EN Official Journal of the European Union C 37/26

Action brought on 11 December 2009 — European Commission v Portuguese Republic

(Case C-518/09)

2010/C 37/33

Language of the case: Portuguese

Parties

Applicant: European Commission (represented by: I.V. Rogalski and P. Guerra e Andrade, Agents)

Defendant: Portuguese Republic

Form of order sought

— Declare that the Portuguese Republic has failed to fulfil its obligations under Article 56 TFEU: — by failing to make a distinction in its law between establishment and temporary provision of services as regards the real property activities of property brokerage firms and estate agents; — by making the property brokerage firms and estate agents of other Member States subject to the obligation to register fully with the Portuguese Institute of Construction and Real Property (InCI, I.P.) in order to provide services temporarily; — by making the property brokerage firms and estate agents of other Member States subject to the obligation to insure against possible professional liability on the terms provided for under Portuguese law; — by making the property brokerage firms of other Member States subject to the obligation to have positive own capital as provided for under Portuguese law; — by making the property brokerage firms and estate agents of other Member States subject to the full disciplinary control of the InCI, I.P.;

— Declare that the Portuguese Republic has failed to fulfil its obligations under Articles 49 TFEU and 56 TFEU by providing that, with the exception of property management services for third parties, property brokerage firms must carry out real property brokerage exclusively and estate agents must act exclusively as estate agents; and

— Order the Portuguese Republic to pay the costs.

Pleas in law and main arguments

The Portuguese system governing real property brokerage and estate agency places numerous restrictions on the freedom to provide services.

Whenever real property in Portugal is at issue, the property brokerage and estate agency activities of entities with their seat or actual domicile in other Member States are subject to Portuguese law.

Portuguese law lays down seven requirements for access to property brokerage activities, and four requirements for access to estate agency activities.

The licence requirements in relation to corporate structure are restrictive.

The requirement concerning professional qualification is also restrictive.

The Portuguese rules on property brokerage and estate agency have altered the traditional brokerage activity. Instead of brokerage, we have agency.

The obligation to obtain professional indemnity cover on the terms laid down by Portuguese law constitutes an unjustified restriction.

The requirement to have positive own capital, determined in accordance with the terms set out in the Portuguese national accounting system, constitutes a discriminatory restriction of the freedom to provide services.

Making property brokerage firms and estate agents subject to disciplinary control by the Portuguese Administration with regard to the provision of services, without taking into account the supervision of the service provider already carried out in its Member State of establishment, constitutes a restriction within the meaning of Article 56 TFEU.

The Portuguese rules which provide that estate agents must act exclusively as estate agents and property brokerage firms must carry out almost exclusively property brokerage constitute a restriction of freedom of establishment and freedom to provide services on a temporary basis.

The access requirements make no distinction, and allow no distinction to be made, between situations involving establishment and those involving the temporary provision of services.

The requirements for entry to the construction sector, as provided for under Portuguese law, are requirements relating to establishment. Portuguese law makes no distinction between establishment and the temporary provision of services.

The restrictions on the freedom to provide services and of establishment stemming from the Portuguese rules cannot be justified on grounds of public policy.

Although consumer protection may justify certain restrictions of the fundamental freedom to provide services and that of establishment, the restrictions in question are not proportionate.

The requirement to be established in Portugal in order to provide services, and the requirement to be licensed, which is intended to check whether the establishment requirements have been fulfilled, are not proportionate measures in relation to the freedom to provide services.

In particular, it is not reasonable to require the insurance policy to be approved in the host State.

It is not for reasons of solvency that Portuguese law lays down the requirement to have access to positive own capital.

It is disproportionate to make the service provider subject in full to the disciplinary control applicable to estate agents and property brokerage firms established in Portugal.