Commission v France

The Court orders France to pay a lump sum as a penalty for the delay in complying with a previous judgment which established a failure to fulfil obligations relating to the transposition of the directive on genetically modified organisms.

In 2004, in its judgment in Case C-419/03, the Court of Justice had held that France had infringed Community law by failing to transpose Directive 2001/18/EC on the deliberate release into the environment of genetically modified organisms (GMOs).

France failed to take the measures to comply with that judgment, as a result of which the Commission brought proceedings before the Court under Article 228 EC. It was only in the course of these proceedings that the French authorities adopted the necessary measures for transposition, first in March 2007 and then in June 2008. The Commission then informed the Court that it was of the opinion that France had finally complied with the judgment establishing a failure to fulfil obligations, but nevertheless maintained its claim that France should be ordered to pay a lump sum as a penalty for the long duration of the serious breach committed.

The Court recalled that Article 228(2) EC is aimed at inducing a defaulting Member State to comply with a judgment establishing a failure to fulfil obligations and ensuring that Community law is in fact applied, and that the measures provided for by that provision, namely a lump sum and a penalty payment, are both intended to achieve this objective. In particular, the imposition of a lump sum is based on the assessment of the effects on public and private interests of the failure of the Member State concerned to comply with its obligations, in particular where the breach has persisted for a long period since the judgment initially establishing it was delivered.

The Court went on to point out that it is for it, in each case and in the light of the circumstances of the case before it and the degree of persuasion and deterrence which appears to it to be required, to determine the financial penalties appropriate for making sure that the judgment establishing the failure to fulfil obligations is complied with as swiftly as possible and preventing similar infringements of Community law from recurring. In this regard, while the guidelines adopted by the Commission in its 2005 Communication on the imposition of lump sum payments may help to ensure transparency, foreseeability and legal certainty, the fact nevertheless remains that such rules cannot bind the Court in the exercise of its broad discretion. In particular, the Court stated that the decision whether to impose a lump sum payment must, in each individual case, depends on all the relevant factors pertaining to both the particular nature of the infringement established and the individual conduct of the Member State concerned. In this case, account was taken of three parameters in particular: 1) the rather reticent attitude adopted by France towards its Community obligations in the specific area of GMOs, which gave rise to several judgments establishing failures to fulfil obligations in this regard, which is an indicator of the need to adopt dissuasive measures; 2) the length of time for which the breach at issue persisted; and 3) the seriousness of that breach.

The Court concluded that the foregoing was sufficient to justify the imposition of a lump sum payment of EUR 10 million. It should be noted that this is only the second time that the Court has ordered a Member State to pay a lump sum, and in fact the first time that it has done so for a breach which had ceased when the judgment was given.