This press release is an unofficial document solely for the use of the press. For further information or for a copy of the judgment please contact Tom Kennedy, telephone 00352 4303-3355, or Ursula Smyth, telephone 00352 4303-3366 or send a fax to 00352 4303-2500.

On 21 October 1991 the Commission submitted to the Council a proposal for a directive relating to the freedom of management and investment of funds held by institutions for retirement provision. The Council was unable to agree on the proposal and so the Commission withdrew it on 6 December 1994.

On 17 December 1994 the Commission published a Communication in the Official Journal on freedom of management and investment of pension funds.

The French Republic claimed that the Communication amounted to nothing less than a legal act having new legal effects for Member States. It therefore asked the Court to annul the Communication, given that it reproduced in virtually identical terms the content of the draft directive on which the Council had been unable to agree.

The Commission's position was that the Communication was interpretative and did not create new obligations for Member States. It merely drew attention to the fact that the principles laid down in the Treaty were directly applicable to pension funds.

The Court scrutinized the content of the Communication in order to determine whether it was act intended to have legal effects in its own right.

The Court found in the first place that the provisions of the Communication were characterized by their imperative wording.

Secondly, it was clear from the content of the provisions of the Communication that they could not be regarded as being already inherent in the provisions of the EC Treaty on freedom to provide services, freedom of establishment and free movement of capital, and as being intended simply to clarify their proper application.

The Court pointed out that, whilst those provisions prohibited imposing unjustified restrictions on the freedoms concerned, they were not sufficient in themselves to ensure elimination of all obstacles to free movement of persons, services and capital. The directives provided for by the Treaty in this matter continued to have a major role to play in fostering the actual exercise of the rights arising out of those provisions.

Yet the Communication covered measures of that very kind which had been the subject of the proposal for a directive that the Commission had withdrawn.

As a result, the Court held that the Communication constituted an act intended to have legal effects of its own, distinct from those already provided for by the relevant Treaty provisions.

The consequence was that the Commission was not empowered to adopt such a act. Only the Council was entitled to do so under the EC Treaty.

The Court therefore annulled the Commission Communication on an internal market for pension funds (94/C 360/08).