62001CC0232_EN
Opinion of the Advocate-General
Opinion of the Advocate-General
1.
This reference for a preliminary ruling concerns the interpretation of Articles 39 and 10 EC.
The Politierechtbank te Mechelen (Belgium) asks whether these provisions preclude a Member State from adopting a measure requiring an employee who is resident in its territory to register his motor vehicle there although the motor vehicle in question belongs to a leasing company established in the territory of a second Member State and is hired out to an employer established in this second Member State in order to be made available to the employee in question under his contract of employment.
I ─ The relevant national provisions
2.
The conditions subject to which a motor vehicle may travel on the public highway in Belgium are laid down in Article 3 of the Royal Decree of 31 December 1953 governing the registration of motor vehicles and trailers.
(2)
3.
In its initial version, this provision prescribed that a motor vehicle could only be taken on to the public highway in Belgium provided it was registered there on application by a Belgian resident who was
"either the personal owner of the motor vehicle"
or to whom it was
"permanently or habitually available"
.
This meant that the user of a vehicle could have it registered in his own name even if he was not its owner.
4.
This provision of the Royal Decree of 31 December 1953 was amended by the Royal Decree of 27 December 1993,
(3) and now provides that only the owner of the vehicle may apply for its registration.
Article 3 of the Royal Decree now provides
verbatim
as follows:
"1.
Motor vehicles and trailers shall be permitted to travel on the public highway only if, on application by and in the name of their owner, they have first been entered in the register of motor vehicles and trailers referred to in Article 2.
2.
However, motor vehicles and trailers driven in Belgium for short periods, without being imported by persons resident in the country, do not have to be registered in Belgium provided that they bear a registration number issued by the authorities of a country other than Belgium which has acceded to the international conventions on road traffic and the annexes thereto, signed at Vienna on 8 November 1968 and Geneva on 19 September 1949 respectively and ratified by the Law of September 1988 and the Law of 1 April 1954, or to the Convention relative to Motor Traffic signed at Paris on 24 April 1926, or bear registration numbers prescribed by these conventions.
No application for registration may be submitted in the name of several persons or in the name of a
de facto
association.
Where various persons are co-owners of the vehicle, the application for registration shall be submitted in the name of the owner who is the principal user of the vehicle.
"
5.
By judgment of 19 May 1999, the Belgian Cour de cassation (Court of Cassation) ruled that it was evident from this provision, taken as a whole, that, with the exception of the case referred to in the second paragraph, no motor vehicle may be driven in Belgium unless it has first been registered in Belgium.
(4)
6.
This version of Article 3 of the Royal Decree applies to the facts of the main proceedings.
II ─ Facts and proceedings
7.
Mr Van Lent is a Belgian national residing in Putte (Belgium).
He works as a civil engineer for a company with headquarters in Luxembourg.
The company provided him with a vehicle registered in Luxembourg, which was leased to him from a leasing company also established there.
Mr Van Lent uses this vehicle both for business trips (in Luxembourg and in order to attend certain meetings in Antwerp (Belgium)) and for private purposes (to drive home and at the weekend).
8.
On 22 August 1999 he was stopped during a traffic check in Willebroek (Belgium).
Following this check, the Crown Prosecutor served a summons on Mr Van Lent, and contended that he had taken on to the public highway a motor vehicle which had not been registered in Belgium on application by the owner, in violation of Article 3(1) of the Royal Decree.
9.
In his defence, Mr Van Lent claimed that this provision runs counter to the principle of freedom of movement for workers as laid down in Article 39 EC.
III ─
The question referred
10.
The Politierechtbank te Mechelen decided to stay proceedings and to refer the following question to the Court of Justice:
"Do Community rules, in particular Article 39 EC (ex Article 48 of the EC Treaty) and Article 10 EC (ex Article 5 of the EC Treaty), preclude a Member State from requiring registration of a vehicle belonging (1) to a leasing company established in a neighbouring Member State, which is hired out to an employer and used by an employee (2) who resides in the first-mentioned Member State, at a distance, more specifically, of some 200 km from his place of employment, where the employee in question resides (3) in the first-mentioned Member State during the week and uses the vehicle in order to perform his contract of employment and also during his free time, including weekends and holiday periods?"
IV ─ Analysis
11.
The referring court asks whether Article 39 EC precludes national legislation which requires registration of a vehicle in its territory where the user of the vehicle in question resides there, even if the vehicle belongs to a leasing company established in a second Member State and has been hired out to a company also established in that second Member State in order to be made available to the user in question under his contract of employment.
12.
It must be stated from the outset that the question of which Member State has competence to require the registration of a vehicle has not been the subject of harmonisation within the Community.
To date, the only harmonisation measures in the sphere of vehicle taxation relate to tax exemptions for certain means of transport temporarily imported by non-residents,
(5) on the application by Member States of taxes on certain vehicles used for the carriage of goods by road
(6) and on the registration documents for vehicles.
(7)
None of these directives lays down rules governing the question of the competence of Member States to require the registration of vehicles.
As a result, Member States are entitled to decide on the registration and the conditions for registration of vehicles used in their territory, provided the rules that they adopt in this respect meet the requirements of Community law.
(8)
13.
Freedom of movement for workers entails, amongst other things, obligations for the host Member State.
Furthermore, according to the Court's case-law, national legislation of the worker's Member State of origin may not impose measures which are capable of inhibiting that freedom or making the exercise thereof less attractive to Community nationals.
(9) Thus, in the
Bosman
judgment,
(10) the Court stated:
"[N]ationals of Member States have in particular the right, which they derive directly from the Treaty, to leave their country of origin
to enter the territory of another Member State and reside there in order to pursue an economic activity.
Provisions which
preclude ordeter a national of a Member State from leaving his country of origin in order to exercise his right to freedom of movement therefore constitute an obstacle to that freedom
even if they apply without regard to the nationality of the workers concerned
"
.
(11)
14.
The Court moreover ruled, in the
Bosman (12) and
Graf (13) judgments, that legislative provisions of the Member State of origin constitute an obstacle to freedom of movement of workers if they affect their access to the labour market in the other Member States.
(14)
15.
This is precisely the case in relation to the contested legislation.
16.
In the
Ledoux
judgment, in a case similar to the present one, the Court held that there might be an obstacle to the free movement of workers.
Mr Ledoux, a worker residing in Belgium, was provided with a motor vehicle by his employer established in France.
The motor vehicle, which belonged to the employer, was registered in its name in its State of residence (France) and Mr Ledoux used this motor vehicle for both professional and private purposes.
17.
Following a traffic check in Belgium, Mr Ledoux was charged with having unlawfully imported the motor vehicle.
He was accused of having imported the motor vehicle without paying the value added tax
(15) relating to the transaction.
The Community legislation applicable at the time was the Sixth Directive 77/388/EEC.
(16)
Under that directive, the importation of goods is liable for VAT unless they are placed under an arrangement for temporary importation.
Whilst awaiting adoption of Community tax rules defining the scope of this exemption, Member States were allowed to specify the conditions to be complied with in order to qualify for it.
18.
The Court began its examination by recalling that one of the objectives of that exemption was the effective removal of restrictions on the movement of persons
(17) and held that a Member State could not specify a procedure for qualification for the right to exemption from VAT which would introduce an obstacle to the free movement of workers who, although residing on its territory, pursue their occupations in another Member State.
(18)
19.
The Court next examined the question whether the fact of considering the import to be permanent and therefore liable for VAT on the ground that the importer (the employee) had his place of residence in the Member State into which the motor vehicle had been brought was capable of introducing an obstacle to the free movement of workers.
(19)
The Court expressed the view, following its analysis, that there could be an obstacle to the free movement of workers, but referred actual examination of this question back to the national court.
20.
The relevant point for the purposes of this case lies in the Court's reasoning which led it to conclude that there was an obstacle to the free movement of workers.
The Court held that importation must be regarded as temporary, and consequently, the exemption granted, even though the motor vehicle could be used for private purposes, since such use was ancillary to business use and was provided for in the contract of employment.
(20)
The Court stated:
"If it were not, frontier workers would be effectively prevented from benefiting from certain advantages granted to them by their employers merely because they resided in the Member State into which the vehicle was temporarily imported.
Such workers would thereby be placed at a disadvantage in regard to working conditions compared to their colleagues residing in the country of their employer, which would have a direct effect on the exercise of their right to free movement within the Community." (21)
21.
In my opinion the
Ledoux
judgment provides authority for the view that a national measure having the effect of preventing (or virtually preventing) a worker residing in a Member State other than that in which his employer is established from benefiting from certain advantages, and in particular from the provision of a motor vehicle, affects the exercise of his right to free movement.
22.
All the Member States participating in the proceedings take the view that the
Ledoux
judgment is not applicable in the present case, since it concerned the interpretation of the Sixth Directive 77/388 and not the registration of motor vehicles.
I do not share this view.
In that judgment, the Court held that the fact that it was impossible, on account of the Belgian legislation, for the worker to benefit from a specific advantage constituted an obstacle to the free movement of workers.
The Court's reasoning which led it to conclude that there was such an obstacle can thus readily be transposed to the present case.
23.
The legislation at issue effectively makes it impossible for the worker resident in Belgium to benefit from the provision of a motor vehicle belonging to a person established in another Member State.
24.
That impossibility stems from an internal contradiction within the Belgian legislation which makes registration impossible in the present case.
First, the Royal Decree provides that
a motor vehicle must be registered on application by and in the name of the owner of the motor vehicle in question.
It follows that the worker who only has use of the vehicle cannot register it.
Second, the national legislation provides that where the applicant for registration (namely the owner of the motor vehicle) is a legal entity, it must quote its Belgian VAT registration number.
Given that, in order to have such a number, the applicant for registration must have a stable establishment in the territory of Belgium, it follows that that entity as owner of the motor vehicle can apply for registration of the motor vehicle in question only if it is established in Belgium.
(22)
Thus, the worker cannot register the vehicle, on the ground that he is not its owner, and the owner (the leasing company) also cannot register it, on the ground that it is not resident in Belgium.
25.
As a result, the worker who resides in Belgium and to whom the provision of a motor vehicle is offered has no choice but to waive the offer if he does not wish to become exposed to the risk of criminal proceedings.
As the Court has made clear in the
Ledoux
judgment, that provision of a motor vehicle constitutes part of the worker's remuneration.
It follows that the legislation at issue causes the worker to be deprived of a proportion of the remuneration offered to him, by the mere fact of his place of residence.
A contract of employment including such a clause relating to the provision of a motor vehicle to the worker would therefore be less attractive where an employer is established in a Member State other than the Kingdom of Belgium, at least where the motor vehicle is registered in that same State.
26.
I therefore consider that the legislation at issue is capable of dissuading a worker residing in Belgium from accepting a contract which includes a clause relating to the provision of a motor vehicle, where the contract in question is offered to him by an employer established in another Member State, whereas such dissuasion would probably not operate if the contract were offered to him by a national employer.
(23)
27.
It seems to me, therefore, that, in the sense contemplated in the
Bosman
and
Graf
judgments, the legislation at issue sets preconditions on access by workers resident in Belgium to the labour market of other Member States.
28.
We must now consider whether the legislation at issue can be justified by reasons relating to the general interest that are compatible with the Treaty.
29.
According to case-law, national measures must fulfil four requirements where they are liable to hinder or make less attractive the exercise of the fundamental freedoms guaranteed by the Treaty by Community nationals, including those of the Member State which enacted the measure.
They must (1) be applied in a non-discriminatory manner, (2) be justified by imperative requirements relating in the general interest, (3) be suitable for securing the attainment of the objective which they pursue and (4) must not go beyond what is necessary in order to attain it.
(24)
30.
The Member States which have submitted written observations and the Commission argue that the legislation at issue is necessary in order, first, to guarantee road safety and, second, to counteract erosion of the basis of tax assessment.
31.
It seems to me, however, that neither of these arguments is capable of justifying the requirement to register the vehicle, still less the criminal penalty attached to the breach of that requirement in the present case.
It appears obvious to me that it must first and foremost be possible for registration to take place in order for the objectives pursued by the registration requirement to be met.
Whatever objectives may be invoked, they cannot be attained in a case such as the present one, since as we have seen, registration is impossible.
32.
A Member State cannot penalise a worker who has exercised his right of free movement on the ground that he has failed to comply with a requirement which he is not able to fulfil.
In that situation, the registration requirement is rendered meaningless and its sole result is to prevent motor vehicles registered abroad from being provided to Belgian residents.
33.
The Tribunal de police (Police Court), Arlon (Belgium) appears to have reached a similar conclusion in its judgment of 12 March 1998.
(25)
34.
The facts were as follows: a person resident in Belgium was accused of having infringed the Royal Decree on the ground that he was driving in the territory of Belgium a motor vehicle belonging to a leasing company established in Luxembourg.
The Tribunal de police, Arlon stated:
"[t]he Public Prosecution Office appears therefore to consider that, notwithstanding the facts, registration of the motor vehicle in Belgium was obligatory and, therefore, necessarily, possible."
35.
The Tribunal de police, Arlon, found that the Royal Decree requires registration to take place in the name of the owner, but that only persons resident in or having their headquarters in Belgium are entitled to effect such registration, which precludes registration where the owner does not satisfy those conditions.
It therefore held that no offence had been committed.
36.
I therefore propose that the reply to the question referred should be that Articles 39 EC and 10 EC preclude a Member State from requiring registration of a vehicle belonging to a leasing company established in a neighbouring Member State, which is hired out to the employer of the user of the motor vehicle in question (namely a worker) who resides in the first-mentioned Member State, at a distance, more specifically, of some 200 km from his place of employment, where the employee in question resides in the first-mentioned Member State during the week and uses the vehicle in order to perform his contract of employment and also during his free time, including weekends and holiday periods.
V ─ Conclusion
37.
On the basis of the foregoing, I propose to the Court that the answer to be given to the question referred by the Politierechtbank te Mechelen should be as follows:
Community rules, in particular Articles 39 EC and 10 EC, preclude a Member State from requiring registration of a vehicle belonging to a leasing company established in a neighbouring Member State, which is hired out to the employer of the user of the motor vehicle in question (namely a worker) who resides in the first-mentioned Member State, at a distance, more specifically, of some 200 km from his place of employment, where the employee in question resides in the first-mentioned Member State during the week and uses the vehicle in order to perform his contract of employment and also during his free time, including weekends and holiday periods.
(1) .
(2)
Moniteur belge
of 9 January 1954.
(3)
Moniteur belge
of 18 January 1994 (hereinafter
"the Royal Decree"
).
(4)
Cour de cassation, 1999, 688.
See also Cour de cassation 1988-89, 816.
(5)
Council Directive 83/182/EC of 25 March 1983 on tax exemptions within the Community for certain means of transport temporarily imported into one Member State from another (OJ L 105, p. 59).
(6)
Council Directive 93/89/EC of 25 October 1993 on the application by Member States of taxes on certain vehicles used for the carriage of goods by road and tolls and charges for the use of certain infrastructures (OJ 279, p. 32).
As the United Kingdom Government pointed out in its written observations, this directive was declared void by the judgment in Case C-21/94
Parliament
v
Council
[1995] ECR I-1827.
It none the less remains applicable until such time as the Council adopts new legislation on this subject.
(7)
Council Directive 1999/37/EC of 29 April 1999 on the registration documents for vehicles (OJ L 138, p. 57).
Member States have until 1 June 2004 to transpose this Directive into national law.
(8)
Judgments in Case 97/83
Melkunie
[1984] ECR 2367, paragraphs 9 and 10, and in Case C-121/00
Hahn
[2002] ECR I-9193, paragraph 34.
(9)
Judgments in Case 127/86
Ledoux
[1988] ECR 3741, in Case 143/87
Stanton
[1988] ECR 3877, paragraph 13, in Case C-370/90
Singh
[1992] ECR I-4265, paragraph 23, in Case C-19/92
Kraus
[1993] ECR I-1663, paragraph 32, in Case C-18/95
Terhoeve
[1999] ECR I-345, paragraph 38 and in Case C-190/98
Graf
[2000] ECR I-493, paragraph 22.
(10)
Judgment in Case C-415/93
Bosman
[1995] ECR I-4921.
(11)
Ibid. (paragraphs 95 and 76), emphasis added.
In paragraph 97 of that judgment, the Court added that it had already
"stated, in Case 81/87
Daily Mail and General Trust
[1988] ECR 5483, paragraph 16, that even though the Treaty provisions relating to freedom of establishment are directed mainly to ensuring that foreign nationals and companies are treated in the host Member State in the same way as nationals of that State, they also prohibit the Member State of origin from hindering the establishment in another Member State of one of its nationals or of a company incorporated under its legislation which comes within the definition contained in Article 58.
The rights guaranteed by Article 52 et seq. of the Treaty would be rendered meaningless if the Member State of origin could prohibit undertakings from leaving in order to establish themselves in another Member State. The same considerations apply, in relation to Article 48 of the Treaty, with regard to rules which impede the freedom of movement of nationals of one Member State wishing to engage in gainful employment in another Member State"
.
(12)
Paragraph 103.
(13)
Paragraph 23.
(14)
These judgments implement the essential criterion identified by the judgment in Joined Cases C-267/91 and C-268/91
Keck and Mithouard
[1993] ECR I-6097 concerning the free movement of workers.
See Opinion of Advocate General Lenz in the
Bosman
case and of Advocate General Fennelly in the
Graf
case, together with my own Opinion in Case C-309/99
Wouters
[2002] ECR I-1577, paragraphs 242 to 246.
(15)
Hereinafter
"VAT"
.
(16)
Council Directive of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes ─ Common system of value added tax: uniform basis of assessment (OJ L 145, p. 1).
(17)
Ledoux
judgment (paragraph 10).
See also, in support of this, the judgment in Case C-249/94
Profant
[1985] ECR 3237.
(18)
Ledoux
judgment (paragraph 12).
(19)
Ibid. (paragraphs 13, 17 and 18).
(20)
Ibid. (paragraph 18).
(21)
Ibid.
(22)
See Thiébaut,
Leasing transfrontalier de véhicules
. Available on the Internet at
www.fiskobel.com/Docs/10.doc
.
(23)
We may assume that the employer will have the motor vehicle registered in its State of residence, at least if it is the owner of the motor vehicle.
Thus, for example, in the
Ledoux
case, in Case C-451/99
Cura Anlagen
[2002] ECR I-3193 and in Case C-115/00
Hoves Internationaler Transport-Service
[2002] ECR I-6077, the owners of motor vehicles registered them in the Member States in which they were established.
Article 3(3) of Council Regulation (EC) No 3118/93 of 25 October 1993 laying down the conditions under which non-resident carriers may operate national road haulage services within a Member State (OJ 1993 279, p. 1) defines the concept of
"vehicle"
as
"motor vehicle registered in the Member State of establishment
or a coupled combination of vehicles of which at least the motor vehicle is registered in the Member State of establishment and which are used exclusively for the carriage of goods."
(emphasis added).
(24)
Judgment in Case C-55/94
Gebhard
[1995] ECR I-4165, paragraph 37.
See also judgments in Cases C-180/89
Commission v Italy
[1991] ECR I-709, paragraph 18, C-106/91Ramrath
[1992] ECR I-3351, points 29 and 30) and
Kraus
(paragraph 32).
(25)
Ministère public
v
Devaux
, judgment No 981345.
Available on the Internet at
http://www.demine.com/jurinews/immajurisp.htm
.