C-191/95

1. In its application of 16 June 1995 the Commission seeks a declaration that, by not providing for appropriate penalties in cases where companies limited by shares fail to dis- 1 — First Council Directive of 9 March 1968 (68/151/EEC) on close their annual accounts, the Federal co-ordination of safeguards which, for the protection of the Republic of Germany (hereinafter 'Germany') interests of members and others, are required by Member States of companies within the meaning of the second para- has failed to fulfil its obligations first under graph of Article 58 of the Treaty, with a view to making such safeguards equivalent throughout the Community (OJ, English Special Edition 1968 (I), p. 41, hereinafter 'the First Direc- tive') and Fourth Council Directive of 25 July 1978 (78/660/EEC) based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies (OJ 1978 L * Original language: Greek. 222, p. 11, hereinafter 'the Fourth Direcove').

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COMMISSION v GERMANY

III — Admissibility of the action with the requirements laid down by its own Rules of Procedure, whereby it first formu- lated the reasoned opinion in respect of Ger- many and secondly decided to bring the present action.

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OPINION OF MR COSMAS — CASE C-191/95

5. The documents produced before the Court sion should act as a college, have been do not prove that the Commission, at the observed. times when it decided in plenary session to issue a reasoned opinion and to bring the action against Germany, had before it the texts of the acts at issue (that is, the reasoned opinion and the application) even in the form of complete drafts prepared by its competent departments. It follows, logically, that it is not possible to ascertain from the documents 7. I shall begin by investigating whether the laid before the Court whether the procedural reasoned opinion issued to Germany com- requirements of Article 12 of the Commis- plied with the legal requirements. I shall sion's Rules of Procedure, 2 in the version in examine whether the principle of collegiality force at the time when the relevant events was observed and, if the answer is in the occurred, were observed. That Article pro- negative, whether it was permissible for the vided that: 'Acts adopted by the Commis- reasoned opinion to be adopted under a del- sion, at a meeting or by written procedure, egation of authority, or in any event without shall be authenticated in the language or lan- observing the obligation on the Commission guages in which they are binding by the sig- to act as a college. natures of the President and the Executive Secretary;' it also required that the texts of such acts be annexed to the minutes of the meeting of the Commission in which the adoption of those acts is recorded.

9. The two major judgments of the Court decisions granting delegations of authority which define the principle of collegiality and should be published. However, applicants delineate its scope and limits are the fol- contesting decisions of the Commission are lowing: not able to rely on failure to publish a decision delegating authority if that failure '... did not deprive the applicants of the opportunity of contesting that decision or the decision adopted under the delegation of authority on 10. The first is the judgment in the AKZO the ground that they were defective.' 6 Chemie case, 3 from paragraph 36 et seq. of which it follows, first and foremost, that col- legiality is the general rule governing the Commission's activities and that, although it is possible to grant delegations of authority 11. Secondly, there is the judgment in Com- for the adoption of decisions, 4 such delega- mission v BASF and Others, 7 in which it is tion is an exception. In order to avoid first pointed out, as the general rule, 8 that the impairing the principle of collegiality it is functioning of the Commission is governed appropriate, first, not to confer on the member by the principle of collegiality. 9 The Court to whom authority is delegated powers to act then goes on to state expressly that: 'Compli- in his own right and, secondly, to exclude ance with that principle, and especially the delegations of authority by definition for need for decisions to be deliberated upon by 'decisions of principle'. In accordance with the Commissioners together, must be of con- Article 27 of the abovementioned Rules of cern to the individuals affected by the legal Procedure of the Commission, to which the consequences of such decisions, in the sense judgment refers, the system of delegation of that they must be sure that those decisions authority is restricted to clearly defined cat- were actually taken by the college of Com- egories of measures of management and missioners and correspond exactly to its inten- administration. At all events, in the judgment tion.' 10 As regards the adoption of decisions concerned the Court took the view that, in for which the Commission is required to state the context of the powers conferred on the the reasons on which they are based, the Commission for the purpose of safeguarding Court recognises that: 'The operative part of free competition, a decision ordering an under- such a decision can be understood, and its taking to submit to an investigation under full effect ascertained, only in the light of the Article 14(3) of Council Regulation N o 17/62: First Regulation implementing Articles 85 and 86 of the Treaty (OJ, English Special Edition 1959-1962, p. 87) must be regarded as a 6 — Paragraph 39 of the AKZO Chemie judgment (see footnote 3 above). straightforward measure of management and 7 — Case C-137/92 P Commission v BASF and Others [1994] may therefore be the subject of a delegation ECR I-2555, 'PVC (paragraph 62).

statement of reasons. Since the operative part vance of the authentication procedure as laid of, and the statement of reasons for, a decision down by the Rules of Procedure is not, of constitute an indivisible whole, it is for the course, required; such delegations of auth- college of Commissioners alone to adopt both ority are, however, excluded for decisions of the operative part and the statement of rea- principle, are restricted to acts of manage- sons, in accordance with the principle of col- ment or administration and must be expressly legiate responsibility.' 1 1Lastly, the P V C judg- laid down, be clearly defined and be pub- ment states expressly that the procedure for lished. 13 the authentication of acts adopted by the Commission provided for in the first para- graph of Article 12 of its Rules of Procedure 'is intended to guarantee legal certainty by B — The application of collegiality in this case ensuring that the text adopted by the college of Commissioners becomes fixed in the lan- guages which are binding'; 12 consequently, 13. The question also arises whether, in the anyone who has a legitimate interest may rely context of the present action, the Commis- on failure to observe the said procedural requirement in order to prevent an act adopted by the Commission in infringement of the procedural requirements from producing legal 13 — At this point it is, I think, useful to draw attention to the recent case-law of the Court of First Instance in order to effects. demonstrate the way in which the latter applies the guiding principles that have been formulated by the Court of Justice, as described above, with regard to the validity and scope of the principle of collegiality. Case T-442/93 AAC and Others v Commission [1995] ECR II-1329 concerned, in connection with the application of Article 92 of the Treaty, a decision approving a State aid programme granted pursuant to a general aid scheme which had already been approved by the Commission in a relevant

. .' (paragraph 87). Consequently, the contested decision should not have mission is obliged, either under a specific been adopted under a delegation of authority. (See also Case T-435/93 ASPEC and Others v Commission [1995] ECR provision or because of their nature, to state II-1281.) the reasons on which they are based, the In its judgment in Joined Cases T-80/89, T-81/89, T-83/89, T-87/89, T-88/89, T-90/89, T-93/89, T-95/89, T-97/89, principle of collegiality requires the simulta- T-99/89, T-100/89, T-101/89, T-103/89, T-105/89, T-107/89 and T-112/89 BASF and Others v Commission [1995] ECR neous adoption by the Commission, as a col- II-729, 'LdPE', at paragraph 99 et seq., the Court of First Instance held that, even when an act has been adopted by legiate body, of both the operative part of and the full college of Commissioners but only in some of the the statement of reasons for the act concerned. languages in which it is binding, it is not permissible to grant a delegation of authority for the purpose of adopting that The procedure for the authentication of deci- text in the other languages in which it is binding, since the establishment of the text in one of those languages cannot sions adopted by the Commission, as laid be regarded merely as a measure of management or admin-

mission. That rule cannot be challenged by the Commis- under such delegations of authority obser- sion's arguments regarding the need to follow more flexible procedures and to avoid the institutional paralysis which, it argues, would ensue from strict observance of the principle of collegiality. It is also clear that the existence of an express poliucal will on the part of the members of the Commis- sion (which was unquestionable in the cases cited above) 11 — PVC judgment (sec footnote 7 above), paragraph 67. was not sufficient, in the Court's view, to ensure the lawful- ness of acts adopted under a delegation of authority. 12 — PVC judgment (see footnote 7 above), paragraph 75.

14. As notified to Germany, the reasoned opinion is dated 2 June 1992 and signed by the then Vice-President Bangemann. H o w - ever, as mentioned above, that text was not drafted, finalised or even submitted for 15. Lastly, for the principle of collegiality to approval at a meeting of the Commission. have been observed it would have been neces- The Commission had merely approved the proposal from its competent departments that a reasoned opinion should be issued to Ger- 15 — There is in exception in this case to the rule that each party many, as is apparent from the minutes of its bears the burden of proof regarding the facts it puts for- ward. As has been accepted in the case-law of the Court, meeting of 31 July 1991 and 18 December that presumption is reversed whenever the evidence is in the exclusive possession of the other party (see Case 45/64 1991. Furthermore, the authenticated text of Commission v Italy [1965] ECR 857) or the latter has, by its the reasoned opinion was not annexed to the conduct, made access to that evidence impossible (Case 49/65 Ferriere e Acciaierie Napoletane v High Authority of the minutes of those meetings in accordance with ECSC [1966] ECR 73). For those reasons, it is for the Com- mission to prove here that it observed the principle of col- Article 12 of the Commission's Rules of Pro- legiality and the procedural requirements associated with that principle. cedure in the version in force at the time when 16 — See Case C-137/92 P, cited in footnote 7 above. the decision to issue the reasoned opinion 17 — As regards the extent to which the Commission's opinion was adopted. 14 Consequendy, the Commis- must be reasoned and the nature of the reasons see, for example. Case 7/61 Commission v Italy [1961] ECR 317, sion failed to observe the essential procedural Case 325/82 Commission v Germany [1984] ECR 777, Case requirements laid down by that article. Irre- C-347/88 Commission v Greece [1990] ECR I-4747 and Case C-289/94 Commission v Italy [1996] ECR I-4405. spective of the requirements of its Rules of 18 — It also follows from the consistent case-law of the Court Procedure, however, the Commission has not that the requirement for a full statement of reasons is directly linked to tne right of the Member State concerned to a fair produced before the Court sufficient evidence hearing. The purpose of issuing a reasoned opinion is pre- cisely to give that Sute the opportunity to present its argu- ments with a view to possibly enabling the dispute that has arisen between it and the Commission to be resolved without any need for a judgment by the Court (Case 124/81 Com- mission v United Kingdom [1983] ECR 203 and Case 14 — Sec footnote 2 above. C-274/93 Commission v Luxembourg [1996] ECR I-2019).

19. I would, however, point out that the Community judicature is not satisfied with this literal criterion and does not consider it decisive. The case-law that has developed in (b) Could the reasoned opinion be adopted connection with determining which acts of under a delegation of authority? the Community institutions may be the sub- ject of an action for annulment under Article

20 — It could, of course, be maintained that in any case it is not apparent from the documents before the Court that the Commission granted a delegation of authority, by its decision, to the Commissioner who signed the reasoned opinion. As already mentioned, a delegation of authority must be express and must meet the requirements of clarity and publication, as opposed to what appears to have occurred in this case. In 17. That question could be expressed as fol- any event, it is appropriate to point out that the Court has held that defects of this kind in the delegation of authority lows: is a reasoned opinion issued under can be accommodated provided that the judicial protection of those affected by an act adopted under a delegation of authority is not ultimately affected (see the AKZO case, cited in footnote 3 above). It is therefore appropriate to start by elucidating whether a particular competence is one of 19 — Case 131/86 United Kingdom v Council [1988] ECR 905. those for which a delegation of authority may be granted.

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21. The judgment in Essevi and Salengo 23 is informative on this point. In that judgment

22. Certainly, at all events, the fact that a rea- 21 — With that approach, actions challenging 'internal instruc- soned opinion does not constitute an enforce- tions' or 'communications' have frequently been ruled admis- able administrative act does not mean that it sible; see, for example, Case C-366/88 France v Commission [1990] ECR I-3571, Case C-303/90 France v Commission automatically falls into the category of acts of [1991] ECR I-5315, Case C-325/91 France v Commission administration or management for which a [1993] ECR I-3283 and the Opinion delivered by Advocate General Tesauro on 16 January 1997 in Case C-57/95 France delegation of authority is permissible. In my v Commission [1997] ECR I-1627 (paragraphs 8 to 11). view, it is not appropriate to place these two 22 — Joined Cases 142/80 and 143/80 Amministrazione delle Finanze dello Stato v Essevi and Salengo [1981] ECR 1413. legal categories on the same footing. A dis- For the same reason, an action against a refusal on the part of the Commission to initiate the procedure provided for under Article 169 against a Member State is also inadmis- sible (Case 48/65 Lüaicke and Others v Commission [1966] ECR 19 and, more recently, the order in Case T-47/96 SDDDA v Commission [1996] ECR II-1559): the Commis- 24 — Ibid., paragraph 18. sion cannot be required to adopt a non-enforceable act. 25 — Ibid., paragraph 15. 23 — Joined Cases 142/80 and 143/80, cited in footnote 22 above. 26 — Ibid., p. 1420.

tinction needs to be drawn, as indeed is pro- remedy it has initiated, just as it can also vided for by the Commission's Rules of Pro- withdraw an unfavourable administrative act. cedure and recognised by the existing case- law, between straightforward acts of administration or management and 'decisions of principle', which the Commission is obliged to adopt as a collegiate body. Decisions of the 24. That is to say, the legal significance of a latter kind are mainly ones whereby the Com- reasoned opinion, which makes it a 'decision mission expresses a final verdict on a signifi- of principle' and excludes it from the cat- cant point of law and where that verdict gives egory of acts that can be adopted under a del- rise to legal effects. In the event of doubt, egation of authority, stems not from any there is a presumption against the permissi- direct adverse effects it creates for its addressee bility of granting a delegation of authority. when notified 27 but from the legal conse- quences which it produces in the course of the Article 169 procedure, in that it binds the Commission as to the content and extent of the complaints that it may bring before the Court and thereby limits the scope of judicial review. 28 In addition, it is appropriate to point to the special importance and position of the Article 169 procedure within the Com- munity legal order, from both the legal point of view and the political point of view. It would, I believe, be contrary to the system of the Treaty to underestimate the role played by the Commission in the context of that 23. From that point of view it is appropriate procedure by categorising the reasoned to accept that, in cases where an action under opinion as an act of administration or man- agement. Article 169 is brought before the Court, a reasoned opinion constitutes a 'decision of principle', in the sense that, in respect of cer- tain questions at least, it expresses the Com- mission's final verdict and produces definitive legal effects in the context of that procedure. 25. In my view, the thesis I have just put for- More particularly, a reasoned opinion defines ward is borne out by the case-law regarding the matters in which the Member State to the legal effects of a reasoned opinion. As which it is addressed has failed to fulfil its already stated, the latter defines the subject- obligations as well as the relevant grounds o n which the Commission's complaints are based, and accordingly delimits the subject-matter 27 — As I have already mentioned, the mere issue by the Com- of the dispute brought before the Court. The mission of a reasoned opinion to the effect that the Member Commission may not alter that subject-matter; State concerned has failed to fulfil its obligations does not in itself establish the existence of such failure. However, it it can only either refrain from referring the is not without its consequences, since in practice the Member Sute cannot ignore i t .That is also why the Court is par- matter to the Court or discontinue the legal ticularly rigorous as regards observing the rights of the Member State concerned to defend itself against the com- plaints raised against it by the Commission in a reasoned opinion. See footnote 18 above. 28 — See paragraph 25 immediately following.

-matter of the dispute before the Court in orous review to the reasoned opinion than t o that both the application and the reasoned the letter of formal notice. 34 opinion must be founded on the same grounds and submissions. 29 It is inadmissible for the Commission to raise new complaints or even to widen its argument by relying on new evi- dence in the context of the same complaints. 30 Correspondingly, when the Court rules on an action under Article 169 its powers are clearly defined; they are confined to reviewing the legality of the evidence which is contained in the reasoned opinion and reproduced in the application. 31 To understand the role of the reasoned opinion in the Article 169 pro- 26. To conclude, the formulation of the rea- cedure, it is important to refer to the case-law soned opinion constitutes, in terms of its according to which, even if the Member State political importance and legal effects, the most has complied after the time-limit laid down in significant contribution made by the C o m - the reasoned opinion has expired, the infringe- mission in the Article 169 procedure. In m y ment is deemed to have already occurred and view it is inconceivable for that act, with the the subject-matter of the proceedings initi- content with which it is notified to the Member ated accordingly remains unchanged. 32 Lastly, State concerned, not to be adopted directly the distinction which the Court draws between by the Commission acting as a collegiate the letter of formal notice and the reasoned body. The special importance accorded to it opinion is significant. Whereas the former is in the case-law of the Court is not compat- not characterised by a strict regard for for- ible with its categorisation as a straightfor- ward act of administration or management malities, the latter must be correct in terms of which may be adopted under a delegation of both form and procedure, since it 'concludes authority. Hence, in the dispute under con- the pre-litigation procedure' provided for in sideration the reasoned opinion on which the Article 169 of the Treaty. 33 Moreover, for present action is based was not formulated that reason, the Court applies a more rig- under the proper procedure, by the Commis- sion acting as a collegiate body, and the plea of inadmissibility raised by Germany is well founded.

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OPINION OF MR COSMAS — CASE C-191/95

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COMMISSION v GERMANY

majority of the companies subject to the obli- 31. Germany also maintains that the afore- gation to disclose their annual accounts dis- mentioned penalty provided for in Paragraph regard that obligation. 335 of the H G B is in keeping with the obli- gation imposed by Community law, and in particular by Article 6 of the First Directive. To support that assertion, it develops the argument that the Community provisions concerned are not intended to protect every natural or legal person who is a third party in relation to a company limited by shares, but only its creditors, including its employees. 29. In my opinion, the above submission by Consequently, according to the defendant, it the Commission is well founded and all the is right that the penalty payment provided for arguments put forward by Germany to in Paragraph 335 of the H G B is not imposed counter those claims must be rejected. automatically but only at the request of a member or a creditor of the company or of its company-level or establishment-level works council.

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tives are intended to ensure the greatest pos- regarded as complying with the requirement sible transparency in the activities of compa- for appropriate penalties as set out in Article nies and for that reason provide for the erga 6 of the First Directive. In the light of the omnes disclosure of a range of information foregoing, I am of the opinion that Germany from which anybody can draw conclusions has failed to fulfil its obligations under that regarding their legal and financial situation. Community provision. Lasdy, such infringe- Consequently, it is against both the spirit and ment cannot be justified or excused by the the letter of these provisions to restrict the fact that the imposition of penalties on all circle of persons able to benefit from that companies which fail to disclose their annual transparency; it is precisely because it is impos- accounts would, because they are so numerous, sible to list them exhaustively — business and create special difficulties for the German commercial activity exceeds the legislature's authorities disproportionate, according to powers of imagination — that it was pre- Germany's submission, to the Community ferred to impose an erga omnes obligation, as legislature's intended purpose. The Court has the only way of ensuring comprehensive legal protection. To conclude, the restriction of the consistently held that '... a Member State may circle of persons able to claim, under German not plead internal circumstances in order to law, that a penalty payment should be imposed justify a failure to comply with obligations for non-disclosure of annual accounts is not and time-limits resulting from Community consistent with the relevant Community pro- law ...'. 37 visions.

(2) order the applicant to pay the costs.

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