Language of document : ECLI:EU:C:2010:200

JUDGMENT OF THE COURT (Fifth Chamber)

15 April 2010 (*)

(Failure of a Member State to fulfil obligations – Directive 2006/43/EC – Statutory audits of annual accounts and consolidated accounts – Failure to transpose completely within the prescribed period – Failure to communicate the measures to transpose the directive)

In Case C‑294/09,

ACTION under Article 226 EC for failure to fulfil obligations, brought on 27 July 2009,

European Commission, represented by G. Braun and A.-A. Gilly, acting as Agents, with an address for service in Luxembourg,

applicant,

v

Ireland, represented by D. O’Hagan, acting as Agent, with an address for service in Luxembourg,

defendant,

THE COURT (Fifth Chamber),

composed of E. Levits, President of the Chamber, M. Ilešič and M. Berger (Rapporteur), Judges,

Advocate General: V. Trstenjak,

Registrar: R. Grass,

having regard to the written procedure,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        By its application, the Commission of the European Communities requests the Court to declare that, by failing to adopt all the laws, regulations and administrative provisions necessary to comply with Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ 2006 L 157, p. 87) or, in any event, by failing to communicate them to it, Ireland has failed to fulfil its obligations under Article 53 of that directive.

 Legal context

2        As recital 5 in the preamble to Directive 2006/43 indicates, the Directive aims at high-level harmonisation of statutory audit requirements. In essence, it lays down rules on approval, continuing education and mutual recognition of statutory auditors, provides for their entry in registers accessible to the public, fixes rules on professional ethics and independence, defines auditing standards, provides for the need for a system of quality assurance, systems of investigations and penalties and public supervision and provides a basis for cooperation both in the relations between the Member States and in the relations of those States with non-member countries.

3        Article 53 of Directive 2006/43 is worded as follows:

‘1.       Before 29 June 2008 Member States shall adopt and publish the provisions necessary to comply with this Directive. They shall forthwith inform the Commission thereof.

2.       When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States.

3.       Member States shall communicate to the Commission the texts of the main provisions of national law which they adopt in the field covered by this Directive.’

 Pre-litigation procedure

4        Since the Commission had not been informed by Ireland of the provisions taken by that Member State to comply with Directive 2006/43 and did not have any other information available to it supporting the conclusion that Ireland had fulfilled its obligation to comply with the directive, the Commission, by letter of 22 July 2008 and in accordance with the procedure laid down in Article 226 EC, gave Ireland formal notice to submit its observations within two months of receipt of that letter.

5        By letter of 20 November 2008, Ireland informed the Commission that the competent authorities were in the process of drafting the necessary measures to comply with that directive. Moreover, it was indicated in that letter that some of the fundamental elements of that directive were already transposed by provisions in force.

6        By letter of 27 November 2008, the Commission delivered a reasoned opinion, in which it concluded that Ireland had failed to fulfil its obligations under Directive 2006/43 and called on that Member State to take the measures necessary to comply with that reasoned opinion within two months of its receipt.

7        Ireland replied to that reasoned opinion by a letter of 30 January 2009, in which it stated that it was at an advanced stage in the process of transposing that directive.

8        Since it had not obtained any further information from Ireland showing that the measures necessary for the transposition of Directive 2006/43 had been adopted, the Commission brought this action.

 The action

9        Ireland submits that the process for the adoption of measures intended fully to transpose Directive 2006/43 is at an advanced stage.

10      That Member State adds that the legislation in force already transposes certain elements of Directive 2006/43. It states that, first, the Companies (Auditing and Accounting) Act 2003 put in place an independent quality assurance system which complies with the requirements of that directive. Secondly, it provides a table listing the elements of that directive which have already been transposed, either substantially or partially, in particular by means of the 2003 Act or the Companies Act 1990. Thirdly, Ireland states that the European Communities (transitional period measures in respect of third country auditors) Regulations 2009, adopted on 23 June 2009, transpose Commission Decision 2008/627/EC of 29 July 2008 concerning a transitional period for audit activities of certain third country auditors and audit entities (OJ 2008 L 202, p. 70).

11      Accordingly, Ireland requests the Court to suspend the infringement proceedings pending the completion of the legislative process commenced and withdrawal of the action by the Commission.

12      The Commission, while stating that the arguments put forward by Ireland do not justify the proceedings being suspended, declined to lodge a reply.

13      In this connection, it is settled case-law that the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation obtaining in the Member State at the end of the period laid down in the reasoned opinion and that the Court cannot take account of any subsequent changes (see, inter alia, Case C-23/05 Commission v Luxembourg [2005] ECR I-9535, paragraph 9, and judgment of 17 December 2009 in Case C-120/09 Commission v Belgium, paragraph 19).

14      It follows that the European Communities (transitional period measures in respect of third country auditors) Regulations 2009, adopted after the time-limit laid down in the reasoned opinion, cannot, in any event, be taken into consideration in this action.

15      As regards the legislation in force in Ireland at the end of the period laid down, it must be stated, first, that the arguments put forward by Ireland before the Court are not such as to establish that that legislation could constitute a correct and complete transposition of Directive 2006/43 and, secondly, that that Member State expressly acknowledges that that transposition was not completed within the prescribed period.

16      It is therefore common ground that, at the date of the expiry of the time‑limit laid down in the reasoned opinion, Ireland had not adopted all the measures necessary fully to transpose that directive.

17      Furthermore, it follows from case-law that, where a directive expressly provides that the measures transposing it are to contain a reference to it or are to be accompanied by such a reference on the occasion of their official publication, it is in any event necessary to adopt a specific measure transposing the directive (see Case C-360/95 Commission v Spain [1997] ECR I-7337, paragraph 13; Case C‑361/95 Commission v Spain [1997] ECR I‑7351, paragraph 15; and judgment of 1 October 2009 in Case C‑502/08 Commission v Spain, paragraph 21).

18      In the present case, Article 53(2) of Directive 2006/43 provides that the measures transposing the Directive must contain a reference to it or be accompanied by such a reference on the occasion of their official publication. Ireland does not claim that the statutory provisions which it relies on fulfil that condition, but merely states that it will submit a formal table of concurrence to the Commission on completion of the transposition process.

19      The action for failure to fulfil obligations brought by the Commission must therefore be considered to be well founded.

20      The finding of a failure to fulfil obligations of itself precludes granting Ireland’s application to suspend the proceedings pending a hypothetical withdrawal of the action by the Commission (Case C-366/00 Commission v Luxembourg [2002] ECR I-1749, paragraph 12, and judgment of 24 February 2005 in Case C-383/04 Commission v Luxembourg, paragraph 7).

21      Consequently, it must be declared that, by failing to adopt within the prescribed period all the laws, regulations and administrative provisions necessary to comply with Directive 2006/43 and, in any event, by failing to communicate to the Commission the provisions of national law considered to contribute to ensuring such compliance, Ireland has failed to fulfil its obligations under Article 53 of that directive.

 Costs

22      Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and Ireland has been unsuccessful, the latter must be ordered to pay the costs.

On those grounds, the Court (Fifth Chamber) hereby:

1.      Declares that, by failing to adopt within the prescribed period all the laws, regulations and administrative provisions necessary to comply with Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and consolidated accounts, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC and, in any event, by failing to communicate to the Commission of the European Communities the provisions of national law considered to contribute to ensuring such compliance, Ireland has failed to fulfil its obligations under Article 53 of that directive.

2.      Orders Ireland to pay the costs.

[Signatures]


* Language of the case: English.