Judgment of the Court (Sixth Chamber) of 7 May 1992. - Colegio Oficial de Agentes de la Propriedad Inmobiliaria v José Luis Aguirre Borrell and others. - Reference for a preliminary ruling: Juzgado de Instrucción n. 20 de Madrid - Spain. - Freedom of establishment - Recognition of diplomas - Estate agents. - Case C-104/91.



European Court reports 1992 Page I-03003



Summary

Parties

Grounds

Decision on costs

Operative part



Keywords

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1. Free movement of persons ° Freedom of establishment ° Estate agents ° Access to the profession ° Obligation on Member States to assess equivalence between the diplomas and qualifications required under national law and those obtained in the Member State of origin ° Obligation to give decisions which state reasons and which are capable of being the subject of judicial proceedings

(EEC Treaty, Arts 52 and 57)

2. Free movement of persons ° Freedom of establishment ° Pursuit of a regulated profession by a national of another Member State who does not fulfil the conditions laid down by the host State ° Imposition of criminal penalties ° Whether permissible ° Conditions

(EEC Treaty, Arts 52 and 57)

Summary

1. Articles 52 and 57 of the Treaty must be interpreted as meaning that:

° in the absence of a directive on the mutual recognition of diplomas, certificates or other evidence of formal qualifications relating to the profession of estate agent, the authorities of a Member State, in response to a request for permission to practice that profession from a national of another Member State who holds a diploma or qualification relating to the pursuit of that profession in his State of origin, must assess the extent to which the knowledge and skills certified by the diplomas or professional qualifications obtained by the person concerned in his State of origin correspond to those required by the rules of the host State;

° where there is only partial equivalence between the diplomas or qualifications, the authorities of the host State are entitled to require the person concerned to show that he has acquired the knowledge and skills which are lacking by requiring him to pass an examination if necessary;

° the decision to deny a national of another Member State recognition or equivalent treatment of the diploma or professional qualification awarded to him by the Member State of which he is a national must be capable of being the subject of judicial proceedings in which its legality under Community law can be reviewed and the person concerned must be able to ascertain the reasons for the decision taken.

2. Subject to the obligation on the part of the authorities of the host State, in the absence of a directive on the mutual recognition of diplomas, certificates or other evidence of formal qualifications relating to a regulated profession, to examine whether the diploma or professional qualification awarded by another Member State to a Community national is equivalent to the diploma or qualification required by the legislation of the first State, and to the requirement that the examination procedure must fulfil certain conditions with regard, in particular, to the statement of reasons for an adverse decision and the remedies available against such a decision, Articles 52 and 57 of the Treaty do not preclude a Member State from imposing criminal penalties in respect of the pursuit of that regulated profession by a national of another Member State who does not fulfil the conditions laid down by the legislation of the host Member State.

Parties

In Case C-104/91,

REFERENCE to the Court under Article 177 of the EEC Treaty by the Juzgado de Instruccion No 20 of Madrid for a preliminary ruling in the proceedings pending before that court between

Colegio Oficial de Agentes de la Propiedad Inmobiliaria

and

J.L. Aguirre Borrell,

S.K. Newman,

S. Aguirre Gil de Biedma,

M.J. Cepeda Ruiz,

P. Aguirre Gil de Biedma,

Ministerio Fiscal,

on the interpretation of Articles 52 and 57 of the EEC Treaty and Council Directive 67/43/EEC of 12 January 1967 concerning the attainment of freedom of establishment and freedom to provide services in respect of activities of self-employed persons connected with: 1. matters of "Real Estate" (excluding 6401) (ISIC Group ex 640), 2. the provision of certain "Business services not elsewhere classified" (ISIC Group 839), (OJ, English Special Edition 1967, p. 3),

THE COURT (Sixth Chamber),

composed of: F.A. Schockweiler, President of the Chamber, G.F. Mancini, C.N. Kakouris, M. Diez de Velasco and J.L. Murray, Judges,

Advocate General: F.G. Jacobs,

Registrar: H.A. Ruehl, Principal Administrator,

after considering the written observations submitted on behalf of:

° Colegio Oficial de Agentes de la Propiedad Inmobiliaria, by Jesus Zarzalejos Nieto, Barrister of the Madrid Bar,

° Ministerio Fiscal (Public Prosecutor) attached to the Tribunal Superior de Justicia de Madrid, by Joaquin Sánchez-Covisa Villa, Public Prosecutor at the Fiscalia del Tribunal Superior de Justicia,

° the Government of the French Republic, by Philippe Pouzoulet, Assistant Director of Legal Affairs at the Foreign Ministry, acting as Agent, and Hélène Duchène, Secretary for Foreign Affairs at that Ministry, also acting as Agent

° the Government of Spain, by Alberto José Navarro González, Director-General of Community, Legal and Institutional Affairs at the State Secretariat for the European Communities, and Antonio Hierro Hernández-Mora, Abogado del Estado, acting as Agents,

° the Commission of the European Communities, by Étienne Lasnet, Legal Adviser, and Daniel Calleja, of the Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of the Colegio Oficial de Agentes de la Propiedad Inmobiliaria, represented by J. Jordana de Pozas, Advocate, of the Spanish Government and of the Commission, at the hearing on 21 January 1992,

after hearing the Opinion of the Advocate General at the sitting on 26 February 1992,

gives the following

Judgment

Grounds

1 By order of 21 February 1991, received at the Court on 2 April 1991, the Juzgado de Instrucción (Local Criminal Court) No 20, Madrid, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Articles 52 and 57 of the EEC Treaty and of Council Directive 67/43/EEC of 12 January 1967 concerning the attainment of freedom of establishment and freedom to provide services in respect of activities of self-employed persons concerned with: 1. matters of "Real Estate" (excluding 6401) (ISIC Group ex 640), 2. the provision of certain "Business services not elsewhere classified" (ISIC Group 839).

2 Those questions were raised in criminal proceedings brought by the Colegio Oficial de Agentes de la Propiedad Inmobiliaria, the official professional association of estate agents, against Aguirre Newman SA, represented by its officers, S. Aguirre and S.K. Newman, for the illegal pursuit of the profession of estate agent.

3 Taking the view that the case before it raised questions relating to the interpretation of Community law, the Juzgado de Instrucción No 20 of Madrid decided to stay the proceedings pending a preliminary ruling by the Court on the following questions:

"1. Must the Community rules on freedom of establishment in Article 52 et seq. of the EEC Treaty and Directive 67/43/EEC and the current state of implementation of Article 57(1) of the Treaty be interpreted meaning that it is possible that in a Member State a citizen of another Member State who holds a qualification validly issued in his country of origin which has not been recognized in the country where he wishes to establish himself and carry on the occupation of estate agent is liable to criminal penalties?

2. Must the aforesaid Community legislation be interpreted as meaning that Article 57(1) of the Treaty, which imposes on the Council the obligation to issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications within a reasonable time, and the absence of any action to that end in so far as concerns estate agents in 24 years, permit the maintenance in a Member State of the requirement for a person who wishes to carry on that occupation and holds the requisite qualification in his country of origin to pass an examination?"

4 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

5 In the interests of a rational approach, consideration should first be given to the second question which relates, in substance, to whether and in what conditions, in the absence of a directive on mutual recognition of diplomas, certificates or other qualifications relating to the profession of estate agent, Articles 52 and 57 of the Treaty allow the authorities of a Member State, in response to a request for permission to practice that profession from a national of another Member State who holds a diploma or qualification relating to the pursuit of that profession in his State of origin, to require that individual to pass an examination.

6 In order to answer the question, the first point to note is that, as the Court held in the judgment in Joined Cases C-330 and C-331/90 López Brea [1992] ECR I-323, Directive 67/43 merely requires the abolition of all direct or indirect discrimination based on nationality, but does not aim to harmonize the conditions laid down in national rules regulating the taking up or pursuit of the profession of estate agent.

7 In the absence of harmonization of the conditions of access to a particular profession, the Member States are entitled to specify the knowledge and qualifications needed in order to pursue it and to require the production of a diploma certifying that the holder has the relevant knowledge and qualifications (see the judgment in Case 222/86 UNECTEF v Heylens [1987] ECR 4097, paragraph 10, and in Case C-340/89 Vlassopoulou v Ministerium fuer Justiz, Bundes-und Europaangelegenheiten Baden-Wuerttemberg [1991] ECR I-2357, paragraph 9).

8 However, in laying down that freedom of establishment is to be attained by the end of the transitional period, Article 52 of the Treaty thus imposes an obligation to attain a precise result, the fulfilment of which had to be made easier by, but not made dependent on, the implementation of a programme of progressive measures (see the judgment in Case 11/77 Patrick v Ministre des Affaires Culturels [1977] ECR 1199, paragraph 10, and Vlassopoulou, cited above, paragraph 13).

9 Moreover, it is settled case-law that, in so far as Community law makes no special provision, the objectives of the Treaty, and in particular freedom of establishment, may be achieved by measures enacted by the Member States, which, under Article 5 of the Treaty, must take "all appropriate measures, whether general or particular, to ensure fulfilment of the obligations arising out of this Treaty or resulting from action taken by the institutions of the Community" and abstain from "any measure which could jeopardize the attainment of the objectives of this Treaty" (see the judgment in Case 71/76 Thieffry v Conseil de l' Ordre des Avocats à la Cour de Paris [1977] ECR 765, paragraph 16, and in Vlassopoulou, cited above, paragraph 14).

10 Even if applied without any discrimination on the basis of nationality, national requirements concerning qualifications may have the effect of hindering nationals of the other Member States in the exercise of their right of establishment guaranteed to them by Article 52 of the EEC Treaty. That could be the case if the national rules in question took no account of the knowledge and qualifications already acquired by the person concerned in another Member State (see the judgment in Vlassopoulou, cited above, paragraph 15).

11 Consequently, a Member State which receives a request to admit a person to a profession to which access, under national law, depends upon the possession of a diploma or a professional qualification must take into consideration the diplomas, certificates and other evidence of qualifications which the person concerned has acquired in order to exercise the same profession in another Member State by making a comparison between the specialized knowledge and abilities certified by those diplomas and the knowledge and qualifications required by the national rules (see the judgment in Vlassopoulou, cited above, paragraph 16).

12 That examination procedure must enable the authorities of the host Member State to assure themselves, on an objective basis, that the foreign diploma certifies that its holder has knowledge and qualifications which are, if not identical, at least equivalent to those certified by the national diploma. That assessment of the equivalence of the foreign diploma must be effected exclusively in the light of the level of knowledge and qualifications which its holder can be assumed to possess in the light of that diploma, having regard to the nature and duration of the studies and practical training to which the diploma relates (see the judgment in UNECTEF v Heylens, cited above, paragraph 13).

13 In the course of that examination, a Member State may, however, take into consideration objective differences relating to both the legal framework of the profession in question in the Member State of origin and to its field of activity. In the case of the profession of estate agent, a Member State may therefore carry out a comparative examination of diplomas, taking account of the differences identified between the national legal systems concerned (see the judgment in Vlassopoulou, cited above, paragraph 18).

14 If that comparative examination of diplomas results in the finding that the knowledge and qualifications certified by the foreign diploma correspond to those required by the national provisions, the Member State must recognize that diploma as fulfilling the requirements laid down by those provisions. If, on the other hand, the comparison reveals that the knowledge and qualifications certified by the foreign diploma and those required by the national provisions correspond only partially, the host Member State is entitled to require the person concerned to show that he has acquired the knowledge and qualifications which are lacking (see the judgment in Vlassopoulou, cited above, paragraph 19).

15 Finally, the examination made to determine whether the knowledge and qualifications certified by the foreign diploma and those required by the legislation of the host Member State correspond must be carried out by the national authorities in accordance with a procedure which is in conformity with the requirements of Community law concerning the effective protection of the fundamental rights conferred by the Treaty on Community nationals. It follows that any decision taken by the national authorities in connection with that examination must be capable of being made the subject of judicial proceedings in which its legality under Community law can be reviewed and that the person concerned must be able to ascertain the reasons for the decision taken in his regard (see the judgment in UNECTEF v Heylens, cited above, paragraph 17, and in Vlassopoulou, cited above, paragraph 22).

16 In those circumstances, the answer to the second question referred by the Juzgado de Instrucción No 20 of Madrid, as recast, must be that Articles 52 and 57 of the Treaty are to be interpreted as meaning that:

° in the absence of a directive on the mutual recognition of diplomas, certificates or other evidence of formal qualifications relating to the profession of estate agent, the authorities of a Member State, in response to a request for permission to practice that profession from a national of another Member State who holds a diploma or qualification relating to the pursuit of that profession in his State of origin, must assess the extent to which the knowledge and skills certified by the diplomas or professional qualifications obtained by the person concerned in his State of origin correspond to those required by the rules of the host State;

° where there is only partial equivalence between the diplomas or qualifications, the authorities of the host State are entitled to require the person concerned to show that he has acquired the knowledge and skills which are lacking by requiring him to pass an examination if necessary;

° the decision to deny a national of another Member State recognition or equivalent treatment of the diploma or professional qualification awarded to him by the Member State of which he is a national must be capable of being made the subject of judicial proceedings in which its legality under Community law can be reviewed and the person concerned must be able to ascertain the reasons for the decision taken.

17 In its first question, the national court seeks to ascertain in substance whether and in what circumstances Articles 52 and 57 of the Treaty preclude a Member State from making the pursuit of a regulated profession by a national of another Member State who does not fulfil the conditions laid down by the law of the host Member State liable to criminal penalties.

18 It follows from the answer to the second question that the authorities of the host State are under an obligation to examine whether the diploma or professional qualification awarded by another Member State to a Community national is equivalent to the diploma or qualification required by the legislation of the first State, and that the examination procedure must fulfil certain conditions with regard, in particular, to the statement of reasons for an adverse decision and the remedies available against such a decision.

19 Subject to those conditions being met, the rules of the Treaty on freedom of establishment do not affect the Member States' power to impose criminal penalties in respect of the illegal pursuit by a national of another Member State of a regulated profession, in particular in cases where the Community national has failed to seek verification as to whether the diploma or professional qualification awarded to him in his State of origin is equivalent to that required in the host State, or in cases where such equivalence has not been recognized.

20 In those circumstances, the answer to the first question, as recast, must be that Articles 52 and 57 of the Treaty do not preclude a Member State from imposing criminal penalties in respect of the pursuit of a regulated profession by a national of another Member State who does not fulfil the conditions laid down by the legislation of the host Member State, provided that that State complies with the conditions laid down in the answer to the preceding question.

Decision on costs

Costs

21 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (Sixth Chamber),

in answer to the questions referred to it by the Juzgado de Instrucción No 20 of Madrid, by order of 21 February 1991, hereby rules:

1. Articles 52 and 57 of the EEC Treaty must be interpreted as meaning that:

° in the absence of a directive on the mutual recognition of diplomas, certificates or other evidence of formal qualifications relating to the profession of estate agent, the authorities of a Member State, in response to a request for permission to practice that profession from a national of another Member State who holds a diploma or qualification relating to the pursuit of that profession in his State of origin, must assess the extent to which the knowledge and skills certified by the diplomas or professional qualifications obtained by the person concerned in his State of origin correspond to those required by the rules of the host State,

° where there is only partial equivalence between the diplomas or qualifications, the authorities of the host State are entitled to require the person concerned to show that he has acquired the knowledge and skills which are lacking by requiring him to pass an examination if necessary,

° the decision to deny a national of another Member State recognition or equivalent treatment of the diploma or professional qualification awarded to him by the Member State of which he is a national must be capable of being the subject of judicial proceedings in which its legality under Community law can be reviewed and the person concerned must be able to ascertain the reasons for the decision taken;

2. Articles 52 and 57 do not preclude a Member State from imposing criminal penalties in respect of the pursuit of a regulated profession by a national of another Member State who does not fulfil the conditions imposed by the legislation of the host Member State, provided that that State complies with the conditions laid down in the answer to the preceding question.