Jean Monnet Center at NYU School of Law

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2.2. The Commission's discretion under Article 169.

2.2.1. Is there room for Member States' discretion under this procedure?

The presumed organizational autonomy of Member States finds a limit in the case-law which states that Member States may not plead provisions, practices or circumstances existing in its internal legal system, in order to justify a failure to comply with the obligations imposed by Community law,[41] even if they form part of the Constitutional system.[42]

In fact, an action based on Article 169 of the EC Treaty depends only on the objective finding of the failure of a Member State to fulfil its obligations and not on the proof of any opposition on the part of that Member State to comply with EC law.[43] In other words, it is not a question of assessing why a Member State does not comply with its obligations, since it is enough to prove that a lack of compliance exists.

In this sense, under the present system, even if a Member State agrees with the Commission on its lack of compliance, but it cannot manage to solve the problems due to national arrangements for power allocation established at constitutional level, this fact cannot be invoked to justify the lack of compliance. As a consequence, the Member State concerned is obliged to modify that legal system in order to guarantee a uniform application of EC law.

Therefore, the Member States' discretion from a legal point of view can be considered quite reduced. Another thing is their discretion in practical terms, mainly derived from the fact that the Commission is lacking the capacity, in terms of human and financial resources, to adequately supervise their action.

2.2.2. Reasons that can justify granting special discretion to the Commission in this area.

The Commission can be considered more of a political body than a simply administrative one subject to following only objective criteria.[44] In fact, the Commission can appreciate reasons of political opportunity, which may advise not pursuing a given case.[45] There are some reasons that support the idea that the Commission performs its work of supervision and enforcement as a political body: (1) the decisions concerning infringement procedures are taken by the "college" of Commissioners; (2) to defend the Community interest, independently from Member States, is in itself a political goal; (3) the Commission has the power of initiative; (4) the Commissioners usually come from national political parties.

Furthermore, there are some infringement procedures of a clear political content. For example, Article 104c describes a clearly political procedure where the Commission can decide to initiate or not a procedure against a Member State for failing to fulfil an established criteria concerning public deficit and public debt. If the Commission decides not to initiate the procedure against a Member State, even if the latter clearly does not fulfil the criteria, neither another Member State nor the Council can oblige the Commission to initiate it. Furthermore, the role of the ECJ is also reduced.[46]

However, although the ECJ has recognized the discretion of the Commission, it has not been in favour of supporting the political nature of Commission action. In the Court's opinion, the Commission's discretion is not incompatible with the requirement for the Commission to follow only objective rules.[47] Furthermore, the fact that the action of the Commission could be considered as moved by a political motive was used by Ireland in Case 415/85 to qualify it as an improper exercise of discretion. The ECJ rejected this argument by stating that the bringing of an Article 169 action against a Member State is objective in nature.[48]

There is another problem with recognizing and accepting the political nature of the Commission, in spite of some improvements made in the Maastricht Treaty, which is its lack of democratic legitimacy. First, the President does not represent the majority of the European Parliament. Second, although the majority in the European Parliament is currently socialist, most of the Commissioners are right wing; this situation does not correspond to the normal relation between a Parliament and the government it supports. Third, although the Commission is controlled by the other institutions (i.e. the Council, European Parliament, and the ECJ) the Commission does not respond to electoral criteria. In fact, some countries are interested in keeping the current status of the Commission in order to be able to attack Commission action due precisely to its lack of legitimacy.[49]

Nevertheless, the discretion of the Commission can also be supported precisely because of its lack of a political nature. Thus, if the suspension of enforcement may be the consequence of a superior public interest, the Commission can better represent this general interest than Member States.[50] In fact, the Commission was originally conceived as an independent and inter-party entity that only served the objective of Community interest. This characteristic was supposed to have, as a consequence, the need to apply law with impartiality and objectiveness. Indeed, its independence and autonomy is wider than in other institutions, such as the Council. For example, although Commissioners come from national political parties, they cannot act as they would in the Council, since they risk losing their credibility if they constantly and without objective reasons defend the interests of their countries. It is precisely because of their autonomy and independence, rather more than the political nature of the Commission, which can justify the Commission being granted wider discretion than Member States in enforcing and supervising EC law.

However, we also have to analyze Article 155 EC Treaty. Thus, the first paragraph of Article 155 EC Treaty states a general obligation for the Commission to supervise and ensure the effective application of EC law. Unlike other paragraphs of this Article, a literal interpretation of the wording of this paragraph presents such an obligation as unlimited.[51] In fact, there are areas where in principle the Commission has no discretion. For example, in evaluating illegal behaviour in the agricultural sector and, more concretely, in the procedure of clearance of accounts, the lack of discretion caused some problems in the past when an irregularity was discovered very late. In these cases, the recovery of large amounts (once 2 milliards ECUS to the Netherlands) proved very difficult in practice for the country involved. However, nowadays, the recent Regulation No. 1287/95 has introduced a new procedure where the Commission and the Member State concerned can reach an agreement on the concrete amount.[52]

Moreover, if Article 155 is combined with other Articles of the Treaty [i.e. Article 169, Article 87(2)], the secondary legislation and the day-to-day practice, we can see that the Commission has, in most cases, from the legal point of view, enough discretion to consider its obligation to ensure the effective application of EC law a real power. In fact, it can be said that the general rule is the discretion of the Commission in supervising and enforcing EC law. Indeed, Article 169 procedure is one of the cases where the Commission's discretion in enforcing and supervising EC law is greater.

2.2.3. The Commission's discretion in the different procedural phases. The initiation of the non-judicial procedure. Preliminary phase.

As we have seen, Article 169 procedure "formally" starts when the Commission sends a formal notice to a Member State. However, in many cases, the procedure starts before by an informal letter where the Commission asks for information from the Member State concerned. The question is whether the Commission has the obligation to initiate the informal and formal phases of the procedure for every suspected breach.

The Treaty does not say anything concerning the informal phase. However, the Commission has accepted the obligation to inform complainants of the pursuance of their complaints. The Commission has stated that "[A]ny individual may lodge a complaint with the Commission concerning a practice or a measure which, in his opinion, infringes a Community provision".[53] The Commission has also established certain administrative safeguards for the complainant's benefit:

-an acknowledgement of receipt will be sent to the complainant as soon as the complaint is registered.

-the complainant will be informed of the action taken in response to his complaint.

-the complainant will be informed of any infringement proceedings that the Commission intends to institute against a Member State as a result of the complaint and of any legal action it intends to take against an undertaking.

Therefore, in this phase, to which no Treaty rules refer, the Commission accepts a sort of "giving reasons" concerning the initiation or not of an Article 169 procedure. In fact, the Commission's decision to drop an affair has been said to affect the rights of citizens or legal persons and, therefore, has to be reasoned.[54]

However, the ECJ has made it clear that individuals do not have the right to require the Commission to commence the formal phase of Article 169 procedure.[55] According to the ECJ:

"[i]t is clear from the scheme of Article 169 of the EEC Treaty that the Commission has no obligation to commence proceedings under that article; it has a discretionary power precluding the right of individuals to require it to adopt a particular position and to bring an action for annulment against its refusal to take action".[56]

Furthermore, since no measure taken by the Commission during this stage has any binding force, an application for annulment under Article 173 is inadmissible.[57] The delivering of a reasoned opinion.

It appears from the wording of the first paragraph of Article 169 that the procedural moment during which the Commission should consider that a Member State has failed to fulfil its obligations is prior to the sending of the formal notice, which functions more as a procedural guarantee for the Member State than as useful instrument for the Commission to corroborate its suspicions. Article 169, first paragraph, states:

"If the Commission considers that a Member State has failed to fulfil an obligation under this Treaty, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations".

The ECJ has also pointed out that:

"[...]It is only if it considers that the Member State in question has failed to fulfil one of its obligations that the Commission delivers a reasoned opinion.[58]

Numerous scholars have highlighted that the use of the word "shall" in Article 169 implies a certain obligation for the Commission. In fact, once the Commission considers that a Member State has failed to fulfil its obligations, Article 169 uses the imperative wording "it shall deliver a reasoned opinion". In contrast, the wording of the second paragraph of Article 169, "may", confers a discretionary power on the Commission concerning the possibility of bringing the matter before the ECJ.[59] However, the word "shall" does not imply, in practical terms, a real obligation for the Commission. In fact, since a subjective and undefined power of appreciation is given to the Commission, such an obligation is made dependent on the Commission's own view.[60]

Although the hallmark of discretionary power is by means of permissive language, using words such as "may", as opposed to obligatory language such as "shall", the use of permissive words is not determining. Thus, in English administrative law there have been many judicial decisions in which permissive language has been construed as obligatory. This has been so not because one type of word is interpreted to mean its opposite, but rather because the power conferred is, in the circumstances prescribed by an Act, coupled with a duty to exercise it in a proper way.[61] For example, the duty to exercise power would become concrete when the thing to be done is for the public benefit or for the advancement of public justice. Therefore, it may be difficult to separate the meaning of concepts such as "may" or "shall" and to draw their limits. In other words, a discretionary power can become a duty where a prescribed condition exists or a sufficient cause can be shown.[62] It is the judge's duty (in EC law the judges of the ECJ) to interpret which conditions and causes allow that interpretation by deducing them from the presumed intentions of the founding fathers and the legislator.

Finally, it has been argued that the present situation may affect the rights of private individuals and legal persons, mainly in the situation that the Commission does not issue a reasoned opinion without justifying its behaviour. This situation of lack of legal protection could be solved if the Treaty were amended by changing the present reasoned opinion by a reasoned decision of the type foreseen under Article 88 of the ECSC Treaty.[63] The confidenciality of the formal notice and reasoned opinion.

Although the Commission makes press releases about some of its decisions to adopt a reasoned opinion or bring an action to the ECJ, there is an informal agreement with Member States that the actual text of formal notice and reasoned opinions must remain confidencial. However, when third parties feel directly affected by one infringement procedure (i.e., recognition of diplomas, obstacles to free movement), and they ask either the Commission or their Member State to have access to the text, they usually find their request refused. Nevertheless, there is no formal rule that states such a confidential character. Given that the general rule must be transparency, for the sake of protection of rights of third parties, there should be clear and formal rules on this subject, also establishing the possible exceptions. This regulation could also resolve another delicate question: the exact legal value and nature of formal notice and reasoned opinions. Reference to the ECJ.

The ECJ has recognized the Commission's discretionary power in very wide terms:

"[...] in the event that the State does not comply with the opinion within the period allowed, the institution has in any event the right, but not the duty, to apply to the Court of Justice for a declaration that the alleged breach of obligations has occurred"[64]

Whereas the English version of the judgement appears to grant the Commission absolute discretion by using the word "right", the French version implies more a power with its correspondent legal duties by using the word "faculté". In fact, the English word would have been more suitable to fit the French version.

Moreover, some scholars have argued, from a legalistic point of view, that once the Commission has come to a conclusion about whether a Member State has failed to fulfil its obligations (for example, by issuing a reasoned opinion) it could go against its obligations, as these are stated under Article 155, and not bring the case before the ECJ. As a consequence, a lack of action could be considered as a fault implying a financial liability of the Community.[65] In another line of reasoning, in order to prove the full powers of discretion enjoyed by the Commission in practice, Schermers and Waelbroeck mention the French Semoules Case where the French Council d'Etat violated Article 177 by not asking the ECJ for a preliminary ruling. Although the Commission, in its answer to the written question of the member of the European Parliament, Mr. Deringer, accepted that France had violated its obligations under the Treaty, the Commission decided not to bring the case before the ECJ. The European Parliament did not complain about this lack of action, which according to Schermers and Waelbroek, shows that the European Parliament accepted that the Commission could act freely.[66] In their view, the reasoned opinion is a procedural condition which must be satisfied before the Commission may refer a breach of Community law to the Court, rather than an obligation on the Commission.[67]

2.2.4. Possibility of applying a policy of selective enforcement. Some general comments on selective enforcement.

Selective enforcement means being able to select the parties against whom the law is enforced, the situations of enforcement, and the law that will be enforced or not.[68] It can also imply the possibility of choosing among different means and tools depending on the characteristics of the case to be enforced.[69]

It can be argued that selective enforcement can violate principles such as "equal justice under law" and non-discrimination. However, it can also be said that to oblige the Commission to follow all the complaints it receives will destroy the objectivity and impartiality it has, in principle, to respect. In fact, complaints are not in themselves neutral, because not all private individuals and legal persons are equally aware of the rights they may have. Usually, those who should complain more lack sufficient knowledge of the channels for complaining, while those who have a more negative attitude towards law and bureaucracy are recurrent complainants.[70]

Moreover, selective enforcement has been characterized as an important element of a good enforcement policy. Thus, it has been clearly shown that administrative agencies have to develop different strategies for good and bad firms.[71] Furthermore, good enforcers should follow at least four criteria that imply selective enforcement: (1) overlook violations that create no serious risk under the given circumstances; (2) not enforce regulatory requirements that would be especially costly or disruptive in relation to the additional degree of protection they would provide; (3) grant a reasonable period of time to come into compliance and accept measures that would provide substantial, if not literal, compliance; and (4) make allowance for well-intentioned efforts on the part of the regulated enterprise, or, in our case, national administration.[72]

Finally, selective enforcement is also a consequence of taking into consideration the practical possibilities of pursuing a breach. In other words, administrations have to be aware of their limited capacities, in terms of resources and staff. In this sense, constrained budgets provide some opportunities for flexible enforcement, since the administrations should deploy their limited staffs more selectively.[73] In fact, the Commission, like national administrations, is affected by constraints of limited resources and limited manpower. Therefore, to oblige the Commission to carry out a detailed and formal examination of all the complaints would preclude it from paying satisfactory attention to more important cases. Selective enforcement in Article 169 procedure.

In principle, it can be said that complete freedom on the part of the Commission to initiate the Article 169 procedure is in contradiction with the obligation stated in Article 155 EC Treaty, in the sense that the Commission will ensure that the provisions of the Treaty and the measures taken by the institutions are applied. However, even if the Commission comes to the conclusion of the existence of an infringement, it may still be possible to consider the action under Article 169 either unnecessary or inappropriate. Thus, Advocate General Roemer argued in his Opinion in Case 7/71 that to initiate an Article 169 procedure on every occasion would detract from its efficacy, which was, at that time, limited, given the absence of any sanctions.[74] The other reason given by Advocate General Roemer to leave a discretionary power to the Commission to decide whether and when the procedure should be initiated, was the fact to some extent that this procedure affects the prestige of the Member State concerned. Furthermore, he specified the areas where the Commission can exercise its discretion: where it is attempting to achieve an informal or "amicable" solution, where only disputes of a minor nature are involved, and where the use of Article 169 procedure might inflame a politically sensitive situation.

A slightly different opinion was put forward by Advocate General Trabucchi. He affirms that, when there is a situation which is incompatible with Community law, "the Commission must take the most appropriate steps to reconcile the difference, including, where appropriate, the procedure provided for in Article 169...".[75] Thus, although other means are provided by the Treaty that may be more appropriate to a particular kind of breach of Community law, i.e. Article 93 and 90 EC Treaty, and the Commission is also free to extend the period of negotiations (package meetings, etc.), once the violation is clear and the possibilities of negotiations exhausted, the Commission might not only be empowered but also obliged to act against a Member State. In other words, it is one thing for the Commission to accept an informal solution and quite another for it to accept that there is no solution at all.

Be that as it may, the Commission is already following a policy of selective enforcement in the use of Article 169. First, where proceedings are invariably initiated against Member States that fail to transpose directives into national law, the Commission treats the lack of transposition differently from cases of manifest lack of or improper application, where the decisions concerning infringement procedures vary from one case to another. Second, the Commission is considering decentralizing the minor questions to national authorities. However, it is having some problems in implementing this criteria. The main problem is to define what is undertood as "minor" since the sectorial Services of the Commission and the Legal Service usually have different opinions on this issue.[76]

Finally, the Commission has attempted to develop a strategy to privilege the follow-up of complaints in some areas. Thus, in 1987 the privileged areas were: the single market (particularly public procurement), freedom of movement, right of establishment, freedom of providing services, fishing quotas, agricultural policy, and environment.[77] In 1995, they were the single market, citizens' rights (i.e., recognition of diplomas), and own resources.[78] In 1996, in order to speed up the management of procedures, the Commission decided to give preference to the following issues: lack and bad transposition of directives and, more generally, failure of internal rules to comply with EC law; detected cases of horizontal bad application (in several Member States); breaches that produce important negative effects on the Community goal intended to protect; infringements that imply fraud to a Community fund.[79]

[ ]41See Case 163/78 Commission v. Italy [1979] ECR 771-776, para. 5, p. 774; also Case 131/84 Commission v. Italy [1985] ECR 3531-3537, para. 6, p. 3536. In this Case the Court refused that a question of legislative policy choice, a situation of emergency which required measures in order to safeguard employment, could not be used as an excuse to postpone the transposition of an EC directive (para. 5, p. 3536).

[ ]42See Case 102/79 Commission v. Belgium [1980] ECR 1473-1494, para. 15, p. 1487.

[ ]43See Case 301/81 Commission v. Belgium [1983] ECR 467-481, para. 8, p. 477.

[ ]44However, the difficulty has been pointed out in drawing a line between the adjectives "political" and "administrative", see LÓPEZ CALVO, José Organización y funcionamiento del Gobierno (Madrid: Tecnos, 1996), especially on pp. 91-99.

[ ]45Cf. this opinion was manifested by some Commission officials interviewed. They argued that the fact of having granted discretion was based on the political nature of the Commission.

[ ]46See my working paper published in this series under the title "Commission Tools for the Supervision and Enforcement of EC law...", already cit.

[ ]47Case 7/68 Commission v. Italy [1968] ECR 423-434, p. 428.

[ ]48Case 415/85 Commission v. Ireland [1988] ECR 3097-3126, para. 9, p. 3118.

[ ]49Some Commission officials interviewed cited as an example the attitude of British negotiators, in some cases, during the Intergovernmental Conference previous to the Maastricht Treaty.

[ ]50In this sense, e.g. JACQUÉ, Jean Paul "Cours général de droit communautaire" (1990) Vol. 1/1 Collected Courses of the Academy of European Law 289. The question of whether the Commission has the monopoly of defining what is the Community interest or whether national courts could also interpret that according to the Community interest a certain complaint should be dealt with by the Commission, has not yet been solved. The ECJ declared inadmissible a preliminary ruling which included among its questions this problem, based on the fact that such a question was extraneus to the dispute as defined by the judge: Order of the Court in Case C-378/93 La Pyramide [1994] ECR I-4001 to I-4010, para. 17, p. I-4009.

[ ]51Article 155 says in its first paragraph that the Commission shall "ensure that the provisions of this Treaty and the measures taken by the institutions pursuant thereto are applied". In at least two of the other paragraphs the element of discretion is evident: "formulate recommendations or deliver opinions [...] if the Commission considers it necessary", "have its own power of decision [...]". See also its correspondents in ECSC Treaty (Article 8) and Euratom (Article 124).

[ ]52Cf. Council Regulation (EC) No. 1287/95 amending Regulation (EEC) 729/70 on the financing of the common agricultural policy (O.J. 1995, No. L125/1), see new version of Article 5(2)(c).

[ ]53Standard complaint published by the Commission in order to assist complainants in cases of failure to comply with EC law (O.J. 1989 No. C26/6).

[ ]54Cf. MATTERA, A. "La procédure en manquement et la protection des droits des citoyens et des opérateurs lésés" (1995) 3 Rev. Marc. Uniq. Eur. 139.

[ ]55See Case 247/87 Star Fruit v. Commission [1989] ECR 291-302, para. 11, p. 301; more recently T-571/93 14 September 1995 Lefebvre et alt. v. Commission, para. 60.

[ ]56Case C-87/89 Sonito and Others v. Commission [1990] ECR I-1981 to I-2012, para. 6, p. 2008.

[ ]57Case 48/65 Lütticke v. Commission [1966] ECR 19-33, p. 27.

[ ]58Emphasis added. Case 247/87 Star Fruit v. Commission cit., para. 12, p. 301. See Case 48/65 Lütticke v. Commission cit., p. 27.

[ ]59In this sense, see DASHWOOD, Alan & WHITE, Robin "Enforcement Actions under Articles 169 and 170 EEC" (1989) 14 ELRev. 398. See also EVANS, A.C. "The Enforcement Procedure of Article 169 EEC: Commission Discretion" (1979) 6 ELRev. 442-456. This author states in p. 445, that "[A]rticle 169 procedure is thereby divided basically into two stages, of which the first is obligatory and the second discretionary".

[ ]60See AUDRETSCH, H., Supervision in European Community Law (Amsterdam: Elsevier Science Publishers B.V., 1986) p. 35; EVANS, A.C. "The Enforcement Procedure of Article 169 EEC: Commission Discretion" (1979) 6 ELRev. 445.

[ ]61WADE H.W.R. & FORSYTH C.F., Administrative law (Oxford: Clarendon Press, 1994) p. 265.

[ ]62See, in this sense, WADE H.W.R. & FORSYTH C.F., Administrative law op. cit., p. 267, 268.

[ ]63This solution has been suggested by MATTERA, A. "La procédure en manquement et la protection des droits des citoyens et des opérateurs lésés" op. cit., p. 147.

[ ]64Case 247/87 Star Fruit v. Commission cit., para. 12, p. 301. The French version of this case instead of using the word "right" uses the words "faculté", which appears to be less pretentious. See also Case C-87/89 Sonito and Others v. Commission cit., para. 7, p. 2009.

[ ]65Cf. VANDERSANDEN, G. and BARAV, A. Contentieux communautaire, (Brussels: Bruylant, 1977) p. 117. They cite in support of their argument, the Case 40/75 Produits Bertrand v. Commission [1976] ECR 1-17, where the ECJ found such a possibility unfounded in the case at stake, but not impossible in general terms.

[ ]66Cf. SCHERMERS, Henry and WAELBROECK, Denis. Judicial Protection in the European Communities (Deventer: Kluwer Law and Taxation Publishers, 1992) p. 309.

[ ]67The case quoted does, however, raise another kind of question, which is whether the Article 169 procedure is "adequate" for judging possible violations of the Treaty committed by judicial bodies.

[ ]68Cf. DAVIS, Kenneth Culp Discretionary Justice: a Preliminary Inquiry (Urbana: University of Illinois Press, 1977) p. 163.

[ ]69On the disadvantages and advantages of choosing among different means of enforcement, see: BRIGHAM, John and BROWN, Don W., Policy Implementation: Penalties or Incentives? (Beverly Hills: Sage Publications, 1980).

[ ]70For the theoretical background of this position see JOWELL, Jeffrey Lionel Law and Bureaucracy: Administrative Discretion and the Limits of Legal Action (New York: Dunellen, 1975), pp. 31 and 91.

[ ]71See SCHOLZ, John T. "Discretion and Enforcement Efficiency: Problems of Complexity, Contingency, and Corruption" in SHUMAVON, Douglas and HIBBELN, H. Kenneth (eds.) Administrative Discretion and Public Policy Implementation (New York: Praeger, 1986), pp. 147 et seq.

[ ]72BARDACH, Eugene and KAGAN, Robert. Going by the Book: The Problem of Regulatory Unreasonableness (Philadelphia: Temple University Press, 1982) p. 134.

[ ]73BARDACH, Eugene and KAGAN, Robert. cit., p. 163.

[ ]74Case 7/71 Commission v. France [1971] ECR 1003-1037, pp. 1026, 1027.

[ ]75Case 2/73 Geddo v. Ente Nazionale Risi [1973] ECR 865-894, p. 885.

[ ]76Cf. interviews with officials.

[ ]77Cf. COM(87) PV 868 p. 17.

[ ]78Cf. interviews with officials.

[ ]79Cf. internal decision of 30 July 1996 (unpublished).

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