OPINION OF ADVOCATE GENERAL

SHARPSTON

delivered on 14 September 2006 ( )

Case C-251/04

Commission

v

Greece





(Treaty infringement proceedings against a Member State – Article 2(1) of Regulation (EEC) No 3577/92 – Transport – Freedom to provide services – Maritime cabotage – Towage on open sea)





1. In this case the Commission seeks a declaration under Article 226 EC that in allowing only vessels flying the Greek flag to provide towage services on the open sea within Greek national waters, ( ) the Hellenic Republic has failed to fulfil its obligations under Article 1 of Council Regulation (EEC) No 3577/92 ( ) applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage).





Relevant Community law

2. Within Title III of Part Three of the EC Treaty (‘Free movement of persons, services and capital’), Articles 49 to 55 concern services.

3. Article 49(1) EC states:

‘Within the framework of the provisions set out below, restrictions on freedom to provide services within the Community shall be prohibited in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended.’

4. Article 51(1) EC provides that freedom to provide services in the field of transport are to be governed by the provisions of the title relating to transport.

5. Article 54 EC states:

‘As long as restrictions on freedom to provide services have not been abolished, each Member State shall apply such restrictions without distinction on grounds of nationality or residence to all persons providing services within the meaning of the first paragraph of Article 49.’

6. Article 80(2) EC, part of Title V of Part Three of the Treaty (‘Transport’) states that the Council may, acting by a qualified majority, decide whether, to what extent and by what procedure appropriate provisions may be laid down for sea and air transport.

7. On the basis of that provision, which was at the time Article 84(2) of the EEC Treaty, the Commission originally proposed to the Council a single draft regulation applying the principle of freedom to provide services to sea transport services within the Community. ( ) Subject to certain limitations, it was intended to apply to sea transport services within Member States, between Member States and between Member States and third countries. However, that draft regulation was not adopted.

8. Subsequently, on the same basis, the Council adopted two related instruments. Regulation No 4055/86 applied the principle of freedom to provide services to maritime transport between Member States and between Member States and third countries. ( ) Regulation No 3577/92 applied that principle to maritime transport within Member States (maritime cabotage).

9. So far as is relevant, the recitals to Regulation No 3577/92 read as follows:

‘…

[2] in accordance with Article 61 of the Treaty freedom to provide services in the field of maritime transport is to be governed by the provisions of the Title relating to transport;

[3] the abolition of restrictions on the provision of maritime transport services within Member States is necessary for the establishment of the internal market; … the internal market will comprise an area in which the free movement of goods, persons, services and capital is ensured;

…

[8] the implementation of this freedom should be gradual and not necessarily provided for in a uniform way for all services concerned, taking into account the nature of certain specific services and the extent of the effort that certain economies in the Community showing differences in development will have to sustain;

…

[11] in view of the need to ensure the proper functioning of the internal market and of possible adaptations in the light of experience, the Commission should report on the implementation of this Regulation and if necessary submit additional proposals’.

10. Article 1(1) of Regulation No 3577/92 provides:

‘As from 1 January 1993, freedom to provide maritime transport services within a Member State (maritime cabotage) shall apply to Community ship owners who have their ships registered in, and flying the flag of a Member State, provided that these ships comply with all conditions for carrying out cabotage in that Member State, including ships registered in Euros, once that Register is approved by the Council.’ ( )

11. For the purposes of Regulation No 3577/92, under Article 2(1),

‘“maritime transport services within a Member State (maritime cabotage)” shall mean services normally provided for remuneration and shall in particular include:

(a) mainland cabotage: the carriage of passengers or goods by sea between ports situated on the mainland or the main territory of one and the same Member State without calls at islands;

(b) off-shore supply services: the carriage of passengers or goods by sea between any port in a Member State and installations or structures situated on the continental shelf of that Member State;

(c) island cabotage: the carriage of passengers or goods by sea between:

– ports situated on the mainland and on one or more of the islands of one and the same Member State,

– ports situated on the islands of one and the same Member State;

Ceuta and Melilla shall be treated in the same way as island ports.’





Relevant national law

12. Article 11(1b) of the Greek Code of public maritime law reserves towage operations and assistance at sea in national waters to vessels flying the flag of Greece.

13. Under Article 188(2) of the Code, the conditions for granting a towage licence, the regulation of towage, circumstances in which towage services must be provided, towage rights in port and mooring waters ‘and all other necessary details’ are to be laid down by a port regulation adopted by the port authority.

14. Article 188(3) of the Code provides:

‘The extent of the right to tow, occasional or emergency towage by other vessels, related rights of tugs and other vessels flying the flag of a State other than Greece, as well as all other related details, shall be laid down by presidential decree.’

15. Article 1(1) of Presidential Decree No 45/83 on the towage of vessels essentially provides that the carrying out of professional towage between two points within national waters as well as the provision of all services directly related to such an operation are reserved to vessels flying the Greek flag. Such vessels must be classed as tugs under the legislation in force and licensed by the competent port authority.

16. Article 4(2) of a General Regulation on Ports, adopted by the competent authority exercising powers in accordance with the competence conferred by Article 188(2) of the Code, requires the owner of a vessel applying for a port towage licence to present to the port authority documents including a certificate of nationality. ( )





Procedure

17. On 18 January 2001 pursuant to the first paragraph of Article 226 EC the Commission sent a letter of formal notice to Greece, stating that in its view Article 11(1b), and Article 188(2) and (3), of the Code of public maritime law and Article 1(1) of Presidential Decree No 45/83 were contrary to Article 1 of Regulation No 3577/92.

18. Greece responded by letter of 27 March 2001, arguing that Regulation No 3577/92 does not apply to towage services. Article 2(1) of the regulation does not define towage services or maritime assistance as maritime transport services; and therefore towage services do not fall within the scope of the regulation. Greece added that, in a recent proposal for a directive on market access to port services, ( ) the Council had referred to a Commission Green Paper on Sea Ports and Maritime Infrastructure of December 1997 ( ) in which the Commission had for the first time expressed its intention to regulate port services. It was therefore contradictory for the Commission to propose regulating the provision of such services and at the same time to examine whether the Greek legislation was compatible with current Community law in that sector. Finally, according to Greece, the Commission had also recognised that situations similar to that arising under the contested Greek legislation existed in several other Member States.

19. On 22 July 2002, the Commission sent Greece a reasoned opinion pursuant to Article 226 EC. It maintained the position it had adopted in its letter of formal notice, but added the further claim that Article 4(2) of the General Regulation on Ports also infringed Article 1 of Regulation No 3577/92.

20. Greece replied to the reasoned opinion by letter of 13 November 2002, maintaining its position that towage services did not constitute maritime transport services within the meaning of Regulation No 3577/92.

21. The Commission therefore brought the present action. The order that it seeks (in the form resulting from the clarification provided at the hearing) asks the Court to

– declare that by allowing only vessels flying the Greek flag to provide towage services on the open sea within Greek national waters, the Hellenic Republic has failed to fulfil its obligations under Article 1 of Regulation No 3577/92 applying the principle of freedom to provide services to maritime transport within Member States (maritime cabotage);

– order the Hellenic Republic to pay the costs.

22. Greece argues that the Court should dismiss the action as unfounded and order the Commission to bear the costs.





Assessment

23. It is settled case-law that the subject-matter of a dispute under Article 226 EC is delimited by the pre-litigation procedure. ( ) Such an action must set out the complaints coherently and precisely to enable the Court to appreciate the exact scope of the infringement of Community law complained of, a condition which is necessary in order to enable it to determine whether there is a breach of obligations as alleged. ( ) The heads of claim must be set out unambiguously, so that the Court does not rule ultra petita. ( )

24. It is to be noted that the Commission has based its application exclusively on Regulation No 3577/92. Importantly, it has not asked the Court to declare in the alternative that the Greek legislation to which it objects, which clearly differentiates between vessels on the basis of nationality, regulates services that are not, on a proper analysis, maritime transport services, and therefore infringes the normal Treaty provisions governing freedom to provide services (in particular Article 49(1) or Article 54 EC) and/or any other rule of Community law (such as Article 12 EC) read in conjunction with those provisions. The sole question raised in the pre-litigation procedure and in the application before the Court is whether the contested national legislation infringes Article 1 of Regulation No 3577/92. The Court must therefore confine its assessment to that question. In what follows, I expressly do not address the question of whether towage services provided on the open sea, if they are not covered by Regulation No 3577/92, nevertheless fall within the scope of other provisions of Community law.

25. It is likewise settled law that Article 1 of Regulation No 3577/92 establishes the principle of freedom to provide maritime cabotage services within the Community ( ) – provided, of course, that the services in question fall within the scope of the regulation. The conditions governing the application of that principle as laid down in Article 49 EC and Article 51 EC have thus been defined in the maritime cabotage sector. ( ) Similarly, the Court has already applied the rules deriving from Article 49 EC in the context of both Regulation No 4055/86 ( ) and Regulation No 3577/92. ( )

26. It seems clear to me – and indeed Greece does not seriously contend the contrary – that if towage services on the open sea are covered by Regulation No 3577/92, application of that case-law should lead the Court to grant the declaration sought.

27. The single issue on which the present application stands or falls is therefore whether towage services on the open sea fall within the scope of Regulation No 3577/92, as defined by Article 2(1) thereof.





The relationship between the general principle of freedom to provide services and ‘services in the field of transport’

28. The provision of services in general is already liberalised by Article 49 EC. The Treaty then makes an exception for ‘services in the field of transport’, indicating – in Article 51(1) EC – that freedom to provide such services ‘shall be governed by the provisions of the title relating to transport’. Because this category of services forms an exception to the general rule, it should, by the normal canons of construction, be interpreted narrowly. That implies that only services whose essence is that they are ‘transport’ fall within the exception. If they do, specific provisions adopted under what is now Article 80(2) EC are required in order (for example) to render the ‘normal’ rules on freedom to provide services applicable to them.

29. It seems to me that there is a plausible case for saying that services that are related, or incidental, or ancillary to (but separable from) transport do not require specific provisions to bring them within the scope of the normal rules on freedom to provide services, because they are already covered by those rules. That argument would seem strongest in respect of services that are only tangentially associated with transport. Perhaps there are other services that are so intimately associated with ‘core’ transport services that they too should (and could) be liberalised only through a regulation adopted on the basis of Article 80(2) EC.

30. In any event, in the interests of legal certainty, the proper discharge of Member States’ obligations and transparency (so that Community nationals may readily ascertain the scope of their rights under Community law), it seems to me essential that, in legislation that expressly purports to apply the principle of freedom to provide services ‘in the field of transport’, definitions should be clear and unambiguous in identifying the classes of services concerned.

31. It is no secret that towage services exist. It is therefore regrettable that Regulation No 3577/92 is entirely silent (one way or the other) on the subject of towage services.





The interpretation of Article 2(1) of Regulation No 3577/92

32. Article 2(1) opens by stating that the term ‘maritime transport services within a Member State (maritime cabotage)’ means ‘services normally provided for remuneration’. It is common ground that the towage services in question satisfy that condition. Article 2(1) goes on to state that maritime cabotage ‘shall in particular include’ three categories of activity: mainland cabotage, off-shore supply services and island cabotage. ( )

33. In Greece’s submission, that is an exhaustive list of the maritime transport services falling within its scope. The term used in Greek in that provision (ειδικότερα) is to be understood as meaning ‘more particularly’, not ‘in particular’. If Article 2(1) had been intended to be illustrative rather than exhaustive, the words ‘such as’ would have been used. Article 2(1) thus covers only maritime transport services involving the carriage of goods or passengers. Towage cannot be classified as transport involving the carriage of goods or passengers. Rather, it is an ancillary service whose purpose is to prevent harm arising to the towed vessel (‘the tow’). It involves moving the tow, not the passengers or goods aboard the tow. Nor is the tow itself a good, but a means of transport requiring assistance.

34. According to the Commission, the words ‘in particular’ show that Article 2(1) is illustrative and that the definition of maritime transport services which it contains should be interpreted broadly. Thus, it should be read as encompassing towage services, since such services are indeed maritime transport services normally provided for remuneration.

35. I agree with the Commission to this extent: in my view, the words ‘in particular’ show that the three terms ‘mainland cabotage’, ‘off-shore supply services’ and ‘island cabotage’ as there defined are not in principle intended to constitute an exhaustive list of the services that are to be regarded as ‘maritime transport services’ for the purpose of Regulation No 3577/92. Other language versions of Article 2(1) that I have examined contain wording analogous to ‘in particular’, ( ) and in my view thus point to the legislator’s desire to indicate the types of maritime transport services to which Regulation No 3577/92 applies, rather than to define them exhaustively.

36. It seems to me that the Court can approach the present application in two ways. It can identify the essential characteristics of what clearly is included within the definition contained in Article 2(1) and then ask whether towage services are, by their nature, services that can sensibly be assimilated to such services so that (even if they are not expressly covered by the definitions of mainland cabotage, off-shore supply services and island cabotage) they should be subsumed within the definition by virtue of the words ‘in particular’. Alternatively, it can fill in the drafting lacuna – as the Commission implicitly urges – and hold that towage services are ‘self-evidently’ so much part and parcel of maritime transport that the Community legislator ‘must’ have intended them to be included in the definition contained in Article 2(1) of Regulation No 3577/92, even if they do not share the essential characteristics of the activities expressly listed under subheadings (a), (b) and (c).

37. The three forms of cabotage expressly listed in Article 2(1) indicate the principal activities which the Community legislator felt ought to be classified as ‘maritime transport services’. As well as being services normally provided for remuneration, mainland cabotage, off-shore supply services and island cabotage all have in common that they consist of (i) ‘the carriage of passengers or goods by sea’ (ii) between two points in the same Member State – whether on the mainland, on an island or on an off-shore installation or structure situated on the continental shelf of the Member State.

38. That is not surprising. To my mind, the words ‘maritime transport’ naturally connote carriage of passengers and/or freight by sea between a point of departure and a point of destination. That perception of what is meant by maritime transport is also borne out by the nature of the maritime transport services explicitly mentioned in Regulation No 4055/86 ( ) and in the earlier draft regulation (which was not adopted) applying the principle of freedom to provide services to sea transport. ( )

39. Other situations that satisfy those criteria (i.e., carriage of passengers or goods by sea between two points in the same Member State) may, I think, legitimately be subsumed within the definition in Article 2(1) of the regulation in reliance upon the words ‘in particular’. But that is as far as the natural substantive scope of the definition, as drafted, extends.

40. In its reply, the Commission sought to rely on its own communication on the interpretation of Regulation No 3577/92 ( ) to demonstrate that towage services on the open sea already fall within the scope of that regulation. However, the communication itself provides no reasoning as to why Article 2(1) of Regulation No 3577/92 should be read in that way. It merely asserts that the text should be so read. That takes the matter no further forward.

41. It might be thought that the more restrictive approach that I here explore runs counter to the approach adopted by the Court in the four cases in which it has so far considered Regulation No 3577/92: Analir, Commission v Greece, Commission v Spain ( ) and Agip Petroli. ( ) It seems to me, however, that there is a fundamental difference.

42. In all those cases, the services at issue unquestionably fell within the definition of ‘maritime cabotage’ contained in Article 2(1) and were thus services to which, in principle, the regulation applied. The issues raised before the Court concerned the precise scope of the regulation. Was the provision of island cabotage to be made subject to prior administrative authorisation and, if so, in what circumstances (Analir)? Could Greece treat the Peloponnese as an ‘island’, and could it apply national manning rules to Community cruise liners exceeding 650 gt which carry out island cabotage (Commission v Greece)? Was the Vigo estuary to be regarded as ‘the sea’ and Vigo, Cangas, Moaña and the Cies Isles as ‘ports’ for the purposes of Regulation No 3577/92, so that maritime transport services within the estuary operating under a public concession were governed by the regulation (Commission v Spain)? To avoid abuse, could a Member State require that, in order to benefit from Article 3(3) of Regulation No 3577/92 (flag State manning rules), an international voyage taking place before or after an island cabotage sector within its waters should not be in ballast (Agip Petroli)?

43. In contrast, in the present case the issue is whether the services in question fall within the scope of Regulation No 3577/92 at all. It seems to me that such a question is different in nature both from questions that concern the interpretation of particular (undefined) terms and from questions involving the scope of Member States’ continuing power to regulate matters covered by the regulation (for example, to prevent abuse or to pursue legitimate safety aims).

44. I therefore turn to examine whether towage services do, or do not, satisfy the twin criteria that they involve (i) ‘the carriage of passengers or goods by sea’ (ii) between two points in the same Member State.





The nature of towage services

45. Towage does not generally entail straightforward carriage of goods or passengers by sea. Rather, it involves assisting the movement of a vessel, rig, platform or buoy. ( ) As a general rule, the purpose served by towage services is different from that served by the forms of maritime cabotage expressly listed and defined in Article 2(1).

46. An illustration will serve to make the point more clearly. Imagine an oil tanker with engine failure lying five nautical miles southwest of the Lizard ( ) with a southerly force 4 wind, a sou’westerly swell and the tide setting up-Channel. The tanker’s captain would, unquestionably, radio requesting towage services from at least one seagoing tug as a matter of urgency so as to avoid risking the lives of her crew, the loss of her cargo, damage to her hull and any consequent environmental harm. Such towage would certainly be necessary to enable the vessel to complete her voyage safely and transport her cargo of oil to its destination. It would not normally, however, be regarded as ‘transport’ either of the oil or of the tanker. A towing vessel that is assisting another vessel to manoeuvre, or supplementing that vessel’s own propulsive machinery, or substituting for it in cases of failure or breakdown, is assisting the vessel by which the passengers or goods are transported. It is not itself the transporting vessel.

47. It is possible that some situations – for example, a seagoing tug towing a rig, platform or buoy to a specified destination – present parallels with the ordinary carriage of goods. ( ) However, in its application and in the declaration that it seeks, the Commission makes no attempt to differentiate between various different activities that may be carried out by vessels providing towage services. In consequence, I consider that the Court should have regard, in determining this application, to the generality of towage services.

48. If I am right that ‘maritime transport services’ within the meaning of Article 2(1) of Regulation No 3577/92 must involve carriage by sea of passengers and/or goods between a point of departure and a point of destination, it follows that towage services do not, as a rule, fall within that definition.

49. It seems to me that the Court should not read Article 2(1) of Regulation No 3577/92 as encompassing any service which is in some way related or incidental or ancillary to the provision of maritime transport services within Member States, irrespective of whether that service shares the essential characteristics of the services expressly defined in Article 2(1).

50. First, there is no basis in either the preamble or the substantive provisions of Regulation No 3577/92 for such an interpretation.

51. It is clear from the preamble that Regulation No 3577/92 was not intended to achieve at a stroke a fully liberalised market in the provision of all services relating to maritime transport. The eighth recital indicates that implementation of the freedom to provide services ‘should be gradual and not necessarily provided for in a uniform way for all services concerned’. Article 10 requires the Commission to submit biennial reports to the Council on the implementation of the regulation and, if appropriate, to put forward any necessary proposals. The Court has, moreover, recently confirmed that ‘it should be recalled that the regulation’s objective of liberalisation, … which is to abolish restrictions on the provision of maritime transport services within Member States, has not yet been fully achieved’. ( ) It appears that the Commission has made no supplementary proposal suggesting that the principle of freedom to provide services should specifically be applied to towage services provided on the open sea. ( )

52. Second, if Article 2(1) of Regulation No 3577/92 is read as encompassing any service which is in any way related or incidental or ancillary to the provision of maritime transport services within Member States, whether or not that service shares the essential characteristics of maritime cabotage there expressly defined, it becomes very difficult, if not impossible, to determine on the basis of the text the actual scope of the definition of maritime transport services (thus negating the purpose of Article 2(1) as a definition in the first place). Such a construction runs counter to principles of legal certainty. It can be tested in the following way.

53. Suppose that one follows the invitation to read Article 2(1) as encompassing any service that is in some way ‘related’ or ‘incidental’ or ‘ancillary’ to the provision of maritime transport services. On that view, it would be hard to exclude from the scope of Regulation No 3577/92 the operations of some or all of (for example) the following: hydrographic vessels (which provide the data necessary to correct and update charts), dredgers (which keep channels cleared to a particular draught), pilot vessels (pilotage being sometimes optional, sometimes mandatory), light ships and vessels which put navigational marks and buoys in place (all essential to navigation), vessels or automated reporting stations that provide data for shipping forecasts (meteorology being an essential element of safe navigation), and lifeboats (the ultimate rescuers in extremis). All of these are involved in the provision of services that contribute, in one way or another, to maritime transport. So where should one draw the line? It is clear that such an approach would give an almost limitless scope to Article 2(1) and would ignore the fact that its very purpose is to define maritime transport services falling within the scope of Regulation No 3577/92.

54. Accordingly, I conclude that Greece has not infringed Article 1 of Regulation No 3577/92 by allowing only ships flying the Greek flag to provide towage services on the open sea in Greek waters, because towage services do not fall within the scope of Regulation No 3577/92 as presently framed. The Commission has not asked the Court to declare that the national legislation to which it objects – whose effects manifestly differ on the basis of nationality – infringes any other aspect of Community law. Therefore the Commission’s action should be dismissed.





Costs

55. In its pleadings, the Greek Republic has asked for costs. I see no reason to depart from the Court’s normal practice. Therefore, pursuant to Article 69(2) of the Rules of Procedure, the Commission should be ordered to bear the costs.

Conclusion

56. In the light of the foregoing considerations, I recommend that the Court should:

– dismiss the application;

– order the Commission to bear the costs.