12 Colum. J. Eur. L. 809 (2006)

Dionysios V. Tsiros. Associate, Skadden, Arps, Slate, Meagher & Flom LLP & Affiliates; Doctoral Candidate, Université Panthéon-Assas (Paris II); LL.M., NYU School of Law; DEA, Université Panthéon-Assas (Paris it); J.D., University of Athens School of Law.

A. Importance and Types of EU Law Enforcement

Enforcement of EU law has always been one of the quintessential objectives of the Community legal order. From the establishment of the direct effect of Community Law to the recognition of its supremacy vis-a-vis the national law of Member States, the European Court of Justice (ECJ or Court) has found creative ways, not always dictated by the letter, but definitely allowed by the spirit of the Treaty, to disseminate Community legal provisions into the legal orders of Member States and to make Community legislation an inseparable part of national law, doted with privileged traits. Under this scheme, not only is Community Law integrated into national law but also citizens of the Member States can derive from it legal rights that could be vindicated before national courts.

In cases of non-implementation of a provision of EU law into a national legal order, the Treaty provides for a private enforcement mechanism, better known as preliminary rulings. Under this mechanism, private individuals are entitled to assert before a national court that their Member State has breached an EU law provision that has conferred on them rights. The Court will then address a question to the ECJ as to the validity of the relevant Community provision and this latter will bind the national court with its ruling. This form of testing Member State conformity with EU law has been seen as a mechanism through which national courts and the ECJ have engaged in a “discourse on the appropriate reach of Community Law when it has come to conflict with national legal norms.” Others have described it as an infant disease that, along with direct effect, treats EU law like foreign law and has, thus, to be dealt with. No one can, however, deny its advantages and its complementarity with regard to the public enforcement mechanism.

This latter is provided for in Article 226 (former Article 169) of the Treaty, which gives the Commission a broad discretionary power to bring a Member State before the ECJ for failure to fulfill its obligations under the Treaty. Under this latter wording, Member States are compelled to uphold primary Community Law (i.e., the Treaty) and to implement secondary Community legislation. Notwithstanding the complaints about the lack of transparency in its exercise and a predominant diplomatic character, one can recognize the importance of the public enforcement mechanism as a channel for private individuals to complain to the Commission about breaches of EU law. In part, the incentives of private individuals may not always be virtuous; by contrast, the Commission has a public interest in implementing EU law. Furthermore, it has a strategic view of the objectives that should be sought in pursuing specific enforcement cases. Last but not least, private individuals, however zealous they might be in enforcing EU law, may lack good standing.

B. Public Enforcement and Internal Taxation in the Context of the “Ouzo” Case: Facts, Procedure, and Legal Issue.

After thirteen years the ECJ is revisiting, pursuant to an action filed by the Commission against Greece under Article 226 EC, the lawfulness of the Greek fiscal legislation setting forth the rates of excise duty on ouzo and other alcoholic beverages.

The Commission, based upon complaints filed by corporations that imported in Greece alcoholic beverages other than but similar to ouzo, had recourse to the procedure of Article 226 EC9 and requested to be recognized that Greece, in applying to “ouzo” produced in its territory lower rates of excise duty than those applied to the aforementioned alcoholic beverages, was in breach of Article 90 EC, which enjoins Member States from imposing fiscal discriminatory measures on similar products imported from other Member-States.

Interestingly, whereas in the first judgment the Court found against Greece, in its recent “ouzo” case it rejected the Commission’s arguments, finding that the Greek legislation was not in breach of Article 90 EC. The judgment was not primarily concerned with the substantive issue whether the national legislation by imposing different excise duties discriminates between imported and domestic alcoholic beverages presenting a degree of similarity. Rather, the Court held that the Commission cannot successfully bring against a Member State which authentically transposed a directive of the Council into its domestic legal order an action for infringement on the basis of a breach of Article 90 EC. Furthermore, after recognizing that the Commission indirectly but effectively challenged the lawfulness of Article 23 (2) of Council Directive 92/83, the Court recalled that the only permissible way for annulment of a directive which is allegedly violative of a Treaty provision is the provisions of Articles 230 and 232 EC, which prescribe a deadline of two months for the exercise of the action for annulment.

Under the same line of reasoning, acts of Community institutions that have not been withdrawn or annulled bear a presumption of validity. In extreme situations of flagrant unlawfulness, a Community measure may be invalidated and considered as non-existent; however, the provisions of the directive cannot be regarded as such.

The following case note seeks to interpret the arguments of the parties and put in a broader context the positions finally held by the Court with regard to this particular public enforcement case. By way of comparative analysis between the “ouzo” case and prior ECJ case law and with reference to the relevant literature with regard to Articles 90 and 226 EC, I will argue that by limiting the scope of the obligation that Member States have under Article 226 of the Treaty to only transpose secondary Community Law in their internal legal order without having any regard to its compliance with the relevant Treaty provision (Article 90 EC), the Court seems to preempt intergovernmentalism over supranationalism. Furthermore, I will demonstrate that by immunizing directives against challenges to their validity, the Court is partially restraining the Commission’s discretion vis-6-vis the exercise of its public enforcement power.