Court of Justice of the European Communities (including Court of First Instance Decisions)

1 . MEMBER STATES - OBLIGATIONS - IMPLEMENTATION OF DIRECTIVES - FAILURE - JUSTIFICATION BASED ON INTERNAL LEGAL ORDER - NOT POSSIBLE
( EEC TREATY , ART . 169 AND ART . 189 , THIRD PARAGRAPH )
2.ACTION FOR A DECLARATION THAT A MEMBER STATE HAS FAILED TO FULFIL ITS OBLIGATIONS - REASONED OPINION - STATEMENT OF REASONS - OBLIGATION - SCOPE
( EEC TREATY , ART . 169 )
3.MEMBER STATES - OBLIGATIONS - IMPLEMENTATION OF DIRECTIVES - PERIODS FOR IMPLEMENTATION
( EEC TREATY , ART . 189 , THIRD PARAGRAPH )
4.MEASURES ADOPTED BY THE INSTITUTIONS - DIRECTIVES - EFFECT
( EEC TREATY , ART . 189 , THIRD PARAGRAPH )

1 . A MEMBER STATE MAY NOT PLEAD PROVISIONS , PRACTICES OR CIRCUMSTANCES IN ITS INTERNAL LEGAL ORDER TO JUSTIFY A FAILURE TO COMPLY WITH OBLIGATIONS UNDER COMMUNITY DIRECTIVES .

2 . THE ADMISSIBILITY OF AN ACTION BASED ON ARTICLES 169 OF THE TREATY DEPENDS ONLY ON AN OBJECTIVE FINDING OF A FAILURE TO FULFIL OBLIGATIONS AND NOT ON PROOF OF ANY INERTIA OR OPPOSITION ON THE PART OF THE MEMBER STATE CONCERNED . THE OPINION REFERRED TO IN ARTICLE 169 MUST BE CONSIDERED TO CONTAIN A SUFFICIENT STATEMENT OF REASONS TO SATISFY THE LAW WHEN IT CONTAINS A COHERENT EXPOSITION OF THE REASONS WHICH LED THE COMMISSION TO THE CONVICTION THAT THE STATE CONCERNED HAD FAILED TO FULFIL AN OBLIGATION UNDER THE TREATY .

3 . 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 .

4 . THE RIGHT OF PERSONS AFFECTED TO RELY IN LAW ON A DIRECTIVE AS AGAINST A MEMBER STATE WHICH HAS FAILED TO TAKE THE REQUISITE NATIONAL IMPLEMENTING MEASURES CONSTITUTES A MINIMUM GUARANTEE ARISING FROM THE BINDING NATURE OF THE OBLIGATION IMPOSED ON MEMBER STATES BY THE EFFECT OF DIRECTIVES UNDER THE THIRD PARAGRAPH OF ARTICLE 189 OF THE TREATY AND CANNOT JUSTIFY A MEMBER STATE ' S ABSOLVING ITSELF FROM TAKING IN DUE TIME IMPLEMENTING MEASURES SUFFICIENT 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 MONTALTO , A MEMBER OF THE LEGAL DEPARTMENT OF THE COMMISSION , JEAN MONNET BUILDING , KIRCHBERG ,
APPLICANT ,
V
KINGDOM OF BELGIUM , REPRESENTED BY THE MINISTER FOR EXTERNAL RELATIONS , ASSISTED BY ROBERT HOEBAER , DIRECTOR AT THE MINISTRY OF FOREIGN AFFAIRS , EXTERNAL TRADE AND COOPERATION WITH DEVELOPING COUNTRIES , AND R . GEUDENS , CONSEILLER ( ADVISER ) AT THE MINISTRY OF FINANCE , AND J . LE BRUN , CONSEILLER AT THE BANKING COMMISSION , WITH AN ADDRESS FOR SERVICE IN LUXEMBOURG AT THE BELGIAN EMBASSY , 4 RUE DES GIRONDINS , RESIDENCE CHAMPAGNE ,
DEFENDANT ,

APPLICATION FOR A DECLARATION THAT THE KINGDOM OF BELGIUM HAS 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 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 ),

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 , 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 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 HARMONIZATION 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 FACILITATE 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 .

5 IN ITS DEFENCE THE BELGIAN GOVERNMENT EMPHASIZED FIRST OF ALL THE EXTENT OF THE TECHNICAL , INSTITUTIONAL AND POLITICAL DIFFICULTIES WHICH EXPLAIN WHY , IN SPITE OF THE EFFORTS IT HAS MADE , IT HAS NOT YET BEEN POSSIBLE TO PLACE THE BILL INCORPORATING THE DIRECTIVE INTO NATIONAL LAW BEFORE PARLIAMENT . MOREOVER , SPECIAL PROBLEMS ARE SAID TO HAVE ARISEN FROM THE FACT THAT IT WAS DECIDED TO USE THE DIRECTIVE AS AN OCCASION FOR RECASTING THE BELGIAN BANKING LEGISLATION IN RELATION TO ALL CREDIT INSTITUTIONS .

6 ALTHOUGH THOSE CIRCUMSTANCE MAY EXPLAIN THE DIFFICULTIES IN APPLYING THE DIRECTIVE , THEY CANNOT EXPUNGE THE KINGDOM OF BELGIUM ' S FAILURE TO FULFIL ITS OBLIGATIONS . THE COURT HAS CONSISTENTLY HELD THAT A MEMBER STATE MAY NOT PLEAD PROVISIONS , PRACTICES OR CIRCUMSTANCES IN ITS INTERNAL LEGAL ORDER TO JUSTIFY A FAILURE TO COMPLY WITH OBLIGATIONS UNDER COMMUNITY DIRECTIVES .

7 THE BELGIAN GOVERNMENT ALSO CONSIDERS THAT INSUFFICIENT GROUNDS ARE GIVEN BOTH IN THE REASONED OPINION AND IN THE COMMISSION ' S APPLICATION , IN SO FAR AS THERE IS NO REFERENCE TO THE DIFFICULTIES ENTAILED BY THE APPLICATION OF THE DIRECTIVE OR TO ANY DEGREE OF INERTIA OR OPPOSITION ON THE PART OF THE BELGIAN STATE IN THAT REGARD . FURTHER , IT IS ARGUED THAT THE PERIOD ALLOWED IN THE REASONED OPINION IS INADEQUATE .

8 IN THAT RESPECT IT MUST BE OBSERVED THAT THE ADMISSIBILITY OF AN ACTION BASED ON ARTICLE 169 OF THE TREATY DEPENDS ONLY ON AN OBJECTIVE FINDING OF A FAILURE TO FULFIL OBLIGATIONS AND NOT ON PROOF OF ANY INERTIA OR OPPOSITION ON THE PART OF THE MEMBER STATE CONCERNED . AS THE COURT HAS ALREADY STATED , THE OPINION REFERRED TO IN ARTICLE 169 MUST BE CONSIDERED TO CONTAIN A SUFFICIENT STATEMENT OF REASONS TO SATISFY THE LAW WHEN IT CONTAINS A COHERENT EXPOSITION OF THE REASONS WHICH LED THE COMMISSION TO THE CONVICTION THAT THE STATE CONCERNED HAD FAILED TO FULFIL AN OBLIGATION UNDER THE TREATY . TO THAT EXTENT THE COMMISSION WAS NOT REQUIRED TO REFER TO ANY DIFFICULTIES ENTAILED BY THE APPLICATION OF THE DIRECTIVE IN THE MEMBER STATE CONCERNED .

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 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 .

10 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 .

11 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 .

12 AS FOR THE DIFFICULTIES IN INTERPRETING THE DIRECTIVE , THEY CANNOT HAVE BEEN SUCH AS TO SANCTION THE BELGIAN GOVERNMENT IN EXCEEDING THE PERIODS IT HAD ACCEPTED , ESPECIALLY AS IT HAD OTHER MEANS TO ENABLE IT TO DETERMINE THE SCOPE OF ITS OBLIGATIONS .

13 MOREOVER , EVEN IF CERTAIN PROVISIONS OF THE DIRECTIVE WERE DIRECTLY APPLICABLE , THAT DOES NOT EXEMPT THE BELGIAN STATE FROM ITS OBLIGATION OF IMPLEMENTING THE DIRECTIVE BY ADOPTING NATIONAL PROVISIONS . AS THE COURT HAS ALREADY OBSERVED IN THE JUDGMENT OF 6 MAY 1980 IN CASE 102/79 ( COMMISSION V BELGIUM ( 1980 ) ECR 1487 ), THE RIGHT OF PERSONS AFFECTED TO RELY IN LAW ON A DIRECTIVE AS AGAINST THE DEFAULTING MEMBER STATE CONSTITUTES A MINIMUM GUARANTEE ARISING FROM THE BINDING NATURE OF THE OBLIGATION IMPOSED ON MEMBER STATES BY THE EFFECT OF DIRECTIVES UNDER THE THIRD PARAGRAPH OF ARTICLE 189 AND CANNOT JUSTIFY A MEMBER STATE ' S ABSOLVING ITSELF FROM TAKING IN DUE TIME IMPLEMENTING MEASURES SUFFICIENT TO MEET THE PURPOSE OF EACH DIRECTIVE .

14 FINALLY , IN ITS STATEMENT OF DEFENCE THE BELGIAN GOVERNMENT OBSERVES THAT THE REQUIREMENTS OF THE DIRECTIVE ARE ALREADY SATISFIED IN NATIONAL LEGISLATIVE PROVISIONS PROPERLY SO CALLED OR IN ADMINISTRATIVE RULES OF A GENERAL NATURE WHICH HAVE RECEIVED SUFFICIENT PUBLICITY . IN ITS REJOINDER THE BELGIAN GOVERNMENT STATES THAT THOSE PROVISIONS CANNOT BE REGARDED SIMPLY AS ADMINISTRATIVE PRACTICES BUT ARE IN FACT ADMINISTRATIVE RULES . IT WAS ONLY AFTER A REQUEST ADDRESSED TO IT BY THE COURT THAT THE BELGIAN GOVERNMENT LODGED , ON 11 OCTOBER 1982 , AT THE COURT REGISTRY A DOCUMENT TO WHICH WERE ANNEXED THE VARIOUS NATIONAL PROVISIONS WHICH , IN ITS VIEW , ENSURE IMPLEMENTATION OF THE DIRECTIVE IN BELGIAN LAW .

15 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 .

16 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 .

17 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 INFORMATION . IT IS THUS WITHIN THOSE LIMITS THAT THE BELGIAN GOVERNMENTS ' S SUBMISSION MUST BE ANSWERED .

18 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 , IMPOSED INTER ALIA BY ARTICLES 3 ( 7 ), 8 ( 5 ) AND 9 ( 2 ) OF THE DIRECTIVE , TO NOTIFY DECISIONS TAKEN BY THE BELGIAN SUPERVISORY AUTHORITIES .

19 AS REGARDS THE PERFORMANCE OF THE OBLIGATION UPON THE COMPETENT AUTHORITIES OF THE MEMBER STATES TO SUPPLY ONE ANOTHER WITH ALL INFORMATION LIKELY TO FACILITATE SUPERVISION OF CREDIT INSTITUTIONS ( ARTICLE 7 OF THE DIRECTIVE ), THE KINGDOM OF BELGIUM SUBMITS THAT SUCH AN OBLIGATION IS LAID DOWN BY ARTICLE 40 OF ROYAL DECREE NO 185 OF 9 JULY 1935 . IT IS TRUE THAT THAT ARTICLE RELEASES MEMBERS OF THE BANKING COMMISSION AND AUDITORS FROM THE DUTY OF PROFESSIONAL SECRECY WHICH BINDS THEM WHEN THEY COMMUNICATE INFORMATION TO A FOREIGN SUPERVISORY AUTHORITY , BUT IT IMPOSES NO OBLIGATION ON THE BELGIAN AUTHORITIES TO COLLABORATE WITH THE AUTHORITIES OF THE OTHER MEMBER STATES .

20 FURTHERMORE , THE DOCUMENT SUPPLIED BY THE BELGIAN GOVERNMENT DOES NOT MENTION ANY PROVISION IMPLEMENTING ARTICLE 5 OF THE DIRECTIVE RELATING TO THE RIGHT OF BRANCHES OF CREDIT INSTITUTIONS TO USE THE SAME NAME AS THEY USE IN THE MEMBER STATE IN WHICH THEIR HEAD OFFICE IS SITUATED . FINALLY , CERTAIN PROVISIONS RELATING TO THE WITHDRAWAL OF AUTHORIZATION ( ARTICLE 8 ) DO NOT HAVE ANY EQUIVALENT IN BELGIAN LAW . THAT IS TRUE OF THE PROVISION WHICH EMPOWERS THE AUTHORITIES TO WITHDRAW AUTHORIZATION IF THE INSTITUTION DOES NOT CARRY ON BUSINESS WITHIN 12 MONTHS .

21 IT IS THEREFORE PROPER TO DECLARE THAT , BY FAILING TO ADOPT WITHIN THE PRESCRIBED PERIOD THE PROVISIONS NECESSARY TO COMPLY WITH COUNCIL DIRECTIVE 77/780 OF 12 DECEMBER 1977 , THE KINGDOM OF BELGIUM FAILED TO FULFIL ITS OBLIGATIONS UNDER THE TREATY .

COSTS
22 UNDER ARTICLE 69 ( 2 ) OF THE RULES OF PROCEDURE THE UNSUCCESSFUL PARTY IS TO BE ORDERED TO PAY THE COSTS .

23 SINCE THE DEFENDANT HAS FAILED IN ITS SUBMISSIONS IT MUST BE ORDERED TO PAY THE COSTS .

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 ;

2 . ORDERS THE DEFENDANT TO PAY THE COSTS .