Opinion of Mr Advocate General Jacobs delivered on 16 September 1999. - Commission of the European Communities v Kingdom of Belgium. - Failure of a Member State to fulfil its obligations - Free movement of workers - Freedom of establishment - Freedom to provide services - Private security activities - Requirement of prior authorisation - Obligation for legal persons to have their place of business in national territory - Obligation for managers and employees to reside in national territory - Requirement of an identification card issued in accordance with national legislation. - Case C-355/98.



European Court reports 2000 Page I-01221



Opinion of the Advocate-General

1. In the present case, the Commission seeks a declaration to the effect that certain provisions of the Belgian legislation governing private security firms are contrary to the Treaty principles of freedom to provide services, freedom of establishment and freedom of movement for workers.

The Belgian legislation

2. The legislation in issue is the Loi du 10 avril 1990 sur les entreprises de gardiennage, sur les entreprises de sécurité et sur les services internes de gardiennage (Law of 10 April 1990 on security firms, security systems firms and internal security services, hereinafter the Belgian Law), as amended by a Law of 18 July 1997.

3. The activities of security firms, as defined in Article 1(1) of the Belgian Law, are those of guarding and protecting persons, property and the transport of valuables, and of operating centralised alarm systems as independent service providers. Under Article 1(2), the Law applies also to internal security services engaged in essentially the same activities in so far as they work in places accessible to the public. Security systems firms, as defined by Article 1(3), design, install, maintain and repair alarm systems.

4. Under Articles 2 and 4 of the Belgian Law, any person managing or operating a security firm, an internal security service or a security systems firm must obtain authorisation from the Minister for the Interior, which can be obtained only if certain requirements are fulfilled. The requirements imposed on security firms and internal security services are stricter than those on security systems firms.

5. Under Article 2(3), security firms may be constituted as legal persons under the legislation of a Member State of the European Union; they must however have their place of business (siège d'exploitation) in Belgium.

6. Under Article 5(3) and (7), all persons engaged in the management of a security firm or an internal security service and members of the board of a security firm if they are effectively involved in the management must be permanently or habitually resident in Belgium. The same residence requirement applies under Article 6(3) and (7) to what I shall refer to as security staff - that is to say, all employees other than administrative or logistic staff. There are no such residence requirements as regards security systems firms (Articles 5(7) and 6(7)).

7. Finally, Article 8 requires security staff working for security firms and internal security services to carry an identification card issued by the Ministry of the Interior.

Procedure

8. The Commission requested the Belgian authorities to provide further information on the Belgian Law in 1995. They did so, but the Commission considered that certain provisions were incompatible with Community law and, by letter of 11 April 1996, formally requested the Belgian Government to submit its observations.

9. In its observations of 14 June 1996, the Belgian Government expressed its view that the restrictions contained in its legislation were justified by the relevant Treaty exceptions for measures justified on grounds of public policy and public security.

10. The Commission did not agree and sent the Belgian Government a reasoned opinion on 10 June 1997, calling upon it to comply within two months.

11. In its reply dated 6 May 1998, the Belgian Government stressed the specific nature of private security operations, their close relationship with the maintenance of public order for which the State is responsible and the need to maintain adequate control over them, as illustrated by a number of recent incidents in Belgium. It further pointed out that the rules governing security firms varied widely from one Member State to another.

12. The Commission remained unconvinced, and on 29 September 1998 brought the present proceedings, in which it seeks a declaration that

by adopting, within the framework of the Law of 10 April 1990 on security firms, security systems firms and internal security services, provisions which

(a) make it necessary to obtain prior authorisation in order to operate an undertaking of any of the kinds referred to in the said Law, that authorisation being subject to a certain number of conditions, namely that:

- a security firm must have a place of business in Belgium,

- persons who

- have charge of the actual management of a security firm or internal security service, or who

- work in or on behalf of such an undertaking or are employed for the purposes of its activities, with the exception of internal staff working in administration or logistics,

must have their permanent residence or, failing that, their habitual residence in Belgium,

- an undertaking established in another Member State must obtain authorisation, for the purpose of which no account is taken of the evidence and guarantees already presented by it for the pursuit of its activity in the Member State of establishment, and

(b) require every person wishing to exercise a security activity or provide an internal security service in Belgium to be issued with an identification card in accordance with that Law,

the Kingdom of Belgium has failed to fulfil its obligations under Articles 48, 52 and 59 of the Treaty (now, after amendment, Articles 39, 43 and 49 EC).

13. On 29 October 1998, the Court gave judgment in Case C-114/97 Commission v Spain, in which it declared that by maintaining in force ... provisions [which] make the grant of authorisation to carry on private security activities, in the case of security companies, subject to the requirement of being constituted in Spain and the requirement that their directors and managers should reside in Spain and the requirement that security staff should possess Spanish nationality, the Kingdom of Spain has failed to fulfil its obligations under those same articles.

14. On 8 December 1998, the Kingdom of Belgium submitted its defence, in which it reiterated very succinctly its position that private security operations cannot be assimilated to other commercial services, that the absence of Community - or even, in many cases, national - regulation makes it necessary to adopt Belgian legislation and that security firms represent a genuine and sufficiently serious threat affecting one of the fundamental interests of society, namely public order and public security.

15. It also stated, however, that it had taken note of the judgment in Commission v Spain and was considering what measures it should adopt to amend the Belgian Law, promising to inform the Court as soon as they were enacted. It may also be noted that the Belgian Government did not formally ask the Court to dismiss the action, and that it waived its right to submit a rejoinder following the Commission's purely formal reply in this case. Nor has it requested to be heard orally by the Court.

Assessment

16. In the light of the application as a whole and the pre-litigation procedure, it appears that the Commission takes issue essentially with four types of rules contained in the Belgian Law: the obligation for security firms to have their place of business in Belgium, the residence requirements for management and security staff, the authorisation requirement for all types of security service activities and, finally, the rules regarding identification cards.

17. As regards, first, the requirement that a security firm must have its place of business in Belgium, it is not clear whether the establishment in Belgium must be the sole or main place of business operated by the security firm or whether it may merely be one among several. However, since by its very nature a requirement that an undertaking must have a stable establishment in a Member State renders the occasional provision of cross-border services impossible, the rule in question restricts freedom to provide services.

18. Secondly, the residence requirements for both managers and staff - in particular when taken together with the requirement that security firms must have their place of business in Belgium - make it more difficult or even impossible for undertakings not established in Belgium to provide any security service there, and for persons not resident in Belgium to set up a security firm there. They thus constitute restrictions of both freedom to provide services and freedom of establishment.

19. The residence requirement for security staff makes it impossible for workers residing abroad - in particular frontier workers - to work for a security service provider established in Belgium. According to the case-law the rules on equal treatment prohibit both overt discrimination based on nationality and covert discrimination achieving the same result, including rules drawing a distinction on the basis of residence, which are liable to operate mainly to the detriment of foreigners. A requirement that certain categories of staff employed by security firms must be at least habitually resident in Belgium thus also encroaches on the freedom of movement guaranteed by the Treaty for workers.

20. As regards, thirdly, the requirement of prior authorisation, rules subjecting the provision of certain services by an undertaking established in another Member State to the issue of an administrative licence constitute - in particular where the occasional provision of services is concerned and even when they apply without distinction to national providers and to those of other Member States - a restriction on the freedom to provide cross-border services.

21. For the same reasons the fourth requirement, that all security staff working in Belgium must carry an identification card issued by the Belgian authorities, constitutes an obstacle to freedom to provide services. The perhaps costly and lengthy formalities involved in obtaining the cards make the provision of occasional cross-border services, such as the protection of valuables in international transit, more difficult.

22. It is thus clear, and it has at no stage been challenged by the Belgian Government, that the four requirements at issue are indeed restrictive of freedom to provide services, of freedom of establishment and of freedom of movement for workers. The only issue appears to be whether the restrictions thus imposed are justified.

23. In accordance with Articles 48(3) and 56(1) of the EC Treaty (now Articles 39(3) and 46(1) EC), the prohibition of restrictions on freedom of movement and freedom of establishment does not apply where measures are justified on grounds of public policy, public security or public health, and Article 66 of the EC Treaty (now Article 55 EC) extends that exclusion to restrictions on freedom to provide services. Under Article 55 of the EC Treaty (now Article 45 EC), in conjunction with Article 66, the prohibition of restrictions of freedom of establishment and freedom to provide services does not apply to activities connected with the exercise of official authority.

24. The Belgian Government sought during the administrative procedure to rely on those exceptions and its cursory defence may be read as maintaining that stance before the Court.

25. On that assumption, I shall deal with those arguments briefly.

26. First of all, there are no grounds for considering that private security firms in any way exercise official authority. The Court held, in Commission v Spain, that private security undertakings and their staff were not directly and specifically involved in the exercise of official authority under the Spanish legislation. No evidence has been put forward at any stage by the Belgian Government to suggest that the situation is any different in Belgium. As Advocate General Alber pointed out in his Opinion in Commission v Spain, the fact that security firms may provide assistance to the police does not mean that they thereby exercise official authority.

27. With regard to the second set of exceptions invoked by the Belgian Government the Court has held that the concept of public policy may be relied upon only in the event of a genuine and sufficiently serious threat to the requirements of public policy affecting one of the fundamental interests of society. The public policy exception, like all derogations from a fundamental principle of the Treaty, must be interpreted restrictively.

28. In its defence the Belgian Government states, without giving reasons, that each security firm constitutes such a genuine and sufficiently serious threat to the requirements of public policy. In its reply to the reasoned opinion it argued that the requirements of public policy were threatened by the danger of conflicts arising out of encroachment by private security service providers into areas of police competence and by the risk that the public might not be able to distinguish between private security staff and police personnel.

29. I cannot conclude, from those arguments alone - if, indeed, the Belgian Government is still maintaining them - that each and every security firm represents a serious threat to the requirements of public policy.

30. Nor can the sectors in question be excluded as a category from the general rules laid down in the Treaty. In Commission v Spain, the Court held: The right of Member States to restrict freedom of movement for persons on grounds of public policy, public security or public health is not intended to exclude economic sectors such as the private security sector from the application of that principle, from the point of view of access to employment ...

31. It is true that that statement was made with specific regard to a nationality requirement imposed on staff. No such requirement is imposed in Belgium but the rules in issue constitute indirect, or covert, discrimination in so far as they impose particular restrictions on persons or undertakings resident or established in other Member States. I therefore find no difficulty in extending that ruling to all forms of discrimination. Nor is there any reason to limit it to the field of employment, in the light of the parallel nature of the exceptions for restrictions on freedom of movement for workers, freedom of establishment and freedom to provide services.

32. However, even if one were to assume that with regard to security service providers some national measures restricting the fundamental freedoms guaranteed by the Treaty may be justified on grounds of public policy, any such measures must comply with the principle of proportionality. National measures liable to hinder or make less attractive the exercise of fundamental freedoms guaranteed by the Treaty must be suitable for securing the attainment of the objective which they pursue and must not go beyond what is necessary in order to attain it.

33. The Belgian Law seems to have particularly restrictive effects for security firms established in another Member State all of whose administrative requirements they fulfil, which provide - possibly on an occasional basis - security services in Belgium or even transnational services such as the protection of valuables in international transit.

34. The Commission has stressed that it does not challenge the justification for measures of government control over security firms - it does not object, for example, to rules regarding the wearing of uniforms, the carrying of firearms, the obligation to inform civil and police authorities of activities carried out or the subjection of private security undertakings to police control - but merely the imposition of that control in a way which discriminates against firms and individuals established or resident in other Member States. It also states that the Belgian authorities should make use of the evidence and guarantees presented by any security firm for the pursuit of its activity in its Member State of establishment.

35. In its defence the Belgian Government did not contest the Commission's arguments on that point. On the contrary, it stated that it was considering in the light of the Court's judgment in Commission v Spain what measures it should adopt to amend the Belgian Law in order to set up an efficient and proportionate system of control of security service providers. It furthermore promised to inform the Court when the appropriate measures were in place.

36. On 23 August 1999, the Belgian Government sent the Court copies of a Law of 9 June 1999, published in the Moniteur Belge on 29 July 1999, amending the Belgian Law of 10 April 1990, and of a letter in which it requested the Commission to discontinue the present proceedings.

37. It is not for the Court to assess the tenor of that amending Law in the context of this case; it has consistently been held that the question whether a Member State has failed to fulfil its obligations must be determined by reference to the situation prevailing at the end of the period laid down in the reasoned opinion. I note, however, that the Law of 9 June 1999 appears to relax the establishment and residence requirements by providing that firms must have their place of business, and the relevant categories of persons must be resident, in a Member State of the European Union rather than in Belgium. The rules relating to ministerial authorisation and the carrying of identification cards issued by the Belgian authorities, though, do not appear to have been modified.

Conclusion

38. I am accordingly of the opinion that the Court should

(1) declare that, by maintaining in force the Law of 10 April 1990 on security firms, security systems firms and internal security services, in so far as it establishes a system under which security firms must have their place of business in Belgium, management and security staff must be at least habitually resident in Belgium, all types of security service activities require prior authorisation and security staff working in Belgium must possess an identification card issued by the Belgian authorities, the Kingdom of Belgium has failed to fulfil its obligations under Articles 48, 52 and 59 of the EC Treaty (now, after amendment, Articles 39, 43 and 49 EC);

(2) order the Kingdom of Belgium to pay the costs.