Judgment — ECLI:EU:C:2004:597
Date: 2004-10-07
Language of the case: Dutch
Court formation: First Chamber
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Freedom to provide services;Free movement of workers
Concepts: The various services
Procedure: Action for failure to fulfil obligations - successful
Origin: Netherlands

summary, it must therefore be observed that there are in fact no objections as a matter of principle to the necessity of prior control of private security firms and detective agencies by the Netherlands authorities. Nevertheless, the Netherlands provisions in their actual form do not satisfy the requirements of the freedom to provide services, as they go beyond what is necessary to ensure consumer protection since they do not sufficiently take into account any requirements which a provider of services established in another Member State must already fulfil in his State of origin. 42. The first complaint of the Commission must therefore be upheld. B – Second complaint: incompatibility of the authorisation requirement for management staff of private security firms with the freedom to provide services 43. The subject-matter of the Commission’s second complaint is the special authorisation requirement applicable in the Netherlands in respect of the management staff of private security firms. In the Commission’s view such an obligation goes beyond what is necessary since it applies in addition to the authorisation requirement for the firms themselves, already considered, thus placing a double burden on those firms. 44. As the Netherlands Government correctly observes, however, an authorisation procedure which was limited to the firms themselves would hardly be appropriate for achieving the desired quality control concerning the services offered by private security firms. Since in each case management staff can decisively influence the practices and the market image of such firms, the quality of the services offered depends considerably on the reliability of such staff. In principle, therefore, there cannot be any objection if the Netherlands provisions require an assessment of both the firm concerned and its management staff. 45. Nevertheless, the same applies in respect of the management staff as was already observed in relation to the firms: (26) the Netherlands provisions go beyond what is necessary for the purposes of consumer protection since they do not take into account any obligations which already apply to the management staff of private security firms established in another Member State in their State of origin. To that extent the Netherlands provisions infringe the freedom to provide services. 46. Thus the second complaint of the Commission is to be upheld in so faras the management staff of private security firms must possess an authorisation without the obligations being taken into account which have to be complied with in the State of establishment and in so far as for that authorisation a fee is charged. For the rest, that is to say, inasmuch as the Commission contests in general the requirement for management staff of private security firms to be authorised, the second complaint is, however, unfounded. C – Third complaint: incompatibility of the proof of identity requirement for the staff of private security firms and detective agencies with the freedom to provide services 47. The subject-matter of the Commission’s third complaint is the requirement that the staff of private security firms and detective agencies must possess a proof of professional identification issued in the Netherlands. It is not contested that this also constitutes a restriction on the freedom to provide services, (27) since costs and a considerable administrative burden thereby arise for the firms concerned, rendering the provision of cross-border services more expensive and in particular rendering the initial, possibly short-term, provision of services more difficult. 1. Arguments of the parties 48. In the Commission’s view, such a proof of identity requirement is already disproportionate since the persons concerned must in any event be in possession of a valid identity card or passport. (28) Moreover, the identification requirement is an outward expression of the system of prior control over the activities of private security firms and detective agencies criticised – in the written proceedings at least – by the Commission. 49. The Netherlands Government replies that the proof of identity requirement constitutes an important guarantee for the quality and reliability of the services of private security firms and detective agencies. The proof of identity at issue (legitimatiebewijs) contains considerably more information than a standard identity card or passport and in particular apart from the usual function of identification also serves as legitimation: it certifies that the bearer of such a card has been authorised by the Netherlands authorities to work for a private security firm or a detective agency. Public confidence is thereby strengthened. 2. Appraisal 50. A proof of professional identity issued by the Netherlands authorities which serves as legitimation can indeed function as a State-awarded seal of approval, thus increasing the confidence of the members of the public concerned in the staff of private security firms and detective agencies. The proof of identity requirement is therefore an appropriate measure for achieving the legitimate objective of protecting the consumer and ensuring the quality of the services offered. (29) 51. Doubts may however arise with respect to the necessity of the Netherlands proof of identity requirement. In that context not only must the proof of identity requirement as such (Article 9(8) of the Law) be evaluated but in particular also the underlying requirement for staff of private security firms and detective agencies to be authorised. The proof of professional identity required in the Netherlands is above all an outward expression of official authorisation for the activities of its bearer and documents this (Article 7(2) of the Law read together with Article 13(2) of the Regulation). 52. As explained above, there are in principle no objections as to the necessity of the system of prior control of private security firms and detective agencies operated in the Netherlands. (30) 53. Nevertheless the principle of the freedom to provide services at any rate requires such a prior authorisation procedure to take into account also those obligations which a provider of services already has to comply with in his State of origin. (31) Thus if in an essentially comparable procedure carried out in the State of origin it has been concluded that the staff of a private security firm or detective agency satisfy those requirements applicable to the activities in question then the firm concerned must be allowed to rely on this in the Netherlands. (32) In addition professional experience obtained in another Member State must also be duly taken into account. 54. As the Netherlands Government points out, Article 8(2) of the Law permits the relevant Minister to exempt private security firms from the requirement that they entrust the fulfilment of their tasks only to those persons who satisfy the relevant Netherlands criteria as to qualifications. It is, however, not evident from the Law itself that this possibility of exemption can also be applied for the purpose of recognising qualifications awarded in other Member States. If one, in fact, considers the wording of Article 8(2) of the Law it appears that that provision more readily applies to situations in which an individual lacks the necessary qualifications and thus needs an exemption, than to situations in which an individual has obtained the necessary qualifications, albeit not in the Netherlands. 55. The firms concerned cannot be expected to engage in additional research into the background parliamentary material put forward by the Netherlands Government in order to acquire a comprehensive understanding of the prevailing legal situation and in particular of any possibility of having the qualifications obtained by their staff in another Member State recognised. 56. In addition, the possibility of exemption in Article 8(2) of the Law is a purely discretionary provision which permits the relevant Minister considerable freedom of action. There is an absence of specific criteria detailing how that discretion is to be exercised and how the equivalence of qualifications is to be assessed. 57. The broader the discretion, however, which is granted to national authorities in a system of prior administrative authorisation the greater the chance that fundamental freedoms are deprived of their effectiveness. Such a discretion must therefore, in any event, be accompanied by objective, non-discriminatory criteria which are known in advance to the undertakings concerned, in such a way as to circumscribe the exercise of the national authorities’ discretion, so that it cannot be used arbitrarily. (33) 58. As I have shown, therefore, the Netherlands provisions do not sufficiently permit the qualifications acquired by staff of the firms affected in another Member State to be taken into account. The proof of identity requirement as an external manifestation of that duty to obtain authorisation exceeds what is necessary for the purposes of consumer protection and does not satisfy the requirements of the freedom to provide services. (34) 59. The Commission’s third complaint is therefore to be upheld in so faras the staff of private security firms and detective agencies, seconded from the State of establishment to the Netherlands, are required to possess a proof of identity issued by the Netherlands authorities without account being taken, on issuing that proof, of the obligations which must be satisfied in the State of establishment. For the rest, that is to say, in so far as the Commission contests in general the requirement of a proof of professional identity as the outward expression of a system of prior control the third complaint is, however, unfounded. VI – Costs 60. As regards the withdrawal of the Commission’s fourth complaint the Netherlands Government in its response thereto made no application as to costs. In those circumstances it therefore follows from the first sentence of the first subparagraph taken together with the third subparagraph of Article 69(5) of the Rules of Procedure that in this regard each party is to pay its own costs. 61. Since as regards the rest of the Commission’s action only one of its three remaining complaints is to be upheld in its entirety whilst it is only partially successful in two of its complaints, the Court should in accordance with the first subparagraph of Article 69(3) of the Rules of Procedure apportion the costs. 62. In these circumstances the Kingdom of the Netherlands should be ordered to pay its own costs and two thirds of the Commission’s costs. The Commission should pay its own remaining costs. VII – Conclusion 63. On the basis of the foregoing I propose that the Court rule as follows: (1) By laying down, in the framework of the Law on private security firms and detective agencies, provisions which require that: – an undertaking that wishes to provide services on Netherlands territory must be authorised, without taking into account the obligations which the foreign service provider must satisfy in the Member State where it is established, and by charging fees for this authorisation; – management staff of these security firms have a permit for which a charge is also made, without taking into account the obligations which must already be satisfied in the State of establishment; and – staff of private security firms and detective agencies seconded from the State of establishment to work in the Netherlands have a proof of identity issued by the Netherlands authorities, without account being taken, on issuing that proof, of the obligations which must be satisfied in the State of establishment; the Kingdom of the Netherlands has failed to fulfil its obligations under Article 49 EC. (2) The remainder of the application is dismissed. (3) The Kingdom of the Netherlands shall pay its own costs and two thirds of the Commission’s costs. The Commission shall pay its own remaining costs. 1 – Original language: German. 2 – Case C-114/97 Commission v Spain [1998] ECR I-6717. 3 – Case C-355/98 Commission v Belgium [2000] ECR I-1221. 4 – Case C-283/99 Commission v Italy [2001] ECR I-4363. 5 – Case C-171/02 Commission v Portugal [2004] ECR I-5645. 6 – Staatsblad 1997, 500. 7 – Stcrt. 1999, 60. 8 – Stcrt. 1999, 60. 9 – 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). 10 – 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). 11 – See on the delineation of the freedom of establishment in particular Case C-55/94 Gebhard [1995] ECR I-4165, paragraphs 25 to 28, and Case C-215/01 Schnitzer [2003] ECR I-14847, paragraphs 27 to 33. 12 – Case C-42/02 Lindman [2003] ECR I-13519, paragraph 20; see also Case C-43/93 Vander Elst [1994] ECR I-3803, paragraph 14, Case C-154/89 Commission v France [1991] ECR I-659, paragraph 12, and Case C-76/90 Säger [1991] ECR I-4221, paragraph 12. 13 – See Säger, cited in footnote 12, paragraph 14, Vander Elst, cited in footnote 12, paragraph 15, and Commission v Belgium, cited in footnote 3, paragraph 35. 14 – In that regard the Netherlands Government refers to the results of a study commissioned by the Commission: A comparative overview of legislation governing the private security industry in the European Union, 2002, submitted in Annex 1 to its defence. 15 – See in particular the written observations of the Commission in its reply to the defence submitted by the Kingdom of the Netherlands. 16 – In that regard the Commission refers to Commission v Belgium, cited in footnote 3, paragraph 33. 17 – Schnitzer, cited in footnote 11, paragraph 35, Case C-58/98 Corsten [2000] ECR I-7919, paragraph 39, Säger, cited in footnote 12, paragraph 15. 18 – Case C-390/99 Canal Satélite Digital [2002] ECR I-607, paragraph 39. 19 – Case 279/80 Webb [1981] ECR 3305, paragraph 17; Säger, cited in footnote 12, paragraph 15; Commission v Belgium, cited in footnote 3, paragraph 37; Corsten, cited in footnote 17, paragraph 35; Canal Satélite Digital, cited in footnote 18, paragraphs 36 to 38, and Commission v Portugal, cited in footnote 5, paragraphs 60 to 66. 20 – See in that regard, for example, Canal Satélite Digital, cited in footnote 18, paragraph 37 and the references cited therein. 21 – Settled case-law since ‘Cassis de Dijon’, Case 120/78 Rewe-Zentral [1979] ECR 649, paragraph 8. In the area of the freedom to provide services see, for example, Canal Satélite Digital, cited in footnote 18, paragraph 37. Corsten, cited in footnote 17, paragraphs 31 and 35, is also decided on the same basis. 22 – The mere fact that one Member State imposes less strict rules than another Member State does not mean that the latter’s rules are disproportionate and hence incompatible with Community law: see Case C-384/93 Alpine Investments [1995] ECR I-1141, paragraph 51; Case C-3/95 Reisebüro Broede [1996] ECR I-6511, paragraph 42; Case C-108/96 Mac Quen [2001] ECR I-837, paragraphs 33 and 34; and Case C-294/00 Gräbner [2002] ECR I-6515, paragraphs 46 and 47. 23 – See also – in respect of skilled trades – Corsten, cited in footnote 17, paragraph 31. 24 – See the case-law cited in footnote 19. 25 – See – in respect of the duty to be entered on the skilled trades register – Corsten, cited in footnote 17, paragraphs 45, 47 and 48; see also Schnitzer, cited in footnote 11, paragraphs 36 to 39. 26 – See, in particular, points 35 to 42 of this Opinion. 27 – Commission v Belgium, cited in footnote 3, paragraph 39, and Commission v Portugal, cited in footnote 5, paragraph 66. 28 – The Commission refers to Commission v Belgium, cited in footnote 3, paragraph 40. 29 – See likewise the Opinion of Advocate General Alber in Case C-171/02 Commission v Portugal [2004] ECR I-5645, point 88. Moreover, in particular on account of the significant legal interests to be protected (see above at point 32) this case can be distinguished from others concerning a proof of identity requirement, for example that applying to tourist guides which was the subject-matter of Case C-375/92 Commission v Spain [1994] ECR I-923, paragraph 21, with further references. 30 – On the lawfulness of a system of prior control, see also point 34 of this Opinion. The observations made there are also applicable to the staff of private security firms and detective agencies. 31 – See the case-law cited in footnote 19. 32 – If necessary, proof could also be demanded that, for example, the staff concerned had familiarised themselves with the basic principles of law in the receiving State governing matters such as the use of firearms, the exercise of the right to self-defence, or the citizen’s right of arrest. Exercise of the freedom to provide services may not, however, be thereby subjected to disproportionate obstacles or delay. 33 – Canal Satélite Digital, cited in footnote 18, paragraph 35, with further references. 34 – For the same conclusion, see also Commission v Portugal, cited in footnote 5, paragraph 66.