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2017   |   Book 1

Case

E-10/16

EFTA Surveillance AuthorityVIceland

(Failure by an EFTA State to fulfil its obligations – Failure to implement – Directive 2014/68/EU on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment)

Table of contents


SummaryPage
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of the Judgment

1 Article 3 EEA imposes upon the EFTA States the general obligation to take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of the EEA Agreement. Under Article 7 EEA, the EFTA States are obliged to implement all acts referred to in the Annexes to the EEA Agreement, as amended by decisions of the EEA Joint Committee. The lack of direct legal effect of those acts makes timely implementation crucial for the proper functioning of the EEA Agreement in Iceland also.

2 The question whether an EFTA State has failed to fulfil its obligations must be determined by reference to the situation as it stood at the end of the period laid down in the reasoned opinion.

3 Iceland failed to fulfil its obligations under the Act referred to at point 6a and at point 6e of Chapter VIII of Annex II to the EEA Agreement (Directive 2014/68/EU of the European Parliament and of the Council of 15 May 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment) as adapted to the Agreement under its Protocol 1, and under Article 7 of the Agreement, by failing to adopt the measures necessary to implement Article 13 of the Act within the time prescribed.

JudgmentPage
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of the Court

1 March 2017

(Failure by an EFTA State to fulfil its obligations – Failure to implement – Directive 2014/68/EU on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment)

In Case E-10/16,

EFTA Surveillance Authority, represented by Carsten Zatschler, Øyvind Bø and Marlene Lie Hakkebo, members of its Department of Legal & Executive Affairs, acting as Agents,

applicant,

V

Iceland, represented by Jóhanna Bryndís Bjarnadóttir, Counsellor, Ministry for Foreign Affairs, acting as Agent,

defendant,

APPLICATION for a declaration that Iceland has failed to fulfil its obligations under the Act referred to at point 6a and at point 6e of Chapter VIII of Annex II to the Agreement on the European Economic Area (Directive 2014/68/EU of the European Parliament and of the Council of 15 May 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment) as adapted to the Agreement by way of Protocol 1 thereto, and under Article 7 of the Agreement, by failing to adopt the measures necessary to implement Article 13 of the Act within the time prescribed or, in any event, by failing to inform the EFTA Surveillance Authority thereof,

ThePage
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Court

composed of: Carl Baudenbacher, President, Per Christiansen (Judge-Rapporteur) and Páll Hreinsson, Judges,

Registrar: Gunnar Selvik,

having regard to the written pleadings of the parties,

having decided to dispense with the oral procedure,

gives the following

Judgment

I Introduction

1 By an application lodged at the Court Registry on 3 August 2016, the EFTA Surveillance Authority (“ESA”) brought an action under the second paragraph of Article 31 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice (“SCA”) seeking a declaration from the Court that Iceland has failed to fulfil its obligations under the Act referred to at point 6a and at point 6e of Chapter VIII of Annex II to the Agreement on the European Economic Area (“the EEA Agreement” or “EEA”), that is Directive 2014/68/EU of the European Parliament and of the Council of 15 May 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment (OJ 2014 L 189, p. 164, and EEA Supplement 2015 No 63, p. 844) (“the Act” or “the Directive”) as adapted to the Agreement under its Protocol 1, and under Article 7 of the Agreement, by failing to adopt or in any event to inform ESA of the measures necessary to implement Article 13 of the Act within the time prescribed.

II LawPage
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2 Article 3 EEA reads:

The Contracting Parties shall take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Agreement.

They shall abstain from any measure which could jeopardize the attainment of the objectives of this Agreement.

3 Article 7 EEA reads:

Acts referred to or contained in the Annexes to this Agreement or in decisions of the EEA Joint Committee shall be binding upon the Contracting Parties and be, or be made, part of their internal legal order as follows:

(b) an act corresponding to an EEC directive shall leave to the authorities of the Contracting Parties the choice of form and method of implementation.

4 Article 31 SCA reads:

If the EFTA Surveillance Authority considers that an EFTA State has failed to fulfil an obligation under the EEA Agreement or of this Agreement, it shall, unless otherwise provided for in this Agreement, 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 EFTA Surveillance Authority, the latter may bring the matter before the EFTA Court.

5 EEAPage
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Joint Committee Decision No 84/2015 of 30 April 2015 (OJ 2016 L 211, p. 19, and EEA Supplement 2016 No 42, p. 19) (“Decision 84/2015”) amended Annex II (Technical regulations, standards, testing and certification) to the EEA Agreement by adding the Directive to points 6a and 6e of Chapter VIII of the Annex. No constitutional requirements were indicated. Therefore, Decision 84/2015 entered into force on 1 May 2015 in accordance with its Article 3. The time limit for the EFTA States to adopt the measures necessary to implement Article 13 of the Directive expired on the same date. For the remainder of the Directive, the transposition deadline was 18 July 2016.

III Facts and pre-litigation procedure

6 On 16 September 2015, after correspondence with the Icelandic authorities, ESA issued a letter of formal notice concluding that Iceland had failed to fulfil its obligations under the Act and Article 7 EEA, by failing to adopt or in any event to inform ESA of the measures necessary to implement Article 13 of the Directive. Iceland did not respond to the letter of formal notice.

7 On 13 January 2016, ESA delivered a reasoned opinion, maintaining the conclusion set out in its letter of formal notice. Pursuant to the second paragraph of Article 31 SCA, ESA required Iceland to take the necessary measures to comply with the reasoned opinion within two months following the notification, that is no later than 13 March 2016. Iceland did not reply to the reasoned opinion.

8 Since Iceland did not comply with the reasoned opinion by the deadline set, ESA decided to bring the matter before the Court pursuant to the second paragraph of Article 31 SCA.

IV ProcedurePage
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and forms of order sought

9 ESA lodged the present application at the Court Registry on 3 August 2016. Iceland’s statement of defence was registered at the Court on 10 October 2016. By letter of 25 October 2016, ESA waived its right to submit a reply and consented to dispense with the oral procedure should the Court wish to do so. By letter of 14 November 2016, Iceland also consented to dispense with the oral procedure.

10 The applicant, ESA, requests the Court to:

1. Declare that Iceland has failed to fulfil its obligations under the Act referred to at point 6a and at point 6e of Chapter VIII of Annex II to the Agreement on the European Economic Area (Directive 2014/68/EU of the European Parliament and of the Council of 15 May 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment) as adapted to the Agreement by way of Protocol 1 thereto, and under Article 7 of the Agreement, by failing to adopt the measures necessary to implement Article 13 of the Act within the time prescribed, or in any event by failing to inform the EFTA Surveillance Authority thereof; and

2. Order Iceland to bear the costs of these proceedings.

11 The defendant, Iceland, submits that it does not dispute the facts of the case as set out in ESA’s application. Furthermore, it does not contest the declaration sought by ESA. Nevertheless, in its defence, Iceland emphasised that it fully intends to fulfil its obligations, and informed that it is currently working on an administrative regulation that will implement the Directive.

12 After having received the express consent of the parties, the Court, acting on a report from the Judge-Rapporteur, decided, pursuant to Article 41(2) of the Rules of Procedure (“RoP”), to dispense with the oral procedure.

V FindingsPage
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of the Court

13 Article 3 EEA imposes upon the EFTA States the general obligation to take all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of the EEA Agreement (see, inter alia, Case E-34/15 ESA v Iceland, judgment of 2 August 2016, not yet reported, paragraph 13 and case law cited).

14 Under Article 7 EEA, the EFTA States are obliged to implement all acts referred to in the Annexes to the EEA Agreement, as amended by decisions of the EEA Joint Committee. An obligation to implement Article 13 of the Directive also follows from its Article 49(1). The Court notes that the lack of direct legal effect of acts referred to in decisions by the EEA Joint Committee makes timely implementation crucial for the proper functioning of the EEA Agreement in Iceland also. The EFTA States find themselves under an obligation of result in that regard (see, inter alia, ESA v Iceland, cited above, paragraph 14 and case law cited).

15 Decision 84/2015 entered into force on 1 May 2015. The time limit for the EFTA States to adopt the measures necessary to implement Article 13 of the Directive expired on the same date.

16 The question whether an EFTA State has failed to fulfil its obligations must be determined by reference to the situation as it stood at the end of the period laid down in the reasoned opinion (see, inter alia, ESA v Iceland, cited above, paragraph 16 and case law cited). It is undisputed that Iceland had not adopted the measures necessary to implement Article 13 of the Directive by the expiry of the time limit set in the reasoned opinion.

17 Since Iceland did not implement the Directive within the time prescribed, there is no need to examine the alternative form of order sought against Iceland for failing to inform ESA of the measures implementing the Directive.

18 ItPage
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must therefore be held that Iceland has failed to fulfil its obligations under the Act referred to at point 6a and at point 6e of Chapter VIII of Annex II to the EEA Agreement (Directive 2014/68/EU of the European Parliament and of the Council of 15 May 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment) as adapted to the Agreement under its Protocol 1, and under Article 7 of the Agreement, by failing to adopt the measures necessary to implement Article 13 of the Act within the time prescribed.

VI Costs

19 Under Article 66(2) RoP, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since ESA has requested that Iceland be ordered to pay the costs, the latter has been unsuccessful and none of the exceptions in Article 66(3) RoP apply, Iceland must be ordered to pay the costs.

OnPage
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those grounds,

The Court

Hereby:

1. Declares that Iceland has failed to fulfil its obligations under the Act referred to at point 6a and at point 6e of Chapter VIII of Annex II to the Agreement on the European Economic Area (Directive 2014/68/EU of the European Parliament and of the Council of 15 May 2014 on the harmonisation of the laws of the Member States relating to the making available on the market of pressure equipment) as adapted to the Agreement under its Protocol 1, and under Article 7 of the Agreement, by failing to adopt the measures necessary to implement Article 13 of the Act within the time prescribed.

2. Orders Iceland to bear the costs of the proceedings.

Carl Baudenbacher

Per Christiansen

Páll Hreinsson

Delivered in open court in Luxembourg on
1 March 2017.

Gunnar Selvik
Registrar

Carl Baudenbacher
President