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I have recently watched an interview with Ana GOMES about how Portugal ended the bearer shares (besides other changes) as a result of implementing the 4th EU Anti-Money Laundering Directive.

This is an important issue in Romania, since important politicians may be shares bearers in dubious companies:

RISE Project on Thursday released a report alleged drawn up by DIGIPI called "Note on aspects affecting the social and economic climate of Teleorman County," that speaks of "a crime ring made up of the county's decision makers," including PSD's Dragnea, who previously was the county's prefect, misappropriated European and national budget funds. The note mentions Dragnea as the major holder of the bearer shares in Tel Drum SA.

NOTE: Dragnea is the leader of the main party in power and head of one of the Chambers of the Parliament.

My assumption is that current politicians will not hurry to implement the aforementioned directive, since they might affect them directly or indirectly.

Question: According to current EU regulations, how much can an EU member delay implementing a EU directive until it is "forced" to change the law accordingly? Or may the time frame vary much based on bureaucratic steps?

By "forced" I mean when fines are issued and/or EU funding for various projects is cut.

  • This seems very closely related to a previous question you asked. Could you clarify the difference? – user9389 Nov 9 '17 at 19:43
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    @notstoreboughtdirt - yes, it is also about bearer shares. The previous question deals with understanding the apparent lack of pressure to forbid them (which was false premise, since countries began forbidding them). For this question, bearer shares issue is just an example and I am interested in an estimation of how much a less compliant country might delay implementing a directive before facing real serious consequences. AFAIK, EU allows a country to delay under certain circumstances and there must be some bureaucratic inertia between implementation deadline and the fines. – Alexei Nov 9 '17 at 20:00
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When a member state does not follow the approved Directive within the deadline than an Infringement procedure is initiated. And I quote:

If the EU country concerned fails to communicate measures that fully transpose the provisions of directives, or doesn’t rectify the suspected violation of EU law, the Commission may launch a formal infringement procedure. The procedure follows a number of steps laid out in the EU treaties, each ending with a formal decision:

  1. The Commission sends a letter of formal notice requesting further information to the country concerned, which must send a detailed reply within a specified period, usually 2 months.
  2. If the Commission concludes that the country is failing to fulfil its obligations under EU law, it may send a reasoned opinion: a formal request to comply with EU law. It explains why the Commission considers that the country is breaching EU law. It also requests that the EU country inform the Commission of the measures taken, within a specified period, usually 2 months.
  3. If the EU country still doesn't comply, the Commission may decide to refer the matter to the Court of Justice. Most cases are settled before being referred to the Court.
  4. If an EU county fails to communicate measures that implement the provisions of a directive in time, the Commission may ask the Court to impose penalties.
  5. If the Court finds that a country has breached EU law, the national authorities must take action to comply with the Court judgment.

For this particular case the deadline for the directive was 26, June, 2017. I believe (but yet to be confirmed) Romania has received the formal notice (the info on this link might be a bit overwhelming but understand that infringement procedures are common for all member states) so it should be in step 1 of the prior list.

All of these steps are under Article 258:

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.

So far there is no reason to believe Romania has any intention to further avoid implementing the directive and I can't even confirm that the formal notice regards the specific points you've mentioned. I looked for a report on it but was unable to find it. At this point we need to wait for Romania reply to know how things stand.

There is not good way to answer your title question since things never really got to extreme points so far. But a good indicator is perhaps the average case duration for an infringement procedure (about 3 years). You'll find a lot of information in this report (Romania its not that bad, and there are good reasons to believe the country is going to progress quickly by comparison with the other members).

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    Indeed, infringement cases are far from being unusual and virtually all EU members had/have dozens of them. The particular example I have provided has not received much support in local media (yet), however I clearly remember that on several occasions the Romanian Parliament had to urgently approve some laws to avoid fines from EU. I still have to find some articles about it to check the time interval between deadline and law approval. – Alexei Nov 10 '17 at 12:06
  • @Alexei Likely it hasn't received media attention because so far is "business as usual". Romania might have a good justification for the delay (those are not uncommon either). Entering infringement procedure is not in itself a bad thing and does not automatically bring any kind of fines (when it does someone probably screwed up big). It might just mean member states need more time to reform. The other examples your are recollecting are probably environment related (marine fuels, air quality, etc.). – armatita Nov 10 '17 at 12:50
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The implementation timeline varies and is typically defined in the directive itself. After that, infringement proceedings are at the Commission's discretion. Several months are in any case required for translation, review, etc. and a full case, all the way to an ECJ decision, takes several years.

Fines are only possible once the ECJ has found a member state to be non-compliant, i.e. the infringement proceedings went to a conclusion and nothing happened after that. The Commission can then go to the court again, this time under article 260 of the Treaty on the Functioning of the European Union, and ask the Court to impose a fine.

But in sensitive domains, the Commission has to pick its battles and might choose not to act or to overlook some details. There are also domains where it did not historically have enforcement powers. That means that infringements can go on for a really long time in some cases. There is therefore no hard deadline or predefined delays, it depends mostly on the Commission's priorities.

As an example, consider the McCarthy decision rendered by the Court at the end of 2014. Without getting into the details, it stems quite directly from the wording of the directive (in my opinion) and yet it took more than ten years for the UK to actually recognise this and act accordingly (and that case did not stem from infringement proceedings).

States can also ignore directives for a really long time, either for political reasons or out of a genuine inability to act. This might involve doing something (but not enough), paying fines, etc. while still falling short of the original intent. For example, France is being famously difficult with the Birds directive. The Commission recently started formal infringement proceedings based on the 2009 directive (7 years after it was enacted) but the problems date back to the first directive in the 1970s.

(Formally, if you read the treaties or secondary literature, you might notice that member states also have the right to initiate infringement proceedings against another member state. But that has only happened something like three times in the whole history of the European Union. So in practice, it all comes down to the Commission's priorities and actions.)

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