Transposition

Introduction

This report takes into account all transposition notifications made by 10 December 2022 for directives with a transposition deadline on or before 30 November 2022. As of that date, 1018 directives and 6224 regulations were in force to ensure the functioning of the single market. All comparisons are with the figures for 10 December 2021, the previous reporting date.

Single market legislation can only achieve its intended effects if the provisions in the relevant directives are completely and correctly implemented in Member States’ national laws by the deadline set out in these directives.

Monitoring transposition helps make the single market work by ensuring that single market rules are implemented properly in Member States.

Such monitoring shows the transposition deficit (the gap between the number of single market directives adopted by the EU and the number of directives transposed by each Member State) and the conformity deficit (the percentage of those directives incorrectly transposed). It highlights what Member States are doing to ensure that single market law is implemented correctly and, by doing so, encourages them to improve their performance.

Transposition and the single market – why does it matter?

Incorrect transposition, implementation and application of EU rules creates barriers to the smooth functioning of the single market. Delays or gaps in transposition deprive people and businesses of the benefits stemming from the agreed rules, sometimes even for years.

The December 2016 Communication on EU law: Better results through better application pointed to the need to strengthen compliance assessment (the effective assessment of the completeness and conformity of national measures implementing EU law). For cases brought to the Court of Justice under Article 260(3) on the Treaty of the Functioning of the European Union (TFEU), the Commission now systematically asks the Court to impose both a lump sum and a periodic penalty payment on Member States that do not communicate their transposition measures. This approach is in line with other infringement cases that can result in financial sanctions. It clearly demonstrates the Commission’s determination to ensure fast transposition.

In its judgment of 8 July 2019 in Case C-543/17, Commission v Belgium, the Court of Justice clarified the scope of Article 260(3) TFEU by stating that its sanction mechanism may also be applied in cases involving partial failure to adopt and to communicate transposition measures. In this context, the Court refers to Member States’ obligation not only to notify transposition measures but also to supply sufficiently clear and precise information as to which provisions in national law transpose which provisions of a directive. On 16 July 2020, the Court of Justice confirmed its position in rulings C-549/18, Commission v Romania, and C-550/18, Commission v Ireland. On the application of the sanctions, the Court clarified that the infringement is deemed to start from the transposition deadline for the Directive.

It is up to each Member State to implement EU directives in an accurate and timely way. The March 2020 Long-term action plan for better implementation and enforcement of single market rules (the “enforcement action plan”) highlights that the single market is built on EU law and is at the heart of the European project. It has fuelled economic growth and has made life easier for European consumers and businesses. However, timely and correct transposition of single market rules remains a challenge.

To support Member States more effectively in transposing directives and prevent new barriers to the single market, the Commission (in its Better Regulation Guidelines of November 2021) proposed implementation strategies to assist Member States and to monitor the transposition of new directives. These strategies identify the challenges that Member States face during the implementation process and explain what support the Commission can provide to Member States. Support measures include preparing guidance documents, organising expert groups and workshops, creating dedicated websites, and promoting training for practitioners.

In October 2022, the Commission adopted the Communication Enforcing EU law for a Europe that delivers setting out its work to ensure that EU law is complied with, and people and businesses can benefit from the same rights across the EU. The Communication is structured around 6 major themes, that can all play a role in improving timely and correct transposition: (1) increased cooperation with Member States and specialised authorities; (2) increased transparency and monitoring; (3) technical assistance and financial support available from the Commission; (4) possible use of pre-infringement process for swifter compliance; (5) use of infringement procedures primarily to tackle breaches with the biggest impact on the interests of people and businesses and (6) adaptability in response to crises.

Iceland, Liechtenstein and Norway are also subject to single market rules under the EEA Agreement. They are monitored by the EFTA Surveillance Authority.

However, there is a time lag between the adoption or repeal of a legal act in the EU and its addition to or removal from the EEA Agreement. This means that the body of EU law that applies in Iceland, Liechtenstein and Norway may differ from that which is in force in the EU. On 1 December 2022, 783 directives and 3875 regulations were in force to ensure the functioning of the single market in the EEA. This should be considered when comparing the Single Market Scoreboard with the EEA Scoreboard.

Focus on “short-overdue” directives

The European Council set a “zero tolerance” target in 2002 for delays of 2 years or more in transposing directives. One purpose of the Scoreboard is therefore to report on the number of long-overdue directives in each Member State. However, successive Scoreboards reveal that Member States may have difficulties in transposing directives by the agreed deadlines (time between the entry into force of the directive and the date agreed for notifying national transposition measures to the Commission). The average delay is usually between 6 and 12 months. It is even longer this year, at 12.6 months.

• In 2016 (1 November 2015 to 30 November 2016), Member States had to transpose 66 new single market directives. This was significantly more than in 2015 (47), 2017 (39), 2018 (38), 2019 (35), 2020 (51), 2021 (45) and 2022 (48). Many of them have a transposition deadline close to the cut-off date for calculating the transposition deficit. Consequently, the transposition deficit more than doubled, from 0.7% in December 2015 to 1.5% in December 2016 (back to its worst level since May 2007).
• If we only consider the 29 directives with the most recent transposition deadlines (1 June to 30 November 2022), the transposition deficit is 12.7%. It is much lower than a year ago, when the transposition deficit for the recent directives was 35.8%. However, it is more than 10 times the average deficit for all directives (1.1%). The transposition rate varies by Member State, from 100% for Estonia and Romania which have transposed all 29 directives to 72% for Belgium and Spain (21 directives transposed). In addition to a high transposition deficit, these directives have an incompleteness rate of 45% as 13 of the 29 directives have not been transposed by at least one Member State (the incompleteness rate for all directives is 6%).
• In most cases, short transposition deadlines do not account for the long delays, nor do administrative burdens or the complexity of the directives. If we look at the 48 directives due in this reporting period (1 December 2021 to 30 November 2022), there is an average transposition period of more than 2 years (27 months) for the 12 directives adopted by the European Parliament and the Council, and an average transposition period of 14 months for the 36 execution directives adopted by the Commission (or by the Council for taxation issues).
• Most Member States need to better plan their transposition and notification processes for directives that have to be incorporated into national law. As the guardian of the Treaties, the Commission strives to launch infringement proceedings for non-communication of the expected national measures within 2 months after the transposition deadline. Too many of these infringement proceedings are being launched because of delays for logistical reasons unrelated to the complexity and/or sensitivity of the directives.
• Based on information provided by Member States, timely transposition seems to be linked to four factors in particular: (i) political attention; (ii) careful planning; (iii) starting transposition work while negotiations are still ongoing; and (iv) close cooperation with national parliaments. Member States are therefore encouraged to proceed with the necessary steps as early as possible on these identified factors and to use tools provided by the Commission. In this context, the 2022 Communication Enforcing EU law for a Europe that delivers outlines the wide range of tools the Commission uses to support more efficient and effective implementation (e.g., IT tools, meeting-based tools, reporting tools, preventing tools, ad-hoc tools).

In addition to today’s transposition deficit, it is also important to look at new directives coming on stream by 30 November 2023.

Given the number of directives to be transposed in the next 12 months (see above “Focus on short-overdue directives”, together with some particularly high backlogs, we can anticipate that several Member States won’t be able to meet the 1% target without drastic action. Nevertheless, the recent achievements of Romania in particular but also Greece, Lithuania and some other Member States show that considerable progress is possible in a short period of time.

Single market directives are legal acts considered to have an impact on the functioning of the single market, as defined in Article 26(2) TFEU. This includes the four freedoms (freedom of movement of people, goods, services and capital) across borders within the EU, and supporting policies that have a direct impact on the single market. These policies include taxation, employment, culture, social policy, education, public health, energy, consumer protection, transport, environment (except nature protection), and information society and media.

The Annual Single Market Report was first published in 2021. The third report “Single Market at 30” was published by the European Commission on 31 January 2023, complementing the publication of the annual Single Market Scoreboard alongside it. It marks the 30 years anniversary of the EU’s single market.

Upon the release of both reports, Thierry Breton, Commissioner for Internal Market said “Today’s reports provide additional evidence of the central role that the single market plays in our daily lives and in helping EU businesses and SMEs to grow and expand. Building on the success of the past 30 years, we will continue to work with Member States to ensure that they apply EU law properly and their administrations do not draw up new barriers in particular in the area of services. In the current geopolitical context and with fierce global competition, a well-functioning single market will be particularly vital for the EU’s competitiveness, job creation and resilience”.

In this regard, this year’s of the Annual Single Market Report takes stock of the integration of the single market over the last 30 years, highlighting the benefits and key achievements for people and businesses. It also discusses the single market from a longer-term perspective through the challenges that the EU is facing.

In particular, the report explores the potential of novel approaches, partnerships and collaborative tools in strengthening trust among authorities and of better cooperation in addressing persisting single market barriers and obstacles. It also touches upon the potential of digital technologies and user-friendly e-government solutions in helping reduce the administrative burdens for businesses and administrations.

The Communication "The Single Market at 30", published on 16 March 2023, looks ahead and calls on a renewed focus on enforcing existing single market rules, supported by benchmarks to address the deficits related to transposition and implementation of EU rules; and removing Member State-level barriers, in particular barriers to the cross-border provision of services, and in the industrial ecosystems with the greatest economic integration potential (retail, construction, tourism, business services and renewable energy sector).

In particular, the Commission, referring to its previous call on the Member States, proposes to set concrete targets on enforcement with the aim of limiting both the transposition as well as the conformity deficit to 0.5%.