Case C-169/04: Reference for a preliminary ruling by the VAT and Duties Tribunals, London Tribunal Centre, by direction of that court dated 2 April 2004, in the case of Abbey National plc (with Inscape Investments Ltd as Joined Party) against Commissioners of Customs and Excise.
Date: 2004-05-29
Institutions: Court of Justice
Subjects: interpretation of the law, investment company, management, securities, tax exemption

29.5.2004

EN

Official Journal of the European Union

C 146/3

The legitimate interest of a Member State in checking compli-
ance with the conditions governing the posting of workers
who are third-country nationals by companies providing
services can be adequately served by the requirement of a visa.
Any additional control, as here by way of an EU Posting of
Workers Certificate, which is issued by another authority,
is
unjustified.

The automatic refusal of a visa in cases of merely formal illegal
entry considerably restricts freedom to provide services and
renders that freedom illusory in some service sectors. In the
current state of Community law the Austrian Republic has, by
virtue of the checks on issue of entry visas, means available to
it which are just as effective but less far-reaching of reviewing
whether third-country nationals are entering the country for
the purpose of providing services.

2. Complianc e with pa y a nd worki ng con di tion s

The substantive condition in Article 18(13)(2) AuslBG under
which the EU Posting of Workers Certificate is issued only if
the Austrian wage and working conditions laid down in the
AVRAG are complied with likewise results in disproportionate
duplicated checks.

The requirement of an EU Posting of Workers Certificate and
the procedure associated with it are disproportionate to the
objective sought of ensuring worker protection, since the
Republic of Austria already has available to it less far-reaching
means.

The Republic of Austria transposed the posting of workers
directive by means of the AVRAG which provides for the possi-
bility of ex post controls in order to check that the requisite
salaries are actually being paid.

3. R e g u la r w or ke r s

The requirement set out in Article 18(13)(1) AuslBG as a condi-
tion for the EU Posting of Workers Certificate of at least one-
year's employment or an indefinite employment contract with
the provider of services constitutes an unjustified restriction on
freedom to provide services. The objective of combating
abusive practices can also be attained through far less restrictive
measures.

II. Refusal of residence permits, Article 10(1)(3) FrG

Under Article 10(1)(3) FrG a residence permit must be refused
when the worker has already entered the country without a
visa. That provision prohibits a posting, even if the providers
of the services can establish lawfulness, namely that an applica-
tion has already been made on the basis of which a Member
State can carry out the required checks.

The automatic refusal of a residence permit under Article
10(1)(3) FrG is disproportionate to the objective of control of
the conditions governing the right of residence and should
therefore be declared unlawful.

Reference for a preliminary ruling by the VAT and Duties
Tribunals, London Tribunal Centre, by direction of that
court dated 2 April 2004, in the case of Abbey National
plc (with Inscape Investments Ltd as Joined Party) against
Commissioners of Customs and Excise.

(Case C-169/04)

(2004/C 146/04)

Reference has been made to the Court of Justice of the Euro-
pean Communities by direction of the VAT and Duties Tribu-
nals, London Tribunal Centre, dated 2 April 2004, which was
received at the Court Registry on 5 April 2004, for a preli-
minary ruling in the case of Abbey National plc (with Inscape
Investments Ltd as
Joined Party) and Commissioners of
Customs and Excise on the following questions:

1. Does the exemption for ‘management of special investment
funds as defined by Member States’, contained in Article
13B(d)(6) of
the
Member States have the power to define the activities
comprising the ‘management’ of
investment
funds, as well as the power to define the special investment
funds which may benefit from the exemption?

the Sixth VAT Directive (1) mean that

the special

2. If the answer to question 1 is no and the term ‘management’
in Article 13B(d)(6) of the Sixth VAT Directive is to be
given an independent Community law meaning, in the light
of Council Directive 85/611/EEC as amended on the co-
ordination of laws, regulations and administrative provisions
relating to undertakings for collective investment in transfer-
able securities (‘the UCITS Directive’) (2), are charges made
by a depositary or trustee for the services it provides
pursuant
the UCITS Directive,
national regulatory provisions and the relevant fund rules,
exempt supplies of
investment
funds’ under Article 13B(d)(6) of the Sixth VAT Directive?

to articles 7 and 14 of

‘management of special

C 146/4

EN

Official Journal of the European Union

29.5.2004

3. Again,

if the answer to question 1 is no and the term
is to be given an independent Community
‘management’
law meaning, does the exemption for the ‘management of
special investment funds’ in Article 13B(d)(6) of the Sixth
VAT Directive apply to services performed by a third party
manager in respect of the administrative management of the
funds?

(1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmo-
nization of the laws of the Member States relating to turnover taxes
- Common system of value added tax: uniform basis of assessment
(OJ L 145, 13.06.1977, p. 1).

(2) of 20 December 1985 (OJ L 375, 31.12.1985, p. 3).

Pleas in law and main arguments

for

The Commission takes the view that the procedure which was
carried out
in relation to the quality checks for finished
products does not conform to Article 15 of Commission Regu-
lation (EC) No 504/97 of 19 March 1997, laying down detailed
the application of Council Regulation (EC) No
rules
2201/96 as regards the system of production aid for products
processed from fruit and vegetables. Therefore, the Commission
proposes a flat-rate adjustment of 10 % of the total expenditure
by way of aid in Spain. Nonetheless, checks are carried out
the
annually in Spain on all undertakings
marketing year. However, in accordance with the provisions in
Article 15(1)(a) of Regulation 504/97, for selected undertak-
ings,
('the sample group'), additional analytical checks are
carried out for finished products which may be the subject of
an application for financial assistance, which does not mean
that the remainder have committed irregularities.

throughout

Action brought on 13 April 2004 by the Kingdom of
Spain against the Commission of the European Commu-
nities

(Case C-175/04)

(2004/C 146/05)

An action against the Commission of the European Commu-
nities was brought before the Court of Justice of the European
Communities on 13 April 2004 by the Kingdom of Spain,
represented by Lourdes Fraguas Gadea, Abogado del Estado,
with an address for service in Luxembourg.

The applicant claims that the Court should:

— annul the decision of 4 February 2004 (1),

in so far as
concerns Spain's exclusion for 'inadequate quality checks'
(EUR 7314 117) in respect of aid for processors of toma-
toes and for 'failure to comply with the delivery timetable'
(EUR 1277 630. 65) in the case of aid to certain producers
of citrus fruit.

— order the defendant institution to pay the costs.

Aid for certain producers of citrus fruits:

The reason given by the Commission for the proposal for
financial correction is the transfer of
the agreed quantities
between different delivery periods. However, in the marketing
year 1997/98 there was considerably above average rainfall in
Spain which gave rise, in some regions or localities, to difficul-
ties in gathering those varieties of fruit ready for harvest and
delays in ripening for later varieties. Those circumstances
affected the delivery timetable mentioned in those contracts.
The Spanish authorities argue that
force
majeure. Moreover, in the marketing year 1997/98, there were
no rules governing the transfers of quantities agreed quarterly
between different delivery periods in respect of multi-annual
contracts. Thus the conduct cannot be deemed to be unlawful,
since in previous marketing years the transfer of agreed quanti-
ties between different delivery period had been authorised.

it was a case of

(1) Commission Decision 2004/136/EC of 4 February 2004 excluding
from Community financing certain expenditure incurred by the
Member States under the Guarantee Section of the European Agri-
cultural Guidance and Guarantee Fund (EAGGF) OJ L 40, p. 31