to at least 8.651.000 EUR for the lump sum, and ranged between 10.753,5 and 645.210 EUR per day for the penalty payment. [1]
In its Judgment of 12 July 2005 (Case C-304/02, Commission v. France), the Court of Justice clarified that the lump sum and the penalty payment may be imposed cumulatively whereby the infringement of EU law is particularly serious and persistent.
The Commission, in its recent Communication 2019/C 70/01 "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", introduced a new calculation method that entered into force on 25 February 2019.
As a result of the new method, the "n factor" for Italy passed from 15,16 to 2,93. Hence the minimum lump sum passed from 8.651.000 EUR to 7.524.000 EUR.
A second important change introduced by the Lisbon Treaty concerns financial penalties in cases of non-transposition of European directives. Whereby a Member State has failed to fulfil its obligation to notify the Commission of the measures taken to transpose a directive, the Commission may request the Court, within the same proceeding for failure to fulfil its obligations, to impose a financial penalty. In sum, under the new procedure provided for in Article 260(3) TFEU, the Commission may request the Court to establish whether the obligation has been breached and to order the non-compliant Member State to pay the penalty imposed, without having to wait for a further pre-litigation stage to be completed.
Note
[1] While the lump sum shall be paid even if the Member State has rectified its breach during the court hearing, the penalty payment shall be applied whereby the breach persists after the judgement and shall be calculated on a daily basis as from the date of the sentence.