Article 50, 2 Years And EU Law (Part 3)

Following on from parts one and two, we address the issue in this piece that should the EU find an onerous law which affects the UK only and pass it via due process all within a very unusually short space of time there then follows the problem of lack of compliance by the UK.

I’m always amused by the seemingly contradictory positions of; “why don’t we do what the French and Italians do and ignore EU laws”, yet if we invoke Article 50 “we would have no choice but to enthusiastically implement them within the two year notice period”. One wonders that if we’re unable to delay and ignore EU laws within the two year period whether we deserve, and are capable of, being free and independent from the EU at all.

Once we invoke Article 50 we shift the balance of power towards us by starting the countdown clock. The longer the clock continues ticking towards the 2 year exit the more power drains away from the EU and towards us. One is reminded of the President of the USA where the second term increasingly resembles a lame duck term due to the fact that they cannot stand again.

With this in mind, we come to EU procedures against member states who are not complying with their obligations under Community law – known as infringement proceedings. Suspected infringements of Community law are investigated by the Commission in its role of "guardian of the treaties". Article 258 of the Lisbon Treaty (page 114) grants the European Commission the right to initiate infringement proceedings against member states that have failed to fulfill a Treaty obligation.

If the Commission considers that a Member State has failed to fulfil an obligation under the Treaties, it shall deliver a reasoned opinion on the matter after giving the State concerned the opportunity to submit its observations. If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court of Justice of the European Union.

Proceedings can be triggered by various sources. Complaints can be lodged by EU citizens, media, corporations, and non-governmental organisations. Some complainants lodge a petition before the European Parliament or it is on the own initiatives of the Commission itself.

An infringement procedure can be initiated when a member state is suspected of breaching any of the following:

1) EU Primary law; mainly violations of the founding treaties or any amendments of the founding treaties

2) EU Secondary law; listed by Article 288 (page 125) as regulations, directives, decisions, opinions and recommendations.

3) Sources of supplementary law which allow "the Court to bridge the gaps left by primary and/or secondary law.

A consequence of Directives not being directly applicable, application is left up to the interpretation of the Member State in question to transpose them into national law. This then leaves flexibility of various means of non-compliance;

1) Complete non compliance - a total failure in passing the required national legislation.

2) Incorrect legal implementation of Directives - parts of the Directive have not been enacted and or have deviated from EU obligations.

3) The legal implementation of a Directive is correct and complete but there is a failure to uphold violations of Community law by institutions such as the Courts.

One can see that should the UK government wish to, like other member states, can act in an awkward manner indeed, exploiting various legal opportunities with the view of delaying proceedings. One can see now that even as a full member the UK currently has eleven outstanding infringement proceedings against it since 2010 regarding Taxation and the Customs Union and indeed still has three open from 2006. As we can see by the latest report by the EU Commission on application of EU law, the number of infringements across the member states are significant:

Member States had to transpose more directives in 2011 compared to the previous year (i.e. 131 in contrast to 111 directives in 2010).There has been a significant increase in late transposition in 2011 compared to the previous year. The Commission launched 1185 late transposition infringements in 2011 compared to 855 in 2010 and 531 in 2009. Compared to the end of 2010, 763 late transposition cases were open at the end of 2011, representing a 60% increase.

According to the report the three areas where the most late transposition infringements occurred were transport, the internal market & services, and health & consumers. And the trend according to the EC for late imposition has been increasing over the last three years, a problem exacerbated by the fact that many of these cases concerned a large number of Member States.

If the Commission does consider that there is a degree of non-compliance then it will begin proceedings which can be simply broken down into four stages.

First there are informal discussions between the Commission and the Member State usually conducted  by an exchange of administrative letters that seek clarifications on the issue at stake. The aim is to allow Member State to conform voluntarily with the requirements of the Treaty.

If this proves unsatisfactory the Commission will then open proceedings with a "letter of formal notice". This requests a Member State to submit formally its observations on the infringement of EU law within a given time limit (usually two months). Then, as per Article 259:

The Commission shall deliver a reasoned opinion after each of the States concerned has been given the opportunity to submit its own case and its observations on the other party's case both orally and in writing.

The "reasoned opinion" is the first official stage in the infringement proceedings. This sets out the justification for commencing legal proceedings. It gives a detailed account of how Community Law has been infringed by a member state and states a time-limit within in which the matter is to be rectified. Failure to do so within the time limit specified may result in referring the case to the European Court of Justice, as per Article 258:

If the State concerned does not comply with the opinion within the period laid down by the Commission, the latter may bring the matter before the Court of Justice of the European Union.

Typically, in over 90% of infringement cases, Member States comply with their obligations under EU law before they are referred to the Court. But in the event that they are referred, then the Court of Justice acts as the ultimate adjudicator between the Commission and the member state in question. If the Court rules against a Member State, they then must then take the necessary measures to comply with the judgment.

Yet, the member state may defy the ruling, in which case the Commission would have to open a further infringement case under Article 260:

If the Commission considers that the Member State concerned has not taken the necessary measures to comply with the judgment of the Court, it may bring the case before the Court after giving that State the opportunity to submit its observations. 

In 2011 there were seventy seven such cases of non compliance of Court judgements, of which the EU Commission referred back to the Court again eleven. The Court then only passed judgement on two - C-407/09 and C-496/09. Crucially though, the increasing trend of late transpositions has inevitably resulted in a ever larger backlog:

"However, that increase in the caseload has not been completely absorbed despite record productivity," the statement said. The Court of Justice completed 1,518 cases between its three branches in 2011. There remains a total backlog of 2,335 cases pending between the three branches of the court.

This has meant that...

 Proceeding durations have risen over 2010, according to the statement. References for preliminary rulings increased to 16.4 months from 16 months in 2010. The average time in 2011 to dispense with direct actions and appeals was 20.2 months and 15.4 months respectively, compared with 16.7 months and 14.3 months in 201.

Should all these hurdles be overcome, ultimately the only sanction the Court of Justice can impose on us is one of a financial nature, based on the duration and severity of the infringement and the size of the Member State, as per Article 260:

[The Commission] shall specify the amount of the lump sum or penalty payment to be paid by the Member State concerned which it considers appropriate in the circumstances. If the Court finds that the Member State concerned has not complied with its judgment it may impose a lump sum or penalty payment on it.

Historically, before the Maastricht Treaty, the former Article 171 (EEC) only allowed for "a declaration of a failure to comply". The Maastricht Treaty introduced economic sanctions for the first time in the form of lump sums or penalty payments. Lump sums are based on the detrimental effects caused by the failure to comply with the original judgement. Conversely penalty payments are often used as means of securing compliance as quickly as possible because payment increases per day as a multiplier, which runs from the date of the Court's judgement. However both options can be used at the same time particularly if a member state is refusing to fulfill an obligation, as per point 82 of C-304/02 vs France (2002):

82...recourse to both types of penalty provided for in Article 228(2) EC is not precluded, in particular where the breach of obligations both has continued for a long period and is inclined to persist.

Yet that's all the EU can do. After a process that overall - from passing law to a ruling from the Court of Justice - is unlikely to be quicker than five years (we leave in two) financial sanctions is all it has left. By invoking Article 50 we would be long gone, demob happy and can refuse to pay because ultimately what can the EU do? Power will have drained away, and after we left we are outside its jurisdiction...