Judgment — ECLI:EU:C:2002:326
Date: 2002-06-04
Language of the case: Portuguese
Court formation: Full Court
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Accession;Right of establishment;Free movement of capital
Concepts: Free movement of capital and freedom of payments
Procedure: Action for failure to fulfil obligations - successful;Action for failure to fulfil obligations - unfounded
Origin: Portugal

Summary of the Judgment 
1. Free movement of capital — Restrictions — Obstacles resulting from a system of 
administrative authorisation relating to privatised undertakings — justification — 
Systems of property ownership — None 
(EC Treaty, Art. 222 (now Art. 295 EC» 
I - 4731 
SUMMARY — CASE C-367/98 
2. Free movement of capital — Restrictions — National rules prohibiting the acquisi­
tion by investors from other Member States of more than a given number of shares and 
providing for a system of prior authorisation for the acquisition of a holding in certain 
national undertakings in excess of a specified level — Not permissible — justification 
on economic grounds — None 
(EC Treaty, Arts 73b and 73d(1) (now Arts 56 EC and 58(1) EC)) 
1. Depending on the circumstances, cer­
tain concerns may justify the retention 
by Member States of a degree of 
influence within undertakings that 
were initially public and subsequently 
privatised, where those undertakings 
are active in fields involving the provi­
sion of services in the public interest or 
strategic services. However, those con­
cerns cannot entitle Member States to 
plead their own systems of property 
ownership, referred to in Article 222 of 
the Treaty (now Article 295 EC), by 
way of justification for obstacles, 
resulting from a system of adminis­
trative authorisation relating to priva­
tised undertakings, to the exercise of 
the freedoms provided for by the 
Treaty. That article does not have the 
effect of exempting the Member States' 
systems of property ownership from 
the fundamental rules of the Treaty. 
(see paras 47-48) 
2. A Member State which adopts and 
maintains in force national rules (a) 
prohibiting the acquisition by investors 
from other Member States of more 
than a given number of shares in 
certain national undertakings and (b) 
requiring the grant by the State of prior 
authorisation for the acquisition of a 
holding in certain national undertak­
ings in excess of a specified level fails to 
comply with its obligations under 
Article 73b of the Treaty (now 
Article 56 EC). 
Such rules constitute a restriction on 
the movement of capital within the 
meaning of that article which cannot 
be justified. In that regard, restrictions 
on the fundamental freedom concerned 
cannot be justified either by the econ­
omic policy objectives reflected in such 
national rules or by the objectives of 
choosing a s t rategic pa r tne r , 
strengthening the competitive structure 
of the market concerned or modern­
ising and increasing the efficiency of 
means of production, inasmuch as all 
those grounds fall outside the ambit of 
the reasons set out in Article 73d(1) of 
the Treaty (now Article 58(1) EC). 
(see paras 46, 52, operative part 1) 
I - 4732