Case C-404/05: Action brought on  17 November 2005  by the Commission of the European Communities against the Federal Republic of Germany
Date: 2006-01-14
Institutions: Court of Justice
Subjects: European Commission, Germany, action for failure to fulfil an obligation, freedom to provide services, health control, organic farming, private sector, right of establishment

14.1.2006

EN

Official Journal of the European Union

C 10/15

The main aim of the contested decision is to combat terrorism
by implementing United Nations Security Council Resolution
1373 (2001) on the fight against terrorism. By contrast, the
aim of Regulation No 443/92 is to aid development by means
of financial, technical and economic cooperation. The powers
of execution delegated by that basic act give the Commission
responsibility for ensuring the management of the financial and
technical assistance, and for economic cooperation. A measure
intended to help the government of the Philippines make its
borders more secure, with the aim of combating terrorism,
exceeds the powers of execution provided for in the basic act
and is therefore illegal.

The contested decision has not been published in the Official
Journal. The European Parliament did not receive notice of its
full text until 9 September 2005.

(1) OJ L 52, 27.02.1992, p. 1

Action brought on 17 November 2005 by the Commission
of the European Communities against the Federal Republic
of Germany

(Case C-404/05)

(2006/C 10/30)

(Language of the case: German)

An action against
the Federal Republic of Germany was
brought before the Court of Justice of the European Commu-
nities on 17 November 2005 by the Commission of the Euro-
pean Communities, represented by Enrico Traversa and Gerald
Braun, acting as Agents, with an address for service in Luxem-
bourg.

The applicant claims that the Court should:

1. declare that the Federal Republic of Germany has failed to
fulfil it obligations under Article 49 EC in requiring that
private inspection bodies in the field of organic production
of agricultural products, which have a registered office in
and are approved in another Member State, must maintain a
place of business or other permanent
infrastructure in
Germany in order to be able to carry out their activities
there;

2. order the Federal Republic of Germany to pay the costs.

Pleas in law and main arguments

The German authorities require of every inspection body in the
field of organic production of agricultural products having a
registered office in and approved in another Member State that
it must also maintain a registered office or place of business in
Germany in order to be allowed to carry out business activities
in Germany. This requirement is contrary to the principle of
freedom to provide services as it renders impossible the supply
of services in Germany by companies with an establishment in
other Member States.

Under Article 49 freedom to provide services is to be under-
from a base in one
stood as the right, without hindrance,
Member State,
in another
services
to provide individual
Member State without maintaining a permanent establishment
there. According to the settled case-law of the Court, the guar-
antee of freedom to provide services requires not only the
removal of all discrimination on the basis of nationality but
also the abolition of all restrictions which lend themselves to
prohibiting, hindering or rendering less attractive the activities
of a services provider who has an establishment in another
Member State and regularly renders similar services there.
Article 49 therefore precludes the application of a national
regulation or administrative practice which, without objective
justification, restricts the opportunity for a services provider to
actually make use of the freedom to provide services.

The reasons given by the Federal Government — the alleged
exercise of official authority by the inspection bodies and the
public interest — are not such as to justify that restriction on
the freedom to provide services. Reference to the exercise of
official authority as a justification for the present restriction on
the freedom to provide services would only be lawful and
acceptable if the activity in question were one which consti-
tutes direct and specific participation in the exercise of official
authority. It is true that the inspection bodies of the Länder are
also entrusted with official tasks and would furthermore have
the opportunity to compulsorily enforce the sanctions provided
for in the Regulation, but that is irrelevant as regards Com-
munity law and does not alter the fact that the activities of an
inspection body governed by Community law can also be
carried out in Germany, in the context of freedom to provide
services, by any inspection body approved in another Member
State on that legal basis.

The fact that an inspection body has no place of business in
Germany does not jeopardise the public interest as the real
control according to Community law criteria takes place when
the inspection body in question is approved and examined by
the public authorities of the approving Member State. In the
present case Community coordination measures and harmoni-
the interest
sation provisions also exist, which ensure that
which the Federal Government
is putting forward is also
pursued according to the same standards in other Member
States.