Margarida Vasconcelos: The Commission strikes again… UK Government set to face a daily fine €300,000

The European Commission has decided, yesterday, to refer the UK to the ECJ for failing to fully transpose the EU internal energy market rules. According to the European Commission, the UK has failed to fully transpose the Electricity and Gas Directives.

The Commission initiated the infringement procedure against the UK, for partially transposed the Electricity and Gas Directives, by sending a letter of formal notice in September 2011 and then a reasoned opinion in April 2012.
It has been reported that whole of the UK has transposed the above-mentioned directives by the required deadline, March 2011, but not Northern Ireland. 

It is important to recall that the Lisbon Treaty introduced the possibility for the Commission to ask the ECJ to impose financial sanctions when referring a Member State, for the first time, for failure to transpose directives into national law within the required deadline. The Commission may also specify the amount of the lump sum or penalty payment to be paid by the Member States. The Commission has therefore the power of immediately seeking, in case of member states failure to transpose EU directives, the imposition of penalty payments. Hence, the ECJ has the power of imposing a lump sump or penalty payment on a Member State which has not implement a directive without having a chance of complying with a previous declaratory judgment.

Hence, in this case, the Commission is requesting the Court to impose on the UK a daily penalty payment of € 148, 177 for each of the partially transposed Directives. According to the Commission “The penalties proposed take into account the duration and the gravity of the infringement.” It will be up to the  Court to decide on the final amount of the daily penalties, but it is likely to follow the Commission recommendation. The Commission pointed out, “In case of an affirmative judgement of the Court, the daily penalty is to be paid from the date of the judgment until the transposition is completed.”

According to The Financial Times, a DECC spokesman said: “It is regrettable that a fine has been proposed by the Commission at this stage given the significant work completed in the UK in relation to these directives with the remainder due to be completed by April 2013.”