C-301/81

JUDGMENT OF 1. 3. 1983 — CASE 301/81

therefore be in a position to prepare 4. The right of persons affected to rely within the period prescribed the in law on a directive as against a legislative provisions necessary for Member State which has failed to their implementation. If, nevertheless, take the requisite national the period allowed for the implementing measures constitutes a implementation of a directive proves minimum guarantee arising from the to be too short, the only means of binding nature of the obligation action compatible with Community imposed on Member States by the law available to the Member State effect of directives under the third concerned consists in taking the paragraph of Article 189 of the Treaty appropriate initiatives within the and cannot justify a Member State's Community in order to obtain the absolving itself from taking in due necessary extension of the period by time implementing measures sufficient the competent Community institution. to meet the purpose of each directive.

In Case 301/81

COMMISSION OF THE EUROPEAN COMMUNITIES, represented by its Legal Adviser, Antonino Abate, acting as Agent, assisted by Hendrik van Lier, a member of its Legal Department, with an address for service in Luxembourg at the office of Oreste Montako, a Member of the Legal Department of the Commission, Jean Monnet Building, Kirchberg,

applicant,

v

Advocate G e n e r a l : S. R o z è s Registrar: J. A. P o m p e , D e p u t y Registrar

gives the following

JUDGMENT

Facts and Issues

I — Facts and p r o c e d u r e By letters dated 2 July 1980 and 29 December 1980 the Kingdom of Belgium Council Directive No 77/780 is intended informed the Commission that for the to coordinate the laws, regulations and purpose of implementing the directive in administrative provisions relating to the question a bill had been agreed upon by taking up and pursuit of the business of the Government and would soon be credit institutions. introduced into Parliament.

The directive was notified to the On 24 March 1981, upon finding that Member States on 15 December 1977. the directive had still not been Article 14 (1) provides that the Member implemented, the Commission issued the States must bring into force the measures reasoned opinion provided for in the first necessary to implement the directive in paragraph of Article 169 of the EEC national law by 15 December 1979 at the Treaty and the Kingdom of Belgium was latest and must inform the Commission invited to comply therewith within a thereof. period of two months.

II — C o n c l u s i o n s of t h e p a r t i e s Those principles have consistently been upheld by the Court. The Commission claims that the court should: In its statement of defence the Belgian "Declare that, by failing to adopt within Government commences by emphasizing the prescribed period the provisions the great difficulties of a technical, necessary to comply with Council institutional and political nature which Directive 77/780/EEC of 12 December explain why in spite of the efforts made 1977 on the coordination of laws, regu- by the Belgian Government, the bill lations and administrative provisions incorporating the directive into national relating to the taking up and pursuit of law has not yet been lodged before the the business of credit institutions, the Parliament. Kingdom of Belgium has failed to fulfil its obligations under the Treaty; The Belgian Government considers the Order the Kingdom of Belgium to pay Commission's application inadmissible the costs." and unfounded in law. The Kingdom of Belgium contends that the Court should: As regards admissibility, the Belgian "Declare the Commission's application Government alleges that insufficient inadmissibile or, in the alternative, reasons are stated both for the unfounded; application and the reasoned opinion of the Commission. No reference is made to the nature of the national legislative Order the Commission to pay the costs." rules to be made to implement the directive, to parts of the directive already implemented in national law, to any Ill — Submissions and argu- national provisions incompatible with the m e n t s of the p a r t i e s directive, to the measures contemplated by the Belgian Government for incor- porating the purport of the directive in In the Commission's view, the wider legislation or to the difficulties mandatory nature of directives means encountered by the Belgian State in view

In the third place, the Belgian The Belgian Government also considers Government emphasizes that Council that the application is inadmissible on the Directive 77/780 raises problems of ground that the time limit fixed by interpretation with regard to the very the reasoned opinion was obviously nature of the obligations which it insufficient and unreasonable. imposes on Member States and with regard to the directly applicable nature of certain provisions. Those difficulties were expressly raised at a meeting which As regards the unfounded nature of the the Commission held in Brussels on 17 Commission's application, the Belgian and 18 March 1980 in order to consider Government alleges in the first place that the problems involved in the im- it decided to use the occasion to clarify plementation of the directive. The old rules, modernize the drafting, Belgian Government mentions in harmonize existing laws and translate particular difficulties concerning the into legislation rules arising from general interpretation of · the • first and second principles of Belgian administrative law. subparagraphs of Article 2 (2) of the As a result the bill satisfies an aim going directive. well beyond strict implementation of the Community directive. In the fourth place, the Belgian Government mentions the particular difficulties arising in relation to the In the second place, the Belgian implementation of the directive with Government submits that no provisions regard to public credit institutions and of law, regulation or general Belgian states that the Belgian Government practice in force are contrary to the decided not to have recourse to the . provisions of the directive. In addition, possibilities of exemption or deferred even before the directive was adopted application but to bring them in their Belgium amended its law to take account entirety within the scope of the directive. of certain provisions contained in the proposed directive submitted by the Commission to the Council. Even as Lastly, the Belgian Government regards the provisions of the directive maintains that the initial period of 24 which so far do not have their equivalent months given for implementing the in national legislation properly so called, directive was patently inadequate. The it is necessary to take account of the fact negotiators of the directive were that the competent authorities already conscious thereof when they provided in apply the requirements of those Article 2 (4) (a) of the directive for a

Further, the Commission considers that In addition the Belgian Government the grounds of the application and emphasizes that the period allowed by reasoned opinion cannot be regarded as the reasoned opinion (two months) was inadequate for failing to stipulate the also too short and reveals a mechanical scope of the implementing measures application of procedures incompatible which ought to have been taken. Since with the aims pursued by the Treaty in the directive was quite clear in that conferring upon the Commission the respect, the measures required were power which it seeks to exercise in the perfectly well known to the Belgian present case. Government, which had. never considered, before the ·'• action was brought, that its obligation was unclear. From the foregoing the Belgian The Government has moreover expressly Government concludes that in bringing recognized that it was able to prepare a the present proceedings the Commission bill to submit to Parliament. In any has not taken account of the difficulties event, the Commission considers that the encountered by the Belgian Government, reasoned opinion and the application are the absence of contradication between perfectly explicit and contain a sufficient Community and Belgian law, the limited statement of the reasons on which they if not formal nature of the amendments are based, since they mention the coming within the power of the defendant's obligation to implement the legislature, the Belgian Government's directive and its failure to fulfil that efforts to work out a set of rules obligation. implementing not only all the rules of the directive but sometimes going beyond the Community obligations. As regards the submission of inad- missibility which the Belgian Govern- ment makes on the ground that the In its reply the Commission contests the period of two months laid down by the Belgian Government's arguments to the reasoned opinion was unreasonable, the effect that the application is inadmissible Commission considers that there is some and, in any event, unfounded. confusion between the period laid down by the reasoned opinion and the period allowed by the directive. The latter As regards the submission that the period, which was 24 months, was fixed reasoned opinion and the application do by the Council following a unanimous not contain a sufficient statement of the decision and cannot be regarded as reasons on which they are based, the unreasonable or inadequate. As for the Commission states first of all that it has period laid down in the reasoned

opinion, it is not a period for support of its argument that the implementing the directive but simply a Community rules are already sub- period in which those responsible for the stantially observed are not convincing. failure were invited to make it good. In any event, the Commission emphasizes that the defendant in fact had some 48 Be that as it may, the Commission months to implement the directive before submits that the defendant is in any the Commission brought the matter event bound to take the proper measures before the Court of Justice. The expiry to translate the principles of the directive of that period makes such an argument into formal provisions of national law on this subject futile. and thus satisfy the requirements of legal

directive. were to establish that there were difficulties in determining the directly applicable nature of certain provisions of In the third place, the Commission the directive, as it alleges, that would not denies that the Community rules are exempt it from the obligation to adopt already substantially observed. The formal measures to receive the directive defendant itself has drafted a bill and into the national legal system (aforesaid recognized in its statement of defence judgment of the Court'of 6 May 1980). that amendments to the rules governing credit institutions are necessary in order to implement the directive.

JUDGMENT OF 1. 3. 1983 — CASE 301/81

COMMISSION v BELGIUM

understand, and contends that the ensure the application of the directive in applicant has not shown, how Belgian Belgian law. law fails in that respect. It is, moreover, wrong to claim that Belgium is satisfied with administrative practices to im- plement the directive. In the present case it is a question, not of administrative IV — O r a l p r o c e d u r e practices, but of administrative rules of a general nature which have received adequate publicity. At the sitting on 26 October 1982 oral argument was presented as follows: for the Kingdom of Belgium, R. Hoebaer, a The Belgian Government maintains that Director at the Ministry of Foreign implementation of the directive raises Affairs, . External .Trade and Co- problems of interpretation. It states that, operation with Developing Countries, R. in its opinion, the arguments put forward Geudens, Conseiller at the Ministry of by the Commission in its reply in relation Finance, and J. Le Brun, Conseiller at to the directly applicable provisions are the Banking Commission; for the Com- not such as to apply to the difficulties mission of the European Communities, encountered in considering the directive. its Legal Adviser, A. Abate, and H. van Lier, a member of its Legal Department.

JUDGMENT OF 1. 3. 1983 — CASE 301/81

Decision

1 By application lodged at the Court Registry on 30 November 1981 the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by failing to adopt within the prescribed period the provisions necessary to comply with Council Directive 77/780/EEC of 12 December 1977 on the coordination of the laws, regu- lations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (Official Journal 1977, L 322, p. 30), the Kingdom of Belgium failed to fulfil its obligations under the third paragraph of Article 189 of the Treaty.

2 The case must be considered in the light of the background to the directive and the events which preceded the commencement of these proceedings.

3 Council Directive 77/780 constitutes the first stage in the harmonization of banking structures and the supervision thereof. The purpose of such harmon- ization is to permit the gradual attainment of freedom of establishment for credit institutions and the liberalization of banking services. In that respect the directive introduces certain minimum conditions for the authorization of credit institutions which all Member States must observe. In order to faci- litate the taking up and pursuit of business as a credit institution the directive aims in particular to reduce the discretion enjoyed by certain supervisory authorities in authorizing credit institutions.

4 Article 14 (1) of the directive provides that Member States must bring into force the measures necessary to comply therewith within 24 months of its notification. That period expired in the present case on 15 December 1979. As a result of the directive a bill was prepared in Belgium but had not yet been introduced into the Belgian Parliament when the action for a declaration was brought by the Commission.

9 Finally, the directive allowed the Member States a period of 24 months for the adoption of implementing measures. The period of two months laid down in the reasoned opinion merely constitutes an additional period in which the Member State is invited to put an end to the failure with which it

JUDGMENT OF 1. 3. 1983 — CASE 301/81

is charged. Further, the Commission waited almost two years after sending the reasoned opinion before bringing the matter before the Court. It is therefore futile for the Kingdom of Belgium in those circumstance to challenge the period of two months laid down in the reasoned opinion.

io The Belgian Government further submits that the action is unfounded because the period of 24 months for implementing the directive is patently inadequate. It also argues that Council Directive 77/780 raises problems of interpretation with regard to the very nature of the obligations which it imposes upon Member States and the directly applicable nature of certain provisions.

n In that respect attention should be drawn to the fact that the governments of the Member States participate in the preparatory work for directives and must therefore be in a position to prepare within the period prescribed the legislative provisions necessary for their implementation. If, nevertheless, the period allowed for the implementation of a directive proves to be too short, the only means of action compatible with Community law available to the Member State concerned consists in taking the appropriate initiatives within the Community in order to obtain the necessary extension of the period by the competent Community institution.

is However, the Belgian Government invoked that argument only during the course of the action before the Court and confined itself during the procedure prior to action to stating that for the purpose of implementing the directive in question legislation was in preparation.

i6 That manner of proceeding does not comply with the obligation imposed by Article 14 (1) of Directive 77/780, which requires Member States immediately to supply the Commission with all necessary information concerning the measures which have been taken to comply with the directive.

i7 However, the action brought by the Commission seeks solely a finding that the Kingdom of Belgium failed to fulfil its obligations under the EEC Treaty "by failing to bring into force within the prescribed period the provisions necessary to comply with Council Directive 77/780/EEC" and thus does not concern the obligation under Article 14 of the directive to supply infor- mation. It is thus within those limits that the Belgian Governments's submission must be answered.

is The submission must nevertheless be rejected. Various clear breaches of the directive may be cited here by way of example. In the first place, there appears to be no law at present in force embodying various obligations,

JUDGMENT OF 1. 3. 1983 — CASE 301/81

imposed inter alia by Articles 3 (7), 8 (5) and 9 (2) of the directive, to notify decisions taken by the Belgian supervisory authorities.

23 Since the defendant has failed in its submissions it must be ordered to pay the costs.

COMMISSION v BELGIUM

On those grounds,

THE COURT .

hereby:

1. Declares that, by not adopting within the prescribed period the provisions necessary to comply with Council Directive 77/780 of 12 December 1977 on the coordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions (Official Journal 1977, L 322, p. 30), the Kingdom of Belgium failed to fulfil its obligations under the EEC Treaty;

(see Case 300/81, p. 458)