Commission of the European Communities v Portuguese Republic.

• Jurisdiction: European Union
• Celex Number: 62002CC0171
• ECLI: ECLI:EU:C:2003:465
• Court: Court of Justice (European Union)
• Docket Number: C-171/02
• Procedure Type: Recours en constatation de manquement - non fondé
• Date: 16 September 2003

OPINION OF ADVOCATE GENERAL
ALBER
delivered on 16 September 2003(1)


Case C-171/02

Commission of the European Communities
v
Portuguese Republic

(Free movement of workers – Freedom of establishment – Freedom to provide services – Activities of private security services – Requirement of a permanent establishment – Consideration of evidence furnished in other Member States – Required minimum amount of capital – Requirement of formation as a legal person – Requirement for a national professional licence – Recognition of attestations of competence)

I – Introduction 1. The proceedings for failure to fulfil obligations which the Commission has brought against the Portuguese Republic concern the rules governing the activities of private security services engaged in the surveillance of persons and property in Portugal. The Commission claims that the Portuguese legislation is incompatible with the provisions of the Treaty concerning the free movement of workers, the freedom of establishment and the freedom to provide services. II – Legislative framework A – 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 (2) (hereinafter ‘Directive 92/51’) 2. The first indent of Article 1(c) of Directive 92/51 defines the term ‘attestation of competence’ as ‘any evidence of qualifications attesting to education and training not forming part of a set constituting a diploma within the meaning of Directive 89/48/EEC or a diploma or certificate within the meaning of this Directive [Directive 92/51] ?’. 3. In Article 1(f), ‘regulated professional activity’ is defined as ‘a professional activity the taking-up or pursuit of which, or one of its modes of pursuit in a Member State, is subject, directly or indirectly, by virtue of laws, regulations or administrative provisions, to the possession of evidence of education and training or an attestation of competence. ?’. B – National provisions 1. Decree-Law No 231/98 of 22 June 1998 3 –Diário da República I, Series A, No 167, of 22 July 1998, p. 3515. (hereinafter ‘Decree-Law No 231/98’ or ‘the Decree-Law’) 4. Article 1(3)(a) defines activities in the private security services sector as ‘the provision of services by private undertakings lawfully constituted for that purpose which are intended to protect persons and property and to prevent the commission of criminal offences’. 5. Article 3 provides that: ‘Private security activity may be pursued only by lawfully constituted undertakings authorised to do so in accordance with the provisions of this Decree-Law.’ 6. Article 7 lays down the conditions under which an individual may pursue activities in the private security services sector. These include, under Article 7(2)(b), ‘the successful completion of tests of knowledge and physical aptitude, the standard content and duration of which are determined by order of the Minister for the Interior, following an initial training course meeting the requirements of Article 8(2)’, and, under Article 8(2), participation in a professional induction course. 7. Article 9(1) and (2) govern the issue of professional certificates: ‘(1) guarding and escort personnel and personal defence and protection personnel must be in possession of a professional certificate which is authenticated by the General Secretary of the Ministry of the Interior, is valid for a period of two years and can be extended for equivalent periods. (2) authentication of the professional certificate is subject to evidence, to be furnished to the General Secretary of the Ministry of the Interior, that the conditions set out in Article 7 have been fulfilled.’ 8. Article 21(1) makes the pursuit of activities in the private security services sector subject to prior authorisation. 9. Article 22(1) and (2) provide: ‘(1) 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. (2) The capital of the undertakings referred to in the foregoing paragraph must not be less than:

(a)

PTE 10 000 000, if they perform one of the services provided for in Article 2(1)(a) and (b);

(b)

PTE 25 000 000, if they perform one of the services provided for in Article 2(1)(c) and (d);

(c)

PTE 50 000 000, if they perform one of the services provided for in Article 2(1)(e).’

10. Article 24(1) lists the evidence which must accompany an application for authorisation to pursue an activity in the private security services sector. Pursuant to subparagraph d, this includes the provision of evidence to show that the conditions laid down in Article 22 have been fulfilled. 2. Code of Commercial Companies 11. Article 4(1) provides: ‘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.’ III – Pre-litigation procedure 12. By letter of 6 May 1999, the Commission informed the Portuguese authorities that it considered Decree-Law No 231/98 to be incompatible with the provisions of the Treaty concerning the free movement of workers, the freedom of establishment and the freedom to provide services. It called on the Portuguese Government to send it relevant information to show that the Decree-Law was compatible with Community law. By letter of 10 September 1999, the Portuguese Government sent a number of documents to the Commission. 13. The Commission’s examination of those documents failed to convince it of the lawfulness of the Portuguese legislation. On 1 February 2000, it therefore sent the Portuguese Government a letter of formal notice in which it reiterated its complaints. The Portuguese Government replied to that letter on 23 May 2000. 14. That reply from the Portuguese Government likewise failed to convince the Commission that the Portuguese legislation was lawful. Consequently, on 29 December 2000, the Commission served a reasoned opinion on the Portuguese Republic, to which the Portuguese Government responded on 20 March 2001. 15. Having formed the view, after examining that response, that the Portuguese legislation was incompatible with the provisions of the Treaty, the Commission brought this action on 8 May 2002. IV – Submissions of, and forms of order sought by, the parties 16. In its application, the Commission raises a total of six complaints. It claims that, under the rules governing the authorisation to be issued by the Minister for the Interior, foreign undertakings which wish to pursue, in the private security services sector in Portugal, surveillance activities in respect of persons and property:

–

must have their head office or a permanent establishment in Portugal;

–

may not rely on evidence or guarantees which they have already presented in the Member State of origin;

–

must be constituted as legal persons; and

–

must have a specific amount of capital.

It also criticises the fact that:

–

the employees of such foreign undertakings must be in possession of a professional certificate issued by the Portuguese authorities;

and that:

–

occupations in the private security sector are not subject to the Community rules on the recognition of professional qualifications.

17. The Commission takes the view that the requirement laid down in Article 22(1) of Decree-Law No 231/98 that foreign undertakings must have their head office or a permanent establishment in Portugal also applies to undertakings which pursue surveillance activities in respect of persons and property in the private security services sector in Portugal on only a temporary basis (in accordance with Article 49 EC). That requirement makes the provision of a service impossible in practice, for, if an undertaking has its head office or a secondary establishment in Portugal, it exercises its freedom of establishment and no longer exercises its freedom to provide services, which is characterised by the temporary nature of the service. As the Court held in Gebhard, the fact that the provision of services is temporary does not preclude the creation of some form of infrastructure. (4) However, exercise of the freedom to provide services may not be made conditional on the existence of such infrastructure. 18. The Commission is unconvinced by the Portuguese Government’s reliance on Article 4 of the Code of Commercial Companies in order to limit the scope of Article 22 of Decree-Law No 231/98, as based on Article 4, to entities which provide security services for longer than a year. In the Commission’s submission, the reference in Article 22 of the Decree-Law to Article 4 of the Code of Commercial Companies can be understood only as a reference to compliance with the provisions concerning the Commercial Register. For the requirement that providers of services must have their head office or a permanent establishment in Portugal is already apparent from the wording of Article 22(1) of the Decree-Law. 19. It is the Commission’s view that the only plausible interpretation of Article 22 of the Decree-Law is that it also requires undertakings providing security services on only a temporary basis to have at least a secondary establishment in Portugal. That, moreover, was the interpretation given by the Portuguese Government on 23 May 2000 in its...