Language of document : ECLI:EU:C:2000:113

JUDGMENT OF THE COURT (Fifth Chamber)

9 March 2000 (1)

(Failure of a Member State to fulfil its obligations - Free movement of workers- Freedom of establishment - Freedom to provide services - Private securityactivities - Requirement of prior authorisation - Obligation for legal persons tohave their place of business in national territory - Obligation for managers andemployees to reside in national territory - Requirement of an identification cardissued in accordance with national legislation)

In Case C-355/98,

Commission of the European Communities, represented by Maria Patakia, of itsLegal Service, acting as Agent, with an address for service in Luxembourg at theoffice of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Kingdom of Belgium, represented by Jan Devadder, General Adviser in the LegalDirectorate of the Ministry of Foreign Affairs, Foreign Trade and Cooperation withDeveloping Countries, acting as Agent, with an address for service in Luxembourgat the Belgian Embassy, 4 Rue des Girondins,

defendant,

APPLICATION for a declaration that, by adopting, within the framework of theLaw of 10 April 1990 on security firms, security systems firms and internal securityservices, provisions which

(a)    make the operation of a business falling within that Law subject to theobtaining of prior authorisation which depends on a certain number ofconditions, namely that:

    -    a security firm must have a place of business in Belgium;

    -    persons who

        -    have charge of the actual management of a security firm orinternal security service, or who

        -    work in or on behalf of such an undertaking or are employedfor the purposes of its activities, with the exception of internalstaff working in administration or logistics,

        must have their permanent residence or, failing that, their habitualresidence in Belgium;

    -    an undertaking established in another Member State must obtainauthorisation, for the purpose of which no account is taken of theevidence and guarantees already presented by it for the pursuit of itsactivity in the Member State of establishment; and

(b)    require every person wishing to exercise a security activity or provide aninternal security service in Belgium to be issued with an identification cardin accordance with that Law,

the Kingdom of Belgium has failed to fulfil its obligations under Articles 48, 52 and59 of the EC Treaty (now, after amendment, Articles 39 EC, 43 EC and 49 EC),

THE COURT (Fifth Chamber),

composed of: J.C. Moitinho de Almeida, President of the Sixth Chamber, acting asPresident of the Fifth Chamber, L. Sevón, C. Gulmann, J.-P. Puissochet andP. Jann (Rapporteur), Judges,

Advocate General: F.G. Jacobs,


Registrar: R. Grass,

having regard to the report of the Judge-Rapporteur,

after hearing the Opinion of the Advocate General at the sitting on 16 September1999,

gives the following

Judgment

1.
    By application lodged at the Court Registry on 29 September 1998, the Commissionof the European Communities brought an action under Article 169 of the ECTreaty (now Article 226 EC) for a declaration that, by adopting, within theframework of the Law of 10 April 1990 on security firms, security systems firms andinternal security services (Moniteur Belge of 29 May 1990, p. 10963; 'the Law‘),provisions which

(a)    make the operation of a business falling within that Law subject to theobtaining of prior authorisation which depends on a certain number ofconditions, namely that:

    -    a security firm must have a place of business in Belgium;

    -    persons who

        -    have charge of the actual management of a security firm orinternal security service, or who

        -    work in or on behalf of such an undertaking or are employedfor the purposes of its activities, with the exception of internalstaff working in administration or logistics,

        must have their permanent residence or, failing that, their habitualresidence in Belgium;

    -    an undertaking established in another Member State must obtainauthorisation, for the purpose of which no account is taken of theevidence and guarantees already presented by it for the pursuit of itsactivity in the Member State of establishment; and

(b)    require every person wishing to exercise a security activity or provide aninternal security service in Belgium to be issued with an identification cardin accordance with that Law,

the Kingdom of Belgium has failed to fulfil its obligations under Articles 48, 52 and59 of the EC Treaty (now, after amendment, Articles 39 EC, 43 EC and 49 EC).

Legal background

2.
    Article 1 of the Law provides:

'1.    For the purposes of this Law, a security firm shall be taken to mean anynatural or legal person carrying on an activity which consists in supplying to thirdparties, on a permanent or occasional basis, services of:

(a)    guarding and protecting movable or immovable property;

(b)    protecting persons;

(c)    guarding and protecting the transport of property;

(d)    operating alarm networks.

2.    For the purposes of this Law, an internal security service shall be taken tomean any service organised by a natural or legal person, to meet the needs of suchperson, in places accessible to the public, in the form of the activities listed inparagraph 1(a), (b) or (c).

3.    For the purposes of this Law, a security systems firm shall be taken to meanany natural or legal person carrying on an activity which consists in the supply tothird parties, on a permanent or occasional basis, design, installation andmaintenance services for alarm systems and networks.

...‘

3.
    Article 2 of the Law prohibits the operation of a security firm or the organisationof an internal security service without prior authorisation from the Minister for theInterior pursuant to an opinion from the Minister for Justice. Security firms maytake the form of legal persons constituted under the legislation of a Member Stateof the European Union, but their place of business must be situated in Belgium. Article 4 of the Law prohibits the operation of a security systems firm without priorapproval of the Minister for the Interior.

4.
    Under Article 5 of the Law, persons who have charge of the actual managementof a security firm or internal security service must have their permanent residenceor, failing that, their habitual residence in Belgium. Under Article 6 of the Law,that condition also applies to the staff of security firms and internal securityservices, save for administrative and logistical staff.

5.
    Article 8 of the Law requires persons working for or on behalf of a security firmor an internal security service to carry an identification card issued by the Ministerfor the Interior.

6.
    The Law was amended, as from 28 August 1997, by the Law of 18 July 1997(Moniteur Belge, 28 August 1997, p. 21964). However, the amendments therebyintroduced do not concern those aspects of the Law that form the subject-matterof this action for failure to fulfil obligations.

Pre-litigation procedure

7.
    By letter of 11 April 1996, the Commission formally requested the BelgianGovernment to submit its observations on the compatibility of the provisions of theLaw with the freedom to provide services, freedom of establishment and the freemovement of workers.

8.
    The Belgian Government replied on 14 June 1996 that the restrictions on thosefreedoms imposed by the Law were justified by the exceptions laid down in Article48(3) of the Treaty and Article 56 of the EC Treaty (now, after amendment,Article 46 EC), combined, in appropriate cases, with Article 66 of the EC Treaty(now Article 55 EC).

9.
    By letter of 10 June 1997, the Commission sent the Belgian Government areasoned opinion, calling on it to take the measures necessary to comply with thatopinion within two months of its notification.

10.
    In its reply dated 6 May 1998, the Belgian Government cited the specific nature ofthe private security industry, referring in that respect to Article 55 of the EC Treaty(now Article 45 EC).

11.
    As regards, more particularly, the obligation for the undertaking to have its placeof business in Belgium, the Belgian Government has argued that this was justifiedon grounds of public policy referred to in Article 56 of the Treaty. As far as therequirement of a prior authorisation or approval is concerned, the Governmentdraws attention to the absence of cooperation between Member States in thematter and to the fact that it had not been demonstrated that services similar tothose authorised in Belgium were provided in other Member States. Finally, asregards the condition of permanent or habitual residence, the Belgian Governmentrefers to the need to 'screen‘ persons wishing to work in the security industry.

12.
    Being dissatisfied with that reply, the Commission brought this action for failure tofulfil obligations.

Arguments of the parties

13.
    The Commission argues that the Law entails several restrictions on the freedom toprovide services. Those restrictions flow from the obligation for security firms tohave their place of business in Belgium, from the requirement of an authorisationto carry on business as a security firm and an approval to carry on business as asecurity systems firm, and, finally, from the obligation for the staff of undertakingsand of internal security services to carry an identification card issued by the BelgianMinister for the Interior.

14.
    The Commission also maintains that the Law restricts freedom of establishmentand the free movement of workers in so far as it imposes a residence condition on,first, persons having charge of the actual management of a security firm or internalsecurity service, and, secondly, the staff of those undertakings and services, save inadministration or logistics.

15.
    The Commission considers that Article 55 of the Treaty does not apply, sincesecurity firms, internal security services and security systems firms are not involvedin the exercise of official authority.

16.
    Regarding the obligation that the place of business be in Belgium, the Commissionconsiders that such a requirement may be justified on public policy grounds underArticle 56 of the Treaty only if it is established that the individual conduct of theperson or undertaking in question constitutes a present, genuine and sufficientlyserious threat, affecting a fundamental interest of society. Proof of such a threathas not been supplied in this case. Furthermore, the Commission considers thatthe requirement in question is disproportionate in relation to the aim pursued.

17.
    The requirement for an authorisation or approval and for an identification card,issued by the Belgian Minister for the Interior, are, the Commission argues, alsodisproportionate in the case of an occasional supply of services. First, the Lawdoes not allow account to be taken of guarantees already presented by the personsupplying the services for the pursuit of his activity in the Member State ofestablishment. Moreover, under Article 4(2) of Council Directive 73/148/EEC of21 May 1973 on the abolition of restrictions on movement and residence within theCommunity for nationals of Member States with regard to establishment and theprovision of services (OJ 1973 L 172, p. 14), any person entering Belgian territoryon a temporary basis for the purpose of providing a service is already required tobe in possession of a current identity card or passport.

18.
    As for the residence conditions imposed by the Law, the Commission considers thatthey cannot be justified by the need to carry out a 'screening‘ of the personsconcerned.

19.
    The Belgian Government argues that, by reason of its specific nature, the securitybusiness requires strict regulation, which is lacking at Community level and in mostMember States. According to that government, every security firm is capable ofconstituting a genuine and sufficiently serious threat, affecting a fundamentalinterest of society, namely public policy and public security.

20.
    Concerning the residence conditions, the Belgian Government states that it hastaken note of the judgment in Case C-114/97 Commission v Spain [1998] ECRI-6717 and that, in accordance with that judgment, the possibility of amending thedisputed provisions of the Law is now being examined.

21.
    By letter of 23 August 1999, the Belgian Government sent to the Court of Justicethe text of the Law of 9 June 1999 amending the Law of 10 April 1990 (MoniteurBelge, 29 July 1999, p. 28316) and a copy of a letter in which it asked theCommission to consider withdrawing these proceedings.

Findings of the Court

22.
    Concerning the Belgian Government's letter of 23 August 1999, it should berecalled that, under consistent case-law, the question whether a Member State hasfailed to fulfil its obligations must be determined by reference to the situationprevailing in the Member State at the end of the period laid down in the reasonedopinion and that the Court cannot take account of any subsequent changes (see,in particular, Case C-316/96 Commission v Italy [1997] ECR I-7231, paragraph 14).

23.
    As regards the provisions of the Law, in the version in force at the end of theperiod laid down in the reasoned opinion, which form the subject-matter of thepresent action, the Belgian Government does not deny that they constituterestrictions on the free movement of workers, freedom of establishment and thefreedom to provide services. It maintains, however, that those measures arejustified.

24.
    By way of preliminary observation, it should be noted that the exception laid downin the first paragraph of Article 55 of the Treaty, combined in appropriate caseswith Article 66 of the Treaty, does not apply in this case.

25.
    According to established case-law, that derogation must be restricted to activitieswhich in themselves are directly and specifically connected with the exercise ofofficial authority (Case 2/74 Reyners [1974] ECR 631, paragraph 45; Commissionv Spain, cited above, paragraph 35).

26.
    The activities of security firms, security systems firms and internal security servicesare not normally directly and specifically connected with the exercise of officialauthority, and the Belgian Government has not adduced any evidence to permit thecontrary to be established.

The obligation to have the place of business in Belgium

27.
    The condition that a security firm must have its place of business in Belgiumdirectly negates the freedom to provide services in so far as it makes it impossiblefor undertakings established in other Member States to provide services in Belgium(see Case 205/84 Commission v Germany [1986] ECR 3755, paragraph 52).

28.
    As regards the reasons of public policy and public security relied upon in order tojustify that requirement, it should be noted, first, that the concept of public policyassumes a genuine and sufficiently serious threat affecting one of the fundamentalinterests of society. Like all derogations from a fundamental principle of theTreaty, the public policy exception must be interpreted restrictively (see Case C-348/96 Calfa [1999] ECR I-11, paragraphs 21 and 23).

29.
    Moreover, the right of Member States to restrict the free movement of persons andservices on grounds of public policy, public security or public health is not intendedto exclude economic sectors such as the private security sector from the applicationof that principle, from the point of view of access to employment, but to allowMember States to refuse access to their territory or residence there to personswhose access or residence would in itself constitute a danger for public policy,public security or public health (see Commission v Spain, cited above, paragraph42).

30.
    Since the Belgian Government's argument that any security firm is capable ofconstituting a genuine and sufficiently serious threat to public policy and publicsecurity is obviously unfounded and, in any event, unproven, it cannot justify therestriction on the freedom to provide services resulting from the obligation forcompanies running such a business to have their place of business in Belgium.

The residence obligation

31.
    The residence obligation imposed on both managers and staff of security firms andinternal security services, save for administrative and logistical staff, constitutes arestriction on both the freedom of establishment (see Commission v Spain, citedabove, paragraph 44) and the free movement of workers (see Case C-350/96 CleanCar Autoservice v Landeshauptmann von Wien [1998] ECR I-2521, paragraphs 27to 30).

32.
    That condition cannot be justified by the need to check the background andconduct of the persons in question, as the Belgian Government maintained in itsreply to the reasoned opinion.

33.
    The need to obtain information on the conduct of managers and staff may besatisfied by means less restrictive of freedom of movement, if necessary throughcooperation between the authorities of Member States.

34.
    Moreover, checks may be carried out and penalties may be imposed on anyundertaking established in a Member State, whatever the place of residence of itsmanagers (Commission v Spain, paragraph 47).

The requirement of prior authorisation or approval

35.
    According to consistent case-law, national legislation which makes the provision ofcertain services on national territory by an undertaking established in anotherMember State subject to the issue of an administrative authorisation constitutes arestriction on the freedom to provide services within the meaning of Article 59 ofthe Treaty (see, inter alia, Case C-43/93 Vander Elst v Office des MigrationsInternationales [1994] ECR I-3803, paragraph 15).

36.
    As regards the specific nature of the security and security systems businesses andthe absence of legislation at Community level and in most Member States, whichare matters relied upon by the Belgian Government in order to justify thisrequirement, it must be noted that, in any event, the Law goes beyond what isnecessary to attain the objective sought, which is to ensure close supervision ofthose activities.

37.
    The freedom to provide services, being one of the fundamental principles of theTreaty, may be restricted only by rules justified by the public interest andapplicable to all persons and undertakings operating in the territory of the MemberState where the service is provided, in so far as that interest is not safeguarded bythe rules to which the provider of such a service is subject in the Member Statewhere he is established (Case 279/80 Webb [1981] ECR 3305, paragraph 17).

38.
    By requiring all undertakings to fulfil the same conditions for obtaining priorauthorisation or approval, the Belgian legislation makes it impossible for accountto be taken of obligations to which the person providing the service is alreadysubject in the Member State in which he is established.

The requirement of an identification card

39.
    The condition that every staff member of a security firm or internal security servicemust carry an identification card issued by the Belgian Minister for the Interiormust also be regarded as a restriction on the freedom to provide services. Theformalities involved in obtaining such an identification card are likely to make theprovision of services across frontiers more difficult.

40.
    Moreover, as the Commission has rightly emphasised, the provider of a service whogoes to another Member State must be in possession of an identity card or apassport. It follows that the requirement of an additional identity document, issuedby the Belgian Minister for the Interior, is disproportionate in relation to the needto ensure the identification of the persons in question.

41.
    It follows from the whole of the above considerations that, by adopting within theframework of the Law provisions which

(a)    make the operation of a business falling within that Law subject to theobtaining of prior authorisation which depends on a certain number ofconditions, namely that:

    -    a security firm must have a place of business in Belgium;

    -    persons who

        -    have charge of the actual management of a security firm orinternal security service, or who

        -    work in or on behalf of such an undertaking or are employedfor the purposes of its activities, with the exception of internalstaff working in administration or logistics,

        must have their permanent residence or, failing that, their habitualresidence in Belgium;

    -    an undertaking established in another Member State must obtainauthorisation, for the purpose of which no account is taken of theevidence and guarantees already presented by it for the pursuit of itsactivity in the Member State of establishment; and

(b)    require every person wishing to exercise a security activity or provide aninternal security service in Belgium to be issued with an identification cardin accordance with that Law,

the Kingdom of Belgium has failed to fulfil its obligations under Articles 48, 52 and59 of the Treaty.

Costs

42.
    Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been applied for in the successful party'spleadings. Since the Commission has applied for costs and the Kingdom ofBelgium has been unsuccessful, the latter must be ordered to pay the costs.

On those grounds,

THE COURT (Fifth Chamber)

hereby:

1.    Declares that by adopting, within the framework of the Law of 10 April1990 on security firms, security systems firms and internal securityservices, provisions which

(a)    make the operation of a business falling within that Law subject to theobtaining of prior authorisation which depends on a certain number ofconditions, namely that:

    -    a security firm must have a place of business in Belgium;

    -    persons who

        -    have charge of the actual management of a security firm orinternal security service, or who

        -    work in or on behalf of such an undertaking or are employedfor the purposes of its activities, with the exception of internalstaff working in administration or logistics,

        must have their permanent residence or, failing that, their habitualresidence in Belgium;

    -    an undertaking established in another Member State must obtainauthorisation, for the purpose of which no account is taken of theevidence and guarantees already presented by it for the pursuit of itsactivity in the Member State of establishment; and

(b)    require every person wishing to exercise a security activity or provide aninternal security service in Belgium to be issued with an identification cardin accordance with that Law,

the Kingdom of Belgium has failed to fulfil its obligations under Articles 48, 52and 59 of the EC Treaty (now, after amendment, Articles 39 EC, 43 EC and 49EC);

2.    Orders the Kingdom of Belgium to pay the costs.

Moitinho de Almeida
Sevón
Gulmann

Puissochet

Jann

Delivered in open court in Luxembourg on 9 March 2000.

R. Grass

D.A.O. Edward

Registrar

President of the Fifth Chamber

1: Language of the case: French.