62008CJ0051_EN
Parties
Grounds
Operative part
Parties
In Case C‑51/08,
ACTION under Article 226 EC for failure to fulfil obligations, brought on 12 February 2008,
European Commission, represented by J.‑P. Keppenne and H. Støvlbæk, acting as Agents, with an address for service in Luxembourg,
applicant,
supported by:
United Kingdom of Great Britain and Northern Ireland, represented by E. Jenkinson and S. Ossowski, acting as Agents,
intervener,
v
Grand Duchy of Luxembourg, represented by C. Schiltz, acting as Agent, and J.‑J. Lorang, avocat,
defendant,
supported by:
Czech Republic, represented by M. Smolek, acting as Agent,
French Republic, represented by G. de Bergues and M. Messmer, acting as Agents,
Republic of Latvia, represented by L. Ostrovska, K. Drēviņa and J. Barbale, acting as Agents,
Republic of Lithuania, represented by D. Kriaučiūnas and E. Matulionytė, acting as Agents,
Republic of Hungary, represented by J. Fazekas, R. Somssich, K. Veres and M. Fehér, acting as Agents,
Republic of Poland, represented by M. Dowgielewicz, C. Herma and D. Lutostańska, acting as Agents,
Slovak Republic, represented by J. Čorba, acting as Agent,
interveners,
THE COURT (Grand Chamber),
composed of V. Skouris, President, A. Tizzano, J.N. Cunha Rodrigues, K. Lenaerts, J.‑C. Bonichot, A. Arabadjiev (Rapporteur) and J.‑J. Kasel, Presidents of Chambers, R. Silva de Lapuerta, E. Juhász, G. Arestis, M. Ilešič, C. Toader and M. Safjan, Judges,
Advocate General: P. Cruz Villalón,
Registrar: M.‑A. Gaudissart, head of unit,
having regard to the written procedure and further to the hearing on 27 April 2010,
after hearing the Opinion of the Advocate General at the sitting on 14 September 2010,
gives the following
Judgment
Grounds
1. By its application the Commission of the European Communities asks the Court to declare that, by imposing a nationality condition for access to the profession of civil-law notary and by failing to transpose for that profession 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), as amended by Directive 2001/19/EC of the European Parliament and of the Council of 14 May 2001 (OJ 2001 L 206, p. 1) (‘Directive 89/48’), the Grand Duchy of Luxembourg has failed to fulfil its obligations under Articles 43 EC and 45 EC and Directive 89/48.
Legal context
European Union law
2. The 12th recital in the preamble to Directive 89/48 stated that ‘the general system for the recognition of higher-education diplomas is entirely without prejudice to the application of … Article [45 EC]’.
3. Article 2 of Directive 89/48 read as follows:
‘This Directive shall apply to any national of a Member State wishing to pursue a regulated profession in a host Member State in a self-employed capacity or as an employed person.
This Directive shall not apply to professions which are the subject of a separate Directive establishing arrangements for the mutual recognition of diplomas by Member States.’
4. The profession of notary was not the subject of any legislation of the kind referred to in the second paragraph of Article 2.
5. Directive 89/48 laid down a period for its transposition, which, in accordance with Article 12, expired on 4 January 1991.
6. Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22), pursuant to Article 62, repealed Directive 89/48 with effect from 20 October 2007.
7. According to recital 41 in the preamble to Directive 2005/36, the directive ‘is without prejudice to the application of Articles 39(4) [EC] and 45 [EC] concerning notably notaries.’
National legislation
General organisation of the profession of notary
8. In the Luxembourg legal system notaries practise as a liberal profession. The organisation of the profession of notary is governed by the Law on the organisation of the notarial profession (Loi relative à l’organisation du notariat) of 9 December 1976 ( Mémorial
A 1976, p. 1230), as amended by the Law of 12 November 2004 ( Mémorial
A 2004, p. 2766) (‘the Law on Notaries’).
9. In accordance with Article 1 of the Law on Notaries, notaries are ‘public office-holders appointed to receive all instruments and agreements on which the parties must have or wish to have conferred the authentic character attached to acts of the public authorities, and to guarantee their date, keep them safe, and issue principal and additional copies of them’.
10. Article 3 of that law provides that notaries are to carry out their functions throughout national territory. All parties can choose a notary freely, as follows inter alia from Article 7(4) of the law.
11. The number and seat of notaries and the scale of their fees and remuneration are determined by Grand-Ducal regulation, pursuant to Articles 13 and 59 of the law.
12. Under Article 15 of the law, to be admitted as a notary in Luxembourg, a person must in particular be Luxemburgish.
Activities of notaries
13. As regards the activities of notaries in the Luxembourg legal system, it is not disputed that their principal task is to establish authentic instruments. The intervention of a notary may be mandatory or optional, depending on the instrument he is to authenticate. By his intervention the notary confirms that all the conditions required by law for the instrument to be drawn up are satisfied, and that the parties have legal personality and capacity to enter into legal transactions.
14. An authentic instrument is defined in Article 1317 of the Civil Code (Code civil), which appears in Book III, Title III, Chapter VI of the code, ‘Proof of obligations and proof of payment’. According to that article, an authentic instrument is ‘one which has been received in due and proper form by office-holders entitled to authenticate instruments in the place where the instrument was drawn up’.
15. Under Article 37 of the Law on Notaries, a notarial act constitutes proof in accordance with the provisions of the Civil Code and is enforceable if it is endorsed with authority to enforce.
16. Article 1319 of the Civil Code specifies that an ‘authentic instrument is complete proof of the agreement it embodies between the contracting parties and their heirs or persons claiming through them’.
17. Article 1322 of the Civil Code provides that a ‘private document acknowledged by the person against whom it is adduced, or deemed by law to have been acknowledged, has the same probative force as an authentic instrument as between the signatories and their heirs or persons claiming through them’.
18. In accordance with Article 13 of the Law on the organisation of bailiffs (Loi portant organisation du service des huissiers de justice) of 4 December 1990 ( Mémorial
A 1990, p. 1248), bailiffs have sole power inter alia to enforce judicial decisions and documents or instruments that are enforceable. Moreover, as follows in particular from Article 690 of the New Code of Civil Procedure (Nouveau Code de procedure civile), it is for the court responsible for enforcement to rule on difficulties arising in connection with enforcement. If those difficulties require urgent action, it is for the local court to rule provisionally.
19. In addition to authentication activities, the Luxembourg legal system assigns the following tasks to notaries.
20. Under Article 809 et seq. of the New Code of Civil Procedure, notaries carry out certain activities in connection with the attachment of immovable property. In accordance with those provisions, the enforceable order is first enforced by a bailiff, who issues the debtor with an order to pay. The debtor then has a period of time in which to comply. At the end of that period, if the debtor has not complied in the meantime, the immovable property concerned is then attached by a bailiff’s warrant, after which the warrant is registered in the register of charges over land. On application by the creditor, the court adjudicates on the statements and observations in the application and the validity of the attachment, and appoints a notary to carry out a public auction. The notary then carries out the auction, by arranging for publication and drawing up the documentation, which indicates the date of the auction and contains a clause assigning the proceeds of the sale to the creditors. Any application in proceedings for the attachment of immovable property is made to the court. In addition, the parties may, pursuant to Article 879 of the code, agree in an authenticated contract that the creditor shall be entitled to have the property sold by a notary without the statutory procedure described above being followed. In that case, if there is a dispute, the notary suspends all actions and brings the parties before the president of the competent court for him to make a ruling in an urgent procedure.
21. Notaries also carry out certain activities, under Articles 1131 to 1164 of the New Code of Civil Procedure, in connection with the apposition and removal of official seals. Appositions and removals are authorised by a magistrate. Where the parties who are entitled to be present at the removal of a seal are absent, the president of the competent court of his own motion appoints a notary to represent them.
22. Under Articles 1165 to 1168 of that code, the notary is entrusted with drawing up the inventory, on application by the persons entitled to request the removal of the seals. If difficulties arise, the notary leaves it to the parties to bring urgent proceedings before the president of the district court, and he may bring proceedings himself if he resides in the district in which the court has its seat.
23. The role of notaries in connection with certain sales of immovable property is governed by Articles 1177 to 1184 of the New Code of Civil Procedure. Those sales can take place only with the authorisation, inter alia, of the court dealing with guardianship matters. When the sale is authorised, the court appoints a notary to conduct the sale by auction. That sale takes place before the guardianship court, which exonerates the notary after approving the accounts. The guardianship court may also by reasoned decision authorise a sale by private treaty.
24. Certain activities concerning the division of estates are also entrusted to notaries under Article 815 et seq. of the Civil Code. Under Article 822 of the code, actions for division and disputes arising in the course of operations are brought before the court. It is before the court that sales by auction are carried out, and before the court that claims must be brought relating to safeguarding the partitioners’ shares and to rescission of the division. If one of the heirs refuses to agree to the division, or if disputes arise as to the method of carrying out the division or the manner of terminating it, the court has to adjudicate. If the immovable property cannot conveniently be divided, a sale by auction takes place before the court. However, if the parties are all of age, they may agree to the auction taking place before a notary on whose appointment they agree. After the movable and immovable property has been valued and sold, if necessary the judge overseeing the matter refers the parties to a notary who deals with any accounts the partitioners may owe each other, establishes the general estate, defines the shares and makes the appropriations to be made in favour of each of the partitioners. If disputes arise in the course of the actions entrusted to the notary, he draws up a report of the difficulties and the statements of the parties, and refers them to the judge overseeing the division.
25. Article 1 of the Law on registration of immovable property rights (Loi sur la transcription des droit réels immobiliers) of 25 September 1905 ( Mémorial
1905, p. 893) provides that all transactions inter vivos, gratuitous or for consideration, transferring immovable property rights other than preferential payment rights and mortgages are to be registered in the registry of charges over land in whose area the property is situated. Under Article 2 of that law, judgments, authentic instruments and private documents, whether or not recognised judicially or before a notary, may be registered. The officer responsible for registration is the registrar of charges over land.
The administrative procedure
26. A complaint was made to the Commission concerning the nationality condition for access to the profession of notary in Luxembourg. After examining the complaint the Commission, by letter of 8 November 2000, gave the Grand Duchy of Luxembourg formal notice to submit its observations within two months on the compliance of the nationality condition with the first paragraph of Article 45 EC and on the failure to transpose Directive 89/48 with respect to the profession of notary.
27. The Grand Duchy of Luxembourg replied to the letter of formal notice by letter of 11 January 2001.
28. The Commission sent the Grand Duchy of Luxembourg a supplementary letter of formal notice on 12 July 2002, complaining that it had failed to fulfil its obligations under Article 43 EC, the first paragraph of Article 45 EC, and Directive 89/48.
29. The Grand Duchy of Luxembourg replied to the supplementary letter of formal notice by letter of 10 September 2002.
30. Since it was not persuaded by the arguments put forward by the Grand Duchy of Luxembourg, the Commission on 18 October 2006 sent it a reasoned opinion in which it concluded that that State had failed to fulfil its obligations under Article 43 EC, the first paragraph of Article 45 EC, and Directive 89/48. The Commission invited the Grand Duchy of Luxembourg to take the necessary steps to comply with the reasoned opinion within two months from its receipt.
31. By letter of 14 December 2006, the Grand Duchy of Luxembourg stated why it considered that the position adopted by the Commission was not well founded.
32. In those circumstances, the Commission decided to bring the present action.
The action
First head of claim
Arguments of the parties
33. By its first head of claim, the Commission asks the Court to declare that, by reserving access to the profession of notary exclusively to its own nationals, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 43 EC and the first paragraph of Article 45 EC.
34. The Commission notes, as a preliminary point, that access to the profession of notary is not subject to any nationality condition in some Member States and that condition has been abolished in other Member States, such as the Kingdom of Spain, the Italian Republic and the Portuguese Republic.
35. It observes, first, that Article 43 EC is one of the fundamental provisions of European Union law which is intended to ensure that all nationals of Member States who establish themselves in another Member State, even if that establishment is only secondary, for the purpose of pursuing activities there as self-employed persons receive the same treatment as nationals of that State and prohibits any discrimination on grounds of nationality.
36. The Commission and the United Kingdom of Great Britain and Northern Ireland submit that the first paragraph of Article 45 EC must be given an autonomous and uniform interpretation (Case 147/86 Commission
v Greece
[1988] ECR 1637, paragraph 8). In that it lays down an exception to freedom of establishment for activities connected with the exercise of official authority, that article must moreover be interpreted strictly (Case 2/74 Reyners
[1974] ECR 631, paragraph 43).
37. The exception under the first paragraph of Article 45 EC must therefore be restricted to activities which in themselves involve a direct and specific connection with the exercise of official authority ( Reyners, paragraphs 44 and 45). According to the Commission, the concept of official authority implies the exercise of a decision-making power going beyond the ordinary law and taking the form of being able to act independently of, or even contrary to, the will of other subjects of law. Official authority manifests itself in particular, according to the Court’s case-law, in the exercise of powers of constraint (Case C‑114/97 Commission
v Spain
[1998] ECR I‑6717, paragraph 37).
38. In the view of the Commission and the United Kingdom, activities connected with the exercise of official authority must be distinguished from those carried out in the public interest. A number of professions are entrusted with special powers in the public interest, but are not for all that connected with the exercise of official authority.
39. Activities which are auxiliary to or cooperate with the exercise of official authority are likewise excluded from the scope of the first paragraph of Article 45 EC (see, to that effect, Case C‑42/92 Thijssen
[1993] ECR I‑4047, paragraph 22).
40. The Commission and the United Kingdom also point out that the first paragraph of Article 45 EC in principle refers to specific activities, not to an entire profession, unless the activities concerned are inseparable from the professional activity in question taken as a whole.
41. The Commission examines, secondly, the various activities of notaries in the Luxembourg legal system.
42. In the first place, as regards the authentication of documents and agreements, the Commission submits that the notary merely attests the wishes of the parties, after advising them, and gives legal effect to those wishes. In carrying out that activity, the notary has no decision-making powers with respect to the parties. Thus authentication by a notary merely confirms an agreement previously entered into by the parties. The fact that authentication is mandatory for certain acts is not relevant, since numerous procedures are mandatory without being manifestations of the exercise of official authority.
43. That also applies to the particular features of the rules of evidence regarding notarial acts, since similar probative force is also enjoyed by other documents which do not fall within the exercise of official authority, such as statements drawn up by sworn field watchmen. The fact that the notary’s liability is engaged when he draws up notarial acts is not relevant either. That is the case with members of most professions, such as lawyers, architects or doctors.
44. As to the enforceability of notarial acts, the Commission submits that the endorsement of a document with the authority to enforce precedes the enforcement proper and is not part of it. Enforceability does not therefore confer any power of constraint on notaries. Moreover, any dispute that may arise will be decided not by the notary but by the court.
45. In the second place, as regards the activities of notaries in connection with the attachment of immovable property, sales by auction of immovable property, the drawing up of inventories, removal of official seals, and the judicial division of estates, the Commission submits that the Grand Duchy of Luxembourg has merely described those activities without succeeding in demonstrating that they have a direct and specific connection with the exercise of official authority.
46. In the third place, as regards the specific status of notaries in Luxembourg law, that is not directly relevant, in the Commission’s view, in assessing the character of the activities in question.
47. The Commission submits, thirdly, with the United Kingdom, that the provisions of European Union law that contain references to the activities of notaries do not prejudge the application of Article 43 EC and the first paragraph of Article 45 EC to those activities.
48. Both Article 1(5)(d) of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) (OJ 2000 L 178, p. 1) and recital 41 in the preamble to Directive 2005/36 exclude from their scope the activities of notaries only to the extent that they involve a direct and specific connection with the exercise of public authority. This is thus merely a reservation which has no effect on the interpretation of the first paragraph of Article 45 EC.
49. Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ 2001 L 12, p. 1), Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, (OJ 2003 L 338, p. 1) and Regulation (EC) No 805/2004 of the European Parliament and of the Council of 21 April 2004 creating a European Enforcement Order for uncontested claims (OJ 2004 L 143, p. 15) do no more, in the Commission’s submission, than require the Member States to recognise and make enforceable documents which have been formally drawn up or registered as authentic instruments and are enforceable in another Member State.
50. Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European company (SE) (OJ 2001 L 294, p. 1) and Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies (OJ 2005 L 310, p. 1) are not relevant to the outcome of the present case, since they merely confer on notaries, and on other competent authorities appointed by the State, the task of certifying that certain acts and formalities have been carried out before the transfer of the registered office and the creation and merger of companies.
51. The Convention abolishing the requirement of legalisation for foreign public documents concluded at the Hague on 5 October 1961 confines itself to defining the term ‘public document’ within the meaning of that convention.
52. The European Parliament Resolution of 23 March 2006 on the legal professions and the general interest in the functioning of legal systems (OJ 2006 C 392 E, p. 105, ‘the 2006 resolution’) is a purely political act, whose terms are ambiguous because in point 17 the European Parliament asserts that Article 45 EC must be applied to the profession of notary, while in point 2 it reaffirms the position taken in its Resolution of 18 January 1994 on the state and organisation of the profession of notary in the twelve Member States of the Community (OJ 1994 C 44, p. 36, ‘the 1994 resolution’), in which it expressed the wish that the nationality condition for access to the profession of notary laid down in the legislation of several Member States should be abolished.
53. The Commission and the United Kingdom further submit, fourthly, that Case C‑405/01 Colegio de Oficiales de la Marina Mercante Española
[2003] ECR I‑10391, referred to by several Member States, concerned the exercise by masters and chief mates of merchant ships of a wide range of functions in connection with the maintenance of safety, police powers, and authority in respect of notarial matters and the registration of births, marriages and deaths. The Court did not therefore have occasion to make a detailed examination of the various activities carried out by notaries from the point of view of the first paragraph of Article 45 EC. Consequently, that judgment is not a sufficient basis for concluding that that provision applies to notaries.
54. Moreover, contrary to the submissions of the Grand Duchy of Luxembourg, the Court’s case-law distinguishes notaries from public authorities by acknowledging that an authentic instrument may be drawn up by a public authority or any other authority empowered by the State (Case C‑260/97 Unibank
[1999] ECR I‑3715, paragraphs 15 and 21).
55. The Grand Duchy of Luxembourg submits, first, that the concept of ‘exercise of public authority’ within the meaning of the first paragraph of Article 45 EC has been applied broadly in the Court’s case-law. Thus the Court acknowledged that notarial functions were connected with the exercise of powers of official authority in Colegio de Oficiales de la Marina Mercante Española . In addition, it follows from Unibank
that the establishment of authentic instruments by an office-holder such as a notary is directly and specifically connected with the exercise of official authority.
56. The Grand Duchy of Luxembourg agrees essentially with the Commission’s view that the concept of official authority is to be distinguished from that of the public interest, which is a necessary but not sufficient condition of it. On the other hand, according to that State and the Czech Republic, the Republic of Hungary, the Republic of Poland and the Slovak Republic, the concept of official authority is not equivalent to that of contentious judicial proceedings.
57. It submits, secondly, that notaries are directly and specifically connected with the exercise of official authority by reason of the exceptional legal effects attached to the instruments they draw up and of the particular status they enjoy in the Luxembourg legal system.
58. On the first point, the Grand Duchy of Luxembourg observes that an authentic instrument, by providing complete proof of the declarations and testimony it contains, enjoys a probative force that ranks it first in the hierarchy of written evidence. Its authenticity cannot be called into question except by bringing a falsification action.
59. An authentic instrument is also enforceable without it being necessary to obtain a judgment first. Thus the creditor merely gives an enforceable copy of the instrument to a bailiff, who is responsible for carrying out the enforcement with the assistance of the police.
60. The Slovak Republic adds that a notary must refuse to issue an authentic instrument if the conditions required by law are not satisfied.
61. The Grand Duchy of Luxembourg also observes that, when an instrument is authenticated, the notary plays the part of a tax collector by receiving payment of any registration fees.
62. Furthermore, the legal advice provided by notaries when they authenticate instruments is a preparatory element that is mandatory and connected to the authentication.
63. As to the status of notaries in the Luxembourg legal system, it follows from that status that a notary has a public role that is visible in particular in the strict control exercised by the State, the relation of confidence and solidarity between the notary and the State, external signs such as authorisation to hold the State seal, the oath the notary must take, the independence enjoyed by him, and the rules on disqualification to which he is subject.
64. The Grand Duchy of Luxembourg submits, thirdly, that the Luxembourg legal system entrusts notaries with certain activities that show that they are connected with the exercise of official authority.
65. As regards, in the first place, the activities of notaries in connection with the attachment of immovable property, the Grand Duchy of Luxembourg observes that, under Article 832 of the New Code of Civil Procedure, the court appoints a notary through whose actions the sale by auction is to take place. He is thus given a complete task to perform. Moreover, in accordance with Article 879 of the code, the parties have the option of agreeing in an authentic contract that the creditor will be entitled to have the mortgaged property sold by a notary without following the formalities laid down by law for the attachment of immovable property.
66. The connection of notaries with the exercise of official authority is also shown, in the second place, by the fact that notarial acts are registered in the registry of charges over land, as follows from Article 2 of the Law of 25 September 1905 on registration of immovable property rights.
67. In the third place, where immovable property belongs to minors or persons under guardianship, the court responsible for guardianship appoints a notary to proceed to a sale by auction in accordance with Article 1180 of the New Code of Civil Procedure. In the case of an agreed division, that court appoints a notary to carry out the division.
68. In the fourth place, under Article 1167 et seq. of that code, the notary is responsible for drawing up the inventory of a deceased person’s estate or of property in joint ownership or co-ownership. If difficulties arise, on the other hand, they have to be referred to the court.
69. In the fifth place, where the parties entitled to be present at the removal of official seals are not present, the president of the court may, in accordance with Article 1152 of the New Code of Civil Procedure, of his own motion appoint a notary to represent them.
70. In the sixth place, under Article 815 et seq. of the Civil Code, notaries are given a number of tasks in relation to division by the court, in particular establishing the estate to be divided, defining the shares, drawing lots, and if necessary drawing up a statement of difficulties. Any disputes must, however, be brought before the court.
71. The Grand Duchy of Luxembourg and the Republic of Lithuania further submit, fourthly, that the European Union legislature has confirmed that notaries are connected with the exercise of official authority. They refer in this respect to the European Union acts and acts of international law mentioned in paragraphs 48 to 51 above, which in their submission either exclude the activities of notaries from the scope of those acts because of their connection with the exercise of official authority or acknowledge that notarial instruments are equated to judicial decisions or indeed to documents emanating from an official authority. The Republic of Lithuania adds that the Parliament asserted in its 1994 and 2006 resolutions that the profession of notary is connected with the exercise of official authority.
72. The Grand Duchy of Luxembourg submits in the alternative that, since the use of the Luxemburgish language is necessary in the performance of notarial activities, the nationality condition at issue is intended to ensure respect for the history, culture, tradition and national identity of Luxembourg within the meaning of Article 6(3) EU.
Findings of the Court
– Preliminary observations
73. By its first head of claim, the Commission complains that the Grand Duchy of Luxembourg is blocking the establishment in its territory, for the purpose of practising as a notary, of nationals of other Member States by reserving access to that profession to its own nationals, in breach of Article 43 EC.
74. This head of claim thus concerns solely the nationality condition laid down by the Luxembourg legislation at issue for access to that profession, from the point of view of Article 43.
75. Accordingly, it does not relate to the status and organisation of notaries in the Luxembourg legal system, nor to the conditions of access, other than that of nationality, to the profession of notary in that Member State.
76. Moreover, as the Commission stated at the hearing, the first head of claim does not concern the application of the provisions of the EC Treaty on the freedom to provide services. Nor does it relate to the application of the Treaty provisions on freedom of movement for workers.
– Substance
77. Article 43 EC is one of the fundamental provisions of European Union law (see, to that effect, inter alia, Reyners, paragraph 43).
78. The concept of establishment within the meaning of that provision is a very broad one, allowing a national of the European Union to participate, on a stable and continuous basis, in the economic life of a Member State other than his State of origin and to profit therefrom, so contributing to economic and social interpenetration within the European Union in the sphere of activities of self-employed persons (see, inter alia, Case C‑161/07 Commission
v Austria
[2008] ECR I‑10671, paragraph 24).
79. The freedom of establishment conferred on nationals of one Member State in the territory of another Member State includes in particular access to and exercise of activities of self-employed persons under the same conditions as are laid down by the law of the Member State of establishment for its own nationals (see, inter alia, Case 270/83 Commission
v France
[1986] ECR 273, paragraph 13, and, to that effect, Commission
v Austria, paragraph 27). In other words, Article 43 EC prohibits the Member States from laying down in their laws conditions for the pursuit of activities by persons exercising their right of establishment there which differ from those laid down for its own nationals ( Commission
v Austria, paragraph 28).
80. Article 43 EC is thus intended to ensure that all nationals of all Member States who establish themselves in another Member State for the purpose of pursuing activities there as self-employed persons receive the same treatment as nationals of that State, and it prohibits, as a restriction on freedom of establishment, any discrimination on grounds of nationality resulting from national legislation ( Commission
v France, paragraph 14).
81. In the present case, the national legislation at issue reserves access to the profession of notary to Luxembourg nationals, thus enshrining a difference in treatment on the ground of nationality which is prohibited in principle by Article 43 EC.
82. The Grand Duchy of Luxembourg submits, however, that the activities of notaries are outside the scope of Article 43 EC because they are connected with the exercise of official authority within the meaning of the first paragraph of Article 45 EC. The Court must therefore begin by examining the concept of the exercise of official authority within the meaning of that provision, before going on to ascertain whether the activities of notaries in the Luxembourg legal system fall within that concept.
83. As regards the concept of the ‘exercise of official authority’ within the meaning of the first paragraph of Article 45 EC, the assessment of that concept must take account, in accordance with settled case-law, of the character as European Union law of the limits imposed by that provision on the permitted exceptions to the principle of freedom of establishment, so as to ensure that the effectiveness of the Treaty in the field of freedom of establishment is not frustrated by unilateral provisions of the Member States (see, to that effect, Reyners, paragraph 50; Commission
v Greece, paragraph 8; and Case C‑438/08 Commission
v Portugal
[2009] ECR I‑10219, paragraph 35).
84. It is also settled case-law that the first paragraph of Article 45 EC is an exception to the fundamental rule of freedom of establishment. As such, the exception must be interpreted in a manner which limits its scope to what is strictly necessary to safeguard the interests it allows the Member States to protect ( Commission
v Greece, paragraph 7; Commission
v Spain, paragraph 34; Case C‑451/03 Servizi Ausiliari Dottori Commercialisti
[2006] ECR I‑2941, paragraph 45; Case C‑393/05 Commission
v Austria
[2007] ECR I‑10195, paragraph 35; Case C‑404/05 Commission
v Germany
[2007] ECR I‑10239, paragraphs 37 and 46; and Commission
v Portugal, paragraph 34).
85. In addition, the Court has repeatedly held that the exception in the first paragraph of Article 45 EC must be restricted to activities which in themselves are directly and specifically connected with the exercise of official authority ( Reyners, paragraph 45; Thijssen, paragraph 8; Commission
v Spain, paragraph 35; Servizi Ausiliari Dottori Commercialisti, paragraph 46; Commission
v Germany, paragraph 38; and Commission
v Portugal, paragraph 36).
86. In this respect, the Court has had occasion to rule that the exception in the first paragraph of Article 45 EC does not extend to certain activities that are auxiliary or preparatory to the exercise of official authority (see, to that effect, Thijssen, paragraph 22; Commission
v Spain, paragraph 38; Servizi Ausiliari Dottori Commercialisti, paragraph 47; Commission
v Germany, paragraph 38; and Commission
v Portugal, paragraph 36), or to certain activities whose exercise, although involving contacts, even regular and organic, with the administrative or judicial authorities, or indeed cooperation, even compulsory, in their functioning, leaves their discretionary and decision-making powers intact (see, to that effect, Reyners, paragraphs 51 and 53), or to certain activities which do not involve the exercise of decision-making powers (see, to that effect, Thijssen, paragraphs 21 and 22; Case C‑393/05 Commission
v Austria, paragraphs 36 and 42; Commission
v Germany, paragraphs 38 and 44; and Commission
v Portugal, paragraphs 36 and 41), powers of constraint (see, to that effect, inter alia, Commission
v Spain, paragraph 37) or powers of coercion (see, to that effect, Case C‑47/02 Anker and Others
[2003] ECR I‑10447, paragraph 61, and Commission
v Portugal, paragraph 44).
87. It must be ascertained in the light of the above considerations whether the activities entrusted to notaries in the Luxembourg legal system involve a direct and specific connection with the exercise of official authority.
88. Account must be taken of the nature of the activities carried out by the members of the profession at issue (see, to that effect, Thijssen, paragraph 9).
89. The Grand Duchy of Luxembourg and the Commission agree that the principal activity of notaries in the Luxembourg legal system consists in the establishment of authentic instruments in due and proper form. In order to do this the notary must ascertain that all the conditions required by law for drawing up the instrument are satisfied. Moreover, an authentic instrument has probative force and is enforceable.
90. It must be observed, in this respect, that the documents that may be authenticated under Luxembourg law are documents and agreements freely entered into by the parties. They decide themselves, within the limits laid down by law, the extent of their rights and obligations and choose freely the conditions which they wish to be subject to when they produce a document or agreement to the notary for authentication. The notary’s intervention thus presupposes the prior existence of an agreement or consensus of the parties.
91. Furthermore, the notary cannot unilaterally alter the agreement he is called on to authenticate without first obtaining the consent of the parties.
92. The activity of authentication entrusted to notaries does not therefore, as such, involve a direct and specific connection with the exercise of official authority within the meaning of the first paragraph of Article 45 EC.
93. The fact that some documents and agreements are subject to mandatory authentication, in default of which they are void, cannot call that conclusion into question. It is normal for the validity of various documents to be subject, in national legal systems and in accordance with the rules laid down, to formal requirements or even compulsory validation procedures. That fact is not therefore enough to bear out the arguments of the Grand Duchy of Luxembourg.
94. The obligation of notaries to ascertain, before carrying out the authentication of a document or agreement, that all the conditions required by law for drawing up that document or agreement have been satisfied and, if that is not the case, to refuse to perform the authentication cannot call the above conclusion into question either.
95. It is true that, as the Grand Duchy of Luxembourg observes, the notary’s verification of those facts pursues an objective in the public interest, namely to guarantee the lawfulness and legal certainty of documents entered into by individuals. However, the mere pursuit of that objective cannot justify the powers necessary for that purpose being reserved exclusively to notaries who are nationals of the Member State concerned.
96. Acting in pursuit of an objective in the public interest is not, in itself, sufficient for a particular activity to be regarded as directly and specifically connected with the exercise of official authority. It is not disputed that activities carried out in the context of various regulated professions frequently, in the national legal systems, involve an obligation for the persons concerned to pursue such an objective, without falling within the exercise of official authority.
97. However, the fact that notarial activities pursue objectives in the public interest, in particular to guarantee the lawfulness and legal certainty of documents entered into by individuals, constitutes an overriding reason in the public interest capable of justifying restrictions of Article 43 EC deriving from the particular features of the activities of notaries, such as the restrictions which derive from the procedures by which they are appointed, the limitation of their numbers and their territorial jurisdiction, or the rules governing their remuneration, independence,
disqualification from other offices and protection against removal, provided that those restrictions enable those objectives to be attained and are necessary for that purpose.
98. It is also true that a notary must refuse to authenticate a document or agreement which does not satisfy the conditions laid down by law, regardless of the wishes of the parties. However, following such a refusal, the parties remain free to remedy the unlawfulness, amend the conditions in the document or agreement, or abandon the document or agreement.
99. Moreover, the legal advice and assistance provided by a notary when authenticating a document or agreement cannot be regarded as connected with the exercise of official authority, even if there is a legal obligation for him to provide such advice or assistance (see, to that effect, Reyners, paragraph 52).
100. As to the probative force and the enforceability of notarial acts, these indisputably endow those acts with significant legal effects. However, the fact that an activity includes the drawing up of acts with such effects does not suffice for that activity to be regarded as directly and specifically connected with the exercise of official authority within the meaning of the first paragraph of Article 45 EC.
101. Thus, in particular, as far as the probative force of notarial acts is concerned, it must be pointed out that that force derives from the rules on evidence laid down by law in the legal system in question. Paragraph 1319 of the Civil Code, which determines the probative force of an authentic instrument, forms part of Chapter VI of that code, ‘Proof of obligations and proof of payment’. The probative force conferred by law on a particular document thus has no direct effect on whether the activity which includes the drawing up of the document is in itself directly and specifically connected with the exercise of official authority, as required by the case-law (see, to that effect, Thijssen, paragraph 8, and Commission
v Spain, paragraph 35).
102. Moreover, under Article 1322 of the Civil Code, a private document acknowledged by the person against whom it is adduced, or deemed by law to have been acknowledged, has ‘the same probative force as an authentic instrument’ as between the signatories and their heirs and persons claiming through them.
103. As regards the enforceable nature of an authentic instrument, it must be observed, as the Grand Duchy of Luxembourg submits, that that enforceability enables the obligation embodied in the instrument to be enforced without the prior intervention of the court.
104. The enforceability of an authentic instrument does not, however, derive from powers possessed by the notary which are directly and specifically connected with the exercise of official authority. While the notary’s endorsement of the authority to enforce on the authentic instrument does give it enforceable status, that status is based on the intention of the parties to enter into a document or agreement, after its conformity with the law has been checked by the notary, and to make it enforceable.
105. It must also be ascertained whether the other activities entrusted to notaries in the Luxembourg legal system, referred to by the Grand Duchy of Luxembourg, involve a direct and specific connection with the exercise of official authority.
106. As regards, first, the functions of notaries in connection with the attachment of immovable property, it must be recalled that the notary is principally responsible for implementing the sale, if a sale has been authorised by the court, by making the arrangements for publication and drawing up the documentation, which indicates the date of the sale and contains a clause assigning the proceeds of the sale to the creditors.
107. It is clear that the notary does not have power to carry out the attachment himself. In addition, it is the competent court which, after adjudicating on any statements and observations in the application and on the validity of the attachment, appoints the notary and entrusts him with carrying out the sale. Any application in proceedings for the attachment of immovable property is also made to the competent court. Moreover, even if the creditor has been authorised in an authentic contract to have a sale carried out by a notary without following the statutory procedure applicable to the attachment of immovable property, a possibility provided for in Article 879 of the New Code of Civil Procedure, to which the Grand Duchy of Luxembourg refers, the notary is obliged in the event of a dispute to suspend all actions and bring the parties before the president of the court for him to rule in an urgent procedure.
108. The functions of notaries in connection with the attachment of immovable property can thus be seen to be exercised under the supervision of the court, to which the notary must refer any disputes, and which takes the final decision. Those functions cannot therefore be regarded as directly and specifically connected, as such, with the exercise of official authority (see, to that effect, Thijssen, paragraph 21; Case C‑393/05 Commission
v Austria, paragraphs 41 and 42; Commission
v Germany, paragraphs 43 and 44; and Commission
v Portugal, paragraphs 37 and 41).
109. The same conclusion follows, secondly, with respect to the functions entrusted to notaries under Articles 1177 to 1184 of the New Code of Civil Procedure in connection with certain sales of immovable property. It is apparent from those provisions that the decision whether or not to authorise those sales is for the court responsible for guardianship matters.
110. As regards, thirdly, the activities of notaries in relation to inventories of deceased persons’ estates and property in joint ownership or co-ownership, and to the affixing and removal of official seals, those activities are subject to authorisation by a magistrate. In the event of difficulties, the notary refers the question to the president of the district court, pursuant to Article 1168 of the New Code of Civil Procedure.
111. As regards, fourthly, the activities of notaries in relation to the judicial division of estates, it must be noted that an action for division is brought before the court, in accordance with Article 822 of the Civil Code. The notary acts only if the parties have agreed that the sale by auction will take place before him. In that event his function is in particular to draw up the inventory, establish the total estate and define the shares. However, even in that case, it is for the court to decide any dispute that may arise. Consequently, those activities do not involve the notary in the exercise of official authority.
112. It should also be pointed out, as regards the activities of notaries mentioned in paragraphs 106 to 111 above, that, as recalled in paragraph 86 above, professional activities cooperating, even on a compulsory basis, with the functioning of the courts do not as such constitute a connection with the exercise of official authority ( Reyners, paragraph 51).
113. Fifthly, the fact that authentic instruments transferring immovable property rights are registered in the registry of charges over land is not directly relevant to the outcome of the present dispute. That registration, which is moreover the responsibility of the registrar of charges, relates to measures for the publicity of those documents and does not therefore reflect the direct and specific exercise of official authority on the part of the notary.
114. As regards, sixthly, the tax-collecting functi ons of notaries when they receive payment of registration fees, these cannot be regarded in themselves as directly and specifically connected with the exercise of official authority. It should be pointed out in this respect that the collection is done by the notary on behalf of the person owing the tax, is followed by the remittal of the corresponding sums to the relevant State department, and is not therefore fundamentally different from the collection of value added tax.
115. With respect to the particular status of notaries in the Luxembourg legal system, it need only be recalled that, as follows from paragraphs 85 and 88 above, it is by reference to the nature of the relevant activities themselves, not by reference to that status as such, that it must be ascertained whether those activities fall within the exception in the first paragraph of Article 45 EC.
116. Two points must be made here, however. The first is that it is not disputed that, apart from the cases in which a notary is appointed by law, every party can choose a notary freely, as follows inter alia from Article 7(4) of the Law on Notaries. While the scale of notaries’ fees is indeed fixed by Grand-Ducal regulation, the quality of the services they provide may none the less vary from one notary to another, depending in particular on their professional capabilities. It follows that notaries practise their profession, as the Advocate General observes in point 18 of his Opinion, in conditions of competition, which is not characteristic of the exercise of official authority.
117. The second point is that, as the Commission submits without being contradicted by the Grand Duchy of Luxembourg, notaries are directly and personally liable to their clients for loss arising from any default in the exercise of their activities.
118. Moreover, the argument which the Grand Duchy of Luxembourg bases on certain European Union acts and acts of international law also fails to convince. As regards the acts mentioned in paragraph 48 above, it must be stated that the fact that the legislature chose to exclude the activities of notaries from the scope of a particular act does not mean that those activities necessarily fall within the exception in the first paragraph of Article 45 EC. With respect to Directive 2005/36 in particular, the very wording of recital 41 in the preamble, according to which the directive ‘is without prejudice to the application of Articles … 45 [EC] concerning notably notaries’, shows that the European Union legislature precisely did not take a position on the applicability of the first paragraph of Article 45 EC to the profession of notary.
119. The argument based on the European Union acts mentioned in paragraphs 49 and 50 above is also immaterial. The regulations mentioned in paragraph 49 above relate to the recognition and enforcement of authentic instruments formally drawn up or registered and enforceable in a Member State, and do not therefore affect the interpretation of the first paragraph of Article 45 EC. The same conclusion follows with respect to the European Union acts mentioned in paragraph 50 above, in that, as the Commission rightly submits, they are confined to entrusting to notaries and to other competent authorities appointed by the State the task of certifying that certain acts and formalities have been carried out before the transfer of the registered office and the creation and merger of companies.
120. The Grand Duchy of Luxembourg also cannot found an argument on Article 1 of the Convention abolishing the requirement of legalisation for foreign public documents concluded at the Hague on 5 October 1961, since that provision merely defines the term ‘public document’ within the meaning of that convention.
121. As to the 1994 and 2006 resolutions, mentioned in paragraph 52 above, it is clear that they have no legal effect, since such resolutions are by nature not legally binding. Moreover, although they state that the profession of notary comes under Article 45 EC, the Parliament specifically expressed the wish in the 1994 resolution that measures should be taken to abolish the nationality condition for access to the profession of notary, that position being implicitly confirmed again in the 2006 resolution.
122. As regards the argument which the Grand Duchy of Luxembourg bases on Colegio de Oficiales de la Marina Mercante Española, it must be observed that that case concerned the interpretation of Article 39(4) EC, not the first paragraph of Article 45 EC. Moreover, it follows from paragraph 42 of that judgment that, when the Court held that the functions entrusted to masters and chief mates of ships were connected with the exercise of rights under powers conferred by public law, it was referring to the totality of the functions exercised by them. The Court thus did not examine the single notarial power conferred on masters and chief mates of ships, namely the power to receive, safeguard and dispatch wills, separately from their other powers, such as their powers of coercion and punishment.
123. As to the Unibank
case, also cited by the Grand Duchy of Luxembourg, it is clear that that case had nothing to do with the interpretation of the first paragraph of Article 45 EC. Moreover, the Court held in paragraph 15 of that judgment that for a document to be an ‘authentic’ instrument within the meaning of Article 50 of the Convention of 27 September 1968 on jurisdiction and the enforcement of judgments in civil and commercial matters (OJ 1978 L 304, p. 36), the involvement of a public authority or any other authority empowered by the State of origin is necessary.
124. As to the need relied on by the Grand Duchy of Luxembourg to ensure the use of the Luxemburgish language in the performance of the activities of notaries, it is clear that the first head of claim in the present dispute relates exclusively to the nationality condition at issue. While the preservation of the national identities of the Member States is a legitimate aim respected by the legal order of the European Union, as is indeed acknowledged by Article 4(2) TEU, the interest pleaded by the Grand Duchy can, however, be effectively safeguarded otherwise than by a general exclusion of nationals of the other Member States (see, to that effect, Case C‑473/93 Commission
v Luxembourg
[1996] ECR I‑3207, paragraph 35).
125. In those circumstances, it must be concluded that the activities of notaries as defined in the current state of the Luxembourg legal system are not connected with the exercise of official authority within the meaning of the first paragraph of Article 45 EC.
126. Consequently, the nationality condition required by Luxembourg legislation for access to the profession of notary constitutes discrimination on grounds of nationality prohibited by Article 43 EC.
127. In the light of all the above considerations, the first head of claim is well founded.
Second head of claim
Arguments of the parties
128. The Commission claims that the Grand Duchy of Luxembourg has failed to transpose Directive 89/48 with respect to the profession of notary. In its view, that profession cannot be excluded from the scope of that directive, as notaries are not directly and specifically connected with the exercise of official authority.
129. The Commission notes that Directive 89/48 allows the Member States to prescribe an aptitude test or an adaptation period capable of ensuring the high level of qualifications required of notaries. In addition, the application of those directives does not have the effect of preventing the recruitment of notaries by means of competitions, but only of giving nationals of the other Member States access to those competitions. That application also has no effect on the procedure for appointing notaries.
130. The United Kingdom further submits that the reference to the profession of notary in recital 41 in the preamble to Directive 2005/36 does not exclude that profession as a whole from the scope of that directive.
131. Without raising a formal plea of inadmissibility, the Grand Duchy of Luxembourg observes that the second head of claim alleges failure to transpose not Directive 2005/36 but Directive 89/48. However, Directive 2005/36 repealed Directive 89/48 with effect from 20 October 2007.
132. On the substance, the Grand Duchy of Luxembourg, the Republic of Hungary, the Republic of Poland and the Slovak Republic submit that recital 41 in the preamble to Directive 2005/36 expressly states that it ‘is without prejudice to the application of Articles 39(4) [EC] and 45 [EC] concerning notably notaries.’ That reservation confirms that the profession of notary is covered by the first paragraph of Article 45 EC, so that Directive 2005/36 does not apply to that profession. In addition, the Republic of Lithuania observes that there is a less specific but similar reservation in the 12th recital in the preamble to Directive 89/48.
Findings of the Court
– Admissibility
133. It is settled case-law that, in the context of proceedings under Article 226 EC, the existence of a failure to fulfil obligations must be assessed in the light of the European Union legislation in force at the close of the period prescribed by the Commission for the Member State concerned to comply with its reasoned opinion (see, inter alia, Case C‑365/97 Commission
v Italy
[1999] ECR I‑7773, paragraph 32; Case C‑275/04 Commission
v Belgium
[2006] ECR I‑9883, paragraph 34; and Case C‑270/07 Commission
v Germany
[2009] ECR I‑1983, paragraph 49).
134. In the present case, that period ended on 18 December 2006. On that date Directive 89/48 was still in force, since Directive 2005/36 repealed it only with effect from 20 October 2007. Consequently, a claim based on failure to transpose Directive 89/48 is not devoid of purpose (see, by analogy, judgment of 11 June 2009 in Case C‑327/08 Commission
v France, paragraph 23).
135. The objection put forward by the Grand Duchy of Luxembourg must therefore be rejected.
– Substance
136. The Commission complains that the Grand Duchy of Luxembourg has not transposed Directive 89/48 with respect to the profession of notary. The Court must therefore examine whether that directive applies to that profession.
137. The legislative context of the directive must be taken into account here.
138. Thus it must be noted that the legislature expressly stated in the 12th recital in the preamble to Directive 89/48 that the general system for the recognition of higher education diplomas introduced by that directive is ‘entirely without prejudice to the application of … Article [45 EC]’. That reservation reflects the legislature’s intention to leave activities covered by the first paragraph of Article 45 EC outside the scope of that directive.
139. At the time of adoption of Directive 89/48, the Court had not yet had occasion to rule on whether the activities of notaries were covered by the first paragraph of Article 45 EC.
140. Over the years following the adoption of Directive 89/48, the Parliament, in its 1994 and 2006 resolutions mentioned in paragraphs 52 and 121 above, asserted on the one hand that the first paragraph of Article 45 EC should be fully applied to the profession of notary as such, while expressing the wish on the other hand that the nationality condition for access to that profession should be abolished.
141. Moreover, when adopting Directive 2005/36, which replaced Directive 89/48, the European Union legislature was careful to state in recital 41 in the preamble to the directive that it was without prejudice to the application of Article 45 EC ‘concerning notably notaries’. As stated in paragraph 118 above, by expressing that reservation the European Union legislature did not adopt a position on the applicability of the first paragraph of Article 45 EC, and hence of Directive 2005/36, to the activities of notaries.
142. That is shown in particular by the legislative history of Directive 2005/36. In its legislative resolution on the proposal for a European Parliament and Council directive on the recognition of professional qualifications (OJ 2004 C 97E, p. 230), adopted on first reading on 11 February 2004, the Parliament had proposed that it should be expressly stated in Directive 2005/36 that it did not apply to notaries. Although that proposal was not taken up in the amended proposal for a Directive of the European Parliament and of the Council on the recognition of professional qualifications (COM(2004) 317 final) or in Common Position (EC) No 10/2005 of 21 December 2004 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a directive of the European Parliament and of the Council on the recognition of professional qualifications (OJ 2005 C 58E, p. 1), that was not because the proposed directive was to apply to the profession of notary but because, in particular, a ‘derogation from the principle of freedom of establishment and the freedom to provide services for activities that involve direct and specific participation in the exercise of official authority [was] provided for’ by the first paragraph of Article 45 EC.
143. In view of the particular circumstances of the legislative procedure and the situation of uncertainty which resulted, as may be seen from the legislative context described above, it does not appear possible to conclude that, at the end of the period prescribed in the reasoned opinion, there existed a sufficiently clear obligation for the Member States to transpose Directive 89/48 with respect to the profession of notary.
144. The second head of claim must therefore be rejected.
145. In the light of all the foregoing considerations, it must be held that, by imposing a nationality condition for access to the profession of notary, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 43 EC, and the action must be dismissed as to the remainder.
Costs
146. Under Article 69(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, the Court may order that the costs be shared or that the parties bear their own costs. Since the Commission’s application has been upheld only in part, each party must be ordered to bear its own costs.
147. Under the first subparagraph of Article 69(4) of the Rules of Procedure, Member States which intervene in the proceedings are to bear their own costs. The Czech Republic, the French Republic, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Poland, the Slovak Republic and the United Kingdom must therefore bear their own costs.
Operative part
On those grounds, the Court (Grand Chamber) hereby
1. Declares that, by imposing a nationality condition for access to the profession of notary, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 43 EC;
2. Dismisses the action as the remainder;
3. Orders the European Commission, the Grand Duchy of Luxembourg, the Czech Republic, the French Republic, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Poland, the Slovak Republic and the United Kingdom of Great Britain and Northern Ireland to bear their own costs.