Case C-47/08, Commission v Belgium

Nationality condition for access to the profession of notary discrimination on grounds of nationality

In this case, the Commission asked the Court to declare that, by reserving access to the profession of notary exclusively to its own nationals, the Belgium had failed to fulfil its obligations under Art. 43 EC and the first paragraph of Art. 45 EC.

The Court first of all held that the concept of establishment within the meaning of Art. 43 EC was a very broad one, allowing a national of the European Union to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to economic and social interpenetration within the European Union in the sphere of activities of self-employed persons (see, inter alia, Case C‑161/07 Commission v Austria [2008]).

The Court held that Article 43 EC was intended to ensure that all nationals of all Member States who established themselves in another Member State for the purpose of pursuing activities there as self-employed persons receive the same treatment as nationals of that State, and it prohibited, as a restriction on freedom of establishment, any discrimination on grounds of nationality resulting from national legislation (see: Case 270/83 Commission v France [1986]).

The Court held that the Belgium legislation at issue reserved access to the profession of notary to Belgian nationals, thus enshrining a difference in treatment on the ground of nationality which was prohibited in principle by Art. 43 EC.

Belgium submitted, however, that the activities of notaries were outside the scope of Art. 43 EC because they were connected with the exercise of official authority within the meaning of the first paragraph of Art. 45 EC.

The Court held that as regards the concept of the “exercise of official authority” within the meaning of the first paragraph of Art. 45 EC, the assessment of that concept must take account of the character as European Union law of the limits imposed by that provision on the permitted exceptions to the principle of freedom of establishment, so as to ensure that the effectiveness of the Treaty in the field of freedom of establishment was not frustrated by unilateral provisions of the Member States (see, to that effect, Reyners, paragraph 50; Commission v Greece, paragraph 8; and Case C-438/08 Commission v Portugal [2009]

The Court furthermore held that since the first paragraph of Art. 45 EC was an exception to the fundamental rule of freedom of establishment, it must be interpreted in a manner which limits its scope to what was strictly necessary to safeguard the interests it allowed the Member States to protect (Case 147/86 Commission v Greece [1988]; Case C-114/97 Commission v Spain [1998]  ; Case C-451/03 Servizi Ausiliari Dottori Commercialisti [2006]; Case C-393/05 Commission v Austria [2007]; Case C‑404/05 Commission v Germany [2007]).  

The Court held the activities of notaries as defined in the current state of the Belgian legal system were not connected with the exercise of official authority within the meaning of the first paragraph of Art. 45 EC.

Consequently, the nationality condition required by Belgian legislation for access to the profession of notary constituted discrimination on grounds of nationality prohibited by Art. 43 EC.

Text of Judgment

Case C‑306/08, Commission v Spain

Court further clarifies application EU procurement rules to urban development

By its action, the Commission criticised Spain for awarding integrated action programmes (IAPs) for the joint urban development of several parcels in accordance with a single programme converting those parcels into building plots in breach of Directives 93/37 and 2004/18 respectively.

The Court stressed that the Commission’s complaints concerned only the procedure for approving IAPs in indirect management, which, under the legislation in question, involved the delegation, by the competent contracting authority to an individual, of the status of developer, selected according to a competitive public procedure whether or not the developer owned the plots concerned.

The Court held that the concept of “public works contracts” within the meaning of Art. 1(a) of Directive 93/37 and of Art. 1(2)(b) of Directive 2004/18 covered contracts for pecuniary interest, concluded in writing between one or more economic operators and one or more contracting authorities and having as their object either the execution, or both the design and execution, of works related to one of the activities referred to in Annex II to Directive 93/37 or Annex I to Directive 2004/18 or of a work defined in Art. 1(c) of Directive 93/37 or Art. 1(2)(b) of Directive 2004/18, or the execution, by whatever means, of a work corresponding to the requirements specified by the contracting authority. The Court held that a contract could be deemed to be a “public works contract” only if its subject-matter corresponded to this definition and that works which were incidental to, and not the subject-matter of, the contract did not justify the contract’s qualification as a public works contract.

The Court reiterated that, where a contract contained elements relating both to a public works contract and another type of contract, it was the main object of the contract which determined which body of European Union rules on public contracts was to be applied in principle (see Case C-220/05 Auroux and Others [2007]).

The Court held that that determination must be made in the light of the essential obligations which predominated and which, as such, characterised the transaction, as opposed to those which were only ancillary or supplementary in nature and were required by the very object of the contract (Case C‑412/04 Commission v Italy [2008]).

The Court held that the Commission confined itself to putting forward the argument that the urban development contracts at issue must be classified as “public works contracts” on the ground that the main object of IAPs was, for the purposes of Arts 1(c) of Directive 93/37 and 1(2)(b) of Directive 2004/18, a “work” of urban development of two or more parcels leading to the construction of highway access by a paved road, the distribution of drinking water and electricity, the evacuation of waste water from gutters and public lighting.

The Court furthermore observed that the Spain rejected the Commission’s assessment that IAPs should be classified as a “work’, in the sense of Directives 93/37 and 2004/18, and contended that the execution of such a work did not constitute its exclusive or even fundamental purpose. Spain contended that the contracts at issue must be classified as “service concessions’, within the meaning of Art. 1(4) of Directive 2004/18.

The Court reiterated that in proceedings under Art. 226 EC for failure to fulfil obligations, it was for the Commission to prove that failure. It was the Commission, indeed, which must place before the Court all the information needed to enable the Court to establish that failure, and in so doing the Commission might not rely on any presumptions (Case C-490/09 Commission v Luxembourg [2011] ).

The Court held that Commission had not sought to substantiate its own allegations or to refute those of the defendant Member State by detailed examination of that information. The Court therefore found that it had not been established that the works consisting of the connection and integration of the plots concerned to the existing infrastructure, energy, communications and public services networks constituted the main object of the contract concluded between the community and the urban developer within the framework of an IAP in indirect management.

The Court held that in fact, the execution of the IAP by the developer included activities which could not be classified as “works’, within the meaning of the directives relied on by the Commission in its application, namely the preparation of the development plan, the proposal and management of the corresponding land consolidation project, obtaining for the administration free of charge plots for public ownership and for the community’s public land bank, management of the legal conversion of the plots concerned or even the equitable division of the costs and profits between the parties concerned as well as the transactions for financing and guaranteeing the cost of the investments, works, installations and compensation necessary for the execution of the IAP.

The Court furthermore held that some of the activities which IAPs involved seemed to correspond, by their nature, to the activities referred to in Category 12 in Annexes IA to Directive 92/50 and IIA to Directive 2004/18, relating to the services referred to, respectively, in Art. 1(a) of Directive 92/50 and Art. 1(2)(d) of Directive 2004/18.

The Court concluded that the Commission had not proved that the main object of the contract concluded between the local authority and the urban developer was a public works contract within the meaning of Directive 93/37 or Directive 2004/18, which was a condition precedent to a declaration of the alleged failure to fulfil obligations.

The Court therefore found that Commission’s action had to be dismissed.

Text of Judgment

Joined Cases C‑165/09 to C‑167/09, Stichting Natuur en Milieu

These references for a preliminary ruling concerned the interpretation of Art. 9 of the IPPC Directive 96/61 (Directive 96/61) and certain provisions of the NEC Directive (Directive 2001/81).

The references had been made in proceedings brought, as regards Case C-165/09, by the foundations Stichting Natuur en Milieu and Stichting Greenpeace Nederland and by four natural persons against the Provincial Executive of the Province of Groningen concerning a decision by which the latter granted the company RWE Eemshaven holding BV, formerly RWE Power AG, a permit for the construction and operation of a power station in the province of Groningen.

As regards Cases C-166/09 and C-167/09, proceedings had been brought by the foundations Natuur en Milieu, Stichting Zuid-Hollandse Milieufederatie and Greenpeace and the Association of concerned Citizens of Voorne against the Provincial Executive of the Province of South Holland concerning the decisions by which that authority granted the companies Electrabel Nederland N.V. and E.On Benelux N.V. respectively, permits for the construction and operation of two power stations in the province of South Holland.

Obligation to include national emission ceilings?

The referring Court first of all asked whether Art. 9(1), (3) and (4) of the IPPC Directive must be interpreted as meaning that, when granting an environmental permit for the construction and operation of an industrial installation, the competent national authorities were obliged to include among the conditions for grant of that permit the national emission ceilings for SO2 and NOx laid down by the NEC Directive.

The Court first of all pointed out that none of these paragraphs of Art. 9 of the IPPC Directive referred, expressly or by implication, to those emission ceilings. Furthermore, the obligation, laid down in the second sentence of Art. 9(4) of the IPPC Directive, to see to it that the conditions of the permit contained provisions on the minimisation of long-distance or transboundary pollution and ensure a high level of protection for the environment as a whole, could be interpreted only in the context of the system established by the IPPC Directive itself and in particular of the rule, set out in the first sentence of Art. 9(4), under which it was mandatory for the emission limit values to be based on the best available techniques.

The Court held that equally no provision of the NEC Directive imposed obligations on the competent national authorities to regard the national emission ceilings for SO2 and NOx, when granting an environmental permit, as a condition for the permit.

On the contrary, the European Union legislature expressly stated, in recital 19 in its preamble, that the NEC Directive should applied ‘without prejudice to [the provisions of the IPPC Directive] in relation to emission limit values and use of best available techniques’, thereby, according to the Court, indicating that the obligations owed by the Member States under the NEC Directive could not directly affect those flowing, inter alia, from Art. 9 of the IPPC Directive.

According to the Court, this interpretation was borne out, finally, by the different purpose and the general scheme of both of the directives in question.

The answer to the first question therefore was it followed from Article 9(1), (3) and (4) of the IPPC Directive that, when granting an environmental permit for the construction and operation of an industrial installation, such as those at issue in the main actions, the Member States were not obliged to include among the conditions for grant of that permit the national emission ceilings for SO2 and NOx laid down by the NEC Directive, whilst they must comply with the obligation arising from the NEC Directive to adopt or envisage, within the framework of national programmes, appropriate and coherent policies and measures capable of reducing, as a whole, emissions of inter alia those pollutants to amount not exceeding the ceilings laid down in Annex I to that directive by the end of 2010 at the latest.

Obligations during period prescribed for transposition of directive

The referring Court furthermore asked what obligations were owed by the Member States under the NEC Directive during the period between 27 November 2002, when the time-limit for its transposition expired, and 31 December 2010, the deadline after which the Member States must comply with the emission ceilings laid down by it.

The Court of Justice first of all reiterated that that, during the period prescribed for transposition of a directive, the Member States to which it was addressed must refrain from taking any measures liable seriously to compromise the attainment of the result prescribed by that directive (Case C-129/96 Inter-Environnement Wallonie [1997] ; Case C-14/02 ATRAL [2003]; and Joined Cases C-261/07 and C-299/07 VTB-VAB and Galatea [2009]).

The Court held that such an obligation to refrain owed by all the national authorities must be understood as referring to the adoption of any measure, general or specific, liable to produce such a compromising effect (see Case C-212/04 Adeneler and Others [2006]).

This obligation to refrain from taking measures was also owed by the Member States, by virtue of the application of Art. 4(3) TEU in conjunction with the third paragraph of Art. 288 TFEU, during a transitional period in which they were authorised to continued to apply their national systems, even though those systems did not complied with the directive in question (see Case C-316/04 Stichting Zuid-Hollandse Milieufederatie [2005] and Case C-138/05 Stichting Zuid-Hollandse Milieufederatie [2006]).

The Court however held that a simple specific measure relating to a single source of SO2 and NOx, consisting in the decision to grant an environmental permit for the construction and operation of an industrial installation, did not appear liable, in itself, seriously to compromise the result prescribed by the NEC Directive, namely limiting emissions from those sources of pollution into the atmosphere to annual total amounted not exceeding the national ceilings in 2010 at the latest.

 The Court held that this conclusion applied all the more where, in circumstances such as those in the main actions, the installation in question was not to be brought into operation until 2012 at the earliest.

The Court furthermore held that the obligation of a Member State to take all the measures necessary to achieve the result prescribed by a directive was a binding obligation imposed by the third paragraph of Art. 288 TFEU and by the directive itself (Case 152/84 Marshall [1986];Case 72/95 Kraaijeveld and Others [1996]).

The Court reiterated that it followed from that obligation that, during the period prescribed for transposition, the Member States must take the measures necessary to ensure that the result prescribed by the directive was achieved at the end of that period. The same was true as regards a transitional period, such as the period provided for in Art. 4 of the NEC Directive.

 As regards the specific content of those national programmes the Court nevertheless emphasised the wide flexibility accorded to the Member States by the NEC Directive prevented limits from being placed upon them in the development of the programmes and their thus being obliged to adopt or to refrain from adopting specific measures or initiatives for reasons extraneous to assessments of a strategic nature which take account globally of the factual circumstances and the various competing public and private interests.

The Court summarised that during the transitional period from 27 November 2002 to 31 December 2010, provided for in Art. 4 of the NEC Directive:

– Art. 4(3) TEU, the third paragraph of Art. 288 TFEU and the NEC Directive required the Member States to refrain from adopting any measures liable seriously to compromise the attainment of the result prescribed by that directive;

– adoption by the Member States of a specific measure relating to a single source of SO2 and NOx did not appear liable, in itself, seriously to compromise the attainment of the result prescribed by the NEC Directive. It was for the national court to review whether that was true of each of the decisions granting an environmental permit for the construction and operation of an industrial installation such as the permit at issue in the main actions;

– the third paragraph of Art. 288 TFEU and Arts 6, 7(1) and (2) and 8(1) and (2) of the NEC Directive required the Member States, first, to draw up, to update and to revise as necessary programmes for the progressive reduction of national SO2 and NOx emissions, which they were obliged to make available to the public and appropriate organisations by means of clear, comprehensible and easily accessible information, and to notify to the Commission within the time-limit prescribed, and second, to prepare and annually update national inventories of those emissions and national emission projections for 2010, which they must report to the Commission and the European Environment Agency within the time-limit prescribed;

– the third paragraph of Art. 288 TFEU and the NEC Directive itself did not require the Member States to refuse or to attach restrictions to the grant of an environmental permit for the construction and operation of an industrial installation such as the permit at issue in the main actions, or to adopt specific compensatory measures for each permit granted of that kind, even where the national emission ceilings for SO2 and NOx were exceeded or risked being exceeded.

Whether Arts 4 and 6 NEC Directive directly effective

Thirdly, the national court asked whether and, if so, to what extent an individual could rely directly before the national courts upon the obligations imposed by Arts 4 and 6 of the NEC Directive.

The Court reiterated that, whenever provisions of a directive appear, so far as their subject-matter was concerned, to be unconditional and sufficiently precise, they might be relied upon by individuals against the Member State where the latter had failed to implement the directive in domestic law by the end of the period prescribed or where it had failed to implement the directive correctly (see, inter alia, Joined Cases C‑6/90 and C‑9/90 Francovich and Others [1991]; Case C‑62/00 Marks & Spencer [2002]; and Joined Cases C-397/01 to C‑403/01 Pfeiffer and Others [2004]).

The Court held that it would be incompatible with the binding effect which the third paragraph of Art. 288 TFEU ascribes to a directive to exclude, in principle, the possibility of the obligation imposed by a directive being relied on by persons concerned. That consideration applied particularly in respect of a directive whose objective was to control and reduce atmospheric pollution and which was designed, therefore, to protect public health (see Case C-237/07 Janecek [2008]).

The Court nevertheless added that a provision of European Union law was unconditional where it set forth an obligation which was not qualified by any condition, or subject, in its implementation or effects, to the taking of any measure either by the institutions of the European Union or by the Member States (see, inter alia, Case 28/67 Molkerei-Zentrale Westfalen/Lippe [1968] and Case C‑236/92 Comitato di coordinamento per la difesa della cava and Others [1994]).

According to the Court, it was clear that Article 4 of the NEC Directive did not display the characteristics set out above. That Article was purely programmatic in nature, in that it merely laid down an objective to be attained, leaving the Member States wide flexibility as to the means to be employed in order to reach that objective.

On the other hand, the Court found that Art. 6 of the NEC Directive was unconditional and sufficiently precise in that it required the Member States in unequivocal terms, first, under Art. 6(1) and (3), to draw up national programmes for the progressive reduction of national emissions of inter alia SO2 and NOx in order to comply with the ceilings laid down in Annex I to the directive by the end of 2010 at the latest and, second, as provided in Art. 6(4), to make those programmes available to the public and to appropriate organisations such as environmental organisations by means of clear, comprehensible and easily accessible information.

 Text of Judgement

Case C‑115/09,Bund für Umwelt und Naturschutz Deutschland, Landesverband Nordrhein‑Westfalen

Plea raised against decision which alleged infringement of the rules of national law flowing from Article 6 of Habitats Directive must be capable of being relied on by environmental protection organisation.

This reference for a preliminary ruling had been made in proceedings between the Nordrhein-Westfalen branch of Friends of the Earth, Germany; “Friends of the Earth” and the Bezirksregierung Arnsberg, concerning the authorisation granted by the latter to Trianel Kohlekraftwerk GmbH & Co. KG (‘Trianel’) for the construction and operation of a coal-fired power station in Lünen.

The referring court asked essentially whether Art. 10a of Directive 85/337 precluded legislation which did not permit non-governmental organisations promoting environmental protection, as referred to in Art. 1(2) of the “EIA” (Environmental Impact Assessment) Directive (Directive 85/337), to rely before the courts, in an action contesting a decision authorizing projects likely to have “significant effects on the environment” for the purposes of Art. 1(1) of Directive 85/337, on the infringement of a rule which protected only the interests of the general public and not the interests of individuals.

The referring court also asked the Court whether Art. 10a of the EIA Directive precluded such legislation in general or only in so far as it did not permit an organisation of that nature to rely before the courts on particular provisions of environment law, whether of Community or purely national origin.

The Court held that whichever option a Member State chose for the admissibility of an action, environmental protection organisations were entitled, pursuant to Art. 10a of the EIA Directive, to have access to a review procedure before a court of law or another independent and impartial body established by law, to challenge the substantive or procedural legality of decisions, acts or omissions covered by that Article .

The Court furthermore held that where, in the absence of EU rules governing the matter, it was for the legal system of each Member State to designate the courts and tribunals having jurisdiction and to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derived from EU law, those detailed rules must not be less favourable than those governing similar domestic actions (principle of equivalence) and must not made it in practice impossible or excessively difficult to exercise rights conferred by EU law (principle of effectiveness).

Although the national legislature was entitled to confined to individual public-law rights the rights whose infringement might be relied on by an individual in legal proceedings contesting one of the decisions, acts or omissions referred to in Art. 10a of Directive 85/337, such a limitation could not be applied as such to environmental protection organisations without disregarding the objectives of the last sentence of the third paragraph of Art. 10a of Directive 85/337.

The Court held that if, as was clear from that provision, those organisations must be able to rely on the same rights as individuals, it would be contrary to the objective of giving the public concerned wide access to justice and at odds with the principle of effectiveness if such organisations were not also allowed to rely on the impairment of rules of EU environment law solely on the ground that those rules protected the public interest.

It followed first that the concept of “impairment of a right” could not depended on conditions which only other physical or legal persons could fulfil, such as the condition of being a more or less close neighbour of an installation or of suffering in one way or another the effects of the installation’s operation.

It followed more generally that the last sentence of the third paragraph of Art. 10a of Directive 85/337 must be read as meaning that the “rights capable of being impaired” which the environmental protection organisations were supposed to enjoy must necessarily include the rules of national law Implementing EU environment law and the rules of EU environment law having direct effect.

The Court that “in order to give the referring court the most useful answer possible, it should be pointed out that a plea raised against a contested decision which alleged infringement of the rules of national law flowing from Art. 6 of the Habitats Directive must be capable of being relied on by an environmental protection organisation.”

The Court furthermore held that a non-governmental organisation could derive, from the last sentence of the third paragraph of Art. 10a of Directive 85/337, as amended by Directive 2003/35, the right to rely before the courts, in an action contesting a decision authorising projects “likely to have significant effects on the environment” for the purposes of Art. 1(1) of Directive 85/337, even where, on the ground that the rules relied on protected only the interests of the general public and not the interests of individuals, national procedural law did not permit this.

Text of Judgment

Case C‑305/09, Commission v Italy

Court of Justice stresses limited reasons not to recover State Aid

Only when “absolutely impossible”

This case concerned an Italian aid scheme which allowed any undertaking liable to corporate income tax in Italy and in business on 2 October 2003 to reduce its taxable income by the amount of the expenses directly incurred with respect to its participation in trade fairs abroad. For undertakings whose business cycle followed the calendar year, that reduction affected the determination of their 2004 taxable income.

The Commission decided, having found the aid scheme in question to be incompatible, that it was necessary to recover from the beneficiaries the aid already made available (Decision 2005/919)

In order to implement that decision, the Italian authorities adopted a number of measures and informed the Commission accordingly. However, since it considered that the recovery of the aid had not progressed despite the legislative action, the Commission decided to bring the present action.

The Court reiterated that the Member State to which a decision requiring recovery of unlawful aid was addressed was obliged under Art. 249 EC (now Art. 288 TFEU) to take all measures necessary to ensured implementation of that decision (Case C‑232/05 Commission v France (2006)). The Member State must actually recover the sums owed (see Case C-304/09 Commission v Italy [2010).

Pursuant to the second subparagraph of Art. 2(1) of Decision 2005/919, Italy was to recover the aid in question from the beneficiaries at the earliest opportunity. The Court noted that several years after Decision 2005/919 was notified to Italy and after the expiry of all the deadlines fixed by that decision, some of the unlawful aid had not yet been recovered by Italy. Such a situation was, according to the Court, clearly irreconcilable with that Member State’s obligation actually to recover the sums owed and constituted a breach of the duty to implement Decision 2005/919 immediately and effectively.

That founding was not affected by the fact that about 90% of the capital of the unlawful aid had been recovered up to the day of the hearing in the present case.

As regards the arguments submitted by Italy in its defence, the Court held that the only defence available to a Member State in infringement proceedings brought by the Commission under Art. 88(2) EC was to plead that it was absolutely impossible for it properly to implement the decision at issue (see, in particular, Case C‑177/06 Commission v Spain [2007]; Case C‑214/07 Commission v France [2008]).

The condition that it be absolutely impossible to implement a decision was not fulfilled where the defendant Member State merely informed the Commission of the legal, political or practical difficulties involved in implementing the decision, without taking any real steps to recover the aid from the undertakings concerned, and without proposing to the Commission any alternative arrangements for Implementing the decision which could have enabled those difficulties to be overcome (see, in particular Joined Cases C‑485/03 to C‑490/03 Commission vSpain [2006]).

The Court held that the fact that Italy found it necessary to verify the individual situation of each company concerned, to conduct a screening to identify persons in receipt of benefits covered by the Commission’s decision, could not justify non‑implementation of that decision (see Case C-99/02 Commission v Italy [2004]).

The Court held, as regards, moreover, the Commission’s argument concerning the right to adopt, by the national courts, suspension measures in the course of the process of recovery of the aid, that such measures might be granted, provided that certain conditions stated in the case-law were met (see, in particular, Joined Cases C-143/88 and C‑92/89 Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest [1991] and Case C-465/93 Atlanta Fruchthandelsgesellschaft and Others (I) [1995]).

The Court stressed that national courts were required, under Art. 14(3) of Regulation 659/1999, to ensure that the decision ordering the recovery of the unlawful aid was fully effective and achieved an outcome consistent with the objective pursued by that decision. In fact, annulment of a national measure implementing a Commission decision ordering recovery of unlawful aid, which impeded the immediate and effective implementation of that decision, was irreconcilable with the requirements arising from Art. 14(3) of Regulation 659/1999 (see Case C‑210/09 Scott and Kimberly Clark [2010]).

The Court concluded that, by failing to adopt, within the prescribed time‑limits, all necessary measures to recover from the beneficiaries all the aid granted under the aid scheme declared unlawful and incompatible with the common market by Decision 2005/919, Italy had failed to fulfill its obligations under Art. 2 of that decision.

Text of Judgment

Case C‑291/09, Francesco Guarnieri

Requirement non-Belgian nationals to provide security for costs too uncertain and indirect to be regarded as hindering intra-Community trade.

This reference for a preliminary ruling had been made in proceedings between Francesco Guarnieri & Cie, a company governed by Monegasque law established in Monaco, and Vandevelde Eddy VOF, whose registered office was in Belgium, concerning the delivery of and payment for various goods.

Article 851 of the Belgian Judicial Code distinguished between Belgian and non-Belgian nationals on the basis of nationality. It required non-Belgian nationals to provide security for costs where there was no reciprocal arrangement between their State of nationality and Belgium.  d

The referring Court asked whether Articles 28 EC, 29 EC and 30 EC preclude a claimant of Monegasque nationality, who lodged a claim in Belgium for payment of invoices relating to the delivery of “twister-glazen” (glasses) and tea-lights with accessories, from being required, upon application by a defendant of Belgian nationality, to give security for the costs and damages arising from the proceedings which he may be ordered to pay.

The Court pointed out Articles 52 TEU and 355 TFEU did not include in ‘the territorial scope of the Treaties’ the territory of the Principality of Monaco. Furthermore, exclusion from the customs territory of the European Union entailed the inapplicability of the FEU Treaty rules on the free movement of goods (Case C‑30/01 Commission v United Kingdom [2003]).

However, pursuant to Article 3(2)(b) of Regulation 2913/92, the territory of the Principality of Monaco was to be considered to be part of the customs territory of the European Union. As no customs duty or charge having equivalent effect could, consequently, be applied to trade between Monaco and the Member States, goods originating in Monaco, exported directly to a Member State, must be treated as if they originated in those Member States.

The result of that assimilation to goods originating in Member States was that goods originating in Monaco were covered by the rules of the Treaty on the free movement of goods (see, by analogy, Case 41/76 Donckerwolcke and Schou [1976]).

The Court held that in relation to the question of whether a provision of a Member State, that required any foreign national, such as Monegasque nationals, to provide security pending judgment when he sought to bring proceedings against a national of that Member State, although such a requirement was not imposed on nationals of that State, constituted a hindrance to the free movement of goods, all trading rules enacted by Member States, that were capable of hindering, directly or indirectly, actually or potentially, intra‑Community trade, were to be considered to be measures having an effect equivalent to quantitative restrictions (see, to that effect, Case 8/74 Dassonville [1974] and Case C‑421/09 Humanplasma [2010]).

However, a national rule, such as that relating to cautio judicatum solvi under Article 851 of the Judicial Code, was purely procedural and its purpose was not to regulate trade in goods. Further, its application depended not on the origin of the goods in question, but on two cumulative conditions, namely, first, that a dispute must arise subsequent to the conclusion of a contract that lead to litigation before the Belgian courts and, second, that any such action must involve a Belgian national as defendant who choose to avail himself of the provision in question.

The Court admitted that a measure of that sort had the effect of making traders wishing to bring proceedings subject to different procedural rules according to whether or not they had the nationality of the Member State concerned.

Nevertheless, the possibility that nationals of other Member States would therefore hesitate to sell goods to purchasers established in that Member State who had the nationality of that State was too uncertain and indirect for that national measure to be regarded as liable to hinder intra-Community trade (see, by analogy, Case C‑69/88 Krantz [1990]; Case C‑379/92 Peralta [1994]; Case C‑96/94 Centro Servizi Spediporto [1995]; and Case C‑412/97 ED [1999].

The causal link between the possible distortion of intra-Community trade and the difference in treatment at issue was therefore not established.

Article 34 TFEU therefore did not preclude a national measure such as that established by Article 851 of the Judicial Code.

Case C‑119/09, Société fiduciaire nationale d’expertise comptable

Services Directive precludes total ban canvassing by qualified accountants

  

This reference for a preliminary ruling concerned the interpretation of Article 24 of the services (Directive 2006/123).

The reference had been made in proceedings between the French Association of Qualified Accountants and the French Minister for the budget in an action for annulment of the Code of professional conduct and ethics of qualified accountants (Decree No 2007-1387).

Société fiduciaire had applied to the Conseil d’État for the annulment of Decree No 2007-1387 in so far as it prohibited canvassing. Société fiduciaire submitted that the general and absolute prohibition on any canvassing under Article 12-I of the Code was contrary to Article 24 of Directive 2006/123 and seriously undermined the implementation of that directive.  

The Court first of all addressed the argument of the French argument that the time-limit for the transposition of Directive 2006/123 (December 28, 2009), had not yet expired on the date of the decision to refer, which was March 4.

The Court has often held that Member States must refrain from taking any measures liable seriously to compromise the attainment of the result prescribed by that directive (Case C‑129/96 Inter-Environnement Wallonie [1997]; Case C‑14/02 ATRAL [2003]; and Joined Cases C‑261/07 and C‑299/07 VTB-VAB and Galatea [2009]

The Court now held that it was for the referring court before which the main proceedings were pending to assess whether the national provisions whose legality was challenged were liable seriously to compromise the attainment of the result prescribed by a directive.

In making that assessment, the referring court must consider, in particular, whether the provisions in issue purported to constitute full transposition of the directive, as well as determining the effects in practice of applying those incompatible provisions and of their duration in time.   

 The Court held that to establish whether Article 24 of Directive 2006/123, and particularly Article 24(1), proscribed a prohibition on canvassing such as that laid down by the national legislation at issue in the main proceedings, it was necessary to interpret that provision by reference not only to its wording but also to its purpose and context and the objective pursued by the legislation in question.

The Court reiterated that Directive 2006/123 was intended to remove restrictions on the freedom of establishment for providers in Member States and on the free movement of services between the Member States, in order to contribute to the completion of a free and competitive internal market.

According to the Court, it followed from both the purpose and the context of Article 24 that the intention of the EU legislature was not only to put an end to total prohibitions, on the members of a regulated profession, from engaging in commercial communications whatever their form but also to remove bans on one or more forms of commercial communication within the meaning of Article 4(12) of Directive 2006/123, such as, for example, advertising, direct marketing or sponsorship.

However, the Court held that the Member States retained the right to lay down prohibitions relating to the content or methods of commercial communications as regards regulated professions, provided that the rules laid down were justified and proportionate for the purposes of ensuring, in particular, the independence, dignity and integrity of the profession, as well as the professional secrecy necessary in its practice. Commercial communication covered not only traditional advertising but also other forms of advertising and communications of information intended to obtain new clients.

The Court held that canvassing constituted a form of communication of information intended to seek new clients. However, canvassing involved personal contact between the provider and a potential client, in order to offer the latter services. It could, therefore, be classified as direct marketing. Consequently, canvassing came within the concept of ‘commercial communication’, within the meaning of Articles 4(12) and 24 of Directive 2006/123.

The Court held that the French ban on canvassing was of broad conception, in that it prohibited any canvassing, whatever its form, content or means employed. Thus, that ban included a prohibition of all means of communication enabling the carrying out of that form of commercial communication.

It followed that such a ban must be regarded as a total prohibition of commercial communications prohibited by Article 24(1) of Directive 2006/123.

Case C-331/09, Commission v. Poland

Poland infringing Article 288 TFEU by not recovering state aid within prescribed period  

By its application, the Commission sought a declaration from the Court that, by failing to comply with its obligations under Decision 2008/344 of 23 October 2007, Poland had failed to comply with the provisions of the fourth paragraph of Article 249 EC (now Article 288  TFEU) and Articles 3, 4 and 5 of that decision.

By that decision, Commission had declared that the measures taken by Poland in favour of the Technologie Buczek Group (‘TBG’) constituted State aid incompatible with the common market.

TBG operated in the steel production sector as a manufacturer of tubes and was composed of Technologie Buczek SA (‘TB’), which owned several subsidiaries, two of which, according to the Commission, were also beneficiaries of the aid in question, namely Buczek Automotive sp. z.o.o. (‘BA’) and Huta Buczek sp. z.o.o (‘HB’).

The aid at issue received by TBG consisted in the non-enforcement of public debt held by several public creditors, in particular the social security authority, Sosnowiec municipality, where TBG’s head office was situated, and the State Fund for the Rehabilitation of Disabled Persons.

When in October 2009,  the Commission, taking the view that Poland had still not properly implemented Decision 2008/344, decided to bring the present action.  The Commission argued that Articles 3 and 4 of the Commission’s decision provided for a period of four months from the date of its notification to recover the aid at issue, while, after more than 21 months after the date of reception of that decision by Poland, no aid had been repaid by HB and BA and, in any event, the Commission had not been informed, in accordance with Article 5 of that decision, of the steps taken by that Member State.

As a subsidiary point, the Commission relied on the fact that TB had repaid only part of the total amount to be recovered from TBG. Finally, it submitted that Poland had not pleaded exceptional circumstances which would have prevented it from properly implementing that decision.

As far as concerns the effective implementation of Decision 2008/344, the Commission, relying in particular on Case 106/77 Simmenthal [1978] and Case C-119/05 Lucchini [2007]     submitted that it was Polish insolvency law which had caused the substantial delay in the recovery of the aid at issue and had therefore prevented the immediate implementation of that decision.

Poland inter alia took the the view that the Commission did not prescribe a period for the implementation of Decision 2008/344. Since the period of four months, calculated from the date of its notification, could not be binding, the expiry of such a period could not be regarded as constituting a time-limit for the implementation of that decision.

The Court of Justice reiterated that the relevant date for the assessment of a failure to fulfil obligations brought pursuant to Article 88(2) EC could be, contrary to the Republic of Poland’s assertions and because that provision did not provide for a pre-litigation phase in contrast to Article 226 EC and therefore the Commission did not issue a reasoned opinion allowing Member States a certain period within which to comply with its decision, when the former provision was applied the reference period, only that provided for in the decision failure to implement which was denied or, where appropriate, that subsequently fixed by the Commission (Case C-378/98 Commission v Belgium [2001]; Case C-499/99 Commission v Spain [2002]; Case C-207/05 Commission v Italy [2006]; and Case C-232/05 Commission v France [2006]).

In the present case, Article 4(2) of Decision 2008/344 imposed a period of four months from the date of notification thereof in order to enable Poland to take the measures necessary to recover the aid at issue. Therefore, according to the Court, that period, in the absence of a new period fixed by the Commission, must be regarded as relevant for the assessment of the failure to fulfil obligations complained of.

The Court reiterated that recovery of unlawful aid was the logical consequence of the finding that it was unlawful. That consequence could not depend on the form in which the aid was granted (see, Case C-183/91 Commission v Greece [1993];Commission v Portugal [2000]; and Case C-507/08 Commission v Slovakia [2010]).

Consequently, the Member State to which a decision requiring recovery of illegal aid was addressed was obliged under Article 249 EC to take all measures necessary to ensure implementation of that decision (see Case C-209/00 Commission v Germany [2002]; Case C-404/00 and Commission v Spain [2003].

The Court reiterated that this must result in the actual recovery of the sums owed (see, to that effect, Case C-415/03 Commission v Greece [2005]  and Commission v France [2006]).

Furthermore, the Court stressed that the obligation on a Member State to abolish aid found by the Commission to be incompatible with the common market was to restore the previous situation on the European Union market (Case C-350/93 Commission v Italy [1995], and Case C-75/97 Belgium v Commission [1999]). The Court argued that as long as the aid was not recovered, the beneficiary of the aid was able to keep funds deriving from the aid declared incompatible and to benefit from the resulting unfair competitive advantage (C-232/05, Commission v France [2006]).

The Court held that, thus, a Member State which, pursuant to a decision of the Commission, was obliged to recover unlawful aid was free to choose the means of fulfilling that obligation, provided that the measures chosen did not adversely affect the scope and effectiveness of Union law. A Member State could fulfil such an obligation to recover only if the measures adopted by it were appropriate for the purpose of establishing the normal conditions of competition which were distorted by the grant of the unlawful aid the recovery of which had been ordered by a Commission decision (Case C-209/00 Commission v Germany [2002]; and Case C-210/09 Scott and Kimberly Clark [2010]).

Furthermore, in accordance with Article 14(3) of Regulation 659/99, recovery of unlawful aid imposed by a Commission decision was to be effected without delay and in accordance with the procedures under the national law of the Member State concerned, provided that they allowed the immediate and effective execution of the Commission decision.

However, it must be recalled that, as follows from the case-law on bankrupt undertakings that have received aid, the restoration of the previous situation and the elimination of the distortion of competition resulting from the unlawfully paid aid may, in principle, be achieved by registration of the liability relating to the repayment of the aid in question in the schedule of liabilities (Case 52/84 Commission v Belgium [1986]; Case C-142/87 Belgium v Commission (‘Tubemeuse’) [1990]; and Case C-277/00 Commission v Germany [2004]).

The Court found that Poland had not provided the documents enabling the Commission to conclude that TBG was insolvent and had definitively and completely ceased its activity, so that the mere registration of the debts relating to the repayment of the aid in the schedule of liabilities of those companies in the group could suffice in order to comply with Decision 2008/344. As regards BA and HB, the case-law on bankrupt undertakings which had received aid was not applicable so that the registration of those debts after the expiry of the period mentioned above did not constitute proper implementation by Poland of its obligations under Articles 4 and 5 of Decision 2008/344.

The Court reiterated that the condition that it be absolutely impossible to implement a decision was not fulfilled where the defendant Member State merely informed of the Commission of the legal, political or practical difficulties involved in implementing the decision, without taking any real steps to recover the aid from the undertakings concerned, and without proposing to the Commission any alternative arrangements for implementing the decision which could have enabled those difficulties to be overcome (Joined Cases 485/03 to C-490/03 Commission v Spain [2006], and Case C-214/07 Commission v France [2006].

Poland, although it had pleaded ‘serious difficulties’, ‘problems’ and ‘major obstacles’ encountered in implementing Decision 2008/344, itself explained, in its written submissions, that it did not regard the existing problems as making impossible recovery of the aid at issue.

The Court reiterated that apprehension of internal difficulties in the course of implementing a decision on State aid could not justify a failure by a Member State to comply with its obligations under Community law (Case C-52/95 Commission v France [1995]; Case C-265/95 Commission v France [1997]; and Case C-441/06 Commission v France [2007]).

It follows from the foregoing that it must be held that, on the expiry of the period prescribed in Article 4(2) of Decision 2008/344 , the actions undertaken by the Polish authorities did not lead to an effective recovery of the aid at issue and, consequently, the normal conditions of competition have not been restored.

The Court held that by failing to take, within the period prescribed, all the measures necessary to ensure the implementation of Decision 2008/344, Poland has failed to fulfil its obligations under the fourth paragraph of Article 249 EC and Articles 3 and 4 of that decision.