CELEX: 62003CJ0514
Failure to fulfil obligations
Articles 43 EC and 49 EC
Restrictions on the freedom of establishment and the freedom to provide services
Private security undertakings and services
Conditions
Legal personality
Minimum share capital
Security
Minimum number of staff
Directives 89/48/EEC and 92/51/EEC
Recognition of professional qualifications

By its application, the Commission of the European Communities is seeking a declaration by the Court that:
–        by requiring, in the implementing provisions, that private security undertakings and members of their staff possess Spanish
nationality;
–        by requiring, in connection with the rules applicable to foreign registrations, that private security undertakings:
(a)      always be constituted as legal persons,
(b)      have a specific share capital, without taking into account the fact that those undertakings are not subject to the same obligations
in the country of establishment,
(c)      lodge security at the Caja General de Depósitos, without taking into account any payment of security in the Member State of
origin,
(d)      employ a minimum number of staff;
–        by requiring staff of a foreign private security undertaking to obtain fresh specific authorisation in Spain when comparable
authorisation in the Member State of establishment of that undertaking has already been obtained,
and by failing to make the professions in the private security sector subject to the Community rules on the recognition of
professional qualifications,
the Kingdom of Spain has failed to fulfil its obligations under Articles 43 EC and 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 (OJ 1992 L
209, p. 25).

Legal context

Community legislation
Directives 89/48 and 92/51 have as their objective to put in place systems for the recognition of diplomas to enable nationals
of Community countries to pursue all those professional activities which in a host Member State are dependent on the completion
of post-secondary education and training. Whilst Directive 89/48 relates to university diplomas awarded on completion of professional
education and training of at least three years’ duration, Directive 92/51 applies to diplomas awarded on completion of a post-secondary
course of at least one year’s duration or of equivalent duration defined in Article 1 of that directive.
Article 1 of directive 92/51 provides:
‘For the purposes of this directive, the following definitions shall apply: …
(c)
attestation of competence
: 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, or
–        awarded following an assessment of the personal qualities, aptitudes or knowledge which it is considered essential that the
applicant have for the pursuit of a profession by an authority designated in accordance with the laws, regulations or administrative
provisions of a Member State, without proof of prior education and training being required;
…
(e)
regulated profession
: the regulated professional activity or range of activities which constitute this profession in a Member State;
(f)
regulated professional activity
: 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. The following in particular shall constitute a mode of pursuit of a regulated
professional activity:
–        pursuit of an activity under a professional title, in so far as the use of such a title is reserved to the holders of evidence
of education and training or an attestation of competence governed by laws, regulations or administrative provisions …
…’
Article 8 of Directive 92/51 provides as follows:
‘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:
(a)      if the applicant holds the attestation of competence required in another Member State for the taking up or pursuit of the
same profession in its territory, such attestation having been awarded in a Member State; or
(b)      if the applicant provides proof of qualifications obtained in other Member States,
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.’

National legislation
In Spain, private security activities are regulated by Law No 23/1992 of 30 July 1992 on private security services (BOE No
186, 4 August 1992, p. 27116; ‘Law on private security services’) and by Royal Decree No 2364/1994 of 9 December 1994 approving
the Regulation on private security services (BOE No 8, 10 January 1995, p. 779; ‘Regulation on private security services’).
Article 5(1) of the Law on private security services contains an exhaustive list of six classes of services which can be provided
by private security undertakings, namely:
–        surveillance and protection of property, premises, shows, contests or conventions;
–        protection of specific persons;
–        depositing, safekeeping, checking and sorting of coins and banknotes, securities, valuables and dangerous objects, as well
as the transport and distribution thereof;
–        installation and maintenance of surveillance and alarm systems;
–        operation of central control offices for the reception, checking and transmission of alarm signals and their communication
to the security forces (Fuerzas y Cuerpos de Seguridad), as well as provision of response services in so far as these do not
fall within the sphere of responsibility of the security forces;
–        planning and assistance in connection with the security services covered by the Law.
Pursuant to Article 7(1) of that law, an undertaking wishing to provide such security services must obtain administrative
authorisation in the form of an entry in a register held by the Ministry of the Interior. In order to obtain such registration,
the undertaking in question must be constituted as a legal person corresponding to one of the four types of companies defined
by national law. In addition, the Regulation on private security services makes the grant of the above authorisation subject
to other conditions which vary according to the type of activity or activities carried out by the undertaking in question.
Thus the undertaking in question must have a minimum share capital and produce security. The amounts of that capital and that
security are graded by reference not only to the type or types of activity carried out by the undertaking, but also to the
geographical range of those activities within the national territory. The security must be lodged with a Spanish body, the
Caja General de Depósitos.
In an annex to the Regulation on private security services, certain particular obligations are imposed on security undertakings
according to the types of activities which they undertake. If that activity is the transport and distribution of valuables
or dangerous objects or the installation and maintenance of surveillance and alarm systems, the following is required:
‘1.      Valuables or dangerous objects
(a)      …
(b)      Second phase
1.
o
A team composed of a head of security and at least 30 guards, if the range of the undertaking is national, and 6 guards, plus
3 per province, if the range covers an Autonomous Community.
…
2.      Explosives
(a)      …
(b)      Second phase
1.
o
A team composed of at least 2 guards specialising in explosives for each vehicle used by the undertaking for the transport
of explosives and a head of security where the number of guards exceeds 15.
…
5.      Installation and maintenance of surveillance and alarm systems
…
2.
o
Second phase
(a)      A team composed of at least one engineering technician and five fitters for undertakings whose range of activity is national
and of an engineering technician and two fitters for those whose range covers an Autonomous Community.’
By application of Article 10 of the Law on private security services, read in conjunction with Article 53 of the Regulation
on private security services, each member of private security staff must obtain authorisation from the Ministry of the Interior.
To that end, he must be of age, not be older than the age limit set by regulation, have the physical and mental attributes
necessary for performance of his work and pass the tests required to show his knowledge and capabilities.
With regard in particular to the profession of private detective, Article 54(5)(b) of the Regulation on private security services
also requires the persons concerned to hold a private detective diploma. That diploma is awarded on condition that a person
has achieved a certain level of training, taken special courses and passed aptitude tests.
Directives 89/48 and 92/51 were transposed into national law by, respectively, Royal Decree No 1665/1991 of 25 October 1991
governing the general system for recognition of higher-education diplomas awarded in the Member States of the European Union
requiring studies of at least three years’ duration (BOE No 280, 22 November 1991, p. 37916) and Royal Decree No 1396/1995
of 4 August 1995 governing the second general system for recognition of professional education and training of the Member
States of the European Union and other States signatory to the Agreement on the European Economic Area and supplementing what
was established by Royal Decree No 1665/1991 (BOE No 197, 18 August 1995, p. 25657). The annexes to those two decrees contain
lists of the regulated professions covered by the procedures for recognition in question. However, the professions covered
by the Regulation on private security services do not appear on those lists.

Pre-litigation procedure and written procedure before the Court
In 1997, the Commission brought, against the Kingdom of Spain, a first action for failure to fulfil obligations with regard
to certain provisions of the Law and Regulation on private security services. In the judgment in Case C‑114/97
Commission
v
Spain
[1998] ECR I‑6717, delivered on that action, the Court held that, by maintaining in force Articles 7, 8 and 10 of the Law
on private security services which limit the grant of authorisation to carry on private security activities to Spanish undertakings
and by issuing security staff permits only to Spanish nationals, the Kingdom of Spain had failed to fulfil its obligations
under the EC Treaty.
By letter of 29 November 1999, the Commission informed the Spanish Government that the national laws and regulations on private
security activities remained in breach of Community law.
Not having received an answer from the Spanish Government within the period prescribed, on 24 July 2000 the Commission issued
a reasoned opinion requesting the Kingdom of Spain to take the measures necessary to end the breaches alleged within two months
of notification of that opinion. Taking the view that the observations submitted by the Spanish authorities in answer to that
reasoned opinion were not satisfactory, the Commission brought the present action.
In its reply, the Commission noted that, following the judgment in
Commission
v
Spain
, the Spanish authorities had amended the Law and the Regulation on private security services by abolishing the nationality
requirement. The Commission therefore withdrew the complaint relating to that requirement, whilst maintaining the other complaints.

The action
In support of its action, the Commission raises six complaints concerning in essence the conditions prescribed by Spanish
legislation for carrying on private security activities in Spain.
Those complaints may be stated as follows:
(1)      incompatibility with Articles 43 EC and 49 EC of the requirement that private security undertakings must always be constituted
as legal persons;
(2)      incompatibility with Articles 43 EC and 49 EC of the requirement that such an undertaking have a minimum share capital;
(3)      incompatibility with Articles 43 EC and 49 EC of the requirement that such an undertaking lodge security with a Spanish body,
the Caja General de Depósitos;
(4)      incompatibility with Articles 43 EC and 49 EC of the requirement that such an undertaking employ a minimum number of workers;
(5)      incompatibility with Articles 43 EC and 49 EC of the requirement that special authorisation is required for security staff
carrying out their work in Spain;
(6)      breach of Directives 89/48 and 92/51 as a result of the lack of recognition of professional qualifications.
Before considering the substance of each of those complaints, it is appropriate to set out the preliminary arguments put forward
by the parties and to recall the general principles laid down in the Court’s settled case-law.

General observations
Arguments of the parties
The Commission recognises that private security activities have not been harmonised at Community level. However, the restrictive
provisions of Spanish law on the subject do not comply with the basic requirements laid down by the Court’s established case-law
with respect to Articles 43 EC and 49 EC. The Commission disputes in particular the alleged closeness between private security
and public security. In its view, the contribution of the undertakings concerned to the maintenance of public security is
no different from the contribution which any individual may be called upon to make. In the present case, the Commission claims
that the fact of making a foreign private security undertaking subject to the same requirements as those to which Spanish
undertakings are subject – without taking into account the obligations, guarantees and requirements which may already have
been imposed on the same undertaking in another Member State – constitutes an unjustified obstacle to its establishment on
Spanish territory and a highly dissuasive factor in respect of the provision of cross-border services in that sector, particularly
with regard to small and medium-sized undertakings.
According to the Spanish Government, private security is closely linked to public security, of which it constitutes an extension.
Thus, a large part of the activities in that sector involves use of certain means which, normally, are not permitted (in particular
weapons). Those activities are also likely to have a serious effect on the free exercise of citizens’ rights and freedoms.
Consequently, in that sector, a Member State may legitimately have recourse to means of intervention and monitoring which
would not be justified in other fields. Since this sector is not harmonised at Community level, its regulation in other Member
States may be radically different from that in Spain, hence the necessity of requiring compliance with the particular requirements
existing in Spain, in particular those connected with the problem of terrorism.
Findings of the Court
In its action, the Commission refers both to Article 43 EC, which guarantees freedom of establishment, and Article 49 EC,
which relates to freedom to provide services. In that regard, it should be noted that the key element defining the respective
fields of application of those two provisions is whether or not the economic operator concerned is established in the Member
State in which it offers the service in question (the host Member State). When it is established there, by either its principal
or secondary establishment, its situation falls within the scope of the principle of freedom of establishment within the meaning
of Article 43 EC. In the contrary case, it must be classified as a ‘cross-border provider of services’ and falls under the
principle of freedom to provide services pursuant to Article 49 EC (see, to that effect, Case C‑55/94
Gebhard
[1995] ECR I‑4165, paragraphs 25 to 28, and Case C‑215/01
Schnitzer
[2003] ECR I‑14847, paragraphs 28 to 32). In the context of the present case, the national laws and regulations in question
appear to apply without distinction both to private security undertakings established in Spanish territory and to those established
in other Member States and active in Spain on an occasional or temporary basis.
Private security services are not, to date, harmonised at Community level. However, although it is true that, in such circumstances,
Member States remain, in principle, competent to define the conditions for the pursuit of the activities in that sector, they
must, when exercising their powers in this area, respect the basic freedoms guaranteed by the Treaty (see Case C‑58/98
Corsten
[2000] ECR I-7919, paragraph 31; Case C‑108/96
Mac Quen and Others
[2001] ECR I-837, paragraph 24; and Case C‑294/00
Gräbner
[2002] ECR I‑6515, paragraph 26).
In accordance with the case-law of the Court, Article 59 of the EC Treaty (now, after amendment, Article 49 EC) requires not
only the elimination of all discrimination on grounds of nationality against providers of services who are established in
another Member State, but also the abolition of all restrictions, even if applicable without distinction to national providers
of services and to those of other Member States, which are liable to prohibit or render less advantageous the activities of
a provider of services established in another Member State, where he lawfully provides similar services (Case C‑43/93
Vander Elst
[1994] ECR I‑3803, paragraph 14, and Case C‑17/00
De Coster
[2001] ECR I‑9445, paragraph 29).
Furthermore, the Court has already held that Article 49 EC precludes the application of any national rules which have the
effect of making the provision of services between Member States more difficult than the provision of services purely within
one Member State (
De Coster
, paragraph 30).
It should also be noted that any national measure liable to hinder or make less attractive the exercise of those freedoms
can be justified only if it fulfils four conditions: it must be applied in a non-discriminatory manner; it must be justified
by overriding reasons based on the general interest; it must be suitable for securing the attainment of the objective which
it pursues; and it must not go beyond what is necessary in order to attain that objective (see, inter alia, Case C‑19/92
Kraus
[1993] ECR I‑1663, paragraph 32; Case C‑424/97
Haim
[2000] ECR I‑5123, paragraph 57; and
Mac Quen and Others
, paragraph 26).
In general, such a measure, when it involves the imposition of certain conditions on the exercise of the guaranteed rights,
may only be justified in so far as the public interest relied on is not safeguarded by the rules to which the provider of
the service is subject in the Member State in which he is established (
Corsten
, paragraph 35). In other words, as the Advocate General observed in point 45 of her Opinion, the authorities of the host
Member State must, in principle, take account of the requirements which the economic operators concerned and their employees
already satisfy in their country of origin.
Finally, with regard to the argument of the Spanish Government concerning the closeness between the field of private security
and that of public security, the Court has already held that the exception laid down in Article 46(1) EC authorising the Member
States to maintain special regimes for foreign nationals justified on grounds of public safety did not apply to the general
system for private security undertakings (
Commission
v
Spain
, paragraphs 45 and 46, and Case C‑355/98
Commission
v
Belgium
[2000] ECR I‑1221, paragraphs 28 and 30).

The first complaint, concerning the legal form of the undertaking
Arguments of the parties
According to the Commission, the obligation that a private security undertaking be a legal person in almost all cases means
that a person established in another Member State and lawfully providing services such as those at issue would be obliged
to constitute a legal person in order to be able to carry out those activities in Spain, even on a temporary or occasional
basis. That requirement, having, in principle, no direct connection to the actual activity of the undertaking, is not effective
in guaranteeing the protection of recipients of those services or the maintenance of public security. All the conditions imposed
by the Spanish legislation could be met effectively without the undertaking being a legal person.
The Spanish Government responds that any provision of the services in question by natural persons would not only create a
whole series of practical problems but would also be unacceptable from the point of view of public security. Firstly, in order
to permit natural persons to provide all the disputed services, it would be necessary to review the existing obligations relating
to possession of firearms which, in Spain, are very strict. Secondly, the provision of certain services by a natural person
would prevent effective communication between the guard and the company’s main office and that communication can be vitally
important to the safety of the persons protected and that of the guard himself. Thirdly, there would be a likelihood of confusion
because of the variety of staff uniforms. The relaxation of the above rules would generally reduce the guarantees of security
considered appropriate by the Spanish authorities.
Findings of the Court
It should be remembered at the outset that, with regard to legislation analogous to the Spanish legislation criticised by
the Commission, the Court has already held that the requirement that a private security undertaking must be constituted as
a legal person in order to be able to carry out its activities constituted a restriction contrary to Articles 43 EC and 49
EC (Case C‑171/02
Commission
v
Portugal
[2004] ECR I‑5645, paragraphs 41 to 44).
In the present case, to justify that restriction, the Spanish Government puts forward the protection of the safety of the
recipients of the services in question and the remainder of the population. For reasons set out more fully by the Advocate
General in point 52 of her Opinion, the requirement of legal personality is not a measure suitable for attaining the objectives
pursued. None of the practical problems listed by that government is directly connected to the legal form of the undertaking.
In those circumstances, the first complaint is well founded.

The second complaint, concerning the requirement for a minimum share capital
Arguments of the parties
The Commission submits that, in order to be able to establish itself in Spain or to supply cross-border services there, a
foreign private security undertaking is subject to the requirement for a minimum share capital. Such a requirement cannot
be justified either by considerations of public security or on grounds of protection of the recipients of the services concerned.
Private security undertakings of other Member States apparently meet those objectives without being required to have a specific
share capital.
The Spanish Government notes that, since private security services are a sector which is not harmonised at Community level,
very great differences may exist between the Kingdom of Spain and the other Member States, particularly as regards the detailed
rules for the carrying and use of firearms. Taking into account the particular situation of that Member State with regard
to the terrorist threat, it is justified in adopting stricter requirements than the other Member States. Although it is true
that, in Spain, private security undertakings are also subject to two additional guarantees, namely obligatory security and
insurance, each of them has a specific function. However, those two guarantees alone are therefore not sufficient to attain
the objectives pursued of security and protection of citizens.
Findings of the Court
In this regard, the Court has already held that the requirement to have a minimum share capital, imposed on private security
undertakings, infringed Articles 43 EC and 49 EC (
Commission
v
Portugal
, paragraphs 53 to 57). The justifications put forward by the Spanish Government, especially the particular terrorist threat
existing in Spain, have no direct connection with the amount of the share capital of the undertaking and do not explain the
restrictions placed on freedom to provide services and freedom of establishment.
Moreover, there are less restrictive means which would permit the attainment of the objective of protection of the recipients
of the services in question, such as lodging security or taking out insurance. Even if, as the Spanish Government submits,
in certain cases each of those two measures may alone be insufficient, the possibility remains of applying them both cumulatively.
The Spanish Government has therefore failed to present arguments to show how the above two measures do not suffice to meet
the objectives of security and protection of citizens.
In those circumstances, the second complaint is also well founded.

The third complaint, concerning the lodging of security with a Spanish body
Arguments of the parties
The Commission understands the main objective of that requirement, which is to keep available to the Spanish authorities sums
guaranteeing cover of the risks connected with possible liabilities or when a fine is imposed. However, it claims that that
requirement is disproportionate to the aims which it pursues. In particular, the national provisions do not allow account
to be taken of payment of security in the Member State of origin of the undertaking, which, in principle, should be sufficient.
For the Spanish Government, paying security or taking out insurance are legitimate means of guaranteeing protection of the
recipients of the services in question. Indeed, the Regulation on private security services requires the undertakings in question
to conclude a contract of civil liability insurance. However, given the economic factors characteristic of the insurance market,
that method can offer only a limited safeguard. In other words, the function of the security is complementary but cannot take
the place of that of the other two safeguards, namely minimum share capital and insurance.
Findings of the Court
It should be noted that the requirement to lodge security with the Caja General de Depósitos, as laid down in Spanish law,
is likely to hinder or make less attractive the exercise of freedom of establishment and freedom to provide services within
the meaning of Articles 43 EC and 49 EC. It makes the provision of services or the formation of a subsidiary or secondary
establishment in Spain more onerous for private security undertakings established in other Member States than for those established
in Spain. It must be determined whether this requirement is justified.
The Court has already expressly held that providing security is less of a restriction on the freedom of establishment and
freedom to provide services than is the setting of a minimum share capital to ensure the protection of creditors (
Commission
v
Portugal
, paragraph 55).
However, it is established case-law that such an obstacle may be justified only in so far as the public interest relied on
is not safeguarded by the rules to which the provider of the service is subject in the Member State in which he is established
(see
Corsten
, paragraph 35). The Spanish legislation at issue requires the security to be lodged with a Spanish body, the Caja General
de Depósitos, without taking into account any security lodged in the Member State of origin. Furthermore, in the current state
of development of the systems for cross-border debt recovery and execution of foreign judgments within the Union, such strictness
appears disproportionate. The requirement to lodge security goes beyond what is necessary to ensure adequate protection of
creditors.
Indeed, it is clear from the observations of the Spanish Government that it has declared itself prepared to take into account
securities lodged with financial bodies of the other Member States, provided that sums relating to the activities carried
out on Spanish territory are set aside and held at its disposal. In that regard, it should be noted that, according to settled
case-law, the question whether a Member State has failed to fulfil its obligations must be determined by reference to the
situation prevailing in the Member State at the end of the period laid down in the reasoned opinion and that the Court cannot
take account of any subsequent changes (see, inter alia, Case C‑103/00
Commission
v
Greece
[2002] ECR I‑1147, paragraph 23, and Case C‑323/01
Commission
v
Italy
[2002] ECR I‑4711, paragraph 8). Moreover, the present case involves a mere declaration by the defendant government and not
a concrete legislative or regulatory measure.
In those circumstances, the third complaint is well founded.

The fourth complaint, concerning the minimum number of employees
Arguments of the parties
According to the Commission, any foreign undertaking lawfully providing private security services in its Member State of establishment
but not having the number of employees required by Spanish legislation is required to increase its staff, even if its actual
activities do not require it. That requirement has a dissuasive effect, particularly on small and medium-sized undertakings,
with regard to the exercise of both the right to set up secondary establishments and the freedom to provide cross-border services.
Articles 43 EC and 49 EC prohibit the application of that legislation to an undertaking established in another Member State
without the Spanish authorities taking into account obligations which are, if not identical, at least comparable and have
already been met by that undertaking in its country of establishment.
The Spanish Government points to the undertaking given by the Spanish authorities generally to reduce by 50% the minimum requirements
with regard to human, material and technical resources. The legislative requirements relating to the number of employees in
the field of transport of explosives, however, are justified by considerations of security linked particularly to the Spanish
situation.
Findings of the Court
As a preliminary point, it should be noted that the provisions setting a minimum number of persons employed by security undertakings
constitute an impediment to freedom of establishment and freedom to provide services in that they make the formation of secondary
establishments or subsidiaries in Spain more onerous and dissuade foreign private security undertakings from offering their
services on the Spanish market.
With regard to the justification for that restriction, the mere fact that one Member State imposes less strict rules than
another Member State does not necessarily mean that the stricter rules are disproportionate and incompatible with Community
law (Case C‑384/93
Alpine Investments
[1995] ECR I‑1141, paragraph 51; Case C‑3/95
Reisebüro Broede
[1996] ECR I‑6511, paragraph 42;
Mac Quen and Others
, paragraphs 33 and 34; and
Gräbner
, paragraphs 46 and 47).
With the exception of the transport of explosives, the Spanish Government has not demonstrated in a detailed manner that the
minimum number of employees required by the legislation in force does not go beyond what is necessary in order to attain the
objective pursued, namely ensuring the required level of security for transport of valuables and dangerous objects and installation
and maintenance of surveillance and alarm systems. To that extent, the fourth complaint must therefore be considered well
founded.
With regard to the requirement for a minimum number of employees in undertakings active in the transport of explosives, referred
to in point 2(b) of the annex to the Regulation on private security services, it must be held that it is justified. In the
light of the security considerations put forward by the Spanish Government, that requirement appears appropriate for the attainment
of that objective without going beyond what is necessary to attain it.
The fourth complaint must therefore be rejected insofar as that Spanish legislation requires a minimum number of employees
for undertakings active in the field of transport or distribution of explosives.

The fifth complaint, concerning the authorisation of staff
Arguments of the parties
The Commission notes that, in Spain, the members of staff of a foreign private security undertaking must, in all cases, obtain
specific administrative authorisation. However, there is no clause recognising an authorisation already issued in the Member
State of establishment of the undertaking in question, even if the requirements in that regard are analogous there to those
in force in Spain. That formality constitutes a significant obstacle to the freedom to provide services since a foreign undertaking
cannot transfer to Spain staff authorised in its State of establishment.
The Spanish Government explains that the national rules require private security staff to have undergone training which is
the longest at the European level. Its requirements are therefore very different from those in force in the other Member States,
such that in principle there cannot be any ‘analogous requirements’ permitting comparison of the legal rules.
Findings of the Court
The Court has already held that the requirement that members of staff of a private security undertaking must obtain a fresh
specific authorisation in the host Member State constitutes an unjustified restriction on that undertaking’s freedom to provide
services within the meaning of Article 49 EC, in so far as it does not take account of the controls and verifications already
carried out in the Member State of origin (
Commission
v
Portugal
, paragraph 66, and Case C‑189/03
Commission
v
Netherlands
[2004] ECR I‑9289, paragraph 30).
Similarly, with regard to freedom of establishment within the meaning of Article 43 EC, the above requirement may make the
formation of a secondary establishment more difficult in the host Member State. It therefore constitutes an obstacle to the
exercise by foreign private security undertakings of their freedom of establishment in Spain.
With regard to the justification for that obstacle, the Court has held that, in the event of establishment in another Member
State, an undertaking is in principle required to meet the same conditions as apply to nationals of the host Member State
(
Gebhard
, paragraph 36). That being the case, general application of an administrative authorisation procedure to foreign security
undertakings is not of itself contrary to Article 43 EC. However, as the Advocate General rightly observed in points 84 and
85 of her Opinion, the Spanish legislation does not provide for the possibility of taking into account the requirements already
met by individual members of the staff of those undertakings in their Member State of origin. Such strictness goes beyond
what is necessary to attain the legitimate objective of checking the abovementioned staff.
The argument of the Spanish Government that its requirements are very different from those in force in other Member States,
such that in principle there cannot be any ‘analogous requirements’ which permit comparison of the respective legal rules,
is irrelevant.
In those circumstances, the fifth complaint is also well founded.

The sixth complaint, concerning recognition of professional qualifications
Arguments of the parties
The Commission notes that the professions governed by the Regulation on private security services are regulated professions
within the meaning of Directives 89/48 and 92/51, to the extent that pursuit thereof is subject to the possession of certain
qualifications. However, those professions were not included in the lists annexed to the decrees transposing those two directives
into national law and no other provision of Spanish law provides for the possibility of recognition of qualifications obtained
in that field in the other Member States. The Commission points out that, because of the permanence of its validity, which
is not limited in time, the authorisation required by Spanish legislation does indeed constitute an ‘attestation of competence’
within the meaning of Directive 92/51.
According to the Spanish Government, neither of those directives has been infringed. Neither taking up the professions in
the private security sector nor pursuit thereof is made subject to the possession of any ‘attestation of competence’. With
regard to the training required by national legislation, it is undertaken only after the person concerned is recruited. What
is more, and contrary to the Commission’s submissions, the authorisation required by the Law on private security services
is limited in time. According to Article 10 of that law, where a member of staff of a private security undertaking ‘remains
inactive for a period of time greater than two years, he must pass new tests in order to be able to carry out his work’. Consequently,
there is no question of an ‘attestation of competence’ and the situation referred to in the complaint does not fall within
the field of application of Directives 89/48 and 92/51.
Findings of the Court
At the outset, it must be stated that the Commission alleges failure to fulfil obligations under both Directive 89/48 and
Directive 92/51. However, it should be noted that those two directives have different fields of application. In particular,
Directive 89/48 relates to higher-education diplomas awarded on completion of professional education and training of at least
three years’ duration. However, it is not apparent from the application lodged by the Commission that the qualifications which,
in Spain, must be held by members of staff of private security undertakings and private detectives require those persons to
have completed higher-education training of at least three years’ duration. The Commission has therefore failed to show how
and why the above professions fall within the field of application of Directive 89/48.
With regard to Directive 92/51, the parties agree that the security staff of private security undertakings pursue in Spain
a regulated profession within the meaning of Article 1(e) of that directive. However, in order to determine whether that directive
is applicable to that activity, it is appropriate to examine whether, according to the Spanish legislation, the grant of an
administrative authorisation to private security staff is subject to their holding an attestation of competence within the
meaning of Article 1(c) of that directive. As the Advocate General rightly observed in points 96 to 100 of her Opinion, the
Commission has not clearly indicated precisely which formal attestations of competence are required by the Spanish authorities
in the field of private security. Accordingly, the complaint concerning Directive 92/51 is also unfounded insofar as it relates
to that field.
However, with regard to the profession of private detective, Article 54(5)(b) of the Regulation on private security services
requires that the persons concerned hold a private detective diploma. That diploma is awarded on condition that a person has
achieved a certain level of training, taken special courses and passed aptitude tests in accordance with the particular provisions
of the regulation. It should be noted that, although that document is not a ‘diploma’ in the strict sense of the word, since
it does not require a training period of at least a year, there is no doubt that it corresponds to the concept of ‘attestation
of competence’ within the meaning of the second indent of Article 1(c) of Directive 92/51, insofar as it is awarded following
an assessment of the personal qualities, aptitudes or knowledge which are essential for the applicant to have for the pursuit
of the professions in question. The Spanish legislation therefore falls within the field of application of that directive.
It must be held that, with regard to the profession of private detective, to date there is in Spain no system of mutual recognition
for professional qualifications, contrary to the requirements of Directive 92/51.
In those circumstances, the sixth complaint is well founded insofar as it relates to the recognition of attestations of professional
competence for the pursuit of the activity of private detective.

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. In the present case, since the Commission applied for the Kingdom of Spain
to be ordered to pay the costs and the Kingdom of Spain has been unsuccessful in respect of the first to third and the fifth
complaints raised by the Commission, it must be ordered to pay the costs relating to those complaints.
With regard to the complaint relating to nationality which was withdrawn by the Commission, each party applied for the other
to be ordered to pay the costs. It is therefore appropriate to apply the first subparagraph of Article 69(5) of the Rules
of Procedure and the Commission must be ordered to pay the costs, unless it appears justified to order the defendant to pay
the costs, having regard to its conduct. As the Advocate General rightly observed in points 109 and 110 of her Opinion, since
the Kingdom of Spain only belatedly amended the Regulation on private security services, its conduct led the Commission to
bring its action. In those circumstances, it is appropriate to order that Member State to pay the costs relating to the complaint
withdrawn.
Having regard to the foregoing, and in light of the fact that, in respect of the fourth and sixth complaints, the Commission
was only successful in part, it is appropriate to order the Kingdom of Spain to pay three quarters of the Commission’s costs
and to decide that, for the rest, each party should bear its own costs.
On those grounds, the Court (First Chamber) hereby:
1.
Declares that, by maintaining in force provisions of Law No 23/1992 of 30 July 1992 on private security services and Royal
Decree No 2364/1994 of 9 December 1994 approving the Regulation on private security services which impose a series of requirements
on foreign private security undertakings for the pursuit of their activities in Spain, namely
the obligation:
–
to be constituted as legal persons;
–
to have a specific minimum share capital;
–
to pay a security to a Spanish body;
–
to employ a minimum number of workers, insofar as the undertaking in question carries out its activities in fields other than
the transport and distribution of explosives;
–
generally, for members of their staff, to hold a special administrative authorisation issued by the Spanish authorities, and
by failing to adopt the provisions necessary to ensure recognition of attestations of professional competence for the pursuit
of the activity of private detective, the Kingdom of Spain has failed to fulfil its obligations under, firstly, Articles 43
EC and 49 EC and, secondly, Council Directive 92/51/EEC of 18 June 1992 on a second general system for the recognition of
professional education and training to supplement 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;
2.
Dismisses the remainder of the action;
3.
Orders the Kingdom of Spain to pay three quarters of the costs of the Commission of the European Communities and to bear its
own costs;
4.
Orders the Commission of the European Communities to bear one quarter of its own costs.
[Signatures]
*
Language of the case: Spanish.