The complaint to the European Commission

1. The complainant submitted an ‘infringement complaint’ to the European Commission, asking it to take action against Denmark in its role as the guardian of the EU treaties[1]. He argued that Danish taxation rules provide for a less favourable treatment of gains on debts/claims in a foreign currency as opposed to debts/claims in Danish kroner, and that this infringes the principle of the free movement of capital[2] in the European Union.

2. The Commission contacted the Danish authorities, informing them of its preliminary analysis. The analysis indicated that there could be an infringement of EU rules as indicated by the complainant.

3. After the Commission had contacted the Danish authorities and examined the matter, it concluded in its final analysis that the Danish taxation rules did not infringe EU rules.

4. Unhappy with how the Commission had handled the infringement complaint, the complainant turned to the Commission again. He argued that the Commission’s preliminary analysis had focussed on the principle of the free movement of capital, whereas its final analysis focussed on the principle of non-discrimination. This change was in the complainant’s view wrong, and he suspected that the Commission had changed legal focus simply to avoid having to take action. He considered that the Commission had manifestly exceeded its discretion. The complainant also took issue with the Commission’s failure to respect certain deadlines in its handling of his infringement complaint.

The European Commission’s response to the complainant

5. The Commission replied that it maintained its final analysis of the issues in the infringement complaint. With regard to its failure to keep certain deadlines, it referred to internal resource problems.

6. The complainant remained dissatisfied with the Commission’s response and therefore turned to the Ombudsman. He argued (1) that the Commission had changed legal focus in its analysis simply to avoid having to take action against Denmark, (2) that it had manifestly breached its discretion, and (3) that the Commission had for no legitimate reason failed to respect certain deadlines in handling his infringement complaint.

The European Ombudsman's findings

7. The Commission is responsible for overseeing the effective application, implementation and enforcement of EU law by the Member States[3]. In the event that a Member State fails to fulfil an obligation under the EU Treaties, the Commission can take measures (infringement proceedings) to bring this infringement to an end. The Commission enjoys wide discretionary powers in deciding whether or not, and when, to start an infringement procedure against a Member State[4].

8. In his complaint to the Ombudsman, the complainant is making a serious first allegation. The complainant basically states that when the Commission ended its handling of the infringement complaint, it was not telling the truth and was acting in bad faith. However, the complainant put forward no evidence that would support such an allegation.

9. Regarding the complainant’s second concern, the Ombudsman finds the complainant’s frustration understandable. The Commission initially appeared to accept his legal view, but later it did not. However, it is not in itself an instance of maladministration for the Commission to change its legal focus during the handling of an infringement complaint, provided that its final assessment is internally consistent and rational within the margins of possible legal interpretation. Having examined the Commission’s final assessment of the complainant’s infringement complaint, the Ombudsman takes the view that the assessment complies with these standards.

10. Regarding the complainant’s third concern, about a failure to respect applicable deadlines, the Commission has not denied that delays occurred (but it cited resource problems). The purpose of a more detailed inquiry into that issue would therefore be to potentially find maladministration regarding a procedural aspect of an already closed infringement complaint, which did not affect the substantive outcome of that complaint. However, the facts of the present case occurred at the time of an own initiative inquiry by the Ombudsman that, among other things, dealt with timeliness in the Commission’s handling of infringement complaints. The Ombudsman made suggestions for systemic improvements[5], and these have largely been accepted by the Commission. The Ombudsman therefore finds that further inquiring into this aspect of the case would not serve a relevant purpose.

11. Based on the information provided by the complainant, the Ombudsman finds no maladministration[6] corresponding to the complainant’s first two concerns, and concludes that further inquiring into the third concern would not serve a relevant purpose.

 

Tina Nilsson

Head of Inquiries - Unit 4

Strasbourg, 25/10/2018

 

[1] Article 258 of the Treaty on the Functioning of the European Union (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12016E258)

[2] For which, see e.g. http://www.europarl.europa.eu/factsheets/en/sheet/39/free-movement-of-capital

[3] Article 17(1) Treaty on the European Union and Article 258 Treaty of the Functioning of the European Union.

[4] Judgment of the Court of Justice of 6 December 1989, Commission v Greece, C-329/88, ECLI:EU:C:1989:618.

[5] Decision of the European Ombudsman in OI/5/2016/AB https://www.ombudsman.europa.eu/en/decision/en/83646

[6] This complaint has been dealt with under delegated case handling, in accordance with Article 11 of the Decision of the European Ombudsman adopting Implementing Provisions