Case C-171/02

Commission of the European Communities

v

Portuguese Republic

(Articles 39 EC, 43 EC and 49 EC – Directive 92/51/EEC – General system for the recognition of professional education and training – Private security activities – Measures taken by a Member State requiring operators, in order for them to be able to pursue private security activities, to have their head office or an establishment in Portugal, to be constituted as a legal person, to have a specific share capital and to provide evidence and guarantees already presented in the Member State of origin – Failure to provide for recognition of professional qualifications in the private security services sector)

Summary of the Judgment

1. Freedom of movement for persons – Freedom of establishment – Freedom to provide services – Treaty provisions – Respective scopes – Criteria – Provision of services over an extended period without having an establishment in the Member State of destination – Included in freedom to provide services

(Arts 43 EC and 49 EC)

2. Freedom of movement for persons – Workers – Freedom of establishment – Freedom to provide services – Restrictions – Requirement for private security activities to have their head office or an establishment on national territory, to be constituted as a legal person, to have a minimum share capital, to obtain an authorisation issued by the national authorities and to obtain, for their employees, a professional certificate issued by those authorities – Inadmissible

(Arts 39 EC, 43 EC and 49 EC)

1. The key element, as regards the definition of the respective scopes of the principles of freedom to provide services and freedom of establishment, is whether or not the economic operator is established in the Member State in which it offers the services in question. Where it is established (in a principal or secondary establishment) in the Member State in which it offers the service (Member State of destination or host Member State), it falls within the scope of the principle of freedom of establishment, as defined in Article 43 EC. On the other hand, where the economic operator is not established in that Member State of destination, it is a transfrontier service provider covered by the principle of freedom to provide services laid down in Article 49 EC. In this context, the concept of establishment within the meaning of Article 43 EC means that the operator offers its services on a stable and continuous basis from an established professional base in the Member State of destination. On the other hand, all services that are not offered on a stable and continuous basis from an established professional base in the Member State of destination constitute provision of services within the meaning of Article 49 EC.

Services within the meaning of Article 49 EC may thus be constituted by services which a business established in a Member State supplies with a greater or lesser degree of frequency or regularity, even over an extended period, to persons established in one or more other Member States.

Therefore, even national measures that apply only to economic operators offering their services in the Member State concerned for a period of more than one year are, in principle, capable of restricting freedom to provide services.

(see paras 24-28)

2. A Member State fails to fulfil its obligations under Articles 39 EC, 43 EC and 49 EC by requiring, in order for foreign operators to be able to pursue surveillance activities in respect of persons and property in the private security services sector on its national territory, that

- those operators have their head office or a permanent establishment on its national territory;

- those operators be constituted as a legal person;

- those operators have a minimum share capital;

- those operators obtain an authorisation issued by the national authorities, without account being taken of evidence or guarantees already presented in the Member State of origin; and

- their employees hold a professional certificate issued by those authorities, without account being taken of controls or verifications already carried out in the Member State of origin.

(see para. 74, operative part)

JUDGMENT OF THE COURT (Fifth Chamber) 29 April 2004 (1)

(Articles 39 EC, 43 EC and 49 EC – Directive 92/51/EEC – General system for the recognition of professional education and training – Private security activities – Measures taken by a Member State requiring operators, in order for them to be able to pursue private security activities, to have their head office or an establishment in Portugal, to be constituted as a legal person, to have a specific share capital and to provide evidence and guarantees already presented in the Member State of origin – Failure to provide for recognition of professional qualifications in the private security services sector)

In Case C-171/02,

applicant,

v

defendant,

APPLICATION for a declaration that:1. in view of the fact that, under the system of authorisations issued by the Minister for the Interior, foreign undertakings wishing to pursue surveillance activities in respect of persons and property in the private security services sector in Portugal,(a) must have their head office or an establishment in Portugal,(b) may not rely on evidence and guarantees already presented in their Member State of establishment,(c) must be constituted as a legal person,(d) must have a specific share capital;2. in view of the fact that the employees of foreign undertakings wishing to pursue surveillance activities in respect of persons and property in the private security services sector in Portugal must hold a professional certificate issued by the Portuguese authorities;3. in view of the fact that professions in the private security services sector are not subject to the Community system for the recognition of professional qualifications;the Portuguese Republic has failed to fulfil its obligations under Articles 39 EC, 43 EC and 49 EC and under Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of professional education and training to supplement Directive 89/48/EEC (OJ 1992 L 209, p. 25).

THE COURT (Fifth Chamber),,

composed of: P. Jann (Rapporteur), acting for the President of the Fifth Chamber, A. Rosas and S. von Bahr, Judges,

Advocate General: S. Alber,

after hearing the Opinion of the Advocate General at the sitting on 16 September 2003,

gives the following

the Portuguese Republic has failed to fulfil its obligations under Articles 39 EC, 43 EC and 49 EC and under Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of professional education and training to supplement Directive 89/48/EEC (OJ 1992 L 209, p. 25).

Definitions

Substantive rules

‘Where, in the host Member State, the taking up or pursuit of a regulated profession is subject to possession of an attestation of competence, the competent authority may not, on the grounds of inadequate qualifications, refuse to authorise a national of a Member State to take up or pursue that profession on the same conditions as those which apply to its own nationals:

and giving guarantees, in particular in the matter of health, safety, environmental protection and consumer protection, equivalent to those required by the laws, regulations or administrative provisions of the host Member State.

If the applicant does not provide proof of such an attestation or of such qualifications the laws, regulations or administrative provisions of the host Member State shall apply.’

Definitions

Substantive rules

‘Private security activity may be pursued only by lawfully constituted undertakings authorised to do so in accordance with the provisions of this Decree‑Law.’

‘Undertakings pursuing private security activity within the meaning of Article 1(3)(a) must be constituted in accordance with the legislation of a Member State of the European Union or the European Economic Area, have their head office or a secondary establishment in Portugal and comply with the provisions of Article 4 of the Code of Commercial Companies.’

‘1. A company which does not have an effective head office in Portugal but wishes to pursue its activity there for more than one year must set up a permanent representation and comply with the provisions of the Portuguese law on the commercial register.

2. A company that does not comply with the provisions of the preceding paragraph is nevertheless bound by the acts performed on its behalf in Portugal and the persons that have performed those acts, as well as the company’s managers or administrators, are jointly and severally liable with it.

3. Notwithstanding the provisions of the preceding paragraph, the court may, at the request of any interested party or the public prosecutor’s office, order a company that does not comply with the provisions of paragraphs 1 and 2, to cease its activity in the country and order the liquidation of assets situated in Portugal.’

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

Arguments of the parties

Findings of the Court

the Portuguese Republic has failed to fulfil its obligations under Articles 39 EC, 43 EC and 49 EC.

On those grounds,

Jann

Rosas

von Bahr

Delivered in open court in Luxembourg on 29 April 2004.

R. Grass

V. Skouris

Registrar

President