CELEX: 62003CJ0189
Failure of a Member State to fulfil obligations
Freedom to provide services
Restrictions
Private security firms

By its application, the Commission of the European Communities asks the Court to declare that, by adopting, in the framework
of the Law on private security firms and detective agencies, provisions which require that:
–
an undertaking that wishes to provide services in the Netherlands must have a permit, without taking into account the obligations
to which the foreign service provider is already subject in the Member State where it is established, and by charging fees
for this permit;
–
managers of these security firms have a permit for which a charge is also made;
–
members of the staff of these firms seconded from the Member State where they are established to work in the Netherlands have
a proof of identity card issued by the Netherlands authorities; and
–
members of the staff have a diploma issued by a Netherlands organisation, and that installers of alarms have professional
qualifications without taking into account qualifications obtained in another Member State,
the Kingdom of the Netherlands has failed to fulfil its obligations under Article 49 EC, Council Directive 89/48/EEC of 21
December 1988 on a general system for the recognition of higher-education diplomas awarded on completion of professional education
and training of at least three years’ duration (OJ 1989 L 19, p. 16) and 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).
Legal framework
The activities of private security firms and detective agencies are governed in the Netherlands by the Wet particuliere beveiligingsorganisaties
en recherchebureaus (Law on private security firms and detective agencies) of 24 October 1997 (Staatsblad 1997, p. 500, hereinafter
‘the Law of 1997’), the Regeling particuliere beveiligingsorganisaties en recherchebureaus (Implementing Regulation on private
security firms and detective agencies) of 3 March 1999 (Stcrt. 1999, p. 60, hereinafter ‘the Regulation of 3 March 1999’)
and the Circulaire particuliere beveiligingsorganisaties en recherchebureaus (Administrative circular on private security
firms and detective agencies) of 16 March 1999 (Stcrt. 1999, p. 60).
Article 2(1) of the Law of 1997 prohibits the activities of private security firms and detective agencies unless they have
been authorised by the responsible minister. Article 2(2) provides further:
‘Our minister may grant an exemption from that prohibition to private security firms and detective agencies if the nature
of their activities does not require the application of the rules by or under Articles 6 to 10. Such exemption may be subject
to conditions’.
Under Article 7(1) of the Law of 1997 the engagement of managers by private security firms also requires authorisation by
the responsible minister.
Article 9(8) of the Law of 1997 requires private security firms and detective agencies to ensure that their staff, when performing
the corresponding activities, carry a proof of identity card (legitimatiebewijs) in the form prescribed by the responsible
minister. That card certifies, as is clear from the combined provisions of Articles 7(2) of the Law of 1997 and Article 13(2)
of the Regulation of 3 March 1999, that the undertaking has obtained the necessary official authorisation to employ the holder
of the card.
Finally, under Article 8 of the Law of 1997, the responsible minister is also to prescribe, for certain categories, requirements
as to the qualifications of the staff of private security firms and detective agencies. Such firms may entrust the performance
of their business only to persons who satisfy the relevant qualification requirements. Article 8(2) provides:
‘Our minister may grant an exemption from this provision.’
The provisions of Article 8 of the Law of 1997 are defined by Articles 5 and 11 of the Regulation of 3 March 1999. Under Article
5(1) of that regulation, private security firms may entrust surveillance activities only to persons holding a particular diploma,
the Algemeen Beveiligingsmedewerker Diploma, awarded by two Netherlands organisations, the Stichting Vakexamens voor de Particuliere
Beveiligingsorganisaties and the Stichting Ecabo. Article 5(5) recognises a series of other diplomas, all of which are also
awarded by Netherlands organisations, as equivalent to that diploma.
In addition, Article 11(1) of that regulation provides that private security firms may entrust the installation and maintenance
of alarms only to persons who are holders of a diploma recognised by the responsible minister. Article 11(2) lists a total
of four diplomas thus recognised, all of which are awarded by Netherlands organisations.
Pre-litigation procedure
Since it considers that the requirements resulting from the national provisions in question are contrary to Article 49 EC
and to Directives 89/48 and 92/51, the Commission commenced the procedure for failure to fulfil obligations.
Having given the Kingdom of the Netherlands formal notice to submit its observations, the Commission, on 11 December 2001,
issued a reasoned opinion requesting that Member State to take the necessary measures to comply with the opinion within two
months from notification thereof. Since the Netherlands Government did not act upon that opinion, the Commission brought this
action.
The action
In support of its action, the Commission made, originally, four complaints concerning the conditions prescribed by the Kingdom
of the Netherlands for carrying on private security activities in that Member State.
Those complaints were based on the incompatibility with Article 49 EC of, respectively:
–
the requirement that private security firms and detective agencies based in another Member State obtain prior authorisation,
on payment of a fee, from the Netherlands authorities, without taking into account the obligations to which those undertakings
are already subject in their State of origin;
–
the requirement for similar authorisation for the managers of such undertakings;
–
the requirement that the members of staff of those undertakings be in possession of a proof of identity card (‘legitimatiebewijs’)
issued, against payment of a sum of money, by the Netherlands authorities, without taking into account that the persons concerned
must, in any event, be holders of an identity card or passport issued by their Member State of origin;
and on the incompatibility with Article 49 EC and Directives 89/48 and 92/51 of
–
the requirement that the members of staff of those undertakings be holders of a diploma issued by a Netherlands organisation
and that installers of alarms possess particular qualifications, without taking into account those they have already obtained
in their State of origin.
At the hearing, the Commission stated that it was abandoning the application in respect of the fourth complaint, whilst maintaining
the first three complaints. The alleged failure to fulfil obligations must therefore be examined solely from the point of
view of Article 49 EC.
The first and second complaints
Arguments of the parties
The Commission submits that, while the protection of recipients of services may possibly justify certain restrictions on the
freedom to provide services in that sector, the requirement, first, that the undertakings in question established in another
Member State and wishing to provide services in the Netherlands, and, secondly, that their managers have prior authorisation,
is not an appropriate measure. In particular, the national legislation in question takes no account of the obligations to
which foreign service providers are already subject in the Member State in which they are established (see Case C‑355/98
Commission
v
Belgium
[2000] ECR I-1221) and entails unjustified extra expenses (see Case C‑43/93
Vander Elst
[1994] ECR I-3803).
The Netherlands Government denies the failure to fulfil obligations on those points. Whilst accepting that the conditions
and requirements relied upon by the Commission are capable of constituting obstacles to the free movement of services, it
contends that they are justified by the public interest, and in particular, by the need to protect the recipients of the services
in question, and the citizenry, from the possible abuses which can be committed by private security firms and detective agencies.
Those measures are appropriate and proportional methods of protecting those persons against unlawful and dishonest practices.
In that context, it is particularly important to examine the intentions and antecedents of the staff managing security firms
and detective agencies, without which any enquiry as to the trustworthiness of the undertakings themselves can be of but little
value. In addition, the costs connected to the grant of the various authorisations and certificates is not excessive.
Whilst it is true that the Netherlands legislation contains no particular provision expressly stating how the qualifications
which a private security firm or its managers have obtained in the Member State where they are established are to be taken
into account, it none the less enables them to be so in connection with an application for ministerial exemption, as provided
under Article 2(2) of the Law of 1997. In the absence of harmonisation at Community level of the obligations imposed on the
undertakings in question, it is in practice very difficult to determine the extent to which the varying obligations imposed
by the different Member States are equivalent to the requirements arising from the Netherlands legislation.
Findings of the Court
It follows from the Court’s settled case-law that national legislation which makes the provision of services on national territory
by an undertaking established in another Member State subject to the issue of an administrative authorisation constitutes
a restriction on the freedom to provide services within the meaning of Article 49 EC (see, for example,
Vander Elst
, paragraph 15, and
Commission
v
Belgium
, paragraph 35, both cited above).
In connection with rules similar to those covered by the Commission’s first complaint, and faced with defence arguments similar
to those relied on by the Netherlands Government, the Court has ruled that such a restriction cannot be justified since, by
excluding consideration of the obligations to which the trans-frontier service provider is already subject in the Member State
in which it is established, it goes in any event beyond what is necessary to attain the objectives sought, namely to ensure
close supervision of those activities (
Commission
v
Belgium
, cited above, paragraphs 36 to 38, and Case C-171/02
Commission
v
Portugal
[2004] ECR I‑0000, paragraph 60). The same conclusion must apply as regards the rules covered by the Commission’s second
complaint, namely the condition requiring that the managers of the undertakings in question obtain an authorisation.
As for the Netherlands Government’s argument based on the existence of an administrative practice which takes into account,
for the purposes of Article 2(2) of the Law of 1997, the obligations laid down by the Member State of origin, it must be observed
that the Netherlands Government was not able to provide sufficient evidence of the existence of that practice. In any event,
the Court has consistently held that mere administrative practices, which by their nature are alterable at will by the authorities
and are not given the appropriate publicity, cannot be regarded as constituting the proper fulfilment of obligations under
the EC Treaty (see, in particular, Case C-358/98
Commission
v
Italy
[2000] ECR I-1255, paragraph 17).
It follows that the condition of prior authorisation imposed on private security firms and detective agencies and their managers,
as laid down by the Netherlands legislation in force, cannot be justified on grounds of public interest in so far as the obligations
to which those undertakings and persons are also subject in their Member State of origin are not taken into account.
In those circumstances, the Commission’s first two complaints are well founded.
The third complaint
Arguments of the parties
The Commission claims that the obligation on members of the staff of private security firms and detective agencies residing
in another Member State to be in possession of a proof of identity card issued by the Netherlands authorities is also an obstacle
to those undertakings’ freedom to provide services. Such a condition is disproportionate, given that such seconded staff must
in any event be holders of an identity card or passport issued by their Member State of origin (see
Commission
v
Belgium
, cited above, paragraph 40).
In addition, the Netherlands authorities apply that obligation generally without taking into account prior checks which have
already been made in the Member State of origin.
The Netherlands Government contends that that obligation is an important guarantee ensuring the quality and professionalism
of the services provided by the undertakings in question. Such a guarantee is above all important for members of the general
public who encounter the actions of members of staff of such undertakings. The proof of identity card shows, apart from its
holder’s identity, that that person is authorised to carry out security activities or investigation on Dutch territory, whereas
a passport or identity card gives no indication of the powers of the person concerned. Consequently, the proof of identity
card alone is an appropriate and proportionate method of protecting citizens against possible unlawful actions.
In any event, obtaining ministerial exemption is also possible, under Article 8(2) of the Law of 1997.
Moreover, the amounts charged for the issue of a proof of identity card serve only to cover the costs of such issue and are
not excessive.
Findings of the Court
In that regard, it follows from the Court’s case-law that the obligation imposed on the members of staff of a private security
firm or detective agency to be in possession of an identity card issued by the authorities of the Member State in which the
services are rendered must be regarded as a restriction on the freedom to provide services since the formalities involved
in obtaining such a card are likely to make the provision of services across frontiers more difficult (see
Commission
v
Belgium
, paragraph 39).
As regards the possible justification for that measure by grounds such as those relied upon by the Netherlands Government,
based on the need to protect the general public, the Commission has rightly pointed out that members of staff of the undertakings
concerned who go to another Member State must in any event be in possession of an identity card or passport, which is sufficient
to enable them to prove their identity (see
Commission
v
Belgium
, paragraph 40).
The Netherlands Government also submitted that, apart from its use as identification of the person concerned, the card in
question also fulfils a purpose of certification since it certifies the extent of the latter’s powers. It cannot be denied
that, in that respect, the possession of such a card may be an appropriate measure for the purpose of strengthening the general
public’s confidence in the staff of private security firms and detective agencies.
In that regard, while the proof of identity card is, admittedly, intended to certify the competence and professional integrity
of the members of staff of private security firms and detective agencies coming from other Member States and offering services
in the Netherlands, such a requirement is a restriction which goes beyond what is necessary to attain the stated purpose,
in so far as it does not take account of the controls or verifications already carried out in the Member State of origin which
certify that competence and professional integrity (see, to that effect,
Commission
v
Portugal
, cited above, paragraph 66).
As regards the ministerial exemption relied upon by the Netherlands Government in that regard, it is sufficient to state that,
as the Advocate General pointed out in paragraphs 54 to 58 of his Opinion, it is not explicitly stated in Article 8(2) of
the Law of 1997 that the possibility of exemption, which is left to the authorities’ discretion, applies equally and in all
cases to the recognition, in connection with the establishment of the proof of identity card in question, of professional
qualifications obtained in other Member States. The requirement of possession of such a card cannot therefore be justified
on that ground.
It follows that the third complaint pleaded by the Commission is also well founded, in so far as, for the requirement in question,
the checks to which providers of cross-frontier services are already subject in their Member State of origin are not taken
into account.
In view of all the foregoing, it must be declared that, by adopting, in the framework of the Law of 1997, provisions which
require that:
–
undertakings that wish to provide services in the Netherlands and their managers must have a permit, without taking into account
the obligations to which foreign service providers are already subject in the Member State where they are established, and
by charging fees for this permit, and
–
members of the staff of these firms seconded from the Member State where they are established to work in the Netherlands have
a proof of identity card issued by the Netherlands authorities, in so far as the checks to which cross-frontier providers
of services are already subject in their Member State of origin are not taken into account for the requirement in question,
the Kingdom of the Netherlands has failed to fulfil its obligations under Article 49 EC.
Costs
Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been
applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Kingdom of the Netherlands
has been essentially unsuccessful in respect of the Commission’s first three complaints, the Kingdom of the Netherlands should
be ordered to pay the costs thereof. As regards the fourth complaint, which the Commission abandoned at the hearing, the parties
have not applied for the costs. It is therefore appropriate, in that respect, to apply the third subparagraph of Article 69(5)
of the Rules of Procedure, under which each party is to bear its own costs. It follows that it is appropriate to order the
Kingdom of the Netherlands to pay three quarters of the Commission’s costs and to decide that, for the rest, each party shall
bear its own costs.
On those grounds, the Court (First Chamber) hereby:
1.
Declares that, by adopting, in the framework of the Law on private security firms and detective agencies of 24 October 1997,
provisions which require that:
–

undertakings that wish to provide services in the Netherlands and their managers must have a permit, without taking into account
the obligations to which foreign service providers are already subject in the Member State where they are established, and
by charging fees for this permit, and
–

members of the staff of these firms seconded from the Member State where they are established to work in the Netherlands have
a proof of identity card issued by the Netherlands authorities, in so far as the checks to which cross-frontier providers
of services are already subject in their Member State of origin are not taken into account for the requirement in question,
the Kingdom of the Netherlands has failed to fulfil its obligations under Article 49 EC;
2.
Orders the Kingdom of the Netherlands to pay three quarters of the costs of the Commission of the European Communities. For
the rest, each party is ordered to bear its own costs.
Signatures.
–
Language of the case: Dutch.