Court of Justice 01-03-1983 ECLI:EU:C:1983:50

I — Facts and procedure

Council Directive 77/780 is intended to coordinate the laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions.

Member States were required to bring into force the measures necessary to comply with the directive, which was notified to them on 15 December 1977, by 15 December 1979 at the latest and to inform the Commission thereof.

Having received no information in this regard, the Commission initiated the procedure under Article 169 of the Treaty by letter dated 29 March 1980. In answer to that letter the Permanent Representative of the Italian Republic informed the Commission by a telex message of 10 September 1980 and a letter of 13 October 1980 that a bill delegating power to implement the directive in question to the government had been introduced into Parliament.

On 24 March 1981, upon finding that the directive had still not been implemented, the Commission issued a reasoned opinion under Article 169 of the Treaty and the Italian Republic was invited to comply therewith within a period of two months.

That reasoned opinion remained unanswered and the Commission lodged the present application at the Court Registry on 30 November 1981.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry.

II — Conclusions of the parties

The Commission claims that the Court should:

“Declare that, by failing to adopt within the prescribed period the provisions necessary to comply with Council Directive 77/780/EEC of 12 December 1977 on the coordination of the laws, regulations and administrative provisions relating to the taking up and pursuit of the business of credit institutions, the Italian Republic has failed to fulfil its obligations under the Treaty;

Order the Italian Republic to pay the costs”.

The Government of the Italian Republic contends that the Court should:

“Declare that the Italian Republic has not failed to fulfil its obligations under Directive 77/780”.

III — Submissions and arguments of the parties

In the Commission's view, the mandatory nature of directives means that the Member States must observe the time-limits which they lay down for the adoption of national implementing provisions. Disregard of those time-limits involves a breach of the Treaty, whichever national body is responsible, by its acts or omissions, for the nonimplemtentation. The Member State in question cannot find justification in reasons relating to national provisions or practices or particular circumstances of a national character.

Those principles have consistently been upheld by the Court.

In its statement of defence the Government of the Italian Republic states that it has submitted to the Senate of the Republic a bill, Article 1 of which delegates legislative power to the Government to adopt rules for the implementation in Italy of Community Directive 77/780 of 12 December 1977, but it observes that compliance with the obligations under Directive 77/780 is not dependent on the passing of that bill and on the adoption, on the basis of the delegated powers provided for therein, of government decrees having the force of law.

In the view of the Government of the Italian Republic, the Italian legislation already complies with the provisions of the Community directive and the Government's proposals to legislate in that field in accordance with the powers delegated by Parliament are motivated rather by the need to adopt precise provisions on matters affected by the directive as part of a wider revision of legislation concerning the whole credit sector. Article 3 of the directive is indirectly implemented in national law by means of Royal Decree-Law No 375 of 12 March 1935. Article 4 of the directive and the rule laid down therein are fully observed by the Italian Government. Observance of Article 8 of the directive is guaranteed by Royal Decree-Law No 375, whilst the obligation of professional secrecy laid down in Article 12 of the directive is guaranteed by the general duty imposed on public officials — and reinforced by criminal sanctions — not to disclose confidential information of which they have acquired knowledge in performing their duties and Article 13 of the directive is guaranteed by the general principles of the Italian legal system.

The Government of the Italian Republic concludes therefore that comparison of the national rules in force with the main provisions constituting the framework of Directive 77/780 reveals substantial agreement which should not be underestimated in considering the position of the Italian Republic in relation to the Community obligations under Directive 77/780.

In the view of the Italian Government, that is all the more true because the directive in question aims to harmonize the rules relating to the taking up and pursuit of the business of credit institutions, as an economic sector subject to supervision by the public authorities, by means of provisions which bind — though not always rigidly — the authorities which in the various States are responsible for supervising the credit sector. In such a context the fact that those authorities comply in practice with the rules laid down by the Community directive constitutes a very significant indication that the national provisions applied by those authorities accord with the provisions of the directive.

The task of ascertaining whether the activities of those authorities comply with the directive is facilitated by the fact that the matters governed by the directive are within the competence of a single central body depending directly on the Bank of Italy and decisions in that field are events of considerable importance and few in number.

In its reply the Commission considers irrelevant the arguments put forward by the Italian Government to the effect that there is substantial harmony between the national legislative provisions and the main provisions of Directive 77/780.

As a preliminary point, the Commission observes that the Italian banking legislation leaves the supervisory authorities a wider discretion. That approach is directly opposed to the very concept of the directive, which aims to establish completely new, specific and mandatory rules. The Commission also observes that, since the taking up and pursuit of the business of credit institutions are regulated by statute in Italy, the amendments made necessary by the directive naturally require to be sanctioned by a measure having the force of law.

The Commission then challenges the defendant's contention that Article 3 (2), Article 4, Article 8 (2) (3) and (4) and Article 12 (2) and (3) have their equivalent in Italian law without specific implementing provisions being necessary.

Finally, the Commission emphasizes that a certain number of provisions of the directive which in its view are of special importance for the purposes of the present action have not been mentioned by the defendant. The Commission refers, in particular, to Article 3 (3) (d), Article 4 (2), Article 5 and Article 7.

On the basis of those considerations the Commission considers that it has sufficiently proved the failure by the Italian Republic to fulfil its obligations under Directive 77/780 and it adheres to its original conclusions.

In its rejoinder the Government of the Italian Republic states that the bill delegating power to implement Directive 77/780 was approved by the Senate of the Republic and transmitted to the Chamber of Deputies on 15 April 1982. It states however that that must not be understood as recognition of the validity of the Commission's objections to the way in which the Government of the Italian Republic has so far implemented Directive 77/780.

According to the Government of the Italian Republic, it is wrong to claim that if a directive relates to a matter subject to rules contained in an ordinary law it is necessary for the provisions implementing the directive to be adopted by means of an ordinary law when, as in the present case, the provisions implementing the directive may be inserted, without conflict or contradiction, in the legislative instrument determined by national law.

The Italian banking legislation in force and Directive 77/780 have an undeniably common basis involving the fundamental principle that the banking sector is subject to public control. The difference to be bridged between the national law and the Community directive arises from the fact that whereas the first does not lay down criteria for the grant or refusal of authorization the second determines in advance the requirements for authori- zation and the. circumstances in which authorization must be refused. The discretionary power so accorded to the competent body by Italian legislation implies the power to substitute, for individual appraisal for each case, administrative rules of a general nature. Those rules, which are consistent with the requirements of certainty in legal relations and equality of treatment, may very well determine with binding force the objective criteria and conditions which must be observed in the adoption of specific measures.

The Italian Government maintains that the provisions of Italian legislation and their application accord substantially with the directive. In that respect the Italian Government emphasizes that observance of those rules by the supervisory body is subject to judicial review: a decision emanating from the administrative authorities may be challenged before the district administrative court in the first instance and before the Consiglio di Stato [State Council] by way of appeal.

The Government of the Italian Republic regrets that the Commission has refused to attach any importance to a position “in practice” which does not correspond precisely to legislative provisions. That is all the more regrettable since Directive 77/780 deals with special areas in which the conduct of the public authorities, even if based on legal rules, is affected in practice by traditions and customs which offer considerable resistance to changes in rules.

Without denying the importance of the certainty which is secured by the adoption of formal provisions to honour the obligation referred to in the third paragraph of Article 189 of the Treaty, the Government of the Italian Republic insists, that certainty is of use only if the supervisory authorities act in accordance with the provisions of the directive. That is the position in Italy and the Italian Government would like the Commission to specify why it considers that Italy has completely failed to implement Directive 77/780. It also queries the appropriateness of the provisions adopted by the other Member States to ensure effective equality of treatment between credit institutions.

IV — Oral procedure

At the sitting on 26 October 1982 oral argument was presented for the Commission by its Legal Adviser, A. Abate, and for the Government of the Italian Republic, by P. G. Ferri, Avvocato dello Stato.

The Advocate General delivered her Opinion at the sitting on 8 December 1982.

Costs

12 Under Article 69 (2) of the Rules of Procedure the unsuccessful party is to be ordered to pay the costs.

13 Since the defendant has failed in its submissions it must be ordered to pay the costs.